Starke & Trenerry

[2025] FedCFamC1F 52

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Starke & Trenerry [2025] FedCFamC1F 52

File number:

PAC 5352 of 2023

Judgment of:

AUSTIN J

Date of judgment:

4 February 2025

Catchwords:

FAMILY LAW – Practice and procedure – Review – Property – Where the applicant de facto husband seeks review of a selection of interim orders made by a senior judicial registrar (“the registrar”) – Where several orders collectively regulate the parties’ dealings with bitcoin – Where the respondent de facto wife could not meet the burden of proving entitlement to an interim property settlement order in respect of the applicant’s bitcoin – Orders made restraining the parties’ dealing of bitcoin in their respective possession – Where an order requiring the applicant to remove caveats over properties registered by his litigation funder is discharged – Where the litigation funder is not an alter ego of the applicant – Where the registrar made an order restraining the respondent from dealing with properties without notice to the applicant – Where the applicant sought to replace the injunction to unconditionally restrain the respondent’s dealings with the properties – Where the applicant could not meet the burden of showing why the respondent should be restrained from dealing with her properties as she pleases – Where several orders of the registrar are discharged and replaced – Application for review and the response thereto otherwise dismissed.

Legislation:

Family Law Act 1975 (Cth) Pt VIII, VIIIAB, ss 79, 114

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 14.07

Real Property Act 1900 (NSW)

Cases cited:

Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337; [1981] HCA 1

Gabel v Yardley (2008) FLC 93-386; [2008] FamCAFC 162

Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466; [2009] FLC 93-466

Tsiang & Wu (2019) FLC 93-911; [2019] FamCAFC 128

Division:

Division 1 First Instance

Number of paragraphs:

39

Date of hearing:

4 February 2025

Place:

Newcastle (via MS Teams)

Counsel for the Applicant:

Mr Othen SC

Solicitor for the Applicant:

Jano Family Law

Counsel for the Respondent:

Ms Jeliba

Solicitor for the Respondent:

Barkus Doolan Winning Lawyers

ORDERS

PAC 5352 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR STARKE

Applicant

AND:

MS TRENERRY

Respondent

ORDER MADE BY:	AUSTIN J
DATE OF ORDER:	4 FEBRUARY 2025

THE COURT ORDERS THAT:

1.Orders 2, 3, 4, 7, 8, 10 and 11 made on 18 December 2024 are discharged.

2.The applicant is restrained from trading, selling or otherwise dealing with any more than 6.5 bitcoin in his present possession and control.

3.The respondent is restrained from trading, selling or otherwise dealing with any more than 6.5 bitcoin in her present possession and control.

4.Otherwise:

(a)the Application for Review filed on 23 December 2024 is dismissed;

(b)the application for relief set out in Exhibit A3 is dismissed; and

(c)the Amended Response to an Application in a Proceeding filed on 29 January 2025 is dismissed.

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 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Starke & Trenerry has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

EX TEMPORE
REASONS FOR JUDGMENT

AUSTIN J:

1. These reasons explain the disposition of a review application filed by the de facto husband.

   Background

2. In October 2023, the de facto husband (“the applicant”) began proceedings against the respondent de facto wife (“the respondent”) seeking de facto financial relief under Pt VIIIAB of the Family Law Act 1975 (Cth) (“the Act”).

3. Those proceedings are yet to be listed for trial but, since their commencement, the parties have consumed an inordinate amount of the Court’s resources in interlocutory disputes.

4. Recently, on 18 December 2024, the senior judicial registrar (“the registrar”) made an extensive suite of interlocutory orders between the parties dealing with a range of separate issues. In all, 15 orders were made, but the following are relevant for present purposes:

   (a)the applicant was ordered to transfer 6.5 bitcoin to the respondent, presumably by way of interim property settlement though the orders do not say so, which she was permitted to liquidate (Orders 2, 4 and 11);

   (b)the applicant was restrained from liquidating any more than 6.5 other bitcoin he owns (Orders 3 and 10);

   (c)the applicant was ordered to cause his litigation funder (“B Finance”) to remove caveats it has registered over the title to three parcels of real property owned by the respondent and, in addition, was restrained from registering any caveat over any other “real property comprising the property pool” (Order 7); and

   (d)the respondent was directed to give the applicant a minimum of 28 days’ notice before moving to diminish the equity she presently enjoys in two particular parcels of real property (the “Suburb D” and “Suburb C” properties) (Order 8).

5. On 23 December 2024, the applicant filed an Application for Review to review the registrar’s decisions reflected in Orders 2, 3, 7, 8(b), 8(d) and 10.

   Relief sought

6. At the hearing, the applicant pressed for remedial orders which were different from those set out within his review application (Exhibit A3).

7. The respondent opposed leave being granted to the applicant to amend his claim for relief in the review hearing because she diligently sought to establish the ambit of the review in court on 21 January 2025 (Exhibit R3) and through correspondence with the applicant’s lawyers on 24 January 2025 (Exhibit R4). She contended the applicant’s present position is a departure from his prior representations. The applicant was ordered to amend his review application by 24 January 2025 (Order 5 made on 21 January 2025), but he did not forewarn of his amended claim until his Case Outline was filed on 31 January 2025.

8. The respondent’s objection is nonetheless dismissed. The respondent still had several days forewarning of the form of the applicant’s amended claim and the amended relief did not expand the areas of disagreement between the parties. If anything, the disagreement may have been marginally narrowed. The applicant did not claim any prejudice in having to meet the amended claim and its entertainment did not protract the hearing. Justice requires resolution of the parties’ actual grievances, not holding them to relatively petty procedural compliance.

9. Substantively, the respondent opposed the review application and, by her Amended Response to an Application in a Proceeding filed on 29 January 2025, primarily sought to retain the orders made by the registrar. She sought different relief in the alternative.

10. As it transpires, it is necessary to adjust the existing orders on a wider basis than proposed to do justice between the parties.

    Evidence

11. The applicant relied upon this evidence:

    (a)his affidavit filed on 24 January 2025, plus annexures;

    (b)page 22 of the transcript of proceedings on 21 January 2025 (Exhibit A1); and

    (c)pages 5–6 of the transcript of proceedings on 18 December 2024 (Exhibit A2).

12. The respondent relied upon this evidence:

    (a)her affidavit filed on 29 January 2025, plus annexures;

    (b)her financial statement filed on 17 January 2025;

    (c)pages 26–27 of the transcript of proceedings on 16 December 2024 (Exhibit R1);

    (d)page 21 of the transcript of proceedings on 21 January 2025 (Exhibit R2);

    (e)page 28 of the transcript of proceedings on 21 January 2025 (Exhibit R3); and

    (f)two emails exchanged between the parties’ solicitors on 24 January 2025 (Exhibit R4).

    Respondent’s bitcoin

13. Orders 2, 3, 4, 10 and 11 collectively regulate the parties’ dealings with bitcoin.

14. It is necessary to set out some facts. The applicant was formerly in possession of 31 bitcoin, which he alleged he owned but which the respondent was not prepared to concede. Regardless, upon discovery of the bitcoin, the respondent took steps to appropriate the 31 bitcoin by transferring them to a different electronic wallet, over which she exercises exclusive control.

15. The applicant alleges he retains another 13 bitcoin. Despite apparently giving an undertaking that he has fully disclosed the totality of his assets, the respondent speculates the applicant may hold more than the remaining 13 bitcoin he admits.

16. Under the reviewed orders, the respondent is restrained from dealing with the 31 bitcoin she has already appropriated (Order 11), the applicant must give the respondent another 6.5 bitcoin (Order 2), which she is then able to liquidate at will (Order 4), the applicant may liquidate at will the residual 6.5 bitcoin he would then hold (Order 3), and the applicant is then restrained from dealing with any other cryptocurrency (Order 10).

17. The applicant sought to discharge Order 2. He does not want to give the respondent another 6.5 bitcoin when she has already taken 31 bitcoin from him. For context, it was agreed that each bitcoin is worth about US$100,000, so the transfer to her under Order 2 amounts to about US$650,000 in value.

18. The respondent sought to retain Order 2, acknowledging that it is an interim property settlement order made pursuant to the power within s 79 of the Act. She contended it was fair that the 31 bitcoin she has already appropriated be quarantined under her temporary control and that the parties share equally in the remaining 13 bitcoin possessed by the applicant.

19. This is a review hearing, so it is an original hearing of the parties’ interlocutory applications (r 14.07(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)). The remaining 13 bitcoin is the applicant’s property. He can do with it as he pleases until a contrary order is made. In effect, the respondent is the applicant for Order 2. She wants an interim property settlement order made transferring to her the legal title in 6.5 bitcoin owned by the applicant, so she bears the burden of proving entitlement to the order in accordance with well-established principles.

20. No property adjustment order under Pt VIIIAB of the Act – either final or interim – should be made unless the Court is satisfied it is just and equitable to make the order and, in that enquiry, it must not be assumed the parties’ rights to or interests in property are or should be different from those that exist (Stanford v Stanford (2012) 247 CLR 108 at [22], [35], [38] and [50]). In Stanford the High Court was dealing with an application between spouses for property settlement pursuant to Pt VIII of the Act, however the principles apply equally to applications between de facto partners pursuant to Pt VIIIAB of the Act.

21. There can only be one exercise of power under Pt VIIIAB to adjust the parties’ property interests (Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [40]–[48]; Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [105]–[113]). The power may be exercised partially or on an interim basis until it is entirely spent or exhausted (Gabel v Yardley (2008) FLC 93-386 at [66]–[67]; Strahan at [114]), though it is preferential for there to be only a singular exercise of the power (Strahan at [115]–[118] and [225]–[228]).

22. There must be a principled reason for fragmenting the property adjustment process (Stanford v Stanford at [41] and [43]), which reason would ordinarily be the need to cause one party to furnish the other with sufficient funds for legal costs to enable the financial proceedings to be contested on a level litigious field (Strahan at [224]).

23. The respondent’s refrain that it would be “fair” for her to have one-half of the husband’s remaining bitcoin fails to positively engage such established principles. She holds the bulk of the known assets which comprise the parties’ property interests. She has no greater need than the applicant for funds to meet her legal expenses in this litigation. Order 2 will be discharged. The grounds for its existence are not made out.

24. Orders 4 and 11 will be discharged and replaced with a fresh injunction restraining the respondent from liquidating any more than 6.5 bitcoin of the 31 bitcoin already in her possession. In that way, the wife will be able to liquidate 6.5 bitcoin, but it will be bitcoin taken from the 31 bitcoin she already possesses and not extra bitcoin forfeited to her by the applicant.

    Applicant’s bitcoin

25. Order 3 permits the husband to deal with 6.5 bitcoin of the 13 bitcoin which he uncontroversially retains and operates in tandem with Order 10, which restrains him from dealing with any more than 6.5 bitcoin.

26. The orders are inelegant. An order which “permits” something to be done is liable to be incompetent in that form because it neither compels nor restrains the subject party to do or refrain from doing anything.

27. Orders 3 and 10 will be discharged and replaced with a single injunction which restrains the applicant from dealing with any more than 6.5 of the bitcoin remaining in his possession. That is a “proper” injunction to make under s 114(2A)(c) of the Act, given the identical restraint upon the respondent. He conceded such an injunction would be proper.

    Withdrawal of caveats

28. The three real properties over which the caveats are registered by B Finance are owned by the respondent. The applicant has no legal proprietary interest in any of the properties and, although he vaguely asserts some form of equitable interest in one or more of the properties, he does not seek any declaratory relief to that effect – either in these proceedings or in any allied proceedings before a State court.

29. Absent any demonstrated proprietary interest of the applicant in the properties, B Finance could have no proprietary interest. It must follow that, in so far as the caveats are only intended to secure the repayment of the litigation funding debt due by the applicant to B Finance, they are registered improperly over property owned exclusively by the respondent. The caveats should be removed, which result the respondent can ensure by serving lapsing notices upon B Finance under the Real Property Act 1900 (NSW).

30. However, Order 7 is, in the first instance, a mandatory injunction binding the applicant because it purports to compel him to cause B Finance to remove the caveats from title. But the applicant has no control over B Finance and cannot force it to do anything. The injunction is incompetent in that respect and should be discharged. The Court has no authority to compel a party to do something which the party could not do or compel others to do, unless the third party is an alter ego of the party (Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337 at 343–344 and 354–356). B Finance is not the applicant’s alter ego.

31. In the second instance, Order 7 is a restrictive injunction because it prospectively restrains the applicant from registering any caveat over any other “real property comprising the property pool”. This supplementary injunction should be discharged for lack of prescriptive form, depriving it of enforceability, because whether a particular parcel of real property comprises part of the “property pool” in dispute between the parties is a matter of subjective interpretation. If the applicant does later improperly register a caveat over a property owned exclusively by the respondent, with which she is dissatisfied, she can serve a lapsing notice on him or seek a mandatory injunction compelling him to remove it by an application filed in this jurisdiction. The perceived problem is not solved by a “catch-all” embargo when there is little or no evidence to suggest the applicant will needlessly register a caveat over the respondent’s property.

32. Order 7 is discharged.

    Injunctions on respondent’s dealings with real property

33. Order 8 restrains the respondent from dealing with the Suburb D and Suburb C properties without giving the applicant 28 days’ notice of her intention to do so.

34. The respondent argued the order is complementary with Orders 6(b) and 7(a) previously made on 1 February 2024 in respect of those two properties, whereas the applicant contended Order 8 is repugnant to those former orders. In fact, Order 8 is entirely unnecessary because Orders 6(a) and 7(b) made on 1 February 2024 provide adequate protection to the parties. Those orders were made in February 2024 with the parties’ consent.

35. Under the orders made in February 2024, the respondent is restrained from dealing with the Suburb D property without the applicant’s consent and she is restrained from dealing with the Suburb C property without giving the applicant 28 days’ notice of her intention to do so. The injunction in respect of the Suburb D property is therefore more rigorous than the injunction in respect of the Suburb C property.

36. The applicant wanted to discharge Order 8, together with the orders formerly made in February 2024, and replace them with another injunction which unconditionally restrains the respondent’s dealings with both properties. He therefore wants heightened protection in respect of the two properties exceeding the combined force of the orders made in February 2024 and Order 8.

37. As the moving party for relief in those terms, the applicant bears the burden of showing why the respondent should be restrained from dealing with her property as she pleases, pursuant to well-known principles (Tsiang & Wu (2019) FLC 93-911 at [20]–[27]). He could not persuasively explain why the injunctions made consensually in February 2024 are not now sufficient to protect his interests. Order 8 will be discharged, but that will mean Orders 6(b) and 7(a) made in February 2024 will remain operable and enforceable.

    Disposition

38. Orders 2, 3, 4, 7, 8, 10 and 11 made by the registrar are discharged.

39. They are replaced by injunctions in the form discussed, precluding the parties from individually dealing with any more than 6.5 bitcoin in their respective possession.

I certify that the preceding thirty-nine (39) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Austin.

Associate:

Dated:       10 February 2025