Garwood & Shipton (No 5)
[2023] FedCFamC1F 237
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Garwood & Shipton (No 5) [2023] FedCFamC1F 237
File number(s): ADC 4995 of 2018 Judgment of: KARI J Date of judgment: 20 March 2023 Catchwords: FAMILY LAW – EX-TEMPORE REASONS – Interim Application – Application for an injunction to be discharged – Where the injunction was originally made by consent – Where the injunction concerned the preservation of funds – Where there was some confusion as to the legal representation of the applicant – Where the applicant appeared as a self-represented litigant – Where the applicant declined an invitation to adjourn the proceedings to obtain further assistance from legal representation – Where the applicant asserts that the injunction needs to be discharged because her personal funds, are needed to fund taxation liabilities of a business she controls and operates – Where the applicant failed to put the relevant evidence before the Court – Where the application is dismissed Cases cited: Garwood & Shipton (No 4) [2023] FedCFamC1F 104 Division: Division 1 First Instance Number of paragraphs: 48 Date of hearing: 20 March 2023 Place: Adelaide For the Applicant: Litigant in person Counsel for the Respondent: Ms O’Connor SC Solicitor for the Respondent: Stanley & Co. Lawyers ORDERS
ADC 4995 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SHIPTON
Applicant
AND: MR GARWOOD
Respondent
order made by:
KARI J
DATE OF ORDER:
20 MARCH 2023
THE COURT ORDERS THAT:
1.That the Application in a Proceeding filed by the applicant and sealed on 10 March 2023 be dismissed.
2.That the Response to an Application in a Proceeding filed by the respondent on 16 March 2023 and in particular paragraphs 1 and 2 of the same, be dismissed.
3.That paragraph 3 of the Response to an Application in a Proceeding filed by the respondent on 16 March 2023 be adjourned to the first day of the resumption of the trial, namely 10.00am on 17 April 2023 for mention only.
4.That the issues raised with respect to the orders made today arising from the said Application in a Proceeding and Response filed by the respondent be certified fit for Senior Counsel.
5.That by consent and on the oral application made by the respondent’s solicitors, leave be given for Mr KK to give evidence by Microsoft Teams during the adjourned trial commencing on 17 April 2023 in accordance with the Trial Plan as filed on 20 February 2023.
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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX-TEMPORE REASONS FOR JUDGMENT
KARI J
INTRODUCTION
This matter comes before me today as a consequence of an Application in a Proceeding filed by the applicant mother on 9 March 2023. The application has at its focus whether or not, from the mother's perspective, an injunction made by consent between the parties on 2 July 2021 should be discharged. That injunction concerned the preservation of certain funds.
BACKGROUND
The injunction was first made by a Judicial Registrar on 2 July 2021, it was made by joint written request of the parties, and was made in chambers.
The injunction was in the following terms:
5. That the Respondent be restrained and an injunction is hereby granted restraining the Respondent from drawing upon, transferring, or dealing in any way with the said proceeds held in the said trust account, save and except with the express and written agreement of each party by his or her solicitor or an Order of this Court.
For the purposes of that order, the proceeds of sale were defined by the earlier terms of the order and in particular, paragraph 4 of the order which referred to sale and settlement of the mother's former home at P Town and the manner in which the proceeds from the sale of that property were to be applied; firstly, in repayment of any mortgage, secondly in relation to any costs of sale, and thirdly, the remaining proceeds to be held in the XX Lawyers trust account (the mother’s then solicitors).
The injunction made in the orders of 2 July 2021 has remained in place since that time.
The order came about in circumstances where, at least for today's purposes, while the parties agree very little, they do however agree the following:
(1)Firstly, that the mother sold the P Town property without notice to the father; and,
(2)Secondly, the injunction was made in circumstances where the primary focus of the father was to preserve assets both with respect to his claim for settlement of property but also with respect to any costs application he may make in the future.
Having said that, the primary focus was to preserve the funds with respect to any claim for property settlement that he may make.
It is important to note at this juncture that there has been a lot of water under the bridge since the making of that injunction. That water under the bridge necessarily includes where the litigation presently stands. Importantly for today's purposes, as I have referred to in previous judgments I have delivered in these proceedings, the final hearing in the matter is part heard.
There was a two week trial listing in September 2022, and the matter is listed for a further three weeks of trial in April 2023. The issues being traversed in the trial at this stage relate to two matters. Firstly, the threshold question of whether a de facto relationship exists between the parties, and secondly, parenting proceedings.
Understanding the issues that are presently part heard gives some light as to why the preservation of assets order was made. In particular, it is the father's position that if he is successful in establishing the de facto relationship jurisdiction of the Court, then he shall ask the court to hear and determine his claim for settlement of property and with that, orders by way of financial adjustment between the parties.
Understanding that the threshold jurisdiction question is before the Court necessarily implies that the mother opposes the Court's jurisdiction. Whatever the case may be, however, it is inescapable that against that contested backdrop, the mother at a time when she was legally represented, saw the merit in the injunction being made, and indeed, an injunction was made in the terms that I have identified.
MOTHERS LEGAL REPRESENTATION
Fast forward to today, and the position from the mother's perspective is starkly different. She is no longer represented by solicitors in these proceedings, save and except pursuant to a grant of s 102NA funding for cross-examination purposes for the continuation of trial. I delivered reasons on 16 February 2023 that have now been published with respect to that issue (Garwood & Shipton (No 4) [2023] FedCFamC1F 104).
Somewhat opaquely, the mother, however, has secured some level of ongoing representation. To what extent that representation covers is a mystery, in circumstances where on or about the 6 March 2023, Ms YY filed a Notice of Address for Service in these proceedings on behalf of the mother.
That Notice of Address for Service indicates at paragraph 3 that Ms YY was acting for the mother with respect to all aspects of these proceedings. Indeed, the application presently before the Court for the discharge of the injunction was filed on 9 March 2023, and Ms YY is the solicitor on record on both the Application in a Proceeding and the affidavit filed in support of the application.
That Application in a Proceeding was filed out of hours on 9 March 2023, with a request that it be heard no later than the following day, being 10 March 2023. In circumstances where the application was filed out of hours while sealed on 9 March 2023, it was not properly before the Court until 10 March 2023 when the Court opened.
In any event, I was able to bring the matter on, not on 10 March 2023, but on the first business day thereafter, being 14 March 2023. On that day, the mother was represented by both her solicitor Ms YY and counsel, Mr ZZ.
At the father's end, given the timing of the application, an adjournment was sought at the hearing on 14 March 2023 to enable the father to file some responding documents. By agreement between all of the parties across the bar table, I indicated that I would adjourn the matter to Friday afternoon being 17 March 2023. In addition, I made orders for the father to file documents by noon on 16 March 2023, the day prior to the hearing.
That order at the father's end was complied with.
Unfortunately, the father's counsel took ill and was unable to appear at the hearing on 17 March 2023. I ultimately recalled the matter by Microsoft Teams in the afternoon of 16 March 2023 and adjourned the matter to today's hearing.
At the hearing on 16 March 2023, Ms YY appeared for the mother. However, she indicated to the Court that she was not instructed with respect to the current application.
Somewhat confusingly, however, and compounding the confusion created by the Notice of Address for Service and the documents filed on the mother's behalf on 9 March 2023, a number of additional matters have occurred. At the hearing on Tuesday 14 March 2023, when the mother was represented by her solicitor and counsel, the Court was advised by counsel on behalf of the mother that the mother was privately funding the Application in a Proceeding presently before the court.
However, when the matter was called on, on 16 March 2023, Ms YY indicated to the Court that she was not representing the mother with respect to that application. While I excused Ms YY from further participation in the hearing, the hearing occurring by Microsoft Teams, Ms YY ultimately determined that it was appropriate that she stay on the Teams Link albeit that she did not participate in the hearing and the mother thereafter, was self-represented.
Further compounding the confusion in the matter from my perspective as to whether the mother is represented by Ms YY or not, is that on 10 March 2023, some further documents were filed by Ms YY on behalf of the mother. One is a further affidavit of the mother containing an annexure which was mistakenly omitted from the mother's first affidavit filed on 9 March 2023.
There were three other documents that were thereafter filed by Ms YY. The first was an affidavit of the mother being a further trial affidavit in accordance with some earlier orders that had been made. The second being a further affidavit with respect to this current application. The third being a costs notice.
When regard is had to the Costs Notice, the waters are further muddied. In particular, because it identifies amounts which the mother is privately paying with respect to this application and perhaps other matters, it is not clear, that being work completed by Ms YY outside the grant of funding pursuant to the s 102NA scheme.
In addition, the mother has funded the preparation of transcript, I am aware, for at least three hearings in the matter during which she was self-represented prior to Ms YY coming onto the file.
I raise all of those matters because as a preliminary issue for today's purposes, I raised with the mother whether she was clear in her understanding and what the position was with respect to whether she is represented by Ms YY or not with respect to this application.
The Court was assured by the mother, and indeed, the mother insisted that she was self-represented for the purposes of this application, whatever the case might have been prior to today, and whatever the case might be after today.
The mother, in those circumstances, asked the Court to proceed to hear the application and that she would be self-represented for that purpose.
THE APPLICATION IN A PROCEEDING
Turning to the application itself, I have before me, as I have indicated, the various documents that have been filed by the mother with respect to the Application in a Proceeding. I also have documents filed, as I indicated, by the father on 16 March 2023 in accordance with the orders that I made.
In particular, the father filed a Response to an Application in a Proceeding and an affidavit in support. Those documents indicate a number of concerns at the father's end as to the lack of clarity with respect to the application and the mother's financial position.
As I have indicated, the application filed by the mother has at its heart the discharge of an injunction made on 2 July 2021. The mother asserts that the injunction needs to be discharged because her personal funds, being the funds held in the XX Lawyers trust account from the sale of the P Town property, are needed to fund certain liabilities of the C Company group of which she is the sole director and sole shareholder.
To that end, while the total debts of the C Company group to the Australian Tax Office are presently sitting at a little over in excess of $2 million, the mother has identified with reference to a letter prepared by her accountants that there are two amounts that are pressing at this juncture; those amounts being an amount of $435,673 required to meet superannuation guarantee payments together with an amount of $139,866 with respect to outstanding payroll tax.
During the course of the hearing, I have raised concerns with the mother which emanate on any plain reading of her material, but have also have been amplified by the concerns raised for and on behalf of the father. Principal amongst those concerns is that there is no explanation from the mother and certainly no evidence before the Court as to why it is that the mother's personal funds are required to meet the business liabilities of the C Company group, whatever those liabilities might be.
Indeed, during the course of the hearing and having identified those concerns with the mother, I invited the mother whether she wished to adjourn the application for a short or a longer period of time to enable her to clarify a range of matters and concerns raised with her during the course of the hearing. The mother opted to adjourn the matter for a short period of 15 minutes to enable her to consider her position and take whatever advice or make whatever inquiries she required.
Having done so, the mother proceeded and the hearing proceeded. I have not invited any further submissions from the father's counsel in circumstances where at the outset of the hearing, the parties understood that in circumstances where the mother is seeking to discharge an injunction that she voluntarily agreed to, the onus rests with the mother to satisfy the Court that circumstances are such that warrant the discharge of the injunction.
During the course of my discourse with the mother, during her submissions, I raised with her a number of concerns, as I have indicated, the principal concern being why it is that her personal funds are required to meet business liabilities.
At the very minimum, what the Court might have expected to have received by way of evidence from the mother is a range of documents including possibly financial statements for the business, including perhaps documents that evidence that the mother owes money to the business for whatever reason. None of those materials have been produced or filed in support of the application.
The mother, during the course of submissions, has made submissions which are not the subject of dispute, that at the present moment the cash flow of the business and the balances in bank accounts is negligible. That is not a submission against which the father rallied.
While I have not received the bank statement evidencing the present bank balances for the business, I accept the mother's submissions that this is an accurate position. However, as I indicated to the mother during the course of her submissions, it is not clear to me without more as to why it is that the position is so, and why it is that the business is not in a position to meet its liabilities as and when they fall due.
During the course of the hearing, the mother referred to documents that had been produced to the Court from her banker, Mr AB. In addition, the mother indicated that while she has made finance inquiries, and it may be that she might be able to get financing one day, from the mother’s perspective, that funding option was not available to her as quickly and as urgently as a release of the funds from her solicitor's trust account from the sale of the P Town property. From my perspective, that is not a sufficient answer nor a reason for the injunction to be discharged.
Without more, the mother's application has significant difficulties. It is for all of those reasons that I am not satisfied that the mother has established to the Court why it is that the injunction needs to be discharged.
I accept that this decision may place the mother, the C Company group and the sale of that business in certain difficulty. However, as I indicated to the mother during the course of her submissions, it is not for the Court to divine what the position might be and manufacture the evidence to support the urgency of the application that she has made and to support the making of the orders that she has sought.
In the absence of the mother putting meaningful documents before the Court which assist me to understand why the orders that she has sought are necessary, it is difficult for the Court to do anything other than to refuse the application.
In relation to the funds held in the XX Lawyers trust account, there is no dispute that the mother has voluntarily placed a sum $41,988 or thereabouts into her solicitor's trust account from the sale of one site relating to the C Company childcare business. Given the voluntary nature of this deposit into her solicitors trust account, and the specific terms of the injunction, which I have already identified, it is clear that the injunction does not cover those funds.
In those circumstances, the father quite properly does not speak against those funds being released to the mother for whatever purpose she requires given they are, for all intents and purposes at this stage, business funds, although even that fact is not entirely clear. Having said that, however, given the specific and precise terms of the injunction, the father acknowledges that there is no basis for those funds to be tied up and retained in the XX Lawyers trust account.
Accordingly, those funds are able to be released to the mother, and it does not require any specific order from me for that to occur.
It is for all of those reasons that I intend to dismiss the Application in a Proceeding filed by the mother on 9 March 2023, together with the Response, filed by the father on 16 March 2023.
Note: These reasons have been corrected from the transcript. Grammatical errors have been corrected. In addition amendments have been made to make the orally delivered reasons clear and easy to read. These reasons should also be read in conjunction with the transcript of the hearing in circumstances where the Court was asked to make orders by consent and the terms of the proposed orders were canvassed with the parties.
I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Kari.
Associate:
Dated: 4 April 2023
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