Sigley and Cullen (No 2)

[2015] FamCA 588

FAMILY COURT OF AUSTRALIA

SIGLEY & CULLEN (NO 2) [2015] FamCA 588

FAMILY LAW – Interim property relief where final haring adjourned – Orders made despite opposition – Injunctive orders removing wife as joint trustee of a self-managed superannuation fund.

Family Law Act 1975 (Cth)

Stanford v Stanford (2012) FLC 93-518

Strahan and Strahan (Interim property orders) (2011) FLC 93-466.

APPLICANT: Mr Sigley

RESPONDENT: Ms Cullen

FILE NUMBER: MLC 11196 of 2013

DATE DELIVERED: 22 July 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 22 July 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Skerlj

SOLICITOR FOR THE APPLICANT: Coulter Roache Lawyers

THE RESPONDENT: In Person

Orders

1. That the wife be and is hereby removed as a trustee of the Sigley Superannuation Fund.

2. That the wife do all things and execute all documents, instruments and writings necessary to forthwith retire as a trustee of the Sigley Superannuation Fund.

3. That the wife be and is hereby, restrained from contacting, communicating with or otherwise attempting to deal with the husband in his capacity as a trustee of the Sigley Superannuation Fund or from contacting, communicating with or otherwise dealing with any director, associate, member or legal representative of C Pty Ltd in their capacity as managers of the Sigley Superannuation Fund.

4. That until further order, the husband provide to the wife, monthly statements of all purchases, sales, transactions and balances pertaining to the management of the Sigley Superannuation Fund.

5. That to the extent necessary, the wife do all acts and things to transfer to the husband her interest in the Sigley Superannuation Fund.

6. That the wife obtain from her oncologist a report addressing the following matters and that such report be provided to the solicitors for the husband:

   (a)   Whether her “significant medical problem” will in any way affect her ability to properly prepare her case for the final hearing on Monday 21 September 2015;

   (b)  Whether her “significant medical problem” would affect her ability to attend and properly participate in the two day hearing commencing on Monday 21 September 2015;

   (c)  The provision of the precise details of the nature and extent of the condition described as a “significant medical problem” and the prognosis for full recovery therefrom;

   (d)  The treatment proposed or recommended for any such condition; and

   (e)  Either treatment already administered for such condition including particulars of the date of the treatment and its form.

7. That the husband provide to the wife upon request such other documents in addition to those referred to in these orders by way of discovery in respect of transactions conducted within the Sigley Superannuation Fund.

8. That the husband’s costs of this day are reserved to the trial.

IT IS CERTIFIED:

1. That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

10.That the husband’s application in a case is otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Sigley & Cullen (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 11196  of 2013

Mr Sigley

Applicant

And

Ms Cullen

Respondent

REASONS FOR JUDGMENT

1. On 22 July 2015, I made the orders that precede these reasons.  I said I would give written reasons and these are those.

2. The interlocutory issues before me concerned the partial distribution of property and injunctive relief sought by the husband.  The injunctive relief related to the distribution of the property. 

3. The background of these orders needs some explanation.

4. Property proceedings have been on foot between the husband and the wife since 2013.  In 2014, in the then usual way, the dispute was set down for final hearing in early 2015 and directions were given for the filing of evidence and case outlines.  Both parties were represented by solicitors and, at the directions hearing when the case was set down for trial, by counsel.

5. On the allocated commencement day in early 2015, the parties, still represented by their legal practitioners, compromised the dispute but asked for time to document their agreement to enable them to seek final orders.  Things apparently then fell apart.  The case was again fixed for final hearing but this time, in July 2015. 

6. A directions hearing was conducted by a registrar who ordered amended final positions if altered from earlier in the year, be filed by early July.  No alteration was indicated by the wife.  It would seem that sometime in early 2015, the wife terminated the retainer with her solicitors and she has been without legal representation since. 

7. As the time for the July final hearing approached, the wife fell seriously ill.  She then sought an adjournment of the trial which was opposed by the husband.  In applying for the adjournment of the final hearing, the wife relied upon letters from her oncologist who confirmed that she was ill but the indicative time when she might be available thereafter, remained vague.  The husband’s solicitors advised the wife that she would have to personally attend the court.  That was somewhat ambitious because, admittedly on the wife’s own evidence, she was (or might soon be) to be treated with a process that would endanger others leaving aside the question of her own capacity.  Perhaps understandably, the wife did not attend the court but, being satisfied that justice required that she be given an opportunity to participate, bearing in mind also the obvious professional qualifications of her specialist oncologist, I granted the adjournment of the trial until September 2015. 

8. What complicated the otherwise simple situation was that the husband had filed an application that sought relief if the proceedings were so adjourned.  I was not satisfied that the wife had had sufficient notice of that application nor that it was pleaded with particularity.  I adjourned that application to 22 July and gave the wife an opportunity to know what exactly it was that the husband was proposing as well as the opportunity to be heard by telephone if she wished to put a case before the Court.  The wife availed herself of that opportunity. 

9. The husband sought specific orders encapsulated in a letter that the wife acknowledged having received.  In simple terms, the wife said there was no urgency or reason to make the orders with the hearing now listed for September 2015.  It was her proposal that the whole issue be transferred over to that date. 

10. The husband’s position was equally simple.  In February 2015, each party had articulated their proposed orders and in respect of a self-managed superannuation fund, they had agreed that the wife transfer to the husband, her member account and that thereafter, the husband was to take over the trusteeship of the fund which, to that point, had been joint.  That position remained constant to this hearing because the wife had not availed herself of the opportunity to indicate any change of direction. 

11. Despite having asked her whether there was to be such a change, the wife evaded the question indicating her concerns that the husband had traded with assets within the fund unilaterally.  Despite my observation that that issue went to value not to the asset itself and discovery would cure any such defect, the wife was not responsive.  The same outlines of case earlier in 2015 had given the wife, uncontroversially, an unencumbered home in excess of $1 million and in which she was still living.  During one exchange, the wife indicated she was not well and she could be heard to be quite tearful.  I had, and have, no desire to distress the wife who has clearly been diagnosed with a serious illness.  However, the discussion to that point had indicated to me that the wife is an intelligent and articulate person.  In addition, the injunctive relief about the self-managed superannuation fund arose out of correspondence the wife had sent the fund managers.  The correspondence was unnecessary and would have been better directed to the husband’s lawyers in a form of discovery.  Just why the wife took the course she did remains unexplained but I have presumed for the purposes of these reasons that she was without legal representation although that also remains unclear.  The tone of her emails was abrasive and unnecessary if the husband was to have the wife’s member account in that fund.  If, as I have said, the issue was the value of the husband’s member account (or indeed hers) the action she took was not the correct approach.  In addition, no application was made by the wife to the Court for any orders of a discovery or injunctive nature.  As such, the husband took the view that this was some type of harassment.  Indeed, the fund managers handed the matter to their lawyers. 

12. Now all of this might be seen as a storm in a teacup but there have been other serious allegations made by the wife against the husband in respect of his professional practice which the husband has maintained are untrue and causing him inconvenience and possibly damage.  It would seem that those allegations remain unresolved so the Court would have been conducting the hearing in July with them still outstanding.  Thus, absent some indication what orders the wife was going to seek and knowing what the assets already were, even taking into account the unspecified assertion that the husband had unilaterally dealt with shares within the fund’s portfolio, it was not an issue that should have been controversial. 

13. Obviously, if the wife does seek an order different to that which she previously sought, she will still be at liberty to do so.  Additionally, notwithstanding the injunctive orders, she still has every right of discovery.  The unresolved nature of the dispute therefore remains rather odd.

14. Before any orders can be made however, the Court has to look to its powers.  I do so now.

15. In relation to the injunctive relief sought by the husband, s 114 of the Family Law Act 1975 (Cth) (“the Act”) refers to the power of the Court in proceedings of a financial nature as defined in sub-s 4(1) of the Act. The Court is empowered to make such order and grant such injunction as it considers proper with respect to the matters to which the proceedings relate including an injunction in relation to the property of a party to the marriage.

16. Having regard to what I have said about the wife’s unnecessary and confrontational approach to the directors of the advisory company responsible for the superannuation fund, I am satisfied it is proper to restrain her from continuing that conduct.  Having regard to my remarks about her entitlement to discovery, it is hard to see how she has any need to contact either the husband directly or indeed anyone associated with the fund.  It is therefore proper to make an injunction precluding her from so doing.  No indication was given by the wife that she would desist from the course she had previously taken.

17. In addition to those matters, because the wife had not indicated any alteration to her position about the ownership or control of the fund, it is proper to make an order removing her as the trustee of something over which she has indicated she has no desire to have any legal interest.  In the course of her discussion with the Court, the wife indicated that she thought that the self-managed superannuation fund was “joint property”.  It is clearly not.  The self-managed superannuation fund is an entity in its own legal right controlled by two trustees.  The interest of the husband lies in what is in his member account and similarly so with the wife.  The trustees of the fund have the responsibility for its management and protection.  The wife’s interest seemed to be about what had happened rather than ongoing protection in circumstances where the real issue seemed to be a dispute about the value.  The wife clearly did not understand her trusteeship role.  The wife clearly did not understand the nature of the superannuation fund.  The evidence appears to be that the husband had made all of the decisions throughout the latter part of the relationship in any event.  There does not appear to have been discussion and agreement between the parties in their capacity as joint trustee.  In those circumstances, it is appropriate to remove the wife as trustee.

18. In respect of the alteration of the self-managed superannuation fund, the authorities that guide the determination are Stanford v Stanford (2012) FLC 93-518 and Strahan and Strahan (Interim property orders) (2011) FLC 93-466.

19. In Strahan, Boland and O’Ryan JJ said that in respect of an interim property order, the requirements of the Act namely s 79(2) and (4) had to be observed. Part of the determination requires the Court to be satisfied that it is likely in the end that there will be relief provided as sought or that appropriate adjustments can be made so that s 79(2) is satisfied. In this case, for the reasons I have already set out, the wife does not seek to retain the fund. She does not seek to retain any portion of her own member account let alone that of the husband.

20. In Strahan, Boland and O’Ryan JJ referred to s 79(2) and said that a court should not make an order unless it is satisfied that in all of the circumstances, it is just and equitable to do so. That decision has been reinforced by the High Court in Stanford.  In this case, the Court has the benefit of the respective trial affidavits of the parties in which all of those matters are addressed.  As I have indicated, the entitlement of the parties in relation to the superannuation fund was hardly controversial. 

21. The Full Court in Strahan made clear that there was only one exercise of power under s 79 of the Act and that it was preferable that there be one final hearing of s 79 proceedings. The Court then went on to say:

    115.It was submitted by senior counsel for the Wife that it is important to recognise that in relation to an application under s 79 and s 80(1)(h) of the Act there are two distinct aspects of an application. The first consideration is the adjectival or procedural step and the second consideration is the substantive step. The first step requires consideration as to whether the jurisdiction will be entertained. The second step arises if the jurisdiction is entertained and requires consideration of the factors which are relevant to the exercise of power under s 79 to make an order.

22. The submission of senior counsel in Strahan was accepted by the Full Court.  Thackray J delivered a separate judgment and did not disagree with the other members of the Court.  His Honour said:

    225.These sorts of considerations provide a strong basis upon which the Court should maintain its traditional stance that there should ordinarily be only one hearing of disputes concerning alteration of property issues.  I accept the submission of senior counsel for the wife that something out of the usual course would need to be established before the Court could be expected to devote its resources to resolution of disputes about interim alteration of property interests.  However, once the Court has determined that it is appropriate to embark upon the hearing of an interim dispute, it has no alternative other than to exercise (or decline to exercise) the power to make an interim order by application of the relevant provisions of the legislation. 

    226.In my view, the two step approach advocated by senior counsel for the Wife aptly encapsulates the way the Court should approach an application for interim property settlement. The Court must first identify circumstances that make it appropriate to give consideration to exercising its power to make an interim order. It is at this stage that the Court has regard to the policy consideration that it is generally in the interest of the parties and the Court for there to be only one exercise of the s 79 power. However, once the Court has determined that the interests of justice require it to exercise the power, the conditions on which the power is to be exercised are governed only by the obligation to make an order that is “appropriate” and to ensure that the proposed order is “just and equitable” by reference to the matters set out in s 79(4).

23. It is clearly therefore preferable that there be one final hearing of the s 79 proceedings. Again, I refer to the fact that the wife has not indicated a position that is controversial in respect of the transfer of the legal title to the member account nor the responsibilities as trustee. In the circumstances, the first of the two procedural steps is fulfilled in that it is a case where the jurisdiction should be entertained because it is not controversial. In respect of the second step, all of the factors to which the Court would need to turn its mind to satisfy s 79(2) are indeed before the Court. Absent the wife’s position altering, the husband would have the fund.

24. Accordingly, orders should be made. 

25. In addition to the foregoing matters, the husband also sought an order for the appointment of a case guardian.  Absent any evidence other than that to which I have referred above, I would not make such an order.  I explained to the wife what such an order would mean for her, directing her attention to the question of her future capability to participate in the substantive proceedings.  I also indicated to counsel for the husband that a further application could be made if the appropriate evidence could be provided. 

26. In passing also, I wish to make reference to the wife’s comment about the view taken by her oncologist.  She said that when she inquired of her oncologist about providing information that the husband was seeking as to her medical condition, he used expletives and said he would tell the information to the Court.  If that was an accurate reflection of what happened, it was not appropriate.  It would have been better that there had been some cooperation which might have avoided all of what has now occurred.

27. Although the husband also sought costs, in my view, it is appropriate to reserve them until such time as the wife’s health position is known as well as the comprehensive financial position of the parties is clarified having regard to the wife’s statement that she disputes the values.  Costs should therefore be reserved.

28. In the circumstances also, it was appropriate for the attendance of counsel on the husband’s behalf.  Orders were made as I have indicated as set out at the commencement of these reasons.

I certify that the preceding Twenty Eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 22 July 2015.

Associate: 

Date:  22 July 2015