Awle and Awle

[2009] FamCA 892

FAMILY COURT OF AUSTRALIA

AWLE & AWLE [2009] FamCA 892

FAMILY LAW – PROPERTY – Interim

APPLICANT: Mr Awle

RESPONDENT: Ms Awle

FILE NUMBER: SYC 2570 of 2009

DATE DELIVERED: 5 May 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan JR

HEARING DATE: 5 May 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hodgson

SOLICITOR FOR THE APPLICANT: Julie Singleton

COUNSEL FOR THE RESPONDENT: Mr Roberts

SOLICITOR FOR THE RESPONDENT: Shaw Reynolds Bowen and Gerathy

SOLICITOR FOR OTHER PARTY: Mr Garnsley (on behalf of Auctioneers)

Orders

1. That orders be made in terms of paras.1, 2 and 3 of the application in a case filed 4 May 2009.  I note that those orders are made on the usual undertaking as to damages, which is exhibit A. 

2. I reserve the question of the costs of the parties of and incidental to these proceedings.

3. I give leave to the parties to restore the matter by arrangement with my Associate on giving seven days' notice to each other and to the Court. 

4. I stay the operation of the order made in terms of para.3 for a period of seven days or such further period and on such further terms as the parties may agree upon in writing. 

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2570 of 2009

MR AWLE

Applicant

And

MS AWLE

Respondent

REASONS FOR JUDGMENT

1. These are proceedings in aid of proceedings for settlement of property.  Husband and wife 49 and 45 years of age respectively.  They started to live together in October 1989, were married in 1991 and separated on 26 December 2007.  They have three children, J, K and Y, 11, 15 and 18. 

2. The property proceedings were commenced with this application before me on 4 May by the husband and he seeks certain orders including, relevantly, to retain certain works of art in specie. 

3. The matter before me is an application to restrain a sale by auction of those works of art. 

4. The parties are present and represented, as is a legal representative of the auction house, being persons interested in the outcome of the proceedings, and also to the extent that they are an agent of the wife directly affected by the orders sought. 

5. The Court has power under s.114 to make an order to grant an injunction.  This is a classic Mareva injunction whereby it is sought to preserve the subject matter of the proceedings to await the proceedings.

6. The facts are the wife gave notice to the husband in March of her intention to sell the works of art.  In early April the husband gave notice to the wife that he opposed that step and, if necessary, would bring proceedings to stop it.

7. The wife's case is that the husband frustrated the pre-filing procedures by not providing any proper disclosure of his financial circumstances, that she needed access to funds to meet existing commitments in relation to school fees and certain other payments.  There has been no payment of child support and she needs those funds.  Her case is that of the parties, she was the legal and beneficial owner of these items, them having been bought in effect for her.  When the parties were together the husband left to her decisions about the sale of the items.  The husband showed by various proposals he made in various things he said over time that he had no interest in the artworks themselves, including a proposal in the course of correspondence that he retain one half of the artworks by value.  The husband has previously considered selling one of the artworks since the parties separated. 

8. So the argument is while he seeks the items in specie, he has no genuine interest in the items and his real interest would be met in terms of their value.  There is a case made through the agents that it may be a way of maximising the value of the items to sell them now and there is evidence that there will be a loss on the contractual obligation with the auctioneer of about $600,000 as a result of that agreement, as well as the fact that the works themselves may suffer some damage and reputation as a result of the withdrawal. 

9. The problem for the wife is it is not possible for the Court to say today that these were exclusively her works of art. It is not a relevant concept for the purposes of s 79 of the Family Law Act. The legal title of works of art, even if one was to identify that, is the thing that would be sought to be changed by s 79. That is the point of s 79. The Court is asked to make a change in the interests of the parties in relation to certain property. So even if these artworks had been given to the wife as a child, the husband had no involvement with them for the entirety of the marriage, had paid nothing towards them, these artworks would be property of the marriage and he would have a right to a say in their disposition. After a marriage breakdown and in the shadow of discussions about settlement of property parties are not free to take unilateral action of substance in relation to their property.

10. It was not the wife's obligation to inform the husband that she was going to sell the property.  It was not her obligation to give him notice so that he could take action.  It was her obligation to either have his agreement or have the Court's permission to sell these items.  All of the authorities on making decisions on the papers have it that I am not free to make a decision on a contested issue where there is conflicting affidavit evidence without there being independent evidence that excludes one version of events or wholly supports the other.  There is nothing like that here.  It is of no moment than when the parties were together the wife was the steward of the parties' finances in relation to the artworks, that she would be the one of the two of them who would make decisions about arranging for sale or not.  That is the point of the controversy in that line of cases that ended up in the decision of Debry.  The parties, once they are separated, they are in a separate interest, not only does not one act for the other without necessarily checking, but they are in a different interest.  So the wife is a trustee of these artworks for the husband, just as he is a trustee of his financial affairs for the wife.  For that reason, they have to be very careful about what they do. 

11. I am told that it is an agreed fact that there are sufficient resources in this family to meet the costs of this rather damaging outcome.  So that is not in issue before me.  It is not apparent on the documents, but I am told that is an agreed fact.  And damages there will be.  We have, as I say, $600,000, the potential for action elsewhere.  We have the need for then proceedings in relation to the relief that the wife sought.  So this is a disaster.  It may be that will not matter much to the parties and that they have sufficient resources.  It is going to matter I think to the taxpayer because I suspect the parties will now tie up the legal system to a greater extent because of all of this. 

12. I asked Mr Hodgson on behalf of the husband for his client to consider again the things that have been said in court today.  Only he knows whether it is his genuine wish to retain these works of art.  Ultimately, that will not be able to be tested I do not think.  It certainly would be easier from all points of view and certainly on the face of it financially to let the auction continue.  But the circumstances are that the husband is the wrong applicant.  He should not have had to bring the matter back to court.  It was for the wife to either have his agreement or bring the matter back to court.  It is a nonsense to say that you would sell valuable personal property as a way of extracting financial information or out of frustration for not having financial information in relation to your husband's finances.  The simple expedient of filing an application would have triggered an obligation in the husband to file a financial statement.  It is not a matter of no controversy or no moment that the husband did not comply with pre-action procedures, if that is what has happened, but there are remedies for that.  As has been said on behalf of the husband, it was open to the wife to bring an action for interlocutory relief in relation to school fees with some restrictions, in relation certainly to interim spousal maintenance, interim costs and even preliminary or interim settlement of property.  If that is what she needed, that is what she should have done. 

13. So it is appropriate that as between the parties the orders be made.  As has been said, I am to make orders that are proper.  In doing so I am to consider the impact on people who are affected by the order, and Mr Garnsley's client is affected by the order.  It is a disaster.  There is an auction planned, a bound catalogue, presumably a level of advertising, too late to do anything about it, and a substantial part I understand of the catalogue is caught up in the subject works of art.  But the happy fact is that the parties are signed up to meet the costs of Mr Garnsley's client.  It may be that there is some complication in terms of identifying any damages and it  might be that there are issues as between the parties as to who meets them, but I am told there is no shortage of the wherewithal to meet them. 

14. The husband's application is supported by an undertaking in the usual terms as to damages whereby he agrees to abide an order that the Court might make in that regard if the Court thinks that any person or entity sustained damage and the Court thinks he should bear that damage.  

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Loughnan JR

Associate: 

Date:  28 August 2009