CHESTER & CHESTER

[2020] FamCA 515

FAMILY COURT OF AUSTRALIA

CHESTER & CHESTER [2020] FamCA 515

FAMILY LAW – PROPERTY – Interim – Where the applicant wife seeks an order that the husband pay her an interim payment in the sum of $150,000 to assist her in meeting her day-to-day expenses – Where the respondent husband resists the application but proposes that he make a payment of $30,000 to the wife – Where the wife has no income and no means of supporting herself – Where the husband has complete control of all the property and superannuation of the marriage – Where the Court is satisfied that the interests of justice demand that some of the parties’ funds are paid to the wife now for her immediate use – Where an appropriate sum is $150,000 – Where the husband is ordered to pay the wife $150,000 from funds held in a joint bank account.

FAMILY LAW – INJUNCTIONS – Preservation of Property – Where the wife seeks an injunction restraining the husband from dealing with any property in his name or control without first providing her with written notice of his intention to do so – Where the husband contends that there is no evidence that the husband will act in any way to prejudice any claim the wife may have – Where in the circumstances an injunction is warranted.

Family Law Act 1975 (Cth)

Marchant & Marchant (2012) FLC 93-520
Patton & Patton [2015] FamCA 1083
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Wenz v Archer (2008) 40 Fam LR 212

APPLICANT: Ms Chester

RESPONDENT: Mr Chester

FILE NUMBER: BRC 4546 of 2020

DATE DELIVERED: 29 June 2020

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 22 June 2020

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Brandon
Evans Brandon Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Shoebridge

SOLICITOR FOR THE RESPONDENT: Frampton Legal

Orders

IT IS ORDERED UNTIL FURTHER ORDER

1. That the Applicant Wife and Respondent Husband do all acts and things as are necessary to cause the payment of $150,000 to the Applicant wife from the Joint C Bank account number …51.

2. That the Respondent is restrained from selling, transferring, encumbering or otherwise disposing of his interest in the real property situated at B Street, Suburb D in the State of Queensland, all or any of his shares in the companies, F Pty Ltd and G Limited (incorporated in New Zealand), from resigning as a director of or appointing any further directors to either of those companies, from causing either of those companies to sell any of their assets save in the ordinary course of business, from taking any step that would cause the G Superannuation Fund to sell, transfer, encumber or otherwise dispose of any of its real property assets, without first giving at least twenty one (21) days’ notice in writing of same to the Applicant wife through her solicitors of record.

IT IS FURTHER ORDERED

1. That the matter be adjourned for case management before a Registrar at a time and on a date to be advised.  

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 Chester & Chester 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 4546 of 2020

Ms Chester

Applicant

And

Mr Chester

Respondent

REASONS FOR JUDGMENT

1. This is the determination of an interim application brought by Ms Chester in substantive property adjustment proceedings commenced by her recently in this Court. The application came before me in the Judicial Duty List on Monday, 22 June, 2020. I heard the matter electronically via the Microsoft Teams internet video conferencing platform. The wife (as I shall call the Applicant) was represented by her solicitor and the husband (as I shall call the Respondent) was represented by counsel.

2. Not many matters that come before this Court involve joyous circumstances, but in this instance I observe that it is particularly saddening to see a married couple, where the husband is 80 years old and in failing health and the wife is 70 years old, separating and embarking on litigation in this Court.

Some Background

1. This former couple have, interestingly, been married to each other twice. They were first married in 1991, and that marriage was dissolved in 1995. They married again in 2015. At this point, there is some dispute about the exact date of their final separation. The wife says she was “excluded” from their jointly owned home just after Christmas 2019. The husband says they separated in late September 2019. Nothing turns on that fact in deciding this application.

2. Both of the parties are retired, but the husband still owns a business (through his shareholdings in the companies that own and operate the business) and the adult son of a former relationship of the wife manages that business for him and, according to the husband, is in negotiations to buy the business from the husband. There is no evidence of the value of the business, but it is a long running, apparently successful business that sells product to the national market and across the Tasman Sea in New Zealand.  The husband says he still receives $5,500 per month in income from the business, as well as $9,000 per month from his self-managed superannuation fund – a total of $14,500 per month.

3. The former couple jointly own their former matrimonial home which the husband continues to occupy. He estimates it is worth $1,500,000. The wife estimates it is worth $2,800,000. Clearly, one of them (if not both of them) is quite wrong about that.

4. The wife asserts the husband’s superannuation fund has assets of $2,000,000. The husband says its assets are worth $1,404,800. Again, one of them (if not both) is quite wrong about that, too.

5. Otherwise, they have some motor cars, furniture and personal possessions and most relevantly for this application, $300,000 in cash in a joint bank account and around $50,000 in cash in a bank account in the husband’s sole name.

6. There is no dispute between the parties that the wife does not have an income. She has, at least over the last few years, had, as the husband also has, access to the money in the parties’ joint bank account as she needed it. It seems this has been the source of some dispute.

7. In a not unfamiliar refrain, the wife complains that the husband has always been very “controlling” in respect of money and finances. For his part, the husband complains that the wife was always overspending. The wife says that by agreement she “was paid” $3,000 per month from the joint account for her needs. The wife says that in late December, when the husband was acting strangely she checked his phone and confronted him about something she discovered on it. She says that the next day, whilst she was out, the husband had the locks on the home changed and she could not regain entry and has been excluded since. She says that the next day the joint bank account was frozen and she has had no access to it since and has been relying on support from her own immediate family members in all the months since.

8. The husband says that he only limited the wife’s monthly drawings from the joint account a year or so ago, after discovering that she was drawing too much from it each month. He says that late last year he discovered that despite having put limitations on her drawings, she was still drawing several thousand dollars per month. He says that when he discovered that he told the wife the marriage was ended. There is no dispute that he froze the joint account and that she has been excluded from their home.

The Wife’s Application

1. The wife seeks final property adjustment orders for her to be paid $1,400,000 and the transfer of their former home to her. She also seeks a split of 50% of the husband’s superannuation. The husband seeks final property adjustment orders requiring their former home to be transferred to him, the wife’s car to be transferred to him and for him to pay the wife $150,000. Once again, one of them (if not both) is very wrong about what would constitute a just and equitable property adjustment outcome.

2. In any event, final resolution appears a way off. If it progresses through this Court’s pending cases list to a trial, that will not be until sometime next year, probably in the second half of the year. In the meantime, at the hearing on 22 June, the wife pressed her application for the following interim orders that were opposed by the husband:

   1.That the parties do all acts and things as are necessary to cause the payment of $150,000 to the Applicant from the Joint C Bank account number …51 [hereafter “joint account”).

   2. That the Respondent be restrained from doing any act or omission with respect to any item of property in his name or under his control which may have the effect of prejudicing the claim of the Applicant in these proceedings without first providing the Applicant with 45 days written notice of his intention to do so.

The Application for the interim payment

1. The wife seeks a payment of an amount of $150,000, half the funds in the frozen joint account. Her solicitor put her case simply. She has no income. She has no other money ($100 in her own bank account as deposed to in her Financial Statement) and she needs some funds to survive whilst finalisation of property matters takes place in circumstances where the husband has complete control of all of their property and superannuation interests. One could expect that she also needs some funds to pay for her experienced family law solicitor’s representation in the matter as well, though the application has not been framed as an interim litigation costs funding one.

2. The wife’s solicitor submitted that the wife’s legitimate claim to property adjustment orders in the matter will see her always getting at least $150,000 as the husband seeks such an order. I understood the wife’s solicitor to be respectfully submitting to the Court that the wife’s claim may legitimately be more than that as well, even if not as much as the orders she seeks in her final application.

3. Curiously, counsel for the husband told the Court that rather than give the wife $150,000 now, the husband proposes giving her $30,000. Counsel’s submissions in support of that referred to the husband’s evidence that the wife had drawn tens of thousands of dollars out of the joint account in excess of the agreed amount over the last year or so. It would seem that the husband believes, at least, that the wife has retained a lot of that money somewhere and is dishonestly not disclosing it to the Court. The husband did not adduce documentary evidence to support his deposition about that and the wife did not put in an affidavit in response confirming or denying the truth of the assertion. I can make no finding at all about that that would be dispositive of this application.

The Applicable Principles

1. The Full Court’s decision in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 (“Strahan”) is authoritative. The relevant principle expounded in that case was approved again by the Full Court in Marchant & Marchant (2012) FLC 93-520 (“Marchant”). Relevantly, the determination of an application for interim property orders pursuant to s 79 and s 80 (1) (h) of the Family Law Act 1975 (Cth) (“the Act”) (the legislative source of power to make such orders) is to be undertaken in two stages. The first stage involves the determination of whether or not the Court should exercise its discretion to entertain the application. An applicant does not have to demonstrate compelling circumstances for that question to be answered in the affirmative, but it is necessary to establish that it would be appropriate for the Court to exercise the power. The overarching consideration in determining that is the interests of justice. In Marchant, the Full Court said at 86,665, [25]:

   … Recognising that in the context of s 79 proceedings, the interests of justice will usually be best served by one single and final determination of property orders, it will not be appropriate to exercise the power merely because, on such a final determination, the applicant would receive the interim property sought or in excess of that sought.

   (My emphasis)

2. In Strahan, their Honours who wrote the majority judgment (Boland and O’Ryan JJ) quoted extensively from a judgment of Reithmuller FM (as his Honour then was) in Wenz v Archer (2008) 40 Fam LR 212 (“Wenz”). In Wenz at 223, [53] Reithmuller FM pointed out that the Full Court of this Court had unanimously said in Blueseas Investments (1999) 25 Fam LR 65 at [54]:

   …[a] highly relevant matter that distinguishes litigation under the Family Law Act from ordinary civil litigation … is the fact that very often the wealth of the parties is controlled by one rather than both of them.

   Reithmuller FM went on to say in Wenz:

   …It cannot be the case that a party who has an irresistible claim to a substantial share of the property of the parties should be held out of that property whilst the matter is litigated, left to rely upon applications for exclusive occupation of the matrimonial home or spousal maintenance alone, particularly where the parties are asset rich but have relatively modest incomes ... Nor could it be appropriate that a party should be denied the ability to liquidate assets when there are real needs for those resources, such as to meet debts which may result in the party being pursued by creditors, or the need for the party to make payments for the benefit of the children, or to take advantage of other financial opportunities (for example the superannuation contribution cases).

3. In Strahan at 86,654,[133] Boland and O’Ryan JJ pointed out that in Harris and Harris (1993) FLC 92-378 at 79,930, the Full Court set out some examples of circumstances where it may be appropriate to exercise the power that is being considered. Relevantly, those examples included “urgent situations” to “avoid injustice”, and the far more familiar circumstance where the party who is without control of the assets and resources “requires funds to assist in defraying the costs of litigation without which funds an injustice may be caused.”

The Determination of the Interim Property Application

1. It is clear the Full Court has expressed the view that in the context of s 79 proceedings, the interests of justice will usually be best served by one single and final determination of property orders and that it is generally not enough for one party to say, figuratively, that they want part of the slice of the cake that they expect to get on finalisation of the matter now before that finalisation without them being able to point to facts that the Court would consider constituting an injustice on an interim basis. Indeed, if the husband is correct in his view of what would constitute a just and equitable property division, giving the wife what she asks for now would be giving her all of the slice of the cake that she would otherwise have to wait for. So be it.

2. In the circumstances of this case, I am satisfied that the interests of justice demand that some of the parties’ funds are paid to the wife now for her immediate use.

3. The husband wants that to be $30,000 whereas the wife asks for $150,000. To give the wife $30,000 as the husband proposes would, in my judgment, go part of the way towards meeting the injustice the wife has been living under since she was unilaterally excluded from the parties’ jointly owned former home and cut off from access to their joint funds. However, $30,000 will not go far in meeting her support and her legal costs, particularly if this matter goes on unresolved. I am satisfied that if that was the amount, the wife would have to come back cap in hand to the husband, who she says has always been controlling with the money, for some more very quickly, or back to the Court with all the costs consequences for both parties that involves.

4. I do not consider $30,000 to be enough in the circumstances. I am satisfied that the justice of the situation is appropriately met by payment to the wife of the amount she asks for. On a cursory consideration of the factual circumstances set out by both parties in their affidavit evidence, with due regard to the facts about which there is dispute at the moment, I am satisfied, at this point, that the wife will be entitled to more than $150,000 worth of property in the final determination of a just and equitable property adjustment. That much I told the parties during the hearing. I have no concerns that making an order that the wife receive $150,000 in funds now will not be able to be justly and equitably accommodated within appropriate final orders. I will make the order sought by the wife.

The Injunction Sought  

1. The wife also seeks an interim injunction in the form I have set out above. The wife’s solicitor referred to a number of relevant facts in support of the wife’s application. Those were:

   ·     The husband’s unilateral exclusion of the wife from their jointly owned property and his subsequent unilateral severance of their joint tenancy;

   ·     The husband’s unilateral freezing of their joint bank account;

   ·     The fact that a sale of the business is now being negotiated (albeit with the wife’s son of a former relationship);

   ·     That all of the property and superannuation interests of the parties or either of them are controlled by the husband.

2. The wife’s solicitor pointed out in his submissions that the wife does not seek complete restraint against the husband, but rather is just wanting appropriate written notice of the husband’s intention to act in a way that may have the effect of prejudicing the claim of the Applicant in the proceedings so that she can at least consider her position. The order sought provides for 45 days written notice.

3. For the husband, it was submitted that there is no evidence that the husband will act in a way that is prejudicial to the wife’s claim and that the injunction should, therefore, not be granted.

The Applicable Principles

1. My learned colleague, Justice Kent succinctly set out the applicable principles in his first instance decision in Patton & Patton [2015] FamCA 1083 (“Patton”) at [25] to [29]. His Honour pointed to ss 34(1) and 114(3) of the Act as the sources of power and set out certain principles that he said “would seem to be well settled by authority”.[1] I respectfully consider it worth citing the following from his Honour’s judgment:

   [1] And his Honour referred to the following cases as authority for that proposition - Waugh & Waugh (2000) FLC 93-052 and Mullen & De Bry (2006) FLC 93-293 and the authorities cited in those cases; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; Beacham Group Ltd v Bristol LaboratoriesPty Ltd (1968) 118 CLR 618; Blue Seas Investments Pty Ltd v Mitchell & McGillivray (1999) FLC 92-856; Stowe & Stowe (1981) FLC 91-027; Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836; Sieling & Sieling (1979) FLC 90-627; Giumelli v Giumelli (1999) 196 CLR 101; Norton & Locke (2013) FLC 93-567; and Martinello & Martinello (1981) FLC 91-050.

   28.…

   a)The applicant has the onus of demonstrating two central requirements, namely:

   i)That the applicant has an existing (or potential) claim to an order altering property interests under s 79 of the Act; and

   ii)An objective risk or danger that the claim may be prejudiced unless an injunction is granted;

   b)There is no “fundamental” or “threshold” question whether a scheme to defeat a judgment exists, to be answered in the affirmative on the balance of probabilities in every case before an order preserving property can be made.  In an inquiry into the risk of disposal of assets, the question of an intention or scheme is but one of a number of factors relevant to the objective risk of disposition to defeat an order;

   c)The Court is required to take into account the balance of hardship and the balance of convenience between the parties and in that context the Court will not usually restrain a party from ordinary business dealings unless there exists a substantial risk of dissipation of assets or some substantial reason justifying such a restriction;

   d)Any injunction granted ought be limited to that which is in the reasonable protection of a legal or equitable right and it is not the function of an injunction to provide an applicant with security in advance of a judgment.

   29.     In Sieling & Sieling (supra) the Full Court observed:

   The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly.  The Court must balance the hardship to each party of granting or refusing an order, and frame its order in such a way as to impose no further restriction that is necessary to achieve the protection of the applicant’s interest.  It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim.

   …

1. I respectfully agree with Kent J’s statement of principle.  

2. The wife in this case has a reasonable claim to an order altering property interests under s 79 of the Act. Is there an objective risk or danger that the claim may be prejudiced unless an injunction is granted? I consider the answer to that to be an affirmative one in the circumstances of complete control of the property by the husband, his unilateral post-separation actions to date and the assertion by the wife that he was always “controlling” of the finances during the marriage. Clearly, there is potential for the husband to act in ways that might prejudice the wife’s claim, particularly when, prima facie, he considers her just and equitable entitlement is only $150,000.

3. Counsel for the husband is correct in submitting that there is no evidence of a “scheme to defeat a judgment”. But, as Kent J pointed out in Patton, that is not determinative of the matter. It is but one of the factors relevant to the objective risk. I am satisfied an interim injunction is warranted in this case.

4. I am of the view that the wording of the particular injunction sought is also relevant when considering whether the balance of convenience favours between the parties favours the granting of an interim injunction, and, most particularly, on what terms. The injunction sought by the wife really just requires notice to be given by the husband, permitting the wife to take advice and act to protect her position if needed. However, the wording of it, in my view, is otherwise problematic. It permits of too much subjectivity on the part of the husband in determining whether notice is required. It permits him to determine what may or may not prejudice the wife’s claim.

5. I consider it more appropriate to require the husband to give reasonable written notice to the wife, through her solicitors of record, of any proposed sale, transfer, encumbrance of or other disposition of his interests in their former home, his shares in the companies that operate the business or the real property assets of his self-managed superannuation fund.  I will also include in the matters for which he will be required to give her written notice, causing the companies to sell any of their assets other than in the ordinary course of business, and resignation by the husband as a director of or the appointment of any other persons as directors of the companies. I will provide for the period of notice to be twenty one days, a period I consider reasonable given the requirement will be to give that notice to the wife through her solicitors.

6. I make the orders set out at the commencement of these reasons.   

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 29 June 2020.

Associate: 

Date:  29 June 2020