Young & Spencer
[2024] FedCFamC2F 1875
•24 December 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Young & Spencer [2024] FedCFamC2F 1875
File number(s): BRC 9040 of 2024 Judgment of: JUDGE MANSFIELD Date of judgment: 24 December 2024 Catchwords: FAMILY LAW – PROPERTY – Application for interlocutory injunction to freeze funds refused. Legislation: Family Law Act 1975 (Cth) s114(1) Cases cited: Australian Broadcasting Corporation v O'Neill [2006] HCA 46 Division: Division 2 Family Law Number of paragraphs: 34 Date of last submission/s: 24 December 2024 Date of hearing: 24 December 2024 Place: Canberra Solicitor for the Applicant: Litigant in Person Counsel for the Respondent: Ms Pendergast Solicitor for the Respondent: Keating Lehn Solicitors ORDERS
BRC 9040 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS YOUNG
Applicant
AND: MR SPENCER
Respondent
ORDER MADE BY:
JUDGE MANSFIELD
DATE OF ORDER:
24 DECEMBER 2024
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed by the wife on 16 December 2024 is dismissed.
2.The husband’s costs of and pertaining to the present application are reserved and the father is at liberty to approach my chambers by email to …@... with any request to list the matter before me for directions with respect to costs. Liberty expires 28 days after final orders are made.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JUDGE MANSFIELD:
On 4 July 2024 the husband instituted proceedings seeking final orders, generally, for an equal division of property. He did not seek any interim orders.
On 12 September 2024, the wife filed a Response seeking final orders. She did not seek any interim orders.
On 16 September 2024, the Court made orders for the appointment of a single expert witness to value a real property at Suburb B, Qld and listing the matter for a compliance and readiness hearing on 28 January 2025.
On 16 December 2024, the wife filed an urgent Application in a Proceeding seeking orders that:
(a)Pursuant to s 114(1) of the Family Law Act 1975, the sums of $150,000 and $25,000 and $30,000 (totalling $205,000) be frozen from the cash assets currently held by the husband.
(b)Upon freezing, the matter be listed for determination of:
(i)Spousal maintenance;
(ii)Funding the costs of the proceedings; and
(iii)Child support.
On 18 December 2024, Orders were made listing the matter for hearing of the interim orders sought in the wife’s Application in a Proceeding. It seems to me the only aspect of the case warranting urgency is that the husband is contractually required to settle on the purchase of real property on 13 January 2025. The orders sought by the wife would prevent that. There would be significant costs and damages consequences and the interests of third parties would be effected. There would probably be insufficient time for a review of any decision made by a Registrar.
On 20 December 2024 the mother filed a Minute of Orders sought which is in the same terms as her application except that:
(a)The amounts sought to be frozen where reduced to $150,000 and $25,000 and $20,000 (totalling $195,000); and
(b)An additional order restraining the husband from selling any shares unless their value is agreed regardless of any actual sale price.
At hearing, the mother clarified that the order sought for lump sum spousal maintenance was in order to put it towards obtaining legal representation – not in order to be able to meet all of her living expenses.
On 20 December 2024, the husband filed a Response to Application in a Proceeding seeking orders that the wife’s application filed on 16 December 2024 be dismissed and for costs.
Taking the Orders of 18 December 2024 together with the wife’s application (which is not particularised with respect to orders about spousal maintenance, funding of legal representation or child support), I understand that the sole issue for judicial determination today is whether or not there be injunctions: i) freezing $195,000 worth of cash presently held in a bank account in the husband’s sole name; and/or ii) restraining the husband from selling any shares.
RELEVANT CIRCUMSTANCES
The parties married in 2003, separated on 17 March 2022 and divorced in early 2024. The pool of matrimonial property includes:
(a)According to the husband’s Financial Statement of 4 July 2024:
(i)Funds in his bank account of $447,000;
(ii)A share portfolio comprising shares in D Company only, estimated at $388,739.
(iii)Interests in two private companies estimated at $32,000 and $171,000.
(iv)Superannuation of $126,489.
(v)No significant liabilities.
(b)According to the wife’s Financial Statement of 12 September 2024:
(i)Unencumbered real property at Suburb B, Qld at $1,950,000;
(ii)Superannuation of $128,128.
(iii)A personal loan of $74,669
The following is taken from the husband’s Outline of Case Document which is uncontroversial for the purposes of this application:
2.4. The Respondent is the party to an unconditional contract to purchase the [Suburb C] property for $1,510,000 purchased at auction [in] November 2024, with settlement due [in] January 2025.
2.5. The total funds required by the Respondent at settlement is $1,577,699 (including stamp duty and legal fees).
2.6. The Respondent is funding the purchase partly through funds in his bank account, and partly through borrowings, specifically:
2.6.1. He has paid a deposit of $75,500;
2.6.2. He has finance approval for $1,040,000;
2.6.3. He is using all funds in his Westpac Bank Account #[…]57 of $374,516.75; and
2.6.4. He is borrowing the balance from friends of $87,682.25.
2.7. The Respondent is dependent upon the funds in his Westpac bank account #[…]57 to complete the contract ...
2.8. The Respondent must settle on the contract by […] January 2025. Failure to settle will result in a loss of the $75,500 deposit, and exposure to litigation for breach of contract and damages by the sellers.
The wife deposes that she first became aware of the husband’s intention to purchase the property on 11 December 2024 which prompted her urgent application.
With the benefit of her written submissions and her oral submissions at hearing, the wife’s case is that:
(a)She seeks to preserve $195,000 from the husband’s bank account to:
(i)Fund this litigation ($150,000), including the costs of her legal representation and necessary expenses for valuations, mediations, etc ($25,000); and
(ii)To ensure there are funds to meet a looming child support debt ($20,000).
(b)It is not about dissolution of the asset pool, it is about preventing conversion of cash to real property such that it is no longer able to be used for the above purposes.
MATERIAL
The material I have taken into account for the husband is:
(a)The Response to the Application in a Proceeding filed 20 December 2024;
(b)The Outline of Case Document filed 23 December 2024;
(c)The affidavit of Mr Spencer filed on 20 December 2024;
(d)The Financial Statement of Mr Spencer filed 4 July 2024; and
(e)The Financial Statement of Ms Young filed 12 September 2024.
The material I have taken into account for the wife is:
(a)The Application in a Proceedings filed 16 December 2024
(b)The Outline of Case Document filed by the wife on 20 December 2024;
(c)The affidavit of Ms Young filed 20 December 2024; and
(d)The Affidavit Addendum of Ms Young filed 20 December 2024.
THE LAW
The wife seeks orders pursuant to s 114(1) of the Family Law Act 1975 which relevantly states:
(1) the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including: (e) an injunction in relation to the property of a party to the marriage.
In Australian Broadcasting Corporation v O'Neill [2006] HCA 46 at [19], the High Court established that in all applications for an interlocutory injunction the court will ask whether the applicant has shown:
1.That there is a serious question to be tried as to the applicant’s entitlement to relief;
2.That the applicant is likely to suffer injury for which damages will not be an adequate remedy; and
3.That the balance of convenience favours the granting of an injunction.
DETERMINATION
The wife’s application fails on application of each of the three principles.
1. That there is a serious question to be tried as to the applicant’s entitlement to relief.
There is no issue that there is a serious question to be tried with respect to the property of the parties to the marriage or either of them. However that is not how the wife casts her case on this application. The serious question to be tried for the purposes of this application is twofold:
(a)Whether the wife would be successful in any interlocutory application for litigation funding; and
(b)Whether the husband is going to be subject to a child support debt and, if so, his capacity to pay such debt.
There is no draft application to provide for litigation funding attached to the mother’s affidavit. The wife, really, is seeking for the Court to:
(a)Postulate on what a proposed order for litigation funding may look like;
(b)Scour all of her evidence and identify the aspects of it that might be relevant to such an application;
(c)Marshall all of that evidence in order to assess how it might be used, or what weight it may carry;
(d)Draw its own conclusions as to what the quantum of litigation funding may be and the terms on which it may need to be paid.
I accept that the issue of litigation funding for the wife is a legitimate, and serious, issue in this matter. However the question as to whether or not the wife would be successful in any interlocutory application for litigation funding could only be answered in the affirmative on a very tenuous basis on the state of the evidence at this time.
With respect to child support, on the wife’s own evidence, any arrears is anticipatory. As at 20 December 2024, she deposed “The total estimate of arrears, based on information available to me today and to the best of my knowledge and belief, is $16,555.81.” Further, even if this was the case, pursuant to the husband’s own financial statement, he earns $3,654 gross per week which does not suggest an incapacity to pay.
2. That the applicant is likely to suffer injury for which damages will not be an adequate remedy.
If the injunction was granted, the husband would almost certainly suffer damages likely to be at least in the order of loss of the $75,500 deposit and exposure to litigation for breach of contract and damages by the sellers. The wife is wholly silent on this issue.
The wife has not given any undertaking as to what, if any, compensation she will pay to the husband for damages he suffers as a result of the order she seeks.
The wife has not given any undertaking as to what, if any, compensation she will pay to any effected third parties for damages they may suffer as a result of the order she seeks.
The wife has given no notice to third parties despite the husband disclosing a copy of the contract for the sale and purchase of land which specifies who those third parties would be.
Meeting these three circumstances are practically essential to any such application. Really, these three circumstances alone are enough for a determination that the wife’s application has no further prospects of success.
3. That the balance of convenience favours the granting of an injunction.
There is no apprehension that the husband is seeking to dissipate matrimonial assets or to transfer them out of the jurisdiction of this Court. There is no apprehension that the husband is seeking to defeat any claim by the wife in these proceedings to which he is the substantive applicant.
The damages likely to be suffered by the husband (and thereby the matrimonial property pool) if the injunction were granted significantly outweigh the relief that may become available to the wife.
Without much effort, identification of alternative sources that may potentially provide for litigation funding include:
(a)The relatively liquid asset of the husband’s share portfolio in an entity listed on the ASX which he estimated at $388,739.
(b)The wife’s unencumbered interests in the real property at Suburb B which she has valued at $1,950,000.
To avoid all doubt, I expressly state the above is not an acceptance or an endorsement by the Court of those things being appropriate or actually available sources of litigation funding. That is ultimately a matter for the wife to pursue if she chooses to.
In the plainest of terms, if the wife wants to pursue an application for litigation funding then that is the application that she should bring and adduce evidence relevant to that issue. Not granting the injunction does not impair the wife in any way of pursuing such an application nor, on the present state of the evidence, would it render any order for litigation funding nugatory.
THE ORDERS
Accordingly, Order 1 is made dismissing the wife’s application.
Order 2 provides liberty to the father to pursue costs of and pertaining to this application at a later time as there has been insufficient opportunity to adduce evidence or make submissions from both sides at this stage.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of Judge Mansfield. Associate:
Dated: 24 December 2024
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