KLEARCHOS & KLEARCHOS
[2013] FamCA 549
•24 July 2013
FAMILY COURT OF AUSTRALIA
| KLEARCHOS & KLEARCHOS | [2013] FamCA 549 |
| FAMILY LAW – INTERIM PROCEEDINGS – INJUNCTIONS – Departure prohibition orders – Where the primary proceedings are between a husband and wife to a marriage – Where the wife is the applicant in the primary proceedings – Where on 14 June 2013 the wife sought and the Court made ex parte injunctive orders prohibiting the husband from departing from the Commonwealth of Australia and requiring him to surrender his Australian and Country D passports – Where the husband now seeks to have the ex parte injunctive orders of 14 June 2013 discharged – Where the husband is a dual Australian and Country D citizen and a resident of Country J –Consideration of s 114(3) of the Family Law Act 1975 (Cth) and the Court’s power to make injunctions – Where the wife argues that if the husband is permitted to depart Australia he will not return – Where the husband argues that there is no basis on which the Court can be satisfied that he will not return to Australia to contest the proceedings – Where the husband at a later date intends to challenge the jurisdiction of this Court on the basis of forum non conveniens – Whether there is a likelihood that the wife will be denied a remedy if the departure prohibition orders are lifted |
| Family Law Act 1975 (Cth) s 114(3) |
| In the Marriage of Anstis (2000) FLC 93-013 Bayer AG v Winter [1986] 1 WLR 497 Danieletto v Khera (Bryson J as he then was, Supreme Court of New South Wales, unreported, 17 February 1995) Edelsten v Federal Commissioner of Taxation (1989) 85 ALR 226 ERS Engines Pty Ltd v Wilson (1994) 14 ACSR 521 Khademollah v Khademollah (2000) FLC 93-050 Kodak (Australasia) Pty Ltd v Cochran (McClelland J in Eq., Supreme Court of New South Wales, unreported, 30 April 1996) Porto v Porto (No 3) (2010) 45 Fam LR 101 Skase v Commissioner of Taxation (Cth) (1991) 32 FCR 206 |
| APPLICANT: | Ms Klearchos |
| RESPONDENT: | Mr Klearchos |
| FILE NUMBER: | SYC | 2977 | of | 2013 |
| DATE DELIVERED: | 24 July 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Fowler J |
| HEARING DATE: | 11 July 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Sullivan QC |
| SOLICITOR FOR THE APPLICANT: | Pearson Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Lloyd SC |
| SOLICITOR FOR THE RESPONDENT: | Barkus Doolan Kelly |
Orders
Orders 5, 6 and 7.1 of the ex parte Orders made by this Court on 14 June 2013 be discharged
AND THE COURT REQUESTS that the Australian Federal Police give effect to these Orders by removing the names of each of the following persons from the Airport Watch List in force at all points of arrival and departure in the Commonwealth of Australia:
(a) Mr Klearchos (a male) born … 1950
(b) B (a female) born … 2000 and
(c) C (a male) born … 2003.
The Registrar of the Family Court of Australia at Sydney forthwith deliver up to the husband or his legal representatives the husband’s Country D and Australian passports.
Order 12.1 made on 14 June 2013 be varied by the addition of the words at the conclusion of the Order “other than in the ordinary course of business”, as set out hereunder:
12.The husband and each of the companies be and is hereby restrained by injunction:
12.1from selling, transferring, assigning, encumbering or alienating their shares and/or interest of any nature whatsoever in any company other than in the ordinary course of business;
…
On a without admissions basis as to the husband’s application for a permanent stay of the proceedings or otherwise, the husband shall pending further order use his best endeavours to cause E Pty Ltd (“E Pty Ltd”) to pay as and when they fall due the following expenses for the property in which the wife and children presently reside at F Street, Suburb G NSW by debiting the payments against his credit loan account in E Pty Ltd:
(a) gas
(b) electricity
(c) landline telephone
(d) internet connection
(e) reasonable and necessary household repairs
(f) gardening and lawn mowing
(g) pool cleaner
(h)obligations under the loan agreement dated 27 June 2011 between H Pty Ltd and E Pty Ltd
(i) rates
(j) house and contents insurance.
The Court notes that this Order is to be additional to the sum of €10,000 (Euros) per month paid by the husband to the wife.
In the event the husband is unable to cause E Pty Ltd to pay the expenses listed in Order 4 herein in the manner specified, the husband shall be personally liable to pay such expenses as and when they fall due.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Klearchos & Klearchos 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 |
FILE NUMBER: SYC 2977 of 2013
| Ms Klearchos |
Applicant
And
| Mr Klearchos |
Respondent
REASONS FOR JUDGMENT
Introduction
The proceedings before the Court are interim proceedings between the husband and the wife. The parties were married for approximately ten years.
There are two children of the marriage: B, born in 2000 and aged 12 years, and C, born in 2003 and aged 10 years (together, “the children”).
The primary proceedings between the parties arose upon the wife’s filing of an Initiating Application dated 13 June 2013 in which she seeks final orders with respect to parenting, property settlement and child support, together with orders that certain companies associated with the husband be joined as parties to the proceedings.
By her Initiating Application the wife also sought that a number of interim orders be made on an ex parte basis. On 14 June 2013, I made Orders granting to the wife ex parte relief in the following terms:
(definitions omitted)
Parties
3.The companies be and are hereby joined as parties to these proceedings for the purpose of being bound by these Orders.
Departure Prohibition Orders
4.The husband, [Mr Klearchos] born on … 1950, his servants and/or agents be and are hereby restrained from removing or attempting to remove or causing or permitting the removal of [B] (a female) born on … 2000 and C Klearchos (a male) born on … 2003 from the Commonwealth of Australia
AND THE COURT REQUESTS that the Australian Federal Police give effect to this order by placing the names of the said children on the Airport Watch List in force at all points of arrival and departure in the Commonwealth of Australia and maintain the children's names on the Watch List until the Court orders their removal.
5.The husband, [Mr Klearchos] born on … 1950 be and is hereby restrained from departing from the Commonwealth of Australia
AND THE COURT REQUESTS that the Australian Federal Police give effect to this order by placing the name of the said [Mr Klearchos] on the Airport Watch List in force at all points of arrival and departure in the Commonwealth of Australia and maintain the name of [Mr Klearchos] on the Watch List until the Court orders his removal.
6.Within 7 days from the date of the making of these Orders the husband surrender to the Registrar of the Family Court of Australia, all his current passports.
Injunctions
7.The husband, by himself, his servants and agents be and is hereby restrained by injunction from:
7.1removing the children from the care of the wife;
7.2assaulting, molesting, harassing or interfering in any manner with the wife;
7.3destroying, altering, selling or otherwise disposing of the wife’s clothing, jewellery and personal possessions.
8.Each of the husband and [E Pty Ltd] be and are hereby restrained by injunction from doing any act or thing that may interfere with the wife's use and occupation of the [Suburb G] property including all the furniture, furnishings, artwork and household effects, and motor vehicles situated at or in the [Suburb G] property.
9.Each of the husband and [E Pty Ltd] be and are hereby restrained by injunction from doing any act or thing that may interfere with the wife's use of the wife’s car.
10.Each of the husband and [E Pty Ltd] be and are hereby restrained by injunction from doing any act or thing that may interfere with the wife's use and occupation of the [I Town] farm including all the furniture, furnishings, artwork and household effects, and motor vehicles situated at or in the [I Town] farm.
11.The husband is restrained by injunction from exercising his power of appointment to appoint a new trustee to any Trust.
12.The husband and each of the companies be and is hereby restrained by injunction:
12.1from selling, transferring, assigning, encumbering or alienating their shares and/or interest of any nature whatsoever in any company;
12.2from doing any act or thing that may cause the assets of the companies to be disbursed, sold, transferred, assigned, further encumbered, alienated or leased in any manner whatsoever other than in the ordinary course of business;
12.3from doing any act or thing to cause the winding up of any of the companies;
12.4from doing any act or thing to cause or permit any of the companies to fail to meet their liabilities as and when same fall due;
12.5from selling, mortgaging, assigning, alienating any real property of which it is the registered proprietor, including but not limited to drawing further funds against any existing security;
12.6from further encumbering or entering into any transaction that would further encumber any of them, including but not limited to drawing further funds against any existing security, other than in the ordinary course of business as properly documented in the records of the companies, and after having given the wife not less than 21 days' notice in writing of their intention to do so;
12.7from doing any act or thing to prevent the wife from lodging and maintaining caveats over the interest of the husband, the companies or any of them in any real property.
(procedural orders omitted)
The Court is told that the husband was served with the above orders, together with the wife’s Initiating Application and supporting affidavit and financial statement, by email on Monday, 17 June 2013. The companies, which were joined as the Second to Fourth Respondents by operation of Order 3, were served with that material at their registered offices in Sydney on 14 June 2013.
The husband filed a Response to Initiating Application on 19 June 2013 by which he sought, inter alia, that the interim ex parte orders made on 14 June 2013 be forthwith discharged and that the wife’s application for final orders be permanently stayed. The husband also asked that Orders 5 and 6 of the ex parte orders of 14 June 2013 be discharged on an interim basis.
At the interim hearing, the parties informed the Court that Order 4 of the interim ex parte orders could be discharged by consent.
The husband provided the Court with a revised Minute of Order setting out the interim orders which he now seeks, which include the immediate discharge of the following orders of 14 June 2013:
a)Order 5, which restrained the husband from departing Australia
b)Order 6, which required the husband to surrender his passports to the Registrar of the Family Court of Australia
c)Order 7.1, which restrained the husband from removing the children from the care of the wife.
The husband also seeks that a variation be made to the injunctive Order 12.1 so that the companies to which that order applies may carry on dealing with their shares and interests in other companies in the ordinary course of business.
The wife through her Counsel informed the Court that she opposed any discharge or variation of the orders of 14 June 2013 as sought by the husband.
Parenting Orders by Consent
At the commencement of the hearing, the parties informed the Court that they had reached agreement with respect to the final parenting orders sought by the wife in her Initiating Application dated 13 June 2013. Accordingly, those orders were made by consent on 11 July 2013.
The effects of the final parenting orders made by consent are, inter alia, that the children shall live with the wife and spend time with the husband as agreed in writing between the parties and, failing agreement, at other times including overnight and holiday time.
In addition, the parties consented to an order permitting each other (on conditions) to remove the children from Australia for the purpose of taking the children on holidays, and to an order stating that the wife shall hold the children’s passports, except as and when needed by the husband to facilitate overseas travel with him.
Background Facts
The husband was born in Country D in 1950 and is currently 63 years old. He is a citizen of Australia and Country D and holds both Australian and Country D passports. The husband is neither domiciled in Australia nor a resident of Australia for tax purposes. He is presently a resident of and domiciled in Country J, where his employment is based. At the time of hearing the husband was staying in a hotel in Sydney.
The husband was qualified as a lawyer in the early 1970s but has worked as a director of mining companies for many years. He is presently the Executive Chairman of K Pty Ltd (“K Pty Ltd”), a publicly listed mining company incorporated in Country L.
The wife was born in Australia in 1970 and is currently 43 years old. She is an Australian citizen and resident. The wife presently resides with the children in a property in Suburb G of which the company E Pty Ltd (“E Pty Ltd”) is the registered proprietor.
The wife is presently engaged in home duties. Prior to the marriage the wife worked in the media industry and owned and ran a media business, however, she ceased operating this business in early 2000.
The husband and wife married in Australia in 2000. It appears that they commenced cohabitation in Sydney about six months prior to marriage. Soon after they married, the wife and the husband moved to City M and started a family.
In 2001, the husband ceased being an Australian resident for tax purposes.
In 2006, the parties moved with the children to Country J.
The date on which the parties separated is in dispute. The wife asserts that the parties separated in August 2010 however the husband denies this and says that he did not consider the marriage was over until the end of May, 2013.
The wife asserts as follows with respect to the parties’ separation:
Since our separation in August 2010 the children and I have lived in Sydney and [Mr Klearchos] has lived in [Country J].
The children and I travelled to Europe each school holidays so [Mr Klearchos] could spend time with the children.
[Mr Klearchos] has spent some time here for periods of not more than 3 or 4 weeks at a time, to attend to his business interests here and to spend time with the children.
The husband however asserts as follows:
[Ms Klearchos] and the children returned to live in Sydney in late 2010, primarily due to [Ms Klearchos’s] unhappiness with the English language school the children attended in [Country J]. [Ms Klearchos] did not communicate to me that she regarded the marriage as over at that time. [Ms Klearchos] has never obtained post 2010, to my knowledge, an Australian drivers licence, and only holds and maintains her [Country J] drivers licence.
We have since then spent extended periods together generally during school holidays as a family. There were also 3 trips undertaken by myself and [Ms Klearchos] without the children in 2011 and 2012, and where the children were cared for by other family members and or friends…
We have held ourselves out, to friends and family, as a married couple.
Putting the issue of separation to one side, the wife moved with the children to Australia to live permanently in August 2010. Between then and now, the husband has continued to reside in Country J but it appears he has travelled in and out of Australia, with and without the children, on several occasions.
Despite the husband’s assertion that the parties were not separated, the wife appears to have retained her present solicitors in January 2011.
In August 2011, the property in which the wife and children are living in Suburb G was purchased for $7,750,000 in the name of E Pty Ltd.
On 30 November 2012, the wife’s solicitor contacted the husband via phone and then via email to inform him that the wife had consulted her for advice in relation to their separation. The wife’s solicitor told the husband that it would be her preference to reach an amicable agreement.
The husband responded to the above communications by stating that it was the first he had heard of the separation, that he was “shocked”, that he did not have a lawyer in Australia and that he would be in Sydney the following day. It appears that neither the husband nor any legal representative of his contacted the wife’s solicitor again in the period shortly following those communications.
Since November 2012, it appears that the husband has travelled on holidays or at least spent time with the wife and/or the children in many overseas destinations.
In January 2013, the husband, wife and children holidayed in the Country N, staying at the parties’ apartment in City M. The children sat entrance tests for The O School in City M but were not offered positions at the school.
In March 2013, the wife had cosmetic surgery for which the husband paid.
In April 2013, the husband, wife and children holidayed in the Country P. The husband asserts that he and the wife were still in a relationship, albeit not a sexual one, at the time. The wife says that she and the husband “barely spoke” on this trip despite sharing a bed at each place they stayed.
On 30 May 2013, the wife filed an Application for Divorce in the Federal Circuit Court of Australia. The wife attempted through a process server to serve that application on the husband on 3 June 2013, however, the husband asserts that he did not become aware of the proceedings for another five days.
On 5 June 2013, the husband commenced proceedings for divorce in the First Instance Tribunal of Country J.
On 8 June 2013, the husband was served with the wife’s application for divorce.
On 13 June 2013, the wife commenced proceedings in the Family Court of Australia for final orders and ex parte interim orders.
On 14 June 2013, the matter came before the Court on the duty list and the
ex parte interim orders set out above were made.
On 19 June 2013, the husband filed a Response to Initiating Application in which he sought orders on both a final and interim basis to, inter alia, discharge the orders made on 14 June 2013 and have permanently stayed the final property orders sought by the wife.
On 24 June 2013, the matter came before the Court with appearances for the husband, the wife and the companies known as E Pty Ltd, Q Pty Ltd and R Pty Ltd (“the second to fourth respondents”). At that hearing, the wife made an oral application for an adjournment which she said was necessary for two reasons: first, the wife wished for an to respond to material raised in the husband’s affidavit material; and second, the wife sought a direction that the husband be required to file a Financial Statement or affidavit setting out in a comprehensive manner his financial position.
After hearing from each of the parties, the matter was adjourned and the husband was directed to file and serve on the wife within four days a statement of his financial affairs. The Court noted that the previous injunctive orders were to continue and the matter was relisted, with some urgency, to hear the husband’s application with respect to the discharge of the non departure injunctive orders only. That application was heard on 11 July 2013 and is the subject of these reasons.
The Orders Sought
The husband by a Minute of Order tendered at the hearing seeks that orders be made in the following terms:
1.That the Registrar of the Family Court of Australia at Sydney forthwith deliver up to the husband or his legal representatives, the husband’s:
a.[Country D] passport;
b.Australian passport.
2.That Orders 5, 6 and 7.1 made 14 June 2013 be discharged.
3.The court requests that the Australian Federal Police forthwith give effect to these Orders by removing the names of each of the following persons from the Airport Watch List in force at all points of arrival and departure in the Commonwealth of Australia:
a.[Mr Klearchos];
b.[B];
c.[C].
4.The Order 12.1 made 14 June 2013 be varied by the addition of the words at the conclusion “other than in the ordinary course of business”.
As noted above, the wife opposes the making of the orders sought by the husband.
Submissions
The Court notes that the husband, both in written and in oral submissions, has expressed to the Court a view that he intends at a later time to challenge the exercise of jurisdiction by this Court with respect to both the wife’s application for a divorce and her application for final property orders. The husband will, it is submitted, maintain that this Court is a clearly inappropriate forum.
To this end, the husband submits that his prime purpose at this interlocutory stage in seeking to have the injunctive orders against him discharged is without prejudice to the arguments which he may seek to run at a later date when the proceedings are before the Court for a final hearing.
The wife, in addition to oral submissions made by Counsel, tendered a document at the hearing titled “Submissions on behalf of the applicant wife”.
The nub of the wife’s case is that if the husband is free to leave Australia the likelihood is that the wife will not receive the benefit of interim or final property orders. She points to a number of factors to support this contention which can be summarised as follows:
a)while the husband is an Australian citizen, he has Country D citizenship and residency in Country J
b)he intends to leave the country
c)he commenced Family Court proceedings in Country J days after the Australian proceedings were instituted
d)the husband early in the proceedings showed resistance to filing a statement of financial circumstances
e)the husband’s position is that the Australian assets (including the family home, the farm and motor vehicles) are owned by a Trust over which the husband will contend this Court does not have jurisdiction
f)withdrawal of support to the wife and children had already commenced, with E Pty Ltd having disconnected the wife’s phone and water services to the Suburb G residence
g)the evidence on an interlocutory basis supports a view that the husband has sought to organise his affairs in ways which have assisted the obfuscation of his true beneficial interests
h)since at least 2010, the husband has been withdrawing from overt management of corporations relevant to the Australian Family Trust over which the wife asserts he has actual control.
The wife further submits that since around October 2010 the husband has removed himself as a director of no less than six entities, five of which the wife asserts fall under the banner of the Klearchos Family Trust.
In addition, the wife asserts that there are number of matters arising from the Financial Statement filed by the husband on 1 July 2013. The submissions of the wife on this point can be summarised as follows:
a)first, the husband identifies the Klearchos Family Trust as a financial resource only and states that he is merely one of a class of beneficiaries of the Trust, with his brother holding the power of appointment. The wife contends that she and the husband and children have enjoyed the exclusive use of assets owed by the Klearchos Family Trust and that E Pty Ltd, an entity associated with the Trust, has met regular financial obligations of the parties
b)second, the husband identifies substantive overseas assets (including a unit in City M and an apartment in Country J) but alleges that the S Pty Ltd has a security interest in those properties
c)
third, the husband identifies a number of debts said to be owing to the S Pty Ltd. The wife points to the figures found in the notes to
Part L (Items 56 and 57) of the husband’s Financial Statement, which suggest that there are debts owing to S Pty Ltd by E Pty Ltd of over $11 million, and a further debt owing to S Pty Ltd of over
$13 million with respect to a property known as the T Property in Country J.
d)fourth, the wife contends that there is evidence which on its face suggests that S Pty Ltd is “not an arms-length party outside of the Husband’s control and ownership”. The wife points to a series of emails from September 2010 which she claims substantiate this assertion and reveal that the husband, as a beneficiary of the U Trust, was seeking to move an asset from the U Trust to a so called “V Foundation” which he had established. The wife further asserts that statements deposed to by the husband that he has never been the beneficial owner of or had the ability to direct or control the U Trust are inconsistent with that correspondence. In addition to the September 2010 emails, the wife points to other emails and documents retrieved from computers which the wife has had access to and which, she says, are directly inconsistent with propositions put forward by the husband. These assertions received some ventilation from both sides at the hearing and the wife was called to give oral evidence in relation to the documents which she obtained from the husband’s computers. The wife, having not obtained disclosure, does however note the following in her written submissions:
Disclosure will be a critical aspect of this proceeding. The few documents which the Wife has been able to access from computers in support of the interlocutory application do support that the [S Pty Ltd] is not an arms-length third party.
On the contentious topic of the parties’ separation, the wife submits that her version of events as to the breakdown of the parties’ marriage in June/July 2010 is corroborated by “telling email correspondence” between the husband and a friend and business associate of his, which reflects that separation was an issue of which the husband was aware at that time. The wife also asserts that it is uncontroversial that she and the children moved back to Australia by the end of 2010 while the husband continued to reside overseas.
Finally, the wife submits as follows:
The balancing position, in light of the evidence, strongly supports the maintenance of the orders.
The principal contention for the Husband relates to his work. It is accepted that the Husband has frequently travelled for his work. However, beyond the general assertions that the Husband needs to continue to travel, he in no way deals with why he cannot conduct his affairs from Australia… through relevant electronic means such as video conferencing and teleconferencing, and where appropriate via the use of subordinates. Indeed, the general meeting of the Company of which the Husband remains an officer, has been held without any evident problem.
Counsel for the husband made oral submissions at the hearing and handed up a document titled “Husband’s Chronology” (which the Court notes is not an agreed chronology but one containing the husband’s assertions). Earlier submissions filed by the husband’s former Counsel on 24 June 2013 were also relied upon by the husband.
The husband submits that the platform upon which the ex parte relief granted to the wife was conceived was based on assertions which have not been established at all.
The husband submits that the wife’s contention that the parties’ separated in 2010 is clearly inconsistent with the chronology of events which he presents to the Court. He asserts that, while the wife may have been extracting documents and seeking legal advice in late 2010 and early 2011, certain events occurred between then and now which cannot be disputed. These events were deposed to in the husband’s affidavit filed on 19 June 2013 and include:
a)a one-week trip to City W which he says he and the wife took without the children in February/March 2011
b)a two-week trip to City M, Country J and City X which he says he and wife took without the children in July 2011
c)
a holiday to City M, Country J and Country Y for 11 days in August/September 2011 which he says he and the wife took. On this trip, the husband says that they attended an appointment at
Z School in Country Y, as they had a view to sending the children there. Annexed to his affidavit is a chain of email correspondence relating to the making of this appointment.
d)a skiing holiday in Country AA which he says the parties took with the children in January 2013.
The husband asserts that the family plan as late as January 2013 was to move to Europe. He says that in January 2013 the children sat entrance exams to attend The O School in City M. Annexed to his affidavit material is a letter dated 19 January 2013 from the O School. The letter thanks the husband and the wife for arranging for the children to sit the entrance tests the week prior and advises them that the children had not been offered places.
It is asserted by the husband that in March 2013 he paid for the wife to have cosmetic surgery because “she and I were a couple and remained a couple and I was willing to assist”. The husband further contends that he and the wife maintained a sexual relationship until March 2013 and that they travelled to City BB and City CC with the children in April 2013, but did not have sexual intercourse on that trip because the wife was still recovering from the surgery. He says that he did not consider the marriage as being over until 26 May 2013 after he was informed that the wife was in a relationship with another man.
With respect to financial matters, the husband denies allegations that he has removed assets from Australia or incurred any liability other than in the ordinary course of business.
In relation to the husband’s role as the Executive Chairman of K Pty Ltd and of DD Pty Ltd, the Court is told that K Pty Ltd is a publicly listed company with over 400 shareholders. The Court is also told that K Pty Ltd is a major shareholder in DD Pty Ltd.
In his affidavit filed on 19 June 2012, the husband states that he cannot perform his Chairman’s role from Australia; he deposes:
My role as Chairman is a full time activity. It requires that I attend numerous meetings with fellow directors and investors and to examine projects in which the company is engaged. Those meetings generally take place in [Country N] and Europe and also at times in Asia and the Americas. [K Pty Ltd] does not conduct business in Australia.
The husband explains that from 1981 to 2000 he was based in Australia but conducted the vast majority of his work overseas. From about 2000 to 2006, he says he was based in City M but travelled extensively to Europe, the Americas, Asia and Africa. Since about 2006, the husband says that he has been a resident of Country J but that he goes on trips between 20 to 40 times per year on average.
With respect to the children’s place of residence being Australia, the husband asserts that he “would never desert or abandon them or fail to travel to see them here in Australia.” At the hearing, Counsel for the husband submitted that the husband also has two children of a prior relationship who are resident in Australia. It was further submitted that since August 2010 the husband has moved in and out of Australia without providing to the mother any reasonable belief that he would take off with the children or flee the country.
In response to the wife’s argument that, at the hearing on 24 June 2013, the husband’s position was that he was not going to comply with his obligation to file a Financial Statement, Counsel for the husband contended as follows:
There was a proper debate before your Honour both at law and in substance as to whether he had an obligation at that stage to file a financial statement. He did not indicate that he was not going to comply. Once your Honour made the direction he complied with it by completing his statement of financial circumstances.
The husband deposes that he has no personal bank account in Australia and that since 2011 money has been transferred from the wife’s bank account in Country J (into which the husband says he pays 10,000 Euros per month) to her bank account in Australia. He concedes cancelling the wife’s use of overseas credit cards in 2012, owing to what he describes as her “outrageously high” expenditure, but he denies cutting off financial support to the wife and children.
With respect to the wife’s fear that the husband will not return to Australia if he is allowed to leave, Counsel for the husband submitted as follows:
a)the husband has challenged the exercise of jurisdiction by this Court and has the right to do so. There is no evidence whatsoever to suggest that he will not return to Australia to debate the issue of forum.
b)even if he lost that debate, there is no evidence that he will abscond and nothing that could lead the Court to form a view that he would not deal with the proceedings honestly and appropriately if he did not win on the forum argument.
When asked by the Court whether it was the husband’s sworn evidence that he would come back for any court case, Counsel for the husband answered affirmatively and added the following:
A chairman of a public company having his passport withheld by the Commonwealth is not a good look. And it’s a rare moment for that to occur in a divorce proceeding.
Applicable Law
Section 114(3) of the Family Law Act 1975 (“the Act”) confers upon the Court a broad power to make injunctions in cases where the Court considers it just and convenient and on such terms and conditions it considers appropriate:
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.
The power of this Court to make injunctions under s 114(3) of the Act was discussed in the cases of Porto v Porto (No 3) (2010) 45 Fam LR 101 (“Porto”), In the Marriage of Anstis (2000) FLC 93-013 (“Anstis”), and Khademollah v Khademollah (2000) FLC 93-050 (“Khademollah”).
In Porto, the wife sought an order restraining her former husband from leaving Australia until such time as she received full payment to effect the property settlement to which she was entitled under the Court’s proposed orders.
In considering the wife’s request, Dessau J referred to Anstis, a decision in which Mullane J discharged departure prohibition orders which had prevented a husband from leaving Australia because most of his assets were located abroad and the assets available in Australia would not have been sufficient to meet the wife’s property settlement entitlement. Dessau J summarised the reasoning of Mullane J as follows at [129]–[133]:
[129] Mullane J considered the International Covenant on Civil and Human Rights, The International Covenant on Civil and Political Rights, and The Universal Declaration of Human Rights, all ratified by Australia, in particular in so far as they related to a person’s freedom of movement and freedom to leave a country. His Honour referred to the High Court’s decision in Minister for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273 ; 128 ALR 353 ; 39 ALD 206 (Teoh), to the effect that ratification by Australia of those international covenants or conventions gave rise to a legitimate expectation that in exercising the power under s 114(3) of the Family Law Act, the court would act in accordance with them.
[130] Mullane J noted that quite apart from the covenants, the court should not lightly exercise the power to restrain a party’s freedom to leave the jurisdiction, “as to do so is a serious restraint on any citizen”: see [35]. His Honour also found that the onus was on the applicant to establish “a likelihood” that she would be “denied a remedy” if the respondent’s freedom to leave the jurisdiction was not limited or suspended.
[131] Mullane J held that the injunction restraining the husband from leaving the country should be discharged, and that his passports should be returned.
[132] I agree with Mullane J’s re-stating of the principles in Teoh, of the importance of an applicant establishing a likelihood that she would be denied a remedy if the respondent leaves the country, and that the court should not lightly exercise a power to restrain a party’s freedom to leave the jurisdiction. I am satisfied however that the single-judge decision does not help me further.
[133] Anstis related to an injunction pending final hearing. His Honour found that the husband showed no intention to leave Australia “for anything but temporary purposes”, and that he had no present intention to leave very significant ties including a business, his children, a lady friend, customers, friends and his adopted nation. Accordingly, the case turned on its own facts, different from the facts in this case in which the husband’s conduct has led to a finding that he has deliberately hidden most of the parties’ assets overseas and that he will endeavour to avoid compliance with an order of this court.
As noted above, in Anstis the departure prohibition orders against the husband were discharged on the basis that it had not been established that the husband intended to leave Australia for anything other than temporary purposes.
In the case of Khademollah, the Full Court considered an appeal from a first instance judgment of Brown J which, inter alia, included an order restraining a husband from leaving Australia for a period of six months or until such time as he complied with final orders. The husband, it should be noted, had lived in Australia since 1989 and was not restricted under the orders from moving freely within Australia. The Full Court upheld the order made by Brown J, who had found that there was no doubt that, if given the opportunity to avoid doing so, the husband would fail to comply with the Court’s orders.
Having considered the decisions in Anstis and Khademollah, Dessau J in Porto ultimately decided to make a departure prohibition order against the husband based on the facts and circumstances of the case, particularly the husband’s prior conduct. In reaching her conclusion, Dessau J stated at [144]:
The situation is clear. The husband took the opportunity on a previous visit to his country of birth to hide the substantial portion of the family’s assets in that country, and/or neighbouring Spain. He has already refused to comply with orders, and has told his children that he shall refuse to comply with any orders that would see any money being paid to the wife. That conduct and attitude cannot be condoned by the court.
In her written submissions dated 11 July 2013, the wife referred to Porto to support her submission that, while the jurisdiction to make orders under
s 114(3) is serious and should not be taken lightly, the matter must ultimately turn on the justice of the case. The wife also acknowledged that the onus was on her as the applicant to establish “a likelihood that she will be denied a remedy” if the husband were free to leave the country: see Porto at [130].
At the hearing, Counsel for the wife reiterated the above and stated that Porto seemed to bring together the cases relevant to the current proceedings. He then stressed that the husband’s conduct at the hearing on 24 June 2013, specifically his resistance to filing a statement of financial circumstances, was of concern. To this end, Counsel submitted:
… there is, on an interlocutory basis, cogent evidence which would cause your Honour serious concern that there has not been, in a truthful way, the disclosure of the husband’s financial statement.
In written submissions filed 24 June 2013, the husband’s former Counsel submitted as follows in relation to the Court’s power under s 114(3) of the Act:
In construing such a section, there is no doubt that the Court has an amplitude of power but nevertheless it must be seriously considered and reviewed in terms of its application to what is both just and convenient in all the circumstances.
Drawing upon the English case of Bayer AG v Winter [1986] 1 WLR 497, the husband further submitted as follows with respect to the Court’s power to restrict a person’s travel:
A Court being moved to grant ex parte relief in the nature of travel restrictions is to act with great care. We respectfully refer the Court to the English decision which was the first case to consider whether a defendant should be restrained from leaving the jurisdiction as an ancillary order, albeit in aid of a Mareva injunction, which was
Bayer AG v Winter [1986] 1 WLR 497.On appeal, the Court of Appeal held that the Mareva injunction seeking to restrain a defendant from leaving the jurisdiction should only be in terms where:
“… it should be of very limited duration. It is an interference with the liberty of the subject, so that the period should be no longer than is necessary to enable the plaintiff to serve the Mareva and Anton Pillar Orders which they have obtained, and endeavour to obtain from the defendant the information which is referred to in those orders.”
The husband went on to cite two unreported Supreme Court of New South Wales decisions to support his argument that the power to make departure prohibition orders should be exercised with “great care”: Kodak (Australasia) Pty Ltd v Cochran (McClelland J in Eq., Supreme Court of New South Wales, unreported, 30 April 1996) (“Kodak”); and Danieletto v Khera (Bryson J as he then was, Supreme Court of New South Wales, unreported, 17 February 1995) (“Danieletto”).
The husband further drew a comparison between the power under s 114(3) of the Act and s 14(s) of the Tax Administration Act 1953 (Cth), which grants the Federal Commissioner of Taxation power to prevent Australians from leaving the county in certain circumstances. He submitted that the reasoning given in the Federal Court of Australia decisions of ERS Engines Pty Ltd v Wilson (1994) 14 ACSR 521, Edelsten v Federal Commissioner of Taxation (1989) 85 ALR 226 and Skase v Commissioner of Taxation (Cth) (1991) 32 FCR 206 also support his position.
The Court notes that, while the decisions referred to by the husband are useful in that they stress the importance of taking great care when exercising the serious power to make departure prohibition orders, they were decisions made in other jurisdictions which considered powers other than that found in s 114(3) of the Act. That said, however, the decisions of this Court which do consider
s 114(3) of the Act convey the same message with respect to the seriousness of denying a citizen their right to leave the jurisdiction.
Ultimately, the jurisprudence of this Court tells us that the applicant must establish that there is a likelihood that they will be denied a remedy, and that the Court’s discretion to exercise its power is a matter which must turn on the facts and justice of the particular case.
Determination
This is an interim hearing and, as such, the evidence before the Court has not been tested.
It is the Court’s view that, on an interim basis, the wife has not satisfied the Court that based on the evidence available there is a likelihood that she will be denied a remedy if the husband is free to depart Australia.
The husband filed a Financial Statement on 1 July 2013. The wife asserts that certain contentions contained within that statement are untrue. The husband in reply says the wife’s assertions are unsubstantiated. Having not had an opportunity to test the evidence before it, the Court cannot make the findings which the wife asks it to make at this stage.
The emails which are annexed to the wife’s affidavit filed on 13 June 2013 and marked exhibit “PK38” received some attention from both sides at the hearing. The Court has read these emails and notes the submissions of the wife and the husband in relation to them. Clearly there is a basis on which they can be read in different ways. The communications are in the Court’s view capable of more than one interpretation and, at this stage, without being able to test the evidence the Court cannot say which of those interpretations is correct.
On the disclosed assets of the parties so far there seem to be significant assets in City M and, if the wife’s assertions are correct, in Australia as well.
The Suburb G property in which the wife presently resides is valued at some $8 million, albeit subject to a mortgage. Further, if this Court were at a later point to make declarations and consequential orders with respect to the parties’ interests in property in City M, it is understood that it would be possible to procure the enforcement of those orders from a Country N Court.
The husband through his Counsel has positively indicated that he will return to Australia for future hearings and the Court is satisfied that the husband will, as he says, return to mount his argument as to Australia being the clearly inappropriate forum.
The Court is satisfied that the husband has a significant connection to Australia. The husband’s mother and brother live in Australia. He has four children who are resident in Australia. The Court notes that two of the father’s children are of a prior relationship and are now of adult age. However, with respect to the children of this relationship who are aged 10 and 12 years old, the husband has shown a desire to fulfil his obligations as a father to them and has demonstrated his willingness to do this in the recent past.
The balance in this case must fall in favour of the husband. It is the Court’s view that he should not at this stage of the proceedings be denied his liberty to travel to and from Australia and accordingly the Court will not continue to place this onerous restriction upon him.
The Orders to be made
The Court proposes to discharge those orders of 24 June 2013 which the husband seeks to have discharged at this time in accordance with the orders set out above.
With respect to the order sought by the husband to vary Order 7.1, the Court has come to the view that the order presently framed imposes too high a restriction on the husband and on the companies referred to therein. It considers that the addition of the words “other than in the ordinary course of business” at the conclusion of the order is a reasonable variation which should be made.
At the hearing, the Court raised with Counsel for the husband the question of whether the husband was prepared to pay future outgoings and expenses relating to the property in which the wife and children currently reside. A submission was made that the husband would hold himself liable for such payment. The parties were requested to confer and present to my Associate a proposed Minute of Order detailing the expenses which the husband was prepared to pay.
No jointly prepared Minute of Order was prepared by the parties. The husband provided a proposed order more or less in the terms of the order which the Court proposes to make.
The wife, in response, made the submission that the husband’s Financial Statement filed on 1 July 2013 makes reference in Part N to a number of additional expenses which the husband meets or has caused to be met (including, inter alia, food, tutoring, child minding, hairdressing and toiletries). The inference drawn from the wife’s submission is that those expenses should also be met by the husband.
The husband, in reply, made the submission that there was no spouse maintenance or child support application before the Court and, that the expenses listed in Part N of the husband’s Financial Statement also included expenses for him.
The Court is of the view that, pursuant to the directions given to the parties at the hearing, the order as proposed by the husband is the appropriate order to be made now and on the basis that other voluntary payments continue to be made. It was clear at the hearing that this is what the Court had in mind and that this is what the husband believed he was undertaking to do. The Court will therefore make the order in the terms proposed by the husband, however, it will vary such order to ensure that the husband is personally liable for meeting the expenses in the event that E Pty Ltd in unable or unwilling to do so.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 24 July 2013.
Associate:
Date: 24 July 2013
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