Lees & Halstead & Anor (No 2)

[2019] FamCA 369

FAMILY COURT OF AUSTRALIA

LEES & HALSTEAD AND ANOR (NO. 2) [2019] FamCA 369

FAMILY LAW – PROPERTY – Interim – Injunction – Where the father has received funds pursuant to a total and permanent disability claim – Where the majority of the funds have been placed into the father’s criminal solicitors trust account pending his criminal trial – Whether to restrain any part or all of the funds – Orders.

Family Law Act 1975 (Cth) s 114(1)

Martiniello & Martiniello (1981) FLC 91-050
Rieck & Rieck (1981) FLC 91-067
Stowe & Stowe (1981) FLC 91-027

APPLICANT: Ms Lees

1st RESPONDENT: Mr Halstead

2nd RESPONDENT: Ms Halstead

FILE NUMBER: ADC 4768 of 2017

DATE DELIVERED: 6 June 2019

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Berman J

HEARING DATE: 24 May 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Pyke QC

SOLICITOR FOR THE APPLICANT: Mellor Olsson

COUNSEL FOR THE 1ST RESPONDENT: Mrs Read

SOLICITOR FOR THE 1ST RESPONDENT: Angela Ferdinandy

COUNSEL FOR THE 2ND RESPONDENT: Ms Lewis

SOLICITOR FOR THE 2ND RESPONDENT:	Douglas Hoskins Legal
COUNSEL FOR THE INTERVENOR	Ms Powell QC
SOLICITOR FOR THE INTERVENOR	Mangan Ey

UPON NOTING that the Application in a Case filed 20 May 2019 is listed for hearing on 2 July 2019

IT IS ORDERED:

1. That during the period of the adjournment the father, his agent and attorney be restrained and an injunction is granted restraining them from authorising the disbursement of any M Super funds paid to the Trust Account of Mangan Ey Solicitors for and on behalf of the father PROVIDED that Mangan Ey and Associates are entitled to be paid upon any accounts being rendered up to a total sum not exceeding FIFTY THOUSAND DOLLARS ($50,000).

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 Lees & Halstead and Anor 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 ADELAIDE

FILE NUMBER: ADC 4768 of 2017

Ms Lees

Applicant

And

Mr Halstead

First Respondent

And

Ms Halstead

Second Respondent

REASONS FOR JUDGMENT

Introduction

1. The Amended Initiating Application filed by Mr Halstead (“the father”) and the Response of Ms Lees (“the mother”) filed 12 January 2018 has been listed for final hearing on 23 September 2019.

2. Following an interim hearing a judgment was delivered on 20 March 2019 that provided for the sale of the house property at B Street, C Town, South Australia (“Property A”) with the net proceeds of sale to be invested pending the agreement in writing between the parties to disperse all or any portion of the funds available or as may be otherwise ordered.

3. The parties separated on 30 June 2017. On 29 October 2017 the father was involved in a traumatic incident with an occupant in the garage of Property A.

4. It is alleged that the father shot the occupant causing grievous injuries. He is charged a serious offence. The proceedings have been listed for hearing in the Supreme Court of South Australia in August 2019. It is anticipated that the criminal trial will be conducted over a period of about one month.

5. The parties remain in dispute over parenting issues in respect of the two children of the parties and settlement of property.

6. On 13 May 2019 the mother’s solicitors received correspondence advising that on 6 May 2019 the father had received the sum of $472,454.99 in respect of his total and permanent disability component of his superannuation entitlements with M Super (“the M Super claim”).

7. In March 2019 the mother’s solicitors were informally advised by the father’s previous solicitors in the precincts of the Court that he had made an application to claim the total and permanent disability payment.

8. The issue of the father’s entitlement to claim was first considered by Judge Brown on 11 December 2017 by order that provided:-

   The father cause the mother’s solicitor to be notified within seven (7) days if he pursues a claim with M Super, and thereafter, he keep her informed as to the progress.

9. A further order was made by his Honour on 23 February 2018 which provided:-

   9. The father inform the mother’s solicitor within seven days of each and all the following incidence arising in respect of his M Super superannuation including any insurance policy ancillary to that superannuation:

   (a)The father applies to the relevant trustee to access any or all of his superannuation on the ground of total and permanent incapacity;

   (b)The father applies to be indemnified in respect of any insurance policy relating to his superannuation for total and permanent bodily impairment;

   (c)The response of the relevant trustee or insurance officer in respect of such application; and

   (d)The amount of any funds to be released to the father and the date anticipated for their release.

10. In his Affidavit filed 25 September 2018 the father considered that he may be eligible for a disability payment up to about $450,000 but that he had not as yet made any claim.

11. It is not controversial that the father received the M Super payment which was paid into his bank account.

The mother’s application

1. On learning of the receipt of the payment by the father, the mother filed an urgent Application in a Case on 20 May 2019 seeking orders that the father disclose all documents in respect to any application made by the father for payment under the total and disability component of the superannuation and an injunction restraining any monies remaining from being further dispersed until further order.

2. The proceedings were listed as a matter of urgency with further consideration adjourned for hearing on 2 July 2019. Judgment was reserved as to whether there should be an interim injunction during the period of the adjournment.

3. The father relies upon his Affidavit filed 23 May 2019.

4. He contends that he was not in Court when the orders of 23 February 2018 were made and was not otherwise served with a copy of the order. He has not received any documents personally from M Super and did not sign any documents pertaining to the claim.

5. It appears that the claim was handled by his mother who holds the father’s Enduring Power of Attorney.

6. The father does not indicate whether his mother informed him that she had made a claim on his behalf.

7. Other than the sum of $30,000 which has been retained by the father, the balance of the M Super payment has been dispersed.

8. The father caused $300,000 to be paid into the trust account of his criminal solicitors on 6 May 2019. A further sum of $60,000 being a component of monies lent to him by a friend was also deposited.

9. The father received a costs advice to the effect that to date fees of $27,514.75 had been paid to his criminal solicitors with a further $12,085 plus $3,156.89 in disbursements having been incurred since the last account was rendered and paid.

10. He has been advised that the cost of his defence will be in the vicinity of $313,500 with estimated disbursements of a further $50,000.

11. The father relies upon the Affidavit of Stephen Ey filed 24 May 2019. Mr Ey confirms that the father has been charged with a serious offence and that the charge has been listed for trial in the Supreme Court for 20 days commencing in August 2019.

12. Mr Ey holds in his trust account for and on behalf of the father the sum of $367,485.25. His affidavit itemises the costs that are likely to be incurred by the father in respect of his defence.

Legal principles – interim injunctions

1. In Stowe & Stowe (1981) FLC 91-027 at 76,273 the Full Court considered the fundamental requirements before a court should consider before making an injunction restraining a party from dealing with property.

2. The Court has power under s 114(1) of the Family Law Act 1975 (Cth) to grant an injunction in property proceedings. The Court must consider both the merits of the claim and the extent of any prejudice to the claim should an injunction not be granted.

3. In Martiniello & Martiniello (1981) FLC 91-050 the Court considered at 76,420 that:-

   ·The order must be necessary to ensure that the property claim is not frustrated;

   ·There must be a real risk that a parties possible entitlements will not be met if the injunction is not granted;

   ·There must be no undue prejudice to third parties.

4. In Rieck & Rieck (1981) FLC 91-067 Nygh J considered the statement of the Full Court in Stowe (supra) and at 76,512 summarised the position as follows:-

   However, as the Full Court pointed out in Stowe it is not sufficient to establish that the applicant has prima facie a relevant interest in the subject property – “Some other factor must be established, for example, that unless an injunction is granted, the other asset may be disposed of or dealt with in such a manner that there is a risk that any order made under sec. 79 will not be met”. In other words, there must be an interest to which the applicant has a prima facie claim and which if the order was not made would be disposed of irretrievably. If that interest has already been disposed of, it would clearly be too late.

5. The Court should also consider the balance of hardship and convenience between the parties and the consequences that might flow to third parties if an order of injunction is made.

6. Ms Powell QC who appeared for Mr Ey was not able to detail what costs were likely to be incurred by the father during the period of the adjournment. I accept that there will be some work done in preparation for the trial. I consider that a balance must be struck between the potential prejudice that may be caused to the mother if the M Super payment is entirely dissipated. Until I can hear argument as to whether an injunction should remain in place pending the final determination of the proceedings in this Court, I have determined that of the money that currently stands to the credit of the father in his criminal lawyers’ trust account, I propose to put in place an interim injunction directed to all but $50,000.

7. I am not able to assess the parameters of the claims of each of the parties. There will be equity from the sale of Property A which the parties consider will be not less than $200,000. There is the competing claim of the father that following separation the mother withdrew a substantial sum of money which she now states has been spent on day to day expenses for herself and the children. The father will argue that whilst the M Super claim may well be treated as property, he had to sustain grievous injuries to be eligible for the payment.

8. For these reasons I propose to put in place an injunction during the period of the adjournment.

I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 6 June 2019.

Associate:

Date: 6 June 2019