Celia & Celia
[2024] FedCFamC2F 1581
•25 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Celia & Celia [2024] FedCFamC2F 1581
File number: MLC 5415 of 2023 Judgment of: JUDGE CHAMPION Date of judgment: 25 October 2024 Catchwords: FAMILY LAW – Property – Applicant seeking an injunction to freeze the bank accounts held in the Respondent's name – Application dismissed Legislation: Family Law Act 1975 (Cth) ss. 79, 114, 117
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr. 5.23, 8.18
Cases cited: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57
Chen & Chen and Anor [2016] FamCA 758
Hancock& Hancock [2023] FedCFamC1F 429
Liatos & Liatos [2007] FamCA 945
M v DB [2006] FamCA 1380
Palmer v Parbery [2019] QCA 27
Tsiang v Wu [2019] FamCAFC 128
Heath, Robert and Johannes Schmidt, “The Unjustifiable Requirement For An Asset Preservation Order” (2024) 33 Australian Family Lawyer 49
Division: Division 2 Family Law Number of paragraphs: 46 Date of hearing: 25 October 2024 Place: Melbourne Applicant: The Applicant in person, appearing electronically Counsel for the Respondent: Ms Rika Teicher Solicitor for the Respondent: Jessy Bhullar Pty Ltd ORDERS
MLC 5415 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR CELIA
Applicant
AND: MS CELIA
Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
25 OCTOBER 2024
THE COURT ORDERS THAT:
1.The application is dismissed.
2.The Applicant Husband pay the Respondent Wife’s costs of the application in the amount of $6,280.00 fixed in accordance with the scale set out in Schedule 1 to the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021 (Cth).
3.The affidavit of Ms B filed 18 October 2024 be struck out pursuant to rule 8.18(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
AND THE COURT NOTES THAT:
A.The previous Court order made by Judicial Registrar Taylor on 16 September 2024 that there be a conciliation conference on 13 November 2024 and the ancillary orders made on that day remain in full force and effect.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
Revised from transcriptJUDGE CHAMPION:
WHAT ARE THE ISSUES?
Mr Celia is the Applicant Husband in an application for the division of the parties’ matrimonial property under s. 79 of the Family Law Act 1975 (Cth). Ms Celia is the Respondent Wife.
In 2016, the parties married. There are no children in the relationship.
In May 2022, the parties separated.
The matter has come before me for an interim defended hearing. By notations to orders made on 16 September 2024, the Court noted that:
The issue for determination at the interim defended hearing is the applicant's application to freeze the respondent's bank account, as set out in the application in a proceeding filed on 9 September 2024.
The Husband's interlocutory application seeks an asset preservation order as to 11 bank accounts he says are in the Wife's name, identified as follows:
(a)two Commonwealth Bank accounts ending in #...62 and #...12;
(b)seven ANZ bank accounts ending in #...03, #...75, #...34, #...08, #...77, #...36, #...72; and
(c)two NAB bank accounts ending in #...34 and #...67.
The Wife opposes the application. I intend to refuse the application.
My reasons follow.
THE MATERIAL BEFORE ME
On 16 September 2024, before the hearing, the Court made orders as to the filing of affidavit material. Order 3 was as follows:
Not later than 4 pm on 18 October 2024, each party file and serve one consolidated supporting affidavit no longer than 10 pages in length, with no more than five annexures, in relation to the issues to be determined at the interim defended hearing, and one affidavit of each witness, noting the provisions of rule 8.13 and 5.08 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 and rule 2.02 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, together with the Central Practice Direction: Family Law Case Management.
The Husband's affidavit did not comply with the orders. It was unsworn. It was longer than 10 pages in length and there were more than five annexures, notwithstanding the Husband sought to subdivide the annexures to his affidavit.
As is his right, the Husband has been able to participate in this proceeding with the assistance of an interpreter in Country C language to English language. His affidavit was written in English, and there was no indication that it had been interpreted for him. I recognise that the Husband is under significant challenges in this litigation, both because he is self-represented and because he is in immigration detention. Nonetheless, he first made his application for an asset-freezing order with his initiating application in May 2023.
As a result, the Husband has had ample time to put on his evidence, in accordance with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth). Although some latitude will always be offered by the Court to a self-represented litigant, there is also the issue of fairness to the other party. In the end, the Rules exist to give a party a reasonable opportunity to present a case. Whether a party takes advantage of that reasonable opportunity is another matter.
In all the circumstances, I decline to permit the Husband to rely upon his affidavit as evidence in this interlocutory proceeding because it does not comply with the Rules. I have regarded, however, those matters in his affidavit as submissions and I have proceeded to application.
The wife is best positioned to explain what has happened with matrimonial property she controls. Evidence should always be adjudged by the power of the party to call particular evidence. Although because I declined to receive it into evidence, there is no affidavit of the husband in support of the application under r. 5.23(3)(b), I still regarded the Wife's affidavit as read on the application. By reference to the wife’s affidavit, there is no evidence that she has been unreasonably or unjustifiably dissipating matrimonial assets.
WHAT IS THE NECESSARY BACKGROUND?
The Wife is a hospitality worker. She deposes that her wages are deposited into CBA account #...62. She says that this account is linked to CBA account #...12.
The Wife says that she has ANZ accounts, ending in #...03 and #...75, solely in her name.
The Wife says she has NAB accounts, ending in #...34 and #...67; these accounts are also solely in her name.
The Wife deposes that she has no knowledge of the five other accounts the Husband referred to in his application, that is, ANZ accounts ending in #...34, #...08, #...77, #...36 and #...72. I must proceed on the basis of the evidence before me on this interlocutory application.
The Wife deposes that the closing balance of all accounts is as follows:
(a)ANZ Account ending #...03 as of August 2024 was $3,155.41.
(b)ANZ Account ending #...75 as of August 2024 was $54,408.00.
(c)NAB Account ending #...67 as of August 2024 was $108,226.63; and
(d)NAB Account ending #...34 as of August 2024 was $1,208.00.
By an admission from the bar table, the Wife said that she has an additional amount of approximately $40,000 held in the CBA account ending #...12.
The Wife deposes at 12(b) of her affidavit, that:
Freezing my bank salary accounts would result in significant and irreparable harm to me. Specifically, the freezing of my salary account would severely hinder my ability to meet essential living expenses and financial obligations. This action would disrupt my daily financial stability, making it challenging to cover necessities such as housing, utility and other daily expenses. The consequences of such a freeze would not only affect my immediate financial situation, but could also lead to long-term repercussions on my creditworthiness and overall financial health.
She further says that freezing the ANZ account ending in #...75, and the NAB account ending in #...67, will hinder her ability to cover legal expenses.
The Wife says that, in substantive terms, the matrimonial asset pool is wholly comprised of those funds held in those bank accounts. That is, the total asset pool, insofar as it is represented by amounts held in the bank accounts, currently approximates $208,000 (the total of those accounts itemised above). It was unclear how the Husband identifies the asset pool.
Importantly, the Wife accounted to me, in her affidavit, that she made a substantial transfer of $161,771 in June 2022 into her NAB account ending in #...34. Of course, that transaction occasions particular attention, as it was made shortly after separation. She notes, however, that there remains a balance of $108,226, which has now been rolled into an NAB account ending in #...67. She offers an explanation for the $52,000 difference (between the approximate $160,000 before transfer and the $108,000 remaining). The difference is because she has expended funds on this legal proceeding, and in relation to other legal proceedings concerning an intervention order in the Magistrates Court.
Unfortunately, having regard to the very modest amount of funds in dispute, the Wife’s legal fees are higher than they would otherwise be, in circumstances in which the Husband has already sworn about 10 affidavits in this proceeding of very great length. A cursory review of the Court file suggests that it may well be that his prosecution of this proceeding is out of all proportion to the value of the asset pool.
WHAT ARE THE RELEVANT LEGAL PRINCIPLES AS TO AN ASSET PRESERVATION ORDER?
As Robert Heath KC and Johannes Schmidt wrote in their recent article “The Unjustifiable Requirement For An Asset Preservation Order” (2024) 33 Australian Family Lawyer 49:
asset preservation orders operate to prevent the party against which they are made from divesting or dissipating assets. These orders are intended to prevent the abuse or frustration of the processes of the courts by preventing respondents from dissipating their assets (or disposing of their assets) so as to deprive applicants of the fruits of any judgment obtained in proceedings.
I have power under s. 114(3) of the Act to make an asset preservation order.
The High Court explained the “organising principles” as to interlocutory injunctions in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65] as follows:
(1)the first inquiry is whether the applicant has demonstrated a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending trial; and
(2)the second inquiry is whether the balance of convenience favours the granting of the injunction sought.
Heath and Schmidt also explained that in order to succeed in obtaining an asset preservation order an applicant must demonstrate:
•a sufficient probability that they will obtain a favourable judgment;
•the risk that, if not restrained by order of the court, the respondent will do something that that brings about an unjustifiable dissipation of assets under the respondent’s control with the consequence that this will interfere with the due administration of justice; and
•that as a matter of discretion, the order ought to be made.
I must also consider matters such as whether irreparable harm to a party would be suffered if an injunction were not granted and the relative hardships that the parties may experience (Liatos & Liatos [2007] FamCA 945).
In M v DB [2006] FamCA 1380 at [49] in considering whether to make an asset preservation order the Full Court focused on whether there was an “objective risk” of disposal of assets
Rule 5.23(3)(b) provides that an application for a freezing order must be supported by an affidavit that includes the reason why the applicant believes “property of the respondent … may be dealt with in or outside Australia” and the reason “removing or dealing with the property should be restrained by order.”
I further refer to the statements of principle drawn from each of the following cases:
(a)Chen & Chen and Anor [2016] FamCA 758 at [49];
(b)Tsiang v Wu [2019] FamCAFC 128 at [27]; and
(c)Hancock& Hancock [2023] FedCFamC1F 429 at [125].
In Chen at [49] Cronin J said:
But what must be considered is the following:
(a) there must be an existing or potential claim under s 79 of the Act (or s.90SM) for alteration of property interests;
(b) any injunction ought be limited to that which is designed to reasonably protect the legal or equitable rights of a party but it is not the function of an injunction to provide security in advance of judgment;
(c) the Court is required to take into account the balance of convenience as well as hardship and in respect of matters connected to businesses, the Court will not usually restrain a party unless there exists a substantial risk of dissipation of assets or some substantial reason justifying a restriction; and
(d) there must be an objective risk of danger that a claim for substantive rights may be prejudiced unless then injunction is granted.
In Hancock at [125] Wilson J said:
Once it is accepted, as it must be, that the asset preservation order is a well-recognised injunction in family law jurisprudence, it follows that the learning about the evidentiary requirements of the grant or refusal of such an order follow axiomatically. For that matter, in Tsiang & Wu the decision in Palmer v Parbery was specifically adopted including McMurdo JA’s formulation of risk. To my way of thinking that adoption included the requirement for the applicant for an asset preservation order to demonstrate that there is a real danger of unjustifiable dissipation of assets, such as to render the judgment wholly or partially ineffective. That “real risk” must be shown by solid evidence and not by speculation, supposition, fear, surmise or conjecture.
[Emphasis added]
WHAT IS MY ANALYSIS?
On the material before me, the Husband has not persuaded me that he has shown a real risk of unjustifiable dissipation of assets by the Wife, shown by “solid evidence and not by speculation, supposition, fear, surmise, or conjecture” (see Hancock, above).
As the Full Court recognised in Chorn & Hopkins [2004] FCA 633 at [24]:
The existence of family law litigation does not require parties to go into a state of suspended economic animation.
The Wife is entitled to spend money in the course of her daily life. In terms of the transfer of approximately $160,000 shortly after separation, the Wife has accounted for the reduction in the available funds, by reference to justifiable expenditure on legal fees. The balance of the funds remains available. She has indicated to me, by her conduct, that she does not intend, unjustifiably, to dissipate those funds.
Although there is always some risk, in my assessment on the evidence before me, there is no reason to make an asset preservation order. Although one can understand the fact of the husband's concern, in my assessment, to make an asset preservation order in this case, would be to act on "speculation, supposition, fear, surmise or conjecture", and not on the basis that it has been shown, by solid evidence, that there is a real risk that the assets will be dissipated.
Finally, in my assessment, in seeking to freeze the Wife’s bank accounts in their totality, rather than by framing his application and any order he sought by reference to a percentile division of matrimonial assets he may realistically achieve at trial, the Husband substantially overreached in his application. That overreach detracted from its merit and the balance of convenience as to any order. I accept hardship would be occasion to the wife were her operative bank accounts to be frozen.
I dismiss the Husband's application.
WHAT HAPPENS NEXT AS TO THIS CASE?
My understanding is that this matter is next listed for a conciliation conference on 13 November 2023. I am told that the matter is otherwise listed before an appropriate judicial registrar in January 2025, on a date to be fixed. I urge the parties carefully to consider their position at conciliation to see if the matter can be resolved on terms satisfactory to both of them.
I will hear the parties as to costs.
CONCLUSION
As to other matters, I strike out the entirety of the affidavit of Ms B made on 18 October 2024 pursuant to r. 8.18(1) of the Rules, on the basis that it is “inadmissible, unnecessary, irrelevant, prolix, scandalous or argumentative”. I note that its purported comments on the lifestyle of the Respondent Wife are “scandalous”. I used that word in the sense of the facts to which the affidavit adverts are wholly unnecessary and irrelevant in a proceeding of this kind.
COSTS
As an addendum to my reasons on the substantive application, I note that on 25 October 2024 I made an order for costs in favour of the Respondent Wife.
Although she sought costs on an indemnity basis, I ordered that the Applicant Husband pay the Respondent Wife’s costs of the application fixed in the amount of $6,280.00, in accordance with the scale set out in Schedule 1 of the Rules.
I did not provide my reasons for the costs order of 25 October 2024. I made an order for costs in favour of Respondent Wife in the exercise of my discretion under s. 117(2A)(c) and (g) of the Act. The usual position under s. 117 is that each party bear his or her own costs. I may make an order for costs under s. 117(2) as I consider “just”. Relevantly my power is subject to s. 117(2A). Under s. 117(2A)(c) the Applicant Husband’s conduct was to press an application in circumstances in which he did not provide affidavit material in support of the application in accordance with the Rules. He did not formulate his application by reference to an outcome he may realistically achieve in the litigation but rather sought totally to freeze the wife’s bank accounts. Further, whether the matter is appropriately considered under s. 117(2)(e) or under s. 117(2A)(g) the Applicant Husband has been wholly unsuccessful in his application. In those circumstances, I assessed that it was appropriate that the Applicant Husband pay the Respondent Wife’s costs. I was not persuaded that exceptional circumstances existed to warrant an order for indemnity costs. I fixed costs by reference to the scale, not on an indemnity basis.
I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge Champion. Associate:
Dated: 11 November 2024
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