Fowles & Fowles (No 6)
[2024] FedCFamC1F 554
•21 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Fowles & Fowles (No 6) [2024] FedCFamC1F 554
File number: MLC 8587 of 2015 Judgment of: HARTNETT J Date of judgment: 21 August 2024 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Injunction – Ex parte application by the wife for an injunction to prevent the husband from leaving the jurisdiction – Where the substantive proceedings have concluded – Where the wife seeks the injunction to preserve her capacity to enforce orders made in the substantive proceedings – Where the wife has no capacity to give an undertaking as to damages – Where assets outside the jurisdiction are controlled by the trustee of a family trust – Orders made granting the injunction and consequential Airport Watchlist order. Legislation: Family Law Act 1975 (Cth) s 106A
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 5.11, 6.06, 11.07
Cases cited: Fowles & Fowles (No 2) [2021] FedCFamC1F 209
Fowles & Fowles (No 4) [2023] FedCFamC1F 819
Fowles & Fowles [2023] FedCFamC1A 238
Fowles & Fowles (No 2) [2024] FedCFamC1A 115
Division: Division 1 First Instance Number of paragraphs: 28 Date of hearing: 9 August 2024 Place: Melbourne Counsel for the Applicant: Mr Sheales Solicitor for the Applicant: Lander & Rogers The Respondent: No appearance required ORDERS
MLC 8587 of 2015 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS FOWLES
Applicant
AND: MR FOWLES
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
9 AUGUST 2024
THE COURT ORDERS, EX PARTE, THAT:
1.This application be heard without notice to the husband.
2.Pursuant to rule 11.07(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), and until further order made by the Court to the contrary:
(a)the husband be and is hereby restrained by injunction from departing from the Commonwealth of Australia;
(b)the husband within 4 days of service of these orders upon him deliver up his current passports issued by Australia, Country U, and Country FF, to Division 1 of the Federal Circuit and Family Court of Australia; and
(c)the respondent named MR FOWLES born 1962 be placed on the Airport Watchlist and is to remain on the Airport Watchlist pending further orders made by the Court (“Orders for Restrain of Travel”).
3.It is requested that the Australian Federal Police give effect to this order by placing the name MR FOWLES on the Airport Watchlist in force at all points of arrival and departure in the Commonwealth of Australia and maintain the respondent’s name on the Watchlist pending further orders made by the Court.
4.The wife forthwith arrange for the husband to be personally served with sealed copies of:
(a)this Enforcement Application;
(b)the Affidavit in support of this Enforcement Application;
(c)the Orders made this day at the Ex Parte Hearing by the Honourable Court; and
(d)a Court-approved brochure entitled ‘Enforcement Hearings’.
5.Otherwise, the Enforcement Application filed 8 August 2024 be adjourned for hearing before Justice Hartnett on 12 September 2024 at 10.00am.
6.There is liberty to the parties to apply on short notice.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
On 8 August 2024, the applicant wife (“the wife”) filed an Enforcement Application seeking numerous orders, being eight in number. Relevantly, the wife sought that, pursuant to final orders made 6 October 2023, the matter be listed urgently and heard ex parte in the absence of the respondent husband (“the husband”); service be dispensed with; and pursuant to rule 11.07(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) the husband be restrained by injunction from departing the Commonwealth of Australia, deliver up his current passports, and be placed on the Airport Watchlist.
On 9 August 2024, the Court heard this matter deeming it urgent. Orders were made on that day. These are the reasons in respect of the making of those orders.
The wife relied upon the following Rules:
Rule 11.07(e) General enforcement powers of court
The court may make an order:
…
(e) in aid of the enforcement of an obligation;
…
Rule 5.11 Applications without notice
An applicant seeking that an interlocutory order be made without notice to the respondent must:
(a) satisfy the court about why:
(i)shortening the time for service of the application and the fixing of an early date for hearing after service would not be more appropriate; and
(ii) an order should be made without notice to the other party; and
(b)in an affidavit or orally, with the court's permission, make full and frank disclosure of all the facts relevant to the application, including the following:
(i)whether there is a history or allegation of child abuse or family violence between the parties;
(ii)whether there have been any previous proceedings between the parties and, if so, the nature of the proceedings;
(iii) the particulars of any orders currently in force between the parties;
(iv)whether there has been a breach of a previous order by either party to the proceeding;
(v)whether the respondent or the respondent's lawyer has been told of the intention to make the application;
(vi)whether there is likely to be any hardship, danger or prejudice to the respondent, a child or a third party if the order is made;
(vii) the capacity of the applicant to give an undertaking as to damages;
(viii)the nature of the damage or harm that may result if the order is not made;
(ix) why the order must be urgently made;
(x) the last known address or address for service of the other party.
MATERIAL RELIED UPON
The wife relied upon:
(1)her Enforcement Application filed 8 August 2024;
(2)her affidavit filed 8 August 2024;
(3)Fowles & Fowles (No 4) [2023] FedCFamC1F 819;
(4)Fowles & Fowles (No 2) [2021] FedCFamC1F 209;
(5)Fowles & Fowles [2023] FedCFamC1A 238; and
(6)Fowles & Fowles (No 2) [2024] FedCFamC1A 115.
CONSIDERATION
The background of this proceeding is lengthy, as set out in the Reasons for Judgment of Bennett J dated 6 October 2023. Only those matters relevant to this enforcement proceeding and the limited orders sought on an ex parte basis are set out hereafter.
On 6 October 2023, Bennett J made final property orders (“the final orders”) in the parties’ substantive property proceedings. Those orders were as follows:
THE COURT ORDERS THAT:
1.As and by way of alteration of property interests, within 90 days, the husband do all things and sign all documents to:
(a)repay any loan secured by the property situate at [X Street], Melbourne, Victoria […] and otherwise cause the discharge of the mortgage […] registered to the Westpac Banking Corporation ("the mortgage"); and
(b)transfer to the wife all of his rights, title and interest in the [X Street Property] free of encumbrance ("the transfer").
2.In the alternative to paragraph 1 of this Order within the lesser period of 30 days from the making of this Order, the husband be at liberty to:
(i)repay any loan secured by the [X Street] and otherwise cause the discharge of the mortgage; and
(ii)to gift all of his rights, title and interest in the [X Street] property to the wife free of any encumbrance in lieu of and in satisfaction of any order for the transfer of the [X Street Property] to the wife pursuant to paragraph 1 of this Order.
3.By way of further alteration of property interests, within 30 days the husband pay to the wife the sum of $1,240,231 ("the Payment").
4.Within 90 days the husband pay to the wife all amounts due by way of outstanding spousal maintenance due pursuant to paragraph 2 of the Order made on 5 October 2015 ("the 2015 Order") or paragraph 6 of the Order made on 5 July 2018 (“the 2018 Order”).
5.If the whole of any payment, including the Payment and/or arrears due under the 2015 Order and/or the 2018 Order due pursuant to this Order has not been made by the due date for such payment, then penalty interest at the rate specified in the Family Law Rules accrue in respect of so much of the payment as remains outstanding, such interest to be calculated with monthly rests.
6.That pending the compliance by the husband with regard to any and all obligations pursuant to these Orders ("the Obligations"):-
(a)the wife have sole use and occupation of the [X Street Property] and the husband to pay and be responsible for all mortgage repayments in respect of the loan secured over the title to the [X Street Property], owners levies, body corporate charges, rates taxes and like apportionable outgoings during the wife’s occupation;
(b) paragraph 6 of the 2018 Order continue in full force and effect;
(c)the wife retains a right of charge against any and all instruments of ownership (including shares) held by the husband in respect of the husband's interest in corporation or entity in Australia;
(d)the husband is to execute a Resignation as Director or Secretary with regard to any entity referred to in the preceding paragraph, to be held in escrow pending any default by the husband with regard to such obligations.
7.In support of the preceding paragraphs and pending compliance by the husband with regard to the Obligations then (at the option of the wife) the husband do all things and sign all documents (including any documents necessary pursuant to any exercise of power by the Husband as a Director or Trustee herein) as may be required to enable the wife her servants or agents to manage, liquidate or call in for sale the following entities:
(a) [L Pty Ltd] […]; and
(b) [T Inc].
8. The proceeds of sale of any entity referred to above be applied as follows:
(a) In payment of the costs commissions and expenses of such sale;
(b) In payment of any costs owing to the wife pursuant to this Order;
(c)In payment of any other obligations owing to the wife herein by way of property settlement, and lump sum or periodic spousal maintenance (see hereunder);
(d)The balance to be held in trust pending further order by this Honourable Court
9.The wife retain all of her rights, title and interest in her share portfolio with [DS Ltd] to the sole exclusion of the husband.
10. By way of costs and reimbursement of expenses:
(a)The husband be liable for and pay the wife $40,000 on account of her costs of his recusal application;
(b)The wife be liable for and pay the husband $20,000 on account of his costs of her application to tender documents;
(c)The wife pay the husband $13,750 by way of reimbursement of valuation expenses – such payments to be effected by the husband paying to the wife the sum of $6,250 in 30 days with the effect that the liabilities referred to in (a), (b) and (c) of this Order are not recoverable independently of one another.
11.Liberty be reserved to the parties to apply in relation to implementation of this Order.
12.Pending full, final and complete compliance with this Order, each party do all acts and things necessary to ensure that his or her address for service, including an email address is notified to the court and service on the party to the email address is deemed to be effective service even if the document is returned marked “Not Delivered” or words to that effect.
13.If the husband fails or neglects to comply with paragraph 1(a) and/or 1(b) of this Order, the wife may take a transfer of the title to [X Street Property] into her name without prejudice to her entitlement to enforce any part of this Order.
14.In the event that the husband fails to comply with any paragraphs of this Order by failing or neglecting to execute a document necessary to give effect to this Order, a Registrar or any other appropriate officer of the Federal Circuit and Family Court of Australia be, and is hereby, appointed pursuant to section 106A to do all things and execute all documents necessary on behalf of the husband to comply with this Order.
15.For the purpose of activating the preceding order under s 106A it is sufficient proof of the husband having failed or neglected to execute a document necessary to give effect to this Order if the solicitor for the wife provides an affidavit by himself or herself deposing:
(a)to the necessity for a document to be executed to give effect to this Order;
(b)details of how such document was provided to the husband for execution and return;
(c)that not less than seven (7) days has elapsed since the document was provided;
(d)the husband has not returned the document duly executed - such affidavit to be filed and served on the husband at his address for service as last notified to the court.
16.Unless otherwise specified in this Order and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Orders including but not limited to, their respective bank accounts and motor vehicles;
(b)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other;
(c)Insurance policies remain the sole property of the beneficiary named therein; and
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders or, in relation to any outstanding credit card balances or personal loan in their name or in which they are personally liable.
17.The parties’ applications in relation to child support be and are hereby dismissed for lack of specificity as to orders sought and grounds relied upon and/or without submissions relevant thereto having been made by either party.
18.Liberty be reserved to apply in relation to any slip rule application, implementation, enforcement of this Order and any such application may be listed before me in the event that I am reasonably available and without any intervening or preliminary listing of the enforcement application before a registrar or like officer exercising delegated judicial power.
19.Otherwise, all extant applications be and are hereby dismissed and this matter be removed from the docket of the Honourable Justice Bennett.
The husband filed a Notice of Appeal on 3 November 2023.
On 20 December 2023, Austin J made orders on the application of the husband and pending the appeal determination, for a stay of the transfer of the X Street Property from the husband to the wife (Order 1(b)); for a stay of the payment of $1,240,231 from the husband to the wife (Order 3); and for a stay of Order 13 of the Orders of 6 October 2023. None of the remaining Orders were stayed in their operation.
On 12 July 2024, the Full Court dismissed the husband’s appeal and the wife’s cross-appeal. As a result, the final orders of 6 October 2023, in their totality, continue in full force and effect.
Despite the ongoing operation of the final orders, the husband has failed to comply with them as alleged by the wife, in particular his obligations to make payments to the wife; his obligation to discharge the mortgage secured over the X Street Property; and his obligation to then transfer his ownership of that property to the wife.
It is the wife’s case that the husband’s refusal to comply with the final orders is an ongoing example of the husband’s continued financial abuse of her. In 2022, a final intervention order (“IVO”) was made against the husband, listing the wife as a protected person. This IVO is due to expire in 2025. The 2022 hearing was one of several IVO proceedings over the course of the protracted family law proceeding between the husband and the wife.
The husband has further, as alleged by the wife, not complied with his duty to provide full and frank disclosure pursuant to r 6.06 of the Rules. Notably, in respect of disclosure, the trial judge found, contrary to the husband’s assertions, that the husband failed to make adequate disclosure and does in fact have an interest in and controls the Fowles Family Trust and the 2017 DD Trust, with both Trusts based in Country FF.[1] That finding was not disturbed by the Full Court.[2] The husband’s lack of disclosure in relation to these assets remains outstanding to the present time as asserted by the wife.
[1] Reasons for Judgment of Bennett J dated 6 October 2023, paragraphs 306, 340 and 383.
[2] Reasons for Judgment of the Full Court dated 12 July 2024, paragraph 172.
It was the wife’s case that there are few assets held by the husband within Australia against which the wife can enforce the final orders. The only assets held within Australia by the husband are:
(1)the X Street Property, which is to be transferred to the wife unencumbered but remains subject to a mortgage with the FQ Bank;
(2)the husband’s interest in L Pty Ltd, with his interest being in a deficit of approximately ($244,427); and
(3)the husband’s vehicle and chattels (of nominal worth).
The balance of the husband’s assets as held outside the jurisdiction include:
(1)the husband’s interest in T Inc with his interest having a value of $1,492,535;
(2)interests in offshore trusts, being the Fowles Family Trust and the 2017 DD Trust; and
(3)‘Addbacks’ as asserted by the wife which are as described in the Reasons for Judgment of Bennett J dated 6 October 2023.
It is the wife’s case that enforcing orders against T Inc is made highly unlikely due to the valuation of the company being outdated (it was obtained in 2020), and the fact of the company being incorporated in Country FF, with the wife having insufficient funds to pursue enforcement in Country FF. The wife asserts there is also the added likelihood of the husband dissipating or moving elsewhere the assets of T Inc before the wife could obtain any orders in respect of that property of the husband, including the obtaining of any restraint on the husband’s dealing with such assets.
It is also the wife’s case that the husband has “significant incentive to leave Australia permanently” due to the Court’s finding that the husband has “substantial” assets based in Country FF.[3]
[3] Wife’s affidavit filed 8 August 2024, paragraph 16.
In 2023, following the delivery of judgment and making of final orders by Bennett J, the wife caused her lawyers to send a letter to the husband requesting he provide full and frank disclosure of all assets in his control. The husband’s response included only disclosure of personal financial accounts and bank statements, and otherwise disclosure in respect of L Pty Ltd and T Inc.
In 2024, the wife’s lawyers filed an affidavit prescribed by Order 15 of the final orders, being an affidavit to activate the s 106A order in Order 14 of the final orders relating to the execution of documents to manage, liquidate, or call in the sale of L Pty Ltd. In mid-2024, that affidavit was refused for filing as the husband’s appeal against the final orders was still pending.
In 2024, some 12 days after the dismissal of the husband’s appeal, the wife caused her lawyers to send a letter to the husband which particularised the amounts owed to the wife pursuant to the final orders. That total amount was said to be in the sum of $1,439,043 after deducting the payments as received by the wife (in 2023 and 2024) from Services Australia in respect of the husband’s arrears pursuant to the registered spousal maintenance order in favour of the wife. The correspondence also notified the husband of the wife’s intention to make an application for “enforcement, contravention or contempt of Court” if the payments as owed to the wife were not made by the husband within seven business days.[4] There was no response by the husband.
[4] Wife’s affidavit filed 8 August 2024, Annexure MF-1.
On 30 July 2024, the wife’s lawyers contacted the Court to advise that as the appeal of the final orders had been determined, the affidavit earlier attempted to be filed to activate the s 106A order now be accepted for filing. As of 8 August 2024, no response had been received from the Court.
It is the wife’s case that the effect of the husband leaving Australia at this time and permanently or otherwise, would significantly and effectively irrecoverably financially harm her because:
(1)the wife requires further information not yet available to her, including as not yet disclosed by the husband to aid her enforcement of the final orders;
(2)the husband’s pattern of non-disclosure is such that the Court can infer that the husband will continue such pattern unless the Court is able to effectively compel the husband’s compliance with the final orders by the use of powers available to the Court in respect of contravention of orders and/or contempt of Court;
(3)the wife’s ability to enforce against the husband’s assets overseas is in all probability not possible due to the trust structures in which the husband’s assets reside, and the jurisdictions in which such trusts are held; and
(4)the wife’s financial position, including as a litigant who has not received the benefit of the final orders as due to her, in all probability renders the bringing of enforcement proceedings overseas an impossibility, or at least very difficult.
The wife is unaware of there being any hardship caused to the husband if the Court were to restrain the husband by injunction from leaving Australia until further order, including him surrendering his passports and being placed on the Airport Watchlist.
The wife sought urgent ex parte orders to restrain the husband by injunction from leaving Australia. The urgency for the obtaining of such orders is because it is asserted by the wife that the husband is presently able to depart the Commonwealth of Australia at will and may indeed do so if he has notice of this application, given his entrenched campaign against the wife to avoid his financial obligations to her including under the final orders. He can without difficulty remain residing indefinitely in Country FF, where he is a citizen and has significant assets available to him which are effectively out of reach of the wife. He is in breach of orders of the Court as alleged by the wife with no action taken by him in compliance with such orders.
When considering any undertaking as to damages, the wife contended that she had no capacity to give an undertaking as to damages except insofar as damages could be offset against unpaid entitlements under the final orders. The wife has no present funds and is on Centrelink support. I observe, in the context of the wife’s allegation that the husband is in breach of the final orders, a very serious matter, that the husband can make application if there is any pressing need for his departure from Australia, which can be made on short notice. I acknowledge the importance of an individual’s freedom of movement in my consideration of this matter and that this is not a punitive exercise. I note further the evidence of the wife that her capacity to provide an undertaking as to damages has been reduced by the extent to which the husband has exerted financial control over the wife. She asserts that the husband continues to deliberately dissipate or move assets beyond the Court’s control, and in contravention of the final orders, to the wife’s detriment.
On all the above matters, I consider that currently the husband presents as a flight risk from the Commonwealth of Australia and that the wife has discharged her ‘heavy onus’ in this regard. It is just and convenient to make the orders sought for a very limited duration and such orders protect the integrity of the Court’s processes. I am also mindful that the balancing exercise required to be undertaken will benefit from a consideration of the husband’s material when before the Court. I have attempted to engage in that when considering, before reaching this concluded view, those matters that might be put in mitigation as to why the husband is not a flight risk which include:
(1)the husband is engaged, through T Inc, as an applicant in the Federal Court of Australia in a case in which T Inc is seeking loss and damages. This matter is part-heard;
(2)the husband is engaged as a defendant in proceedings in the Supreme Court of Victoria against the FQ Bank as mortgagee of the X Street Property; and
(3)the husband’s son, Mr D, who is 21 years old, remains in Australia and lives with the wife, although it is the wife’s evidence that the relationship between the husband and Mr D is very strained, and that Mr D has not seen his father for over two years.
As to (2) above, it is the wife’s case that the husband may not seek to defend those proceedings in circumstances where his appeal in this proceeding has been overturned by the Full Court, including that the order made for a transfer of the X Street Property to the wife remains in full force. The Supreme Court proceedings are in the mortgage recovery list. The husband has allowed this situation to occur it is claimed, to the detriment of D and the wife, both of whom reside in the property, whilst paying costs in the appeal up to 26 February 2024 of $493,003.45 according to his own costs notice, with further costs incurred thereafter.
The mitigating factors above do not outweigh the need to make orders as sought by the wife and without notice to the husband at this time.
Accordingly, the orders sought ex parte will be made.
I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 21 August 2024
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