Shamon & Shamon

Case [2021] FamCA 417

FAMILY COURT OF AUSTRALIA

Shamon & Shamon [2021] FamCA 417  

File number(s): SYC 2375 of 2021
Judgment of: MCCLELLAND DCJ
Date of judgment: 22 June 2021
Catchwords:

FAMILY LAW – PROPERTY –Injunctions –Where the husband has transferred significant property interests since separation – Where the wife seeks orders restraining the husband from further dealing with the matrimonial property –Orders made restraining the husband from further dealing with the identified matrimonial property.

FAMILY LAW – PROPERTY – Interim Application – Partial Property Distribution – Where the wife seeks orders for litigation funding and lump sum payment by way of partial property settlement – Consideration of s 79(4) of the Family Law Act 1975 – Finding that litigation funding for the wife up to the conciliation conference is in the interests of justice – Where the parties seeks orders for sale of property to meet litigation funding – Where the parties dispute property to be sold – Finding that orders for sale are inappropriate where the property is sought to be retained by a party – Orders made for the husband to pay the wife $80,000.

FAMILY LAW – PROPERTY – Interim Application – Spousal Maintenance – Where the wife was the primary carer of the parties’ children and has been the sole carer since separation – Where the husband has paid no child support and provided limited financial support for the children since separation – Consideration of s 75 of the Family Law Act 1975 – Orders made for the husband to pay the wife weekly spousal maintenance in the sum of $772.  
Legislation:

Family Law Act 1975 (Cth) Pt VIII ss 72, 74, 75, 79, 80, 114(3)

Evidence Act 1995 (Cth) ss 76, 79, 140

Family Law Rules 2004 (Cth) rr 12.07(2), 15.41, 15.63, 15.64, 19.04(2)

Cases cited:

Acton & Burton [2015] FamCA 469

Adam P Brown Male Fashions Pty Limited v Philip Morris Inc (1981) 148 CLR 170

Aitken & Murphy (No. 2) [2012] FamCA 239

Cutler v Wandsworth Stadium Limited [1945] 1 All ER 103

Davidson and Davidson (No. 2) (1994) FLC 92-469

Edgar & Strofield (2016) FLC 93–711

Finn v Carelli [2007] NSWSC 261

Gabel & Yardley (2008) FLC 93-386

Hall v Hall (2016) 257 CLR 490

Hyman v Hyman [1929] AC 601

Iphostrou & Iphostrou [2011] FamCA 20

Maroney & Maroney [2009] FamCAFC 45

Medlow & Medlow (2016) FLC 93-692

Stein v Stein (2000) FLC 93-004

Strahan & Strahan (Interim Property Orders) (2011) FLC 93-570

Thornley and Thornley [2018] FamCA 964

Wenz v Archer (2009) 40 Fam LR 212

Yunghanns v Yunghanns (1999) FLC 92-836

Number of paragraphs: 174
Date of hearing: 24 May 2021
Place: Sydney by web conference
Counsel for the Applicant: Mr Campton SC
Solicitor for the Applicant: Lawbridge Lawyers & Consultants
Counsel for the First Applicant: Mr Cummings SC
Solicitor for the First Respondent: Cordoba Legal
No appearance for the Second and Third Respondents, who were excused by consent.

ORDERS

SYC 2375 of 2021
BETWEEN:

MS SHAMON

Applicant
AND:

MR SHAMON

First…

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Shamon & Shamon [2021] FamCA 417
Case
[2021] FamCA 417
Decision Date

CaseChat Overview and Summary

In the matter of *Shamon & Shamon*, McClelland DCJ of the Federal Circuit and Family Court of Australia considered an application by the wife against the husband and two other respondents. The dispute concerned the division of matrimonial property following the parties' separation. The wife sought various orders, including injunctions to restrain the husband from further dealing with identified matrimonial property, litigation funding, and spousal maintenance.

The court was required to determine whether to grant interim injunctive relief to preserve matrimonial assets, considering the wife's contention that the husband had transferred significant property interests since separation and posed a risk of further dissipation. Additionally, the court had to consider the wife's applications for litigation funding and a partial property distribution to cover her anticipated costs up to a conciliation conference, as well as her claim for interim spousal maintenance.

McClelland DCJ applied the principles for granting preservation orders, requiring the applicant to establish an arguable case and a real risk that any judgment would go unsatisfied due to the other party dealing with their assets. The court found that the evidence demonstrated a live issue regarding the husband's conduct aimed at dissipating assets and a real risk of future dissipation, justifying the wife's requested injunctive relief, with some modifications to previous orders. The court also found it appropriate to order litigation funding for the wife and interim spousal maintenance.

Consequently, the court ordered variations to existing restraints to permit the husband to manage certain property-related expenses through specific companies, while otherwise restraining him from dealing with benefits or assets held by S Pty Ltd without the wife's agreement or court leave. Further restraints were imposed on the husband regarding other properties and trusts. The husband was ordered to pay the wife $80,000 for litigation funding and $772 per week as spousal maintenance.

Orders

Orders of the court

SYC 2375 of 2021

BETWEEN:

MS SHAMON

Applicant

AND:

MR SHAMON

First Respondent

MR B SHAMON

Second Respondent

MS C SHAMON

Third Respondent

ORDER MADE BY:

MCCLELLAND DCJ

DATE OF ORDER:

22 JUNE 2021

THE COURT ORDERS THAT:

1. Orders 1 and 2 of the orders made 9 April 2021 be varied to the extent necessary to permit Mr Shamon(“the Husband”) to:

(a) Cause S Pty Ltd to service the mortgage secured on the property at H Street, Suburb J, and to pay any rates, insurances, land tax or other outgoings in respect of the said property;

(b) Deposit money into a bank account held or operated on behalf of S Pty Ltd in order to facilitate Order 1(a) of these Orders;

(c) Cause T Pty Ltd to manage and service the property at Level 3, L Street, Suburb K in the ordinary course of its business; and

(d) Cause V Pty Ltd to deal with the income of the V Fixed Trust for the payment of the mortgage secured on the property at L Street, Suburb K and to pay any rates, insurances, levies, land tax, or other outgoings in respect of the said property.

2. Other than as identified in Order 1, the Husband be restrained from dealing with any benefits or assets held by S Pty Ltd in its own capacity or as trustee of any trust, unless with the prior written agreement of Ms Shamon (“the Wife”) or leave of the Court.

3. Order 4 of the orders made 9 April 2021 be varied to include mandatory injunctive restraints in the same terms as identified in the said order as against the husband in relation to Shamon Trust and Shamon Fixed Trust.

4. That the Husband be restrained from doing any act or thing so as to cause or permit any further drawing upon any loan facility or mortgage secured over:

(a) the property at 1 M Street, Suburb P; and

(b) the property at 2 M Street, Suburb P.

5. The Husband pay by way of litigation funding to the Wife’s solicitor the sum of $80,000.

6. The Husband pay to the Wife the sum of $772 per week as spousal maintenance, to be paid into a bank account nominated by the Wife in writing.

Note: The form of the order is subject to the entry in the Court’s records.

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 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

I have determined that it is appropriate, in the circumstances of this case, to make an order for there to be a partial property distribution in the sum of $80,000 representing the wife’s anticipated costs up to the point of a conciliation conference. I have also determined that it is appropriate that there be an order for interim spousal maintenance in the sum of $772 per week, and that the Court should grant the injunctive relief sought by the wife. BACKGROUND On 4 April 2004, the parties married. From 2007 until separation, the parties resided with the children at the property located at 2 M Street, Suburb P in the State of New South Wales (“the former matrimonial home”). There are three (3) children of the parties’ marriage, being:(1)X born in 2007, currently aged 13 years;(2)Y born in 2010, currently aged 10 years; and(3)Z born in 2018, currently aged two (2) years(collectively “the children”). On 30 June 2020, the parties separated on a final basis when the wife left the former matrimonial home with the children. The husband currently resides in the former matrimonial home. The wife currently resides with the children in a two bedroom rental unit located on a major highway, Suburb AA in New South Wales. On 1 April 2021, the wife commenced these proceedings by filing an Initiating Application in this Court, seeking final orders for an adjustment of property under s 79 of the Family Law Act 1975 (Cth) (“the Act”). By way of that Application, she further sought urgent interim orders for injunctions in respect to the parties’ dealings with certain items of property. On 9 April 2021, Rees J made the following orders and notations:IT IS ORDERED PENDING FURTHER ORDER 1.That, noting that the wife has provided an undertaking as to damages filed on 8 April 2021, the husband be restrained in his capacity as a shareholder, director or officeholder of any of the corporations identified in this order, or in respect of any trust that the said corporation is a trustee of, from transferring, assigning, encumbering or adversely dealing with his shareholdings or any other interest including by way of debit credit loan account:(a) S Pty Ltd ACN …(b) BB Pty Ltd ACN …(c) T Pty Ltd ACN …(d) V Pty Ltd ACN …(Collectively known as “the entities”)2.That in respect of each of the entities listed in order 1, the husband shall be restrained from doing any act or thing to deal with, sell, encumber, mortgage or in any other way dispose of or adversely affect any asset or property including but not limited to the following real property:(a) H Street, Suburb J NSW; and (b) L Street, Suburb K NSW.3.That the husband shall in his personal capacity, be restrained from doing any act or thing to deal with, sell, encumber, mortgage or in any other way dispose of or adversely affect any of the following real property:(a) 2 M Street, Suburb P NSW(b) 1 M Street, Suburb P NSW(c) L Street, Suburb K NSW(d) H Street, Suburb J NSW.4.That the husband be restrained in relation to the V Fixed Trust (“the trust”) other than with the prior agreement in writing of the wife from doing or causing to permit to be done any of the following:(a)The exercise of any power that the husband may have directly or indirectly in respect of the trust including but not limited to any power of appointment and any power to vary the terms of the trust.(b)Removing, replacing or appointing any director or other office holder of any of the trustees of the trust.5.That the matter be referred to the listing registrar to list the wife’s application for interim orders on a date not before 10 May 2021. IT IS DIRECTED6.That the husband within 28 days file and serve any application and affidavit upon which he seeks to rely in these proceedings and provide disclosure to the wife in compliance with Rule 13.04.7.That costs of all parties are reserved.IT IS NOTED8.That the wife may amend both her final and interim relief sought subject to the husband making disclosure and such amendment may include relief pursuant to section 106B of the Family Law Act 1975 (Cth) and the joinder of other parties.

Evidence

Evidence Before The Court

During the course of the proceedings, the husband indicated, through senior counsel appearing on his behalf, that the orders he seeks are consistent with those sought by the wife and may be made by consent, save for those orders which appear underlined in his Minute of Order marked ‘Exhibit D’.EVIDENCE The wife relies upon the following documents: (a)Amended Initiating Application sealed on 16 April 2021; (b)Application in a Case filed 19 April 2021; (c)Affidavit of the wife filed 14 May 2021 together with annexures (“the wife’s Affidavit”); (d)Financial Statement of the wife filed 14 May 2021; and (e)Undertaking as to damages of the wife filed 8 April 2021. The husband relies upon the following documents: (a)Response to Initiating Application filed 12 May 2021; (b)Affidavit of the husband filed 12 May 2021 together with annexures (“the husband’s Affidavit”); and (c)Financial Statement of the husband filed 12 May 2021. The following exhibits were relied upon: (a)Case outline of the wife filed 19 May 2021 (‘Exhibit A’); (b)Case outline of the husband filed 19 May 2021 (‘Exhibit B’); (c)The wife’s Minute of Consolidated Orders filed 24 May 2021 (‘Exhibit C’); (d)Tender bundle of the husband filed 24 May 2021 including the husband’s consolidated Minute of Order (‘Exhibit D’); (e)Joint Balance Sheet filed 10 May 2021 (‘Exhibit E’); (f)Tender bundle of the wife part one (‘Exhibit F’); (g)Tender bundle of the wife part two (‘Exhibit G’); (h)Costs notice of the wife dated 24 May 2021 (‘Exhibit H’); (i)Suburb F Mortgage Statement for account ending (‘Exhibit I’); (j)Bank statements in annexures to affidavit of husband (‘Exhibit J’) ; and(k)Letter from husband’s solicitors dated 7 May 2021 in respect to the issue of disclosure (‘Exhibit K’). RELEVANT FACTUAL CONTENTIONS I have set out in greater detail the husband’s initial contributions and contributions made during the course of the marriage in my consideration below of the wife’s Application for orders for partial property distribution. Both parties agree that, on 28 September 2005, S Pty Ltd was incorporated and, on that date, the husband was the sole shareholder and appointed as the sole director of S Pty Ltd. The wife contends that the husband holds a legal and/or beneficial interest in a unit trust, the ‘V Trust’, which is the beneficial owner of the property located at L Street, Suburb K (“the Suburb K property”). It was not disputed that V Pty Limited (“the V Pty Ltd”) is the corporate trustee of the V Trust. Comparatively, the husband attests that he has never held any legal or beneficial interest in the V Trust and that his involvement “was simply as the director and shareholder of the corporate trustee entity”, which I take to be the V Pty Ltd. The husband further contends that the ultimate beneficial ownership of the units in the V Trust is as follows: (a)five (5) per cent by the wife and the parties’ eldest two children; (b)80 per cent by the husband’s brother-in-law Mr EE ; and (c)10 per cent by Mr FF, on behalf of the husband’s “former employer”, Mr GG.

Decision

Reasons for decision

I accept the submission of senior counsel for the husband, that it is inappropriate for the Court, at this interim stage of the proceedings, to make findings of fact in respect to what clearly are matters of controversy between the parties. However, the evidence to which I have referred above satisfies me that, at the very least, there is a live issue regarding whether the husband has engaged in conduct, to date, which was intended to dissipate the assets of the matrimonial property pool and, based on the number of transactions that give cause for concern, to which I have referred, I am also satisfied that there is a real risk the husband may further dissipate the matrimonial assets in the future such that, at the final hearing, the Court is unable to do justice between the parties. Summary and conclusion in respect to preservation injunctions Accordingly, the restraints sought by the wife, which in part modify previous restraints imposed by the orders of Rees J made on 9 April 2021, are entirely justified. Specifically, I note that both of the parties sought a variation to those restraints in the form of the proposed order 1.1 sought by the wife in her consolidated Minute of Order marked Exhibit ‘C’ in these proceedings. I will therefore make an order in those terms. Proposed order 1.2 by the wife is not agreed to by the husband, unless that proposed variation to the existing restraints includes a reference to a bank account held or operated on behalf of the husband’s cousin, so as to enable the husband to deposit money into such a bank account. That proposal is, however, too open-ended, insofar as there is no qualification or, more accurately, limitation, on any such monies which could potentially be paid to the cousin. This is in the context where the husband remains the sole director of S Pty Ltd. In those circumstances, the Court has concerns that enabling an unspecified amount to be paid into a bank account of the husband’s cousin, at his behest, leaves open the risk to which I have referred, being that property of the parties may be dissipated through that process prior to the final hearing. Accordingly, I am satisfied that order 1.2 as proposed by the wife is appropriate and I will make an order in those terms. In addition, the husband also proposes order 1.3, which would enable the husband to transfer net proceeds derived from the rental income of the Suburb J property to both his cousin and his father. In circumstances where evidence, to which I have referred, casts into doubt the husband’s assertion that S Pty Ltd holds its interest in the Suburb J property on behalf of his father, that order sought by the husband is inappropriate. Proposed order 1.4, as sought by the husband in his Minute of Order marked Exhibit ‘D’ in these proceedings, essentially replicates proposed order 1.3 set out in the wife’s consolidated Minute of Orders, save to the extent that it seeks to limit the reference to the Suburb K property to ‘Level 3’ of that property. It being noted that BB Pty Ltd, which was formerly owned jointly by the husband and the Second Respondent but now owned solely by the Second Respondent, operates from that floor. At paragraph 80 of his Affidavit, the husband attests to T Pty Ltd being a service company for the finance business that operates on the third floor of the Suburb K property. In that respect, the accuracy of the husband’s evidence did not appear to be disputed in these proceedings, and no contrary evidence has been presented which enables me to conclude that T Pty Ltd has a role broader than acting as a service company for BB Pty Ltd. Accordingly, in those circumstances I will make proposed order 1.4 as sought by the husband.

Ratio Decidendi

Legal Principle Established

In respect to the relevant legal principles in determining whether the Court should make orders or grant injunctions for the preservation of property, I noted in Thornley and Thornley [2018] FamCA 964 at [16] – [19], as follows:16.The relevant law in respect to the making of preservation orders or granting of preservation injunctions is usefully summarised by Hume J in the case of Liu v Xiao (2018) NSWSC 1401 at [7], as follows:The principles relating to an application of this type were usefully set out in written submissions by senior and junior counsel for the plaintiff:The Court’s jurisdiction to grant a freezing order is contained within UCPR 25.14, as well as its inherent jurisdiction. An applicant must establish, first, a good arguable case and, second, a risk that any judgment will go unsatisfied by reason of the other party dealing with their assets to place them out of the reach of the Plaintiff (Tomasetti v Brailey [2012] NSWCA 6 at [14]–[15]; Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 at [72–[74]). It must be shown there is a risk, not a mere assertion, the Defendant may dispose of or deal with his her assets in such a manner as to leave any judgment unsatisfied (Frigo v Culhaci [1998] NSWCA 88 at p8). It is not necessary to prove the Defendant has a positive intention of embarking on that course (Finn v Carelli [2007] NSWSC 261 at [4]). Proof of risk of dissipation of assets may be established by evidence of a prior want of probity by the impugned person (Samimi v Seyedabadi; Seyedabadi v Samimi [2013] NSWCA 279 at [73]; Ninemia Maritime Corporation v Trave Schiffahrtsgesellschaft mbH & Co KG ‘The Niedersachsen’ [1983] 1 WLR 1412; [1984] 1 All ER 398 at p406; Frigo v Culhaci [1998] NSWCA 88 at p8.). The quantum of the freezing order ought not be fixed at a sum greater than that which the Plaintiff would potentially or likely recover (Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 428; OXC Bidco Pty Ltd v Dickson [2016] NSWSC 968 at [14]).17.The reference in that extract to the Court’s jurisdiction to grant a freezing order, is contained in the Uniform Civil Procedure Rules 2005 (NSW). The equivalent of that provision, for these purposes, is s 114(3) of the Act, as set out above. 18.In summary, an applicant for such an order must establish, firstly, an arguable case, and, secondly, that there is a risk that, if the order is not made, a judgment will go unsatisfied by reason of the other party having dealt with their assets to place them out of the reach of the applicant. In terms of that second element, it must be shown that there is a real risk of that occurring, rather than a mere assertion that the defendant may dispose of, or deal with, their assets in such a manner.19. Relevantly, in Finn v Carelli (2007) NSWSC 261 at [4], Brereton J said: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 398, as well as Patterson v BTR Engineering.Consideration