FAMILY COURT OF AUSTRALIA

SIMPSON & SIMPSON (NO 2)	[2014] FamCA 1169	

FAMILY LAW – PROPERTY – Application for Stay of Orders pending the determination of an appeal against those Orders 	

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

The Commissioner of Taxation of the Commonwealth of Australia v Myer Emporium Limited [No. 1] (1986) 160 CLR 220 at 222
Alexander v Cambridge Credit Corporation (1985) 2 NSW LR 685
Jennings Construction Limited v Burgundy Royale Investments Pty Limited (1986) 161 CLR 681 
Trahn & Long (No.2) [2008] FamCAFC 194 at [38]
Vadisanis & Vadisanis [2013] FamCAFC 90

APPLICANT:	Mr Simpson	

RESPONDENT:	Ms Simpson	

FILE NUMBER:	BRC	4117		of	2014	

DATE DELIVERED:	19 December 2014	

PLACE DELIVERED:	Brisbane	

PLACE HEARD:	Brisbane	

JUDGMENT OF:	Forrest J	

HEARING DATE:	19 December 2014	

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr Richardson of Senior Counsel	

SOLICITOR FOR THE APPLICANT:	Hartley Healy Lawyers	

COUNSEL FOR THE RESPONDENT:	Mr Looney of Queen’s Counsel	

SOLICiTOR FOR THE RESPONDENT:	Rice Naughton	

Orders
IT IS ORDERED 

(1)	The Application in a Case filed by the husband on 18 December 2014 is dismissed. 

(2)	The Applicant husband shall pay the Respondent wife’s costs of and incidental to the Application in a Case dismissed by paragraph 1 hereof, as may be agreed or as assessed pursuant to the Family Law Rules 2004 (Cth) on a party and party basis. 

IT IS NOTED that publication of this judgment by this Court under the pseudonym Simpson & Simpson (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Family Court of Australia at Brisbane	

FILE NUMBER: BRC 4117 of 2014

Mr Simpson 	
Applicant

And

Ms Simpson 	
Respondent

REASONS FOR JUDGMENT
1.	On Monday 15 December 2014 I delivered judgment in respect of competing applications for various interim orders sought by the Applicant and the Respondent in this matter that I had heard on Tuesday 8 December 2014. 

2.	Yesterday, 18 December 2014, the Applicant husband filed a Notice of Appeal against Orders 5, 6 and 7 of the Orders I made on Monday. At the same time, he filed an Application in a Case seeking an order that Orders 5, 6 and 7 be stayed until the determination of his appeal against those Orders. 

3.	The wife opposes the stay application and asks that I dismiss it. 

4.	I heard the application this morning, giving Senior Counsel for the Applicant husband leave to appear at the hearing by telephone.  Queen’s Counsel for the Respondent wife appeared at the hearing and I was assisted by the provision of written submissions from both barristers. 

The Orders appealed against and sought to be stayed 

5.	Orders 5, 6 and 7 of the Orders of Monday 15 December 2014 are as follows:

(5)	That pursuant to s 80(1)(h) of the Family Law Act 1975 (Cth), on or before Friday 6 February 2015, the Husband or an entity he controls, pay directly to the Rice Naughton Family Law Trust Account the sum of $500,000 to be used as the wife sees fit pending the final hearing of all matters in dispute between the parties with such sum being hereby categorised as a partial distribution of property to the Wife. 
(6)	That from midday on Saturday 20 December 2014 until further Order, the Wife shall have the sole right to use and occupy the real property situated at [B Street, C Town] in the State of Queensland to the exclusion of the Husband. 
(7)	That from midday on Saturday 20 December 2014 until further Order, the Husband be restrained, and an injunction is issued restraining the Husband from coming within 100 metres of the Wife or her place of residence save for the purposes of collecting and/or delivering the children at the commencement and conclusion of time that they spend with him, and specifically, this injunction restrains the Husband from going onto the real properties situated at [1 and 2 B Street, C Town] in the State of  Queensland, save for the purposes of collecting and/or delivering the children from and to the Wife’s residence. 
The Principles by which this application is to be determined

6.	There was no dispute as to the principles by which the Court is to determine an application for a stay of orders pending the determination of an appeal against those orders. 

7.	The determination of the application is discretionary in nature but there are a number of principles to be applied and matters to be taken into account. These include:

•	An appellant has no automatic right to a stay of orders appealed against and has the onus of establishing a proper basis for the stay;
•	“Special” or “exceptional circumstances” are not required to be demonstrated;
•	The litigant who has obtained a judgment in her favour should not be deprived of “the fruits of the victory without good cause”;
•	The bona fides or otherwise of the applicant for the stay is relevant;
•	The timeliness of the application for the stay is relevant;
•	The amount of time that will elapse before the appeal can be heard is relevant;
•	Some preliminary assessment of the strength of the proposed appeal is required and the Court must be satisfied that the applicant for the stay has, at least, an arguable case on the appeal;
•	A stay may be granted on terms and consideration of this matter may involve weighing the balance of convenience and the competing rights of the parties;
•	The Court should weigh the risk that an appeal may be rendered nugatory if a stay is not granted. This has been described as being “a substantial factor” in the discretionary exercise.

The Applicant’s case

An Arguable Case

8.	Senior Counsel for the Applicant husband pointed out in his written submissions that the appeal is against interlocutory orders and, hence, leave to appeal is required with his client faced with the burden of demonstrating an error of principle and/or a substantial injustice before leave can be granted, or that the appeal raises an issue of general importance. Senior Counsel, of course, contended that those tests will be satisfied. 

9.	It is clearly not for me to express a view as to whether I accept that contention. I consider it sufficient to observe that in this case, Queen’s Counsel for the Respondent wife did not submit that the Husband’s appeal has no merit and is not arguable and having read what must be regarded as draft Grounds of Appeal, given that leave to appeal is first required, and having considered Senior Counsel’s written submissions, I accept that, on its face, the Application for Leave and any substantive appeal is arguable. 

Time that will Lapse before the Appeal can be heard and the Applicant’s bona fides 

10.	 For the Applicant husband reliance was placed on evidence from a solicitor in the employ of the husband’s solicitors who deposed to information she was given from the Regional Appeals Registrar by phone yesterday morning. She deposed to being told that it may be possible for the appeal to be heard in the February 2015 Full Court sitting in Brisbane if (a) effort was made by all parties to prepare for the Appeal, and (b) the Full Court deemed the appeal to be sufficiently urgent to displace other matters already listed in those sittings. She also deposed to being told that otherwise the matter would be listed in the April 2015 Full Court sitting in Brisbane. 

11.	Senior Counsel for the husband also referred to the husband’s affidavit filed 18 December 2014 in which he promised to seek an order for expedition of the appeal should a stay be granted and to otherwise diligently prosecute his application and appeal. 

12.	Satisfied of the Applicant husband’s bona fides, I have regard to the evidence that it might be possible that the appeal will be heard in late February 2015 (just over two months from now) at the earliest but with a greater likelihood that it will be heard in mid-April 2015 (four months from now). Senior Counsel for the husband submits that is not a long time relative to most appeals. 

13.	For the wife it was submitted that this lapse of time must nevertheless be seen in the context of the circumstances where the parties have been living in homes that are side-by-side since September this year, circumstances that were a major factor in the determination of the exercise of the discretion to grant the wife exclusive use and occupation of the property at number 27 and grant the 100 metre restraint against the husband in the first place. He submitted that the grant of a stay until either late February or mid-April 2015 would either nearly double or more than double that time. 

14.	Consideration of those matters just outlined, including the evidence that in my view supports a conclusion that there is a greater probability that the application for leave to appeal might not be heard until mid-April, and of the reasons why I granted the sole use and exclusive occupation order and the restraining order in favour of the wife earlier this week, in my view, weighs against granting the stay the Applicant seeks in respect of those particular Orders. 

Weighing of the risk that the appeal will be rendered nugatory if the stay is not granted

15.	This was the point around which most disagreement emerged on the hearing of this application. 

16.	Senior Counsel for the husband submitted in his written Summary of Argument that if the exclusive use order was satisfied “it would render the appeal nugatory or substantially nugatory.” He submitted that the Applicant husband will otherwise be required to immediately vacate the home in which he has resided since September 2014. He submitted that the Applicant will “be required to commit to rental of premises” and “the wife and children will be installed to [B Street]”.  He submitted that the “latter event will impact so resoundingly on any future exercise of discretion as to irreparably damage his prospects of recovering the subject matter of the appeal. This would occasion irrecoverable injustice to the applicant”. 

17.	In his oral submissions, Senior Counsel for the Applicant said further in this respect that if the exclusive occupation and restraining Orders are not stayed: 

it involves an outcome to [the Applicant] that is likely to undermine his ability to recover the subject matter of the action …. and those factors would speak so forcefully against any success on his part [on a re-exercise of the discretion] that…. is a weighty matter  and is of the ilk that is ordinarily described in these applications as driving towards a position where his application … having the effect of rendering his application nugatory.

18.	Queen’s Counsel for the wife made the contrary submission that the Applicant’s appeal would not be rendered nugatory by the refusal to grant the stay sought. He made the submission that what is required for an appeal to be considered as being rendered nugatory is “something more than a mere change of circumstances that might influence an exercise of discretion.” He submitted that if the wife and children are in occupation at the time of the appeal, and the husband is successful on appeal he would still have the benefit of the re-exercise of the discretion and, that whilst the wife’s occupation would be a matter to be considered as part of that discretionary exercise, it could not be said to be so likely to be determinative of that re-exercise that refusing a stay now is likely to render the husband’s appeal nugatory. 

19.	I accept that submission and do not consider occupation of the property by the wife and children pursuant to my previous Order pending the appeal to be so prospectively determinative of the outcome of a re-exercise of the discretion on any successful appeal that it would render such appeal nugatory.  I consider this weighs heavily against granting the stay. 

Other matters going to “balance of convenience” considerations 

20.	In the Application for Leave to Appeal/Notice of Appeal filed, the Applicant has set out facts relied upon in support of the Application for Leave to Appeal. Those include the observation that the Order sought to be stayed requires the Applicant to vacate number 27 by 5 days before Christmas when he has no other immediate accommodation to move into. It is also asserted that he will have to vacate the property during time that the children are with him pursuant to existing parenting Orders. None of that is deposed to by the Applicant husband in any evidence filed in support of the Application for the Stay, but the husband’s prior evidence that he desired to continue living in the same town as the mother and the children was before the Court when the competing applications were heard last week and determined earlier this week. 

21.	 Whilst I accept the Applicant’s expressed desire to live in the same town as the wife and children is, without being tested on cross-examination, on its face bona fide and not unreasonable, I am very mindful of the undisputed fact that the applicant has the immediate use of the valuable former family home in D Town to reside in, and to have the children spend time with him in, pending its sale and whilst he finds alternative suitable accommodation in the area where he would like to live. Further, I am not persuaded that the applicant does not have the financial capacity to afford alternative, suitable short-term accommodation in his area of choice if he does not want to stay in the D Town property pending its sale or the determination of his appeal if it has not sold beforehand. 

22.	Consideration of these matters adds further weight, in my view, against granting the stay sought by the Applicant. 

23.	Ultimately, I am satisfied that the exercise of discretion should be against staying Orders 6 and 7 of my previous Orders of 15 December 2014 and I will not do so. 

The Question of staying Order 5

24.	Senior Counsel for the Applicant pointed to paragraph 41 of my Reasons for Judgment delivered on Monday of this week where I said:

I expect [the $500,000] will be sourced from the equity the parties have in the [D Town] property, either by way of loan borrowed prior to the sale of the property or from the proceeds of sale of the property.

25.	He submitted that given that reasoning on my part the stay of Order 5 requiring the Applicant to pay the wife $500,000 by way of partial property adjustment as a means of interim litigation costs funding should be granted, conditioned on it being in place only until the parties either secure borrowings of that amount against the equity in the D Town property or until the amount is sourced from the proceeds of sale of that property. 

26.	There was evidence before me when I heard and determined the competing applications last week that a bank valuation of $3.7 million for that property had been recently obtained. It was agreed that the property, registered in the joint names of the parties, was unencumbered. I was not persuaded that the husband did not have the capacity to borrow against that property and that he would only be able to source funds of the quantum the wife was seeking on the sale of that property. Before me in evidence now on this application, is a letter from the wife’s solicitors to the husband in which it is made absolutely clear to him that she, as joint registered proprietor of the D Town property, will do all acts and things necessary to facilitate borrowing against that property as is necessary to give effect to the Order. 

27.	The Order requires payment by 6 February 2015. When it was made, that was just under two calendar months away. Today, that is still over seven weeks away. Not even for this application, does the applicant adduce evidence that he cannot borrow $500,000, or any portion of that amount, against the D Town property. Nor does he adduce evidence that other items of property, about the existence of which there was no dispute last week, cannot be sold during that seven week period to provide funds to contribute towards making up the ordered sum, if necessary. 

28.	I am not persuaded to stay Order 5 with or without conditions. 

29.	I dismiss the Application in a Case filed 18 December 2014. 

Costs  

30.	At the conclusion of the hearing this morning, I heard submissions from both senior barristers in respect of costs. 

31.	Queen’s Counsel for the wife submitted that should the application for the stay be dismissed that the Applicant husband should be ordered to pay the wife’s costs of and incidental to the application. Effectively, he submitted that such an order would be “just” and “justified”, as required by s.117(2) of the FLA, having particular regard to the financial circumstances of the parties and the fact that the Applicant would have been wholly unsuccessful in the application, matters within the list of matters to be considered pursuant to s.117(2A) of the FLA. 

32.	Senior Counsel for the Applicant submitted that each party’s costs should be reserved until the determination of the Appeal as success or otherwise on the Appeal would be a relevant fact in determining the “justice” or otherwise of a costs order in favour of, or against either party. 

33.	In response, Queen’s Counsel for the wife submitted that determination of a stay application stands on its own merits and should a party be wholly successful in resisting an application for a stay pending an appeal then success or failure on the appeal should not be determinative of the costs application in respect of the stay application. 

34.	I accept the submission that costs consequences of being wholly unsuccessful on an application for a stay of orders pending an appeal against those orders should not be avoided simply by ultimate success on the appeal, particularly in circumstances where the stay application has not been unsuccessful because of a view that the appeal has no prospects but rather for other considerations unrelated to prospects of success of the appeal. 

35.	In circumstances where I am satisfied that the Applicant husband’s income, assets and financial resources are such that he has the capacity to pay the wife’s costs without it causing him severe financial hardship and where, as I have determined, he has been wholly unsuccessful on the stay application for reasons other than the issue of prospects of success of his appeal, and where the wife has no immediate capacity to pay her legal costs as actually incurred, I am of the opinion that a costs order as sought by the wife is justified and that an order that the Applicant pay her costs of and incidental to the application as agreed or as assessed pursuant to the Rules on a party and party basis is a just order.  

36.	I make the Orders set out at the commencement of these reasons. 

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 19 December 2014.

Associate:  

Date:  19 December 2014