Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [2020] FamCA 542 | Case summary

What happened

This is an interlocutory stay application arising from financial relief proceedings between Ms Velten (applicant/wife) and Mr Velten (respondent/husband). The trial judge had made interlocutory orders on 22 May 2020 requiring sale of various chattels, described in the hearing as boats, a mooring, a jet ski and other luxury items, to realise the sum of $200,000 payable to the wife (see paras 5–6). The respondent filed a notice of appeal and, on 23 June 2020, an application in a case seeking a stay of those interlocutory orders pending his appeal (paras 1, 7).

At the 26 June 2020 hearing, Wilson J refused the stay and dismissed the application in a case (Orders; para 31). The judge concluded the respondent had not established a proper basis for staying the orders: the assets targeted for sale were discretionary luxury items, the respondent had not shown inability to raise funds by other means, and the proposed appeal grounds had slim prospects of success, including a ground that raised issues not argued at first instance (paras 5–9, 16, 23–31). The respondent was ordered to pay costs of $2,210 to the applicant by 27 July 2020 under s 117(2A) (Orders; para 32).

Why the court decided this way

The decision rests on established principles governing stays pending appeal and an application-specific assessment of facts and appeal prospects.

The legal frame. The judge reviewed and applied stay principles as discussed in recent Family Court authority Wei & Wei (No 4) and older authorities including Jennings Construction Ltd v Burgundy Royale and Jackson & Balen (paras 10–14). The court emphasised that:
- the applicant for a stay bears the onus to establish a proper basis for a stay;
- the mere filing of an appeal does not stay orders (para 8);
- a stay may be granted on terms, weighing balance of convenience and risk of the appeal being rendered nugatory; and
- the court should make some preliminary assessment of the prospective strength of the appeal (paras 13–16).
Application to facts. The judge applied those principles to the specific facts:
- The assets to be sold were characterised as discretionary luxury items or 'toys' (para 9). That affects how urgent or prejudicial a sale would be to the respondent.
- The respondent's commercial affairs were described as precarious and heavily geared; however, the judge noted the respondent had unsecured assets theoretically available to meet the order and had not shown he had tried to obtain other finance or approached lenders (paras 5, 21).
- The respondent’s contention that the appeal would be rendered nugatory if a stay were refused was rejected: the judge observed that the respondent could raise funds by means other than selling the 'toys' if he wished and, short of such steps, is not entitled to preserve those assets merely by seeking a stay (paras 16, 20).
Appeal prospects and procedural fairness. The judge reviewed each proposed ground of appeal:
- Grounds 1 and 2, alleging failure to identify statutory power and, if s 74 relied upon, failure to identify needs, were rejected as lacking merit because the judge considered it unnecessary to state express statutory headings in reasons (paras 24–25).
- Ground 3 raised issues not argued at first instance; the judge applied Coulton & Holcombe to hold such points are typically disfavoured and carry poor prospects on appeal (paras 26–28).
- Ground 4 challenged adequacy of reasons; the judge held the reasons were detailed and adequate (paras 29–30).

Given poor prospects and the availability of other funding alternatives, the balance of convenience favoured refusal of a stay (paras 16, 20, 31). Costs followed as the application was wholly unsuccessful (para 32).

Before and after state of the law

Before: The authorities cited set out the established framework for stay applications:

Jennings (High Court) emphasises the extraordinary jurisdiction to stay to preserve subject matter pending special leave and describes exceptional circumstances needed in that context (para 11).
Jackson & Balen (Family Court Full Court) and Aldridge & Keaton address more directly the routine stay application, noting discretionary nature, need to assess bona fides, balance convenience, and consider prospects (para 13, quoting Jackson para 28).

After: This judgment does not change doctrine but applies and clarifies in context:

It reiterates that even where 'special' circumstances need not be shown for interlocutory Family Court stays, an applicant must still establish a proper basis (para 16).
It confirms a pragmatic approach: if the appellant has means to satisfy an order other than selling judicially-ordered assets, that weakens a stay argument (paras 16, 20).
It endorses the view that judicial reasons need not mechanically itemise the statutory section relied upon to avoid appellable error (para 24). This is presented as persuasive guidance rather than a rigid rule.

The case therefore reinforces existing stay principles and demonstrates how they are applied in family financial proceedings where interlocutory sale of assets is ordered.

Key passages with plain-English translation

"It must not be forgotten that the filing of an appeal does not operate as a stay..." (para 8).
- Plain English: Simply lodging an appeal does not automatically stop existing court orders from taking effect. You need a separate stay order.
Quoting Jennings: "A stay to preserve the subject matter ... is an extraordinary jurisdiction and exceptional circumstances must be shown ..." (para 11).
- Plain English: If someone wants a court to pause enforcement so the thing at issue is preserved while they seek High Court leave, they must show rare and strong reasons. The judge notes this was said in a different context (High Court special leave).
"While it is not necessary for special or exceptional circumstances to be shown, the applicant for the stay must nevertheless establish a proper basis for the stay." (para 16).
- Plain English: For Family Court interlocutory stays you do not always need hugely exceptional reasons, but you still must show a real, acceptable reason why the stay should be granted.
"The items I ordered sold were correctly identified ... as 'toys'. It is difficult to see how the appeal would be rendered nugatory unless a stay is ordered." (para 9).
- Plain English: The assets are luxury items; if the respondent can find other ways to raise money, refusing a stay will not make the appeal pointless.
"Grounds 1 and 2 ... are devoid of merit." (para 25).
- Plain English: The judge says these points raised in the appeal are unlikely to succeed; they are not legally strong.
"I dismiss the application in a case and refuse the stay application." (para 31).
- Plain English: The judge refused to pause the orders and dismissed the procedural challenge.

What fact patterns trigger this precedent

This decision is most directly relevant where:

Interlocutory orders require sale of personal chattels or similar assets to meet a financial obligation (para 5).
The appellant seeks a stay pending an interlocutory appeal, but the assets are characterised as discretionary or luxury items (paras 5, 9).
The appellant has not demonstrated inability to raise funds by other lawful means or to obtain accommodation from lenders, and has not established that refusal of a stay would render an appeal nugatory (paras 16, 20–21).
Proposed grounds of appeal are arguable only if they were ventilated at first instance; grounds raising fresh issues are likely to be treated unfavourably (paras 26–28).
The court assessing the stay conducts a preliminary assessment of prospects of success and balance of convenience (paras 13–16, 20).

In short, when an appellant cannot show both a realistic risk of irreversible prejudice and that the appeal has real prospects, a stay will likely be refused, particularly where the assets are non-essential and alternative funding is possible.

How later courts have treated it

This judgment itself cites and applies recent Family Court authority Wei & Wei (No 4) and prefers Jackson & Balen over Aldridge & Keaton for the current context (paras 10–14). The decision is a trial judge's interlocutory ruling that applies existing appellate doctrine rather than a binding statement changing precedent. It is likely to be cited in future Family Court interlocutory stay applications where:

a party seeks to preserve luxury assets pending appeal; or
counsel advances that reasons are inadequate because a judge did not specify a statutory heading (para 24).

Given its alignment with Full Court and High Court principles on stays and the handling of new grounds on appeal (especially Coulton & Holcombe), later courts would treat this decision as an example of applying settled principles rather than as a departure. If anything, it underscores trial judges' discretion on stays and their approach to the adequacy of reasons.

Still-open questions

Degree of required factual showing. The judge required the applicant to show a "proper basis" but did not provide a detailed checklist of documentary proof that would suffice. What minimum evidence of inability to raise funds will satisfy a stay applicant in family financial settings remains context-dependent (paras 16, 21).
Characterisation of assets. The judge relied in part on counsel's description of assets as 'toys' (para 9). How courts will treat contested factual characterisation of assets (essential v discretionary) where parties differ sharply, and the extent of evidentiary proof needed, remains fact-sensitive.
The requirement to identify statutory provision in reasons. The judge took the view that failing to cite the exact statutory section in a heading does not alone create an appellable error (para 24). How appellate courts will treat borderline cases where a judge's reasons are less clear remains to be tested.
Interaction with secured creditors. The judge noted surprise that secured lenders had not enforced securities (para 5). The interplay between interlocutory family orders and third-party secured creditors' rights, especially where the respondent claims inability to sell due to third-party securities, raises practical issues for court management and enforcement.
Extent of preliminary assessment of merits. The judge performed a preliminary assessment of appeal prospects. The precise depth of that assessment required before refusing a stay is not exhaustively defined here and may vary with the stakes and complexity of the underlying issues.

These questions reflect areas where outcomes depend heavily on the detailed facts and evidence before the court.

Disclaimer: This is a grounded analysis of the reasons in Velten & Velten (No 2) [2020] FamCA 542, not legal advice. I can make mistakes. Before you act on these points, rely on them, or use any draft documents, get a qualified Australian lawyer to check them.

Judgment (20 paragraphs)

[1]

For the reasons that now follow, in my judgment -
1. his application for a stay is refused; and
2. I dismiss his application in a case.
I shall hear the parties on the question of costs.

[2]

The factual setting of this litigation has been carefully narrated by me in the reasons against which the respondent appeals. They appear in Velten & Velten.[1] The respondent needs leave to appeal from my interlocutory orders. He must obtain that from an appeal court.
Pursuant to my orders made on 22 May 2020, various chattels were to be sold in order to realise the sum of $200,000. The applicant in the proceeding also the applicant for interlocutory orders demonstrated to my satisfaction an entitlement to the orders she sought. The respondent, against whom orders were made, owns or controls corporate entities and a trust that operates retail outlets selling food. On the evidence before me (which I was cautious to be circumspect in its acceptance or rejection) the respondent's commercial endeavours were in a precarious financial state. His own solicitor gave evidence to that effect. It surprised me that secured lenders had not taken steps to enforce their securities.
Be that as it may, the items that the applicant sought sold were luxury items. They included boats, a mooring, a jet ski and other items that are conventionally funded by discretionary spending, that is to say once creditors have been paid as and when their debts fall due. The respondent's evidence revealed an approach to paying creditors that was significantly less than diligent. He approached the sums he paid to his wife with a comparable attitude. My reasons for making the orders I made are supported by full and detailed reasons. Ironically, the legal representatives for the respondent put forward as a ground of appeal the lack of adequate reasons yet they do not identify why my reasons are as they say.
In support of this application today the respondent relied on his own affidavit made on 23 June 2020. In it he said he is aggrieved by my orders and he seeks relief today _"in order to preserve the integrity of the appeal," w_hatever that may mean.
It must not be forgotten that the filing of an appeal does not operate as a stay and the decision appealed against is presumed to be correct unless and until an appeal court holds otherwise.
The items I ordered sold were correctly identified by counsel then appearing for the wife as "toys". It is difficult to see how the appeal would be rendered nugatory unless a stay is ordered. The applicant has struggled to meet his children's school fees in the past yet he wishes to preserve a car, a jet ski, a mooring and a boat that I ordered be sold.

[3]

In Wei & Wei (No 4)[2] I recently reviewed the more important legal principles that apply to a stay application. The decision of the High Court in Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd[3] is frequently cited in a stay application. There, Brennan J held as follows -

[4]

A stay to preserve the subject matter of litigation pending an appeal for special leave to appeal is an extraordinary jurisdiction and exceptional circumstances must be shown before its exercise is warranted. If an order for a stay is made, the respondent is kept out of the benefit of the order of the court in which the matter is pending until the hearing of the application for special leave to appeal.

[5]

Of course, it must be recognised that the decision in Jennings involved a stay pending the hearing and determination of an appeal to the High Court of Australia, very different to the application with which I am here concerned.
In the present application, more relevant principles emerge from the decisions in Aldridge & Keaton[4] and Jackson & Balen.[5] As indicated in Wei & Wei I prefer the reasoning in Jackson over that in Aldridge. In Jackson the relevant statement of principle emerges in eight subparagraphs in paragraph 28. It is utile to quote what was there held -

[6]

The principles to be applied in hearing a stay application pending an appeal are well settled (see Federal Commission of Taxation v Myer Emporium Ltd [No.1] [1986] HCA 13; (1986) 160 CLR 220 at 222; Alexander v Cambridge Credit Corporation Ltd (1985) 2 NSWLR 685, Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [1986] HCA 84; (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 -

[7]

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 fide;
a stay may be granted on terms that are fair to all parties. This may involve the court weighing the balance of convenience to the competing rights of a party;
a weighing of the risks that an appeal may be rendered nugatory if a stay is not granted. This will be a substantial factor in determining whether it is appropriate to grant a stay; and
some preliminary assessment of the strength of the proposed appeal whether the appellant has an arguable case.

[8]

Working through those subparagraphs, several matters emerged. They may be distilled into the issues set out below.
While it is not necessary for special or exceptional circumstances to be shown, the applicant for the stay must nevertheless establish a proper basis for the stay. In essence, the respondent in this litigation (the applicant for the stay) asserts that his interlocutory appeal will be rendered nugatory unless the stay is granted. To my mind he wholly misses the point of my orders. By those orders the respondent is entitled to generate the sum ordered to be paid to the wife in such manner as he is able. However, short of borrowing funds, his most obvious source of funds is the sale of the items the wife's counsel described as "toys". He complains about being ordered to do so, citing how this appeal will be rendered nugatory unless a stay is order. That is an entirely circuitous argument. He is perfectly entitled to raise funds to meet the order I made without touching those assets. It is not for me to advise him how he might do that. I do not accept that the applicant has a proper basis for the stay.
So far as the second subparagraph in Jackson was concerned, it is trite to say that a person who has obtained a judgment is entitled to the benefit of it. The wife has a benefit of an order in her favour. I am not willing to entertain the prospects that my decision appealed against is erroneous.
Next, the mere filing of an appeal is insufficient for the grant of a stay. Were it otherwise, any opportunistic notice of appeal would thwart the benefit of the orders made in favour of the successful party.
Next, the appeal must be bona fide. Nothing in the material addressed the respondent's bona fides of this appeal.
Next, it was said in Jackson that I must balance the risk of appeal being rendered nugatory against the refusal of the stay. As has been said several times, the respondent is perfectly at liberty to preserve the items he seeks by raising funds from some other source. If he is unwilling or unable to raise funds in that way, the items he does not want to sell must, in fact, be sold.
Next, it is necessary to address the consequences of the possibility of the respondent being successful on appeal and whether the orders I have made might be reversed. The wife's financial circumstances were bleak, as I have canvassed in my earlier reasons. The husband's commercial enterprise was complex, heavily geared and extensively secured in favour of lenders. He seems to have at his disposal unsecured assets capable of meeting the amount ordered. Naturally, in the absence of consent from secured financiers he is unable to sell secured assets. His choice of assets against which he has recourse to meet my orders is very limited. He says he does not want to sell those unsecured assets. That is not a good reason for refusing to comply with the orders I have made. The respondent gave no evidence of attempts he may have made (and by now he should have made) to approach his existing lenders to explore whether any lender is willing to extend further financial accommodation to him. On the figures available to me at the earlier hearing the respondent's liabilities exceeded his assets and those of his group. It fell to him to demonstrate his financial circumstances. He failed to do so.

[9]

In any consideration of the grant of a stay it is relevant - dare I say, necessary - to examine the proposed grounds of appeal to ascertain whether the appeal is likely to enjoy any prospects of success. In my view the respondent's prospects of success are slim, to say the least. Of course, an appeal court may say otherwise. However, it is utile to address each ground of appeal.
Ground 1 asserts that I failed to identify the source of power on which I relied in making the order. In ground 2 the drafter of the notice of appeal asserts that if I relied on s 74 then I allegedly failed to identify the wife's needs. Both grounds can be addressed concurrently. The reasons and the authorities on which I relied make plain the source of power on which my decision was based. But both ground 1 and 2 are premised on what I regard as a basic error, namely the need to recite in express terms the statutory provision on which the power to make the relevant order is being exercised. For example, if an injunction application comes before the court it is not necessary to incorporate in the judge's reasons an express mention of s 114 of the Family Law Act. If an application comes before the court for an alteration of property interest it is not necessary for the judge to state in his or her reasons that the application is made under s 79 of the Family Law Act. It is self-evident that application is made under that provision. The omission of the reference to the relevant statutory provision does not render the reasons amenable to appellate review by reason of that omission alone. In debate with Mr Matta I invited Mr Matta to take me to any authority of the High Court of Australia or of the Full Court of the Family Court of Australia that has held that a judge falls into appellable error by failing to specify in the judge's reasons the precise section of the on which the judge relies in making the orders that are made. Mr Matta took me to the decision in . I do not read it in the way for which Mr Matta contended as requiring in mandatory terms that I set out in a heading and with express reference the precise statutory provision upon which I rely. Beyond that decision Mr Matta did not take me to any particular authority which mandated in terms that I was required to do as he said.

[10]

the finality of litigation; 2. the undesirability of encouraging tactical decisions not to present an issue at first instance, and

[11]

the need for vigilance to avoid injustice to a party having to meet new issues for the first time at the appeal court.
Those considerations apply with full force to ground 3. That ground does not enjoy favourable prospects of success on appeal in my view.
Ground 4 is an omnibus unparticularised and, quite frankly disparaging contention that my reasons were inadequate. To the contrary, they canvassed the factual background of the application then before me in considerable detail, they addressed the wife's evidence in her affidavit material, they addressed the husband's evidence in his affidavit material and the reasons canvassed relevant legal principles in considerable detail. I do not accept that my reasons were inadequate. Ground 4 is without merit.
On behalf of the wife today, counsel focused on the merits of the appeal and the prejudice that she was likely to suffer if the application succeeded. He said there was no error in the approach and so there was no defect in reasoning in reliance upon s 79. That accorded with my view. He said s 79 was correctly invoked and so the appeal is unlikely to succeed. There is considerable force in that.
He submitted on the point of prejudice that there was none. I agree.
I dismiss the application in a case and refuse the stay application.
The effect of these orders does not operate to prevent the respondent seeking a stay from the Full Court of my orders. Of course, I cannot foreclose on his right to make any such application.

[12]

On behalf of the wife, counsel applied for costs pursuant to s 117(2A). He sought a scale item for counsel's fee in the sum of $1,210 and an amount for his solicitors. He said the appropriate measure was five hours preparation at $250 per hours. The relevant provision of s 117(2A) upon which he relied was the provision in respect of the application being wholly unsuccessful. I agree that the application was wholly unsuccessful and on that basis alone I am prepared to make an order for costs but not in the total sum allowed. The item for counsel of $1,210 is allowed. I do not accept that five hours were involved for solicitor preparation and I reduce that to $1,000, being four hours.

[13]

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 26 June 2020.

[14]

[1] [2020] FamCA 384.

[15]

[2] [2020] FamCA 160.

[16]

[3] [1986] HCA 84; (1986) 161 CLR 681.

[17]

[4] [2009] FamCAFC 106.

[18]

[5] [2009] FamCAFC 131.

[19]

[6] [2013] FamCAFC 22; (2013) 48 Fam LR 618.