Bonciani v Hawkesford
[2015] WASC 263
•24 JUNE 2015
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: BONCIANI -v- HAWKESFORD [2015] WASC 263
CORAM: PRITCHARD J
HEARD: 24 JUNE 2015
DELIVERED : 24 JUNE 2015
FILE NO/S: CIV 1815 of 2015
BETWEEN: CHAD NICHOLAS BONCIANI
Plaintiff
AND
LEAH JANE HAWKESFORD
Defendant
Catchwords:
Application for a freezing order pursuant to O 52A of the Rules of the Supreme Court 1971 (WA) or for interlocutory injunction - Whether there exists a danger that a prospective judgment would be unsatisfied - Whether the balance of convenience favours the grant of a freezing order
Legislation:
Rules of the Supreme Court 1971 (WA), O 52A
Result:
Applications refused
Category: B
Representation:
Counsel:
Plaintiff: Dr P MacMillan
Defendant: Mr D F Beere
Solicitors:
Plaintiff: TGC Lawyers
Defendant: Lane Buck & Higgins
Cases referred to in judgment:
Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199
Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380
Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148
X v Y [2013] WASC 339
PRITCHARD J:
(This judgment was delivered extemporaneously on 24 June 2015 and has been edited from the transcript.)
This is an application by the plaintiff, by an amended chamber summons dated 19 June 2015, by which the plaintiff seeks that a freezing order pursuant O 52A of the Rules of the Supreme Court 1971 (WA) (RSC) be made to restrain the defendant from disposing of, or dissipating in any way, any monies held by her, or by her solicitors on her behalf, purportedly on behalf of the Estate of the late Steven John Bonciani (Estate), including any monies held by the plaintiff in her own personal accounts, and in any other account purportedly being used for, or held on behalf of, the Estate.
Alternatively, the plaintiff seeks an order for an injunction in the following terms:
Until further order of this court, the defendant be restrained and an injunction is hereby granted restraining the defendant from disposing of or dissipating in any way any monies held by her or by [her solicitors] on her behalf, on behalf of or purportedly on behalf of the Estate of the late Steven John Bonciani including any monies held by the defendant in her own personal accounts being used for or on behalf of the Estate.
The application by the plaintiff was supported by the affidavit of Chad Nicholas Bonciani sworn 21 May 2015 and the affidavit of Tihomir Galic sworn 23 June 2015. The application was resisted by the defendant. Both of the parties filed outlines of submissions, and there has been a detailed discussion today of the precise bases for the application.
For the reasons I will outline shortly, I am not satisfied that any basis has been established either for the grant of a freezing order under O 52A RSC, or the grant of an injunction, and I will therefore dismiss the application.
The factual background
The present dispute arises out of the defendant's administration of the Estate. The defendant is the executrix of the will of the late Mr Bonciani. It appears from the affidavit material that the late Mr Bonciani had a life insurance policy, and that proceeds from that life insurance policy were paid to the defendant. The allegation by the plaintiff (who is a beneficiary under Mr Bonciani's will) is that those funds were then used to pay certain debts of the Estate, which it is alleged constituted a breach of s 205 of the Life Insurance Act 1995 (Cth). The defendant's position is that she acted on the basis of legal advice. It now appears that the defendant is exploring the possibility of a claim against her former solicitors in respect of that advice, and discussions are currently underway with their insurer.
The present application has been made because the plaintiff is concerned that the defendant intends to dissipate further funds of the Estate. The application was wholly deficient in the extent to which it dealt with the funds in the Estate, the source of those funds, and the basis on which the plaintiff contended that those funds remain subject to the limitations imposed under s 205 of the Life Insurance Act.
In response to the present application, the defendant has offered an undertaking to the Court that she will not disperse any funds currently held by her on trust for the Estate without the consent of the plaintiff, or an order of the Court, except as to the payment of administration expenses in relation to the Estate, the prosecution of the claim currently being pursued by the Estate against its former solicitors, and the defence of the present application.
Why the application for a freezing order should be refused
Order 52A r 2 of the RSC permits the Court to make a freezing order for the purpose of preventing the frustration or inhibition of the Court's process by seeking to meet a danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied. The Court may also make ancillary orders. The rule applies if an applicant has a good arguable case on an accrued or prospective cause of action that is justiciable in the Court.[1] Under O 52A r 5(4) the Court may make the freezing order if the Court is satisfied:
having regard to all the circumstances, that there is a danger that a judgment or prospective judgment will be wholly or partly unsatisfied because any of the following might occur -
(a)the judgment debtor, prospective judgment debtor or another person absconds; or
(b)the assets of the judgment debtor, prospective judgment debtor or another person are -
(i)removed from Australia or from a place inside or outside Australia; or
(ii)disposed of, dealt with or diminished in value.
[1] Rules of the Supreme Court 1971 (WA) O 52A r 5(1)(b).
I observe that the imposition of a freezing order is an order which should be granted only with a very high degree of caution.[2] An order under O 52A RSC is a drastic remedy which should not be granted lightly.
[2] See Cardile v LED Builders Pty Ltd [1999] HCA 18; (1999) 198 CLR 380.
The evidence before the Court does not make out the basis for the grant of a freezing order in this case.
Having regard to the submissions and evidence filed on behalf of the plaintiff, the cause of action alleged against the defendant was, with respect, far from clear. It appeared (from the indorsement to the writ) that the contemplated cause of action is an action as against the defendant for a breach of trust and a breach of fiduciary duty, arising from the improper use and handling of monies as a result of her dissipation of the funds received from the late Mr Bonciani's life insurance policy. But if that is the case it would appear that the action contemplated by the plaintiff would be an action as against the defendant personally, which if successful would result in the payment of damages by her rather than the Estate.
Even if it is assumed that there would be a good arguable case on a prospective cause of action of that kind, there was no basis established on the evidence for the Court to be satisfied that there is a danger that any prospective judgment which might be achieved as against the defendant would be wholly or partly unsatisfied. There was no evidence whatsoever to suggest that the defendant might abscond from the State or that her assets might be disposed of, dealt with or diminished in value so as not to be available to satisfy any judgment debt. The application under O 52A RSC should be dismissed on that basis alone.
There was some suggestion in the submissions that this case might be analogous to the facts in X v Y.[3] In my view, there is no factual analogy whatsoever and the considerations alluded to in that case, which gave rise to a concern about the dissipation of assets, are not applicable in the present circumstances.
[3] X v Y [2013] WASC 339.
Why the application for an interlocutory injunction should be refused
Turning next to the plaintiff's alternative application for an interlocutory injunction, I am not satisfied that the plaintiff has established the requirements for the grant of an injunction.[4] First, the plaintiff must show that there is a serious question to be tried or must make 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 would be entitled to relief). Secondly, the plaintiff must show that if the injunction is not granted, the plaintiff will suffer irreparable injury for which damages will not be adequate compensation. Thirdly, the plaintiff must demonstrate that the balance of convenience favours the grant of an injunction.
[4] See Castlemaine Tooheys Ltd v The State of South Australia (1986) 161 CLR 148, 153 (Mason ACJ); Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd (2001) 208 CLR 199, 217 ‑ 218 [13] (Gleeson CJ).
The basis on which the injunction was sought was not clear, on the material before the Court. It appeared that what the plaintiff sought to do was to restrain the defendant in her future conduct of the administration of the Estate, on the basis of an apprehension that her administration of the Estate (and any payment of funds out of the Estate in the ordinary course of its administration or in the course of pursuing an action against the Estate's former solicitors) would constitute a breach of trust. The evidence and the basis for any such application were not clear.
Further, even if it is assumed for present purposes that there would be a serious question to be tried, in that the plaintiff would have an action as against the defendant for a breach of her duties as a trustee, I am not satisfied that this is a case in which it has been shown that the plaintiff will suffer irreparable injury for which damages would not be adequate compensation. This is precisely the sort of case where damages would provide adequate compensation. In addition, having regard to the intended conduct of the defendant, who is clearly receiving legal advice about the manner in which the Estate should be administered, I am not presently satisfied that the balance of convenience would favour the grant of an injunction.
For all of these reasons, the application by the amended chamber summons will be dismissed. As discussed with the parties, the application by the defendant for the costs associated with defending the chamber summons should be reserved and those costs can be dealt with on a future occasion should the need arise, if the parties are unable to otherwise resolve that matter as between them.
It appears that the defendant is receiving legal advice and is endeavouring to explore a legal claim as against her former solicitors, the outcome of which may render the present disputation between the parties redundant. It suffices to say that it appears to be in the interests of the beneficiaries of the Estate and the expeditious finalisation of the administration of the Estate that the parties to the present application work together to explore whether there can be a resolution of any prospective cause of action as against the defendant's former solicitors, and, if that cannot be resolved by a compromise, then to explore any legal avenues to bring that matter to finalisation. The pursuit of litigation as between the parties in the present circumstances seems, with respect, to be a distraction from pursuing that outcome, which is in the interests of all concerned.
Orders
The orders that I will make today are:
(1)The application by the amended chamber summons dated 19 June 2015 is dismissed.
(2)The costs of the application are reserved.
(3)The defendant has liberty to apply for those costs on seven days' notice.
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