Velten and Velten (No 2)
[2020] FamCA 542
•26 June 2020
FAMILY COURT OF AUSTRALIA
| VELTEN & VELTEN (NO 2) | [2020] FamCA 542 |
| FAMILY LAW – STAY APPLICATION PENDING APPEAL – respondent in the proceeding seeking to stay operation of interlocutory orders requiring him to pay the applicant the sum of $200,000 – respondent arguing 4 grounds of appeal – relevant legal criteria for grant of a stay considered – none of the criteria met – stay application unmeritorious – application for stay dismissed – costs ordered. |
| Family Law Act 1975 (Cth), ss 74, 79, 114, 117(2A) |
| Aldridge & Keaton [2009] FamCAFC 106 Coulton & Holcombe (1986) 162 CLR 1 Jackson & Balen [2009] FamCAFC 131 Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681 Kyriakos v Kyriakos (2013) 48 Fam LR 618 Velten & Velten [2020] FamCA 384 Wei & Wei(No 4) [2020] FamCA 160 |
| APPLICANT: | Ms Velten |
| RESPONDENT: | Mr Velten |
| FILE NUMBER: | MLC | 7244 | of | 2019 |
| DATE DELIVERED: | 26 June 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | The Honourable Justice Wilson |
| HEARING DATE: | 26 June 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr T. Puckey |
| SOLICITOR FOR THE APPLICANT: | Taussig Cherrie Fildes |
| COUNSEL FOR THE RESPONDENT: | Mr D. Matta |
| SOLICITOR FOR THE RESPONDENT: | KCL Law |
Orders
The respondent’s application for a stay of my orders made on 22 May 2020 is dismissed.
The respondent’s application in a case filed 23 June 2020 is dismissed
On or before 27 July 2020 the respondent pay to the applicant costs in the sum of $2,210.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Velten & Velten has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 7244 of 2019
| Ms Velten |
Applicant
And
| Mr Velten |
Respondent
REASONS FOR JUDGMENT
(Ex tempore)
Introduction
By application in a case dated 23 June 2020, the respondent in this litigation has sought orders staying the operation of my orders made on 22 May 2020. The respondent has filed a notice of appeal against my orders. He says that unless a stay of the operation of those orders is granted his appeal will be rendered nugatory.
Synopsis
For the reasons that now follow, in my judgment –
a)his application for a stay is refused; and
b)I dismiss his application in a case.
I shall hear the parties on the question of costs.
A short factual recital
The factual setting of this litigation has been carefully narrated by me in the reasons against which the respondent appeals. They appear in Velten & Velten.[1] The respondent needs leave to appeal from my interlocutory orders. He must obtain that from an appeal court.
[1] [2020] FamCA 384.
Pursuant to my orders made on 22 May 2020, various chattels were to be sold in order to realise the sum of $200,000. The applicant in the proceeding also the applicant for interlocutory orders demonstrated to my satisfaction an entitlement to the orders she sought. The respondent, against whom orders were made, owns or controls corporate entities and a trust that operates retail outlets selling food. On the evidence before me (which I was cautious to be circumspect in its acceptance or rejection) the respondent’s commercial endeavours were in a precarious financial state. His own solicitor gave evidence to that effect. It surprised me that secured lenders had not taken steps to enforce their securities.
Be that as it may, the items that the applicant sought sold were luxury items. They included boats, a mooring, a jet ski and other items that are conventionally funded by discretionary spending, that is to say once creditors have been paid as and when their debts fall due. The respondent’s evidence revealed an approach to paying creditors that was significantly less than diligent. He approached the sums he paid to his wife with a comparable attitude. My reasons for making the orders I made are supported by full and detailed reasons. Ironically, the legal representatives for the respondent put forward as a ground of appeal the lack of adequate reasons yet they do not identify why my reasons are as they say.
In support of this application today the respondent relied on his own affidavit made on 23 June 2020. In it he said he is aggrieved by my orders and he seeks relief today “in order to preserve the integrity of the appeal,” whatever that may mean.
It must not be forgotten that the filing of an appeal does not operate as a stay and the decision appealed against is presumed to be correct unless and until an appeal court holds otherwise.
The items I ordered sold were correctly identified by counsel then appearing for the wife as “toys”. It is difficult to see how the appeal would be rendered nugatory unless a stay is ordered. The applicant has struggled to meet his children’s school fees in the past yet he wishes to preserve a car, a jet ski, a mooring and a boat that I ordered be sold.
Relevant legal principles.
In Wei & Wei(No 4)[2] I recently reviewed the more important legal principles that apply to a stay application. The decision of the High Court in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd[3] is frequently cited in a stay application. There, Brennan J held as follows –
A stay to preserve the subject matter of litigation pending an appeal for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the court in which the matter is pending until the hearing of the application for special leave to appeal.
[2] [2020] FamCA 160.
[3] (1986) 161 CLR 681.
Of course, it must be recognised that the decision in Jennings involved a stay pending the hearing and determination of an appeal to the High Court of Australia, very different to the application with which I am here concerned.
In the present application, more relevant principles emerge from the decisions in Aldridge & Keaton[4] and Jackson & Balen.[5] As indicated in Wei & Wei I prefer the reasoning in Jackson over that in Aldridge. In Jackson the relevant statement of principle emerges in eight subparagraphs in paragraph 28. It is utile to quote what was there held –
[4] [2009] FamCAFC 106.
[5] [2009] FamCAFC 131.
The principles to be applied in hearing a stay application pending an appeal are well settled (see Federal Commission of Taxation v Myer Emporium Ltd [No.1] [1986] HCA 13; (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [1986] HCA 84; (1986) 161 CLR 681. Those authorities stress the discretionary nature of the application which should be determined on its merits. Principles relevant to this matter include the following –
· the onus to establish a proper basis for the stay is on the applicant for the stay, however it is not necessary for the applicant to demonstrate any “special or exceptional” circumstances;
· a person who has obtained a judgment is entitled to the benefit of that judgment;
· a person who has obtained a judgment is entitled to presume the judgment is correct;
· the mere filing of an appeal is insufficient to grant a stay;
· the application must be bona fide;
· a stay may be granted on terms that are fair to all parties. This may involve the court weighing the balance of convenience to the competing rights of a party;
· a weighing of the risks that an appeal may be rendered nugatory if a stay is not granted. This will be a substantial factor in determining whether it is appropriate to grant a stay; and
· some preliminary assessment of the strength of the proposed appeal whether the appellant has an arguable case.
Working through those subparagraphs, several matters emerged. They may be distilled into the issues set out below.
While it is not necessary for special or exceptional circumstances to be shown, the applicant for the stay must nevertheless establish a proper basis for the stay. In essence, the respondent in this litigation (the applicant for the stay) asserts that his interlocutory appeal will be rendered nugatory unless the stay is granted. To my mind he wholly misses the point of my orders. By those orders the respondent is entitled to generate the sum ordered to be paid to the wife in such manner as he is able. However, short of borrowing funds, his most obvious source of funds is the sale of the items the wife’s counsel described as “toys”. He complains about being ordered to do so, citing how this appeal will be rendered nugatory unless a stay is order. That is an entirely circuitous argument. He is perfectly entitled to raise funds to meet the order I made without touching those assets. It is not for me to advise him how he might do that. I do not accept that the applicant has a proper basis for the stay.
So far as the second subparagraph in Jackson was concerned, it is trite to say that a person who has obtained a judgment is entitled to the benefit of it. The wife has a benefit of an order in her favour. I am not willing to entertain the prospects that my decision appealed against is erroneous.
Next, the mere filing of an appeal is insufficient for the grant of a stay. Were it otherwise, any opportunistic notice of appeal would thwart the benefit of the orders made in favour of the successful party.
Next, the appeal must be bona fide. Nothing in the material addressed the respondent’s bona fides of this appeal.
Next, it was said in Jackson that I must balance the risk of appeal being rendered nugatory against the refusal of the stay. As has been said several times, the respondent is perfectly at liberty to preserve the items he seeks by raising funds from some other source. If he is unwilling or unable to raise funds in that way, the items he does not want to sell must, in fact, be sold.
Next, it is necessary to address the consequences of the possibility of the respondent being successful on appeal and whether the orders I have made might be reversed. The wife’s financial circumstances were bleak, as I have canvassed in my earlier reasons. The husband’s commercial enterprise was complex, heavily geared and extensively secured in favour of lenders. He seems to have at his disposal unsecured assets capable of meeting the amount ordered. Naturally, in the absence of consent from secured financiers he is unable to sell secured assets. His choice of assets against which he has recourse to meet my orders is very limited. He says he does not want to sell those unsecured assets. That is not a good reason for refusing to comply with the orders I have made. The respondent gave no evidence of attempts he may have made (and by now he should have made) to approach his existing lenders to explore whether any lender is willing to extend further financial accommodation to him. On the figures available to me at the earlier hearing the respondent’s liabilities exceeded his assets and those of his group. It fell to him to demonstrate his financial circumstances. He failed to do so.
As I have said earlier, unless the respondent’s financial fortunes radically improve, his group is nearing collapse.
The notice of appeal
In any consideration of the grant of a stay it is relevant – dare I say, necessary – to examine the proposed grounds of appeal to ascertain whether the appeal is likely to enjoy any prospects of success. In my view the respondent’s prospects of success are slim, to say the least. Of course, an appeal court may say otherwise. However, it is utile to address each ground of appeal.
Ground 1 asserts that I failed to identify the source of power on which I relied in making the order. In ground 2 the drafter of the notice of appeal asserts that if I relied on s 74 then I allegedly failed to identify the wife’s needs. Both grounds can be addressed concurrently. The reasons and the authorities on which I relied make plain the source of power on which my decision was based. But both ground 1 and 2 are premised on what I regard as a basic error, namely the need to recite in express terms the statutory provision on which the power to make the relevant order is being exercised. For example, if an injunction application comes before the court it is not necessary to incorporate in the judge’s reasons an express mention of s 114 of the Family Law Act. If an application comes before the court for an alteration of property interest it is not necessary for the judge to state in his or her reasons that the application is made under s 79 of the Family Law Act. It is self-evident that application is made under that provision. The omission of the reference to the relevant statutory provision does not render the reasons amenable to appellate review by reason of that omission alone. In debate with Mr Matta I invited Mr Matta to take me to any authority of the High Court of Australia or of the Full Court of the Family Court of Australia that has held that a judge falls into appellable error by failing to specify in the judge’s reasons the precise section of the Family Law Act on which the judge relies in making the orders that are made. Mr Matta took me to the decision in Kyriakos v Kyriakos.[6] I do not read it in the way for which Mr Matta contended as requiring in mandatory terms that I set out in a heading and with express reference the precise statutory provision upon which I rely. Beyond that decision Mr Matta did not take me to any particular authority which mandated in terms that I was required to do as he said.
[6] (2013) 48 Fam LR 618.
Grounds 1 and 2, in my submission, are devoid of merit.
Ground 3 of the proposed notice of appeal was premised on arguments not raised before me on the hearing before me. Commonly on the hearing of appeals an attempt is made to agitate a point that was not raised at first instance. It is fair to say that, in the main, an appeal court sets its face against that practice for two main reasons. The first is that by reason of the point being raised for the first time in the appeal court, that court does not have the benefit of the reasons for judgment on point of the judge at first instance. The second reason why appeal courts generally do not allow a point not taken at first instance to be raised on appeal is that an unfairness is visited upon the respondent to the appeal (the wife in this instance) by a surprise and novel point being raised when the point, had it been valid, would have and should have been debated fully at first instance.
As I have already pointed out, when this case was before me at first instance in both verbal addresses and written submission no substantive debate was devoted to the issue now raised in ground 3 of the notice of appeal. The raising on appeal of points not raised at first instance invokes principles canvased by the High Court in Coulton & Holcombe.[7] In essence, the High Court held that such a practice is not to be condoned for several reasons, including –
a)the finality of litigation;
b)the undesirability of encouraging tactical decisions not to present an issue at first instance, and
c)the need for vigilance to avoid injustice to a party having to meet new issues for the first time at the appeal court.
[7] (1986) 162 CLR 1.
Those considerations apply with full force to ground 3. That ground does not enjoy favourable prospects of success on appeal in my view.
Ground 4 is an omnibus unparticularised and, quite frankly disparaging contention that my reasons were inadequate. To the contrary, they canvassed the factual background of the application then before me in considerable detail, they addressed the wife’s evidence in her affidavit material, they addressed the husband’s evidence in his affidavit material and the reasons canvassed relevant legal principles in considerable detail. I do not accept that my reasons were inadequate. Ground 4 is without merit.
On behalf of the wife today, counsel focused on the merits of the appeal and the prejudice that she was likely to suffer if the application succeeded. He said there was no error in the approach and so there was no defect in reasoning in reliance upon s 79. That accorded with my view. He said s 79 was correctly invoked and so the appeal is unlikely to succeed. There is considerable force in that.
He submitted on the point of prejudice that there was none. I agree.
I dismiss the application in a case and refuse the stay application.
The effect of these orders does not operate to prevent the respondent seeking a stay from the Full Court of my orders. Of course, I cannot foreclose on his right to make any such application.
[discussion on costs]
On behalf of the wife, counsel applied for costs pursuant to s 117(2A). He sought a scale item for counsel’s fee in the sum of $1,210 and an amount for his solicitors. He said the appropriate measure was five hours preparation at $250 per hours. The relevant provision of s 117(2A) upon which he relied was the provision in respect of the application being wholly unsuccessful. I agree that the application was wholly unsuccessful and on that basis alone I am prepared to make an order for costs but not in the total sum allowed. The item for counsel of $1,210 is allowed. I do not accept that five hours were involved for solicitor preparation and I reduce that to $1,000, being four hours.
I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 26 June 2020.
Associate:
Date: 9 July 2020
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