Eastburn & Eastburn
[2022] FedCFamC1F 706
•16 September 2022
Federal Circuit and Family Court of Australia
(DIVISION 1)
Eastburn & Eastburn [2022] FedCFamC1F 706
File number(s): SYC 1933 of 2022 Judgment of: CHRISTIE J Date of judgment: 16 September 2022 Catchwords: FAMILY LAW – ANTI-SUIT INJUNCTION – where proceedings were commenced in the Supreme Court of NSW by the husband’s father – where the wife seeks an injunction from the husband’s father continuing proceedings in the Supreme Court of NSW.
FAMILY LAW – JOINDER APPLICATION – where it is agreed the husband’s father loaned the husband and wife money – where the loan agreement defaulted due to the husband and wife’s separation.
FAMILY LAW – REVIEW OF REGISTRAR’S DECISION – where a subpoena was objected to on the basis of legal professional privilege – where a judicial registrar upheld the objection – where the wife asked for a review of that decision – legal professional privilege where all parties share same lawyer
FAMILY LAW – PARTIAL PROPERTY ORDER – only quantum of order in issue
Legislation: Evidence Act 1995 (Cth) ss 118, 124
Family Law Act 1975 (Cth) ss 79, 80(1), 90AE, 90AF(3) and 106B
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 43
Real Property Act 1900 (NSW) s 57
Cases cited: Aspinall v Aqua Sports Pty Ltd (2018) 57 Lam LR 594; [2018] NSWSC 706,
Baba and Jarvinen (1980) FLC 90-882; 6 Fam LR 276,
Ballard v Ballard [2020] NSWSC 778,
CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345; [1997] HCA 33,
Geron v Geron [2018] VSC 582
Glen v Kemp [2022] NSWSC 551,
Henry v Henry (1996) 185 CLR 571; [1996] HCA 51,
Hurst v Koszewski [2019] SASC 67,
Jane v Jane & Ors [2008] VSC 341,
Lan & Hao (No 2) (2017) FLC 93-795; [2017] FamCAFC 175,
Lederer v Hunt (2007) FLC 93-311; [2007] FamCA 55,
MJM v DT [2020] NSWSC 1881,
Oceanic Sun Line Special Shipping Company Inc v Fay (1986) 165 CLR 197; [1988] HCA 32,
S Pty Ltd v BV (No 2) [2019] VSC 125,
Kennon v Spry; Spry v Kennon (2008) 238 CLR 366; [2008] HCA 56,
Strahan and Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FamCAFC 166,
Valceski v Valceski (2007) FLC 93-312; 70 NSWLR 36,
William v Spautz (1992) 174 CLR 509; [1992] HCA 34,
Xie v Li [2019] NSWSC 808,
Xue v Xue; Xue v Xue [2020] NSWSC 501.
Division: Division 1 First Instance Number of paragraphs: 105 Date of hearing: 15 September 2022 Place: Sydney Counsel for the Applicant: Mr Samson SC Solicitor for the Applicant: Karras Partners Lawyers Counsel for the First Respondent: Mr Ford Solicitor for the First Respondent: Owen Hodge Lawyers Counsel for the Second Respondent: Mr Dick Solicitor for the Second Respondent: Colin Biggers Paisley ORDERS
SYC 1933 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS EASTBURN
Applicant
AND: MR EASTBURN
First Respondent
AND: MR B EASTBURN
Second Respondent
order made by:
CHRISTIE J
DATE OF ORDER:
16 september 2022
THE COURT ORDERS THAT:
1.Leave be granted to Ms Eastburn (“the wife”) to join to these proceedings the father of the applicant, Mr B Eastburn.
2.Within seven days the wife file and serve an Amended Response to Final Orders setting out the relief sought against Mr B Eastburn.
3.Mr B Eastburn be restrained from further prosecuting proceedings commenced by Statement of Claim in the Supreme Court of NSW proceedings ….
4.Within 14 days the husband pay to the wife or as she may direct the sum of $166,000.
5.The subpoena to Owen Hodge Lawyers has been answered by production of documents to which objection was not taken including the redacted documents attached to the affidavit of Mr C dated 8 September 2022 and is otherwise set aside.
6.There be no order as to costs in respect of the subpoena to Owen Hodge Lawyer such that the order dated 25 July 2022 is discharged.
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 Eastburn & Eastburn has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
This is an interlocutory application by Ms Eastburn (“the wife”). She was seeking:
(a)Access to documents returned on subpoena by Owen Hodge Lawyers;
(b)An anti-suit injunction;
(c)To join a third party (the husband’s father) to the proceedings; and
(d)A payment to fund legal fees (costs or partial property settlement).
The respondent husband is Mr Eastburn (“the husband”).
The third party who the wife proposes be joined to these proceedings is the husband’s father Mr B Eastburn (“the husband’s father”). The husband’s father is also an interested party in respect of the subpoena to Owen Hodge Lawyers.
Background
The husband and wife (“the parties”) commenced to reside together in mid-1986 and were married in 1988.
In 2014 the parties purchased a property at D Street, Suburb E (“the Suburb E property”). It would appear that in mid-2014 the deposit to facilitate the purchase of the Suburb E property was paid by the husband in the sum of $850,000 from his own funds.
In late 2014 two amounts, $5.5million and $3million, were deposited by the husband’s father to the husband’s ANZ bank account and was subsequently utilised to complete the purchase.
In late 2014 the husband says the parties signed a loan agreement recognising advance of the funds by the husband’s father to the parties. On the same day they signed a mortgage document. I am not sure how this is reconciled with the evidence of the husband’s father as set out in [9] and [10] below.
In late 2014 the husband transferred to his father the sum of $1million being monies which were sourced from the sale of the parties previous property at F Street, Suburb G.
In early 2015 a loan agreement was prepared by Owen Hodge Lawyers, being a loan agreement between the husband’s father as lender and the husband and wife as borrowers.
In late 2015 a mortgage was signed which permitted the husband’s father to secure the loan over the Suburb E property.
The parties separated in July 2021.
On or about mid- 021 the husband’s father registered the mortgage.
On 24 March 2022 the husband initiated proceedings in this Court, the Federal Circuit and Family Court of Australia (Division 1) (“this Court” or “the FCFCOA”).
On 7 April 2022 the wife provided notice of the orders sought by her in this Court, to the proposed third party.
On 14 April 2022 the lawyers acting on behalf of the husband’s father wrote to both of the parties serving them with a Notice of Default and Demand in respect of default in a term of the loan – namely the parties’ separation.
In mid-2022 the husband’s father commenced proceedings in the Supreme Court of NSW (“the Supreme Court”) and on 23 May 2022 the wife filed an application before this Court for joinder of the husband’s father as third party (for some reason that application is marked as having been filed on 24 May 2022, nothing turns on this).
In mid-2022 the wife filed a Notice of Motion in the Supreme Court seeking a transfer of the proceedings in the Supreme Court to the FCFCOA. The application in respect of the wife’s Notice of Motion is anticipated by each of the parties to be heard and determined on 19 September 2022.
the subpoena
On 4 May 2022 the lawyers acting for the wife caused to be issued a subpoena addressed to the Managing Partner at Owen Hodge Lawyers. That subpoena sought:
All documents, correspondence, attendance, memoranda, file notes, trust and office account ledgers and the files generally whether in the names of [Mr Eastburn], [Ms Eastburn], [Mr B Eastburn] and / or [Ms H Eastburn], relevant to all instructions leading up to any including the preparation of the Loan Agreement dated [… 2015] between the named persons and the related mortgage documentation including in respect of the registration of the mortgage, being dealing number […].
On 17 May 2022 a Notice of Objection was filed naming as the person objecting Mr Eastburn. The Notice of Objection was filed by Owen Hodge Lawyers. The subpoena objection detailed that “some of the documents sought to be produced by way of subpoena are subject to client legal privilege pursuant to s 118 of the Evidence Act 1995 (Cth) (“the Evidence Act”) and have been placed in a sealed yellow envelope and will be provided to the Court registry”.
Written submissions were filed on behalf of the husband on 24 May 2022 and submissions in reply on behalf of the wife on 26 May 2022. On 25 July 2022 a Judicial Registrar determined the subpoena objection and made an order that the material produced was covered by legal professional privilege. In addition a costs order was made.
A Review was filed by the wife. When the matter came before the Court on 7 September 2022 senior counsel who appeared on behalf of the wife raised the applicability of s 124 of the Evidence Act which provides for legal professional privilege when a lawyer is retained by more than one party.
The matter was adjourned for further hearing to 9 September 2022 at which time the issues had further narrowed and a redacted set of documents were produced. As I understood the evidence, the redactions related to matters other than the loan agreement between the husband and wife and the husband’s father, except in 2021 when the references to the loan agreement were as a consequence of the husband’s father contacting the law firm as opposed to the parties jointly approaching the lawyers.
At the hearing on 15 September 2022, the issues were narrowed further when counsel who appeared on behalf of the husband’s father proposed that I consider the redacted documents with a view to forming a conclusion as to whether the redacted documents should be released. I formed the view that the redacted documents were not relevant to the determination of the issues as between the husband and wife or as between the husband and/or wife and the husband’s father and accordingly, I find that compliance with the subpoena is satisfied by production of the redacted documents attached to the affidavit of Mr C adopted on oath on 8 September 2022. I will otherwise set it aside.
A Review application is a hearing de novo. I heard submissions in respect of costs. Senior counsel for the wife and counsel for the husband’s father accepted that the way in which the subpoena matter had resolved itself supported there being no orders as to costs on the subpoena. Counsel for the husband submitted that the original objection was soundly made and accordingly there was some merit in the registrar’s order for costs. I accept the submission that in respect of the subpoena no party has been wholly unsuccessful and the matter was assisted by the cooperative approach undertaken by the lawyers. It is appropriate, having regard to the usual rule, that each party pay his or her own costs of the subpoena issue.
ANTI-SUIT INJUNCTION: the law
It is accepted that proceedings have been properly commenced before the Supreme Court by the husband’s father. The wife seeks to restrain the husband’s father from continuing those proceedings.
I accept that the husband’s father was entitled to bring the proceedings. Further I accept that I should be cautious in making an order which would prevent him from continuing those proceedings in a jurisdiction of his choosing.
All parties accept that either the Supreme Court or the FCFCOA have jurisdiction to hear and determine the dispute involving the third party. If the matter were to be determined by this Court it would be as a non-federal matter with sufficient connection with the federal matter before this Court.
This Court has the power, in proceedings before it, to restrain a party to those proceedings from commencing or continuing proceedings in another court. That power arises either from the Court’s inherent power to prevent an abuse of its own processes or from the power to prevent proceedings which are vexatious or oppressive or both: CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345 at 392 to 393. As to which court should hear the matter, the test is more than one of convenience.
In determining whether to grant the relief sought by either party there are a number of matters to properly take into account:
(a)Do both courts have jurisdiction?
(b)Will the FCFCOA recognise orders made in the Supreme Court as binding upon its determination of the factual controversy?
(c)Can one court or the other more effectively deal with all disputed matters?
(d)Which proceedings were filed first in time?
(e)What stage are both sets of proceedings at?
(f)Are there barriers to participation faced by one party or the other in the different courts (put another way can both parties participate on an equal footing)?
(g)Is there a juridical advantage to one party or the other in the available jurisdictions?
The mere existence of simultaneous proceedings in two different jurisdictions is not of itself vexatious or oppressive conduct: Henry v Henry (1996) 185 CLR 571 at 590 to 591.
The proper question is whether two sets of proceedings would be “productive of serious and unjustifiable trouble and harassment or seriously burdensome, prejudicial or damaging”: CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345; Oceanic Sun Line Special Shipping Company Inc v Fay (1986) 165 CLR 197 at [247] as cited in Lan & Hao (No 2) (2017) FLC 93-795 at [37].
It must be acknowledged that the making of an anti-suit injunction is a final determination as to the place in which an issue is to be litigated. In this case that determination needed to be made in one court of the other.
In order to consider the application for the antisuit injunction I must have regard to those aspects of s 90AF of the Family Law Act 1975 (Cth) which are relevant to this case.
consideration
It is appropriate to consider the issues of anti-suit injunction and joinder together.
It that context it is important to understand the nature of the relief sought as against the third party by the wife in the proceedings before this Court.
In the wife’s Response to the husband’s Application for Final Orders she sought orders for the sale of the Suburb E property and from the proceeds:
3 Upon settlement of the sale of the home, the parties shall do all acts and things necessary to distribute the proceeds of sale of the home in the following manner and priority:-
31. In payment of agent’s commission and any auction fees on sale.
3.2 In payment of legal costs and disbursements incurred in the sale.
3.3 In payment to the wife of 60% of the then remaining proceeds of sale.
3.4 In payment to the wife of $2,500,000,00.
3.5 In payment to the husband of the then remaining balance of the proceeds of sale.
4 Upon settlement of the sale of the home, the husband shall do all acts and things necessary to discharge the mortgage registered upon the title of the property in favour of [Mr B Eastburn] as dealing number […] and the husband shall otherwise indemnify and save harmless the wife in respect of any monies alleged to be outstanding pursuant to the said mortgage and the Loan Agreement asserted as between the parties and [Mr B Eastburn] and [Ms H Eastburn] dated [… 2015].
The wife tendered an Amended Response to Initiating Application (which formed part of exhibit 1) which she sought leave to file if her application for joinder was successful. Order 6 and 7 seek the following:
That pursuant to section 106B of the Family Law Act 1975 the mortgage registered upon the title of the home as dealing number […] be set aside, or in the alternative, that pursuant to section 90AE of the Family Law Act 1975 the respondent do all acts and things necessary to remove the mortgage registered upon the title of the home as dealing number […].
That pursuant to section 90AE of the Family Law Act 1975 the third party is directed to substitute the applicant for both the applicant and respondent as debtors in the loan agreement asserted as between the parties dated [… 2015].
It is necessary to understand the order in which events occurred to evaluate the submission that the wife’s application for an anti-suit injunction is improper.
The Suburb E property was purchased in the names of the husband and wife. The title recorded the husband as entitled to 1 per cent and the wife 99 per cent. At that time the evidence suggests the husband was in employment and the wife did not have paid employment.
In late 2015 a Loan Agreement between the husband and wife and the husband’s father evidenced an advance of $7.5million from the husband’s father to the parties (in 2014 to allow acquisition of the Suburb E property).
The parties did not have funds to purchase the property absent the advance from the husband’s father.
A mortgage over the Suburb E property was signed.
It is common ground that no repayments were made towards either capital or interest in respect of the advance.
On 4 July 2021 the parties separated.
On or about mid-2021 the mortgage was registered.
On 24 March 2022 the husband filed an Initiating Application in the FCFCOA (Division 2). The husband’s financial statement filed 24 March 2022 acknowledged the existence of a debt to his father in the sum of $11,080,914.
The orders the husband sought by way of his Initiating Application provided for repayment of that debt – there is some confusion arising from the orders sought since Order 3 deals with circumstances where there is a shortfall or a surplus at a sale price above or below $11million.
On 7 April 2022 the wife filed her first Response to Initiating Application as set out above.
In early 2022 the husband’s father issued a demand for payment under the loan agreement and notice under s 57 of the Real Property Act 1900 (NSW). The sum claimed was principal $7,500,000 and interest of $3,375,152. In mid-2022 a further default notice provided for principal of $7,500,000 and interest of $3,411,353.
A copy of the wife’s Response to Initiating Application was provided to the lawyers for the husband’s father by letter dated 19 April 2022.
In mid- 2022 the husband’s father filed a Statement of Claim in the Supreme Court.
In mid-2022 the husband filed a Defence to Statement of Claim filed by his father in the Supreme Court. The effect of that Defence was that the husband admitted each of the paragraphs and their corresponding particulars.
In mid-2022 the proceedings between husband and wife were transferred to the FCFCOA (Division 1).
On 24 May 2022 the wife filed the joinder and anti-suit injunction applications in those court by way of an Application in a Proceeding. That application was listed on 12 July 2022. On 12 July 2022 that Application was adjourned by the Judicial Registrar to 1 November 2022.
On 1 June 2022 the wife filed an application for the Supreme Court proceedings to be transferred to this Court.
The husband’s father argued that the wife having filed a Notice of Motion in the Supreme Court seeking transfer and having committed to a timetable for the filing of evidence and submissions in support of that course should have been content to await the determination of that application. This submission would have significant force if she had not filed her application for anti-suit injunction in this Court until after her Notice of Motion in the Supreme Court.
On 18 August 2022 the wife filed a further application in a proceedings seeking partial property settlement and seeking that her application of 24 May 2022 be listed urgently.
The husband’s father contended that the wife had failed to establish why the hearing of her application for anti-suit injunction should be considered urgent. It was argued that there had been no material change between the circumstances which existed on 12 and 13 July 2022 when it was understood by all parties that:
(a)the Judicial Registrar in this Court had listed the wife’s application for anti-suit injunction for mention/directions on 1 November 2022; and
(b)the Registrar of the Supreme Court listed the wife’s Notice of Motion seeking transfer for hearing on … 2022.
I accept those submissions. Apart from the fact that the wife has at all times sought to have the proceedings in the Supreme Court brought to an end in favour of the issues being litigated in this Court there is no particular explanation for urgency in the sense of a changed circumstance. It is perhaps best understood in the context that the wife sought to have all of her outstanding applications determined – a not unreasonable proposition. She says that the Judicial Registrar declined to list her 24 May 2022 application until 1 November 2022 and it is plain that is what occurred. The subsequent application by the wife brought the issue to the attention of a judge. If all matters currently before this Court could be determined that may prevent the need for a hearing elsewhere.
It is necessary to consider principles of judicial comity: Lederer v Hunt (2007) FLC 93-311. It is necessary to observe that issuing an injunction which has the effect of preventing a party from continuing validly instituted proceedings in another Australian court “ought to be avoided, if possible”: per Nygh J in Baba and Jarvinen (1980) FLC 90-882. Against this it must be recognised that injunctions are directed to the litigants and not to the court. The husband’s father would not be prevented from asserting his legal rights if an injunction issued, merely from asserting them in the Supreme Court.
The gravamen of the wife’s case for the anti-suit injunction was:
(a)The husband’s father filed his application knowing that the validity and effect of the loan agreement was an issue the subject of legal proceedings in another court;
(b)The wife filed her anti-suit injunction application very soon after the proceedings were commenced in the Supreme Court so all parties have been on notice of her position (albeit perhaps not the particulars);
(c)The husband and his father are in the same cause in the Supreme Court proceedings and accordingly the husband may not necessarily be a witness in those proceedings;
(d)The wife seeks to agitate an application for relief under ss 90AE and 106B of the Act which applications would not be available in the Supreme Court since no party seeks to transfer the whole of the proceedings to that Court; and
(e)This Court can deal with the whole of the dispute.
In answer to those submissions, counsel who appeared on behalf of the husband’s father pointed to:
(a)his client’s right to bring an application in the court of his choosing;
(b)the apparent abuse of the process inherent in the wife being the applicant by way of Notice of Motion and simultaneously seeking to bring on her anti-suit injunction application in this Court;
(c)The availability of remedies analogous to those in ss 90AE and 106B of the Act together with other equitable remedies in the Supreme Court; and
(d)Counsel urged this Court to adjourn to allow the Notice of Motion to be determined and make orders and directions thereafter depending on the outcome.
The application before the Supreme Court was regularly and properly brought. The bringing of the application and its further conduct is not vexatious. Whether or not the continuation of the proceedings is to be regarded as oppressive turns on the facts of the matter.
I accept that it is necessary to take into account on this application the fact that the husband’s father is a stranger to the marriage who is seeking to enforce a debt. I do not however accept the submission that s 90AF(3)(b) of the Act, which requires me to consider whether it is forseeable that granting the injunction would result in the debt not being paid in full, is answered by the simple submission that it is plainly forseeable. The husband’s father must be entitled to bring the same claim in this Court as is presently before the Supreme Court – otherwise I could not conclude that both courts have jurisdiction to determine the dispute. The extent of the debt and its repayment are squarely before both courts.
Equally the question of how far each set of proceedings have progressed does not favour one party or the other. The proposed third party served a Response and affidavit in response to the wife’s 24 May 2022 application on 21 June 2022. The preliminary issue (venue) could be determined at about the same time in each court.
The wife has not filed a Defence to the Statement of Claim but that is not unusual given her application for transfer. I accept that all parties and the court would be assisted by clarification of the precise basis or bases upon which she seeks to impugn the loan agreement and/or mortgage.
I accept that submission that the husband’s father was entitled to bring proceedings in the Supreme Court. However, it cannot be overlooked that he did so with full knowledge that there were parallel proceedings already on foot. The wife’s Response, at Order 3 was seeking an order for sale of the Suburb E property. It is plain from Order 3 that she was seeking that the proceeds of sale be disbursed as though the mortgage were not registered on title.
While Order 3 is not an order which is expressed to bind a third party it could not be more plain from its terms that it was an order which affected the husband’s father. The husband’s father was given notice of the relief and chose to proceed with the Supreme Court application in the knowledge that the issue of the loan was squarely before another court.
On 19 April 2022 the lawyers for the wife wrote to the lawyers for the husband’s father. That correspondence referred to previous correspondence which had raised questions about the validity and enforceability of the loan agreement. It was that letter of 19 April 2022 which served the wife’s Response to Initiating Application which contained Orders 3 and 4. That letter also in effect invited the husband’s father to participate in the FCFCOA proceedings so he might be heard about the effect of the loan agreement. His Response filed after he had commenced proceedings in the Supreme Court, declined the invitation to participate in the proceedings before this Court (at least on a consensual basis).
It follows that I accept that the husband’s father was on notice before he commenced the proceedings in the Supreme Court that orders were sought which, if made, impacted upon his rights.
I accept that it is most unfortunate that all the parties were preparing for litigation about the same subject matter (where the dispute would be resolved) in two courts simultaneously but that is what a plain reading of the chronology supports. I asked counsel for the husband’s father whether, even if I accepted that ideally the wife, having committed to a timetable in one court she should have waited for the determination of that court, it was still open to me to hear and determine her application on the basis that everyone was on notice of it, it had been filed first and promptly, everyone was represented and everyone was in a position to make submissions. In response counsel for the third party effectively submitted that the agreed chronology dictated that the appropriate place for the debate was the Supreme Court. It seemed to me that in those circumstances to adjourn would be out of step with the obligations of the Court to act in accordance with the principles in s 43 of the Federal Circuit and Family Court of Australia Act2021 (Cth).
Counsel for the husband echoed and supported the submissions made by counsel who appeared on behalf of the husband’s father.
The husband’s written submissions contend that the mere fact that a party has brought proceedings in this Court (or foreshadows an intention to bring proceedings in this Court) seeking relief pursuant to ss 90AE and 106B of the Act is not sufficient to ground the making of an anti-suit injunction. I accept that on an application before a state court for transfer, that court will not be bound to transfer an application properly brought before it on the basis that relief is sought under ss 90AE and/or 106B of the Act.
In written and oral submissions I was taken to a number of first instance decisions in state courts concerning applications for transfer from the Supreme Court. I have read and considered those decisions. I approach them conscious of the fact that the test for transfer and the test for the making of an anti-suit injunction share some but not all features. The decisions in MJM v DT [2020] NSWSC 1881 (“MJM”) and similarly, S Pty Ltd v BV (No 2) [2019] VSC 125 and Hurst v Koszewski [2019] SASC 67 must turn on their own facts since there was a threshold dispute about the existence of jurisdiction in all three cases and the assets of one of the parties were under the control of the Supreme Court in the protective list In MJM). I was not assisted by the decision in Glen v Kemp [2022] NSWSC 551 to which I was referred by the husband’s counsel - the issue was transfer between two state courts of a contract and tort claim which turned on the parties arguments about where in the interests of justice lay having regard to the location of the parties, the subject matter (dogs and dog semen) and the parties’ lawyers.
The decisions of Ballard v Ballard [2020] NSWSC 778 and Aspinall v Aqua Sports Pty Ltd (2018) 57 Lam LR 594 to which I was referred appropriately, with respect, set out the law to be applied on application for transfer. In each case the Supreme Court was satisfied that the matter before it was a discrete proceeding regularly filed and declined the transfer application. The wife has foreshadowed relief in this Court which would have the effect of broadening significantly the scope of the present dispute in the Supreme Court possession list and accordingly the fact that a judge of the Supreme Court may have declined to transfer discrete issues before them in individual cases does not require that I decline the application for injunction.
The decision in Xie v Li [2019] NSWSC 808to which I was referred is easily distinguishable because there were, at the time of the application for transfer, no proceedings before the Family Court of Australia (as it then was) (“the Family Court”). Similarly, the decision in Xue v Xue; Xue v Xue [2020] NSWSC 501 related to a loan between the husband and his father where no party to the loan was heard to suggest that it was not binding. The situation is different here where the wife is a party to the loan and disputes its validity and enforceability in either forum. In Jane v Jane & Ors [2008] VSC 341 the decision of the state court on transfer centered around the discrete nature of the issue to be determined in the state court and the fact that the proceedings before the Family Court were not significantly advanced. The decision in Geron v Geron [2018] VSC 582 made note of the fact that the proceedings in the state court involved a commercial partnership and not (as in Valceskiv Valceski (2007) FLC 93-312 (“Valceski”) and this case) the matrimonial home
To the extent that the husband submitted that the wife is seeking an advantage in having her application determined ahead of the Supreme Court proceedings, I have elsewhere in these reasons observed that the question of when a court lists a party’s application is somewhat outside their control and, the wife having filed this application in May 2022, it is not unreasonable that she seeks to have it heard. One application was going to be determined first, the wife cannot properly be criticised for the fact that ultimately the one which is being determined first is the one which was filed first in time. As has been observed, the issues needed to be determined in one place or the other before any steps could be taken in either set of litigation.
I am not satisfied (to the requisite standard) that the wife seeking her application be dealt with could properly be characterised as an abuse of process: William v Spautz (1992) 174 CLR 509.
This is not a case where all of the arguments fall squarely in favour of one party. It cannot be suggested that there was any delay in bringing the application for anti-suit injunction although it is accepted that it was not listed for hearing. The evidence before me did not allow me to make a finding as to how that occurred. On behalf of the husband’s father it was submitted that I could infer from the fact that all the parties were represented by experienced lawyers that the listing of the application for directions only (as opposed to determination) at some date in the future occurred either with the imprimatur of the wife’s lawyers or following the rejection of submissions. Unfortunately I do not have evidence which allows me to conclude any more than I am concerned that an application for anti-suit injunction should, as a general rule, be listed with alacrity and in this case that did not occur.
It is tempting to accede to the request that this Court await the outcome of the transfer application in the Supreme Court. However, having listed the matter for hearing, read the evidence and heard submissions, whatever procedural irregularities may have occurred along the way do not (absent procedural fairness considerations – and none were identified) dictate that I dismiss or adjourn the wife’s application.
In determining that the interests of justice lie in granting the anti-suit injunction I find that:
(a)This Court can determine all issues as between the parties;
(b)The specific issue concerning the circumstances of the advance from the husband’s father to the parties and the default arising out of the parties’ separation are matters which arise in the context of a matrimonial cause;
(c)The factual matters which make the connection between the claim of the husband’s father and the marriage (or its breakdown) plainly include the default clause of the loan agreement, the date on which the mortgage was registered and the context in which the Notice of Demand then followed. As his Honour Justice Brereton observed in Valceski:
Third parties – especially associates such as parents or children or private companies of one or other of the spouses – who use the occasion of the demise of a marriage to assert a right against the property of one or other (or both) of them, cannot reasonably complain if their claim is treated as part of the larger matrimonial dispute in the context of which it arises.
The fact that similar considerations arise in respect of the transfer application and the exercise of discretion concerning the making of the injunction and joinder is not a basis upon which to avoid considering the merits of the injunction application. I accept that the observations of Brereton J are not a substitute for the actual tests which apply when the court is considering either the application for transfer or the application for an anti-suit injunction.
(d)Having regard to the parties submissions about the size of the net asset pool the resolution of this issue is likely to be central to the resolution of the wider dispute;
(e)The wife does not have the same access to income and resources as the husband and if the anti-suit injunction is not granted she will be required to litigate in two courts in Australia. I am required to avoid injustice as between the parties and must consider the circumstances of each of them and in that regard can comfortably find that the wife has a lesser financial capacity to participate in multi-court litigation ;
(f)There is a juridicial advantage in proceedings about the debt being dealt with in this court since the husband may (given his position in the Supreme Court proceedings) legitimately decline to participate as a witness;
(g)The wife foreshadowed the orders sought (see exhibit 5) which include relief under s 90AE and relief under s 106B of the Act which relief is not available if the whole of the proceedings are not heard in the one court (albeit similar remedies may exist). The husband’s father submitted that s106B may not be available on the facts of this case having regard to the date of the loan agreement. However, the default clause on the loan agreement itself seems to plainly contemplate a potential separation. It should be clear that this decision is not an evaluation of the merits (or otherwise of the wife’s application) except in the most summary way and decisions such as Kennon v Spry; Spry v Kennon (2008) 238 CLR 366; may be relevant in due course as regards the timing of the transaction; and
(h)If there are two set of proceedings running concurrently it is possible that there could be conflicting findings made on relevant issues.
In reaching the conclusion that I have I am conscious that the actual dispute remains very much a live one unaffected by the venue. The husband’s father and the husband will claim that the loan agreement and mortgage provide legal rights to the husband’s father and the wife will pursue her claims concerning the force and effect of the documents she accepts were likely signed by her. Counsel for the husband’s father referred to the matters raised by the wife to date as a “smorgasbord of legal challenges”. She should be required in the interests of justice to particularise her claim. I have in mind a document in the nature of a pleading. I anticipate this can occur without the need for a formal order but if I am wrong the parties should raise this at the next case management hearing.
Partial property settlement: THE law
The power in this case to make an order is to be found in ss 79 and 80(1)(h) of the Act. As a general rule it is appropriate that there be one exercise of the s 79 power.
In an appropriate case it is recognised that one or both of the parties may seek an order under s 79 of the Act at an interlocutory stage of proceedings.
A party does not have to demonstrate special circumstances in order to seek an interim order. However, it is necessary to demonstrate that:
(a)Such on order would be just and equitable;
(b)Such an order would not prejudice the relief of another party; and
(c)There are assets available to satisfy the order.
Both parties accepted that the principles involved were those discussed in Strahan and Strahan Strahan & Strahan (interim property orders) (2011) FLC 93-466..
Partial property settlement: consideration
The wife seeks an order that she received the sum of $166,000. The husband agrees that there should be a payment but says the amount ordered should be $90,000. Senior counsel submitted, and I accept, that the position taken by the husband is a recognition that the husband accepts that the wife has satisfied the necessary requirements for the making of an order.
It is necessary to understand both the nature and extent of the net assets (or at least each of the parties’ positions in respect of same) in order to determine whether there is a prejudice to the final relief either seeks by the making of an order.
A very preliminary outline of the assets, liabilities, financial resources and superannuation of the parties (derived from their respective financial statements) are as follows:
Property Ownership Wife’s Value Husband’s Value ASSETS D St, Suburb E J $12million $14million Husband’s bank accounts H $140,495 Husband’s e-trade account H $190,000 25 per cent J Pty Ltd H $1,553,485
L Pty Ltd H M Pty Ltd H NK Household contents H $5,000 Joint K Bank account J $4,500 $4,500 Joint N Bank account J $1,708 $1,708 Wife’s bank accounts W $13,023 $13,023 Car W $70,000 Household contents W $5,000 V Trust W $65,794 Total: $14,049,005+ $16,049,005 SUPERANNUATION P Pty Ltd Super H $828,385 Total Assets, superannuation: 14,877,390+ $16,877,390 LIABILITIES Mortgage J NIL $10,891,352 ANZ credit card H $35 O Bank credit card W $6,258 Amex – Q Finance W $100 Total: $10,897,745 NET ASSETS/SUPER: 3,979,645+ $5,979,645 FINANCIAL RESOURCES Potential interest in various family trusts NK R Company LLC
S Street, City T[1]H
[1] As I understand the issue the husband resides in a home owned by an LLC in the USA in which he is a member but does not have a beneficial interest. That home is said to be valued at $1,170,000. It appears as though he pays rent to the LLC.
The wife’s case is not yet clear. She certainly acknowledges the husband’s father was the source of the $7.5million advance. She is yet to settle on whether she accepts those funds were a loan or whether she will assert that they were a gift.
It is not possible at this stage of proceedings to make findings about the size of the net asset pool. Too many issues (both in respect of ownership and of valuation) remain unresolved. Accordingly, I asked the lawyers appearing for both the husband and the wife to clarify the positions of their respective clients as regards the net pool of assets available for adjustment. I was told that the assets available for distribution were between $2.1million and $3.1 million (even if the husband’s father’s claim was satisfied).
The wife seeks orders on a final basis for payment of a sum of money which well exceeds that which she has received by way of partial property settlement to date and that which she seeks by way of this application.
The husband’s final relief includes payment to the wife of a sum of money equivalent to 55 per cent of the net assets of the parties. At this stage of the proceedings it is difficult to know what that looks like in dollar terms (as discussed above) since the value of the husband’s interest in shares in private companies is unknown and the parties are in dispute about the effect of the registered mortgage over the Suburb E property.
Neither party is seeking a splitting order in respect of the husband’s superannuation.
Even if the husband and his father are correct about the effect of the mortgage the balance of the husband’s self-managed superannuation fund and the shares and cash available to the husband at present are such that it could not be rightly argued that the payment the wife seeks would prejudice the husband’s relief at final hearing. To his credit the husband through his counsel made that concession.
It is important to have regard to the importance of each party being legally represented where the assets of the parties are sufficient to permit this to occur. In a case where, after a long marriage, one party to the litigation has greater access to or control over the assets of the parties. In this regard I note that the husband anticipates that the total legal fees payable by him, should the matter require a four day final hearing, would be in the order of $812,431. I note that he estimates his annual income at $460,356 plus any income he may receive from the L Trust. The wife is not in receipt of any investment or personal exertion income.
The real dispute was not about whether there should be a sum paid to the wife but rather about the quantum. Counsel who appeared for the husband did not contend that the greater amount sought by the wife would prejudice his final relief.
The husband said it was not clear how the figure had been reached – this was clarified by reference to the exhibited costs notice of the wife.
I must have regard to the evidence about the source of funds available to meet any order.
The wife’s senior counsel referred to the husband’s financial statement filed 24 March 2022. In that document the husband had available to him:
Bank accounts with ANZ, [W Bank] and [K Bank] $627,718
Jet skis $20,000
Balance of solicitor’s trust account $28,413
I accept the submissions on behalf of the husband to the effect that he has had expenses to meet from those funds since 24 March 2022, including: partial property payment to the wife of $70,000, spouse maintenance, his own legal fees and some ongoing expenses relating to the Suburb E property. I am not confident that all of the expenditure is properly accounted for by the evidence but in any event the husband has not dissipated all of his assets so the question of where the funds have been expended does not require granular determination.
The husband had available to him to meet the expenses set out above and his own living expenses his income, the proceeds of sale of jetskis and the monies in his bank account and (on account of his legal fees) the money in his lawyer’s trust account.
The husband’s financial statement indicates he has the following liquid assets as at 6 September 2022:
Bank accounts $140,495
U Company account $190,000
Balance of Solicitors Trust account $65,794
I accept that the terms of any retainer agreement with his lawyers may limit the manner in which the trust account monies may be applied but there could be no impediment to those funds being applied to the husband’s legal fees.
In broad terms then the available assets of the husband which could be applied to legal fees total $396,289. The wife has sought a sum which is less than half of the available funds. It is appropriate that she receive that sum. The husband has contributed to his legal fees from income in the past (exhibit 6) and so it may be safely anticipated that he will draw on income and capital in the future.
I certify that the preceding one hundred and five (105) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 16 September 2022
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