Wilson and Wilson

[2009] FamCA 592

FAMILY COURT OF AUSTRALIA

WILSON & WILSON [2009] FamCA 592

FAMILY LAW – PROPERTY – Interim injunctions

Family Law Act 1975 (Cth)

APPLICANT: MS WILSON

RESPONDENT: MR WILSON

FILE NUMBER: MLC 1687 of 2009

DATE DELIVERED: 30 JUNE 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: YOUNG J

HEARING DATE: 30 JUNE 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR HARVEY

SOLICITOR FOR THE APPLICANT: BAYANI HARVEY LAWYERS

COUNSEL FOR THE RESPONDENT: MR TESTART

SOLICITOR FOR THE RESPONDENT: PLAZA LEGAL

Orders

IT IS ORDERED UNTIL FURTHER ORDER:

1. THAT each of the husband and wife be and are hereby restrained from further encumbering, mortgaging or dealing with the property at L save with the prior written consent of the other or order of the Court.

2. THAT the line of credit obtained by the husband in his sole name with the Commonwealth Bank, Colonial, in account number …23 be fixed in the sum of $50,000 and the husband be restrained from extending or in any way increasing that loan or of obtaining any other line of credit against the security of the L property.

3. THAT on or before Tuesday 28 July 2009 the husband, as a trustee of the self managed R Superannuation Fund cause to be prepared and lodged with the Australian Taxation Office the audited financial and taxation return of that Fund for the financial year ended 30 June 2009.

4. THAT all urgent ex parte interim orders, urgent interim orders and other interim orders sought by the wife in her application filed 25 June 2009, and the orders sought by the husband in his response filed by leave this day be adjourned to the Judicial Duty List at 10.00 a.m. on 20 August 2009.

5. THAT a Financial Conciliation Conference be fixed before Registrar Kaur on 9 September 2009 at 9.15 a.m.

6. THAT the extempore reasons for judgment be transcribed, be placed upon the Court file and be made available to the parties.

7. THAT there be no order for costs of and incidental to the hearing this day.

IT IS NOTED:

A.THAT the Court should arrange for a Japanese interpreter to attend with the wife at the adjourned Pre-Trial hearing and Financial Conciliation Conference as ordered.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1687 of 2009

MS WILSON

Applicant

And

MR WILSON

Respondent

REASONS FOR JUDGMENT

1. The matter of Wilson is before me as an urgent hearing, having been transferred from Senior Registrar FitzGibbon’s list.  Mr Harvey, solicitor, appear for the applicant wife.  Mr Testart of counsel appears for the husband.  Both the husband and wife are in court. 

2. The wife is Japanese by birth and language.  Her lengthy affidavit has been prepared with the assistance of an interpreter and is appropriately sworn.  I have sought a response from her solicitor, who has advised that the wife has a somewhat limited knowledge and understanding of English, but would be not wholly understanding of, and therefore confused by all matters said in court this day.  An interpreter is not available at the court.  Mr Harvey, however, did press for the matter to proceed on the basis that he has wholly undertaken to appropriately have conveyed to his client by proper Japanese interpretation the matters raised in court this day.  There was no objection taken by or on behalf of the husband and the matter has proceeded on the basis of an interim hearing on the papers.

3. The wife’s application was filed at court on 25 June and made returnable this day.  A variety of orders are sought which include urgent ex parte interim orders, other interim orders and other urgent interim orders and final orders.  In support of that application the wife filed a Form 13 financial statement and a very detailed affidavit of some 22 pages, plus a considerable bundle of annexures thereto. 

4. In response the husband filed his document this morning, 30 June 2009, and in that response sought for the wife’s interim applications to be dismissed, and thereafter costs.  In support the husband has filed a Form 13 financial statement and an affidavit, which again is fairly substantial, given that it was required to respond to the many and varied matters raised by the wife.  There were various exhibits to the husband’s affidavit.

5. Whilst I received the documents only at about 11 o’clock, I was able to read all of them before commencing this case at 11.30.  The matter has proceeded on the papers.  I have had relatively brief submissions from the legal practitioners appearing for the parties.  I do not propose to recite the facts in details. 

6. These parties married in March of 1988.  There is a significant dispute as to the date of separation which, on the papers before me, varies from 2003 until 2008.  Physical separation occurred in or about February of 2008, though the husband maintains that the wife clearly knew of either his intended separation, or the real circumstances of the marriage for many years leading up to his physically departing the home to take up residence with his now partner elsewhere.

7. There are four children of the marriage whose ages are 20, 17, 15 and 12.  The three younger children live with the wife in the former matrimonial home at L.  That home seemingly has an agreed value of $570,000 or thereabouts.  It is encumbered by a registered first mortgage of $28,000.  It would seem that traditionally that mortgage has encumbered the home.  There is now a second mortgage securing a line of credit, which the husband has obtained in or about September of 2007 in his sole name.  The facility was for $150,000.  It has been drawn to $48,000, and it has now been capped at that figure by the husband, and, in that regard, there is a handwritten letter yesterday sent by the husband to Colonial, a subsidiary of the Commonwealth Bank, reducing his line of credit from the facility available $150,000 to $50,000 - effective immediately.  I understand the evidence before the court is that it is drawn to $48,000 or thereabouts.

8. The other significant asset of the parties is a self-managed superannuation fund.  There is some material before me indicating that this is a joint superannuation fund, that is, of and for the husband and wife.  Clearly it has been managed by the husband, who has assumed all financial knowledge and financial responsibility therefore of and after marriage. The assets of that superannuation fund, in round figures, are a cash management investment with Macquarie of $87,600 and publicly listed shares of a value of approximately $86,000. 

9. The last annexure to the husband’s affidavit filed by leave this day gives a breakdown of the portfolio of shares, and their market value will fluctuate on a daily basis.  That document is, in effect, the husband’s watchlist, and provides a number of shares which are not currently owned by the superannuation fund.  But those shares where the unit number and value identifies the current shareholder are what is in the portfolio. 

10. As a result of questions I have asked I understand and accept that the husband has that superannuation fund properly managed.  Tax returns are filed each year, and the superannuation fund itself is audited.  Given that today is the last day of the financial year, I will require that fund to prepare and submit within 28 days its taxation return, subject to the appropriate audit process.  The assets of the fund are straightforward and simple, and should not require any technical difficulty in preparation or lodgement thereof, all dividends having been paid prior to this date for the current superannuation financial year.

11. Returning to the orders sought by the wife, the primary orders are to secure any other dealing with or expenditure in respect of the jointly owned home.  It is a matter of importance that the home is in joint names.  It properly secures the first mortgage of $28,000.  No other debt should be incurred save by consent of the parties, and each of them, on a jointly and wholly informed basis, signing appropriate documents.  It may be that, for legal costs already substantially incurred, there will need to be further borrowings, but I leave that issue to another day, and to the judicial duty list to where I will transfer all other matters. 

12. Coupled with the issue of any restrictive or injunctive order against the home is the issue of the Colonial Bank line of credit.  The wife provided as exhibit “1” to her affidavit the actual request for line of credit, which the husband sought in the sum of $150,000 on 20 September 2007.  That loan was acquired with the assistance of a mortgage broker.  I accept what Mr Harvey says to me, that the wife’s signature adorns the document.  Who witnessed the signature, or who explained the guarantee that she provided to her are perhaps questions that arise and be answered another day.  It may be that they are not ultimately relevant, given that the husband, by his own actions, has capped the line of credit at $50,000. 

13. I accept the husband’s instructions to the court through his counsel that the line of credit was obtained as wealth creation, and the intention was to use the equity in the home to invest and promote wealth.  The fact that it was taken out at the height of the stock market and prior to its downfall is a matter of likely fact, but for which no criticism would be directed to the husband, as he had no knowledge of the downturn that was forthcoming in September of 2007. 

14. Littered throughout the wife’s affidavit are suggestions that her signature had, on other documents, and particularly relating to the self-managed superannuation fund, being forged.  I carefully make no finding at this stage of any issue of forgery.  They are matters that may become relevant another day. 

15. What orders the wife seeks on this urgent hearing are encapsulated within paragraph 2 of her affidavit and the many subparagraphs thereof.  I do not intend to deal with paragraphs 3 and 4 in respect of any liabilities on the home or indemnities in respect of the superannuation fund.  They may all await another day.  I likewise do not intend to deal with the issues raised for security for costs, maintenance or other payments of moneys, or costs of valuation of assets. 

16. As an overview, this should be an extremely simple case.  There is one home, with a known equity, subject to the line of credit debate.  There is one superannuation fund where the parties are trustees, with assets of approximately $175,000, subject to market fluctuation.  Otherwise there are personal assets, furniture, a motor vehicle and the like.  The husband’s income is declared and that can be verified against tax returns.  The wife is supported by the community through Centrelink. 

17. There are four children, three of whom are at school, one of whom is in his VCE year.  Stability is critically important to the children.  I am also aware that there are various children’s orders sought, but, at this stage and on the basis of this application, and having regard to the ages of the children, I would not think it appropriate to make any order of or in respect of the children.  Certainly it does not seem that they are impacted by the current issues between husband and wife, which are financially based, or otherwise, which have their genesis in the lack of knowledge and discussion between husband and wife.

18. This matter, as I am aware from the affidavits, has a particular history involving a religious cult or group, again, in respect of which I make no comment or finding.  It does seem inherent in the wife’s material that she has always been financially uninvolved, and, from the husband’s point of view, it seems central to his argument that financially he has been involved as the decision-maker of the family.  Again, those matters may or may not be relevant. 

19. The immediate issue is whether I am persuaded to make any injunction restraining the parties from dealing with the remaining equity in the home, or otherwise freezing the line of credit at $50,000 and restricting the parties to make no further increase in that line of credit or fresh application in that regard.  Injunctions are sparingly issued by the court, and I have been referred to and I well understand the basis of the decision in Waugh’s case.  Mr Testart would have no injunctions made against his client on the basis of a fair and strict reading of the decision of the court in that case. 

20. This judgment is delivered on an ex tempore basis without leaving the bench.  It is done upon referral of a matter that has come from the Senior Registrar, where there has been an inability of the parties and their legal practitioners to discuss these issues. 

21. I am concerned that there is a significant imbalance of financial knowledge in this case.  One party knows all financial and related material facts.  The other party, and without criticism of her, simply knows nothing of financial aspects of the ongoing case, certainly post-separation. 

22. I accept, as previously indicated, that injunctions are to be pronounced sparingly and in proper and necessary circumstances.  It is a matter of importance, in this preliminary analysis that I make, and these ex tempore reasons, that the husband obtained a line of credit against a jointly owned asset in his sole name.  That does not sit comfortably with creation of wealth for the family.  If it were, the loan would have been jointly obtained, not just by each of them purporting to sign a document, but in joint names, and the husband would have been acting for the family.

23. By the creation of a single line of credit, he has facilitated an argument that could one day be presented to the court that he made money through his prudent and informed investments, which might be said to have been created by his personal exertion and/or knowledge.  Of course, the fallacy with that is he was using a jointly based asset to secure funds.  I carefully make no finding of the manner in which the line of credit was obtained.  I make no finding upon exhibit 1 to the wife’s affidavit and whether she had informed knowledge from Colonial to properly satisfy the standard of required disclosure.

24. I see that there is or should be little or no issue in this case, given that the husband has capped the line of credit.  What I have read in that exhibit to his affidavit is that he has reduced the line of credit from $150,000 to $50,000.  I simply intend to make certain that $50,000 is only the sum, and that there is no other line of credit without prior agreement or consent of the parties or order of the court.  That does to me seem to be appropriate and necessary in the particular circumstances of this case. 

25. I reflect and ultimately decide that it is both proper and necessary and within the guidance of injunctive decisions to ensure that all other equity in this home remains constant, and not able to be increased by one or other party pending further order.   Accordingly, and being mindful both of the judgment and its ratio in Waugh’s case, and the numerous judgments thereafter which have developed or refined Waugh’s case, I do intend, notwithstanding the strong objections of counsel for the husband, to make appropriate injunctive orders. 

26. For those very brief reasons, which I emphasise are delivered entirely ex tempore and without leaving the bench, I will shortly pronounce orders. 

27. As to all of the matters that I have not dealt with today, I will have those matters referred to a judicial duty list on 20 August 2008 at 10.00 a.m. before Cronin J, and, at the request of counsel for the husband, and with the acquiescence of the solicitor for the wife, I will order a financial conciliation conference on 9 September 2009 at 9.15 a.m. before Registrar Kaur.  I do so on the basis that this matter has all of the financial material ready for such a conference.  Largely the documents are before the court, and, as I say, the pool of asset is relatively straight forward.  It may be that there are further disclosure or conduct issues which are to be investigated, but predominantly these parties should be about limiting their legal costs and expenditure, preserving their own assets and negotiating an outcome that is in their best interests and those of their children.

28. At the commencement of the case I made observations that the wife’s material was somewhat heavy-handed.  It did identify her fear and concern, and appropriately that should not be in the affidavit material. 

    For those brief reasons I will proceed now to pronounce orders.  I will have the ex tempore judgment typed, made available to the parties, and placed upon the court file.  I well understand the echoed concern of the husband’s counsel, but, of course, the husband has all rights to pursue and expend other moneys as he may wish to set aside or challenge the orders that I regard as proper, necessary and in the wider interests of justice, and better to preserve the equilibrium as between husband and wife.

I certify that the preceding paragraphs are
a true copy of the reasons for judgment herein
of The Honourable Justice Young

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Associate: