Murillo & Murillo (No 4)
[2023] FedCFamC1F 199
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Murillo & Murillo (No 4) [2023] FedCFamC1F 199
File number(s): SYC 3325 of 2017 Judgment of: SCHONELL J Date of judgment: 24 March 2023 Catchwords: FAMILY LAW – PROPERTY – Injunction – Where the second respondent sought orders relating to a property that she owns – Where the first respondent resides in that property – Where the property has been sold and settlement is to occur in April 2023 – Where the second respondent seeks an injunction – Where there is no evidence that relief will be imperilled if the injunction is not granted – Application dismissed. Legislation: Family Law Act 1975 (Cth) ss 90SM, 114 Cases cited: Sieling & Sieling (1979) FLC 90-627; [1979] FamCA 23
Tsiang & Wu and Ors (2019) FLC 93-911; [2019] FamCAFC 128
Division: Division 1 First Instance Number of paragraphs: 27 Date of hearing: 24 March 2023 Place: Sydney Solicitor for the Applicant: Mills Oakley Solicitor for the First Respondent: Coleman Greig Lawyers Counsel for the Second Respondent: Mr Lo Schiavo Solicitor for the Second Respondent: Cruz Clowry Law Group ORDERS
SYC 3325 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MURILLO
Applicant
AND: MR MURILLO
First Respondent
MS B
Second Respondent
order made by:
SCHONELL J
DATE OF ORDER:
24 MARCH 2023
THE COURT ORDERS THAT:
1.The Amended Application filed 16 March 2023 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Murillo & Murillo has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
SCHONELL J:
These are interlocutory proceedings brought by the second respondent against the first respondent in relation to a property at Suburb N.
The second and first respondent were in a de facto relationship that ended in February 2022. There is one child of that relationship.
During the course of that relationship, the first and second respondents purchased a property at Suburb N in the name of the second respondent. The funds to acquire the property were provided in part from a bank and in part by way of a loan from a company controlled by the first respondent.
The first respondent is also a party to proceedings brought by the applicant for financial adjustment arising out of their relationship, the commencement of which pre-dates the relationship with the second respondent.
As part of her final relief, the applicant seeks orders and declarations in relation to the Suburb N property.
On 9 January 2023, the second respondent in reply to the relief sought by the applicant filed an Amended Response. That Amended Response seeks the following orders:
1. That the balance of the proceeds of sale of the property situated at and known as [M Street, Suburb N] NSW (“the [Suburb N] property”) be disbursed from the trust account of Cruz Clowry Law Group Pty Ltd as follows:
a. The sum of $539,435.75 to [V Pty Ltd];
b. The balance to be paid into a controlled monies account pending agreement between the First and Second Respondents or otherwise a further order of the Court.
2. That upon payment of the amount specified in 1(a) above the First Respondent shall indemnify the Second Respondent as to any liability arising from the mortgage dated [late] 2017 between [V Pty Ltd] (Mortgagee) and [Ms B] (Mortagor).
3. A declaration that the neither the Applicant nor [V Pty Ltd] has any legal or equitable interest in the monies referred to in 1(b) above.
4. The First Respondent shall indemnify the Second Respondent in respect of any and all actions, claims, suits, and demands as may be made against the Second Respondent by the Applicant.
I raised today with counsel for the second respondent whether the Amended Response is to be construed as seeking relief under s 90SM of the Family Law Act 1975 (Cth) (“the Act”) as against the first respondent. I am not confident that I received an affirmative response.
The Suburb N property has been sold and settlement is to occur in April 2023. The second respondent by application filed 16 March 2023 seeks orders that the first respondent pay the mortgage over the property and vacate the property within 7 days.
The first respondent has been residing in the property with the implicit consent of the second respondent since she vacated the property on the parties’ separation. Her counsel said that she has not brought any proceedings to have the first respondent vacate the property until the filing of the current application on 16 March 2023. Her evidence, which does not appear to be in dispute, is to the following effect:
2. I purchased the property at [M Street, Suburb N] (“the [Suburb N] property”) in around 2017.
3. The property was purchased in my sole name.
4. When I purchased the property there was a mortgage attached to it with [TT Bank], and this mortgage is in my sole name. As at 2 March 2023, the outstanding mortgage debt is $1,749,973.45 with arrears of $49,909.97.
5. Since the purchase of the [Suburb N] Property and during my relationship with [Mr Murillo], we have both been responsible for paying the mortgage. I was responsible for caring for [X] and other family duties. I have made the following repayments to the mortgage:
a. 18 June 2018 - $2,900.00
b. 3 July 2018 - $2,900.00
c. 18 July 2018 - $1 ,800.00
d. 31 July2018 - $1,800.00
e. 15 August 2018 - $2,900.00
f. 24 March 2020 - $3,000.00
g. 16 October 2020 - $5,800.00
h. 30 October 2020 - $3,000.00
i. 16 November 2020 - $2,900.00
j. 27 November 2020 - $2,900.00
k. 10 December 2020 - $2,900.00
6. After I separated from [Mr Murillo] in February 2022, I left the [Suburb N] Property with our son [X] who was three years old at the time. [Mr Murillo] remained living at the property and continues to live there.
7. [Mr Murillo] continued paying the mortgage for some time after we separated, but stopped after 29 July 2022. [Mr Murillo] is not paying any rent to me and has not ever paid rent while living at the [Suburb N] Property.
…
9. [In late] 2022 I applied to the bank to have the mortgage repayments put on hold through a Hardship Assistance Scheme. The Bank agreed to do this, under the following schedule. I further refer to this schedule in Annexure A of my affidavit sworn on 23 September 2022:
a. $0, 17/8/2022
b. $0, 17/9/2022
c. $0, 17/10/2022
d. $0, l 7/11/2022
e. $0, 17/12/2022
f. $0, 17/1/2023
g. $9370, 17/2/2023
h. $9370, 17/3/2023
i. $9370, 17/4/2023
j. $9370, 17/5/2023
10. The first monthly payment of $9370.00 fell due on 17 February 2023. Payments of $9370 are ‘serviceability payments’ and will continue for six months, after which the monthly payments will return to their full balance. Annexed and marked ‘Annexure A’ is a copy of email correspondence from [TT Bank] dated 2 March 2023 confirming these details.
…
16. On 2 March 2023, I instructed my solicitor to write to [Mr Murillo’s] solicitor advising them that the first serviceability payment was overdue and that if it was not paid immediately then it would result in a negative impact on my credit rating. This has been annexed and marked ‘Annexure C’.
17. I believe [Mr Murillo] did make the payment of $9,370.00 to the bank after receiving this letter.
She says that she cannot afford to meet the mortgage payments in relation to the Suburb N mortgage. The next instalment is due on 17 April 2023 in the sum of $9,300.
The first respondent in his affidavit does not address whether he has the capacity to meet the mortgage payments but does say he will vacate the property on settlement. In his affidavit, he says:
2. [Ms B] and I purchased a property situated at [M Street, Suburb N] (“Suburb N Property”) in 2017 and this was placed in [Ms B’s] sole name. We both lived in her property and raised our child [X] there. In order to purchase the property, [V Pty Ltd] loaned the sum of $709,160 to [Ms B] from the business. A caveat was placed against the property by [V Pty Ltd] and [Ms B] was made aware that it would only be removed once the business was repaid.
…
4. Neither [Ms B] or I had the financial capacity to retain the [Suburb N] property and agreed that the property needed to be sold. [Ms B] applied for and was successful in obtaining mortgage relief against the property from [TT Bank].
5. By consent, orders were made on 2 November 2022 that within twenty-eight days, the parties were to do all acts and things and sign all documents necessary to cause the [Suburb N] property to be listed for sale. The orders of this date also ordered the appointment of [Mr UU] of [VV Real Estate] to be appointed as the independent trustee of the sale (annexed hereto and marked “A”).
…
13 On 3 March 2023, I caused my solicitor to write to [Ms B’s] lawyer advising that the repayment for the mortgage due post-hardship period was due on same date. (My solicitor indicated that I was hopeful the [Suburb N] property would sell prior to the hardship period ending. The letter to Mr Cruz noted and confirmed I had been liaising with [Ms B] regarding the sale price and how we were trying to obtain the best outcome for the property. My solicitor advised Mr Cruz that if [Ms B] (we made the payment that day and we would do so on the basis that they will write to the bank thereafter) made payment on 3 March 2023, then [Ms B’s] application for hardship would not be declined. My solicitor requested that Mr Cruz confirm prior to the next Court date of 24 March 2023 that [Ms B] was assisted by Mr Cruz with respect to applying for a hardship extension with the bank. I made this request because I was not aware if [Ms B] had applied for an extension on her own. I am aware that the bank would take into consideration requests made by practitioners on behalf of their clients in cases where the home was on the market to be sold and subject to Court Orders (annexed hereto and marked “E”).
…
20. On 16 March 2023 [Ms B] filed an amended application sealed 16 March 2023 that I should be removed from the [Suburb N] property within 7 days. This is well before the settlement period. I require an appropriate time to find a new rental property not just to cater to my own needs but also that of [X] when he is present in my potential new rental property. I have been searching for a new rental and have made an application for a home at [Suburb SS].
21. As I am the only one of the parties that is employed I do not have ample time to check out rentals whilst I have to manage my work projects. I am happy to fulfill the terms of the contract and provide clear occupancy by the allocated time frame in the Orders.
There is no evidence before me that the first respondent has taken steps to frustrate the sale or would do other than vacate the property on settlement. He gives evidence that he is looking for alternate accommodation.
These are interlocutory proceedings and I am not unable to findings on disputed facts.
The second respondent did not identify the source of power to make the order she seeks. I presume it is an injunction pursuant to s 114(2A) of the Act. It is not expressed as a maintenance order.
The effect of the orders is, assuming settlement occurs in April 2023, that the first respondent will be required to make one mortgage repayment in April, some four days prior to the settlement. She also seeks an order that he vacate the property within 7 days, that is by about 31 March and that she thereafter have exclusive occupation. She does not, however, give evidence that she intends to enter possession but as the legal owner would be entitled to do so with or without an order.
Section 114 of the Act provides that the Court may make such order or grant such injunction as it considers proper, including an injunction in relation to the property of a party.
In Tsiang & Wu and Ors (2019) FLC 93-911, the Full Court summarised the relevant law in relation to injunctions in the following terms:
20.The grant of an injunction is discretionary and the basis on which such an order is made is well established. A purpose, as in this case, is to preserve the status quo pending resolution of the controversy. An applicant must demonstrate first that there is a serious issue to be tried. While that statement has been the subject of various iterations, in essence it requires the demonstration of an arguable case or as was said in Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65], the applicant must “show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo”.
21.Next the applicant must demonstrate that the balance of convenience favours making the order sought. As part of this, the applicant must show that there is a “danger” or risk of dissipation of or dealings with assets which will frustrate any judgment in favour of the applicant.
22.In Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319, Gleeson CJ said after discussing the discretionary nature of the remedy at 321–325:
… as a general rule a plaintiff will need to establish, first, a prima facie cause of action against the defendant, and secondly, a danger that, by reason of the defendant’s absconding, or of assets being removed out of the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied.
...
It is not difficult to imagine situations in which justice and equity would require the granting of an injunction to prevent dissipation of assets pending the hearing of an action even though the risk of such dissipation may be assessed as being somewhat less probable than not.
23.As McDougall J in Skyworks v 32 Drummoyne Road [2017] NSWSC 343 said:
24.The Court is required to undertake a qualitative evaluation of all the evidence that is available, to see if there is a sufficiently serious risk of frustration to justify the making of a freezing order. Further, the two considerations [namely, (1) whether there is a good arguable case and (2) whether there is a real risk of judgment frustration] should be analysed together (as each may impact on the other), and with an appreciation of both the underlying purpose of the rule and the relative risks of granting or withholding relief – the customary discretionary calculus.
24.In this case the identified risk was that the wife might dispose of assets in Australia and in her name in order to defeat the husband’s claim and, equally it was asserted that there was a risk that the second and third respondents too might deal with the partnership assets in a way so as to defeat the husband’s possible judgment or claim to that entity.
25.It is unnecessary to demonstrate a positive intention but merely the possibility of the event occurring. The determination about the balance of convenience may thus be an inference drawn from the facts and circumstances established by the applicant’s evidence.
26.Nor is it the role of the judge determining the question of the injunction to, in effect conduct a trial of the disputed evidence to resolve those disputes (see Shercliff v Engadine Acceptance Corporation Pty Ltd [1978] 1 NSWLR 729).
27.As to the determination of the existence of the risk and its magnitude, in Palmer v Parbery [2019] QCA 27 McMurdo JA (with whom Fraser and Gotterson JJA agreed) said:
119.The determination of whether there exists a sufficiently serious risk of the dissipation of assets involves the evaluation of future possibilities, rather than the ascertainment of historical facts. The risk of dissipation might justify an order although the probability of the risk eventuating is less than 50 per cent. But, as the risk of dissipation must be a real and not merely a theoretical one, it must have an evidentiary basis. Where a fact is alleged by the plaintiff in support of its case about the risk, but there is contrary evidence from the defendant, must the fact be proved to the court’s satisfaction as if the application for the freezing order was the trial of the case? In my view, a plaintiff need not do so. A freezing order is interlocutory in nature; it does not involve a final determination of the parties’ positions. Usually it is made in circumstances of urgency in which the court is unable to conduct an extensive and conclusive factual inquiry in a way which is fair to both parties. Where the factual basis for the plaintiff’s case about the risk of dissipation is disputed, the risk will commonly have to be evaluated with the recognition that the factual basis for it is in doubt. Nevertheless, the possibility of the plaintiff’s evidence being correct, considered with other facts and circumstances, might mean that there is a sufficiently serious risk of the frustration of the satisfaction of a judgment as to justify the making of a freezing order. …
(Footnotes omitted)
Thus to ground the second respondent’s relief, she needs to establish that there is a serious issue to be tried alternatively expressed as a prima facie case for relief. She must also establish that her claim for relief will be imperilled if the injunction is not granted. To that extent the Court might be satisfied about risk of dissipation by an assessment of future possibilities of an event occurring, which may be established by the drawing of inferences from the evidence.
The question of prejudice to the first respondent needs to be considered and the order made should be no more than is necessary. It is the party seeking the injunction who bears the onus of satisfying the Court that the circumstances justify the making of the order: Sieling & Sieling (1979) FLC 90-627 at 78,262.
I am not satisfied that the second respondent has established the requisite elements sufficient to engage the relief she seeks. I accept that the Amended Response identified some relief.
There is no evidence, however, that final relief will be imperilled if the injunction is not granted. There is no evidence that the first respondent will not vacate the property.
The second respondent has not adduced any evidence that the first respondent has the capacity to meet the order that she seeks nor that it is necessary that he do so to protect her final position in light of the orders she seeks at paragraph 1(b) of the Amended Response.
I am also satisfied that there is a prejudice to the first respondent in the relief she seeks given his evidence as to his ability to find a rental property in the time sought.
The second respondent also sought an order as follows in her application filed 16 March 2023:
3. Otherwise than by written agreement with the Second Respondent, the First Respondent is restrained from removing or causing to be removed from the [Suburb N] property any items of furniture, electrical goods or appliances, or any household items.
No evidence is adduced in support of that order.
These proceedings are highly conflictual and on its face, the order, if made, would mean that in the absence of any agreement, the first respondent could not remove the contents of the home. This could have the effect of frustrating the settlement.
For these reasons I will dismiss the second respondent’s application.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 24 March 2023
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