ABDO & ABDO

[2020] FamCA 460

FAMILY COURT OF AUSTRALIA

ABDO & ABDO [2020] FamCA 460

FAMILY LAW – PROPERTY – Injunctions – Where application for urgent ex parte injunctions restraining the disposition of funds under the husband’s control pending determination of the parties’ property entitlements – Where appropriate to grant leave for the application to proceed ex parte – Where a risk exists that funds may be dissipated or disposed of by the husband – Where consideration of applicable principles – Where appropriate for injunctions to be granted securing funds under the husband’s control pending further order.

Family Law Act 1975 (Cth) s 114

Tsiang & Wu & Ors (2019) FamCAFC 128

APPLICANT: Ms Abdo

RESPONDENT: Ms Abdo

FILE NUMBER: PAC 2380 of 2020

DATE DELIVERED: 25 May 2020

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Foster J

HEARING DATE: 25 May 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton SC

SOLICITOR FOR THE APPLICANT: Khalil Family Lawyers Pty Ltd

RESPONDENT – SELF-REPRESENTED LITIGANT: No appearance

Orders Made On 25 May 2020

1. That on an urgent ex-parte basis that the husband in his personal capacity and his capacity as sole director and shareholder of B Pty Ltd be restrained from doing any act or thing to withdraw or otherwise dispose of funds held in bank account:

   Bank:  Commonwealth Bank of Australia
   Acc Name:                B Pty Ltd
   BSB:  …

   Acc Number:            …25  

2. That on an urgent ex-parte basis that the husband be restrained in his personal capacity and in his capacity as shareholder, director, office holder of any of the corporations identified in this order or in respect of any trust that the said corporation is a trustee of from doing any of the following:

   (a)Transferring, assigning, encumbering or adversely dealing with his shareholdings or any other interest including by way of debit credit loan account in respect of the following corporations:

   (i)B Pty Ltd ACN …

   (ii)C Pty Ltd ACN …

   (iii)D Pty Ltd ACN …

   (iv)F Pty Ltd ACN …

   (v)G Pty Ltd ACN …

   (vi)H Pty Ltd ACN …

   (Collectively known as “the entities”).

   (b)In respect of each of the entities listed in 2(a) the husband shall be restrained from doing any act or thing to transfer, encumber or adversely affect any asset or property including but not limited to real property except in the ordinary course of business.

3. The proceedings be adjourned for interim hearing as to the remaining interlocutory relief sought by the wife to 11.30am on Tuesday, 16 June 2020.

4. The wife effect service of her Initiating Application, Financial Statement, affidavit and a sealed copy of the Orders made today on the husband by no later than Friday, 29 May 2020.

5. The husband file and serve a Response, Financial Statement and any affidavit to be relied upon by him in response to the remaining interlocutory relief sought by the wife by no later than Monday, 15 June 2020.

6. Liberty is granted to either party to relist the proceedings on short notice by application to the Court in chambers in appropriate circumstances.

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 Abdo & Abdo 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 PARRAMATTA

FILE NUMBER:  PAC 2380 of 2020

Ms Abdo

Applicant

And

Ms Abdo

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. The proceedings before the Court are commenced by the applicant wife by Initiating Application filed on 22 May 2020.  In that Initiating Application, the applicant wife seeks orders in relation to property settlement.  Those orders at this stage can be seen as an ambit claim, but they would require the husband to transfer to the wife the matrimonial home at J Street, Suburb K unencumbered, and, in addition to that, pay to the wife an additional sum, using round figures, of $7 million.  Otherwise, the wife seeks in that initiating application interlocutory relief in relation to spouse maintenance, interim property, litigation funding, some disclosure orders and, more particularly for the purpose of the present application, she seeks interim orders in the following terms: 

   (1)That on an urgent ex parte basis, that the husband, in his personal capacity, and his capacity as sole director and shareholder of B Pty Ltd, be restrained from doing any act or thing to withdraw or otherwise dispose of funds held in bank account: 

   Bank:   Commonwealth Bank of Australia

   Account name:         B Pty Ltd

   BSB:   …

   Account number:      …25

   (2)That on an urgent ex parte basis that the husband be restrained in his personal capacity and his capacity as a shareholder/director/officeholder of any of the corporations identified in this order, or in respect of any trust that the said corporation is a trustee of, from doing any of the following:

   (a)transferring, assigning, encumbering or adversely dealing with his shareholdings, or any other interest, including by way of a credit and loan account in respect of the following corporations:

   (i)B Pty Ltd, ACN …; 

   (ii)C Pty Ltd, ACN …;

   (iii)D Pty Ltd, ACN …;

   (iv)F Pty Ltd, ANC …;

   (v)G Pty Ltd, ACN …;

   (vi)H Pty Ltd, ACN …, collectively known as the entities. 

   (b)In respect of each of the entities listed in 2(a), the husband shall be restrained from any act or thing to transfer, encumber or adversely affect any asset or property, including but not limited to real property, except in the ordinary course of business.

2. The wife relies upon her financial statement filed 22 May 2020, and her affidavit in support of the interim relief sought by her, filed on 22 May 2020. 

Context

1. The wife is presently aged 52 and the husband 55.  The parties were married in 1990 and separated in February 2015, although there was a short period of attempted reconciliation in July 2019.  There are five children of the relationship, the older children aged 28, 27, 24 and 22, and the child X born in 2004, who is 15 years of age.

2. The wife, in her affidavit, deposes to various real estate assets owned by the primary entity, B Pty Ltd.  Those assets include three properties at Suburb L, two at Suburb M and one at Suburb N.  Those properties, she asserts, have combined values of approximately $8.5 million.

3. The wife seeks a restraining order as against the husband in relation to the Commonwealth Bank account, and, having access to the bank account, she has observed, in the last few weeks, deposits into that bank account totalling $900,000, they being various deposits on 19 April, 29 April, 6 May and 20 May 2020. 

4. The deposits, she says, are identified as “return loan”.  She is not aware as to the nature of the loans, or on what basis they were made or on what basis repayments were made.  She asserts that the loan transactions are unusual transactions in relating to various corporate entities that, in fact, trade as businesses and have not been in the business of investing or lending money.  The wife asserts that throughout the relationship, the husband has regularly moved money around between the various entities in respect of which he has shareholding and interest in, and she is aware of that as a consequence of her having access to the bank accounts during cohabitation.

5. The wife expresses her concern that if the husband becomes aware of the present application, he will facilitate the transfer of moneys from the Commonwealth Bank account and remit those funds overseas.  She has that fear on the basis that he has regularly transferred or taken money overseas to purchase assets in Country P and stock necessary to be imported into Australia for the purposes of the various businesses.

6. Subsequent to separation, and notwithstanding that the parties are not yet divorced in Australia, the wife asserts that the husband has remarried in Country P.  She further asserts that the husband has referred to his desire to have a child in Country P who can look after his assets in Country P.

7. The wife has not sought disclosure from the husband at this stage, bearing in mind the nature of the present interim application on an ex parte basis.  She has provided to the Court an undertaking as to damages in the usual form, and that undertaking, signed by her on 22 May 2020, also has her solicitor sign the necessary certificate as to her understanding of the nature of the undertaking.

8. The wife’s present circumstances necessitating interim orders to preserve cash funds available are on the basis that from February 2019, the time of separation, through to September 2019, the husband paid her regular sums of money to support herself and the children, or those of the children who remain with her in the matrimonial home. 

9. In September 2019, the husband stopped paying her support, and otherwise, she receives no income, nor does she receive any government benefits.  The wife resides in the property at J Street, Suburb K, which is currently mortgaged, with the husband attending to payment of mortgage and other outgoings.  She lives there with one of her children, her son Mr Q, and the two daughters, Ms R and X.  She asserts that during the course of the relationship, the husband was controlling and manipulative, and was degrading of her in the presence of the children.  She says he has now cut off all financial support.

10. She appreciates that the current matter, as a consequence of the corporate entities, is a complex matter and will require certain investigation and valuation to be undertaken at significant expense, and she will be seeking orders as against the funds presently in the Commonwealth Bank account by way of interlocutory property or litigation funding.

11. The husband presently is the sole director and shareholder of the entities G Pty Ltd, B Pty Ltd and C Pty Ltd.  The husband is also a director and 50 per cent shareholder in the company F Pty Ltd, and he is a director and 25 per cent shareholder in the company H Pty Ltd. 

12. The wife asserts her belief that the husband is, indeed, the beneficial owner of all of the shares in the various entities by reason of the control he has exhibited during the period of cohabitation, both financially and otherwise.

13. The parties, at the commencement of cohabitation, had little by way of assets.  The husband had minimal assets of about $6,000 in savings.  He was working in his father’s retail business in Country T.  The wife had minimal assets: a car, later sold for $7,000, and, subsequent to marriage, the present extent of the parties’ wealth has accrued during the period of a long marriage, with five children and significant involvement of the wife in the husband’s businesses and other entities.

14. The wife provides in her affidavit in support details in relation to each of the entities, and assertions as to her contributions during their relationship.  It is readily apparent that she has a significant claim as to property entitlement.  The wife says that, post-separation, the husband moved out of the matrimonial home at J Street, Suburb K and provided her cash to support herself and the child, X, in her care within the home.  The wife has relied solely upon funds provided by the husband, but, in about May 2019, the husband stopped making timely cash payments to the wife, and payments were intermittent and only when she pressed him for financial support.

15. The circumstances following separation in September 2019 saw the wife cease working for the G Pty Ltd, and in October 2019, the husband stopped paying the wife financial support.

16. As a consequence, in November 2019, the wife removed, from various Commonwealth Bank accounts to which she had access, sums totalling $96,000, which were deposited variously into her bank account, her Commonwealth Bank account, and the bank account of her daughter.  Subsequently, from those funds of $96,000, she expended $30,000 or thereabouts on the costs of her daughter’s engagement party, and otherwise advanced moneys to her son, Mr S, totalling $25,000, as he was in financial need. Otherwise, she expended some $25,000 on a holiday for herself and the two children, Ms R and X, in Queensland.  Consequently, she has little funds now available to her to meet her ongoing needs.

17. It is readily apparent that some action needs to be taken so as to preserve readily-identified cash funds for the purposes as sought by the wife.

18. The position in relation to interlocutory injunctions is well settled, and in the Full Court of this Court, in Tsiang & Wu and Ors (2019) FamCAFC 128. The Full Court revisited the approach to interlocutory injunctions :

    20.The grant of an injunction is discretionary and the basis on which such an order is made is well established: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380. A purpose, as in this case, is to preserve the status quo pending resolution of the controversy: Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199 at [9]–[12], [15] (per Gleeson CJ) and [245] (per Callinan J). An applicant must demonstrate first that there is a serious issue to be tried: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153-154; Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 328–329; Blueseas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856 at [56]. While that statement has been the subject of various iterations, in essence it requires the demonstration of an arguable case or as was said in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65], the applicant must “show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo”.

    21.Next the applicant must demonstrate that the balance of convenience favours making the order sought: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [19]. As part of this, the applicant must show that there is a “danger” or risk of dissipation of or dealings with assets which will frustrate any judgment in favour of the applicant.

    22.In Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319, Gleeson CJ said after discussing the discretionary nature of the remedy at 321–325:

    … as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that, by reason of the defendant’s absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied.

    ...

    It is not difficult to imagine situations in which justice and equity would require the granting of an injunction to prevent dissipation of assets pending the hearing of an action even though the risk of such dissipation may be assessed as being somewhat less probable than not.

    23.As McDougall J in Skyworks v 32 Drummoyne Road [2017] NSWSC 343 said:

    24.The Court is required to undertake a qualitative evaluation of all the evidence that is available, to see if there is a sufficiently serious risk of frustration to justify the making of a freezing order. Further, the two considerations [namely, (1) whether there is a good arguable case and (2) whether there is a real risk of judgment frustration] should be analysed together (as each may impact on the other), and with an appreciation of both the underlying purpose of the rule and the relative risks of granting or withholding relief – the customary discretionary calculus.

    24.In this case the identified risk was that the wife might dispose of assets in Australia and in her name in order to defeat the husband’s claim and, equally it was asserted that there was a risk that the second and third respondents too might deal with the partnership assets in a way so as to defeat the husband’s possible judgment or claim to that entity.

    25.It is unnecessary to demonstrate a positive intention but merely the possibility of the event occurring: Mullen and De Bry (2006) FLC 93-293 at [49]. The determination about the balance of convenience may thus be an inference drawn from the facts and circumstances established by the applicant’s evidence: Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 at 321-322.

    26.Nor is it the role of the judge determining the question of the injunction to, in effect conduct a trial of the disputed evidence to resolve those disputes (see Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729).

    27.As to the determination of the existence of the risk and its magnitude, in Palmer v Parbery [2019] QCA 27 McMurdo JA (with whom Fraser and Gotterson JJA agreed) said:

    119.The determination of whether there exists a sufficiently serious risk of the dissipation of assets involves the evaluation of future possibilities, rather than the ascertainment of historical facts. The risk of dissipation might justify an order although the probability of the risk eventuating is less than 50 per cent. But, as the risk of dissipation must be a real and not merely a theoretical one, it must have an evidentiary basis. Where a fact is alleged by the plaintiff in support of its case about the risk, but there is contrary evidence from the defendant, must the fact be proved to the court’s satisfaction as if the application for the freezing order was the trial of the case? In my view, a plaintiff need not do so. A freezing order is interlocutory in nature; it does not involve a final determination of the parties’ positions. Usually it is made in circumstances of urgency in which the court is unable to conduct an extensive and conclusive factual inquiry in a way which is fair to both parties. Where the factual basis for the plaintiff’s case about the risk of dissipation is disputed, the risk will commonly have to be evaluated with the recognition that the factual basis for it is in doubt. Nevertheless, the possibility of the plaintiff’s evidence being correct, considered with other facts and circumstances, might mean that there is a sufficiently serious risk of the frustration of the satisfaction of a judgment as to justify the making of a freezing order. …

    (Footnotes omitted)

19. Clearly, the grant of an injunction is discretionary, and the Court is empowered by s 114 of the Act to make such order, or grant such injunction, as it considers proper, with respect to the matter to which the proceedings relates.  It is clear that the wife has a serious issue to be tried, in that she has a significant claim in relation to property that also attaches itself to the various corporate interests and assets of the husband.  Clearly, she has demonstrated to the Court that there is an identified risk that the husband might dispose of at least the readily-identified cash assets in the Commonwealth Bank account.

20. In those circumstances, and, in particular, bearing in mind her present financial circumstances, the balance of convenience clearly favours the wife in making the injunctions, as sought by her.  Otherwise, the Court will make orders to bring the remaining interlocutory financial relief sought by the wife on for hearing at the earliest convenience.

21. In all of the circumstances, the Court is satisfied that injunctive orders should be made in terms of interim orders sought in the wife’s primary application, filed 22 May 2020, those orders being numbered 1, 2(a) and 2(b). 

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 25 May 2020.

Associate:

Date:  25 May 2020