AY v MAR [2006] QCA 436

SUPREME COURT OF QUEENSLAND CITATION: AY v MAR [2006] QCA 436 PARTIES: AY (applicant) v MAR (respondent) FILE NO/S: Appeal No 7093 of 2006 DC No 651 of 2006 DIVISION: Court of Appeal PROCEEDING: Application for Security for Costs ORIGINATING COURT: District Court at Brisbane DELIVERED ON: Orders delivered ex tempore on 16 October 2006 Reasons delivered on 3 November 2006 DELIVERED AT: Brisbane HEARING DATE: 16 October 2006 JUDGES: Jerrard JA, Mackenzie and McMurdo JJ Separate reasons for judgment of each member of the Court, each concurring as to the orders made CATCHWORDS: PROCEDURE – COSTS – SECURITY FOR COSTS – OTHER MATTERS – respondent purchased property and paid monthly mortgage instalments – respondent and applicant separated after living together in a de facto relationship for several years – applicant claimed 60 per cent of the value of the property – trial judge ordered the property be sold and the net proceeds divided between respondent and applicant – substantial damage to house caused significant decrease in the property value – trial judge amended the earlier order so that the applicant would receive full net proceeds of property sale – respondent applied for stay of execution of the amended order and appealed against amended order – respondent has not filed material for stay application or appeal – whether respondent should give security for costs for prosecution of appeal COUNSEL: R I Cameron, with L M Dollar, for the applicant No appearance for the respondent SOLICITORS: Baker O’Brien Toll for the applicant No appearance for the respondent -- 1 of 4 -- 2 [1] JERRARD JA: On 22 August 2006 MAR filed a notice of appeal against orders made in a judgment in the District Court delivered on 25 July 2006. On 18 September 2006 the respondent to that appeal, AY, filed an application for an order that MAR give security for the prosecution of the appeal by paying $7,500 into court within seven days of being ordered to do so; she also asked for an order that should MAR not pay that security within the time specified, then his appeal stand dismissed with costs and without further order.1 On 16 October 2006 MAR did not appear when AY’s application for security for her costs of the appeal was called on for hearing, and after proof of service of the application, this Court made the orders she sought, and undertook to publish reasons later. These are those reasons. [2] The parties lived together in a de facto relationship for seven years, from 1996 until 21 February 2003. They have an eight year old daughter who was born on 6 July 1998. MAR had fractured his right leg in an accident before the de facto relationship started, and received a compensation payment of approximately $38,000, and he put all of that towards buying a house at an address in Bundaberg (the house address), which he bought in September 1998, paying a substantial deposit of 58 per cent of the purchase price, namely $65,000. Since then he has paid monthly instalments to the mortgage. [3] After the parties separated AY brought proceedings in the District Court under Part 19 of the Property Law Act 1974 (Qld), asking for an adjustment of MAR's interest in that property; overall, she asked for 60 per cent of the value of the assets he held in his name. [4] In those proceedings MAR rejected AY’s claims, and submitted that she was entitled to nothing. The learned trial judge thought it only fair to record that MAR was very upset at the ending of the relationship, and at the fact that he was not getting to see his daughter. He was making monthly repayments on the outstanding debt on the property at the house address, and as at early June 2006 that debt was still $49,000. The property, with the house then on it, was then assessed at $175,000 in value. [5] At a hearing conducted on 5 June 2006, the learned judge considered the provisions of Part 19 and the contributions made by each party, and concluded it was appropriate to order that AY be paid 50 per cent of the value of the parties’ assets. Accordingly, the judge ordered that the property at the house address be sold, and that MAR ensured the house be vacated, and left clean and tidy, by 30 June 2006; he appointed AY as MAR’s agent to sell the property, and ordered that the net proceeds of sale be divided between the parties. [6] On 25 July 2006 the learned judge made further orders, the subject of the appeal filed on 22 August 2006. That came about because AY filed an application on 20 July 2006, under s 334 of the Property Law Act, asking that those orders be varied. The evidence presented to the learned judge on 25 July, when that application came on for hearing, included evidence that consistently with the earlier orders about the proposed sale, the house keys were in fact delivered into AY’s control on or about 29 or 30 June, by MAR. But in fact on or about 29 or 30 June the house had been substantially damaged, with the external weatherboards removed from the 1 A self-executing order of the kind made in Murchie v Big Kart Track P/L & Anor [2002] QCA 339; Appeal No 2566 of 2002, 6 September 2002. -- 2 of 4 -- 3 hardwood frame, and the internal linings taken off those walls. Many internal walls had been destroyed, as had things in the house, such as fixtures. The valuer, who had considered the property worth $175,000 with the house intact, considered that it was now worth about $70,000, and that the remaining structure was unsafe. In fact, that structure was removed on the insistence of the local council, who required MAR to remove it; the obligation fell on him as the registered owner. [7] Returning to the narrative, the learned judge recorded on 25 July that in the earlier proceedings leading up to the making of the order on 5 June 2006 MAR had been recalcitrant, unco-operative and unrealistic in his strong feelings about what should happen, and had refused to co-operate in an earlier ordered valuation. The judge therefore concluded that it was highly probable that MAR had been responsible for the damage to the house. That inference was supported by the fact that MAR had apparently continued to live in the house until about 29 or 30 June, and it would therefore have been difficult for anyone else to do it over objection from MAR; by the fact of his evident hostility to the orders made on 5 June 2006; and by his occupational skills as a self-employed removalist. The conclusion he was responsible resulted in an amendment to the earlier orders, and the judge ordered instead that AY keep all of the net proceeds of the ordered sale of the property. The learned judge held that result to be just and equitable, because more than half the value of the property had been removed by MAR, and accordingly AY should get what was left. [8] MAR appealed, and his substantive ground was that he did not know of the “new orders being made”, and for that reason had not appeared on 25 July to contest the application to amend the orders. That was really an argument that he had not been served. In proceedings which he then brought in this Court for a stay of execution of the orders of 25 July, heard on 26 September 2006, he made clear that he agreed it was appropriate that the property be sold (subject to the possibility of his being able to negotiate an agreement with AY whereby he paid her in cash the net value of the property, but retained the title to it and the obligations to repay the mortgage), and the only live issue was who should be responsible for conducting the sale. In that hearing on 26 September 2006 he did not file any affidavit material contesting the conclusion that he was responsible for the damage to the house, but informed the Court that he did challenge that conclusion, having only very recently learnt of it. [9] As at 16 October 2006 he had still filed no affidavit material, and had not filed his outline of argument in the appeal. He had been required to do so by 12 September 2006, in a letter sent to him on 22 August 2006. No draft index to the record book had been delivered, as at 9 October 2006. [10] AY proved service upon MAR of the application for security for costs. Materials she filed demonstrated that the learned trial judge hearing the application on 25 July 2006 was satisfied that service of that application had been effected upon MAR. It follows that his prospects of success on the appeal against the order of 25 July appear poor, because he was served with notice of that application, and he has still not filed any material challenging the finding that he was responsible for the damage, although he has now known of it for at least three weeks. On this application for security for costs AY filed material which included proof of an order made by Senior Judge Skoien on 27 January 2006, in appeal proceedings conducted under s 222 of the Justices Act 1886 (Qld), ordering that MAR immediately pay -- 3 of 4 -- 4 $2,648.60 to AY. Her affidavit evidence on this application included that, despite demands, MAR has refused to pay that sum to her. [11] In those circumstances the only conclusions open are that MAR chose not to attend and to resist the order for security for costs, that his prospects of success on his appeal are poor, and that whether or not he could pay costs if ordered to do so, he would not voluntarily pay AY her costs of the appeal when he lost. In those circumstances it was considered appropriate to protect AY against the high probability that she would succeed on the appeal but not recover any costs. [12] The Court accordingly ordered: • that MAR give security for the prosecution of the appeal No 7093 of 2006 filed 22 August by paying into court within 14 days of 16 October 2006 the sum of $7,500; • that should MAR not pay that amount within the time specified then his appeal filed 22 August 2006 stand dismissed with costs without further order; • that MAR pay AY’s costs of incidental to this application for security for costs. [13] MACKENZIE J: The reasons given by Jerrard JA reflect the reasons why I agreed that the orders made on 16 October 2006 should be made. [14] McMURDO J: I concurred in the orders made on 16 October 2006 for the reasons now given by Jerrard JA. -- 4 of 4 --