Cavan and Cavan

[2017] FamCA 511

FAMILY COURT OF AUSTRALIA

CAVAN & CAVAN [2017] FamCA 511

FAMILY LAW – PROPERTY – INTERIM – INJUNCTIONS – Where the wife has a concern that the husband will dispose of marital assets – Where the wife seeks an injunction to preserve assets of the marriage – Where the application has not been satisfactorily served on the husband – Where there is a prima facie case for the relief sought by the wife – Undertaking as to damages – Order made restraining husband from certain dealings in relation to company and assets – Order made for wife to have exclusive occupation of former matrimonial home and restraint on husband from attending home.

Family Law Act 1975 (Cth)

APPLICANT: Ms Cavan

RESPONDENT: Mr Cavan

FILE NUMBER: SYC 3461 of 2017

DATE DELIVERED: 15 June 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 15 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton SC

SOLICITOR FOR THE APPLICANT: Southern Waters Legal

COUNSEL FOR THE RESPONDENT: Mr Morahan

SOLICITOR FOR THE RESPONDENT: Gordon & Barry Lawyers

Orders

1. That the proceedings be adjourned to 10 August 2017 at 10.00 am.

1. That any Response to the wife’s Initiating Application including a response in respect of interlocutory issues, a financial statement and any affidavit in support of the interim issues be filed and served within 14 days from today’s date.

2. The Court notes the wife gives the usual undertaking as to damages in relation to the orders made today and that undertaking is to be provided in written form by close of business on 16 June 2017, with a copy served on the solicitors for the husband.

3. That the husband’s solicitors file and serve a Notice of Address For Service not later than the close of business on 21 June 2017.

4. On the basis of the undertaking as to damages, until further order, orders are made in terms of the orders sought at paragraphs 2 to 7 inclusive of the interim orders sought in the Initiating Application filed by the wife on 6 June 2017 as set out hereunder:

   Definitions

   In these Orders the following definitions shall apply:

   A.“The former matrimonial home” means the property located at 1 B Street,  Town L in the state of New South Wales (Lot …, …).

   B.“the Business” means Cavan A Pty Ltd (ACN …), Cavan Family Trust (ABN …), Cavan D Pty Ltd (ACN …), Cavan D Trust (ABN …), E Trust; and Cavan Superannuation Fund (ABN …).

   …

   Restraints

   2.That pursuant to Section 114 of the Family Law Act, the Respondent Husband be hereby restrained in his personal capacity and in his capacity as a shareholder, director or office holder of any of the entities identified as the Business from:

   a.      Doing any act or thing to change the power of appointment of the Trustee or any Trust he has an interest in;

   b.     Transferring any shares or units or the benefits of any loan accounts or otherwise issuing any additional shares of any of the entities identified as the Business;

   c.     Deposing of any property of any of the entities within the Business having a value greater than $5,000 other than in the usual course of business provided that any such disposal is at market value and provided that the Husband provide to the Wife a copy of any documents pertaining to such disposal (of items in excess of $5,000) within three (3) days of such sale;

   d.     Doing any act or thing so as to wind up, liquidate or otherwise adversely affect his control of any of the entities identified as the Business;

   e.     Further encumbering the interest, he holds in 2 B Street, Town L (Lot …);

   Employment

   3.The Respondent Husband be hereby restrained in his personal capacity or in his capacity as director or office holder from doing any such act or thing that:

   a.      Causes the Applicant Wife’s continued employment with Cavan A Pty Ltd to cease; or

   b.     Causes the Applicant Wife to not receive her salary of $961 per week or any other benefit she derives from her continued employment with Cavan A Pty Ltd.

   Former Matrimonial Home

   4.That pending further Order the Applicant Wife have exclusive occupation of the former matrimonial home to the exclusion of the Respondent Husband and that the Respondent Husband be restrained from attending upon or approaching the former matrimonial home other than to collect the children from the front door at pre-arranged changeover times.

   Motor Vehicle

   5.That the Respondent Husband will do all things and sign all documents necessary to cause the Applicant Wife to continue to have the sole use of the motor vehicle (NSW Registration …).

   6.That the Respondent Husband will do all things and sign all documents necessary in his capacity as director, office holder or otherwise of the Business to continue to ensure that all registration, compulsory and comprehensive insurance, lease or finance payments, e-Tag and fuel card payments in relation to the vehicle referred to at Order 5 above are made as and when they fall due.

   7.The Respondent Husband in his capacity as director, office holder or otherwise of the Business will sign all documents and do all things necessary to ensure that the Applicant Wife is able to continue to utilise the fuel card currently in her possession.

5. Leave is granted to either party to restore the proceedings to the list on the giving of 48 hours’ notice to the Court and to the other party.

6. In the event that that leave is sought to be exercised in aid of substantive orders, it is to be exercised by the filing of an Application in a Case supported by affidavit.

7. The question of costs of the parties of and incidental to today are reserved.

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 Cavan & Cavan 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:  SYC3461 of 2017

Ms Cavan

Applicant

And

Mr Cavan

Respondent

REASONS FOR JUDGMENT

introduction

1. An Initiating Application that was filed on 6 June 2017.  It contains prayers for interim relief.  They were allocated a return date on 19 July 2017.  An application was filed seeking to review the decision of the registrar that the matter be listed on that date.  That application came to me and I granted the application for review and listed the substantive matter for mention today. 

2. The wife and husband are 43 years of age and 45 years of age, respectively.  They started living together in about 1997, were married in 1998 and separated in December of 2015.  They have three children aged 12, 10 and five.  Under an informal arrangement the children live with the wife on 11 nights a fortnight and for three nights with the husband.  The main source of the family income has been an eponymously named business.  Although the wife is a health professional, she has been involved in home duties and in backroom accountancy / bookkeeping services in respect of the business.  She has also run her own small business.  It is the wife’s evidence that the parties’ company has been profitable with a net profit of in excess of $1 million every year.  She says that the net profit in 2016, for example, was nearly $4 million.  The wife has received an income through the business. 

3. It is the wife’s evidence that the parties were living separately, the wife in the former matrimonial home at Town L.  The husband recently bought a property just down the road.  For reasons that are unclear, although the parties separated in 2015, things have reached a boiling point now. 

4. The wife says that the current bookkeeper for the business is now in a personal relationship with the husband.  The wife says that she is concerned that the husband will engage in conduct that imposes on her privacy and safety and that seeks to damage the parties’ wealth.  The wife says she does not know about the value of all assets but she believes that the assets she does know about are worth something like $13.8 million. 

5. The wife has assets in her name worth in excess of $1 million and that includes about $340,000 in a bank.  So it is not a case of her being starved out or whatever.  She says that, at 2.30am on 26 May 2017, the husband arrived at the former matrimonial home, flustered, angry and red in the face.  The wife contends that the husband said: “I want to talk about the settlement” and that she said to him that she was not comfortable talking about that, responding: “Send it to my solicitor.” 

6. She says the conversation went, “[Ms Cavan], what do you want?  You need to decide what you want from the property settlement.  I can’t believe how greedy you’re being.  You don’t deserve anything from the business.  It’s mine.”  This is a business that started in 2000, after the parties were married.  It is the wife’s evidence that neither of the parties brought any assets of significance into the marriage.  Returning to the conversation, the husband is alleged to have said:  “I will give you $7 million worth of property with no debt.  I want to keep (a particular property).” The wife says that she responded: “[Mr Cavan], I don’t want to talk about this, put it in writing.  I don’t want you here in the house.  I don’t feel comfortable.” 

7. She says that the husband said, “I’m going to wind up the company.  I’m not going to be doing any more jobs after 30 June.  I don’t need to keep working in the business if I don’t want to and I can get rid of it at any time.  I’m going to lease the company, staff, machinery and cars to another company.  I might decide to work for this new company in a managerial role.  What makes you think that you have any entitlement to the [Cavan A] anyway?  Why do you think you deserve any part of it because you don’t.  [Cavan A] paid for most of the properties we have anyway.” 

8. I interrupt to note that the wife says there are a number of properties – 10 or more pieces of real estate.  The wife says that the husband went on: “That’s all you will get from [Cavan A].  This is all I’m offering you.  You have one week to decide.  If you don’t take this offer, you will end up with nothing as there will be no company and no income coming from the company or me.  Everything will be in my trust and it is untouchable,” he says.  “You won’t have a claim to anything.”  The wife says she observed her husband to be extremely angry and agitated.  He was physically shaking when he yelled.  The wife says she was frightened by that.  She asked the husband to leave.  She says that he went on: “You’re just being greedy.  You want everything.  You’re not a good wife.  Why don’t you just agree to what I’m offering you.  [Mr F’s] wife only took a little bit and left him with the rest.  What’s wrong with you.  I’ve spoken to a solicitor and they just laughed at your letters and request for information.  I can do whatever I like.  You can’t stop me.  [Mr F’s] wife...” – Just stopping there, the wife says that Mr F is a friend of the husband who runs a similar business to that of the parties.  The wife says that it is possibly Mr F’s business to which the husband was planning to transfer the parties’ business.

9. The wife says on or about 25 May 2017, she discovered invoices issued by Cavan A to G Pty Ltd (which is Mr F’s company) for the sale of two pieces of equipment.  The wife contends that the parties’ business may have sold one to G Pty Ltd for $1.10.  The wife says that she thinks that vehicle should have sold for more than $200,000.  She says that a second sold for $143,000 and she thinks that it might be worth more than that. 

10. The wife refers to pages from the asset schedule of an entity called the Cavan Family Trust.  She thinks there are assets there that have been incorrectly identified as trust assets and assets of the company.  She secured the issue of some subpoenas.  She understands her husband has established a new trust.  This is the “untouchable” one.  She says the husband bought a property up the road from the matrimonial home in November 2016.  She understands from equipment on the site of that property that there is renovation work underway there.  She is concerned that the husband might be paying for those renovations from the business. 

11. In 2016, a letter went from the wife’s solicitors to the husband expressing concern about him disposing of assets.  And among other things, she asked through her solicitors for an undertaking that he not dispose of assets and indicated that she did not consent to any change of the corporate structure.  An undertaking was given on 17 June 2016.  On 24 June 2016, there was a letter from the husband’s solicitors confirming he would not transfer, deal with, alter or otherwise dispose of any assets or change the corporate structure without first providing her with 14 days’ notice.  Perhaps that is what he was doing the other day.

12. The wife outlines the basis of her case for property settlement.  She sets out what the parties had or did not have when they started living together; describes her work during the marriage in the form of paid employment, work in the business, work in her own business, and work as a parent and homemaker.  The wife would say that the husband’s efforts were focused on the business.  The wife sets out what she did in that business.

13. The wife says that in or about May 2016 the husband sold some machinery which, she said, was owned by the Cavan Family Trust and the sale proceeds were deposited into the personal account of the son of Mr H, who she understands is the husband’s partner.  She is also an employee of the company.  The wife requested that the moneys be returned and she says that the money should be now back in the trust accounts.

14. The wife says that in June of last year the husband said he did not want her coming to the business premises any more.  She says that in August last year, sadly, the husband’s father died, and she understands there is an estate.  She understands that the husband inherited a third of that estate.  She has not had any disclosure about that.  She says in November 2016 the husband prevented her access to the company emails and in December he restricted her access to the company accounts.  She says that on 26 May 2017 the husband said, “I don’t have to run the company.  I can give it all up if I want”.  In that regard the wife says that if the husband did not want to run the company, she would be willing to step in and retain the personnel to do that.  Of course, there are powers in the court to appoint an administrator or a receiver, not in the sense of winding up but to manage a company so that would not be a problem provided no damage has been done.

15. She says, in terms of matters that might be relevant to a s 75(2) adjustment, as far as she knows, the parties are both in good health.  She still has primary care of the children who are achieving well.  She mentions the distress caused by her husband coming to the home uninvited.  The children have told her that he has been there going through her records.  She cannot think of a reason why he would need to come to the home.  She says the vehicle she drives is a company vehicle and that the company has previously paid for the outgoings.

16. There is no encumbrance on the home in which she lives but the company has paid the other outgoings on the property. 

17. As to the category of orders sought on an interim basis:  the wife seeks injunctions in the nature of Mareva injunctions to preserve for the application of the Court’s jurisdiction, the assets of the marriage.  In particular she seeks that the husband be restrained personally and in his capacity as an officer and shareholder of the entities that are named - and that includes Cavan A, the family trust, Cavan D and a superannuation fund and the E Trust.  She seeks that the restraint extend to changing the appointment of the trustee, transferring shares, units or benefits of loan accounts or otherwise issuing any additional shares in the entities and disposing of property of any of the entities having a value of more than $5,000 other than in the ordinary course of business provided that, in the event that it is in the ordinary course of business, that the dealings are at market value.  She seeks that the husband provides to her a copy of the documents dealing with such disposals within three days of sale.  The wife seeks that the restraint apply to anything to cause the winding up, liquidation or that would otherwise adversely affect his control of the entities or encumber his interests in the property at 2 B Street.

18. The wife wants the husband restrained in relation to terminating the wife’s employment by the company or doing something to interfere with her salary from the company.  She seeks exclusive occupation of the former matrimonial home and that he be restrained from approaching that property other than for the purpose of collecting the children at the front door for prearranged changeover times.  She wants him to sign documents and cause her to continue to have sole use of a motor vehicle she uses, to continue in whatever capacity to cause the registration, insurance, lease payments, e-TAG, fuel cards and so on in relation to the vehicle paid as they fall due and to secure continued use of that card.

19. The Application has not been satisfactorily served on the husband.  He is represented today only for the purpose of an appearance to ask for an adjournment.  It is understood that he has been overseas until last Sunday.  He has an appointment with his solicitors next Tuesday and he needs time to address these matters.  However, there is a prima facie case for the relief sought by the wife.  Once serious damage is done to the parties’ assets it can be expensive and slow and tedious and so on to recover.  I have explained to his representative today, although I do not imagine I needed to, that if the husband was stupid enough to carry through with any of his alleged threats, something like the first half of his efforts to destroy the parties’ finances would only succeed in destroying his own assets.

20. People say things in the heat of the moment and there will no doubt be another side to the allegations made by the wife.  It might be that the husband will say that he did not make any of those statements.  Even if that is true it is difficult to see that there could be any harm done by the orders sought.  The orders really just preserve what is.  The business and entities are allowed to operate in the ordinary course.  The only restraint on the husband in that regard is in relation to transactions of a certain size.  In that event, the husband must account to the wife for what he has done and the transactions need to be on commercial terms. Those do not seem to be improper or onerous conditions.

21. Once parties have separated, they are entitled to the quiet enjoyment of their own premises and entitled not to be harassed or bullied or encroached on.  Of course, once litigation commences there is the additional worry about privileged documents being accessed by each other.  The husband is entitled to the quiet enjoyment of his part of the street and the wife is entitled to the quiet enjoyment of hers. 

22. The outcome of most family law proceedings is an informed settlement.  Ninety-something per cent of all cases, settle.  However, the integrity of a settlement depends on the agreement being free, informed and not coerced.  What the wife describes in her affidavit is a clumsy bullying effort.

23. Hopefully what the wife alleges did not happen at all.  Otherwise it might be that the husband was under some temporary mental disability in which case he needs to get some help with it.  The big fear is that it did happen and if so the parties will just end up with satellite litigation in the criminal courts if they continue along that road.  The wife is entitled to exclusive occupancy of the home and worse could happen if there is any evidence of a repeat of the type of conduct that has been alleged.  The wife is entitled to retain access to a motor vehicle.

1. There is no suggestion that the assets are such that there will be a call on this particular motor vehicle for some other purpose.  Again, it can appear to be bullying if you cut the resources or facilities or amenities of the household or the income of the person, such as motor vehicles, of the other party.  For the time being, it seems to me that those things should be safeguarded.  Mareva injunctions are granted where there is a prima facie case and the balance of prejudice favours the granting of the injunction.  Nothing is said against the orders and, for all that the husband was overseas, we are now well through the week after his return.

2. The husband has had notice of the documents, we know, because Mr Morahan is here.  If he was really worried about the wife’s application presumably he would have come along.

3. Again, the wife has pointed to a prima facie case.  This is a long marriage, substantial contributions have been made by her and presumably also by the husband.  She has made a case for a very significant property settlement.  It is not necessary to say whether that is for half of the parties’ assets or more or less.

4. It is not uncommon that a property settlement of the order of half is appropriate.  The husband might say that if he offered the wife $7 million and the parties’ assets are worth about $14 million, that might be a proper offer. However, the wife believes that there are other assets.

5. The wife seeks further relief but is not pressing for all of that today.  She will later press for spousal maintenance, disclosure, which is an automatic obligation but might need reinforcing, and a process of valuation to assist the parties in taking the next step of having informed settlement discussions.

6. The wife gives the usual undertaking as to damages through her counsel which is an undertaking that she will meet any damages caused to any person as a result of these orders which the Court finds have arisen from these orders and should be met by her.  That provides the husband with a measure of comfort because, on the wife’s case, she has significant assets in her name – over $1 million worth – and, of course, he and anybody else affected are obliged to mitigate any loss that they might suffer.  If the husband is aware of something that would be adversely affected by these orders then it is his job to mitigate the loss by contacting the wife or bringing the matter back to Court and so on. 

I certify that the preceding twenty nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 15 June 2017.

Associate: 

Date:  5 July 2017