Lenova and Lenova

[2009] FamCA 634

FAMILY COURT OF AUSTRALIA

LENOVA & LENOVA [2009] FamCA 634

FAMILY LAW – PRACTICE AND PROCEDURE – Injunctions – Case management

Family Law Act 1975 (Cth)

APPLICANT: Ms Lenova

RESPONDENT: Mr Lenova

FILE NUMBER: MLC 5218 of 2009

DATE DELIVERED: 25 June 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 25 June 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr D.J. Brown SC
SOLICITOR FOR THE APPLICANT:	Nicholes Family Lawyers

COUNSEL FOR THE RESPONDENT:	Mr M. Bartfeld QC
SOLICITOR FOR THE RESPONDENT:	Taussig Cherrie & Associates

Orders

1. That all extant applications be adjourned before me at 10.00am on 20 July 2009.

2. That paragraph 6 of the wife’s application filed 15 June 2009 is dismissed.

3. That within 7 days the husband do all acts and things and sign all such documents as may be required to authorise M Accountants, accountant or any other accountant retained on his behalf and on behalf of the Lenova Group of Companies, to provide to an accountant retained on behalf of the applicant wife, all financial information and documents reasonably requested by the wife’s accountant including but not limited to the information sought in the letter from the wife’s solicitors to M Accountatns dated 12 May 2009.

4. That within 14 days, the husband provide the documentation requested of him and the letter to him from Nicholes Family Lawyers dated 13 March 2009.

5. That my reasons for judgment this day be transcribed.

IT IS NOTED that publication of this judgment under the pseudonym Lenova & Lenova is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 5218 of 2009

MS LENOVA

Applicant

And

MR LENOVA

Respondent

REASONS FOR JUDGMENT

1. This is an application for a variety of orders on an urgency basis, but predominantly orders sought by the wife in relation to injunctions.  The parties have had a long marriage with three adult children from whom the wife is estranged. 

2. I am only dealing with the urgent issues that I have been asked to determine and the matter is otherwise to be adjourned for a period of some three weeks.  On that day, the matter can be more comprehensively argued. 

3. Notwithstanding their long marriage, the parties separated under the one roof in November 2007 and finally physically separated in or around December 2008.  The husband says that the wife lives with her cousin, and otherwise the family home is currently unoccupied.  The wife disagrees with that, saying that she is still coming and going. 

4. Each party alleges violence against the other, and I note that there are currently proceedings against the husband in the Local Court on 8 July 2009. 

5. The material upon which I am determining this matter is extensive, but because the matter is to be dealt with in three weeks' time, I am dealing specifically with the matters that relate to the injunctive relief and one other matter in relation to an application by the husband and the wife about information.

6. In the wife's affidavit, she refers to the fact that both she and the husband are directors and shareholders of various companies which she described as the Lenova Group.  The husband agrees with that.  The wife says that she instructed her solicitor to undertake company searches and then set out in her affidavit a variety of entities which she described as the Lenova Group in some detail.  In each of the relevant entities, she describes the position of the husband and herself as either a director or shareholder.  Again, looking at the material provides by the husband, he does not disagree with most of what the wife says.

7. The wife then goes on to say that since the separation under the one roof, that is, 2007, the company searches show that the husband has effected a number of changes to the structures of entities which form part of the Lenova Group.  She pointed out that on 22 August 2008 the husband resigned as a director and secretary of GF Pty Ltd.  She said that on 31 October 2008 the husband resigned as a director of G Pty Ltd.  On 22 August 2008, the husband resigned as a director of V Pty Ltd, and on the same date he resigned as a director of T Pty Ltd.  Again, the husband does not disagree with that, but interestingly says that the wife was with him at the time that most of these steps were taken. 

8. The wife then says that she wrote through her solicitors to the husband, seeking details of the financial circumstances relating to the group.  That letter was written on 13 March 2009, and the husband failed to provide the information sought in that letter.  A further letter was followed up on 2 April, and the husband responded, saying that he would have his lawyer write shortly. 

9. In his affidavit, the husband refers to the fact that it had been an extremely busy time in the business, and there was no suggestion from his senior counsel that he was endeavouring to evade the responsibilities of disclosure.

10. The wife's affidavit then said that following separation in or about June 2007 the husband told the adult children in her presence on numerous occasions that she was mentally unstable and that he was compelled to save the family assets by transferring those to the children. 

11. Effectively, in July 2006 through to July 2007, the husband transferred just over a million dollars to one of the adult daughters for the purchase of a cafe, and that was subsequently sold.  The husband then, according to the wife, said that because they were separated under the one roof the moneys were being returned to them.  The wife said that the husband then told her he was using $250,000 of those moneys to assist a son in the building of a million‑dollar home in one of the parcels of land that she believed the husband was planning to transfer to that son.  In respect of that issue, the husband disagrees in respect of the $250,000, but otherwise does not dispute the issue about the cafe.

12. The wife then said that she was deeply concerned that the husband was disposing assets.  She said that in or about June and July 2007, the husband first boasted to her that he was giving away assets.  She said that when she questioned him, the husband became extremely angry and would yell at her close to her face.  She said he would engage with the children and encourage them to abuse her verbally, and the adult son pushed and shoved her and demanded that she leave the house, and that the husband was inciting the son to continue doing that.  The husband denies that

13. The important issue arising out of that evidence is the timing.  The wife specifically says that the allegation arose in June and July of 2007.  I note that there is no specific allegation of anything similar since that time. 

14. The wife then said, in respect of the husband's resignation of his directorships in various companies which form part of the Lenova Group since the separation, and his failure to respond to the solicitor's request for financial information, his conduct in transferring assets to the children since the separation, and the threats to which I have just referred, she was concerned that the husband was actively seeking to diminish the value of the assets or to divest himself of interest that formed part of the asset pool.  That was the statement that gave rise to the application.  The husband's response to that affidavit was simply to deny that he was doing any of those things. 

15. It is important to understand in this case two things.  The first is that I am dealing with this matter on an urgent basis.  The second is that the husband was only served four days ago and commences his material by saying that he has not had an opportunity to give a comprehensive response. 

16. One of the problems in this case also is the fact that the orders sought by the wife seem to have a direct as well as an indirect impact upon the adult children. Those children are not as yet, if they ever will be, joined as parties to the proceedings.  Mr Spender has appeared on behalf of the two sons today, and has indicated that he joins with the husband in the position of opposing the injunctions being sought.

17. There is also a dispute between the parties about the former matrimonial home.  As I have indicated, the parties seem to disagree about who is in fact living in the home, but it is common ground that the wife has changed the locks on the property and that that home is actually on the business premises generally of the husband and the sons.

18. The husband has said that he wants that property back, but there is a dilemma for him at the moment, because he is facing the Local court shortly.  There is a current interim apprehended violence order that may very well be breached if he somehow or other harasses the wife.

19. In relation to the husband's position, in addition to the matters that I have referred to, he says that he has always had the sole conduct of the business. He said he has had the responsibility for its day‑to‑day operations, including financing, strategic planning and all necessary decision‑making to ensure its viability.  He said he needed access to all of the records as well as the staff, and I note that there are quite a number of them.  The wife has had a role in the business, which seems to be evident from her material. 

20. The husband sets out that in addition to the corporate entities referred to by the wife there are also a number of trusts.  There does not seem to be any major dispute about that issue.  In relation to the family trust, of which one of the companies is the trustee, the husband set out in some detail when that was settled and the fact that he and the wife are the joint appointors and guardians.  He said that both she and he were the directors and shareholders of the corporate trustees as well as the beneficiaries, along with the children. 

21. The husband said that due to the current circumstances he was unable to run the business and conduct it appropriately, given that the directors of the various entities were he and the wife, and that they were not able to function as a board.  That was so having regard to the assault charges and the absence of communication.  The husband goes further and says in his affidavit that the wife consistently hampers business operations and interferes with the staff and customers. 

22. There is a significant dispute between the parties about the wife having appropriated business funds, to use the husband's words.  The wife responds by simply saying that she took the money, but there is $100,000 of it sitting in a solicitor's trust account.  She says she only took the money because the husband took a sizeable sum as well.

23. There is a very big dispute in this case as to exactly what is happening and what has happened, and I am unable to make any clear findings.  Again, I stress that I am dealing with the matter only on an urgency basis.

24. When I look at the basis upon which an injunction of this nature should be granted, it is clear that the power comes from section 114 of the Family Law Act.  That provision says that the court is entitled to make such order or grant such injunction as it considers proper with respect to the property of a party to a marriage.  That particular provision has been analysed a number of times by various courts, including the Full Court.  It is clear that the purpose of an interlocutory injunction is to preserve the status quo until trial.  The court is required to find that there is a serious issue to be tried in the exercise of its discretion and that, most importantly, it is the balance of convenience that must support the making of the order. 

25. It is also clear from the various authorities, including Waugh and Waugh (2000) FLC 93-052 that the restraints sought have to be reasonably necessary in the sense that if they are not made there would be a real risk of the defeat of the applicant's claimed interest. In Mullen and De Bry (2006) FLC 93-293, the Full Court said a court may grant an injunction in any case in which it is just or convenient to do so:

    Ultimately, each case will involve an overall assessment of a number of factors to determine a 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.

26. The Full Court went on to say that:

    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.

27. That is particularly relevant in this case because the only evidence of a clear intent, asserted by the wife, denied by the husband, arises in the period June and July 2007.  I note that subsequent to that particular period of time the parties lived together under the one roof.  I also note - and it does not seem to be disputed by the parties - that their various activities involved a legal practitioner.  So to that extent, the evidence will be clear as to whether or not there was something untoward happening.  The wife makes it clear that she was under considerable pressure to do whatever was done in any event.

28. In my view, there is nothing urgent about these injunctions.  I do, however, make it clear that in the event that the wife has information or evidence other than that which she has put in her affidavit then on the return date the matter can be revisited.  Under those circumstances, I do not propose to grant the wife's application for the injunctions that she now seeks.

29. In her application, the wife also sought two other orders.  Paragraphs 2 and 4, subject to the deletion of the words "information", referring specifically to the fact that the husband is obliged to provide documents, are commonsense, having regard to his obligations of disclosure.  This matter cannot proceed very far without the husband complying with that obligation of disclosure, and his senior counsel very sensibly says that he is endeavouring to do so.  In those circumstances, I propose to make orders in terms of paragraph 2 and 4 of the wife's application.

30. For his part, the husband also sought a variety of orders.  Those include removing the wife from the position within the companies, and also that he have exclusive access to the home.  None of those matters seem to me to be urgent today to the extent that they cannot wait until the adjourned date when the matter can be comprehensively argued by all parties. 

31. In those circumstances, I propose only to make the orders in terms of paragraph 2 and 4 of the wife's application this day, and otherwise to adjourn the proceedings to a date, which I think we have agreed is 20 July. 

I certify that the preceding Thirty One (31) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  10 July 2009