Zagar and Bacall

[2020] FamCA 595

FAMILY COURT OF AUSTRALIA

ZAGAR & BACALL [2020] FamCA 595

FAMILY LAW – STAY APPLICATION – a large number of unparticularised, vague and near meaningless grounds of appeal advanced – no evidence that appellant had approached all relevant lenders for funds to pay out the wife – stay application refused.

Family Law Act 1975 (Cth) ss 75(2), 79
Family Law Rules 2004 (Cth)

Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106
Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685
Commissioner of Taxation (Cth) v Myer Emporium Ltd (No 1) (1986) 160 CLR 220
Jackson & Balen [2009] FamCAFC 131
Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (1986) 161 CLR 681

APPLICANT: Mr Zagar

RESPONDENT: Ms Bacall

FILE NUMBER: SYC 8282 of 2017

DATE DELIVERED: 17 July 2020

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: The Honourable Justice Wilson

HEARING DATE: 17 July 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr J. Lloyd SC

SOLICITOR FOR THE APPLICANT: Neil Jamieson & Associates

COUNSEL FOR THE RESPONDENT: Ms D. Coulton

SOLICITOR FOR THE RESPONDENT: O’Sullivan Legal

Orders

1. I refuse the appellant’s applications made in paragraphs 3 and 4 of his application in a case sealed 9 July 2020 for a stay of my orders made on 18 June 2020.

2. The appellant’s application in a case filed 9 July 2020 is dismissed.

3. The further hearing of this proceeding is adjourned to 23 July 2020 at 9:30am for determination of all questions of costs.

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 Zagar & Bacall 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 NEWCASTLE

FILE NUMBER: SYC 8282  of 2017

Mr Zagar

Applicant

And

Ms Bacall

Respondent

REASONS FOR JUDGMENT

(Ex tempore)

Introduction

1. Following a two-day trial of this proceeding, on 14 May 2020 I handed down reasons for judgment directing the parties to bring in minutes that gave effect to those reasons.  After subsequent hearings on the form of orders, final orders were pronounced by me on 18 June 2020. 

2. The parties fought this case on two main levels.  The first was the duration of the relationship and the second was the nature and extent of the parties’ financial and non-financial contributions.  Both issues were hotly contested.  In the upshot I made findings of fact that the duration of cohabitation was, as the wife argued, namely 15 years.  So far as contributions were concerned, I adopted an asset-by-asset approach and assessed contributions of all forms at 40% in favour of the wife and 60% in favour of the husband. 

3. The wife has applied for a costs order to be made in her favour in relation to the proceeding.  The wife’s legal representatives provided material in support of her costs application.  The husband’s submissions on costs are not due until 20 July 2020.

4. By notice of appeal filed 3 July 2020 the husband has appealed against the substantive orders I made on 18 June 2020.  The appellant has formulated 17 grounds of appeal.  It will be necessary to make some preliminary assessment of the strength of the proposed appeal especially whether the appellant has an arguable case, as was held in Jackson & Balen.[1] 

   [1] [2009] FamCAFC 131.

5. Pursuant to my orders made on 18 June 2020, I have allowed the appellant to raise funds to meet the sum ordered to be paid to the wife.  Whether he is able to do so depends on steps he must take to approach a lender.  In the directions hearings convened subsequent to the handing down of judgment, it was apparent that the appellant has either been extremely slow to do what he was ordered to do or he has elected to ignore the orders I have made, instead pursuing such avenues as  are open to him on appeal. 

6. Time and again appeal courts have stated that two important principles operate when an appellant chooses to appeal.  First, the person who has obtained the judgment appealed against is entitled to presume that the judgment is correct and, as a corollary to that, the person who has obtained the judgment is entitled to the benefit of that judgment.  Second, the mere filing of an appeal is insufficient to grant a stay.  To that end, any application for a stay must be made bona fide, that is to say, it must not be made as a tactic or as a weapon to thwart the holder of the judgment enjoying the benefit of the judgment. 

7. In two decisions of the Full Court of this court,[2] both in the year 2009, statements of principle were made concerning the proper approach to be adopted in an application for stay.  Pursuant to the Family Law Rules, the stay application must be heard by the judge who pronounced the orders against which the appeal has been filed.  If the trial judge refuses the stay application, the appellant has his, her or its remedies before the Full Court.  It is utile to quote the statement of principle as it was set out in Jackson & Balen –

   [2]Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 and Jackson & Balen [2009] FamCAFC 131.

   The principles to be applied in hearing a stay application pending an appeal are well settled (see Federal Commissioner of Taxation v Myer Emporium Ltd [No. 1] (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit CorporationLtd (1985) 2 NSWLR 685; Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd (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 fides;

   ·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 a stay;

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

Synopsis

1. For the reasons that follow I refuse the appellant’s applications made in paragraphs 3 and 4 of his application in a case sealed 9 July 2020.

Material on this application

1. At the appellant’s request I agreed to urgently list this matter at noon on 17 July 2020.  The appellant’s applications before me, as recorded in his application in a case, were four-fold, as follows –

   a)        that leave be granted to serve short notice of this Application.

   b)this Application be listed before Justice Wilson and/or another Judge of the Family Court of Australia should Justice Wilson not be available.

   c)that the Orders of 18 June 2020, be stayed pending the determination of the husband’s Appeal filed 3 July 2020.

   d)that the issue of the costs of the wife be adjourned to a date after the determination of the Appeal.

2. The respondent to the appeal, that is to say the wife, filed a detailed response to the appellant’s application in a case, her response being dated and sealed on 15 July 2020.  In it she put forward a proposal that advanced two alternatives.  In the first (her preferred alternative) the respondent wife sought orders dismissing the appellant’s application in a case with consequential costs orders.  As her alternative position, the respondent proposed that a stay be granted on conditions that included –

   a)the payment of 50% of the sum ordered to be paid to her by the appellant; or

   b)the payment of 10% of the net asset pool as contended by the appellant at trial;

   c)the appellant departing the B Street property;

   d)the sale of the B Street property; and

   e)restraints upon the appellant encumbering the B Street property, the property at G Street, Suburb C and the property at X Street, Suburb Y.

The appellant’s affidavit

1. On 8 July 2020 the appellant made an affidavit in support of his application for the grant of an order staying the operation of the 18 June 2020 orders.  The affidavit as filed is bereft of a jurat clause or any evidence that the document that purports to be an affidavit is in fact an affidavit.  I assume the appellant relies on the protocols adopted in this court for the filing of affidavits during the currency of the COVID-19 pandemic.  Relevantly paraphrased, in that affidavit the appellant said the following –

   a)three properties are in contention in this litigation, namely the B Street property, the G Street property and the X Street property;

   b)between late October 2019 and 24 February 2020 the wife lived somewhere other than at the B Street property but since 24 February 2020 the appellant and the wife have lived at that residence, separately and apart;

   c)the sum of $1,960,000 is owed to KK Bank pursuant to a mortgage that exists over the B Street property, the monthly mortgage instalment sum being $7,232;

   d)monthly levies in respect of that property are $1.692, or thereabouts;

   e)the appellant pays monthly mortgage sums and outgoings in respect of the B Street property;

   f)the properties at G Street and at X Street are tenanted;

   g)he asserts that upon the sale of either or both of the tenanted properties a significant capital gains tax liability will arise;

   h)he says he does not have the resources to refinance the debt due to KK Bank; and

   i)he asserts that the wife has refused to sign documentation to refinance the KK Bank indebtedness.

2. The appellant exhibited to his affidavit a collection of text messages exchanged between himself and the wife.  An email dated 27 March 2020 from Westpac to the appellant revealed the response to an enquiry from the appellant to Westpac concerning a loan extension.  Westpac took the view that the appellant was unable to service any extension of existing loan facilities.  However, no evidence was adduced by or on behalf of the appellant in respect of any other possible finance providers.  Historically, the Commonwealth Bank had provided funds to him as had his own parents.  His affidavit material was bereft of details about any approaches he may have made to a financier of any description other than Westpac. 

The respondent’s affidavit

1. In opposition to this stay application, the respondent wife swore an affidavit on 15 July 2020.  Relevantly paraphrased, in it she deposed to the following –

   a)since mid-March 2020 she has been receiving fortnightly sums from JobSeeker totalling $506.75 weekly or $1013.50 fortnightly;

   b)she owes Ms LL about $50,000;

   c)she pays storages costs of $700 a month;

   d)she is in a payment plan of $100 per fortnight in reduction of credit card indebtedness;

   e)she suffers anxiety and depression but is unable to obtain treatment from a private mental health practitioner by reason of her limited means;

   f)she currently lives at B Street and accesses common areas only when the appellant is at work;

   g)a verbal altercation took place on 1 March 2020 resulting in police officers attending the B Street property;

   h)she said she has no alternative accommodation;

   i)she does not now wish to refinance the B Street property and seeks orders for its sale; and

   j)if the appellant’s application for a stay is successful, she says the impact of her living in the same house as the appellant will be intolerable.

Applying the legal principles to the facts of this application 

1. As has already been mentioned, the Full Court in Jackson & Balen set out eight principles to guide judges on the hearing of a stay application.  It is not necessary for an applicant for a stay to demonstrate special or exceptional circumstances.  On behalf of the appellant it has been contended that the appeal will be rendered nugatory unless the stay is ordered.  Jackson & Balen also requires some preliminary assessment to be undertaken of the proposed appeal and whether the appellant has an arguable case.  To those two main issues I now turn. 

Whether the appeal will be rendered nugatory

1. Embedded in the appellant’s principle contention on this application is the notion that a stay is the only means of rendering the appeal utile. 

2. I disagree. 

3. The appellant has been ordered to pay the respondent a sum certain.  How he does that is a matter for him.  He has said a particular bank will not extend his existing finance facility as he will be unable to service an increased loan.  But he is silent in relation to approaches to or responses from other lenders.  It must not be forgotten that over the history of his relationship with the wife and the various properties the appellant acquired, he did so with substantial capital support from his parents.  He said nothing in this application about any approaches to or responses from his parents.  In short, I am not persuaded that the appellant has meaningfully applied himself towards attempts to obtain finance to pay out his wife.  For that matter, the appellant knew from the date on which my reasons were handed down in May 2020 that he needed to arrange his financial affairs so as to deal with the effect of my reasons.  The parties were given seven days to bring in a minute that gave effect to my reasons.  Final orders were not pronounced until over a month thereafter.  The notice of appeal, containing all 17 of the grounds of appeal on which the appellant now relies, emerged on 3 July 2020.  On that timeline, it is immediately apparent that the appellant has been more focused on the appeal in this case than endeavouring to refinance his loans to enable him to pay out his wife. 

4. I do not accept that his appeal will be rendered nugatory unless a stay is granted.

5. On his own evidence, two out of the three properties in issue in this case are investment properties.  If sold, CGT will be payable.  The imposition of any such liability is not a good reason for not selling them in order to pay out the wife.  The appellant’s reticence in selling the two investment properties points more to his unwillingness to comply with my orders than it points to the appeal being rendered nugatory unless a stay is ordered. 

6. I reject the appellant’s contention that the appeal will be rendered nugatory unless a stay is granted. 

7. I now turn to an assessment of the strengths of the grounds of appeal.  The 17 grounds fell, in broad terms, into four main categories and in several instances they overlapped.  The four main categories were grievances expressed by the appellant about –

   a)my treatment of deficiencies in his financial disclosure;

   b)my findings of facts concerning interests to be altered in the property of the parties;

   c)my findings of fact about the nature and the duration of the relationship; and

   d)my findings concerning the respondent’s homemaker’s contributions.

8. Despite the prolix grounds of appeal, it became necessary to address each because success on any one could upend the whole of my orders. 

9. Ground 1 asserts, in terms, a denial of procedural fairness.  I take exception to the author of the notice of appeal in recording in a court document that I as the trial judge misled the appellant’s counsel by failing to alert the appellant that his veracity and creditability as a witness was in issue.  Every witness who enters the witness box to address contentious factual matters is at risk that the witness’s evidence may not be accepted.  I do not accept that a trial judge is under a legal obligation to give advance warning to a witness signposting a conclusion about witness veracity.  For that matter, deficiencies in the witness’s evidence may only appear to the judge while judgment is under consideration when the decision is reserved. 

10. Further, twice while my decision was reserved, my associate, at my direction, communicated with the parties by email about matters that were troubling me.  Both related to deficiencies in the evidence about certain aspects of valuations.  Further, whether or not one party complains about deficiencies in disclosure is beside the point as the authorities I surveyed represented the state of the law which the legal practitioners in this case should be taken to know. 

11. Ground 1 is devoid of merit.

12. Ground 2 invokes a debate about semantics, namely my use of the word “estimates”.  In the absence of proper evidence about valuations, a party’s assessment of value could never raise higher than an estimate, even if that estimate was agreed.  Ground 2 is devoid of merit.

13. Ground 3 raises a complaint that I found the total value of net assets to be nearer $5.3 million than $4.3 million.  The appellant’s ground of appeal on point (nearer a submission than a proper ground of appeal) stated that the parties agreed on the lesser figure and no cross-examination was directed to the issue.  The appellant submitted that discovery about historical valuations occupied thousands of pages.  That may or may not be correct, although as I only saw the evidence adduced before me I am unable to say.  Cross-examination on all aspects of the parties’ property positions was poor.  It ill-behoves the appellant to criticise the first instance judgment when next to no cross-examination emerged as to valuations and submissions on point scarcely touched upon the issue.  Ground 3 is without merit.  It must have been apparent when preparing the case for trial that if matters of fact were agreed, as the appellant says was the situation in respect of the total value of the assets, it was desirable to tell the trial judge in opening or in final written submissions that based on verifiable valuation evidence, agreement had been reached on the precise monetary amounts to be attributed to –

    a)the amount by way of valuation of each parcel land; and

    b)the date on which the valuation was attributed.

14. No such agreed position was given in this case.  Instead the appellant by ground 3 contended that by reason of there being no complaint of substance as to disclosure, there being thousands of pages of discovery, amounts said to be agreed had a proper, forensically maintainable foundation. 

15. I disagree.  Ground 3 was without merit.

16. Ground 4 largely is a repeat of ground 3.  I reject error.

17. Ground 5 is an omnibus complaint that I erred in finding, largely throughout my reasons, that the appellant failed to provide full and frank disclosure.  Contracts of purchase of parcels of real estate were not put into evidence, the partnership arrangement was not put into evidence, details of trusts were also not put into evidence.  If matters were agreed rendering the adducing of evidence on a particular issue otiose, then the parties should have filed an agreed statement of facts.  No such document was put in evidence.  The failure to provide documentary evidence infected (to use the word in ground 5) the manner in which the appellant at trial adduced his proofs in this case.  It must not be forgotten that the appellant was contending that the wife was entitled to no more than 5% of the value of the property in this case.  Unless and until the value of all property had been put in evidence by the person best able to adduce that evidence, here, the appellant, any discussion of a percentage of division was largely meaningless.  As I said in my reasons, the appellant’s documentary evidence was extremely poor.  Ground 5 is devoid of merit.

1. Ground 6 fell into a similar category.  While I accept that the relevant date of the enquiry under s 79 is the date of the trial, the history of contributions is critical.  The appellant’s evidence of that history was very poor.  Ground 6 is devoid of merit.

2. Ground 7 is so vague as to be meaningless.  In an unparticularised way the appellant asserts that I failed to engage with his case.  To the contrary – I did.  I simply rejected it.  Ground 7 is devoid of merit.

3. Ground 8 harks back to a point the appellant made early in the case.  It was the need, on his version of events, to assess the assets globally.  I rejected that contention, exposing my reasoning for so doing.  No error was thereby committed.  In any event the High Court has held that there is no special preferred approach to be adopted.  The assertion in ground 8 that I “failed to properly make findings upon the evidence and to weigh and assess contributions thereby causing error” is so vague as to be embarrassing.  Ground 8 is devoid of merit.

4. Ground 9 contained an assertion that I somehow conflated s 79(4) with factors under s 75(2) thereby rendering it impossible to discern my path of reasoning.  I reject both submissions.  It must not be forgotten that in assessing reasons for judgment an appeal court does not rake over the reasons with an eye keenly attuned to the existence of error.  The appellant did not particularise the so-called conflating.  In the absence of those details the ground is meaningless.  I do not accept that any conflating in the manner alleged occurred.  Ground 9 is devoid of merit.

5. Ground 10 was an equally unparticularised contention that inadequate reasons were given to support the finding “in an appellate sense” (whatever that meant) of a 40% assessment of the wife’s contribution.  I disagree.  The reasons, read fairly and not with an eye keenly attuned to the existence of error, disclose the path of reasoning.  It was perfectly legitimate.  Ground 10 is devoid of merit. 

6. Ground 11 asserts the existence of error in the finding that no evidence was given by the appellant of valuations “when such matters were agreed”.  If they were agreed, the appellant’s counsel did not open by saying one or more valuations were agreed.  If they were agreed, in final written submissions the appellant’s counsel did not say as much.  If those amounts were in fact agreed, no agreed statement of facts was filed.  To the contrary, the state of valuation evidence was so poor that I had my associates contact the parties twice about aspects of the evidence concerning the properties.  It was not my job to prepare for the case in a manner that best advanced the appellant’s case.  Ground 11 is devoid of merit.

7. Ground 12 is an attack on a fact as found by me.  There is nothing in the ground.  Ground 12 is devoid of merit. 

8. Ground 13 is a fact-specific challenge to a finding of fact I made at trial.  Challenges to findings of fact present particular obstacles to an appellant.  On this application for a stay I am not willing to entertain the likelihood that my own finding of fact on the issue raised in ground 13 is wrong.  Ground 13 is devoid of merit.

9. Ground 14 contained another assertion of a failure on my part “as to the weighing and assessment of the contributions of the parties”.  Dressed in the way ground 14 reads, the ground is unparticularised and scarcely comprehensible.  The reasons for judgment following the trial were very detailed.  They carefully addressed the parties’ respective financial and non-financial contributions.  This ground smacks of a grievance about the result reached rather than the basis for the result.  Unparticularised, generic, confusingly structured grounds of appeal such as that in ground 14 have no place in appeal courts.   This ground is near meaningless.  It is devoid of merit.

10. Ground 15 is another fact-specific assault on a factual finding I made, as it happened, a critically important factual finding, namely the finding about the duration of the relationship.  For the very detailed reasons I gave in my reasons following the trial, I examined each temporal epoch of the relationship of the parties, weighing and assessing the competing versions of events.  It is important to emphasise – yet again – that on important periods of time of the relationship the appellant put forward no evidence at all.  It ill-behoves him now on this application for a stay for him to say that I made some factual error when in truth the appellant laid no factual foundation for the factual finding that was made against the appellant, largely on account of the fact that he gave no evidence about the relevant epoch.  I reject out of hand the appellant’s challenges to the factual findings I made concerning the duration of the relationship.  As mentioned above, a challenge to a finding of fact, especially one where the overall veracity and believability of a witness is involved presents near insuperable obstacles for an appellant.  On this leave application I am not willing to say my findings were wrong.  To the contrary, unless and until an appeal court holds otherwise, my findings were correct.  Ground 15 is devoid of merit.

11. Ground 16 raises the same issue but cast from the appellant’s perspective of alleged error by accepting the wife’s version of events.  I accepted the wife’s version of events because it was more probable than not, according to the requisite standard of proof.  Ground 16 will call for an examination of the factual finding that was properly open to me.  Ground 16 is devoid of merit.

12. Ground 17 raised a peculiar issue about some alleged failure to determine costs.  The order about which the appellant complains was not made by me.  Costs have not yet been determined as the appellant has until 20 July 2020 to file submissions on costs.  Those submissions must address all questions of costs, including reserved costs.  It is a most unusual and in my view erroneous ground of appeal that the appellant raises by contending that I failed to make all orders as to costs in circumstances when the time within which the appellant must make submissions has not yet even expired.  Self-evidently, this ground is devoid of merit.

13. I am proceeding on the basis that all costs issues must be determined once the appellant complies with orders previously made for him to file submissions on costs.  The deadline for him to do so expires Monday 20 July 2020.  If the appellant files written submissions as previously ordered, I shall consider them and hand down my judgment on costs on Thursday 23 July of this year.  If the appellant elects not to file any submissions on costs in accordance with orders previously made, I shall nevertheless determine the question of costs.  The wife has complied with orders previously made by filing submissions on costs.  It follows from those comments that I refuse the separate application made by the appellant in paragraph 4 of his application in a case sealed 9 July 2020. 

Conclusion

1. The applications for relief in paragraphs 3 and 4 of the appellant’s application in a case are refused.  I dismiss the appellant’s application for a stay.  Costs issues will be determined by me on 23 July 2020.  The appellant always has the right to approach the Full Court to grant him the stay he seeks.

I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 17 July 2020.

Associate: 

Date:  22 July 2020