Seurat and Garrett

FAMILY COURT OF AUSTRALIA

SEURAT & GARRETT

[2017] FamCA 455

FAMILY LAW – INJUNCTIONS – where broad injunctions are sought as “holding orders” – where the evidence does not reflect what, if any, entitlement the applicant has to substantive property alteration relief nor how the orders affect (if not all) non-parties – interim orders refused.

Family Law Act 1975 (Cth)

ABC v Lenah Game Meats Pty Ltd (2001) HCA 63; 208 CLR 199
Cardile & Ors v LED Builders Pty Ltd (1999) 162 ALR 294
Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148
Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612
Waugh & Waugh [2000] FamCA 1183

APPLICANT:

Ms Seurat

RESPONDENT:

Mr Garrett

DATE DELIVERED:

29 June 2017

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

8, 9 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Stoikovska SC

SOLICITOR FOR THE APPLICANT:

Moores

COUNSEL FOR THE RESPONDENT:	Mr Strum QC
SOLICITOR FOR THE RESPONDENT	Robinson Gill

Orders

That the application for interim orders pending the return date is refused save as to paragraph 16 as to the respondent’s obligation as to disclosure.
All outstanding interim applications are otherwise adjourned to 6 July 2017 at 9 am.

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 Seurat & Garrett 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 MELBOURNE

FILE NUMBER: MLC 5572 of 2017

Ms Seurat

Applicant

And

Mr Garrett

Respondent

REASONS FOR JUDGMENT

These reasons arise out of an application filed by Ms Seurat (the applicant) on 7 June 2017 seeking injunctive and other relief against Mr Garrett (the respondent). The Court initially set the matter down at the request of the applicant as an ex parte matter but with the limitation that it only related to paragraphs 3-8 of the interim orders sought.
The application was listed on 8 June 2017 at which time, and for reasons that no longer matter, I declined to deal with the application on an ex parte basis. The respondent’s whereabouts were known, solicitors had been known to previously act for him and there was no specific detail of a threat to dispose of property. Absent evidence justifying the matter being heard behind closed doors, the proper approach was to provide the respondent an opportunity to be heard. Service orders were then made.
On the morning of 9 June 2017, Mr Strum one of Her Majesty’s Counsel announced his appearance for the respondent but indicated his client sought an adjournment to file responding evidence. It could not be argued that the respondent had only seen the applicant’s documents for a very short period of time and, as will become apparent, the facts of this relationship are complicated because they involve other legal entities but there are apparently different versions of what has been said and done. The evidence needs to be before the Court.
Ms Stoikovska of Senior Counsel appeared for the applicant and informed the Court that she was seeking a raft of injunctive and discovery orders but did not oppose a short adjournment.
The disputed issue was in relation to what might be described as “holding orders”. The applicant submitted there was no prejudice to the respondent and the respondent, who opposed the making of any such orders, said that there was no basis for the Court to make orders on the evidence provided by the applicant. The applicant’s position was that there had been limited time and the issue had been deemed urgent so the evidence was not as it might otherwise be. For the reasons that follow, I have doubts about that.
There was agreement about discovery and I have made some orders notwithstanding there should be no need to do so because it is the very obvious obligation under the Court’s rules for that disclosure to take place. It is not the applicant’s responsibility to tease out matters but for the respondent to be positive in his disclosure.
Injunctions which interfere with a person’s lawful rights to treat their property as their own must be carefully considered because the statutory power should only be exercised if the circumstances indicate that it is proper to make that interfering order. In this case, even based on the balance of probabilities standard, I am not satisfied that there is sufficient urgency to justify the suite of orders the applicant sought. That is not to say that on a further examination of the applicant’s material seen in the context of what the respondent says in his reply, those orders might not be made. The only order I propose to make is to adjourn the application but decline to make the orders sought. That is not a dismissal of the application.
It is not controversial that the applicant and the respondent lived in a de facto relationship and that it came to an end in December 2016. A cursory examination of the applicant’s affidavit will show that the relationship was not one of smooth sailing in terms of the applicant’s view about the respondent’s trustworthiness but even if such a finding was made, that alone is not a basis for making an injunction of the type pursued.
Before turning to the facts, the law as I perceive it sets out a guide for what evidence warrants injunctive orders.
Section 114(2A) of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides that in a de facto financial cause (defined in s 4 of the Act), the court may make such order or grant such injunction as it considers proper with respect to the property of the parties to the de facto relationship or either of them. That means that even though a party may have no legal or equitable interest in property held by the other, the court is empowered to make an order provided it is satisfied that it is proper to do so.
The extent of the power, although concentrating on s 114(1) which deals with property proceedings arising out of a marriage, was considered in Waugh & Waugh [2000] FamCA 1183. Having regard to the similarity in wording, I see no reason to disregard that authority just because it related to a marriage or different section of the Act.
In Waugh, the Full Court considered injunctions made which imposed obligations on a party to restrain him from dealing with income, trading entities and trusts, pending the determination of a property settlement and then later, further restrained him from dealing with business entities. The trial judge determined the matter on the basis of the wife’s concerns about the business having been previously close to financial disaster and the court held that the restrictive injunctions were justified. The trial judge determined the matter on the balance of convenience; that is, balancing between the need to do justice between the parties against the risk associated with the husband’s ventures. The determination was along the lines that it was desirable to preserve assets capable of satisfying the wife’s claim “whilst still permitting the husband to trade with minimum inconvenience”.
Unlike the case before me where no undertaking by the applicant as to damages was offered, the court in Waugh required one. On the evidence here, I remain unsure what impact injunctions in relation to the respondent would have (if any) on other people who have shareholding interests in corporations associated with the business conducted by the respondent.
The husband in Waugh appealed and one of his grounds was that the evidence did not establish any basis for interlocutory relief by way of injunction.
The Full Court suggested caution about relying upon “Mareva” injunction principle cases in other jurisdictions observing that there are essential differences between the provision in the Act and other jurisdictions. The Full Court gave an example of the claim of the judgment debtor being different from the alteration of property interests under the Act. In the latter, the property interest is one to which the party can point and the other party ought not be permitted to adversely affect that entitlement by his or her conduct. A difficulty with the example arises if the assets are all in one party’s name and the other (the claimant) is unable to (or does not) identify what interests (and why) he or she has in the other’s property. Some evidence of how any entitlement to an alteration of property interests would assist the court in deciding whether to exercise the discretion in examining whether it is proper to make injunctive orders.
The Full Court in Waugh referred to Cardile & Ors v LED Builders Pty Ltd (1999) 162 ALR 294 and Jackson v Sterling Industries Ltd [1987] HCA 23; (1987) 162 CLR 612 and followed them. In the latter, Deane J with whom Mason CJ, Wilson and Dawson JJ expressed their agreement:
As a general proposition, it should now be accepted in this country that ‘a Mareva injunction can be granted ... if the circumstances are such that there is a danger of [the defendant’s] absconding, or a danger of the assets being removed out of the jurisdiction or disposed of within the jurisdiction, or otherwise dealt with so that there is a danger that the plaintiff, if he gets judgment, will not be able to get it satisfied’. (references and citations omitted).
To some extent, the general power of the English High Court of Justice to grant a Mareva injunction was initially seen as based on the provisions of s.45(1) of the Supreme Court of Judicature (Consolidation) Act 1925 (U.K.): see also the Supreme Court Act 1981 (U.K.), s.37(3).
Deane J went on to say that the general injunctive power should now be accepted as an established part of the “armoury of a court of law and equity” to prevent the abuse or frustration of its process in relation to matters coming within its jurisdiction. The reference his Honour then made to the provision he was contemplating in the Federal Court of Australia Act is very similar to that under which this Court operates. Deane J observed that such injunction could be granted if there was a danger of the respondent:
absconding, or a danger of the assets being removed out of the jurisdiction or disposed of within the jurisdiction, or otherwise dealt with so that there is a danger that the plaintiff, if he gets judgment, will not be able to get it satisfied.
As his Honour said, the injunction is designed to prevent a person disposing of assets so as to frustrate the process of the court by depriving the other party of the fruits of any judgment. In the other High Court authority considered by the Full Court (Carlisle) the warning was made that those statements of Deane J ought not obscure the fact that an injunction is bound to have an impact on the property of the person so restrained. The words contemplated by the Full Court were:
It requires a high degree of caution on the part of a court invited to make an order of that kind.
The Full Court in Waugh said a trial judge had to give consideration to the fundamental question whether there was any evidence of any intention by the husband to dispose of any assets pursuant to any scheme to defeat any judgment which the wife might obtain in the substantive proceedings, or whether he merely wished to continue to trade, as he always had done, prior to and since the separation of the parties.
That case included evidence in which the husband had made statements to the wife such as:
I am not going to tell you anything. I have instructed my lawyer not to reply. I will do what I like. I’ll let it all go and you will get none of it. It can all go to tax and the bank.
There are self-evident similarities between Waugh and the present case even down to the concept, deposed to by the applicant, under which it is said the respondent was going to leave the country.
The Full Court considered in Waugh, that absent a finding that such language warranted the court interfering by injunction, that was not sufficient to support the inference the judgment would not be satisfied.
In the present case, a submission was put on behalf of the applicant that if the respondent left the country it would be so much more difficult for the applicant because she would not have access to discovered documents and therefore, pursuing her claim would be problematic. A court cannot force a litigant to participate and if that person does not fulfil their disclosure obligations, the applicant must prove his or her case in the usual way. Originally, the applicant sought an order restraining the applicant from leaving the country but that was based on the principle just mentioned. Sensibly, that application was not pressed.
Further consideration of how courts should approach injunctions interfering with rights of their former partners can be seen in ABC v Lenah Game Meats Pty Ltd (2001) HCA 63; 208 CLR 199 where the High Court discussed the question of what was being protected.
Gleeson CJ referred to the purpose of an interlocutory injunction being to keep matters in statu quo until the rights of the parties could be determined at the hearing of the suit. His Honour referred with apparent approval to the test in Castlemaine Tooheys Ltd v South Australia [1986] HCA 58; (1986) 161 CLR 148 at 153 which required the applicant to show:
(1)That there was a serious question to be tried or that a prima facie case, in the sense that if the evidence remains as it is there is a probability that ultimately, the applicant will be held entitled to that or similar relief;
(2)That the applicant will suffer irreparable “injury” unless an injunction is granted; and
(3)That the balance of convenience favours the granting of an injunction.
Whilst the Full Court in Waugh cautioned about seeing the statutory injunction in the same vein as a Mareva Injunction, because the exercise of the statutory power is discretionary, there is much to commend what Gummow and Hayne JJ said in ABC (at para [90]) because their Honours remarks mirror what the earlier authorities said and which were followed by the Full Court. That is, it is necessary to identify the legal or equitable rights in respect of which final relief is sought and in respect of which there is a need for protection by an injunction. It is not sufficient to say that someone was in a relationship and that an entitlement thereby arises. Where property has been acquired during a relationship but in one party’s name, some evidence is needed about why that still gives rise to a right to future alteration by a court if an injunction is needed to protect that right or entitlement.
I turn then to the facts of this case and the positions of the parties as I set out at the beginning of these reasons.
The orders sought by the applicant will not all be set out here and it is sufficient to detail those which are most contentious. The applicant sought an order that the respondent be restrained from:
[5] [a]Disposing of, selling, encumbering, diminishing the value of or disposing of or in any way dealing with the shareholding in the following companies and trusts:
(there are then a variety of entities named)
The last of the described “entities” was set out like this:
(xii)or any other company, trust or corporate entity in which the Respondent has an interest either directly or indirectly or in which he holds a position of power or control.
It is a curious piece of drafting. What is the identifier of “or corporate entity” if it is not a company? What does “either directly or indirectly” mean? Is it to mean that if he holds “an interest” through a trust or agent, that is covered? What does the reference to “position of power or control” encompass? If for example, the respondent was a board member or director of a charity or residential body corporate, he could not dispose, diminish etc?
The concern I have lies in the use of vague precedents which do not easily identify or fit in with concepts recognised by not just the commercial law but also the commercial world. If the respondent cannot readily and easily understand from an examination of the wording of an order what rights and responsibilities he has, the order may be flawed.
The next paragraph in the proposed orders was equally difficult:
[5][b]Disposing of, selling, encumbering, diminishing the value of or disposing of or in any way dealing with all or any property without limiting the generality of same, bank accounts, stock and equipment of the (entities earlier mentioned) save for the dealing with income and expenses as reasonably necessary in the ordinary day to day running of the (entities) or the meeting of liabilities as and when they fall due with respect to any property of the (entities).
The length of the sentence is not just metaphorically breathtaking. What is this clause addressing? This seems to be addressing the restriction on the respondent in any business activity unless it is in the ordinary course of business. If in the usual course of the business, he runs an overdraft, or sells stock or invests money, those might not be problematic but absent some very clear evidence as to what impact that sort of restriction would have on the operation of any of the business entities and structures, the court is metaphorically “flying blind”. If there is that uncertainty, how is it enforceable? What does “reasonably necessary” mean and by whose objective standard is it to be tested?
There is reference in the applicant’s evidence of the respondent conducting business through companies in which other people have an interest. I am unable to decipher what impact such an order would have on those parties. The proposed order says that once made, the order should be served on those parties and if they are then unhappy about the infringement of their rights, they can participate by application to join. With respect, that misses the point that this is an application as between two parties to a relationship. If others are to be affected by orders, they must not just be heard, they must be joined. Without their co-operation, I have no idea whether these orders would be workable. For example, would they consent to an order under which the business banking arrangements which involved distributions of profits being restricted? The power of the Court has to be found for that to be possible and there was no endeavour by the applicant to address such provisions as s 90AF of the Act.
Other paragraphs would restrict the respondent from doing the same sorts of things mentioned above without the applicant’s permission or court order. As I said in the hearing, the law cannot expect the parties’ lives to remain in suspended animation whilst the proceedings continue. That is particularly pertinent here where there are other non-parties and there is no offer of an undertaking as to damages.
Paragraph [7] of the proposed order would restrict the respondent from drawing money from any bank account in his name “or to which he has access of any kind absolutely save for” and then there is recited mortgage payments and an amount of $500 per week to meet living expenses. The arbitrary nature of the latter allowance is troubling. There is no evidence as to how that is worked out or what day to day expenses means, nor how it would make any difference here in the long run. There is no suggestion of any proposed application by the applicant for spousal maintenance such that the injunction would be designed to preclude the respondent avoiding a responsibility towards her. Again, the over-arching drafting which was proffered by the applicant as an indication of what is needed to protect her interests in the sense described in the authorities above is perplexing. I agree with Mr Strum for the respondent that such an order is draconian and would have to be supported by significant evidence as the authorities above state.

Another order [10] seeks that the various mortgage payments be met by the respondent. This proposed order was not mentioned in submissions and thus, the source of power was not mentioned either. If it was designed with the spousal maintenance power in mind, it is breathtaking because of the absence of any evidence that would support such an approach.
I do not intend to set out the various other orders because in my view, it would be inappropriate to make any orders here based on the evidence provided to the court as I shall mention below.
I stress that there is obvious difficulty for the applicant in pressing these types of orders on an urgent basis. Urgency of attention requires an indication as to the nature of the immediate problem that cannot wait until a reasoned and careful consideration of all of the facts from both sides is available. That has not happened here.
The parties’ relationship began as a de facto relationship in about 2006 and ended 10 years later. There are no children of the relationship. The applicant works in administration. The respondent runs a business. He commenced a Masters Degree in about 2008 but it was not completed and the applicant asserts that together they paid off the HECS debt.
The substantive justification for the injunctive relief seems to relate to two particular concepts. The first concerns the applicant’s allegation that the respondent has not been open in relation to financial and property dealings and the second relates to his dishonesty apparently arising out of gambling and there is also a reference to drug usage.
In respect of the former, the applicant said that she and the respondent purchased a house using borrowed funds and that property has been sold and settlement is due in August 2017. There is no suggestion of any difficulty in her getting access to the mortgage details but after doing a title search in March 2017, she ascertained that a friend of the respondent had lodged a caveat. She said she understood from something that the respondent had told her “years ago” that he had borrowed money from the person to repay gambling and drug debts. This particular caveat however asserted that there was an agreement dated 10 January 2017 and about which she was oblivious.
It is trite to say but the claim arising out of the January 2017 agreement could only affect the interest of the respondent.
A second property is in Suburb B. According to the applicant, it was purchased by she and the respondent in 2011 although she then went on to say that for “taxation purposes” it was registered in the respondent’s name. She said that she did a title search this year and became aware that the respondent’s father was noted as an owner of the property as to one percent although she then described the ownership as “tenants in common in equal shares”. I am not at all sure what that means having regard to the one per cent ownership said to be held by the respondent’s father. She then said she recalled when it was purchased, the respondent’s father was a guarantor for the borrowings from the bank. It is not said in the affidavit that she was a guarantor. If, as asserted, the applicant purchased the property with the respondent, she was oblivious to the involvement of his father as a purchaser but that seems inconsistent with her recollection that the father was in some way a guarantor when she was not. Just how she asserts an interest in that property remains unclear.
A third property relates to a house at Suburb A which was purchased in 2012. Again, this property was not purchased with her involvement and the registered proprietors are said to be the respondent and another person again. This was also funded by borrowings but it was renovated later and to the extent that she asserted some contribution towards that, she said she worked there for several weekends and evenings painting and doing other works. It has since been a rental property and the rent covers mortgage repayments.
In respect of the Suburb A property, the applicant said that she had seen a contract between the respondent and the other co-owner but this was in November 2014 under which the respondent transferred his interest to the other person for $45,000. She challenged the respondent about it and he indicated to her that it was done for tax purposes but that he still considered himself the proprietor. She said she raised the matter on a number of occasions and received the same answers. In March 2017, she spoke to the other purchaser who indicated that the transfer had taken place as a compensation for the respondent “defrauding” the business that the men conducted together. That being so, by March 2017, the applicant had a clear picture of the ownership of that property. This evidence could only be led for the purposes of showing the risk of the respondent having access to property that could be disposed of by him without her knowledge. Part of the dilemma with that is that she chose not to be a registered proprietor even if it was for taxation purposes (whatever that means) but in any event, took no action in 2014 when she became aware of the transfer. To compound matters, when she became aware in March 2017 that the respondent had no interest in the property by virtue of what she was told by the co-purchaser, she still took no action for some weeks.
The second of the two concepts relates to the respondent’s gambling and dishonesty. The applicant pointed to the fact that she had always known that he had a gambling problem. In about 2008, he stole $12,000 from her and that when he needed money, he told her that it was for the business but she later discovered that he had gambled it. Notwithstanding that, the relationship continued.
From 2008 onwards however the applicant took protective measures by having her salary paid into an account in her name alone. Despite that, no action seems to have been taken in respect of the real properties.
In 2016, the applicant discovered that her Commonwealth Bank credit card had shown a number of transactions in favour of an online betting organisation which were ultimately traced to the respondent according to the applicant. That unashamedly is an assertion of criminal conduct. But again, this evidence can only be used for the purposes of restraining the respondent in respect of other assets because to the extent that it needs to be said, any dishonesty on his part and the claim by a third party against the applicant is difficult to see being sustained.
Throughout the parties’ relationship, the respondent conducted a variety of entities. I know little about those entities other than the details provided by the applicant. But importantly, some of those have shareholders other than the respondent. At [29] the applicant referred to C Pty Ltd in which the applicant said that the respondent told her that she was “part shareholder” but when she undertook a recent ASIC search, that was incorrect and it now transpires that the respondent’s mother holds two of 100 shares.
All of these statements indicate that the parties have very much led different financial lives and leaving aside the assertions of the respondent’s improper use of money or property to which the applicant had an entitlement, he appeared to be conducting his own business activities without reference to the applicant. It is clear that some of the changes that the respondent has made in the structures have occurred over a number of years.
At [32] et seq the applicant said that she “understood” that six companies which she named formed a conglomerate of companies and that the respondent controlled 30 per cent of those companies which indicates that there were significant other persons involved as well. The applicant described the group of companies as manufacturing in Asia and successfully distributing throughout Australia and 15 other countries. But she then said that she did not know what value the respondent’s entitlement in the group was other than she expected it to be significant. She said he told her that the group was recently valued at $30 million. She went on to talk about negotiations that the parties had had. To that end and in support of an injunction to preclude the respondent from leaving Australia which she did not pursue, the applicant annexed and relied upon a number of text messages for the purposes of indicating that he was going to live in the US or Europe because there was nothing left for him in Melbourne. Quite unfortunately, the text messages are on a number of days some days apart and not comprehensive enough to give a clear picture of exactly what was being said each to the other even if it was not negotiation of a settlement. It is important in an interlocutory application and particularly one that was to be pursued on an ex parte basis that the full picture is portrayed. The only inference I am prepared to draw from the text messages is that the parties were negotiating an agreement and the respondent was indicating that the applicant had given him “no direction or feedback”.
There can be no doubt that the respondent has an obligation to make comprehensive disclosure. He agreed to an order to that effect but just how much reliance the court could place on the evidence to which the respondent has not had an opportunity to reply, leaves me uncertain.
The applicant’s position as advocated by her senior counsel was that she was only interested in holding orders. It was submitted that the evidence that the applicant had put before the court caused the court discomfort. It was submitted that there was no prejudice to the respondent. Senior counsel for the applicant relied upon the accusations that the respondent had transferred his entitlement arising out of money owed to his partner, her accusation of his use of her credit card; and his use of a loan to which she was a party in September 2016 secured against one of their real properties. In respect of that loan, the applicant said that she accepted the respondent’s word that he would only use the loan facility for business purposes and at that time, did not have a pressing need for it. Having regard to her knowledge at that stage of his business activities and his prior history of inappropriate use of funds and property, one might wonder why that occurred but in any event, if the funds have been inappropriately used, there still seems to be sufficient funds available from that sale to make an adjustment back in favour of the applicant.
In so far as the applicant relied upon any misappropriation of the respondent arising out of his gambling use, she acknowledged that even after separation, she was sufficiently concerned to urge “further gambling rehabilitation” but the respondent refused. That being the case, one must ask why the delay in commencing proceedings.
Mr Strum on behalf of the respondent submitted that the court had to take property as it found it and it was interesting that there was no equitable interest claimed by the applicant in respect of property held by the respondent.
It was further submitted that whilst there are clearly accusations and problems here, the applicant has known of them for many months if not years. He questioned why if the separation occurred in December 2016, no action was taken until June 2017 and even then only on an urgent basis. One plausible explanation as to why the applicant delayed was that she relied upon the text messages to feel that she was negotiating a settlement with the respondent. If that was the case, a more comprehensive amount of evidence should have been provided.
It was also submitted on behalf of the respondent that there was no undertaking as to damages offered. In circumstances where there are other parties who may be affected by orders and where the evidence is based on submission rather than fact, the caution to which the authorities refer, should be heightened.
The respondent has only had 24 hours after service of the documents to attend court and with no reasonable opportunity to respond, bearing in mind that the affidavit of evidence in chief of the applicant is 82 paragraphs long and traverses almost ten years of their relationship. It was submitted that there was no evidence of a “scorched earth” policy. There is some substance to that submission bearing in mind the nature of the discussion that had taken place via text messages in the months of May and early June.
Mr Strum submitted that there was no prima facie case of an entitlement to an equitable interest and I accept that submission. In circumstances where the parties have had a long relationship and property is acquired in one person’s name alone, the other person has to either show that there was an equitable interest arising in some way because otherwise the court is interfering in the legitimate rights of the legal owner.
Here, one of the orders sought by the applicant includes a restraint on income and as I have already observed, that sort of order is problematic. I agree with counsel for the respondent that this looks like an attempt at asset creation rather than asset protection.
Absent some clear indication that there is a prima facie case for alteration of property interests and that damage would be done unless the injunction was granted, the applicant ought not be entitled to relief even on a holding order basis; the court should have an opportunity to hear the evidence of both sides. The issue of the balance of convenience must usually favour the applicant if there is no prejudice to the respondent and other parties. In this case, I do not know what the prejudice is to the respondent and as there are clearly other parties involved who may face indirect consequences of their partner or co-director or co-shareholder being restrained from financial activity, it is not sufficient to say that they could join to protect their interests. The emphasis of the court rules is that if there is a risk of their entitlements being affected, they must be joined.
Notwithstanding the inference I suspect the applicant wished the court to draw that the respondent was going to leave the jurisdiction and prejudice her legitimate rights, I would not draw such an inference here because I do not know the comprehensive nature of the discussion as indicated in the text messages nor whether the absence from Australia of the respondent would make any difference to continuing business interests. The applicant asserts that the respondent has a business here which has international outlets.
As already indicated, the relationship of the parties ended in December 2016. Why then was there no activity until June 2017 and only then on an urgent basis? As senior counsel for the respondent submitted, the applicant had to explain the delay. He further submitted that the applicant could not pick and choose what orders she wanted outside of the terms of the application. Whilst the court ultimately has to determine what orders are proper, it is not appropriate for the applicant to seek to justify all of the orders on the basis of the material provided and then argue that failing the court’s acceptance of that evidence as the basis for the orders, there can be a fallback position.
Another example of the paucity of evidence can be seen in [38] where the applicant referred to her suspicions about what the respondent was doing with his salary and that suspicion arose from her knowledge of his “secrecy” and “gambling”. But each of these matters was known for a long time (since 2008) and yet only now, the applicant sought to obtain holding orders without more than suspicion. She was not apparently involved in the business in any direct sense and therefore drew conclusions from her interpretation of things. Whilst that conclusion might be right, the immediate issue is whether on an urgent basis, the holding orders should be made as against allowing a relatively modest adjournment for the respondent to provide not just answers to the accusation against him but also comprehensive discovery.
In fairness, the applicant’s knowledge arose in late 2016 when she was startled to find transactions on her credit card and when she approached the respondent, he said it was a mistake. But the more significant question is why action was not then taken. Just what happened is not clear but the applicant and the respondent continued their relationship until December and then had periods of communication electronically.
Surprisingly, the evidence of the applicant was also largely silent on the question of how her entitlement would be thwarted bearing in mind there are assets of a real property nature. What contributions the applicant has made such as to indicate there was a necessity to protect her entitlement was not evident.
The detail in the applicant’s affidavit at [63] sets out a table of what she saw as “property and liabilities” and as such, it was obvious that a lot of work had gone into assessing ownership and values. That makes the urgent nature puzzling when seen in the context of a separation that has been extant for over 6 months.
Senior counsel for the applicant submitted in reply that there was a “real risk of disposal of assets”. That may be the correct synopsis but such an inference should only be drawn with the benefit of at least the respondent’s evidence. The risk here is to be inferred from the gambling background, transactions relating to property to which the applicant was not privy because of her lack of an obvious legal interest and the statements of the respondent himself. In particular, there is a very clear assertion of dishonesty against the respondent here. Whilst that would only hopefully be made on a sound footing, there is no evidence that the applicant has pressed the respondent or gone to the police.
As the authorities indicate above, the court is required to undertake a high degree of caution where it is invited to make orders that are bound to have an impact on the property of the person restrained let alone third parties. Under those circumstances, it is inappropriate absent some material which can be weighed in the balance, to be the only basis upon which the court can make a determination. The applicant’s application for interim injunctive orders must therefore be refused.
The matters need proper consideration and it is not proper to make orders of a holding nature. I note that the respondent agrees to immediate and comprehensive disclosure of his position.

I certify that the preceding Seventy One (71) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 29 June 2017.

Associate:

Date: 29 June 2017

[2017] FamCA 455

29 June 2017

Key Legal Topics

Areas of Law

Civil Procedure

Legal Concepts

Discovery

Injunction