Starkey and Starkey

[2007] FamCA 1416

FAMILY COURT OF AUSTRALIA

STARKEY & STARKEY [2007] FamCA 1416

FAMILY LAW – PROPERTY – Case Guardians – Injunctive Relief

Family Law Act 1975 (Cth)

APPLICANT: Mr Starkey

CASE GUARDIANS FOR APPLICANT: Mr C & Mr T

RESPONDENT: Ms Starkey

FILE NUMBER: LEC 245 of 2007

DATE DELIVERED: 29 November 2007

PLACE DELIVERED: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 29 November 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT

(BY HIS CASE GUARDIANS):

Mr Cameron

SOLICITORS FOR THE APPLICANT: S & P Lawyers

SOLICITORS FOR THE RESPONDENT: No appearance by or on behalf of the Respondent

Orders

1. The Application in a Case filed by the Case Guardians on 27 November 2007 (“the Application”) be heard today without notice to the wife pursuant to Rule 5.12 of the Family Law Rules 2004.

2. The Application be adjourned for further hearing to the Judicial Duty List at 10.00am on 7 December 2007 in the Brisbane Registry of the Family Court of Australia.

3. Pursuant to Family Law Rule r6.10(2) the managers of the husband’s affairs, Mr C and Mr T, be taken as appointed as the Case Guardians for the husband.

4. Until 4.00pm on 7 December 2007 or earlier order:

   a.The husband (by his Case Guardians) and wife, shall by this Orders, be taken to authorise Westpac Banking Corporation to recognise, and act solely upon, the joint signatures of the husband’s Case guardians, Mr C and Mr T in respect of all cheques, authorities, withdrawal forms, deposit slips and other documents drawn upon or signed in operation upon the accounts styled Mr & Ms Starkey (Account number: …) conducted at its branch at 31 Molesworth Street, Lismore until further order.

   b.Within 48 hours of the date of service of this Order, the wife hand to the solicitors for the husband (by his Case Guardians) all correspondence, banking records, contracts and all other business documents and records of, or in any way relating to the contact of, the business.

   c.The husband (by his Case Guardians) pay or cause to be paid all outgoings, invoices, accounts and debts properly due and payable by the business as and when they fall due, including but not limited to:

   i.Employee’s wages;

   ii.The cost of vehicle maintenance;

   iii.The cost of complying with all necessary and reasonable contractual, statutory and governmental obligations howsoever arising not exceeding the sum of $5,000.00 in any one case;

   iv.Upon giving to the wife 21 days notice in writing of the intentions so to do any such expenses exceeding the sum of $5,000.00.

   d.The husband (by his Case guardians) shall ensure that in the running of the business they comply with all statutory and legal requirements and that they shall keep all proper books and accounts and such other records (including Business Activity Statements) as may be necessary or required. They shall make available to the wife at her expense such books, accounts, records and documents as she may reasonably require.

   e.The wife is hereby restrained from doing, causing or permitting to be done either by herself, her servants or agents any of the following acts or things:

   i.Taking any step in the management or attempted management of the business;

   ii.Holding out to any person or company that she has authority to manage or to do any act in the management of the business;

   iii.Communicate or give any instruction to the branch conducted at 31 Molesworth Street, Lismore by Westpac Banking Group Limited or any other finance institution in its or their capacity as the bankers or financiers of the business;

   iv.Removing from the place of business any document etc belonging to or pertaining to the business;

   v.Attending at the J Hostel at H.

   IT IS FURTHER ORDERED THAT

5. A copy of these orders, and all relevant material relied upon by the Applicants today, be served on the Respondent within 48 hours. Leave is granted if necessary, to serve in the first instance, a faxed sealed copy of these Order.

6. The issue of costs arising from the Application be reserved.

7. Either party shall have liberty to apply on 48 hours notice.

IT IS NOTED that publication of this judgment under the pseudonym Starkey & Starkey is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: LEC 245 of 2007

MR STARKEY  

Applicant

And

MR C & MR T

Case Guardians for the Applicant

And

MS STARKEY  

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. This is an application by Mr C and Mr T.  They seek orders on behalf of the husband for, broadly described, mandatory injunctive relief with respect to the management of the husband and wife's company run in partnership. 

2. The partnership is known as "[Mr & Ms Starkey]" and it trades as "[Starkey Partnership]". The business is based in Lismore and has contracts with Government departments to provide specific services in and around the Lismore/Northern New South Wales area.

3. Before determining the substantive application, it is necessary for me to determine three preliminary matters: the first is whether Mr T and Mr C have standing to bring this application. 

4. The evidence reveals that Mr T and Mr C were appointed as Managers of the affairs of the husband by order of the New South Wales Guardianship Tribunal on 23 October 2007. Rule 6.10(2) of the Family Law Rules 2004 provides that:

   A person who is a manager of the affairs of a party is taken to be appointed as the case guardian of the party if the person has filed:

   (a)     a notice of address for service; and

   (b)     an affidavit which:

   (i)provides evidence that the person has been appointed manager of the affairs of the party; and

   (ii) states that the person consents to being appointed as the case guardian of the party.

5. "Manager of the affairs of a party" is not defined.  It seems to me to clearly encompass the order made by the New South Wales Tribunal on 23 October 2007.  The evidence reveals, in terms of the rule, that Mr T and Mr C are "Managers of the affairs" of the husband.  There is evidence before me that they have filed a notice of address for service.  I have affidavit material before me which deposes to their appointment, and further that each of them consents to being appointed as a case guardian for the husband.

6. Accordingly, I am satisfied that the provisions of r. 6.10(2) are satisfied and Mr T and Mr C, as case guardians for the husband, have standing to bring the instant application.

7. The second preliminary matter that needs to be determined is whether there are, in fact, proceedings on foot. I am told that the issue joined between the parties, that is to say the husband and the wife, is an application for settlement of property pursuant to s 79 of the Family Law Act 1975 (“The Act”). Clearly the case guardian of the husband would have standing to be heard in and about the conduct of those proceedings.

8. The issue which arises, however, is that a Notice of Discontinuance in those proceedings was filed by the wife, and purportedly by the husband, on 3 October 2007.  Of course, the filing of mutual Notices of Discontinuance would bring an end to the proceedings.

9. However, in this case the position is not that simple.  The New South Wales Guardianship Tribunal acted in appointing Mr C and Mr T as managers for the affairs of the husband on, among other things, a report of a neuropsychologist.  That report is in evidence before me, exhibited to the affidavit of Mr C filed 22 August 2007.  There is no question, on the basis of that report, that the husband suffered from a disability at that time and the findings and ultimate order of the New South Wales Guardianship Tribunal are clearly to the effect that the husband suffered from a disability at, relevantly, 3 October 2007. 

10. Accordingly, there is a real issue about whether the husband had capacity in his own right to file a Notice of Discontinuance.  Certainly, Mr Cameron, who appears on behalf of Mr C and Mr T, contends that, as far as the case guardians of the husband are concerned, the husband did not have the capacity to file that Notice of Discontinuance at that time and that, accordingly, proceedings continue to be on foot.

11. Mr Cameron submits further that, in any event, the Notice of Discontinuance has not been acted upon in the sense that the case guardians for the husband continue to proceed on the assumption and on the basis that those property proceedings pursuant to s 79 remain on foot.

12. I am satisfied, on a prima facie basis, that there is a real issue about the capacity of the husband to file a Notice of Discontinuance on 3 October 2007 and that, prima facie, the proceedings between the parties remain on foot.  I make it clear this in an interim determination of that issue.

13. The third preliminary matter that I need to determine with respect to this application is whether it should be heard and determined on an ex parte basis.  As the record reveals, I indicated to Mr Cameron during the course of argument that I had some real concerns about proceeding on that basis. 

14. Ultimately I am persuaded that I should. In making that determination, I have had regard to the principles applicable and, in particular, to the provisions of r. 5.12 of the Family Law Rules. In terms of the matters set out there as being required to be received by the Court either in affidavit or oral form, it seems to me that the following matters, referable to the sub-paragraphs of the rule, have relevance to this particular case.

15. First, I am required to take into account the particulars of any orders currently in force between the parties.  Whilst strictly not an order between the parties, I do take notice of the fact that an order has been made by the New South Wales Guardianship Tribunal with respect to the husband's incapacity.  I also take note of the fact that, in the context of those proceedings, the husband's adult son, known as Mr D Starkey, brought an application to be appointed manager of his father's affairs and that the Tribunal rejected that application and, in lieu, appointed Mr C and Mr T.

16. Secondly, although there has not been, as I understand the evidence, any allegation of a breach of a previous order, nevertheless, in the context of the instant application, I take notice of the fact that the Notice of Discontinuance was filed purportedly by the husband at a time when, on the prima facie evidence before me, he was suffering from a disability.  This is a matter of great concern to me in the context of the other aspects of urgency to the matter, to which I will refer in a moment. 

17. Thirdly, having listened to the submissions of Mr Cameron, I think it is unlikely, as a result of the orders proposed to be made by me, that there is any hardship, danger or prejudice to the wife, to Mr D Starkey, or indeed to any third party if I do make the orders.  However, it seems to me that, if I do not make the orders, there is potential harm to employees of the business, to the business itself, and to third parties, in particular the children who use the community service, which is at the centre, as I understand it, of the business's income and day to day activities.

18. Fourthly, I take account of the capacity of the applicants to give an undertaking as to damages.  I have sought, and received, an undertaking as to damages on behalf of Mr C and Mr T. The rule also requires me to take account of the nature of the damage or harm that may result if the order is not made.  I have already referred to that. 

19. Fifth, the evidence reveals that some wages are unpaid and will remain unpaid in the absence of an order.  I am told from the Bar table that there is a real prospect that employees who work for the company, who have not been paid, will stop work.  The consequences of that for a local business are obvious.

20. Sixth, Mr Cameron mentions a matter to which I have already referred, namely, that the core component of the business is the provision of a community service to children, therefore, a number of children will be left without this service. 

21. Seventh, that core business, in turn, results from contracts held with Government authorities or agencies who, I am told by Mr Cameron, require the highest standards in and about the running of the businesses with whom they contract, and that in circumstances where there was concern about the way in which the business was run and, in particular, whether that business was not paying its employees and the like, then those contracts would be in jeopardy and therefore provide potential serious consequences for the business.

22. Eighth, I am told that further potential harm emanates from the fact that some suppliers have not been paid.  Again, the consequences of that for a business are obvious.

23. Ninth, I am required to take into account the circumstances that indicate why the order must be made urgently.  I am told that all of the matters that I have just referred to put the business in a very precarious situation and threaten its very survival and they are all matters that need to be attended to immediately, including, in particular, the real prospect that the employees will stop work.

24. Finally, the sub-rule indicates I should take into account the last known address, or address for service, of the other party. I expressly asked Mr Cameron about this issue in the context of convincing me that the matter should be heard ex parte.  There are a number of disturbing things about that.  First, to the best of the knowledge of the applicants, the respondent wife resides at an address with her son. An attempt was made to deliver correspondence and documents through a Mr K, who is a deponent.  Mr K is a long term employee of the business.

25. He has worked for the business for about 30 years or so and is, as I understand it, accordingly, very well known to its proprietors, the husband and wife.

26. Having delivered some documents in an envelope marked for the urgent attention of the wife, the envelope was received back by Mr K and it had written on it a number of things.  In broad terms, they might be described as exhibiting an unco-operative attitude to Mr C and Mr T generally and, in particular, their day to day running of the business.  This is a matter which I consider is particularly troubling.  I am told by Mr Cameron that this address is the best means that his clients have of serving material. 

27. The applicants have a concern that, given the sort of matters such as those just raised, if material was filed, that there could be, putting it in its most neutral language, some significant delays in establishing service and having the matter heard and determined in a timely way consequent upon that service and, in the meantime, the urgent requirements for the business that I have just referred to would remain outstanding.  I am told by Mr Cameron that his clients suggest that, in those circumstances, the business would be significantly in jeopardy.

28. There is also evidence before me that there have been, again seeking to use neutral language, issues involving the wife and, I gather, some perhaps involving the son, at the hostel where the husband is now accommodated.  Again, on the surface of it at least, they have a theme about them of a general lack of co-operation with Mr C and Mr T as ordered managers for the husband's affairs.  In those circumstances, Mr T and Mr C, I am told, have, again, real concerns about the delay inherent in the process if orders are not made.

29. I think this is a relatively finely balanced case, in terms of whether the application should be heard ex parte. I think there are strong arguments in favour of urgency.  I think the arguments in favour of the matter being heard ex parte and urgently are less persuasive.  However, on balance, it seems to me that there is a very significant potential for harm if service was effected and matters, the subject of the application, could not be dealt with on a very urgent basis and, as it were, the business be put back on an even keel. 

30. In that respect, I am told that it is difficult at the moment for Mr T and Mr C to know precisely what the property of the parties, or either of them, in the s 79 sense might be. But it seems relatively clear that the business would be a significant component of any property "pool".

31. In all of those circumstances then I am persuaded that I should make orders on an ex parte basis. 

32. In terms of the orders themselves, they might be described broadly, as I said, as orders for a series of mandatory injunctions designed to run the business and to, in the first instance, meet its most immediate debts so as to allow its core business to continue.  By reason of the concerns that I have expressed about the application being heard ex parte and, of course, the principle that ex parte relief should be sparingly granted.

I certify that the preceding thirty-two` (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy

Associate

Date:  6 December 2007