B1 v B2 (No. 4) [2018] NSWDC 497

District Court New South Wales

Medium Neutral Citation: B1 v B2 (No. 4) [2018] NSWDC 497 Hearing dates: 17 May 2018 Date of orders: 24 May 2018 Decision date: 24 May 2018 Jurisdiction: Civil Before: Gibson DCJ Decision: See [74] Catchwords: Application to set aside freezing order – whether "a good arguable case" – whether there is a likelihood that any prospective judgment will be wholly or partly unsatisfied – whether full disclose of information had been made by the defendant – balance of convenience – variation of freezing order Cases Cited: B1 v B2 (No. 3) [2018] NSWDC 108 In the marriage of Elias (1977) 3 Fam L R 11,496; (1977) FLC 90-267; 29 FLR 393 Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 Weldon v Levitt [2017] FCCA 3072 Texts Cited: Chisholm, R., "Exclusion of evidence inconsistent with earlier statements: the rise and fall of the 'Elias principle'" (2001) 15 Australian Journal of Family Law 1 Category: Procedural and other rulings Parties: Plaintiff: B1 Defendant: B2 Representation: Counsel: Plaintiff: Mr M J Lewis Defendant: Ms D Woods

Solicitors: Plaintiff: Diamond Conway Defendant: Lawhouse File Number(s): 2017/180457 Publication restriction: Names of the parties have been anonymised

Judgment

The freezing orders the subject of this application 1. On 26 April 2018, the plaintiff brought an application for an ex parte freezing order in relation to the proceeds of sale of the defendant's primary asset, a property situated at Saratoga in the State of New South Wales. The basis for the freezing order was for the preservation of assets pending the hearing of defamation proceedings between the plaintiff and defendant, who were formerly married. 2. The orders that I made were as follows (see B1 v B2 (No. 3) [2018] NSWDC 108): 1. An order that the Court grant leave that this motion may be filed in Court. 2. An order that this motion be returnable instanter. 3. An order that: 1. The time for service of this motion and supporting affidavits is abridged and service is to be effected by 5pm on Thursday 26 April 2018. 2. Service on the defendant is deemed to be effective if sent by email to the attention of the Defendant's solicitor. 1. An order that this motion shall be further listed for hearing at 9 am on Thursday 3 May 2018 for a further hearing in respect of this motion before Judge Gibson. 2. An order that orders (6) to (20) inclusive to have effect up to and including Thursday 3 May 2018. 3. Pursuant to s 46 of the District Court Act 1973 (NSW) and r 25.11 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") and upon the applicant giving an undertaking as to damages, as the Court considers appropriate: 1. A freezing order restraining the Defendant from removing any assets located in Australia or from disposing of dealing with or diminishing the value of those assets ("Australian assets") up to the unencumbered value of $250,000 (the "Relevant Amount") until further order; 2. If the unencumbered value of the Defendant's Australian assets exceeds the Relevant Amount, the Defendant may remove any of those assets from Australia or dispose of or deal with them or diminish their value so long as the total unencumbered value of the Defendant's Australian assets still exceeds the Relevant Amount; 1. For the purposes of these orders: 1. Assets include: 1. all of the Defendant's assets, whether or not they are in her name and whether they are solely or co-owned; 2. any asset which the Defendant has the power, directly or indirectly, to dispose of or deal with as if it were her own (the Defendant to be regarded as having such power if a third party holds or controls the asset in accordance with her direct or indirect instructions); and 3. the following assets in particular: (A) the proceeds of sale of the property at 210 Steyne Road, Saratoga NSW 1. the value of assets is the value of the interest the Defendant has individually in the assets; 2. unencumbered value means value free of mortgages, charges, liens or other encumbrances. 1. Order (6) will cease to have effect if the Defendant: 1. Pays the relevant amount into Court; or 2. Pays the relevant amount into a joint controlled monies account in the name of the Defendant's solicitor and the Plaintiff's solicitor as agreed in writing between them; or 3. Provides security in that sum by a method agreed in writing with the Plaintiff to be held subject to the order of the Court. 1. If order (6) ceases to have effect pursuant to order 8(a) (above), the Defendant must as soon as practicable file with the Court and serve on the Defendant a notice of that fact. 2. Any payment made or any security provided pursuant to order (8) will not provide the Plaintiff with any priority over the Defendant's creditors in the event of the Defendant's insolvency. 3. An ancillary order pursuant to r 25.12 UCPR that the Defendant inform the Plaintiff in writing of all of her Australian assets, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and the extent of the Defendant's interest in the Australian assets and to swear or affirm and serve on the Plaintiff an affidavit setting out the above information on or before the Return Date. 4. This order (12) applies if the Defendant objects to complying with order (11) on the grounds that some or all of the information required to be disclosed may tend to prove that the Defendant: 1. has committed an offence against or arising under an Australian law or a law of a foreign country; or 2. is liable to a civil penalty. 3. The Defendant must: 1. disclose so much of the information required to be disclosed to which no objection is taken; and 2. prepare an affidavit containing so much of the information required to be disclosed to which objection is taken, and deliver it to the Court in a sealed envelope; and 3. file and serve on the Plaintiff a separate affidavit setting out the basis of the objection. 1. Subject to the conditions noted in orders (14) to (17) these orders does not prohibit the Defendant from: 1. paying her ordinary living expenses; 2. paying her reasonable legal expenses up to $20,000; 3. dealing with or disposing of any of her assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred; and 4. in relation to matters not falling within paragraph (13) (a), (b) or (c), dealing with or disposing of any of her assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so the Defendant gives the Plaintiff, if possible, at least two working days written notice of the particulars of the obligation. Conditions to the exceptions offered above. 1. In so far as the Defendant is not prohibited from paying ordinary living expenses pursuant to order 13(a) above, until further order of the Court the Defendant shall keep a written record of all such expenditure. 2. Insofar as the Defendant is not prohibited from paying reasonable legal expenses pursuant to order 13(b) above, until further order of the Court the Defendant shall instruct any lawyer acting on her behalf to produce, as and when you require, a statement of legal expenses incurred and, a statement that they have been reasonably and properly incurred by the Defendant. 3. Insofar as the Defendant is not prohibited from dealing with or disposing of any assets in the ordinary and proper course of your business pursuant to order 13(c) above, until further order of the Court the Defendant shall keep a written record of all dealings and any such dispositions. 4. The Defendant and the Plaintiff may agree in writing that the exceptions in the preceding paragraph are to be varied. In that case, the Defendant or the Plaintiff must as soon as practicable file with the Court and serve on the other a minute of the proposed consent order recording the variation signed by or on behalf of the Plaintiff and the Defendant and the Court may order that the exceptions are varied accordingly. 5. Order (13) shall not apply if the unencumbered value of the Defendant's Australian assets exceeds the Relevant Amount. 6. Anyone served with or notified of this order, including the Defendant, may apply to the Court at any time to vary or discharge this order or so much of it as affects the person served or notified. 7. The court notes the undertaking of the solicitor for the Plaintiff pay the filing fee of the notice of motion within 7 days. 8. Costs reserved to Thursday 3 May 2018. 9. Stand over the plaintiff's notice of motion for hearing on Thursday, 3 May 2018 at 9am in the Defamation List (estimate of 1 hour plus). 1. A short history of the case management of these proceedings is set out in B1 v B2 (No. 3) at [2]-[4]. The parties are also engaged in Family Court proceedings which it would be fair to characterise as being combative. There are also criminal proceedings commenced in relation to the plaintiff which had been set down for hearing in November 2018.