Masters and Parsons (No 2)

[2011] FamCA 1043

FAMILY COURT OF AUSTRALIA

MASTERS & PARSONS (NO 2) [2011] FamCA 1043

FAMILY LAW – INJUNCTION – restraint from mortgaging property – preservation of property

Family Law Act (Cth) 1975 – s75(2); s79

APPLICANTS: Mr B & Mr C

RESPONDENT: Mr Masters

RESPONDENT: Ms Parsons

FILE NUMBER: SYF 3340 of 2006

DATE DELIVERED: 15 December 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 15 December 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Skinner

SOLICITOR FOR THE APPLICANT: B C & Law

SOLICITOR FOR THE RESPONDENT HUSBAND: N/A

SOLICITOR FOR THE RESPONDENT
WIFE: N/A

Orders

IT IS NOTED

1. That there is no appearance by or on behalf of the Husband and Wife at 3:45 pm today.

IT IS ORDERED

1. The Court deemed the Amended Application in a Case filed 14 December 2011 an application to be filed pursuant to the leave granted on 21 November 2011 AND the Court dispensed with further compliance with those orders.

1. Until further order an order is made in terms of paragraph 6 of the Amended Application in a Case filed 14 December 2011 as set out hereunder;

“Pending the hearing of the Amended Application in a Case and upon the applicants giving the usual undertaking as to damages, the husband wife be restrained from mortgaging the property known as D Street, E Town in favour of F Financial Services or from entering into a mortgage of the property arranged by F Financial Services in capacity as a broker.”

1. The Court noted that these orders are made upon the usual Undertaking as to Damages given by the Applicants through their counsel today.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Masters and Parsons 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: SYF 3340 of 2006

Mr B and Mr C

Applicants

Mr Masters

Respondent Husband

And

Ms Parsons

Respondent Wife

REASONS FOR JUDGMENT

1. These are proceedings in the context of property proceedings between husband and wife.  The matter has been on foot for a long time.  No final orders have been made.  There were contested proceedings between the husband and wife, including substantive proceedings for property settlement and proceedings at an earlier time for spousal maintenance, and there have been a series of interim consent orders apparently made under section 79, dealing with particular properties.  There is evidence to suggest that the assets of the husband have largely become assets of the wife.

2. In the meantime, there were proceedings in the New South Wales Supreme Court, I understand, initiated by the husband in 2002.  They resulted in a costs order and an assessment, which in turn resulted in a judgment debt amounting to in excess of $214,000, and it is submitted that that debt has been assigned to the applicants.  The applicants have sought to intervene in these proceedings to seek to set aside various orders in circumstances where they don’t believe that their debt can be satisfied from the husband’s property.  There is a tale to be told in relation to the Supreme Court proceedings in relation to the progress of the assessment of costs.

3. Reviews and appeals have been dealt with and dismissed. It is submitted that the only remaining possible challenge to the judgment is the husband’s application to the Supreme Court to reopen an argument in relation to the judgment. Those proceedings have been adjourned, I’m told, possibly on his application, to January 2012.

4. In the meantime, the matter came before me on 21 November, and certain orders were sought on behalf of the applicants. They weren’t granted.  However, I made an order that the wife be required to provide to the applicants’ solicitors at least 14 days’ prior notice of an intention by her to divest herself of or to encumber in any way, her interests in a property at D Street, E Town. That is one of the properties which came into her ownership from the husband by orders made in these proceedings. Notice was given by the wife’s solicitors I think on 2 December, of a proposed dealing with the property. The solicitors for the applicants followed that up on the 7^th or so of December, I think perhaps after there had been some telephone communication, asking for some details about the proposed transaction.  Notice was given in the letter originally advising about the wife’s proposal, that her solicitor would be overseas between 8 and 19 December 2011, and that the solicitor may not be able to reply to correspond as promptly or at all around that period.  The letter of 7 December was communicated on that date to the wife’s solicitors, and threatened an application for injunction in the Supreme Court.

5. That was followed up with a letter on 9 December indicating that there was no response to the earlier letter and no communication by telephone advising that the wife would refrain from the proposed dealing, there would be an application to the Supreme Court under a provision of the Conveyancing Act and an application for an injunction to restrain the dealing. That communication was also sent directly to an email address known to be that of the wife, and also by post.

6. The application before me was filed electronically yesterday.

7. Leave to serve short notice was sought. The application contains an amended prayer in relation to what I will call the substantive application, the 79A application, and also, relevantly, an application is made to abridge the time, it being, I think, slightly less than the seven days’ notice on which an application was to be restored in these proceedings pursuant to my order of 21 November. The application also seeks an injunction. The amended application in the case and the affidavit of one of the applicants has been served by post or electronic means on the wife and on the husband.

8. The matter comes before me today, and as at quarter to 4 there is no appearance by or on behalf of either the husband or the wife.  The counsel for the applicants proffers the usual undertaking as to damages, which is that the applicants will abide any order for damages the Court considers arise from the orders I am asked to make, and which should be borne by the applicants.

1. And the order sought, apart from the abridgement, is that, on that undertaking, the husband and wife be restrained from mortgaging the property known as D Street, E Town, in favour of F Financial Services, or from entering into a mortgage of the property arranged by F Financial services in their capacity as broker;  and I understand that the latter reference comes from inquiries made with that entity, and it transpires that it may be a broker rather than a lending body. 

2. There is a substantive issue to argue.  The husband has been before the Court recently and said that he was in receipt of Centrelink benefits. It is his case that he is impecunious.

3. Section 79 calls for the distribution of property between husband and wife reflecting a just and equitable settlement of their property on the basis of contributions made during a marriage, and on the basis of the other matters in section 79(4)(d), (e), (f) and (g). Now, it may be, when the matter is investigated, that a proper consideration of those factors – that is to say, the contributions made by the parties of various sorts, and those other matters, warrant the wife retaining the lion’s share of the property of the parties. However, there is an issue to argue about that, and one could see why the creditor would be concerned.

4. A creditor has a right to apply, being a person interested in and affected by the orders that have been made. There is specific reference in section 75(2) to the interests of creditors. The applicants seek to agitate for an order that the interim in relation to the D Street, E Town property, should be set aside on the basis of a miscarriage of justice.  Therefore there is a substantive issue to be determined. It doesn’t seem to be a frivolous or meaningless argument to make.

5. The creditor may find themselves armed with a judgment of some $200,000 and a husband with no wherewithal in circumstances where arrangements have been made over recent years to vest himself of assets. That isn’t to say that that argument will succeed ultimately.  Section 114 empowers the Court to grant injunctions to preserve a property, and to grant injunctions that are proper, and in the circumstances, it’s appropriate that this injunction be granted.

6. The applicants are on the record to the effect that there may be other ways to compromise the issue. Mention has been made of the possibility that some other security might be provided for their debt. That might allow the wife to press ahead with development plans in relation to the E Town property while securing the Applicants’ claim. It is unusual that there are ongoing property settlement proceedings between two parties when they are apparently no longer at arm’s length. There is some circumstantial evidence to suggest that the husband has a hand in the property development by the wife.

7. No doubt those matters will be explained. In the meantime the orders will be made.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 15 December 2011

Associate: 

Date:  7 February 2012