A court has ordered the removal of a caveat lodged by a company over the home of a former employee to secure repayment of allegedly misappropriated funds.
Office manager Annie Robinson defends the allegations, contending the transfers she made to her accounts were with the authority and consent of her employer’s sole director, Anthony Byrne with whom she was then having an illicit affair.
She opened an account at his suggestion – she asserts – as a means to receive funds from his company without alerting his wife or the company accountants, claims Mr Byrne states are fabricated.
Annie had worked for the Byrne Civil group on the Sunshine Coast for more than 6 years up to September 2019 as had her husband Troy as a machinery operator in 2013.
To investigate the alleged fraud, the company commissioned forensic accountant Steven Ponsonby who concluded that “on becoming aware of legal action being commenced for the civil recovery of the alleged misappropriation, a total of $295,000 was removed from multiple ATMs” by the pair.
A police investigation began and both Annie and Troy are now defending embezzlement charges.
Byrne Civil commenced civil proceedings in the Supreme Court in January 2020 against the couple alleging she had overpaid wages to herself and her husband and made other fraudulent electronic funds transfers.
The lawsuit particularises transfers of $20k having been applied to the cost of improvements at the family home in Gympie they acquired in 2008 but do not plead what happened to a further $1.6 million of allegedly embezzled funds.
Because of the criminal proceedings, a stay order was made in August 2021 in respect of the civil proceedings.
Byrne Civil lodged a caveat over the Gympie residence in February 2021 claiming an interest pursuant to a constructive trust in the equity of the home by way of the reduction of the mortgage debt that the misappropriated funds achieved.
What came before Justice Helen Bowskill in October was the Robinsons’ application that the caveat be removed and Byrne Civil’s application for a freezing order.
The Robinsons contended firstly that the company could not possibly have any caveatable interest given that the property was acquired in 2008 well before either of them had begun work with the company.
Annie and Troy also told the court that they needed to sell the home – which had been appraised at $440k – to fund their defence of these proceedings and the criminal action.
Her Honour thought it arguable that a constructive trust could be created by contributions to mortgage repayments but rejected the contention in this instance as it was unsupported the evidence and the argument was inconsistent with what Byrne had so far pleaded.
A mere inference was in Her Honour’s view “insufficient to support a conclusion as to the claim to an interest in the Gympie property on the basis of financial contributions in the form of mortgage payments”.
For that reason Byrne Civil could not make out the beneficial interest it claimed in the property to support the caveat and an order was made for its removal.
Justice Bowskill also ruled that the balance of convenience favoured removal of the caveat.
Accepting that Byrne Civil had “a good arguable case in respect of their underlying cause of action” – as opposed to its claim to an interest in the Gympie property – the court directed its attention as to whether a freezing order should be made.
Her Honour agreed that the conduct referred to by Mr Ponsonby was suspicious but given that it had all occurred in 2020 and the freezing order application was not filed until October 2021, she saw no sufficient basis for making the orders sought.
She called for submissions from the parties as to whether Byrne Civil might be permitted to assemble additional evidence for an adjourned hearing of the application at the same time suggesting that sufficient undertakings could be provided by the Robinsons in order to satisfy the company that their assets would not be dissipated.
A determination of the substantive issues will likely occur in late 2022.