Thommy & C Consulting Pty Ltd

Case •

[2009] FamCA 945

•

2 October 2009

FAMILY COURT OF AUSTRALIA

THOMMY & C CONSULTING PTY LTD AND ORS [2009] FamCA 945
FAMILY LAW – PROPERTY – Interim – Injunction against eviction
APPLICANT: Ms Thommy
1st RESPONDENT: C Consulting Pty Limited
2nd RESPONDENT: Mr Petrucco
3rd RESPONDENT: Ms Petrucco
4th RESPONDENT: Ms Montesi
FILE NUMBER: SYF 3505 of 2006
DATE DELIVERED: 2 October 2009
PLACE DELIVERED: Sydney
PLACE HEARD: Sydney
JUDGMENT OF: Cohen J
HEARING DATE: 27 July 2009

REPRESENTATION:

COUNSEL FOR THE APPLICANT: Mr Simpson SC
COUNSEL FOR THE 1ST RESPONDENT:: Mr Johnston
COUNSEL FOR THE 2ND RESPONDENT: Mr Cook
COUNSEL FOR THE 4TH RESPONDENT: Mr Cameron

Orders

  1. That on the applicant 5th Respondent filing an undertaking to the Court in the usual form to pay to the 1st Respondent, C Consulting Pty Limited, such damages as it suffers as a consequence of this order restraining it from seeking possession of or evicting the 5th respondent from the real property at and known as No 6 T Street, NSW, the 2nd Respondent is hereby restrained from seeking possession of or evicting the 5th respondent from the said real property

  2. Costs are reserved.  

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3505 of 2006

MS THOMMY

Applicant

And

C CONSULTING PTY LTD AND ORS

Respondent

REASONS FOR JUDGMENT

  1. On 18 March 2009 the 5th respondent filed an Application in a Case.  This was amended by filing, on the day of the hearing, an Amended Application in a Case.  The orders sought in that application are:

    1.Pending further order, Order that [C Consulting] Pty Limited CAN […] (ABN […]) (“the company”) and whose registered office is […], its servants and agents be and is restrained by injunction from evicting the Applicant [Ms Thommy] (the 5th Respondent in the substantive proceedings) and her family from the property situate at and known as [No 6, T Street].

    2.Order, pending further order, the Applicant [Ms Thommy], be and is granted the right to occupy to the exclusion of the Company the said property.

    3.Order that  to the extent it may be necessary the Second Defendant, [Mr Petrucco], do all acts and things necessary including the calling of any meeting and exercising any voting power to cause the first respondent [C Consulting] Pty Ltd to be restrained from the acts subject to Order 1 above.

    4.The second defendant, [Mr Petrucco], forthwith allot to the Applicant, [Ms Thommy], an aliquot portion of the 50,000 shares held in trust by him for the said [Ms Thommy] and the wife, [Ms Montesi], and thereafter do all acts and things necessary to enter her name in the share register of the said company.

    5.Order that the Applicant’s Costs of and incidental to this application be paid on an indemnity basis.

    6.Leave to serve short notice.

    7.Order that the Second respondent, [Mr Petrucco], give all requisite directions to afford to the Applicant, [Ms Thommy]:

    1.At a reasonable and proper cost to her, copies of that documentation sought under cover of the letter of James Richardson Family Richardson Family Lawyer & Notary Public to KP Lawyers dated 15 July 2009 the documentation noted therein with 7 days, and

    2.And her legal representatives, production an inspection of the document set forth under cover of the letters of James Richardson Family Lawyer & Notary Public to KP Lawyers dated 20 and 21 July 2009. 

  2. The issue to be dealt with at this stage is over the grant of an interim order preventing the 1st respondent to the Application, C Consulting Pty Limited (“C Consulting”), from evicting or taking steps to evict the 5th respondent from her home which is the property at 6 T Street.  C Consulting owns this property.

  3. The 5th respondent lives in it with her husband and two children aged 6 and 4 years.  She has lived in it rent free since 2001.  Her sister, the wife in the principal proceedings, lives at 8 T Street.  It is owned by the 5th respondent’s and wife’s parents.  Number 10 T Street is occupied by the wife’s parents. 

  4. The 5th respondent seeks to be entitled to continue living in No 6 until the issues of her interest in and right to occupy it are finally decided.  The company says she can remain in occupation if she pays a bond and rent at commercially determined rates.  It does not suggest it wishes to sell this property, so, realistically, the only direct damage it could suffer if the order the 5th respondent seeks at this time is made yet at final hearing the 5th respondent is unsuccessful is the after tax value of the rent it would otherwise have received and the interest on it.  It is not alleged that the failure to receive rent will lead to indirect loss.

  5. The 5th respondent has offered to make an undertaking as to damages as a condition for being granted the orders she seeks.  She has assets which are much more than sufficient to meet such an undertaking.

  6. There is no doubt that the issue of the 5th respondent’s right to live in 6 T Street is associated with the proceedings between the husband and wife.  One of the issues between the husband and wife is the extent and value of the wife’s interest in C Consulting. As this company owns 6 T Street, the value of those premises is relevant. The extent of the 5th respondent’s interest in them will affect the value of the assets available to be distributed between the husband and wife.

  7. The proceedings between C Consulting and the 5th respondent are of a commercial nature rather than in the nature of more usual proceedings heard by the Family Court of Australia despite the fact that the 5th respondent, the wife, their father and their mother are said to be the shareholders in C Consulting. The jurisdiction of the Family Court to decide the matter now before me is in my view, primarily the consequence of s 33 of the Family Law Act 1975 (Cth) (“the Act”). That section gives the Court jurisdiction in matters associated with proceedings in which the Court clearly has jurisdiction.

  8. The property dispute between the husband and wife is clearly within the Court’s jurisdiction.  As I have said, the issue of the 5th respondent’s interest or rights over 6 T Street is necessarily associated with the value of the wife’s property.  As there is no reason to believe the Court does not have jurisdiction to determine the issues between the 5th respondent and C Consulting involving 6 T Street, I reject the contention of counsel for C Consulting that s 1337C of the Corporations Act is the sole source of this Court’s jurisdiction in this dispute. I therefore reject the submission that, accordingly, s 1324 of that Act limits the bases upon which it may grant an injunction.  In fact, the Family Court is not the only court which can grant injunctions against a corporation without reliance on a power and jurisdiction under the Corporations Act.  In a commercial dispute the civil courts of a State can do so by reliance on common law. 

  9. I find that pursuant to s 114(3) of the Act the Court has power to grant an interim injunction like that which the 5th respondent seeks because that section grants it the power to “grant an injunction by interlocutory order or otherwise … in any case in which it appears to the Court to be just or convenient to do so” where the Court is exercising jurisdiction under the Act in other than a “matrimonial cause” as defined in s 4(1) of the Act, except one included in (e) of the definition of matrimonial cause.

  10. The ordinary principles apply to the grant of an injunction in these proceedings. Firstly, the purpose of the injunction must be appropriate.  Here it is claimed to be so that the status quo can be maintained pending final determination of the 5th respondent’s rights over and entitlements to 6 T Street.  This is an appropriate purpose. Next, the applicant must establish that she has a reasonably arguable case to establish the rights and entitlements she wishes to assert.  This does not mean she must prove to me, on balance, that she is more likely than not to be ultimately successful or that she only need demonstrate a prima facie case.  I shall deal with the facts she alleges in due course, but she must establish, at this stage, assuming the facts she alleges, that she has a right and entitlement at law to the financial relief she seeks. Unless it is then shown, prima facie, by the opponent to the grant of the injunction that despite the applicant’s prima facie evidence there is some reason why the question to be tried is not substantial or serious, the interim injunction should be granted. Whether there is a serious question to be tried will be determined by a review of the facts.

  11. The Court must consider, in the exercise of its discretion whether to grant an interlocutory injunction or not, where the balance of convenience lies.  This issue is limited to the effect of granting or refusal of the injunction on the parties to it, not on others who may or may not be involved in other aspects of the whole proceedings which are before the Court. 

  12. The 5th respondent argues that a right and/or interest which would allow her to live in 6 T Street indefinitely has arisen by virtue of an estoppel created by representations made by her father upon which she acted to her detriment. Such an estoppel would give her a good defence against proceedings for possession if it is established.

  13. The 5th respondent’s claim over the home where she now lives is broadly based on much of the history or her life in the context of her family and on promises and assumptions which were made by the 2nd respondent, her father, and her reactions to these. The facts which are asserted and upon which the 5th respondent relies, so far as they are significant to the issue now before the Court, need to be stated more than briefly.

  14. C Consulting was established in 1979.  It conducted a business in H in the early 1980’s.  It now has an issued share capital of $300,000.00 worth of ordinary shares and 8 A class shares valued at par.  The A class shares are the only ones with voting rights.  These are held by the 2nd respondent.  He and his wife, the 4th respondent, hold the legal title to the ordinary shares but the 5th respondent claims that $75,000.00 worth of these are held on trust for the 5th respondent and $75,000.00 are held in trust for the wife, the 2nd respondent’s other daughter.  The 5th respondent alleges that the 2nd respondent and the wife, her sister, have falsely claimed that the wife and the 5th respondent only beneficially own $25,000.00 shares each and that this stance has been taken by her father and sister in an attempt to undermine the husband’s property claim against the wife.  The 5th respondent says C Consulting is only threatening to dispossess her of her home to either punish her for not supporting the wife in her case against the husband or to pressure her to become more supportive.

  15. The 5th respondent worked at a business operated by her father when she was a school girl before C Consulting was formed.  When C Consulting was formed she commencing doing work for it.  She graduated in a profession after leaving school and obtained employment in that profession.  While in that employment she continued to do general administrative and professional work for C Consulting. 

  16. Not long after the husband married the wife he commencing working for C Consulting.  On that marriage taking place the husband and wife moved into the 2nd and 4th respondents’ home at 8 T Street where the 5th respondent also lived.

  17. In 1987 the 5th respondent was made a director and the company secretary of C Consulting.

  18. In 1988 the family moved to 10 T Street which was also owned by the 2nd and 4th respondents.  The house at 8 T Street was then demolished and a new home was erected on the site. In 1992, on completion of this home, the husband and wife moved into it.  At about this time the 2nd respondent said to the 5th respondent, “the company has built your sister a beautiful house.  It’s only fair that you should have a house also. So this will be your house” referring to 10 T Street. It had been registered in the names of the 2nd and 4th respondents. After this, whenever the 2nd respondent spoke of this property to or in front of the 5th respondent, he referred to it as “your house”.  The 5th respondent assumed that meant it was held on trust for her and, in reality, belonged to her.

  19. In the second half of 1991 it is alleged by the 5th respondent that the 2nd respondent struck her during a number of incidents and, as a result, the 5th respondent moved into 8 T Street, the husband and wife’s home for a short time.  In mid August 1992 she rented accommodation in Sydney and moved there.  She continued to undertake administrative, secretarial and professional work for C Consulting.

  20. In 1993 C Consulting bought a house at 6 T Street.  It was old, with four bedrooms.  It was let for a few years.  At about the same time as it was purchased the 2nd respondent asked the 5th respondent to give up her practice as a professional and come to work full time for C Consulting.   In the years prior to this as well as afterwards, on various occasions, the 2nd respondent said things to the 5th respondent which resulted in her, in 1996, ceasing her professional practice and commencing full time work for C Consulting.  The things he said, being the representations the 5th respondent relied on, amounted to:

    a)That she owed a one-fourth interest in C Consulting with the wife, the 2nd respondent and the 4th respondent and the second respondent held 75,000 of the 300,000 shares in C Consulting on trust for her.

    b)That C Consulting would provide a house for her, then that 10 T Street would be that house.

    c)That C Consulting would make other very significant financial provision for her.  The specific details of these are not relevant at this stage.

  21. The 5th respondent claims that what happened between 1987 and 16 July 2008 was quite consistent with these representations and, as the situation evolved, it appeared to her to be a partial performance of them.

  22. In February 2000 the 5th respondent married and eventually had two children.  At first she lived in central Sydney with her husband, but in 2001 she spoke with the 2nd respondent about moving to 6 T Street.  The 2nd respondent originally told her he did not regard that house as good enough for her, but when the 5th respondent explained to him how convenient it would be for the 4th respondent and the wife for her to live so close to them, the 2nd respondent offered to upgrade it, including some improvements that the 5th respondent felt were needed.  The improvements were undertaken and the 5th respondent and her husband moved into 6 T Street.  She and her family have lived in this home since then.  She has never paid rent.  Until recently, no mention of rent was ever made.  Her sister lives next door and had not paid rent up to the time the 5th respondent moved into 6 T Street.  It is not suggested by the 2nd respondent that the wife has ever paid rent.

  23. According to the 5th respondent, in late 2002  during a conversation with the 2nd respondent., the second respondent said:

    This house is not good enough for you … Do you want to come and live with your mother and me in your house?

    or words of similar effect.  The house which he said was not good enough is 6 T Street.  The house he referred to as “your house” is 10 T Street.

  24. The 5th respondent’s response and the 2nd respondent’s reply to it are very significant in view of the claim which the 5th respondent makes to remain in 6 T Street.  The 5th respondent declined to move to 10 T Street.  She did not wish to live with her parents.  The 2nd respondent replied:

    What about we build you a new house?  We will rent another house for you while your new house is being built.  If council will let us build the design we like then we will go ahead and build the house that [the previous owner] had had approved.

    The 2nd respondent showed the 5th respondent the plans which had been approved and suggested that the approval was still current because there had been substantial commencement.  A little later the 2nd respondent showed the 5th respondent plans he had for building a new house at 6 T Street and said “these are the plans of the house I am going to build for you here”.  He also told her he would apply to build a pool crossing the rear of both 6 and 8 T Street.

  25. In effect, what is claimed to have been said by the 2nd respondent is a recognition that the situation with the family had evolved so that the promises he had made amounted to a representation that it would be 6 T Street rather than 10 T Street which would be given to the 5th respondent for her home.

  26. In mid 2004 the family was involved in an altercation over the fact that the 2nd respondent had a girlfriend.  The 5th respondent did not approve. On 6 September 2004, the 5th respondent received a Notice of General Meeting of C Consulting. The agenda was to dismiss both the 5th respondent and the wife as its directors, leaving the 2nd respondent as sole director. At this time the wife was separated from the husband. They reconciled but finally separated in September 2005.  Property proceedings between them were instituted in 2006.

  27. On 8 July 2008, according to the 5th respondent, the 2nd respondent said to her:

    We need to make sure that at worst your brother-in-law will only be able to show that your sister has 25,000 shares in the company.

    When the 5th respondent pointed out that his idea of moral justice was inconsistent with her obligation to uphold the law, the 2nd respondent is claimed to have attempted to get the 5th respondent to swear an affidavit to be used in support of the wife’s case to the effect that the 2nd respondent’s two daughters, the wife and the 5th respondent, owned 50,000 shares in C Consulting between them.  The 5th respondent refused.

  28. She was due to receive her wages on 17 July 2008.   These were not paid.  She has not been paid since and not received any of the other benefits apart from actual possession of the home at 6 T Street which had habitually been provided to her since she gave up her job as a professional.

  29. On 24 February 2009, for the first time, the 5th respondent was requested to pay rent of $800.00 per week and a bond of four weeks rent, with an additional two weeks rent in advance.  The letter written by the solicitor acting for C Consulting, the 2nd respondent and the wife, admits that the 5th respondent and her husband have occupied the property as licensees although nothing is said of the terms of the licence.  It is often said that licences can be terminated at will and do not give exclusive possession.  These are not by any means universal principles.

  30. Here, on the prima facie evidence, there could well be a licence to exclusively occupy 6 T Street until its title is transferred to the 5th respondent (see Errington v Errington [1952] 1 KB 290; Facchini v Bryson [1952] 1 TLR 1386 and Radaich v Smith (1959) 101 CLR 209). These cases are authority that exceptional circumstances such as family arrangements can create a licence which is not terminable at will. Such a licence would warrant an injunction until the matter is decided if the balance of convenience favours the 5th respondent.  There seems little doubt that there is a serious question to be tried on the evidence by the 5th respondent.  This is even more so because the 5th respondent also relies on higher rights; that she holds the property beneficially and that C Consulting is estopped from saying otherwise.

  31. The letter of 24 February 2009 was sent after the 5th respondent served her points of claim on the 2nd respondent and on C Consulting.  This was pointed out in a letter from the 5th respondent’s solicitor to the solicitor acting for the 2nd respondent, C Consulting and the wife.

  1. In a letter of 2 March 2009 the 2nd respondent’s solicitor asked for confirmation that no steps would be taken to attempt to end the 2nd respondent’s occupation before final determination of the issues in the proceedings.  No such confirmation was given, resulting in the 5th respondent filing her Application in a Case.  

  2. In her points of claim, the 5th respondent alleges the following actions in reliance on the representations of the 2nd respondent and C Consulting which were to her detriment:

    a)she gave up her professional career and refused an offer of a  partnership;

    b)she did not make the financial provisions for her future which she would otherwise have made;

    c)she undertook a mortgage debt; and,

    d)she enrolled the children in private schools.

    Of course, as is obvious, she also failed to purchase a home for herself.

  3. There is no doubt a serious question to be tried based upon the 5th respondent’s claim and the relevant denials by the 2nd respondent on behalf of C Consulting and on his own behalf.  If the 5th respondent is believed she is highly likely to succeed in her claim.  If not, she is even more likely to be declared to have a licence to occupy the premises exclusively for some time.

  4. The issue of the balance of convenience is quite straightforward.  The 5th respondent and her family will have to move out of their home at 6 T Street, obtain a new home and, if they succeed, will be entitled to move back to 6 T Street and move out of their intervening accommodation. For many years her mother, the 4th respondent, has been disabled due to mental illness or psychological disturbance.  She helps her mother virtually daily and has done so for many years.  She is immediately available if her mother needs her. She does not have to travel to care for her. If she moves out, she will have to travel for that purpose. 

  5. Of course, an alternative would be to pay the rent and bond which have been demanded on a “without prejudice” basis and claim return of all moneys paid if she succeeds.  However, the offer to rent made by C Consulting was not made on a “without prejudice” basis and I do not know whether such a term would be acceptable to it.  In any event, as the 5th respondent is not receiving the wages and the other benefits she received until mid 2008 her and her husband’s capacity to pay must be undermined.

  6. By comparison, as the 5th respondent has offered to make a formal undertaking to pay damages caused by the grant of an injunction if she eventually fails and certainly has the capital to meet that undertaking, C Consulting will suffer no inconvenience because there is no evidence to suggest that it has any reason to need to receive rent as it might fall due.

  7. This is a strong case for finding that the balance of convenience favours the 5th respondent so I should and shall grant the injunction she seeks which is to come into effect on her filing an undertaking to the Court as to damages in the usual form.

I certify that the preceding thirty eight (38) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen.

Associate: 

Date:  2 October 2009

Key Legal Topics

Areas of Law

  • Civil Procedure

  • Property Law

Legal Concepts

  • Injunction

  • Costs

  • Damages

  • Reliance

Actions
Download as PDF Download as Word Document
Cases Citing This Decision

0

Cases Cited

1

Statutory Material Cited

0

Radaich v Smith [1959] HCA 45
Radaich v Smith [1959] HCA 45