Rabino and Rainsford
[2020] FamCA 142
•10 March 2020
FAMILY COURT OF AUSTRALIA
| RABINO & RAINSFORD | [2020] FamCA 142 |
| FAMILY LAW – INJUNCTIONS – injunctions made in relation to employment contracts and severance payments – where the status and recoverability of an essentially unsecured loan made by the parties’ self-managed superannuation fund is uncertain – where the injunctions are designed to seek to preserve various entitlements the husband may be entitled to receive from his current employer - where it is necessary in the interim period to seek to preserve the available pool of assets for property adjustment. |
| Family Law Act 1975 (Cth) |
| Broxham & Broxham & Ors [2012] FamCA 775 |
| APPLICANT: | Ms Rabino |
| RESPONDENT: | Mr Rainsford |
| FILE NUMBER: | BRC | 4468 | of | 2019 |
| DATE DELIVERED: | 10 March 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Baumann J |
| HEARING DATE: | 5 March 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr P Hackett |
| SOLICITOR FOR THE APPLICANT: | Hirst & Co |
| COUNSEL FOR THE RESPONDENT: | Mr G Waterman |
| SOLICITOR FOR THE RESPONDENT: | Fox & Staniland Lawyers |
Orders
That until trial or earlier Order, the Respondent husband is hereby restrained, whether by himself, or by his servants or agents, from:
(a)entering into any new contract of employment without:
(i)first exhibiting the full terms of such employment contract to an Affidavit to be filed and served upon the Applicant wife; and
(ii)twenty one (21) days having expired from such filing and service,
or earlier with the written consent of the wife.
(b)taking any steps that may impact in any way, his entitlement to a severance payment under his existing contract of employment.
That noting that the solicitors on the record for the husband have provided the husband’s email address, the Court shall, upon this Order being made, forward a copy of the Order to that email address for the husband’s attention.
That the husband pay the wife’s costs of and incidental to the Application in a Case filed 25 February 2020 and heard today, with the quantum of such costs and the date for payment to be reserved to trial.
Trial directions
That these proceedings be set down for Final Hearing for not more than two (2) days commencing at 10.00am on 14 May 2020 in the Family Court of Australia at Brisbane.
That the Applicant pay any hearing fee or seek a waiver of the fee no later than 4.00pm on 16 April 2020.
That each party file and serve on each other no later than 4.00pm on 23 April 2020:
(a) one (1) consolidated Affidavit of evidence in chief;
(b) an updated Financial Statement; and
(c) one (1) Affidavit of each witness intended to be relied upon at trial.
That each party file and serve on each other no later than 4.00pm on 7 May 2020, a case outline setting out:
(a)a precise minute of the final orders sought;
(b)a relevant chronology;
(c)a schedule of the asserted assets, liabilities and financial resources of the parties;
(d)a list of Affidavits and Applications and/or Responses intended to be relied upon at trial; and
(e)a list of authorities.
That the parties file and serve a list of objections to evidence, if any, by no later than 4.00pm on 7 May 2020.
The parties file and serve a reply to objections to evidence, if any, by no later than 4.00pm on 11 May 2020.
That no party shall be entitled to rely upon any affidavit material not filed in accordance with these directions without leave of the Court.
That in the event that either party wishes to cross examine any Expert at the final hearing, that party shall provide written notice to the Expert of such intention as soon as reasonably practicable, but by no later than 4.00pm on 23 April 2020.
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 Rabino & Rainsford 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 4468 of 2019
| Ms Rabino |
Applicant
And
| Mr Rainsford |
Respondent
REASONS FOR JUDGMENT
On 5 March 2020, I made Orders on an interim basis, as appear at the commencement of these Reasons. I indicated that although the transcript would reveal the basis for the Orders made, as the husband was not present (and lives in Country B), I would provide some further brief written Reasons for the interim injunction.
These are those reasons
The dispute before the Court requiring resolution is the wife’s Application for property adjustment orders, opposed by the Respondent husband. The substantive proceedings have been listed for Final Hearing commencing on 14 May 2020. The interim injunction made on 5 March 2020 should be seen in the context of various uncertainties which currently exist, likely to be clarified before or during the Final Hearing. The injunctions are designed to seek to preserve various entitlements the husband may be entitled to receive from his current employer.
Although Counsel for the wife Mr Hackett, through his detailed written and oral submissions, urged me to accept (or find) that the husband has not made full and complete disclosure in a timely manner – a contention disputed by the written and oral submissions of Counsel for the husband Mr Waterman – I am acutely conscious that I will be the trial Judge when I will have an opportunity to have contested facts properly tested, after which findings as to credit and the like could be made.
However, noting this cautionary tone, I make the following observations, which provide the context for the Orders made, namely:
a)The parties married in 1997 and separated finally by September 2017 (the wife says in December 2016). The husband was a Manager for an international company and had been based in Country B since 2002 when he commenced his status (which he retains) as a non-resident Australian taxpayer;
b)Although the wife and the parties’ two elder children (now aged 19 years and 17 years) lived with the husband in Country B until around 2008, the children completed their education in the C Region and lived in the former family home in that region. The home, which is heavily encumbered, is valued at approximately $1,425,000 with an equity of approximately $400,000;
c)The wife commenced proceedings on 17 April 2019, and when the matter first came before me on 1 November 2019 (and was adjourned until 9 December 2019), the Court made the following Orders:
1. That the husband file and serve by no later than 4.00pm on 5 December 2019 any further Affidavit he seeks to rely upon that clarifies the position in respect of his employment and likely remuneration if there is a change of his job role with his current employer or new employer.
2. That the Court noting the husband’s evidence that he anticipates a likely significant reduction in his income by the end of November 2019 and further noting, on his current income, the husband has voluntarily maintained a number of payments in respect of preservation of Australian assets, payments of the support of the Australian household including the children and the horses:
a. if husband fails, without reasonable explanation to the wife, to be able to make payments he has voluntarily made to date then the wife shall have liberty to apply to have the proceedings re-listed.
3. That pursuant to Rule 13.22 of the Family Law Rules 2004, the husband provide to the wife copies of:
a. any loan agreement between the self-managed superannuation fund and Mr D; and
b. bank statements for all bank accounts held in the husband’s sole name or jointly with another person (other than the wife), including any overseas bank accounts for the period from 30 June 2013 to present.
4. That pursuant to Rule 13.24 of the Family Law Rules 2004, the husband provide to the wife copies of the documents to be disclosed in paragraph 3 by way of electronic communication.
5. That pursuant to Section 114(1)(e) of the Family Law Act 1975, the husband be restrained and an injunction hereby issue restraining the husband from:
a. transferring any property or funds from any bank account in which he has an interest, directly or indirectly, to Mr D; and
b. transferring ownership or otherwise disposing of the Motor vehicle 1 currently in the possession of Mr D without the wife’s consent.
6. That the issue of costs be reserved.”
At the time of these Orders, the husband’s employment situation was uncertain, arising primarily from a determination he was unable to continue in his role for medical reasons. As the Orders make clear, it was anticipated that by 9 December 2019, his future employment pathway would have been illuminated – as well as any entitlement to severance payments;
d)Another significant uncertainty at 1 November 2019 was the status and recoverability of a loan made by the parties’ self-managed superannuation fund (“SMSF”) called “Rainsford Super Fund”, of which the parties were the joint Trustees. The wife asserts that the husband, without her knowledge or consent as a joint Trustee, caused a loan to be made by the SMSF to Mr D on or about 1 December 2016 for $500,000. The husband had earlier indicated to the Court that Mr D intended to repay the “loan” by February 2020. It has not been repaid;
e)At the hearing before me on 5 March 2020, a copy of the loan agreement and the draft financial statements for the SMSF were produced and tendered. Although the nature and circumstances of this “loan” are likely to be a significant transaction to be analysed at the Final Hearing (and the Court has indicated that the husband should call Mr D as a witness), at the current time this unpaid “loan” is:
i)essentially unsecured. Clause 4.1 of the Loan Agreement purports to charge Mr D’ “right, title and interest in the SPA and any property whether real property or otherwise, of any nature or kind and wherever situate in which the Borrower now or in the future has a legal, equitable and/or caveatable interest”;
ii)Although the Loan Agreement (at Recital D) says the Sale and Purchase Agreement (SPA) dated 21 June 2016 was attached to the Loan Agreement, the copy of the Loan Agreement tendered in evidence has no attachment;
iii)The Loan Agreement refers to the Borrower having “secured an allocation” from the E Corporation for the supply of a commodity and having entered in the SPA with F Company for the sale of 48 million units of that commodity;
f)Although the interest rate payable of 15% per annum is commercially attractive, the wife’s understandable concern is that the funds paid by the SMSF to Mr D are lost;
g)The financial statements of the SMSF (in draft form, at least because the wife feels she is unable to sign same and satisfy her fiduciary duties), reveals a balance for the Fund at 30 June 2019 of $477,928.27 (up from $351,529.42 for the previous financial year), almost totally made up by “Loan Receivables” of $469,199. It is very difficult to reconcile this figure with the asserted loan $500,000 and an alleged “Rollover” amount since 1 July 2018 of $130,000 (the source of which is unknown). However, at first blush, the wife’s concerns that if the funds “loaned” by the SMSF to Mr D are irrecoverable, then the pool of assets (estimated at paragraph 44 of her Affidavit filed 25 February 2020) is drastically reduced are reasonable;
h)In the context of these concerns about the operation and funds available in the SMSF, the wife’s attention has been focused not only on the husband’s future income, but his entitlement to any severance payment. This was an alive issue when the matter returned to the Court on 9 December 2019, and as a result, Order 2 was made in the following terms:
“2. That the husband must provide to the wife’s solicitors twenty one (21) days prior written notice of the anticipated receipt of any severance payment, loss of flying authorisation scheme compensation payment, insurance payment (including but not limited to income protection insurance or total and permanent disability insurance), or other payment that he receives from his employer or arising from his employment (other than his usual remuneration, to include discretionary income, gratuity payments and bonuses) other than in accordance with these Orders.”
i)The wife strongly asserts the husband was failing to make full and timely disclosure about his change in employment and her Affidavit sets out the steps taken to try and illicit some responses from the husband, which the husband, in his Affidavit in reply filed 3 March 2020, seeks to answer. Furthermore, the husband relied upon an Affidavit filed 3 March 2020 by Ms G, the Project Manager for H Company;
j)Although I was taken to a stream of correspondence and emails that passed between a Mr J (and others) who is the senior person to whom the husband is responsible in Country B including with the husband and Ms G, I choose not to refer to all that correspondence at this time. Suffice it to say that now that the Court (via a subpoena to H Company) has evidence of significant exchanges within that organisation, the husband’s explanation for some earlier assertions will be helpful. What at least flows at this time is that:
i)at 3 March 2020, Ms G affirms that “[Mr Rainsford] continues to be employed in [Country B] by [H Company] Limited. No other employment contract has been offered to [Mr Rainsford] as of this date.” This is confirmed by the husband at paragraph 64 of his recent Affidavit. I note, despite requests for a copy of his wage payment since at least 31 January 2020, none has been produced;;
ii)the “Conditions of Service” for H Company Limited for employees engaged to provide services in Country B are set out at Exhibit B to the Affidavit of the husband. Although the most recent Conditions of Service are dated December 2019, the husband says (at paragraph 41) that the terms of this document are similar to the ones from October 2016;
iii)the husband, at paragraphs 38 to 66, seeks to explain what he says is the difference between his eligibility to accrue a severance benefit in accordance with the Conditions of Service and the entitlement to receive a severance payment and asserts that the “actual receipt of a severance payment is discretionary”;
iv)Counsel for the wife contends that a proper interpretation of clause 6.5.1 demonstrates a severance payment (as calculated by reference to the length of service) is payable and not discretionary, other than if clause 6.5.3 applies when no severance payment is payable if the employment is terminated in accordance with clauses 3.1.1, 3.3 or 3.6 (none of which currently appear to apply). Clause 6.5.3 further provides that if employment is terminated in accordance with clause 3.5 (namely if the Country B Government requires the employment to be terminated), then the company “will decide upon any eligibility for a severance payment”; and
v)accepting, as I do on the current evidence, that the husband has neither received a new offer of employment by the United Kingdom entity or otherwise, nor has he entered into any new contract of employment, the correspondence revealed in the subpoena documents at least demonstrates some consideration has been given not only to the payment of a severance payment to the husband, but also, if paid, how the assessed payment of over $500,000 might be taxed and if it is possible (or desirable) to “roll over” the benefit into a new contract effectively delaying payment. These are issues likely to require careful consideration and examination during the Final Hearing.
Conclusion
It follows from the context set out above, that I was comfortably satisfied that it was necessary in the interim period to seek to preserve any entitlement that might be payable to the husband and to further ensure that the husband, who lives out of the jurisdiction, is not able to so treat any entitlement he may have in a way to reduce the available pool of assets for adjustment.
In this respect, Mr Waterman of Counsel for the husband, did not assert that the principles to be applied were other than those broadly set out by Mr Hackett in his written submissions at paragraphs 19 and 20. I adopt those expressed principles, relying on the summary by Murphy J in Broxham & Broxham & Ors [2012] FamCA 775 at [24] to [31].
I am satisfied that the injunction, pronounced in the terms prescribed, is necessary as there is a real risk that if the injunction was not made, the severance payment might be dealt with in a way so as to reduce the available pool of assets or remove it out of the reach of the wife.
Considering the husband’s employment began in 2002, I accept that most of the length of the service upon which any severance entitlement is calculated, accrued during the course of the marriage. I also accept that if those entitlements (if found to exist) are lost to the divisible pool of assets and the SMSF loan is irrecoverable, the remaining assets available might not be sufficient to be able to make orders achieving justice and equity to at least the wife.
For completeness, I also find that the terms of the Orders made on 5 March 2020, although they do restrict to some degree the husband’s capacity to renegotiate new terms of employment as he is entitled to do, are a proper balance between his rights and the rights of the wife to preserve the assets that should be available for distribution.
I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 10 March 2020.
Associate:
Date: 10 March 2020