Leng and Lau & Anor

[2014] FamCA 816

FAMILY COURT OF AUSTRALIA

LENG & LAU AND ANOR [2014] FamCA 816

FAMILY LAW – INTERIM PROCEEDINGS – Where the wife seeks interlocutory orders – Where the husband seeks interlocutory and final orders – Where numerous orders are made in line with the wife’s application – Where orders are made adjourning the interim proceedings – Where interim orders are made that may be varied on the adjourned date – Where various orders are stayed until the adjourned date – Where trial directions are made and the matter listed for final hearing.

APPLICANT: Ms Leng

RESPONDENT: Mr Lau

INTERVENOR: Mr Headon

FILE NUMBER: SYC 734 of 2014

DATE DELIVERED: 12 September 2014

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 11 September 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Campton

SOLICITOR FOR THE APPLICANT: Mills Oakley Lawyers

RESPONDENT In person

SECOND RESPONDENT: No appearance

Orders

1. The interim proceedings are adjourned to 10.00 am on 10 October 2014 before Justice Rees.

2. The Court Noted that the following orders are made on the basis that whether on the application of a party or otherwise, they may be varied or discharged on the adjourned date.

1. Pending further order the husband:

   3.1 in his personal capacity or capacity as a shareholder of B Pty Limited trading as Company C (“the Company”) or by way of any other third party or institution be and is hereby restrained from doing any act or thing so as to vary or change the Australian Securities and Investments Commission record relating to the Company on the Australian Securities and Investments register;

   3.2be restrained in his personal capacity or as capacity as shareholder and director of D Pty Limited as trustee for the M Superannuation Fund from doing any act or thing to interfere with the use and possession of the real property situated at and known as Property 1-2, E Street, Suburb F (“the E Street property”) by the Company;

   3.3 be restrained from allowing or permitting D Pty Limited as trustee for the M Superannuation Fund from transferring selling, encumbering,  dealing with and/or adversely affecting interests of that Fund in relation to the E Street property;

   3.4be restrained from causing any monies to be withdrawn from his member entitlements and interest with the M Superannuation Fund;

   3.5be restrained from dealing with any aspect of the property of D Pty Limited as trustee for the M Superannuation Fund;

   3.6be restrained from selling, further encumbering or otherwise dealing with the property situated at and known as G Street, Suburb H in the State of New South Wales being all of the land comprised Folio Identifier … (“the Suburb H property”);

   3.7be restrained from otherwise dealing with his shares in the Company or any asset of the Company or anything to require a meeting to be called on behalf of the Company.

1. The Second Respondent be and is hereby restrained, in any capacity asserted or otherwise, from entering or approaching within five hundred (500) metres of the E Street property.

1. The operation of Orders 11, 12 and 13 made on 5 March 2014 be stayed until 10 October 2014.

1. That the Wife be granted leave to serve a copy of these Orders upon:

   6.1 Suburb J Police Station;

   6.2Suburb H Police Station;

   6.3The Proper Officer of the Australian Securities and Investments Commission; and

   6.4The Commonwealth Bank.

1. The Court notes that Orders 1(a) to 1(f), 2(a) to (f), 3, 5(a) to (e), 6, 7, 14, 15 and 16 of the Orders made 5 March 2014 continue in force, pending further Order.

1. The Court notes that the wife asserts that evidence and representations before the Court on 10 September 2014 indicated that the husband and/or the second respondent refuse to comply with their obligation under Order 3 made on 25 August 2014 to return items belonging to the company.

1. Unless the Court otherwise orders, orders are made in accordance with the document titled “Minute of Order as to Directions for Trial” (Exhibit 1 dated 11 September 2014, as amended), as set out hereunder:

1       That the requirement for the Husband and the Wife to participate in a Conciliation Conference be dispensed with.

2.      That these proceedings be listed for final hearing for four (4) days commencing 13 January 2015.

3.      That the Wife file and serve any Amended Initiating Application by close of business on 10 October 2014.

4.      That the Husband file and serve any Response to the Wife’s Amended Initiating Application by close of business on 31 October 2014.

5.      That the Second Respondent file and serve any Response to the Wife’s Amended Initiating Application by close of business on 31 October 2014.

6.      That each of the Husband, the Wife and the Second Respondent file one consolidated Affidavit in chief by close of business on 7 November 2014.

7.      That each of the Husband and the Wife file and serve an updated Financial Statement by close of business on 7 November 2014.

8.      That each of the Husband and the Wife file a single Affidavit of each other lay witness upon which they seek to rely at the hearing by close of business on 7 November 2014.

9.      That Order 1.3 of the Orders dated 3 March 2014 providing that Mr K be appointed as the single forensic accounting expert be discharged.

10.    That each of the Husband and the Wife be granted leave to adduce their own expert evidence as to the value of the following:

10.1 real property;

10.2 the interests of the parties in each of the following:

10.2.1B Pty Limited;

10.2.2 L Pty Limited;

10.2.3D Pty Limited; and

10.2.4 The M Superannuation Fund;

10.3motor vehicles;

10.4the Husband’s boat (potentially by description);

10.5the Husband’s Brand N watch (potentially by description);

and that such evidence be contained in an Affidavit of such expert to be filed and served by close of business on 1 December 2014.

11.    That for the purpose of Order 10 hereof each of the Husband and the Wife shall:

11.1 provide all documents and/or information requested by the other party as required by their respective expert witnesses within seven (7) of receipt of such request from the other party; and

11.2do all things necessary to ensure that their respective expert witness(es) has access to premises for the purposes of undertaking their expert report.

12. That in the event that the Husband and Wife adduce evidence by their own expert witness pursuant to Order 10 hereof in relation to all or any of the property referred to therein, then on or before 8 December 2014 the Husband and the Wife shall do all such things to cause a conference to occur between each of their respective expert witnesses pursuant to Rule 15.69 of the Family Law Rules 2004 (Cth) and upon the conclusion of such conference the experts shall produce a joint statement to be served on each of the Husband and the Wife addressing the following:

12.1 if any agreement is reached of any outstanding issue;

12.2 identify the reason for disagreement on any issue;

12.3identify what action, if any, may be taken to resolve any outstanding issues.

13.    That in the absence of leave of the Court, neither party shall be permitted to rely on any affidavit evidence filed later than the times prescribed by these Orders.

14.    That on or before 10 October 2014:

14.1 The Husband shall:

14.1.1provide by way of disclosure the information and documents requested in the letter to him from Mills Oakley Lawyers dated 8 September 2014, a copy of which is annexed hereto and marked “A”;

14.1.2provide particulars in relation to the disposal of stock belonging to B Pty Limited trading as Company C and/or L Pty Limited trading as Company O, being the stock identified in the Inventory annexed hereto and marked “B”, including but not limited to the date of disposal, the amount received and how such funds were subsequently applied by the Husband, including documents and bank statements evidencing such transactions;

14.1.3provide particulars in relation to the disposal of the Husband’s boat and Brand N watch, including but not limited to the date of disposal, the amount received and how such funds were subsequently applied by the Husband, including documents and bank statements evidencing such transactions;

14.1.4disclose the amount paid to Ms Lau by L Pty Limited trading as Company O for the period 1 March 2014 to date.

15.    That:

15.1 on or before 10 October 2014; and

15.2 at least three (3) days before the commencement of the final hearing

each of the Husband and the Wife shall disclose to the other details of their total legal fees paid to date, including the source of funds for such fees and the dates of payment, together with documents evidencing such payments.

16.    That twenty-one (21) days prior to the commencement of the final hearing the Wife shall submit to the Husband a Balance Sheet.

17.    That within seven (7) days of the Husband receiving the Balance Sheet pursuant to Order 16 hereof, the Husband shall complete his column of the Balance Sheet including his contentions as to value and noting the foundations for his assertions and shall serve same upon the Wife.

18.    That within seven (7) days of receipt of the joint Balance Sheet from the Husband pursuant to Order 17 hereof, the Wife shall file the joint Balance Sheet.

19.    That each party shall file and serve a Case Outline document setting out a Minute of Order sought, List of Documents relied upon, Chronology and skeletal outline of submissions not less than seven (7) days prior to the commencement of the trial.

20.    That paragraph 21.3 of the Amended Response to an Application in a Case filed by the Wife on 9 September 2014 being that the Husband and the Second Respondent shall jointly and severally pay the Wife’s costs of and incidental to the Wife’s Application in a Case filed 18 August 2014 and the subsequent Orders of 25 August 2014 on an indemnity basis be adjourned to the trial.

21.    That the parties shall have liberty to re-list these proceedings on seven (7) days’ notice.

1. The Court noted that although he seeks a similar order, the husband opposed the making of an order in terms of paragraph 5 of the document titled “Wife’s Amended Minute of Interlocutory Relief in the event of an expedited hearing commencing 12 January 2015” and although he seeks an order that he receive $70,000 from a redraw facility, he opposed an order that each of the parties receive $40,000 from that source.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Leng & Lau and Anor 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 SYDNEY

FILE NUMBER: SYC734 of 2014

Ms Leng

Applicant

And

Mr Lau

Respondent

EXTEMPORE JUDGMENT

introduction

1. These are the reasons for decision for interlocutory orders made yesterday after hearing the matter.  There was not time to give reasons for judgment and I told the parties that I would do so today.  The parties were excused on delivery of judgment.  Because the husband was assisted by an interpreter and because he was not legally represented I told the parties that I would cause the reasons to settled and published.

2. The proceedings came before me because they were listed before Rees J yesterday and her Honour was not available.  The proceedings had been before her Honour on 10 September 2014 and arrangements were made for a final hearing to be conducted by her Honour over four days in the week of 12 January 2015.  Arrangements were subsequently made with her Honour’s chambers for any further interlocutory matters to be listed before her Honour on 10 October 2014.

BACKGROUND

1. The proceedings are between a wife and husband who are 49 and 52 years of age, respectively.  They started to live together in 2000 and were married in December 2003.  They separated under one roof on 10 April 2013, according to the wife, and the husband left the former matrimonial home in October of that year. 

2. Orders were made on 5 March 2014 whereby the wife was given carriage of the parties’ tradesperson business.  Their company B Pty Limited trades as Company C.  The husband had 11 shares in the company and the wife had 9.  And the orders of 5 March 2014 provided for the husband to resign as a director and for the wife to conduct the business and report to the husband.  Among other orders the wife was to pay the husband $1,000 a week after tax, and he was to pay her $300 a week rent on some other premises.  There were a number of other orders but the thrust of the orders was that the wife would have carriage of the business and would account to the husband.  Importantly, there was no appeal in relation to that decision. 

3. On 1 August 2014 the husband sold his shares in the business to his brother-in-law, Mr Headon.  The wife discovered that two weeks later.  In breach of the Court’s orders, around 14 August the husband and Mr Headon had made arrangements through ASIC, to register the transfer of shares, hold the requisite meetings, cause the wife to be removed as a director, and to install Mr Headon as a director and controller of the business.  At about the same time the wife discovered that she had been removed as signatory to the company bank account.

4. The matter came before Watts J on 25 August 2014 and those arrangements were reversed in terms agreed to, not only by husband and wife, but by Mr Headon.  That is to say, an order was made, by consent, reversing the transfer of the shares, requiring the restoration of the wife as a director of the business, removing Mr Headon as a director of the business.  The orders also required Mr Headon to restore items, I think including a safe, to the business premises.  Mr Headon was restrained in relation to the business and, relevant to the orders being made by me today, those restraints included him being restrained from approaching any employee of the business.

5. The parties appeared before Rees J on 10 September, and I think I am right in saying that that appearance might have been a transfer from a duty list of that date.  And her Honour indicated to the parties that rather than focus on the interlocutory matters as such, she would give the parties some time for a final hearing and thereby resolve the matter on a final basis.  And that was why the indication was given of a hearing in the week of 12 January.

6. When the matter came before me, yesterday, the wife was represented by counsel.  The husband appeared on his own account, with an interpreter.  Although he appeared before the Court on 10 September 2014, there was no appearance by or on behalf of Mr Headon when I heard the matter yesterday.  And the court record shows that, at least before the registrar on 10 September, the second respondent appeared, Mr Headon.  

7. When the matter first came before me, the parties expected that it would be listed before Rees J.  I told the parties that I had taken the matter over because her Honour was not available, I understood that trial directions were needed for a trial in the week of 12 January 2015 and that there were outstanding interlocutory matters.  I said that such matters could be dealt with by her Honour on 10 October 2014 but that I would deal with any urgent issues.

8. The hearing before me proved very unsatisfactory, particularly for the husband, because English was not his first language.  It was my understanding that although he indicated that there were a number of orders he sought on an interlocutory basis, he wanted the proceedings adjourned.  Although he had the assistance of an interpreter, he persisted in not using the interpreter, even after I asked him to do so.  As the husband complained later in the day, he did not have much of an opportunity to make a case in relation to the orders being pressed on behalf of the wife.  At one point he handed up a document which, unfortunately, in the heat of battle was returned to him, which I understood to be an intake or assessment document in relation to his mental health.  I understood it to be a document that had issued out of a clinic or a hospital.  It was essentially a hearsay document, but it identified that the husband, as I recall, had suffered or was diagnosed with depression and/or anxiety.  Importantly for these purposes, it also indicated that he was able to make logical judgments.  I have forgotten the exact words used in the document.

9. Just stopping there for the moment.  If the husband asserts that either temporarily or on an indefinite basis, he is not able to conduct the proceedings because of an illness, whether mental illness or physical illness, then if that is found to be correct, the proceedings have to be stayed.  He did not make any representations about that.  The husband handed up a document on the day that contained orders that he sought.  I was left a little confused as to whether he intended to represent that he was unable to prosecute the interlocutory proceedings or whether he was indicating something more permanent.

10. I indicated to the parties, anything I did could be undone on 10 October.  Rather than express the orders I made only until 10 October, I expressed them as indefinite orders. That was only done to avoid the problem of decisions not being made until sometime after the next date.

11. In relation to the trial directions, her Honour had directed that the parties provide to her chambers a minute of the directions they sought.  That had been done on behalf of the wife but not on behalf of the husband or Mr Headon.  The wife proposed a set of directions and ultimately I made orders in accordance with the framework that was identified. 

12. In my view, it was necessary to make trial directions, notwithstanding that the husband was not ready, because they were necessary to give effect to what I was told had been an agreed position on 10 September, that the matter would be listed for final trial in the week of 12 January.  If that was to happen, then directions had to be made to get that underway.  Again, I indicated to the parties that the timetable was fixed, but only imposed one obligation on the husband before 10 October.  In that way he could agitate that issue again before the trial judge on that date.  Perhaps that is all I need to say about that.

13. Her Honour had indicated to the parties that orders would be made for adversarial rather than single experts.  The trial directions put in place a timetable working towards a trial commencing on the 13^th day of January for four days.  The requirement for a conciliation conference was dispensed with.  The wife was to amend her initiating application by 10 October;  the husband’s amended response, if any, was to be filed and served by 31 October, similarly for the second respondent.  The evidence of lay witnesses together with the parties financial statements were be filed and served by close of business on 7 November 2014.  A single expert was discharged and adversarial experts were allowed in relation to real property, four commercial entities, motor vehicles, and some personal items.  That evidence is to be available by 1 December.  Orders were made for conferences of experts and a minute to come out of those conferences and so on.  Not before 10 October, paid legal fees are to be disclosed. 

14. That is the only order affecting the husband that must be complied with by 10 October.  However, as I said to the husband yesterday, it is an obligation that arises under the rules, in any event.  He is obliged to disclose legal fees paid to date and the source of the funds.  Therefore no mischief is done to him.  Of course her Honour would be in a position to extend the date for compliance, after the event, if some mischief was caused.  But it seemed to me that that was a practical solution.  Orders were also made for the creation of balance sheets and other things.  The related costs issues were adjourned to the final trial. 

1. It is difficult to see that there could be any mischief arising to the husband.  He did not take up the opportunity to propose directions himself as directed by her Honour.  There is only so many ways you can make arrangements for a trial to start on 13 January and it seems to me that no mischief is done and it was necessary to make those orders. 

2. Then as to the substantive interlocutory orders that were sought, the husband provided a document to me which I will now mark as exhibit A.  The wife had provided through her solicitors a document titled Wife’s Amended Minute of Interlocutory Relief in the Event of an Expedited Hearing Commencing 12 January. 

3. And ultimately, I made orders in terms of subparagraphs 3.2 to 3.8, order 4, an order related to paragraph 7, order 9.  I made notations in relation to the subject matter of paragraph 10, and a notation in relation to the subject matter at paragraph 12.  They were made in circumstances where it was the wife’s case that those orders had to be made now.  The context of those orders was that there is no doubt that the husband with Mr Headon had taken steps in breach of the orders of 5 March.  Not ambiguous steps.  They had embarked on a course which was entirely inconsistent with the orders made on 5 March, orders with which the husband apparently had no quarrel because he did not take any proceedings by way of appeal.  Remarkably, after orders were entered on 25 August 2014, to remedy the problem by agreement, the husband has appealed against those orders.  No application has been made for a stay of the orders of 25 August 2014.

4. I was told evidence is available that the husband and Mr Headon have indicated to the Court that they will not comply with the orders that they asked be entered on 25 August.  I was also told that the husband has already been reminded by the Court that the orders of 25 August had to be complied with unless they were stayed.  I made the same observation to him yesterday, and he made no application for a stay.  I do not by that mean that I would have determined any such application, but at least the matter could have been listed before Watts J who could consider the question of a stay.

5. So coming back to the reason why orders are necessary now, a scheme was put in place on 5 March which the husband frustrated.  He agreed to the scheme being restored and he later sought to challenge that order.  He told the Court that he and his brother-in-law, Mr Headon, would not comply with their obligations under that order.  It seems to me that in those circumstances, the problems in relation to communicating with the husband, give way to necessity.  It is not as though there was another option for the husband.  He was obliged to comply with the orders that he breached and then asked the Court to restore and although he filed an appeal he has not sought a stay. 

6. Some of the orders sought by the wife were not pressed immediately.  Some of the subparagraphs of order 3 are simply an aid of the obligation established in the 5 March orders and restored by consent in the 25 August orders.  Order 4 is an order sought against Mr Headon restraining him from entering or approaching within 500 metres of the business premises.  I am not absolutely sure what notice Mr Headon had on 10 September, of the orders sought by the wife yesterday.  Mr Headon must have known that the matter was adjourned to yesterday.  He either had notice of the order sought, in which case, it is undefended or he took the risk of not appearing.  Mr Headon did not attend court yesterday and so could not rely on any evidence or make any submissions.  I am to assume that is because he did not want to be heard against the order. 

7. In any event, the existing orders restrain him from a number of things, as I have indicated, including approaching an employee of the business.  I asked the husband whether he wanted to be heard in relation to this injunction against Mr Headon and the effect of his response to me was that Mr Headon was entitled to go where he wanted and he might (for example) attend at the business as a customer.  The injunction restraining him from approaching an employee of the business would prevent that happening.  The order sought is consistent with the existing orders. 

8. Mr Headon has indicated, I am told, that he would breach orders of the court.  If Mr Headon is aggrieved about that, he could take a step although it is difficult to see what case he could make, given that he now has no role with the business and he is not allowed to approach any employee. 

9. Paragraph 5 was sought by the wife and that was an order discharging the husband’s own obligation to pay the wife $300 a week rent for the use of a particular property.  In the minute that the husband provided, he sought a similar order at paragraph 6 of his document – an order that he stops paying his wife $300 a week rent. 

10. Remarkably, even though the parties seem to both want the same order, the husband said to me he did not want me to make that order.  It is an order in his favour.  That is a matter for him.  It makes no sense and it is a bit of a concern if there is a shadow over the husband’s mental health but no harm is done to the wife by refusing that order for the time being.  I did not make that order. 

11. At paragraph 7 the wife seeks an order discharging an order in relation to audits of the business.  This was part of the mechanism of accounting by the wife to the husband for her carriage of the business put in place by the orders of 5 March. 

12. Ultimately, what was pressed on behalf of the wife was that I stay the operation of the order until 10 October, and that is what I did.  There has been significant mischief done to the arrangements that were put in place by those original orders, largely mischief at the hands of the husband.  The husband is hardly in a position to complain about compliance with the original orders but for more abundant caution, I stayed the operation of the wife’s part of the obligation given that the husband so grievously interfered with the integrity of those orders.  That is not to say that the obligation will not be restored on 10 October or at some other time. 

13. Next the wife sought permission to serve copies of the court orders on Suburb J and Suburb H Police, ASIC and the Commonwealth Bank. 

14. The husband raised a concern about that.  As I understood him, he was concerned about there being some leakage of evidence between the family law dispute and perhaps a domestic violence dispute.  I made the order.  I indicated to the husband that the order did not empower the named agencies to do anything.  The order sought could perhaps be seen as a way of avoiding the prohibition in s 121 in terms of publication to a section of the public.  I doubt that provision of a document to those agencies could offend s 121 but there it is.  There has, in effect, been an improper attempt to take over the business, including the removal of business assets.  It may be of assistance to the police and others to know the rights and wrongs about the carriage of the business.  That seemed to be an appropriate provision. 

15. Paragraph 10 purported to say that a number of the orders of 5 March continue pending further order.  Courts do not make the same orders twice.  I indicated to the wife’s counsel that I would simply note that those orders remain in place.  There was no objection to that course. 

16. And, finally, I was asked to note what I was told had happened of recent times, that is, that the husband and Mr Headon, or one of them, had indicated that they refused to comply with their obligations arising under order 3 of the orders of 25 August 2014 to return the safe and the other items that had been removed by Mr Headon from the business premises.  I made that notation.  As I had not been involved in the matter the day before, 10 September 2014, I noted that the wife asserts that there was a representation made to that effect. 

17. Turning the minute of orders sought by the husband – he seeks a number of things that could be interlocutory and a number of things that could be final orders.  He seeks that:

    ·he be able to draw $70,000 from the mortgage to pay legal fees and for his own support because he has ceased to receive $1000 a week for his wages; 

    ·an administrator be appointed to the tradesperson business; 

    ·he be given permission to pay out a mortgage on I Street, Suburb P and at G Street, Suburb H; 

    ·five properties be sold:  the Suburb P property; the Suburb H property; Property 1, E Street, Suburb F; Property 2, E Street, Suburb F; and Q Street, Suburb J;  and that the proceeds be split equally;

    ·his obligation to pay his wife $300 a week rent be terminated or that the subject property be sold and there be an equal split of the proceeds.

18. In relation to the first prayer for relief, counsel for the wife said that he understood that there was a redraw facility with $140,000 available.  The wife is concerned that some room needs to be left on the redraw facility, but his client would agree to each of the parties taking $40,000. 

19. I put that to the husband, particularly in light of one of his complaints being that he could not afford legal representation, suggesting to him that if he had $40,000, that might help him restore legal representation for 10 October.  He opposed that order.  I cannot fathom why.  It may be that he did not want the wife to receive $40,000.  In any event, in those circumstances, I certainly did not make the order that he sought.  The other orders are orders of substance and mainly need to be considered at the final hearing.  Some of them could be argued on an interim basis, but that is something that can be left for 10 October 2014.

20. I made trial directions including an order fixing the matter for final hearing over four days, commencing 13 January 2015.  I adjourned the interlocutory proceedings before Rees J on 10 October 2014, and I made the orders that I have indicated from the wife’s amended interlocutory orders.

I certify that the preceding thirty six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 12 September 2014.

Associate: 

Date:  24 September 2014