MacDuff & MacDuff (No 2)

[2012] FamCA 328

FAMILY COURT OF AUSTRALIA

MACDUFF & MACDUFF (NO. 2) [2012] FamCA 328

FAMILY LAW – INJUNCTIONS – Preservation of property – whether there is a sufficient risk of the husband dissipating the marital assets – found a sufficient risk in accordance with the terms of the test established in M v DB (1996) 36 Fam LR 454 – where prior orders have prevented the husband from operating his business – orders made 3 April 2012 varied to allow the husband to deal with the credit bank account of the business even if the company’s bank balance is below $5 million.

FAMILY LAW – PROPERTY – Interim distribution – distribution for the payment of both parties’ tax liability.

Family Law Act 1975 (Cth) s 114(3)

M v DB (1996) 36 Fam LR 454

APPLICANT: Ms MacDuff

RESPONDENT: Mr MacDuff

FILE NUMBER: SYC 1828 of 2012

DATE DELIVERED: 5 April 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 5 April 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Schonell SC

SOLICITOR FOR THE APPLICANT: York Family Law

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: Broun Abrahams Burreket

IT IS ORDERED

1. That order 4 of the orders made 3 April 2012 by the Honourable Justice Rees be vacated and in lieu thereof the following order be made:

   That the husband in his capacity as a director and/or a shareholder of the Companies as well as X Group Holdings Pty Limited be restrained by injunction from in any way dealing with, drawing, transferring, withdrawing or in any way operating upon the credit bank account of X Group Holdings Pty Limited except in the ordinary cause of business.

2. That order 1B of the orders made 3 April 2012 by the Honourable Justice Rees be vacated and in lieu thereof the following order be made:

   That from the account in the amount of approximately $300,000.00 in Commonwealth Bank in the name of the husband being account number …78 the husband shall pay the tax assessment $116,530.10 being the husband’s tax and the amount of the wife’s tax of approx $6,000.00 and the husband is restrained from dealing with the balance of the monies in that account.

3. That the substantive proceedings not be placed in the docket of the Honourable Justice Rees.

4. That the husband’s Application in a Case filed in court this day seeking a stay of the orders of 3 April 2012 be dismissed.

5. That the costs of all parties be reserved.

IT IS ORDERED BY CONSENT

1. That the order dismissing the application for a stay contained in the Application in a Case filed in court this day be vacated.

2. That leave be granted to the parties by arrangement with my Associate to relist the matter for hearing before me in relation to the application for a stay.

3. That leave be granted to the parties to approach the lists clerk for a hearing date for the balance of the competing interim applications.

IT IS NOTED that publication of this judgment by this Court under the pseudonym MacDuff 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: SYC 1828 of 2012

Ms MacDuff

Applicant

And

Mr MacDuff

Respondent

REASONS FOR JUDGMENT

1. These proceedings come before the Court as a consequence of ex parte orders made by me on 3 April 2012.  Those orders were made after I had been satisfied that it was appropriate to make them ex parte and without notification to the husband.  The matter was then stood over to 3.00 pm today to allow the husband to be heard in relation to the continuation of the orders.  The husband appeared with his solicitor and counsel and filed, in court, an affidavit, a financial statement, a response and an application in a case.

2. Annexed to the husband’s affidavit were two letters dated 1 February 2012 and 6 March 2012, setting out in detail the settlement negotiations between the parties.  I read those letters.  As a consequence of having done so I offered to disqualify myself from further involvement in the proceedings.  Both of the parties urged upon me that I should hear the applications before the Court today and I will do so but I disqualify myself in respect of the substantive proceedings and will direct they not be listed in my docket.

3. The orders which were made on 3 April 2012 restrain the husband, firstly, from dealing with the term deposit in the sum of $1.5 million in his name and secondly, from dealing with a sum of $300,000 in his name. 

4. They further restrain the husband from increasing borrowings against real estate owned either by the parties or by the corporate entities and trust with which the husband is concerned and restrain the husband in his capacity as a director and shareholder of the various companies from reducing the company’s bank balance below $5 million.

5. The orders further restrain the husband from changing, dealing or altering the corporate structures.

6. Further orders were made restraining the husband from having occupation of the matrimonial home. 

7. The legal framework within which this application is to be decided is found in s 114(3) of the Family Law Act 1975 (Cth) which sets out that the Court may grant an injunction in any case in which it is just or convenient to do so.

8. I was referred by counsel for the husband to the decision of the Full Court in M v DB (1996) 36 Fam LR 454 and I set out in my judgment, paragraphs 46-51 inclusive from the judgement:

   Conclusion in respect of this proposed ground

   [46] Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in s 114(3):

   A court … may grant an injunction … in any case in which it is just or convenient to do so …

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

   [48] We perceive that a real, though perhaps subtle, difference exists between, on the one hand, establishing on the balance of probabilities a risk or danger of a disposal of property intended to defeat an order and, on the other hand, proving to the civil standard and as an independent issue that a scheme to defeat an order exists.

   [49] 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.

   [50] It follows that we do not say that, in addressing the question of whether there is a risk of disposal of assets to defeat an order, it is unnecessary to enquire whether there is any evidence of an intention, plan or scheme to dispose of assets. But in an enquiry into the risk of disposal, the question of intention or scheme is but one of a number of factors relevant to the objective risk of disposition to defeat an order.

   [51] Moreover, while ultimately a particular factor may overwhelm others, it is generally unwise to commence with a rigid focus on finding, to a particular standard of proof, one or more of a number of factors relevant only at a discretionary level and subsidiary to the ultimate question.

9. It was submitted by Counsel for the husband that the evidence before me is untested.  That is so, and I can make no findings of fact.  Counsel for the husband says that the wife’s allegations of threats are untested and that her evidence is uncorroborated.  Again, that is so but that is not the end of the decision or the determination which I am required to make.

10. The determination which I am required to make is a determination of the existence of risk.  The evidence before me in relation to risk is the wife’s evidence.  Her evidence is, and it is not denied, that the husband removed from joint accounts the sum of approximately $1.8 million placing those moneys in accounts in his own name.

11. Her evidence, and it is not denied, is that the husband removed the wife as a beneficiary of the family trust. 

12. Her evidence, which is denied, is that the husband threatened to dissipate the assets of the marriage. In her most recent affidavit, the wife gives evidence, at paragraph 4 of the affidavit sworn 5 April 2012 that the husband said to her:

    I warned you that you will come out with a lot less and now you will come out with a lot less.  I had already today remortgaged the house and put the money back into the company.  I promised you if you went down the legal route that you will end up with much less and now you will end up with much less.

13. In my view, the matters which I have set out are sufficient to establish that there is a risk of the husband dissipating assets in terms of the test established in M v DB (1996) 36 Fam LR 454.

14. There were no submissions made before me which were directed specifically to orders 3, 5, 6 or 7 of the orders of 3 April 2012.  The thrust of the husband’s submissions went to the effect of order 4.  The husband’s argument related to annexures A and B of his affidavit, which were letters or emails from the Commonwealth Bank which included inter alia, the words:

    The block was placed on 03Apr12 on the day that we were served with the court order. 

    Consequently, all payment instruction post 03Apr12 will be automatically cancelled.  This will include salary payment, commission payment, our HSBC interest payment, etc. 

    I can imagine that the above injunction will have a major adverse effect to your business, because it will basically freeze your business.  I hope that you can resolve this as soon as possible.

15. Given the gravamen of the information in the letter, it is somewhat surprising that it should be commenced with the words “Hi [husband’s first name]” but nevertheless, a subsequent letter which is annexed and marked annexure B and commences with the words “Hi […]” suggests that the bank’s total of the amounts in the company’s consolidated accounts is $2,077,324.50.  In those circumstances, the bank has declined to allow the husband to draw on any funds because the accounts are already less than $5 million – that being the lower limit which was set by the injunction order.

16. Consequently, I propose to vary order 4. 

17. In relation to order 1(a) which is the order which preserves the amount of $1.5 million, the husband conceded that he would not be prejudiced if an order were made in those terms.

18. In relation to order 1(b), the husband said that he was left without any funds on which to live from day to day and that he had a tax liability in the sum of $116,530.10.  Senior counsel for the wife pointed out that the wife also had a small tax liability in the region of $6,000.

19. Senior counsel for the wife submitted that the tax of both of the parties should be paid from the $300,000 deposit and the balance should be split.  The husband does not agree with that proposition.  However, in relation to the husband’s submission that he is without funds, I was directed to the husband’s financial statement and to the husband’s most recent tax assessment.  The husband in his financial statement, deposes to an income including interest, of $5,836 a week on my calculations, approximately $303,500 per annum.

20. The most recent tax assessment issued by the Commissioner for Taxation on 14 March 2012 suggests a taxable income in the hands of the husband of $967,353 giving rise to an assessment of $116,530.10.  In addition, the husband’s Financial Statement at note 38 suggests that he has share portfolio investments, I infer, in publicly listed shares of $82,941 and his counsel conceded that those funds were also available to him.  I can make no finding as to the husband’s actual income but there is an enormous disparity between that upon which he has been taxed and that to which he swears.

21. Because the husband does not agree, I do not propose to vary order 1(b) in the manner which is proposed by senior counsel for the wife but I do propose to make an order which would vary order 1(b) to allow both the husband’s tax and the wife’s tax to be paid from that amount. 

22. The husband has also filed an application in a case, seeking a stay of the orders made on 3 April 2012, pending the filing of an application for leave to appeal and an appeal.

23. Counsel for the husband has told me today from the bar table that due to time constraints, no application has yet been filed and no appeal has yet been lodged.  I expressed my view that, even if an appeal had been lodged, and an application had been filed, I would not propose to stay the orders because I am satisfied that the orders as I will amend them today, allow for the husband to continue to operate the business and also allow for the preservation of the assets in the interest of both of the parties. I then dismissed the application for a stay of the injunction orders.

24. I did so without allowing counsel for the husband to address me as he wished in relation to the application.

25. Counsel for the husband wishes to make further submissions in relation to the application for a stay and therefore has asked for leave to relist the matter before me at a future date to argue the application for a stay. Senior Counsel for the wife consented to that application. By consent, I will grant that leave and vacate the order dismissing the application for the stay.

I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 5 April 2012.

Associate: 

Date:  9 May 2012