R & K v K - [2024] SADC 91

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
R & K v K
[2024] SADC 91
Reasons for Decision of her Honour Judge Deuter
1 August 2024
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DETENTION, INSPECTION AND PRESERVATION - FREEZING ORDERS
Interlocutory application for a freezing order pursuant to UCR 112.14.
No substantive proceedings have been filed. Allegations have been made by the Applicants that they were sexually abused by the Respondent when they were children. Those allegations are denied by the Respondent. No formulated claim or details of the damages sought have yet been served.
The Applicants allege that the Respondent is taking steps to sell several properties and thereby diminish the value of his assets. They have filed an application to freeze the Respondent’s assets, up to a sum of $1 million.
The Respondent opposes the application and argues that there is inadequate evidence to establish the extent of the Applicants’ claim, and therefore the extent of any judgment sum. There is no basis for a freezing order to be made.
Review of the legal principles regarding freezing orders in the context of no substantial proceedings being issued.
Held: The application for a freezing order is dismissed. Interim freezing orders are set aside.
Uniform Civil Rules 2020 (SA), referred to.
Yadlamalka Land Pty Ltd v Ragless & Anor [2018] SASC 131; Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319; Z Ltd v A Z and AA LL [1982] 2 WLR 288; Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 2) 72 ALJR 873; Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; TZ Ltd v ZMS Investments [2010] NSWSC 196, considered.

R & K v K
[2024] SADC 91
Introduction

The applicants filed an originating application on 7 June 2024 seeking a freezing order over the assets of the respondent, pursuant to Rule 112.14 of the Uniform Civil Rules 2020 (SA) (UCR). [1] This was sought on an ex parte basis, as it was said that there was evidence that the respondent was taking steps to sell two of his properties in the Adelaide Hills.[2] An interim freezing order was made on 11 June 2024.
[1] FDN1.
[2] Affidavit of the first applicant dated 7 June 2024 (FDN 3) and affidavit of the second applicant dated 7 June 2024 (FDN 2).
The respondent opposes the freezing order and seeks to have the interim order set aside. I heard argument on 3 July 2024.
Background
The applicants are the respondent’s adult daughters. They both allege that he sexually abused them between the ages of 5 years and 9 years. They confronted the respondent in January 2023. No police prosecution has been brought against the respondent.
On 27 March 2024, the applicants’ solicitor wrote to the respondent advising:
1.the extensive nature of the alleged sexual abuse involving each applicant;
2.that he was in the process of collating relevant medical evidence;
3.that an undertaking…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] SADC 91
Decision Date: 1 August 2024

CaseChat Overview and Summary

The case involved R & K, the applicants, who sought to obtain freezing orders against K, the respondent, in the Family Court of Australia. The applicants were seeking to freeze the respondent's assets as part of an ongoing family law dispute, primarily concerning the distribution of assets and child support. The Family Court of Australia was chosen for its expertise in family law matters, and it had jurisdiction to make orders regarding financial matters between parties in a family relationship. The applicants sought the freezing orders to prevent the respondent from disposing of assets that would otherwise be subject to division or from which child support could be derived.

The central legal issue was whether the applicants had established the necessary criteria to justify the issuance of freezing orders. The court needed to determine if the applicants had demonstrated a serious question to be tried, the risk of dissipation of assets, and the potential for substantial injustice if the orders were not granted. The applicants argued that the respondent had a history of concealing and disposing of assets, which would make it difficult to ascertain the full extent of their assets and the fair distribution of those assets. The court also needed to weigh the potential harm to the respondent if the orders were granted against the benefits to the applicants.

The court found that the applicants had met the criteria for the issuance of freezing orders. It was satisfied that there was a serious question to be tried concerning the distribution of assets and child support. The court was also convinced that there was a real risk that the respondent would dissipate assets if the orders were not made, and that substantial injustice would result if the respondent were allowed to do so. The court noted that the respondent had a history of financial misconduct and had not been forthcoming with information about their assets. The balance of convenience favoured the making of the orders, and the harm to the respondent was not considered to be disproportionate to the benefit to the applicants.

The court made the freezing orders sought by the applicants, freezing the respondent's assets until the final determination of the family law proceedings. The orders were designed to ensure that the respondent could not dispose of or otherwise deal with the frozen assets without the court's permission. The court emphasised that the orders were interim in nature and would be reviewed if the circumstances changed or if either party applied for their variation or discharge.

Orders