Matheson v Velipasaoglu

[2019] VCC 2113

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMON LAW DIVISION

Revised
Not Restricted
Suitable for Publication

MEDICAL LIST

Case No. CI-19-03692

Samantha Matheson	Plaintiff
v
Muhammet Velipasaoglu	Defendant

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JUDGE:	Saccardo
WHERE HELD:	Melbourne
DATE OF HEARING:	7 October 2019
DATE OF RULING:	17 December 2019
CASE MAY BE CITED AS:	Matheson v Velipasaoglu
MEDIUM NEUTRAL CITATION:	[2019] VCC 2113

REASONS FOR RULING
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Subject:  Application for freezing order.
Legislation Cited:     Property Law Act 1958 (Vic)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Nguyen	Slater & Gordon
For the Defendant	Mr J Castelan	Logie Smith Lawyers

HIS HONOUR:

1       In this proceeding, on the basis of affidavit evidence filed on behalf of the plaintiff, a freezing order was made against each of the defendants.

2       No issue has been taken on behalf of the defendants as to whether the freezing order involved a process which was appropriate in all the circumstances for the purpose of securing the fruits of any judgement entered by the plaintiff against the first defendant.

3       For the purpose of the record it is appropriate that I make it clear that in making the order I was of the opinion, having regard to the affidavit material filed on behalf of the plaintiff, that whilst adopting a high degree of caution before making such an order that would operate to restrict the ability of a third-party ( the plaintiff’s wife) to deal with her interest in the property which she received via a transfer from her husband:

a)    it was nevertheless appropriate that such an order be made having regard to the absence of any explanation as to the reason for the transfer by the first defendant to the second defendant of his interest in the property; and

b)    in making that order I did so being satisfied that in the absence of making the order there was a real risk that any judgement for the plaintiff would remain unsatisfied.

4       The only issue for my determination is to the wording of that order in particular whether the order should apply to the property at 16 Rocklands Rise, Meadow Heights:

a)    without further qualification; or

b)    with a qualification which recognises that the interests secured by the order is limited to 50% of the unencumbered value of the property.

5       There is no issue that the test which I should apply in fixing the terms of the order involves the issues set out in paragraph 10 of the helpful submissions of Mr Castelan of Counsel who appeared on behalf of the defendants, namely:

(i)    the ultimate question in the application is whether in all the circumstances it is just and convenient that the order be altered in the form contented for on behalf of the respondent;

(ii)  the correct test is whether, on the assumption that the plaintiff has established good an arguable case for the entitlement to relief, the court is satisfied that if the injunction were refused there exists a real risk that a judgement for the plaintiff would remain unsatisfied;

(iii) the part of the order that relates to assets held by a third-party should only require the third party to freeze the assets up to a specified maximum sum; and

(iv) the grant of the variation of that order is dictated by what justice demands in the particular circumstances of the case.

6       In this application there is no issue:

·    that the property the subject of the freezing order was originally held by the first and second defendants as joint tenants;

·    that the first defendant transferred his interest in the property to the second defendant on grounds of affection on 31 July 2019;

·    that by reason of that transfer the second defendant is the sole proprietor of the property;

·    that the reason for the transfer of the property by the first defendant to the second defendant has never been disclosed to the court notwithstanding the filing by the second defendant of an affidavit in this application;

·     that the value of the freezing freezing order is in the sum of $350 000

·    that the net value of the property the subject of the freezing order (after the mortgage applicable to the property is taken into account) is between $289,007 and $455,007;

·    that the net value of the first defendant’s half share in the property is between $144,500 and $227,500;

· the plaintiff in the proceeding seeks an order setting aside the transfer of the property by the first defendant to the second defendant pursuant to the provisions of section 172 of the Property Law Act;

·    the second defendant has filed no material as to prejudice, hardship or inconvenience visited upon her by the maintenance of the current order without variation.

7       Should the Order be varied so as to allow the second defendant to sell  one half of the share of her property the application of both common sense and real-world analysis to the utility of that process for the second defendant seems negligible given the difficulty she would face in finding an arm’s-length buyer of one half of the property. It follows that any transfer action involving such a sale round likely to be an arm’s-length commercial transaction.

8       The Plaintiff’s position at that time would be that the limited market which existed as to the sale of the remaining half share of the property would be weighted in an extreme sense in favour of any potential purchaser. The result being that the access by the plaintiff to the fruits of the judgement, which is already limited by reason of the shortfall between the potential value of that judgement and the value of a half share of the property, would be diminished even further.

9       Further, whilst it may be that a purchaser would be cautious in buying the property having regard to:

a)    the notification on the title by the registrar of titles; and

b)    the supervision of any the dealings associated with the property by the registrar of titles;

the issue as to whether that notification or supervision would operate so as to prevent the sale of the property within a timeframe during which the plaintiff would be in a position to make application to the Court for an order which would  preserve her entitlement to one half of the funds associated with the sale, is a moot point.

10      Further if it were the case that the sale of the property was being negotiated by the second defendant for a figure which was at the lower level of the market value range, or marginally below that range, it might be that the plaintiff would be entitled to intervene in the sale because the impact of such a sale would operate to further diminish her access to the fruits of her potential verdict.

11      There is no evidence before me that the operation of the present order operates in any way to hinder the second defendant in her lifestyle either presently or in the future.

12      The order provides the second defendant is at liberty to apply should she wish to deal with her interest in the property.

13      In my opinion the balance of convenience clearly favours the maintenance of the current order until the resolution of the proceeding or further application on behalf of the second defendant to allow her to deal with the property.

14      For these reasons I am satisfied that the current order should remain in place and the parties should prepare consent orders which give effect to these reasons.