Barilla & Barilla (No 2)
[2023] FedCFamC1F 277
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Barilla & Barilla (No 2) [2023] FedCFamC1F 277
File number: CAC 1604 of 2018 Judgment of: GILL J Date of judgment: 19 April 2023 Catchwords:
FAMILY LAW – PRACTICE AND PROCEDURE – PROPERTY – Where the interests of the liquidator are directly impacted by the property proceedings – Liquidator seeking to withdraw from proceedings and seek relief in another jurisdiction – Where the court has jurisdiction for the relief sought by the liquidator – Where the wife seeks an anti-suit injunction to prevent liquidator pursuing relief in another jurisdiction – Consideration of whether liquidator conducting litigation in another jurisdiction is oppressive and vexatious.
Legislation: Corporations Act 2001 (Cth)
Family Law Act 1975 (Cth) s 79
Federal Circuit and Family Court of Australia (Family Law Rules) 2021 (Cth) rr 3.01, 6.01–6.04, 6.06, 6.08, 7.06
Cases cited: Barnes v Addy (1874) L.R. 9 Ch. App. 244
CSR Limited v Cigna Insurance Australia Pty Ltd (1997) 189 CLR 345
Lederer & Hunt (2007) FLC 93-311
Pates & Pates [2018] FamCAFC 171
Division: Division 1 First Instance Number of paragraphs: 84 Date of hearing: 5 April 2023 Place: Canberra Counsel for the Applicant: Mr Howard Solicitor for the Applicant: Farrar Gesini Dunn Solicitor for the Respondent: Litigant In Person Counsel for the Interested Party: Mr Haddock Solicitor for the Interested Party: Parker Coles Curtis ORDERS
CAC 1604 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS BARILLA
Applicant
AND: MR BARILLA
Respondent
MR MARRIOTT AS LIQUIDATOR OF B PTY LTD (IN LIQUIDATION)
Interested Party
order made by:
GILL J
DATE OF ORDER:
19 APRIL 2023
THE COURT ORDERS THAT:
1.In the event that he intends to prosecute a claim against the husband, wife or to seek a remedy with respect to the property at C Street, Suburb D, NSW, Mr Marriott, the liquidator of B Pty Ltd (“the liquidator”) shall within 28 days of these orders file a response setting out the relief sought and identifying whether the relief is sought in debt and/or equity.
2.Should the liquidator fail to file in accordance with the above order he is taken not to pursue relief against the husband, wife or a remedy with respect to Suburb D and is discharged from these proceedings as a party.
3.The liquidator is hereby restrained by injunction from commencing or continuing a claim in debt or equity against the husband, wife or in relation to Suburb D connected with the liquidation of B Pty Ltd.
4.Whether or not a party, the liquidator has leave to apply in relation to the above orders.
5.The proceedings are adjourned to a date to be fixed following the expiration of 28 days for further trial directions.
6.That within 30 days of the date of final hearing dates being allocated, unless otherwise agreed between the parties in writing, the wife and husband do all things necessary to obtain an updated valuation for Suburb D, from E Company, or such other valuer as agreed between the husband and wife, on agreed joint instructions and at their joint expense.
7.The wife’s Amended Application in Proceedings filed 28 February 2023 is otherwise dismissed.
8.The husband’s Response to an Application in Proceedings filed 8 February 2023 is dismissed.
9.The liquidator’s Response to an Application filed 3 April 2023 is dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Barilla & Barilla has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
GILL J:
INTRODUCTION
The parties to this matter are Ms Barilla, the applicant wife, Mr Barilla, the respondent husband, and Mr Marriott the interested party, who is the liquidator for the corporate trustee of the parties’ family trust (“the liquidator”), B Pty Ltd. The proceedings relate to the property of the parties.
These interim proceedings concern issues of valuation and disclosure to prepare the matter for trial and the involvement of the liquidator in the proceedings.
The liquidator, having joined the proceedings in August 2022, has now discontinued the pursuit of any relief (the only relief sought so far has been the adjournment of proceedings) and seeks orders discharging him as a party to the proceedings. The wife, however, asserts that in the event that the liquidator pursues a claim against the wife in relation to B Pty Ltd, that he is a necessary party to the proceedings. She seeks to restrain the liquidator from commencing proceedings in another jurisdiction against her and, while he remains in these proceedings, seeks particularisation of the relief he seeks, and of the claim (if any) against her, and with specific orders for disclosure.
The dispute occurs against a background where the husband, as the sole shareholder and director of B Pty Ltd, without notice to the wife, appointed Mr Marriott as the liquidator of B Pty Ltd. Following that appointment, the liquidator determined that B Pty Ltd was insolvent. His preliminary enquiries indicated creditors owed approximately $490,000, inclusive of monies owed for the superannuation entitlements of employees of B Pty Ltd of approximately $320,000. The liquidator further asserted in the statutory report prepared in the matter, that the primary assets of B Pty Ltd are in the form of loans made to the wife and husband. In that same report, he indicated an intent to pursue those assets either by actions in debt or by equitable tracing of the funds that he considered had ultimately been expended on a property in Suburb D that is held in the name of the wife. That property is the remaining significant asset of the parties (apart from superannuation) and appears likely to form the bulk of the pool of property the subject of the litigation between the wife and husband.
Litigation history
The parties separated on 24 April 2017, following a relationship of about 21 years.
The wife commenced proceedings in relation to property on 10 August 2018.
Interim orders were made by consent on 5 November 2018.
The matter was transferred to the Family Court of Australia, as it was then known, on 21 May 2020.
On 3 May 2022, the matter was listed for final hearing for five days commencing 21 November 2022.
The interested party filed his notice to intervene on 21 July 2022. The expressed reason for intervening was the concern that company assets had been used to purchase property that was forming part of the matrimonial property pool.
On 26 October 2022, the trial dates were vacated.
The wife filed her Application in a Proceeding on 25 November 2022.
The husband filed his Application in Response on 8 February 2023.
The solicitors for the interested party filed a Notice Ceasing to Act on 13 February 2023.
The wife filed an Amended Application in a Proceeding on 28 February 2023 and sought an urgent hearing.
The solicitors for the husband came off record on 31 March 2023.
These interim proceedings were heard on 5 April 2023.
MATERIAL RELIED UPON
Applicant Wife
The applicant wife relied upon the following material:
(1)Amended Application in a Proceeding filed 28 February 2023;
(2)Affidavit of Applicant filed 28 February 2023; and
(3)Outline of Case filed 4 April 2023.
Respondent Husband
The respondent husband relied upon the following material:
(1)Affidavit of Applicant filed 28 February 2023; and
(2)Response to an Application filed 8 February 2023.
Interested Party
The interested party relied upon the following material:
(1)Response to an Application filed 3 April 2023;
(2)Affidavit of Mr Marriott filed 3 April 2023; and
(3)Outline of Case filed 3 April 2023.
ORDERS SOUGHT
The specific orders sought are set out in an appendix to this judgment.
In general terms, the wife seeks to compel the liquidator to take particular steps in the proceedings, including identifying any claim that he will make against her. The wife seeks disclosure orders against the liquidator and injunctive relief to prevent him from litigating against her in another jurisdiction. Unless such injunctive relief is granted, the wife seeks that the liquidator not be discharged as a party. If the liquidator is restrained and exits the proceedings, the wife does not pursue the particularisation and disclosure orders against the liquidator.
The wife also seeks disclosure orders against the husband, along with orders for the valuation of the property held at Suburb D.
The husband seeks disclosure orders against the wife, and against a third party who he asserts is in a relationship with the wife.
The liquidator seeks to have the wife’s relief against him dismissed and to be released from the proceedings.
THE EVIDENCE
The circumstances of withdrawal by the liquidator
The liquidator first appeared on 3 August 2022, at which time he advised of a need to complete his investigations, a process then estimated at 3 months. This was updated on 26 October 2022, when a further six months was identified as necessary, seeking at the same time that the final hearing be heard not before July 2023. On that day, the trial date of 26 October 2022 was vacated.
Despite requests from the wife, the liquidator has not identified his claim, if there is to be one, against the wife.
This occurs in the further context, as set out above, that the liquidator has asserted that the creditors of B Pty Ltd are owed approximately $490,000, and that the primary assets of B Pty Ltd are in the form of loans made to the wife and husband.
The liquidator’s stated position is that his investigations are ongoing, and that he does not as yet “have a definitive position about the quantum of what claims may exist against the Wife and the [Suburb D] Property.”[1] He has also stated that he has reached a view that remaining in the Family Law proceedings is not viable for the creditors of the company, and that in any event to do so results in “the potential delay to the parties due to the substantial further work to be done to settle on a quantum of claim.”[2] Each of these explanations anticipates a claim against the parties. Specifically, the liquidator says at [27] that:
[1] Affidavit of Mr Marriott filed 3 April 2023, paragraph 22.
[2] Affidavit of Mr Marriott filed 3 April 2023, paragraph 15.4.
Other Responses to the Wife’s Affidavit filed 28 February 2023
27. Paragraph 18: The ongoing nature of my investigations and uncertainty around them is one of the reasons why I filed a Notice of Discontinuance and why I seek to be removed as a party to the proceedings. At the time I filed a Notice of Discontinuance I had in my mind that my continued participation in these proceedings would yield no benefit to the Parties or the Company’s creditors and that I could progress my investigations and claims more cost effectively for the Parties in another forum. I formed that view only after it became apparent that all opportunities to reach a commercial settlement with the Parties had evaporated.[3]
[3] Affidavit of Mr Marriott filed 3 April 2023, paragraph 27.
That is, the discontinuance in this forum is in contemplation of taking action in another forum. That action will necessarily involve a claim that impinges upon the Suburb D property, given the liquidator’s acceptance at [8] and [9], as set out below, that the claims all lead to that property:
8. In brief, in my Report I note that my investigations are ongoing but have caused me to believe that the Company may have claims against:
8.1. the property at [C Street, Suburb D NSW] ([Suburb D] property) under the principle of equitable tracing;
8.2. the Husband and the Wife and/or the Suburb D property under the first and/or second limb of Barnes v Addy; and
8.3 both the Husband and the Wife for the value of their unpaid loan accounts.
9. It is apparent from my investigations that the only source of funds from which the settlement of any such claims could arise would be the Suburb D Property.[4]
[4] Affidavit of Mr Marriott filed 3 April 2023, paragraphs 8–9.
The conclusion to be drawn is that the liquidator seeks release from these proceedings with the intent to pursue claims in relation to the parties and the Suburb D property in another forum.
Disclosure by the husband and the liquidator
It is convenient to deal with the husband and the liquidator together given the obligations of the husband to give disclosure of particular matters under the Corporations Act 2001 (Cth) to the Liquidator, being in turn matters relevant to the litigation of the claims under the Family Law Act 1975 (Cth) (“the Act”) and so being matters also subject to disclosure under the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”).
The husband asserts that he has provided all the books and records that he held for B Pty Ltd to the liquidator, and that all of the documentation regarding B Pty Ltd and the purported loan accounts have been provided to the company accountant or to the liquidator. He asserts that he no longer holds relevant documents of B Pty Ltd. To the extent that this is so, the documents held by the liquidator may be considered essential to the resolution of the question of the content and character of the pool of property of the parties and the claims made against it by third parties.
The wife, in particular, identifies a potential failure to disclose documents related to the preparation of the 2020 report for B Pty Ltd, being the first documents that purportedly identify the wife as owing funds to B Pty Ltd. More generally, the wife asserts that she has sought particularised disclosure from the liquidator in October 2022 and has not received a response.
On 22 August 2022, a specific order was made dealing with an aspect of the disclosure obligations of the liquidator:
1.That by way of ongoing disclosure, the Interested Party provide to solicitors for the Wife, copies of all written communications between the Interested Party and the Husband (and [Mr F]/[G Pty Ltd]) including but not limited to copying the Wife’s solicitors into all correspondence sent to the Husband and his representatives, and copies of all notices to creditors.
The wife complains that the liquidator has been non-compliant with the obligations imposed by this order, explaining failure to provide documents passing between himself and Mr F as being due to the liquidator’s previously expressed view that “he did not consider the emails assisted the parties in the Family Law matter and would likely only increase the parties’ costs.”[5]
[5] Affidavit of the wife filed 28 February 2023, paragraph 76.
Disclosure by the wife
The husband seeks that the wife provide a list of documents that she has received from him. At the same time, he asserts that his (previous) lawyer provided an indexed list of his disclosure provided to the wife or to her solicitor and he annexed such to his affidavit. The wife resists such an order asserting that it will add to her legal expenses.
The husband also seeks a disclosure order against a third party, Mr H, who he contends is in a relationship with the wife. He contends that since 2015, the wife and Mr H have been in a de facto relationship, that Mr H frequently sleeps at the wife’s home and that the wife and Mr H are engaged to be married.
Valuation
The wife seeks an update to a valuation of the Suburb D property, the last valuation being provided in mid-2021. As at mid-2022, a quote from the same (then jointly appointed) valuer to update was at $1,100.
Given that the Suburb D property is the key asset, up to date information as to its value may be considered as necessary to resolve the case.
The husband asserts that he is unable to pay for the valuation, and further that repairs should be undertaken to the house prior to valuation.
PRINCIPLES AND DISCUSSION
Parties and anti-suit injunctions
The identification of necessary parties and the granting of an anti-suit injunction are closely related matters in this case.
The issue of whether the liquidator should remain a party to the proceedings starts with a consideration of Rule 3.01 which is in the following terms:
3.01 Necessary parties
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.
The liquidator has identified that the assets available for distribution to creditors of B Pty Ltd are purported loans by B Pty Ltd to the husband and wife, and/or the property at Suburb D, with such assets to be secured in the liquidation by an action in debt or in equity that he regards can only be satisfied against that property. Although the liquidator has not identified quantum, or exactly how the claim will be pursued, the liquidator has signalled an intent to pursue the issue outside this court after being released from these proceedings.
To the extent that the liquidator claims an interest in purported debts owed by the parties, and in the real property that is the substance of the pool of property, the interests of the liquidator are directly impacted by the conduct of property proceedings between the parties. The resolution of the parties’ claims against each other may impact upon the liquidator’s capacity to recover against one or other of the parties. Where, for example, the liquidator holds an equitable interest in the Suburb D property, orders in relation to that property may cut across that interest, or in the alternative, that interest will potentially distort the effect of orders that are calculated to be just and equitable in relation to the adjustment of the property interests of the parties, should such interest be able to be prosecuted following any property adjustment.
On this basis, it may be taken that the rights of the liquidator may be directly affected by an issue in the proceedings and the liquidator’s involvement as a party is necessary to determine all issues in dispute between the parties.
It also may be observed that the determination of the liquidator’s rights to the Suburb D property is necessary to undertake the identification of the parties’ legal and equitable interests that are the subject of the proceedings, and that determination of the liquidator’s debt claims against the parties is necessary to ensure that there is no distortion of the effect of property adjustment orders that would render what was considered just and equitable absent such claims into a result that is not just and equitable.
The essential nature of the determination of these rights, if such are to be claimed by the liquidator, means that the determination of the liquidator's rights and claims are incidental to the exercise of the jurisdiction to adjust the parties’ property interests pursuant to s 79 of the Act. The rights of the liquidator, the parties’ legal and equitable interests and their obligations of debt arise in a common substratum of facts of transactions involving B Pty Ltd.
This means both that the resolution of the liquidator’s claims is necessary to the determination of the s 79 proceedings and, as a corollary, that the court holds the jurisdiction necessary to resolve the claims of the liquidator, whether they arise in debt or equity. This in turn means that this court could not be regarded, for the purposes of the discussion of anti-suit injunctions below, as a clearly inappropriate forum.
This remains the situation while the prospect of a claim as identified by the liquidator remains, as it presently is, in contemplation. Similarly, the absence of such a potential claim would mean that the liquidator is no longer a necessary participant.
Accordingly, the liquidator should not be released from these proceedings other than on terms that restrain those claims, as until they are restrained he remains a necessary party.
This then leads to the relief by way of anti-suit injunction as pursued by the wife.
An anti-suit injunction is pursued against the liquidator by the wife. The Full Court in Lederer & Hunt (“Lederer”),[6] distilled the approach of the High Court in CSR Limited v Cigna Insurance Australia Pty Ltd (“CSR”),[7] and identified two broad bases upon which an anti-suit injunction may be granted. Firstly such relief is available in the inherent jurisdiction of the court where it is necessary to protect the processes or proceedings of the court. The second basis for the relief arises from equity and is available to restrain unconscionable conduct or the unconscientious exercise of legal rights to conduct proceedings in another court that are vexatious or oppressive in relation to the proceedings in this court.
[6] (2007) FLC 93-311.
[7] (1997) 189 CLR 345.
Although on the above outline relief may also be available on the first basis, the particular basis argued for the wife is the second, that it would be oppressive and vexatious for the liquidator to now pursue remedies in another court. That argument was founded upon the notion that an example identified in Lederer of oppressive and vexatious conduct is for a litigant in pending litigation, where complete relief may be had, to institute foreign proceedings.[8] Where the foreign proceedings offer no further benefit, meaning other or additional remedies to those available in the first jurisdiction, parallel proceedings that might otherwise be permissible become oppressive.
[8] (2007) FLC 93-311.
Here the liquidator does not propose to conduct parallel proceedings, in the sense of being involved in two contemporaneous sets of proceedings. Having joined these proceedings, and successfully adjourned them, the liquidator now seeks to be released from these proceedings (and therefore not seek relief here) in order to seek relief elsewhere.
This would result in the liquidator not being involved in parallel proceedings, but the parties being subjected to parallel sets of proceedings dealing with establishing their interests in the Suburb D property and the nature of their debt obligations.
In identifying this nuance it is important to recall, as observed in CSR, that the occasion for the exercise of the power to restrain is defined by “the dictates of equity and good conscience”[9] where the circumstances indicate that the pursuit of proceedings in another jurisdiction is unconscionable.
[9] CSR Limited v Cigna Insurance Australia Pty Ltd (1997) 189 CLR 345 at 388.
The issue then is whether the firm prospect of the liquidator pursuing relief in another jurisdiction would constitute oppressive and vexatious, unconscionable conduct. Where the liquidator has intervened, altered the course and timetable of the proceedings and now seeks to leave the proceedings to pursue relief that is available in these proceedings, exposing the parties to fragmented litigation and to the potential undermining of the proceedings in this court is oppressive.
Such a description points to the need to ameliorate the risk of such occurring by restraining the liquidator from engaging in the pursuit of relief that is available here in another jurisdiction.
Fairly, the liquidator complained that the particular injunctive relief sought by the wife was broader than what is required on her case, and is in itself oppressive. The liquidator observes that the terms of the injunction pursued by the wife would also restrain the liquidator from defamation proceedings or from obtaining a personal protection order should such be warranted.
In response the wife submitted that lesser, directed restraint was sufficient. For the wife, restraint that prevents the prosecution of claims in another jurisdiction as to debt, or equitable claims against the Suburb D property is all that is required, and if such relief is granted, there remains no need for the liquidator to remain in these proceedings unless he chooses to pursue relief here.
Accordingly, orders should be made that provide injunctive protection more narrowly than sought by the wife in her amended application. Such injunctive protection should give the liquidator liberty to apply in relation to such. Further, a mechanism should be provided to make clear whether or not the liquidator wishes to continue in these proceedings and, if not, discharging the liquidator as a party.
Valuation
The wife seeks an updated valuation of the Suburb D property. The mechanism is reasonable and reflects the previous appointment of a single expert valuer by the agreement of the parties. An updated valuation of the key asset is important information for the resolution of the dispute in a just manner. The appointment sought by the wife accords with the overarching purpose set out in the Rules and should be made to enable the matter to proceed to resolution.
Despite the husband’s resistance and assertions of incapacity, a sufficient case is not made out to depart from the costs arrangement set out in Rule 7.06, being the default sharing of such expenses, as sought by the wife.
Disclosure
The husband sought further disclosure from the wife, specifically the disclosure of the financial circumstances she has with her new partner. Counsel for the wife submitted that there is no evidence that the wife is cohabiting with any other person except for the children, and that any change of circumstance would be reflected in the wife’s financial statement. While there is a duty contained at Rule 6.06 for parties to make full and frank disclosures regarding their financial circumstances in property proceedings, the Full Court held in Pates & Pates,[10] that there is “no general obligation upon parties to disclose the financial circumstances of their domestic partners.”[11]
[10] [2018] FamCAFC 171.
[11] Pates & Pates [2018] FamCAFC 171 at [73].
On the present information there is no basis to make the order sought by the husband directed to Mr H.
The husband also sought that the wife prepare a list of the disclosure that the husband has provided. To require the wife to do so, particularly when the husband asserts that his solicitor has made an itemised list of the disclosure, is to put the wife to an expense that she should not bear, to no apparent benefit to the administration of the proceedings. This relief should be refused.
The wife seeks disclosure orders against the husband. The first part of those (proposed Order 7) deals with documents provided by the husband to the liquidator. The documents that the husband (generally) describes as having been provided, being records of B Pty Ltd are documents to which it appears that Rule 6.08 applies. It is information that the husband should give to the wife, and the obligation imposed under the Rules will be buttressed with the particular orders sought by the wife.
While the documents covered by the wife’s proposed orders 8 and 9.1, which deal with alleged interactions between the wife and B Pty Ltd as either a debtor or an officeholder, already attract a disclosure obligation, again, given the potential importance of such documents to the hearing of the matter a specific order will be made buttressing those obligations.
Similarly the documents referred to in the wife’s proposed order 9.2, as they relate to the ongoing status of B Pty Ltd and its liquidation should also be the subject of buttressing orders. The wife’s proposed order 10 provides a timeframe for compliance which is reasonable and appropriate to ensure the progression of the matter to trial.
The wife also seeks that specific disclosure orders be made directed to the liquidator.
The liquidator complains in respect of these orders:
13b. The Wife’s Orders effectively seek to conscript the Interested Party to an obligation to provide documents to her in lieu of obtaining those documents from the Husband or by operation of a subpoena. Presumably, this is a forensic attempt to avoid the attendant appropriate professional costs of obtaining material pursuant to a subpoena. The Interested Party seeks to be removed from the proceedings; he has obligations as a Liquidator to the company’s creditors, who are owed more than $300,000.00 in superannuation and other unpaid entitlements. He seeks to fulfil those obligations by removing himself from the proceedings and thereby protecting the creditors from any further costs on a commercial basis- a position somewhat understandable given the barrage of documents, correspondence and criticisms the Wife’s solicitors subjected to him. The exact effect of the Wife’s Orders Sought is to seek to add to those creditors’ inability to recover effectively, add to fees, or otherwise put [Mr Marriott] to personal cost. It fails to address the plain fact that [Mr Marriott] is a liquidator acting appropriately in the execution of his duties when it is plain that monies were taken from the company and used for the property of which the Wife has enjoyed the benefit, whether she knew about that or not.[12]
[12] Outline of Case Outline for the Interested Party filed 3 April 2023 at 13(b).
Whilst the liquidator remains a party to these proceedings, the liquidator is bound by the disclosure obligations set out at Rules 6.01 through to 6.04. He is also bound by the previous specific order as to disclosure made on 22 August 2022. These do not place an undue burden upon the liquidator, focussed as they are on B Pty Ltd and the circumstances of its liquidation, being circumstances that, while there are claims being pursued in respect of B Pty Ltd, remain vital to the resolution of the parties’ claims against each other, and the liquidator’s claims against them.
Should the liquidator remain a party to the proceedings then the disclosure obligations under the Rules will plainly apply to the liquidator.
Should the liquidator not remain a party, it could reasonably be anticipated that subpoenas would be issued to cover the same ground in any event.
While it is proper that the liquidator should consider the impact of proceedings upon the creditors’ claims, it is difficult to foresee any outcome that results in the liquidator, either as a party the subject of disclosure obligations, or a non-party subject to a subpoena, being free of obligations to produce.
The wife, however, seeks a set of disclosure orders directed to the liquidator in the context of claimed default on the part of the liquidator. These claims are exemplified by the liquidator’s delay in production of material because he did not regard it as helpful to the parties. Despite such issues, rather than make further specific orders for disclosure, should the liquidator remain a party then the liquidator will be required to file an undertaking as to disclosure as required by Rule 6.02. It may be anticipated that this will be sufficient to deal with outstanding disclosure issues in relation to the liquidator.
The husband and wife will be required to do likewise.
Response and particularisation
The wife seeks both that the liquidator file a Response, and give certain particulars. If the liquidator is to seek relief against the parties and remain in the proceedings it is appropriate that the liquidator file a Response identifying the relief and in particular whether the relief is sought in equity or in debt. The balance of the particularisation sought by the wife does not arise until the Response is filed. Similarly, the issue of the filing of affidavits does not arise unless or until a Response is filed. Directions will be given for the filing of a Response, in default of which it will be taken that the liquidator does not pursue relief in this jurisdiction and he will be discharged from the proceedings as a party, but remain subject to an anti-suit injunction to prevent litigation in another forum. In the event that the liquidator files a Response, the matter will be brought back in order to make trial directions and to fix (if possible) a trial date.
CONCLUSION
The liquidator will be subject to an anti-suit injunction, but will be at liberty to apply to the court in relation to such.
The liquidator will be required to file a Response. Failure to file a Response in accordance with the direction will result in the discharge of the liquidator from the proceedings on the basis that he seeks no relief from the court. He will however remain subject to the anti-suit injunction.
On filing, or failing to file a response by the liquidator the matter will be listed to give trial directions and consideration to whether, in light of the filing or non-filing of a Response a trial date should be allocated.
Orders will be made for the parties to file undertakings as to disclosure, and specific orders for disclosure will be directed to the husband.
Orders will be made for the updating of the valuation of the Suburb D property.
I certify that the preceding eighty-four (84) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Gill. Associate:
Dated: 19 April 2023
ANNEXURES
Orders Sought by the Applicant Wife as per her Amended Application in a Proceeding filed 28 February 2023
Final Hearing
1.That forthwith the matter be listed for final hearing for 5 days as a primary listing on a date to be advised by the Court.
The Interested Party/Mr Marriott
2.That within 21 days of the date of these Orders the Interested Party (also known as Mr Marriott) shall file and serve:
2.1A Response setting out the Orders sought and the particulars of any claim sought by the Interested Party
2.2An Affidavit detailing the supporting evidence for the Orders sought in the Response and evidence supporting the claims against the parties by the Interested Party, including the evidence relating to:
2.2.1All alleged unreasonable director-related transactions and related records;
2.2.2All alleged misconduct by either or both of the parties and related records;
2.2.3All alleged drawings by either or both of the parties to apply toward personal expenses, including mortgage payments of the properties held under their personal names and related records;
2.2.4All alleged conduct in the course of these proceedings the Interested Party asserts occurred for the purpose of ignoring or defeating creditors of B Pty Ltd (or their interests otherwise defeated); and
2.2.5All findings by the Interested Party pursuant to section 533 of the Corporations Act and the basis of such findings.
3.That within 21 days of the date of these Orders, the Interested Party provide to the solicitors for the Wife, copies of records within his possession or control, to the extent not already provided by the Interested Party to solicitors for the Wife, as follows:
3.1 A copy of all records indicating the Wife’s written consent to be appointed as a Secretary, or in any other role, in B Pty Ltd;
3.2 A copy of all section 533 Reports(s) submitted to ASIC with respect to B Pty Ltd and the Barilla Family Trust;
3.3Copies of all records of meetings regarding B Pty Ltd and the Barilla Family Trust (including but not limited to pursuant to section 530A of the Corporations Act) between the Interested Party and:
3.3.1 the Husband (and/or his representatives);
3.3.2 Mr F (and/or G Pty Ltd);
3.3.3 J Accountants;
such records to include, but not be limited to: recordings, file notes, lists of documents, and records of interview;
3.4Copies of all versions of the document titled “Preliminary Financial Reports, Barilla Family Trust, For the year ended 30 June 2020”, including but not limited to a final version and a signed version;
3.5Copies of all records used in preparation of document titled “Preliminary Financial Reports, Barilla Family Trust, For the year ended 30 June 2020”, such records are to include, but not be limited to: all accounting working papers, draft accounting reports, emails between the Husband (or his agents) and his accountants, written instructions to the accountants, memorandums, minute of meetings, trustee resolutions, loan agreements, bank statements, transaction listings and all source documents; and
3.6 Copies of all records with respect to all claims against the parties, including but not limited to the records referred to in Order 2.
4.That by way of ongoing disclosure, the Interested Party provide to solicitors for the Wife, to the extent not already provided by the Interested Party to solicitors for the Wife:
4.1Copies of all records listed in Order 3, as and when they come into the possession or control of the Interested Party; and
4.2Copies of all reports sent to ASIC with respect to B Pty Ltd and the Barilla Family Trust.
5.For the purpose of the preceding Order, copies are to be provided by the Interested Party to the solicitors for the Wife as soon as practicable and no later than 7 days following the receipt of such records or sending of correspondence, whichever first occurs.
The Husband
6.That within 14 days of the date of these Orders, the Husband provide to the solicitors for the Wife a list of all records provided by the Husband (and his representatives) to the Interested Party (and/or the Interested Party’s representatives);
7.For the purpose of Order 6;
7.1By way of ongoing disclosure, the Husband will provide an updated list of records to the solicitors for the Wife when additional records are provided by the Husband (and/or his representatives) to the Interested Party (and/or the Interested Party’s representatives), within 7 days of the records being provided; and
7.2If the Wife requests a copy of any record in the list(s), the Husband will provide a copy of such record to the solicitors for the wife within 7 days of receiving such request.
8.That within 14 days of the date of these Orders, the Husband provide to the solicitors for the Wife, copies of records within his possession or control, to the extent not already provided by the Husband to solicitors for the Wife, as follows:
8.1Copies of all versions of the document titled “Preliminary Financial Reports, Barilla Family Trust, For the year ended 30 June 2020”, including but not limited to a final version and a signed version;
8.2Copies of all records used in preparation of document titled “Preliminary Financial Reports, Barilla Family Trust, For the year ended 30 June 2020”, such records are to include, but not to be limited to: all accounting working papers, draft accounting reports, emails between the Husband (or his agents) and his accountants, written instructions to the accountants, memorandums, minute of meetings, trustee resolutions, loan agreements, bank statements, transaction listings and all source documents; and
8.3A copy of all records indicating the Wife’s written consent to be appointed as a Secretary, or in any other role, in B Pty Ltd.
9.That by way of ongoing disclosure, the Husband provide to solicitors for the Wife, to the extent not already provided by the Husband to solicitors for the Wife:
9.1 Copies of all records listed in Order 8, as and when they come into the possession or control of the Husband: and
9.2Copies of al communications between the Husband (and his representatives on his behalf) and the Interested Party including but not limited to copying the Wife’s solicitors into all correspondence sent to the Interested Party (and the Interested Party’s representatives).
10.For the purpose of the preceding Order, copies are to be provided by the Husband to the solicitors for the Wife as soon as practicable and no later than 7 days following the receipt of such records or sending of correspondence, whichever first occurs.
Valuations
11.That 30 days of the date of final hearing dates being allocated, unless otherwise agreed between the parties in writing, the Applicant Wife and Respondent Husband do all things necessary to obtain an updated valuation for the property known as C Street, Suburb D NSW, from E Company, or such other valuer as agreed between the Husband and Wife, on agreed joint instructions and at their joint expense.
Mr Marriott
12.That within 7 days of the date of these Orders, Mr Marriott is to file and serve a Notice of Address for Service.
13.That Mr Marriott, including but not limited to in his role as Liquidator of B Pty Ltd, be hereby restrained from commencing and/or continuing any proceedings in any other jurisdiction against the Wife Ms Barilla, without an Order of this Court.
14.That by way of ongoing obligation, Mr Marriott shall provide to solicitors for the Wife:
14.1copies of all written communications between Mr Marriott (and sent on his behalf by his agents or representatives) and the Husband (and his agents and representatives);
14.2Copies of all written communications between Mr Marriott (and his agents and representatives) and Mr F/G Pty Ltd; and
14.3Copies of all notices to creditors of B Pty Ltd;
15.For the purpose of the preceding Order:
15.1In the event that there are records that have not yet been provided by Mr Marriott pursuant to Order 5 of the Orders of Justice Mead dated 22 August 2022, Mr Marriott shall provide such records within 7 days of the date of these Orders;
15.2Copying the Wife’s solicitors into all applicable correspondence will satisfy compliance with respect to any further correspondence sent by or on behalf of Mr Marriott;
15.3Copies are to be provided by Mr Marriott to the solicitors for the Wife as soon as practicable and no later than 7 days following the receipt of such records or sending of such correspondence, whichever first occurs.
16.AND IT IS NOTED THAT all Orders made in these proceedings with respect to Mr Marriott, including but not limited to at times when he was an Interested Party, continue to be binding on Mr Marriott until such time as the Orders are discharged, and will continue to apply notwithstanding whether or not Mr Marriott is a party to these proceedings.
Costs
17.That the Respondent Husband and Interested Party pay the Applicant Wife’s costs in such sum and in such proportions as Ordered by the Court.
Orders Sought by the Respondent Husband as per his Response to an Application in a Proceeding filed 8 February 2023
1.The Applicant’s solicitor provide the Respondent’s solicitor a summary list of all disclosure that they have received from the Respondent, not already noted in the Disclosure Summary annexed to the Respondent’s affidavit.
2.That within 14 days from the date of these orders, Mr H provide financial disclosure for the past 3 years, including all financial support provided to Ms Barilla since June 2018.
3.That the Applicant pay the Respondent’s cost in such sum and in such proportions as Ordered by the Court.
Orders Sought by the Interested Party as per their Response to an Application filed 3 April 2023
1.That the Interested Party be removed as a party to all proceedings relating to CAC 1604/2018.
2.That the Wife’s Amended Application in a Proceeding filed 28 February 2023 be dismissed as it relates to any and all Orders involving the Interested Party
3.That the Wife pay the Interested Party’s costs in relation to this Application in a Proceeding.
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