Klearchos and Klearchos and Ors - [2017] FamCA 14

FAMILY COURT OF AUSTRALIA

KLEARCHOS & KLEARCHOS AND ORS

[2017] FamCA 14

FAMILY LAW – PRACTICE AND PROCEDURE – Summary dismissal – Application by the fifth respondent for summary dismissal of the wife’s claim against the fifth respondent pursuant to s 106B(1) of the Family Law Act 1975 (Cth) – Where the fifth respondent’s case is as to the adequacy of the wife’s pleadings – Where the fifth respondent can be under no misapprehension as to the wife’s case – Where the fifth respondent has not established that the wife’s case has no reasonable likelihood of success – Where the fifth respondent has not established that the wife has no reasonable likelihood of establishing that at the relevant time a property settlement order between husband and wife was reasonably anticipated – Where there are serious factual and legal questions to be determined at trial – Application for summary dismissal dismissed.

FAMILY LAW – INTERLOCUTORY INJUNCTION – Application by the wife to extend an injunction affecting the fifth respondent – Where the fifth respondent was not a party to the proceedings when the injunction was made – Where the wife has established that an injunction is reasonably necessary to effect a division of property between the husband and wife – Where it is just and convenient to extend the injunction – Order made to extend the injunction to 30 days following the conclusion of the proceedings.

Family Law Act 1975 (Cth) ss 79, 90AF, 106B, 114(3)
Family Law Rules 2004 (Cth) r 10.12, 10.14

Bretton & Bondai[2013] FamCAFC 168
Burton v President of the Shire of Bairnsdale (1908) 7 CLR 76
Lindon v The Commonwealth (No 2) (1996) 136 ALR 251
M & DB (2006) FLC 93-293
Spencer v The Commonwealth(2010) 241 CLR 118
Waugh & Waugh(2000) FLC 93-052

APPLICANT:

Ms Klearchos

RESPONDENT:

Mr Klearchos

SECOND RESPONDENT:

E Pty Ltd

THIRD RESPONDENT:

Q Pty Ltd

FOURTH RESPONDENT:

R Pty Ltd

FIFTH RESPONDENT:

H Ltd

SIXTH RESPONDENT:

H Ltd

Mr Norton

FILE NUMBER:

SYC

2977

2013

DATE DELIVERED:

19 January 2017

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Loughnan J

HEARING DATE:

15 December 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT WIFE:

Mr Cummings SC

SOLICITOR FOR THE APPLICANT:

Lander & Rogers

COUNSEL FOR THE RESPONDENT

HUSBAND:

No appearance

SOLICITOR FOR THE RESPONDENT HUSBAND:

No appearance

COUNSEL FOR THE SECOND, THIRD AND FOURTH RESPONDENTS:

Mr Kerr SC

SOLICITOR FOR THE SECOND, THIRD AND FOURTH RESPONDENTS:

Argyle Lawyers

COUNSEL FOR THE FIFTH RESPONDENT:

Mr Priestly SC

SOLICITOR FOR THE FIFTH RESPONDENT:

Henry Davis York

COUNSEL FOR THE SIXTH RESPONDENT:

No appearance

SOLICITOR FOR THE SIXTH RESPONDENT:

No appearance

Orders

The Response to an Application in a Case filed by H Ltd on 6 December 2016 (including an application for summary dismissal of the wife’s application for final orders against H Ltd in the substantive proceedings) is dismissed.
The interlocutory orders of 23 June 2014, as varied on 6 December 2016, be further varied by replacing the words and figures…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] FamCA 14
Decision Date: 19 January 2017

CaseChat Overview and Summary

The proceedings involved the wife, seeking final orders, and H Ltd, which had filed an application for summary dismissal of the wife's application against it. The court was Loughnan J.

The primary legal issue before the court was whether to dismiss H Ltd's application for summary dismissal of the wife's application for final orders. The court was also required to consider variations to interlocutory orders previously made, in light of an undertaking provided by the wife.

Loughnan J's reasoning focused on the principles governing the grant of injunctions, particularly in the context of preventing the disposal of assets to defeat a court order. The court emphasised that the essential power being exercised is to grant an injunction where it is "just or convenient to do so" under section 114(3) of the relevant Act. The court clarified that establishing a risk or danger of property disposal intended to defeat an order is distinct from proving, as an independent issue, the existence of a scheme to defeat an order. While evidence of an intention or scheme can be a factor in establishing the probability of an objective risk of disposal, it is not the sole determinant. The court noted that the requirement for an injunction is that it be just and convenient, and that such an order should not be granted lightly, requiring close scrutiny of the evidence and imposing the minimum necessary restrictions.

The court dismissed H Ltd's response to the application, which included its application for summary dismissal. Interlocutory orders were varied to reflect the undertaking of the wife, and parties were given liberty to address the court regarding the wording of the final orders.

Orders

Orders of the court

The Response to an Application in a Case filed by H Ltd on 6 December 2016 (including an application for summary dismissal of the wife’s application for final orders against H Ltd in the substantive proceedings) is dismissed.

The interlocutory orders of 23 June 2014, as varied on 6 December 2016, be further varied by replacing the words and figures “paragraphs 9(a) to 9(c)” in paragraph 17 of those orders with the words and figures “paragraphs 9(a) to 9(e)”.

Order 2 is made on the undertaking of the wife dated 15 December 2016.

The parties are at liberty to address the Court in relation to the wording of these orders by seeking that the matter be relisted by arrangement with the Court and each other, within 14 days or within such further time as the parties may agree.

Note: The form of the order is subject to the entry of the order in the Court’s records.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

And later:Conclusion in respect of this proposed ground46. Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in s 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.48. We perceive that a real, though perhaps subtle, difference exists between, on the one hand, establishing on the balance of probabilities a risk or danger of a disposal of property intended to defeat an order and, on the other hand, proving to the civil standard and as an independent issue that a scheme to defeat an order exists.49.In some cases, the possibility (based on some evidence) of an intention or scheme may, with other factors, be sufficient to establish the probability of an objective risk of disposal with intent to defeat an order.50. It follows that we do not say that, in addressing the question of whether there is a risk of disposal of assets to defeat an order, it is unnecessary to enquire whether there is any evidence of an intention, plan or scheme to dispose of assets. But in an enquiry into the risk of disposal, the question of intention or scheme is but one of a number of factors relevant to the objective risk of disposition to defeat an order.51. Moreover, while ultimately a particular factor may overwhelm others, it is generally unwise to commence with a rigid focus on finding, to a particular standard of proof, one or more of a number of factors relevant only at a discretionary level and subsidiary to the ultimate question.”(original emphasis) Therefore the requirement for granting an injunction is that it be just and convenient to do so. Such an injunction may be granted conditionally or unconditionally, as the court considers appropriate. By way of guidance only, the following matters have been found to be of assistance in deciding whether to grant an injunction in the style of a Mareva[2] order:·the applicant must identify an arguable case for the judgment, in aid of which the injunction is sought;·the applicant must demonstrate by evidence, and not mere assertion, that a refusal to grant the order creates a real risk that judgment in the applicant’s favour would remain unsatisfied because of concealment or dissipation of assets; or put another way, an objective risk of disposal must be established;·such an order can represent a drastic remedy and therefore should not to be granted lightly and requires close scrutiny of the available evidence; and·the imposition on those bound or affected by such an order should be to the minimum extent necessary.[2] See Mareva Compania Naviera SA v International Bulkcarriers SA ("The Mareva ") [1975] 2 Lloyd's Rep 509. Unlike the situations in Waugh or M & DB the disputed injunction sought in these proceedings is sought against third parties – E and its directors and through them, E’s Deed Administrator, Mr Norton. Part VIIIAA of the Act makes provision for orders and injunctions against third parties. Section 90AF provides as follows:

Ratio Decidendi

Legal Principle Established

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