Bloomfield and Grainger and Anor (No 3)

[2017] FamCA 653

FAMILY COURT OF AUSTRALIA

BLOOMFIELD & GRAINGER & ANOR (NO. 3) [2017] FamCA 653

FAMILY LAW – INTERIM – INJUNCTION – Where the First Respondent previously provided an Undertaking not to transfer, assign, convey or further mortgage or encumber the relevant property without at least 14 days prior notice in writing to the Applicant’s solicitors – where the First Respondent as seller and Ms Grainger as purchaser entered into a contract for the sale of the relevant property in December 2016 and the First Respondent informed the Applicant of this specific contract in August 2017 - Where the Applicant sought an injunction to prevent the First Respondent from dealing with or further encumbering the relevant property – Where Applicant offered usual undertaking as to damages – Application for injunction granted.

APPLICANT: Ms Bloomfield

1st RESPONDENT: Mr Grainger

2nd RESPONDENT: The Bankrupt Estate of Ms Grainger

FILE NUMBER: BRC 89 of 2014

DATE DELIVERED: 24 August 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 23 August 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hackett

SOLICITOR FOR THE APPLICANT: Tucker & Cowen Solicitors

COUNSEL FOR THE 1ST RESPONDENT: Mr Coulsen

SOLICITOR FOR THE 1ST RESPONDENT: Morgan Conley Solicitors

FOR THE 2ND RESPONDENT: No appearance

Orders

UPON THE USUAL UNDERTAKING as to damages offered on behalf of the Applicant by her Counsel on 23 August 2017 and accepted by the Court IT IS ORDERED UNTIL FURTHER ORDER THAT

1. The First Respondent, [Mr Grainger], be restrained, whether by himself, his servants or agents, from dealing with or further encumbering the real property registered in his name located at [T Street], [Suburb B] in the State of Queensland, more particularly described as Lot … on RP …17, County of …, Parish of ….

AND IT IS FURTHER ORDERED THAT

1. The Applicant has leave to amend paragraph 49(a) of the Statement of Claim filed 8 April 2014 by inserting the words “the trustee of the bankrupt estate of” after the phrase “Mr [Grainger] reconvey [T Street] to”.

2. The parties’ costs of and incidental to the Application in a Case filed 22 August 2017 are reserved to the trial judge unless either the Applicant or the First Respondent files and serves, by 4.00 pm on Thursday 31 August 2017, a written submission outlining that they wish to prosecute an application for costs in respect of the Application in a Case filed 22 August 2017 prior to the trial.

3. In the event that either the Applicant or the First Respondent files and serves, by 4.00 pm on Thursday, 31 August 2017, a written submission outlining that they wish to prosecute an application for costs in respect of the Application in a Case filed 22 August 2017 before trial, then:

   (a)the party seeking the payment of costs shall file and serve brief written submissions in support of such application for costs within twenty-eight (28) days of today; and

   (b)the party against whom an order for costs is sought shall file and serve, within a further twenty-eight (28) days thereafter, any brief written submissions in answer to the submissions filed and served by the party seeking costs; and

   (c)the party seeking an order for costs shall file and serve any brief further written submissions within fourteen (14) days of its service, strictly in reply to the submissions served by the party against whom an order for costs is sought,

   and any such application for costs shall be considered in Chambers.

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 Bloomfield & Grainger and Anor (No.3) 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 BRISBANE

FILE NUMBER: BRC 89 of 2014

Ms Bloomfield

Applicant

And

Mr Grainger

First Respondent

And

The Bankrupt Estate of Ms Grainger

Second Respondent

REASONS FOR JUDGMENT

1. In order to avoid unnecessary repetition, by way of broad overview of the factual circumstances of this case, I refer to and incorporate into these Reasons those matters summarised in paragraphs 5 to 20 (inclusive) of the Reasons for Judgment I delivered on 27 January 2017.

The current Application

1. By Application in a Case filed 22 August 2017, the Applicant seeks that the First Respondent be restrained, whether by himself, his servants or agents, from dealing with or further encumbering the real property registered in his name located at T Street, Suburb B in the State of Queensland, more particularly described as Lot … on RP …17, County of …, Parish of ….

2. This application was instigated urgently after the First Respondent informed the Applicant, in correspondence dated 15 August 2017, that he intended to sell the Suburb B property and that the settlement date for the sale was Friday, 25 August 2017.

3. The copy of the contract for sale, dated 12 December 2016, initially provided by the First Respondent to the Applicant was redacted to preserve the identity of the purchaser. However, it is apparent that the contract is between the First Respondent and Ms Grainger, whose address is that of the Suburb B property.

The gist of the substantive proceedings

1. Reference to the Initiating Application and the Statement of Claim filed 8 April 2014 establishes that, in summary, the Applicant seeks the following relief:

   a)an order pursuant to s 90K(1)(aa)(i) of the Family Law Act1975 (Cth) that the Binding Financial Agreement between the First Respondent and Ms Grainger (dated 1 November 2012) be set aside; and

   b)an order pursuant to s 90K(3) of the Act that the First Respondent transfer to the trustee of the bankrupt estate of Ms Grainger the Suburb B property, free from mortgage or other encumbrance; or, alternatively

   c)an order pursuant to s 90K(3) of the Act that the First Respondent pay to the trustee of the bankrupt estate of Ms Grainger an amount of money being the market value of the Suburb B property, as at the date of transfer of that property to the First Respondent or, alternatively as at the date of the Binding Financial Agreement, in an amount to be assessed.

2. On the most recent evidence before me, the Suburb B property has been valued at $2.7 million.[1] At present, it secures borrowings, in an amount of about $2.6 million, obtained in the name of Ms Grainger from J Bank (the J Facility). These borrowings are also secured by an existing company charge given by P Pty Ltd and W Pty Ltd as Trustee for The H Trust, a guarantee and indemnity given by the First Respondent and a guarantee and indemnity given by P Pty Ltd, W Pty Ltd as Trustee for The H Trust, W Pty Ltd as Trustee for The Q Trust and by W Pty Ltd as Trustee for the F Trust. The Applicant contends that these entities and trusts are, in essence, under the control of the First Respondent.

   [1]Albeit described as having been provided on the basis that its purpose is for stamp duty purposes.

3. Whilst the Applicant previously sought a declaration that the First Respondent is liable to exonerate the bankrupt estate of Mrs Grainger in respect of any mortgage, encumbrance, lien or other charge or liability secured over or connected to the Suburb B property, this declaration is no longer sought.

4. Rather, as I understand it, the Applicant’s case involves the assertion that the power provided to the Court by s 90K(3) of the Act is of sufficient scope, width or extent as to permit the court, if persuaded to set aside the Binding Financial Agreement, to make orders in the terms she seeks: that is, her case involves the contention, broadly described, that the J Facility was drawn upon by the First Respondent and used by him in business activities with which Ms Grainger was not really engaged and that, in such asserted circumstances, it is just and equitable that the First Respondent indemnify Ms Grainger with respect to the amount owing under the J Facility. Again, speaking broadly, if her various contentions are accepted at trial, the trustee of the bankrupt estate of Ms Grainger would receive either the Suburb B property unencumbered by the J Facility or the payment of an amount which is the market value of that property as at either 1 November 2012 or 10 December 2012 and, it is submitted, this property would be available to meet the Applicant’s substantial judgment (namely, $2.1 million plus interest given by the Queensland Court of Appeal on 16 September 2011) against Ms Grainger.

5. The First Respondent does not accept any of the contentions I have outlined in paragraph 8 above.  Speaking broadly, he contends that, even if (contrary to his primary position) the Binding Financial Agreement is set aside, the Court is empowered by s 90K(3) of the Act to do no more than make orders which would substantially restore the position which existed vis-à-vis him and Ms Grainger to that which existed before the Binding Financial Agreement came into existence, was executed and/or put into effect.  If this latter contention finds favour at trial, given the asserted current value of the property and the extent of the J Facility, any order for the transfer of the Suburb B property back to the trustee of the bankrupt estate of Ms Grainger would not provide the trustee with any funds, or any substantial funds, such that it is submitted that the Applicant has no prospects of success, practically speaking, on the substantive application.

6. It is, I think, obvious from this very broad overview of the competing contentions that the Applicant has a prima facie case and that there is a serious question to be tried as between the Applicant and the First Respondent in these proceedings.

The parties’[2] previous approach to dealings with the Suburb B property

[2]          By which I am referring only to the Applicant and First Respondent.

1. The substantive proceedings between the parties were commenced by the Applicant by Initiating Application filed on 7 January 2014.

2. On 15 May 2014, Judge Cassidy adjourned the Applicant’s application for interim injunctive relief to restrain the First Respondent from dealing with the Suburb B property to a later date in June 2014.

3. Her Honour did so on the basis that, by his Counsel, the First Respondent undertook not to transfer, assign, convey or further mortgage or encumber the Suburb B property without at least 14 days prior notice in writing to the Applicant’s solicitors, with such undertaking to continue until the determination of the proceeding or earlier period.

4. This undertaking has not been discharged.

5. Reference to the correspondence passing between the Applicant’s solicitors and the First Respondent’s solicitors about the potential sale by the First Respondent of the Suburb B property seems to me to establish, relevantly, that:

   a)by correspondence dated 14 July 2016, the First Respondent’s solicitors advised the Applicant’s solicitors that:

   i)in May of that year, J Bank had written to the First Respondent to advise that it was cancelling the J Facility associated with the Suburb B property and to demand repayment of the facility by 1 July 2016; and

   ii)the First Respondent could not meet this demand without selling the property and would be taking steps to put it on the market for sale; and

   iii)this correspondence constituted notice as required under the undertaking that the First Respondent would be selling the property as soon as is possible.

   b)by correspondence dated 19 July 2016, the Applicant’s solicitors:

   i)asked that the First Respondent provide documents (such as correspondence from J Bank, an estimate of the balance then owing under the J Facility, details of the agent and listing arrangements, a copy of any executed contract for the property and the date of the proposed settlement of the sale of the property) so that the Applicant could give proper consideration to any proposed sale; and

   ii)advised that, subject to provision of that information, the Applicant will consider not seeking to restrain the sale of the Suburb B property on the basis that surplus proceeds after discharge of the J Facility were quarantined; and

   iii)advised that, if a response was not received by 22 July 2016, they would apply to the court for an injunction in relation to the proposed sale and/or net sale proceeds.

   c)by correspondence dated 21 July 2016, the First Respondent’s solicitors advised the Applicant’s solicitors that:

   i)the balance owing to J Bank pursuant to the J Facility as at 18 May 2016 was $2,605,873.63; and

   ii)the First Respondent proposed to sell the Suburb B property by option and, if this was unsuccessful, then by private treaty but had not yet selected a real estate agent; and

   iii)they could not then tell if there would in fact be a surplus but, if there was, the First Respondent was agreeable to paying this into their trust account; and

   iv)the property was not listed for sale, there was no sale contract and therefore no date for settlement.

   d)by correspondence dated 2 August 2016, the Applicant’s solicitors:

   i)put into contention the suggestion that what the First Respondent had provided on 14 July 2016 constituted notice as required by the undertaking provided to the Court on 15 May 2014; and

   ii)asserted that, especially given that the Suburb B property was not then even listed for sale, once it was sold notice was to be given to the Applicant; and

   iii)noted that, in calling up the J Facility, the bank did not rely on monetary default; and

   iv)noted that the valuation conducted on 27 November 2015 by C Real Estate valued the Suburb B property at $2.5 million; and

   v)asserted that: the First Respondent’s contentions were a contrivance; he had been servicing the J Facility; whilst the bank had demanded payment from him in his capacity as guarantor of the J Facility,  P Pty Ltd and W Pty Ltd (in its own right and as trustee of various trusts) were also guarantors and both owned substantial real estate and had the capacity to meet the demand; the Applicant did not accept that the First Respondent and the companies did not have the capacity to meet the bank’s demand; the demand could be satisfied by making a payment to decrease the principal owing so as to bring the facility within the LVR range required by J Bank; and

   vi)advised that for the Applicant not to object to the sale of the Suburb B property and for her not to seek further injunctive relief, she required that the First Respondent undertake to discharge the J Facility fully before sale of the Suburb B property, provide details of the sale and settlement, restrain the net proceeds in trust and, further, undertake not to dispose or deal with property.

   e)by correspondence dated 12 August 2016, the First Respondent’s solicitors advised the Applicant’s solicitors that:

   i)the First Respondent would not provide the undertaking sought as it was unreasonable; and

   ii)if the Applicant wanted to apply for injunctive relief (as previously foreshadowed), then she should do so within seven days so that, in essence, both parties would know what was happening; and

   iii)if the Applicant did not apply for injunctive relief within the seven-day time period, but did so later and such action cause delay or the termination of a sale, then the First Respondent would seek damages from her pursuant to the undertaking as to damages she would have to give in order to obtain the injunctive relief.

   f)by correspondence dated 17 August 2016, the Applicant’s solicitors informed the First Respondent’s solicitors that they considered he had not addressed the issues they raised (for example, especially why the guarantors could not reduce the principal under the J Facility so that the LVR was brought into account in a manner acceptable to the bank). They also advised that the Applicant did not accept that the information contained in the correspondence dated 14 July 2016 was notice for the purpose of the undertaking provided by the First Respondent to the Court on 15 May 2014;

   g)by correspondence dated 26 August 2016, the First Respondent’s solicitors:

   i)advised the Applicant’s solicitors that the First Respondent:

   (i)was in default of the J Facility secured by the Suburb B property, would be placing it on the market for sale in the next two weeks and that if he did not take this action, the bank might appoint receivers to the property; and

   (ii)had to repay the full amount of the J Facility to J Bank because he had given Ms Grainger an indemnity and he was also a guarantor of that facility in his own right; and

   (iii)the Suburb B property had a market value (according to the earlier valuation) of $2.5 million and therefore, he would be liable to J Bank for the shortfall; and

   (iv)agreed to preserve any surplus funds received from the sale of the Suburb B property; and

   (v)was prepared to provide the Applicant with the marketing material from the agent and to provide updates as to the status of any sale.

   ii)asked that, on the condition that the First Respondent would agree to pay into Court any surplus received from the sale of that property, the Applicant provide an undertaking that she would not interfere with the marketing or sale of the Suburb B property, including by applying to a court for an injunction.

   h)by correspondence dated 9 September 2016, the Applicant’s solicitors advised the First Respondent’s solicitors that she would not provide the undertaking sought and reiterated that she did not accept that he had provided notice as required by the terms of his undertaking and that she would hold him to such terms;

   i)by correspondence dated 25 October 2016, the First Respondent’s solicitors advised the Applicant’s solicitors of the view that the First Respondent had complied with the terms of the undertaking or 14 July 2016 and that they intended to seek directions (when the matter was before the Court on 1 November 2016) in relation to the listing of an Application in a Case by which they intended to seek either a declaration that the First Respondent had provided the notice required by the terms of his undertaking and was free to deal with the property or  an order releasing him from the undertaking; they repeated their request that the Applicant provide the undertaking previously sought;

   j)by correspondence dated 27 October 2016, the Applicant’s solicitors sought the First Respondent’s agreement to adjourn the directions hearing listed for 1 November 2016, advised the First Respondent’s solicitors that the Applicant declined to given the undertaking sought and asserted that any application seeking a declaration amounted to an abuse of process.

6. On the evidence before me, that is where the issue of the First Respondent’s dealing with the Suburb B property remained until correspondence dated 15 August 2017 was provided to the Applicant’s solicitors.

7. That is, despite what was conveyed in the 26 August 2016 correspondence from the First Respondent’s solicitors to the Applicant’s solicitors, there is no evidence before me to suggest that the First Respondent provided the Applicant with any update as to the status of any (proposed) sale of the Suburb B property until the 15 August 2017 correspondence. This occurred in circumstances where the evidence also establishes that the date of the contract, due to settle on 25 August 2017, is 12 December 2016.

The 15 August 2017 correspondence

1. By correspondence dated 15 August 2017, the First Respondent’s solicitors:

   a)referred to his undertaking not to deal with the Suburb B property without prior notice; and

   b)advised that J Bank had demanded that its facility secured over that property be redeemed and that the First Respondent had known this for  some time and had done what he could to prolong the bank taking steps to enforce its interests; and

   c)advised that “in expectation” of the bank actively enforcing its rights, they enclosed a redacted copy of a contract of sale (in respect of which it was asserted that the contract had been partially redacted “due to the misgivings our client has of your client”) and a C Real Estate valuation for the property; and

   d)advised that settlement having been extended, it was now due to occur on 25 August 2017; and

   e)advised that the First Respondent would provide a copy of the settlement figure before then and would pay any surplus received from the sale of the property into Court.

The contract dated 12 December 2016

1. The redacted copy of the December 2016 contract for the sale of the Suburb B property permitted the Applicant’s solicitors to ascertain the following information:

   a)the sale price is $2.7 million; and

   b)no deposit was payable; and

   c)no building or pest inspection was required; and

   d)the finance date was 120 days from the contract date (that is, 11 April 2017); and

   e)the Settlement date was 60 days after satisfaction of the Finance date (that is, no later than 10 June 2017); and

   f)there is a Special Condition in the following terms: “The Seller may, in its absolute discretion, give written notice to the Buyer 30 days from settlement that it elects to sell the property by public auction and terminate this Contract.”

2. Whilst the name of the buyer had been redacted, the signature of “Mr Grainger” and the initials “…” remained visible in the copy of the contract provided by the First Respondent solicitors to the Applicant’s solicitors.

The C Real Estate valuation: 22 November 2016

1. The C Real Estate valuation provided by the First Respondent’s solicitors to the Applicant’s solicitors under cover of the 15 August 2017 correspondence was prepared as at 22 November 2016. The report asserts it was prepared for Grainger Pty Ltd and for the purpose of “Market Value for Stump (sic) Duty Transfer Purposes.”

2. The valuation asserts that the market value of the Suburb B property is $2.7 million ($2.2 million being for “land as established” and $500,000.00 being in respect of the “added value of improvements”).

What happened after the provision of the December 2016 contract and November 2016 valuation?

1. By correspondence dated 17 August 2017, the Applicant’s solicitors:

   a)informed the First Respondent’s solicitors that they considered that the First Respondent had not given the Applicant the notice required by the terms of his May 2014 undertaking; and

   b)noted that they had been provided with the contract eight months after it was entered into and that the price just covered the J Facility and would result in no surplus; and

   c)expressed their view of the price as “remarkable” on the basis of the assertion that the Valuer General had valued the unimproved value of the property at $2.3 million and that the First Respondent and Ms Grainger paid $3.0 million for it more than 10 years ago unimproved value of the land; and

   d)asserted that, given the  unredacted details of the contract, it appeared that the transaction was to a related entity (namely, Grainger Pty Ltd); and

   e)asked that they be provided with a complete copy of the contract upon their undertaking not to provide it to the Applicant or anyone else other than lawyers retained in the matter; and

   f)asked that, if an agent had been appointed, the details of that agent be provided, together with some details in relation to the selling process; and

   g)asked that the First Respondent provide copies of any default notices from J Bank.

2. By correspondence dated 21 August 2017, the First Respondent’s solicitors took issue with the assertion that he had not provided the requisite notice of his intention to deal with the Suburb B property). They asserted he had provided this on “14 July 2017” (which I have taken to be a typographical error in so far as the year is concerned; I have assumed that the intended date is “14 July 2016”[3]) after “receipt of notice from [J Bank] requiring him to reduce his loan facility.” They also noted that the Applicant’s solicitors had previously been provided with a copy of that notice.

   [3]There being no evidence before me of any correspondence from the First Respondent's solicitors to the Applicant's solicitors dated 14 July 2017 in relation to the issue of his proposed dealing with the Suburb B property.

3. The First Respondent’s solicitors enclosed an unredacted copy of the contract on the Applicant’s solicitors’ undertaking and advised that they were instructed that:

   a)the contract had been entered into after receipt of J Bank’s notice to allow the First Respondent the opportunity to see if the property could be refinanced and that settlement had been extended “several times” to allow this to occur; and

   b)J Bank was now insisting that settlement of the refinance occur as soon as possible and they would enquire as to whether this could be extended from a further seven days.

4. The First Respondent’s solicitors also asserted, amongst other things, that there appeared to be no reason to prevent the sale/refinance other than “misplaced concerns” of the Applicant and reiterated that the First Respondent had agreed for any surplus proceeds to be paid into Court pending the outcome of the proceedings.

5. Having had the opportunity to peruse the unredacted contract, the Applicant’s solicitors outlined their position in email correspondence sent on 21August 2017 that their inability to provide their client with the details of the purchaser was unjustified and that the asserted “misgivings” of the First Respondent were without reasonable foundation.

6. They asked for details in relation to the finance, including the name of any financier, the proposed terms of any finance, the amount of the security. They reiterated their request for copies of default notices of demand issued by J Bank, noting that they were yet to receive any other than the notice dated 18 May 2016. They put the First Respondent on notice that, in the absence of provision of any further default notices or demands issued by J Bank, they would assume that there were none and would argue before the Court that the First Respondent was engineering the circumstances in an attempt to place assets beyond the Applicant’s reach.

7. The only document from J Bank having the nature of a demand before me is that of May 2016.

The evidence relied on by the First Respondent

1. The First Respondent relied on an affidavit by Mr E, his solicitor.

2. In summary, Mr E’s evidence is that, on 23 August 2017, the First Respondent told him that:

   a)J Bank had made a formal demand for the repayment of the funds on 14 May 2016; and

   b)between July and September 2016, he made enquiries of real estate agents which suggested to him that the Suburb B property would sell for $2.5 million (which was insufficient to repay the outstanding debt); and

   c)he attempted to see if he could refinance, but was told that, because of the litigation and the relief sought against him, he was unable to obtain finance but Ms Grainger could because she is no longer in bankruptcy; and

   d)it cost about $12,000.00 per month in interest to maintain the Facility, which was in arrears; and

   e)the contract with Ms Grainger was for $2.6 million (but, in fact, it is for $2.7 million); and

   f)settlement under the December 2016 contract had been delayed numerous times, but Ms Grainger eventually obtained finance from St George Bank; and

   g)in early August 2017, J Bank insisted that settlement occur as soon as practicable and on 18 August 2017; and

   h)he had been told by a Mr SK (from J Bank) that if the Facility was not repaid “soon”, the bank will take possession of the Suburb B property and sell it as a mortgagee exercising its power of sale.

3. Mr E then spoke with Mr K on 23 August 2017. He said Mr K told him he had spoken with the Mr S, the Applicant’s solicitor on 21 August 2017. Mr E’s affidavit contains his evidence of his conversation with Mr K about Mr K’s conversation with Mr S. Whilst Mr S does not challenge Mr E’s recounting of what Mr K told him, Mr Hackett (who appeared for the Applicant) informed me that he does challenge Mr K’s accuracy in recounting their conversation to Mr E.

4. Given this challenge, it seems to me to be most appropriate to focus upon the contents of Mr K’s email to Mr E on 23 August 2017. This email contains the information that J Bank is expecting the Facility to be repaid in full this Friday “as scheduled” and that, if this is not the case, it “will be considering its options further”; such options may include taking possession or appointing a receiver/manager in relation to the sale of the Suburb B property. Mr K also provided the most recent bank statement, which confirmed that the Facility is in default.

5. Reference to this bank statement, which is the only one in evidence before me and is for the period from 10 July 2017 to 9 August 2017, shows that the opening balance was $2,641,692.91. After interest of $11,936.12 was charged (together with an account keeping fee of $10.00 and an arrears administration fee of $20.00), as at 9 August 2017, the amount outstanding is $2,653,659.03.

6. As outlined earlier, the balance outstanding pursuant to the J Facility as at 18 May 2016 (when J Bank took issue with the manner in which the Facility was being managed) was $2,605,873.63. That is, despite the concerns raised in the May 2016 correspondence, J Bank has taken no action in relation to the Facility and the indebtedness pursuant to it has increased by about $47,786.00 since then. Further, this increase in indebtedness has been limited to this amount over the approximately 15 months since May 2016, in circumstances where the only evidence I have is that the monthly interest payable is in the approximate amount of $12,000.00 (or approximately, $180,000.00 in total over that time).

7. Such matters are, in my view, particularly relevant to an assessment of the objective risk to the Suburb B property if the injunction sought by the Applicant is granted.

Further discussion and conclusions[4]

[4]Waugh and Waugh [2000] FamCA 1183; (2000) FLC 93-052 and Mullen and  De Bry [2006] FamCA 1380; (2006) FLC 93-293.

1. As outlined earlier, I accept that the Applicant has established a prima facie case and that there is a serious question to be tried. I note that the Applicant has offered the usual undertaking as to damages.

2. I also note that, despite the offer contained in the correspondence dated 26 August 2016 to provide the Applicant with updates as to the status of any sale of the Suburb B property, the First Respondent first provided notice of the existence of the December 2016 contract by correspondence dated 15 August 2017. This is something which, in my view, is relevant in the consideration of whether there is any objectively assessed risk to the Applicant’s ability to recover that which she seeks if successful in her application and also to a consideration of the issue of the balance of convenience.

3. I also note that, despite requests made by the Applicant’s solicitor, the First Respondent has not provided any details of the manner in which any refinance is to take place, particularly in circumstances where it is asserted that Ms Grainger, a relatively recently discharged bankrupt, will be the purchaser and has been able to obtain finance.

4. I take into account the absence of evidence from the First Respondent that he is financially able to meet a money order in the terms sought by the Applicant irrespective of the disposition of the Suburb B property.

5. In the absence of any evidence from the First Respondent about his current financial circumstances, I do not accept the submission that, if the transfer of the Suburb B property is prevented, this will have the effect that he will remain in default and cannot remedy the same. The matters discussed at paragraphs 34 and 35 certainly suggest, on at least a prima facie basis, that he has been able to meet the payments required by J Bank under the Facility (or cause them to be met somehow) at times during the last 15 months or so.

6. I also record that I do not accept the submission that the Applicant has not suggested that the contract price of $2.7 million represents a “serious undervalue” of the Suburb B property. It seems to me that the manner in which the Applicant became aware of the existence of a contract for that price has meant that she has not necessarily had the opportunity to investigate whether that is the amount the property would likely be sold for if offered at auction or by private treaty (as previously adverted to by the First Respondent in the course of the 2016 exchange of correspondence between solicitors). Further, it seems from the face of the most recent valuation that its purpose was limited to that for the purpose of stamp duty.

7. In the circumstances as I have summarised them and upon the Applicant offering the usual undertaking as to damages (which is accepted by the Court)  and for the reasons outlined above, I am persuaded that it is appropriate, just or convenient to make an interim order restraining the First Respondent from dealing with or encumbering the Suburb B property.

Leave to amend the Statement of Claim

1. I accept the submissions made by Counsel for the Applicant in support of his oral application to amend the Statement of Claim filed 8 April 2014. I am not persuaded that there is any particular prejudice to the First Respondent of such amendment, particularly given the time between now and the trial listed for February 2018. I grant leave to the Applicant to make the amendment sought.

Costs of and incidental to the Application in a Case filed 22 August 2018

1. Both the Applicant and the First Respondent formally sought an order for the payment of costs.

2. It seems to me that the appropriate course is that I reserve the issue of the costs of and incidental to the current Application in a Case to the trial, particularly given that it will be before me and that, at that time, I will no doubt have the benefit of evidence about the respective financial circumstances of the Applicant and First Respondent.

3. However, given that the parties were not afforded the opportunity to address the issue of costs at the hearing, in the event that they wish to agitate such application on the basis of the evidence currently before me as relied on at the hearing of the interim application before the trial, I will provide them with the opportunity to do so by provision of written submissions.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 24 August 2017.

Associate:     

Date:              24 August 2017