Allan and Allan and Ors - [2009] FamCA 553

FAMILY COURT OF AUSTRALIA

ALLAN & ALLAN AND ORS

[2009] FamCA 553

FAMILY LAW – PROPERTY – Interim hearing – Wife seeking interlocutory orders restraining mortgagees from dealing with property of the relationship – consideration and application of s90AF(1); s 90AF(3) and s 90AK Family Law Act – Wife seeking orders enabling her to sell properties owned by trustee of the trust established by the husband – Trust is the alter ego of the husband

Family Law Act 1975 (Cth) ss 90AF, 90AF(1), 90AF(3), 90AF(4), 90AK, 114(3)

Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337

Sanders & Sanders (1967) 116 CLR 366
Antonarkis v Delly (1976) FLC 90-063
Kennon v Spry (2008) FLC 93-388
Custodio v Pinto & Ors (2006) FLC 93-279
W & W and Anor [2006] FamCA 163
B Pty Ltd & Ors & K & Anor (2008) FLC 93-380
Harris & Harris (1983) FLC 92-378

Trustee of the property of G Lemnos, a bankrupt and Lemnos and Lemnos (2009) FLC 93-394

Biltoff and Biltoff (1995) FLC 93-614

APPLICANT:

Mrs Allan

RESPONDENT:

Mr Allan

2^nd RESPONDENT:

W Nominees Pty Limited

3^rd - 6^th RESPONDENTS:

Ms E Allan
Ms H Allan
Ms C Allan
Mr L Allan

7^th RESPONDENT:

Toner Nominees

8^th RESPONDENT:

Ms A Toner

9^th RESPONDENT:

Mr K Toner

10^th RESPONDENT:

Mr N Toner

11^th RESPONDENT:

Mr D Toner

FILE NUMBER:

SYC

3842

2008

DATE DELIVERED:

26 June 2009

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

25 May 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Lloyd

SOLICITOR FOR THE APPLICANT:

Paul and Paul Lawyers

SOLICITOR FOR THE RESPONDENT:

John De Mestre & Co

SOLICITOR FOR 3^RD - 6^TH RESPONDENTS:

Horowitz & Bilinsky

COUNSEL FOR P FINANCE:

Mr Walker, SC

SOLICITOR FOR P FINANCE:

Tiernan & Associates

SOLICITOR FOR M FINANCE:

HWL Ebsworth lawyers

SOLICITOR FOR B FINANCE:

Bansgroves Lawyers

SOLICITOR FOR F FINANCE:

Madsen Rowley

SOLICITOR FOR MR D:

Kelly & Co

COUNSEL FOR A FINANCE:

Marks & Sands Lawyers

Orders

Orders 1, 2 and 3 sought in the wife’s Application in a Case filed 14 May 2009 be dismissed.

Pending further order:

The husband is restrained from doing any act which would remove W Nominees Pty Limited (“W Nominees”) as trustee of the Allan Family Trust.
Forthwith upon the making of this order the husband join with the wife in passing any necessary resolution to amend the Articles of Association and/or Constitution of W Nominees so as to provide that the minimum number of directors is one.
Forthwith upon the making of this order the husband and wife in their capacities as shareholders of W Nominees execute all documents necessary to appoint the wife the sole director and secretary of W Nominees.
Upon the making of the preceding order the wife and W Nominees immediately do all acts and things and sign all necessary documents to cause the following properties to be placed on the market for sale…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] FamCA 553
Decision Date: 26 June 2009

CaseChat Overview and Summary

In the matter of *Allan and Allan and Ors*, Watts J of the Family Court of Australia considered an application by the wife concerning the management and sale of various properties held by W Nominees Pty Limited, the trustee of the Allan Family Trust. The dispute involved the husband and wife's roles in the trust and the disposition of its assets.

The court was required to determine several key issues, including whether the husband should be restrained from removing W Nominees as trustee, and how the company's directorship and shareholding should be structured to facilitate the sale of trust properties. The court also had to consider the process for marketing and selling specific Western Australian and New South Wales properties, including the setting of reserve prices and the distribution of sale proceeds.

Watts J ordered that the husband be restrained from removing W Nominees as trustee. The court further directed that the husband and wife, in their capacities as shareholders, take steps to amend W Nominees' articles of association to allow for a minimum of one director and to appoint the wife as the sole director and secretary. The court then made detailed orders for the sale of the Western Australian and New South Wales properties by public auction, specifying timelines, marketing requirements, and the process for negotiating sales if reserve prices were not met. The proceeds of sale were to be applied first to legal fees, then to discharge secured liabilities, and finally to satisfy a specific debt owed to P Finance Limited. The court also appointed the Registrar of the Family Court to execute documents if necessary to give effect to these orders.

Orders

Orders of the court

Orders 1, 2 and 3 sought in the wife’s Application in a Case filed 14 May 2009 be dismissed.

Pending further order:

The husband is restrained from doing any act which would remove W Nominees Pty Limited (“W Nominees”) as trustee of the Allan Family Trust.

Forthwith upon the making of this order the husband join with the wife in passing any necessary resolution to amend the Articles of Association and/or Constitution of W Nominees so as to provide that the minimum number of directors is one.

Forthwith upon the making of this order the husband and wife in their capacities as shareholders of W Nominees execute all documents necessary to appoint the wife the sole director and secretary of W Nominees.

Upon the making of the preceding order the wife and W Nominees immediately do all acts and things and sign all necessary documents to cause the following properties to be placed on the market for sale by public auction for the best price reasonably obtainable:

5.1. 1 F Street in the State of Western Australia being lots … in SP …;

5.2. 1 J Street in the State of Western Australia;

5.3. 2 J Street in the State of Western Australia.

(“the Western Australian properties”)

The wife and W Nominees, after the expiration of 28 days from the date of these orders, do all acts and things and sign all necessary documents to cause the following properties to be placed on the market for sale by public auction for the best price reasonably obtainable:

6.1. 1 M Street at M in the State of New South Wales;

6.2. H Street at M in the State of New South Wales;

6.3. 2 M Street, M, in the State of New South Wales;

6.4. 1 G Street, M in the State of New South Wales;

6.5. 3 M Street, M in the State of New South Wales;

6.6. 2 G Street, M, in the State of New South Wales;

6.7. 2 A Street, M, in the State of New South Wales;

6.8. 1 A Street, M, in the State of New South Wales.

(“the M properties”)

For the purpose of implementing orders 5 and 6:

7.1. the wife shall instruct such lawyer(s) as she chooses to act on behalf of W Nominees to have the conduct of the sale of the Western Australian properties and M properties;

7.2. the wife shall appoint such agents as she may determine to have the conduct of the sale of the Western Australian properties and M properties on behalf of W Nominees;

7.3. the Western Australian properties shall be listed for sale by public auction (“the first Western Australian auctions”) to take place within six weeks of the date of these orders or such other longer period as the wife may determine:

7.3.1. the wife and husband shall agree upon the reserve sale price and failing agreement after a period of seven days the wife shall determine the reserve sale price for the purpose of such auction;

7.3.2. the wife, W Nominees and the husband shall co-operate in every way with the agent and any valuer engaged by the wife, including (without limiting the generality of the foregoing):

7.3.2.1. making the key(s) to the property available to the agent(s) and the valuer(s);

7.3.2.2. allowing inspection of the property at all reasonable times requested by the agent(s) and valuer(s);

7.3.2.3. doing or saying nothing to hinder or prevent a sale being effected;

7.3.2.4. ensuring that the property, including the grounds, is in a neat and clean condition at the time of inspection by the agent(s) and prospective purchasers; and

7.3.2.5. signing all documents requested by the agent in relation to the listing for sale of the property except a contract or agreement for sale which has not been authorised by W Nominees’ conveyancing lawyer;

7.3.2.6. undertake a marketing campaign in accordance with the recommendations of the agent.

7.4. the M properties shall be listed for sale by public auction (“the first M auctions”) to take place within ten weeks of the date of these orders or such other longer period as the wife may determine:

7.4.1. the wife and husband shall agree upon the reserve sale price and failing agreement after a period of seven days the wife shall determine the reserve sale price for the purpose of such auction;

7.4.2. the wife, W Nominees and the husband shall co-operate in every way with the agent and any valuer engaged by the wife, including (without limiting the generality of the foregoing):

7.4.2.1. making the key(s) to the property available to the agent(s) and the valuer(s);

7.4.2.2. allowing inspection of the property at all reasonable times requested by the agent(s) and valuer(s);

7.4.2.3. doing or saying nothing to hinder or prevent a sale being effected;

7.4.2.4. ensuring that the property, including the grounds, is in a neat and clean condition at the time of inspection by the agent(s) and prospective purchasers; and

7.4.2.5. signing all documents requested by the agent in relation to the listing for sale of the property except a contract or agreement for sale which has not been authorised by W Nominees’ conveyancing lawyer;

7.4.2.6. undertake a marketing campaign in accordance with the recommendations of the agent.

7.4.3. the wife, W Nominees and the husband be restrained from selling or encumbering the M properties for a period of 28 days from the date of these orders.

7.5. In the event the bidding at the first Western Australian auctions or first M auctions do not reach the reserve price the wife shall negotiate with the highest bidder or any other interested person and effect a sale of the property at a price which is not less than five per cent (5%) less than the reserve price or such other price as the parties agree upon in writing.

7.6. In the event any of the properties are not sold at first auction the wife shall do all acts and things and sign all documents necessary to list the properties for sale by further auction(s) no more than eight weeks from the date of the previous auction or such longer period that the wife may determine.

7.7. Upon settlement of the sale of the properties that the proceeds of sale be applied in the following order and priority:

7.7.1. in payment of legal fees;

7.7.2. in discharge of any liabilities properly secured over the properties;

7.7.3. the outstanding debt payable to P Finance Limited secured over Units 1 and 2 at No. 5, E in the State of New South Wales (being the whole of the land in Folio Identifiers 1/… and 2/…) and over Y property in the State of Western Australia (being the whole of the land in Lot … on Diagram …)

The applicant wife do all acts and things so as to open a new bank account in the name of W Nominees in its capacity as trustee of the Allan Family Trust.

In the event that there are any monies payable to the wife pursuant to orders made by the Honourable Justice Rose on 24 November 2008 that remain unsatisfied and in the event there are funds in the account established pursuant to the preceding order, then the wife shall be permitted to do all acts and things and sign all documents necessary for an amount to be paid to the wife to satisfy the outstanding balance.

10.

The husband forthwith and without delay do all acts and things and give all such assistance to the Receiver appointed by A Finance in relation to the sale of collectables as the Receiver may require from time to time.

11.

For the purposes of implementing these orders and pursuant to s 106A of the Family Law Act the Registrar of the Family Court of Australia, Sydney be appointed to execute all documents in the name of any party and to do all such acts and things necessary to give validity and operation to such documents.

12.

Liberty to restore on 7 days notice in respect of the implementation of these orders.

Notation:

13.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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