Romano and June

[2011] FamCA 377

FAMILY COURT OF AUSTRALIA

ROMANO & JUNE [2011] FamCA 377

FAMILY LAW – PROPERTY – Whether the Court should grant an injunction against the husband to not sell, mortgage, transfer or otherwise deal with his interest in the property – Where the husband has an existing undertaking with the Federal Magistrate Court in similar terms – Whether it is just or convenient to grant the injunction sought by the wife – Whether the evidence establishes, on the balance of probabilities, a risk or danger of a disposal of property intended to defeat an order – Court satisfied that it is just and convenient in the circumstances to grant the injunction.

Family Law Act 1975 (Cth) s 79

Mullen and De Bry (2006) FLC 93-293

APPLICANT: Ms Romano

RESPONDENT: Mr June

FILE NUMBER: BRC 3679 of 2010

DATE DELIVERED: 10 May 2011

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 10 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr P Hackett

SOLICITOR FOR THE APPLICANT: Hirst & Co Family Solicitors

COUNSEL FOR THE RESPONDENT: Mr T North SC

SOLICITOR FOR THE RESPONDENT: Bowen Buchbinder Vilensky Lawyers

Orders

(1)The husband not sell, mortgage, transfer or otherwise deal with his interest in the property at … A Street, WA, more particularly as Lot … on Diagram …, Register Book volume … Folio …, without first obtaining either the prior written consent of the Wife or an order of the Court.

(2)The husband not seek to cause the release of the mortgage in favour of the National Australia Bank registered over the property at … A Street, WA, more particularly as Lot … on Diagram …, Register Book volume … Folio …, without first obtaining the consent of the wife or an order of the Court.

(3)The parties’ costs of and incidental to the application in a case filed 3 May 2011, heard and determined by his Honour Justice Forrest today, shall be reserved to the Trial Judge.

IT IS NOTED that publication of this judgment under the pseudonym Romano and June is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 3679  of 2010

Ms Romano

Applicant

And

Mr June

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1.By Application in a Case filed 3 May, 2011, the wife in this matter seeks certain interim injunctions restraining the husband from selling, mortgaging, transferring or otherwise dealing with his interest in a particular piece of real property situated in A Street in a suburb of Perth, Western Australia and also from seeking to cause the release of the mortgage in favour of the National Australia Bank registered over the property without first obtaining the prior written consent of the wife or an order of the Court.

2.The interim injunctions are sought to “aid the preservation of” the said property pending trial of the wife’s application for alteration of property interests between the parties pursuant to section 79 of the Family Law Act.

3.The trial of the wife’s application for alteration of property interests has been allocated fourteen days of reserved hearing dates from the 3^rd until the 20^th of October, 2011. The proceedings will require the determination of some complicated factual matters, most particularly in respect of determining whether or not a company, registered in the Caribbean, which the wife contends is worth approximately $AU26,000,000, is the alter-ego of the husband and should be held to be “property of the parties or either of them” for the purposes of the alteration of their property interests. There is a lot of other apparently valuable property to consider as well, some in the form of real properties in Australia and other jurisdictions and some in the form of personal property currently in Australia and in other jurisdictions.

4.The jointly prepared balance sheet of Asset and Liabilities of the parties reveals that the wife asserts that the total value of all assets of the parties or either of them is approximately $51,000,000. The same balance sheet reveals the wife agreed that there are debts totalling approximately $4,334,192 in existence. In contrast, the same document reveals that the husband contends that the total value of all assets of the parties or either of them is approximately $11,478,707 and that there are debts totalling $5,748,402.

5.In a document handed to the Court this morning by Mr Hackett of counsel for the wife, it is noted that the wife now contends that the total value of all of the assets is $61,000,000 with total debt at $5,000,000 and that the husband now contends that the assets have a total value of $13,200,000 with total debt at $6,400,000.

6.At this point in time, the wife seeks final orders that include orders that she retain real properties in Australia registered in her name and that the husband discharge or refinance the debts secured over all of those properties, leaving her with unencumbered properties. Some of that total debt, whilst currently secured by mortgages over those properties, is also secured by the mortgage registered over the real property at A Street, WA that is registered in the husband’s name, the property that is the subject of the application before me today.

7.Although steps are in place to obtain expert opinion as to the value of the property at A Street, WA, the parties remain, at this point in time, in disagreement as to its current value. The wife asserts it is worth $5,500,000 and the husband asserts it is currently worth “somewhat less than $4,000,000”. Substantial debt is secured by mortgage registered in favour of the National Australia Bank over the title to the property at A Street, WA but there is apparent disagreement between the parties as to the exact amount of that debt, the husband asserting it is “more than $3,200,000” and, for the wife, it being asserted that it is $2,087,000.

8.For the wife it is asserted that the equity in that real property at A Street, WA is the only property in Australia that could not be removed from the jurisdiction that could be used to ensure the final orders the wife seeks have efficacy. The wife’s counsel says that the value of the wife’s Australian real property is otherwise $4,857,500 and that the total of the remaining debts to the National Australia Bank that are not secured by mortgage over the property at A Street, WA is $1,313,000, leaving the wife with current net equity of $3,544,500. The wife asserts that the equity in the property at A Street, WA is equal to a further amount of approximately $3,413,000 that would be available to meet the final orders she seeks that would have her debts of $1,313,000 paid out or refinanced. On the husband’s case the equity in the property at A Street, WA is currently no more than approximately $800,000.

9.The wife’s case is, essentially, that if that equity, whatever it might be, is not preserved pending trial then her rights to just and equitable orders altering the parties’ property interests pursuant to section 79 of the FLA will be prejudiced.

10.On the evidence before me, I am satisfied, having regard to the case the wife contends for and the orders that she seeks, that should the husband be able to realise whatever equity actually does currently exist in the property at A Street, WA and cause that to be removed from the jurisdiction, that the wife could suffer real prejudice in the event that her case is accepted in its entirety or, frankly, even if the case as ultimately determined by the Court on the wife’s application for final orders does not meet the full extent of that claimed by the wife at this point in time.

11.I note here that I do not understand Mr North of Senior Counsel for the husband to have advanced a case contrary to that but rather to have mounted his defence around submissions that I would not find that there is an objective risk of disposal of the property with intent to defeat an order in this case. 

12.As stated by the Full Court in Mullen and De Bry (2006) FLC 93-293, “a court may grant an injunction in any case in which it is just and convenient to do so” pursuant to the power conferred on the Court by section 114(3) of the FLA. The Full Court said there that each case will involve an overall assessment of a number of factors to determine the just or convenient result. And the Full Court stated, as pointed out by Mr North of Senior Counsel for the Husband, that the matter for the court to consider in cases such as this, where property preservation injunctions pending trial are sought, is whether the evidence establishes, on the balance of probabilities, a risk or danger of a disposal of property intended to defeat an order.

13.In this case, the consideration of that last matter is one that I am required to undertake against the interesting factual circumstance that on 13 August, 2010, when these proceedings were still in the Federal Magistrates Court where they had been earlier commenced by the wife, the husband gave an undertaking to that Court in the following terms:-

I will not sell, mortgage, transfer or otherwise deal with my interest in the property at [A Street, WA], without first obtaining either the prior written consent of the Applicant or an order of the Court.

14.The matter was transferred to this Court just a few days after that undertaking was given by the husband to the FMC, namely on the 19^th August, 2011.

15.The husband’s sworn evidence is that he considers himself still bound by that undertaking and, further, that he has no intention of dealing with the said property in any way contrary to or in breach of that undertaking.

16.Senior Counsel for the Husband asserts that the undertaking given to the FMC remains binding upon the husband notwithstanding the fact that the matter was transferred to this Court subsequent to the giving of the undertaking.

17.For the Husband, it is submitted that having given that undertaking and having sworn to the facts I have just referred to, that the injunctions that the wife seeks should not be granted as I should not be satisfied, in such circumstances, as  to the requisite standard as to risk. Senior Counsel also points, in support of that submission, to the absence of any evidence that objectively establishes that there is currently a threat of, or an intention or a scheme to dispose of the property. The absence of such evidence was also conceded by counsel for the wife in his submissions.

18.The submission of Mr North SC is indeed a powerful submission. However, Mr North did not refer me to any authority for the proposition that once an undertaking has been given and remains in place that an interim injunction cannot be granted in a form that essentially includes or incorporates restraints that are provided for in the undertaking. Mr Hackett submitted that where the Court is considering whether to grant an injunction or accept an undertaking dealing with the same subject matter, the Court still has a discretion to determine to grant the injunction rather than to accept the undertaking and that questions as to any advantage to be gained from the injunction as opposed to the acceptance of the undertaking are relevant to the determination of the discretion. I accept that submission and consider that the discretionary remedy of the interim injunction may still be used, where appropriate, notwithstanding there already being in place an undertaking, previously given by the person to be restrained by the injunction, in similar terms. The existence of the undertaking previously given is but one of the facts to be considered in determining the issue of risk.

19.The evidence in this case establishes that notwithstanding the existence of the undertaking the wife signed and lodged a caveat over the property at A Street, WA on 17 January 2011. At least there is room for an inference that the wife and/or her legal advisers still considered there to be a risk of disposal of the property by the husband with intent to defeat orders notwithstanding the existence of the undertaking. I note here also, that was done without prior communication to the husband or his legal advisers.

20.The wife’s caveat was requisitioned by the relevant Western Australian authorities but ultimately registered some time in late February 2011. Whilst that caveat remains registered, clearly the husband is effectively restrained, regardless of his undertaking to the FMC, from dealing with the property at A Street, WA.

21.Without communication by the husband or his legal advisers to the wife or her legal advisers, the husband took steps to cause the wife to have to justify the legitimacy of her caveat by requiring her to commence proceedings in the Supreme Court of Western Australia. For the husband, it is asserted that the wife and her legal advisers always would have been aware that the wife had no caveatable interest that would sustain the registration of the caveat in Western Australia. Whether that is correct is something I simply cannot determine on this application on the evidence. What is clear on the evidence is that the wife and her Brisbane legal advisers subsequently obtained advice from Western Australian lawyers to the effect that she would not be able to maintain a caveatable interest in the Supreme Court of Western Australia.

22.The evidence before me establishes that upon being advised of that and noting the date on which the caveat would lapse, namely the 12^th May, 2011, the wife’s solicitors began to communicate with the husband’s solicitors about the matter. The evidence establishes that the wife’s solicitors sought explanations from the husband’s solicitors as to why the husband had taken steps to force the issue of the continued registration of the caveat The husband’s solicitors advised that the husband continued to be bound by the undertaking and that they knew of no intention or request by the husband to mortgage, transfer or deal with the property at A Street, WA. The husband’s solicitors then questioned the basis for the registration of the caveat in the first instance and asserted, effectively, that the husband was exercising his rights in respect of the caveat in response to what he considered was the wife’s actions in intentionally inflaming and aggravating these proceedings.

23.The wife’s solicitors requested the husband to give the same undertaking to this Court as previously given by him to the FMC and also to write to the NAB advising them that he would not attempt to release the mortgage over the property at A Street, WA. The husband’s solicitors then advised of his refusal to do so and the wife’s solicitors then asked for the husband to consent to an order being granted in the form of the first part of the injunction now sought from the Court and when that was refused the wife brought this application in a case.  It was listed by me so as to be able to be heard and determined prior to the lapsing of the caveat on the 12^th of May, 2011.

24.The evidence of the wife is that her legal advice from Western Australian solicitors is that if such an order as is currently sought is obtained it may be lodged with the titles office in Western Australia to notify them of the restraint on the husband. It is said to be Western Australian titles office practice that upon receipt of the notice of the orders they will be placed in what is called a Registrar’s packet and a caveat by the Registrar of Titles will be noted on the Certificate of Title. Anyone dealing with the land will then have notice of the Registrar’s caveat and will be required to provide evidence that the consent of the wife to the dealing or an order of the Court permitting the dealing has been obtained before any further dealing is registered.

25.No evidence was put before the Court by the husband to suggest the position just outlined as advised to the wife by WA lawyers is not correct.

26.In considering whether there is a risk or danger of a disposal of property intended to defeat an order in this case, and further, in considering whether it is just or convenient to grant the injunctions sought by the wife,  I have had regard to all of the evidence before me but in particular to the following matters and the following list is not in any order of priority:-

(i)the evidence of the husband that he left Australia and has lived in Europe since 1992;

(ii)that the husband considers Europe his permanent place of abode, he lives there with his new wife and their young son and has no current intention of returning to permanent residency in Australia;

(iii)that the husband asserts he is a consultant to the company that is based in the Caribbean and that he has no proprietary interest in it,  whilst the wife asserts it is his company and that it is worth $AUD 26,000,000 at least;

(iv)that, assuming the wife’s case in the property division proceedings is correct at its highest or, even somewhat less than that, the husband has the financial means and incentive to breach the undertaking he has given the court without great risk, given his lack of intention to return to Australia;

(v)the husband has resigned from directorship of that company and an Australian company that he remained a director of, after the wife commenced these proceedings in the FMC and the wife is unaware of him being a director of any other Australian company;

(vi)the wife’s evidence (disputed by the husband) that the husband said things to her after 2008 such as and to the effect of  “I will drag a Court case out for years. It will cost you $500,000 and be very colourful. I will stop at nothing to win. You will come out very badly” and also “you should do what I say and accept what I am prepared to give you or you will suffer in Court” and also “if this goes to Court I will murder you if it means I lose [A Street, WA].”

(vii)That the husband has taken steps to cause the caveat to be removed from the title to the property at A Street, WA although he swears he has no intention of dealing with the property in any way contrary to the undertaking given, and asserts he has done this as it is his right to do so and because the wife had no right to caveat in the first place, doing so for inflammatory reasons only;

(viii)That the husband has refused to give an undertaking in the same form to this Court when asked to do so by the wife’s solicitors notwithstanding he swears that he has no intention of dealing with the property;

(ix)That the husband refused to agree to consent to an order in accord with the terms of the first part of the orders sought by the wife notwithstanding swearing that he has no intention of dealing with the property;

(x)The undertaking on its own does not provide the practical protection and advantage  that is apparently offered to the wife by an injunction granted by this court in respect of the Western Australian titles office;

(xi)The prejudice to the wife of having to attempt to enforce alteration of property orders against property outside the jurisdiction, in places such as Europe and the Caribbean.

(xii)The fact that the wife proffers an undertaking as to damages in the usual form notwithstanding the relativities of the financial circumstances of the wife and the husband. I note that, apparently, having regard to the values of the real properties that are registered in the wife’s name and the debts that are said to be attached thereto, that there is equity in those properties of substance to stand behind the undertaking that she proffers as to damages.

(xiii)The fact that the husband swears of absolutely no intention to deal with the property in any way contrary to the undertaking already in place, therefore satisfying me that an injunction granted in the form that is sought by the wife in today’s proceedings will be of no prejudice to the husband pending the trial of the application for final relief in this matter.

27.Accordingly, having considered all of those matters, I am satisfied that it is just and convenient in the circumstances of this case to grant the injunctions in the form that the wife seeks in her Application in a Case, in accordance with the wording of paragraphs 1 and 2 of that Application and I make such orders on the Undertaking of the wife as to damages that has been signed by her and filed and bears a date stamp 10 May 2011.  

I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 10 May 2011.

Associate: 

Date:  25 May 2011