Zao & Lee (No 2)
[2023] FedCFamC1F 855
•12 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Zao & Lee (No 2) [2023] FedCFamC1F 855
File number(s): SYC 8556 of 2015 Judgment of: ALTOBELLI J Date of judgment: 12 October 2023 Catchwords: FAMILY LAW – STAY – Where the wife has filed a Notice of Appeal and argues error of fact – Where the appeal would be rendered nugatory if the stay was not granted – Orders stayed pending determination of the appeal – Order made for 30 per cent of the net sale proceeds of the former matrimonial home to be released to the husband by way of partial property distribution. Legislation cited: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 13.12 Cases cited: Aldridge & Keaton [2009] FamCAFC 106
Gronow & Gronow (1979) 144 CLR 513; [1979] HCA 63
Zao & Lee [2023] FedCFamC1F 675
Division: Division 1 First Instance Number of paragraphs: 24 Date of hearing: 6 October 2023 Place: Sydney Counsel for the Applicant: Mr Fermanis Solicitor for the Applicant: Gramelis Attorneys Solicitor for the Respondent: Westlink Legal Pty Ltd ORDERS
SYC 8556 of 2015 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR LEE
Applicant
AND: MS ZAO
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
12 OCTOBER 2023
THE COURT ORDERS THAT:
1.Pursuant to Rule 13.12 of the Federal Circuit and Family Court of Australia (Family Law) Rules2021, Orders 1(c), 2 and 3 of the orders made by the Honourable Justice Altobelli on 16 August 2023 (“the Orders”) be stayed pending the determination of the appeal bearing the Court File Number NAA251/2023 (“the Appeal”).
2.In lieu of Order 1(c) of the Orders:
(a)An amount equivalent to 30 per cent of the net sale proceeds of the H Street property (after deduction of the amounts in Orders 1(a) and (b) of the Orders) be released to the Respondent husband upon settlement of the sale by way of partial property distribution; and
(b)The balance of the net sale proceeds be held in the Trust Account or a Controlled Monies Account of CC Lawyers on trust for the parties pending the determination of the Appeal.
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 Zao & Lee has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
These reasons for judgment explain the orders that the Court has made pending an appeal in the substantive matter to the Full Court.
BACKGROUND
On 16 August 2023, after hearing contested proceedings between the Applicant wife (“the wife”) and the Respondent husband (“the husband”) in relation to alteration of property interests over a period of four days, the Court made the following orders:
1. Within 60 days, the parties are to do all acts and things to sell the property located at [H Street], [Suburb E] NSW being the whole of the land contained in Certificate of Title Folio Identifier […] (“the [H Street] property”). Upon the sale of the [H Street] property, the proceeds of sale are to be disbursed in the following manner:
(a) To pay the ancillary costs of sale;
(b) To discharge the mortgage; and
(c) To pay the balance to the Applicant husband (“the husband”).
2. Within 28 days of settlement of the sale, the Respondent wife (“the wife”) is to pay the husband a lump sum (“the lump sum”) equivalent to any shortfall between the husband receiving all of the net sale proceeds plus all assets in his possession and control, and 50% of the net assets of the parties as found by the Court (having regard to the actual sale price of the said property), failing which interest will accrue on the said sum in accordance with the Family Law Act 1975 (Cth) (“the Act”), its Rules and Regulations, calculated from 28 days from the date of settlement aforesaid.
3. In the event that the wife is not able to meet the lump sum payment of any shortfall to the husband in accordance with Order 2, then the wife shall forthwith take all necessary steps and execute all documents to cause the property at [F Street], [Suburb E] NSW to be sold for the best price achievable, and to use the net proceeds of sale to pay the husband the lump sum together with any interest to which he is entitled under these orders.
4. As between the parties and subject to the above orders herein, the husband and the wife will each respectively retain all interest in and entitlements to all of their property and entitlements in their possession, power or control, including their superannuation, as at the date of these orders.
5. Both parties shall promptly do all acts and things and execute all documents, authorities and writing as are necessary to give effect to all or any of the provisions of the paragraphs comprising these orders within the timeframes specified.
6. In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders then the Registrar of the Court be appointed pursuant to s 106A of the Act to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
7. Leave is granted to the parties to apply to relist the proceedings on 14 days’ notice to deal with any interpretation, implementation and/or enforcement of these orders.
The accompanying reasons for judgment explained why I made those orders. The judgment was reported as Zao & Lee [2023] FedCFamC1F 675 (“my reasons for judgment”).
One of the features of the substantive hearing was the nondisclosure by both parties in relation to their financial affairs. That feature continues even in the present application for a stay. For example, it was conceded by counsel for the wife and solicitor for the husband that neither party had placed evidence before the Court at the substantive hearing about the arrears of a mortgage over the jointly owned former family home at H Street (“the H Street property”). It was also conceded by counsel for the wife that, without notice to either the husband or to the Court, the wife had sold one of the properties referred to in the 16 August 2023 orders, namely the property in her name only at F Street Suburb E (“the F Street property”). Subsequently the wife caused that contract to be rescinded and compensated the purchaser.
On 12 September 2023 the wife filed a Notice of Appeal on the following grounds:
1. The trial judge erred in finding that the addbacks attributable to the Appellant totalled the sum of $636,712 instead of the sum of $232,782:
1.1. It was not open to the trial judge to conclude on the evidence or to find that the Court ought to addback the sum of $636,712;
1.2. In making the finding that the sum of $636,712 ought to be added back, the trial judge "doubledipped" in the amount of $403,930;
1.3. The error of fact is material in circumstances where the error accounts for approximately 16.78% of the pool found by the trial judge;
1.4. The trial judge failed to give adequate reasons in finding that the sum of $636,712 ought to be added back.
2. The trial judge erred in that he failed to make any adjustment pursuant to section 79(4)(d) to (g) of the Family Law Act 1975 (Cth) (the Act) with respect to the adverse findings regarding the Respondent's lack of disclosure and that the Court could not accept the Respondent's evidence about his assets and resources in Australia and [Country D] (the Respondent's Lack of Disclosure):
2.1 The trial judge failed to take into consideration for the purposes of section 75(2)(0) of the Act and make any adjustments in favour of the Appellant by reason of the finding of the Respondent's Lack of Disclosure; and
2.2. The trial judge erred in finding that the Appellant did not seek any adjustment under section 75(2) of the Act by reason of the finding of the Respondent's Lack of Disclosure.
3. The trial judge was in error in assessing the respective contributions of the parties at 50% each in respect of the contributions pursuant to section 79(4)(a) to (c) of the Act:
3.1. The trial judge failed to give proper weight to the contributions, and in particular the initial contributions, of the Appellant; and
3.2. The trial judge gave undue weight to the contributions of the Respondent.
On 29 September 2023 the wife filed an Application in a Proceeding in which she sought the following orders:
1. This Application be short-listed.
2. Any Rule not complied with be dispensed with.
3. An ORDER that pursuant to Rule 13.12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, Orders 1(c), 2 and 3 of the Orders made by the Honourable Justice Altobelli on 16 August 2023 ("the Orders") be stayed pending the determination of the appeal bearing the Court File Number NAA251/2023 ("the Appeal").
4. An ORDER that in lieu of Order 1(c) of the Orders:
a. an amount equivalent to 30% of the net sale proceeds of the [H Street] property (after deduction of the amounts in Orders 1 (a) and (b) of the Orders) be released to the Husband upon settlement of the sale by way of partial property distribution; and
b. the balance of the net sale proceeds to be held in the Trust Account or a Controlled Money Account of the solicitor for the Wife on trust for the parties pending the determination of the Appeal.
5. The Husband pay the Wife's costs of and incidental to this Application in a Proceeding.
6. In the alternative to Order 5 hereof, the parties' costs of this Application be reserved pending the determination of the Appeal.
(As per the original)
The application was supported by the wife’s affidavit sworn 26 September 2023.
On 5 October 2023 the husband filed a Response to the Application in a Proceeding in which he sought the following orders:
1 agreed
2 agreed
3. Not agreed to stay lc of the orders made by Honourable Justice Altobelli on 16 August 2023
4. Not agreed as to 4a of the oders sought by the applicant the percentage of net proceeds sought by the applicant;
Not agreed to 4b of the order sought by the resondent, but agree to have the remainder of the money be deposited with the the trust account of the conveyancer of the choice, i.e. , [CC Lawyers] ([DD Street], [Suburb EE], NSW). Both the applicant and respondent's lawyer to instruct the sales agent and the conveyancer for the sales of the property at [H Street], [Suburb E], NSW.
5. The wife pay the Hustand the cost incidental to this application
6. Not Agreed. Each party bears own cost.
(As per the original)
His response was supported by his affidavit sworn 3 October 2023 and filed 5 October 2023.
The matter came before me for hearing on 6 October 2023. The wife was represented by her counsel, Mr Fermanis. The husband was represented by his solicitor, Ms Zhang. Each made submissions.
THE EVIDENCE BEFORE THE COURT
In support of her case, the wife relies on the following documents:
(a)Application in a Proceeding filed 29 September 2023;
(b)Her affidavit filed 29 September 2023; and
(c)Case Outline filed 5 October 2023.
In support of his case, the husband relies on the following documents:
(a)Response to an Application in a Proceeding filed 5 October 2023;
(b)His affidavit filed 5 October 2023; and
(c)Case Outline filed 5 October 2023.
THE APPLICABLE LAW
Counsel for the wife correctly identified that an application for a stay pending an appeal may be made pursuant to r 13.12(2) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. Counsel then referred to the Full Court decisions in Aldridge & Keaton [2009] FamCAFC 106 and Gronow & Gronow (1979) 144 CLR 513 in paragraphs 6–9 of his Case Outline as follows:
6. In Aldridge & Keaton (Stay Appeal) [2009] FamCAFC 106 (“Aldridge”), the Full Court noted at [17] that an appeal from parenting orders is subject to well established principles on the limits on interference by an appellate court with a discretionary judgment: House v The King (1936) 55 CLR 499. A different view by an appellate court, only on matters of weight, by no means justifies a reversal of a decision of the primary judge (Gronow v Gronow [1979] HCA 63; (1979) 144 CLR 513 at 519).
7. The Full Court in Aldridge (supra) set out the following relevant principles relating to an application for a stay of property orders:
a. 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;
b. A person who has obtained a judgment is entitled to the benefit of that judgment;
c. A person who has obtained a judgment is entitled to presume the judgment is correct;
d. The mere filing of an appeal is insufficient to grant a stay;
e. The bona fides of the applicant;
f. 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;
g. 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;
h. Some preliminary assessment of the strength of the proposed appeal - whether the appellant has an arguable case;
i. The period of time in which the appeal can be heard and whether existing satisfactory arrangements may support the granting of the stay for a short period of time; and
8. Stephen J in Gronow v Gronow (1979) 144 CLR 513 at pp.519-520 said:
The constant emphasis of the cases is that before reversal an appellate court must be well satisfied that the primary judge was plainly wrong, his decision being no proper exercise of his judicial discretion. While authority teaches that error in the proper weight to be given to particular matters may justify reversal on appeal, it is also well established that it is never enough that an appellate court, left to itself, would have arrived at a different conclusion. When no error of law or mistake of fact is present, to arrive at a different conclusion which does not of itself justify reversal can be due to little else but a difference of view as to weight: it follows that disagreement only on matters of weight by no means necessarily justifies a reversal of the trial judge. Because of this and because the assessment of weight is particularly liable to be affected by seeing and hearing the parties, which only the trial judge can do, an appellate court should be slow to overturn a primary judge's discretionary decision on grounds which only involve conflicting assessments of matters of weight. In the present case it should not have done so at all.
9. In Gronow, Aickin J said (at pp.537-538) (Mason and Wilson JJ agreeing at p.526):
Statements of the general principles to be applied by an appellate court when asked to set aside an order made in the exercise of a judicial discretion generally include a reference to the trial judge giving inadequate weight to some factors and excessive weight to others. It is however a mistake to suppose that a conclusion that the trial judge has given inadequate or excessive weight to some factors is in itself a sufficient basis for an appellate court to substitute its own discretion for that of the trial judge. As Kitto J. said in Lovell v. Lovell (1950) 81 CLR, at p 533:
“The proposition that the appeal court will consider whether 'no sufficient weight' has been given to relevant considerations is not inconsistent with the principle that the appeal court does not deal with the appeal as if it were exercising the original jurisdiction; even if it considers that insufficient weight has been given to some relevant consideration, it will still not substitute its judgment for that of the primary judge unless it comes clearly to the conclusion for that reason that the discretion has been exercised wrongfully.”
It is clear that that test will not be satisfied merely by reason that the appellate court, considering the matter de novo, would itself have arrived at a different result. The fact that a decision on custody depends upon the exercise of a judicial discretion recognizes that in many cases different minds may arrive at different conclusions.
The advantage which a trial judge has of seeing and hearing the witnesses is of particular importance in matters of custody where so much depends on an evaluation of the characters and personalities of the parents, and their attitudes, not only to the child, but also to each other. The attribution of comparative weight or importance to various factors will generally be influenced by the impression formed on seeing and hearing each parent, and in appropriate cases the child or children involved. Some objective matters such, for example, as relative financial resources and adequacy of accommodation may stand in a different position but in the present case it is not suggested that any error occurred in that respect.
(As per the original)
The Court accepts and adopts the applicable law as outlined by counsel for the wife.
DISCUSSION
It became apparent in submissions that despite the orders sought by the husband, his opposition to the stay itself was only nominal, and his real concern was about the amount of the net sale proceeds of the H Street property (which he occupies) that would be released to him notwithstanding the appeal so that he could reaccommodate himself. The wife contended that it be 30 per cent, with the rest held in a trust or controlled monies account. In submissions, on behalf of the husband it was contended that it would be 56 per cent. It was agreed during submissions that whatever amount was ordered to be held in trust would in fact be held by CC Lawyers who were, apparently, jointly engaged in relation to the conveyancing on the sale.
Despite what seems to be the relatively limited ambit of the dispute between the parties the Court finds as follows:
·The wife is bona fide in bringing the appeal;
·The appeal would be rendered nugatory if a stay were not granted;
·The wife has an arguable case; and
·The granting of a stay may be for as short a period as six months, even if the hearing of the appeal is not expedited. Given that the husband is a 63 year old unemployed man whose first language is not English and who will be without accommodation on the sale of the former family home, there may be grounds to expedite the appeal. That is a matter for him, of course.
Counsel for the wife summarises the grounds of appeal at paragraph 10 of his Case Outline filed 5 October 2023:
10. In summary, the Grounds of Appeal articulate three errors upon which the Applicant relies to ground her appeal:
a. The findings with respect to certain add backs the effect of which amount to “double-dipping”;
b. The failure to make an adjustment under s 75(2)(o) having regard to the finding that Respondent’s failure to comply with his duty of full and frank disclosure; and
c. Matters of weight attributed to the parties’ respective contributions.
(As per the original)
The focus of counsel’s submission was the purported error in relation to the add backs which, he contended, amounted to 16.7 per cent of the pool, or about $400,000. Specifically, and referring to [60] of my reasons for judgment in the substantive hearing, the wife contends that items 30, 33, 34, 40A and 40B should not be included as an add back. Counsel submitted that double dipping had occurred. The grounds of appeal assert error of fact in this regard. The wife’s affidavit does not elucidate this assertion.
This Court, of course, concedes the possibility of error of fact, though not the probability. For example, the add backs at 40A and 40B are based on the wife’s own evidence and concessions made on her behalf ([51] of my reasons for judgment).
In determining how much of the sale proceeds of the H Street property should be released to the husband pending the appeal, the focus will be on the impact of the order made altering property interests if $400,000 less were on the balance sheet as found by the Court. This would reduce the net total assets including superannuation to $2,006,783.02. As implausible as this Court believes it to be, the Court nonetheless notes the wife’s contention that on appeal, and in the event that the Full Court re-exercises discretion, the husband should receive 48.6 per cent of the net sale proceeds, on the basis of an overall 70:30 split in her favour. Presumably the assumption was made that the H Street property would sell at $1,400,000, the agreed value at the hearing.
On a 70:30 split, the husband would receive assets approximating to $600,000 (despite, it would seem, the Court’s unchallenged finding that the husband contributed $680,000). Conversely, of course, the wife would receive approximately $1,400,000.
The Court found that the husband’s assets comprised his interest in the former family home in the H Street property (item 2 on the balance sheet), the property at item 3 ($6,000), the property at item 4 ($150,000), the motor vehicle at item 11 ($1,000), the add back at item 20 ($41,877), the add back at item 40 ($82,377.89), less loans owed to relatives ($93,791.84), in addition to superannuation he has in the amount of $6,000. Thus, his total net assets and financial resources excluding his interest in the home is $193,463.05. This is about $206,500 short of his entitlement on the wife’s contention.
If the H Street property sells for $1,400,000, the wife’s evidence is that the bank is owed about $723,000 as at 14 September 2023. The Court will assume for present purposes that the net sale proceeds will be $750,000 less than the sale price of $1,400,000, thus $650,000. In order for the husband to receive the 30 per cent the wife contends for, he would need to receive $206,500 out of the $650,000 or about 31 per cent. The order that she proposes, is, therefore, appropriate and strikes the balance between his entitlement to judgment, and the prejudice that the wife would suffer if the stay is not granted.
ORDERS
Pending the conclusion of the Notice of Appeal filed 12 September 2023, orders will be made in terms of Orders 1 and 2 of the minute of orders sought in the wife’s Case Outline filed 6 October 2023 save that the name of the agreed solicitor will be inserted in Order 2b. The costs of the present application will be reserved pending the determination of the appeal with the successful party having leave to relist before me on seven days’ notice.
I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 12 October 2023
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