Haseeb & Haseeb

[2021] FCCA 2000

FEDERAL CIRCUIT COURT OF AUSTRALIA

Haseeb & Haseeb [2021] FCCA 2000

File number(s):	PAC 1927 of 2017
Judgment of:	JUDGE OBRADOVIC
Date of judgment:	26 August 2021
Catchwords:	FAMILY LAW – wife’s application to join husband’s father as second respondent – wife’s application for injunctive orders – where outstanding debts will affect the pool of assets – proceedings transferred to the Family Court of Australia – husband’s father joined as second respondents – husband restrained from disposing or further encumbering the real estate assets
Legislation:	Family Law Act 1975 (Cth) s 79 Federal Circuit Court Rules2001 r 11.01
Cases cited:	Benjamin v Endeavour Industries Pty Ltd [2012] FMCA 488 TheState of Victoria v Sutton [1998] HCA 56 Tsiang & Wu and Ors [2019] FamCAFC 128 Wayne & Dillon & Dillon [2008] FamCAFC 204
Number of paragraphs:	65
Date of hearing:	10 August 2021
Place:	Parramatta
Counsel for the Applicant:	Mr Singh
Solicitors for the Applicant:	Opal Legal
Counsel for the Respondent:	Mr Campton SC
Solicitors for the Respondent:	Matthews Folbigg Pty Ltd
Counsel for the proposed Second Respondent:	Mr Heath
Solicitors for the proposed Second Respondent:	McLaughlin & Riordan

ORDERS

PAC 1927 of 2017
BETWEEN:	MS HASEEB Applicant
AND:	MR HASEEB Respondent

ORDER MADE BY:	JUDGE OBRADOVIC
DATE OF ORDER:	26 AUGUST 2021

THE COURT ORDERS THAT:

(1)Mr B is joined to these proceedings as the Second Respondent.

(2)The Applicant is granted leave to file and serve a further Amended Initiating Application within 14 days, setting out with sufficient particulars, the relief sought.

(3)Pursuant to s.114(3) of the Family Law Act 1975 (Cth), the First Respondent, Mr Haseeb, be restrained from selling, transferring, assigning, further encumbering or otherwise disposing of any real estate assets in his sole or joint name, unless agreed to in writing by the parties or until further order of the Court.

(4)Costs of the Applicant, First Respondent and Second Respondent of this application be reserved.

(5)The proceedings are transferred to the Parramatta Registry of the Family Court of Australia to be listed on a date to be advised.

NOTATION:

(a)The Court notes and accepts the undertakings provided to the Court by the Second Respondent on 10 August 2021.

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 under the pseudonym Haseeb & Haseeb is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

JUDGE OBRADOVIC:

1. These are reasons for judgment in respect of the orders sought in an Application in a Case filed 26 July 2021 by Ms Haseeb, the applicant in the substantive proceedings (“wife”). The respondents to that interim application are the respondent in the substantive proceedings (“husband”) and the husband’s father, Mr B.

2. The husband is the sole legal owner of five properties:

   (a)C Street, Suburb D (“Suburb D property”);

   (b)1 E Road, Suburb F (“1 E Road”);

   (c)2 E Road, Suburb F (“2 E Road”);

   (d)G Road, Suburb H (“Suburb H property”); and

   (e)I Road, Suburb J (“Suburb J property”).

3. The husband also runs two businesses, Company K and Company L.

4. It appears that the value of the properties in the husband’s name and the two business is approximately $8,540,000 (rounded).

   Mr Haseeb’s Claims

   Judgment for $2,604,400.95

5. The husband claims that in 2004 Mr Haseeb lent him $1,000,000, pursuant to a written loan agreement dated 5 February 2004. The agreement is said to be witnessed by the husband’s sister. The husband claims that the money was lent to him to purchase 2 E Road. 

6. It is not entirely clear on the evidence when Mr Haseeb demanded payment of the loan. It was submitted on behalf of the wife that the limitation period in respect of the purported loan had expired. Certainly, proceedings were not commenced by Mr Haseeb until late 2015 and the proceedings were not in any way defended or challenged by the husband.

7. On 8 February 2016, Mr Haseeb obtained default judgment against the husband in the sum of $2,604,400.95. The judgment sum includes the principal amount of $1,000,000 plus interests and costs. To date, Mr Haseeb has not sought to enforce this judgment.

   Judgment for $708,987.18

8. The husband claims that in 2013, Mr Haseeb lent him a further $266,000 pursuant to a written agreement dated 23 August 2010.

9. In 2021, Mr Haseeb filed a Statement of Claim in Court M, being a claim for a liquidated amount of $708,987.18 (which included $442,220.18 of interest). Mr Haseeb relied upon the loan agreement dated 23 August 2010. Mr Haseeb claimed that on 18 June 2021, he made a demand for the repayment of the loan agreement, and that the husband failed to comply with the demand.

10. In 2021, Mr Haseeb filed a Notice of Motion for Default Judgment pursuant to Rule 13.1(1) of the Uniform Civil Procedural Rules 2005, supported by an affidavit of Mr Haseeb of 25 June 2021, where he deposed as to his belief that the husband had no defence to his claim, or any part of it.

11. In 2021, orders were made in Court M for judgment in favour of Mr Haseeb, in the amount of $708,987.18.

    Suburb D Property

12. The Suburb D property was purchased in the husband’s sole name in 1992. It is the husband’s evidence that Mr Haseeb paid $40,000 towards the purchase of the Suburb D property in 1992 and that it was bought for the benefit of Mr Haseeb. The property was subject to a mortgage in the husband’s name, and there has been subsequent refinancing of the property. The property is presently subject to a mortgage with the National Australia Bank in the amount of approximately $400,000. The husband is the mortgagor. Until recently, the lender was not aware of Mr Haseeb’s claim. The claim made by Mr Haseeb is not a matter which has been disclosed to any financial institution by the husband, notwithstanding the 3 mortgages which have been held over the property since it was purchased in 1992.

13. In 2021, Mr Haseeb commenced proceedings in the Court N seeking orders that the Suburb D property be transferred to him, on the basis that the property was held in trust for him by the husband. The husband does not oppose the making of those orders.

14. Those proceedings are next before Court N in August 2021.

    Background

15. The husband and wife have been embroiled in family law proceedings for over 4 years.

16. The parties were married in 2002, and they separated in December 2014. The parties have four children together, aged between 16 and 12 years old. All four girls live with their mother and spend limited time with their father.

17. The wife commenced proceedings seeking property adjustment orders in April 2017. In January 2018, the husband filed his Response to the wife’s Initiating Application for property adjustment orders, but also sought orders in respect of parenting of the parties’ four children.

18. Between the commencement of the proceedings and the hearing of the interim application presently before the Court, there have been many Court events and many procedural and interim orders. For periods of time neither party was represented. Issues of disclosure have been one of the recurring themes in these proceedings.

19. It is probably the case that the primary focus of the parties’ many appearances before this Court to date have been on the parenting proceedings, but the property adjustment proceedings have been bubbling along the way and from time to time procedural orders have been made in respect of that aspect of the proceedings. The parties have attended mediation. It is apparent from the Court record that many subpoenas have been issued, and there have been numerous objections to subpoenas, some of which have required determination by the Court.

20. On 24 February 2021, the Court made a number interim property orders, interim parenting orders and procedural orders, including setting the matter down for final hearing in early August 2021. 

21. On 14 July 2021, the wife filed an Application in a Case seeking to join Mr B, the husband’s father, to the proceedings as second respondent, and restraints against the husband from dealing with any assets. The application was supported by a lengthy affidavit of the wife filed on 9 July 2021.

22. On 22 July 2021, the Court made orders by consent in chambers as follows:

    1. That the final hearing listed 10-12 August 2021 (first reserve) be vacated.

    2. That the application in a case filed by the Wife on 14 July 2021 remain listed on 10 August 2021.

    3. That on the determination of the Application in a Case filed by the Wife on 14 July 2021, that the proceedings be transferred to the Family Court of Australia, Parramatta Registry.

    4. That the Wife have leave to issue a subpoena to National Australia Bank in the form of that annexed hereto and marked A.

    5. That the Husband will comply with his disclosure obligations and in particular provide the documents in his possession that were last requested by the Wife's solicitors on 21 July 2021 by 12pm on 28 July 2021.

    Notations

    That parties acknowledge the following:

    A. The Wife contends that she became aware in 2021 that Mr B (father of the Husband) had obtained default judgement against the Husband in Court N on 8 February 2016 for the sum of $2,604,400.95 and that Mr B has not enforced this judgement.

23. On 22 July 2021, the wife filed a further Application in a Case seeking the same orders as contained in the Application in a Case filed on 14 July 2021, in addition to restraints against Mr B from enforcing judgments obtained against the husband and from further pursuing Court N proceedings in relation to the Suburb D property. It is the latter application that is now pressed.

    Further Detail

24. The substantive proceedings were commenced by the wife on 26 April 2017. Her Initiating Application sought final property adjustment orders, inter alia, in the following terms “The Applicant’s interest in all matrimonial property be declared at 70%”, a rather poorly drafted and perhaps embarrassing application for final orders.

25. Together with the final relief, the wife also sought an interim order restraining the husband from dispensing by way of transfer, sale or otherwise any real or personal property held in his name or jointly with any other person, and that he be restrained from further encumbering any real properly listed in his name. The wife also sought an order that the husband provide disclosure in respect of properties that he has disposed of or is in the process of disposing of, since separation and disclosure in respect of liabilities attaching to the respondent and assets owned by the respondent or in which he has an interest.

26. Although there was no application for parenting orders, the wife did disclose in her Initiating Application, orders made in Suburb F Local Court for a provisional apprehended domestic violence order (“ADVO”) for her protection made on 12 December 2014. The grounds of the application for the provisional ADVO disclose some historical facts, including that in September 2014 the wife reported a domestic violence incident that resulted in charges being laid against the husband and an ADVO being applied for and subsequently granted for the protection of the wife. The husband was then charged with breaching the ADVO. The grounds of the application for the provisional ADVO further disclose two allegations of sexual intercourse without consent by the husband upon the wife in early December 2014, allegations of verbal abuse, and coercive and controlling behaviour.

27. Also annexed to the Initiating Application filed 26 April 2017, were orders of this Court made on 13 July 2015 granting leave to discontinue an Initiating Application filed 6 February 2015 (in respect of parenting orders), and noting that orders had been made in the Children’s Court granting parental responsibility in favour of the Minister. The Children’s Court order dated 22 March 2016 was also annexed.

28. One of the significant benefits of the docket system, which this Court has employed since it was set up (and which will cease on 1 September 2021) is that the docket judge has an intimate knowledge of the file and the proceedings. It is for that reason, that the Court is well aware that the parties were involved in proceedings in the Children’s Court in Suburb F in 2015 and 2016, which were commenced by the Department out of concern for the safety and welfare of the children following reports of domestic violence. The Department intervened as it was concerned that the children remained at risk of being exposed to further violence if the mother did not take adequate steps to protect the children from the violence between herself and the father.

29. These proceedings were first before the Court on 31 May 2017, and the husband who appeared in person, was directed to file a response, affidavit and financial statement by 14 July 2017. The husband did not comply with that order.

30. On 2 June 2017, the wife pursuant to procedural orders made on 31 May 2017, filed an Amended Initiating Application, only slightly rephrasing the final relief that was sought, but still asking for a 70% adjustment in her favour.

31. On 12 September 2017, when the matter was next before the Court, the husband was again directed to file and serve a response, affidavit and financial statement, this time by 27 October 2017. He again did not comply with the Court order, although he did explain by way of an affidavit filed 10 January 2018, that he had attended Court on 27 October 2017 to file documents but that they were rejected by the Court “due to incorrect words and language used”.

32. It was not until 10 January 2018, that the husband filed his response. He did not join issue with the wife’s application for final property orders, except to the extent that he sought an interim order to allow refinance of existing properties to pay council rates, land taxes, maintenance bills, ATO debts and all other debts.

33. In the husband’s affidavit filed 10 January 2018, the husband deposed:

    (a)At paragraph 12: “At the first opportunity I purchased a very small retail business in Suburb K.”

    (b)At paragraph 13: “After successfully running this, I purchased a second small retail business in Suburb F.”

    (c)At paragraph 18: “By now [presumably being a reference to 3 years after the parties commenced cohabitation] my father had purchased a property in Suburb O which my father allowed me, my wife and our two children to live in.”

    (d)At paragraph 20: “I purchased a lavish 5 bedroom family home at Suburb P…”

    (e)At paragraph 21: “The proceeds from the sale of the Suburb O house was used towards the purchase of the Suburb P House”.

34. At the time of filing his response, the husband also filed a financial statement, which was accompanied by the usual affidavit. The financial statement discloses liabilities of $7,396,000, which are purportedly explained in a balance sheet which inter alia, records that the husband is the owner of the property at C Street, Suburb D which is “Held in trust on behalf of Mr & Mrs B (Parents)” and further discloses “Persona (sic) loans” owed to “Family” of $3,550,000. Debts to the “ATO, ORS, ETC” in the amount of $200,000 for “fees and taxes” are also disclosed.

35. In his affidavit filed 10 January 2018, the husband does not disclose any loans by his father. He certainly did not annex the purported loan documents which are now before the Court.

36. The husband does not disclose the default judgment which was obtained against him by his father in the Court N in 2016, either in his affidavit or his financial statement. The pleadings and orders of Court N were not annexed nor in any other way mentioned.

37. The husband has since January 2018 filed a number of further affidavits:

    (a)On 13 November 2018 with no references being made to the judgments, loans or the Suburb D property;

    (b)On 16 August 2019 with a reference at paragraph 7 to the husband’s parents living in Suburb D where “they have a 3 bedroom home”.

    (c)On 17 November 2020 with a reference in paragraph 15 that the wife’s legal representatives had written to him asking for full financial disclosure, and that the husband responded with a message stating that there was a conflict of interest. (This affidavit was filed in support of an application seeking to restrain the wife’s solicitors from acting in the proceedings, such application ultimately being withdrawn).

    (d)On 8 August 2021,  disclosing for the first time the particulars of:

    (i)The alleged loans from his father;

    (ii)the default judgment obtained against him; and

    (iii)the equitable interest said to be held by his father in the Suburb D property and the basis for it.

38. At first blush, some of the evidence in the affidavit filed 8 August 2021 may be in conflict with the husband’s evidence in the affidavit filed on 10 January 2018.

39. The husband asserts that he had told the wife about the loans and the 2016 Court N judgment and/or that she had been aware of the sources of funds with which various properties were purchased. The husband also asserts that in 2015 when the initial proceedings were commenced in this Court, there had been disclosure between the parties, including disclosure by the husband of the loans and the judgement debt.

40. Certainly, it is conceded that disclosure of relevant documents was not made by the husband in these proceedings until July 2021. These were matters which were specifically within the husband’s knowledge and which he had an obligation to provide disclosure about.

41. The wife says that the first time she became aware of Mr Haseeb’s various claims, was in late April 2021. It certainly does not appear that the wife was served with any of the Statements of Claim at the time proceedings were commenced, and not until recently.

42. Given the history of the parties, and the very serious allegations of family violence made by the wife against the husband (some of which were referred to earlier in these reasons) and in particular the coercive and controlling behaviour which the wife alleges the husband engaged in, such behaviour if ultimately proven, would be supportive of a scenario that the way the husband has conducted himself in terms of not making full and frank disclosure, while at the same time conceding the claims against him and in not defending Court N proceedings or the Court M proceedings (in 2016 and in 2021), is further evidence of coercive and controlling behaviour and financial control. This is particularly so noting the timing of the Court M proceedings and Court N proceedings relating to Suburb D, while noting that the final hearing in this matter was to occur in early August 2021.

43. In circumstances where the husband does not on his evidence dispute the debts owed to his father or indeed that his father is the beneficial owner of the property, one is left to wonder why in the world Mr Haseeb then commenced proceedings in other jurisdictions in mid-2021, and particularly when he was on notice about these proceedings.

    Joinder

44. The Federal Circuit Court Rules2001, are fairly straight forward in respect of who may be a necessary party. In particular, Rule 11.01 provides as follows:

    (1) Subject to any order of the Court, a person whose participation is necessary for the Court to completely and finally determine all matters in dispute in a proceeding must be included as a party in the proceeding.

    (2) The Court may require a person to be included as a party.

    (3) A person required to be included as an applicant who does not consent to be included may be included as a respondent.

    (4) The Court may decide a proceeding even if a person is incorrectly included or not included as a party.

1. Of relevance also is section 79(10) of the Family Law Act 1975 (Cth), which provides that a creditor of a party may intervene in the proceedings. Mr Haseeb, of course not only does not apply to intervene, but he actively opposes being joined to the proceedings.

2. The decision as to whether a party is to be joined in the proceedings is a discretionary matter.

3. As held in Wayne & Dillon & Dillon [2008] FamCAFC 204:

   18. The word “necessary” in rule 11.01(1) must mean something more than “useful” or “expeditious”. In my view, if there are available alternative means to joinder to the substantive proceedings, of obtaining from a third person or someone already a party what is needed to allow an applicant for joinder to establish an identified “case”, joinder is unlikely to be “necessary”.

   19. However, if a cause of action, recognisable at law, against a “third person” is particularised, then it is at least highly likely that joinder will be “necessary for the court to completely and finally determine all matters in dispute”. 

4. It is appropriate for the Court to consider whether the orders sought in the proceedings would directly affect that person’s rights against, or liabilities to, a party in a proceeding: Benjamin v Endeavour Industries Pty Ltd [2012] FMCA 488, citing News Ltd v Australian Rugby Football League Ltd (1996) 64 FCR 410.

5. Justice McHugh in TheState of Victoria v Sutton [1998] HCA 56 at [77] held:

   “The rules of natural justice require that, before a court makes an order that may affect the rights or interests of a person, that person should be given an opportunity to contest the making of that order. Because that is so, it is the invariable practice of the courts to require such a person to be joined as a party if there is an arguable possibility that he or she may be affected by the making of the order.”

6. The final orders which the husband seeks in relation to property adjustment are as follows:

   Property Orders

   23. That the wife’s Application for Orders pursuant to section 79 of the Family Law Act as set out in her Initiating Application filed 26 April 2017 (subsequently amended by her Amended Initiating Application filed 02 June 2017) is hereby dismissed.

   The Court Notes

   A. That the Husband contends that after payment of liabilities there is no property available for adjustment between the parties.

7. Significant liabilities of the husband are the judgment debts of $2,604,400.95 and $708,987.18. Any adjustment of the parties’ property interests will potentially have an effect upon any enforcement application brought by Mr Haseeb in respect of those judgment debts.

8. It is apparent from the Statement of Claim filed 18 June 2021, that Mr Haseeb was on notice as to the proceedings before this Court and as to the wife’s application for property adjustment orders, including the Suburb D property. It would have been appropriate at that point in time, for Mr Haseeb to apply for leave to be joined to these proceedings.

9. The judgment against the husband in the amount of $708,987.18 was also obtained by Mr Haseeb, at a time when he was on notice as to the proceedings before this Court. The matters upon which he relied upon to obtain such judgment are matters which the Court will need to consider as part of these proceedings. The judgment was obtained within less than 1 month of filing, and with no formal notice to the wife.

10. It is apparent from the material filed in the husband’s case that his case is that the property at Suburb D is held in trust for his parents, although he does not seek any declarations in this regard. It is a relevant matter.

11. For the purposes of the present application, on the wife’s case, the net pool of assets is approximately $4,500,000. This does not take into consideration Mr Haseeb’s claims, namely the two judgment debts and his claim with respect to the Suburb D property. If Mr Haseeb is successful in enforcing the judgments and is successful in obtaining the orders he presently seeks from the Court N, and the wife is successful in her claim for a 70% property adjustment order, her rights will be severely affected.

12. The wife seeks orders, on a final basis for the sale of the Suburb D property and a distribution of the net proceeds of sale as between herself and the husband. She also intends to move the Court for orders that the judgments obtained in Court N and the Court M be set aside – an order that neither this Court nor the Family Court is likely to be able to make. However, there is other relief that might be ordered against Mr Haseeb in respect of taking steps to have those judgments set aside or similar. There is also scope to order Mr Haseeb to apply for a transfer of the current proceedings before the Court N in respect of the Suburb D property, either to this Court or more properly to the Family Court, where these proceedings will be transferred.

13. So that the Court can completely and finally determine all matters in dispute, it is necessary that Mr Haseeb be joined as a party to these proceedings. An order to that effect shall therefore be made.

    Injunctive Relief

14. The wife seeks injunctive orders against both the husband and Mr Haseeb.

15. In Tsiang & Wu and Ors (2019) FamCAFC 128, the Full Court noted at [27]:

    (a)The grant of an injunction is discretionary and the basis on which such an order is made is well established;

    (b)A purpose, is to preserve the status quo pending resolution of the controversy;

    (c)An applicant must demonstrate first that there is a serious issue to be tried - in essence it requires the demonstration of an arguable case or as was said in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65], the applicant must “show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo”;

    (d)The applicant must demonstrate that the balance of convenience favours making the order sought; the applicant must show that there is a “danger” or risk of dissipation of or dealings with assets which will frustrate any judgment in favour of the applicant;

    (e)It is unnecessary to demonstrate a positive intention but merely the possibility of the event occurring. The determination about the balance of convenience may thus be an inference drawn from the facts and circumstances established by the applicant’s evidence;

    (f)It is not the role of the judge determining the question of the injunction to, in effect conduct a trial of the disputed evidence to resolve those disputes.

    (citations omitted)

16. In respect of Mr Haseeb, the wife seeks orders that he be restrained from enforcing the judgments of Court N and the Court M, and from further pursuing Court N proceedings relating to the Suburb D property.

17. On 10 August 2021, Mr Haseeb offered a number of undertakings to the Court, as follows:

    Mr B undertakes to the Court that upon the mortgage on the property situate C Street Suburb D being the whole of the property contained in Lot 1 of deposited plan (the property) being discharged and the title of that property being transferred to Mr B pursuant orders being made in Court N, Mr B undertakes to the Court that he will not dispose or otherwise deal with the property without first giving 28 days’ notice in writing to the Wife’s solicitors.

    Mr B undertakes to the Court that Order of Court N dated 8 February 2016, obtained in Court N would not be enforced by him without 28 days’ notice in writing to the Wife’s solicitors.

    Mr B undertakes to the Court that Order of the Court M dated 2021, obtained in the Court M would not be enforced by him without 28 days’ notice in writing to the Wife’s solicitors.

18. In light of the undertakings, which the Court accepts, the injunctive relief is not presently necessary to protect the substantive claim by the wife, particularly where Mr Haseeb will be a party to these proceedings henceforth.

19. In respect of the injunctive relief sought against the husband, the Court notes that the husband has already provided to the wife notice of his intention to dispose of certain assets. The husband’s case is that it is necessary for him to sell the Suburb J property and the Suburb H property in order to meet a number of debts. If those properties are sold in the manner suggested by the husband, there will be a significant reduction in the net pool. In addition, the wife contends that the liabilities asserted by the husband are problematic.

20. In light of the husband’s conduct, his lack of disclosure and the fact that he controls the majority of the parties’ assets, it is appropriate that until such time as the Court can properly determine any application for a partial property distribution (if one is to be made) for the payment of certain liabilities, that the husband be restrained from disposing or further encumbering the real estate assets presently in his name.

21. For all of those reasons, orders as set out at the forefront of these Reasons for Judgment will be made.

66          I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic.

Associate:  

Dated: 26 August 2021