Xin & Qinlang (No 7)
[2024] FedCFamC1F 281
•30 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Xin & Qinlang (No 7) [2024] FedCFamC1F 281
File number: CAC 1782 of 2018 Judgment of: CHRISTIE J Date of judgment: 30 April 2024 Catchwords: FAMILY LAW – APPLICATION FOR ENFORCEMENT – APPLICATION FOR A STAY OF ORDERS – Whether the orders which permitted the sale of a property in default of payment to the applicant should be stayed pending the appeal filed by the first respondent – Whether appeal would be rendered nugatory unless a stay was granted -Where the first respondent has merely failed to make the payment – Where the evidence is not sufficient to ground a stay of the order for payment of funds or the default sale orders except on strict terms. Cases cited: Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Australian Coal and Shale Employees’ Federation v The Commonwealth (1956) 94 CLR 621
Federal Commissioner of Taxation v Myer Emporium Ltd (No.1) (1986) 160 CLR 220
Xin & Qinlang (No 6) [2024] FedCFamC1F 8
Division: Division 1 First Instance Number of paragraphs: 49 Date of hearing: 29 April 2024 Place: Canberra Counsel for the Applicant: Ms Borger Solicitor for the Applicant: Dobinson Davey Clifford Simpson Counsel for the First Respondent: Mr Lawrence Solicitor for the First Respondent: Longton Legal Counsel for the Second and Third Respondent: Mr Matthews Solicitor for the Second and Third Respondent: Lander & Rogers ORDERS
CAC 1782 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS QINLANG
Applicant
AND: MR XIN
First Respondent
MR B XIN
Second Respondent
MS WANG
Third Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
30 APRIL 2024
THE COURT ORDERS THAT:
1.Upon the Wife’s solicitors providing a clean copy of the following documents to the Court Pursuant to Order 29 of the Orders dated 25 January 2024, the Registrar of the Federal Circuit and Family Court of Australia (Division 1) at Canberra is hereby appointed pursuant to the provisions of Section 106A of the Family Law Act 1975 (Cth) to execute such deeds and instruments on behalf of the Husband and the Second Respondent and the Third Respondent in respect of the following:
(a)The discharge of mortgage and transfer of ownership of the property at EE Street, Suburb FF in Region DD (more particularly described in Certificate of Title Volume … Folio Edition …) (“the Suburb FF property”); and
(b)The withdrawal of caveat lodged over the property at O Street, Suburb K in Region DD (more particularly described in Certificate of Title Volume … Folio … Edition …) (“the Suburb K property”).
2.Upon the Wife’s solicitors providing a clean copy of the following documents to the Court, the Registrar will sign on behalf of the Husband and the Second Respondent and the Third Respondent:
(a)ANZ Discharge and Variation Authority (with respect to the Suburb FF property mortgage);
(b)Transfer (with respect to the Suburb FF property); and
(c)Withdrawal of Caveat (with respect to the Suburb K property).
3.The husband is granted a stay of orders 11-13 of the orders of 25 January 2024 on terms as follows:
(a)Orders 11-13 are stayed until 4.00 pm on 24 May 2024;
(b)The husband pay into a trust account in the name of the wife’s solicitors the sum of $158,000 (“the payment”) on or before 4.00 pm on 24 May 2024;
(c)If the husband makes the payment, the stay is extended until appeal NAA37 of 2024 is determined;
(d)If the husband fails to make the payment, the stay is lifted at 4.00 pm on 24 May 2024.
4.The wife’s Application in a Proceeding filed 2 April 2024 is otherwise dismissed.
5.The husband’s Application in a Proceeding filed 5 April 2024 is otherwise dismissed.
6.The second and third Respondent’s Response to Application in a Proceeding filed 24 April 2024 is otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Xin & Qinlang has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
On 25 January 2024, Gill J made final property adjustment orders in this matter: Xin & Qinlang (No 6) [2024] FedCFamC1F 8 (“Xin & Qinlang (No 6)”). On 19 February 2024 the husband filed a Notice of Appeal.
The appeal is listed for determination on 29 May 2024.
The parties to this interlocutory application are the wife, the husband and the husband’s parents. As there are a number of interlocutory proceedings, an appeal and ongoing final parenting proceedings I will refer to the parties in these reasons as the husband, wife and the husband’s parents.
This is an application for enforcement filed by the wife on 2 April 2024. The wife’s Application for enforcement was met by an Application by the husband for a stay of the financial orders made 25 January 2024.
The husband’s parents support the husband’s Application for a stay.
Some uncontroversial background is relevant to the disposition of the competing applications.
In Xin & Qinlang (No 6), the Court found at [278] that the property of the parties available for adjustment was as follows:
Property Ownership Value EE Street, Suburb FF, Region DD Jointly owned by the husband and wife $1,550,000 O Street, Suburb K, Region DD Jointly owned by the husband and wife $840,000 Suburb K Mortgage ($159,128) Suburb VV Apartment Husband’s share $470,000 Motor Vehicle 2 Husband $9,000 Savings Wife $6,365 Husband $6,967 Region DD Revenue refund Husband $91,620 AF Street proceeds Husband $92,076.84 P Group Pty Ltd Joint Nil R Pty Ltd shares Wife Nil S Family Trust Joint Nil Query add-backs – do not add-back rather s 75(2)(o) Credit cards Wife ($8,949) Debt to 2nd and 3rd resp Joint ($229,916) Superannuation Wife $9,394 Superannuation Husband $180,000
The net pool was $2,857,000 which was to be divided so that the wife received 60 per cent ($1,714,000) and the husband 40 per cent ($1,143,000).
Significantly, the wife was to retain a property at Suburb FF valued at $1,550,000 and the husband a property at Suburb K valued at $840,000 (and subject to a mortgage of $159,128). Each party retained his or her own superannuation entitlements.
The wife was appointed trustee for sale of a business owned by the company P Group Pty Ltd. It appeared in the summary in Xin & Qinlang (No 6) at [278] with a nil value but contracts have exchanged for sale of the business for $200,000.
Without including the husband’s share of the proceeds of sale of the business, the husband had available an apartment ($470,000), savings ($6,967), the Region DD Revenue refund ($91,620) and AF Street proceeds ($92,076.84) as well as a car ($9,000). Those assets total $669,663.84.
THE LAW
The applicable law is well settled: see Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
A successful litigant is entitled to the fruits of his or her judgment.
There is presumption of correctness of the primary decision: Australian Coal and Shale Employees’ Federation v The Commonwealth (1956) 94 CLR 621.
A stay may be granted in special circumstances: usually where the appeal would be rendered nugatory if the stay were not granted or where it would be difficult to restore a successful appellant to his or her former position if a stay is not granted: Federal Commissioner of Taxation v Myer Emporium Ltd (No.1) (1986) 160 CLR 220 at 222–223.
I am obliged to consider the merits of the appeal – at least in a cursory fashion.
I am also obliged to consider where the balance of convenience lies.
Other matters which may be relevant include whether there has been any delay in seeking the stay and how long the stay (if granted) is likely to be in place, and the bona fides of the decision to seek a stay.
The decision to grant a stay is a discretionary one.
CONSIDERATION
While the scope of the dispute as defined by the competing applications is somewhat broader, the case really turned on whether the orders which permitted sale of the Suburb K property in default of payment of the amount due to the wife should be stayed pending appeal.
The husband seeks to retain the Suburb K property which is his primary residence and also the home in which the second and third respondents live.
The wife first sought an order permitting a Registrar to sign the following:
(a)Discharge of mortgage secured over the Suburb FF property;
(b)Transfer of the Suburb FF property;
(c)Withdrawal of caveat over the Suburb K property.
The wife did not seek any order specifically directed to either the default in payment of the amount due to her under Order 11 or any of the orders flowing from her position as default trustee for sale under Order 13.
The husband (and his parents) contended that the appeal would be rendered nugatory unless a stay was granted.
I raised with counsel who appeared on behalf of the husband whether a stay of all orders was indicated (or supported by the evidence). Counsel appropriately conceded that while he was not instructed to confine the application to the orders in relation to the payment and default sale, the issues were distinct and (implicitly) the case in respect of the orders other than orders 11-13 was less strong.
I accept that the husband notified the wife of his desire to seek a stay – albeit by including an application for a stay in his Notice of Appeal. He did so on 19 February 2024 and I accept the submission that while that application was not the appropriate vehicle it could not be said that the wife was not on notice of his intentions.
I accept that the Notice of Appeal was filed promptly and has been prosecuted diligently such that it is listed for determination in about one month.
It was not submitted that the husband’s application for the stay was a tactic or designed to delay or otherwise not bona fide.
Given the wife’s entitlement to the fruits of the judgment, it is appropriate to consider the merits of the husband’s appeal.
In that regard, I note that while the husband has not filed an Amended Notice of Appeal he has effectively given notice of his intention to do so through the written submissions filed as Appellant’s Summary of Argument in the Appeal on 24 April 2024, a copy of which was tendered on this application.
It is useful to set out the content of paragraphs [3]–[4] of those submissions:
3. The Appellant’s sole ground of appeal is that the Primary Judge erred in making an adjustment in favour of the Respondent of 10% pursuant to s 75(2) by: (1) failing to take into account a relevant consideration, namely the financial circumstances of her cohabitation with her new partner s.75(2)(m); and (2) failing to consider and analyse the effect of adjustment in monetary terms.
4.The Appellant therefore seeks leave to amend ground 4 of his Notice of Appeal to the foregoing extent. The Appellant does not press his remaining grounds of appeal.
It follows that the merits of the husband’s application for a stay fall to be considered having regard to the prospects of that ground.
Appeals which assert that a judge has failed to take into account a relevant consideration will require the appellant to persuade the appellate court that the failure is both demonstrated and material.
I accept that it is not my function to determine the prospects of the appeal but rather to take into account, when exercising my broad discretion, whether on the face of the documents the appeal is without merit (in which case ordering a stay would be an abuse of process) or, as is the case here, whether the appeal, as articulated, is arguable.
Briefly I accept that the ground is a proper ground of appeal. The arguments of the appellant as advanced in the Summary of Argument are orthodox. Nonetheless I would anticipate, as foreshadowed by the wife’s counsel in oral argument, that the appeal will face some significant hurdles.
It is useful to deal with the application to stay what may be regarded as the less central orders. Counsel for the husband said that the whole suite of orders needed to be stayed because they form a regime which implements the 60/40 division and hence may be the subject of adjustment in the event that the appeal is allowed, the matter remitted and the property adjustment percentage altered. I disagree. Given that the granting of a stay ought only occur in circumstances which warrant depriving the wife of the fruits of her judgment then proper attention needs to be paid to the ability to remedy matters in the event of a successful appeal. Given the appeal is proceeding on the basis that the primary judge was in error to order a 10 per cent adjustment to the wife without adverting to “the financial circumstances of her cohabitation” with her partner, this focuses the Court’s attention on the effect of this adjustment.
In the affidavit of the solicitor for the husband relied upon in support of the application, the solicitor sets out the mathematical calculations relevant to this application:
15.… the net value of the pool of assets between the applicant and first respondent as found by His Honour was $2,847,000, and based on the distribution, the applicant will receive $1,143,000 and the first respondent, $1,714,000. The adjustment consists of a cash payment by the applicant to the first respondent in the amount of $158,000. Whilst modest in comparison to the value of the pool, a swing of 5% in favour of the applicant would result in a reduction of $142,350 in the cash payment and should he be wholly successful in obtaining a 10% swing in his favour, he would be entitled to a cash payment of $126,700 instead.
For this reason I am not persuaded that the application for stay of orders other than those which deal with the payment to the wife of $158,000 and the default sale of the Suburb K property have any merit. Noting no challenge to the factual findings of the primary judge concerning the composition and the value of the pool ground the appeal, the asset pool of the parties on any view is sufficient to remedy the position in the event of a successful appeal and success on remitter. In fact, the parties now agree there will be more liquid assets available as a consequence of the sale of an asset of the P Group Pty Ltd.
The primary judge made orders as follows:
21.The husband and wife as beneficial owners of the shares in [P Group Pty Ltd] do all acts and things necessary to sell the business known as [T Franchise] (owned and operated by the company [P Group Pty Ltd]), including instructing and securing the cooperation of [Mr P] (as the director and non-beneficial shareholder of [P Holdings Pty Ltd]).
22.That for the purpose of the sale referred to in Order 24 the wife be appointed as the sole Trustee of the sale.
23.That upon the settlement of the sale of [T Franchise], the wife as Trustee of the sale, cause the net proceeds of sale to be applied as follows:
(a) 60 per cent to the wife; and
(b) 40 per cent to the husband.
This new development – the sale of T Franchise – is significant for two reasons: firstly because it further renders the husband’s arguments about his appeal being nugatory illusory (except perhaps in respect of sale of the Suburb K property) and secondly because it means that I am obliged to take into account the interests of a third party who has entered into a contract to acquire the T Franchise business. The third party does not have notice of the stay application. That is not the husband’s fault since it would appear the contract was only recently executed but the requirement to provide notice to effected parties is fundamental and no application for an adjournment was made.
Counsel who appeared on behalf of the husband’s parents supporting the granting of a stay of the order which required removal of his clients’ caveat on the title of the Suburb K property argued that he was not instructed to consent to the order in respect of the caveat being complied with and supported a stay in respect of that order. Notwithstanding, the husband’s parents have not appealed the decision of the primary judge. The husband’s appeal is not premised on any asserted error in the primary judge’s treatment of the trust arguments advanced by the husband’s parents at trial.
Counsel for the husband’s parents understood that given the undisturbed findings of the primary judge the legal basis for any caveatable interests was absent and any argument supporting a stay of the order requiring removal optimistic at best. I will make the orders the wife seeks about removal of the caveat.
The counsel for the husband’s parents otherwise supported the stay of the orders which would require a default sale of the Suburb K property on the basis that it was the home of his clients.
I will now turn then to consider whether the balance of convenience favours granting a stay of the orders which related to the payment to the wife and the default sale provisions.
Counsel for the husband and counsel for the husband’s parents unsurprisingly focused on the fact that the husband and his parents wish to remain living in the Suburb K property and the husband does not want to be required to comply with the default sale order since that circumstance could be regarded as the type of situation where, if successful on an appeal, he would be unable to be returned to his former position – namely the owner and occupier of a specific piece of real property.
This argument would have some force if there was any evidence to demonstrate that the husband was unable to make the payment to the wife which triggered the default sale clause. The evidence does not come close to establishing that proposition.
The husband was required to pay the wife the sum of $158,000 within 60 days. That time elapsed on 25 March 2024. No evidence (of the husband) is directed towards attempts to make the payment, failure to make the payment, sourcing of funds seemingly available on the face of the judgment to make the payment. This leaves the inevitable conclusion that the husband has merely failed to make the payment. It is his inexplicable action which has the effect of triggering the default sale order. Accordingly, he has not satisfied me, through admissible evidence, that the order for payment of funds or the default orders should be stayed.
In considering the balance of convenience I note that given how promptly the appeal can be heard and determined there may be some merit in considering a limited stay on terms. I do so having raised this with the parties but appreciating that none of the lawyers held instructions to proceed on this basis.
I have in mind that the husband should pay into the trust account of the wife’s solicitors the sum of $158,000 on or before 24 May 2024. Orders 11-13 would be stayed until the payment is made. If the payment is made the stay would continue until the matter is dealt with by the appellate division. If the payment is not made the stay would lapse at 4.00 pm on 24 May 2024.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 30 April 2024
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