Collis & Collis
[2023] FedCFamC1F 885
•17 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Collis & Collis [2023] FedCFamC1F 885
File number: SYC 7100 of 2023 Judgment of: CAMPTON J Date of judgment: 17 October 2023 Catchwords: FAMILY LAW – PROPERTY – Where both parties sought urgent mandatory injunctive orders regulating the process of completing an exchanged contract for the sale of real property subject to a notice to complete –Where the final relief sought by both parties was incompetent and abuse of process – Where the parties had multiple opportunities to amend their final orders sought – Where neither party could identify the source of power to ground their respective substantive relief sought – Where the success of the interlocutory injunctive relief sought by each party was improbable – Where both parties sought leave to withdraw their Initiating Application and Response to Initiating Application – Orders made providing both parties with such leave – No order as to costs. Legislation: Family Law Act 1975 (Cth) Pt VII, ss 79, 90C and 114
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6
Division: Division 1 First Instance Number of paragraphs: 31 Date of hearing: 17 October 2023 Place: Sydney Solicitor Advocate: Mr Morison Solicitor for the Applicant: Wood Marshall Williams Counsel for the Respondent: Mr Wong Solicitor for the Respondent: Long Saad Woodbridge Lawyers ORDERS
SYC 7100 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS COLLIS
Applicant
AND: MR COLLIS
Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
17 OCTOBER 2023
THE COURT ORDERS THAT:
1.The wife be granted leave to withdraw her Amended Application for Final Orders filed
1311 October 2023.2.The husband be granted leave to withdraw his Amended Response to Final Orders filed 12 October 2023.
3.There be no order as to costs.
THE COURT NOTES THAT:
A.The withdrawal of each of the substantive application or response does not prejudice the capacity of either party to make such further application on terms they consider appropriate.
B.The making of these Orders conclude this proceeding.
C.These Orders have been amended pursuant to rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
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 the pseudonym Collis & Collis has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
By way of an Application for Final Orders filed on 22 September 2023 in the Federal Circuit and Family Court of Australia (Division 2) Ms Collis (“the wife”) sought orders enforcing the terms of a s 90C Financial Agreement made between she and Mr Collis (“the husband”) on 14 June 2023 as if they were orders of the Court. On 3 October 2023 the husband filed a Response to the Application of the wife seeking other orders including challenging the said Financial Agreement.
The matter was urgently listed before a judge of Division 2 on 4 October 2023. On that day, a consent order was made setting aside the s 90C agreement and the matter transferred to this Court, such transfer being grounded from contentions as to complexity and urgency. In circumstances of such urgency, it has been listed for interim hearing today as to competing mandatory interlocutory injunctive relief.
BACKGROUND
The wife contends that the parties commenced cohabitation in late 2016. The husband contends cohabitation commenced towards the end of 2017. The parties married in 2018.
The date of separation between the parties is the subject of dispute. It is the wife’s contention that the parties effected a separation on 14 June 2023, being the date of entry of the s 90C agreement. The husband contends that separation occurred on 15 September 2023. Although not in evidence before me, the s 90C agreement made 14 June 2023 contained a provision for a separation declaration to be made. The evidence suggests that the husband executed a separation declaration on 14 June 2023, and the wife a separation declaration on 21 September 2023. No finding is made as to the date of separation between the parties.
There are no children of the relationship. Both parties have been previously married. They each have two children from their previous marriages.
The evidence is relatively uncontroversial, that the husband established a corporation, B Pty Ltd, in 2012, and that at the commencement of cohabitation, he was the sole director and shareholder of that corporation.
In 2018, B Pty Ltd acquired an apartment block at C Street, Suburb D, for $3.875 million. The husband contends that the acquisition was financed by way of a National Australia Bank mortgage of approximately $3,000,000, and the balance of funds sourced by B Pty Ltd to complete the acquisition were made available by way of his own resources through a prior property settlement. It is his case that the loan secured by the mortgage was serviced solely by way of the rental income collected by B Pty Ltd from the apartment building. He denies that the wife made any contribution to the purchase of the property by B Pty Ltd or to the payments in respect of the mortgage.
The wife contends that she contributed $110,000 to the acquisition of the property. I am unable to make a finding in relation to that issue. It is evident that the parties have not disclosed to the other documents verifying their respective contentions, notwithstanding their entry into the s 90C agreement four months ago and these proceedings being on foot for about a month.
It is uncontroversial that the husband had not been formally employed during the period of the relationship. His gives his occupation as “renovator”. He says he purchases real properties, improves them, and then “flips” them for a profit.
The evidence suggests that in order to achieve the funding of the loan secured by the mortgage on the C Street property, B Pty Ltd relied on the fact of the wife’s earnings to meet lending requirements.
The husband gives evidence as to borrowing additional funds from another third-party lender to meet the costs of renovations to the C Street property in 2021 and 2022.
In March 2022, B Pty Ltd acquired a further property at E Street, Suburb D, at an acquisition cost of $3.57 million. The husband’s evidence is that B Pty Ltd sourced $178,000 from him, obtained $40,0000 – $50,000 from the wife, and otherwise secured further borrowings in the range of about $3,000,000 from the National Australia Bank using the equity in the E Street property and the C Street property, to complete the acquisition.
It is uncontroversial that the wife has provided personal guarantees in relation to some of the loans obtained by B Pty Ltd and potentially the mortgages securing B Pty Ltd real property acquisitions.
Issue exists between the parties as to whether the wife has made any direct or indirect contribution to the mortgage payments in respect of the E Street property. It is uncontroversial that the parties commenced to reside in the E Street property in the latter part of their relationship. The mortgage payments have not been made for almost 12 months. Such arrears are to be met from the imminent completion of the sale of the C Street property. The E Street property has been subject to a developmental application filed by the husband on behalf of B Pty Ltd that has run into difficulties with the local authority and is the subject of current Land and Environment Court litigation.
The wife, at the commencement of cohabitation, was the sole shareholder and director of F Pty Ltd. The wife contends that this entity is currently dormant, albeit that it is the registered owner of Motor Vehicle 1 subject to a lease that the wife is paying in the sum of $1,132 per month. Notwithstanding the vehicle is owned by the wife’s corporation and the wife is paying the lease on the vehicle, it remains in the husband’s possession. The wife seeks that it be returned to her corporation. The husband seeks to retain a specific numberplate attached to the vehicle.
B Pty Ltd entered a contract for the disposal of the C Street property in mid-2023 at a sale price of $6,800,000. The contract was due to complete in late 2023. The completion has not occurred in circumstances where the parties are in dispute as to the instructions to be provided to the National Australia Bank at settlement, specifically how the proceeds of sale are to be applied to meet outstanding securities and other guarantees provided by them and B Pty Ltd to the bank. The evidence suggests that the settlement was again scheduled unsuccessfully for late 2023 and for a third occasion a short time later. The Court is told today, and accepts, that a notice to complete has issued, and a completion of the sale is required to occur in or before late 2023.
It is against this background that each of the parties contend that mandatory injunctive orders are required, sourced by way of s 114 of the Family Law Act 1975 (Cth) (“the Act”) to preserve the subject matter of the current litigation. The determination of the outstanding interlocutory disputes of the parties was listed for hearing before me today. Each of the parties has filed affidavit evidence and outline of case documents.
At the commencement of the hearing today, the wife confirmed that she moved upon the final and interlocutory relief as contained in her Amended Initiating Application filed 11 October 2023. The relief the wife seeks on a final basis is as follows:
1. …The matter be referred to mediation as to distribution of the joint and sole property in accordance with section 79 of the Family Law Act 1975.
The husband identifies that he moves upon the final and interlocutory relief as contained in his Amended Response to Initiating Application filed 12 October 2023. The final relief sought by the husband in that document is as follows:
2.That the [husband] be at liberty to particularise his Final Order upon full and frank disclosure by the parties.
At the commencement of the hearing today, I sought submissions from each of the parties as to why the substantive relief as sought in the Amended Initiating Application or the Amended Response to Initiating Application ought not be dismissed in circumstances where, to my mind, that relief was incompetent and it was, in reality, an abuse of process in that it did not engage with orders that could be made by the court on a final basis pursuant to Part VIII of the Act or otherwise.
Throughout the course of the hearing today, inquiries were made as to the source of power relied upon by either party to ground the substantive relief as sought, and no such source of power had been identified.
It is further apparent that the parties have not engaged in mandatory disclosure pursuant to the rules either prior to the commencement of the litigation or while the litigation has been on foot for the past month or so.
Neither party has placed into evidence or disclosed to the other, consistent with ch 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, their last three taxation returns as filed together with notices of assessment or the last three sets of financial statements of either of their corporate entities, including but not limited to relevant loan account ledgers.
Neither party put into evidence for the purposes of the anticipated hearing today, the terms of the loan agreements entered into by B Pty Ltd with the National Australia Bank for the advances used to acquire either property, the mortgage documents securing those loan advances, or the personal guarantees given by each of the parties in respect of the said loans.
It is the husband’s case that he has engaged in exchanges with the National Australia Bank as to what appear to be variations of loan agreements and/or guarantees that are required so as to achieve his objectives on the disposal of the C Street property by way of B Pty Ltd as to partial discharge of some loans, reconfiguration of other loans and guarantees and specific other directions as to the use and application of the balances of the proceeds of the sale. To my mind, the evidence that he has identified does not indicate any agreed terms with the National Australia Bank as to those matters. He does not have what he described as “the permission document” from the mortgagee for the wife to execute should he achieve part of his injunctive relief sought. It is self-evidently problematic as to the success of the injunctive relief he seeks on an interlocutory basis that the precise document that he wants the wife to sign has never been produced by the bank or otherwise so as to progress the current settlement of the C Street property.
The principles applicable to determine an application for orders for injunctions of the nature as sought by each of the husband and the wife on an interlocutory basis are well known. Each party must establish an arguable case with sufficient likelihood of success to justify the injunctive orders sought and must otherwise be able to establish that the balance of convenience favours the grant of the injunction as sought by each of them identifying with precision the danger or risk of dissipation that may frustrate any judgment in favour of each of them as sought on a final basis. Fundamental to that controversy is to demonstrate that there is a serious issue to be tried between the parties.
This, in essence, requires the demonstration of an arguable case or, putting it another way, that the applicant for the injunction can show a sufficient likelihood of success by way of final relief sought to justify in the circumstances the making of the mandatory order.
In this case, neither the husband nor the wife, having regard to the final relief they currently seek, can identify the parameters of the s 79 dispute. The successful progression of the interlocutory injunctive orders as sought by either party is, as identified earlier, at least is problematic.
Each of the parties have sought the opportunity to again amend their substantive relief. This indulgence is cast against the history of the following notation and orders made by Judge Neville on 4 October 2023:
A.Each party wishes to contemplate amending their application or response and each party contemplates filing evidence in addition to, or in substitution for, the evidence that has already been filed to date. The parties would seek directions be made in the following terms:
a.The Applicant file and serve any Amended Initiating Application and any affidavit evidence in addition to, or in substitution for, that which has already been filed within 7 days of the date of this order.
b.The Respondent file and serve any Amended Response together with any affidavit evidence in addition to, or in substitution for, that which has already been filed within 72 hours of being served with the Applicant’s documents.
And additionally the Orders made by Schonell J on 9 October 2023:
1. The applicant wife is to file and serve any Amended Initiating Application and any affidavit evidence in addition to or in substitution for that which has already been filed by 4.00pm on Tuesday, 10 October 2023.
2.The respondent is to file and serve any Amended Response together with any affidavit evidence in addition to or in substitution for that which has already been filed by 4.00pm on Thursday, 12 October 2023.
Each of these parties are required to conduct this litigation responsibly. They have each had two opportunities to set out with particularity their final orders as sought. They have failed to do so. Cast against that background, each of the husband and the wife seek leave to withdraw the Amended Initiating Application filed 11 October 2023 and the Amended Response to Initiating Application filed 12 October 2023 on the basis that no order be made as to costs. In all the circumstances, I consider that course to be appropriate.
It is important to recognise that each of the parties has the capacity to engage in a sensible resolution as discussed during the course of exchanges in the hearing today with the National Australia Bank so as to ensure and absence of prejudice in the completion of the sale of the C Street property, and in the event such agreement cannot be reached, either party is at liberty to make such application as they are advised with urgency to the Federal Circuit Court and Family Court of Australia (Division 2), even as early as tomorrow if they are so advised and consider, having regard to the matters identified in these reasons, an appropriate course.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 18 October 2023
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