Marello and Marello (No. 2)

[2013] FamCA 473

FAMILY COURT OF AUSTRALIA

MARELLO & MARELLO (NO. 2) [2013] FamCA 473

FAMILY LAW – PROPERTY – INJUNCTION – where judgment has been delivered effecting a property settlement between the parties on a final basis – where the applicant husband now seeks an injunction the effect of which is to afford the applicant a veto over the purchase of a property by the respondent wife – where the purchase of a property by the respondent was anticipated and accounted for in the final property judgment – where the applicant contends that the injunction is necessary to ensure the respondent has sufficient funds to meet any costs order made against her – where no costs order has been made – where there is no current entitlement by the applicant to any amount that the injunction seeks to protect –  where the injunction sought has the potential to affect third party interests and those third parties were not parties to the application – whether the injunction sought should be made – where the balance of convenience and the interests of justice favour not making the injunction – application for injunction dismissed.

Family Law Act 1975 (Cth)

Abella & Anderson [1987] 2 Qd R 1
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380
Frigo v Culhaci (Unreported, New South Wales Court of Appeal, 17 July 1998)
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
Waugh & Waugh (2000) FLC 93-052

APPLICANT: Mr Marello

RESPONDENT: Ms Marello

FILE NUMBER: BRC 11438 of 2010

DATE DELIVERED: 11 June 2013

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 11 June 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hackett

SOLICITOR FOR THE APPLICANT: Hirst & Co

COUNSEL FOR THE RESPONDENT: Mr Page SC

SOLICITOR FOR THE RESPONDENT: McMillan Legal

Orders

Husband’s application for an injunction

1. The husband’s application for an injunction filed on 5 June 2013 is dismissed.

2. Any application for costs of and/or incidental to the husband’s application for an injunction is to be filed by 4:00pm, 14 June 2013 and will be heard contemporaneously with the husband’s application for costs of the proceedings for final relief on 29 July 2013.

3. The parties file and serve any material in support of, or any Response or material in answer to, any application for costs filed in accordance with paragraph 2, by 4:00pm, 5 July 2013.

4. The parties file and serve written submissions in respect of any application for costs in accordance with paragraph 2, by 4:00pm, 24 July 2013.

Husband’s application for costs

1. The husband’s application for costs filed on 5 June 2013 be adjourned for hearing to 10:00am, 29 July 2013 before Justice Murphy.

2. The wife file and serve a Response to the husband’s application for costs by 4:00pm, 14 June 2013.

3. The parties file and serve any material in support of or in response to any application for costs by 4:00pm, 5 July 2013.

4. The parties file and serve written submissions in respect of any application for costs by 4:00pm, 24 July 2013.

IT IS NOTED THAT
The husband be entitled to rely upon the Outline of Argument filed by leave today and any material already filed in support of the two Applications in a Case filed by him on 5 June 2013.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Marello & Marello (No. 2) 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 BRISBANE

FILE NUMBER: BRC 11438 of 2010

Mr Marello

Applicant

And

Ms Marello

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. The husband’s application for an injunction was listed urgently before me today.  He seeks these orders in that application:

   1.That pending the determination of the Husband’s Application in a Case for costs and compliance by the Wife with any order made arising from that application, the Wife be restrained and an injunction be granted restraining her from:

   (a)doing anything or signing any document to encumber, mortgage or deal with her interest in the property at [B Street, Brisbane Suburb 1] in the State of Queensland (“the [B Street] property”); and

   (b)dealing with any proceeds of sale of the property at [F Street, Brisbane Suburb 2] in the State of Queensland (“the [F Street] property”) to which she is entitled pursuant to any order of this Court other than to place them in a bank account in her name

   Except upon compliance with paragraph 2 of these orders.

   2.(a)       That the Wife provide to the Solicitors for the Husband a copy of any contract which she has signed since 1 January 2013, whether in her own name, jointly with any other person or on behalf of an entity which she controls or has an interest in for the purchase of any real property (“the intended property”) and any document amending the said contract;

   (b)That the Wife provide to the Solicitors for the Husband a copy of any letter from any bank or financial institution offering to advance funds relating to the purchase of the intended property;

   (c)That the Wife certify in writing to the Husband, with adequate particulars, that the legal interest of the Wife in the intended property is not less than her legal interests in the [B Street] property and her entitlement to the proceeds of sale of the [F Street] property arising pursuant to the judgement of Murphy J of 19 April 2013; and

   (d)The Husband agrees in writing, within 1 business day of receiving the Wife’s certification pursuant to paragraph 2(c) hereof, that he accepts the accuracy of the Wife’s said certification.

   3.That should the parties be in dispute or should the Husband not agree as provided in order 2(d) hereof the parties have liberty to apply.

   4.That the Wife pay the Husband’s costs of and incidental to this Application.

   5.Such further or other order as this Honourable Court deems necessary.

2. The urgency derives by reason of the sale settlement of the former matrimonial home this afternoon.  That sale is to occur simultaneously with the settlement of a purchase by the wife and her new partner of a property in which they will live, together with the parties’ children during the time that the wife has them, and the children of her partner during the time that he has them. 

3. The sale provides for vacant possession of the former matrimonial home.  The wife deposes to having, as a result, nowhere to live by nightfall in the event that the purchase and sale does not simultaneously occur this afternoon.

4. The context in which this application is brought is important.  There was a trial of parenting and property issues between the parties, which concluded on 13 February.  I delivered reasons for judgment some eight weeks later, on 19 April 2013. 

5. As I record in the reasons, each of the parties requested the opportunity to formulate minutes of order giving effect to my findings, having each had the opportunity to take such legal and financial advice as they might wish.  I considered that course to be appropriate, but only insofar as it took account of findings made by me or – and I seek to emphasise these words – as might otherwise be agreed in writing.

6. It is important, I think, to quote here what I said at paragraph 121 of those reasons, in the context of affording the parties the opportunity to formulate orders which they themselves sought:

   121.I cannot, however, countenance that opportunity causing yet further disagreement and yet further expenditure on legal fees.  I cannot see that the process involves any particular difficulties.  I will, then, make orders to the effect that if agreed minutes are not forthcoming within 28 days, the matter be listed before me or another Judge, in which event, each of the parties shall file all such material as might be necessary so as to determine the issue of costs of and incidental to that appearance and the settling of the minutes of order.

7. The parties today indicate to the court that they have between them expended almost $1.2 million on legal fees (together with expert fees and the like).  The expenditure of that amount of money is a disgrace, and all the more so when the parties have a disabled child upon whom the money could much more commendably be spent. 

8. I observe in that respect that the net value of the assets of the parties as found by me was just over half a million dollars.  There was about a quarter of a million dollars in superannuation, and the net assets plus superannuation were approximately three quarters of a million dollars.  The parties have spent between them one and a half times the net pool of property and superannuation assets. 

9. That causes me great distress and does neither of them any credit.

The Terms of the Final Orders

1. Unsurprisingly perhaps, the parties were unable to agree on matters which, as it seems to me, ought readily have been able to be agreed upon. This morning, the parties presented orders, the vast majority of which were agreed, but in which there were some remaining matters which I was asked to determine.  Counsel for each of the parties agreed that I should do so, and I proceeded to determine all of those matters by reference to a minute of proposed order which became Exhibit A in the interim proceedings before me. 

2. One issue remains outstanding as between the parties in respect of those final orders.  The matters underpinning that issue do not need to be canvassed in these reasons, but as I indicated to the parties earlier, I will make orders that agreed minutes are to be forwarded to me by joint communication of the parties within seven days of today. As I indicated to the parties, I will also make provision in identical terms to paragraphs 4 and 5 of the Orders made by me on 19 April 2013 in the event that those orders are not forthcoming. 

The Application for Costs of the Trial

1. On 5 June 2013, the husband filed an application for costs in respect of the proceedings.  That application is of course made in circumstances where final orders have, for the reasons just outlined, not yet been made between the parties.  That application is not before me today for hearing.  No circumstances of urgency attend it.  I indicated to the parties that I would set down a date for the hearing of that application.

2. The application for costs will be set down for hearing on Monday, 29 July at 10.00 am. 

3. Debate attends the delivery of material in relation to that proposed order. Again, the merits or otherwise of that debate do not need to be traversed in these reasons, but in order to obviate any further difficulty, I propose to make directions in respect of that hearing.

4. I will require the wife, pursuant to the undertaking offered by Mr Page on her behalf, to file responses to the Applications in the Case, each filed by the husband on 5 June 2013, by 4.00 pm this Friday, 14 June.

5. I will also direct both parties to file any material in support of the application for costs of the proceedings, or in answer thereto, by not later than 4.00 pm on Friday, 5 July 2013. I will also direct that both parties file a written outline of argument in support of, or answer to, the application for costs of the proceedings.  I will include a notation in the order that the husband be permitted to rely upon the outline of argument handed up by his counsel today, together with the material already filed on the husband’s behalf.

The Application for Urgent Injunction

1. The application for the costs of the proceedings by the husband was accompanied by affidavit material sworn both by him and by his solicitor, Mr Hirst. For the purposes of the instant proceedings, it contends that the husband has a good prima facie case, by reference, in particular, to the making of what are asserted to be timeous offers to settle and, otherwise, assertions with respect to the conduct of the wife within the proceedings, as that expression is used in section 117(2A) of the Family Law Act 1975 (Cth) (“the Act”).

2. I accept that the husband in that material makes out a prima facie case that might activate a case pursuant to section 117(2A) of the Act.

3. I also accept and find that it could not be said that the application by him for costs is in any way frivolous or vexatious. 

4. Those matters form the foundation for the submission by his counsel that there is “a serious issue to be tried,” as that expression is used within the authorities in relation to interlocutory injunctions.

5. In Abella v Anderson [1987] 2 Qd R 1 at 2-3, McPherson J said that the function of an order of the type sort by the husband in this case is not to:

   … provide a plaintiff with security in advance for a judgment that he hopes to obtain, and that he fears might not be satisfied; nor is it to improve the position of the plaintiff in the event of the defendant’s insolvency.

6. That statement by his Honour has been approved in the High Court.  In Jackson v Sterling, a decision of the High Court reported at (1987) 162 CLR 612, Dawson and Wilson JJ said at 618:

   … the Mareva injunction represents a limited exception to the general rule that a plaintiff must obtain his judgment and then enforce it.  He cannot beforehand prevent the defendant from disposing of his assets merely because he fears that there will be nothing against which to enforce his judgment.  Nor can he be given a secured position against other creditors.  The remedy is not to be used to circumvent the insolvency laws.

7. Their Honours continued at 619, in respect of the injunction:

   It exists not to create additional rights but to enable a court to protect its process from abuse in relation to the enforcement of its orders.  It is neither a species of anticipatory execution nor does it give a form of security for any judgment which may ultimately be awarded.

8. Those statements by the High Court pertaining to interlocutory injunctions, or Mareva relief more broadly, have been accepted by the Full Court of this court as directly applicable to injunctive relief sought pursuant to section 114(3) of the Act (see e.g. Waugh & Waugh (2000) FLC 93-052).

9. The authorities are also careful to point out that the grant of relief of the type sort is discretionary, and great care must be exercised in the granting of such relief because of the impact that it has on proprietary and other rights. In Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 the High Court quoted an earlier statement by the Court of Appeal in Frigo v Culhaci (Unreported, New South Wales Court of Appeal, 17 July 1998, 10-11) to the effect that:

   [A Mareva order] is a drastic remedy which should not be granted lightly….

   A [Mareva order] is an interlocutory order which, if granted, imposes a severe restriction upon a defendant’s right to deal with his or her assets.  It is granted at the suit of a plaintiff whose status as a creditor is in dispute and who need not be a secured creditor.  Its purpose is to preserve the status quo, not to change it in favour of the plaintiff…

10. The last of the statements there quoted forms the foundation of the central plank of the argument advanced on behalf of the husband by his counsel.  Mr Hackett argues that the order the subject of the application does not seek to place the husband into the position of a secured creditor, or indeed give any preference to him as against any other person who may have a remedy as against the wife.  He uses the expression that the purpose of the order sought by the husband is to “preserve the status quo.” 

11. I disagree. The status quo to which reference is made has, in my view, been altered by orders to be made by me, providing a final determination of the rights and remedies of the parties, referrable to section 79 of the Act. So much is clear, as it seems to me, by reference to section 81 of the Act.

12. Secondly, such status quo as might be relied on involves no current entitlement by the husband to any amount (whether by reference to costs or anything else that might be the subject of the order sought by him). 

13. The following matters, by reference to the authorities to which I have made reference, are in my view significantly determinative in ascertaining, by reference to the balance of convenience and the interests of justice, whether the injunction should be granted:

    i.This is not a case involving the potential sinister removal of assets or unanticipated dissipation of assets.  The wife is doing that which she indicated at the trial she intended to do, and which might have been anticipated as having been done by her.  In particular, the sale of the former matrimonial home was always contemplated, as was, as a consequence: her need to rehouse her and the children. 

    ii.There is no current entitlement by the husband to any amount that the injunction seeks to protect. 

    iii.Not only is there no current entitlement to any amount that the injunction seeks to protect, but the Act provides that, on a prima facie basis, there is no such entitlement by reason of s 117(1) of the Act.

    iv.The husband has, I accept, a prima facie case in respect of s 117(2A) of the Act, but it is a case that is as yet unresponded to by the wife, both in respect of the assertions with respect to offers and what they might mean within the context of s 117(2A), and also – and importantly – by reference to the other matters which the Act says the court ought take into account in the exercise of the discretion pursuant to s 117(2).

    v.The injunction, in terms, gives the husband a veto over a transaction that (a) affects where the children of the parties will live, at least during the time that the orders provide they are to live with the mother, and (b) affects, at least in part, third party rights, including, in particular, the rights of Mr Z, who was a co-purchaser of the property the subject of the purchase transaction. It would also seem likely – although I accept the arguments by Mr Hackett that the affidavit material by the wife in this respect is somewhat less than clear – that the injunction potentially affects the rights of a lending bank.

14. In my view, the balance of convenience and the interests of justice lie with the wife, particularly in light of the circumstance that the actions the subject of the transactions, effectively sought to be restrained, provide for what I have described as the veto of the husband (see paragraph (2)(d) of the application).

15. For those reasons, the application for injunction will be dismissed. 

16. I will, in addition to the directions earlier made, make a direction that any application for costs by either party of and incidental to this application be filed by not later than 4.00 pm Friday, 14 June, and be heard contemporaneously with the application for the costs of the proceedings on 29 July.  The parties shall file any material in support of any application for, or answer to any application for, costs of these proceedings by not later than 4.00 pm Friday, 5 July 2013.  Each of the parties shall file a written outline of argument in support of, or opposition to, any application for costs of this application by not later than Wednesday, 24 July 2013. Each of the parties will also file an outline of argument with respect to the application for costs of the proceedings by that time on that date. 

17. I will discharge the order I indicated earlier with respect to the final order.  The terms of the order will instead be in terms of the minutes of order comprising Exhibit A, as amended by me pursuant to my determinations today, save for paragraph 51A of those orders. I will include a notation that the terms of the orders so made are, with the agreement of the parties, consequent upon the matters referred to at paragraphs 120 through 123 of the reasons for judgment delivered 19 April 2013, and the earlier order that I made with respect to both parties’ joint communication, within seven days, etcetera, will apply only to the matters contained in paragraph 51A of those minutes. 

1. So that we are clear, the minutes of order that are agreed upon, minus 51A, will be sent to my associate this afternoon.  Orders will then be made in the terms of the orders that I have just indicated. 

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 11 June 2013.

Associate: 

Date:  20 June 2013