Federal Circuit and Family Court of Australia
(DIVISION 1)
Pejic & Pejic (No 2) [2022] FedCFamC1F 513
File number(s): CAC 559 of 2022 Judgment of: AUSTIN J Date of judgment: 4 July 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Review of Decision – Property – Injunctions – Where the second, third, fourth and fifth respondents seek review of interim orders granting the wife sole occupation of a property and restraining them from disposing of or encumbering it – Where the property is owned by the third and fifth respondents – Where the wife failed to advance any good reason for why the third and fifth respondents should be impeded from exercising their legal rights in respect of the property – Where the wife could not establish the grounds for an interim injunction – Orders of the senior judicial registrar set aside – Interim order made by consent restraining the third and fifth respondents from dissipating the net proceeds of the property if and when it is sold – Costs ordered in a fixed sum. Legislation: Family Law Act 1975 (Cth) Pt VIII, s 79 Cases cited: Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249
Blue Seas Investments Pty Ltd & Mitchell (1999) FLC 92-856
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148
Re Ross-Jones; Ex parte Green (1984) 156 CLR 185
Division: Division 1 First Instance Number of paragraphs: 43 Date of hearing: 4 July 2022 Place: Newcastle (via video link) Counsel for the Applicant: Dr Leslie Solicitor for the Applicant: Andrew Warren Associates Solicitor for the First Respondent: Santo Family Lawyers Counsel for the Second, Third, Fourth and Fifth Respondents: Mr May Solicitor for the Second, Third, Fourth and Fifth Respondents: York Law ORDERS
CAC 559 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS PEJIC
Applicant
AND: MR PEJIC
First Respondent
MS PEJIC SNR
Second Respondent
PEJIC HOLDINGS PTY LTD
(and others named in the Schedule)Third Respondent
order made by:
AUSTIN J
DATE OF ORDER:
4 jULY 2022
BY CONSENT, IT IS ORDERED THAT:
1.Order 3 made on 9 May 2022 is discharged.
2.Upon sale of the “Property F” property (comprising at least Lot … in DP … and Lots …, … and … in DP …) the Third and Fifth Respondents are restrained from dealing with the proceeds of sale other than as follows:
(a)To the discharge of agent’s fees and costs of sale;
(b)To the discharge of any registered mortgage secured against the property;
(c)To the payment of any Capital Gains Tax liability arising upon sale and payable to the Commissioner of Taxation; and
(d)The balance of the proceeds are to be deposited into the self-managed superfund account with the Third and Fifth respondents restrained from withdrawing or transferring those funds without the prior written consent of all parties, or further Order of the Court.
IT IS FURTHER ORDERED THAT
3.Orders 1 and 4 made on 9 May 2022 are discharged.
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- AGLC
- Pejic & Pejic (No 2) [2022] FedCFamC1F 513
- Case
- [2022] FedCFamC1F 513
- Decision Date
CaseChat Overview and Summary
The decision of Pejic & Pejic (No 2) involved a wife seeking interim injunctions against third parties, including her husband's family members, to prevent them from selling certain farming properties. The dispute centred around claims of financial contributions made by the wife to improve these properties, which she argued should entitle her to an equitable proprietary interest. The court had to decide whether the wife had demonstrated a serious question to be tried, whether she would suffer irremediable prejudice without the injunction, and whether the balance of convenience favoured the grant of the injunction. Additionally, the court considered whether an undertaking as to damages was necessary, despite the wife's impecuniosity.
The court found that the wife had not established a serious question to be tried, as the extent of any equitable interest she may have was minimal. Furthermore, the respondents faced significant financial losses if the injunctions were granted, and the wife had failed to provide an undertaking as to damages. The court held that these factors outweighed the balance of convenience in favour of granting the injunction. Consequently, the wife's application for interim relief was dismissed, and the orders previously made were set aside.
The court also noted that the wife's claims for financial contributions were not sufficient to warrant the broad relief she sought. The court emphasised that the wife either demonstrated grounds for the interim injunction or she did not. The court further found that the wife had no entitlement to the allied order for sole and exclusive use of the property or any part of it. A further interim order was made by consent to restrain the owners of the property from dissipating the net proceeds if and when it is sold. Any other applications for interim financial relief sought by the parties were dismissed.
The court found that the wife had not established a serious question to be tried, as the extent of any equitable interest she may have was minimal. Furthermore, the respondents faced significant financial losses if the injunctions were granted, and the wife had failed to provide an undertaking as to damages. The court held that these factors outweighed the balance of convenience in favour of granting the injunction. Consequently, the wife's application for interim relief was dismissed, and the orders previously made were set aside.
The court also noted that the wife's claims for financial contributions were not sufficient to warrant the broad relief she sought. The court emphasised that the wife either demonstrated grounds for the interim injunction or she did not. The court further found that the wife had no entitlement to the allied order for sole and exclusive use of the property or any part of it. A further interim order was made by consent to restrain the owners of the property from dissipating the net proceeds if and when it is sold. Any other applications for interim financial relief sought by the parties were dismissed.
Orders
Orders of the court
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Background
Background to the litigation
However, that case concerned an appeal from an interlocutory injunction made against a corporation which was effectively controlled by the husband, to which corporation the husband had transferred assets in an attempt to put them beyond the reach of the Court in any exercise of power between the spouses under s 79 of the Act. That is not the situation at hand. Neither the wife nor the husband has ever enjoyed any legal proprietary interest in the assets of the second, third, fourth and fifth respondents, including Property F. Contrary to the wife’s implied submission, Blue Seas is not authority for the unconditional abandonment of the need for an undertaking as to damages in all financial litigation under the Act.Factual Background Property F has always been owned by the third and fifth respondents. The spouses have conducted farming enterprises on Property F for the last decade or so. One farming enterprise was their own partnership and the other was a pastoral business formerly owned by the second respondent (but apparently now owned by the fifth respondent). The wife has lived in a homestead at Property F since about April 2021. There is substantial factual conflict about the financial transactions between the parties in respect of Property F and the two farming enterprises. The wife contends she and/or the husband made financial and non-financial contributions to Property F’s improvement, which should sound in her equitable proprietary interest in the property, which proposition the respondents deny. On her best case, the wife contends for relevant financial contributions which would reflect in only a very small proportional proprietary interest in Property F, given its apparent current value – perhaps more than five per cent but almost certainly less than 10 per cent.Undertaking as to Damages The wife declined to give an undertaking as to damages to secure the proposed interim injunction. She sought to justify that on the basis that she is impecunious. The settled law requires the undertaking, without which she cannot sustain an entitlement to the injunction. I accept the respondents’ submissions in that regard. The separate issue about the enforceability of any such undertaking is an argument for another day, depending upon the need to invoke the undertaking and the extent to which it should or can be enforced. The Property F property is one of three farming properties which the respondents wish to sell. The other two properties can be sold, since Order 2 made by the Senior Judicial Registrar on 9 May 2022 permits it. One of the other two properties adjoins Property F. The respondents fear that their restraint from selling the properties soon might diminish their realisable value. That problem is compounded if they cannot sell Property F and the adjoining property in one line. The properties have a real chance of realising a higher price if sold together. The absence of any undertaking as to damages is fatal to the wife’s application, given the circumstances of the respondents’ prospective losses if the injunction is imposed.
Evidence
Evidence Before The Court
In respect of Order 4, the wife agrees to submit to the contraction of the injunction so her sole occupation of Property F is confined to the homestead rather than the whole property. That is the fall-back position of the second, third, fourth and fifth respondents, but they maintain objection to an injunction in any form.Evidence The wife relies upon:(a)her affidavit filed on 30 June 2022, the exhibits to which were separately tendered (Exhibit A); and(b)her financial statement filed on 29 March 2022. The second, third, fourth and fifth respondents rely upon:(a)the affidavit of the second respondent filed on 26 April 2022;(b)the affidavit of Mr B filed on 27 June 2022; and(c)the affidavit of Mr C filed on 27 June 2022. Neither party objected to the evidence adduced by the other. The interim dispute as between the spouses was settled by the orders made on 29 April 2022 with their consent, which orders are not the subject of the review application. The husband did not seek to be heard in the dispute between the wife and the other respondents.Legal Principles The wife is seeking interim injunctions against third parties. The fact that the second respondent is the husband’s mother and the third, fourth and fifth respondents are corporations controlled by other members of the paternal family does not expand the power of the Court over the respondents (Re Ross-Jones; Ex parte Green (1984) 156 CLR 185 at 202 and 204). Accordingly, to obtain the interlocutory relief she seeks, the wife must demonstrate these things: there is a serious question to be tried and so the claim for substantive relief should be protected by interlocutory injunction; irremediable prejudice would be caused if the injunction were not granted; and the balance of convenience favours the injunction being granted (Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148 at 153). The wife did not cavil with the application of these principles. In addition, it is well accepted that the applicant for the interim injunction must proffer an undertaking as to damages (Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1981) 146 CLR 249 at 311 and 312). The wife sought to contend it is not strictly necessary to give an undertaking as to damages in matrimonial proceedings such as these, in support of which contention she cited Blue Seas Investments Pty Ltd & Mitchell (1999) FLC 92-856 (“Blue Seas”), in which the Full Court said this:54.It should be noted that these principles in relation to undertakings as to damages are principles of equity derived from civil litigation. There is, we think, an additional highly relevant matter that distinguishes litigation under the Family Law Act from ordinary civil litigation: that is the fact that very often the wealth of the parties is controlled by one rather than both of them. This in turn means that it is not uncommon for one of the parties to have no means of meeting any liability that may be incurred pursuant to an undertaking as to damages.…57.No doubt in ordinary civil litigation the impecuniosity of a party is a matter that may be relevant to the issue of balance of convenience. For the reasons already stated however, we consider that family law cases must be looked at in a different light. In our view it would be unconscionable to accept a broad principle that the impecuniosity of a party in family law proceedings would be given such weight as to prevent an injunction being granted where all the other requirements for the grant of such an injunction are present. Indeed, it may even be doubtful whether the impecuniosity of one of the parties to family law proceedings would usually be a factor militating against a grant of interim or interlocutory injunctions if the other tests for the grant of the same were otherwise satisfied. This is not to say that such a factor would never be relevant but in the present circumstances at least, where the injunction may have the effect of preserving the only piece of property to which the wife might have recourse, it would be unreasonable in the extreme for her impecuniosity to operate to prevent an injunction being granted.(Emphasis added)
Decision
Reasons for decision
If the wife does have such an equitable right, the extent of the right is not such as to warrant an interlocutory injunction of anything like the breadth she proposed. That problem was not cured by the suggestion that the injunction should only apply until the parties mediate the dispute in the next couple of months. She either demonstrates grounds for the interim injunction or she does not.Conclusion The wife fails to establish entitlement to the interim injunction. Order 1 made on 9 May 2022 will be set aside. Similarly, the wife has no entitlement to the allied order for sole and exclusive use of Property F or any part of that property. Order 4 made on 9 May 2022 will also be set aside. The wife admitted the two forms of relief necessarily “travel together”. The respondents placed on record that they will allow the wife 30 days to vacate Property F. Order 3 made on 9 May 2022 will be set aside by consent, as I have already mentioned. A further interim order will be made by consent restraining the third and fifth respondents, as the owners of Property F, from dissipating the net proceeds of the property if and when it is sold. Any and all other applications for interim financial relief sought by the parties will be dismissed.
Ratio Decidendi
Legal Principle Established
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