SEATON & SEATON
[2019] FamCA 462
•9 April 2019
FAMILY COURT OF AUSTRALIA
| SEATON & SEATON | [2019] FamCA 462 |
| FAMILY LAW – PROPERTY – Orders by consent that parties attend Mediation - Orders by consent that parties must attend Mediation in person and make a genuine effort to resolve all of the matters in dispute. FAMILY LAW – PRACTICE AND PROCEDURE – Discovery – Orders by consent that parties exchange documents prior to mediation – Orders by consent in relation to the sale of a property – Orders by determination for the husband to make discovery in respect of a company and transfer of monies overseas – Orders by determination for the appointment of a single expert valuer – Orders by determination adjourning matter to fixed date for trial directions and directions in relation to bifurcation. |
| Family Law Act 1975 (Cth) |
| Labonte & Labonte and Anor [2018] FamCA 755 |
| APPLICANT: | Ms Seaton |
| RESPONDENT: | Mr Seaton |
| FILE NUMBER: | SYC | 3756 | of | 2017 |
| DATE DELIVERED: | 9 April 2019 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Hobart |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 9 April 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr W. Ayliffe |
| SOLICITOR FOR THE APPLICANT: | Blissenden Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Schonell |
| SOLICITOR FOR THE RESPONDENT: | Karras Partners |
Orders
BY CONSENT the parties attend a mediation before the Honourable Michelle May on 2 & 3 May 2019 or such alternate dates as are agreed between the parties and the mediator, at a venue in Hobart or at a place to be determined.
BY CONSENT the husband pay the costs of the mediation which will be subject to any subsequent costs orders that the Court may or may not determine at a later stage.
BY CONSENT each party must attend the mediation in person and must make a genuine effort to resolve all of the matters in dispute.
BY CONSENT at least ten (10) days prior to the mediation, the parties exchange a Balance Sheet, identifying agreed and disputed assets.
BY CONSENT at least seven (7) days prior to the mediation, the parties’ solicitors send, to the nominated mediator, copies of:-
(a)all relevant Applications, Responses, Affidavits and Financial Statements filed in the proceedings;
(b)the Balance Sheet of agreed and disputed assets and liabilities;
(c)any relevant documents exchanged between the parties;
(d)the orders sought by them to give effect to their settlement proposal;
(e)an outline of case document;
(f)valuations of any asset or financial resource, the value of which is in dispute;
(g)valuations or market appraisals with respect to any parcel of real estate in which any party has an interest;
(h)market appraisals or internet valuations for any motor vehicle, the value of which is not agreed;
(i)valuations of any superannuation interests;
(j)written confirmation that the superannuation trustee of any fund that may be the subject of a splitting order has been afforded procedural fairness; and
(k)any intervention or restraining orders currently in place.
BY CONSENT orders in relation to any proposed and actual sale of the ‘L Business’, however the time period for giving notice shall be no less than forty eight (48) hours with respect to any proposed sale.
BY CONSENT subject to order 6, the husband shall give the wife fourteen (14) days prior written notice of the following:-
(a)of any proposed sale of a husband’s asset or an entity, set out in schedule 1 hereof, such notice to include details of:-
(i) the asset to be sold;
(ii)the price or other consideration for the sale;
(iii) a copy of the proposed sale document, and if it has not been drawn then that document is to be provided at least fourteen (14) days before it is executed by the husband, a known entity or by another entity;
(iv) the proposed completion date for the sale; and
(v) if any sale becomes unconditional, then seven (7) days prior to the date for completion of the sale, a written settlement statement, such statement to detail the proposed manner of distribution of the gross proceeds of sale (‘the settlement statement’).
(b)of any proposed borrowing by the husband or by a known entity or by another entity, such to include details of:-
(i) the amount proposed to be borrowed;
(ii)from whom the monies are to be borrowed;
(iii)the purpose of the borrowing;
(iv)the security proposed to be given for the borrowing; and
(v)a copy of the loan documentation.
(c)Of any proposed restructuring of any existing borrowings or the security for existing borrowings of and/or given by the husband or by a known entity or by another entity, such notice to include:-
(i)what borrowing or security for the borrowing is being restructured;
(ii)full particulars of what the restructuring involves;
(iii)a written statement of the reasons for the restructuring; and
(iv)a copy of the loan documentation.
IT IS FURTHER ORDERED BY DETERMINATION
If the proceedings are not resolved at mediation, within seven (7) days of the date of the mediation, the parties are to serve upon one another written notices identifying:-
(a)the issue/s that the party considers were resolved at the mediation;
(b)those issues that remain in dispute;
(c)the expected duration of trial; and
(d)the expected costs of trial.
The parties must not unreasonably include in their statements of the issues, as referred to in the above order, that the party considers to remain in dispute an issue that is unmeritorious or has no reasonable prospects of success.
IT IS DIRECTED
The husband shall, within fourteen (14) days from the date of this order, nominate an experienced particular valuer from three of the four valuation companies set out in the husband’s affidavit with the exception of F Valuers together with the curriculum vitae of such valuer and the estimated cost of the valuations and the wife, within a further period of twenty eight (28) days, nominate one or other of those three valuers to undertake the valuations set out in orders sought no. 11 in the wife’s application in a case filed 20 March 2019.
IT IS FUTHER ORDERED
Within twenty eight (28) days of the date of this order the husband provide to the wife a written summary of the total of all monies caused by the husband and/or his nominees and/or his employees to be transferred to overseas recipients through G Company or otherwise over the last ten (10) year period, if that material has not already been provided.
The husband shall provide to the wife such documents as are reasonably requested by the wife in relation to the interests of J Pty Ltd in Q Group.
These proceedings be adjourned for trial directions and directions in relation to bifurcation to Justice Watts in Sydney at 10.00am on 28 May 2019.
IT IS DIRECTED
A copy of the reasons for these orders be taken out and placed on the Court file.
IT IS NOTED
Any application for costs is reserved and I otherwise dismiss it.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage senior counsel and counsel to attend.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Seaton & Seaton has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT HOBART |
FILE NUMBER: SYC 3756 of 2017
| Ms Seaton |
Applicant
And
| Mr Seaton |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
These are proceedings between the husband and the wife in relation to an application to set aside property consent orders which were made in 2017, on a variety of bases. If those consent orders are set aside, then the adjustment of property between the parties, which seems to have a value at the present time, without finalisation of valuations, of about $122 million.
These proceedings were commenced in August 2018, and an application in a case was filed on 20 March 2019 in relation to a number of issues, which I am asked to determine. Those issues, in their generality, relate to injunctions the wife seeks with regard to the husband and his operation of a number of businesses, including dispersal of funds and otherwise; second, in relation to a single expert valuer of substantially commercial properties in Tasmania; third, in relation to further disclosure sought by the wife. There was to be a fourth application determined today, which is an application for bifurcation of the substantive proceedings and the proceedings to set aside the orders of 2017, either by a review of leave to review the determination of the Registrar or, more broadly, under s 79A(1)(a) of the Family Law Act 1975 (Cth) (‘the Act’).
I have declined to deal with that latter aspect, as it seems to me far more appropriate that this is dealt with by the trial judge, and in that circumstance, I note that these proceedings are to be listed before Watts J on 28 May 2019. At that time, there will no doubt be discussions between his Honour as to whether he should or should not hear the matter. If he does, then it will be appropriate for him to make that determination; if he does not, then it is likely to be transferred to a judge in another registry. Whether that be Brisbane or Melbourne will be a matter for the Deputy Chief Justice, except to say that it has been made clear to this Court that resources will be allocated to having a judge hear this matter early next year, irrespective of which judge shall hear it, subject to the determination of the bifurcation. That decision ought to be then made by whoever that other judge may be.
I do not intend to go into great detail about the parties’ age, state of health, or other matters. Suffice to say that these parties have been in a relationship over 50 years, and have acquired significant assets, and I am told today that it could be in the vicinity of about $120 million.
If the consent orders are set aside, I do not make any suggestion as to how much money would be paid or could be adjusted as between the parties, particularly as to whether it ought to be 50 per cent or some higher or lower percentage, but it is open for me to conclude that if the orders are set aside, the substance of the property adjustment sought by the wife and paid to the wife is likely to be considerable.
The wife moved on her application in a case, to which I have already referred, and was represented by a solicitor and senior counsel today. I was provided with a list of authorities, which is Exhibit E1, and told that the wife relied on:-
(a)the affidavit of Mr Blissenden of 20 March 2019;
(b)the affidavit of Mr K of 7 March 2019;
(c)a notice of facts in issue and contentions of 23 November 2018;
(d)a notice of dispute to those contentions of 20 December 2018;
(e)her affidavits of 23 November 2018; and
(f)an affidavit of her son, Mr B, filed 17 December 2018.
I interpose at this point that there was an argument as to whether that material should be made available, and I determined that it ought to be made available, on the basis of it being relevant. I was also asked to have regard, on behalf of the wife, of the consent order made in these proceedings in 2017.
The husband had filed a response to the application, and, in fairness, had acknowledged a number of orders to which he did not object being made. He provided a list of authorities, which is Exhibit E3. The husband relied on:-
(a)his affidavit, dated 8 April 2019;
(b)his financial statement; and
(c)a case outline.
During the course of submissions, I was also referred to the application for consent orders.
The parties can take it that, yesterday or last night, I read all of the material available to me, so that I was at some levels prepared to deal with the matter today.
It is clear that the injunction is sought under s 114(3) of the Act. It is clear that the wife relies upon the as yet untested assertions contained in her affidavit, and that of her son Mr B. That seems to me to be the transaction which causes the wife to have concerns in respect of the operations of the business.
I was taken to the principles formally to apply in such applications under s 114 of the Act. I was taken to a decision of McClelland J, as he then was, in a case of Labonte & Labonte and Anor [2018] FamCA 755. It seems not in issue that the principles to be adopted in such cases were correctly set out by his Honour in paragraphs 55 and 56 of those reasons:-
55.It is unnecessary for an applicant for interlocutory orders to establish “all of the propositions that would be necessary” to obtain the final relief they are seeking: Cardile at [127]. However, the applicant for such an order must establish:
a)That there is a real risk of assets being disposed of (Cardile at [122]); and
b)That, as a result of that risk, there is a real ground for believing that the applicant will be prejudiced in the remedy he or she is seeking (Glover v Walters (1950) 80 CLR 172 at 176).
56.In that respect, in Curtis v NID Pty Limited [2010] FCA 1072, Edmonds J said at [8] to [10]:
8. The test in Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319 is in similar terms to O 25A r 5(4). In that case, Gleeson CJ, with whom Meagher JA broadly agreed, said, at 321 – 322, as follows:
[A] plaintiff will need to establish … a danger that, by reason of the defendant absconding, or of assets being removed from the jurisdiction or disposed of within the jurisdiction or otherwise dealt with in some fashion, the plaintiff, if he succeeds, will not be able to have his judgment satisfied.
9. ‘Danger’, however, is not defined. In some cases, judges have employed the phrase ‘real risk’ to identify the degree to which a plaintiff must demonstrate that a prospective judgment will go unsatisfied: see, for example, Cardile at [122] per Kirby J; Ninemia [1983] 1 WLR 1412 at 1422 per Kerr LJ. In others, it has been said that an applicant must establish ‘a sufficient likelihood of risk which in the circumstances of a particular case justifies an asset preservation order’: Lifetime Investments Ltd v Commercial (Worldwide) Financial Services Pty Ltd [2005] FCA 226 at [14] per Kiefel J, approving Victoria University of Technology v Wilson [2003] VSC 299 at [36] per Redlich J. There is even a third view, namely, that the plaintiff establishes ‘a sufficient apprehension of dissipation of the … assets’: Vaughan v Duncan [2007] NSWSC 811 at [5] per Hamilton J.
10. What is settled, however, is that solid evidence of a danger of dissipation or disposal of assets be produced. The relevant test was enunciated by Brereton J in Finn v Carelli [2007] NSWSC 261 at [4], where his Honour referred to the NSW Court of Appeal’s decision in Frigo v Culhaci [1998] NSWCA 88:
It is not necessary for an applicant to show that the respondent has a positive intention of evading a judgment, and it is sufficient to show that the course on which the respondent proposes to embark is, objectively speaking, calculated to have that effect. But as the Court of Appeal made clear in Frigo v Culhaci, an applicant must establish, by evidence and not mere assertion, that there is a real danger that by reason of the respondent absconding or otherwise dealing with assets, the applicant will not be able to have its judgment satisfied. While acknowledging that there has been much debate as to the precise degree to which that has to be shown, the Court emphasised that mere assertion that the defendant was likely to put assets beyond the plaintiff’s reach was inadequate, for which the Court cited Ninemia Maritime Corp v Trave GmbH & Co Kg (The Niedersachsen) [1984] 1 All ER 298 as well as Patterson v BTR Engineering.
His Honour went on to say in paragraphs 64 through to 67, in particular, that the wife carries out the onus of establishing the restraint to which she seeks and said:-
64.In considering what orders are appropriate, it is important to apply the principle that any orders that are made must go no further than that which is necessary “to limit the disturbance of the property and other assets of the [respondent to the Application] to the potential recovery of [the applicant] and nothing more”: Cardile at [129]. The reason for this was explained in Cardile at [50] as being the fact that an order of this nature:
… is bound to have a significant impact on the property of the person against whom it is made: in a practical sense it operates as a very tight "negative pledge" species of security over property, to which the contempt sanction is attached. It requires a high degree of caution on the part of a court invited to make an order of that kind.
65.In the context of family law proceedings, in Sieling and Sieling (1979) FLC 90-627 at 78,264, the Full Court said:-
The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly. The Court must balance the hardship to each party of granting or refusing an order and frame its order in such a way to impose no further restriction than is necessary to achieve the protection of the applicant’s interest. It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim.
66.In Martiniello & Martiniello (1981) FLC 91-050 at 76,416, it was suggested that a party should not be restrained from using their money for ordinary business purposes unless “it could be shown that there was a fear that [the party] would dissipate [the] funds”.
67.In this matter, it can reasonably be inferred that the orders sought by the wife would be “bound to have a significant impact on the property” of the husband and, as the applicant for the orders, the wife carries the onus of establishing that the restraint she seeks is reasonable and appropriate and, specifically, goes no further than is reasonably necessary to protect her interests.
I have also had regard to the comments referred to me by senior counsel for the wife, at pages 46625, 46920 and 46925, in relation to those principles.
The husband has, in his material, said that he consents to orders in relation to injunctions, and consents to orders 4 and 6 with regard to the injunctions.
Much of the debate and argument in relation to it fell into, I think, three areas:-the first is whether there ought to be an injunction supporting order 4, in the terms of orders 1 and 2, or whether orders 4 and 6 ought to be simply standalone; the effect of those in relation to dealing with property would mean that there was a, as it were, belt-and-braces approach, that the husband could not deal with the property until after he had given the notice set out in order 4 and in order 6 and that once he had given notice unless a court became involved in the proceedings he would otherwise be free to deal with those in accordance with the notice given. There would of course still remain in place, in the wife’s case, broader injunctions.
There was debate, which seemed to be resolved at the end, with regard to how I treat the evidence. I can have regard to the evidence of the wife and Mr B, however I cannot and I do not make any findings of fact in that regard. What is involved in this case is an assertion by the wife, supported by Mr B, that a significant fraud or conspiracy to pervert the course of justice has taken place.
It was put to me that there was no denial of those matters. I, with respect, do not agree. Whilst I am concerned when practitioners respond this is not admitted and I think this in an unhelpful process, I have inferred for the purpose of this determination that the husband disputes such serious allegations, and I have treated them as allegations, albeit made on oath and that they are not the subject of any concession. I have carefully read the affidavits of Mr K, as with the other witnesses, and I am not convinced it provided the level of concern submitted on behalf of senior counsel for the wife.
In this matter I respectfully agree with McClelland J, as he then was, that the principle is that the orders must go no further than which is necessary to limit the disturbance of the property. I also make it clear on the facts and the assertions, and the material before me that even without consent I would have made the limited injunctive orders that I propose to make in respect of this matter.
I am concerned about the breadth of the orders and the construction of the orders contained in paragraphs 1, 2, 3, 5, 7 and 8. Most of the assets involved in these proceedings are real estate assets and if there was a huge sale of real estate assets, given the orders that I propose to make and to which, and are at least in part consented to the wife would be aware of them and could take action or could make such application as she considers appropriate.
It seems to me that the other and broader injunctions sought by the wife in the circumstances of these parties are far too wide, and given the nature of the orders that I am putting in place this will be sufficient to protect the substantive pool of assets available to the parties and which may or may not be available for an adjustment of property between the parties.
The second issue which I was asked to address was that regarding the single expert valuer. The wife submits that it ought to be Mr R and provides evidence of his experience and involvement in Tasmanian industry and on the face of it, it would normally be appropriate. However, there are two issues which cause me some concern. The first is that I had anonymised these proceedings at the request of the husband. The principle concern I had was that the wealth of the parties was such that a dispute as to their property may impact on the overall value of the property and it is important that as far as possible that the identity of these parties should be protected for that purpose.
It is not the process of the Court to undermine the wealth of the parties. It is to ascertain in appropriate circumstances the wealth of the parties and put in place orders that are just and equitable. I am also concerned as to Mr R’s involvement with the property of the parties and I would hate to put in place an arrangement which may impeach the role of the single expert.
One of the final issues I have to address is the disclosure. It is sought by the wife in orders 12 to 13. The first relates to a series of transactions in respect of G Company. Given the material provided so far I accept the submissions of senior counsel for the husband that this, in the context of these parties, relates to relatively modest amounts. However, I understand the wife’s concern about the monies being transferred overseas. I am also conscious that the parties have agreed to Ms N undertaking valuations of the companies and no doubt the parties will raise such issues with her about such transactions. I am satisfied that what is sought in 12(a) and 12(b) is in the context of what I have seen at the moment, even notwithstanding the assertion that it may have been broader than those transactions, is too wide. I do however intend to make an order in similar terms to that sought in paragraph (c) of 12, but with some constraints on it.
In relation to that order I have put the onus on the wife to identify the property for these reasons that there has been some disclosure and it is open to her to request copies of the financial returns of that company if they have not already been provided, the trusts and other documents, but not in a wider sense sought by the wife at this time.
There is also an application for costs by each of the parties. Given the extent of the litigation of this matter I intend to reserve the costs of this application and otherwise dismiss it.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 9 April 2019.
Associate:
Date: 26 June 2019
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