Shipp v Sword [2002] FMCA 37 (18 February 2002)

Last Updated: 16 April 2002

FEDERAL MAGISTRATES COURT OF AUSTRALIA

SHIPP v SWORD

[2002] FMCA 37

BANKRUPTCY - Ex parte injunction vacated - conduct of parties - failure to provide available evidence on ex parte hearing - no orders as to costs.

Applicant:

CATRIONA MOYRA SHIPP

Respondent:

MALCOLM BAIRD SWORD

File No:

WZ105 of 2001

Delivered on:

18 February 2002

Delivered at:

Perth

Hearing Date:

18 February 2002

Judgment of:

McInnis FM

REPRESENTATION

Counsel for the Applicant:

Mr W Goodlet

Solicitors for the Applicant:

Unmack & Unmack

Counsel for the Respondent:

Mr T Coyle

Solicitors for the Respondent:

Phillips Fox

ORDERS

(1) Order 3 of the court made on 19 November 2001 be vacated.

(2) There be no order as to costs

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH

WZ105 of 2001

CATRIONA MOYRA SHIPP

Applicant

And

MALCOLM BAIRD SWORD

Respondent

REASONS FOR JUDGMENT

1. This is the return of an application for injunctive relief which had been commenced in this court by the applicant on an ex parte application which was dealt with by the court on 19 November 2001. On that occasion the court heard submissions by the representative of the applicant, Mr Goodlet, which essentially related to seeking orders by way of injunctive relief against the respondent in relation to items which were disputed items of the estate, and those items had in fact been and continue to be the subject of proceedings in the Supreme Court of Western Australia.

2. At the time when the application was then heard the court had before it an affidavit sworn by Walter Leslie Goodlet filed on 16 November 2001. In that affidavit the deponent refers to the fact that the applicant, his client, had asserted that she was in fact the beneficiary under the terms of a will and that the deceased estate at that stage of her late father included an item of jewellery, amongst other antique items.

3. Without transgressing all the facts and circumstances in that affidavit and without also dealing with a further affidavit which was filed on

16 November 2001 by the applicant, in essence what was before the court was a concern overall as to the lack of participation or compliance with those matters which were the subject of proceedings in the state Supreme Court by the respondent. There was concern expressed about the continued involvement of the respondent's solicitors, concern expressed about the whereabouts of the respondent and knowledge at least at that stage that the respondent was then residing in the state of Queensland and that his whereabouts were unknown, save and except that there was an intended journey overseas.

4. At that stage I accepted that the ex parte application was made in circumstances where there was a significant degree of uncertainty both in relation to the whereabouts of the respondent and in particular the possibility that he may dispose of certain items which are in dispute as to whether or not they form part of an estate and in turn would be items which the applicant might at least be a part beneficiary.

5. Before the court on 19 November 2001 there were the two affidavits placed before the court and there was a degree of urgency. As a consequence of that degree of urgency, the court made orders ex parte that in fact the respondent be restrained until further order from departing from Australia, that he forthwith deliver up to a member of the Australian Federal Police, to be held until further order, any airline ticket which may be in his possession for a journey from Australia, and his current passport.

6. A further order was made that the respondent be restrained until further order by himself, his servants or agents from removing or causing or permitting to be removed from Australia or selling, charging, mortgaging or otherwise dealing with or disposing of or causing or permitting to be sold, charged, mortgaged or otherwise dealt with or disposed of the item of jewellery described as a platinum ring, emerald, approximately 4.58 carats, and further described and being referred to as the emerald ring. It was further ordered that a sealed copy of that order was to be served on the respondent by 4 pm Thursday, 22 November 2001 and the application was otherwise adjourned to 23 November 2001.

7. Those orders were made upon a written undertaking given by the solicitor for the applicant in the usual form as to damages. When the matter was then listed before this court on 23 November 2001, Mr Coyle appeared for the respondent and on that occasion there was an affidavit placed before the court sworn by Timothy Oscar Coyle on 23 November 2001 and submissions were made that the court should not continue the restraining orders numbered 1 and 2 which had been made by the court on 19 November 2001, which effectively restrain the respondent from departing from Australia.

8. In the affidavit sworn 23 November 2001 the deponent attaches certain other affidavits which are said to have been sworn, filed and relied upon in the Supreme Court of Western Australia proceedings wherein the applicant is the plaintiff and the respondent is the defendant. They are, as I have indicated, proceedings which relate to a dispute over items in the estate to which I have referred.

9. In particular there was an affidavit of the respondent sworn 21 May 2001. In that affidavit he makes specific mention of the ring which was the subject of orders made by this court on 19 November 2001, and he states that in relation to that ring,

"I understood from conversations with my father the ring was purchased by his father in or around 1930. The ring formed part of my mother's jewellery. My mother committed suicide on 10 September 1985. At that time I was living in Brisbane and I flew to Perth for the funeral a few days after her death. I stayed in Perth for around 4 or 5 days. My sister Karen flew to Perth from the UK from where she was living. My other sister, the plaintiff, also attended at the funeral. A few days after the funeral my father told me that all of my mother's jewellery was to be divided equally between myself and my sisters Karen and the plaintiff. He handed me the emerald ring and I understand that my sisters were also given items of jewellery. My mother died intestate and I base that belief on things said to me by my father after her death and the fact that I was never made aware through any other source of the existence of any valid will executed by my mother."

10. A further affidavit attached to the affidavit of Timothy Oscar Coyle was in fact an affidavit of the applicant sworn 29 May 2001. In that affidavit the deponent says:

"5. The ring never belonged to my mother who did indeed not like the ring, saying that the stone was so large that she was sure people would regard it as an imitation emerald."

11. She goes on to say in the same affidavit:

"6. I cannot know but believe that it would be extremely unlikely that my father took the ring from safe custody after my mother's death and gave it to the defendant, as he says as ´part of (our) mother's jewellery to be divided equally (between him, my sister Karen and me).

7. There was, indeed a division between us of some of my mother's things but this certainly did not include the emerald ring, which was never hers and consisted only of such things as gold bracelets and similar items of personal adornment, none being of great value."

12. "The value of the emerald ring" she goes on to say -

"was certainly so very much greater that it was impossible that the ring should be given to the Defendant in an equal division of jewellery.

9. To the best of my knowledge and belief the emerald ring was always kept by my father during his lifetime in his bank and was certainly part of his estate."

13. A further affidavit attached to the affidavit of Timothy Oscar Coyle is the affidavit of Dawn Star Sword sworn 6 June 2001. In that affidavit the deponent refers to the ring and says the following:

"3. I recall discussion from time to time concerning an emerald ring. I cannot recall when those discussions took place, save that on several occasions I recall Malcolm's father David commenting that the ring had been bought by his father, had been passed to him (David) and he in turn would hand it down to Malcolm.

4. I recall seeing the ring on infrequent occasions when Malcolm's mother wore it on special occasions. I understood from comments made by Malcolm's parents and Malcolm, from time to time, that the ring was quite valuable and was kept in a bank safe under the control of Malcolm's father.

4. Malcolm's mother committed suicide on 10 September 1985. Malcolm and I were then living in Brisbane. Malcolm flew to Perth shortly after his mother's death, returning about 1 week later. On his return Malcolm showed me the emerald ring and said that his father had given it to him. Malcolm told me that he would keep the ring in a bank vault for safe keeping. In March 1986 I recall that we were in Perth for the birthday of Malcolm's sister Catriona on 19 March 1986. I recall during that visit Malcolm's father told me he had given the ring to Malcolm."

14. It is clear from that affidavit material to which I have referred that there is a significant dispute as to the ownership of the emerald ring. It is equally clear, however, that during the course of the ex parte application before this court that although those affidavits were not placed before the court the court was cognisant of the fact that there was a dispute between the parties and indeed it was indicated and I accept that that dispute has led to what appear to be unfortunate proceedings in the Supreme Court of Western Australia.

15. On an ex parte application the normal principles apply that a party making such an application and seeking significant interlocutory or interim relief as an injunction, which on this occasion was an injunction to restrain the movement of a citizen from Australia to overseas destinations, requires an applicant in those circumstances to provide full and frank disclosure of all material which might be regarded as relevant, albeit adverse to the application in circumstances where the application is heard in the absence of another party and where, as I have indicated, significant interlocutory relief is sought.

16. In the normal course of events I would expect that the affidavits to which I have referred would have been filed in this court. They do provide, it seems to me, significant information concerning the issue, at least one of the issues before the court; namely the contesting views about the ownership of the emerald ring.

17. I am satisfied, however, in the circumstances that there was sufficient affidavit material before the court at the time of the ex parte application that would have persuaded the court to make the orders, having regard to the lack of participation in the Supreme Court proceedings by the respondent, his unknown whereabouts, the unknown location and whereabouts of the emerald ring, amongst other property, and the fact that although the affidavits were not produced to the court there was a clear indication that this item, amongst others, was the subject of dispute. In those circumstances, although the affidavit material was not before the court, it seems to me that the orders of the court, in any event, would not have been necessarily different having regard to those other facts to which I have referred.

18. Before me this day the representative of the respondent has sought to persuade the court that it should make orders vacating order number 3 made on 19 November 2001 and that it further should make orders that the applicant pay on an indemnity basis the costs of the respondent. In addition, an order has been sought, which I note is not opposed, that there be liberty to apply by the respondent on or before 30 March 2002 on the question of damages both as to entitlement and assessment which flow from the undertaking concerning damages which was given in writing to the court at the hearing on 19 November 2001.

19. Mr Goodlet for the applicant initially indicated at this hearing that he understood the matter was simply to be adjourned. That understanding arose from what now appears to at least be common facts that the respondent is contemplating obtaining legal advice relating to the issue of whether he should petition for bankruptcy. I am told, and I accept, that the respondent is seeking that advice next week. There was some degree of confusion about the steps that would be taken by the respondent, with the applicant's solicitor indicating that he understood there was going to be an application for bankruptcy, but as I understand it and accept from the respondent's counsel there is not an application yet to be made but, rather, advice to be sought and an indication at least that the respondent would proceed to consider the issue of bankruptcy and, indeed, does not appear to be opposed to that course if it indeed be the subject of the advice from the accountant.

20. In the circumstances it is also relevant to consider whether or not at present there is now sufficient information before the court which would justify the continuation of the order in relation to the emerald ring. Again it does not seem to be strenuously opposed by the applicant that that order should now be vacated in circumstances where at least there are now assurances given to this court that the emerald ring is stored in a bank vault in Brisbane and has not been disposed of by the respondent. It also seems to me on the evidentiary material currently before the court that there is in fact no proper basis for that order being continued.

21. The next question that I have to consider then is what order, if any, I should make concerning the issue of costs. Whilst it is true that on the one hand on an ex parte application the court ought to have been provided with the copies of the affidavits to which I referred, it seems equally clear to me that in times of a degree of urgency with the prospect of departure from Australia of a respondent who is a defendant to Supreme Court proceedings in the state of Western Australia and who had behaved in a manner which at the very least created an air of suspicion, that the risk of that person who may become bankrupt disposing of property which may form part of an estate to which the applicant has an entitlement, was at least a sufficient basis for the court to make the order sought despite, as I have indicated, my reservations about the sufficiency of the material to do so.

22. I accept the criticisms that have been made on the evidence by the representative of the respondent, but in my view on an ex parte application there is a very broad discretion the court has to make orders of an urgent kind, which in fact were made on this occasion. It is my view in exercising my discretion on the issue of costs that I should make no order as to costs in circumstances where I think there should have been further material provided, but that there was at least a basis on the material then before the court to make the orders that were then sought.

23. It is also my view that in the circumstances of this case, having regard to the conduct by the respondent, it is evident before this court that I should not make any further orders either as to costs or damages, I should simply make an order that order number 3 of the court made on 19 November 2001 be now vacated. Accordingly, for the reasons stated I make the following orders:

(1) Order 3 of the court made on 19 November 2001 be vacated.

(2) There be no order as to costs.

24. I direct that the reasons for judgment that I have just delivered be transcribed and upon revision shall constitute my reasons for decision.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of McInnis FM

Associate:

Date: 18 February 2002