Vu & Ton (No 2)
[2021] FedCFamC1F 324
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Vu & Ton (No 2) [2021] FedCFamC1F 324
File number(s): MLC 7739 of 2019 Judgment of: JOHNS J Date of judgment: 23 December 2021 Catchwords: FAMILY LAW – PROPERTY – Interim orders – sale of property – distribution of proceeds of sale – question of whether debts claimed exist – where the applicant claims to be indebted to his mother – where the respondent refutes the claimed debt – need for testing of evidence – injunction against further encumbering items of real property. Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Norton & Locke [2013] FamCAFC 202 Division: Division 1 First Instance Number of paragraphs: 63 Date of hearing: 12 October 2021 Place: Melbourne Counsel for the Applicant: Mr North SC Solicitor for the Applicant: Coote Family Lawyers Counsel for the Respondent: Mr Schmidt Solicitor for the Respondent: Lander & Rogers ORDERS
MLC 7739 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR VU
Applicant
AND: MS TON
Respondent
ORDER MADE BY:
JOHNS J
DATE OF ORDER:
23 DECEMBER 2021
THE COURT ORDERS THAT:
BY CONSENT
1.That within fourteen days of the date of these orders, the respondent do all acts and things as may be required and at her expense to:-
(a)Withdraw the caveat registered over the property at 2 J Street, Suburb K (caveat registration number …); and
(b)Withdraw the caveat registered voter the property at 4 J Street, Suburb K (caveat registration number …).
BY THE COURT
2.That until further order the applicant, by himself, his servants or agents be restrained by injunction both personally and in his capacity as a director, shareholder and/or secretary of D Pty Ltd or O Pty Ltd ("the Entities") from dealing with, transferring, alienating, disposing or further encumbering the following properties:-
(a)2 J Street, Suburb K in the State of Victoria;
(b)4 J Street, Suburb K in the State of Victoria; and
(c)G Street, Melbourne in the State of Victoria.
3.That until further order the applicant, by himself, his servants or agents be restrained by injunction both personally and in his capacity as a director shareholder and/or secretary of the Entities from transferring monies held in any bank accounts in his name or in the name of the Entities to accounts held outside of Australia either in his name, controlled by him or in which he has an interest or holds with any third party.
4.That the Application in a Case filed 16 June 2021 and Response to an Application in a Case filed 31 August 2021 be otherwise 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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Vu & Ton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
By Application in a Proceeding filed 16 June 2021, the applicant, Mr Vu, seeks orders in respect of the application of proceeds of sale from the property held by him at B Street, Suburb C ("the Suburb C property").
In his original application, the applicant sought that the sale proceeds be applied firstly, to the payment of $85,000 to the respondent's solicitor on account of her legal costs in the proceedings and secondly, the balance to be paid to a bank account nominated by him for the purposes of reducing debt allegedly owed to the P Bank. In addition, the applicant sought orders that the respondent withdraw caveats lodged by her over properties held by the applicant or entities controlled by him at 2 J Street, Suburb K and 4 J Street, Suburb K. He also sought to register a mortgage in favour of his mother, Ms Q, against the titles to those properties to secure debts allegedly owing to her.
The respondent, Ms Ton, in her Response to Application in a Proceeding filed 31 August 2021 opposed those applications and sought orders as follows:-
·That from the proceeds of sale of the Suburb C property:-
(a)The sum of $85,000 together with interest thereon be paid to her lawyers in compliance with order 4 of the orders made 18 November 2020;
(b)The sum of $43,782 be paid to her lawyers on account of costs in the proceedings;
(c)The balance to be held in a bank account in the name of either the applicant or D Pty Ltd and not to be used by either until further order of the Court.
·Injunctions restraining the applicant personally and in his capacity as a director, shareholder or secretary of D Pty Ltd or O Pty Ltd ("the Entities") from dealing with the properties at:-
(a)2 J Street, Suburb K;
(b)4 J Street, Suburb K;
(c)G Street, Melbourne.
·Injunctions restraining the applicant either personally or in his capacity as a director of the Entities from transferring monies in any bank accounts in his name or the names of the Entities to accounts held outside of Australia.
Those applications were heard on 12 October 2021 and judgment was reserved. However, on 2 December 2021, the matter was listed for further mention as a result of the sale of the Suburb C property and the need for an urgent determination as to the application of the proceeds of sale from the property given settlement was scheduled to occur on 8 December 2021. That day, I made orders by consent that provide as follows:-
1. That the Applicant in his personal capacity and in his capacity as a director of D Pty Ltd do all such acts and things and sign all necessary documents to authorise the conveyancers, R Lawyers to transfer upon the settlement of the sale of B Street, Suburb C less selling costs, the net proceeds of sale, to the lawyers for the Respondent, Lander & Rogers to hold the monies on trust on behalf of both parties pending the judgment arising from the hearing on 12 October 2021, save as provided in paragraph 2.
2. That the lawyers for the Respondent be permitted to distribute from the settlement sums the following:
2.1.The sum of 85,000 in accordance with order 4 of the orders of 18 November 2020;
2.2. A further sum of $115,000 by way of litigation funding for the Respondent;
2.3.A sum of $200,000 to the Applicant and from that sum the solicitors for the Respondent shall pay directly to Coote Family Lawyers the sum of $41,922 upon receipt of the invoice;
2.4.To meet the capital gains tax liability assessed by the ATO on the sale of the Suburb C property upon receipt of a copy of the formal assessment from the ATO;
2.5.To pay the outstanding Body Corporate Fees in relation to the G Street property.
As a result of those orders, it was common ground that the issues with respect to the parties' competing applications for litigation funding, payment of expenses arising from the sale and payment of outstanding body corporate fees on the G Street property had resolved.
Accordingly, the only issues remaining for determination are:-
·Whether the balance of the sale proceeds should be applied to the reduction of alleged debts to the P Bank;
·Whether the applicant ought be permitted to register a mortgage in favour of the applicant's mother over the titles to the J Street properties;
·Whether the applicant should be restrained both personally and in his capacity as a director of the Entities from dealing with the J Street properties and the G Street property and from remitting monies in any bank accounts in his name or the name of those entities to accounts held outside of Australia.
These are my reasons for judgment with respect to the parties' competing applications.
BACKGROUND
The applicant was born in 1975 and is aged 46 years. He describes his occupation as a professional. It is common ground that he is the director of a number of entities.
The respondent was born in 1985 and is aged 36 years. Her occupation is described as home-duties.
The parties commenced cohabitation in 2009. The date of separation is disputed. It is the applicant’s case that the parties separated in August 2011. The respondent deposes that separation occurred in about June 2019.
The parties have one child, Z, who was born in 2009 and is aged 12 years. The child lives with the respondent.
The applicant commenced proceedings in the Federal Circuit Court of Australia (as it then was) in July 2019 seeking parenting orders.
In her Response to Application for Final Orders filed in July 2019 the respondent sought final parenting and property orders. The relief sought by her in her Amended Response to Final Orders filed 24 September 2020 includes that the applicant pay to her periodic spousal maintenance and that the Court declare that she has an equitable interest in the properties at G Street and J Street.
The applicant challenges the Court’s jurisdiction to entertain a property dispute, it being his position that no de facto relationship existed between the parties after August 2011. Accordingly, he seeks that the respondent’s application for final property orders be dismissed. The proceedings were transferred to this Court by Judge Carter on 16 August 2019.
In June 2020 the matter was allocated to my docket. Since that time there have been a number of interlocutory applications filed on behalf of each of the parties. The course of the threshold hearing as to the Court’s jurisdiction to dispose of the property dispute has been further disrupted as a result of the impact of the global pandemic upon the Court’s capacity to hear cases.
It is common ground between the parties that a virtual hearing via Microsoft Teams is impractical given that both parties require the assistance of a Mandarin interpreter and having regard to the nature of the issues in dispute. The matter is listed for a four-day hearing before me in relation to the threshold issue to commence on 7 February 2022.
MATERIAL RELIED UPON
The applicant relied upon the following material:-
·Application in a Proceeding filed 16 June 2021;
·Affidavit of Mr Vu (including annexures) filed 15 June 2021;
·Affidavit of Mr Vu filed 8 September 2021;
·Outline of Case filed 9 September 2021;
·Amended Application in a Proceeding filed 11 October 2021;
·Affidavit of Mr Vu filed 11 October 2021.
The respondent relied upon the following material:-
·Response to an Application in a Proceeding filed 31 August 2021;
·Affidavit of Ms Ton filed 31 August 2021;
·Outline of Case filed 7 September 2021;
·Affidavit of Ms Ton filed 8 October 2021;
·Outline of Case filed 8 October 2021.
ORDERS SOUGHT
As a result of discussions between Senior Counsel and Counsel representing the parties, each modified their respective positions in relation to the orders sought. For example, there was agreement between the parties in respect of many aspects of the terms and conditions for the sale of the Suburb C property. It was also agreed that the respondent would withdraw the caveats lodged by her over the title to the J Street properties.
The applicant pressed the following parts of his application:-
…
(3)Paragraphs 1 and 2 of the Orders made on 18 November 2020 be discharged and upon the settlement of the sale of the Suburb C property, the proceeds be disburse as follows:-
(a)First, to pay the sale and commissions costs;
(b)Secondly, to pay any council and water rates and other charges outstanding in respect of the real property, if any;
(c)Thirdly, to pay the Respondent the sum of $85,000 in compliance with Order 4 of the Interim Orders made 18 November 2020;
(d)Fourthly, the sum of $30,000 to Coote Family Lawyers in payment of the Applicant's outstanding and anticipated legal fees;
(e)Fifthly, the sum of $350,000 to the Applicant to enable him to reduce the debts owed personally and by the Applicant's company, D Pty Ltd;
(f)Sixthly, the sum of $45,710.50 comprising of:-
(i)the land tax payable to the State Revenue Office in the sum of $31,750 as a result of the real property situated at G Street, Melbourne, Victoria ("the G Street property") no longer being a principle place of residence for the Applicant; and
(ii)the outstanding Owners' Corporation fees for the G Street property in the sum of $13,960.50;
(g)Seventhly, the sum of $70,000 to the Applicant; and
(h)Finally, the balance then remaining to be held on trust by Coote Family Lawyers pending further Court Order.
(4)Within 7 days of the date of these Orders the Respondent forthwith do all acts and things necessary, at her expense, to:-
(a)withdraw the caveat registered over the property at 2 J Street, Suburb K …; and
(b)withdraw the caveat registered over the property at 4 J Street, Suburb K…
("The Caveats").
(5)Upon the withdrawal of the Caveats, the Applicant be at liberty to secure a registered mortgage in favour of his mother, Ms Q, against the properties at:-
(a)2 J Street, Suburb K…; and
(b)4 J Street, Suburb K…
with the proceeds of the mortgage to be used as security for the debts owed to the Applicant's mother, Ms Q and in reduction of the Chinese debt owed to Mr S.
…
As noted above, whilst the respondent agreed with parts of the applicant’s proposals in relation to the terms for the sale of the Suburb C property and the withdrawal of caveats, there was a significant dispute as to the application of the sale proceeds. She sought orders as follows:-
(1)That upon settlement of the sale of the Suburb C property the proceeds be disbursed as follows:-
(a)First to pay the sales and commission costs;
(b)Secondly, to pay any council and water rates and other charges outstanding in respect of the real property, if any;
(c)Third, to pay the Respondent the sum of $85,000 in compliance with Order 4 of the Interim Orders made 18 November 2020, together with interest at the rate prescribed by the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 from 2 December 2020 until the date of the disbursement;
(d)Fourthly, the sum of $43,782 to be paid to the Respondent's lawyers, Lander and Rogers, to be used on account of the costs of the Respondent in prosecuting her entitlements in these proceedings;
(2)The Applicant be restrained by injunction both personally and in his capacity as a director, shareholder and/or secretary of D Pty Ltd or O Pty Ltd from dealing with, transferring, alienating, disposing or further encumbering the following properties:-
(a)2 J Street, Suburb K in the State of Victoria;
(b)4 J Street, Suburb K in the State or Victoria; and
(c)G Street, Melbourne in the State of Victoria.
(3)The Applicant be restrained by injunction both personally and in his capacity as a director, shareholder and/or secretary of D Pty Ltd and/or O Pty Ltd from transferring monies held in any bank account/s in his name or in the name of D Pty Ltd to accounts held outside of Australia either in his name, controlled by him, or in which he has an interest or held with any third party.
In addition to the above orders, the respondent opposed the orders sought by the applicant seeking:-
·The discharge of paragraphs 1 and 2 of the orders made 18 November 2020;
·The disbursement of the sum of $30,000 to Coote Family Lawyers in payment of his outstanding and anticipated legal fees;
·The payment to him of the sum of $350,000 to enable him to reduce the debts allegedly owed by him and his company D Pty Ltd;
·The payment of a lump sum of $70,000 to the Applicant;
·The registration of a mortgage over the titles to those properties to secure the debts allegedly owed to the applicant's mother.
As noted above, events have overtaken parts of the parties' applications due to the sale of the Suburb C property and settlement of the sale on 8 December 2021. The orders made by consent on 2 December 2021 dispensed with the applications with respect to litigation funding and payment of body corporate fees.
THE HEARING
Both parties were represented by counsel at the hearing and the matter was conducted on the papers. Each party relied upon the material referred to above and their counsel's oral submissions. The onus of proof lies with the applicant in relation to his application to deal with the proceeds of sale of the Suburb C property and to register a mortgage over the titles of the J Street properties and the G Street property, and with the respondent in relation to her application for injunctive relief.
However, given the nature of the hearing, contentious facts cannot be determined without the evidence being properly tested. Accordingly, in determining the matter I have relied upon only those facts which are agreed or not in issue.
Should the applicant be permitted to apply the sale proceeds to payment of specified debts?
The applicant seeks orders that would enable him to apply the proceeds of sale of the Suburb C property towards the payment of the following expenses, which are agreed:-
·The costs and commissions of the sale;
·Council and water rates and other charges outstanding in respect of the Suburb C property;
·The sum of $45,710.50 in relation to the land tax payable to the State Revenue Office with respect to the G Street property and outstanding owners' corporation fees for that property.
In addition, the applicant seeks orders for the payment of the sum of $350,000 to the applicant to enable him to reduce his debts owed personally and by his company, D Pty Ltd. That application is opposed by the respondent.
Mr Vu's application seeking payment to his lawyers in respect of outstanding and anticipated legal fees and for a lump sum have otherwise been dealt with by the orders made by consent on 2 December 2021.
The applicant seeks orders for the release of funds as it is his case that he is impecunious. He deposes that his bank accounts have been frozen, that he has debts in excess of $7 million outstanding in China and that he has insufficient assets in China to meet those liabilities. He asserts that he is in dire financial circumstances and relies upon his Financial Statement filed 1 February 2021 in support of that submission.
In that document, the applicant deposes to owning property valued at approximately $8,218,000 and liabilities of approximately $17,180,000. The liabilities identified in Part K of his Financial Statement include an alleged debt to his mother, Ms Q in the sum of $7,420,000.
In his affidavit filed 15 June 2021 the applicant deposes at paragraphs 5 to 10 inclusive as to his interest in the entity, D Pty Ltd which produces produce that is exported from Australia to China. At paragraph 10 of his affidavit, the applicant deposes that D is required to refund the sum of $400,000 to wholesalers in China as a result of orders cancelled by them due to trade tensions between Australia and China. The applicant seeks release of funds in order to pay that alleged debt.
At paragraph 39 of his affidavit, the applicant deposes as to other debts he alleges are owing in China. Those alleged debts total approximately $7,643,316.
At paragraph 46 of his affidavit the applicant deposes that his credit rating has been affected due to his indebtedness to the P Bank and that the P Bank has cancelled his credit card. He deposes that unless able to repay the debts, he will be dependent upon his mother and friends to assist him in meeting his living expenses.
The respondent disputes the applicant's allegations in respect of his indebtedness and opposes his application in relation to the disbursement of the proceeds of sale of the Suburb C property.
In support of that position, the respondent relies upon the applicant's conduct following the making of the interim orders on 18 November 2020. At the time those orders were made, it was the applicant's position that the Suburb C property was to be sold and the orders made at that time were directed to the application of the proceeds of sale of that property.
However, following the making of those orders, it is common ground that the applicant, who is a director and shareholder of D Pty Ltd, which was the sole registered proprietor of the property, withdrew the property from the market for sale. At the time of the filing of his Application in a Proceeding currently before the Court, the Suburb C property was still not listed for sale and that remained the position at the time that application first came before me on 10 September 2021. That day I made orders that the applicant do all such acts and things as may be required to list the property for sale and otherwise adjourned the application for hearing on 12 October 2021.
Given that conduct, it is submitted on behalf of the respondent that if the applicant were genuinely in a parlous financial situation, he would have listed the property for sale without the necessity of orders requiring him to do so. Given the representations that were made on behalf of the applicant on 18 November 2020 that the Suburb C property was to be sold, there is much force in the submissions made by the respondent that the applicant's actions are inconsistent with his asserted impecuniosity.
In her affidavit filed 8 October 2021, the respondent challenges the applicant's assertions that he owes his mother substantial sums. She deposes that the applicant's mother is a retired educator who lives a frugal life and is supported by the applicant.
At the hearing it was the applicant's contention that he owes his mother the sum of $8,624,000 and further, that he has entered into loan agreements with her in respect to the alleged debts. Further he deposes in his affidavit filed 15 June 2021 that he entered into a Mediation Agreement with his mother on 9 September 2019 (Annexure H-11) as a result of claims allegedly made by her in relation to those loans. That agreement provides that the applicant will sell properties including the Suburb C property and the J Street properties to effect payment of principal and interest under the alleged loans. The agreement also provides that the applicant undertakes to pay those debts by 9 September 2021.
Notwithstanding the terms of that agreement, none of the Australian properties held by the applicant or his entities have been sold. Indeed as at 10 September 2021, he had not listed the Suburb C property for sale, notwithstanding earlier representations made by him to this Court that the property would be sold. It was submitted that the applicant's conduct in relation to the alleged debts to his mother and his failure to attend to the sale of the Suburb C property is inconsistent with the terms of the agreement between the applicant and his mother and raises doubts as to the existence of those alleged debts. I accept that submission.
Further, it was submitted on behalf of the respondent that notwithstanding the alleged claims of the applicant's mother, it is significant that she has taken no action in these proceedings to recover funds allegedly advanced by her. There is no evidence before this Court from her in relation to the alleged debts. Having regard to those matters, I accept that there is uncertainty as to the existence of and/or extent of the alleged debts.
Further, the respondent relies upon the applicant's evidence as to real property held by him or entities controlled by him, which includes:-
(a)G Street, Melbourne E$2,500,000
(b)4 J Street, Suburb K E$2,000,000
(c)Property at E Street, F City E$1,300,000
(d)2 J Street, Suburb K E$1,700,000
(e)Suburb C property E$1,400,000
(f)M Street, Hong Kong E$2,400,000
The respondent asserts that property held by the applicant or entities controlled by him is valued at in excess of $11 million.
The respondent also asserts that in addition to the above properties, the applicant has an interest in a property at T Street, U District, City V.[1] The applicant denies that he has an interest in that property.
[1] Affidavit of the respondent filed 8 October 2021, paragraph 17
In support of her contention as to the applicant's interest in that property the respondent relies upon a judgment delivered in the People's Court of the U District on 6 November 2015 in relation to a lease dispute with respect to that property which identifies the applicant as its owner.[2]
[2] Affidavit of the respondent filed 8 October 2021, Annexure W-1
It is evident from the submissions made and evidence adduced by each of the parties that there is a significant dispute between them as to the nature and extent of the applicant's interests and the existence or otherwise of his asserted liabilities.
One of the alleged principal creditors of the applicant is his mother. Whilst it is his evidence that she has commenced proceedings in China in relation to the alleged debts and further, he and his mother have entered into mediation agreements in relation to the payment of those alleged debts, the applicant's mother has taken no action in these proceedings in order to secure or recover those debts. There is no evidence before this Court from the applicant's mother in relation to the alleged debts.
Further, the submission made by the respondent that the applicant's conduct is inconsistent with his assertions as to his level of indebtedness is compelling; the reality is that whilst the applicant has maintained before this Court that he has significant liabilities, including the liability to his mother, and further that he intended to sell the Suburb C property in order to reduce his level of indebtedness, since those assertions were first made in November 2020, there is no evidence that the applicant has taken any action to sell that property until orders were made in September 2021 requiring him to do so.
In circumstances where the parties have agreed to the release of limited funds to enable them to prosecute their claims and meet their immediate needs, I am not persuaded that it is appropriate to make any further orders for the release of the proceeds of sale of the Suburb C property at this time until there is an opportunity for a testing of evidence. The reality is that the parties will have a final hearing in relation to this Court's jurisdiction to entertain the respondent's property claim in February 2022, a period of only two months.
Having regard to all of those factors, I am not persuaded that any orders ought be made for the release of further funds pending the determination of that issue.
Should the applicant be permitted to register mortgages in favour of his mother secured over the titles to the J Street properties?
and
Should the applicant be restrained from dealing with real properties and from remitting funds to accounts outside of Australia?
The applicant seeks orders that the respondent withdraw caveats lodged by her over the titles to the properties at J Street, Suburb K to enable him to register a mortgage in favour of his mother to secure debts allegedly owing to her.
The respondent concedes that orders ought be made for the withdrawal of the caveats but seeks orders restraining the applicant from registering mortgages over the titles of the subject properties.
As noted above, there is a significant dispute between the parties as to the existence of the alleged liability to the applicant's mother. Absent a testing of evidence with respect to those matters, I am not in a position to make any determination as to the existence or otherwise of the debts alleged to be owing to the applicant's mother.
The effect of the registration of the mortgages will be to significantly diminish the value of the assets available to the parties in Australia, the effect of which will be to limit or defeat any claim by the respondent with respect to property. It is the respondent’s case that the parties shared a relationship of approximately 10 years duration, that there is a child of that relationship and that she has entitlements to a property settlement and periodic maintenance; she seeks a declaration that she holds an equitable interest in the properties at J Street and G Street.
There is no dispute that this Court has jurisdiction to grant an injunction by interlocutory order in any case which appears to the Court to be just or convenient. That this is so was confirmed by the Full Court in Norton and Locke (2013) FLC 93-567 at [43] to [44] where the Court stated:-
43.This court, does, however, plainly have jurisdiction to determine if it has jurisdiction – in this case the jurisdiction to embark upon proceedings which seek to establish or deny the relevant jurisdictional facts. This court has the power to make orders that are necessary for the determination of issues relevant to that jurisdiction. Those powers include the power to control its own process; “[t]he power of each court over its own process is unlimited; it is a power incident to all courts, inferior as well as superior; were it not so, the court would be obliged to sit still and see its own process abused for the purpose of the injustice…” (Cocker v Tempest (1841) 151 ER 864 at 865 by Alderson B, cited by Gaudron J in Jackson v Sterling Industries Pty Ltd (1987) 162 CLR 612, at 638). More specifically, this court has the power to, as Menzies J put it in Ex-parte Bevan, “protect […] its function as a court”.
44.Within that jurisdiction and within the ambit of powers just described, this court has the power to make what this court has described as “holding orders” pending the determination of the jurisdictional facts necessary to found jurisdiction. Orders of that type can include, specifically, orders for interlocutory injunctions (see, for example Ex parte Green; Re LSH; and, Jackson v Sterling Industries Pty Ltd at 617, per Wilson and Dawson JJ). In both the High Court and this court orders of that type have been expressed as orders “preserving the status quo” pending resolution of the question of jurisdiction.
As to the circumstances which would enliven the Court's jurisdiction to grant interlocutory injunctions as sought by the respondent, the Full Court stated as follows:-
50.However, the ambit of relief “preserving the status quo” is limited by the narrow ambit of the power itself and by the narrow jurisdiction within which the power is being exercised. As a result, the cautionary notes sounded by the authorities in respect of Mareva orders have a direct bearing upon the nature and ambit of interlocutory injunctions of the type under discussion. In particular:
a)the preservation of an existing state of affairs (the “status quo”) is not sufficient, of itself, to grant the relief – an injunction is not granted “as of right” when an assertion of jurisdiction and an entitlement to de facto financial relief is sought;
b)the injunction “…must be necessary to prevent the abuse of the process of the court” (per Wilson and Dawson JJ in Jackson at 617-8) or to “protecting its function as a court” (per Menzies J in Ex parte Bevan; Gibbs CJ in Ex parte Green);
c)the relief must be required by reference to an emergent state of affairs which demonstrate a clear danger to the applicant obtaining relief reasonably sought. That is where “…the circumstances point compellingly to a need to preserve the status quo as an interim measure pending a hearing to determine whether interlocutory relief should be granted” (per Wilson and Dawson JJ in Ex parte Green);
d)the relief should be granted only “ …while the question whether [the court] had jurisdiction remained in doubt” (Ex parte Green);
e)the questions of fact and law upon which jurisdiction depended would have to be determined as a matter of the “utmost urgency” and “…once it appeared that jurisdiction was lacking, the injunction would have to be dissolved, however inconvenient that course might appear” (Ex parte Green);
f)the remedy is not to be used so as to “create security for the [applicant] or to require a [respondent] to provide security as a condition of being allowed to defend the action …” (per Deane J in Jackson v Sterling Industries Pty Ltd);
g)pending a decision as to jurisdiction, regard must be given to the fact that the injunction “…imposes a severe restriction upon a [respondent’s] right to dealt with his or her assets” (per Dixon J in Glover v Walters);
h)proper regard must be had to the fact that jurisdiction has not been decided and the fact that, consequently, a possible outcome is that no remedy sought by the applicant may be granted. Equally, proper regard must be had to the nature, extent and value of the relief claimed by the applicant in the event that jurisdiction is established;
i)the remedy, if granted should go no further than that which is required to preserve property in respect of which a danger is established pending determination of the jurisdictional question.
The respondent seeks injunctive relief to preserve the unencumbered assets in Australia in circumstances where the applicant seeks to convert unsecured liabilities allegedly owing to his mother to secured liabilities. The existence of those liabilities is in dispute. Were I to accede to the applicant’s application to permit the registration of mortgages in favour of his mother against the titles to the properties at J Street there would be little equity remaining in those properties, the effect of which would be to defeat the respondent’s claim.
As I have already observed, the question of the existence and legitimacy of those loans is a matter for trial in the event that this Court has jurisdiction. The question of jurisdiction will be determined in a matter of months, in February 2022. Having regard to the proximity of the hearing date I am satisfied that it is just and convenient to make orders preserving the equity in those properties pending the determination of the jurisdictional issue.
In support of her application for injunctive relief the respondent also relies upon the conduct of the applicant with respect to the payment by the applicant of $85,000 ordered to be made to her pursuant to the orders dated 18 November 2020. It is conceded by the applicant that he did not make the payment to the respondent pursuant to those orders. Indeed, he concedes that the monies transferred from China to Australia for the purpose of meeting that payment to the respondent pursuant to the November 2020 orders were not paid to her, but remitted by him to China and paid to his mother.
It is submitted that in light of that conduct, the orders sought by the respondent, which will have the effect of preserving the existing state of affairs and preventing a further abuse of the Court's processes pending the determination of the threshold issue, is warranted.
The applicant concedes that monies transferred to him from China were paid by him to the Child Support Agency. Upon ascertaining that those monies had been incorrectly directed by him to that agency, he sought a refund of those funds. However, when those funds were repaid to him, rather than applying them towards the payment of monies due to the respondent pursuant to orders of this Court, the applicant remitted those funds to accounts in China.
I am satisfied, having regard to that conduct, that the injunctions sought by the respondent are necessary and appropriate. I am satisfied that the conduct of the applicant, in the face of these proceedings and orders of this Court, supports the contention of the respondent that orders are necessary to preserve the existing state of affairs pending the determination of the threshold issue.
Accordingly, I will make orders as follows:-
BY CONSENT
1.That within fourteen days of the date of these orders, the respondent do all acts and things as may be required and at her expense to:-
(a)Withdraw the caveat registered over the property at 2 J Street, Suburb K (caveat registration number …); and
(b)Withdraw the caveat registered voter the property at 4 J Street, Suburb K (caveat registration number …).
BY THE COURT
2.That until further order the applicant, by himself, his servants or agents be restrained by injunction both personally and in his capacity as a director, shareholder and/or secretary of D Pty Ltd or O Pty Ltd ("the Entities") from dealing with, transferring, alienating, disposing or further encumbering the following properties:-
(a)2 J Street, Suburb K in the State of Victoria;
(b)4 J Street, Suburb K in the State of Victoria; and
(c)G Street, Melbourne in the State of Victoria.
3.That until further order the applicant, by himself, his servants or agents be restrained by injunction both personally and in his capacity as a director shareholder and/or secretary of the Entities from transferring monies held in any bank accounts in his name or in the name of the Entities to accounts held outside of Australia either in his name, controlled by him or in which he has an interest or holds with any third party.
4.That the Application in a Case filed 16 June 2021 and Response to an Application in a Case filed 31 August 2021 be otherwise dismissed.
I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Johns. Associate:
Dated: 23 December 2021
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