Daniels and Findlay

[2012] FamCA 406

FAMILY COURT OF AUSTRALIA

DANIELS & FINDLAY [2012] FamCA 406

FAMILY LAW – INJUNCTION – Wife not to change company or deal with specified accounts

APPLICANT: Mr Daniels

RESPONDENT: Ms Findlay

INTERVENOR:

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 1996 of 2008

DATE DELIVERED: 11 May 2012

PLACE DELIVERED: Melbourne

PLACE HEARD:

JUDGMENT OF: Dessau J

HEARING DATE: 11 May 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr A Combes

SOLICITOR FOR THE APPLICANT: Holt & McDonald

COUNSEL FOR THE RESPONDENT: In person

SOLICITOR FOR THE RESPONDENT:

Orders

1. That all existing applications shall be adjourned before me at 10.00am on 25 May 2012 for argument on the release of the subpoenaed material received from the Westpac Bank in response to the subpoena filed 4 May 2012.

2. That the wife, by herself or her servants or agents shall be and is hereby restrained from either directly or indirectly making or attempting to make any change to the shareholders, directors, secretary, addresses or any other office-bearers or registered details of the company A-P Pty Ltd or interfering and/or moving monies or providing any directions to Westpac Bank in relation to Account No. …55 or any account in the name of A-P Pty Ltd save for an order of this Honourable Court or direction from N Firm Accountants.

3. That all questions of costs of this day shall be reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Daniels & Findlay has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1996 of 2008

Mr Daniels

Applicant

And

Ms Findlay

Respondent

REASONS FOR JUDGMENT

1. This is an application in a case brought by Mr Daniels (“the husband”) effectively to finalise the implementation of final property orders made by me way back on 9 March 2010.  Nothing in this case has been easy, including in this current round of the proceedings.  Throughout, Ms Findlay (“the wife”) has been unrepresented.  She has at times acted badly, at times dishonestly, and she has exhibited an obstructive attitude, all documented in previous judgments. 

2. The husband, through his legal representatives, has occasionally introduced incorrect details into orders or, as now, brought misdirected applications.  It does not appear to have been in any way deliberate, but it has certainly exacerbated the problems in this case, and the impediments to finalisation. 

3. In briefest summary, the rather complex schemer of final property orders resulted specifically from the need for companies to be wound up, shares to be transferred, and funds withdrawn and disbursed, amid circumstances in which it was clear that the wife, who had previously controlled the parties’ financial affairs, would not cooperate.

4. Accordingly, the power was vested in the husband to instruct N Firm Accountants, and to have the running of the implementation of orders.  Most of what should have been distributed between the parties has been, and most of what needed to be completed by N Firm has been.  The one remaining step, the disbursement of approximately $250,000 held in a term deposit at the Westpac Bank account of A-P Pty Ltd, the trustee of the parties’ superannuation fund, precludes the final disbursement of that sum, and therefore the final tax returns and winding up of the entities.

5. It has had a chequered history, this particular account with Westpac.  In August 2010 there were proceedings to have the wife, as a director of A-P Pty Ltd sign relevant bank documents.  Ultimately she did sign withdrawal slips.  After that, there was an outstanding issue as to the bank requiring her to meet an outstanding request as to 1000 points of identification, and that eventually occurred.  It appeared to be an end to the issue.  Unfortunately, what has since occurred when it comes to this account, proves it has not been the end at all.

6. The brief version is that Westpac has refused to release the funds to the husband upon receipt of the signed withdrawal forms, because he was not a director.  That came as news to him.  He had been removed as a director on 14 December 2010, that is, at a time after the final orders, and unbeknownst to him.  N Firm, the accounting firm responsible for the implementation of the orders, had him appointed as a director again on 6 May 2011, but it transpires that he was again, without notice to him, removed that day. 

7. With no success in persuading Westpac to release the funds, the husband ultimately brought an application filed on 2 April 2012, supported by his affidavit and an affidavit of Mr I from N Firm, both filed the same day.  He sought various orders to the effect that a Registrar be able to sign all documents on behalf of the wife and A-P Pty Ltd to effect her removal as director or secretary of the company and other relevant companies, to withdraw funds held for the company and other companies, and to re-appoint N Firm as the agents of the company and other companies.

8. He also sought orders to restrain the wife from signing anything on behalf of the companies, including instructing Mr Z to undertake audit work on their behalf.  He sought an order restraining the wife “from taking any action or causing another party to do so, which is designed to frustrate the orders of this Honourable Court dated 9 March 2010”, and that the wife do all acts and sign all documents to transfer to N Firm the corporate key, that is, a PIN number allowing access to alter the ASIC details of A-P Pty Ltd.  He also sought indemnity costs.  The affidavit material supported the fact that the withdrawal of these funds was the last outstanding matter which would enable the final distribution of property and the winding up of the companies, and also that the ASIC records were being changed without his knowledge.

9. The wife filed responding material on the night before and on the morning of the hearing of 24 April 2012.  The Court received an email from her dated 23 April 2012 at 23.49 hours, an email dated 24 April 2012 at 9.46 hours, and an email dated 24 April 2012 at 9.21 hours, together with a response – or an unfiled response, an unfiled affidavit, transcript of proceedings of 6 August 2010, and an affidavit of Dr D, a doctor advising that the wife was taking some post-operative painkillers.  No objection was taken on behalf of the husband to the late filing of material or the manner in which material was filed.

10. At that point, first, the wife was saying that she could not come to Court as she was in post-operative rehabilitation.  She produced the unsworn affidavit of the doctor saying she had had a knee reconstruction on 23 February 2012, and that she was unable to travel long distances.  The affidavit in fact related to 8 March 2012, not 24 April 2012 which was the date the matter was in Court before me.  In any event, she appeared by telephone, and there was no objection. 

11. Secondly, at that point, the wife was seeking a stay of all orders previously made by me.  That was because she was awaiting a Full Court decision, she said, about N Firm’s role in the case as to the winding up of the various entities.  I would not grant her stay.

12. Rule 22.11 Family Law Rules deals with a stay.  It is a discretionary matter, certainly not given just as a matter of course.  A court needs to consider the merits of an appeal, the delay in the application for a stay, the applicant’s bona fides, and the length of time before the appeal would be finalised, amongst other things.  I looked at the wife’s Notice of Appeal against orders made by me on 21 January 2011, orders that permitted a Registrar to sign the various documents on her behalf, to effect her removal as a director of A-P Pty Ltd and other companies, to effect the withdrawal of the very funds that are now being discussed, and to stop Mr Z doing audit work on behalf of the entities.

13. Her Notice of Appeal shows complaints against N Firm, both old and new.  It is hard to follow, but the import appears to be a defence of her role in the appointment of Mr Z.  From the material, it is hard to deem it an appeal of merit.  Of course the appeal has now been heard, but it remains unclear as to when the judgment will be given.  It could be many months, and that was something that I did not and could not know.  What I did know though, was that the wife was seeking to stay orders that were by then some two years old.  She had applied for a previous stay and then withdrawn it last minute.  This application for a stay was simply too late.  It showed no bona fides, particularly when measured against her constant obstructions in allowing this case to conclude.

14. Otherwise, in the unfiled response, she sought the adjournment or stay “until all avenues of appeal have been undertaken by the parties.”  In my view, it was simply unclear and unfair to adjourn a case on that basis.  She sought some nine or so orders in total, mostly relating to the substantive case already determined or enforcement matters already determined.  Similarly, her affidavit is hard to follow in terms of being responsive to the application that was then before me.  It purported to resurrect all sorts of issues and complaints, again about the husband or N Firm, without independent proof of assertions. 

15. So far as the husband’s application was concerned, the wife said that on 6 August 2010 she signed all the required withdrawal forms at Court.  That is true, but the husband’s material sets out what has since been required by the bank, and material that raised the suspicion that she was thwarting those requirements and the conclusion of this case.  In the course of the hearing before me on 24 April 2012, the wife made it clear that there were now other directors of A-P Pty Ltd, as was clear from the ASIC search, being Ms H and Mr C.  She was vague as to who held the corporate key, that is the ASIC PIN that would give someone access to change the ASIC records.  She said it could be Ms H or Mr C or Mr Z, the auditor purportedly appointed, at least in part by her, contrary to my orders for N Firm to conduct every facet of the winding up of the relevant entities. 

16. It became apparent to counsel for the husband, as the wife’s late material came to light, that the husband’s application may have needed amendment.  I was not prepared to allow that to occur that day.  First, it was clear that the husband’s legal advisors needed to think through their approach to effect enforcement of the orders.  Secondly, it was unfair to the wife not to have time to consider an application in a totally new form.

17. On 2 May 2012, the husband filed an Amended Application in the Case.  Although the wife would not readily concede that she had received the application with an additional affidavit in support sworn by Mr I from N Firm, ultimately she had to concede that she had seen the documents, or was well aware of the documents, as she had in fact sought to file material in direct response to them. 

18. In that new application, the husband has sought orders that there be a meeting of members of A-P Pty Ltd at N Firm on 30 May 2012.  He sought that the wife provide him with a proxy directing him to vote in favour of resolutions to appoint him as director and secretary of the company, to appoint the wife as a director of the company, and to remove Ms H and Mr C as directors, to appoint N Firm as sole agent for the company, and to change the registered office from the wife’s home to N Firm’s office. 

19. The husband also sought an order that the wife be restrained from revoking her proxy or transferring her shares before or during the meeting, or from attending the meeting. He sought an order that, after resolutions, she be restrained from calling a meeting or signing documents without written direction from N Firm, and that each party should sign all documents requested by N Firm within three days of a request. He sought an order under s 106A of the Family LawAct for a Registrar to otherwise sign those documents.  Finally, he sought an order that the wife and her servants and agents be restrained from “hindering or preventing” N Firm from withdrawing bank funds.

20. The wife was to file material by 4.00 pm on 8 May.  She attempted to do so only on 10 May 2012.  It was late, but the husband had also filed his material later than had been ordered.  So without objection from counsel for the husband, I have accepted her response and affidavit both dated 7 May 2012 as exhibits marked W1 and W2. 

21. The wife’s response sought that all of the husband’s applications be dismissed, that all the orders sought by her in her response of 24 April 2012 be granted, that the husband be declared vexatious, and that she receive indemnity costs.  She also sought orders again, that all outstanding matters be adjourned pending the Full Court’s decision, as well as more orders in relation to N Firm and Mr U, irrelevant to the issues at hand, and that the husband be ordered to produce the jointly signed withdrawal forms directed to Westpac on 6 August 2010.

22. The wife’s affidavit, as in previous affidavits, purports to deal with matters long since dealt with, such as N Firm’s role.  Although she tries to establish blame, suspicion and deceit on the part of the husband or the accountants, all to achieve some gain to the husband, as she would have it, it is hard to comprehend as in any way in touch with reality when it is the husband who is consistently trying to enforce the orders to bring the matter to conclusion.  She does though make some points specifically about the meeting, the proxy and the resolutions as sought by the husband, to which I shall return.

23. The hearing today was relatively short.  I asked Mr Combes for the husband to expand upon the Corporations Act provisions pertaining to members’ meetings.  Ultimately he conceded that the husband could, as he already had, call a meeting, and therefore no Court order was in fact required in that regard.  He then pursued the proxy part of his application.  When I asked Mr Combes what rights the wife was to sign over by way of proxy he could not really answer that query.  He told me she is a shareholder of the company.  When directed to the ASIC search produced by his side, he saw that she was not.  He no longer pursued that application.

24. He sought to pursue the part of the application to the effect that the wife should be restrained from hindering N Firm in withdrawing the Westpac funds.  It was in far too general terms.  Mr Combes amended it to seek a more specific order restraining the wife from taking steps in relation to the company in the following terms:

    That the wife and her servants and/or agents be and are hereby restrained from either directly or indirectly making any change to the company [A-P Pty Ltd] or interfering and/or moving moneys or providing any directions to Westpac Bank in relation to account number […55] or any account in the name of [A-P Pty Ltd] save for an order of this honourable court or direction from [N Firm].

25. The wife says she has no role at all with the company other than as company secretary, so there is no conduct to restrain.  I note the registered office of the company is her home address.  She says though there are two independent directors.  I am not called upon today to make definitive findings about those directors.  For the purposes of considering the proposed restraint that is sought, I do note however as follows. 

26. The director, Mr C was in a relationship with the wife and remains a friend according to my recollection of the evidence at the trial.  Today, the wife has exhibited close knowledge of his current state of health and his recent surgery which suggests close contact with him. 

27. The director, Ms H, appointed since the trial, is also known to the wife.  The wife described her to me as a friend of the husband’s de facto, a woman who it is fair to describe as the wife’s nemesis, and she described this Ms H also as someone who – as she put it – knows about the dishonest things the husband has done. 

28. I note the directors had previously appointed Mr Z.  The wife was in fact a director at that time.  That directors’ decision was very much in line with the wife’s claim and consistent desire that there should be an “independent” auditor of A-P Pty Ltd.  The wife’s knowledge of the directors and the directors’ views was shown today to be very close.  When she was asked last time about who held the corporate key to the company she said it could be – amongst others – Mr Z.  Arguably it should not have been, but he was someone that she certainly wanted and still wants to be involved with the company.

29. The wife has shown an unwillingness to cooperate throughout the proceedings.  The mysterious changes to office holders, the company office and other details have been more in her obstructive interests, than in the husband’s interests, which have clearly been to bring this matter to conclusion.

30. In combination, and in light of the wife’s many statements and assertions that suggest she still will not accept the property orders, I am satisfied that at least the restraint is today appropriate.  It is appropriate to restrain not only any changes to the company, but also any removal by her or interference by her of monies in the Westpac account, given the understandable alarm about distrust of her behaviour that cannot help be instilled in the husband when he has met so many obstacles to simply conclude these orders.

31. I propose changing the wording slightly of the restraint to make it clearer in relation to A-P Pty Ltd, so that the restraint in that regard will read:

    That the wife by herself or servants or agents shall be and is hereby restrained from either directly or indirectly making or attempting to make any change to the shareholders, directors, secretary, addresses or any other office bearers or registered details of the company [A-P Pty Ltd].

32. The restraining order will continue as dictated by Mr Combes. 

33. There is otherwise an outstanding issue about subpoenas filed on behalf of the husband, directed to Westpac, to produce correspondence and transactions about the term deposit held in the name of A-P Pty Ltd.  Again, the wife brought news from the two directors of the company that they would object to the release of what she called, the “confidential material”, although she said they had not received notice of the subpoenas.  If they had not received notice the only logical inference is that she had raised the question or the issue with them.

34. Mr Combes says the material is important to hopefully disclose what has been going on with the instructions in relation to this account.  The bank has apparently forwarded material to the Court and has not objected to its release.  The directors should be notified, although as I have noted from the wife’s comments it is clear that they have at least been told of it, that they should be given copies of the subpoena and notification, before I deal with the question of the release of those documents at 10.00 am on 25 May 2012.

35. I have chosen that date as, shortly after, the wife travels overseas she says for three months.  Even though she will be in Australia she can, if she chooses, again appear by telephone.  So can Mr C if he chooses to do so from France.  Ms H, if she wants to be involved can appear at Court.  Although it is clear that I shall in due course dismiss most of the applications before me today I shall not proceed to do so today.  The subpoena argument needs to be concluded before the application can be properly concluded.  That is only fair to the husband and I cannot even, for example, conclude a costs argument until that is done.

36. I make one final observation today.  The wife says that the case is a “mess.”  It is not.  The implementation of the final part of these orders is only a “mess” insofar as various things have occurred that have interfered with the implementation of final orders.  It is up to the husband’s lawyers to consider a full range of options, whether under the Family Law Act, Corporations Law or the rules that govern superannuation funds, and the fiduciary duties of directors of a company, the trustee of a fund.  The subpoena argument must first be concluded.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau delivered on 11 May 2012.

Associate: 

Date:  11 May 2012