Chontoglou & Chontoglou
[2023] FedCFamC1F 313
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Chontoglou & Chontoglou [2023] FedCFamC1F 313
File number(s): DNC 98 of 2023 Judgment of: BERMAN J Date of judgment: 26 April 2023 Catchwords: FAMILY LAW – PROPERTY MATTERS – Interim – Anti-suit injunction – Where there are proceedings on foot in Country B – Where the wife seeks orders to stay the Country B proceedings and that the husband be restrained from continuing the prosecution – Where the husband is prepared to agree to a stay but does not consent to discontinue or withdraw the Country B proceedings – Orders.
FAMILY LAW – PROPERTY MATTERS – Interim – Sole use and occupation – Where the wife seeks an order for the sole use and occupation of the Suburb C property – Where the husband obtained an order in the Country B proceedings that prevented the wife from occupying the Suburb C property – Where the Suburb C property is registered in the husband’s sole name – Where the husband resides in City E– Where the wife resides in City F – Where the Suburb C property is not the wife’s primary residence – Order made restraining each of the parties from the occupation and use of the Suburb C property other than by consent.
Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 Part 6.1, r 6.06 Cases cited: Baba & Jarvinen (1980) FLC 90-882
Beecham (Australia) Pty Ltd v Roque Pty Ltd (1987) 11 NSWLR 1
Brown & Brown (2007) FLC 93-316
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Davis & Davis (1976) FLC 90-062
Hall v Hall (2016) 332 ALR 1
Lederer & Hunt (2007) FLC 93-311
Maroney & Maroney [2009] FamCAFC 45
Savage & Hodgson (1982) FLC 91-281
Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
Yen v Yen [2010] FamCA 1
Division: Division 1 First Instance Number of paragraphs: 120 Date of hearing: 12 April 2023 Place: Heard in Adelaide via MS Teams, delivered in Sydney Counsel for the Applicant: Ms Farmer Solicitor for the Applicant: AFL Withnalls Lawyers Counsel for the Respondent: Ms McMahon Solicitor for the Respondent: O’Sullivan Legal ORDERS
DNC 98 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR CHONTOGLOU
Applicant
AND: MS CHONTOGLOU
Respondent
order made by:
BERMAN J
DATE OF ORDER:
26 April 2023
UPON NOTING THAT the wife will retain and have access to funds held in her safety deposit box of approximately $413,043 without restriction or condition.
THE COURT ORDERS THAT:
1.Forthwith, the husband and the wife do all acts and things necessary to notify the National Australia Bank, in writing, that the hold placed on the G Pty Ltd bank account, BSB … Account Number …54, be removed and the account be solely operated by the husband in the ordinary course of business.
2.Forthwith, the husband disclose to the wife, the identity of the bank account or accounts into which the income of G Pty Ltd or any other trading entity operated or controlled by the husband, is to be deposited.
3.The husband and wife shall be restrained from doing the following with respect to rent received from H Street, Suburb J:
(a)Accessing, transferring, withdrawing or removing rental income; and
(b)Redirecting the rental income to any accounts other than Wesptac Loan Account ending #...99 and #...26 other than for the purpose of paying the expenses associated with H Street, Suburb J.
4.The husband and wife shall be restrained from doing the following with respect to rent received for K Street, Suburb J:
(a)Accessing, transferring, withdrawing or removing rental income; and
(b)Redirecting the rental income to any accounts other than Westpac Loan Account ending #...64 other than for the purpose of paying the expenses associated with K Street, Suburb J.
5.The husband do all things necessary to enable the wife to have read only access to all of the company banking and financial accounts for G Pty Ltd, including any account in the husband’s name to which money payable to G Pty Ltd or such other trading entity as may be operated or controlled by the husband is deposited.
6.By way of spousal maintenance, the husband pay to the wife the sum of ELEVEN THOUSAND SIX HUNDRED AND SIXTY SIX DOLLARS ($11,666) on the fifteenth day of every month commencing 15 May 2023, into the wife’s nominated Australian bank account.
7.Forthwith, the husband and the wife be restrained from occupying the property at Suburb C, D Region, Country B (“the Suburb C property”) other than as may be agreed between the parties.
8.Forthwith, the husband do all acts and things necessary to provide the wife with a key and all security access passwords for all surveillance equipment in respect of the Suburb C property.
9.Forthwith, the husband make available to the wife in good order and for her exclusive use, Motor Vehicle 1 and that the husband’s sister be instructed to deliver up any keys to the said Motor Vehicle 1 as may be retained by her.
10.No later than seven (7) days from the date of this order, the husband do all acts and things to cause the wife’s property removed from the Suburb C property to be returned to the wife as may be directed by her but in default, to the premises of the wife’s sister PROVIDED THAT the husband will ensure that the wife’s belongings are adequately packed, insured and forwarded at his expense to the wife in good order.
11.The husband be restrained from dealing with his L Bank account in Country B which currently holds the sum of approximately AUD $62,456, subject to the written consent of the parties.
12.The wife be restrained and an injunction be granted restraining her from withdrawing monies held by her in three term deposit accounts containing approximately $564,473, $806,391 and $806,391 respectively, PROVIDED THAT as soon as the wife is able to do so, the three term deposits are to be repatriated to Australia and deposited into an account in the joint names of the parties and shall be applied as follows:-
(a)in payment of the principal and interest amount as and when they fall due for the following mortgages, including any arrears, fees or penalties in the event the bank demands payment:
(i)Westpac Loan Account #...28 and #...50 secured against M Street, Suburb J;
(ii)Westpac Loan Account #...99 and #...26 secured against H Street, Suburb J; and
(iii)Westpac Loan Account #...64 secured against K Street, Suburb J;
(b)To the NAB Account for N Trust, the sum of $48,000;
(c)To the NAB Account of G Pty Ltd, the sum of $56,500; and
(d)To the Chontoglou Super Fund, the sum of $270,000.
13.Upon the parties setting up the bank account into which the three Country B term deposits are to be deposited, the husband will do all thing necessary to cause funds held by him in the L Bank to be deposited into the joint account of the parties.
14.Forthwith, the parties shall do all acts and things to instruct their accountant to produce tax returns for each of the individual parties, the P Trust, the Chontoglou Family Trust, G Pty Ltd, Chontoglou Investments Pty Ltd and N Pty Ltd, for the financial years ending 30 June 2021, 30 June 2022 and interim accounts as of 31 March 2023.
15.Failing agreement as to the value of the entities set out in order 14, within twenty eight (28) days of these Orders, the parties shall forthwith jointly instruct a single joint expert valuer to provide valuation reports for each entity, with the costs to be shared equally between the parties.
16.Within fourteen (14) days of these Orders, the parties will attempt to reach agreement as to the fair current market value of each of the following real properties:
(a)M Street, Suburb J;
(b)H Street, Suburb J;
(c)K Street, Suburb J;
(d)Q Street, Suburb R;
(e)S Street, Suburb T; and
(f)U Street, Suburb V.
PROVIDED THAT the cost of such reports shall be shared equally between the parties.
17.The husband be restrained from continuing the prosecution of the Country B proceedings commenced by him and that he will forthwith seek to discharge or suspend any orders made to date that are inconsistent with orders made herein.
18.Within twenty-eight (28) days of these Orders, the wife file and serve an Amended Response particularising the final orders sought.
19.The matter be listed for mention before the Honourable Justice Kari on 1 June 2023 at 11.00 am.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BERMAN J
INTRODUCTION
Mr Chontoglou (“the husband”) and Ms Chontoglou (“the wife”) are not able to agree orders in respect of property settlement and division.
The husband has commenced proceedings by Initiating Application filed 2 March 2023. Whilst the final orders sought are detailed, the husband seeks that the property of the parties, at this stage anticipated to be in excess of $7,000,000 in value, should be divided equally between the parties.
By the wife’s Response to Initiating Application filed 15 March 2023, the wife seeks leave to file an Amended Response particularising the final orders that she seeks within 14 days of the husband filing an undertaking of disclosure.
The proceedings are made complex by the parties owning property both in Australia and Country B. The husband currently resides in City E where he operates a business whereas the wife now resides between City F and D Region where she intends to remain.
There is one adult child of the relationship who studies in City F but is otherwise not relevant to the proceedings.
BACKGROUND
Both parties were born in City E. The husband was employed as a tradesperson from 1992 until 2003 when he became a Director and Shareholder in a company known as W Company. The wife worked in administration in W Company and the parties commenced their relationship in 1997, were married in late 1997 and separated either in December 2022 or January 2023.
The husband considers that neither of the parties came into the relationship with any assets of significance.
In 1997, the parties purchased their first parcel of real estate at X Street, Suburb Y. Following the birth of the parties’ son, the wife undertook the role of primary care giver until he commenced school in 2010. Thereafter, the wife commenced part-time employment with W Company and after the husband left the business in 2016, the wife became the Director of G Pty Ltd given that the husband was the subject of restraint of trade provision.
The parties purchased the property at M Street, Suburb J (“the M Street property”) in 2000. The M Street property became the matrimonial home. The husband continues to remain in the M Street property.
In 2006, the parties purchased the property at K Street, Suburb J (“the K Street property”) which is currently tenanted to N Pty Ltd, an entity controlled by the parties.
In 2007, the parties purchased the property at H Street, Suburb J (“the H Street property”). The H Street property has been at all times an investment property and is currently tenanted. The husband deposes that prior to separation, the rental income was paid by the tenant into the Westpac Loan account which is secured against the H Street property. The Westpac loan has assumed some relevance in the proceedings in circumstances where the husband alleges that the wife instructed the tenant to direct rental payments to an account controlled by her.
In 2015 the parties purchased vacant land at Suburb C, D Region (“the Suburb C property”) and subsequently constructed a home on the property. Because of restrictions on persons not being resident in D Region, only the husband was able to be the registered proprietor of the Suburb C property. The parties intended that they would live in the Suburb C property over extended periods when they returned to holiday in D Region.
For some period of time, the wife has spent her time either in City F with the parties’ son or in D Region in the Suburb C property. Of recent date, the husband has taken steps to change the locks on the Suburb C property and the surrounding perimeter and to remove the wife’s personal belongings to either her sister or her sister in law. The consequence of the husband’s actions is to prevent the wife from returning to the Suburb C property.
The husband seeks to retain the Suburb C property as part of his final orders sought. At present, there is uncertainty as to the intention of the wife however, she seeks use and occupation of the Suburb C property pending a final determination of the proceedings.
It is conceded by the husband that the initial prohibition of the wife being able to be the registered proprietor of the property has now been removed.
The husband also holds an account with L Bank which contains approximately AUD $62,456, being the net-proceeds received following the sale of a property at Suburb Z, D Region.
The parties operated what appears to be a successful business via the entity G Pty Ltd. As discussed, G Pty Ltd commenced in late 2016 with the wife as Sole Director and Secretary until the restraint of trade restriction against the husband expired and he was able to become a Director and Shareholder.
Following the separation of the parties and the conduct of the wife, the husband caused her removal as a Director in early 2023. G Pty Ltd generated significant income for the parties prior to separation. At paragraph 38 of the husband’s Affidavit filed 2 March 2023 he concedes that up until 2 February 2023, each of the parties received an equivalent salary of $140,000 per annum. The husband’s acknowledgement of income distribution from G Pty Ltd is corroborated by the detail of the wife’s 2020 taxation return.
The parties are also members of the Chontoglou Super Fund which owns property at AA Street, Suburb BB (“the AA Street property”).
The husband is the Sole Director, Secretary and Shareholder of N Pty Ltd, registered in 2017. At the same time, the husband became the Appointor, Sole Trustee and Designated Beneficiary of the N Trust.
It seems that whilst the husband has control of N Pty Ltd, he asserts that the entity is held on trust for a friend and is not in any way connected to the parties. Further, he asserts that the wife is fully aware that the entity is held on trust for a friend. At this stage, I am uncertain as to whether the wife concedes that N Pty Ltd should not be included in the pool of property available for division between the parties however, the relevance of N Pty Ltd is that after separation, the husband alleges that the wife removed $48,000 from the N Pty Ltd’s account without his knowledge or consent.
The parties are the joint Appointors, Trustees and Beneficiaries of the Chontoglou Family Trust which holds shares in Chontoglou Investments Pty Ltd (“Chontoglou Investments”). The wife is the Sole Director, Secretary and Shareholder of Chontoglou Investments and in 2019, she caused Chontoglou Investments to purchase a property at Q Street, Suburb R (“the Q Street property”), unencumbered. There appears to be some arrangement for the wife’s mother to reside in the Q Street property, rent free, on the basis that she receives a one- half interest in a property at U Street, Suburb CC (“the U Street property”).
The wife also owns a one-half interest in property situate at S Street, Suburb T (“the S Street property”).
The husband contends that between 2022 to January 2023, the parties sold four properties and received net-proceeds in the total sum of $1,781,486. It is likely that there will be Capital Gains Tax payable upon the sale however, the gravamen of the interim proceedings is the allegation of the husband that the net-proceeds of sale were deposited into a Westpac Bank Account solely controlled by the wife and thereafter, the entirety of the funds were transferred to a bank account held by the wife in Country B.
In addition, at paragraph 68 of the husband’s affidavit, he details a summary of purported redraws by the wife totalling $1,165,500. The husband also contends that the wife withdrew $48,000 on 3 February 2023 from the accounts of N Trust and $56,500 from the accounts of G Pty Ltd.
It also appears that the wife withdrew the sum of $270,000 from the Chontoglou Super Fund on 20 February 2023 which may have rendered the SMSF non-compliant.
The wife broadly agrees with the history of the acquisition and accumulation of property and says that in or about mid-2022, the parties considered a retirement plan which would see the liquidation of property in Australia and the purchase of property in Country B. The plan was to be given effect by all excess funds from property sales, excess funds in redraw loans and cash to be deposited into the wife’s personal savings account and then for it to be transferred to bank accounts in Country B and thereafter converted into local currency once the exchange rate was reasonable.
In paragraph 30 of the wife’s affidavit filed 15 March 2023, she details the disbursements of the net-proceeds from the sale of the four properties being sent to her Country B bank account and being converted to local currency.
In 2023, the wife contends that the parties sold an apartment in Suburb Z, D Region for about AUD $160,000 with a proportion of the proceeds to be deposited into a Country B bank account controlled by the husband.
The wife considers that from late 2015 to early 2015 she was in receipt of income from G Pty Ltd which was equal to that received by the husband.
There has not been a valuation conducted on the husband’s interest in G Pty Ltd although the wife’s contention is that the business is successful, employs numerous employees and subcontractors and owns substantial plant and equipment.
It is uncontroversial that since January 2023, the husband has taken steps to remove any access that the wife had to the MYOB accounting software and the business accounts. It is likely that the husband has set up either a new entity or at the very least, a separate bank account into which the income of G Pty Ltd is deposited, such that there is no possibility of the wife accessing the accounts of G Pty Ltd or any other entity that is now its alter ego.
Whilst there may have been some disagreement between the parties as to the personal expenditure of each of them but in particular the husband, the wife concedes that she withdrew $56,500 from the previous company account held with NAB and $48,000 from the accounts of N Pty Ltd. The wife agrees that those amounts should be restored to G Pty Ltd and N Pty Ltd.
A further complexity is that the husband has issued collateral proceedings in Country B and has secured orders that the wife is not able to access the banks accounts held in Country B, which underpinned the husband’s action in changing the locks to the Suburb C property.
Apparently, there are further proceedings or at the very least an extension of the current Country B proceedings that have been served on the wife with a court date on 18 April 2023.
The wife seeks an anti-suit injunction to stop the Country B proceedings. The husband appears to concede that at the very least the proceedings should be stayed. The husband’s argument is that the property now held in Country B, comprising the wife’s bank accounts and the Suburb C property, whilst they may be subject to an order made in this Court, would not be capable of enforcement in Country B.
INTERIM ORDERS SOUGHT
The husband seeks the interim orders as set out in his Initiating Application. In summary, the husband seeks that the wife be restrained from communicating with the tenants in the K Street property and H Street property in respect of the payment of rental income. The husband also seeks that money held by the wife in her Country B accounts be used either to pay the principle and interest amounts on the Westpac loans in respect of M Street, H Street and K Street or that the funds controlled by the wife be used to discharge the loans in their entirety.
The husband also seeks that the wife transfer the sum of $270,000 back into the Chontoglou Super Fund, the sum of $48,000 to N Pty Ltd and $56,000 to G Pty Ltd.
The interim orders sought by the wife are set out in a draft Minute of Order tendered by counsel at the hearing.
The draft Minute of Order is of assistance in that some aspects of the orders sought by the wife have been the subject of agreement. What is not agreed is as follows:-
(1)That the husband reinstate the wife as a Director of G Pty Ltd and allow her to have access to all company banking and financial records.
(2)That the husband cause to repay all income owing to the wife from 23 January 2023 to date or in the alternative that the husband pay to the wife $11,666 on the fifteenth day of every month to commence on 15 April 2023.
(3)That the wife have exclusive occupation of the Suburb C, D Region property or in the alternative that the husband provide to the wife the sum of $4,101 per month so that she can rent a property in City F.
(4)That the husband be restrained from dealing with his L Bank Account, currently containing the net-proceeds of the sale of a property at Suburb Z, D Region, in the sum of approximately AUD $62,456.
(5)That the parties be restrained from disposing of the net-proceeds of sale of the Suburb Z property.
(6)That within 28 days, the wife is to receive a further sum of $200,000 by way of partial settlement of property.
As considered at the commencement of these reasons, the prime focus is upon the repatriation of monies currently held by the wife in her Country B bank accounts to an Australian account controlled by the parties, the wife’s application for sole use and occupation of the Suburb C property, her application for either spousal maintenance or her restoration as a Director of G Pty Ltd and her ability to access the accounts of G Pty Ltd.
ANTI-SUIT INJUNCTION
Legal issues
In CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 (“CSR Ltd v Cigna Insurance Australia Ltd”), the High Court considered whether an anti-suit injunction made by a judge at first instance and left in place by an appeal court, should remain.
In CSR Ltd v Cigna Insurance Australia Ltd (supra), a dispute between an Australian company and a United States subsidiary arose with the United States parent company of an Australian insurer. The Australian company and its subsidiary, brought proceedings in a United States court seeking relief. The parent company insurer brought proceedings in the Supreme Court of New South Wales seeking an anti-suit injunction to restrain the continuation of the United States proceedings. The Australian company and the United States subsidiary sought a stay of the New South Wales proceedings. The trial judge at first instance, granted the anti-suit injunction and dismissed the application for stay. The majority considered that the trial judge had erred in making the anti-suit injunction and considered that a stay of the New South Wales proceedings should have been granted. As part of the Court's determination, consideration of any difference or distinction between a stay order and an anti-suit injunction was considered. At page 390, the Court approved of the consideration by the Privy Council in Société Nationale Industrielle Aerospatiale v Lee Kui Jak [1987] AC 871, namely:
Although stay orders and anti-suit injunctions are not governed by the same principles, it will later become apparent that, in some cases, the power to grant anti-suit injunctions is an aspect of the power which authorises a court to stay its own proceedings. And it will also become apparent that, in other cases, the power to grant anti-suit injunctions should not be exercised without the court concerned first considering whether its own proceedings should be stayed.
The High Court also made reference to Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 to further reinforce the position in Australia namely, that the Court has adopted an "inappropriate forum test" rather than the "more appropriate forum test". A stay is therefore to be granted only if the Australian Court is considered to be a clearly inappropriate forum.
In considering the Court's power to grant anti-suit injunctions, the Court said in CSR Ltd v Cigna Insurance Australia Ltd (supra) at page 392 as follows:-
The inherent power to grant anti-suit injunctions is not confined to the examples just given. As with other aspects of that power, it is not to be restricted to defined and closed categories. Rather, it is to be exercised when the administration of justice so demands or, in the context of anti-suit injunctions, when necessary for the protection of the court's own proceedings or processes.
(Citations omitted)
At pages 395-396, the Court considered the appropriate practice with respect to interlocutory anti-suit injunctions and summarised the position as follows:-
The cases concerned with injunctions in restraint of proceedings in foreign courts recognise that, although an injunction of that kind operates in personam, it nevertheless interferes with the processes of the foreign court and may well be perceived as a breach of comity by that court. Comity, relevantly, was explained by the Supreme Court of the United States in Hilton v Guyot in the following terms:
"'Comity', in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or other persons who are under the protection of its laws."
For this reason, the cases also emphasise that the power to grant injunctions in restraint of foreign proceedings, should be exercised with caution. And that is so whether the injunction is sought in the exercise of the inherent or equitable jurisdiction.
(Citations omitted)
Whilst the ability to order an anti-suit injunction is well settled in circumstances where this Court should do so, it is not necessarily straight forward. The decision of Beecham (Australia) Pty Ltd v Roque Pty Ltd (1987) 11 NSWLR 1 (“Beecham (Australia) Pty Ltd v Roque Pty Ltd”) at [3], suggests that an order:-
…should rarely, if ever, be granted to restrain a party not otherwise controlled by statute or clear contractual obligation, from proceeding in the appropriate court of another State of Australia….
It is noted that this decision was also applied in Lederer & Hunt (2007) FLC 93-311 (“Lederer & Hunt”) at [35]-[36] and Yen v Yen [2010] FamCA 1 at [40].
The Full Court, at page 81,346, referred with approval to the observations made by the Court in Beecham (Australia) Pty Ltd v Roque Pty Ltd (supra) and to the remarks of Nygh J in Baba & Jarvinen (1980) FLC 90-882 (“Baba & Jarvinen”). In summarising the general principles that should be applied, the Full Court considered that it would be an oversimplification of what fell from the High Court in CSR Ltd v Cigna Insurance Australia Ltd (supra) if it is suggested that to grant an anti- suit injunction should only occur in the most extreme and unusual circumstances, accordingly its application would have little application.
The Full Court referred to the explanation expressed by the High Court in CSR Ltd v Cigna Insurance Australia Ltd (supra) under the heading "Principles governing stay of proceedings on forum non conveniens grounds and the grant of anti-suit injunctions" at pages 389 to 390 as follows:-
The question whether a dispute as to legal rights should be litigated in the courts of one country or those of another is one that permits of resolution, if resolution is possible, by one court staying its proceedings in favour of the other or by it granting an anti-suit injunction restraining a person amenable to its jurisdiction from commencing or continuing proceedings in that other country. …
…
Although stay orders and anti-suit injunctions are not governed by the same principles, … in some cases, the power to grant anti-suit injunctions is an aspect of the power which authorises a court to stay its own proceedings. And…, in other cases, the power to grant anti-suit injunctions should not be exercised without the court concerned first considering whether its own proceedings should be stayed.
In Lederer & Hunt (supra) at [42], the Court gave a number of examples of where an anti-suit injunction may have a focus for "the protection of the integrity of a court's own processes". It was emphasised that the categories as described are by way of example only and it should not be assumed that “The inherent power to grant anti-suit injunctions is not confined to the examples just given".
In summary, whilst the granting of an anti-suit injunction would be considered unusual, the matters raised by Nygh J in Baba & Jarvinen (supra) at [37], and the Full Court in Savage & Hodgson (1982) FLC 91-281 focused the attention on issues relating to comity between courts.
It must be noted that the husband commenced the proceedings in this Court and simultaneously commenced proceedings in Country B. There is some uncertainty as to the extent of the Country B proceedings. At present, the Court is assisted by reliable translations of the Country B proceedings however, there is nothing from the husband which defines the breadth and scope of the orders being sought in Country B other than to restrain the wife from accessing monies held in her Country B accounts and from being able to use and occupy the Suburb C property in D Region.
The husband concedes that there is now a further extension of the proceedings recently filed on the wife.
The wife seeks orders that the proceedings commenced by the husband in Country B be stayed and further that the husband be restrained from continuing the prosecution of any proceedings that he has commenced. The husband is prepared to consent to orders in those terms but at this stage, does not consent to the Country B proceedings being withdrawn or discontinued.
I give consideration to the broad principle that emphasises that detailed consideration should be given to the circumstances of any potential decision that would interfere with proceedings in an overseas jurisdiction and impact on the comity of courts.
The husband seeks orders in this Court that are apparently similar to orders that he has either obtained or is seeking in a Country B Court.
To the extent that it potentially places the wife in a position where she must meet proceedings in two jurisdictions, a potential for an abuse of process is raised. Of greater concern is the real possibility that orders could be made in this Court that are in conflict with orders made in a Country B Court consequent upon the husband’s application.
An anti-suit injunction is a personal order directed against a party. Such an order does not restrain an overseas jurisdiction from conducting its own affairs but rather requires the husband to elect in which jurisdiction he seeks to proceed. The husband’s position is that he seeks orders from this Court with the intention that they will cover the field.
Whilst it is at an early stage, it is a reasonable contention that the majority of the assets of the parties available for division may well be held in Australia as opposed to Country B.
I propose to make orders that will restrain the husband from continuing proceedings in Country B and that he do all things necessary to cause the proceedings to be stayed. I do not propose to order the husband at this stage to discontinue the proceedings in circumstances where enforcement of these orders may be assisted by the extant proceedings.
The status of orders already made in Country B and directed against the wife may well need to be discharged where they are contrary to orders made in this Court.
The wife seeks to be reinstated as a Director of G Pty Ltd. It is likely that the consideration of the wife is not such that she would wish to resume active involvement in G Pty Ltd but rather that she seeks a reinstatement of the income to which she was otherwise entitled to receive in the sum of $11,666 per month based upon the simple arithmetic of a history of income received by her of approximately $140,000 per annum.
The wife has lived in Country B since 2019. The parties accept that separation occurred either in December 2022 or January 2023. The parties have now separated and are in high conflict which is in all probability, heightened by the transfer of funds from the Australian based resources of the parties to the wife’s private accounts in Country B.
I do not consider that the wife be reinstated as a Director to G Pty Ltd given the conflict between the parties but there is no good reason for her not to have access to all company banking and financial accounts.
In that regard, the parties are in agreement as to the preparation of financial accounts for all of the relevant entities including G Pty Ltd.
The husband has set up a separate account or accounts into which the income of G Pty Ltd is now deposited. The wife is not able to access that account however, there is no good reason why the wife should not be able to access on a read only basis the accounts of G Pty Ltd.
I propose to order that within 7 days of these orders the husband shall nominate an account into which the income of G Pty Ltd or other entities shall be deposited.
In terms of the personal affairs of the parties, they are reminded of their separate duty of disclosure as set out generally in Part 6.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Family Law Rules”) and in particular r 6.06.
OCCUPATION OF THE SUBURB C PROPERTY
As a result of the husband being the sole registered proprietor of the Suburb C property, he was able to obtain an order in the Country B proceedings that prevented the wife from occupying the Suburb C property. In addition, the husband has changed the locks and the security access passwords to ensure that the wife could not access the property or its perimeter. In doing so, the husband also prevented the wife from using her Motor Vehicle 1. The husband now concedes that the motor vehicle can be released to the wife but does not concede her application to resume exclusive occupation of the Suburb C property.
The husband concedes that the wife would now be able to become the registered proprietor of the property if that ultimately forms part of the orders that she seeks and the Court determines a transfer of the property to be an appropriate outcome.
As considered, the husband continues to reside primarily in City E in the former matrimonial home and is in control of the various businesses operating in EE Region. The wife has lived in Country B since 2019 when she accompanied her son to enable him to commence his studies. It is acknowledged by the husband that from time to time the wife has occupied the Suburb C property.
Whilst the wife has not yet particularised the final orders that she seeks, it is likely that she will also seek to retain the Suburb C property. Her argument is that the husband is in control of the assets in Australia and given she resides now permanently in Country B, there is no good reason why she should not also have access to the Suburb C property.
The husband contends that if the wife’s true purpose is to assist their son in his studies, then her primary residence is likely to be in City F and the Suburb C property would be for the purposes of a holiday.
In Davis & Davis (1976) FLC 90-062 at page 75,309 the Full Court held:-
The criteria for the exercise of the power under sec. 114(1) are simply that the court may make such order as it thinks proper. The matters which should be considered include the means and needs of the parties, the needs of the children, hardship to either party or to the children and, where relevant, conduct of one party which may justify the other party in leaving the home or in asking for the expulsion from the home of the first party.
The test is not the balance of convenience that might favour one party or the other but rather to consider all of the circumstances that might be relevant to a determination.
I am not satisfied that the Suburb C property is the wife’s primary residence. It is conceded on her behalf that it is not an easy commute from City F to D Region and given that the property is currently registered in the name of the husband, his right to utilise the property should not be easily ignored. There is no allegation of aggression or physical conflict between the parties. The wife does not assert family violence and in circumstances where the property is not the wife’s primary residence, it is difficult to see why merely because she resides in Country B she has a better right of occupation than the husband.
The husband however, is in a similar position to the wife. His primary residence is in Australia and to the extent that he would wish to use the Suburb C property it could only be on the basis of a holiday home.
I do not consider that the husband has any better right to the use and occupation of the Suburb C property than the wife. There is no evidence that any conduct or misconduct of the wife should be considered as a justification for the pre-emptive action by the husband in seeking orders from a Country B court that prevents the wife’s occupation of the Suburb C property. In addition, the removal of the wife’s personal property was cavalier and unnecessary.
The Court has considered the future conduct of the proceedings and it is likely that a final hearing can be listed in the City E Registry in early 2024. Effectively, the issue of who will ultimately retain the Suburb C property, assuming both parties maintain orders seeking the retention of the property, is likely to be of relatively short duration.
Either both parties are able to freely access the property or neither party is able to do so without the agreement of the other.
I will restrain each of the parties from the occupation and use of the Suburb C property other than by consent. It is appropriate that each of the parties have the ability to access the property if agreement is reached and in order to give effect to that outcome, the husband will need to provide keys to the premises to the wife and all necessary access codes so that if agreement is reached, each of the parties are able to access the property.
FUNDS RETAINED BY THE WIFE
The wife sets out in the balance sheet forming part of her Case Outline document that she holds deposits in three Country B accounts and the sum of $413,043 in a safety deposit box held in the L Bank.
The husband concedes that the wife should retain the monies held in the safety deposit box but that the balance of the monies held in the wife’s accounts should be repatriated to Australia. The wife does not agree that this should occur and it is her argument that the husband controls significant assets in Australia and therefore there is no good reason why she should not control the monies currently in her account.
Whatever the arrangement may have been between the parties in 2022 with a view to their retirement and move to Country B, the circumstances changed given their separation.
The evidence does not support a finding that the manner in which the wife removed money from Australia was undertaken in an orderly fashion and with the knowledge and consent of the husband.
In particular, the wife concedes that $270,000 was removed from the Chontoglou Super Fund which may well have had an adverse impact on the ability of the fund to comply with the requirements of a SMSF.
Moreover, the wife concedes that the sum of $56,000 should be returned to G Pty Ltd and the sum of $48,000 to N Pty Ltd.
In circumstances where the wife is to retain her safety deposit box contents of $413,043, the appropriate order is for the totality of the three term deposits held by the wife in Country B accounts, should be repatriated to Australia and disbursed as follows:-
(1)$56,000 to G Pty Ltd.
(2)$48,000 to N Pty Ltd.
(3)$270,000 to the FF Bank Cash Management Account held in the name of Chontoglou Super Fund.
(4)The balance to be held in a joint account in the name of the parties with neither party to be able to unilaterally access the account without the consent of the other save that it is appropriate that the funds be utilised to pay any shortfall in terms of the Westpac mortgage loans secured against M Street, H Street and K Street.
The husband acknowledges that he holds an account with L Bank which contains approximately $62,456, being the net-proceeds of sale of a property at Suburb Z, D Region.
The wife seeks that the husband be restrained from accessing this account.
At this stage, there is not any reason to treat monies held by the husband in Country B as different to the accounts of the wife.
Whilst the amount is relatively modest taking into account the entirety of the pool, it is not the husband’s position that the money has been earmarked for some specific purpose.
I propose to restrain the husband from using the money held in the L Bank and that similar to the wife, those monies should be repatriated to the same account that the parties will be required to set up in Australia.
WIFE’S APPLICATION FOR FINANCIAL SUPPORT
It is not suggested that G Pty Ltd, or such other trading entity that generates income for the parties, is in a parlous or constrained financial position. The wife contends that the business is highly profitable, employs a number employees and subcontractors and that it generates significant income. Moreover, the wife refers to her 2020 tax return which confirms her assertion that in that year and certainly of more recent time, the income attributed to her from G Pty Ltd was in the order of $140,000.
At paragraph 38 of the husband’s affidavit, he acknowledges that each of the parties received the equivalent salary of $140,000 per annum. The payments to the wife ceased upon her removal and withdrawal of substantial funds.
The wife’s application for financial support is predicated upon the order she seeks that she be reinstated as a Director and therefore entitled remuneration that she had historically received.
The wife’s counsel promoted the concept of the wife receiving a wage from G Pty Ltd under the rubric of “garden leave”.
I am not persuaded that, unless by consent, an order should be made that the wife receive a wage in circumstances where she does not render any duties for G Pty Ltd.
It is however acknowledged by the husband, that the wife has a need for income. The wife has lived in Country B since 2019 and has the expense of the parties’ son.
In Hall v Hall (2016) 332 ALR 1, the High Court considered that the issues to be determined are summarised as follows:-
(1)To what extent is the wife unable to support herself;
(2)What are the wife’s reasonable needs;
(3)What capacity does the husband have to meet a spousal maintenance order if such an order was to be made; and
(4)If the wife’s circumstances favour an order for spousal maintenance to be made then what order is reasonable having regard to s 75(2) of the Act.
In Brown & Brown (2007) FLC 93-316 at [161], the Full Court summarised the principles to be applied as follows:-
•The word “adequately” is not to be determined according to any fixed or absolute standard.
•The idea that “adequate” means a subsistence level has been firmly rejected.
•Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
•In some circumstances it may be reasonable for the parties to live at a higher standard than previously enjoyed.
•It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
•However, an applicant is not entitled to live at a level of considerable luxury or comfort merely because the other party is very wealthy.
It is apparent that as a result of the successful business, the parties were able to enjoy a high standard of living. Whilst not yet determined, it is likely that the net property of the parties will exceed $7,000,000 in value.
Moreover, the parties considered it important that they build a luxury house in D Region to enable them initially to holiday but potentially to provide a home for their future retirement.
The wife has lived in Country B since 2019 and has clearly established that her expenses are not insignificant and in any event, prior to the parties’ separation the husband caused sufficient funds to be available to the wife for her appropriate maintenance.
Whilst there is scant evidence as to the extent of the wife’s duties as a Director of G Pty Ltd, what is clear is that the husband took the unilateral action of removing the wife as a Director of the company. He also created a new account or accounts into which the income of G Pty Ltd would be deposited.
By reference to the wife’s Financial Statement filed 15 March 2023, her only income declared is as to one half of the rent paid by the tenant in the H Street property.
The wife’s previous income of $140,000 was terminated by the actions of the husband.
Other than her credit card, the wife does not disclose any significant personal expenditure other than the loan repayments on the M Street and H Street properties.
Her Part N expenses are in the sum of $1,005 excluding the expenses for the parties’ adult son in the sum of $905 per week. It is not unreasonable to find that whilst the wife is under no obligation to continue payments in respect of the son, there is an expectation by the husband that from the collective resources of the parties, their son will be supported. Accordingly, the wife contends that her average weekly expenses are $1,910 over and above her credit cards.
For his part, the husband’s Financial Statement filed on 2 March 2023 sets out that he receives $140,036 by way of salary together with $800 rent from the tenant in H Street and $250 rent paid by N Pty Ltd for the K Street property, received weekly in the sum of $2,693.
The expenditure of the husband is comprised of income tax of $764 per week and a contribution to superannuation of $283 per week. In addition, the husband brings to account the mortgage payments in respect of M Street, H Street and K Street. There is also a contribution towards life insurance and TPD insurance of $507 per week.
The husband provides no detail of his Part N expenses as set out in his Financial Statement although he asserts that the total discretionary expenditure is in the sum of approximately $1,000 per week.
The husband does not explain the manner in which the income that had previously been paid to the wife is now reflected in the company.
The wife acknowledges that she received the sum of $7,000 net per month which equates to about $84,000.
The wife seeks a payment of $11,666 per month. I am not told of the likely accommodation costs of the wife in circumstances where she has been living with her son but chooses not to do so and for at least some significant periods was able to live in the Suburb C property. It is however reasonable to infer that there is likely to be some additional costs for the wife’s separate accommodation.
Taking into account the circumstances of each of the parties, the financial resource available to the husband and his recognition that the wife’s costs of remaining resident in Country B to look after their adult son is significant, there is merit in the orders sought by the wife that the husband do all things to pay her the sum of $11,666 per month. It is a matter for the husband as to how that is achieved but I consider it relevant that the level of support available to the wife should not be determined on a subsistence level, nor do I consider that the wife should use up her assets in order to adequately support herself.
In Maroney & Maroney [2009] FamCAFC 45 the Full Court said at [56]:
…. Once a party, …, establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.
FURTHER ORDERS
I note that the parties have reached substantial agreement in respect of discovery, valuation of properties and other considerations that will assist in the parties working towards a concluded balance sheet, which if achieved, is likely to assist in them either reaching a resolution or enabling the matter to be listed for hearing in early 2024.
I make orders as appear at the commencement of these reasons.
I certify that the preceding one hundred and twenty (120) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Berman. Associate:
Dated: 26 April 2023
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