ROMANO & JUNE
[2010] FamCA 1027
•29 October 2010
FAMILY COURT OF AUSTRALIA
| ROMANO & JUNE | [2010] FamCA 1027 |
| FAMILY LAW – PROPERTY – CHANGE OF VENUE – Husband’s application for transfer of proceedings to Family Court of Western Australia at Perth – Application dismissed FAMILY LAW – PROPERTY – Miscellaneous interlocutory and interim applications and orders |
| Family Law Act 1975 (Cth) ss 114(3), 79 Family Law Rules 2004 – Rules 11.17, 11.18 |
| Abella v Anderson (1987) 2 Qd R 1 Blueseas Investments Pty Ltd & Mitchell & McGillivray (1999) FLC 92-856 Cardisle v LED Builders Pty Ltd (1999) 198 CLR 380 |
| APPLICANT: | Ms Romano |
| RESPONDENT: | Mr June |
| FILE NUMBER: | BRC | 3679 | of | 2010 |
| DATE DELIVERED: | 29 October 2010 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | O'Reilly J |
| HEARING DATE: | 20 October 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Hackett |
| SOLICITOR FOR THE APPLICANT: | Mr Hirst Hirst & Co Family Solicitors |
| COUNSEL FOR THE RESPONDENT: | Mr St John SC |
| SOLICITOR FOR THE RESPONDENT: | Ms Pemberton Bowen Buchbinder Vilensky |
Orders
IT IS ORDERED
Wife’s application for interim orders by her amended initiating application filed 21 May 2010 – paragraphs 2, 4(d) and (g), 5(b) and (c)
Paragraph 2
Until the trial of this matter or earlier order the husband pay to National Australia Bank the amounts due in respect of “the mortgages” as defined in the wife’s amended initiating application filed 21 May 2010 in respect of “the properties” as defined in the wife’s amended initiating application filed 21 May 2010 as and when those amounts fall due.
The amounts so paid by the husband be taken into account at the trial of this matter as to whether they be characterised as contributions by the husband to those properties or otherwise.
Paragraphs 4(d) and (g)
The wife’s application for disclosure by the husband of the tax returns and financial statements of X1 Limited is dismissed.
The husband disclose to the wife copies of any statements or vouchers in relation to any credit cards used by him for the past three financial years.
Paragraphs 5(b) and (c)
UPON THE UNDERTAKING AS TO DAMAGES FILED BY THE WIFE ON 29 OCTOBER 2010 until further order the husband by himself his servants and agents is restrained by this order and there be an injunction so restraining him from causing X1 Limited from selling mortgaging transferring encumbering or otherwise dealing with any property in the ownership of X1 Limited without first obtaining either the prior written consent of the wife or an order of the Court.
The husband:
a. must not without giving the wife 21 days notice in writing of his intention to do so resign or offer to resign as a director of any of the following:
i.A Investments Pty Ltd
ii.K Pty Ltd
iii.B Ltd
b.upon being asked to resign or upon being removed from the board of directors of any company provide the wife with timely notice of such.
Otherwise, the wife’s application that the husband not resign from any of the companies listed in par 5(c) of her amended initiating application filed 21 May 2010 without first giving the wife 48 hours notice of such intention and the reason for such intention is dismissed.
Husband’s response filed 2 August 2010 – paragraphs 1 – 10 and 11
The husband’s application for sale of the properties at:
a. F Street Western Australia
b. E Street South Australia and
c. C Street Western Australia
and consequential orders is dismissed.
The husband’s application for the transfer of these proceedings to the Family Court of Western Australia at Perth is dismissed.
Procedural
The husband’s and the wife’s applications for procedural orders stand over until the next procedural Court event.
The parties as soon as possible take all necessary steps for this matter to be included in the Financial Fast Track Pilot Project published by the Honourable Justice Murphy to the Family Law Practitioners Association at Brisbane so as to ensure a trial at Brisbane as soon as possible: see Annexure A to these orders.
Dismissal otherwise
Otherwise, all applications for interim or interlocutory relief in the wife’s amended initiating application filed 21 May 2010 and the husband’s response filed 2 August 2010 are dismissed.
Costs
The parties’ costs of and incidental to their applications heard before me on 22 October 2010 are reserved to the trial judge.
IT IS NOTED that publication of this judgment under the pseudonym Romano & 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 2007
| MS ROMANO |
Applicant
And
| MR JUNE |
Respondent
REASONS FOR JUDGMENT
Applications
The wife and the husband have competing applications for procedural and injunctive relief as well as a change of venue.
The wife’s applications are contained in her amended initiating application filed 21 May 2010, Interim Orders, pars 2, 4(d) and (g), 5(b) and (c).
The husband’s applications are contained in his response filed 2 August 2010, pars 1-10 and 11.
It is convenient to deal with the matters in the order in which they were argued.
Disclosure – wife’s Application pars 4(d) and (g)
The wife seeks an order that the husband make disclosure of the following documents, within 7 days:
(d)the tax returns and financial statements of [X1 Limited] for the past 3 financial years;
…
(g)copies of any documents or vouchers in relation to any credit cards used by the husband for the past three financial years.
Paragraph 4(d)
X1 Limited, incorporated in the British Virgin Islands (BVI), was established in early 1992 as a private investment company. Its registered office is in Europe, where the husband lives and has done so since about 1992 or shortly after. The husband has deposed that its directors are Mr BN, Mr FD, Ms MS and Ms EE, and that whilst he was a director until May 2010 he no longer is. He deposes that X1 Limited has one share and one shareholder namely Q Trustees SA as trustee of the X Trust, he holds no position or office in Q Trustees SA and that as far as he is aware he is not an eligible beneficiary of the X Trust. He deposes that he is and has been since 1992 engaged by X1 Limited as a consultant, initially in relation to “restructuring activities and strategic investments” but evolving over time to the role of principal consultant for these matters and advising on corporate strategy. See his affidavit filed 29 July 2010, pars 349-356; 367-9.
The wife contends that the husband’s evidence is false and that X1 Limited in fact is the husband’s alter ego company. Her material refers to a considerable body of evidence which, if proved at the trial, would tend to suggest that her assertion is true. By way of example only, the wife has deposed that while she and the husband were in a relationship, cohabited and married (wife’s version 1993/1994 relationship, 1994 cohabitation, 2000 marriage, 2007 separation, 2009 divorce; husband’s version 1995/1996 relationship, 1995/1996 cohabitation, 2000 marriage, 2004 separation, 2009 divorce) she and the husband each had credit cards in X1 Limited’s name as did the husband’s brother Mr P June and his wife Mrs P June and that the husband also was chief executive officer of X1 Limited until he resigned his directorship after the commencement of these proceedings. (The proceedings were commenced by the wife on 21 April 2010). The wife deposes also that during the course of their relationship, cohabitation and marriage the husband told her that X1 Limited was “his” company, a matter denied by the husband.
The husband claims that, as a former director of X1 Limited, he is bound by confidentiality as to his access to confidential information concerning X1 Limited’s operations and its clients and thus is not permitted to disclose information and documents without X1 Limited’s permission, and, where applicable, its clients, such that any request for information and documents must be directed to its current directors (same affidavit, pars 376-7). He deposes further that Mr FD, a current director, is a senior experienced lawyer and has advised him and requested his acknowledgement of the fact that X1 Limited and its directors are constrained by European Union laws and regulations from disclosing to anyone information belonging to third parties and that there are criminal sanctions applicable for breaches of those laws and regulations (same affidavit, par 378). If the husband’s assertions as to the composition and business of X1 Limited are true, then undoubtedly both the common law and any applicable statutory laws relating to corporate client confidentiality apply.
The question however is whether the composition and business of X1 Limited as deposed by the husband is true, or whether X1 Limited is as asserted by the wife the alter ego of the husband.
Certainly there is suspicion, based upon the evidence upon which the wife relies, that the husband may be the de facto controller of X1 Limited and that its operations were from inception and still are undertaken for him ultimately beneficially, by some structure or other, or perhaps beneficially for himself and his brother.
However, it is neither necessary nor appropriate to descend further into the considerable body of evidence gathered by the wife and her legal advisers in order to determine this question at this stage for the reason that the disclosure the wife seeks relates to a procedural matter, and fundamentally and categorically it is not any part of my function, nor permissible, to make findings of fact on contested issues of fact for the purpose of procedural, interim or interlocutory hearings. In short, as a premise for me to order the disclosure sought, I would need to reject the husband’s evidence, and determine that he is the controller of X1 Limited. This is a question of fact to be determined at the trial. Further, it is a relevant principle that in relation to “specific” disclosure, as is sought here, it is not permissible to go behind a party’s affidavit of disclosure (here, by analogy, the husband’s affidavit relating to the matters to which he has deposed in relation to the disclosure sought) unless the party seeking the disclosure points to specific documents shown to be likely to be in the other party’s possession, power or control. The wife has not discharged this onus in relation to the tax returns and financial statements of X1 Limited.
I am constrained therefore to dismiss the wife’s application concerning the disclosure sought in par 4(d) of her application.
Prudently, the wife might consider either joining X1 Limited as a party to her litigation, seeking for example a declaration that it is owned by the husband as his alter ego (with costs consequences if she should fail in that endeavour), or alternatively (as she may be advised) seeking non party disclosure.
Paragraph 4(g)
The husband, by Mr St John of Senior Counsel, conceded that the disclosure sought by par 4(g) (as amended during the hearing to read as set out above) is clearly relevant, and that the husband is obliged to make the disclosure sought, such that it is not opposed. I will therefore make an order in the terms of par 4(g).
Should the husband be ordered to make certain mortgage payments to the National Australia Bank – wife’s application par 2
The wife seeks an order, by way of mandatory injunction, based upon the asset preservation principles, that the husband “pay the mortgages as they fall due”.
By reference to the definition section of the wife’s amended initiating application “the mortgages” is a reference to nine National Australia Bank (NAB) loan accounts as follows:
·National Bank Account number …25;
·National Bank Account number …33;
·National Bank Account number …07;
·National Bank Account number …33;
·National Bank Account number …13;
·National Bank Account number …05;
·National Bank Account number …32;
·National Bank Account number …28;
·National Bank Account number …75.
The assets sought to be “preserved”, by the wife’s application, are five properties registered in the wife’s name (the fourth mentioned being held by the wife and her mother):
·M Street, QLD;
·F Street, WA;
·C Street, WA;
·R Street, WA;
·E Street, SA.
Exhibit 1 is a letter from Mallesons Stephen Jaques, the solicitors for NAB, 19 October 2010, enclosing a schedule of loan facilities provided to the husband, to A Investments Pty Ltd as trustee for the A Trust, to the wife as sole borrower, but guaranteed by the husband, and to the wife as joint borrower with the husband, as at 18 October 2010.
In ex 1, I have indentified with a “tick” the accounts listed above.
Mr Hackett of Counsel, for the wife, identified that the monetary value of the relief the wife seeks, if the order sought be made, is about AUD19,201 per month.
During argument, Mr Hackett explained that whilst two of the facilities marked on ex 1 have expired – see the second page of ex 1 – his understanding is that provided that interest on those two facilities is paid (as well as on the other facilities) the NAB may be likely not to proceed to exercise any rights of power of sale in respect of the five properties.
During argument, it was put that more likely than not the NAB has protected itself by way of cross-collateralisation, so that any default in respect of any of the facilities might trigger deemed default in respect to all, to enliven rights in respect of all properties the subject of mortgage to it, not just the five listed. However, I need not, to dispose of the wife’s application, further consider this aspect of the matter, given that the wife’s interest is to “preserve” the five properties referred to until trial by payments of the amount identified, that is about AUD19,201 monthly.
Mr Hackett put the wife’s “preservation of assets” case on the basis of the necessity to maintain the status quo until the trial. He referred to the circumstance that after the parties’ separation (which the husband has as 2004 and the wife 2007), but predating a Deed dated 30 August 2008 between the husband and the wife (annexure K to the husband’s affidavit filed 29 July 2010), they agreed that the husband would make all necessary payments to the NAB in respect of the five properties and that the wife could have for herself all net income received from them. The wife’s case is that she wanted a business to provide an income stream for herself, but the husband persuaded her that property would be better. The husband’s case is that after the acquisition of three of the properties (M Street, Qld; F Street, WA and E Street, SA) the wife wished to purchase C Street, WA, which he agreed to fund conditional upon the wife selling two of the existing three properties, which he says the wife promised would occur. He says, thus, that he was deceived into the funding commitment for the C Street property if she did not intend to keep her promise.
Mr Hackett, during argument, expressly disavowed that the wife based her claim for injunctive relief, as relief to restrain a breach of contract (which, plainly would need to have been refused if damages be a sufficient remedy) and made clear that the wife’s claim was solely based on the asset preservation principles.
The wife, I should say, has disavowed reliance on the Deed, claiming that she was pressured by the husband into signing it that before signing it she received legal advice that it would not bind her, and that within a month or so of signing the Deed she told the husband of the legal advice she had received before signing it. The wife said that she signed the Deed because if she had not the husband had said that he would not conclude finance arrangements with the NAB in relation to C Street, and that if the finance were not provided the wife would lose her deposit in relation to the contract for the purchase of that property. As I understand the wife’s case, the husband “required” her to sign the Deed some days before that contract for purchase was due to settle. In essence her case is that when “the last” of the properties was acquired (that is, the contract for purchase signed, requiring settlement, such that if settlement did not occur the wife would be exposed to damages for breach) in those circumstances the husband procured her to sign the Deed, which in reality she had to do or lose her deposit and be exposed to an action for damages for breach of contract.
The husband in contrast, claims that he required the wife to enter into the Deed, as a stated condition of finalising his exposure to the NAB for the purchase of C Street, in the sense that if the wife had not signed the Deed he would not have entered into financial exposure of the NAB borrowing to complete the purchase, but that in no sense was the wife “pressured” into signing the Deed.
It is timely I think to refer to clauses 4, 5, 8(a) and (b) of the Deed, but bearing in mind that the wife seeks to be excused from it on the basis, as I understand her case, of undue influence or illegitimate pressure by the husband in procuring her to sign it. The Deed is annexure 1, wife’s affidavit filed 21 April 2010:
4.[Romano] hereby acknowledges that during the period of Separation, [Romano] has acquired certain properties in Western Australia, South Australia and Queensland more particularly referred to in Schedule 1 to this Deed (the “[Romano] Properties”) which were acquired through the provision of funding by [June] and financings arranged through the National Bank of Australia (“NAB”) which were guaranteed and supported by [June] on a personal basis and secured over property owned by [June] in Western Australia.
5.[Romano] has now agreed to purchase another property at [C Street], Western Australia and more particularly referred to in Schedule 1 hereto (the “[C Street] Property”) which can only be acquired with additional financial support and bank loans arranged through NAB and guaranteed by [June] and which [June] has agreed to provide conditional upon and subject to [Romano’s] agreement to the matters referred to in this Deed including the timely performance of those matters required to be performed by [Romano] and in particular those matters referred to in Clause 8 hereof.
…
8.[Romano] hereby undertakes to [June], to do each of the following:
(a)To sell the Adelaide Property (being one of the [Romano] Properties referred to in Schedule 1 hereto) to an “arm’s length buyer” for a full and fair consideration not later than 30th September, 2008 and upon settlement of the sale of Adelaide Property, apply the sale proceeds in repayment of the NAB debt financing secured against such property and the balance of the sale proceeds to assist [June] with the repayment of the [C Street] No. 3 Loan more particularly referred to in Schedule 2 to this Deed (the “[C Street] No. 3 Loan”) and to secure the release of [June’s] personal guarantee of the [C Street] No. 3 Loan.
(b)To sell either the Brisbane Property or the [F Street] Property (being two of the [Romano] Properties referred to in Schedule 1 of this Deed) to an “arm’s length buyer” for a full and fair consideration not later than 31st December, 2009 and upon settlement of the sale of either of either (sic) the Brisbane Property or the [F Street] Property apply the sale proceeds of such sale in repayment of the NAB debt financing secured against such property and the balance of the sale proceeds to the repayment of the [C Street] No. 1 and No. 2 Loans more particularly referred to in Schedule 2 to this Deed (the “[C Street] No. 1 and No. 2 Loans”) and to secure the release of [June’s] personal guarantee of each of the [C Street] No. 1 and No. 2 Loans.
As will be seen, the husband’s competing application is that three of the five properties be sold, namely, the Adelaide property (clause 8(a) of the Deed), the F Street property (clause 8(b) of the Deed) and the C Street property.
However, during argument I insisted that the issues of the wife’s application that the husband pay in effect AUD19,201 monthly to the NAB to preserve the five properties be separately addressed from the husband’s competing application that three of them, to which I have referred, be sold.
Asset preservation injunctions are usually in the form of restraint. In relation to them an applicant must establish that unless restrained there is a real risk or danger that a respondent will dispose of or dissipate assets in his possession or under his control so as to defeat any judgment which the applicant may obtain.
The grant of relief is discretionary and most usually will be provided where a propensity to shift or conceal assets apparently to defeat a judgment already has been manifested: Cardisle v LED Builders Pty Ltd (1999) 198 CLR 380; Jackson v Sterling Industries Ltd (1987) 162 CLR 612; Waugh & Waugh (2000) FLC 93-052 at [32]-[34]; Mullen & De Bry (2006) FLC 93-293 at [41]-[44] explaining [45]-[46] in Waugh. In Mullen the Full Court concluded at [46]-[47]:
46.Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in section 114(3):
A court…may grant an injunction…in any case in which it is just or convenient to do so…
47. Ultimately, each case will involve an overall assessment of a number of factors to determine the just or convenient result. Not all cases with the same identity of factors will necessarily produce the same result because of varying weight individually and comparatively.
Thus, plainly there is power also, in relation to asset preservation injunctions, for a mandatory injunction that a party take such positive steps as may be necessary to preserve an asset provided that it is just or convenient to do so, such that the power is not restricted to restraint injunctions.
There is no evidence that the husband, unless restrained, will or may be likely to take steps to dispose of or to dissipate the five properties.
Rather, the fate of the five properties will be decided, it appears, by the NAB unless the requisite payments are made.
In this sense, plainly it is convenient that the payments are made, because if they are not the NAB may claim to exercise power of sale for default, which fate is to be avoided if possible, at least until there can be a trial.
The question thus comes down to whether it is just to require the husband to make the monthly payments until the trial.
The husband says that he does not have the financial capacity to do so. He relies on his financial statement filed 29 July 2010 showing a total average weekly income of E AUD17,035 and total average weekly personal expenditure of E(estimated) AUD21,466 (each by reference to applicable conversion rates set out in schedule B to his financial statement for AUD, $C, € and £) being a weekly shortfall of E AUD4431. Included in schedule B, in relation to the calculation of his total average weekly expenditure is an item “Australian mortgages for [the wife’s initials]” (Ms Romano, the wife) AUD5571.81 weekly, detailed on a separate sheet in schedule B as relating to the five properties the wife seeks to preserve. This equates to AUD24,144.50 monthly (which the husband has been paying to date, apparently, according to his schedule B), whereas the wife is seeking only AUD19,201 monthly. The difference AUD4943 monthly, or AUD1140 weekly, partially reduces the claimed shortfall of AUD4431 weekly.
Curiously, AUD19,201 monthly equates to AUD4431 weekly, the precise amount of the husband’s claimed shortfall. Perhaps this is a coincidence. Be that as it may, and although I am required at this interlocutory stage of the proceedings to take the husband’s financial statement at face value, there being no cross examination of him on it, there is no reason demonstrated by the husband during argument that all of his other claimed liabilities in schedule B necessarily should have precedence over the liabilities to the NAB in respect of the five properties. Indeed, as seems plain upon even a cursory examination of the various sheets in schedule B, some expenditure items seem to relate to discretionary spending related more to lifestyle than need, in particular when compared with the wife’s financial statement filed 21 April 2010 showing her to be in comparatively very diminished circumstances, at least in relation to income and expenditure, namely, average weekly income AUD2151 and average weekly expenditure, including outgoings on the rental properties, AUD3521. In this regard, I note the wife has included in relation to her income rental from tenants in some of the five properties.
The husband’s case, according to his financial statement and the submissions put, is to the effect that he can afford to pay, weekly or monthly, everything for himself (and his new wife and dependents including a nephew) but nothing for his former wife in her ambition simply to maintain necessary payments to the NAB to avoid a sale of the five properties which by reference to her amended initiating application filed 21 May 2010, Final Orders, she seeks to have.
In my analysis, without making any findings of fact, which at this stage of the proceedings I am precluded from doing, the observations I have made lead me to the conclusion that the husband is disingenuous in claiming by reference to his financial statement that he does not have the capacity to pay AUD19,201 monthly in relation to the mortgages referred to until the trial of the matter. Put shortly, by affording precedence to his legal obligations to the NAB instead of affording precedence to his lifestyle considerations amounting to discretionary spending, I am persuaded not only that the husband has the financial capacity to pay AUD19,201 monthly to the NAB for asset preservation purposes in relation to the five properties, but also, subject to my determination as to his application that three of the properties be sold, that it is just that he do so.
Further as will be seen, the husband proposes that he make all necessary payments to the NAB in respect of three of the five properties pending his proposed sale of them (but subject to the wife contributing the very modest rental income she receives, and needs for her subsistence, as plainly demonstrated according to her financial statement). This makes a mockery of his contention of present incapacity to pay the requisite NAB payments and further shows that his case in relation to the wife’s interim claim is disingenuous.
I therefore determine, subject to my dealing with the husband’s application for sale of three of the five properties, that for the purpose of s114(3) of the Family Law Act 1975 (Cth) it is both just and convenient (bearing in mind that I need be satisfied as to only one of these matters, not both) that until the trial or earlier order the husband make the payments sought, “just” because on my analysis of the evidence the husband has the capacity to pay where the wife does not, and “convenient” because if he does not pay the NAB may be likely to sell the five properties which the wife seeks to have awarded to her by way of final relief. In so determining, I am conscious of the estimated equity values in relation to three of the properties stated during argument to be about $440,000 (before selling costs) for F Street, Western Australia (appraisal $1,487,500 value less $1,048,644 debt); about $115,000 (before selling costs) for E Street, South Australia (appraisal $385,000 less $269,000 debt); and about $320,000 (before selling costs) for C Street, Western Australia (appraisal $1,300,000 less $988,049 debt).
Further, I am conscious of the evidence of Ms V, chartered accountant, in her affidavit filed 13 August 2010, on which the husband relied, of calculated income losses to 30 September 2009 in respect of three of the properties, that is, F Street, Western Australia, E Street, South Australia and C Street, Western Australia, and demonstrating further loss accumulation should they not be sold. Mr St John, for the husband, submitted that the income losses set out in Ms V’s evidence annexed to her affidavit (opinion, p 2, and schedule of calculations, p 1) show that rather than “preserving” these three assets continuation of holding them would lead only to continuation of “massive losses” so that the net effect of retaining them would not be to preserve them as assets but to preserve ongoing losses. However, income losses on investment properties for taxation purposes, or even in themselves as a reality, are a quite different matter from preservation of capital assets for family law purposes.
In all of the circumstances, subject to the qualification I have mentioned concerning the husband’s application yet to be dealt with, on the available evidence I am satisfied that it is both just and convenient, on the asset preservation basis, that I order the husband until the trial of this matter or earlier order to pay as they fall due all amounts payable to the NAB in respect of finance arrangements with the NAB concerning the five properties.
Plainly, such amounts will be taken into account at the trial in relation to contribution by the husband to those five properties.
Should three of the properties be sold, namely F Street, WA, E Street, SA and C Street, WA – husband’s response pars 1-10
The husband seeks by pars 1-10 of his response filed 2 August 2010, Interim Orders, that these properties be sold, that until sale the husband be solely responsible for payments to the NAB (see pars 3(a), 6(a), 9(a), 10(a) and (b)), but with the wife to pay net rental from those properties towards the debts in relation to them (see pars 3(b), 6(b), 9(b)), and that after costs of sale and the preservation of specified amounts in relation to potential capital gains tax the balance proceeds of each sale be applied to discharge the respective mortgages for those properties, and then a loan account in the husband’s name solely secured against a property at A Street, WA being a property registered in the husband’s name solely, which property, according to the husband’s schedule A to his financial statement, is the most valuable asset in the pool appraised at AUD4.3 million.
In my view, the husband’s application is preposterous. It would have the effect, at the interlocutory stage, of putting out of reach the whole basis of the wife’s ultimate s 79 property claim, namely that she be awarded the five properties she seeks, leaving realistically her claim to M Street, Qld, and R Street, WA for whatever equity there may be in those two properties, which on the evidence is modest.
I have referred already to the parties’ competing contentions in relation to the Deed 30 August 2008 which the husband seeks to uphold and which the wife seeks to deny validity on the basis of undue influence or illegitimate pressure in the husband’s procuring of her to sign it. These are matters for trial. On the interlocutory basis I am not able to make any findings about the husband’s and the wife’s competing interests in relation to the Deed.
However, on the interlocutory basis, the husband has failed to persuade me that the relief he seeks is just or convenient. Put shortly, to grant it may have the effect of putting beyond reach for the wife the very assets she seeks to be given to her in any ultimate s 79 property division order.
The husband argues that if I do not order the sales he seeks the result may be that the NAB will exercise power of sale in respect of the assets the wife seeks to have, such that it would be better to have an orderly or controlled sale by the husband and the wife, rather than forced mortgagee sales by the bank. In particular, the husband’s Counsel urged this aspect of the matter, namely that a voluntarily orderly sale ultimately will benefit the parties mutually rather than a forced mortgagee sale sooner or later by the NAB. I reject this argument, particularly because, as already I have indicated, I propose to order that the husband make the necessary payments to the NAB to preserve the five properties which the wife seeks to have. Thus, if the husband seeks to have an orderly sale ultimately, on his case, rather than a forced mortgagee sale, this is entirely in his hands. Indeed, as I have observed earlier, it is disingenuous for the husband to say on the one hand that in respect of the relief the wife seeks, he cannot afford to make the necessary monthly repayments until the trial, but that for the purposes of his own case, he can afford to make them, pending sale. It is no answer that in respect of the husband’s proposal the payments to the NAB would be assisted by the wife paying the net rental on the properties to the bank. As shown already, by reference to the wife’s financial statement, the rental not only is very modest but the wife needs it for outgoings in relation to the properties and for her subsistence. In particular, the wife’s financial statement shows weekly income rental of E AUD1866 and property expenses of E AUD1465, net about AUD400 weekly for her subsistence, supplemented by a boarder (presumably at M Street) who pays her AUD165 weekly.
Ultimately, if the husband should defy my order that he pay the requisite payments to the NAB, and potentially thus be in contempt of that order such that the NAB sells the properties which the wife seeks to have, this may have considerable bearing upon any ultimate s 79 order to ensure a just and equitable property division overall. It is however premature to consider this.
In deciding the husband’s application for the sale of the three properties, I have considered also their relative (projected) equity after sale, but before costs of sale, earlier referred to, and the evidence of Ms V earlier referred to.
In my view, the husband has failed to demonstrate any case for the early sale of these three properties and accordingly I will order that his application in this regard be dismissed. In short, to grant the relief he seeks on the interlocutory basis would defeat the wife’s case for trial before even there can be opportunity for a trial and would serve to give partial effect to clauses 8(a) and (b) of the Deed on the final basis before the wife’s case that it be set aside for undue influence or illegitimate pressure can be determined.
Should the husband be restrained from dealing the with property of X1 Limited and from resigning any positions he holds in several companies – wife’s application pars 5(b) and (c)
Paragraph 5(b)
It is convenient to set out the precise terms of the restraint sought.
5.That until further order, the Respondent personally and by his servants and agents be restrained and an injunction be granted restraining him from:
…
(b)Causing [X1 Limited] to sell, mortgage, transfer or otherwise encumber or deal with any property in the ownership of that company without first obtaining either the prior written consent of the Applicant or an order of the Court.
Relevant principles
In order to succeed in the grant of an interlocutory injunction it is incumbent upon the wife to prove that the issue to be tried, if the evidence remains as it is, carries a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial; and that the inconvenience or injury which she would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the respondent would suffer if an injunction is granted: Australian Broadcasting Corporation v O’Neill (2006) 227 CLR 57 at [65] and [70].
I have referred already to the husband’s evidence that he is no longer a director of X1 Limited but an employed consultant, and the wife’s case of allegation that X1 Limited in truth is the husband’s alter ego. I have observed already that there is suspicion surrounding the timing of the husband’s resignation as a director and chief executive officer of X1 Limited, to the use by the husband and the wife of X1 Limited credit cards during their relationship and marriage and to the wife’s evidence that the husband would refer to X1 Limited as “his” company.
It seems to me that there is certainly an issue to be tried, in the sense explained, as to whether X1 Limited was, or is, the alter ego of the husband, on the basis that if the evidence of the wife referred to remains as it is, it carries a sufficient likelihood of success of proof by the wife that X1 Limited at least was the husband’s alter ego, and also that, despite his recent resignation as a director, he may still have effective but disguised control, so that in my view there should be preservation of the status quo until trial, if that can be achieved. In this sense however, it is to be noted that the wife does not seek to restrain Mr BN, Mr FD, Ms MS and Ms EE from dealing with X1 Limited’s property, but only the husband, and there is no evidence that the current four directors in any sense are the husband’s servants and agents. Even if they were, there is no power to restrain servants and agents personally, only the power to restrain a person “by himself, his servants and agents” that is, those to whom the person restrained gives direction. Abella v Anderson [1987] 2 Qd R 1, per McPherson J.
Thus, if the husband is restrained in those terms it is difficult to conceive of the idea that the four current directors effectively would be restrained unless, in truth, they are, by disguise, the husband’s servants and agents by his real control of X1 Limited. This presently is unknown. However, the restraint the wife seeks is not against the four current directors personally.
Mr Hackett of Counsel, for the wife, candidly put that if in truth X1 Limited is not the alter ego of the husband then the injunction sought “will be of no impediment to him” such that “if his sworn denials are correct then an injunction would cause him no prejudice”. Whilst the Court will not make a futile order, there is merit I think in Mr Hackett’s submission in this particular case.
Against that, Mr St John submitted that there is no evidence that the husband has the capacity to do any of the things sought to be restrained and that the Court must proceed on evidence not suspicion. I have referred already however to the wife’s evidence. Although it be in narrow compass, the two pieces of evidence she relies on which I have identified are hallmark features of an alter ego company, so that, as I have said, if the evidence remains as it is, there is sufficient likelihood of success by the wife on the issue to justify the preservation of the status quo until the trial. The premise of the wife’s case it must be understood is that the husband’s recent resignation as a director and CEO, on her case, have effect that he is still the controller of X1 Limited but through disguised control.
As to the balance of convenience, I note that the wife seeks in the Final Orders section of her amended initiating application, by par 4(g), that the husband retain:
(g)his interest in [X1 Limited];
…
Thus, she does not seek that any of its assets be awarded to her. However, as is well understood, in order for the wife to have the assets she seeks (see pars 1, 2 and 3 of her amended initiating application) the value of the pool as a whole must be identified so that ultimately after a trial the value of X1 Limited either will be included or excluded from the pool according to the finding whether X1 Limited is the husband’s alter ego, with 100% interest in it, on the one hand, or that he has no interest in it, on the other hand, or some interest in it to be valued. If in truth, thus, X1 Limited is the husband’s alter ego, the balance of convenience favours the restraint sought. In respect of the husband’s position, I have referred already to Mr Hackett’s submission, which is apt, that is to say, if X1 Limited is not the alter ego of the husband and he does not have control of it, there is no inconvenience or injury which he could suffer (put as “impediment”) by the grant of the injunction, nor indeed in such case would there be inconvenience or injury to the company itself.
As to the need for restraint, if what the wife alleges is true, the husband’s conduct in resigning as a director and the chief executive officer serve as sufficient evidence to warrant restraint, that is, there is the position demonstrated that unless restrained the husband may take steps to put the company and its assets out of reach of the trial process.
Finally, I would refer to s 114(3) of the Act, referred to already in a different context. I am satisfied in all of the circumstances that it is both just and convenient to grant the restraint sought, provided that the wife gives the usual undertaking as to damages. This was not offered during the hearing. However, the wife and her Counsel are present in Court and at the conclusion of these reasons I will ask whether the usual undertaking as to damages is given.
As to the worth of any undertaking which may be offered by the wife, this was not canvassed during the hearing. It seems to me however that the circumstances are such that even if the wife is impecunious, such would not warrant in this particular case refusal of the injunction sought, on the basis that ultimately any conditions of the grant of an injunction are as much discretionary as the grant of relief itself. See also: Blueseas Investments Pty Ltd & Mitchell & McGillivray (1999) FLC 92-856 at [57], to the effect that in family law cases the inability to give a worthwhile undertaking ought not prevent an order being made in cases where otherwise all of the requirements for its making are made out.
I will grant liberty to the husband to apply in case he should wish to challenge the worth of any undertaking given by the wife. However if, as the husband asserts, he has no capacity to deal with any of the assets of X1 Limited probably it would be inconsistent for him to test the worth of the undertaking. This will be a matter for the husband as he may be advised.
Paragraph 5(c)
Again, it is convenient to set out the precise terms of the relief sought.
5. That until further order, the Respondent personally and by his servants and agents be restrained and an injunction be granted restraining him from:
…
(c)Resigning from any position he holds in any company (private or public) whether in Australia or out of Australia, including but not limited to as Director of [29 companies listed, names omitted],
without first having given 48 hours written notice to the wife’s solicitors of his intention to do so which notice is to include explanation as to why it is that he wishes to resign.
The words appearing separately are not in the wife’s amended initiating application but I allowed Mr Hackett to add them by oral amendment.
The husband, as noted already, has resigned as the director of one of these companies, X1 Limited.
The wife’s case is that the husband’s resignation from X1 Limited, which she contends was to defeat her interest in the proceedings and avoid his disclosure obligations, gives rise to the necessity of the restraint sought in relation to the other companies of which he is a director.
The husband resists the relief sought, with an exception to which presently I will refer, as both an unnecessary and unwarranted significant curtailment of his business operations. The husband, through his solicitors and Counsel, by written submissions received by the Court, 18 October 2010, and referred to by Mr St John during argument on 20 October 2010, include the following:
43.The Husband has offered to and is prepared to concede the following orders:
(a)the Respondent shall not without giving the Wife 21 days notice in writing of his intention to do so, resign or offer to resign as a director from the following companies:
i) [A Investments] Pty Ltd;
ii) [K] Pty Ltd; and
iii) [B] Ltd;
(b)the Respondent will upon being asked to resign or upon being removed from the Board of Directors of any company, provide the Applicant with timely notice thereof.
I will therefore make that order as one volunteered by the husband.
As to the balance of the relief the wife seeks, I would refer to the relevant principles concerning the grant of restraint injunctions, without again setting them out.
In my view the wife has failed to show, despite the husband’s resignation as a director of X1 Limited, that unless restrained he is likely to resign from all or any of the companies listed (if indeed he is a director of all or any). Moreover, the relief the wife seeks in the Final Orders section of her amended initiating application, whilst referring to “the [A Street] property”, “the assets of the [A] Trust”, “the [B property], London” (pars 4(a), 4(b) and 4(c)) does not refer to any of the companies listed in par 5(c) of her application other than X1 Limited. (Some of the companies are referred to in the “Definitions” section, but not in the Final Orders section).
There is a note to the wife’s amended initiating application, however, in the Final Orders section:
NOTE:
The Applicant is unable to provide further particulars of the orders she seeks on a final basis as at the date of commencing this proceeding. She is unable to do so in circumstances where the Respondent has not agreed or failed to make disclosure adequately of his worldwide financial position. He has failed to do so despite the specific requests of the Applicant. The Applicant will further particularise the relief she seeks in these proceedings once this disclosure has been provided, and in particular that the Respondent has provided proper disclosure relating to his interest in the [A] Trust, and a company ([X1 Limited]).
Further, at par 4(h) the wife seeks that the husband retain:
(h)any other property in his ownership.
The wife is fearful that if the husband should resign as a director of the companies which she has listed, he will avoid his obligation as to disclosure concerning them and in turn until there is disclosure she cannot further particularise her claim.
I do not think there is substance in this. The husband has an obligation to disclosure all of his assets, including any shareholding he may have in any companies, and to disclose all documents relevant to such, whether held in companies of which he is a director or not.
Further, as I put during argument, there may well be good reason for the husband wishing to resign a directorship, because of the onerous duties on directors, exposure to personal liability in some circumstances, or for merely personal reasons, and that further there may be good reason to resign to avoid prosecution if, for example, the husband as a director discovered insolvent trading or other illegality. This observation prompted the amendment by Mr Hackett which I have set out.
Mr St John submitted that the amendment relating to the 48 hours notice would serve no utility. This appears to be correct. That is to say, advance notice of an intended resignation, for whatever reason, cannot prevent it, if that is the object of the exercise.
It would be a quite different thing to seek to restrain the husband from dealing with any shares in these companies which he may have, relating to preservation of the asset pool. However the wife does not seek this.
I am not satisfied, on the evidence and argument that the wife presents, that the relief she seeks comes within the principles in ABC v O’Neill (above) or s 114(3). Although an issue to be tried is the nature and value of the husband’s assets, his directorship of companies, as opposed to his shareholding in them, is not demonstrated to affect this, so as to justify that until the trial he not resign any directorships. The matter of his obligation in relation to disclosure is a different matter on which I have made sufficient observation.
The balance of convenience, in relation to the relief the wife seeks, does not favour it and potentially could impact adversely upon the husband’s right to decide to remain as a director of any company, or if he should see fit, on the bases outlined, to resign any directorship. Further, I accept Mr St John’s submission that the 48 hour notice requirement would have no utility. That is to say, even if the husband wished to resign his directorships and give a reason or explanation with 48 hours prior notice, such would not then prevent any intended resignations. The wife, at trial, by her Counsel, will have full opportunity to cross examine the husband as to his reason for any resignation that may occur between now and then, if such then be considered appropriate.
I have indicated that I will make an order in the terms of par 43 of the husband’s written submissions. Otherwise the wife’s application under par 5(c) is refused.
Transfer to Perth – husband’s response par 11
The husband applies that the proceedings be transferred to the Family Court of Western Australia, Perth Registry. The wife resists this and seeks that the proceedings remain in Brisbane.
Although the Family Court of Australia and the Family Court of Western Australia are separate courts, Counsel agreed that the effect of the husband’s application is that it be regarded as one for change of venue under r 11.17 of the Family Law Rules 2004 (Cth), and not a “forum” matter, as such.
Rule 11.18(1) provides:
RULE 11.18 FACTORS TO BE CONSIDERED FOR TRANSFER
11.18(1)In making a decision under rule 11.17 or in deciding whether to remove a case from another court under subsection 46(3A) of the Act, the court may consider:
(a) the public interest;
(b)whether the case, if transferred or removed, is likely to be dealt with:
(i) at less cost to the parties;
(ii)at more convenience to the parties; or
(iii) earlier;
(c) the availability of a judicial officer specialising in the type of case to which the application relates;
(d) the availability of particular procedures appropriate to the case;
(e) the financial value of the claim;
(f) the complexity of the facts, legal issues, remedies and procedures involved;
(g) the adequacy of the available facilities, having regard to any disability of a party or witness; and
(h) the wishes of the parties.
…
In Sheen & Paolo [2007] FamCA 1175, Boland J sitting as a single Judge said at [38], in relation to the Federal Magistrates Court Rules, Rule 8.01, which set out three specific matters and then a sub-paragraph (d) “any other relevant matter”:
38.The mother was unable to take me to any authority to support her proposition that equal weight should be given to each factor in the relevant rule. It is clear having regard to the drafting of the rule, that the rule does not require any particular weight to be given to any one factor. In some cases issues relating to the balance of convenience may be decisive. In other cases the proximity of a final hearing date and the availability of a judicial officer to hear an application may be the most influential factor in determining a venue application. I am satisfied there is no basis, either in the rule itself, or authority, which requires equal consideration to be given to each sub-paragraph of the rule, and sub-paragraph (d) which is necessarily general in its terms, militates against such a construction.
I would leave aside her Honour’s reference to sub-paragraph (d) of the Federal Magistrates Court Rules as having no equivalent provision in Rule 11.18(1). Otherwise however, her Honours observations seem equally apt to the several matters listed in rule 11.18(1), that is to say, that the rule does not require any particular weight to be given to any one factor nor equal weight to each factor.
Further, although rule 11.18(1) uses the permissive “may” consider in relation to the matters listed for consideration, the intent of the rule undoubtedly is that a judge should give consideration to all of the matters listed to the extent to which they may appear to be relevant to the particular case or which have been argued in respect of a particular case. Mr St John submitted that the absence of a catch-all provision such as “any other relevant matter” or “any other matter the Court or a Judge considers relevant” would tend to indicate that the list of matters is intended to be exhaustive. Whilst this appears to be correct, it is not necessary for me to express a concluded view on this.
It is convenient to deal with each of the matters in the order in which they are listed.
Before doing so it is convenient to record the evidence referred to by Counsel as the parties’ relevant evidence:
· husband’s affidavit filed 29 July 2010, pars 517-537
· wife’s affidavit filed 13 August 2010, pars 19-37
· husband’s affidavit filed 15 October 2010, pars 23-58
· wife’s affidavit filed 13 October 2010, pars 54-67 (relied upon by the husband)
· wife’s affidavit filed 13 October 2010, pars 224-6.
Public interest
There is no aspect of public interest raised.
Cost to the parties and convenience
The husband and his family live in Europe and the wife in Brisbane. The husband will have to travel from continental Europe or London, where he also has a residence, to Australia for the trial whether it be at Brisbane or Perth. He argues that Perth is closer to Europe and London than Brisbane.
The husband says (husband’s affidavit filed 29 July 2010, par 531) there are 28 “likely witnesses” for the trial, whose names he lists, plus another “group” of witnesses namely “tenants and residential property managers” of the wife in Perth, whom he intends to subpoena, the number of such witnesses in that group not being stated. He says that of these “likely witnesses”, all either live in Perth, or are located in Perth, or are resident in Europe (which is closer to Perth). Most of these, he says, thus would be required to travel from Perth or Europe to Brisbane if the trial is here and be accommodated in Brisbane, whereas if the trial is in Perth, the cost of accommodation would be saved for the witnesses from Europe because he would be able to accommodate them with family members. It would appear however, as I will mention further below, that some 11 or so of the witnesses listed by the husband are relatives or friends of the wife.
The husband does not descend to particularity as to the proposed evidence of each listed prospective witness, but lists the prospective issues (husband’s affidavit filed 29 July 2010, par 530) in this way :
530.There is an actual or potential divergence of the evidence between myself and the Applicant as to:
(a)The dates of commencement and the end of our cohabitation and separation
(b)Her travel with me and the Applicant’s contributions generally
(c)My contributions
(d)My assets at the date of cohabitation and separation
(e)The circumstances surrounding the signing of the Deed and the implications thereof on the validity or otherwise of the NAB guarantees (including the possibility that NAB becomes a party to these proceedings)
(f)The Applicant’s behaviour in Perth as a distinctly single woman following separation
(g) The nature and extent of my non-Australian assets
(h)The nature of my Australian assets, including the [A] trust, the [W] partnerships, the [W] Unit Trust and potentially the […] royalty agreements
(i)Control of the [A] Trust
(j) Debts I owe to [Mr P June] and others.
He refers also to the circumstance that the majority of the parties’ real estate is in Perth and that the value of the Perth properties significantly exceeds the value of the properties held outside Perth, with effect that the cost of expert valuers will be higher if they are required to travel to Brisbane, such expert valuers being in addition to the list of witnesses to whom I have already referred.
He refers to the circumstance that he has had extensive dealings with the NAB in Perth, with effect that relevant banking documents are located there, and he anticipates two NAB witnesses from Perth. He refers also to a Mr FL from Perth in relation to a trust, namely the W Trust, and witnesses in Perth concerning control of the A Trust.
The husband refers also the circumstance that his lawyers in the proceedings are in Perth, and that they have acted for him in previous family law matters. He says that it will be much more difficult for him to liaise with his Perth lawyers, and they in turn with their Brisbane agents, because of time differences between Europe/London/Perth (10 or 12 hours) and Perth/Brisbane (2 hours). The husband says that whilst the wife lives in Brisbane, initially during 2008 she instructed solicitors in Perth, Lavan Legal.
The husband recently provided the wife with a Notice to Admit Facts and received a Notice Disputing Facts denying all matters. Some of these concern the husband’s brother, Mr P June, who resides in Perth. The husband says that the wife’s denials have effect that the husband now expects his brother to intervene in the proceedings. He refers also to his intention to join the wife’s mother, who lives in Perth, concerning whether the wife holds one half of the property at R Street, WA in trust for her.
He refers to extensive evidence and reports he has obtained or proposes to obtain from persons in Perth concerning the wife’s allegation that he has assets of about AUD35 million. He refers to substantial costs he has incurred already in obtaining expert evidence to refute the wife’s allegations, and that he anticipates further substantial costs because of anticipated further allegations. By way of this, Mr St John referred to the wife’s affidavit filed 13 October 2010, very recently, pars 54-67, as demonstrating that the “breadth” of the dispute is continuing, not narrowing. Whether or not this is so, there is no suggestion, it seems to me, or necessary inference, that the costs associated with any expansion of the wife’s case would be less in Perth than in Brisbane.
The husband’s evidence to support his application for transfer of the proceedings to Perth is extensive in its volume and detail. I have therefore not attempted any summary of it, but rather highlighted the categories of concern he has as to both cost and convenience if the proceedings are to remain in Brisbane rather than be transferred to Perth. A reading of his material, however, and of Mr St John’s written submissions concerning it, colour the matters to which I have referred with considerable weight concerning cost and convenience, both in respect of the husband’s preparation for trial and its duration.
The husband points also to the circumstance that the Deed 30 August 2008 referred to earlier, contains clause 15, to the effect that not only is the Deed to be interpreted according to the laws of Western Australia (a neutral matter, having regard to the common law), but also that the parties agreed to submit to the jurisdiction of the Courts of Western Australia with respect to any proceedings concerning it. The Family Court of Western Australia, as is understood, is a State court exercising federal jurisdiction. However, there are other matters concerning jurisdiction. In particular, it does not appear that the husband is seeking to invoke clause 15 to oust the jurisdiction of Family Court of Australia in relation to matters concerning the Deed, in particular, where plainly jurisdiction in the Family Court of Australia is attracted on the accrued jurisdiction basis. The contrary was not argued by Mr St John, and thus I need not deal with matters of jurisdiction, as opposed to cost and convenience.
The wife’s initiating application was filed on 21 April 2010. Her amended initiating application was filed 21 May 2010. It appears to be common ground that it was served on the husband on 19 June 2010. Since then, the husband has filed his response on 2 August 2010 and has filed voluminous material in the proceedings at Brisbane. However, he says that expressly, through his solicitors, he took an early stand to contend that Brisbane is an inappropriate venue and that he would be making application for change of venue to Perth. He says that he has had to pay Counsel to fly to Brisbane for hearings on 19 August 2010 and 20 October 2010, the latter date being for the various applications heard on that date with which I am now dealing.
The wife says that she has lived in Brisbane since July 2008 (which the husband disputes, asserting that she has lived in Brisbane since 2005) and that she has instructed solicitors and Counsel in Brisbane since April 2010. She says she will be very substantially inconvenienced in relation to her legal representation if the proceedings are transferred to Perth, and rejects that the husband would suffer any more inconvenience in instructing his solicitors and Counsel if the matter remains in Brisbane, than she would suffer if the matter is transferred to Perth, particularly, as she emphasises, because the husband does not reside in Perth, but overseas, so that, in any event, all of his instructions to date are likely to have been by email or fax and there is no reason why he cannot continue to communicate with his solicitors in Perth in such manner even if the proceedings remain in Brisbane. She points to the circumstance that the husband is a professional who is experienced in conducting instructions and negotiations by telephone.
As to costs, the wife says that although her mother and other members of her family live in Perth, she does not travel there regularly, as she cannot afford to do so, and that she travels to Perth about once a year. She resists the husband’s notion that if the proceedings are transferred to Perth she would not be required to attend interlocutory hearings, but only need to travel once for the trial.
As to the issues set out in the husband’s par 530 (set out above), whilst the wife agrees that most are issues, she submits that the nature of them does not warrant transfer to Perth. In particular, she says that the NAB Perth file has been subpoenaed, and relevant documents already produced to the Court at Brisbane. There has been substantial agreement, she says, reached, as to the value of the real estate in Perth. Further, she says that she has waived legal professional privilege in relation to the legal advice she received from Lavan Legal concerning the Deed, such that the entire file of Lavan Legal has been disclosed.
She points to the circumstance that since she commenced the proceedings in April 2010, they have reached an “advanced stage”, so that in her view it is now ready to be set down for trial. In particular, the parties each already have filed their comprehensive substantive trial affidavits concerning their relationship, marriage and contributions, and as well their comprehensive financial statements. Even a cursory examination of the parties’ material filed to date shows this to be true.
She says that in relation to valuation, only two properties are as yet to be agreed, namely the A Street property, and the W farm, and that she proposes that for those there be a single expert.
She proposes to have X1 Limited valued, however, it is not a Perth company.
In relation to the husband’s list of likely witnesses, she identifies 11 as either relatives or friends of hers, and questions, in those circumstances, whether the husband would call them. She points also to the circumstance that he has not identified what the evidence of each would be or be likely to be.
The husband says that the issues are such that he will oppose that any witnesses attend electronically, particularly as credibility matters, he asserts, are very much in issue. In contrast, the wife asserts that many of the witnesses may be likely to be permitted by the Rules of Court, and consequent decision of a judge, to appear by telephone or video link, and that such application will be made by her if the matter stays in Brisbane, at least in relation to minor witnesses.
The wife deposes that the husband has said to her that he will spend as much money as required to “drag the case on for years” and that she will come off “second best”. The husband denies this.
The wife says that she does not have the financial capacity to conduct her case if it is to be heard in Perth.
As I have mentioned in respect of the husband’s material, similarly I have not attempted any summary of the wife’s material, as unnecessary, but rather highlighted the categories of concern she has as to both cost and convenience if the matter is transferred to Perth rather than if it remain in Brisbane. A reading of her material, similarly, and Mr Hackett’s written submissions concerning it colour the matters to which I have referred with considerable weight concerning cost and convenience, both in relation to the preparation for trial and its duration.
The length of the trial the wife estimates as 4 days and the husband as 10 days. On any view, on the material which I have seen to date, the trial is likely to occupy 10-15 days. There is almost no agreement in relation to the issues, except in relation to some of the real property valuation matters.
Cost – summary and conclusion
Objectively, the cost to the parties of a trial, and its further preparation before trial, will be considerable, whether in Brisbane or in Perth. The question of the parties’ legal costs in preparation is a neutral factor, whether the proceedings be here or in Perth, that is, if here, the husband’s legal costs may be likely to be greater and if in Perth, the wife’s legal costs may be likely to be greater. In relation to the costs of the trial itself, the cost of travel for overseas witnesses is likely to be similar, whether the destination be Perth or Brisbane, or perhaps a little less if Perth.
The husband says there would not be accommodation costs in Perth for overseas witnesses because he would be able to accommodate them with family, whereas he could not do that in Brisbane. The husband points to accommodation costs of the many Perth witnesses in Brisbane, and also for himself, for the duration of the trial if the matter remains here. However, there is merit in my view in the wife’s case that the husband has failed to demonstrate with any particularity, rather than generalisation, any specific relevant evidence of the several Perth witnesses he says will be necessary, or indeed of any proposed overseas witnesses. Further, if their evidence is in short compass, it will be open to the trial judge, if the matter is in Brisbane (or indeed in Perth) to consider and rule upon applications for telephone or video link evidence.
The husband, I should think, may be unlikely to call the 11 or so family and friends of the wife as his witnesses. Indeed, the husband does not say that he has 28 or more witnesses, but rather that potentially the persons on his list are “likely” witnesses to be called either by the husband or the wife, as I understand his affidavit. The husband has not specified, thus, how many on the list he may be likely to call. Further, it is not up to him to look into the wife’s brief, as it were, and anticipate the identity or number of witnesses she may be likely to call.
However, if the husband should have as witnesses even half the number of people on his list, and if the wife seeks to have them cross examined at Brisbane, plainly the cost overall would be more than if the trial were at Perth, and to that end the proceedings now transferred to Perth.
Thus, the factor of cost to the parties weighs in favour of the proceedings being transferred to Perth.
Cost, however, although a matter of significant weight, is only one of the relevant factors to be considered.
Convenience – summary and conclusion
As the husband lives overseas it seems to me that both in the preparation for trial phase, and for the duration of the trial, the husband would not suffer more inconvenience if the proceedings remained in Brisbane or were transferred to Perth. Basically, the husband would need to be “away from home” for the trial and the period leading up to it. The husband, on the evidence, seems to fly regularly between London and continental Europe. He will be required to fly from either London or Europe to Brisbane for the trial, or from London or Europe to Perth for the trial. There is no reason, in my view, why in the meantime until the trial, and the immediate time leading up to it, he cannot continue to retain his Perth solicitors.
The wife, in contrast, lives in Brisbane and rarely travels. She has chosen the Family Court of Australia at Brisbane, no doubt because of convenience to herself and her inability to travel frequently or widely. She would need to spend considerable time away from her home, if the matter is in Perth, both leading up to the trial and during it. In Perth, conceivably, she could stay with her mother or other family members. This however is a cost factor, not a convenience factor.
Overall, in my view, the factor of convenience to the parties weighs in favour of the proceedings remaining in Brisbane.
Convenience, however, although similarly a matter of significant weight, also is only one of the relevant factors to be considered.
Earlier? When the trial may be likely to be heard
Ms BBB, legal assistant within the employ of the husband’s solicitors in Perth, had a telephone conversation with an employee of the Federal Magistrates Court at Brisbane on 28 July 2010. Her information was that a trial could be accommodated in the Federal Magistrates Court “sometimes up to 4 months after the first court date then up to 2 years”. The matter however was transferred to the Family Court of Australia at Brisbane on 19 August 2010. Ms BBB said that the informant in the Federal Magistrates Court said of property cases in the Family Court of Australia at Brisbane “Same thing, it’s a case by case scenario and it’s up to the Judge to determine how long. Hard to say.” Ms Yuruten said that she also telephoned the Family Court of Western Australia and was told to the effect that “You’re looking at 17-18 months after the first Court date”, “unless it is fast tracked or deemed to be urgent.”
In my experience, as a Family Court of Australia judge in the Brisbane Registry in the Trial Division, a property case of 10 or more days, if ready for trial now, in the ordinary course may be expected to be allocated trial dates by end 2011 or at the latest mid 2012. However, in the ordinary course, much would depend upon the number and nature of any further interlocutory proceedings. The parties have several affidavits each already. It is likely that they may be ordered to provide one only trial affidavit each, and one affidavit of each of their witnesses, and possibly prepare a bundle of agreed documents to avoid the multiplicity of the parties annexing the same documents to several affidavits. If the matter has not had external mediation, a conciliation conference would be ordered. Then there would be a trial directions hearing. Largely however the allocation of trial dates would depend upon whether the parties are ready to proceed. As in Perth however, if a matter is ready for trial, it can be “fast tracked”.
Both parties have expressed the want that the trial proceed as expeditiously as possible, and be allocated trial dates as soon as possible, to put the litigation behind them.
I note that Thackray J in Perth, acted for the husband in former matrimonial proceedings in 1994: wife’s affidavit filed 13 October 2010, annexure A, p 23 of that annexure. His Honour sits in the Appeal Division, but also does trial work. It would seem likely that His Honour would not be able to hear this matter, as having previously acted for the husband in matrimonial proceedings. I am unaware of the present trial commitments in Perth of the Trial Division judges.
In Brisbane, however, the parties would have the advantage of the new Financial Fast Track Pilot Project (FFTPP), being piloted by and managed by Murphy J, who is also the case management judge. With this system, the parties would have the opportunity to apply for inclusion on that docket with early trial dates in 2011 guaranteed before his Honour, provided that they do not default in ordered directions or other matters specified on the FFTPP protocol sheet. In my view, the case is ideal for entry onto his Honour’s FFTPP docket. Indeed, the wife’s material requests the first available trial dates at Brisbane. The new FFTPP appears the best opportunity for both parties to have the matter dealt with as quickly as possible. The husband, as much as the wife, has intimated that he wants the proceedings to be “over” as soon as possible.
This opportunity for early trial at Brisbane is a powerful consideration, and one which, in my view, is of greater weight than the competing convenience/cost considerations, having regard to the parties’ mutual wish for the proceedings to be disposed of as quickly as possible.
I note that one of the features of the FFTPP relates to disclosure. In particular, parties are required to certify, amongst other things, that disclosure has been carried out in a manner sufficient to allow the trial to proceed to completion. The wife complains, still, of lack of full disclosure by the husband.
However, often it is better to proceed to trial on avowed disclosure, and rely on the principle in Weir & Weir (1993) FLC 92-338 if non disclosure be demonstrated during cross examination, rather then to spend years trying to get disclosure when it is resisted. The wife should bear this in mind if she is to benefit by any inclusion in the FFTPP in the event that I determine that the venue should remain at Brisbane.
Availability of a judicial officer specialising in the type of case to which the application relates
I have mentioned that Thackray J in Perth is unlikely to be able to hear the matter. There are four other Trial Division judges at Perth, namely, Martin, Crisford, Crooks and Moncrieff JJ.
In Brisbane, there are four Trial Division judges. I have mentioned however the possibility of inclusion in the FFTPP. Murphy J, for that purpose, has undoubted expertise in precisely this sort of matter, and a reputation for quick dispatch.
The availability of particular procedures appropriate to the case
I would refer again to the FFTPP available in Brisbane.
The financial value of the claim
This is unknown. The wife asserts that the husband has assets of some AUD35 million. He denies this, as to which I would refer to schedule A to his financial statement. The wife claims to have the five properties, to which I have referred, and a cash sum. All else, she is content for the husband to have.
The complexity of the facts, legal issues, remedies and procedures involved
The matter is complex factually in relation to the identification and value of the husband’s assets, both during the course of the parties’ relationship and marriage and now. There are forensic issues requiring a considerable body of expert evidence and legal issues including undue influence and illegitimate pressure surrounding the Deed, in addition to the usual application of the s 79 principles. The remedies sought by the husband and the wife, by way of final orders, are not in themselves complex, but the factual and legal issues underlying them, as I have mentioned, are complex. I have referred sufficiently already to the procedures involved in bringing the matter to trial.
The adequacy of the available facilities having regard to any disability of a party or witness
On the present material, this does not arise. If it does, suitable arrangements can be made at either venue.
The wishes of the parties
The wife strongly wishes the proceedings to remain in Brisbane. The husband strongly wishes the matter be transferred to Perth. They have the common wish, however, that the proceedings be set down for trial as early as may be possible.
Analysis and conclusion
I have referred already to the significant weight that should be given to the factors of cost and convenience.
Rule 11.18(1) does not require any particular weight to be given to any one factor. In Sheen & Paolo (above), however, as I have observed, Boland J said to the effect that in some cases:
… the proximity of a final hearing date and the availability of a judicial officer to hear an application may be the most influential factor in determining a venue application.
In my view, the observations I have made as to the availability of Murphy J to hear the matter on the FFTPP, provided that the parties comply with its stringent requirements, as part of the advertised and published FFTPP in Brisbane, is the most influential factor and thus the one of greatest weight in my determination of the parties’ venue dispute.
Accordingly, in my determination, the proceedings should remain in the Family Court of Australia at Brisbane, and I will dismiss the husband’s application for transfer to the Family Court of Western Australia at Perth. Further, I will order that the parties take all steps necessary to be included as soon as possible in the FFTPP, which has been published by Murphy J to the Family Law Practitioners Association at Brisbane.
Other matters
The husband’s response, at pars 12-13 and 16, seeks other orders relating to procedural matters. These are not appropriate at this stage. There will be a full directions hearing as to procedural matters, either as part of the FFTPP, or not. The wife also seeks specific procedural orders: see the wife’s written submission pars 39-41, but these too can be referred to the processes under the FFTPP.
Costs
It is appropriate that the parties’ costs of and incidental to their applications heard by me on 20 October 2010 be reserved to the trial judge.
I certify that the preceding one hundred and thirty-four (134) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly delivered on 29 October 2010.
Associate:
Date: 17 November 2010
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