MOREIN & MOREIN
[2014] FamCA 1004
•30 October 2014
FAMILY COURT OF AUSTRALIA
| MOREIN & MOREIN | [2014] FamCA 1004 |
FAMILY LAW – PROPERTY – INJUNCTION – Where the wife seeks various interlocutory orders and injunctions including an ex parte Anton Piller order – Where the wife ultimately seeks parenting orders, settlement of property, spousal maintenance and costs – Where the wife has given an undertaking as to damages – Where the wife gives evidence that the former matrimonial home may represent the entirety of the available assets of the parties – Where the wife gives evidence that two-thirds of the value of the former matrimonial home may have been dissipated, without her knowledge and in a way that cannot be recovered – Where the balance of prejudice favours the granting of the injunctions and orders – Where interlocutory orders are made ex parte including Anton Piller order.
| Family Law Act 1975 (Cth) – s 114AA, 121 Family Law Rules 2004 (Cth) – r 14.04 |
| Anton Piller K.G. v Manufacturing Processes Limited [1976] 1 Ch 55 Blue Seas Investments Pty Ltd & Mitchell and McGilvray (1999) FLC 92-856 Microsoft Corporation v Goodview Electronics Pty Ltd (1999) 46 IPR 159 PMSI Group v Wilson [2003] NSWSC 263 Stowe & Stowe (1981) FLC 91-027 Talbot & Talbot (1995) FLC 92-586 |
| APPLICANT: | Ms Morein |
| RESPONDENT: | Mr Morein |
| FILE NUMBER: | SYC | 6802 | of | 2014 |
| DATE DELIVERED: | 30 October 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 30 October 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Johnston |
| SOLICITOR FOR THE APPLICANT: | Legal One Services |
| COUNSEL FOR THE RESPONDENT: | No appearance |
| SOLICITOR FOR THE RESPONDENT: | No appearance |
Orders
IT IS ORDERED ON AN EX PARTE BASIS:
That pending further order the husband be restrained from drawing on the mortgage to the Australian and New Zealand Banking Group Limited registered over the title to the former matrimonial home situate at K Street, Suburb D in the State of New South Wales.
That the wife serve a sealed copy of this order upon the husband and the Australian and New Zealand Banking Group Limited no later than 4.00 pm on Monday 3 November 2014.
That pending further order the husband be restrained from listening to or recording the wife’s telephone and from accessing her email and SMS messages.
That pending further order that the husband be restrained from assaulting, molesting or otherwise interfering with the wife.
That pending further order the wife have the exclusive occupation of the former matrimonial home situate at K Street, Suburb D (“the home”).
That pending further order the husband vacate the home forthwith upon the service of this order.
That pending further order the husband be restrained from approaching within 500 metres of the home.
The Court noted that Orders 4, 5, 6 and 7 are orders for the personal protection of the wife and pursuant to s 114AA of the Family Law Act 1975 (Cth) import in terms of that section the power of arrest without warrant to a relevant police officer.
That pursuant to r 14.04 of the Family Law Rules2004 (Cth) the husband forthwith upon the service of this order on him permit the applicant or her nominee, Elle Luke Georges (“the independent solicitor”), Mr E (“the computer expert”) and any law enforcement officer accompanying them to enter the premises of Morein & Co at P Street, Suburb A, NSW and to seize the business computer server and any back up drives and to remove the same from the premises for the purpose of copying the hard drives.
That forthwith upon service of these orders the husband provide to the independent solicitor all passwords or security codes associated with the said server and drives.
That the independent solicitor return the computer server and drives to the said premises by 10.00 am on the next working day following the execution of Order 9 and he is authorised to supervise the copying of the data on the server and drives.
That the independent solicitor shall personally supervise and facilitate the execution of Orders 9 and 11 herein and in particular, shall:
(a) attend at all times during the execution of the order at the business premises;
(b) prepare a record of the execution of the order including a record of the computer server and drives seized and of the device or medium on which the copied data is stored; and
(c) maintain physical possession of the server and drives seized pursuant to the orders until their return to the premises and of any device or medium on which the copied data is stored, pending further order of the Court.
That the independent solicitor is restrained from releasing or allowing access to the seized computer or drives or any device or medium on which the copied data is stored other than by the computer expert and only for the purposes of compliance with these orders, pending further order of the Court.
That pending further order the applicant by herself her servants and agents be otherwise restrained from accessing any information on or copied from the said server and drives.
That the Court requests that the Marshal of this Court and officers of the Federal Police and/or the New South Wales Police assist in the execution of these orders, including by accompanying the applicant or her nominee on the service and execution of the orders.
That leave is granted to either party or to any other person or entity affected by these orders to restore the matter to the list on giving 24 hours’ notice to the Court.
That the wife’s Initiating Application filed 29 October 2014 be stood over to 10.00 am on Tuesday 11 November 2014.
The Court noted that these Orders are made on the usual undertaking given by the wife.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Morein & Morein 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: SYC 6802 of 2014
| Ms Morein |
Applicant
And
| Mr Morein |
Respondent
REASONS FOR JUDGMENT
These are proceedings for injunctions including an Anton Piller order on an ex parte basis in the context of proceedings for settlement of property. The Application was filed yesterday by the wife, and it has been given a formal return date in February. Neither the Application nor the supporting documents have been served. In the Application, the wife seeks parenting orders, settlement of property, spousal maintenance and costs.
She was born in 1981 and her husband was born in 1967. They were married in 2002 and started to live together a few months later in 2003. Their final separation, the wife says, was yesterday, but she gives evidence elsewhere that she considers that the parties were separated under one roof. I suppose there is something a little wrong with all of that, but that is what her Application and affidavit say.
The parties have three children - S born in 2003, M born in 2005, and W in 2008. So something like 11 years of age, eight years of age and six years of age.
The interlocutory orders that are pressed on an ex parte basis – include an order restraining the husband from drawing on a mortgage in favour of the ANZ Bank and that service of the orders be effected by no later than 4.00 pm on Monday next, but it might be that it is earlier than that.
The wife seeks an order that the husband be restrained from listening to or recording her telephone conversations and accessing her email and SMS messages. The interim application goes on to deal with a restraint on him using a particular email address, that he cancel that address and related orders. She seeks an injunction that he be restrained using a particular software to spy on her or use other forms of surveillance on her, personally on her computer and other IT devices and in her motor vehicle.
The wife seeks an order that pending further order, the husband be restrained from assaulting, molesting and otherwise interfering with her. It is clear from her affidavit that she seeks that as an order for personal protection. The import of that is that an order for personal protection implies a power of arrest without warrant to the police. She seeks an order for exclusive occupation of the home currently occupied by the parties, that the husband forthwith vacate the home upon service of the order and that he be restrained from approaching within 500 metres. All of those orders would also import the power of arrest without warrant, being orders for personal protection.
The wife seeks that the matter be brought back on a date convenient to the Court. That would normally be a date in reasonably short order, but a date giving the respondent time to seek legal advice. Of course he would be entitled to bring the matter back immediately and put the wife to proof in relation to any of the orders made.
The wife seeks an order in the style of an Anton Piller order whereby the husband be required to permit the wife, a nominated solicitor who is on affidavit and who has indicated he is willing to supervise the execution of the order, and a named IT expert. The wife also seeks permission for law enforcement officers, I think she means any police officers who may be available, to enter the premises of the husband’s accountancy practice at P Street in Parramatta. The purpose of the entry is for the independent solicitor to seize the server of the husband’s professional practice’s business computer together with any backup drives and remove those items from the premises for the purposes of copying the hard drives involved.
The wife seeks an order against her independent solicitor requiring him to return those hard drives to the business premises by 10.00 am on the next working day following the execution of the Anton Piller order and permission for him to undertake the copying of those drives. She seeks an order against herself restraining her and her agents from accessing certain information. She seeks that the Court request the assistance of the authorities in relation to the execution of the orders including accompanying her on the execution of the Anton Piller order. And she seeks an order that the husband be restrained on the return of server and hard drives from altering or deleting data on the drives.
As to ex parte orders, the Rules of Court provide that – and this is really just an expression of the general law – that the applicant is required to make a complete disclosure of all relevant facts. The rules identify relevant facts as including whether there is a history or allegation of child abuse or family violence. In that regard, the wife gives evidence that there has been a history of violence inflicted on her by the husband. She makes a general assertion but also gives evidence about an incident in 2011 when she says the husband struck her over the head with a crutch and destroyed her computer. There was an interim domestic violence order, she says, secured by the police, and a charge was laid against the husband for assault. At the end of the day, she says that she told the husband that their marriage was over. She says that sometime earlier than that the husband had become physically disabled as a result of cancer. She said that following the incident in December, the husband went to live with his parents for some months. She says that she attempted to separate from the husband, and ultimately, it is not clear how, but obviously, the husband came back into the household and resumed living there. It is the wife’s evidence that she now considers herself separated from the husband. Her Application and her affidavit are a bit at odds about that – as to when that happened.
As to violence, she says in particular that the husband has forced himself upon her sexually, and that as recently as last week, she awoke and he was attempting to, in effect, rape her. She says that there were other incidents, and she will depose to them when time permits. Thus there is some evidence of a specific assault as recently as last week. Although she provides no copy of the Apprehensive Violent Order (“AVO”) involved, there is evidence that there was previously an interim AVO.
Nextly, whether there have been previous proceeding between the parties – there were only those AVO proceedings and they are not strictly between the parties, but relating to them. It is not asserted that there are orders in force between them now. The wife does not say that there was any breach of the interim AVO, although it may be implicit in what she says depending on when the hearing was conducted and when the order lapsed.
The wife has not told the respondent or his lawyer of her intention to make the Application. As to likely hardship or danger or prejudice to the respondent or a child if the order is made, the wife has noted that the order for exclusive occupancy and vacation of the property will rob the husband of the amenities of that home in relation to his disability. She thinks that can be ameliorated by a portable bathing frame. She says that otherwise, no significant changes were made to the former matrimonial home after the husband became disabled. The wife has given evidence that the husband lived at his parents’ home for a period after he became disabled, some years ago.
The wife has given an undertaking as to damages orally having had explained to her the import of the undertaking.
The wife points to the potential for a claim for property settlement as the source of funds as the wherewithal to meet that undertaking, if necessary. There is a decision of Blue Seas Investments Pty Ltd & Mitchell and McGilvray (1999) FLC 92-856 which confirms that the fact of a party’s impecuniosity would not prevent the Court making an order on an ex parte basis. You cannot be shut out from your rights to a Court on the basis of impecuniosity. It must be said that the wife has some concerns about what claim might be borne out for her in property settlement.
As to the prejudice to third parties. There are the clients of the husband’s professional practice. The Court is asked to seize all of their electronic records. There is a significant potential risk in terms of harm to those clients. The claim is pressed on the basis that time will be given over this next weekend to avoid the asserted deadline for income tax returns. That is said to ameliorate the risk in that regard, but there is a risk nevertheless.
As to the nature of the damage or harm that could result if an order is not made, in terms of the personal orders, including exclusive occupancy, the wife gives evidence that she does not have access to any significant funds. There is a need to accommodate her and three children. She has $400 in the bank. She does not have any friends and certainly no relatives in Australia with whom she could live. The wife says she has some friends, but she says she would not want to encroach on them. In the circumstances where she alleges physical danger and a basis for concern about a very adverse reaction from the husband, one could understand why she might not want to expose other people to those risks.
As to the financial records, she says – and I will address this in relation to the Anton Piller order – she says in effect that there is some complexity to the parties’ finances. She says she is aware that there were two properties registered in her name. One of them being the former matrimonial home, and it was her understanding that that home was unencumbered. She now knows that in April of this year, virtually the whole value of the property was borrowed from the ANZ Bank on the security of that property. It is her evidence that she signed a document being told and believing that it was a document in relation to borrowings by the parties’ self-managed superannuation fund for the purposes of an investment to be made by the fund in a development owned or promoted by a friend of the husband. She has recently discovered that the document she signed was the signature page of document creating a facility of $900,000 secured against the home. It is her evidence that she had no understanding and did not consent to that advance.
It is the wife’s evidence that she understands – and there is some evidence to support this in the form of a letter on settlement – that 500 and something thousand dollars was paid out on settlement of the borrowing to a company, X Pty Ltd. The wife characterises that company as the company of the husband, although, she concedes that the office holders and or shareholders are the husband’s brother and, perhaps, the husband’s mother. Thus there is some objective support for the contention that the equity in the matrimonial home, which she says has a value of $950,000 or thereabouts, has been dissipated as to nearly $600,000 and could be dissipated as to $900,000.
The document evidencing the disbursement refers to an asserted loan from the company to the parties. It is the wife’s evidence that she has no knowledge of any such borrowing. She understood that she and the husband funded the purchase of the property. She is not aware of the precise source of the funds, although, she says when the parties bought the property she was working in the husband’s practice and understood inter alia that the funds representing her wages and other funds were applied to the purchase. She says that she recalls that it was bought for about $500,000. That calls into question whether there could be a debt of a similar amount, going to the entire purchase price, still applying in relation to the property.
As to the other property registered in her name, the wife has discovered that it, too, has been dealt with. In that case, by sale. She says that she did not have any knowledge of that sale. She understands now that the sale was conducted by the husband under a power of attorney which she says that she signed some years ago, and which she says she has repeatedly sought to withdraw from the husband, or withdraw in any event, and that he has refused to cooperate with that process. She understands that the husband has been involved in the purchase of nine or 10 other properties. She thinks there have been dealings with members of his family in that regard. She does not really have an understanding of the parties’ assets or outgoings.
The mischief she points to is, the potential that the former matrimonial home represents the entirety the readily available assets of the parties and it might be that two-thirds of the value of the property has been dissipated already in a way that could not be recovered, and that the remaining equity is at similar risk. And that risk, the wife would say, cannot be addressed by listing her application on short notice. It seems to me on that basis of that evidence the balance of prejudice favours the granting of the injunctions and the orders.
In relation to the personal issues, the order sought for exclusive occupation is a draconian order, and one likely, as I said to counsel, to have an incendiary effect on the litigation. Litigation that starts with such an order usually ends up badly. But again, as to the balance of prejudice. We have three relatively young children who are not capable of self-protection. We have evidence that the wife was the subject of a sexual assault as recently as a week ago. There is evidence that she has no other reasonable options in terms of accommodation. Normally, an order such as this would be sought on short notice and the wife and children would be camped somewhere for a few days, so that the husband has an opportunity to be heard about it. But it seems to me, on balance, the wife has made a case whereby the prejudice is such that it favours ex parte orders. The wife has sat on her rights about some of these issues. She said something in the witness box about thinking about some of these issues the best part of a year ago, and it has taken her a while to get the courage to take this step.
On balance those factors favour the making of the orders. There is the obvious practical issue about it being easier to accommodate one person rather than four members of the family. There is evidence that suggests that there might be short term accommodation options for the husband.
In terms of an Anton Piller order, the rules at r 14.04 describe such an order. The order requires a respondent to permit an applicant alone or with others to enter into premises – the respondent’s premises and seize documents or property and requires the respondent to disclose specific information relevant to the case, and restrains the respondent for a period, if necessary, from informing others that the order has been made. That would be in aid of a sequential order.
An Anton Piller order is an interlocutory injunction made ex parte for the mandatory production and removal or safe keeping of documents and things and the preservation of property – the subject matter of the proceedings. It is used to preserve threatened evidence or property. The order takes its name from the decision Anton Piller K.G. v Manufacturing Processes Limited [1976] 1 Ch 55, a 1976 case from the Chancellery jurisdiction in the Great Britain. The Family Court has jurisdiction to make such an order. It was so held in a case of Talbot & Talbot (1995) FLC 92-586 from 1995. The relief is discretionary, and the applicant is obliged to make a full disclosure of material facts. A material non-disclosure is fatal to the validity of an order, says the Full Court in the matter of Stowe & Stowe (1981) FLC 91-027.
In the Anton Piller decision, Lord Justice Ormrod said that there are three essential pre-conditions for the making of an order. First, there must be an extremely strong prima facie case. Secondly, the damage, potential or actual, must be very serious for the applicant. And thirdly, there must be clear evidence that the respondents have in their possession incriminating documents or things, and that there is a real possibility they may destroy such material before any application inter partes can be made. There is no doubt we are testing the limits of the authority with the facts here.
I have referred to the evidence in relation to the transactions by the husband. We have some corroboration of the wife’s oral testimony in the fact of the borrowing of more than $500,000. Much of the case rests very significantly on the uncorroborated testimony of the wife. If the wife’s evidence was uncontroverted, which is a strong prima facie case, then significant orders would be made that would warrant the sort of relief that is being sought here. As I have indicated, the damage is potentially complete in relation to the wife. Potentially, she was a person who had a significant claim for a property settlement in a relationship of some length, the parties have three children. The wife deposes to contributions she has made in two forms, as parent and homemaker and as a wage earner at the time of the purchase of property. The wife has outlined the elements of her claim. She has pointed to assets, and she has pointed to a circumstance that could have the visible assets reduced dramatically or completely.
As to destruction of evidence, there are the references in her affidavit to the husband’s refusal to cooperate in various things. There is the evidence of his physical abuse. She has reason to believe that the husband engaged in controlling behaviour that – spying behaviour or behaviour that breaches any reasonable level of privacy or private correspondence. She has reason to believe that a website has been established – or an email address has been established – to which all of her private emails have been and are secretly diverted. She has cause to believe that she has been spied on. She asserts a level of covert surveillance of her by her husband in her home, in her motor vehicle, and of her electronic records.
The bare conduct identified by the wife of fraudulently obtaining her signature causing a borrowing of such significance; the potential abuse of trust applying to the misuse of a power of attorney without notice to the fiduciary affected by that conduct, suggests a capacity in the husband for secretive, perhaps illegal and certainly immoral, conduct. It is a matter for the wife to establish those things, and it may be that there is a benign explanation for all of this. I specifically asked the wife about that in the witness box, and I did not detect any attempt by her to mislead the Court. It seems to me that the wife was somewhat overwrought, but sincere in her expressed concerns about the various events.
I think, on balance, the Court should be satisfied on those facts that a measure of relief is available. Going through the orders sought, it is unremarkable that the husband would be restrained from further drawing on the mortgage. The property is in the wife’s name and he needs her consent to draw on the mortgage. Therefore that is not a matter of controversy.
The wife seeks permission to serve the order on the husband and on the ANZ Bank by a certain time. There is nothing remarkable that. The ANZ Bank is the mortgagee, so it is affected and it would be helpful in terms of implementation of the order if it is on notice. Some people have a view about s 121 affecting service of documents on people. It is not a remarkable thing in any event.
The next order sought is that the husband be restrained from listening into or recording the wife’s telephone or other communications. That is not remarkable. He is not permitted to do that in any event.
The second part of that order is that he be restrained from using a particular email address and is to cancel it. That order is fully supported by the evidence and I will not make that extension to the order. It may be on a later date the groundwork can be laid for that order. It is not expressed in a way that gives any latitude. He would be required to cause the cancellation of the email account, and I do not have enough evidence that he would be able to do that.
Next, that he be restrained from using particular software. I do not understand all of that and I do not think that is an order that needs to be made today.
Next, the wife seeks that the husband be restrained from assaulting, molesting or otherwise interfering with the wife. That is a significant order, albeit he is not permitted to do those things in any event. But, as I say, I think on the basis of the evidence, the balance of prejudice favours that order being made. Through section 114AA, such an order imports a power of arrest without warrant, to police. In aid of that and the exclusive occupation, the wife seeks an order that he vacate the home and a restraint on approaching within 500 metres. I have indicated my ambivalence about those orders. However, I do not resile from the fact that I think the balance of prejudice favours the making of them. I will expressly identify those orders as importing the power of arrest without warrant by noting that they are orders for the personal protection of the wife.
There is an order sought, at paragraph 19, about the husband being restrained from altering, destroying or otherwise interfering with all of the files of the practice or matrimonial documents relating to the parties’ financial affairs. That is too broad by a long chalk. Such an order would mean that the husband could not put a pencil mark on a financial record of one of his clients. Obviously that goes too far. That issue is a matter for another day but if ever, such an order should not be made.
As to the Anton Piller order, order 21, is appropriate. The word “backup” should be followed by “drives” to make it a clearer for those of us in the analog generation.
The next order sought is that the husband provide the IT expert with passwords. That is said to be required to effect the copying and will be ordered.
Then, an order is sought against the IT person to return the server.
Counsel reminds me of a discussion we have had during which I indicated that I would not be willing to allow the wife access to any of the information, except for the purpose of complying with the letter of the order until the matter has come back before the Court. Unless the parties agree, of course. Normally, the concern is that there might be privileged information or private information of the respondent amongst the seized material. Here, there is the additional concern that these are business records and there is likely to be private information of many third parties among the seized records. The orders about inspection of the material will need to be carefully considered, and in the first instance, the process of accessing the server and drives will be for the bare purpose of replicating them.
Assistance is requested from the authorities and I will make that request. It is a matter for the authorities whether they assist with the execution of the orders. I will add the Marshal of the Court to the addressees and a copy of the order will be sent to his office. That can be useful in terms of liaison with the police. I will address the request to the Marshal of this court, and then officers of the Federal Police and the New South Wales Police.
The order proposed seeks that the husband be restrained from altering or deleting items from the server or backup after their return, and I will not make that order.
As to the role of the supervising solicitor, in a decision of Microsoft Corporation v Goodview Electronics Pty Ltd (1999) 46 IPR 159 at [30], Branson J said:
… The service of the order by the supervising solicitor, a neutral appointee of the court, should assist in ameliorating the shock likely to be experienced by the occupier of premises when the order is served. Further the supervising solicitor will then be in a position:
(a)to give immediate and independent advice to the occupier as to the significance of the order;
(b)to ensure that the occupier has an appropriate opportunity to obtain his or her own legal advice should he or she so desire;
(c)to mediate any dispute as to whether any particular member of the applicant’s search team is an unsuitable member of the team on the basis, for example, that he or she might derive commercial advantage from an inspection of the premises;
(d) to ensure the proper protection of privileged documents (if any);
(e) to attempt to achieve agreement on a suitable search procedure;
(f)to assess whether items or documents come within the terms of the court order and, in the case, of doubtful material, to ensure its safe keeping pending an order of the court;
(g)to ensure that an appropriate list is prepared of all items or documents to be removed from the premises; and
(h) generally to assist in the smooth execution of the order.
In PMSI Group v Wilson [2003] NSWSC 263 Campbell J said at [8]:
The role of the Supervising Solicitor is most important. The Supervising Solicitor must be a solicitor who is independent of the solicitor for the plaintiff, and who has experience in the execution of Anton Piller orders. We do not have that last bit here. The solicitor involved has indicated that he has a practicing certificate and he agrees to undertake the role. He does not say he knows what the role is, and the orders as they are drawn do not require the seized material to remain in his presence at all time, and that must be part of the order. It is not a situation where we can visit that responsibility on an information technology expert. It is critical that the solicitor attend at all times, retain physical possession of the items seized, make a record of the event of the attendance upon the premises, and be available to assist in, as Branson J identified, the smooth execution of the orders.
I certify that the preceding forty six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 30 October 2014.
Associate:
Date: 13 November 2014
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