Allan & Allan

In *Allan & Allan*, the Family Court of Australia considered an application by the husband to discharge an order restraining him from exercising his powers as protector of the M Trust. The wife, the trustee of the M Trust, and the Receivers of S Nominees had jointly sought consent orders to give effect to a compromise agreement regarding a dispute over the ownership of certain assets. The husband, an undischarged bankrupt, sought to have the restraint order lifted so that he could potentially remove the current trustee and appoint a new one, who would then reconsider the proposed compromise.

The court was required to determine two primary legal issues: first, whether the husband possessed the legal standing to bring an application to discharge the order restraining him from exercising his powers as protector of the M Trust; and second, whether the husband ought to provide security for costs in relation to any application he might bring. The husband’s standing was contested, particularly given his status as an undischarged bankrupt and his assertion that he was acting altruistically as a representative of the family rather than for personal gain.

Justice Watts found that the husband did have standing to bring an application to discharge the order restraining his powers as protector of the M Trust. The court reasoned that the husband's standing did not arise from any application under s 85A of the *Family Law Act 1975* (Cth) or any interest in the matrimonial asset pool, but rather from his role as protector and his stated intention to act in the family's interest. However, given the husband's status as an undischarged bankrupt and the potential costs associated with the wife and Receivers preparing for and making submissions on his application, the court ordered that the husband provide security for costs.

The court ordered that within 28 days, the husband must provide security from a third party in the sum of $30,000. This amount was to cover $15,000 for the wife's costs and $15,000 for the Receivers' costs, in respect of a hearing concerning the discharge of the restraint order and the appropriateness of sanctioning the compromise agreement. Additionally, the husband was required to file and serve specific affidavits in support of his application within the same 28-day period. The matter was then adjourned for mention to allow for directions regarding further filings and the setting of a hearing date.