Fowles & Fowles (No 2)
[2021] FedCFamC1F 209
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)Fowles & Fowles (No 2) [2021] FedCFamC1F 209
File number(s): MLC 8587 of 2015 Judgment of: WILLIAMS J Date of judgment: 19 November 2021 Catchwords: FAMILY LAW – INJUNCTION – Application by the husband to discharge an injunction preventing him from leaving the jurisdiction – Relevant orders made in 2018 to preserve the integrity of the trial process – The substantive proceedings have now been completed – The wife seeks the continuance of the injunction to preserve her capacity to enforce orders ultimately made in the substantive property proceedings – Assets outside the jurisdiction are controlled by the trustee of a family trust and related corporate entities in circumstances where they are not parties to the substantive proceedings – Consideration of relevant authorities – Balancing of the husband’s rights of movement and the length of time the injunction has been in place with the wife’s assertions that she will be unable to enforce orders made in the property proceedings – Timeframe of judgment for property proceedings uncertain – Wife seeks security if the injunction is discharged – Held orders made discharging the injunction and consequential watch list order Legislation: Child Support (Registration and Collection) Act1988 (Cth)
Family Law Act 1975 (Cth) ss 4, 79, 114
Cases cited: BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496
Damberg v Damberg & Ors [2001] NSWCA 87
Fowles & Fowles (No. 2) [2019] FamCA 1027
Fowles & Fowles (No. 5) [2018] FamCA 929
In the Marriage of Saad [1992] FamCA 44
Morrison v Hudson [2006] QCA 170
Division: Division 1 First Instance Number of paragraphs: 81 Date of hearing: 28 September 2021 Place: Melbourne Counsel for the Applicant: Mr North SC Solicitor for the Applicant: Pullos Lawyers Counsel for the Respondent: Dr Smith Solicitor for the Respondent: Lander & Rogers ORDERS
MLC 8587 of 2015 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR FOWLES
Applicant
AND: MS FOWLES
Respondent
ORDER MADE BY:
WILLIAMS J
DATE OF ORDER:
19 NOVEMBER 2021
THE COURT ORDERS THAT:
1.Paragraph 2 of the Orders made 16 November 2018 and paragraph 5 of the Orders made 12 December 2019, by Bennett J are discharged as from 26 November 2021.
2.The husband’s name be removed from the watch list at all Australian international departure points as from 26 November 2021.
3.The husband be permitted to obtain his passports from the Melbourne Registry of the Court as from 26 November 2021.
4.All extant interim applications be otherwise dismissed.
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 Fowles & Fowles has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Williams J
On 10 September 2021, the husband filed an Application in a Proceeding seeking discharge of an injunctive order preventing him from leaving the Commonwealth of Australia and an order for the return of his passports currently held by the registry of this Court.
The orders which the husband seeks to discharge were made by Bennett J on 16 November 2018 and 12 December 2019 and are as follows:
16 November 2018
(2)Until further order, the husband be and is hereby restrained by injunction from departing from the Commonwealth of Australia without further order of the court.
12 December 2019
(5)the husband deliver his passports to the Melbourne registry of the Family Court of Australia within 7 (seven) days of the date of his return to the Commonwealth of Australia.
The wife opposes the discharge of the orders referred to in the previous paragraph on the following basis:
(a)it is an abuse of process as the husband is effectively seeking to re-litigate an issue determined on 3 September 2021; and
(b)on its merits.
At paragraph 2 of her Response to an Application in a Case filed 23 September 2021, the wife seeks orders for security, if the court permits the husband to travel outside the Commonwealth, pending the conclusion and determination of the final hearing. This includes payment of the sum of $2 million to the wife’s solicitors trust account, payment of a further $453,452 to the wife’s solicitors trust account, being the amount required to discharge a mortgage in favour of Westpac Banking secured against a property in Melbourne and payment to the wife of $115,025.53 for arrears of spousal maintenance due to her pursuant to orders made during the course of the proceedings.
On 17 September 2021, Howard J made an ex parte order for the husband to be placed on the Watch List and thereafter adjourned that application to a judicial officer.
On 21 September 2021, the wife filed an Application in a Proceeding seeking a watch list order, in addition to the injunction, because a Departure Prohibition Order has now been discharged.
Both parties agreed that the injunction and the application for a watch list order are inextricably linked, and that if the injunction is not discharged, then the watch list order should remain in place as a consequential order to the injunction. If on the other hand, the injunction is discharged, then the watch list order should also be discharged.
On 28 September 2021, both Applications in a Proceeding were listed before the Court and proceeded by way of submissions.
Prior to commencement of submissions, I was informed by Senior Counsel for the husband that the intervener in the preceding, a firm which had recently been joined as an intervener, was aware of the application, did not seek to participate and would abide the order of the Court.
Background
The substantive property proceedings between the husband and the wife commenced as a final hearing on 19 March 2018 and continued for 45 days, with evidence being concluded on 10 September 2021.
The principal dispute between the parties in the substantive proceedings is whether or not various trusts and other interests primarily located in the United States are property of the husband for the purposes of s 79 of the Family Law Act 1975 (Cth) (“the Act”). The wife asserts that the husband has control of a family trust and various other entities and that the entities are shams or mere puppets of the husband. The husband denies that assertion.
On 27 March 2018, on the seventh day of the trial, the wife made an oral application seeking an injunction pursuant to s 114 of the Act, to prevent the husband leaving Australia.
On 5 July 2018, when the matter was adjourned for further hearing, the wife made an oral application to renew her application that the husband be restrained from leaving Australia and that he hand up his passports.
On that day, Bennett J made interim orders restraining the husband from departing Australia without further order of the Court and for the husband to deliver his passports to the Registrar of the Court. The husband agreed to the surrender of his passports to the Court without admitting the necessity for such an order.
On 22 August 2018, the husband filed an Application in a Case seeking the discharge of the order of 5 July 2018 or in the alternative that he be permitted to travel to the United States for specified periods. That application was set down for hearing on 10 September 2018. On that day the application was adjourned.
On 16 November 2018, Bennett J handed down her reasons pertaining to the hearings on 27 March 2018 and 5 July 2018 (Fowles & Fowles (No. 5) [2018] FamCA 929 (“Fowles & Fowles (No. 5)”)).
In December 2019, the husband made a further application to the Court seeking to dissolve the restraint against him leaving the jurisdiction and for his passports to be returned to enable him to do so. The basis of that application was so that the husband could travel to the United States, his country of origin, for various reasons including attending a memorial and burial service for his father.
On 23 December 2019, Bennett J delivered reasons and made orders suspending the injunction to enable the husband to travel to the United States and Country U for a limited period.
At paragraph 18 of her reasons in Fowles & Fowles (No. 2) [2019] FamCA 1027 (“Fowles & Fowles (No. 2)”), Bennett J said:
The extant Orders of 27 March and 5 July 2018, which operate to restrict the husband’s freedom of movement, were made for the purpose of protecting the integrity of the court’s process, in particular, to secure the continued attendance of the husband whilst his evidence was tested by cross examination and otherwise. It should be apparent from my reasons for decision on 16 November 2018 that the husband’s evidence gave cause for concern vis a vis his intention to divest himself of offices within entities and power over certain assets, his compliance with orders was being criticised but, most importantly, he did not have any firm proposal to travel or pressing reason to travel.
The husband travelled overseas and returned to Australia, whereupon his passports were again delivered to the Registrar of this Court.
On 3 September 2021, the husband again applied to the Court for a discharge of the injunction and return of his passports to enable him to travel overseas. That application was made by the husband in circumstances where he wished to travel to the United States to spend time with his family and grieve the passing of his mother.
On 3 September 2021, Bennett J heard the husband’s application, which was opposed by the wife. Her Honour made orders dismissing the husband’s application. Her Honour’s reasons have not yet been published and there is considerable dispute about why the order was made on that day.
The husband’s current application before this Court is again for discharge of the injunctive orders restraining him from departing Australia and the return of his passports.
Documents relied upon by the parties
The documents relied upon by the husband are as follows:
(a)Application in a Proceeding filed 10 September 2021;
(b)Response to Fourth Amended and Initiating Application filed 18 October 2020;
(c)Affidavit of the husband filed 10 September 2021;
(d)Affidavit of the husband filed 9 December 2015 (paragraphs 61 to 71);
(e)Affidavit of Ms AR dated 22 September 2021;
(f)Various orders of the Court and judgments.
The documents relied upon by the wife are as follows:
(a)Application in a Proceeding filed 21 September 2021;
(b)Affidavit of the wife filed 20 September 2021;
(c)Response to Application in a Proceeding filed 23 September 2021;
(d)Affidavit of the wife filed 23 September 2021;
(e)Affidavit of Mr AQ filed 19 June 2019;
(f)Various orders of the Court and judgments.
Preliminary Issue – Is the husband’s current application an abuse of process?
Counsel for the wife submitted that the Court should not entertain the husband’s current application as it is an abuse of process for the following reasons:
(a)the present Application in a Case seeks to re-litigate the issues raised on 3 September 2021;
(b)there has been no substantive change in the circumstances which would permit the re-litigation of the issues.
That is so because:
(a)the husband now wishes to travel to the United States to mourn the passing of his mother as that was the primary basis for his wanting to travel on 3 September 2021;
(b)that the final hearing has since concluded, is not a change in circumstances because the looming conclusion of the final hearing, and the conclusion of the husband’s evidence, was before the Court on 3 September 2021;
(c)that the child support has now been paid, is not a change in circumstances as that issue was also before the Court, on 3 September 2021.
Counsel for the wife also submitted:
(a)the submissions of Senior Counsel for the husband, that it was apparent from the transcript of 3 September 2021, Bennett J indicated she was minded to grant the application and discharge the injunction, but did not do so because of the failure to provide an undertaking, is not what a plain reading of the transcript reveals;
(b)the transcript establishes that her Honour consistently phrased discussion between counsel and the Court as to practicalities, in terms of if she were minded to make the order, and not that she would do so. There was no unequivocal statement by her Honour that she would acquiesce to the application;
(c)the issue of the child support arrears and the departure prohibition order was before the Court on 3 September 2021;
(d)absent reasons from her Honour about why the application was dismissed, the Court could not accept that it was dismissed only because of the failure to proffer the particular undertaking;
(e)it may be prudent to reserve this judgment pending publication of reasons by Bennett J for the 3 September 2021 hearing.
Senior Counsel for the husband submitted that:
(a)the current application was not an abuse of process; and
(b)there has been a material change in circumstances since 3 September 2021.
The change of circumstances are:
(a)the husband’s child support liability of $30,681.97 has now been paid;
(b)the departure prohibition order has now been discharged.
Senior Counsel for the husband submitted that when the husband applied on 3 September 2021 to discharge the injunction preventing him from travelling overseas, there were three impediments which prevented overseas travel:
(a)the interlocutory injunction of 16 November 2018 made by Bennett J;
(b)the order of 12 December 2019 requiring the husband to deliver his passports to the registry of the Court;
(c)a departure prohibition order issued by the Child Support Registrar on 19 November 2020, which resulted in the husband’s name being placed on the airport watch list. The prohibition order resulted from the husband’s non-payment of disputed child support of $30,681.97.
The hearing of the husband’s application was dealt with by Her Honour Justice Bennett on the afternoon and evening of 3 September 2021. During the course of that hearing it was accepted that the court had no power to deal with the departure prohibition order by reason of various sections of the Child Support (Registration and Collection) Act1988 (Cth).
Senior Counsel for the husband referred to the transcript of that hearing (p.292 line 20 to p.293) where her Honour indicated her intention to discharge the injunction and return the passports to the husband, upon her being satisfied that the child support liability had first been paid (Transcript, pages 330, 333, 335 and 338–339).
On that day, Senior Counsel for the husband proposed, on behalf of his client, that the husband’s solicitors would provide an undertaking to the Court to cause the child support liability to be paid to the Child Support Registrar, (from funds held in their trust account) and upon that undertaking, the Court could be reasonably satisfied that the child support liability would be met.
Senior Counsel for the husband was unable to obtain instructions from the husband to provide an undertaking to the Court, as proposed by her Honour, that the outstanding child support would be paid to the wife’s solicitors, for the benefit of the wife, subject to any direction of the child support agency.
It was also submitted on behalf the husband, the reason the application for discharge of the injunction was dismissed on 3 September 2021, was not on the basis of any argument as to the merits for the continuance of the injunction, but rather because of the husband’s failure to provide an undertaking in the terms required by the Court, with respect to the payment of outstanding child support.
It was submitted that the matters referred to in the previous paragraphs are apparent from an examination of the transcript and in particular the discussion between Her Honour and Senior Counsel for the husband, about arrangements for the passports to be put into the hands of someone on behalf the husband on that same evening.
Her Honour has not yet published reasons for the order of 3 September 2021 and those reasons are unlikely to be published until the publication of reasons for final orders.
Absent the publication of reasons, I agree with the submission of the wife’s counsel, it is not possible to ascertain precisely why her Honour dismissed the husband’s application on 3 September 2021, although it seems, from a reading of the relevant transcript, that her Honour may have done so for the reasons submitted by Senior Counsel for the husband.
However, notwithstanding the absence of her Honour’s reasons, I accept the submissions of Senior Counsel for the husband that there has been a change in circumstances subsequent to the hearing of 3 September 2021, namely that one of the impediments to the husband’s overseas travel no longer exists, as it did on 3 September 2021. That is, the husband’s child support liability has been paid and the departure prohibition order has now been discharged.
I do not accept that any decision of the current application should await publication of reasons by Bennett J, as I am satisfied there has been a change in circumstances.
The change in circumstances negates the wife’s argument that the current application by the husband is an abuse of process. I will consider the merit of the applications of each party.
The purpose of the original injunction
On 23 December 2019, Bennett J published reasons for the making of the order of 12 December 2019 (Fowles & Fowles (No. 2)). The following paragraphs of those reasons were referred to by Senior Counsel for the husband.
At [16], her Honour said:
…The wife is not invoking a statutory restraint such as that available under the Bankruptcy Act and considered by the Federal Court in Talacko. Here, the wife seeks to continue the injunction on an interlocutory basis, where any entitlement or award is not yet known and nor is it identifiable as being outside the jurisdiction.
At [18], her Honour said with respect to the purpose of the Order of 5 July 2018:
The extant Orders of 27 March and 5 July 2018, which operate to restrict the husband’s freedom of movement, were made for the purpose of protecting the integrity of the court’s process, in particular, to secure the continued attendance of the husband whilst his evidence was tested by cross examination and otherwise. It should be apparent from my reasons for decision on 16 November 2018 that the husband’s evidence gave cause for concern vis a vis his intention to divest himself of offices within entities and power over certain assets, his compliance with orders was being criticised but, most importantly, he did not have any firm proposal to travel or pressing reason to travel.
At [19], her Honour said:
The Orders of 27 March and 5 July 2018 were made on the seventh and thirteenth day of the trial respectively, when the husband was in his second and eleventh day in the witness box. My reasons for decision were handed down on 16 November 2018 which was between the fourteenth and fifteenth day of the trial which, excluding this application, is now in its twenty fifth day. The husband has stepped into the witness box on 21 days of the hearing, albeit sometimes not for long and frequently not productively.
Senior Counsel for the husband submitted that it was apparent beyond doubt that the injunctions were imposed in order to secure the husband’s attendance at court to enable the wife to mount her case by the cross-examination of the husband, and not for any further purpose. Counsel for the wife did not make any submissions to the contrary about the reasons for the making of the Order of 5 July 2018.
I accept the submissions of Senior Counsel that the reason for making the relevant orders was to protect the integrity of the court process.
I will now turn to whether the injunction should continue or be discharged.
Submissions on behalf of the husband
The gravemente of the submissions on behalf of the husband is that as the substantive proceedings have now concluded, there is no longer any basis for the continuing existence of the injunction. It should be discharged and the basis upon which the wife seeks the continuing of the injunctions, differs from the reason the injunctions were made. She seeks that continuance of the injunction as quia timet relief to allay her concerns, as expressed in paragraph 23 of her affidavit filed 23 September 2021:
…the Respondent may not return to Australia and in those circumstances it will be incredibly difficult, if not impossible, to enforce any orders made by this Honourable Court for the Respondent to make a personal payment to me in accordance with the final relief sought by me.
Senior Counsel for the husband submitted that to permit the injunction to continue would offend the relevant principles in granting such injunctions, which were referred to by Bennett J at [13] and [14] of Fowles & Fowles (No. 2):
13.There are a few general principles that I will state about the exercise of the court’s power to interfere with a litigant’s freedom to leave the jurisdiction. Some derive from cases to which I was helpfully referred to by Mr North SC and some flow from the concept of what is just and convenient in this case. In no particular order of importance I state the following;
·The relief is discretionary.
·By virtue of Australia’s execution in 1972 and ratification in 1980 of the International Covenant on Civil and Political Rights, a person’s freedom of movement is “certainly a relevant consideration when making an order pursuant to s 114 retraining a person from leaving Australia” (Minister for Immigration and Ethic Affairs v Teoh (1995) 183 CLR 27 at [286-288]). However, the rights protected by Article 12 must be taken into account by reference to the plain terms of relevant municipal law and balanced against a competing principle relating to the likelihood that a party applying for the order will be denied a remedy if the respondent’s freedom to leave the jurisdiction is not restrained (Rahman and Rahman [2013] FamCAFC 162 at [55] and [57]).
·Restraining a litigant’s freedom of movement is not a power that should be exercised punitively.
·Restraining a litigant’s freedom of movement should not take on the character of a free standing enforcement procedure and should be in the nature of a short term restraint (Brown & Brown (2007) FLC 93-316 at [192] - [195]).
·The onus of proving that the party applying for the order would be denied a remedy if the respondent’s freedom to leave the jurisdiction is not limited or suspended is a “heavy onus” (Rahman and Rahman [2013] FamCAFC 162, at [65]). The onus on the applicant for the order, is to establish that he or she ‘will not’, not ‘may not’, be denied a remedy which the proceedings are otherwise likely to provide (Xuen & Chao (injunction in aid of enforcement) per Tree J quoting from Antis & Antis (2000) FLR 93-013 at [38]).
·It is not appropriate to hold someone hostage or conduct a trial by ordeal.
·The power is to be exercised having regard to what is just and convenient. It is a balancing exercise. If the reason to travel is strong then the legitimate risks associated with the litigant leaving the jurisdiction will need to be stronger, before the court interferes with the liberty of a litigant.
·The restriction on a person’s ability to travel out of the jurisdiction should be of limited duration. It does not need to be limited in time but such a restriction should not be imposed for longer than is necessary which, in this case, means longer than is necessary to protect the integrity of the court’s processes.
14.In Talacko v Talacko [2010] FCA 193, Dodds-Streeton J summarised the issues as follows:-
45.As the authorities recognise, curial restraint and caution must be exercised in relation to curtailing or interfering with a person’s travel and freedom of movement, even in a bankruptcy context.
46. In Weiss v Offıcial Trustee in Bankruptcy (1983) 1 FCR 40 at 43, Bowen CJ stated:
I am conscious of the fact that the evidence revealed in his public examination suggests that he has committed various offences against the Bankruptcy Act 1966 (Cth) which have characteristics involving nondisclosure and concealment. However, these are matters to be litigated at the proper time. It is a basic principle that a resident of Australia is entitled to expect that he may travel freely notwithstanding the fact that he is a bankrupt provided it will not lead to his staying overseas in order to defeat or delay his creditors and provided it will not interfere with the due administration of his bankrupt estate (see Tyndall’s case at 15). It is to secure the proper administration of bankrupt estates that bankrupts are required by the Bankruptcy Act 1966 (Cth) to give their passports to the trustee (par 77(a)) and to obtain the permission of the trustee before travelling overseas (par 272(c)). This interference with the travel of bankrupts is not for the purpose of punishing or expressing disapproval of them for offences or alleged offences against the Bankruptcy Act 1966 (Cth).
47. Finkelstein J, in Australian Securities and Investments Commission v Wiggins (1998) 90 FCR 314 at 320 made observations to similar effect in relation to an application to order a director to remain in Australia to assist in ASIC investigations. His Honour stated:
In my view the power to restrain a person from leaving the jurisdiction or requiring a person to deliver up his passport, which would have the same effect, is a power that should be exercised with great caution. I regard any restriction on a person’s individual freedom of movement from one country to another as being a sufficiently serious interference with that person’s personal rights and liberties that the power to impose the restriction should be exercised only in the most clear case. Thus, in circumstances such as the present where the orders are sought for the purposes of assisting a current investigation that is being conducted by the ASIC, unless it is shown that the investigation cannot properly or effectively be conducted in the absence of the person, the orders should not be made.
48.Finkelstein J concluded that the appropriate course was to seek undertakings from the respondent’s solicitor as to the control of the respondent’s passport, which was currently in the solicitor’s possession.
49.Section 50 of the Act is aimed at facilitating the preservation and protection of the debtor’s property, so that in the event of sequestration, it will be available for equitable distribution to creditors. The considerations relevant to making an order thereunder differ from those relevant to the enforcement of a judgment and the present application differs from those recently made before the Supreme Court of Victoria.
Senior Counsel referred to the relevant principles and submitted:
(a)that unless the wife could demonstrate she would not obtain a remedy or at least highly likely that she will not obtain a remedy, then the injunction should not be continued;
(b)the wife’s statements (at paragraphs 14–19 of her affidavit filed 23 September 2021) do not amount to proper evidence sufficient to establish incapacity to enforce;
(c)her evidence amounted to a layperson’s expression of concern and assertion that because the husband may be in the United States or elsewhere, it will be impossible for her to enforce;
(d)the evidence of Mr AQ relied upon by the wife (which was relied upon when the wife sought and then did not persist with an application to join the trustee of the Fowles Family Trust as a party to the substantive proceedings) to assert that it would be difficult to enforce orders is deficient for the following reasons:
(i)the trustee of the Fowles Family Trust is not a party to the substantive proceedings;
(ii)the trustee of the Fowles Family Trust is a corporate trustee in FF State;
(iii)no order of the court as between the husband and the wife could ever give rise to a direct right of enforcement against the trust property, because the trustee could not be bound by any such order.
(e)there is no evidence about the capacity to enforce against the husband personally if he were to travel overseas, and in particular any region of United States;
(f)the wife has had three years during the substantive proceedings to adduce evidence about the difficulty, impossibility, or likely difficulty of enforcing any order in the foreign jurisdiction, and she chose not to do so;
(g)because of her failure to lead evidence about the law of the foreign forum to establish that it would be difficult to enforce orders overseas, the wife should not be permitted to rely on the assumption that the foreign law will be the same as the law of the forum, (see Damberg v Damberg & Ors [2001] NSWCA 87 at [119] (Heydon J)) because:
(i)such a presumption is not of universal application (BP Exploration Co (Libya) Ltd v Hunt [1980] 1 NSWLR 496 at [25] (Hunt J));
(ii)it would enable the wife who carries the onus of establishing the difficulty in executing the judgment overseas to do so, leaving it to the husband to disprove it;
(iii)it would be contrary to and an affront to the interests of justice that she should be so permitted.
(h)when the trial commenced in 2018, the wife was aware that the husband had transferred assets into the Fowles Family Trust by way of gift;
(i)those assets included a company, SS Company, which owns shares in another company, AT Company, which owns an apartment in AV City;
(j)the wife knew at least by 15 December 2015 everything done to place assets into the trust and the value of the assets at the time of transfer as the husband has set out the establishment of the Fowles Family Trust at paragraphs [61]–[71] of his affidavit of 9 December 2015;
(k)the wife had an opportunity to join the trust and relevant companies at the commencement of the proceedings and subsequently;
(l)she failed to proceed with an application to do so, which was filed on 21 May 2019, some 14 months after the trial had started and after the wife’s case had closed;
(m)having conducted her litigation in the manner in which she did, her only avenue for enforcement is against the husband, when her opportunities were potentially much wider;
(n)the wife has not demonstrated an incapacity to enforce any order;
(o)her evidence supporting the granting of an injunction, or continuance of the injunction as quia timet relief in respect to the future is wafer thin, and there is no certainty that she will obtain the order as sought by her;
(p)the wife makes loud and serious assertions in support of the continuation of an injunction, however, the assertions are not facts;
(q)the husband has connection with the jurisdiction as he has a son who lives in Australia, with whom he has contact;
(r)the restrictions sought by the wife are a significant imposition on a resident, should be made sparingly and should not last a moment longer than to fulfil their purpose, which has now occurred;
(s)the wife has failed to demonstrate a proper purpose for the continuance of the injunctions.
Submissions on behalf of the wife
Counsel for the wife agreed with the submissions of Senior Counsel for the husband about the legal principles applicable to travel restraints. Paragraphs 22–27 of the Wife’s Outline of Argument refer to the principles. He submitted that the power to make such orders could be found in s 114(3) of the Act, which requires a balancing exercise as to what is just and convenient between the parties.
Counsel for the wife properly conceded that the injunction was originally made for the primary purpose of protecting the integrity of the trial and to enable due process to continue. As the substantive proceedings have now concluded, the onus to convince the court that the injunction should continue falls on the wife, rather than the husband having to demonstrate a change in circumstances to justify the discharge or variation of the injunction, as would usually be the case (In the Marriage of Saad [1992] FamCA 44).
Counsel for the wife submitted:
(a)the wife is likely to be denied a remedy if the husband’s freedom to leave the jurisdiction is not limited or suspended;
(b)in her application for relief in the substantive proceeding, the wife seeks a payment to her of $2 million together with the matrimonial home unencumbered, which would necessitate a payment to her from funds held by the husband outside the jurisdiction;
(c)there is a $20 million discrepancy between the parties about the asset pool available for distribution;
(d)of the $15 million which the wife asserts is available for division between the parties, about $13 million is located within the trust in FF State;
(e)in the substantive proceedings the wife has argued and will make submissions to the effect that the husband indirectly has the overall control of the Fowles Family Trust and for all intents and purposes the family trust is used by him as his property;
(f)ultimately, Bennett J will come to the conclusion that the Fowles Family Trust and related entities are property for the purposes of s 4 of the Act and are available for division between the parties pursuant to s 79 of the Act;
(g)in the event the husband leaves the jurisdiction, the wife will be unable to enforce any order ultimately made;
(h)there can be little confidence in the husband complying with court orders absent compulsion, which is demonstrated by:
(i)the husband was previously in arrears of $30,681.97 in child support until compelled to pay those arrears in order to discharge the departure prohibition order;
(ii)the husband continues to be in arrears of an order for spousal maintenance made 5 October 2015, to the extent of $115,025.53, in circumstances where he has paid his legal representatives in excess of $2.7 million, as stated in his updated cost letter of 6 September 2021;
(iii)the husband has breached previous injunctive orders, specifically he sold shares worth $500,000 in breach of paragraph 5(e) of orders made 5 October 2015;
(iv)the comments of Bennett J at [54] of Fowles & Fowles (No. 5) expressing the possibility that if the husband is permitted to leave the jurisdiction he would not return when required;
(i)the difficulty of enforcement of orders in the United States is referred to in the affidavit of Mr AQ dated 17 June 2019;
(j)if the husband is permitted to leave Australia there is a real and significant risk, in fact an exceptionally high risk, he will not return to the jurisdiction, and he does not provide any evidence as to intention to return to Australia in the short term, nor his capacity to return in the context of the current Covid-19 travel restrictions;
(k)when he travelled overseas in December 2019 it was for the specific purpose of attending his father’s funeral as opposed to the lack of urgency in this application where he wants to mourn his mother’s loss with his family;
(l)in December 2019, there was no impediment to his return to Australia, unlike the current situation with Covid-19;
(m)the transcript of 3 September 2021 (at page 315, lines 16–37) demonstrates that the husband is unable to provide any method of guaranteeing when he could be back;
(n)any statement by the husband that he attend intends to return to Australia should be treated with circumspection because the husband is not a witness of credit, and in particular the contradictory statements in his affidavit filed 10 September 2021 and statements in his email dated 19 September 2021;
(o)there are few ties keeping the husband in Australia. He is an American citizen and on his case, has $577,000 in actual Australian tax liabilities, $611,912 in estimated tax liabilities, a business with a net value of $244,427 and owes his landlord in excess of $30,000;
(p)the husband does not offer any security for his return despite having $10 million of assets in the USA;
(q)the net effect of any orders made in this Court will have little utility for the wife in seeking to enforce that order in the USA;
(r)the wife could not possibly be expected to provide evidence as to the applicable law in each of the 50 or so jurisdictions in the United States, as matrimonial cause is a state power and not a federal one;
(s)nor could she be expected to provide evidence about the law in Country U, a country to which the husband also has close ties and may travel;
(t)the husband’s reason for travel do not have any urgency, particularly in circumstances where there is a finite end to the litigation, with the evidence in the substantive proceedings having been concluded and a timetable fixed for submissions;
(u)it is conceded that the husband had been restrained for a long period of time, however much of that was due to his own conduct which are referred to in the judgment of Bennett J delivered on 9 June 2021, with respect to the husband’s application for her Honour to recuse herself;
(v)the fact that the parties son, Freddy remains residing in Australia would not be a significant factor identifying the husband’s ties to the jurisdiction, as Freddy is now over the age of 18 and is not the subject of any orders of this Court, which was not the case in December 2019. Freddy is free to travel anywhere he now seeks to travel, subject to COVID-19 restrictions.
Because of the matters referred to in the preceding paragraph, the prejudice to the wife would be significant if the injunction did not continue.
The wife did not seek to submit or rely on an inference that the law in the United States would be the same as Australian law, other than Australia and the USA have no reciprocating recognition treaty in place, which would apply in this case. Counsel for the wife was not aware of any property convention between the two countries which would enable registration or the enforcement of any orders in the United States, from an order made in this Court.
As to the prejudice to the husband, Counsel for the wife submitted:
(a)the husband deposes to minimal prejudice other than the general right of movement;
(b)in his affidavit of 3 September 2021, the husband states that the purpose of his travel is to attend his mother’s funeral which was to take place on 5 September 2021. That time has now passed;
(c)in his affidavit of 10 September 2021, the husband states that his mother’s funeral has occurred and he seeks to return to the USA to spend time with his family to grieve the passing of his mother;
(d)there is now no particular urgency for the husband to travel to the USA, in accordance with the submission made by Senior Counsel for the husband on 3 September 2021 (Transcript p.323, lines 22–24);
(e)although the injunction has been in place for some time, in her judgment of 9 June 2021, Bennett J identified the reasons for the length of the proceedings, most of which were directly attributable to the husband;
(f)it is difficult for the husband to complain about the length of the proceedings, and thus the period of time the injunction has been in place when much of the delay has been occasioned by him.
As to what is just and convenient in this application, counsel for the wife agreed with the submissions of Senior Counsel for the husband at the hearing on 3 September 2021, namely, “the power is to be exercised having regard to what is just and convenient. It is a balancing exercise. If the reason to travel is strong, then the legitimate risks associated with the litigant leaving the jurisdiction need to be stronger” (Transcript 3 September 2021, p.319, lines 14–17).
In response to the Court’s question about the circumstances giving rise to the wife’s ability to enforce an order against a third party, counsel for the wife submitted:
(a)once a finding is made that the trust is controlled by the husband, the husband would then have an order compelling him to pay some $2 million;
(b)if the husband were recalcitrant in paying in Australia, then the wife would seek orders either by way of orders against the trust itself, or enforcement of those orders in support of that finding, or by way of a third party debt notice;
(c)applications would be made in the course of enforcement which would provide the trust with an opportunity to be heard;
(d)in the enforcement process, orders can be made against the husband in personam requiring him to execute various deeds or he could be compelled through contempt proceedings;
(e)there would be little which could be done to compel the husband if he were overseas.
In his final submissions, counsel for the wife raised the issue of the husband’s lack of proposal for any security. The orders made in December 2019 permitting the husband to travel overseas following the death of his father, included orders providing for a transfer of the matrimonial home to the wife to be held in escrow by his solicitors, pending return of the husband to Australia. There were other orders providing security to the wife including documents appointing the wife as a director of one or more corporate entities, in the event the husband failed to return.
In response to the submissions of the wife’s counsel, Senior Counsel for the husband submitted:
(a)the timeframe for submissions referred to by counsel for the wife did not reflect the timeframe referred to by Bennett J. If the injunction is to endure it would be for seven or eight months at least, in circumstances where the husband has been subjected to that restraint since 2018;
(b)the security as sought by the wife in this application would impose a burden on the husband which he simply could not meet. It is his case that he has no capacity to offer the security sought;
(c)not enough has been shown by the wife other than her own fears of apprehension that her enforcement will be prejudiced if the injunction is discharged;
(d)her assertions do not descend into the capacity to enforce;
(e)the Court is being asked to assume that a man who has lived in this country for many years, running a business here and is a dual citizen with roots and family in this country would be likely to remain outside the jurisdiction;
(f)it would not be beyond the scope of enquiry for the wife to present evidence about enforcement personally in FF State, in AW City where the apartment is located, or in MM State where the husband’s family principally resides.
Discussion
As correctly identified by both Senior Counsel for the husband and counsel for the wife, the decision is a balancing exercise having regard to what is just and convenient. It is also correct that it is incumbent on the wife to satisfy the Court that the injunction should continue, and not for the husband to demonstrate a change in circumstances to justify the discharge or variation of the injunction, as would usually be the case.
Senior Counsel for the husband emphasised both the restrictions placed on the husband’s liberty and the wife’s obligation to demonstrate to the court that she would not obtain a remedy or at least it would be highly likely that she would not obtain a remedy, if the injunction restraining the husband from leaving the country did not continue.
Counsel for the wife emphasised the likelihood of the wife being unable to receive her anticipated entitlement to a property settlement if the husband is permitted to leave the jurisdiction and he is unlikely to return to this country.
The factors referred to in the two preceding paragraphs inform the balancing exercise in this application.
Senior Counsel for the husband was highly critical the wife’s failure to join relevant parties to the substantive litigation, that is, the trustee of the Fowles Family Trust and associated corporate entities and to adduce proper evidence about possible enforcement difficulties in the USA. The criticism about failure to join relevant parties was highly relevant to the nature of the relief which the wife could expect at the conclusion of the substantive proceedings. That relief would be orders in personam directed to the husband.
Submissions were also made on behalf of the husband that the wife has simply assumed that the husband will not return to the jurisdiction, if he were permitted to travel overseas. That assumption is not justified in circumstances where the husband has lived in Australia for many years, has been running a business here for a long time, he is a dual citizen of Australia and the USA and he has family and roots in this country.
Whilst I have sympathy for the predicament facing the wife, it is her obligation to persuade the Court on the basis of proper and relevant evidence, as opposed to assertions, that the injunction should continue. As submitted by Senior Counsel for the husband, the wife has not adduced any evidence about her inability to enforce orders against the husband if he were permitted to travel outside the jurisdiction. I accept the submission of the wife’s counsel that it would be impossible for her to obtain evidence about enforcement difficulties in each state of the USA, but it would not be beyond her capacity to adduce that evidence from the three relevant states, FF State, AW City and MM State, as submitted by Senior Counsel for the husband. The assertions of the wife’s fear and apprehension about her inability to enforce any order, may be well founded, but such assertions are not evidence.
Furthermore, the wife’s ability to enforce any orders against a third party, the trustee of the family trust, are predicated on a finding in the substantive proceedings that the trustee is a puppet of the husband. Absent final reasons for judgment there is no certainty that such a finding will eventuate.
I am bound by the principles referred to at paragraph 51 hereof. It is apparent from the authorities that it is a very serious matter to make a restraining order restricting a person’s liberty to leave the jurisdiction. The onus on the applicant for such an order is a “heavy onus” and requires the applicant to establish that he or she will not, rather than may not, be able to enforce a remedy. I do not consider the wife has discharged that onus to the requisite standard to prove that she will be denied a remedy or entitlement which she hopes to receive in the substantive proceeding.
The husband’s reason to travel is to mourn the recent passing of his mother with his family. I consider it a legitimate reason to leave the jurisdiction, particularly in circumstances when he was able to travel internationally to attend various services following the passing of his father.
Additionally, it is not possible to contemplate the length of time such a restraint would continue, as there is no certainty when final reasons will be delivered. That is particularly so when the submissions due in a number of weeks, referred to by counsel for the wife, are submissions with respect to rulings about the admissibility of 54 documents. Once those submissions are finalised and the trial judge has delivered reasons, then final submissions relevant to the substantive proceedings are to be filed with judgment to come sometime thereafter. According to Senior Counsel for the husband, the anticipated duration of a further injunction would be for seven or eight months at least, in circumstances where the husband has been subjected to a restraint since 2018.
I have considered the submissions of counsel for both parties and weighed all relevant matters including the original purpose of the injunction and on balance it is not appropriate to restrain the husband from leaving the jurisdiction in circumstances where he has a legitimate reason for travel. The wife has failed to adduce proper evidence about her inability to enforce orders against the husband or indeed against the trustee of the family trust if the husband is permitted to leave the jurisdiction.
In terms of the security sought by the wife, the written submissions of her counsel propose that the husband pay to her solicitors trust account, a sum in excess of $2.5 million, which includes $453,452 to discharge a mortgage secured against a property in Melbourne and arrears of spousal maintenance of $115,025. There were no submissions about the husband’s capacity to make the significant payment.
Senior Counsel for the husband submitted that the trial judge was requested to impose similar security to enable the husband to travel overseas to attend his father’s memorial service, but declined to do so. The security imposed by Bennett J in Fowles & Fowles (No. 2) was in accordance with the husband’s own proposal. It was also submitted that the nature and amount of security sought by the wife, in this application, would impose a burden upon the husband which he could not meet as he had no capacity to offer the security sought. The Court should not make an order requiring security unless it had a reasonable basis for assuming that the husband had a capacity to meet it. There were no submissions why the husband did not offer security in this application, as he did in December 2019.
In Fowles & Fowles (No. 2), the husband proposed to execute a number of documents by his solicitor which would facilitate the transfer of the apartment in X Street from the husband to the wife and the husband’s resignation and the wife’s appointment, as a director of a company, T Inc. The transfers were to be effective if the husband failed to return by 31 January 2020. The wife does not now propose that the husband resign and she be appointed a director of the company, if the husband fails to return. Indeed there was no proposed return date.
Counsel for the wife did not refer to any authorities relevant to the imposition of security. I have regard to the wife’s proposal for security as a matter relevant to the balancing and weighing up of factors to exercise my discretion. I do not propose to impose any security for return, particularly in circumstances where the trial of the substantive proceedings has now been completed and orders and reasons for judgment will be made and delivered in due course.
At [15] of Fowles & Fowles (No. 2) Bennett J said:
There is no evidence about how an order, which provides the wife with an entitlement or award to extra territorial property, can or cannot be enforceable in the other jurisdiction.
That comment remains pertinent to this application, which has been made almost two years later.
In circumstances where the original basis for the order no longer exists, and the wife has not discharged the relevant onus, I intend to discharge the orders and the watch list, as sought by the husband. I do not accept the submission of counsel for the wife that the interests of justice dictate that the injunction should remain pending the final determination of the matter, particularly in circumstances where the wife has failed to adduce proper evidence to discharge her onus.
I have no doubt the wife will be aggrieved with my decision and may well seek to challenge it. I propose to make orders providing for the discharge of the injunction and the watch list order at the expiration of seven days from the date of the orders, to enable the wife to make any further application she may feel is warranted.
I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 19 November 2021
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