Kendall and Kendall

[2012] FamCA 587

FAMILY COURT OF AUSTRALIA

KENDALL & KENDALL [2012] FamCA 587

FAMILY LAW – PROPERTY – Injunction – Preservation of property

Family Law Act 1975 (Cth)

APPLICANT: Ms Kendall

RESPONDENT: Mr Kendall

FILE NUMBER: ADC 1635 of 2012

DATE DELIVERED: 13 July 2012

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne by video link to Adelaide

JUDGMENT OF: Cronin J

HEARING DATE: 13 July 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Tredrea

SOLICITOR FOR THE APPLICANT: Pederick Lawyers

COUNSEL FOR THE RESPONDENT: Mr Burrell

SOLICITOR FOR THE RESPONDENT: David Burrell & Co

Orders

1. That the application of the wife filed 12 July 2012 is dismissed.

2. That the husband’s costs of this day are reserved.

3. That reasons be transcribed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kendall & Kendall  has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: No. ADC 1635 of 2012

Ms Kendall

Applicant

And

Mr Kendall

Respondent

REASONS FOR JUDGMENT

1. This is an application was brought on urgently via video link from the Adelaide registry into Melbourne.  It was filed yesterday. 

2. Mr Tredrea, on behalf of the applicant, and Mr Burrell, on behalf of the husband, addressed the legal issues and how I should deal with the matter. 

3. Mr Burrell acts for the husband at something of a disadvantage today, because having regard to the timing of the filing of the matter, his client has no evidence before the Court.  Both parties have acknowledged that the asset position is roughly what each says it is, I have a fairly good picture.

4. The application was brought on urgently, having been filed in the Adelaide registry yesterday, because in the substantive proceedings, the husband by an affidavit in June, in which he indicated that he is due to turn 60 and may be going to access his superannuation.

5. The affidavit of the wife annexes a statement of financial position of the superannuation fund, which is 12 months old.  The fund, it is common ground, has four members and the balance shows that there are assets of just over $6.2 million.

6. It seems almost common ground as well that the husband and wife have about 4.5 to $4.8 million of that $6.2 million.  Importantly, the balance sheet showed that of the $6.2 million, $5.7 million lies in land and buildings and, no doubt, when the parties get down to working out just exactly what to do here, a valuation of those land and buildings will need to be undertaken.

7. There are also companies with shares totalling $2.4 million and bearing in mind that that was at 30 June last year, a whole year has gone by and there may have been significant changes. 

8. There is also a liability in the superannuation fund to a corporate entity by way of a loan.  I do not know what the position with that is, save that if one looks at the 2010 figure, compared with the 2011 figure, the debt dropped by $600,000.

9. All of that indicates to me that there is a fairly significant asset in the member accounts, even though both parties seem to think that the entitlements of the parties is somewhere between 4.5 and $4.8 million.

10. Having regard to what the husband said in his affidavit about turning 60 and wishing to retire, the wife filed her affidavit and said she did not want the husband to deal with his entitlements in the fund.  She does not go any further than that, other than to indicate that there are significant disputes about assets.

11. The law relating to injunctions is clear.  The power to make an order lies in s 114 and Mr Tredrea, on behalf of the wife, pointed me directly to s 114(1)(e), which is the power for the Court to make an order, effectively, to protect the property of the parties. 

12. It is clear, looking at the common law history of injunctions, that this statutory injunction is much wider than any previous injunction known to the common law. 

13. In 2006, however, the Full Court in Mullen & De Bry [2006] FamCA 1380 examined the basis upon which that power should be exercised. The Court there was quick to point out that it is not appropriate for the discretion to be fettered in any way. It considered general principles applicable to a Mareva type injunctive order. In the Mareva injunctions, the applicant needs to show that there is an arguable case that a judgment will be obtained. There can be little doubt in this case that there is going to be a judgment obtained by the wife.

14. In the Mareva injunction, the applicant has to demonstrate, by real evidence not mere assertion, that the refusal to make the injunctive order involved a real risk that the judgment in her favour would remain unsatisfied because of the concealment or dissipation of assets.  Section 114 power is much wider.  The Court needs not to worry too much about a risk that the judgment will not be satisfied because of concealment, but because assets will be somehow removed or altered.

15. The third basis upon which the Mareva injunction was always made, was the balance of convenience.  The balance of convenience looks largely at the prejudice and the hardship to each of the parties if, or if not, the order is made.  In s 114 the balance of convenience test tends to take a very second place.

16. In Mullen & De Bry (supra) the Full Court came back to the overall question of whether or not there was evidence that would satisfy a court that there was a risk that the entitlement of the person who was seeking the injunction might be thwarted in some way.  The evidence in this case is scant, but here I have some common ground.  It seems that of the $4.5 to $5.8 million in superannuation member accounts, there are also other assets which may be somewhere between $6 million and $10 million.  Mr Tredrea points to the fact that all of those assets are under the control of the husband and there are to be injunctive orders sought by the wife in a hearing before Dawe J on 23 August.

17. On any view, the only risk here to the wife is that the husband might somehow or other take his $2.4 million, if that, in fact, is what his member account shows, and run away with it.  If that occurred, she would be able to be compensated out of the other assets, not only in the superannuation fund but also in the other pool.

18. If I, therefore, look at this from the perspective of a much wider power than that in which the Mareva injunctions would normally be sought, I find that there is no arguable case here that the wife will not get her judgment.  There is no argument here that there is some evidence that the husband is going to do what he wants to do, but that will not prejudice the wife in any way.  It seems to me that the wife does not satisfy the test set out by the Full Court in Mullen & De Bry.

19. As I pointed out, however, s 114 is a discretionary power.  What the section actually says is that a court should not make an order of that nature, affecting a person’s proprietary rights, unless it is proper to do so.  In my view, it is not proper to make an order, simply on the basis of containing or corralling assets simply until a matter can be sorted out.  I am not satisfied in the circumstances that an order should be made.

20. The second part of the application sought injunctions in relation to the husband accessing any annual leave entitlements.  Mr Tredrea was coy about not trying to defend that application in some way, but conceded that there may be a problem about the power of the Court to use s 114 to make such an order.  Even if there was power, there is absolutely no evidence here that would justify me making an order on the basis that the husband is going to take his leave.  Even if he did take his leave and the wife was somehow prejudiced, as I have pointed out, there are ample assets here to, effectively, adjust so that she was not prejudiced.

21. In the circumstances the application filed on 11 June 2012 is dismissed.

RECORDED  :  NOT TRANSCRIBED

I certify that the preceding Twenty One (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 13 July 2012.

Associate: 

Date:  26 July 2012