Baillieu & Baillieu & Ors

[2019] FamCA 683

FAMILY COURT OF AUSTRALIA

BAILLIEU & BAILLIEU & ORS [2019] FamCA 683

FAMILY LAW – PROPERTY – INTERLOCUTORY INJUNCTIONS – Where the husband seeks an interlocutory injunction to prevent wife from disposing of proceeds of sale from the former matrimonial home – Application by husband seeking a partial property settlement pending resolution of the property proceedings - Orders that wife’s conveyancing solicitors retain a fixed sum of money from the proceeds of sale of the former matrimonial home

FAMILY LAW – PROPERTY – Orders by consent that a mediator be appointed – Orders by consent that the parties equally share the mediation costs – Orders by consent that parties attend mediation and make genuine attempt to resolve matters in dispute – Orders by consent for the exchange of documentation prior to mediation

Family Law Act 1975 (Cth) s 114

Tsiang & Wu and Ors [2019] FamCAFC 128

APPLICANT: Mr A Baillieu

1st RESPONDENT: Ms Baillieu

2nd RESPONDENT: Mr B Baillieu

3rd RESPONDENT: E Pty Ltd (in liquidation)

4th RESPONDENT: H Pty Ltd

5th RESPONDENT: J Pty Ltd

6th RESPONDENT: Ms J

FILE NUMBER: SYC 1492 of 2018

DATE DELIVERED: 24 September 2019

PLACE DELIVERED: Hobart

PLACE HEARD: Sydney

JUDGMENT OF: Benjamin J

HEARING DATE: 21 March 2019

REPRESENTATION:-

COUNSEL FOR THE APPLICANT: Ms O’Reilly

SOLICITOR FOR THE APPLICANT: McCabe Partners

COUNSEL FOR THE 1ST RESPONDENT: Ms Deirmendjian

SOLICITOR FOR THE 1ST RESPONDENT: E H Tebbutt & Sons

SOLICITOR FOR THE 2ND RESPONDENT: No Appearance

COUNSEL FOR THE 3RD RESPONDENT: Ms Hoskinson

SOLICITOR FOR THE 3RD RESPONDENT: Daniela Fazio Lawyers Pty Ltd

SOLICITOR FOR THE 4TH RESPONDENT: No Appearance

SOLICITOR FOR THE 5TH RESPONDENT: No Appearance

SOLICITOR FOR THE 6TH RESPONDENT: No Appearance

Orders

1. That the matter be stood over generally, including the applications in a case, for determination before the Honourable Justice Benjamin the time to be determined by the Honourable Justice Benjamin and the parties may have the matter listed before the Honourable Justice Benjamin on seven days’ notice to the other parties and to the Court.

2. That leave be given to the parties to attend by telephone by dialling … then enter passcode …#.

3. That this leave will continue until one month after completion of consent mediation.

4. That the wife shall do all acts and sign all documents to retain from the proceeds of sale of the Suburb D property in her conveyancing solicitors’ trust account or interest bearing account in the name of that solicitor as trustee for the wife the sum of $500,000 which will include the $138,000 previously agreed to be restrained.

5. That that injunction will continue until further order and the hearing of the outstanding applications in a case and/or the determination of the continuing Applications in a Case.

6. That should the parties require reasons in that respect they will notice to the Associate to the Honourable Justice Benjamin within 30 days from today’s date.

IT IS DIRECTED

1. That a Transcript of Proceedings of the exchanges today to be taken out.

IT IS FURTHER ORDERED BY CONSENT

1. Mr Ian Coleman SC be appointed mediator for that purpose.

2. The parties are to equally share the costs of the mediation, including the costs of the mediator or mediation service.

3. Each party must attend the mediation in person and must make a genuine effort to resolve all of the matters in dispute.

4. At least 10 days prior to the mediation, the parties exchange a Balance Sheet, identifying agreed and disputed assets.

5. The parties make arrangements for their legal representatives instructed and/or briefed to appear at the mediation and to confer, at least three (3) days prior to the mediation.

6. At least seven (7) days prior to the mediation, the parties’ solicitors send, to the nominated mediator, copies of:-

   a.all relevant Applications, Responses, Affidavits and Financial Statements filed in the proceedings;

   b.the Balance Sheet of agreed and disputed assets and liabilities;

   c.any relevant documents exchanged between the parties;

   d.the orders sought by them to give effect to their settlement proposal;

   e.an outline of case document;

   f.valuations of any asset or financial resource, the value of which is in dispute;

   g.valuations or market appraisals with respect to any parcel of real estate in which any party has an interest;

   h.market appraisals or internet valuations for any motor vehicle, the value of which is not agreed;

   i.valuations of any superannuation interests;

   j.written confirmation that the superannuation trustee of any fund that may be the subject of a splitting order has been afforded procedural fairness; and

   k.any intervention or restraining orders currently in place.

7. If the proceedings are not resolved at mediation, within seven (7) days of the date of the mediation, the parties are to serve upon one another written notices identifying:-

   a.the issue/s that the party considers were resolved at the mediation;

   b.those issues that remain in dispute;

   c.the expected duration of trial; and

   d.the expected costs of trial.

8. The parties must not unreasonably include in their statements of the issues, as referred to in the above order, that the party considers to remain in dispute an issue that is unmeritorious or has no reasonable prospects of success.

IT IS NOTED

1. The parties will share equally in the costs of mediation, the parties are the husband and the wife.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

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 of
Baillieu & Baillieu and Ors 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 SYDNEY

FILE NUMBER: SYC 1492 of 2018

Mr A Baillieu

Applicant

And

Ms Baillieu

First respondent

And

Mr B Baillieu

Second respondent

And

E Pty Ltd (in liquidation)

Third respondent

And

H Pty Ltd

Fourth respondent

And

J Pty Ltd

Fifth respondent

And

Ms J 

Sixth respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. These reasons relate to an order made by this Court on 21 March 2019 at that time there was a call-over in relation to this matter and a number of other property matters.  The relevant Order provides:-

   4.The wife shall do all acts and sign all documents to retain from the proceeds of sale of the Suburb D property in her conveyancing solicitor’s trust account or interest bearing account in the name of that solicitor as trustee for the wife the sum of $500,000 which will include $138,000 previously agreed to be retained.

   5.That injunction will continue until further order and the hearing of the outstanding applications in a case and/or the determination of the continuing application in a case.

2. Reasons were not provided at the time the order were made and an order was made that if any of the parties wanted reasons they could request same.  A written request was made by E H Tebbutt & Sons, the solicitors for the wife, on the 3 April 2019.

3. Unfortunately by the time that request was made and acted upon I had become ill and was absent from work for a significant period of time, hence the delay in providing these reasons.

4. These proceedings related to an application in a case filed by the husband on 20 November 2018 which was subsequently amended in his application in a case filed 19 February 2019. 

5. There is a claim against the property by a liquidator for E Pty Ltd.

APPLICATIONS

Orders sought by the husband

1. In his amended application in a case filed 19 February 2019 and in his minute of order set out in his case outline filed the same date the husband sought the following orders:-

   1.Subject to Order 2 below, that until further order the wife be restrained from doing any act or thing that would result in the disposal of the net proceeds of sale of the property know as C Street, Suburb D being the whole of the land in Certificate of Title Folio Identifier … (‘the property’) which is listed for sale.  For the purposes of this order, net proceeds of sale shall mean the net proceeds after payment of the agent’s commission, conveyancing costs, discharge of the CBA mortgage and discharge of the parties’ Latitude loans.

   2.That on completion of the sale of the property part of the net proceeds of sale be released to the wife by way of partial property settlement to meet her reasonable re-location cots and the reasonable living expenses of the wife and the parties’ children and part shall be released to the husband by way of partial property settlement to meet his reasonable living expenses pending resolution of these proceedings.

   3.That the wife execute all documents and do all things necessary to cause the balance of the net proceeds of sale to be deposited initially in E H Tebbutt & Son’s Trust Account or alternatively McCabe Partners Lawyers Trust Account and thereafter invested in a controlled monies account on behalf of the husband and wife pending resolution of these proceedings.

   4. The wife pay the husbands costs of this application.

Orders sought by the wife

1. The wife sought the following orders in her response to an application in a case:-

   1.That the husband’s application in a case filed 20 November 2018 be dismissed;

   2.In the event that the property at C Street, Suburb D (‘the property’) is sold, that the proceeds of sale be applied as follows:-

   (a)payment of costs and expenses of sale including agent’s commission, auction expenses, legal costs and disbursements pertaining to the sale;

   (b) payment of adjustments (if any);

   (c)payment to the Commonwealth Bank of the outstanding mortgage secured over the property;

   (d)payment to the wife to meet the relocation expenses for the wife and the children; and

   (e)the balance be applied in reduction of the mortgage secured over the wife’s property at K Street, Suburb L.

   3.That the parties do all acts and sign all documents necessary to:-

   (a)change the Commonwealth Bank mortgage to interest only or other loan facility which will reduce the current mortgage repayments;

   (b)arrange for the discharge of the Commonwealth Bank mortgage pending the completion of the sale of the property.

   4.That the husband pay the wife’s costs of and incidental to this application in a case.

THE EVIDENCE

1. The husband relied upon the following documents at the interim hearing:-

   (a)application in a case filed by the husband on 20 November 2018;

   (b)amended application in a case filed the 19 February 2019;

   (c)consolidated affidavit (incorporating an earlier affidavit filed 20 November 2018) filed 12 February 2019;

   (d)response to interim orders filed 11 April 2018; and

   (e)amended financial statement filed 21 February 2019.

2. The wife relied upon the following documents at the interim hearing:-

   (a)response to an application in a case filed the 15 February 2019;

   (b)affidavit filed 15 February 2019;and

   (c)financial statement filed 15 February 2019.

3. Each of the parties had provided case outlines.[1]

   [1] Husband’s case outline filed 22 March 2019 (document 42) and wife’s case outline filed 22 March 2019 (document 43).

4. I had regard to the submissions contained in those case outlines.  I also had regard to the documents set out in each of the parties’ respective case outlines.  Finally, I had regard to the submissions made by and on behalf of the parties during the course of submissions.

5. Given the delay in delivering reasons, when writing these reasons I had available to me a Transcript of the Proceedings on 21 March 2019 and I had regard to that material.

THE LAW RELATING TO INTERLOCUTORY INJUNCTIONS

1. Section 114 of the Family Law Act 1975 (Cth) (‘the Act’) provides that the Court may make such order or grant such injunction as it ‘considers proper’ with respect to the matter to which the proceedings relate.

2. Section 114(3) of the Act gives the Court jurisdiction to grant interlocutory injunctions of the type sought by the husband. Section 114(3) provides:-

   A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.

3. In the recent decision of Tsiang & Wu and Ors [2019] FamCAFC 128 the Full Court comprising of Strickland, Ainslie-Wallace & Aldridge JJ considered and set out the law in relation to interlocutory injunctions. Their Honours said:-

   20.    The grant of an injunction is discretionary and the basis on which such an order is made is well established.  A purpose, as in this case, is to preserve the status quo pending resolution of the controversy.  An applicant must demonstrate first that there is a serious issue to be tried.  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.  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.

   (Footnotes omitted)

   …

4. The Full Court went on to say:-

   25.    It is unnecessary to demonstrate a positive intention but merely the possibility of the event occurring.  The determination about the balance of convenience may thus be an inference drawn from the facts and circumstances established by the applicant’s evidence.

   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)

5. The two steps which I have applied in relation to this is:-

   (a)Whether the Court ought to exercise its discretion to grant the application; and

   (b)What order, having regard to the matters of justice and equity as between the parties, should the Court make.

6. There are serious issues of fact in relation to this matter which remain unresolved, although the parties may find a solution to this through mediation.

7. I have had regard to the issues of fact, but I have made no determination in respect of those issues.

8. The wife has purchased accommodation for herself and the children, but owes her parents a considerable amount of money.  The extent of this liability seems to be in issue.

9. It is the wife’s desire to rationalise and consolidate her financial position until the matter is heard.

10. From the husband’s perspective, he wishes to preserve the asset pool pending the outcome of the proceedings.

11. The parties had agreed to the sale of their former matrimonial home and by the time these reasons are published no doubt that settlement would have completed.

12. The husband expressed a concern that if all of the monies are released there may not be monies available for him to receive any entitlement which he may have to those proceeds of sale.

13. The husband further asserts that this may impact upon his ability to pay creditors.

14. There seemed to be no issue that an amount of $138,000 should be retained for the liquidator or trustee of the husband’s business. 

15. Given the exchanges between counsel and bench on 21 March 2019 it seems to me that there is no reason why, for the interim at least, the sum of $500,000 ought not to be held in trust pending either resolution of the matter, further application or the final determination.

16. Accordingly I have made those orders.

I certify that the preceding twenty eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 24 September 2019.

Associate:     

Date:              24 September 2019