Matthau and Matthau - [2009] FamCAFC 60

FAMILY COURT OF AUSTRALIA

MATTHAU & MATTHAU

[2009] FamCAFC 60

FAMILY LAW – APPEAL – FROM DECISION OF A FEDERAL MAGISTRATE – Application for Permission to Appeal against interlocutory restraints on the husband’s assets and refusal to grant an adjournment – Husband had been ordered by consent in January 2008 to pay money by way of property settlement to the wife– In October 2008 husband had not paid at least the bulk of the money ordered – Wife applied to set aside the consent orders or alternatively, sought enforcement. In the interim she sought certain enforcement measures – Husband filed no material for the return date – Federal Magistrate ordered that the husband be restrained from dealing with property – Applicant in this appeal always had open to him the avenue of bringing the question of interim or interlocutory restraints back on for hearing – Applicant did not demonstrate any error of principle or substantial injustice in relation to the restraints or refusal to grant an adjournment – Application for leave to appeal dismissed
Appeal from an order for indemnity costs – Costs order varied by consent

Emany and Marino (1994) FLC 92-487
P and R [2001] FamCA 299
Rutherford and Rutherford (1991) FLC 92-255
Sali v SPC LTD and another (1993) 116 ALR 625

APPELLANT:

Mr MATTHAU

RESPONDENT:

Ms MATTHAU

FILE NUMBER:

BRC

3779

2007

APPEAL NUMBER:

NAL

113

2008

DATE DELIVERED:

21 April 2009

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Warnick J

HEARING DATE:

15 April 2009

LOWER COURT JURISDICTION:

Federal Magistrates Court

LOWER COURT JUDGMENT DATE:

21 November 2008

LOWER COURT MNC:

[2008] FMCAfam 1421

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr McGregor

SOLICITOR FOR THE APPELLANT:

Anthony Black Family Law Services

COUNSEL FOR THE RESPONDENT:

Mr Galloway

SOLICITOR FOR THE RESPONDENT:

Cartledge Law

Orders

That, by consent:
(a)The appeal against Order 4 of the orders made in the Federal Magistrates Court of Australia on 21 November 2008 be allowed;
(b)The said order be varied by deleting the word “indemnity” and adding, after its present conclusion “on a party/party basis”.
That the application for leave to appeal Orders 2 and 3 of the orders of the Federal Magistrates Court of Australia made 21 November 2008 be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Matthau & Matthau is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NA 113 L of 2008
File Number: BRC 3779 of 2007

Mr MATTHAU

Appellant

And

Ms MATTHAU

Respondent

REASONS FOR JUDGMENT

On 22 January 2008, Mr and Ms Matthau obtained by consent, orders finalising property issues arising from the breakdown of their marriage and in relation to parenting arrangements. One order required the husband to pay to the wife $400,000.00 on or before 30 June 2008. Another provided for the provision by the husband of security for that payment by him. He was to forthwith cause a company (“M”) to execute a mortgage and a fixed and floating charge, he was to give a personal guarantee and ancillary documents were to be executed.
On 31 October 2008, the wife, alleging among other things, a suppression of evidence when the consent orders were made, filed an application in the Federal Magistrates Court seeking that those orders be set aside or varied. She sought, “In the Alternative”, orders by way of enforcement of the consent order providing for the payment by the husband to the wife of the $400,000.00. By way of interim orders, the wife sought restraints upon the husband and M dealing with identified real property and that the wife be appointed trustee to sell or dispose of the properties and pay herself the sum of $400,000.00, before placing the balance in trust pending further order. Other orders by way of enforcement were sought, in addition or in the alternative. Costs were sought against the husband on an indemnity basis.
The wife’s application came before Federal Magistrate Slack on 20 November 2008. A solicitor appeared for the husband and sought an adjournment for “10 to 14 days…so we are able to obtain our client’s instructions and to put a proper response to this application”. His Honour refused an adjournment and proceeded with a hearing for some of that day, completing the proceedings the next day. He granted as an interim or interlocutory order the restraints sought in relation to the sale of property and he mandated that monies to be paid to the husband from a sale (of the “K Property”) be held in trust until further determination by the court. He further ordered that the husband pay the wife indemnity costs (in relation to the application to enforce the orders only) and transferred the matter to the Brisbane Registry of the Family Court of Australia, to be listed on a date to be advised.
The proceedings to which these reasons relate are the husband’s application for permission to appeal the orders about dealing with property and sale proceeds and the costs order.
The husband does not actually need permission to appeal the costs order, that order not being interlocutory. During the hearing of the “application” – strictly the appeal – in respect of that order, Mr McGregor, counsel for the husband, sought leave to amend the (draft) Notice of Appeal to add a ground, effectively that, in the conduct of the hearing insofar as it related to costs, the husband had been denied an opportunity to be heard. Mr Galloway did not oppose the addition of that ground and conceded in light of it that the appeal against the costs order ought be allowed, the order for indemnity costs be set aside and in lieu, the husband be ordered to pay the wife’s costs of the application for enforcement only, on a party/party basis. Mr McGregor accepted such a result.
As to the remaining question of whether leave to appeal the interlocutory restraints ought be granted, the husband must show that in the making of those orders there was an error of principle and/or a substantial injustice to him. (Rutherford and Rutherford (1991) FLC 92-255; Emany and Marino (1994) FLC 92-487).
As to the latter, Mr McGregor conceded that the Federal Magistrate might properly have adjourned the wife’s application as requested by the husband and made the restraints he did as an interlocutory order, to operate until the return date. It follows, I think, that the best the husband could achieve from his current application is to remain subject to the restraints imposed, but be able to file material, the matter to come again before the Federal Magistrates Court – or before the Family Court of Australia – and the continuation of the restraints at all, or in amended form, be reconsidered.
In my view, of itself, the difference between the husband’s position, had that course been initially taken or now be permitted and the position arising from what the learned Federal Magistrate actually did, does not amount to any substantial injustice to the husband.
This is because the husband was (and still is) at liberty to file material and bring the issue of interlocutory restraints back on for hearing. As the Full Court said in respect of an application for leave to appeal, in P and R [2001] FamCA 299;
[57] Finally, in our view, despite the fact that his Honour's orders are not expressed as being “until further order”, it is clear on their face that they are interlocutory orders. Counsel for the husband was unable to explain why, in that circumstance, it was not open to the husband to apply to a single judge to vary the orders.
True it is that, if he brought the issue back to Court, the husband might have been required to show some “new” matter had arisen since the restraints were imposed, before the orders could be varied. Against that, had the restraints only been made to operate until a return date, the husband would not have had to meet such a hurdle. However, I consider any such difference does not in this case constitute substantial hardship, because; firstly, the restraints were arguably only to last until the matter returned to court, and secondly, the husband certainly does not demonstrate that he cannot meet any requirement to show a change of circumstance since the restraints were granted.
As to any error of principle in respect of the grant of the restraints and related orders, the proposed grounds of appeal assert error in Slack FM not granting the adjournment, a denial of procedural fairness by Slack FM receiving an affidavit of an accounting expert, only received by the husband’s solicitors the day before and that, in respect of the restraints; they were not necessary, Slack FM failed to consider if they were necessary and, in any event, they ought to have been limited to secure payment to the wife of the $400,000.00 or alternatively such sum as she might reasonably expect to receive in the event her application to set aside or vary the consent orders succeeded.
As to the refusal of an adjournment, the learned Federal Magistrate’s reasons are understandably short. He said:
3.The husband's application for an adjournment is based on, as I understand it, three propositions. Firstly, that his solicitors whom he has now engaged have only recently become involved in the matter, and they have only recently received the wife's material and need to obtain his urgent instructions in relation to the matter. Secondly, they say that, in the time they have received instructions, they have not been sitting on their hands and that they have been urgently trying to put into place arrangements that would at least allow some compliance with the orders. I acknowledge that the application has been brought on reasonably urgently on the application by the wife. Ultimately though, I am persuaded that I should refuse the application for the adjournment.
4.The husband was aware of his obligations under these orders since January 2008. There is no evidence of any attempt by him to comply with the property orders. Even now, there is no appearance by him and there is no affidavit by him offering any explanation for his failure to comply with his obligations under the orders. The wife was entitled to receive her entitlement under the orders since 30 June. It is now November. She is entitled to enforce the orders. It is now several months since the moneys were due and payable and, as I understand it, the husband has not even provided the security that was to be provided under the terms of those orders.
It may be that the learned Magistrate’s reasons oversimplify the position of the parties as to compliance with the original orders. In the material before Slack FM, the wife deposed that she had a discussion with the husband in about mid-June 2008, when he informed her that he would not be able to pay monies due by 30 June 2008 but he put certain proposals including payment of a sum per week by way of interest. The wife further deposed that in the preceding twelve months, the husband had advanced to her some sums of money and attended to payment of a number of accounts on her behalf. The husband suggested that he therefore owed her only approximately $300,000.00 although the wife considered the amount owing to be of the order of $370,000.00. There was correspondence between solicitors in July 2008 about these matters and proposals.
But any over-simplification in his reasons, or even inaccuracy, does not in my view amount to an error of principle. As Toohey and Gaudron JJ said in Sali v SPC LTD and Another (1993) 116 ALR 625, at 632:
A decision by a court to grant or refuse an adjournment of proceedings is a decision made in the exercise of a discretion vested in that court. It is therefore a decision which will not lightly be set aside on appeal. Furthermore, this court has expressed its reluctance to interfere with decisions made by courts below on procedural matters which, ordinarily, are best let to the court seized of the proceedings. (footnotes omitted)
As to receipt by Slack FM of the “late” affidavit by the accounting expert, without material from the husband, one cannot conclude that receipt of that affidavit was “prejudicial” to the husband. In any event, any prejudice to the husband was something the husband could have promptly removed by responding to it and bringing the issue back on for further hearing.
As to his reasons for imposing the restraints, Slack FM said:
1.This is an application by the wife, in essence, to enforce orders that were made by way of property settlement between the parties on 22 January 2008. Under the terms of those orders, the husband was to pay to the wife on or before 30 June 2008, the sum of $400,000. In addition, as security for the payment of those monies, the husband was ordered to cause forthwith [M] Pty Ltd to execute in favour of the wife, a mortgage over its interest in Lot […] on FL[…] and a fixed and floating charge over [M] Pty Ltd in the form attached to the orders.
2.It is not in dispute, in these proceedings, that the husband has not made the payment of $400,000 and, as I understand it, has not made any payment towards that money. The husband has also not caused [M] Pty Ltd to provide the security as envisaged by paragraph 6 of the orders.
3.The wife seeks to secure payment of the $400,000 and any interest accrued on those monies. The wife, as part of her application, is also bringing an application to set aside the orders that were made on 22 January 2008.
4.The other evidence that is relevant to this application is that the husband has apparently, contrary to the intentions of the orders, registered a floating charge over the assets of the company to another financial institution.
5.In relation to the wife's application, I am persuaded that I should make orders largely in terms of the wife's application although not entirely so. In terms of her interim application, I am persuaded that I should make the injunction sought in paragraph 1 of her application, that is, that the respondent by himself, his servants or agents, be restrained and an injunction issue restraining him from dealing with, encumbering, mortgaging, selling or disposing of any interest he may have in, or any interest which [M] Pty Ltd may have in, any real estate, in particular the named real properties mentioned in Order 1 of the application.
…
8.The other order sought by the wife was a general provision in paragraph 2 of her application that she be appointed Trustee for the applicant and respondent to sell or dispose of the respondent's interests in relation to a number of properties. I am not persuaded, at this time, that I should make such an order in broad terms. Ordinarily an order of that sort would be a vesting order which vests the legal title of a particular property into the applicant as Trustee. I am not persuaded that I should make such a broadly expressed order without some specifics as to the particular property that is sought to be sold. It may be that there are third party interests that might have some impact in relation to those matters and, as far as I am concerned, those matters should be properly pleaded in an affidavit.
9.I take into account in not making such an order that the orders that have been made in relation to this matter should protect the wife's interests in relation to the existing orders. The orders themselves proposed a security provision for the payment of the money and the wife now has the capacity to put in place the security provisions with respect to those orders and the wife will have the capacity to take action regarding her securities.
10.If the wife is not able to secure payment in accordance with the existing orders then, of course, she will be at liberty to bring a further application in relation to the sale of some of the existing properties of the respondent and she can pursue that application once she has particularised the particular property that she would seek to take action against to recover her monies.
In my view the above reasons, particularly insofar as they explain why Slack FM did not grant all that the wife sought, show that the learned Federal Magistrate did consider whether the restraints were necessary, explain why he thought they were and what their limits ought be. I discern no error of principle in his reasons.
I reject the further argument that the restraints went beyond what was necessary. In the absence of material from the husband, his Honour must have been left in doubt as to where “necessity” began and finished. He had evidence that, however many assets the husband had (or were restrained) the husband himself had said he could not meet his obligations to the wife at that time.
In my view the husband has not demonstrated that in making the restraints and mandatory order, Slack FM erred in principle.

Conclusion

It follows that the husband’s application for permission to appeal ought be dismissed.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Warnick.

Associate:

Date: 21 April 2009