Masters and Parsons

[2011] FamCA 1012

FAMILY COURT OF AUSTRALIA

MASTERS & PARSONS [2011] FamCA 1012

FAMILY LAW – PROCEDURE

Family Law Act 1975 (Cth)

APPLICANT: Mr Masters

RESPONDENT:	Ms Parsons
INTERVENERS:	Mr B & Mr C

FILE NUMBER: SYF 3340 of 2006

DATE DELIVERED: 21 November 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 21 November 2011

REPRESENTATION

APPLICANT: In person

COUNSEL FOR THE RESPONDENT: Mr Adamo

SOLICITOR FOR THE RESPONDENT:	Bradley Legal
COUNSEL FOR THE INTERVENERS:	Mr Skinner
SOLICITOR FOR THE INTERVENERS:	B & C & Law

Orders

1. These proceedings are adjourned to 10:00 am on 24 February 2012 before Justice Loughnan.

1. That any further documents on which the Applicants seek to rely be filed and served not later than 21 December 2011.

1. That any documents by way of Response and supporting material be filed and served by the husband and/or wife by 17 February 2012.

1. That the Orders of Registrar Campbell of 29 June 2011 be stayed until further order to the extent only that the wife is permitted, prior to discharging her obligations under Orders 16 and 17, to expunge from copies of any application, response or order information only referable to the parenting proceedings.

1. That the costs of the parties of and incidental to today be reserved.

1. That the wife provide to the solicitors for the Applicants at least 14 days prior written notice of her intention to divest herself of or encumber in any way her interest in the property at D Street, E Town in the State of New South Wales, that notice to include the details of the proposed transaction.

1. Leave is granted to the parties to apply in relation to these proceedings on giving 7 days’ notice to the Court and to each other.

1. Leave to the husband should he so wish to appear by telephone on the adjourned date.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYF 3340 of 2006

Mr Masters

Applicant

And

Ms Parsons

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for settlement of property.  I gather they might be divorced now, but I will refer to the principal parties as the husband and wife. The matter hasn’t come to final hearing as yet.  The matter is listed today, I understand, in relation to applications by the husband and the wife to review an exercise of power by a Registrar on 29 June 2011 and in relation to an application by two solicitors who seek to intervene in the proceedings and who seek orders under section 79A to set aside some interim orders made and who seek an injunction restraining the wife from dealing with a property at E Town. I indicated briefly this morning that I was not going to grant the injunction.

2. Mr Masters appears on his own account today, and the matter was called, I think probably out of turn, on the basis that he said he is in the course of treatment for serious cancer, and he sought that the matter be adjourned to a date in February. 

3. The controversial issues today were related to the injunction sought in respect of an E Town property and the third parties’ substantive application. It was argued by the husband and on behalf of the wife that the application for leave to intervene by the solicitors should be rejected today and presumably – I’m not quite sure whether this was expressed – that the application under section 79A should be summarily dismissed.  I didn’t make the injunction, because although there are a raft of issues raised, there is a question as to the status of the applicants as creditors. The original creditor, who benefited from costs certificates in Supreme Court proceedings against the husband, may have been bankrupt at the time some of the costs were incurred, some of the costs were awarded or some of the costs became judgment debts. It will be argued against the applicants that the assignment of the debt was not a valid in that the costs certificates were assigned and not the judgment debt. It will also be argued that there are ongoing proceedings in the New South Wales Supreme Court out of which the costs awards may be reversed or there may be compensating costs awards in his favour which would be a setoff against the judgment debt. On that basis it is argued that it is not safe to accept that there was a debt of any particular amount owing to the original creditor and therefore no debt has been transferred on to the applicants.

4. As I said briefly before lunch, it didn’t seem to me that it was necessary to decide those things. The injunction was not sought in the formal application and therefore the parties have very little notice of it. I am told that although it is not apparent on the face of the applicants’ documents, an undertaking as to damages is offered. However, there is no evidence to suggest that the claim, which is something in excess of $200,000, would be jeopardised without the injunction. In my view, that fact it fatal to the application.

5. Unlike the circumstances this Court faced in Waugh & Waugh and Mullen & Debry the injunction sought here is not between the parties to a marriage. Here the competing parties are said to be creditor and debtor. Unlike a family law situation where the funds in question are joint funds, the issue here is somebody who says they have a judgment debt and in advance of collecting on that debt that person wants to restrain the respondent in relation to the dealings with the respondent’s own property. In those circumstances, the Court needs to be particularly careful that there is a link between any dealings with the property in question and the potential risks to the applicants’ rights.

6. In any event, I have refused the injunction today. That is not to say that it might not be argued on another day. It is clear in relation to some orders that were made by a Registrar on an earlier occasion that there could be a suggestion that transactions were undertaken for the purposes of defeating creditors.

7. I am not sure that the applicants need for leave to intervene in order to make an application under section 79A. In any event, there is a question about the status of the applicants and that issue will go over to 24 February.

8. I did indicate to the parties that I would make an order that required the wife to keep the applicant’s solicitors advised in relation to transactions in respect of the E Town property.  There were some submissions about limiting that, and it seems to me that no harm is done on the basis that defined as transactions in relation to divesting, encumbering – divesting herself from or encumbering in any way.  So I will require the wife to provide that notice. I note that section 79 incorporates the need to protect creditors.

9. Nextly, there is an issue in relation to a stay of the orders made by the Registrar on 29 June. The Registrar has made a number of statements of background and some orders.  The orders are extending the time for compliance with directions in relation to preparing the matter for a date later in July and then requiring that the wife give notice to named persons, companies or entities who may be creditors, who may not be able to recover debts if interim orders that had been made in the proceedings were to become final. A number of entities in Australia and overseas are mentioned.  That is to be done, the Registrar provides, by forwarding to the named persons, companies or entities by pre-paid registered post copies of each application filed by the husband, each response filed by the wife, the interim consent orders made on 18 January, 8 December, 14 December, all of 2010, and 2 February this year, and a copy of the Registrar’s orders. The wife is also required to explain what steps she had taken to comply with those orders by a certain date.

10. Now, I’m told – I haven’t seen the documents – that there are applications by each of the husband and wife to set aside those orders.  It is clear from the recitals what has concerned the Registrar.  He identifies in summary that the husband has filed a Financial Statement asserting assets in excess of $3.9 million, debts in excess of $3.2 million; that the wife in her affidavit had given evidence that the husband owed significant additional moneys to others apart from the people disclosed by him; and that he has on a number of specified occasions actively pursued arrangements to avoid payment to his creditors by placing or trying to place assets in the ownership, possession or control of the wife.  The Registrar goes on to recite some of those additional debts.

11. I am asked to stay the operation of the orders requiring notice to be given.  I have not been taken to any formal application before the Registrar for a similar order, remembering that this order was made in June of this year, so five months ago.  I am not told why the issue was not prosecuted in a more timely fashion. The only things said in support of the wife’s application for relief were that she didn’t have all of the details of addressees and so on that would be necessary for her to comply with the orders.  Mr Masters, although he’s not directly affected by the orders, said that he believes that a number of the Registrar’s recitals are incorrect. Presumably the argument would be, then, that that has contaminated his reasoning in terms of the orders, and secondly, that the orders would permit information in relation to parenting issues, not matters relevant to a creditor directly, to be exposed.

12. Well, it seems to me that the greater risk is to not notify the creditors.  It may be that the Registrar was mistaken as to some of the detail. Certainly there is enough material in these proceedings for there to be confusion about something. However, the learned Registrar has gone to a great deal of trouble, and in proceedings where there may not be a transcript available he has thoughtfully set out the basis on which he has come to the conclusion he has.  No harm is done, it seems to me, if the identified persons are notified. It is not as though they include a newspaper or the like. The organisations include the Law Society of England and Wales and the Australian Tax Office. These are bodies corporate and are not likely to be affected by salacious material, even if there was such material.

13. The Registrar has made the order on a proper and it seems to me that it should be complied with.  All the wife has to do is to take all steps she can to comply. If for example, it is beyond her capacity and that of her lawyers to find the address of the Australian Taxation Office, the Bar Association of New South Wales, the Hong Kong and Shanghai Banking Corporation and so on, then I would imagine that she will have a perfectly good excuse in not providing the notification.

14. In relation to the husband’s concerns, I haven’t been through each of the documents that is to be sent, but I would be content to permit the wife to expunge parenting information from any photocopy she provides.

I certify that the preceding fourteen (14) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 21 November 2011.

Associate:

Date:  9 January 2012