Mah & San
[2022] FedCFamC1F 316
•13 May 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Mah & San [2022] FedCFamC1F 316
File number(s): SYC 732 of 2022 Judgment of: HOWARD J Date of judgment: 13 May 2022 Catchwords: FAMILY LAW – PROPERTY – Interim injunctions – anti-suit injunction – third party rights – applicant and respondent citizens of the People’s Republic of China – where there is matrimonial property in China and Australia – where the only significant asset of parties in Australia is a cash sum – where that cash sum was transferred from a bank account in the name of the husband by the wife – where the wife had an authority to operate the account – where the authority was withdrawn by the husband – where the bank did not action the withdrawal of authority until after the monies were transferred by the wife – where the bank is pursuing the wife in the Equity Division of the New South Wales Supreme Court for a claim of unjust enrichment and/or restitution for the return of the monies – where the wife seeks an injunction against the bank pursuant to s 90AF of the Act – power of the Court to make orders against third parties – consideration of Part VIIIAA of the Act – held provisions of s 90AF satisfied – injunction issued. Legislation: Family Law Act 1975 (Cth) ss 79, 90AE, 90AF, 114. Cases cited: Christie v Christie (2007) 37 Fam LR 181
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Fried & Ors v National Australia Bank Ltd & Ors (2001) 111 FCR 322
Hunt v Hunt and Ors (2006) 36 Fam LR 64
National Australia Bank Ltd v Hokit Pty Ltd (1996) 39 NSWLR 377
Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
Wasser & Wasser [2006] FamCA 163
Division: Division 1 First Instance Number of paragraphs: 72 Date of last submission/s: 7 April 2022 Date of hearing: 24 March 2022 & 7 April 2022 Place: Sydney on 24 March 2022, Brisbane (via video-link) on 7April 2022 and delivered in Brisbane (via telephone-link) Counsel for the Applicant: Mr Batey Solicitor for the Applicant: Diamond Conway Lawyers Counsel for the Respondent: Ms Coulton Solicitor for the Respondent: Tahota Law ORDERS
SYC 732 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MAH
Applicant
AND: MR SAN
Respondent
ORDER MADE BY:
HOWARD J
DATE OF ORDER:
12 MAY 2022
THE COURT ORDERS UNTIL FURTHER ORDER:
1.That pursuant to section 90AF of the Family Law Act 1975 (Cth), B Bank ACN … be restrained by injunction from continuing the proceedings number … in the Supreme Court of New South Wales Equity Division (Commercial List) pending further determination of the proceedings between the Wife and the Husband in the Federal Circuit and Family Court of Australia (Division 1), being the proceedings number SYC732/2022.
2.That this matter be adjourned for further submissions as to costs and further directions (by way of video link) on a date to be fixed in the Federal Circuit and Family Court of Australia (Division 1) at Brisbane.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mah & San has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
REASONS FOR JUDGMENT
HOWARD J:
BACKGROUND
The applicant wife in this matter is Ms Mah (“the wife”). The wife was born in China in 1972.
The respondent husband is Mr San (“the husband”). The husband was born in China in 1956.
The parties commenced a relationship in about 1994. The parties married in 1997. The wife says that the parties separated on a final basis in July 2019 – although they remain living under one roof.
The parties have one adult daughter, Ms C. Ms C was born in 1999. The husband has a child from a previous relationship. His name is Mr D. He was born in 1992. Mr D lived with the wife and the husband during the course of their relationship.
The wife has annexed to her affidavit filed 21 March 2022 four documents (Annexures A, B, C and D) which she says are divorce agreements presented to her by the husband. They are written in the Chinese language. My attention has not been drawn to any translation of these documents – although the wife provides some information in her affidavit concerning the terms of the various versions of the “Divorce Agreements”.
The matter currently before the Court relates to an interlocutory application filed by the wife (by way of an Amended Initiating Application filed 21 February 2022). The wife originally sought an interlocutory order in the following terms:
“8. That the proceedings number […] in the Supreme Court of New South Wales Equity Division Commercial List be stayed pending determination of the proceedings between the Wife and the Husband in the Federal Court and Family Court of Australia being proceedings number SYC732/2022.”
Those proceedings in the Supreme Court of New South Wales Equity Division are proceedings brought by B Bank ACN … against the wife. The precise terms of the orders sought by the wife at the hearing of the application on 7 April 2022 were varied. That variation was made known to the husband and the B Bank by virtue of the wife’s Outline of Case document filed on 23 March 2022. In Part E (at paragraph 3 of that document) the wife sought the following order:-
“3. That pursuant to section 90AF of the Family Law Act, [B Bank] be restrained by injunction from continuing the proceedings number […] in the Supreme Court of New South Wales Equity Division Commercial List pending further determination of the proceedings between the Wife and the Husband in the Federal Circuit and Family Court of Australia being proceedings number SYC 732/2022.”
B Bank are not currently a respondent in the proceedings before this Court. The matter originally came before me in Sydney on 24 March 2022. Prior to that date I had issued a direction requiring that B Bank be notified of the hearing and that the bank be given a chance to appear and make submissions. The bank did appear on that day in Sydney and the parties reached agreement in relation to various orders. Those orders disposed of several of the interlocutory issues that were outstanding between the wife and the husband. The following orders were made on that day:
“1. That on or before 12 noon, 28 March 2022, [B Bank] to provide a draft Tripartite Deed of Release to the parties.
2. That the [E Bank] Account No. […98] in the name of the Husband and Wife be forthwith divided equally between the parties.
3. That an amount of $100,000 each be paid to the Husband and Wife forthwith from [F Bank] Account No. […56].
4. That the balance of the [F Bank] Account No. […56] after payment of the amount provided in Order 4 be deposited into a controlled money account in the names of the parties with Diamond Conway Solicitors.
5. That the parties provide full disclosure of all bank accounts, together with bank statements from date of separation to date for all bank accounts, howsoever described, in which they have a legal or beneficial interest in their personal name or with any other person or corporation or trust by 5 April 2022.”
Those orders were made by consent. At the hearing on 24 March 2022 Mr Batey of counsel appeared on behalf of the wife, Ms Coulton of counsel appeared on behalf of the husband and Mr G of counsel appeared on behalf of B Bank.
The matter was then adjourned for a further Interim Hearing by video link to 7 April 2022.
On 7 April 2022, Mr G of counsel provided to the Court a supplementary outline of submissions. By those written submissions, the B Bank conceded that this Court has power pursuant to s 90AF of the Family Law Act 1975 (Cth) (“the Act”) to grant the kind of injunction sought by the wife against B Bank. By those submissions – the bank also submitted that the Court would not exercise its discretion to grant the injunction. For present purpose, it is noted that B Bank provided a proposed short minute of order. That document clearly represented an open offer to the wife and the husband which would have enabled the proceedings in the Supreme Court of New South Wales to be discontinued. Those proceedings were commenced by B Bank against the wife in the Supreme Court of New South Wales Equity Division in early 2022. By the Supreme Court proceedings B Bank seeks restitution of $2,590,271 (alternatively $2,574,100), which it says concerns funds made available to the wife by mistake.
As noted, in the matter currently before this Court the wife seeks to restrain B Bank from continuing with those proceedings in the Equity Division of the Supreme Court of New South Wales Supreme Court – pending further determination of these family law proceedings between the wife and the husband.
Both B Bank and the husband opposed this application by the wife.
The proceedings in the Supreme Court relate to the B Bank account number ending in #...39. That account is in the name of the husband. The husband authorised the wife to operate the account.
Just before the final separation between the wife and the husband, the husband attended the Suburb H branch of B Bank and requested that the bank remove the wife’s authority to operate the account (#...39). The bank failed to process the request made by the husband.
The money that was originally in the B Bank account #...39 appears to be the only substantial asset of these parties in Australia. In addition to the money that was formerly in account #...39, the parties have property in China – including a house in City J and a business. The husband estimates the value of the house in City J as approximately AUD$3 million. There has been no estimate as to the value of the business which the husband operates in China, the K Company, of which the husband has an 80% share. The husband attributes a nil value to it in his Financial Statement filed 30 March 2022. The wife seeks a direction that the business be valued.
The house in City J is owned in joint names – although I do not currently have the benefit of any evidence concerning property law in China and the precise rights and entitlements of the wife and the husband in respect of the property in City J.
The wife says that she had become fearful that the husband would transfer the money in the B Bank account #...39 from Australia to China – beyond the jurisdiction of this Court. The wife says that the husband had requested that she sign a divorce agreement. It is apparent that the wife was not willing to sign a divorce agreement. At paragraph 30 of the wife's affidavit filed 21 March 2022 she states:-
“30. As I previously depose to in this Affidavit and in my February Affidavit, I had authority from [Mr San] to operate online [Mr San’s] [B Bank] Account #...39 and following [Mr San’s] demands that I sign what he referred to as “Divorce Agreement” and in fear that [Mr San] would transfer monies in Australia to China which may be beyond the jurisdiction of this Court, I transferred the following sums to my B Bank accounts:
(a) 12 March 2020 ~ $500,000 to my B Bank Account #...12 ("my B Bank Account #...12");
(b) 30 March 2020 ~ $500,000 to my B Bank Account #...39 ("my B Bank Account #...39");
(c) 27 July 2020:
(i) $500,000 to my B Bank Account #...39;
(ii) $500,000 to my B Bank Account #...39;
(d) 28 July 2020 ~ $500,000 to my B Bank Account #...39,
a total of $2,500,000. Annexed to this Affidavit and marked with the letter "G" are composite statements of my B Bank accounts together with statement of my CBA Account showing the above transactions.”
The husband says that he first became aware that the B Bank account #...39 had no money in it in late 2020 (I note paragraph 39 of the husband’s affidavit filed 30 March 2020).
The husband’s evidence is slightly bewildering. It is probably capable of further explanation at the trial. The husband does not seem to accept that separation occurred under one roof in mid-2019. In paragraph 41 of his affidavit, the husband states that between June 2020 and September 2020 the parties lived together as a “normal couple as a husband and wife”. The husband says further in that paragraph:-
“…During this period [Ms Mah] never advised me about any separation as a married couple or settlement of property.”
The husband states further in paragraph 44 of his affidavit that:-
“During the period from the date of Jan 2021 to December 2021, [Ms Mah] and I lived together as normal couple and [Ms Mah] did not mention any issue regarding separation or settlement of property…”
This picture of marital bliss painted by the husband in paragraphs 41 and 44 of his affidavit filed 30 March 2022 appears to be somewhat at odds with his evidence in paragraphs 35 and 36 of the same affidavit where he stated:-
“35. In early 2019, l asked [Ms Mah] to return the USB security key of my [B Bank's] account ending in …39 but [Ms Mah] refused to return it. At that time, the majority of the savings were in that account in my name with B Bank.
36. On 9 April 2019, I went to the [B Bank's] [Suburb H] branch and signed a requisite form to cancel any authority of [Ms Mah] to access my account ending …39 in any way which included internet and mobile banking.”
It is not altogether clear to the Court (at this point in time) why the husband sought to withdraw the wife’s authority to operate account number #...39 in April 2019 – if the husband and the wife were continuing to live harmoniously in the one residence as husband and wife until (on the husband's version) at least early 2022 (note paragraph 46 of the husband’s affidavit). Furthermore, it is not clear to the Court (at present) why the husband gave the wife a draft “Divorce Agreement” in or about July 2019 (paragraph 60, Husband’s affidavit) – noting his evidence in paragraphs 41 and 44.
At this point in time I do not need to resolve the apparent ambiguities contained within the husband’s affidavit. I have noted what the husband says in paragraphs 33 and 34 of his affidavit – but I still consider, that further explanation is required from the husband in relation to the matters to which I have referred.
For present purposes, the husband appears to have spoken to the B Bank in early 2022. This is apparent from the letter which is Annexure C to the husband's affidavit. This a letter from B Bank to the husband dated 17 February 2022 and refers to the “recent communications” between the husband and B Bank in relation to account #...39. In the letter from B Bank to the husband dated 17 February 2022, I also note the following:-
“Withdrawn Funds
9. As you are aware, amounts were withdrawn from the Account after 9 April 2019.
10. On or around 12 January 2021, [B Bank] received a letter from a solicitor acting for [Ms Mah] informing [B Bank] that $2,574,100 (Withdrawn Funds) had been transferred from your Account (copy enclosed).
11. The letter also said words to the effect, among other things, that:
(a) [Ms Mah] asserts that the Withdrawn Funds are joint funds notwithstanding the Account was solely in your name;
(b) the solicitor had written to you to inform you that [Ms Mah] would not deal with $2,000,000 standing in her [F Bank] Account other than by consent of yourself or a Family Law order;
(c) the solicitor was in the process of commencing Family Law proceedings.
12. [B Bank's] solicitors have recently contacted [Ms Mah’s] solicitors to seek an update regarding the status of the Family Law proceedings foreshadowed in the letter of 12 January 2021.
13. On 10 February 2022, [Ms Mah’s] solicitors informed [B Bank’s'] solicitors that those Family Law proceedings have been commenced.
14. The solicitors for [Ms Mah] have also informed our solicitors that the $2,000,000 referred to above remains in a [F Bank] Account.
15. Based on communications with [Ms Mah’s] solicitors, [B Bank] understands that [Ms Mah] asserts:
(a) the Withdrawn Funds form part of the property of your marriage with [Ms Mah] - which [Ms Mah's] solicitors have informed us is in the order of $7,500,000;
(b) the Family Law proceedings are the most appropriate and proper forum to determine any dispute between you and [Ms Mah] in respect of the Withdrawn Funds - noting that [Ms Mah] asserts an entitlement to the Withdrawn Funds;
(c) the proposed Family Law proceedings will make orders in relation to the Withdrawn Funds, and any adjustment of liabilities and assets as between you and [Ms Mah].
16. Given the assertions above and the pending Family Law proceedings, [B Bank] is not prepared to agree to your request for the Withdrawn Amount to be paid to you.
17. [B Bank] is continuing to investigate the matter, and invites you to explain to [B Bank], for its consideration, why you consider the Withdrawn Amount should be paid to you by [B Bank] in circumstances where funds appear to remain in [Ms Mah']s possession, there are Family Law proceedings on foot and [Ms Mah] asserts that this is property of your marriage. We will then consider the matter further.”
The proceedings were commenced by the bank against the wife in the Equity Division of the Supreme Court of New South Wales in early 2022. The bank did not tell the husband of this fact. Indeed, in paragraph 20 of the letter, B Bank told the husband that it was “considering its position regarding the preservation of the funds, which may include proceedings against [Ms Mah].”
Of particular relevance, for present purposes, is the fact that the bank concedes (in paragraph 13 of the letter dated 17 February 2022) that the wife’s solicitors informed the bank's solicitors on 10 February 2022 that the wife had commenced proceedings in the family law jurisdiction.
Notwithstanding being in receipt of that information – the bank decided to commence proceedings against the wife in the Equity Division on 16 February 2022.
A thumbnail sketch of the property pool at the moment reveals that the parties have, at least, the following assets:-
(a)$1.8 million currently in a controlled monies account in the names of both the wife and the husband with Diamond Conway Solicitors (the solicitors for the wife);
(b)The City J property – which the husband estimates has as a value of AUD$3 million; and
(c)Approximately $450,000 which the parties received (50 per cent each) pursuant to the consent orders of 24 March 2022.
I note that the bank told the husband in the letter of 17 February 2022 (paragraphs 16 and 17) that it would not be paying to the husband the $2,574,100 (referred to as the withdrawn amount) – “in circumstances where funds appear to remain in [Ms Mah’s] possession, there are family law proceedings on foot and [Ms Mah] asserts that this is property of your marriage.”
There is significant merit in that comment by the bank. I will return to the point shortly.
As noted, in B Bank’s supplementary outline (dated 6 April 2022) – the bank conceded that the Court has power under s 90AF of the Act to make the kind of injunction sought against the bank. As to whether the Court should exercise its discretion and grant the injunction sought by the wife is another question.
Section 90AF of the Act states:-
“90AF COURT MAY MAKE AN ORDER OR INJUNCTION UNDER SECTION 114 BINDING A THIRD PARTY
(1) In proceedings under section 114, the court may:
(a) make an order restraining a person from repossessing property of a party to a marriage; or
(b) grant an injunction restraining a person from commencing legal proceedings against a party to a marriage.
(2) In proceedings under section 114, the court may make any other order, or grant any other injunction that:
(a) directs a third party to do a thing in relation to the property of a party to the marriage; or
(b) alters the rights, liabilities or property interests of a third party in relation to the marriage.
(3) The court may only make an order or grant an injunction under subsection (1) or (2) if:
(a) the making of the order, or the granting of the injunction, is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage; and
(b) if the order or injunction concerns a debt of a party to the marriage—it is not foreseeable at the time that the order is made, or the injunction granted, that to make the order or grant the injunction would result in the debt not being paid in full; and
(c) the third party has been accorded procedural fairness in relation to the making of the order or injunction; and
(d) for an injunction or order under subsection 114(1)—the court is satisfied that, in all the circumstances, it is proper to make the order or grant the injunction; and
(e) for an injunction under subsection 114(3)—the court is satisfied that, in all the circumstances, it is just or convenient to grant the injunction; and
(f) the court is satisfied that the order or injunction takes into account the matters mentioned in subsection (4).
(4) The matters are as follows:
(a) the taxation effect (if any) of the order or injunction on the parties to the marriage;
(b) the taxation effect (if any) of the order or injunction on the third party;
(c) the social security effect (if any) of the order or injunction on the parties to the marriage;
(d) the third party’s administrative costs in relation to the order or injunction;
(e) if the order or injunction concerns a debt of a party to the marriage—the capacity of a party to the marriage to repay the debt after the order is made or the injunction is granted;
Note: See paragraph (3)(b) for requirements for making the order or granting the injunction in these circumstances.
Example: The capacity of a party to the marriage to repay the debt would be affected by that party’s ability to repay the debt without undue hardship.
(f) the economic, legal or other capacity of the third party to comply with the order or injunction;
Example: The legal capacity of the third party to comply with the order or injunction could be affected by the terms of a trust deed. However, after taking the third party’s legal capacity into account, the court may make the order or grant the injunction despite the terms of the trust deed. If the court does so, the order or injunction will have effect despite those terms (see section 90AC).
(g) if, as a result of the third party being accorded procedural fairness in relation to the making of the order or the granting of the injunction, the third party raises any other matters—those matters;
Note: See paragraph (3)(c) for the requirement to accord procedural fairness to the third party.
(h) any other matter that the court considers relevant.”
In Christie v Christie (2007) 37 Fam LR 181 (“Christie”) Cronin J was faced with a reasonably similar set of circumstances to those currently before the Court. His Honour relied upon the provisions of Part VIIIAA of the Act and granted an injunction preventing third parties to the marriage from continuing proceedings in the Supreme Court of Victoria. Those third parties to the marriage were respondents in the Family Court proceedings. That is not currently the case here – so far as the third party (B Bank) is concerned. However no point was raised in respect of that difference at the hearing of the application. In any event, it is apparent from the terms of Part VIIIAA that this Court has the jurisdiction to make an order restraining a third party from doing certain acts – even if that third party is not a respondent in the family law proceedings.
Cronin J canvassed this Court’s power to grant an injunction against third parties. His Honour referred to cases such as Hunt v Hunt and Ors (2006) 36 Fam LR 64 (“Hunt”) along with Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 and CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345. I have taken those decisions into account. His Honour stated between paragraphs 47 to 53 of the decision in Christie as follows:-
[47] More recently, in Hunt v Hunt O’Ryan J dealt with this court’s power to interfere with the right of a third party to take action in another court. It is important to note that in that case, no-one argued that there was no jurisdiction to make the orders sought. In his reasons for judgment, O’Ryan J said:
[69] Where proceedings are pending in a court which could be brought in another jurisdiction, a court may adjourn the proceedings or temporarily or permanently stay the proceedings. A court may stay the local proceedings if it is satisfied that it is a clearly inappropriate forum: Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; 97 ALR 124. Further, provided it has personal jurisdiction over the party concerned a court may restrain a domestic or foreign party from taking or continuing proceedings in a foreign or local jurisdiction and an order in such terms is referred to as an anti-suit injunction.
[70] The source of power to make an anti-suit injunction is either under s 34 of the Family Law Act or the inherent jurisdiction of the Family Court to make orders which are necessary and appropriate to avoid injustice. In this case it is not contended by any party that I lack the power to grant the injunction.
[48] His Honour referred to the views expressed by the High Court in CSR Ltd v Cigna Insurance Australia Ltd and said:
[72] The exercise of the power to grant an anti-suit injunction is not restricted to defined or closed categories. It is to be exercised when the administration of justice requires, or where necessary for the protection of the court’s own proceedings or process. The power may also be exercised to avoid an injustice. The approach to be taken, however, in considering whether to grant an application for an anti-suit injunction is not the same as that taken to an application for a stay on the basis that the local jurisdiction is an inappropriate forum.
[49] On 9 February 2007, the Full Court dismissed an appeal against the decision of O’Ryan J and said (at [33]):
[33] There was no issue before O’Ryan J or before us that in the appropriate circumstances the Family Court has the power to make the anti-suit injunction which the wife sought in this case (that is, an anti-suit injunction directed to proceedings in another Australian superior Court), nor that the source of such power was, as his Honour explained (in paragraph 34 of his reasons), either s 34 of the Act or the inherent (or, we would add, implied) jurisdiction of the Family Court “to make orders which are necessary and appropriate to avoid injustice”. (See in relation to anti-suit injunctions directed to proceedings in a foreign court Dobson and Van Londen (2005) 33 Fam LR 525; FLC 93-225; [2005] FamCA 479 at [42], which was the subject of an unsuccessful application for special leave to the High Court specifically in relation to an anti-suit injunction made by this court in relation to proceedings in the Netherlands).
[50] The Full Court said (at [39])
[39] In CSR under the heading “Principles governing stay of proceedings on forum non conveniens grounds and the grant of anti-suit injunctions” (at 389–390) the majority explained that:
[t]he question whether a dispute as to legal rights should be litigated in the courts of one country or those of another is one that permits of resolution, if resolution is possible, by one court staying its proceedings in favour of the other or by it granting an anti-suit injunction restraining a person amenable to its jurisdiction from commencing or continuing proceedings in that other country[,]
And:
[a]lthough stay orders and anti-suit injunctions are not governed by the same principles, … in some cases, the power to grant anti-suit injunctions is an aspect of the power which authorises a court to stay its own proceedings … [a]nd … that, in other cases, the power to grant anti-suit injunctions should not be exercised without the court concerned first considering whether its own proceedings should be stayed.
[51] Further, the court said (at [51]):
[51] It will thus be seen that not only is there no general rule that an anti-suit injunction will not be granted unless the applicant for the injunction has sought a stay in the “foreign jurisdiction”, but more significantly for present purposes, that the High Court majority considered that such a rule would serve no purpose in cases where an injunction is sought to protect the integrity of the proceedings or the processes of the court concerned. As we have already pointed out, one of the bases for the injunction which was granted in this case was to protect this court’s proceedings and processes.
[52] Insofar as I am being asked to ignore the rights of third parties to bring their proceedings in their court of choice and am stepping away from the principle of comity between courts, I say that having regard to what I have set out in [24], [34] and [35] above, there is a serious matter to be tried in this court and I am endeavouring to protect the process of this court by granting the injunction against parties who have been participating in this court’s process.
[53] As I have set out however, the wife has chosen to proceed under Pt VIIIAA of the Family Law Act.”
(Footnotes omitted)
It will be apparent from the background that I have provided earlier in these reasons – that there is a serious matter to be tried in this Court. These are proceedings pursuant to s 79 of the Act. Less than one half of the total property pool (comprising approximately AUD$5.25 million) is property that is situated within this jurisdiction. The balance is situated in China – beyond the jurisdiction of this Court. It is an important and relevant consideration for this Court to take into account – that it (this Court) should protect its own processes. B Bank appeared and made submissions on 7 April 2022. The bank had appeared on 24 March 2022 and had tried to get the parties to reach an accommodation – so far as the bank is concerned.
As in Christie – the wife here seeks the injunction pursuant to Part VIIIAA of the Act.
Part VIIIAA has an extremely wide reach. This much was made clear by O’Ryan J in Hunt and by Cronin J in Christie (especially at paragraph 63).
In Christie at paragraph 74, Cronin J stated that:-
“[74] The word “commencing” may be read literally to mean “starting”. To a large degree that would make a nonsense of the provision. For example, a non-marriage party could thwart the whole intention of the legislation simply by issuing proceedings in another court. “Commencing” could also mean starting a hearing as distinct from initiating a process. Whatever the intention was, the issue needs clarification to overcome any difficulty.”
It seems to me that the Court does have the power to issue an injunction to restrain a person from continuing with proceedings that have already been commenced in another court. That would especially be the case (in my view) if the non-marriage party was aware of the proceedings in the family law jurisdiction – before commencing proceedings in the Supreme Court of a State or Territory – as is the case here. To restrict the Court to only having the power to restrain a person from commencing proceedings would, indeed, make a nonsense of the provision.
In any event, I note that s 90AF(2) can also be utilised to make the injunction sought by the wife. Cronin J in Christie noted further from paragraph 75:-
[75] Section 90AF(2) widens the scope of the provision so that in the s 114 proceedings, the court may direct: “a party to do a thing in relation to the property of the party to a marriage”.
[76] In respect of s 90AE(2) which carries identical words, O’Ryan J said (at [113]):
[113] When s 90AE(2) is read in conjunction with s 90AE(3), s 79 and Pt VIIIAA generally, it is clear that what is contemplated is not some arbitrary invasion of the rights of the Third Party but an alteration of those rights where they are sufficiently connected to the division of the property between parties to a marriage.
[77] The relevance of the connection to the division of property between the parties to the marriage is important.
[78] It would also seem odd that the parliament would limit the court’s power in relation to proceedings in other courts only before they have been commenced but not afterwards yet it would allow courts to order a non-marriage party to do a thing, for example, in relation to a debt of a party of the marriage regardless of whether there has been any proceeding in relation to the debt.
[79] Accordingly, I do not think anything significant turns on the word “commencing” in s 90AF(1)(b) but if I am wrong about that, s 90AF(2)(a) seems wide enough to cover the action of a creditor against a party to a marriage.”
SECTION 90AF
The wife has asked the Court to issue an injunction preventing B Bank from continuing with the proceedings in the Equity Division of the Supreme Court of New South Wales. The wife has asked the Court to issue this injunction by exercising its power under s 90AF of the Act. The Court’s powers (outlined in the statute above) are contained in s 90AF(1) and s 90AF(2). However, the Court is only permitted to issue an injunction under ss 90AF (1) or (2) if the matters contained in ss 90AF (3) and (4) are satisfied.
Section 90AF(3)(a)
In relation to s 90AF(3)(a) – the Court has to be satisfied that the granting of the injunction is “reasonably necessary” or “reasonably appropriate” – “to effect a division of property between the parties to the marriage”. This provision was considered by Cronin J in Christie at paragraphs 82 and 83. His Honour there made a reference to an earlier unreported decision of Bennett J in Wasser & Wasser [2006] FamCA 163. Cronin J in Christie stated at paragraphs 82 and 83:-
“[82] In this case, is it reasonably necessary to make the order? In what circumstance could it be argued that it was “reasonably necessary”? In an unreported decision of Bennett J on 27 February 2006 of Wasser & Wasser, her Honour granted a very limited injunction against a bankruptcy trustee because he was about to evict the wife and two children and sell the house in which they lived. Her Honour granted the injunction because the wife wanted to keep the house and was endeavouring to raise the finance. I think “reasonably necessary” means that without the order, the property proceedings between the husband and wife will be thwarted in the same way that Bennett J was referring to it.
[83] The provision goes on also to say “or reasonably appropriate and adapted” and I interpret those words to mean “convenient”. On what I have read in these proceedings, it would be more convenient for all issues to be determined in this court and the respondents would not be prejudiced.”
(Footnotes omitted)
In the case currently before the Court, I have reached the conclusion that without issuing the injunction to restrain B Bank from continuing its proceedings in the Equity Division of the Supreme Court of New South Wales – these property proceedings in this Court are likely to be “thwarted”. The parties concede that the property available for distribution in these s 79 proceedings includes the (approximately) $2.25 million currently in Australia. This includes the $1.8 million in the controlled money account in the names of both parties. The parties also have possession themselves (pursuant to the order of 24 March 2022) of approximately $226,000 each. There seems to be some other money in additional bank accounts – certainly in the name of the wife. The husband has not yet provided disclosure. There is at least $3 million which forms part of the property pool but is situated in the People’s Republic of China. There may be other property in China (for instance, the business referred to earlier). It remains to be seen whether that business has any value.
For present purposes, the only property that is within the jurisdiction is the (approximately) $2.25 million. That same money is also the subject of the litigation in the Equity Division of Supreme Court of New South Wales (although the bank’s claim is higher). It seems to me to be an unnecessary disruption to these property proceedings to allow B Bank to continue to litigate in the Equity Division in respect of (substantially) the only property of the parties to the marriage which is inside the jurisdiction. There could be an argument that, if B Bank were successful in its claim against the wife in the Equity Division of the New South Wales Supreme Court – that would merely mean a (possible) return of the $2.5 million to the B Bank account #...39 and hence the property would still be available for distribution in these proceedings. But at what cost and at what delay?
My view is further strengthened by reference to the other words contained in s 90AF(3)(a) – whether the granting of the injunction is “reasonably appropriate”. I say that it is reasonably appropriate. It is (As Cronin J pointed out in Christie) convenient – because it will enable all outstanding issues to be determined in this Court. B Bank will not be prejudiced. Even if B Bank does not become a respondent in these proceedings – they will be given leave to appear and make submissions in relation to the debt that they say is owing by the wife to the bank. B Bank will be accorded procedural fairness. Furthermore, this will alleviate the real concern of the bank (as articulated by B Bank’s counsel, Mr G at the hearing on 7 April 2022) that the bank remains exposed to the husband. The bank’s position in this regard will be protected by the litigation in this forum – the Federal Circuit and Family Court of Australia (Division 1). This Court has wide-ranging powers pursuant to, for instance, s 90AE(2) – as well as other powers – to make sure that the interests of the bank are not prejudiced.
To put it another way, if the wife and the husband are litigating in this Court – and B Bank have leave to appear and make submissions in relation to all aspects of the matter relating to their own interests – then there is, realistically, no chance that the husband will be able to, in the meantime, pursue the bank in another Court. It will be clear enough from these reasons for judgment as to why I take that view. Any such attempt by the husband is not likely to be looked upon favourably by this Court.
B Bank, via its counsel, proposed a solution on 7 April 2022. The bank provided what was essentially an open offer via a draft minute of order annexed to counsel’s written submissions. Each party's written outline of submissions will be made an exhibit in these proceedings. The written submissions contained in the outline of case provided on behalf of the wife will be Exhibit 1 and the written submissions of B Bank (including short minute of order annexed thereto) will be Exhibit 2. The wife was not keen on the costs order contained in paragraph 2 of the draft minute of order. The husband was not prepared to agree that he would not pursue the bank separately. I note the submission made by counsel for the husband on 7 April 2022 to this effect (Transcript 7 April 2022, p.10 lines 32–47).
This leaves open the very real possibility of three different sets of litigation. The property proceedings on foot in this Court; the current proceedings commenced by B Bank in the Equity Division of the Supreme Court of New South Wales; and thirdly, the husband's possible claim against B Bank – presumably to also be brought in the Supreme Court of New South Wales. This would result in a farcical situation if it were allowed to eventuate. It would make a mockery of the administration of justice in this country. The only way to prevent such an outcome is for this Court to act now and issue the injunction to prevent the bank from continuing its proceedings against the wife in the Equity Division of the New South Wales Supreme Court.
This strengthens my view that it is both reasonably necessary and reasonably appropriate to issue the injunction sought by the wife.
To my mind, s 90AF(3)(a) is satisfied.
Section 90AF(3)(b)
In relation to s 90AF(3)(b), I note that there is currently approximately (at least) $2.25 million still available in this jurisdiction. There is at least AUD$3 million property in China. I have no reason to doubt the bona fides of the parties to make available further funds from China (if ordered to do so by this Court) to satisfy the bank’s claim for $2.5 million – in the highly unlikely event that it should become necessary. The role or the position of the bank in this litigation – is like a revolving door. If the $2.5 million was placed back in the B Bank account number #...39 – it would nonetheless become immediately available to the parties via an order under s 79 of the Act. The money that would go into the B Bank account would, subsequently, return to the parties (or one of them) after the making of any s 79 order. As I say, a revolving door is the best analogy.
Given the following – between the money currently available in Australia and the property of the parties in China, and my view that there is no evidence to suggest bad faith on the part of either of the parties – the conclusion I have reached is that, at this point in time, it is not foreseeable that if the injunction is granted that the bank might not receive payment of its money in full.
Section 90AF(3)(c)
As to section 90AF(3)(c) – the B Bank has been accorded procedural fairness. They are represented by L Lawyers and their counsel, Mr G, appeared before this Court on 24 March 2022 and 7 April 2022. It is important to give full credit to the attempts made by Mr G to reach a sensible solution in respect of the application for the injunction.
Section 90AF(3)(d)
As to section 90AF(3)(d) – I am satisfied that in all circumstances, it is proper to issue the injunction. I am well aware of the fact that this amounts to interference with the rights of B Bank to pursue the wife in a court of the bank’s choosing – namely, the Equity Division of the Supreme Court of New South Wales. However, as the bank’s letter of 17 February 2022 addressed to the husband makes clear – as at 10 February 2022 the bank were made aware by the wife’s solicitor that she had instituted property settlement proceedings in this Court. The bank was also aware (as at 10 February 2022) that the wife’s solicitors were clearly of the view that this Court was the appropriate forum for the determination of matters relating to the property of the parties to the marriage. Whilst it is a matter for B Bank to choose which court it wanted to pursue the wife – the bank made its choice with the full knowledge that these family law proceedings were on foot and that the wife’s view was that the withdrawn funds formed part of the property pool of the parties to the marriage and that this Court was the most appropriate and proper forum for litigation in relation to the withdrawn funds. Indeed, it is worth reiterating what the bank said in paragraphs 16 and 17 of its letter dated 17 February 2022.[1] In those paragraphs, the bank stated:-
“16. Given the assertions above and the pending Family Law proceedings, [B Bank] is not prepared to agree to your request for the Withdrawn Amount to be paid to you.
17. [B Bank] is continuing to Investigate the matter, and invites you to explain to [B Bank], for its consideration, why you consider the Withdrawn Amount should be paid to you by [B Bank] in circumstances where funds appear to remain in [Ms Mah's] possession, there are Family Law proceedings on foot and [Ms Mah] asserts that this is property of your marriage. We will then consider the matter further.”
[1] Contained at Annexure C to the husband’s affidavit filed 30 March 2022 (p.33).
Frankly, B Bank has failed to properly explain to the Court why it should be permitted to continue litigation in the Equity Division of the New South Wales Supreme Court when it well knew that these proceedings were on foot and that the money in question (in the Supreme Court) was precisely the property that is at stake in this litigation. This part of B Bank’s conduct leaves a bit to be desired. For the very reasons that I have just stated (namely that the money in question is said to be property of the parties to the marriage and there are proceedings on foot in this Court in relation to that property) the bank declined to repay the withdrawn amount to the husband. So the bank relied upon these matters in deciding not to pay money to the husband – but now seems to want to sidestep those very same considerations for the hearing of this application.
I am not persuaded by any of the bank’s arguments concerning the apparent changing “character” of the money. The $2.5 million in question remains, in my view, property of the parties to the marriage. Whether this money is in the hands of the parties; or the controlled money account in the joint names of the parties; or back in the B Bank account #...39 in the husband's name – the money remains amenable to the jurisdiction of this Court and is capable of being subject to an order under s 79 of the Act. The reference by the bank to cases such as Fried & Ors v National Australia Bank Ltd & Ors (2001) 111 FCR 322 (“Fried”) and National Australia Bank Ltd v Hokit Pty Ltd (1996) 39 NSWLR 377 (“Hokit”) – are not helpful for this litigation. The bank may be construed to have paid away its own money. The bank may have every right to pursue the wife for unjust enrichment or restitution – but it does not change my view that the correct forum for these various claims and issues to be worked through – is this Court. As I have made it clear already, the bank will not in any way be prejudiced by participating in the litigation in this Court. To be fair to Mr G of counsel, he did make the point that his argument relating to the decisions in Fried and Hokit are only subsidiary or minor arguments. His real argument was that the Court should not exercise its power to grant an injunction and he made submissions relating to s 90AF in that regard. It will be apparent from these reasons that I reject his submissions. It is worth pointing out the following. There is approximately (at least) $2.25 million available in this jurisdiction. If the parties spend their respective $226,000 in living expenses and litigation expenses prior to the trial – there will still remain $1.8 million in the controlled money account. That would leave a balance of $700,000 to make up B Banks claim for $2.5 million – which it says is currently owing to it by the wife. If the matter is litigated in this Court and the parties refused to bring onshore an additional $700,000 to make up the bank’s claim of $2.5 million – this Court has the power pursuant to section 90AE(2)(b) to make an order in the s 79 proceedings to limit the bank's liability to the husband.
I consider that s 90AF(3)(d) is satisfied.
Section 90AF(3)(e)
As for s 90AF(3)(e) – in my view, it is both just and convenient to grant the injunction. The wife has made it clear (via her counsel, Mr Batey) that in the event that the injunction is not granted – the wife will, essentially, be left with no alternative but to go to the Supreme Court of New South Wales and ask that Court to stay those proceedings and, essentially, transfer the proceedings currently on foot in the Equity Divison to this Court.
The view that I have formed is that a judge sitting in the Equity Division of the Supreme Court of New South Wales is likely to make that order in a heartbeat. If I do not grant this injunction, then the Supreme Court of New South Wales is highly likely to send that litigation to this Court. This ties in with my consideration relating to comity. To put it another way – the view that I have formed is that the Supreme Court of New South Wales would likely be disappointed if I did not issue this injunction. I have considered (within the context s 90AF(3)(e)) – the submission on behalf of the husband that the wife removed the money from the husband’s B Bank account #...39 inappropriately and well knowing that she ought not do it. However I note that it does remain the case that she was at all times an authorised signatory to the account. The fact that the husband had withdrawn that authority was never activated by the bank. The wife was not notified that she was no longer a signatory. The wife says she moved the funds because she had been presented with an “unfair divorce agreement” and that this was the only money available in Australia. Those matters remain to be determined at a trial – at least in relation to the allegation of an “unfair divorce agreement”. It is the case that the wife transferred approximately $400,000 to her father. I am not in a position to make a finding about that money at this point in time. What I do know is that the majority of the money moved by the wife from the B Bank account #...39 remains in a controlled money account in the names of both parties. That is, this is not one of those cases where a party to a marriage has moved money from one account to another – and then dissipated that money. There are sufficient assets available between the property in Australia and the property in China to enable the Court to, eventually, make a just and equitable order under s 79. As noted earlier, there are numerous outstanding and unresolved questions relating to precisely what has been going on between this married couple. The claims by the husband seem completely at odds to the claims by the wife concerning such matters as – when did they actually separate and what happened in the meantime in relation to the money in question.
There is a good deal of overlapping between some of the subsections in s 90AF(3). For the reasons contained here in these reasons for judgment – I am satisfied that is just and convenient to grant the injunction sought.
Section 90A(3)(f) and s 90AF(4)
Pursuant to s 90AF(3)(f), this Court must be satisfied that the injunction takes into account the matters contained in s 90AF(4)
I have had regard to the matters set out in s 90AF(4) – my attention has not been drawn to any evidence relating to the taxation effects of the issuing of the injunction, either on the parties to the marriage or B Bank or any other third party.
I cannot imagine that there are any social security effects on the parties to the marriage in relation to this injunction. There is certainly no evidence of it.
As to the third party’s (B Bank) administrative costs in relation to the injunction and, indeed, in relation to the bank’s litigation costs in the Equity Division – these are all matters that can be adequately raised (by B Bank) in these proceedings and this Court has the power to grant costs to the bank – if this Court considers that it is just to do so. That is an argument for another day.
As to section 90AF(4)(e) – in one respect, the granting of this injunction does concern (according to B Bank) a debt of a party to the marriage – namely, the wife to the bank. I have already considered the question of the repayment of the debt after the injunction is granted. The view that I have formed is that there will be sufficient funds available (either from the property in Australia or the property in China) to repay the bank and the point I made previously I will reiterate here – that to the extent that the parties fail to bring onshore sufficient money to make good the debt which is said to be owed to the bank – this Court has the power pursuant to s 90AE(2)(b) to alter the liability of the bank in relation to the husband.
I have no doubt that the B Bank has the economic, legal and other capacities necessary to comply with the injunction (s 90AF(4)(f)).
As to s 90AF(4)(g) – the bank has made submissions. I have had regard to all of those submissions – both the written submissions and the oral submissions. To the extent necessary, I have referred to those submissions.
Pursuant to s 90AF(4)(h), the Court is required to take into account any other matter which the Court considers relevant. In the event that the Court does not issue the injunction to halt the proceedings in the Equity Division of the Supreme Court of New South Wales – there will be two sets of litigation on foot. One possible outcome is that the bank obtains a judgment against the wife for $2.5 million. The bank would not likely be able to recover its money until the litigation here in this Court has been finalised. In the meantime, the costs of two sets of litigation would mount. Would the bank serve a bankruptcy notice on the wife? Is it the case that this Court would then be asked by the wife to issue an injunction against the bank in that respect? Or perhaps this Court would be asked by the wife to issue an injunction against a Trustee in Bankruptcy who was seeking to recover the wife's share of the money in the controlled monies account. The litigation might never end. It would become a runaway train – unless this Court acts now. This is the correct forum. Proceedings were instituted here first. The bank's position can be comprehensively protected by:-
(a)Becoming a party here in this litigation (note s 79(10) of Act); or
(b)Alternatively, as an interested third-party, B Bank will be granted leave by this Court to appear and to make submissions at the trial in this matter as to the appropriate orders relating to those matters that affect the bank’s interests.
I did turn my mind to the question of whether it was appropriate for these s 79 proceedings to be stayed. In my view, it is not appropriate to take that course of action. The matters in dispute in both sets of proceedings relate to or involve property of the parties to the marriage. Obviously, that includes the matters in dispute between the wife and the husband in this Court – but it also includes the subject matter of the proceedings in the Supreme Court of New South Wales. In these circumstances, this Court exercising family law jurisdiction is the most appropriate and convenient Court for all these various matters to be litigated.
CONCLUSION AND ORDERS
Pursuant to the provisions of Part VIIIAA of the Act and for the foregoing reasons contained herein, I propose to grant the injunction sought by the wife.
I will list this matter again for submissions in relation to costs. I note that the wife seeks her costs of this application and the matter may need some further directions in preparation for trial. It may be the case that B Bank applies to be joined to this litigation as a respondent. That is a matter for the bank. As I have indicated, B Bank will be granted leave (should the bank seek leave) to appear at the trial and to make submissions in relation to any matters that might affect the bank’s interests.
I certify that the preceding seventy-two (72) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Howard. Associate:
Dated: 13 May 2022
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