Simpson and Lien

[2017] FamCA 828

FAMILY COURT OF AUSTRALIA

SIMPSON & LIEN [2017] FamCA 828

FAMILY LAW – PROPERTY – interim proceedings – interim injunction  – application to restrain wife from selling or dealing with property – application in a case – injunction granted.

Family Law Act 1975 (Cth) s 114

Cardile v LED Builders Pty Limited (S61-1998) [1999] HCA 18
Patrick Stevedores Operations No2 Pty Ltd v Maritime Union of Australia[No 3] [1998] HCA 30
Sieling & Sieling (1979) FLC 90-627

APPLICANT: Ms Simpson

RESPONDENT: Mr Lien

FILE NUMBER: SYC 2376 of 2017

DATE DELIVERED: 11 September 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: McClelland J

HEARING DATE: 11 September 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Reeves

SOLICITOR FOR THE APPLICANT: Manning Lawyers

COUNSEL FOR THE RESPONDENT: Mr Richards

SOLICITOR FOR THE RESPONDENT: Clinch Long Woodbridge Lawyers

Orders

THE COURT ORDERS THAT:

1. The matter remains listed in the duty list on 27 September 2017.

2. The parties’ costs of today are reserved.

AND THE COURT ORDERS PENDING FURTHER ORDER THAT:

1. Subject to the husband providing an undertaking as to damages, the wife be and is hereby restrained from disposing of, further encumbering, renting or licencing, or performing any action that may affect the value of the property at B Street, Suburb C NSW ...

AND THE COURT NOTES THAT:

A. The husband undertakes to provide an undertaking as to damages to the wife in respect to the above order.

B. The wife undertakes, pending further order of the Court and unless obtaining the consent of the husband, not to dispose, further encumber, rent, licence or perform any action that may affect the value of the properties at:

i.D Street, Suburb E NSW …;

ii.F Street, G Town NSW …; and

iii.H Street, Suburb J QLD ….

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 Simpson & Lien 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 SYDNEY

FILE NUMBER: SYC 2376 of 2017

Ms Simpson

Applicant

And

Mr Lien

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. In this matter, the husband has sought to restrain the wife from selling a property located at B Street, Suburb C (“the Suburb C property”).  The orders are sought in an Application in a Case filed on 5 September 2017. That application is opposed by the wife. The circumstances in which the application has been made are that, on 27 September 2017, the Court will consider an application by the wife for interim property orders, that is, for an order for the sale of the Suburb C property, and for the proceeds of the sale to be distributed to the wife.

2. A brief background of the matter is that the wife is 36 years of age, and the husband is 40 years of age. The parties were married in 2011, and separated in January 2017. They have one child, K, who is currently three years of age. The parties are in dispute regarding both parenting and property matters. The dispute in respect of the property matter is in relation to property that is identified in a draft balance sheet attached to the father’s affidavit filed 5 September 2017 at pages 27 to 29.

3. The basis of the husband’s application for an injunction pursuant to section 114 of the Family Law Act 1975 (Cth) (“the Act”) is that the husband asserts that the sale of the Suburb C property would result in the depletion of the parties’ marital assets such that it has the potential to impact upon orders that the Court could make at final hearing.

4. Specifically, it is contended that the sale of the Suburb C property may reduce the marital property below that which is required for the Court to make an appropriate, just, and equitable distribution of the parties’ property in light of the issues that will be considered at final hearing.

5. Secondly, and additionally, it is said that the husband will seek at final hearing an order that he retain the Suburb C property. The sale of that property, pursuant to an interim order, it is contended, would necessarily deprive the Court of the opportunity of making an order to that effect. 

6. It is not in dispute that the wife intends to sell the Suburb C property. At paragraph 14 of her affidavit filed 8 September 2017 the wife refers to entering into an agreement with D Real Estate for the property to be sold.  That agreement was entered into in July 2017. That agreement between the wife and the real estate agency was entered into without the husband’s consent. 

7. The husband further contends that the wife proposed to exchange contracts for the sale of the Suburb C property on 31 August 2017, contrary to consent orders made on 16 August 2017 which included, in order 2, a requirement that the wife give 14 days’ written notice to the husband if she intends to exchange contracts of sale for, or further encumber the property, at B Street, Suburb C, in the State of New South Wales.

8. The husband contends that the evidence suggests that the wife’s intention was to exchange contracts on 31 August 2017 and, in that context, I have been referred to page 34 of the wife’s affidavit filed 8 September 2017, which contains an email in which the solicitor for the husband is advised:

   My client has received an offer today of $739,000, which she has accepted, and the purchaser intends to exchange contracts tonight.

9. The wife acknowledges that on 31 August 2017 her solicitors sent an email to the husband’s solicitors in which it was stated that the wife “had received an offer today of $739,000 which she has accepted, on the purchaser intends to exchange contracts tonight”. The wife contends, however, that the email was not a confirmation of her intention to so exchange contracts.

10. It is unnecessary in these proceedings to determine whether the wife’s actions were contrary to the orders made on 16 August 2017.  It is sufficient for me to be satisfied that the wife intends to sell the Suburb C property.

11. The wife submitted, however, that the proposed sale will not deplete the marital assets but, rather, that issue can be determined at the hearing on 27 September 2017 when the Court will consider the wife’s application for orders for an interim distribution of property. 

12. In essence, the relevant point for my consideration today, is whether the Court should restrain the sale of the property pending the Court considering issues that are to be considered on 27 September 2017, namely, whether there should be an interim distribution of property.

13. In Cardile v LED Builders Proprietary Limited (S61-1998) [1999] HCA 18, Kirby J at paragraph 118 said:

    …In a society such as ours, people are ordinarily entitled to use their property as they see fit.  This is a civil right with which the courts will interfere only when the law authorises them to do so, and then with good reason…

14. In terms of what is a “good reason”, Kirby J acknowledged that, in circumstances where court proceedings have been commenced, it may be necessary for the Court to make orders of an injunctive nature to effectively preserve the property of parties pending a final hearing. In that context, he said at paragraph 116:

    …such orders have been developed as much to protect and defend the court's process from abuse as to protect and defend the interests of the potential judgment creditor.  This point was made in the Canadian case of Grenzservice Speditions v Jans where Huddart J observed:

    “The Mareva and Anton Piller orders were conceived not so much to protect plaintiffs as to protect the Court’s jurisdiction against defendants bent on dissipating or secreting their assets or evidence in order to render inconsequential the judicial process against them.”

15. In a similar context, in Patrick Stevedores Operations (No. 2) vMaritime Union of Australia (No. 3) [1998] HCA 30, in their joint judgment, Brennan CJ, McHugh, Gummow, Kirby, and Hayne JJ said at paragraph 35:

    The general principle which informs the exercise of the power to grant interlocutory relief is that the court may make such orders, at least against the parties to the proceeding against whom final relief might be granted, as is needed to ensure the effective exercise of the jurisdiction invoked.

16. The High Court held that the Federal Court, which had made the injunctive orders in that case, had acted appropriately and within the jurisdiction.

17. I am satisfied in this matter that the course of conduct proposed by the wife, namely to sell the Suburb C property, has the potential to impact upon the Court’s ability to determine in a reasoned and considered way the wife’s application for orders for an interim distribution of property.

18. The orders sought by the husband are, essentially, to restrain the wife from selling the Suburb C property for a period of approximately 14 days, until the Court has the ability to consider the wife’s application for an interim distribution of property which will be heard on 27 September 2017. 

19. In terms of applying section 114 of the Act it is necessary to consider firstly whether there is an arguable case and, if so, where the balance of convenience lies.

20. In this matter, the wife has an arguable case that there should be an interim distribution of property. Equally, however, the husband has an arguable case that the Suburb C property should not be sold at least until the matter is determined at final hearing.

21. The issue therefore becomes one of weighing the balance of convenience.  The inconvenience to the wife is that she will have to wait a period of 16 days, until 27 September to have the opportunity of presenting her argument to the Court.  The greatest potential detriment, however, is that there is a prospect that she will lose the proposed sale of the Suburb C property to the purchaser who has made a formal offer.

22. The husband acknowledges that potential for the loss of the sale and, on that basis, offers an undertaking as to damages should the wife suffer a loss as a consequence.

23. The potential detriment to the husband is the loss of his ability to present argument on the 27 September 2017 and at final hearing as to why the Suburb C property should not be sold.

24. Having regard to the husband’s undertaking as to damages, the balance of convenience favours the granting of the injunction sought by the husband in these proceedings.

25. It is then necessary for the Court to determine the nature of the injunctive relief that it grants. Any injunctive orders should be confined to that which is reasonably necessary to prevent the Court’s ability to determine the matter in a fair and equitable way from being interfered with, and/or a party depleting the marital assets such that it adversely impacts upon the other party. 

26. In Sieling & Sieling (1979) FLC 90-627 at paragraph 79 the Full Court stated that in in the event of the Court granting injunctive relief the Court should:

    …frame its order in such a way as to impose no further restriction than is necessary to achieve the protection of the applicant’s interest.

27. In this matter, I propose making the interim injunction sought by the husband in paragraph 2.1 of his application.  I do not make the further orders as sought by the husband in paragraphs 2.2, 2.3, and 2.4, on the basis that the wife has provided an undertaking that she will not, without the consent of the husband or without further order, sell the properties listed in paragraphs 2.2, 2.3, 2.4. 

28. Accordingly, I make the orders as set out at the commencement of these reasons for judgment.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 11 September 2017.

Associate:

Date:  17 October 2017