Lord and Castor and Anor

[2016] FamCA 675

FAMILY COURT OF AUSTRALIA

LORD & CASTOR AND ANOR [2016] FamCA 675

FAMILY LAW – INTERIM PROCEEDINGS – MAREVA INJUNCTION – Where wife seeks an injunction restraining the husband from dealing with certain bank accounts – Where the Application heard on an ex-parte basis – Where the husband suffering from a severe mental illness – Where the husband has discharged himself from hospital against his psychiatrist’s advice – Where the husband has access to substantial funds amounting to almost half the matrimonial pool – Where the wife can provide an undertaking as to damages.

Family Law Act 1975 (Cth) s 114(3)
Family Law Rules 2004 (Cth) 5.12 and 14.05

Blueseas Investments Pty Ltd v Mitchell & McGillivray(1999) FLC 92-856
Mullen and  De Bry  (2006) FLC 93-293
Waugh and Waugh (2000) FLC 93-052
Yunghanns & Others v Yunghanns & Others(1999) FLC 92-386

APPLICANT: Ms Lord

1st RESPONDENT: Mr Castor

2nd RESPONDENT: B Pty Ltd

FILE NUMBER: BRC 7795 of 2016

DATE DELIVERED: 17 August 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Carew J

HEARING DATE: 17 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms A. McDiarmid

SOLICITOR FOR THE APPLICANT: Michael Lord Family Lawyers

COUNSEL FOR THE 1ST RESPONDENT: No appearance

COUNSEL FOR THE 2ND RESPONDENT: No appearance

Upon the undertaking of Ms Lord (“the Applicant”) to pay damages in the event of loss suffered by the First Respondent Mr Castor due to the ex parte Mareva Orders granted.

Orders

1. On an ex parte basis, pursuant to Rule 14.05 of the Family Law Rules 2004, MR CASTOR (“the First Respondent”) be restrained from selling, buying, transferring, disposing or otherwise dealing with or doing any act, signing any document or doing anything to cause the sale, transfer, disposition or other dealing with:

   (a)       The Commsec Account in the First Respondent’s name being account number … valued at approximately $274,000 as at 12 July 2016;

   (b)       The Commsec Account in the First Respondent’s name being account number … valued at approximately $68,000 as at 12 July 2016; and

   (c)       The Commsec Account in the First Respondent’s name being account number … valued at approximately $68,000 as at 12 July 2016

   without the prior written consent of the Applicant or further Order of the Court.

2. On an ex parte basis, pursuant to Rule 14.05 of the Family Law Rules 2004, the First Respondent be restrained from drawing money, including money paid in advance, further encumbering or causing the drawing of money from the following bank accounts and/or loan facilities:

   (a)       The Company C loan account held in joint names being account number …, account type Mortgage – Interest Only;

   (b)       The Company C loan account held in joint names being account number …, account type Mortgage – Principal and Interest; and

   (c)       The Company C account held in joint names being account number …, account type Equity Access/Line of Credit.

   without the prior written consent of the Applicant or further Order of the Court.

3. The Applicant to forthwith effect service on the First and Second Respondents of the following material:

   (a)       Initiating Application filed 11 August 2016;

   (b)       Affidavit of Ms Lord filed 11 August 2016;

   (c)       Financial Statement of Ms Lord filed 11 August 2016;

   (d)       Affidavit of Mr Lord filed 11 August 2016;

   (e)       Order made 17 August 2016;

   (f)       Reasons for Judgment dated 17 August 2016.

4. That the applicant be at liberty to serve a copy of this Order on Company C and Commonwealth Bank of Australia.

5. That the Initiating Application (interim orders sought) be adjourned for further hearing at 10.00 am on 1 September 2016 before the Honourable Justice Carew.

6. That the costs of and incidental to the Application be reserved.

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 Lord & Castor 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 BRISBANE

FILE NUMBER: BRC 7795  of 2016

Ms Lord

Applicant

And

Mr Castor

First Respondent

And

B Pty Ltd 
Second Respondent

REASONS FOR JUDGMENT

1. This is an application by Ms Lord (“the wife”) for an ex parte injunction against Mr Castor (“the husband”) seeking to restrain him from dealing with certain share trading accounts in his sole name and from accessing certain draw down facilities on loan accounts in joint names without the wife’s consent or further Order. There are substantive proceedings in relation to property settlement on foot.

Relevant background facts

1. The wife and husband commenced cohabitation in late 2006, married in 2011 and separated on 2 July 2016. There are no children of the relationship.

2. The wife is a professional and the husband is a manager with Company C.

3. On 3 July 2016 the husband was admitted to the Emergency Department of the D Hospital after an attempted suicide. On 4 July 2016 the husband was admitted to the E Hospital where he remained until 3 August 2016 when he discharged himself contrary to the advice of his treating psychiatrist. The husband has allegedly been diagnosed as suffering from Bipolar Mood Disorder (Type 2) and with various addictions, including to drug and alcohol. The husband’s current medication regime allegedly includes Lithium (a mood stabiliser), Luvox (antidepressant), Valium, Seroquel (an antipsychotic), Zyprexa (an antipsychotic) and Neulactil (a drug used in the treatment of anxiety and control symptoms such as impulsiveness and aggression). The husband’s mother was allegedly diagnosed with Bipolar Mood Disorder (Type 1) and admitted to a psychiatric hospital at age 43.

4. After the husband’s hospital admission the wife attended the hospitals and conferred with the husband and his treating psychiatrists. The husband made a number of admissions to the wife including his use of between $15,000 - $20,000 on prostitutes and erotic massage therapists and his regular use of cocaine, ecstasy, cannabis and abuse of prescription medications. These admissions came as a surprise to the wife.

5. The husband agreed to provide the wife with access to some of his online accounts including his share trading accounts. Given the husband’s precarious mental state and the comments by his treating psychiatrist that he should not be making financial decisions in his state, the wife changed the passwords on the accounts. When the husband found out he alleged to Company C and Commsec that he suspected a fraud had been committed on the accounts and caused the accounts to be closed. The wife alleges that Commsec have advised her that new accounts can be set up by the husband and he can continue share trading.

6. The wife recently became aware for the first time of various matters concerning their financial situation including that the husband had obtained a joint line of credit with Company C secured against the former matrimonial home and that the husband had drawn down $193,000. She also became aware that he had at least three sports bet and gambling accounts and had spent at least $15,000 in the last 18 months on gambling. Shares had been purchased in the husband’s sole name and dividends payable on shares were paid into accounts in the husband’s sole name. The wife also became aware of the extent of the husband’s share trading activity over recent months and on some days she alleges the husband made up to ten or more trades with some single trades valued up to approximately $80,000.

7. While the wife notes that the husband appears to have done well in respect of his share trading she is concerned that decisions may be made by him in his precarious mental state that will put their home at risk.

8. The wife describes erratic behaviour by the husband while he was an inpatient at E Hospital relating to proposed buying and selling of shares and spending money. Further the wife describes the husband’s excitable and erratic behaviour relating to share prices and gold prices and his statements of intent to purchase more shares. The husband appeared to be obsessed with the idea of continuing share trading while in hospital.

9. The wife contends that if the husband is given notice of her application she fears the husband will act in a reckless way and dissipate funds. The wife has caused ‘temporary holds’ on the redraw facilities on two home loans with Company C and has altered access to another line of credit requiring joint signatures. She has also caused ‘holds’ to be placed on the husband’s share trading accounts with Commsec. The husband is aware of these actions and the wife has been advised by the Commonwealth Bank that the ‘holds’ cannot really be maintained without a Court order. Company C have indicated that they will maintain ‘holds’ on joint accounts but require a letter from the husband’s treating psychiatrist to maintain the holds on accounts in the husband’s sole name. The wife has not requested the letter from the psychiatrist because she noted previously a distinct reluctance to become involved when she has spoken to the treating psychiatrist previously.

10. The wife contends that the husband’s violent behaviour has been escalating over the last 18 months and includes his punching a hole in the bedroom wall after her refusal to spend $50,000 on his birthday party; slapping the wife hard across the bottom and thighs during sexual intercourse; driving at high speeds and erratically while becoming increasingly agitated; kicking and punching walls; yelling at the wife to “fuck off”. On 3 August 2016 the husband expressed further thoughts of suicide.

11. As a result of the wife’s fears for her physical safety she caused the locks on the home to be changed. The husband was so outraged he caused an Application for a Protection Order to be filed against the wife because he stated it was the only way he could get the wife out of the house. No order has been made.

12. After the husband discharged himself from hospital the wife vacated the home because she was fearful of an altercation with the husband.

13. The wife suffers from anxiety and panic attacks and admitted herself to the F Hospital for a week after the husband was first admitted to hospital.

14. The wife and husband own property in their respective sole names or joint names, including superannuation, to the value of an estimated $994,137 net. Most of the property is in the sole name of the husband.  

15. The wife contends that she has made significant financial and non-financial contributions to the acquisition, conservation and improvement of property over the ten year relationship. Her application for property settlement seeks an equal division of property.

Applicable legal principles

1. The power to grant the injunctions sought can be found in s 114(3) which relevantly provides:

   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 ... 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.

2. Prior to granting an injunction the following matters need to be determined:

   a)Whether there is a serious issue to be tried;

   b)The balance of convenience;

   c)Whether there is any objective risk of disposal of assets if the injunction is not granted; and

   d)If it is considered appropriate to issue injunctions the Court should, to the minimum extent required.

   (Yunghanns & Others v Yunghanns & Others(1999) FLC 92-386; Blueseas Investments Pty Ltd v Mitchell & McGillivray(1999) FLC 92-856;  Waugh and Waugh (2000) FLC 93-052; Mullen and  De Bry  (2006) FLC 93-293)

3. An applicant seeking an ex parte application must be able to satisfy the court about a number of matters as provided by Rule 5.12 Family Law Rules 2004 (Cth):

   An applicant seeking that an interim order or procedural order be made without notice to the respondent must:

   (a)satisfy the court about why:

   (i)shortening the time for service of the application and the fixing of an early date for hearing after service would not be more appropriate; and

   (ii)an order should be made without notice to the other party; and

   (b)in an affidavit or orally, with the court's permission, make full and frank disclosure of all the facts relevant to the application, including:

   (i)whether there is a history or allegation of child abuse or family violence between the parties;

   (ii)whether there has been a previous case between the parties and, if so, the nature of the case;

   (iii)the particulars of any orders currently in force between the parties;

   (iv)whether there has been a breach of a previous order by either party to the case;

   (v)whether the respondent or the respondent's lawyer has been told of the intention to make the application;

   (vi)whether there is likely to be any hardship, danger or prejudice to the respondent, a child or a third party if the order is made;

   (vii)the capacity of the applicant to give an undertaking as to damages;

   (viii)the nature of the damage or harm that may result if the order is not made;

   (ix)why the order must be urgently made; and

   (x)the last known address or address for service of the other party.

4. The circumstances in which a party may apply for a Mareva injunction are set out in Rule 14.05 Family Law Rules as follows:

   (1)A party may apply for a Mareva order restraining another person from removing property from Australia, or dealing with property in or outside Australia, if:

   (a)the order will be incidental to an existing or prospective order made in favour of the applicant; or

   (b)the applicant has an existing or prospective claim that is able to be decided in Australia.

   (2)The applicant must file with the application an affidavit that includes:

   (a)a description of the nature and value of the respondent's property, so far as it is known to the applicant, in and outside Australia;

   (b)       the reason why the applicant believes:

   (i)property of the respondent may be removed from Australia; and

   (ii)dealing with the property should be restrained by order;

   (c)a statement about the damage the applicant is likely to suffer if the order is not made;

   (d)a statement about the identity of anyone, other than the respondent, who may be affected by the order and how the person may be affected; and

   (e)if the application is made under paragraph (1)(b), the following information about the claim:

   (i)        the basis of the claim;

   (ii)       the amount of the claim;

   (iii)if the application is made without notice to the respondent, a possible response to the claim.

Discussion

1. The wife has a substantial claim for property settlement. Most of the property known by the wife to be in existence is in the husband’s sole name.

2. The husband has been diagnosed as suffering from a severe mental illness and has recently attempted suicide. He discharged himself from a psychiatric unit against his treating psychiatrist’s advice on 3 August 2016. He has stated a desire to continue share trading despite his recent illness and against the advice of his treating psychiatrist not to make financial decisions in his current state.

3. The husband has been observed by the wife to be behaving in an increasingly erratic manner.

4. The wife has recently discovered information about their joint financial situation which indicates a substantial use of and at times wastage of funds by the husband.

5. Absent the injunction the husband will have imminent access to substantial funds and financial resources which if depleted could reduce the property available for distribution by a sum in the order of $545,722. The total estimated net pool is only $994,137.

6. The injunctions sought will enjoin the husband from drawing on three bank accounts, a draw down on a loan facility and from increasing debt on existing loan accounts.

7. The husband will continue to have access to funds for his day to day living expenses as he has other bank accounts in his name, Company G shares valued at approximately $11,500 and a joint credit card although only limited funds are available on that card. The husband, according to the wife, is in receipt of sick leave payable into a bank account in his sole name.  

8. The injunctions sought do not impact on the second respondent.

9. The wife can provide an undertaking as to damages.

10. I am satisfied that the injunctions sought should be granted and propose to have the matter return to Court on 1 September 2016 after service of the material and order on the husband.

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 17 August 2016.

Associate:  B. Feehely

Date:  17 August 2016