Andreopolis and Beazley and Anor

[2007] FamCA 1319

FAMILY COURT OF AUSTRALIA

ANDREOPOLIS & BEAZLEY AND ANOR [2007] FamCA 1319

FAMILY LAW – INJUNCTION – Business restrained from commencing proceedings and continuing any proceedings against the husband in relation to the recovery of property

Family Law Act 1975 (Cth)

APPLICANT: Mr Andreopolis

1ST RESPONDENT:	Ms Beazley
2ND RESPONDENT:	R Corporation Pty Ltd

INDEPENDENT CHILDREN’S LAWYER: Legal Aid Commission of New South Wales

FILE NUMBER: SYF 2624 of 2004

DATE DELIVERED: 17 October 2007

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: JR Loughnan

HEARING DATE: 17 October 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr King & Ms Valoski

SOLICITOR FOR THE APPLICANT: Willis & Bowring

COUNSEL FOR THE 1^ST RESPONDENT:

SOLICITOR FOR THE 1^ST RESPONDENT: Karras Partners

SOLICITOR FOR THE 2^ND RESPONDENT: Prime Lawyers

Orders

1. Until further order the business known as R Corporation Pty Ltd ABN … be restrained from taking any further step in proceedings commenced by it in the … Local Court against the husband on 9 July 2007 save to have those proceedings discontinued or adjourned.

2. Within one month from today's date and subject to the assessment process, the respondent company pay to the solicitors for the applicant the costs of the applicant of and incidental to the appearance today, those costs to be as agreed between the parties or as assessed by a taxing officer.

IT IS NOTED that publication of this judgment under the pseudonym Andreopolis & Beazley is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF2624/2004

MR ANDREOPOLIS

Applicant

And

MS BEAZLEY
1^st Respondent

And

RODIN CORPORATION PTY LTD

2^nd Respondent

REASONS FOR JUDGMENT

1. These are interlocutory proceedings in the context of significant proceedings, among other things, for property settlement between parties to a marriage.  An amended application in a case was filed on 13 August 2007. 

2. There was a previous hearing in relation to that application, but as to one issue, which is the prayer found in para 6 of the application, the matter was adjourned to today's date for interim hearing. The order sought there by the husband is that the business known as R Corporation Pty Ltd be restrained from commencing proceedings and continuing any proceedings against him in relation to the recovery of property including but not limited to the motor vehicle identified as a four-wheel drive motor vehicle, registration number ….  There is an affidavit to the effect that another registration number referred to in the documents is incorrect.

3. There is no evidence of it, but I am told that it is an agreed fact that proceedings have been commenced in the Local Court by R Corporation Pty Ltd.  That is said by an officer of the company. There is no reference in the husband's affidavit, I do not think, to any particular proceedings number.  I do not think that matters much.  It is an agreed fact that proceedings have commenced by way of statement of claim in the Local Court on 9 July 2007. I gather that they are proceedings against the husband for the return of this vehicle.

4. The evidence of the husband is to the effect that the vehicle was the subject of an agreement between the husband and wife in 1998 in circumstances where the husband and the wife agreed to search out and find an appropriate vehicle to purchase. They found a vehicle, which I was told this morning was manufactured in Western Australia.  It is a four-wheel drive vehicle. 

5. The evidence is unchallenged that the parties decided that the funds would be provided by R Corporation, the respondent to these interlocutory proceedings. It is an agreed fact that the wife is one of two directors and a significant shareholder in that company and that continues to this day. As I understand it, at no relevant time has the husband been an officer or shareholder or director of that company.

6. The husband goes on to say that the parties then attended at Perth to collect the vehicle. When it came to registration of the vehicle he says that the wife suggested that registration be affected in the name of the company, and without any contradiction, the husband says that thereafter he had exclusive use of the vehicle.  He says that it has been his primary vehicle, to the extent that that is relevant to anything; he says that in effect it has never been used for company purposes.  He says it is suited to him because it facilitates his hobbies. 

7. He says that in June of this year, some two and a half years after he and the wife separated, he received a letter from R Corporation demanding the return of the vehicle and threatening action. Then a month or so later proceedings were commenced by statement of claim in the Local Court.

8. It is the husband’s case that he and the wife have an interest in the vehicle.  He says that it was the intention of the husband and the wife that this be a vehicle beneficially, if not legally, owned by the parties.  He says that significantly, up until 2004, an exclusively since 2004 he has met all of the running costs, repair costs and recurrent costs associated with the vehicle. That is not in issue. 

9. So his case is in the final proceedings between himself and the wife under s 79 he intends to agitate the Court to retain that vehicle. Given its legal ownership that will involve a number of but that is the case that he wants to put to the Court. It is not just that, because even under the company’s proposals, the vehicle would still be available and dealt with in the property proceedings; he also uses the vehicle and wants to continue to use it. 

10. It is also his case that there is something sinister in the proceedings themselves.  He points to the fact that the wife has a significant interest in the company; that she does not want to be heard in the proceedings before me, against the orders that he is asking to be made today in these proceedings. He says that he has had a conversation with the other proprietor of the company who has expressed to the husband words to the effect that he has no interest in the retention of the vehicle for the purposes of the company or for any other reason. the conversation that the husband says, without complaint, he had with the other owner of the business, the person who has all the voting rights, was a conversation the husband says took place after the commencement of the proceedings to recover the vehicle, and was:

    I do not want the [four-wheel drive] motor vehicle.  I am not interested in it being returned to [R] Corporation.  The [four-wheel drive] motor vehicle had nothing to do with the [R] Corporation between you and [the wife] to sort out.

11. “Hear, hear” I say.  “Hear, hear.”

12. The husband contends that in those circumstances the Local Court proceedings may be an abuse of process.

13. The Company’s case is that the vehicle should be returned to it and that it will then hold the vehicle, and not dispose of it, to await the outcome of the proceedings between the husband and wife. The Company relies on a 10 paragraph affidavit by the financial controller. The gist of her evidence is that this is a vehicle owned by the company; it is recorded on the books of the company; that the control of the company is held in a way whereby the other director and shareholder, Mr D, has the ability, to the exclusion of the wife to control decisions in relation to the governance of the company; that the company has endeavoured to obtain possession of the vehicle for more than a year, and that it has issued proceedings after some correspondence between solicitors.

14. It is submitted on behalf of the husband that the Court has power under s 90AE and under s 114 of the Family Law Act to grant the injunction sought, and that it is appropriate to do so in the circumstances of this case because the property that is the subject of the proceedings of the other Court is property which it will be argued, is property of the marriage, and therefore the subject of proceedings in this Court. It is submitted that the Family Law proceedings were well on-foot by the time the Local Court proceedings were commenced, and that in terms of the balance of prejudice there is no prejudice to the company by the granting of the injunction.

15. It is said for the company that the Court has no jurisdiction that the provisions of s 90AF do not extend to these circumstances.  I take it that the submission is that there is not a sufficient connection between the property involved in the Local Court proceedings, being the motor vehicle, and the marriage. I am referred to a decision of a Judge of this Court, O'Ryan J, in a case variously reported as H & H [2006] FamCA 167. That was a case where his Honour was asked to consider summary dismissal of proceedings under section 106B, 90AE and 90AF. His Honour in that case referred to the requirements in s 90AE and in 90AF, for the making an order reasonably necessary or reasonably appropriate and adapted to effect a division of the property between parties to the marriage and in particular, the connection between the proceedings and the property to the marriage.

16. There is a slightly later decision - well, I am not sure about that - certainly reported later - of Lederer & Hunt 36 Fam LR 587, which is a Full Court decision in relation to an appeal against, again, O'Ryan J. Interestingly in that case, his Honour had been asked to grant an anti-suit injunction of the application of the wife to restrain proceedings commenced by a trustee of a deceased estate in the Supreme Court of New South Wales in relation to the office-holders of a company.

17. Those proceedings, like these, instituted by a stranger to the marriage, although like these proceedings there was a connection between the plaintiff in the other proceedings and one of the parties to the marriage. In that case the husband was a beneficiary under the deceased estate that the trustee was managing. It is not necessary to go into the detail of it, but the effect of it was that there were provisions under the will of the testator who was a co-owner of a significant business with the husband, that enabled action to be taken by the other owners of the business to interfere with the disposition made under a will which could have affected the control of the company. The wife's complaint in those proceedings was that the husband was choosing to sit on his rights and not take any action which could have, under a provision available to him under the will and under the articles of the company, meant that he could have significantly increased his share of the property. Then there was a very nice argument about whether all of that represented a transfer that could be impugned under s 106B of the Family Law Act.

18. None of that matters today, but the interesting thing was that his Honour issued an anti-suit injunction in relation to those Supreme Court proceedings, and there was a challenge - as there is before me - as to whether that was available. Leave was granted to appeal against the decision, being an interlocutory decision, but the appeal was dismissed by the Full Court. There was no contest before the Full Court in relation to the power of the Court to grant an anti-suit injunction in relation to proceedings in another Australian superior Court. The source of the power was identified to be either s 34 of the Act, or the inherent or implied jurisdiction of the Family Court to make orders which are necessary and appropriate to avoid injustice. 

19. The Full Court canvassed the issues about the similarities between these issues relating to domestic Courts and international Courts, and the issues to do with comity between Courts.  The Full Court noted that in addition to the inherent power to issue an anti-suit injunction for the protection of its own process the Court could also, in the exercise of an equitable jurisdiction, restrain proceedings which involve unconscionable conduct, or the unconscionable exercise of a legal right. The Full Court dismissed an argument that was apparently made that there should have been an application for a stay in the original jurisdiction. That was not found to be necessary.

20. In the matter before me, there is a connection between the subject matter of the Local Court proceedings and these proceedings. The husband says, and the facts that he has outlined, would be a basis for arguing, that the parties have an interest in this motor vehicle, and that the legal title does not reflect the beneficial interest in the motor vehicle.  That may or may not succeed of course and is an argument for another day, but there is a connection between the subject matter of the proceedings and this. There has been no challenge to the proposition, there is no suggestion from the wife that there could not be an order in relation to the motor vehicle.  It is not necessary in granting an injunction in aid of jurisdiction to be satisfied that the ultimate argument would succeed; just that there is an arguable case.

21. Nextly as to power, I am satisfied that I have power under the provisions that have been identified, s 90AF, but in any event, I would have power under s 114. The Court there has power to grant an injunction, and there is some law about the extent to which s 114 constitutes an independent head of power, but here the argument is this is an injunction in aid of proceedings for property, and as I said, the Full Court has confirmed there is power to restrain a third party whether by way of anti-suit injunction or some other order.

22. Injunctions are granted where it appears to the Court to be just or convenient to do so.  They can be granted conditionally or on such terms and conditions as the Court considers appropriate.  The Court may make such order, or grant such injunction as it considers proper with respect to the matter to which the proceedings relate.

23. Then as to the exercise of discretion as to whether there should be an order made. It is cases like this that make me embarrassed to be involved in the Court system. This is a case about a motor vehicle whose written-down value is $6300. I am told that there might an argument that it is worth something more like $50,000. I am told, without complaint, that the parties in these proceedings have significant wealth. I am told that R Corporation, in respect of which the wife has a significant interest, has significant wealth. The fact that one Court, let alone two Courts should have a matter like this before them suggests that something has gone seriously wrong. It is a struggle taking the significant issues and concepts that were referred to and were before the Court in H & H and in Lederer & Hunt and to translate them down to this battered 1999 four-wheel drive motor vehicle. It is something of an outrage in my view. 

24. Nevertheless, the application is here and I am obliged to deal with it.  It is not the case that R Corporation would have been without remedies had it not taken proceedings in the Local Court.  There are proceedings on foot involving an officer of that company (the wife), and it would have been possible for the company to preserve its position or prosecute a position in relation to the possession of the motor vehicle by joining in these proceedings.  It beggars belief that the company could not have, through the wife, caused a more satisfactory and direct outcome in relation to the motor vehicle because it is apparent on the face of the evidence that the motor vehicle is not and has never been needed by the company. 

25. As to the competing prejudices, the husband has a need for the use of the motor vehicle, and there is no suggestion of any prejudice to the company in it not having possession of it.  Nothing is provided by way of evidence. 

26. The background evidence confirms that there is no prejudice to the company by the granting of the injunction.  The fact is that the company did without the use of the vehicle from 1999. The fact is that the company did without the vehicle for two and a half years after the husband and wife separated. There is no suggestion that there is any legal obligation on the company to try and regularise what, on the face of it, has been a completely irregular exercise.  By that I mean it may transpire that the company has been making claims (depreciation etc) in relation to a motor vehicle that has never been used for business purposes. I was going to ask counsel about that but I did not want to put him in a difficult position. On the face of it the company has done the wrong thing in relation to this vehicle, and the belated nature of the action it has taken highlights exactly what the problems are.  But there is no mischief to the company if it is not able, in the short term, to prosecute the proceedings in the Local Court. 

27. The Full Court in Lederer made an observation that the effect of an anti-suit injunction is that an interlocutory anti-suit injunction is effectively a final determination as to where the matter or some particular aspect of it is litigated.  With the greatest respect, I do not know whether that is true.  I think if an injunction was granted, for example, that until further order the company be restrained from taking a further step in proceedings in the Local Court, I do not know that that will conclusively determine the proceedings in that Court.  It would not be the end of the world if that did happen of course because, as I said, as they are now parties to these proceedings, they could join in the substantive proceedings and preserve the interest, whatever it is, that they have in the motor vehicle. 

28. I suggested this in the course of submissions without much enthusiasm from anybody - but on the face of it, the wife could have arranged to purchase the vehicle from the company and that would have regularised what is the apparent reality with the motor vehicle, but for some reason that has not been done.

29. I have power to grant the injunction.  The balance of prejudice, trivial as it is, favours the retention of the motor vehicle for the time being by the husband, and as I say, there is absolutely not a scintilla of evidence or submission as to any prejudice to be suffered by the company if the order is granted.

30. I was invited to view the litigation in the Local Court as an abuse of process.  I am reluctant to do that, and I have said that to counsel earlier today.  It used to be an offence to bring proceedings in a Court for a reason other than the purpose of the proceedings, the common law offence of maintenance.  That is not the case now, but I think if a decision is to be made as to whether the proceedings in the Local Court are an abuse of process the appropriate venue perhaps for that decision may well be that Court.

31. The factual circumstances are suggestive; the fact that the wife has no interest in these proceedings one way or another, did not want to be heard; the fact that the person who has the voting control has expressed in the past at least a disinterest in the vehicle in specie. However, it might be - although there is no evidence about this - it might be that belatedly the company has taken a step that it thought it was obliged to take to regularise the book recording of an asset that was held by the company but apparently not used for company purposes:  that might be it.  And that would explain everything, I suppose.  That would explain why there is no suggestion of any prejudice; that it was just the company protecting itself, or trying to belatedly correct the irregularity; I am not sure.

32. There is no evidence that any other proceedings have been commenced by the company against the husband in relation to any other property, but what I propose to order - and if it is slightly different to the wording of the order that is sought I will give liberty to the parties to bring the matter, by arrangement with my Associate, back before me on short notice if there is something about the wording of the order that embarrasses them - what I propose to order is that the company be restrained from taking any step in the proceedings instituted against the husband in the local Court other than to seek an adjournment of those proceedings, and that order would be an order until further order.

ORDERS DELIVERED

The Court has power to make an order for costs. 

1. The general provision in s 117 is that parties bear their own costs, but the Court has power, and in considering an order for costs it is required to consider the financial circumstances of each of the parties to proceedings, whether either party is in receipt of assistance of Legal Aid, and if so the terms of the grant, the conduct of the parties to the proceedings in relation to the proceedings, including without limiting, the generality of that, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answers questions, admissions of fact, production of documents, and similar matters, whether the proceedings are necessitated by the failure of a party to the proceedings to comply with previous orders of the Court, whether any party to the proceedings has been wholly unsuccessful in the proceedings, whether any party has made an offering in writing to the other  and such other matters that the Court considers relevant. 

2. Here, I do not know anything about the husband's financial circumstances.  I was told, without complaint, that the company - which is the respondent - turns over 900 million dollars a year. There is no Legal Aid that I am aware of.  I do not think that anything comes to attention in relation to the conduct of the parties in relation to the proceedings; the parties have attended on time and filed documents as they should, as far as I am aware.

3. There was no failure to comply with a Court order.  The respondent has been wholly unsuccessful in the proceedings. There has been a raft of correspondence. The financial controller, Ms S, annexes correspondence to the husband's solicitors of 14 August 2007:

   We are in the process of preparing affidavit evidence to support our client's position -

   just touching aspects of it -

   to avoid further costs being incurred by our client in relation to preparation of the affidavits we ask that you desist with your application against our client immediately.  Should you proceed with your client's application of 15 August that we will be relying on this and previous correspondence in relation to the issue of costs. 

4. On 7 August 2007 there was a letter:

   We refer to your letter dated 1 August 2007, while we are aware that the Family Court has the power to bind third parties from commencing and maintaining legal proceedings we are of the opinion that the present circumstances do not warrant the Family Court making these orders.  We are instructed by our client to maintain -

5. That was an offer of settlement .There is an earlier letter of 1 June:

   We are instructed that you have the use and possession of the motor vehicle.  Our client does not consent to the use of the motor vehicle under any circumstance and demand that it be returned.

6. There was a similar demand on 14 August 2006. The from the husband's solicitors on 5 June this year:

   As you may be aware our client is currently involved in protracted Family Law litigation out at the Family Court of Sydney with his wife, [Ms Beazley].  We note that the motor vehicle […] - is the subject of Family Law proceedings, and entitlements to the motor vehicle be decided either by agreement by the Family Court.  We ask that you do not take any further reaction to this matter pending an outcome of the Family Court proceedings.  We reserve the right to show this letter on any application commenced by your client for recovery of the motor vehicle and in relation to the question of costs.

7. There is a letter of 3 August from the company's solicitors:

   We note your advice unless we withdraw the statement of claim commenced in the […] Local Court by 3 August that you will be filing an application in the Family Court seeking an order which will have the effect from injuncting our client from pursuing his claim.  We advise that we are currently seeking instructions from our client on this point and ask that you refrain from filing this application until we have had a reasonable opportunity to obtain those instructions.

8. Then there is the letter of 10 August from the husband's solicitors to the company noting that the process is being issued, and serving the application that I have referred to; the amended application.

9. These are a bit unusual proceedings in the context of Family Law.  They are not proceedings between two applicants.  Usually, Family Law proceedings are between parties, each of whom seeks relief.  Here, this is an application solely by the husband against a third party, the third party wants no orders, and it seems to me that it means in terms of a discretion to consider the order of costs these are more akin to civil proceedings where costs often follow the event.

10. The key issue under s 117 is that the respondent has been wholly unsuccessful.  It is clear from the correspondence, that the respondent always understood the Court has power to make an order, and it just felt that the Court would not be attracted to exercising its power in the circumstances of this particular case. 

11. It seems to me that there is absolutely no explanation for the company not holding off in relation to the proceedings.  I am working a bit in the dark here because there is no explanation anywhere as to why two and half years after the circumstances which presumably excited their interests, the separation of the parties, the company took action to recover the vehicle.  If that was not a significant date, then there is no explanation for the lack of action every day since 1999.

12. So it raises the spectre, and I am reluctant to go into it, heightened by the conversation between the husband and the other principal of the firm revealing that he had no interest in recovering the vehicle, that there may have been some influence by the wife in that decision,

13. Now, as I said, it is a very serious thing to find an abuse of process, and I am reluctant to find to make the finding, but it is suggestive. There is simply no explanation in the respondent's case as to why the proceedings were taken, or why, once the anti-suit injunction was sought, there was not some compromise of the issue, and there were a thousand ways to deal with it.

14. In those circumstances it seems to me that this has been an entire waste of time, and in those circumstances it is appropriate that there be an order for costs. 

15. There is no estimate provided to me. I am told that the costs sought relate only to today, so the order that I make is:

ORDERS DELIVERED

I certify that the preceding forty eight (48) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Loughnan

Associate

Date:  9 November 2007