FAMILY LAW - APPLICATION FOR LEAVE TO APPEAL – INTERLOCUTORY ORDER – Where trial Judge discharged an interlocutory injunction restraining the husband from leaving Australia – Where property proceedings pending – Where wife asserted husband had significant undisclosed assets overseas – Where wife asserted husband had forged documents and that he would not return to Australia if criminal proceedings were brought against him – Where wife asserted her s 79 entitlements incapable of enforcement by way of contempt proceedings if husband overseas – Where wife asserted trial Judge had failed to rule on admissibility of expert forensic document examiner’s report – Where no leave sought or granted for appointment of document examiner – Where assertion trial Judge had not applied the “proper test” in his consideration of balance of convenience –– Consideration of proper test to be applied in determining whether or not to grant an interlocutory injunction –Where reasons of trial Judge alleged to have been inadequate – Where no error of principle or substantial injustice established – Application dismissed.
FAMILY COURT OF AUSTRALIA
Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc  HCA 39; (1981) 148 CLR 170
American Cyanamid v Ethicon  A.C. 296
Australian Broadcasting Corporation v O’Neill  HCA 46; (2005-06) 227 CLR 57
Australian Course Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 46 ALR 393
Mullen & De Bry  FamCA 1380; (2006) FLC 93-293
Rutherford & Rutherford (1991) FLC 92-225
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
25 July 2008
LOWER COURT MNC:
ORDERS MADE 20 DECEMBER 2007
(1) That the application for leave to appeal be dismissed.
(2) That the wife pay the husband’s costs of the application for leave to appeal as agreed and failing agreement as assessed under Chapter 19 of the Family Law Rules 2004.
(3) That the enforcement of Order 2 of these orders be stayed until the determination of the substantive proceedings under s 79 of the Family Law Act 1975 (Cth).
(4) That the stay being Order 1 of the orders of the Honourable Justice O’Ryan made 10 September 2007 be discharged.
THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY
J Capital Limited
REASONS FOR JUDGMENT
- On 20 December 2007 we dismissed an application by Ms Liatos (“the wife”) for leave to appeal an interlocutory order made by O’Ryan J on 28 August 2007 being the discharge by his Honour of an order which restrained Mr Liatos (“the husband”) from leaving the Commonwealth of Australia, and reserved our reasons for judgment. At the time of the hearing before the trial Judge the wife had, on 31 July 2007, obtained an ex-parte interim injunction restraining the husband’s travel outside Australia. The interim injunction was continued by Judicial Registrar Loughnan on 2 August 2007 pending the hearing before the trial Judge.
- The injunction was sought in the course of proceedings between the parties for property settlement under s 79 of the Family Law Act 1975 (Cth) (“the Act”). A company, J Capital Limited (“the company”) had been joined to the property proceedings as second respondent.
- We also reserved our reasons for allowing a late amendment to the proposed grounds of appeal, and for rejecting an application by the wife to adduce further evidence. These are our reasons for allowing the amendment to the proposed grounds of appeal, rejecting the wife’s application to adduce further evidence, and dismissing her application for leave to appeal against the orders of the trial Judge.
- The wife’s counsel at the hearing before us submitted the trial Judge was in error in failing to grant the injunction as:
- the husband had vast wealth overseas which he had not disclosed;
- the wife may be entitled in her property claim to assets in excess of those in Australia;
- if the husband contravened orders made at the conclusion of the property proceedings he could not be incarcerated for such contravention; and
- if the husband had committed forgeries he may not return to face criminal proceedings in Australia.
- Specifically, in support of the wife’s application for leave to appeal her counsel submitted in summary that the trial Judge:
- had erred in not admitting evidence of a forensic document examiner;
- had failed to adopt the “proper test” when deciding whether or not the husband should be restrained from leaving Australia; and
- had failed to provide adequate reasons.
- At the hearing the wife abandoned grounds 2 to 12 in her proposed amended Notice of Appeal, but sought (and was granted) leave to rely on an additional ground of appeal namely:
That his Honour erred in not admitting into evidence annexure “JL5” to the affidavit of the wife sworn 30 July 2007, such error amounting to a denial of natural justice.
- The husband opposed the wife’s proposed amendment. We indicated we would give our reasons for allowing the late amendment with these reasons.
- Before us the wife also sought to adduce further evidence being certain paragraphs of her affidavit sworn 19 November 2007. The husband opposed the adducing of further evidence by the wife, and relied on his affidavit sworn on 11 December 2007. We dismissed the wife’s application to adduce further evidence on 12 December 2007, and as we have already noted, reserved our reasons in respect of that application.
- Counsel for the wife argued the issues raised on the application for leave to appeal by first addressing the issue of whether or not the trial Judge was in error in failing to rule on the admissibility of the report of a forensic document examiner, or was in error in failing to admit his report, then addressing issues relating to the balance of convenience, and asserted inadequacy of reasons. The first issue raised was also relevant to the amendment made to the proposed grounds of appeal.
- We propose, for convenience, to follow the course adopted by the wife’s counsel in these reasons. We will thereafter, to the extent necessary to do so, refer to issues raised in the application to adduce further evidence.
- The trial Judge’s reasons contain a very detailed explanation of the competing applications before him, earlier orders made in the proceedings by Judicial Registrar Loughnan on 26 July 2007 (and also 2 August 2007), and by Steele J on 31 July 2007 (the latter order, pending further order, restrained the husband from leaving Australia).
- Whilst before the trial Judge the wife raised contentious issues about the husband’s conduct, it was not asserted by her counsel that any matter in his Honour’s recitation of the history of the parties’ litigation was in error, nor that his Honour erred in his recording of various transactions disclosed in documents. For the purpose of these reasons it is sufficient if we note the following salient matters from his Honour’s judgment.
- On 30 January 2007 the husband filed an application for adjustment of property under s 79 of the Act and for parenting orders. At the date of the hearing before the trial Judge the parties to the litigation were the husband and wife and the company, which company is incorporated in Samoa.
- The husband was born in March 1969 in Australia and the wife was born in March 1962 in Greece. The parties were married in August 1988 and they separated in about April 2006. There are two children of the marriage A born in March 1996 and T born in August 2000. The children were living with the wife at the date of the applications before the trial Judge.
- The husband is a property developer and the wife is engaged in home duties. The husband has for several years travelled and worked extensively overseas.
- In about 1990 the parties purchased a franchised real estate agency in Sydney. The husband contended that the franchise was operated by a joint venture company and a Mr AQ was a 50 per cent shareholder and the husband held the remaining 50 per cent of the shares. The wife asserted, and the husband denied, that Mr AQ (who is now deceased) was the husband’s biological father, and that the husband has two half siblings including a Mr RQ.
- The wife asserted that the husband had, between August 1990 and September 1996, transferred “about $983,255.00” from the real estate agency and a joint bank account to overseas bank accounts in Greece, England and the United States. The real estate agency was sold in 1995 for a sale price of $700,000.00.
- From 1995 the husband undertook a series of property developments in Australia through various entities but principally through a discretionary family trust of which the husband is a potential beneficiary (the Liatos Family Trust).
- The husband asserted he acted through much of the marriage as a funds manager charging commissions and fees in respect of such business.
- The trial Judge noted (at paragraph 13 of his reasons) “[i]n the property settlement proceedings there is a significant issue as to the extent and value of the net assets of the parties”. His Honour further explained that:
In summary the Wife contends that there are very extensive and valuable assets located overseas. However the Husband contends that he has no interest in any of the assets and that they are owned by [Mr RQ] through a structure of various companies and trusts resident in Samoa, Hong Kong, Singapore and Jersey. The Wife contends that these asset [sic] are owned by the Husband and or that he has a significant interest in such assets. The Wife’s contentions include that:
- The Husband has transferred overseas during at least two periods being from 1990 to at least the end of August 1996 and from 2001 to 2004, not less than $7,939,345.21 of which he was the beneficial owner;
- The Second Respondent is a corporation which is the alter ego of the Husband; and
- In order to facilitate the transfer of funds the Husband executed documents by signing the Wife’s name as a signatory without her knowledge (paragraph 20).
- At paragraphs 23, 24 and 26 of his reasons, the trial Judge set out the parties’ respective disclosure of their assets and liabilities as follows:
23. As to her property interests the Wife disclosed:
- V property 5,500,000.00
- ANZ Bank account 182,709.36
- Motor vehicle 90,000.00
- Household contends [sic] 35,000.00
- Jewellery and clothes 10,000.00
- As to liabilities the Wife disclosed a mortgage debt of $2,900,000. The Wife is presently paying mortgage payments of about $18,500 per month to the Commonwealth Bank pursuant to interim orders made on 13 March 2007.
- In relation to his property interests the Husband contended that he has property of a value of $1,468,404 which comprises:
- Land X, Greece 1,000,000
- Land Y, Greece 300,000
- Land Z, Greece 100,000
- Commonwealth Bank account 10149329 63,404
- Two shares in Liatos Group Pty Ltd -
- Clothes, jewellery 5,000
As to his liabilities the Husband contended that he has no liabilities.
- The wife asserted the husband had stated that he proposed to “reside overseas and [had spent] significant periods out of Australia”.
- The husband contended that Liatos is a trustee company and was the trustee of a unit trust, the DEF Property Trust, the Liatos LMN Property Trust and the Liatos Family Trust. The Liatos Family Trust has shares in the DEF Property Trust and the Liatos GHI Property Trust.
- The trial Judge recorded (at paragraph 196) the wife’s assertions of a conversation with the husband in November 2003 as follows:
The Wife contends that in November 2003 the parties had a conversation during which the Husband said words to the effect “I am not in a position to divorce you yet. I have to rearrange my finances and then I’ll be able to make my decisions and there will be nothing you can do to me financially”. The Wife said: “If you feel like that why don’t you divorce me now?” The Husband then said words to the effect of: “I am not financially ready yet.” The Wife contends that she did not reply to this comment as she loved the Husband at that time and wanted to reconcile with him. The Husband denies the conversation. It was submitted on behalf of the Husband that it is relevant that the conversation was not referred to by the Wife in a draft affidavit handed to the Husband’s lawyers in March 2007.
- His Honour recorded (at paragraph 219 of his reasons) the wife’s contentions about her conversation with the husband following the parties’ separation in April 2006. His Honour said:
The Wife contends that in about July 2006, the Husband telephoned her at the former matrimonial home to discuss the separation and their financial position. During the conversation the Husband said words to the effect of: “We have to sell [the V property] and sell [the Queensland Property] and pay off all the creditors. Suncorp has to be paid and [J Capital Ltd] have to be paid.” The Wife replied: “Who is [J Capital Ltd]?” The Husband then said: “I am but you can’t prove it, anyway how do you think I get money offshore.” The Husband denies that he has ever said anything to the Wife to suggest that he is [J Capital Ltd] or that he owns or controls it in any way. He contends that [J Capital] has always been “the vehicle” of [Mr AQ] and [Mr RQ]. [Mr RQ] suggests that it may also have been the “vehicle” for other “investors”. It was submitted on behalf of the Husband that it is relevant that the conversation was not referred to in a draft affidavit handed to the Husband’s lawyers in March 2007.
- On 20 March 2007 the wife’s lawyers provided the husband’s lawyers with a draft affidavit proposed to be sworn by the wife. Paragraph 6 of the draft affidavit purported to summarise the husband’s overseas financial arrangement as follows:
At the time of our separation I retained copies of some documents that [Mr AQ] had previously given to me for safe keeping in 2005. Attached hereto and marked collectively with the letter “I” are copies of documents held by me. The documents refer to the establishment of overseas trust and fiduciary service arrangements in Singapore, Jersey and Hong Kong from and subsequent to 2003. We also record transfers of money from an account or accounts maintained by the [Liatos Family Trust] to a Singaporean company named [ABC Pty Ltd] and then from that company to an entity described as [the Jersey entity] and thereafter being advanced by [J Capital Ltd] in the form of two loans, one to the [GHI Property Trust] and the second to the [DEF Property Trust] which trusts are referred to in [Mr AQ’s] statement of financial circumstances as having liabilities to [J Capital Ltd]. (paragraph 232)
- The husband accepted the paragraph described his dealings, but denied any ownership or control over the Jersey entity or the company, which he asserted were owned by Mr RQ and the late Mr AQ.
- On 20 March 2007 the parties reached a settlement of matters in dispute in respect of property settlement and signed heads of agreement.
- In April 2007 the husband delivered to the wife, for safe-keeping in the garage of the former matrimonial home, four plastic tubs containing documents. The wife asserted she did not “investigate the contents of the archive boxes ... although she briefly looked at them” (judgment paragraph 235).
- In May 2007 contracts for the sale of the Queensland property were exchanged. Settlement was to occur on 7 August 2007.
- In May 2007 the husband placed further documents in the garage at the matrimonial home. The husband denied he said to the wife that he intended shredding the documents. The trial Judge noted of the husband’s evidence that “[h]e contends that it is these records that the Wife now claims constitute evidence of his long term fraudulent activities”. The husband deposed that the wife did not make the same suggestion about many of the very same documents that were annexed to the draft affidavit received in March 2007.
- On 30 May 2007 the husband left for Greece having, in the prior week, “shipped all his personal items and home office equipment”.
- In June 2007 the parties were to meet to formalise documentation to reflect the heads of agreement. The wife withdrew from the negotiations because the husband had not returned from Greece.
- In late June 2007 the wife went through the documents left by the husband. The wife estimated there were approximately 10,000 documents in total. She said a number of documents purporting to bear her signature, as well as those of her parents, were forgeries. The wife retained Mr Paul Westwood, a forensic document expert, who prepared a report dated 22 June 2007. The husband disputed the wife’s assertion that she only looked at the documents in June 2007 and asserted some of the documents were annexed to the draft affidavit provided to him in March 2007.
- On 29 July 2007 the husband returned to Australia. An urgent application filed by the wife was listed before Registrar Cameron who refused to make ex-parte orders and listed the matter before the Court on 2 August 2007. On reviewing the Registrar’s orders the same day, Steele J confirmed the Registrar’s orders, and also ordered that the husband be restrained from leaving Australia prior to 3 August 2007.
- On 1 August 2007 the wife’s solicitors filed a further urgent application seeking orders that the husband be restrained from leaving Australia. On 2 August 2007 Judicial Registrar Loughnan made orders adjourning the application before O’Ryan J on 9 August 2007. The Judicial Registrar also made orders, until further order, that the husband be restrained from leaving Australia.
- The matter came before O’Ryan J on 9, 17, 24 and 27 August and on 28 August 2007 his Honour made the order now sought to be appealed by the wife.
- In addition, the trial Judge made orders dealing with the proceeds of sale of the property in Queensland.
- The wife had sought orders that she be appointed trustee of the Queensland property, that the proceeds of sale be applied to costs associated with the sale, discharge of a mortgage to Suncorp Metway Ltd (“Suncorp”), and the balance of funds (and mortgage monies in excess of $2 million owing to the company), be deposited into an interest bearing account pending final hearing of the s 79 proceedings.
- The husband sought orders for the sale of the Queensland property, and further sought that the funds owing to the company be paid from the proceeds of sale. The company too sought orders for the sale of the Queensland property, and payment of the debt owing to it.
- The trial Judge determined that the Queensland property should be sold by the husband in his capacity as sole director of Liatos Group Pty Ltd (“Liatos”), and after payment of the legal costs and payment to Suncorp, that the proceeds of sale be paid into an interest bearing controlled monies account. His Honour also ordered that, pending the hearing of the property proceedings, the wife and the husband (as the sole director of Liatos) be restrained from dealing with those monies. There was no challenge to the orders made by the trial Judge dealing with the Queensland property by any party to the proceedings. The company was separately represented before us, but made no submissions either supporting or opposing the application for leave to appeal.
RELEVANT LEGAL PRINCIPLES – LEAVE TO APPEAL
- There was no dispute that the orders sought by the wife to restrain the husband travelling overseas pending the determination of the s 79 proceedings were interlocutory in nature. The principles to be applied in dealing with an application for leave under s 94AA are well known. In Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc  HCA 39; (1981) 148 CLR 170, Gibbs CJ, Aickin, Wilson and Brennan JJ said at 177:
An interlocutory order for an injunction is a matter of practice and procedure. See McHarg v. Universal Stock Exchange Ltd [ 2 QB 81 at 82]; Minister for The Army v. Parbury Henty and Co. Pty. Ltd.  HCA 52; [(1945) 70 CLR 459 at 489]; White v. White [ VLR 434 at 438].
Nor is there any serious dispute between the parties that appellate courts exercise particular caution in reviewing decisions pertaining to practice and procedure. Counsel for Brown urged that specific cumulative bars operate to guide appellate courts in the discharge of that task. Not only must there be error of principle, but the decision appealed from must work a substantial injustice to one of the parties. The opposing view is that such criteria are to be expressed disjunctively. Cases can be cited in support of both views: for example, on the one hand, Niemann v. Electronic Industries Ltd [ VR 431 at 440]; on the other hand, De Mestre v. A.D. Hunter Pty. Ltd. [(1952) 77 WN (NSW) 143 at 146]. For ourselves, we believe it to be unnecessary and indeed unwise to lay down rigid and exhaustive criteria. The circumstances of different cases are infinitely various.
- We will explain our reasons for our determination not to grant leave to appeal in this case by an examination of the proposed grounds of appeal.
GROUNDS OF APPEAL
The amended ground allowed by leave – asserted failure to admit and give weight to the forensic document examiner’s report
- By the date of the hearing before O’Ryan J the wife had filed an affidavit to which she annexed a report by the forensic document examiner (which attached to it various documents provided to the examiner by the wife). No application had been made to the Court for the appointment of a single expert, and senior counsel for the husband opposed the report being relied on before his Honour. The wife had the report prepared on the basis she asserted signatures on a number of documents purporting to be her signature were forgeries.
- At the hearing before us, after we rejected the wife’s application to adduce further evidence, her counsel sought and was granted leave to rely on the additional (unnumbered) proposed ground of appeal. For ease of understanding, we again set out the amended ground:
That his Honour erred in not admitting into evidence annexure “JL5” to the affidavit of the wife sworn 30 July 2007, such error amounting to a denial of natural justice.
- The wife’s counsel submitted in respect of the forensic document examiner’s report that his Honour:
- had either admitted the documents annexed to the forensic document examiner’s report, but had failed to consider the relevance of the evidence in his overall assessment of where the balance of convenience lay in granting the injunction sought; or
- impliedly ruled on the admissibility of the report, and rejected it without giving the wife an opportunity to be heard, and thus denied her natural justice; or
- was in error in failing to rule on the admissibility of the forensic document examiner’s report at the original hearing or the re-opening.
- The wife’s counsel submitted that the evidence of the forensic document examiner supported the granting of the injunction because, if the husband was likely to face criminal charges for forgery, he would be unlikely to return to Australia.
- The application to amend was opposed by senior counsel for the husband on a number of bases. He submitted, correctly, that the amendment was sought “at the eleventh hour” when the reasons for judgment had been available for a considerable period of time. He further submitted that even if the evidence had been admitted before the trial Judge it would have been in breach of the collateral evidence rule (now contained in s 102 of the Evidence Act 1995 (Cth) (“the Evidence Act”)).
- On exploration of the proposed amendment with counsel we were satisfied that, as the proposed amendment dealt with one of the principal planks of the wife’s case, she should be afforded the opportunity to argue the asserted error. In exercising our discretion to allow the amendment we took into account no prejudice was suffered by the husband as it was clear that the husband’s senior counsel was well able to deal with the arguments advanced before us on behalf of the wife, many of those arguments having been articulated in counsel for the wife’s written submissions.
- To understand the challenge formulated in the amended grounds of appeal (including the additional ground) to his Honour’s order dismissing the application for an injunction restraining the husband travelling overseas, it is necessary to consider both his Honour’s reasons and the transcript of the hearing before him.
- The transcript reveals that at the hearing senior counsel for the husband objected to his Honour admitting into evidence the forensic document examiner’s report which was annexed to the wife’s affidavit on the basis that no order had been made under Part 15 of the Family Law Rules 2004 (“the rules”) for the appointment of a single expert, and that the husband had not had the opportunity to participate in the expert’s appointment, give any instructions to him, nor was he able to participate in the instructions he received. The following passages from the transcript are relevant:
HIS HONOUR: Mr Westwood – I know Mr Westwood. He is a forensic (indistinct)
MR RICHARDSON: Yes, but in this issue he deals with documents that are said to be contentious going back to, I think, 1992 in relation to people who have just separated a period 15-odd years later.
HIS HONOUR: Yes.
MR RICHARDSON: In relation to some of the most peripheral matters, and it is material that, firstly, your Honour should simply excluded [sic] because of the single expert provision, and secondly, adding to that, is that it is material that could only go to an assertion of credit. That is it would be contrary to the collateral evidence rule, or I think, now section 102 of the Evidence Act because it is effectively evidence from him contending to say on the basis of instructions he has, but nobody gives any direct evidence of those instructions I should add, it is simply recorded in the body of his report that my clients should be seen to have been the person likely to have signed signatures, or in some instances that the wife shouldn’t have been seen as likely to have signed signatures that go back years and years and years. Now, I don’t know any basis other than that would be said to assist your Honour other than the purpose for which it is not permitted at law.
HIS HONOUR: Mr Richardson, I wouldn’t be prepared to make a ruling on that preliminary issue without having read the material.
MR RICHARDSON: I – look, when I say preliminary [sic] I accept your Honour should look at it, but - - -
HIS HONOUR: I am going to read everything.
MR RICHARDSON: - - - but in doing so, it may be that your Honour doesn’t need to read it with the level of attention, but to get an understanding of it within the context of the objections so your Honour can deal with those sorts of - - -
HIS HONOUR: Yes. I will read it on the basis that there is an objection as to its use in these – as to whether or not it is in the evidence, or should be included in the evidence in these current proceedings.
MR RICHARDSON: Yes. And I should say there is one matter in it that we would tender in any event, and that is Mr Westwood’s identification of instructions coming to him on 13 June 2007. Your Honour will see that appear [sic] in the report, and we will demonstrate to your Honour how that is relevant to the submission that I foreshadowed earlier today.
HIS HONOUR: Okay. (Transcript 9 August 2007 pp 7-8, lines 27-48 & 1-24)
- After his Honour had read the documents the parties had listed were to be relied upon at the hearing, the following exchange occurred between his Honour and senior counsel for the husband:
HIS HONOUR: ...All right. So far as the affidavit of Mr Westwood is concerned, Mr Richardson, what I did was I did look at it, but I didn’t look at any that Mr Westwood expressed by way of opinions in the light of your objections, subject to dealing with that. I mainly looked at the annexures to it which could be considered as part of either business records or other primary material just to see if that’s what was stated in the document, rather than - - -
MR RICHARDSON: Yes. I don’t know that any of those documents that are – as we apprehended – put forward has any meaningful part of the present case, rather it was the opinion that our friends rely upon but – and what I said to your Honour on the basis of the objection of that remains (indistinct). (Transcript 17 August 2007, p 11, lines 23-39)
- Later, without his Honour having made any rulings on admissibility of documents, senior counsel who then appeared for the wife raised with the trial Judge material in the forensic document examiner’s report:
Mr LETHBRIDGE: The next date relevant is 13 June 2001, and your Honour will see that it’s contended that on that day, the husband through the Liatos Family Trust, entered into a St George Bank guarantee facility in the amount of $5,500,000. That document is not in evidence on the wife’s affidavit, but it does appear in Mr Paul Westwood’s affidavit or report, I’m sorry, and if I might take your Honour to that report for the purpose of highlighting several matters. Your honour will find it - - -
HIS HONOUR: Are you only taking me to the annexure?
MR LETHBRIDGE: Yes.
MR RICHARDSON: Could I just – your Honour it’s (inaudible) admissibility of these matters now because, for example, there’s no primary evidence in the wife’s case where she says my client has forged her husband’s signature. She doesn’t address the topic; she just annexes it.
MR LETHBRIDGE: I’m not going to that issue
HIS HONOUR: No, I think – look, Mr Lethbridge, just deal with it now, if you it’s convenient to you, in the context of what I said to Mr Richardson earlier. Mr Richardson has made an objection to the receipt into evidence of the report of Mr Westwood and he relies primarily on the fact that it’s not in accordance with Family Law rules, he says, because, subject to looking at that, my understanding is in order to rely upon evidence of an expert nature, you need permission in the absence of a joint report or whatever one wishes to call it.
I haven’t read Mr Westwood’s opinions about forgery. I know who Mr Westwood is; I should indicate I have a familiarity with Mr Westwood from prior cases. I haven’t read his report in relation to the issue of forgery. I simply understand there to be such an issue. But I have looked at the annexures, of which I don’t mind saying, Mr Richardson, I do recall a St George Bank letter of offer of facility which is identified. So, when I look at this aide memoir I’m only looking at it in the context of what that document revealed. Now, what do you say about that?
MR LETHBRIDGE: Your Honour, to outline our position, it will be that your Honour could properly admit Mr Westwood’s report on the basis that your Honour has a capacity to waive the laws that Mr Westwood’s report is a document going to issues in circumstances where your Honour would waive the rules.
HIS HONOUR: I understand that.
MR LETHBRIDGE: But for the purposes of my submissions before your Honour, I’m content at the moment to just deal with the document as a document. (Transcript 17 August 2007, pp 23-24, lines 35-48 and 1-34)
- On 27 August 2007 junior counsel then appearing for the wife sought to re-open the matter before his Honour, and to make submission about the granting of an injunction restraining the husband leaving Australia, no submissions on this topic having been made to his Honour by the wife’s senior counsel on 24 August 2007. The following exchange occurred between his Honour and counsel:
MR RICHARDSON: Firstly, unless our friend contends some new issue emerges on these documents there [sic] was no part of his case previously. There having been no submission put by senior counsel on the last occasion in support of the injunction to restrain my client leaving, in my submission he can’t legitimately take that course on a reopening.
HIS HONOUR: No. Go on, Mr Lloyd.
MR LLOYD: I’m in your Honour’s hands.
HIS HONOUR: Make your submission.
MR LLOYD: Your Honour, in my respectful submission if the husband is allowed to leave the jurisdiction he has the opportunity to do whatever he wants with the properties presently in Greece and any other moneys that may or may not be overseas. There can be no doubt that in the past the husband has transferred moneys to [Mr AQ], [Mr RQ] and his sister. If the husband does leave the jurisdiction, then in my respectful submission that may defeat the wife’s claim pursuant to section 79 in circumstances where we say that the husband’s form 13 is somewhat deficient with respect to his duty of disclosure.
There are no guarantees put forward by the husband to his Honour that in the event your Honour allows the husband to travel overseas that he will return and in my respectful submission there is not a great deal of incentive to return, depending upon what view your Honour takes and what ultimately happens with respect to the wife’s allegations of forgery. There can be no doubt that the husband has already moved a vast amount of money out of the jurisdiction. There is an issue still unresolved regarding this 30,000 document situation. I’m instructed the wife has not completed viewing all of those yet. Documents may still turn up that assist my client’s case. In the event that the husband did travel overseas, then of course she would be left with no recourse in my submission against the husband.
Your Honour must weigh up the risk of the husband leaving the country versus the prejudice to the wife in circumstances where a great deal of property is in another jurisdiction, amount, however, unknown. It’s a matter of weighing the balance, that is, the degree of prejudice to the wife if the order is not made. It may be – and I don’t know – that the husband may be exposed to breaches of the Corporations Law which per se in my respectful submission your Honour can draw the inference that that is incentive for him not to return if in fact he did leave the country. If the husband remains in the jurisdiction it’s open to him to arrange to have the Greek properties and other properties valued and of course orders could be made in personam that would in fact be enforceable, which would otherwise be not if they were made in rem against the properties overseas.
We say the balance of convenience favours the wife, your Honour. Section 114(3) of the Family Law Act and certain section 90AF gives your Honour the jurisdiction to be able to continue the orders that are presently in place. Your Honour, there is in this case in my respectful submission a risk of disposal of assets that would have the effect of defeating a judgment pursuant to section 79. There is the probability of an objective risk of disposal of property in this case. With respect to the risk of disposal, the question of intention or a scheme as referred to in Waugh’s case is but one of a number of factors relevant to the objective risk of disposal.
HIS HONOUR: I think you’re now making submissions in a general sense.
MR LLOYD: I am, your Honour.
HIS HONOUR: I’ve had those submissions already. This was just simply – as I understand it, unless the evidence shows some basis for a different submission, all I’m hearing is more evidence that your client contends is relevant to what I’ve already been told. (Transcript 27 August 2007, unpaginated (Appeal Book 11:1528-1529, lines 15-47 and 1-31))
- Later, in submissions in reply the wife’s junior counsel said:
MR LLOYD: Yes, your Honour, very briefly. Your Honour, with respect to my learned friend Mr Richardson’s submission regarding the forgeries, I take your Honour to paragraph 30 of my client’s affidavit where in my respectful submission she nails the colours to the mast when she says this:
I’ve observed that in amongst the aforementioned documents there are documents that appear to me to purport to contain my signature but upon inspection by me I have formed the view that the signatures are not mine but appear to be a forgery of my signature.
So she’s raised that issue fairly and squarely, your Honour, in my respectful submission. I take my learned friend’s point regarding the Thomas Edison case. I can only say this with respect to that, your Honour: there is still a great deal of documents that my client is yet to discover in the sense of read to see whether or not anything else is still relevant. There is some figure has been mentioned at 30,000. I certainly haven’t seen them all and I’m instructed that my instructing solicitor hasn’t. (Transcript 27 August 2007, unpaginated (Appeal Book 11:1533, lines 18-35))
- His Honour at paragraph 36 of his reasons explained the manner in which the applications proceeded before him, and noted there were “significant issues in relation to the extent and value of the assets of the parties” which required further investigation, and at this stage of the proceedings he was unable to resolve such issues. He then explained:
... What I will hereafter set out appears from the written material and I accept that there may be objection at the final hearing to some of the material; that my understanding of what is in the material may be in error or that there may be an explanation or evidence in reply. The Husband contends that he will require more time to deal with the evidence of the Wife.
- In dealing with documents, some of which became annexures to the forensic document examiner’s report, the trial Judge recorded the conflicting evidence of the husband and wife about the circumstance of the storage of the documents in the garage at the matrimonial home. Included in this recitation his Honour said:
...[t]he Husband deposed that he is fully aware that they are financial records and the requirement for their retention and he has always maintained meticulous records of all his financial and business dealings. He contends that it is these records that the Wife now claims constitute evidence of his long term fraudulent activities. The Husband deposed that the Wife did not make the same suggestion about many of the very same documents that were annexed to the draft affidavit received in March 2007. He contends that if they were evidence of incriminating activity on his behalf, why in the context of these proceedings would he deliver them up to the Wife. He contends that they are each capable of proper explanation and context which at present he has only had the opportunity to provide in a general way. (paragraph 244)
- Later in his reasons, at paragraph 257 the trial Judge said:
The Wife also contends that she observed documents that appear to purport to contain her signature but upon inspection she formed the view that the signatures are not hers but a forgery of her signature. She said that as a consequence she instructed her solicitor to instruct an expert to prepare a report with respect to the signatures that appeared to be forgeries of her signature as well as the signature of her father, [AB], and her mother, [CB]. The Wife’s solicitor retained Mr Paul Westwood who is a forensic document expert and he prepared a report dated 22 June 2007 a copy of which was attached to the Wife’s affidavit. The Husband objects to the receipt of this report into evidence. As I indicated during discussion, in dealing with the current applications I have ignored the opinions of Mr Westwood (our emphasis).
- Having dealt with matters raised by the wife in support of the interlocutory relief sought, his Honour turned to the assertions of forgery made by the wife. His Honour was critical of the wife’s failure to refer to her draft affidavit, to conversations with the husband, and the inference which could be drawn from what the wife contended she discovered in June 2007.
Discussion – admissibility of forensic document examiner’s report
- It is convenient for us to now deal with the asserted error by the trial Judge, namely that he failed to make a ruling on the admissibility of the forensic document examiner’s report. Before us, counsel for the wife argued that although senior counsel for the husband proceeded before the trial Judge on the basis there was an agreement the annexures to the forensic document examiner’s report would be admitted as business records, but not the report itself, that this assumption was incorrect, and that a reading of the transcript in context supported the assertion that senior counsel for the wife was referring only to one document (No 107) annexed to the report. Thus he submitted the trial Judge failed to deal with the objection raised by the husband’s senior counsel.
- It was also asserted that the admissibility of the report was raised on the re-opening on 27 August 2007.
- The transcript relevant to the “concession” does not, on our reading, imply the limitation for which the wife’s counsel contends. The transcript reveals that the trial Judge was taken to a number of documents being business records annexed to the wife’s affidavit, not just document numbered 107, some of which were tendered by her senior counsel as exhibits.
- This was an interlocutory application where the wife was represented at the hearing by senior counsel. On the appeal, counsel for the wife did not take us to any material in the transcript where the wife’s senior counsel sought, after his initial submissions which we have set out above, to have his Honour make a ruling on the admissibility of the forensic document examiner’s report.
- Our reading of the transcript makes it clear that the issue of the report itself was not pressed by senior counsel for the wife who was content, understandably where the report sought to be tendered was not filed in accordance with the rules, to have before the trial Judge the documents annexed to the report on the basis those documents were properly admissible as business records (see s 69 of the Evidence Act).
- We do not accept that it was incumbent on the trial Judge to further raise the issue of the admissibility of the report with counsel, given the concession by counsel that he was content for the trial Judge to have regard to the material in the wife’s affidavit, and the documents annexed to the forensic examiner’s report. Accordingly, we are not persuaded in these circumstances that the wife was denied natural justice by his Honour rejecting the evidence and/or failing to give the wife an opportunity to be heard on 27 August 2007.
- Further, when junior counsel for the wife appeared before his Honour at the re-opening the transcript reveals no application was made at that time to his Honour to receive the report into evidence, but rather junior counsel proceeded to make submissions in support of the granting of the injunction on the basis of the wife’s own assertions in her affidavit. Again, in the circumstances of this interlocutory hearing, where the wife was represented initially by senior counsel, and later on the re-opening by junior counsel, who did not press for a ruling on the admission of the report, we do not accept there was any denial of natural justice to the wife.
- We note before us that counsel for the wife conceded that, even if the report had been before the trial Judge, it would have carried little weight, being untested, and that his Honour would not have been able to make findings as to the assertions contained in the report (Transcript 12 December 2007 p 32). Accordingly, we find no merit in these grounds.
Grounds 1B and 1C - that his Honour erred at law in failing to apply the proper test for the balance of convenience when deciding whether or not to restrain the husband from leaving Australia
- In his written submissions, counsel for the wife noted “Appeal Ground 1C is merged with Ground 1B” (applicant’s submissions p 5).
- Counsel for the wife’s arguments in support of ground 1B were not directed to “the proper test”, but rather to matters relevant to be considered by the trial Judge in determining where the balance of convenience lay. Senior counsel for the husband in his written submissions at paragraph 18 noted:
This ground contends that the discretionary judgment fails as a consequence of an error in principle. That principle is said to be “failing to apply the proper test” (my emphasis). Neither the ground, nor the submissions identify what the alleged test is.
- His Honour referred in his reasons to the relevant principles in the authorities to be applied in determining an application for an interlocutory injunction, and paid careful regard to the issues raised in Mullen & De Bry  FamCA 1380; (2006) FLC 93-293; (2006) 36 Fam LR 454.
- As noted by counsel for the husband in the submission we have just set out, the wife’s counsel did not in his written or oral submissions assert what was the proper test to be applied in determining whether or not to grant an interlocutory injunction. The wife’s counsel in his submissions (paragraph 1B.2) and list of authorities did refer to the decision of the House of Lords in American Cyanamid v Ethicon  A.C. 296, and Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board of Queensland (1982) 46 ALR 393. To the extent that the wife’s counsel referred to American Cyanamid when dealing with the ground directed to the “proper test” we draw attention to the decision of the High Court in Australian Broadcasting Corporation v O’Neill 227 (2005-06) CLR 57, in particular at paragraph 65, where Gummow and Hayne JJ said:
The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd. This court (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries, and continued:
The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.
By using the phrase “prima facie case”, their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the court continued, in a statement of central importance for this appeal:
How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks. (foonotes omitted)
Later at paragraph 71 their Honours said:
However, a difference between this court in Beecham and the House of Lords in American Cyanamid lies in the apparent statement by Lord Diplock that, provided the court is satisfied that the plaintiff’s claim is not frivolous or vexatious, then there will be a serious question to be tried and this will be sufficient. The critical statement by his Lordship is “[t]he court no doubt must be satisfied that the claim is not frivolous or vexatious, in other words, that there is a serious question to be tried”. That was followed by a proposition which appears to reverse matters of onus:
So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought. [Emphasis added]
Those statements do not accord with the doctrine in this court as established by Beecham and should not be followed. They obscure the governing consideration that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted and the practical consequences likely to flow from the interlocutory order sought. (footnotes omitted)
- Given the lack of submissions in support of these grounds (other than those in support of the application to adduce further evidence which we dismissed) we are satisfied they have not been established.
Ground 1A - asserted lack of adequate reasons and Ground 1D - asserted error in assessing balance of convenience
- By reason of overlap it is convenient for us to deal with the submissions raised in respect of these two grounds together.
- There is no doubt about the necessity for a trial Judge to provide adequate reasons, taking into account how matters were presented to him or her at trial (see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247).
- The trial Judge noted the facts relied on by the wife to support the injunction, including her assertion she had “established a strong prima facie case” that funds from the company lent to the Liatos Family Trust were funds of the husband, and that his overseas interests were more significant than disclosed by him. He also recorded that the wife submitted since separation the husband had primarily resided in Greece, and that the company was resident in a “well-known tax haven”. He noted the wife’s assertions about the forgeries. He also noted the wife was prepared to give an undertaking as to damages, and the relevance of such undertaking.
- In support of the wife’s case the trial Judge found there were serious questions to be tried in the identification, and value of the husband’s assets. His Honour explained that, if sale of the Queensland property proceeded without restraint on the proceeds, those proceeds would be remitted overseas and invested in a project in Greece, and may not be able to be recovered thus defeating the wife’s claim. His Honour further explained that, as the husband contended the proceeds of the Queensland property were not his, he would not suffer prejudice if the funds were subject of an injunction restraining disposal pending the s 79 proceedings. We note again at this point his Honour did make orders restraining the disposition of the proceeds, including funds asserted to be owing to the company.
- At paragraph 300 of his reasons, the trial Judge highlighted the matters of concern in the husband’s case including the fact he had spent considerable periods of time overseas in recent years, and that there were deficiencies in his evidence, including lack of disclosure of his income and expenditure.
- At paragraphs 301 to 303 of his reasons his Honour set out the matters in the exercise of his discretion which he weighed in the husband’s favour in determining the balance of convenience including:
- that the husband contended he proposed to participate in the proceedings;
- the husband sought to spend face to face time with the children;
- the husband said he had family in Australia;
- the husband had assets in Australia;
- that the assets available for division could be about $8 970 000; and
- the failure of the wife to refer to her draft affidavit including failure to refer to conversations relied on to support the granting of the injunction in that affidavit.
- As we noted at the commencement of these reasons, this was an application for leave to appeal. As we were readily able to discern his Honour’s reasoning process, and we did not find any matter which his Honour failed to take into account or properly weigh in the exercise of his discretion in refusing the injunction to restrain the husband travelling overseas, we found no error of principle or substantial injustice disclosed by the proposed grounds. Accordingly, we rejected the application for leave to appeal.
THE FURTHER EVIDENCE APPLICATION
- The wife sought to adduce further evidence being her affidavit sworn 19 November 2007. In that affidavit the wife deposed, inter alia, to the husband giving the parties’ daughter a laptop computer from which she had an expert download information being financial modelling for a project in Romania. The wife also sought to rely on information she downloaded from the internet about Liatos Capital. The wife asserted the husband had made no disclosure of any interest in any projects in Romania. The wife also asserted that the husband had been involved with a company, H Pty Ltd, which had “failed to meet its obligation”.
- Before us, counsel for the wife conceded that any assertion that the husband, as a director of H Pty Ltd, was in breach of provisions of the corporations law, could not be maintained on the material advanced by the wife.
- The wife’s counsel conceded the balance of the material, which was directed to the wife’s submission the husband had vast undisclosed overseas wealth, was sought to be adduced on the question of balance of convenience.
- We refused to admit the further evidence on a number of bases. First as the wife’s counsel readily conceded, if there was new relevant material, then the proper application was an application at first instance before the trial Judge. Secondly, that much of the material had been in evidence before the trial Judge including the website of Liatos Capital, and finally because of the contentious nature of some of the material.
COSTS OF THE APPLICATION
- At the conclusion of the hearing before us we sought submissions from the parties as to costs. Senior counsel for the husband sought an order that the wife, having been unsuccessful, pay the husband’s costs both of the application for leave and the application to adduce further evidence, but that the husband would be content for the order to be stayed until the conclusion of the proceedings. Counsel for the wife did not make any submission in respect of costs on the basis that a costs order would not be enforceable until the conclusion of the proceedings.
- The wife was wholly unsuccessful in respect of the application for leave and the application to adduce further evidence. The wife is likely to receive a substantial entitlement at the conclusion of the s 79 proceedings. Accordingly, we made the order for costs sought by counsel for the husband.
I certify that the preceding eighty-five (85) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court
Date: 25 July 2008