Owen v Owen

[2019] ACTSC 108

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Owen v Owen

Citation:

[2019] ACTSC 108

Hearing Date:

29 April 2019

DecisionDate:

29 April 2019

Before:

Murrell CJ

Decision:

Freezing order in the amount of $110,000 made.  Costs reserved. 

Catchwords:

PRACTICE AND PROCEDURE – FREEZING ORDER – Where the Respondent is the judgment debtor in another court – Whether there is a danger that a judgment debt will go unsatisfied because of the disposal of assets – Whether balance of convenience favours the making of the order

Legislation Cited:

Court Procedures Rules 2006 (ACT) rr 741, 743

Service and Execution of Process Act 1992 (Cth) s 105

Cases Cited:

Jackson v Sterling Industries Ltd (1987) 162 CLR 612

National Gallery of Australia v Beljan [2018] ACTSC 78

Parties:

Paul Owen, as executor of the estate of Sharyn Louise Owen (Applicant)

Amanda Amy Owen (Respondent)

Representation:

Counsel

Ms C Lee (Applicant)

No Appearance (Respondent)

Solicitors

Bradley Allen Love Lawyers as agent for Walsh & Associates (Applicant)

No Appearance (Respondent)

File Number:

SC 199 of 2019

Murrell CJ

Application

1. The applicant is the father of the late Sharyn Louise Owen (the deceased) and executor of her estate.  The respondent is the applicant’s former daughter-in-law, the deceased’s former sister-in-law and the mother of D, the deceased’s niece.  The respondent separated from the deceased’s brother in 2016.

1. The applicant applies for a freezing order in relation to funds of $131,000 held or to be held by Sneddon Hall and Gallop Pty Ltd on trust for the respondent, and seeks the provision of information concerning the respondent’s assets. 

1. The application provides for exceptions and asks that the costs of the application be reserved to the judge hearing the application on the return date.

1. The applicant offers appropriate undertakings.

1. The respondent is on notice of the application.  The Court has been advised by email that she is overseas and is not expected to return until 1 May 2019 or soon thereafter. 

Facts

1. As tutor for D, the respondent brought proceedings in the Supreme Court of New South Wales challenging the grant of probate to the applicant in relation to the deceased’s estate.  On 11 March 2019, the Supreme Court dismissed the proceedings, ordering the respondent to pay 75 per cent of the applicant’s costs of the proceedings.  

1. The applicant asserts that he incurred costs of $117,570.96.  At 75 per cent, the costs due to the applicant would be $88,178.22.  The respondent disputes the quantum of the costs and will seek an assessment.  As the costs were awarded on the ordinary basis, it is unlikely that the assessed costs will exceed $88,178.22. 

1. That costs order made in New South Wales is likely to be registered and enforced in this court under s 105 of the Service and Execution of Process Act 1992 (Cth).  The respondent is a judgment debtor in relation to the costs order.

1. There is also the question of securing the costs of this application.  I am informed that these costs already amount to about $20,000 to 25,000, which seems a high figure.  However, there are two firms of solicitors involved: one in New South Wales and the other acting as agent in the ACT. 

1. On 20 November 2018, the Federal Circuit Court of Australia made consent orders finalising the division of the matrimonial property of the respondent and the deceased’s brother.  The order provides for the sale of the former matrimonial home in Forde, ACT and sets out how the proceeds of sale are to be distributed. 

1. The matrimonial home was sold recently for $845,000.  The expected settlement date is tomorrow, 30 April 2019.

1. If the proceeds are distributed in accordance with the orders of the Federal Circuit Court, the value of the respondent’s remaining equity is estimated to be $131,000.  It is expected that this sum will be paid to the respondent’s solicitors for the conveyance, Sneddon Hall and Gallop.

1. According to the applicant, these funds are the only known means available to the respondent to meet the applicant’s costs of the New South Wales proceedings and this application.

1. The respondent has declined to provide her solicitor with an irrevocable authority directing that the applicant’s costs be paid from the sale of the property.  She has stated that the proceeds have already been assigned to the payment of other expenses, to which she affords higher priority.  One of those expenses may be the respondent’s own costs of the New South Wales proceedings of approximately $20,000. 

Rule and legal principles

1. The relevant rules are rr 741 and 743 of the Court Procedures Rules 2006 (ACT). Rule 741 relates to the making of a freezing order to prevent the frustration of the court's process by ensuring that a prospective order of the court is not made valueless or diminished. It applies to any costs order that might be made in connection with the current proceedings before this court.

1. The rule that is relevant in relation to the costs order made by the New South Wales Supreme Court is r 743. It applies if an order has been given in favour of an applicant by another court and if there is a sufficient prospect that the order will be registered in or enforced by this court. Rule 743(4) provides:

(4) The court may make a freezing order or ancillary order (or both) against an enforcement debtor or prospective enforcement debtor if satisfied, having regard to all the circumstances, that there is a danger that an order or prospective order will be completely or partly unsatisfied because any of the following might happen:

…

(b) the assets of the enforcement debtor, prospective enforcement debtor or someone else are –

(ii) disposed of, dealt with or diminished in value.

1. Under r 743(5), the court may make a freezing order against a third party where the third party holds a power of disposition over assets.

1. The purpose of the discretionary power to make a freezing order is not to create security for the applicant; it is to prevent frustration of a court process: Jackson v Sterling Industries Ltd (1987) 162 CLR 612. Before an order is made, the applicant must establish both a good arguable cause of action and that there is a danger (or “real risk”) that a judgment debt will go unsatisfied because of the disposal of assets.

1. In National Gallery of Australia v Beljan [2018] ACTSC 78 at [30], Mossop J said:

In general terms, in order to warrant the making of a freezing order it is necessary to establish:

(a) that the plaintiff has a vested and accrued cause of action against the defendant;

(b) that a danger exists that if the plaintiff is successful, it will not be able to have the judgment satisfied by reason of the defendant absconding, removing assets from the jurisdiction, disposing of them within the jurisdiction or otherwise dealing with them in a manner that puts them beyond reach; and

(c) the balance of convenience favoured the granting of relief.

Consideration

1. In this case, I am satisfied that an order has been made by another court (the New South Wales Supreme Court) that is likely to be registered in this court.  It is virtually certain that the order will be registered.

1. Given the imminent settlement date, the respondent’s refusal to give an irrevocable authority, and the fact that the Federal Circuit Court orders indicate that the respondent’s only asset of substance is her equity in the Forde property, I am satisfied that there is a danger or real risk that, if the freezing order is not made, the New South Wales order will be completely (or, at the very least, partly) unsatisfied because the funds held by Sneddon Hall and Gallop will be dissipated by the respondent paying other debts.

1. Given the relatively brief period for which the order will stand, the balance of convenience clearly favours the granting of relief.

1. As to the appropriate quantum of the order, an order in the sum of $110,000 should satisfy both the need to protect the costs awarded in the New South Wales proceedings and the need to provide for the reasonable costs of these proceedings.

1. Although an order of this nature would usually be made for a very brief period, given the respondent's indication that she will not return from overseas until on or after 1 May, it is appropriate that the order be made and the proceedings adjourned until 6 May 2019, one week from today. 

Orders

1. I make orders in accordance with the general form of order proposed by the applicant, restraining the respondent from disposing of, dealing with or diminish the value of funds not exceeding $110,000 held or which may become held by Snedden Hall and Gallop.  The matter is returnable on 6 May 2019 before the duty judge. 

1. The costs of the application are reserved.

I certify that the preceding twenty-six [26] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice Murrell.

Associate:

Date: