Hawford and Hawford

[2010] FamCA 1051

FAMILY COURT OF AUSTRALIA

HAWFORD & HAWFORD [2010] FamCA 1051

FAMILY LAW – PROPERTY –Ex parte proceedings – Mareva Injunction – Fears by the wife that the husband will dispose of boat – Injunction granted

Mullen & De Bry (2006) FLC 93-293
Stowe & Stowe (1981) FLC 91-074
Waugh & Waugh (2000) FLC 93-052

Family Law Act 1975 (Cth)
Family Law Rules 2004 Rules 5.12; 14.05

APPLICANT: Ms Hawford

RESPONDENT: Mr Hawford

FILE NUMBER: BRC 10919 of 2010

DATE DELIVERED: 19 November 2010

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 19 November 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr Jones

THE RESPONDENT: No appearance

Orders

IT IS ORDERED THAT

1. The Application in a Case filed on 19 November 2010 be listed urgently and that the time for service be abridged.

2. On an ex parte basis, and pursuant to Rule 14.05 of the Family Law Rules 2004, the respondent, MR HAWFORD, be and is hereby restrained from selling, encumbering or disposing of the interest of the parties or either of them, or authorising, directing or otherwise participating in the selling, encumbrancing, or disposing of the interests of the parties or either of them in the Bayliner 26’ Cabin Boat, registration number not known.

3. Within 7 days of these orders, the applicant shall be at liberty to make, file and serve an Amended application and supporting Affidavit.

4. The further hearing of the matter be adjourned to the Judicial Duty List at 10.00am on 29 November 2010 in the Brisbane Registry of the Family Court of Australia.

5. The solicitors for the wife shall serve upon the husband the wife’s Application and Affidavit filed on 19 November 2010, and a sealed copy of the Orders made today, as soon as reasonably practicable, and by not later than 4.00pm on 24 November 2010.

6. The solicitors for the wife shall serve upon the husband the Judgment delivered today, as soon as reasonably practicable following the distribution of such judgment.

IT IS DIRECTED THAT

1. The preparation of the ex tempore Reasons of today be expedited.

2. A transcript of today’s proceedings be prepared and expedited and a copy of same be provided to the parties free of charge, and that, upon its receipt by the solicitors for the wife they shall serve a copy of same on the husband as soon as reasonably practicable.

3. Leave is granted for the solicitors for the wife to approach the Registrar seeking the listing of any further urgent application either in terms of paragraph 3 of the Application in a Case filed today, or otherwise, and, upon the Registrar being satisfied as to the urgency of the matter, it is directed that any such application be heard as soon as can be arranged.

IT IS NOTED that publication of this judgment under the pseudonym Hawford & Hawford is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 10919 of 2010

MS HAWFORD

Applicant

And

MR HAWFORD

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. Approximately six weeks ago the parties to this approximate seven year relationship separated.  At that time the parties were living in Dubai where the husband is based and employed ….

2. The wife applies today, by way of an urgent application without notice to the husband, for orders that might conveniently be described as Mareva injunctions.

3. The husband is, on the material before me, due in Australia pursuant to his employment on Monday 22 November and, in that respect, in answer to a question posed in correspondence from the solicitors for the wife annexed to an affidavit by her, indicates that he will be in Australia for, “A maximum of five days a month until December 24, then permanently.”

4. Parties seeking orders without notice to the other party must comply with Rule 5.12 of the Family Law Rules 2004. The Court is bound to take account of a number of factors enumerated within Rule 5.12 in deciding whether to hear the application in the manner sought. The first four of those specific matters do not apply to this case.

5. In respect of the fifth, the letter from the wife’s solicitors earlier referred to requests the husband to have his lawyer contact the solicitors for the wife. Subsequently, the husband has himself engaged in correspondence with the wife’s solicitors and has indicated that he intends to represent himself until such time, that this matter comes to Court, if that occurs.  Accordingly, the husband has no lawyers at the current time and, therefore, sub-paragraph (v) of the rule need not be complied with.

6. It is said that the husband ought not be told of these prospective proceedings because of the danger that he will dispose of a boat in circumstances to which I will refer in my more detail in a moment.

7. I will also deal with the next matter referred to in Rule 5.12, namely the hardship, danger or prejudice to the respondent in a moment.

8. I have asked the solicitor for the wife about her capacity to give an undertaking as to damages.  A written signed undertaking as to damages is available but, as will emerge, the wife’s capacity to give substance to that undertaking is, plainly on the evidence before me, significantly lacking.

9. I also propose to deal with the nature of the damage or harm that may result if the order is not made and why it ought to be made urgently in dealing with the circumstances surrounding the application because each of those matters are directly relevant to the relief itself as well as to the necessity to examine the circumstances said to sustain the urgency.

10. It is clear that the Court has power to grant what is commonly called a Mareva injunction.  The circumstances in which that power may be exercised, or should be exercised, have been the subject of a number of decisions of the Full Court stretching back to, for example, Stowe & Stowe (1981) FLC 91-074.

11. In more recent times, a significant discussion of those principles was undertaken by the Full Court in Waugh & Waugh (2000) FLC 93-052. That decision came in for a significant degree of academic and other criticism and there were suggestions that the principles enunciated in that decision changed, for the purposes of their application to this jurisdiction, what might be described as ordinary principles applicable to interim or Mareva injunctions. The Full Court in Mullen & De Bry (2006) FLC 93-293 explained the proper basis of the decision in Waugh. It was specifically held in that case that the reasoning in Waugh was correct.

12. During the course of discussing the earlier Full Court decision, the Full Court in Mullen referred specifically to two paragraphs in Waugh each of which, as it seems to me, are important in the context of the current application. The Court held:-

    30. Whilst we do not disagree with that submission, we think that it has limited significance in the context of this case.  We consider that in seeking to apply, in proceedings under the Act, principles developed in other jurisdictions (including principles relating to grant or refusal of “Mareva” injunctions) care should be taken to ensure that sight is not lost of the essential differences which may exist between the proceedings in this Court to which it is being sought to apply those principles and the type of proceedings in other jurisdictions out of which those principles have sprung.

    31. For example, we think that it is important to bear in mind that there may be a distinction to be drawn between proceedings at law for a debt or damages in which the plaintiff seeks a “Mareva” injunction to restrain the defendant from dissipating assets to which it is expected that resort might ultimately be had to enforce a judgment obtained in the proceedings, and proceedings under s.79 of the Act in which one spouse seeks an interlocutory injunction to restrain the other from dissipating assets which, although not the subject of a specific claim under s.79, represents property of the parties to the marriage, or one of them, to which the applicant spouse claims to have made a relevant contribution, under s 79(4)(a), (b) or (c) of the Act.  In the latter case, there is an essential connection between the substantive proceedings and the relevant property, notwithstanding that the applicant spouse may not seek an order altering the parties’ interests in that property in his or her favour, but only the payment of a lump sum of money as a “settlement”.  That essential connection between the property and the proceedings may not, and usually does not exist in the case of proceedings for a “Mareva” injunction in other jurisdictions.

13. Importantly, as it seems to me, the Full Court in Mullen went on to hold:

    46.Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in section 114(3):

    a Court …may grant an injunction … in any case in which it is just or convenient to do so …

    47.Ultimately, each case will involve an overall assessment of a number of factors to determine the just or convenient result.  Not all cases with the same identity of factors will necessarily produce the same result because of varying weight individually and comparatively.

14. It seems to me, then, that I am bound to examine the circumstances in which it is said by the wife that it is just and convenient to grant the injunction sought in this case.  Included among the factors referred to by the Full Court is a consideration of whether the granting of the injunction is truly necessary (and truly necessary to be made on an urgent basis).

15. Secondly, because the other party is not present for the purpose of these ex parte proceedings, there is a high duty upon the applicant to make the Court aware of all circumstances relevant to the potential grant of the relief whether those circumstances are helpful to her case or not.

16. An important consideration for the Court emanating from the absence of the other party and also from the very nature of the relief sought, is the type of any hardship or prejudice likely to be occasioned to the respondent if the injunction is granted. So too, as it seems to me, that the Court should have a regard to issues such as the capacity of the person seeking the injunction to pay damages resulting from the grant of an injunction that subsequently proves to be baseless.

17. In deciding whether the grant of the injunction is just and convenient, it is also necessary to examine the nature and extent of the harm said to be occasioned to the applicant in circumstances if the injunction is not granted.

18. Although, by reason of the nature of the application and its asserted urgency, there is no material from the husband, there is included as an annexure to the wife’s affidavit correspondence forwarded to the husband. To that correspondence, the husband has appended answers to specific propositions put by the solicitors for the wife. As a result, the Court has before it, an assessment of the “property of the parties or either of them” within the meaning of section 79 as asserted by each of the parties.

19. The answers by the husband contained in the correspondence just referred to also provide material directly relevant to the factors that ought, in my view, be taken into account in deciding whether to grant the relief sought, and whether to do so in the circumstances of urgency as asserted.

20. First, it is important to state that, on the current assessment of the property of the parties made by the wife (which includes, obviously enough, at this early stage of the potential proceedings between the party, estimates in respect of value), there is here a total property “pool” of somewhere between about $280,000 net and $345,000 net.  Equally, it is important to consider that that “pool” includes superannuation in the husband’s name and a “provident fund” in the husband’s name estimated to be “valued” at, in total, about $200,000. 

21. The upshot is that the parties’ property and superannuation interest asserted by the wife sees two available assets that might meet her entitlement to a property settlement, her prospective claim for spousal maintenance (which is plainly foreshadowed in the correspondence from her solicitor) and issues, potentially, about child maintenance in circumstances where, on the material before me, it is not immediately apparent that the provisions of the Child Support Assessment Act would apply to the husband by reason of the location of the husband and his employment for the last four years.

22. Once account is taken of the substantial mortgage on the former matrimonial home, the property available to satisfy the parties’ entitlements, (if any) is very modest and consist essentially of the mortgaged former matrimonial home and (on the wife’s assertion) a Bayliner 26 foot cabin boat owned by the husband which she estimates to be valued at somewhere between $50,000 and $80,000.

23. The application in respect of financial relief, whether by way of property settlement and/or spousal maintenance, must be met, in terms of available or realisable assets, from the equity in the former matrimonial home, the boat (on the wife’s assertion) and chattels including motor vehicles and the like.

24. Added to the claims just referred to is an assertion by the wife that her straightened financial circumstances (and those of the children) are likely to result in her making an application for what is commonly, in this registry at least, referred to as a, “Hogan order” – that is, an order that funds be provided to her to meet her legal expenses.

25. One might be more troubled by an application of this type that has as its primary foundation, (if the affidavit of the wife is a guide), spousal/child maintenance and/or a Hogan order.  That is all the more so because of existing authorities in this Court which, in effect, eschew the making of lump sum maintenance orders when income streams are available from which a periodic order can otherwise be met.

26. However, in this case it becomes important to take into account what the husband himself says in response to the wife’s correspondence earlier referred to. He indicated there that he will be visiting Australia for a period of about five days until Christmas Eve when he will be here “permanently”.

27. The husband also says, in answer to a separate question posed specifically in relation to spousal maintenance,  and the assertions made by the wife’s solicitors in respect of that issue:

    In the interim period I will continue to provide funding as I have been doing for the previous period, however I will be unemployed and will not have any income if effect 20 December 2010.  After this time I will be living on any funds saved in the next two months.  [My employer] withhold my last pay for 10 weeks to secure against outstanding loans guaranteed by the company.  My last pay therefore was 26 October 2010.  This will enable me to pay the mortgage payment on 23 November 2010.

28. The husband then goes on to say:

    It is therefore paramount that steps are taken towards the placement of the [former matrimonial home] on the market now for urgent sale, or rent, to prevent the loan defaulting from 23 December 2010.  The property will have to be sold by this date unless [the wife] is able to make the repayments, which I imagine will be impossible.  This requires urgent consideration.

29. These two passages, in the husband’s own words, are important. 

30. First, there is an assertion by the husband that he will be unemployed as and from 20 December 2010.  Secondly, there is an assertion by the husband himself that he will have limited funds available to him in the two months thereafter because of a policy of the company that employs him.  Thirdly, he acknowledges that, subsequent to the mortgage payment on 23 November 2010, he will, at least as he asserts it, be unable to meet further mortgage payments including, in particular, the payment due on 23 December 2010. In addition, the husband plainly asserts that the former matrimonial home will need to be liquidated by the parties lest the mortgage fall into default and ultimately, a mortgagee sale. 

31. Each and all of those matters lend significant weight, as it seems to me, to the wife’s assertion that the financial position of the parties is parlous. Moreover, they lend weight to the assertion by the wife that her position, and the position of the parties’ children, is also parlous.  Further weight is added to that latter conclusion by the husband himself saying that he, “Imagines [it] will be impossible” for the wife to meet the mortgage payments on 23 December 2010 and beyond.

32. The husband has also, in that same response to the wife’s solicitor’s correspondence, set out his assertion as to the assets and liabilities of the parties. 

33. The husband asserts that the superannuation interests of the parties amount to about $120,000 amidst gross property and superannuation of slightly more than $900,000.  The husband accepts the mortgage liability asserted by the wife of $680,000 and lists a number of other liabilities including, for example, a figure agreed with the wife on the likely commission on the sale of the former matrimonial home. When account is taken of all of those matters the husband arrives at what he describes as a “total pool” of $159,766.93.  From that figure he subtracts his assessment of superannuation of $123,000 to arrive at an “accessible net worth” figure of approximately $36,600. 

34. This is, at it seems to me, an important admission by the husband in two respects relevant to the current application. First, it seems to me that the husband himself acknowledges that the potential available pool for the satisfaction of the parties’ respective entitlements by way of settlement of property, and/or spousal maintenance and/or child maintenance, as the case may be, will need to be met from a very limited capital source, or sources. Secondly, there seems to be contained, within the husband’s own assertions, an acknowledgment that he, by reason of what he asserts is unemployment, will be very unlikely to meet any periodic spousal maintenance sum or, if applicable, periodic child maintenance sum (or, indeed, child support). 

35. It is in that context that the wife’s assertion central to the nature of the relief sought today needs to be seen.

36. That central assertion derives from what the wife says is an important untruthful statement made by the husband. 

37. As earlier pointed out, the wife asserts that the very modest capital sums available to meet any orders of the type just described include a sailing vessel, which she estimates as being valued at between $50,000 and $80,000.  That vessel is missing from the husband’s list of assets and liabilities. 

38. The reason for its absence is explained, on the husband’s assertions, in his answers to the correspondence earlier referred to.  He says in respect of questions relating to the boat that there are no freighting costs applicable to removing the boat from Dubai (where it was situated) to Australia and that there were no mooring fees in respect of the boat at Brisbane.  The husband answers “not applicable” to each of those two questions. 

39. The husband then goes on to say:

    NB, the Bayliner 24 foot boat was sold in late August 2010 to partially fund the purchase of a Bayliner 305 boat under negotiation in California, USA put on hold now due until property settlement issues.  Sale price of $21,000 USD was applied to the HSBC UAE boat loan to discharge the debt (AED 62,000) which has now been cleared.

40. Further correspondence passing between the solicitors for the wife and the husband include, first, an express assertion by the husband that the boat was sold in Dubai, and, secondly, documents produced by the husband purportedly showing funds being deposited into an account in Dubai in reduction of the liability referred to in the passage just quoted.

41. The wife asserts that the statement by the husband that the boat was sold is false.  She asserts also that the statement that the boat was sold in Dubai is false. 

1. The wife asserts that the boat has, in fact, been shipped to Australia by the husband and is currently situated at or near the home of a good friend of the husband, Mr S, with whom the husband has indicated he proposes to stay for a period of about 14 days when he comes to Australia at Christmas time as earlier referred to.

2. The wife deposes to a concern, based on what she asserts to be those false statements made by the husband about the alleged non-existence of the boat and its sale, and the husband’s erstwhile international living arrangements and employment.  She deposes to a fear that, on his forthcoming trip to Australia the husband will dispose of the boat which he has, in correspondence, indicated is no longer either in Australia or in his possession.

3. The wife deposes that the husband is due to arrive in Australia “sometime this weekend, either tomorrow the 20^th or Sunday 21 November.”  She says that he proposes to stay with his friend, Mr S, and that she believes:

   That the boat is only being stored at [Mr S’s] place pending [the husband’s] return to Australia over the weekend whereupon the boat will be removed to some place completely unknown to me.

4. If the wife is correct that the husband has told false statements about the sale of the boat, concerns are raised, as it seems to me, about what the husband may do with the boat.  Those concerns might be sent to be significantly greater or exacerbated by the fact that the boat represents, on either party’s assessment, a significant proportion of the net available pool from which, it seems, any financial orders will need to be met. 

5. On one assessment of the pool, for example, if indeed the boat is valued at between $50,000 and $80,000, then the boat alone is worth about double what the husband asserts is the parties’ “net worth.” If the husband’s assessment of the net property plus superannuation is taken into account, and the wife’s assessment of value is right, then the boat represents potentially more than a third of the total value of the available property and superannuation.

6. If indeed a significant component of the wife’s proceedings will involve an application for spousal, and perhaps child, maintenance, the necessity for available funds (as distinct from superannuation) is, of course, all the more apparent.  The importance of the boat then, to any prospective proceedings or, indeed, the resolution of any potential proceedings between the parties for financial relief of the type foreshadowed, is apparent.

7. If the wife is right and the husband has made false statements about the boat, the importance of those false statements in raising concerns about what the husband might do with the boat are, it seems to me, well based and those concerns can be seen to be all the greater than what they might otherwise be if the boat was but a small component of “the pool”.

8. If the husband asserts that the boat no longer exists because there has been an arm’s length sale of it, and the reduction of a debt from its proceeds, then, it seems to me, the husband suffers no prejudice from an injunction which seeks to restrain the use by him of that boat. 

9. I observe that the relief that will be given by orders to be made by me today does not bind third parties.  But, it also needs to be said that remedies are available as against a third party in certain circumstances.

10. On the evidence before me I can’t see that the husband suffers any hardship, danger or prejudice as a result of an injunction being made in respect of an item which he asserts has been sold. 

11. There is, though, as it seems to me, the potential for significant prejudice to the wife emanating from the circumstances to which I have just made reference and, in particular, the important place of the boat (if it can be established by the wife that it is property of the husband) in the context of what is plainly, on either party’s view of the case, to be an extremely modest asset pool.

12. It follows, as it seems to me, that the failure to make the order is likely to result in significant potential financial harm to the wife if it can be established that the boat forms part of the pool. 

13. On the totality of the evidence before me I consider that I should grant the injunction and that the circumstances surrounding same are sufficiently urgent to allow the application to be heard in the manner contemplated by that application.

14. I will then make orders in accordance with paragraph 1. Paragraph 2 of the order will be amended slightly to read:  On an ex parte basis and pursuant to Rule 14.05 of the Family Law Rules 2004 the respondent Mr Hawford is hereby restrained from selling, encumbering or disposing of the interest of the parties or either of them, or authorising, directing or otherwise participating in the selling, encumbrancing or disposing of the interest of the parties or either of them in the Bayliner 26 foot cabin boat, registration number not known.

15. I will order in terms of paragraph 4 of the Application. 

16. I will adjourn the matter to 10.00 am on 29 November in the judicial duty list and I will direct the solicitors for the wife to serve the wife’s application and affidavit, and these orders on the husband as soon as reasonably practicable, and by not later than 4.00 pm on Wednesday 24 November. I will also direct the solicitors for the wife to serve upon the husband the settled ex tempore reasons for judgment as soon as reasonably practicable once they are forwarded to those solicitors.

17. I will direct that the preparation of the transcribed ex tempore reasons for judgment be expedited.

18. I will give leave to the solicitors for the wife to approach the registrar for the listing of any further urgent application, either in terms of paragraph 3 of the application for interim relief or otherwise, and upon the registrar being satisfied as to the urgency of the matter I will direct that any such application be heard as soon as can be arranged.

19. I will also order that a transcript of today’s proceedings be prepared and provided to each of the parties free of charge and I will direct that a copy of that be served, together with the ex tempore reasons, on the husband.

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 19 November 2010.

Associate: 

Date:  24 November 2010