WALTERS & CARSON

[2017] FamCA 556

FAMILY COURT OF AUSTRALIA

WALTERS & CARSON [2017] FamCA 556

FAMILY LAW – PRACTICE AND PROCEDURE – STAY APPLICATION – Application by de facto husband for a stay of orders pending appeal – De facto wife’s response treated as stay application – De facto husband’s stay application granted in part – De facto wife’s stay application granted in part – The remainder of parties’ stay applications dismissed – Costs reserved to conclusion of appeal

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) r 22.11

Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106

APPLICANT: Mr Walters

RESPONDENT: Ms Carson

FILE NUMBER: SYC 79 of 2016

DATE DELIVERED: 3 August 2017

PLACE DELIVERED: Hobart

PLACE HEARD: Sydney

JUDGMENT OF: Benjamin J

HEARING DATE: 27 July 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton SC

SOLICITOR FOR THE APPLICANT: Barkus Doolan

COUNSEL FOR THE RESPONDENT: Mr Gould

SOLICITOR FOR THE RESPONDENT: Watts McCray

Orders

1. The remainder of the application for a stay of the orders made 18 May 2017, filed by the de facto husband on 19 June 2017, is dismissed.

2. The response filed 24 July 2017 by the de facto wife for stay of the operation of order 3 of the orders made 18 May 2017, which ordered the sale of A Street, Suburb L (‘the property’) and requiring the parties to list the property for sale on a date in February 2018, is granted pending the disposal of the de facto husband’s appeal.

3. The remainder of the application by the de facto wife for stay of a number of orders is dismissed.

4. IT IS NOTED that pending the sale of the property and subject to orders of this Court the de facto wife shall continue to have sole right of occupation of the property and the de facto husband shall not enter upon the property without the de facto wife’s consent or order of a court; and

5. IT IS NOTED that the repayments of the mortgage securing a loan over the property shall continue to be met from the funds standing in the joint name of the ANZ Bank (account no. …82) until such account is exhausted and the wife shall meet the loan repayments thereafter.

6. The costs of both parties in respect of the stay application are reserved pending the disposal of the appeal.

7. The application for enforcement of part of the property orders is to be listed before a Registrar not less than fourteen (14) days after the making of these orders.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage senior counsel and counsel to attend.

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 Walters & Carson (Stay application) 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 HOBART

FILE NUMBER: SYC 79 of 2016

Mr Walters

Applicant

And

Ms Carson

Respondent

REASONS FOR JUDGMENT

Introduction

1. Mr Walters (‘the de facto husband’) and Ms Carson (‘the de facto wife’) have been engaged in proceedings in the Family Court with regard to property adjustment, spousal maintenance and a child support departure.

2. Those proceedings were determined following a hearing in January 2017 and orders were made on 18 May 2017 (‘the orders’).

3. The de facto husband filed a Notice of Appeal on 26 June 2017 in relation to orders 2, 3, 4, 5, 13, 14, 15(d), 15(e), 17, 18, 19, 20 and 21 of the orders. That appeal was filed within the times provided by the Family Law Rules 2004 (Cth) (‘the Rules’).

4. On 19 June 2017 the de facto husband filed an application in the Family Court seeking stay of a number of the orders, in accordance with the Rules. That application was heard by me on 27 July 2017.

5. The de facto wife filed a response on 24 July 2017 and sought a number of orders, including a stay in relation to the date of sale of the parties’ property at A Street, Suburb L (‘the Suburb L property’) pending the disposal of the appeal.  She also sought orders enforcing the transfer of frequent flyer points to the parties’ children, orders regarding personal effects and costs.

6. The issue regarding the collection of possessions and access for such purpose was determined by me on 27 July 2017 and orders were made on that day.

7. The question of costs, including the de facto husband’s 15 June 2017 application in a case and the parties’ costs applications in this respect, have been stood over generally to be restored following the disposal of the appeal.

8. The de facto wife’s enforcement application was dealt with by leave to apply.  This will be before a registrar no less than 14 days following the delivery of these reasons and the making of the orders to which they relate.

The relief sought

1. The stay orders sought by the de facto husband were:-

   (a)    A stay in relation to the transfer of frequent flyer points to the parties’ children pursuant to order 5, which provided:-

   5.Within twenty one (21) days of the date of this order the de facto husband shall transfer 200,000 Qantas Frequent Flyer points from his frequent flyer account to each the children’s respective Qantas Frequent Flyer accounts, being a total of 600,000 points.  The de facto wife alone is permitted to operate the children’s Qantas Frequent Flyer accounts and redeem those frequent flyer points on the respective children’s flights.

   (b)    A stay in relation to payment to the de facto wife of 65 per cent of the capital due to him in May 2017 and in May 2018 pursuant to order 13 on the condition that the de facto husband pay to the de facto wife 50 per cent of such funds in lieu of the 65 per cent provided in the orders.  The effect of this regarding the current order is that the de facto husband received $359,129.31 in about May 2017 and paid to the de facto wife $179,564.66 in lieu of the amount provided under the orders of $233,434.05.  This left a shortfall of $53,869.39.  In terms of the May 2018 payment there would be a similar adjustment, although the exact amounts would be different depending on the value of the Australian dollar as against the US dollar at that time.  Order 13 provides:-

   13.Within seven (7) days of receipt of each the repayments of each capital due to him in both May 2017 and May 2018 from the [US] firm partnership of the which the de facto husband was a partner:-

   a.the de facto husband shall provide to the de facto wife an account of the precise sum which he receives in both United States dollars and Australian dollars together with copies of all documents available to him showing the payments and the calculation of such payments; and

   b.The de facto husband shall pay to the de facto wife in Australian dollars the sum equivalent to 65 per cent of each such payment.

   (c)    That the child support departure order made pursuant to orders 18 and 19 of the orders be stayed.  This is conditional upon the de facto husband paying periodic child support for the children as administratively determined by the Child Support Registrar pursuant to the basic statutory formula provided the de facto husband agrees to pay a series of expenses including private academic tutoring for the elder children, and other expenses as set out in his notice of appeal. Orders 18 and 19 provide:-

   18.Pursuant to s 117 Child Support (Assessment) Act 1989 (‘the Assessment Act’), the current child support assessment between these parties is varied to provide that de facto husband shall pay to the de facto wife by way of monthly periodic child support of $3,400 for each of [P] (born … 2006), [F] (born … 2008) and [R] (born … 2013) (‘the children’) making a total of $10,200 per month, and:-

   a.This rate of child support commences as and from the date of this order;

   b.This child support is to be paid by a pro rata payment in the first month, then the full amount to be paid in advance on the first day of each calendar month on a monthly basis, until each of the children turns 18 or completes secondary schooling in the year the child attains the age of 18 years, whichever is the later.

   c.This periodic child support shall be varied on 1 July in each year (commencing 1 July 2018) by increasing the amount payable by the “Child Support Inflation Factor” calculated with reference to the annualised MTAWE figure, as used by the Child Support Agency ( to s 124 of the Assessment Act, the de facto husband shall in addition to periodic child support pay or reimburse to the de facto wife, the following non periodic expenses in respect of the children:-

   a.The youngest child’s pre-school fees, all school fees including private school fees, levies and other compulsory education-related costs and expenses, from the date of these Orders for the three children until each child attains the age of eighteen years or completes the final year of his or her secondary school in the year of his or her eighteenth birthday (whichever is the later) including but not limited to all:-

   i.school fees, enrolment fees, non-refundable deposits, tuition fees and levies, reasonable levels of school uniforms, school shoes, school sports uniforms, school sports shoes, local excursions including school camps;

   ii.compulsory and recommended textbooks, compulsory school computers, compulsory school music equipment, school recommended additional classes, school requested sporting equipment; and

   iii.other compulsory parent contributions, including but not limited to such things as building levies and the like.

   b.Private health and hospital insurance premiums for each of the children at the current rate of cover and with the current or similar provider, until each child attains the age of eighteen years or completes the final year of his or her secondary school in the year of his or her eighteenth birthday (whichever is the later);

   c.Ninety per cent of any gap in medical, dental and optical expenses, including any treatments or medications prescribed by the children’s treating General Practitioner or other specialist health provider, ‘equipment’ such as braces, spectacles, prescription sunglasses, or contact lenses, psychological or other therapeutic expenses until each child attains the age of eighteen years or completes the final year of his or her secondary school in the year of his or her eighteenth birthday (whichever is the later);

   (d)    A stay in relation to the de facto spousal maintenance order pursuant to order 17 which provides:-

   17.The de facto husband shall pay the following by way of maintenance for and to the de facto wife:-

   a.the sum of $923 per month on the first day of each calendar month (monthly in advance) to a bank account as she shall direct, until the last day of the month in which the sale of the [Suburb L] property is completed; and

   b.the sum of $1,174 per month from the first day of each calendar month following the completion of the sale of the [Suburb L] property until 31 December 2025; such payments are to be monthly in advance to a bank account as the de facto wife shall from time to time direct.

2. In her response the wife sought a stay of the date for sale of the Suburb L property from February 2018, as provided in order 3, until a date after the disposal of the appeal.  This stay was granted.  She also sought an order that the de facto husband pay the mortgage on the Suburb L property once a fund presently being used for that purpose is exhausted.  That part of her application was dismissed. 

Rules and Principles relating to Stay applications

1. The determination of a stay application is a discretionary decision made by the first instance judge if available, or other first instance judge if otherwise.

2. The Rules at 22.11 provide:-

   (1) The filing of a Notice of Appeal does not stay the operation or enforcement of the order appealed from, unless otherwise provided by a legislative provision.

   (2) If an appeal has been started, or a party has applied for leave to appeal against an order, any party (emphasis added) may apply for an order staying the operation or enforcement of all, or part, of the order to which the appeal or application relates.

   (3) An application for a stay must be filed in the Registry in which the order under appeal was made and be heard by the Judge of the Family Court, Judge of the Federal Circuit Court or Magistrate who made the order under appeal.

3. The relevant principles in the determination of a stay application are clear:- [1]

   [1] Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 at paragraph 18.

   ·    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 “special” or “exceptional” circumstances;

   ·    a person who has obtained a judgment is entitled to the benefit of that judgment;

   ·    the person who has obtained a judgment is entitled to presume the judgment is correct;

   ·    the mere filing of an appeal is insufficient to ground a stay;

   ·    the bona fides of the applicant;

   ·    a stay may be granted on terms that are fair to all parties – this may involve a court weighing the balance of convenience and the competing rights of the parties;

   ·    a weighing of the risk that an appeal may be rendered nugatory if a stay is not granted – this will be a substantial factor in determining whether  it will be appropriate to grant the stay;

   ·    some preliminary assessment of the strength of the proposed appeal – whether the appellant has an arguable case;

   …

   ·    the period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of a stay for a short period of time; …

4. In this case the appeal has been filed and there are before the Court applications for stays by both of the parties.  The de facto husband in his 19 June 2017 application in a case and the de facto wife in her 24 July 2017 response.  There was argument by senior counsel for the de facto husband that the Court’s power to make a stay order was limited to the appellant or if sought by the respondent there needed to be a cross appeal or a concession that there was substance in the initial appeal.  I reject that submission and I will deal with the de facto wife’s stay application on its merits according to law.  

The parties’ material

1. The de facto husband relied upon:-

   (a)his application in a case filed 19 June 2017;

   (b)his affidavit sworn and filed 19 June 2017; and

   (c)his affidavit sworn and filed 24 July 2017.

2. The de facto wife relied upon:-

   (a)her response to the application in a case filed 24 July 2017; and

   (b)her affidavit filed 24 July 2014.

3. Attached to the de facto husband’s affidavit was a copy of my reasons and orders.  

4. Attached to the de facto wife’s affidavit was a copy of reasons and orders of Ryan J delivered and made 12 July 2017; which dismissed the de facto husband’s expedition application and directed him to file an amended notice of grounds of appeal.

5. The notice of grounds of appeal was what could best be described as a ‘scatter gun approach’.  It contained 59 grounds of appeal and the first ground of appeal included some 37 particulars, including sub-ground 1(hh) which had two parts to it.

6. Ryan J described the Notice of Grounds of Appeal as ‘extraordinary’ and stated that it was not entirely clear ‘whether it was intended to convey that those findings were not available or merely that different findings should have been made’.

7. Her Honour observed the following:-

   25.… I am satisfied that can be complied with [the mechanical questions] but I am not satisfied that the respondent should be called on to answer this notice of appeal …

   26.… There is no doubt that in relation to the appeal and this application, the de facto husband has moved promptly and has done all that is required to prosecute his appeal and case for expedition.  To the extent that the provision is concerned with timeliness the provision weighs in favour for an order for expedition.  To the extent that the provision is concerned with “acted reasonably”, the notice of appeal is plainly not a reasonable document and in that respect provision weighs against the order for expedition.

   …

   34.Finally, it is necessary to consider the grounds of the application for leave to appeal and the appeal.  The grounds of appeal for leave to appeal appear to raise matters of some substance and there may be some substance in the grounds of appeal but if there is substance, the white noise of approximately 97 grounds has tended to mask their strength.  It is not apparent that the appeal is presented on such compelling and urgent grounds in its current form that the court should dislocate other appeals so as to give priority.

8. Notwithstanding these comments I am satisfied that the de facto husband is bona fide in terms of his appeal.  I have made this determination in that context. 

9. I accept that in this application the mere filing of an appeal is insufficient to ground a stay and that the onus of proof to establish a proper basis for stay is on the de facto husband, however, it was not necessary for him to demonstrate ‘special’ or ‘exceptional’ circumstances.  I have adopted that approach in relation to the applications of each of the parties in respect of their stay applications.

10. One of the matters before me at the commencement of the hearing was in relation to some personal effects and I have already made short orders in that respect.  I had regard to the material used in this part of the stay application in relation to that matter and I indicated this to the parties.

11. In relation to the remainder of the application for appeal, I have had regard to the terms and principles to be applied in the stay application.

12. The onus to establish a proper basis for the stay is on the applicant.  I accept that it is not necessary for the applicant to demonstrate any ‘special’ or ‘exceptional circumstance’.  The onus rests with the de facto husband in respect of his stay application and with the de facto wife in respect of her stay application.

13. The person who has obtained a judgment is entitled to the benefit of the judgment and to presume it is correct.  In this matter the de facto wife is entitled to the benefits due to her under the orders.

Maintenance Stay – Order 17

1. Senior counsel for the husband conceded that there was in place an existing interim spousal maintenance order made on 22 August 2016 providing that the de facto husband pay the de facto wife $923 per month.  The effect of staying the substantive order would be to restore the previous order, which would require the payment of the same sum until the sale of the Suburb L property.

2. Given the order that I made in relation to the sale of the Suburb L property there is little or no utility in considering the stay in relation to spousal maintenance, as the de facto husband’s obligations would be the same until the determination of the appeal.

3. As such I will not make any stay order in relation to the spouse maintenance order.  

The Qantas Frequent Flyer points – Order 5

1. The de facto husband sought a stay of order 5 which in turn provided:-

   5.Within twenty one (21) days of the date of this order the de facto husband shall transfer 200,000 Qantas Frequent Flyer points from his frequent flyer account to each the children’s respective Qantas Frequent Flyer accounts, being a total of 600,000 points.  The de facto wife alone is permitted to operate the children’s Qantas Frequent Flyer accounts and redeem those frequent flyer points on the respective children’s flights.

1. In relation to the question of the frequent flyer points, the essence of the de facto husband’s complaint is that this is not property.  He asserted in his grounds of appeal:-

   8. That his Honour erred in determining that Qantas Frequent Flyer were property and gave no reasons for reaching such conclusion.

2. The legal maxim ‘res ipsa loquitor’ has a meaning in tort law, but its literal Latin translation that ‘the thing speaks for itself’ and this could best address this ground of appeal.  These points are essentially corporate currency which can be ‘spent’ on the acquisition of flights and upgrades and/or the acquisition of other goods.  That they can be transferred and used by other members of a family disabuses any notion that they are not property.

3. The points were not valued, but clearly have some form of value to each of the parties.  The appeal in this regard seems to have little merit.  If I am wrong in not providing sufficient or any reasons, then the de facto wife is able to transfer the points back to the de facto husband.  If the points are used prior to the determination of the appeal they can be valued and dealt with in the context of the rehearing or re-exercise of the property discretion by the Full Court if it takes that course. 

4. As such, having regard to all of the relevant factors, I am not satisfied that a stay should be made in relation to that particular order and I will not do so.

The US Firm money – Order 13

1. In relation to order 13, this order provides:-

   13.Within seven (7) days of receipt of each the repayments of each capital due to him in both May 2017 and May 2018 from the [US] firm partnership of the which the de facto husband was a partner:-

   a.the de facto husband shall provide to the de facto wife an account of the precise sum which he receives in both United States dollars and Australian dollars together with copies of all documents available to him showing the payments and the calculation of such payments; and

   b.The de facto husband shall pay to the de facto wife in Australian dollars the sum equivalent to 65 per cent of each such payment.

2. The husband seeks a stay in relation to payment to the de facto wife of part of the 65 per cent of the capital due to him in May 2017.  He says the de facto wife should receive 50 per cent pending the hearing of the appeal.  This amounts to a difference of $53,869.39 from the May 2017 payment and a similar sum in the May 2018 payment, subject to currency fluctuations.  This difference is primarily needed by the de facto husband to meet his needs to pay tax on his considerable earnings over recent times, given the overlap between income from his previous work with the US firm and his income with the UK firm.  The bulk of this income was retained by the de facto husband.

3. He, in essence, seeks that the de facto wife contributes $53,869.39 from the May 2017 payment to pay his tax liability and a similar sum from his May 2018 payment, impliedly for the same reason.  The nature of this part of his stay application is that the de facto wife use funds that are otherwise to go to her, subject to the appeal, to fund his tax liability of which he was no doubt aware, in general terms, at the time of the hearing.

4. If my orders are set aside there is more than sufficient money to take from the de facto wife’s share of the Suburb L property to preserve this approximately $108,000.  I do not accept that out of her comparatively limited income resources, as against the de facto husband, the de facto wife should, in effect, subsidise his tax liabilities.  The de facto husband is better off to the extent of $2,000 per week having moved from rental accommodation into his home at Suburb N (‘the Suburb N home’) and he concedes an income of at least $1.02 million in the current financial year.

5. If there is a shortfall the de facto husband can refinance the Suburb N home to address that issue.  That property has a value of about two million dollars and is subject to a mortgage at present of about six to seven hundred thousand dollars.

6. In relation to that part of his application for a stay, I am satisfied that the de facto husband is bona fide and that the appeal in this regard is at least arguable. 

7. The appeal is likely to be heard within twelve months.  Given all of those circumstances I am not satisfied that a stay should operate in respect of the payment of those monies, whether it be in May 2017 or May 2018.

Child Support – Orders 18 and 19

1. The final ground of the de facto husband’s stay application is in relation to the child support for the parties’ three children in accordance with orders 18 and 19 of the orders.  The underlying essence of the application seems to be that the de facto husband cannot afford to make those payments.  The effect of the payments is that the de facto husband would be paying child support of somewhere between $126,000 and $150,000 per year.  The sum will be greater if the children attend private schools, but that will not be the case between now and the determination of the appeal. 

2. The de facto husband acknowledges that he would be paying some child support in the meantime, probably to the extent of between $35,000 and $50,000 a year, having regard to the previous administrative assessment and the concessions that the de facto husband made in his application for stay.

3. If the appeal is heard and determined within 12 to 18 months from the date of this stay application, which the evidence seems to indicate is the likely time before the determination of the appeal, the de facto husband will be paying somewhere between $100,000 and $150,000 more than he says he can afford.

4. If the determination by this Court is successfully challenged in the Full Court, any monies overpaid by the de facto husband to the de facto wife would be credited back to him.

5. There would also be an option for the de facto husband to offset that money against monies otherwise payable to the de facto wife out of the proceeds of sale of the Suburb L property, so there is no risk that the money would be lost.

6. The de facto husband complains that, on a finding of $1.02 million dollars gross income he has been unable to meet that additional child support.  If need be the de facto husband can raise that money against the Suburb N home.

7. I accept that the de facto husband is bona fide in relation to this ground of appeal and for the purpose of determining this question I have assessed or assumed that he has an arguable case on appeal.

8. However, in terms of the significant monies being dealt with in this proceeding and the significant income of the de facto husband I am not satisfied that the de facto husband’s application for stay in this regard is, in all the circumstances, warranted.

The wife’s stay application

1. The de facto wife has sought a stay of the sale of the Suburb L property.  In her affidavit she sets out the reasons for this being the uncertainty of her financial circumstances if the Suburb L property is sold and that the appeal has not been determined.  The effect of not staying that order would mean that the house would be sold in early 2018 and the de facto wife and the parties’ children would need alternative accommodation.

2. Consequently the de facto wife would be unable to reasonably assess what amount would be available to her to purchase another property in the vicinity of the children’s school and, given the extent of the appeal, she would not be able to reasonably assess the amount of money to be paid into her household.  As such her desire to purchase alternative accommodation would logically be deferred until the appeal was determined.  

3. Counsel for the de facto wife rightly submitted that the de facto wife is entitled to some certainty.  The end result of the de facto wife’s stay not being granted would be the sale of the Suburb L property, with likely temporary accommodation for the de facto wife and the children until the proceedings were concluded.  The appeal may not be heard for 18 months or so, and if the appeal is successful it is likely to be at least another six months or more before the matter is reheard.

4. If there is a stay the consequences are predictable.  There would be a delay in payment of money to each of the parties and the spousal maintenance payable to the de facto wife would remain at a lower level as envisaged by the orders made on 22 August 2016.  The detriment to the de facto husband falls into two areas: firstly, the de facto husband would be without a part of the proceeds of the sale of the Suburb L property, which in the circumstances of this case that would be a relatively modest amount; and secondly, but more importantly the money set aside in the joint account for the payment of the mortgage secured against the Suburb L property would be dissipated in another few months.

5. Given all of the circumstances, I am satisfied that there should be a stay on the date of sale of the Suburb L property.  The stay should remain in place until the determination of the appeal.

6. Given that I have declined to make a stay order in respect of the monies from the US firm, the de facto wife will receive $53,869.39 (plus interest) from the May 2017 payment and about $233,434.05 in May 2018 from that payment.  She will have received capital of about $287,000 in liquid funds after those payments.

7. The de facto wife’s costs of caring for the children will be significantly met from child support given that the child support departure order will remain in place.

8. In those circumstances when the money runs out in the ANZ account which is funding the mortgage secured against the Suburb L property at the present time, I am satisfied that the de facto wife will have the capacity to meet those payments from that time onward until the disposal of the appeal.

9. Accordingly, I will so order.

I certify that the preceding fifty nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 3 August 2017.

Associate:     

Date:              3 August 2017