Palau & Ors and Palau & Anor - [2017] FamCA 961

FAMILY COURT OF AUSTRALIA

PALAU AND ORS & PALAU AND ANOR

[2017] FamCA 961

FAMILY LAW – PRACTICE AND PROCEDURE – INJUNCTION – Where the applicants seek to be joined to the proceedings currently on foot between the first and second respondents – Where certain injunctions were also sought against the Husband – Whether the applicants are a necessary party to the proceedings – Where the Husband has provided an undertaking not to cause the reappointment of a receiver or controller – Whether sufficient evidence to warrant further injunctions

Family Law Rules 2004 (Cth)

Mullen and De Bry (2006) FLC 93-293
Waugh and Waugh (2000) FLC 93-052

FIRST APPLICANT:

Mr A Palau

SECOND APPLICANT:

Mr Dylan

THIRD APPLICANT:

B Pty Ltd ACN …

FIRST RESPONDENT:

Ms C Palau

SECOND RESPONDENT:

Mr D Palau

FILE NUMBER:

BRC

6537

2017

DATE DELIVERED:

28 November 2017

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Carew J

HEARING DATE:

27 November 2017

REPRESENTATION

COUNSEL FOR THE FIRST, SECOND, AND

THIRD APPLICANTS:

Mr Coulsen

SOLICITOR FOR THE APPLICANT:

Stone Group Lawyers

COUNSEL FOR THE FIRST RESPONDENT:

Mr Jordan

SOLICITOR FOR THE FIRST

RESPONDENT:

Phillips Family Law

COUNSEL FOR THE SECOND

RESPONDENT:

Dr Ingleby

SOLICITOR FOR THE RESPONDENT:

Hopgood Ganim Lawyers

Upon the continuation of the undertaking given by the applicants on 14 November 2017

and upon undertaking of the husband not to cause the reappointment of a receiver or controller to BPL projects pty ltd until further order

Orders

That Mr A Palau, Mr Dylan and B Pty Ltd (“the interveners”) be joined to the proceedings pursuant to Rule 6.02 of the Family Law Rules 2004 (Cth).
That on or before 4.00pm 31 January 2018 Mr D Palau file and serve an Amended Initiating Application setting out the orders sought against the interveners and a Statement of Claim particularising his claim against the interveners.
That on or before 4.00pm 28 February 2018 the interveners file and serve a Response to the Amended Initiating Application and a Defence to the Statement of Claim.
That paragraphs 8, 9 and 10 of the Application in a Case (as amended by leave) filed 24 November 2017 be adjourned to the trial judge.
That paragraph 11 of the Application in a Case (as amended by leave) filed 24 November 2017 be dismissed.
That the Application in a Case (as amended by leave) filed 24 November 2017 be otherwise dismissed.
That any extant application for interim orders be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Palau and Ors & Palau and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 6537 of 2017

Mr A Palau

First Applicant

And

Mr Dylan

Second Applicant

And

B Pty Ltd ANC …

Third Applicant

And

Ms C Palau

First Respondent

And

Mr D Palau

Second Respondent

REASONS FOR JUDGMENT

The applicants apply to be joined to the proceedings currently on foot between the first respondent (“the wife”) and second respondent (“the husband”) and for certain injunctions against the husband seeking to restrain him from allegedly interfering with the operation of a business currently operated by the applicants.
The husband opposes the joinder of the applicants unless they file a ‘notice of facts, issues and contentions’ with respect to the final orders they seek as set out in their Application in a Case filed 9 November 2017 before the husband files a ‘notice of facts, issues and contentions’ in response. The husband seeks an adjournment of the application for the injunctions and opposes the granting of any injunction pending the return of the matter to court.
The applicants contend that the husband should file a ‘notice of facts, issues and contentions’ first in time.
The wife joins in the relief sought by the applicants.

background

The husband and wife married in 1985 and separated on 14 March 2016. Since separation the relationship between the wife, the first applicant (“Mr A”) and the husband has soured with the husband contending that Mr A has taken the wife’s ‘side’ in the dispute.
The husband commenced a new relationship in May 2016 and is now engaged to be married.
The wife commenced proceedings for property settlement and spouse maintenance on 29 June 2017.
Mr A is the son of the wife and husband. The second applicant (“Mr Dylan”) is a long-time family friend and business partner. The third applicant (“BPL”) operates a contracting business (“the current business”). Mr A and Mr Dylan are the directors of BPL. The shareholders of BPL are Mr A, Mr Dylan and C Pty Ltd as trustee for C Trust (“the trust”). Mr A and the wife control the trust and are the beneficiaries.
There is a significant dispute between the parties about the current business. The husband alleges that the wife and Mr A and others conspired to illegally remove him from the business he had built up over many years.
On 31 October 2017 the husband caused a receiver to be appointed to BPL and commenced proceedings in the Supreme Court of Queensland seeking a declaration that the appointment had been validly made. Those proceedings were initially adjourned pending the determination of an application by the applicants to join the proceedings in this Court.
On 14 November 2017 the parties, including the receivers, reached agreement in this Court, inter alia, for the appointment of the receivers to be terminated. The applicants provided certain undertakings in relation to the continued orderly operation of the business (amongst other things) and those undertakings continue. On the basis of the undertakings, the Application in a Case filed 9 November 2017 was adjourned to 27 November 2017.[1]
[1] Only paragraphs 1, 9, 10, 11 and 12 sought relief on an interim basis and the balance related to final relief. As the appointment of the receivers was terminated paragraphs 10 and 11 were no longer sought
The Court has accepted a further undertaking from the husband not to cause a receiver or controller to be reappointed to BPL.
In the meantime a further Application in a Case was filed on 24 November 2017 which was amended by leave on 27 November 2017. Mr Coulsen, counsel for the applicants, clarified that any relief previously sought by the applicants has been subsumed by this application. I note that the Application in a Case filed 24 November 2017 was listed for mention only although that could only relate to the additional relief sought and in particular the injunction sought to restrain the husband from allegedly interfering with the operation of the business.
In his affidavit filed in the Federal Circuit Court on 8 August 2017 the husband, in support of his application that the proceedings be transferred to this Court, stated that inter alia:
a)He intended to rely upon the accrued jurisdiction of this Court in seeking relief against the applicants (and another person) for breach of fiduciary duty; and
b)Before the Court could determine the value of the matrimonial pool and make final orders in the proceedings his claim against the applicants would need to be determined.
Also in that affidavit, the husband set out a list of property that he said were “the assets, liabilities and financial resources of the matrimonial pool”. Included in that list are all of the shares in BPL owned by Mr A, Mr Dylan and the trust and all of the shares of the trustee company and all of the assets of the trust.
The husband contends that he started an contracting business in 1986 and built it up to a number of entities which comprise the Palau Group. During the period 1999 to 2014 a business was conducted via two entities, D Pty Ltd and E Pty Ltd (“EPL”). On 31 October 2014 D Pty Ltd went into liquidation. BPL was incorporated on 25 August 2014 and until February 2017 BPL and EPL operated separate aspects of the business. The husband was not a shareholder of BPL but contends that he made all the important decisions, tendered for all new work and secured contracts for both aspects of the business.
The operation of the business was effectively split in February 2017 so that the husband operated his part through EPL and the applicants operated their part through BPL.
Mr A worked in the business from 2008 and became a director of BPL on incorporation. Mr Dylan worked in the business from 2005 and also became a director of BPL on incorporation.
The husband contends that with the assistance of certain key staff within EPL, the applicants have sabotaged his business and have in the process unlawfully cancelled banking arrangements and telephone accounts, made unauthorised payments, removed his car and transferred accounting data to BPL. He further contends that the applicants issued invoices to customers of EPL.
The husband contends that before fully appreciating the extent of the sabotage he entered into an agreement with Mr A in March 2017 that the husband would be a subcontractor to BPL.
Upon discovering the extent of the alleged subterfuge the husband terminated the agreement in May 2017.
The husband contends that the actions of the applicants have significantly reduced the value of the matrimonial pool and have deprived him of his livelihood.
Mr A contends that on 1 November 2017 he was informed by a an employee F Pty Ltd (“of FPL”), that the husband had informed it that BPL owes the husband $600,000 and that the manager of FPL has said he was happy for the husband to “sink” BPL.
On 16 November 2017 FPL terminated BPL projects on all of FPL’s projects relying on a receiver having been appointed. BPL informed FPL that no receiver was appointed. No response to that email was received.
Mr A states that he is “concerned” that the recovery of money currently owing by FPL to BPL in the sum of $174,682 may be put in jeopardy without commencing legal proceedings.
On 2 November 2017 Mr A received an email from another customer advising that the husband had advised him that a receiver had been appointed to BPL.
On or about 2 November 2017 it was suggested to Mr A by the receivers that he may want to chase a particular customer for payment. On the basis of that suggestion Mr A became “concerned” that the husband may have provided commercially sensitive information to the receiver.
On 13 November 2017 another customer informed Mr Dylan that the husband had attended a work site where BPL was undertaking work and said that he would be taking over the project.

discussion

Joinder

The joinder of the applicants can be made by the court pursuant to Rule 6.02 of the Family Law Rules 2004 (Cth) where it is considered that they are a necessary party to the proceedings. Rule 6.02 relevantly provides:
(1) A person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.
On the face of the husband’s affidavit filed 8 August 2017 he intended to include in the property ‘pool’ available for distribution between the husband and wife, shares owned by Mr A and Mr Dylan in BPL and the property at G Street, Suburb H in which Mr A lives and considers he owns. In addition, the husband contended that the property ‘pool’ cannot be identified until his claim against the applicants has been determined. On the face of the evidence relied upon by the husband there would appear to be a prima facie claim in equity against the applicants and it would appear that any such claim would need to be determined in order to identify the property ‘pool’.
The husband in his Response filed 24 November 2017 seeks the joinder of the applicants subject to a condition.
The applicants wish to be joined and the wife supports their joinder.
The only issue about which there is dispute is which party should be required to plead their case first. Although pleadings are not usual in this Court it is generally the case that they are required in a case where the accrued jurisdiction of the court will be relied upon.
The declarations sought in the applicant’s Application in a Case should more correctly be included in a Response to Initiating Application. They are defensive in nature as submitted by Mr Coulsen for the applicants.
Accordingly I propose to order that the applicants be joined and that the husband file a Statement of Claim and the applicants file a Defence.

Injunction

There was some discussion about a short adjournment to enable the husband to file an affidavit in response to the application for an injunction against him and whether or not an injunction should be granted in the meantime. As the parties were unable to agree I have proceeded to consider the application on its merits. As I do not propose to grant the injunction there is no need to adjourn it.
In considering whether or not to grant an interlocutory injunction the following considerations are relevant:[2]
a)Whether there is a serious issue to be tried;
b)The balance of convenience;
c)Whether there is any objective risk that a claim for substantive rights may be prejudiced if the injunction is not granted; and
d)If it is considered appropriate to issue injunctions they should to the minimum extent required.
[2] Waugh and Waugh [2000] FamCA 1183; (2000) FLC 93-052 and Mullen and De Bry [2006] FamCA 1380; (2006) FLC 93-293
The applicants rely upon alleged conduct on the part of the husband that predates his consent to terminate the appointment of the receiver. The receiver’s appointment has now been terminated and the husband has provided an undertaking not to cause the reappointment of a receiver or controller. It is submitted on behalf of the applicants that I should infer that the husband will take steps in the future to interfere with the operations of the business. I am not satisfied on the evidence before me that such an inference is open.
Accordingly, I propose to dismiss the application for the injunction.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 28 November 2017.

Associate:

Date: 28 November 2017.