Bauer & Nolan
[2021] FedCFamC1F 182
•10 November 2021
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Bauer & Nolan [2021] FedCFamC1F 182
File number(s): WOC 1022 of 2019 Judgment of: ALTOBELLI J Date of judgment: 10 November 2021 Catchwords: FAMILY LAW – INJUNCTION – De facto relationship – Application to preserve property pending final hearing – Orders made restraining respondent from disposing of assets. Legislation: Family Law Act 1975 (Cth) s 114 Cases cited: Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58 Division: Division 1 First Instance Number of paragraphs: 20 Date of last submission/s: 30 August 2021 Date of hearing: 30 August 2021 Place: Sydney (via videoconference) Counsel for the Applicant: Ms Gillies SC Solicitor for the Applicant: Hansons Lawyers Counsel for the Respondent: Ms Eldershaw Solicitor for the Respondent: Heard McEwan Legal ORDERS
WOC 1022 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BAUER
Applicant
AND: MS NOLAN
Respondent
ORDER MADE BY:
ALTOBELLI J
DATE OF ORDER:
10 NOVEMBER 2021
THE COURT ORDERS PENDING FURTHER ORDER THAT:
1.Pending Final Hearing or a date for Arbitration, the Respondent to the Amended Application in a Case filed 25 August 2021 (“this Application”) be restrained by injunction, from selling, giving away and dealing with, alienating or disposing of any assets, subject to the Respondent meeting reasonable living expenses and legal expenses.
2.Within seven (7) days, the Respondent to this Application is to remit the funds removed from ANZ Account *…49 and ANZ Account *…89 into ANZ Progress Saver Account *…89 or any other account which is agreed to in writing between the parties and thereafter be restrained by injunction, from selling, giving away and dealing with, alienating or disposing of those funds, subject to the Respondent meeting reasonable living expenses and legal expenses.
3.Within seven (7) days of compliance with above Order 2, the Respondent to this Application shall provide to the Applicant of this Application a bank statement showing the funds have been deposited into ANZ Progress Saver Account *…89 or any other account which has been agreed to in writing between the parties.
4.Forthwith, on the last day of each month, pending the Final Hearing of this matter, the Respondent to this Application shall provide to the Applicant’s legal representatives a bank statement from the ANZ Progress Saver Account *…89 or other agreed account, which details the amount held in that account and the manner in which any funds were applied.
5.Leave is granted to the parties to relist the matter in the event that the implementation of these orders is impracticable.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bauer & Nolan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALTOBELLI J:
INTRODUCTION
The substantive matter before the Court is a dispute between two same-sex partners, Ms Bauer (“the Applicant”) and Ns Nolan (“the Respondent”), as to whether their relationship constituted a de facto relationship under the Family Law Act 1975 (Cth) (“the Act”) and, if so, what orders if any should be made altering their respective property interests. The Respondent denies that there was a de facto relationship. This will need to be determined as a separate, preliminary matter. This matter has been expedited for hearing and is in fact listed to commence on 21 February 2022. Any order that the Court makes will therefore have limited duration.
By way of an Amended Application in a Case filed 25 August 2021 the Applicant seeks the following orders:
4.That pending the allocation of Hearing dates or a date for Arbitration, that the Respondent to this Application be restrained by injunction, from selling, giving away and dealing with, alienating or disposing of any assets, subject to the Respondent meeting reasonable living expenses and legal expenses.
5.That within seven (7) days, the Respondent to this Application is to remit the funds removed from ANZ Account *…49 and ANZ Account *…89 into ANZ Progress Saver Account *…89 or any other account which is agreed to in writing between the parties and thereafter be restrained by injunction, from selling, giving away and dealing with, alienating or disposing of those funds, subject to the Respondent meeting reasonable living expenses and legal expenses.
6.That within seven (7) days of compliance with above Order 5, the Respondent to this Application shall provide to the Applicant of this Application a bank statement showing the funds have been deposited into ANZ Progress Saver Account *…89 or any other account which has been agreed to in writing between the parties.
7.That forthwith, on the last day of each month, pending the Final Hearing of this matter, the Respondent to this Application shall provide to Applicant’s legal representatives a bank statement from the ANZ Progress Saver Account *…89 or other agreed account, which details the amount held in that account and the manner in which any funds were applied.
In short, the Applicant seeks a number of injunctions preserving property pending the determination of the existence of a de facto relationship and any subsequent order. It is clear from the order that, if made, it would not preclude the Respondent from meeting her reasonable living expenses and legal fees. The Respondent opposes the making of any orders against her.
BACKGROUND
The substantive application was filed on 9 September 2019, over two years ago. Despite an order made on 21 May 2020 that she file a financial statement, it seems from the Court’s file that the Respondent, who maintains that there is no de facto relationship, has not filed one to date. The Respondent has filed affidavits that refer to her financial circumstances including some of the transactions in respect of which the Applicant has concerns. It is not possible to form a comprehensive picture of the Respondent’s financial affairs from the evidence she has filed in this matter to date. For reasons that will become apparent, this is significant. There is no draft balance sheet available to the Court. There is insufficient evidence in the material filed to enable a balance sheet to be approximated. In circumstances where the Applicant seeks injunctions to preserve property pending the final determination of her claim, it becomes impossible for the Court to assess the validity of submissions made on behalf of the Respondent in opposition to the grant of the injunction.
The Applicant is 72 years old and is retired. The Respondent is 63 years old and is also retired. The Applicant contends that the parties commenced cohabitation in 2000 and their relationship ended in 2018. The Respondent contends that she and the Applicant were not in a de facto relationship for much more than one year. The evidence of both parties suggests that irrespective of the nature of their relationship, they appeared to be in business together and were involved in various property transactions. On a very tentative, impressionistic basis, some of these transactions are of an arm’s length nature, but some are not.
The Applicant contends that after separation, and indeed after the commencement of the present proceedings, she became aware of various financial transactions conducted by the Respondent involving funds to which the Applicant contends she made contribution and which may have been applied towards the Respondent’s superannuation, share and property purchases, and other unknown uses. The Applicant contends that she does not know where approximately $900,000 representing the sale proceeds of a property are being kept. The Respondent has attempted to explain these transactions but otherwise declines to make sufficient disclosure that would enable a balance sheet to be approximated, as she considers herself not obliged to in circumstances where she denies that there was a de facto relationship.
The parties do not put in issue the Court’s jurisdiction to make the orders sought.
THE EVIDENCE BEFORE THE COURT
In support of her case, the Applicant relied on the following documents:
(a)Her Affidavit filed 23 July 2021;
(b)A cover letter for urgency filed 23 July 2021;
(c)Her trial plan filed 3 August 2021; and
(d)Her Amended Application in a Case filed 25 August 2021.
In support of her case, the Respondent relied on the following documents:
(a)Her Response to an Application in a Case filed 27 August 2021;
(b)Her Affidavit filed 27 August 2021;
(c)A Case Outline document, marked by the Court as exhibit R1; and
(d)A tender bundle, marked by the Court as exhibit R2.
THE APPLICABLE LAW
Section 114(2A) of the Act states:
(2A)In a de facto financial cause (other than proceedings referred to in, or relating to, paragraph (e) or (f) of the definition of de facto financial cause in subsection 4(1)) the court may:
(a)make such order or grant such injunction as it considers proper with respect to the use or occupancy of a specified residence of the parties to the de facto relationship or either of them; and
(b)if it makes an order or grants an injunction under paragraph (a)—make such order or grant such injunction as it considers proper with respect to restraining a party to the de facto relationship from entering or remaining in:
(i) that residence; or
(ii) a specified area in which that residence is situated; and
(c)make such order or grant such injunction as it considers proper with respect to the property of the parties to the de facto relationship or either of them.
Sections 90SB and 90SK apply in relation to an order or injunction under this subsection in a corresponding way to the way in which those sections apply in relation to an order under section 90SM.
The principles governing the grant of interlocutory injunctions were usefully and succinctly summarised in the Respondent’s case outline, with reference to Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 where Mason ACJ states at 153:
In order to secure such an injunction the plaintiff must show (1) that there is a serious question to be tried or that the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief; (2) that he will suffer irreparable injury for which damages will not be an adequate compensation unless an injunction is granted; and (3) that the balance of convenience favours the granting of an injunction.
DISCUSSION
Counsel for the Respondent submitted that the Applicant’s delay in seeking injunctive relief was in itself a factor that the Court would consider in the exercise of its discretion in declining to grant the orders sought by the Applicant. The Court disagrees. This is an application to preserve assets pending a determination by this Court about the existence of a de facto relationship, and the consequences of the same, if established. Moreover, it was the Applicant who had to issue a subpoena in order to gain a more detailed understanding of the various transactions that now cause her concern, in circumstances where disclosure was not provided by the Respondent. It is no answer to say that the Respondent was entitled to arrange her property and finances as she saw fit. Until an injunction is made, that is undoubtedly the case. However the present context is one where the Applicant is forced to establish the preliminary issue of the existence of a de facto relationship before she can seek orders altering property interests. Information asymmetry seems to exist between the parties. The Applicant can hardly be criticised for bringing an application that has been delayed because of this information asymmetry. In any event, the Court is not satisfied that the delay has caused any prejudice to the Respondent.
The Court is satisfied that there is a prima facie case. The Applicant’s evidence should be taken at face value albeit with a measure of critical scrutiny. In this regard, the Court has read the affidavits of both parties filed in the proceedings to date. The Applicant contends that after a Court determines that there was a de facto relationship, she will be entitled to an adjustment of 60:40 in her favour because of the contributions that she has made and the needs she has. Of course, the Respondent has a different view about the evidence, as she is well entitled. There is no need to go through the detailed evidence of the parties, or of their supporting witnesses. The Applicant’s case is not fanciful, and if accepted by the Court the making of an order altering property interests is plausible, though not necessarily in the percentage sought by her. Of course, this does not mean that the Respondent’s case is not equally plausible. The very purpose of an interlocutory injunction is to preserve assets pending these substantive determinations.
In her evidence the Applicant raises legitimate questions about financial transactions undertaken by the Respondent in respect of which there has seemingly been inadequate disclosure. If the Respondent had made adequate disclosure, there might not have been the need for an injunction. The Respondent may well say that she was not required to make disclosure, but that is hardly a defence to an application for an injunction that may have been obviated if the disclosure had been made.
In her evidence the Respondent does not deny that some part of the sale proceeds of a jointly owned property was applied to the Respondent’s own use, but she seems to contend that there was some sort of offset arrangement in relation to these funds.
The Respondent contends that the Applicant cannot establish that there is no other fund or equity available to her that sufficiently preserves her entitlement apart from the asset sought to be preserved in the application. In this regard, the Respondent submits that, in effect, assets in the Applicant’s own name would more than adequately satisfy any claim that she has.
The Court does not accept this submission. As the Respondent has not filed a financial statement or otherwise provided sufficient evidence that would enable even a draft balance sheet to be formulated, it is simply not possible to determine whether, in effect, the Applicant retains enough property to satisfy her claim against the Respondent. The Applicant’s claim is for 60 per cent but what the Court does not know is the size of the asset pool against which the 60 per cent is to be assessed. The situation might be different if the Respondent provided sufficient disclosure to enable the size of the asset pool to be at least approximated.
The Respondent submits that the balance of convenience speaks against the granting of the injunction. The Court disagrees for reasons that are articulated above. The balance of convenience does not change because the Applicant has lodged a caveat preventing dealings in relation to the Respondent’s property. As the Respondent’s case outline quite properly observes, the caveat is of “doubtful legitimacy”. The mere fact that it has not been disturbed at the behest of the Respondent offers little comfort in the context of the present injunction application.
The Respondent submits that the orders sought by the Applicant are so wide as to be oppressive for its uncertainty and disproportionality. There may be substance to this submission. The difficulty is that neither the Applicant nor the Court are fully appraised of the transactions that the Applicant puts in question. Due to the information asymmetry, the reality is that the Applicant does not know whether the orders that she seeks are feasible, but that is hardly her fault. Indeed, the Applicant does not know whether there have been further changes to the Respondent’s financial circumstances that are of potential prejudice to her claim. For example, if the money removed from the accounts referred to at Order 5 of the orders sought by the Applicant have been placed into superannuation, it may not be possible for the funds to be remitted to another account. In these circumstances, all the Court can do is to make the orders and to grant the parties leave to relist if it turns out that the orders are impracticable. The Respondent cannot create the circumstances that led to the making of orders and then complain that they are too wide when she knows what happened to the funds in question, but the Applicant does not.
CONCLUSION
The Court is satisfied that based on the evidence available to it that it is proper to make the orders proposed by the Applicant pending the final hearing of this matter, with a slight amendment to reflect the fact that a hearing date has been allocated.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Altobelli. Associate:
Dated: 10 November 2021
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