Hijazi and Hijazi and Ors
[2016] FamCA 811
•23 September 2016
FAMILY COURT OF AUSTRALIA
| HIJAZI & HIJAZI AND ORS | [2016] FamCA 811 |
| Anti-suit injunctions where jurisdiction is disputed because of the existence of a financial agreement which is presently the subject of an application to set aside – jurisdiction accepted but evidence does not support orders being made – Application, including for joinder of new parties, refused. |
| Family Law Act 1975 (Cth) |
| B Pty Ltd and Ors & K and Anor [2008] FamCAFC 113 Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 227 ALR 425; (2006) 80 ALJR 1100 CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345; (1997) 146 ALR 402; (1997) 71 ALJR 1143 R v Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 202 Re LSH; Ex parte RTF and Another [1987] HCA 53; (1987) 164 CLR 91 Teh & Muir [2015] FamCAFC 224 Yunghanns & Yunghanns and Ors [1999] FamCA 64; (1999) FLC 92-836 |
| APPLICANT: | Ms Hijazi |
| RESPONDENT: | Mr Hijazi |
| 2ND RESPONDENT: | B Pty Ltd |
3RD RESPONDENT: | C Pty Ltd |
| FILE NUMBER: | MLC | 11158 | of | 2015 |
| DATE DELIVERED: | 23 September 2016 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 22 September 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Smith |
| SOLICITOR FOR THE APPLICANT: | Ferdinand Zito & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Stanley |
| SOLICITOR FOR THE RESPONDENT: | Schembri & Co Lawyers |
| COUNSEL FOR THE 2ND RESPONDENT: | Mr Wilkinson |
| SOLICITOR FOR THE 2ND RESPONDENT: | JHK Legal Australia Pty Ltd |
COUNSEL FOR THE 3RD RESPONDENT: | Mr Schlicht |
Orders
Save as to issues of costs;
The wife’s application in a case filed 15 September 2016 is dismissed.
The husband’s response filed 21 September 2016 is dismissed.
The applications for orders by the proposed third parties are dismissed.
IT IS CERTIFIED:
That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
That any application for costs be by submission filed and served by 4.00pm on 7 October 2016 and any reply thereto filed and served by 4.00pm on 14 October 2016.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hijazi & Hijazi and Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 11158 of 2015
| Ms Hijazi |
Applicant
And
| Mr Hijazi |
Respondent
And
| B Pty Ltd |
2nd Respondent
And
| C Pty Ltd |
3rd Respondent
REASONS FOR JUDGMENT
Ms Hijazi (“the wife”) filed an application in a case on 15 September 2016 (having apparently satisfied the Registrar that an urgent hearing was required) relevantly seeking the following orders:
2.There be leave granted to the applicant wife to file an amended initiating application joining C Pty Ltd …and B Pty Ltd…to the proceedings as the second and third name respondents (sic).
3.Until further order, C Pty Ltd be restrained by injunction from prosecuting proceedings numbered … of 2016 in the Supreme Court of Victoria against the husband and the wife.
4.The parties and C Pty Ltd do all things and sign all documents necessary to adjourn or stay the proceedings referred to herein.
5.Until further order, B Pty Ltd be restrained by injunction from commencing or prosecuting proceedings in any court enforcing the orders made.
Leave was not necessary in this case as no “first day” had been allocated (Rule 11.10). Thus, joinder of a party could have occurred by amendment naming the new party (Rule 6.03).
Mr Hijazi (“the husband”) filed a response to the wife’s application seeking these orders:
1.That within 7 days, the Applicant deliver the 4WD motor vehicle registration number … (“the vehicle”) to B Pty Ltd or its Agent.
2.That the Respondent will make available a hire vehicle for the Applicant’s use and benefit for up to 2 weeks from the delivery of the vehicle pursuant to Order 1 above.
3.That within 7 days of the Applicant delivering the said vehicle in accordance with Order 1 above, the Respondent is to pay to the Applicant the sum of $22,000.00 which is to be applied to the purchase of a motor vehicle.
The husband otherwise sought a dismissal of the wife’s application and also that he be paid costs.
For the reasons that follow, there is no foundation for the Court to make orders 1, 2 or 3. If for no other reason, B Pty Ltd no longer seeks a delivery of the motor vehicle nor can it, because it has a judgment against the wife for $45,000 as I shall describe.
B Pty Ltd (“B Pty Ltd”) appeared by counsel and despite what could have happened as set out above in relation to joinder, opposed being so joined. It seeks a dismissal of the wife’s application on the basis that an injunction, as claimed, protects no cause of action.
C Pty Ltd (“C Pty Ltd”) (and I note both husband and wife describe it as C Pty Ltd) also appeared by counsel and similarly opposed the joinder on three main grounds:
(a) there is no jurisdiction to grant the orders sought;
(b)no permanent relief is sought such as would justify the injunction; and
(c)nothing in the wife’s material raises any defence to its cause of action in the Supreme Court of Victoria.
All is not as it would seem and accordingly, some background is necessary.
Background
It is important to observe that this is an interlocutory hearing on submissions reliant upon the affidavit material filed. Findings on the evidence could not be made and, in this unusual case the Court was not asked to do so.
The husband and wife married in 2007.
The husband described himself as a professional and the wife as “home duties” caring for the parties’ two children aged seven and five years respectively.
In February 2010, the husband and wife signed a financial agreement said to have been made under the Family Law Act 1975 (Cth). It was not suggested by the wife that there was any invalidity in respect of the contractual principles that would be considered for an agreement (save to the bases upon which she seeks to set it aside).
It was not suggested that the relevant advice was not given nor that certificates were not filed.
Relevantly, the agreement provides that in the event of a separation wherein their relationship breaks down irretrievably, the agreement finalises each parties’ claim against the other. Its salient terms were:
7(a)The husband shall do all such acts and things as may be required to purchase a property…in metropolitan Melbourne, Australia to the value of $1,200,000 (such value to be adjusted on 30 June each year in accordance with CPI increases) the real property shall be selected by the wife and registered in her sole name on an unencumbered basis…
7(b)The wife shall retain for her exclusive use the motor vehicle that she is habitually driving as at the time of separation (as defined within the relevant recital) and the husband shall do all such acts and things and sign such documents as may be required to register or cause the registration of the said vehicle in the name of the wife…
…
12Subject to the performance and observance of the terms of this Agreement the parties hereby release and forever discharge one another from all claims, demands, actions, causes of action, costs, liabilities and proceedings of whatsoever nature, wheresoever and howsoever arising out of or in relation to their marriage, whether directly or indirectly or as a consequence of or in connection with their marriage.
On 28 July 2014, the parties separated and the husband served the relevant separation notice on 15 September 2014.
On 27 November 2015, the wife filed an application in this Court seeking (in respect of financial matters) the following orders:
6.That pursuant to s 90K(1) of the Family Law Act the Agreement between the Respondent and Applicant dated 26 February 2010 be set aside by this Honourable Court.
7.That upon the granting of the Order sought in paragraph 6 hereof this Honourable Court make such Orders it deems just and equitable for the purpose of effecting a property settlement and adjustment of spousal maintenance entitlements as between the Applicant and the Respondent.
The wife’s application also sought interim orders, two of which read:
15.That pending further Orders and the setting aside of the Agreement dated 26th February 2010:
...
(b)the Applicant have exclusive occupation of the property known as [D Street, Suburb E] (“the property”);
(c) neither party remove any furniture or furnishings from the property and the Respondent be restrained from removing the [4WD] motor vehicle registration No. … from the possession of the Applicant and deliver to the Applicant the spare key for the said motor vehicle. (My emphases)
The husband’s response to those orders (21 April 2016) was (both as to substantive and interim relief):
That the wife’s application be dismissed insofar as it relates to issues dealing with the property of the parties or the validity of the binding financial agreement dated 26 February 2010.
A registrar’s conference failed to resolve the issues and the proceedings were referred to Thornton J on 7 June 2016. There, the parties compromised seeking the Court make no financial orders and indeed, the order reads:
9.All interim applications be dismissed.
Consideration of the evidence from the affidavits of the respective parties sheds some light on the two relevant issues. First, the “wife’s car” and secondly, the real property at D Street, Suburb E are the focus of the relevant injunctive orders sought. Notwithstanding her applications for interim orders (see 17 above) did not proceed, action was then taken by B Pty Ltd to endeavour to recover the car and C Pty Ltd commenced proceedings to sell the house. Hence the current proceedings.
B Pty Ltd
The true ownership position of B Pty Ltd is confusing. The wife’s evidence is that ASIC records (which were dated 9 September 2016) show two directors and shareholders. They are the husband and one other person. Yet, the husband by affidavit said he was removed from his role as CEO “by my partners”. Counsel for the husband said there were silent partners – one equity, one not. That is a curious description but obviously relevant here because the husband and B Pty Ltd are separately represented. It certainly raises questions of whether the husband has active control over what is going on. B Pty Ltd is represented by different solicitors to those representing the husband.
C Pty Ltd
The wife’s evidence about C Pty Ltd was:
17.The husband was the sole director of [C Pty Ltd] from 22 October 2008 to 16 May 2016. On 16 May 2016, the husband ceased to be a director and instead [Mr F Hijazi] was appointed as the sole director. [Mr F Hijazi] is the husband’s brother. Annexed hereto (is the ASIC search).
18.The husband held an interest in [C Pty Ltd] until recently and may still do so. The company extract reveals that the husband formerly owned all 12 shares of [C Pty Ltd]. The company extract now suggests that the 12 shares are owned by [C Pty Ltd] itself. This change occurred on 2 June 2016.
The wife then went on to say:
[C Pty Ltd] formed part [of] the Financial Agreement at recital H.
but of course, C Pty Ltd was not a party to the agreement.
The husband filled in the gaps. He said:
24.[C Pty Ltd] is the corporate trustee of the [C Pty Ltd] Trust. It does not own property or hold assets in any capacity. Its sole purpose is to act as a corporate trustee.
25.I was the sole Director and Shareholder of [C Pty Ltd] between 22 October 2008 and 16 May 2016. By way of further background information, the [C Pty Ltd] Trust is a beneficiary of the [G Trust], which is the beneficial owner of the shares in [B Pty Ltd] that are held on behalf of the beneficiaries.
26.A similar structure applies to the [C Pty Ltd] Trust. [Mr F] is the Appointor and I am a named primary beneficiary with [Mr F] and my mother.
27.Mr F and my mother asked me to step aside as the sole Director of [C Pty Ltd] on or about 16 May 2016 when [Mr F] asked me to sign a Caveat on behalf of Mr H, however, I refused. I understood that the Caveat was to be lodged because he became aware that I had utilised C Pty Ltd funds to pay down the mortgage over the property at D Street, Suburb E, which is owned jointly by the Applicant and I. I concede that I made the decision to utilise funds belonging to C Pty Ltd without first obtaining the consent of Mr F and my mother.
Despite what is described above, the husband did not explain how his directorship changed notwithstanding the records of ASIC. He said his decision not to consult his brother or mother “resulted in them bringing proceedings” in the Supreme Court of Victoria in which he and the wife are “Defendants”. That is surely odd. His mother and brother did not bring proceedings, C Pty Ltd did. A different firm of solicitors acted upon the issuing of that writ. This whole situation is confusing and very unsatisfactory but the common positions seem to be that the husband no longer had control of C Pty Ltd. A better explanation from the husband is necessary.
The action by B Pty Ltd
Solicitors for B Pty Ltd sent a letter of demand to the wife in May 2016 (so before this Court’s proceedings were heard in June) advising of the change of “policy” such that the motor vehicle was to be surrendered by the wife. As the wife did not comply, B Pty Ltd issued proceedings in the Melbourne Magistrate’s Court. There, the amended complaint was only against the wife. It alleged that the vehicle was subject to finance and indeed, as the documents now show it was a chattel mortgage. Just what the legal positon is (and was) about ownership, remains to be seen but importantly, B Pty Ltd did not seek an order for recovery of the car but rather, a payment of $45,000. The formal pleading in the complaint was “vehicle property damage”. The company’s solicitor swore an affidavit in support of that claim. One might speculate whether there was a cause of action at all and the admissibility of the evidence in support of it looks questionable. However, the wife did not defend the proceedings and judgment was entered against her for $45,000.
All of that makes the wife’s application for Order 5 above confusing. Her focus was on not having to return the car (bearing in mind that the husband seeks an order for its return) relying upon the BFA clause about her entitlement to a car. Yet, she seeks to set aside that agreement.
No evidence was presented by the wife to show how execution could presently be made against her for $45,000. There is no order in relation to the car. The car could presumably not be seized now because it is not the wife’s property. Possibly, B Pty Ltd can no longer seize the car either because, by virtue of the Melbourne Magistrate’s Court order, they have a judgment for $45,000 instead of the rights to possession of the car.
Even more curious is the issue of paragraph 12 of the financial agreement which requires each party to release the other from claims arising out of their marriage. Literally read, any claim by B Pty Ltd against the wife may have given rise to an indemnity by the husband. I do not raise these questions flippantly. They are unanswered questions that go to the issue of whether, if there is jurisdiction to make the orders sought by the wife, the Court should exercise its discretion.
C Pty Ltd
C Pty Ltd issued a writ out of the Supreme Court of Victoria on 9 August 2016 against the husband and the wife. Leaving aside the question of whether the husband was, in part, suing himself, the relief sought was:
A.A declaration that the mortgage has been subrogated to the Plaintiff.
B.A declaration that the Defendants hold the land on a resulting trust for the Plaintiff to the extent of $284,469.97.
C.Further and in the alternative, replacement of the amount of $1,476,307.20.
D.Costs.
E.Interest.
It seems common ground that the equity in that house (in which the wife and children live) is limited if it is accepted the mortgage debt is real. But much also depends on whether the company is indeed not the husband’s agent. Judgment has not been entered but if it is, the relief sought does not, at present, seek possession of the property.
Jurisdiction
C Pty Ltd asserted that there was no jurisdiction to make the sort of injunctive orders sought by the wife. There is certainly an argument about jurisdiction. The wife cannot seek s 79 orders at present because s 71A precludes her from so doing because of the financial agreement. The wife accepted that the agreement is valid and hence seeks to set it aside.
If the anti-suit injunctions are intended by the wife to bring assets under the control of the Court for the purpose of alteration of interests, that can only arise if the agreement is set aside. The grounds pleaded by the wife are a change of circumstances relating to the parties’ child J but also on the basis that the husband’s behaviour in getting her to sign the agreement was unconscionable. The difficulty with relying on either of those evidentiary matters is that the Court is being asked to speculate about what jurisdiction it will have after that issue is determined.
Counsel for the wife submitted that s 90AF provided the necessary injunctive power but that must be in aid of something. Injunctions must protect some process that would otherwise thwart the rights of the wife. The substantive action of the wife in this Court is to seek relief under s79 if she can obtain that jurisdiction by the setting aside of the financial agreement. Thus Part VIIIAA does not assist here.
Counsel for the wife directed my attention to Section 114(3) of the Act which provides:
A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.
Section 114(3) by its very words is not confined in its operation to proceedings involving matrimonial causes which are the focus of s 114(1). The Court needs to show that there is some jurisdiction to which s 114(3) can be addressed and in this case, it must be s 90K. The Court clearly has power to determine the setting aside of the financial agreement issue and the wife needs to point to the reason why the Court should exercise s 114(3) in her favour. Counsel for the wife also relied upon Teh & Muir [2015] FamCAFC 224 to indicate that at an interlocutory stage, the Court has injunctive power if there is an extant application to set aside an agreement. There, Finn & Strickland JJ observed that the issue of whether a de facto relationship existed was alive but in the interim pending that determination:
It has long been recognised that while the Family Court is exercising its power (which if not expressly provided for in the Act, must necessarily be implied) to determine whether or not it has jurisdiction in a particular case, it can be appropriate for it to preserve the status quo (in this case the disputed half share of the sale proceeds) by the grant of an interlocutory injunction (see R v Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 202, and Yunghanns & Yunghanns and Ors [1999] FamCA 64; (1999) FLC 92-836).
Counsel for C Pty Ltd relied upon Re LSH; Ex parte RTF and Another [1987] HCA 53; (1987) 164 CLR 91 along with Ex parte Green but those decisions relate to the limitations on jurisdiction. The question here is the existence of the jurisidiction.
I am satisfied that there is therefore jurisdiction to make the orders sought. The power to make injunctive orders here is dependent upon the proceedings in the two courts mentioned, being before this Court in some way. That leads to the question of whether an anti-suit order should be made.
Should the Court make anti-suit injunctions here?
It was not argued by anyone that there is no power to make an anti-suit injunction.
In Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27; (2006) 227 ALR 425; (2006) 80 ALJR 1100, the High Court discussed the line of authority dealing with the stay of proceedings instituted in a second forum where there were pending proceedings in another forum and that continuance of the second proceedings would be an abuse of the process of the first forum (CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33; (1997) 189 CLR 345; (1997) 146 ALR 402; (1997) 71 ALJR 1143). It includes the power of the Court to both prevent the abuse of its processes and to protect the integrity of those processes.
At its highest, the wife said she believed the husband was instrumental in the litigation outside of this Court to harass and annoy her. There is no evidence upon which a finding could be made (as distinct from a suspicion) that in either or both cases, the plaintiffs (as distinct from the husband) have issued those proceedings knowing of the extant applications in this Court and ignoring the possibility of obtaining the relief here such as to cause unnecessary delay, costs, pressure or annoyance to the wife.
On their face, and that is all the Court can look to in combination with the evidence provided by the parties, the proceedings in the Supreme Court are a declaration that encumbrance on the home is genuine and in the Magistrates Court that the wife has caused damage to the plaintiff company by retaining its property.
There is no application in this Court to set aside any instrument or transaction between the husband and his brother in relation to C Pty Ltd. That being so, one might conclude that, notwithstanding my earlier expressed reservation about the husband’s evidence that his mother and brother brought the action, the wife does not seek to say that any equity in C Pty Ltd belongs to the husband.
There is no suggestion that the car which is the subject of the Magistrates Court dispute is owned by anyone other than the plaintiff in that action. That plaintiff has apparently charged its equity in the vehicle by the chattel mortgage. On the face of that evidence, what cause of action is there in this Court that requires determination? If that plaintiff was genuinely aggrieved by not having access to its property in the car, what is the abuse of process claimed by the wife to have been perpetrated by B Pty Ltd in taking action in the Magistrates’ Court as distinct from coming to this Court?
In neither case is there any specific evidence upon which I could make a finding that the actions were taken as an abuse of the process of this Court and absent an indication of what causes of action the wife would bring against those plaintiffs, it is impossible to find on this evidence that the Court needs to protect its processes because those other proceedings will in some way thwart this Court carrying out its function. At the moment, there is simply an application to set aside a financial agreement which the wife accepts is, on its face, valid.
In the circumstances, it would not be proper to make the proposed anti-suit injunctions. The application of the wife does not seek specific injunctions in the alternative preventing any action by C Pty Ltd if the declarations sought by it in the Supreme Court are granted.
Similarly, the wife’s application relating to the action in the Magistrates Court concerns preventing enforcement of its judgment but the underlying premise is said to be that enforcement otherwise will affect her property entitlements if she is successful in getting the financial agreement set aside. No issue was raised by the wife about any indemnity she would seem to have against and from the husband in relation to debts into which he entered. It may be that she has a current right (which she is seeking to set aside) to claim that the debt to B Pty Ltd belongs to the husband. It is therefore difficult to see the evidentiary basis upon which any injunctive orders could be made against B Pty Ltd even if the anti-suit injunction was refused.
The husband’s application is for the return of the car by the wife. Ironically, the husband does not say how he has the right to claim property said to be of B Pty Ltd. No authority was produced. As the judgment is now entered against her, the wife owes B Pty Ltd money not a car. There is therefore no basis to grant the husband’s application.
The applications of the wife and that of the husband must therefore be dismissed. It goes without saying that it is not necessary for me to deal with the joinder issue because as I have already observed, there is no clear cause of action to be pursued in this Court (B Pty Ltd and Ors & K and Anor [2008] FamCAFC 113).
As there was some uncertainty at the end of the proceedings about costs arising out of this application, it was generally agreed that simple submissions should be made. Having said that, because of the clear mandate in s 117 and in particular, that one of the s 117(2A) considerations is the financial circumstances of the parties, because of the state of the evidence and particularly that of the husband about the change of control of C Pty Ltd and B Pty Ltd, I will need to be persuaded that his interests do not overlap with those of the other proposed third parties.
I certify that the preceding Fifty (50) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 23 September 2016.
Associate:
Date: 23 September 2016
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