Cavallio and Cavallio (No 2)

[2010] FamCA 623

FAMILY COURT OF AUSTRALIA

CAVALLIO & CAVALLIO (NO. 2) [2010] FamCA 623

FAMILY LAW – INJUNCTIONS

Family Law Act 1975 (Cth)

APPLICANT: Ms Cavallio

RESPONDENT: Mr Cavallio

FILE NUMBER: MLC 2443 of 2010

DATE DELIVERED: 2 July 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 2 July 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms O’Connell

SOLICITOR FOR THE APPLICANT: Oakfair Lawyers

THE RESPONDENT: No appearance

Orders

1. That the application filed 24 May 2010 be adjourned to 10.00am on 14 July 2010 in the Judicial Duty List.

2. That until further order, the husband, his servants and agents be restrained by injunction from doing any act either personally or in his capacity as a director of L & F Pty Ltd to alter the balance of the funds held in the St George Bank Account No …86 in the name of L & F Pty Ltd or from encouraging any other director to so act.

3. That the wife forthwith serve upon The Manager of St George Bank a copy of these said orders so that the said bank notes this injunction.

4. That before 4.00pm on 9 July 2010, the wife file any amended application she is so advised relating to orders sought about the bank account referred to in paragraph 2 hereof.

5. That forthwith upon filing the said application, the wife arrange service of the application and any affidavit in support thereof together with a copy of these orders as follows:

   (a)    upon the husband by ordinary post to his address at …;

   (b)   upon the St George Bank;

   (c)   Upon C Cavallio by post at … or such other address as is known to the wife in his capacity as a director of L & F Pty Ltd;

   (d)   Upon V Cavallio by post at the last known address to the wife, in his capacity as the shareholder of L & F Pty Ltd and

   (e)   L & F Pty Ltd at its registered office by ordinary pre-paid post.

6. That the husband pay the wife’s costs of $1500 thrown away this day.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2443 of 2010

MS CAVALLIO

Applicant

And

MR CAVALLIO

Respondent

REASONS FOR JUDGMENT

1. On 2 June 2010, I adjourned an application filed by the wife to today, and gave the wife leave to proceed in the absence of the husband on an undefended basis.  I discharged orders made on 7 August 2008 and then made a variety of other orders, including the payment of moneys from the proceeds of the sale of G property. 

2. I am satisfied that the various documents have been served upon at least the husband.  Attached to an affidavit filed 29 June 2010 are copies of the envelopes which appear to have been returned by Mr husband in language that might be seen to be colourful but, on the other hand, can be seen as nothing short of contemptuous.  I do not know why the husband is behaving in the way that he is, but he is certainly not assisting the resolution of what is a difficult problem.

3. There is currently $484,300.99 sitting in a St. George Bank account in the name of L & F Pty Ltd.  Ironically enough, that seems to have got there by a deposit as a result of an order by consent made by the court to which the wife, who was then represented, consented, and to which the husband, who was unrepresented, consented.  When I say it looks like that, I mean that I do not know for certain that it is the same money.  I can only presume that, having regard to the size of the money involved.

4. The difficulty, however, is that, for whatever reason, I must interpret the order as meaning that the money belongs to L & F Pty Ltd.  The wife clearly has a different view about that, but she will need to prove that that was not L & F’s money.  L & F, according to a search attached to her own affidavit, is a company in which the husband and his brother are the directors.  The only shareholder, according to the ASIC search, is the party’s son, V.  Whilst there may be some confusion about why that is the case, the ASIC records shows that the wife was previously a shareholder and transferred her share, as did the husband presumably, to the son.  Someone will have to establish that that transaction was not genuine, and that is the reason why the wife, today, makes another application to adjourn these proceedings.

5. What she needs to do, according to her counsel, is get her house in order so that she can get control of the money and, thereafter, a number of things can happen.  L & F Pty Ltd is also one of the registered proprietors of one of the properties which the parties might say belongs to them, but the reality is that people who treat corporate entities as their own face the ultimate consequences of having to deal with a separate legal person.  Whilst this court lifts the corporate veil, the problem is that the Registrar of Titles recognises L & F Pty Ltd as a separate legal person, as does ASIC.  As such, the wife will need to ensure that she has the proper application before the court before she could satisfy me that she can get access to the money from the bank account to which I have referred.

6. Clearly, this is a case in which the bank is in the middle.  It is the controller of the funds, but it is contracted only to deal with whoever is authorised to act on behalf of L & F Pty Ltd.  It is, therefore, inappropriate, on the basis of the material that I have at this stage, to make any orders directing the manager of the bank to do anything.  However, on the anticipated return date, that may be rectified.  Because of the behaviour of the husband which, as I said, is nothing short of contemptuous, there seems to me to be every reason to be suspicious about what he is doing and he might do if he is not restrained.  As I said, it is not his money.  It belongs to L & F Pty Ltd.  He is a director of that company.  I cannot make an injunction against any other director, because they have not been served with any process, and natural justice requires that they should do so.

7. In this case, therefore, having regard to the husband’s approach to the proceedings, it seems logical for me to make an order that he be restrained, in his capacity both personally and as a director of L & F, from doing anything that might cause the manager of the St. George Bank to pay out the money in any form.   Section 114 of the Act provides that I can make an order for the protection of property of the parties, so long as I am satisfied that there are proceedings as between them and that it is proper to do so. 

8. It is an extremely wide provision, but in this case it seems logical, at least on an interim basis, to make an order restraining the husband from doing anything in L & F that might prejudice the interests of the wife.  For that reason, I propose to have the St. George Bank put on notice.  Clearly, if the wife is intending to do something with those funds through L & F, she will need to get control of the company.  To do that she will need to make the necessary application and serve all of the relevant people whose names will appear in the order. 

9. At the conclusion of the day, the wife seeks an order for costs.  The husband was on notice today that these proceedings were on foot.  His attitude, as I said, has been made abundantly clear.  There is no reason why I should not presume that he is not going to participate.  Section 117 of the Act says that each party pays their own costs unless the circumstances justify the court departing from that principle.  If it does, it must consider the provisions of s 117(2A).  This is a case, having regard to the attitude of the husband, that there ought to be an order for costs made. 

10. In taking into account s 117(2A), I take into account that, whilst the wife may be having some difficulties with money at the moment, there are a number of properties asserted to belong to the husband and the wife, albeit in the names of other people. It certainly seems that there are no difficult financial circumstances in one way or another for the parties.  If, in fact, the money in the St. George Bank account belongs to the husband and/or the wife, then there are no problems about money in this case at all.

11. I have taken into account that the husband has not complied with the court order.  In an order made by Registrar Field on 18 May 2010, the husband was ordered to be here.  He has not done so today, nor did he appear on 2 June.  On that basis, I conclude that he does not comply with court orders.  In the circumstances, it seems to me that not only is the wife justified in having her costs, but that I ought not be too troubled about the quantum of them.

12. The provisions of the Family Law Act 1975 (Cth) require that I consider the rules of the court in relation to costs.  Counsel’s brief has been marked at $1500, and that costs will be thrown away if there is no order protecting the wife.  Costs are not a punishment.  They are intended to compensate the party who has had to participate in the proceedings in a reasonable way.  The husband had not done so, and, in this case, it seems to me that an order for costs is an appropriate exercise of discretion.  I, therefore, make the orders that I have already articulated, together with an order for costs for $1500. 

I certify that the preceding twelve (12) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  23 July 2010