Beaman v Bond
[2014] FCWA 21
•4 APRIL 2014
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: JURISDICTION OF COURTS (CROSS-VESTING) ACT 1987
BANKRUPTCY ACT 1966
LOCATION: PERTH
CITATION: BEAMAN and BOND [2014] FCWA 21
CORAM: CRISFORD J
HEARD: 25, 26 NOVEMBER 2013 & 28 JANUARY 2014
DELIVERED : 4 APRIL 2014
FILE NO/S: PTW 3223 of 2013
BETWEEN: DIANNE ELIZABETH BEAMAN
Applicant
AND
CRAIG DAVID BOND
First RespondentAND
CHRISTOPHER MICHAEL WILLIAMSON and
DAVID ASHLEY NORMAN HURT
Second Respondents
Catchwords:
BANKRUPTCY AND INSOLVENCY– authority under s 188 of the Bankruptcy Act 1966 (Cth) – application pursuant to s 208 for order to release control of property from trustee – whether entry into personal insolvency agreement by former de facto partner an abuse of Part X to frustrate Family Court proceedings – whether “special circumstances” justify the release of the “debtor’s” property – where “special circumstances” are made out
BANKRUPTCY AND INSOLVENCY – whether a party is a “debtor” and insolvent or solvent and not a “debtor” within the meaning of the Bankruptcy Act 1966 (Cth) – where there are related party creditors – where there is no demand for payment of outstanding debts – where party not proved to be solvent
PRACTICE AND PROCEDURE – where the proceedings were cross-vested from the Federal Court to the Family Court of Western Australia pursuant to the Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth) – where the matter is a “special federal matter” – where there are pre-existing Family Court proceedings involving the “debtor” and a creditor
PRACTICE AND PROCEDURE – whether there is a potential conflict of interest – where the solicitors acted for the trustee and then act for the “debtor” – where no conflict of interest found
EVIDENCE – discussion of principle in Jones v Dunkel (1959) 101 CLR 298 – whether Jones v Dunkel inference can be drawn from failure of one party to give evidence
Legislation:
Bankruptcy Act 1966 (Cth)
Family Law Act 1975 (Cth)
Family Court Act 1997 (WA)
Jurisdiction of Courts (Cross-vesting) Act 1987 (Cth)
Category: Not Reportable
Representation:
Counsel:
Applicant: Mr P Dowding SC, with Ms J Brady
First Respondent : Ms P Cahill SC, with Mr L Christensen
Second Respondents : Mr J Vaughan SC, with Mr A Mason
Solicitors:
Applicant: Carr & Co
First Respondent : Gadens Lawyers
Second Respondents : Roe Legal Services
Case(s) referred to in judgment(s):
Adler v Australian Securities and Investments Commission [2003] NSWCA 131
Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345
Beaman and Bond [2013] FCWA 15
Brandi v Mingot (1976) 12 ALR 551
Deputy Commissioner of Taxation v Johns [2005] FCA 1143
Fabre v Arenales (1992) 27 NSWLR 437
Jones v Dunkel (1959) 101 CLR 298
Laurence v Mulroney (1987) 82 ALR 404
Minister for Community Services and Health v Chee Keong Thoo (1988) 78 ALR 307
O’Meara v Dominican Fathers [2003] ACTCA 24
Oriolo v Oriolo (1985) 10 Fam LR 665
Re Allebart Pty Ltd (in Liq) and the Companies Act [1971] 1 NSWLR 24
Stankiewicz v Plata [2000] FCA 1185
Application
1Dianne Beaman, has made an application pursuant to s 208 of the Bankruptcy Act 1966 (Cth) (“BA”) to obtain the release of property owned by Craig Bond from the controlling trustees of his estate, Christopher Williamson and David Hurt. Mr Bond signed an authority under s 188 of the BA in favour of his controlling trustees on 11 April 2013.
2In essence, Ms Beaman alleges that the step taken by her former de facto partner, Mr Bond, to enter into a personal insolvency agreement (“PIA”), is an abuse of Part X of the BA and was designed to frustrate existing Family Court proceedings for property settlement.
3On 31 May 2013 the Honourable Justice McKerracher in the Federal Court of Australia made an order cross-vesting the bankruptcy proceedings to the Family Court of Western Australia. Accepting that there are special reasons for so doing, the Family Court of Western Australia dealt with the matter and a trial was conducted over three days:- 25 and 26 November 2013 and then resuming to a conclusion on 28 January 2014.
4The property settlement proceedings in the Family Court have been long and protracted. They pre-date the bankruptcy proceedings. The final hearing as to how the assets and liabilities arising from the de facto relationship of the parties should be divided is yet to be dealt with.
Bankruptcy and the Family Court of Western Australia
5Ms Beaman finds herself in a unique yet unfortunate position. As a former de facto partner living in the State of Western Australia when issues of bankruptcy and family law exist together, unlike in every other Australian state, they do not exist harmoniously. The Bankruptcy and Family Law Legislation Amendment Act 2005 (Cth) and the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) amendments to the BA and the Family Law Act 1975 (Cth) (“FLA”) were enacted to overcome the inability of a non-bankrupt spouse to obtain property settlement orders pursuant to s 79 of the FLA in respect of the property of a spouse subject to bankruptcy legislation.
6The Explanatory Memorandum to the Bankruptcy and Family Law Legislation Amendment Bill 2004 (Cth) stated that the amendments would address longstanding issues concerning the interaction between bankruptcy and family law which have created uncertainty as to the competing rights of creditors and a non-bankrupt spouse.
7The Explanatory Memorandum states:
9.There are a number of difficulties which can arise when bankruptcy and family law issues and/or proceedings exist at the same time. There are inconsistencies between family law and bankruptcy law which create uncertainty for all involved and can cause hardship for either or both creditors and non-bankrupt spouses.
…
11.From a family law perspective, the legal ownership of property does not always reflect the non-financial contribution of the parties to the marriage. The special interest of the non-bankrupt spouse in the marital property created through both financial and non-financial contributions, which may be recognised by the Family Court in exercising its discretion to alter property interests, is not expressly recognised under the Act.
12.Different outcomes result depending upon the order in which events occur (those events including separation, bankruptcy and distribution of property by the trustee in bankruptcy).
13.The amendments proposed in this Bill will address these issues by clarifying the rights of the bankruptcy trustee and the non-bankrupt spouse. Generally, the amendments will enable concurrent bankruptcy and family law proceedings to be brought together to ensure all the issues are dealt with at the same time.
8The second reading speech of the Bill, which when enacted gave rise to the current provisions of the FLA and the BA, stated:
The amendments in Schedule 1 will enable concurrent bankruptcy and family law proceedings to be brought together in a court exercising family law jurisdiction, to ensure that all issues are dealt with at the same time. This is achieved by giving courts exercising family law jurisdiction additional jurisdiction to deal with bankruptcy matters that are run concurrently with a family law financial matter, and by facilitating the bankruptcy trustees and third party creditors’ involvement in family law proceedings.
…
The effect of these amendments will be to offer procedures and protections to the non-bankrupt spouse that were not previously available. At the same time, the court can be on notice about the interests of creditors of a bankrupt spouse and can take those interests into account in determining family property adjustment or spousal maintenance orders.
…
The government is committed to enhancing and making the family law and bankruptcy schemes more accessible, efficient and effective and this bill is part of the government’s commitment to that goal.
9In Western Australia, unlike in other states, de facto property disputes are not subject to the FLA because the West Australian Parliament has not referred the requisite powers to the Commonwealth. Part 5A of the Family Court Act 1997 (WA) (“FCA”) governs such disputes.
10The Family Legislation Amendment Act 2006 (WA) sought to bring the State FCA in line with the Commonwealth FLA. It was intended that this amending legislation would assist de facto couples living in Western Australia to be in the same position as their married counterparts in other states. When the Family Legislation Amendment Bill 2006 (WA) came before the Legislative Assembly on 15 June 2006 it was noted that the provisions could not be proclaimed until the amendments to the BA had been made (Western Australia, Parliamentary Debates, Legislative Assembly, 15 June 2006, 3838b – 3846a (James McGinty, Attorney General)). On 4 July 2006 the relevant amendments received the Royal Assent but remain to be proclaimed.
11There is nothing subsequently reported to explain why, despite the fact the required amendments to the BA have been made, the implementation of the West Australian amendments has never been completed.
Orders sought by each party
12Ms Beaman seeks an order pursuant to s 208 of the BA on the basis there are special circumstances which justify the Court releasing Mr Bond’s property from the control of the trustee. She seeks either the whole of Mr Bond’s property or, alternatively, a portion of his property be released.
13Ms Beaman seeks relief on alternate grounds, namely that there be a declaration pursuant to s 30(1)(b) of the BA that:
•by reason of Mr Bond’s solvency he is not a “debtor” within the meaning of s 188(1) and s 187(1); and
•the authority which Mr Bond signed on 11 April 2013 in favour of the controlling trustees was made for a purpose not contemplated by s 188.
14As a result, Ms Beaman says an order setting aside the authority which Mr Bond signed on 11 April 2013 should be made.
15Ms Beaman also seeks a declaration pursuant to either s 30 of the BA, s 39B(1A) of the Judiciary Act 1903 (Cth), or s 21 of the Federal Court of Australia Act 1976 (Cth), that, notwithstanding the authority under s 188 of the BA, the Family Court of Western Australia can proceed to determine the financial entitlements of Ms Beaman and Mr Bond.
16There is considerable overlapping of facts between these grounds. However, the nub of the issue for determination raised by those grounds is whether the proposed entry into the PIA was genuine or an abuse of Part X of the BA.
17The controlling trustees seek no specific orders in these proceedings. Their view is that they will abide by any order this Court makes. They want to be heard on the issue of their costs.
18The application of Ms Beaman is opposed in its entirety by Mr Bond, who seeks its dismissal.
Brief background
19On 16 March 2010, Ms Beaman, through her solicitors, Carr & Co, filed an initiating application in the Family Court seeking to set aside a Binding Financial Agreement (“BFA”) entered into by the parties on 11 April 2006 pursuant to s 205ZO of the FCA. In lieu of the arrangements set out in the BFA, Ms Beaman makes a claim pursuant to s 205ZG of the FCA for a property settlement. She also seeks spousal maintenance from Mr Bond.
20Initially, the proceedings to set aside the BFA were resisted by Mr Bond through his solicitors, O’Sullivan Davies. However, on 10 January 2012, immediately prior to a trial set down to determine whether the BFA should be set aside, Mr Bond agreed that it was appropriate to do so.
21Whilst not stating the exact basis upon which he agreed to this course, the court had little difficulty in accepting Mr Bond did not make full disclosure of his financial position at the time the parties entered into the BFA. What is not clear is whether such a failure would have had a material effect on the agreement reached by the parties and recorded in the BFA. In any event, the matter now to be determined by the Family Court includes identifying the existing legal and equitable interests of the parties in their property.
22Throughout 2012 Ms Beaman utilised almost all the avenues available to her through the auspices of the FCA and the Family Law Rules 2004 (Cth) (“FLR”) to shed light on the financial position of Mr Bond. Her attempts have run the gamut of subpoenas to various third parties, applications seeking copies of vast amounts of documents and numerous requests for disclosure from Mr Bond. She signalled her intention to request answers to specific questions once disclosure had been provided.
23On 8 November 2012 Ms Beaman filed an application seeking that Mr Bond pay her $750,000 to enable her to continue the litigation. She estimated that this amount would be required to fund all of her legal expenses if there was a defended hearing. This issue was dealt with by the court on 6 February 2013 and a judgment was published on 26 February 2013 (Beaman and Bond [2013] FCWA 15). Relevantly, for present purposes, the court said:
11.I am satisfied that the financial statement filed by Ms Beaman on 8 November 2012 reflects all that she owns. I am not so satisfied with Mr Bond. I am not satisfied that the Court fully comprehends the extent or otherwise of Mr Bond’s assets and, most importantly, his financial resources. The financial jigsaw created by Mr Bond’s family is difficult to understand without all the appropriate information. Mr Bond has certainly provided a plethora of documents and this needs to continue. It appears that even he is not altogether familiar with the operation or composition of assets or entities in which he has an interest given his affidavit material to date. Ultimately, this is a matter for a trial.
12.I am satisfied from the information provided to me throughout these proceedings and during the oral submissions relating to this application that Mr Bond is in a position of relative financial strength.
• A capacity on the part of Mr Bond to meet his own litigation costs.
13.Mr Bond has met his own litigation costs to date. He has realised some of his assets in order to do this. I have no doubt that he will continue to fund these proceedings one way or another.
24In concluding that Mr Bond should pay to Ms Beaman $100,000 within 30 days of 26 February 2013 (for the payment of forensic investigation fees ($60,000) and future legal costs and disbursements ($40,000)) the court commented:
34.I accept the submissions of Ms Beaman’s senior counsel, Mr Dowding, that the number and type of entities Mr Bond is associated with, especially those operating off-shore, are far from consistent with what he says is his stated asset position. The affidavit material provided by Mr Bond is often vague in the description of his assets and the operation of them. There is limited clear information about how assets have been disposed of and whether any funds were realised from the disposition.
…
44.There may be a difference in views about the extent of any duty to disclose for parties negotiating a financial agreement where each is adequately resourced, legally represented and at no special disadvantage. However, there can be no doubt that in the context of court proceedings there is a duty to disclose in the “full and frank” fashion enunciated in such cases as Oriolo v Oriolo (1985) 10 Fam LR 665.
45.I am not satisfied, to date, that such duty has been fully discharged by Mr Bond. The financial information before the Court is opaque.
46.Given the apparent lack of disclosure in the BFA, Ms Beaman holds a healthy scepticism about what she has presently been provided. The Court accepts that it does not give a complete picture of Mr Bond’s financial position. It does not yet enable a court to identify the parties’ assets and liabilities.
47.At this juncture I am persuaded that Ms Beaman has an arguable case. I say this because there appears to be some resistance to the provision of all necessary relevant financial information to enable Ms Beaman to appropriately assess her position. To that extent it is arguable that she does have a positive case to run. The manner in which it was agreed the BFA be set aside, coupled with the lack of complete transparency in Mr Bond’s financial affairs, is consistent with this.
48.Whether Mr Bond is successful after trial is a separate issue to whether he has, at this stage, provided a complete disclosure of all matters relevant to the issues a trial judge is to determine. There can be default in this obligation no matter what the final outcome at trial.
25On 24 February 2013, Mr Bond took steps to sell a residential property at 20 Little Chester Street, London, United Kingdom (“the London property”). Mr Bond identifies the property as having an estimated resale value of £3.5 million with security over the property of £1.5 million. It remains unsold.
26On 6 March 2013, Lee Christensen, of Gadens Lawyers, referred Mr Bond to Mr Williamson of WA Insolvency Solutions, Chartered Accountant, advising that Mr Bond needed to enter into a Part X arrangement because of “Issues with Family Court settlement”. In his Statement of Affairs Mr Bond notes that his financial difficulties started in November 2012.
27In the meantime Ms Beaman continued her action in the Family Court. On 7 March 2013 she commenced proceedings to restrain Mr Bond from further dealing with the London property and on 19 March 2013 Ms Beaman served an application seeking Mr Bond answer questions on oath. On 28 March 2013 she filed additional subpoenas seeking financial documents from entities related to Mr Bond.
28On 2 April 2013, Mr Bond, with Mr Christensen, had a meeting with Mr Hurt. The prospective controlling trustee was advised that there was a Family Court event on 16 April 2013. At that time there was an order that Mr Bond pay $100,000 for Ms Beaman’s litigation costs. Mr Bond said he was not able to meet it. On 11 April 2013, Mr Bond signed an authority under s 188 of the BA in favour of Messrs Williams and Hurt.
29The matter duly came before the Family Court on 16 April 2013. Gadens Lawyers instructed counsel to appear for the controlling trustees on both this occasion and on 18 April 2013. Mr Bond was represented by O’Sullivan Davies on 16 April 2013, but on 18 April 2013 he was unrepresented. The jurisdiction of the Family Court to continue with Ms Beaman’s application for property settlement was put in issue. The matter was adjourned until 18 June 2013.
30On 9 May 2013, the controlling trustees circulated their first report to the creditors. Ms Beaman provided the trustees with additional information relating to matters to be included in the report and a supplementary report was issued on 17 May 2013.
31On 15 May 2013, Ms Beaman filed an application in the Federal Court for final orders, inter alia, pursuant to s 208 of the BA as outlined above and orders on an interim basis for:
•release of the London property from the control of the trustees;
•the Family Court, if it was considered appropriate, to make orders in relation to the proceeds of sale of the London property and the tracing of the proceeds of sale;
•the Family Court to make orders in relation to disclosure;
•orders restraining the trustees from proceeding to meet with creditors in relation to the PIA;
•orders restraining Mr Bond from executing a PIA; and
•the proceedings to be cross-vested to the Family Court.
32On 20 May 2013, in the Federal Court, Mr Christensen filed a Notice of Acting for the controlling trustees and Martin Bennett, of Bennett & Co, filed a Notice of Acting for Mr Bond. The following day Andrew Mason, of Roe Legal Services, filed a Notice of Change of Lawyer for the controlling trustees.
33After a hearing on 29 May 2013, Justice McKerracher cross-vested the bankruptcy proceedings to the Family Court. On 24 July 2013 Mr Christensen appeared for Mr Bond in the Family Court in the conduct of the bankruptcy proceedings.
34The trial of the cross-vested bankruptcy proceedings commenced on 25 November 2013. In essence, the case was based on submissions. The only witness available and required for cross-examination was Mr Williamson.
35Mr Bond neither filed nor relied upon any affidavit material in these particular proceedings. He was therefore not required to be available for cross-examination.
36Given the position of Mr Bond, Ms Beaman’s case was based largely on documentary evidence. Her case rests on the Court’s acceptance, both as to the relevance and the admissibility, of the many documents she sought to place before it. Unsurprisingly, there were a plethora of objections to the evidence.
37As urged upon me by counsel, I addressed the categories of complaint or objection made in a representative way. Despite the pitfalls of this course and of which the parties were aware, it was accepted that if there was any particular matter that I had not specifically addressed at the commencement of the resumed hearing, but which formed the basis or played a part in my ultimate decision, then it would be referred to in this judgment.
Contentions of the applicant
38Ms Beaman identified a number of matters in her written submissions that she said would justify the Court making one or more of the orders she seeks releasing Mr Bond’s property from the control of his trustees. These can be distilled as follows:
•four of the creditors listed in Mr Bond’s Statement of Affairs that he used as a basis for signing an authority pursuant to s 188 of the BA are, in fact, related parties and are not his creditors;
•even if the debts allegedly owed to these related parties are actual debts, they should be disregarded for the purpose of the application under the section because they are not “payable”. Mr Bond is not a debtor and is solvent;
•Mr Bond is able to access assets held by some Bond related trusts to pay out debts to the related party creditors. This again impacts on the concept of solvency;
•Mr Bond, whether solvent or not, entered into the s 188 Authority for a purpose not contemplated by the BA; and
•Ms Beaman has a “possibility” of obtaining an order under Part 5A of the FCA and this is a relevant factor.
Is Mr Bond insolvent?
39Counsel for all parties addressed the Court on the basis that the issue of solvency was relevant, in one way or another, to all aspects of Ms Beaman’s claim. Ms Beaman says Mr Bond is entirely solvent. Mr Bond says he is genuinely unable to pay his debts as and when they become due. He says he cannot meet his financial obligations.
40Section 187 of the BA provides an interpretation of the various terms used in Part X. Relevantly here, debtor means a person who is insolvent. Section 187(1)(A) defines insolvency to include temporary insolvency. Pursuant to s 5(2) of the BA a person is solvent if the person is able to pay all of the person’s debts as and when they become due and payable. Section 5(3) provides that a person who is not solvent is insolvent.
41In Stankiewicz v Plata [2000] FCA 1185, the Full Court of the Federal Court of Australia considered (in the context of annulment of a sequestration order) the question of insolvency and at paragraph 30 said:
In order to satisfy the Court that he or she is “able to pay his or her debts”, it is not necessary for the debtor to show that he or she has cash resources immediately available for this purpose. But the debtor must be able to realise assets, sufficient to pay the debt, within a relatively short time. As Barwick CJ said in Sandell v Porter (1966) 115 CLR 666, at 670, the resources to be considered
“extend to moneys which [the debtor] can procure by realization by sale or by mortgage or pledge of his assets within a relatively short time relative to the nature and amount of the debts and to the circumstances, including the nature of the business, of the debtor. The conclusion of insolvency ought to be clear from a consideration of the debtor’s financial position in its entirety and generally speaking ought not to be drawn simply from evidence of a temporary lack of liquidity. It is the debtor’s inability, utilizing such cash resources as he has or can command through the use of his assets, to meet his debts as they fall due which indicates insolvency.”
Statement of Affairs
42The first four creditors listed in Mr Bond’s Statement of Affairs are conceded by him to be related party creditors:
•Fairoak Pty Ltd (“Fairoak”) as trustee for the Greenplace Trust: loan of $2.85 millon incurred in September 2006;
•Tambar Pty Ltd (“Tambar”) as trustee for the Craig Bond Investment Trust (“CBIT”): beneficiary loan of $567,580;
•Tambar as trustee for the Craig Bond Trading Trust (“CBTT”): beneficiary loan of $761,846; and
•Sunland Nominess Pty Ltd (“Sunland”) as trustee for the Upphall Trust: beneficiary loan of $245,081.
43The largest creditor, Fairoak, is an entity controlled by John Bond (“Mr J Bond”), Mr Bond’s brother. Tambar is the trustee of the CBIT and the CBTT. Mr Bond holds all the issued shares in Tambar either in his own name or beneficially. Mr J Bond and Ms Eileen Bond, Mr Bond’s mother, hold all the shares in Sunland Nominees.
44Mr Bond also lists a mix of other creditors, including the Australian Taxation Office (“ATO”) ($71,000 and $6,818), accountant’s fees ($1,358) and legal fees (various).
45After the filing of Proofs of Debt, further creditors include American Express ($6,000), ATO ($97,437) and Christchurch Grammar School ($10,580).
46Ms Beaman was originally not listed by Mr Bond as a creditor in the Statement of Affairs in respect of the court order for payment of $100,000, or for any amount.
Ms Beaman’s position
47In order to persuade the Court Mr Bond was solvent, Senior Counsel for Ms Beaman, Mr Dowding, undertook a detailed tracing or analysis of numerous entities in which Mr Bond had an interest, either directly or indirectly.
48The purpose of this exercise was intended to show:
•Mr Bond had, and continues to have, an interest in numerous and often intertwined entities from which he has received money in the past;
•Mr Bond has an ability to access assets held by some of the related party entities to pay out debts owed to creditors;
•in the Family Court proceedings, Mr Bond lists a number of trusts as financial resources from which he has and will continue to receive funds in the future; and
•the stated wealth of Mr Bond in 2010 is still available to him and any debts to related party creditors will never become payable.
49Mr Dowding, in particular, referred to the entities contained in the Statement of Affairs which he says support his contentions.
50Fairoak acts as the trustee of the Greenplace Trust and the Alpha Trust. Mr Bond, the CBTT and the CBIT are the primary beneficiaries of the Greenplace Trust. In 2006 Fairoak funded the purchase of a Broome Street, Cottesloe property which was part of the matrimonial property settlement in the BFA. Mr Bond says the funds were by way of loan. Ms Beaman says the funds were a gift.
51The funds were not included in Fairoak’s financial statements until 2010. Ms Beaman says there has been inconsistency between the figures provided by Mr Bond as to what is owed by him to the Greenplace Trust and that she has her suspicions about the funds previous absence from the Trust’s financials. She says that this is demonstrative of the funds being gifted to Mr Bond rather than by way of loan.
52In Fairoak’s financial statements for 2009 a loan, described as a non-current borrowing for $2.85 million, appears. In the 2010 financial statements the same loan is included under the 2009 and 2010 years as a non-current borrowing “Craig Bond (2007) loan re Broome Street - $2.85m”. In documents disclosed in relation to the funds loaned for the purchase of Broome Street, Pye & Quartermaine, solicitors, received funds into their trust account in the amount of $2,360,000. Ms Beaman says there are inconsistencies in Mr Bond’s evidence as to how much of the loan is actually owed. In any event she says the funds were a gift and not a loan to Mr Bond.
53Sunland Nominees Pty Ltd is the trustee of the Upphall Trust. On 30 June 2006 $272,767 was lent to Mr Bond by way of beneficiary loan. On 30 June 2010 another $245,081 was lent by way of beneficiary loan. Mr Bond has also used his beneficial interest in the Upphall Trust to guarantee his loan to purchase a property in Kensington, London.
54Mr Bond has given evidence that he has received “non cash” distributions:
30 June 2006 - $155.374 – repaid 30 June 2009
30 June 2007 - $153,579 – repaid 30 June 2009
30 June 2008 - $135,023 – repaid 30 June 2009
30 June 2009 - $292,361 – partially repaid as at 30 June 2013 with $139,778 outstanding. Ms Beaman says that there is no evidence of a demand for payment by this entity.
55Windworks Engineering is an entity incorporated under variations of its name in different countries. Windworks Engineering Inc is a British Virgin Islands company originally incorporated as Ballatyne Ltd. Windworks Engineering Pte Ltd is a company incorporated in Singapore. Windworks Engineering Inc (Cyprus) a subsidiary incorporated in Cyprus.
56Exhibit 51 to Ms Beaman’s affidavit filed 11 October 2013 is an “assetts [sic] and liabilities schedule” compiled by Mr Bond as at 31 May 2010 and disclosed by him in the Family Court proceedings. This document refers to Mr Bond as having “Windworks shares in an off shore company” worth $AUD29.2 million. Mr Dowding submits that it is unclear what has happened to these funds and that it is difficult to trace their whereabouts. Mr Dowding says it is difficult to accept Windworks is “bereft” of present funds.
57Tambar acts as trustee for CBIT and CBTT. In the Family Court proceedings Mr Bond filed financial statements in 2011, 2012 and 2013 each listing a financial resource, by way of beneficiary loan, in the CBTT. As at January 2013 this resource was listed as $411,952 as well as profits in account from share trading for the year ending June 2012 of $26,187.85. The controlling trustees note that disclosed in Tambar’s financial statements for the year ending 30 June 2012 there is a net deficiency in Tambar’s own financial circumstances.
58Since April 2013 Mr Bond has travelled overseas to Japan, Indonesia and the United Kingdom. Ms Beaman says at times Mr Bond has travelled business class and stayed at five star hotels funded by Tambar. She says he has also continued to lose significant funds gambling online. Ms Beaman says the Court should infer that if Mr Bond can afford to enjoy what she describes as a “lavish” lifestyle then he cannot be insolvent.
59Mr Dowding urged the Court to apply the principle in Jones v Dunkel (1959) 101 CLR 298 to support the drawing of the inferences proposed. He says that the failure of Mr Bond and his family to give evidence and explain the financial position provides a basis for the Court to make adverse findings against him.
Mr Bond’s position
60There was never any secret made by Mr Bond of the fact that the Family Court’s order for payment of $100,000 within 30 days of 26 February 2012 was the catalyst for his need to enter into a PIA. It was this unrelated party debt which tipped the scales of his solvency.
61It is not suggested by Mr Bond that any other debts he had at that time, from a practical viewpoint, had become immediately due and payable. These debts became relevant for consideration at the time of his entering into the authority.
62Senior Counsel for Mr Bond, Ms Cahill, says that the money provided to Mr Bond by Fairoak, although not documented as a loan prior to 2010, was also not documented as a gift. The money was not documented in any particular way at that stage. The funds were only included when the nature of the advance of funds became relevant in the Family Court proceedings.
63Ms Cahill identified that regardless of any money received from Tambar to fund Mr Bond’s current lifestyle these funds would not amount to a sum all the creditors are now entitled to receive. Mr Bond says that he cannot pay all his debts as and when they become due and payable. He accepts he has received distributions from discretionary trusts in the past, but says there is no evidence that the trustees of the respective trusts have any intention to provide Mr Bond with further funds.
64Ms Cahill submits that the principle in Jones v Dunkel (supra) does not apply in this matter as Ms Beaman has not proved, on the balance of probabilities, that Mr Bond is solvent. As such Mr Bond has nothing to explain or to contradict.
The controlling trustees’ position
65The controlling trustees depose that they have received numerous proofs of debt from the creditors of Mr Bond. They are satisfied these are sufficient to admit the proofs of debt for voting purposes. The controlling trustees were satisfied that Mr Bond could enter into the authority and held two Meetings of Creditors. A report was circulated to the creditors on 9 May 2013 and a second report circulated on 17 May 2013. Both support a finding that Mr Bond is insolvent.
Inferences from proved facts
66Given the open ended invitation to the Court by Mr Dowding to draw inferences from certain facts in this case, it is useful to consider how the authorities have treated such a course.
67The principle in Jones v Dunkel (supra), referred to extensively by all counsel, only applies where a party is required to explain or contradict something. What a party is required to explain or contradict depends on the issues raised by the pleadings and by the course of the evidence in the case (O’Meara v Dominican Fathers [2003] ACTCA 24). If the principle is found to apply then adverse inferences may be drawn from the failure of a party to adduce particular evidence where such evidence would reasonably have been expected. If a person is likely to be able to speak on some fact in issue then one would reasonably have expected that party to call the person (Fabre v Arenales (1992) 27 NSWLR 437).
68A potential witness who could have reasonably been expected to adduce evidence may be a party to the proceedings (Adler v Australian Securities and Investments Commission [2003] NSWCA 131). The principle will only apply having regard to the existing evidence. Once the evidentiary threshold is met an inference can more strongly be drawn (Australian Securities and Investments Commission v Hellicar (2012) 247 CLR 345).
69Any adverse inference that may be found in Mr Bond not giving evidence in these proceedings extends to the limit that, if adduced, the evidence may not have assisted his case. A trier of fact may draw an inference unfavourable to that party with greater confidence. It cannot be inferred that the evidence of the absent witness would have been positively adverse or unfavourable to the party’s case (Brandi v Mingot (1976) 12 ALR 551). The failure to give evidence cannot fill an evidentiary gap in the opponent’s case (Jones v Dunkel (supra)).
70Mr Bond says his failure to give evidence is explained by Ms Beaman’s own failure to discharge her evidentiary burden in terms of the issue of his solvency. He says the evidence is clear that at the time of entering into the authority on 11 April 2013 he fell fairly and squarely within s 188 of the BA. The inferences sought to be drawn by Ms Beaman do not change this position.
71When one winnows the objective evidence from the analysis put forward by Ms Beaman it is apparent that Mr Bond is reliant on the availability of loan funds and discretionary or voluntary payments being made to him. These two facts do not enhance his solvency.
72The invitation to utilise the principle in Jones v Dunkel in a very broad brush way is based more on speculation and possibility than on inferences which can be drawn from proven facts.
73I accept there are gaps in the financial evidence but these cannot simply be bridged by inferences. I am not persuaded that this is a case whereby the principle in Jones v Dunkel can close the gap.
74I am not satisfied that, in accordance with the requirements of the BA, Mr Bond is solvent.
The appointment of the controlling trustees
75Ms Beaman has identified some aspects of the appointment of the controlling trustees which she says are troubling. Her concerns involve not only the timing of the appointment, but the purpose for which she says it was sought by Mr Bond.
76In essence, she says the s 188 authority was entered into for a purpose foreign to the BA.
Timing of the Authority
77On 6 March 2013, Mr Williamson was told that Mr Bond may need to enter into a Part X arrangement because of issues with the Family Court proceedings. In his Statement of Affairs Mr Bond identified the main cause of his insolvency to be “Adverse legal action”. He noted that he first had difficulty paying his debts in November 2012.
78Significantly, it was on 8 November 2012 that Ms Beaman filed her application for litigation funding to enable her to continue with the Family Court proceedings. The order for Mr Bond to pay $100,000 within 30 days was made on 26 February 2013. The specific purpose of the funding was to enable a forensic investigation of Mr Bond’s financial affairs to be undertaken.
79Ms Beaman says the use of the court order by Mr Bond as a catalyst for entering into a PIA is artificial. Given that the London property had been placed on the market two days prior to the Family Court order being made, it was immediately open to Mr Bond to seek an extension of time within which to pay the $100,000, to seek to vary or to apply to set the order aside. He chose neither to appeal or vary the order.
80Ms Beaman says the reason Mr Bond signed the Authority was to put a stop to the Family Court proceedings. Ms Beaman opines that some reasons Mr Bond wants to halt the proceedings are:
•he will not have to pay her the court ordered $100,000 or, at the very least, will defer paying all of that amount; and
•that the bankruptcy proceedings give him the opportunity to pay out, on an equal footing with Ms Beaman, the debts he owes to related party entities. Any such payment is likely to come from his only tangible asset – the London property. He may not have the same opportunity in the Family Court proceedings.
81Mr Bond’s legal costs arising out of his attempts to enter into a PIA have been about one and a half times more than the amount he was ordered to pay Ms Beaman in February 2013. Not only has he been able to secure funds to pay his own legal fees but, according to Mr Williamson, has also been in a position to facilitate the provision of at least some funds for the role of the controlling trustees. The source of funds from which the controlling trustees would be able to continue their investigations in the event of a PIA is unclear.
82Mr Dowding says that the Court can draw an inference that because the primary creditors are related parties who have not required repayment of debts, the authority executed by Mr Bond was designed to frustrate the Family Court proceedings. He says the balance of the debts alone would not justify a PIA. The timing of the authority presents an irresistible inference that Mr Bond used the BA to circumvent the FCA.
83Ms Cahill says the inferences sought to be drawn from the proven facts are equivocal at best.
84Whilst Ms Beaman seeks to have the Court draw the inference Mr Bond did not want to pay her the $100,000, the evidence of Mr Williamson supports that he could not pay that sum. If one accepts the Statement of Affairs at face value that would appear to be correct. The London property remains unsold.
85The actual effect of the signing of the authority, regardless of intention, was to halt the Family Court proceedings. I will return to this when I consider the matters relating to special circumstances.
Purpose of the Authority
86In his cross-examination of Mr Williamson, Mr Dowding carefully explored the steps taken by the controlling trustees to investigate Mr Bond’s affairs. The end result was an acceptance that given the short period of time of 15 days within which the controlling trustees had to conduct such preliminary investigations, coupled with the spectre that their role may be terminated, they decided any further or more thorough investigation would await the execution of the PIA.
87Mr Dowding maintained his criticism of the manner in which Mr Christensen and Mr Bond secured the services of WA Insolvency Solutions as controlling trustees. There was a two pronged attack in this regard.
88Firstly, it was established that Mr Christensen has a longstanding professional relationship with Mr Williamson arising from a mutual involvement in the area of insolvency. This relationship is of some 30 years standing. Mr Christensen had acted for the firm WA Insolvency Solutions previously. Mr Williamson accepted his own experience in investigating issues such as overseas trusts was non-existent. Mr Hurt did not give evidence.
89Mr Dowding asked the Court to draw an inference that the introduction of Mr Bond to Mr Williamson was an action designed to limit a thorough investigation of Mr Bond’s overseas assets given the controlling trustee’s lack of knowledge and experience in this area.
90Mr Williamson was cross-examined at length about these issues. I find there was nothing in his direct oral evidence, or inferentially, to suggest he was an inappropriate choice as controlling trustee or that a lack of personal experience in the investigation of overseas assets impacted on his ability to organise such an investigation if required. I was not satisfied Mr Christensen had made a deliberate choice of Mr Williamson for the purpose suggested by Mr Dowding.
91This then sequed into a criticism of Mr Christensen in his capacity as a lawyer acting for both Mr Bond and the controlling trustees. As already noted, Mr Christensen introduced the debtor, Mr Bond, to Mr Williamson, who became controlling trustee. Mr Williamson was appointed, inter alia, to make inquiries and investigations in connection with the debtor’s property, in the interests of the creditors, one of whom was Ms Beaman. Despite having introduced Mr Bond to the controlling trustee, Mr Christensen’s firm was then instructed to appear for the controlling trustee in both the Federal Court and Family Court proceedings. The latter in relation to largely procedural hearings held on 16 and 18 April 2013 and the former for a brief appearance on 20 May 2013. After the cross-vesting order was made on 31 May 2013, on 24 July 2013 Mr Christensen then appeared for Mr Bond in the bankruptcy proceedings in the Family Court.
92There is a duty on the controlling trustee to exercise powers and perform functions in an impartial and independent manner (s 190A(i) BA). Mr Christensen’s introduction of Mr Bond to the controlling trustee and the subsequent involvement of his firm on behalf of both the controlling trustee and then the debtor may convey an impression of Mr Christensen having some sway or influence over the controlling trustee – through an intermingling of roles.
93The legislation emphasises that the fundamental duty of a controlling trustee is to act in an impartial and independent manner. It is essential that public confidence be maintained in the administration of Part X. A debtor (or anyone associated with him) who has the ability to influence the manner in which the controlling trustee conducts his duties would create a situation clearly inconsistent with the objects of Part X.
94Counsel for both the controlling trustees and Mr Bond said that the course taken here in the bankruptcy proceedings was not uncommon. I was referred to Street J’s comment in Re Allebart Pty Ltd (in Liq) and the Companies Act [1971] 1 NSWLR 24 where his Honour held a liquidator’s appointment of solicitors concurrently also acting for a party interested in the liquidation to be both “innocuous” and “commonplace”. It was pointed out that in this case the involvement of Mr Christensen and his firm, insofar as it concerned the bankruptcy proceedings, was fleeting. His firm was on the record in the Federal Court for a period of approximately one day before the controlling trustee’s present legal representation was secured. In the Family Court there were two brief appearances that involved largely uncontentious procedural matters. Mr Christensen then changed roles and represented Mr Bond in the bankruptcy proceedings in the Family Court.
95The issue of the genuineness or otherwise of Mr Bond’s debts, especially in relation to overseas trusts and related party entities, has been an overarching issue for Ms Beaman since at least 2010. This covers the same ground as the matters the subject of investigation by the controlling trustees.
96For example, the most significant creditor in the s 188 Statement of Affairs is Fairoak, as trustee for the Greenplace Trust. In the Family Court proceedings Ms Beaman has applied to set aside, pursuant to s 222 of the FCA, the purported loan from Fairoak to Mr Bond and previously discussed in this judgment.
97Ms Beaman’s perception, as the most contentious creditor, that there may be some lack of impartiality, or at least rigor, in the conduct of the bankruptcy proceedings may not be without some foundation. However, on a consideration of the objective facts, there is nothing to suggest any impropriety on the part of the controlling trustees in their investigations or their conduct. Again, I will return to this issue below.
Section 208 - Are there special circumstances?
98Section 208 of the BA provides for a court to terminate control of a debtor’s property in the following terms:
The Court may make an order releasing the debtor’s property from control under this Division if:
(a) an interested person applies to the Court for such an order; and
(b) the Court is satisfied that special circumstances justify it making the order.
99Ms Cahill concedes that Ms Beaman is an interested person in accordance with s 208(a) of the BA, she maintains the Court could not be satisfied there are special circumstances justifying any exercise of discretion in making the order sought.
100Edmonds J in Deputy Commissioner of Taxation v Johns [2005] FCA 1143 considered and applied the meaning of “special circumstances” as adopted by Burchett J in Minister for Community Services and Health v Chee Keong Thoo (1988) 78 ALR 307 at 324, albeit in a different statutory context:
… the core of the idea of “special circumstances” is that there is something unusual or different to take the matter out of the ordinary course…
101Edmond J continued in Johns (supra) at [110]:
The phrase “special circumstances” is obviously designed to accommodate a great variety of circumstances which are “out of the ordinary course” in the sense used by his Honour, however, they must be circumstances which justify an order releasing the debtor’s property from the control of the controlling trustee.
102Whilst the term special circumstances can and often does include an abuse of process there is nothing to suggest that an abuse of process is pivotal to a finding of special circumstances. Special circumstances are simply those which are “out of the ordinary course”.
103Burchett J had earlier considered the meaning of “special circumstances” in Laurence v Mulroney (1987) 82 ALR 404 and accepted that in considering whether special circumstances are sufficient to justify an order releasing a debtor’s property from control it is relevant to consider whether the existence of a controlling trustee is likely in the particular circumstances of the case to serve the purposes suggested by the Clyne Committee. His Honour said at 407:
The committee referred to the “hiatus” which occurred under previous procedures because of the “unavoidable delays that take place in the holding of meetings and in obtaining assents to deeds”. The committee continued:
During this hiatus, the debtor’s affairs are out of control, assets are frequently dissipated and, where a business is involved, unnecessary losses are often incurred. In the situation described, neither the debtor nor the trustee is in a position to exercise effective control of the debtor’s affairs.
104This is a case in which I consider that special circumstances exist and that the property of Mr Bond should be released from the control of the trustees. There are a number of different factors, which when taken together, can be properly described as “out of the ordinary course”.
The effect of not releasing Mr Bond’s property from control
105Whether it was deliberate or not, Mr Bond’s execution of the authority has had the effect of halting the Family Court proceedings. If it is not set aside, it will permanently change the financial landscape of the parties to this de facto marriage, who up until the signing of the authority, were actively involved in litigation in the Family Court.
106The nature of Mr Bond’s financial circumstances is presently the central issue in contention, both in the FCA and BA proceedings. Rather than having this central issue dealt with and determined in one court hearing, there will be two disparate manners of addressing it. If the PIA proceeds in isolation, it will disable or utterly ruin Ms Beaman’s claim in the Family Court. There is a decided risk of an inconsistent result in the two courts relating to the same issue. Proceeding with the PIA will have an irreversible effect on the FCA proceedings.
107Ms Cahill sought to persuade the Court that once the PIA had been executed and dealt with the Family Court would be free to continue its own financial exercise using all the mechanisms available to it. She says this is to Ms Beaman’s advantage as the Part X debts identified by Mr Bond will be cleared at a discount of some 70 cents in every dollar, thus freeing the Family Court from the need to take into account those debts. Further, she argues Ms Beaman would be able to utilise what was described as a “Kennon & Spry point” to argue for a share in any trusts or interparty related entities.
108This argument has little attraction. Unless the proceedings under the two sets of legislation are dealt with in tandem, so that the nature and extent of any debts can be properly determined, an injustice to one or both of the parties to the Family Court litigation, or indeed the creditors generally, is likely to result.
109Although the controlling trustees indicate that under a PIA the creditors are likely to receive some 70 cents in every dollar, the Family Court has extensive powers which can be tailored more usefully to the circumstances here. True it is that it may be appropriate some of the debts be paid at only 70 cents in the dollar, but alternatively there may be some debts that should be paid out completely if there is the capacity for this to happen. The Family Court has power to discount certain debts in appropriate circumstances. Its discretion is far wider and more tailored to individual circumstances. A blanket payment of all debts at a certain rate, when detailed examination of the nature and extent of some debts is well under way in the Family Court, is of concern.
110The Family Court proceedings have ensued since 2010. Investigation into the financial circumstances of Mr Bond has received close attention. Considerable effort has been made in those proceedings to understand Mr Bond’s financial circumstances. There have been numerous attempts to ascertain the identity of assets either held in his name or in the names of others. This includes a consideration of the background circumstances of any trust and corporate structure, any overseas assets associated with those entities and the relationship between all the parties. The matter has progressed to a stage where a plethora of documents have been provided to Ms Beaman and what remains is for some forensic financial investigation to take place in an attempt to analyse the information provided and to tie matters together.
111It was at the point of an order being made to facilitate some means of financing the forensic investigation that Mr Bond sought assistance through the BA. If the PIA is executed, Ms Beaman faces a real risk of prejudice in that her possible entitlements under Family Court legislation may no longer exist. Any proceeds of sale of the London property will likely be used to pay creditors without any detailed consideration of how and why the debts were incurred. The rights of the creditors are something the Family Court routinely takes into account in determining entitlements. All the creditors are entitled to be heard and become involved in the Family Court proceedings if they wish. There are quite specific legislative requirements the Court must take into account under Part XIIIAA (orders and injunctions involving third parties) before making orders that affect third parties.
112The powers of the Family Court of Western Australia in property proceedings are akin to those under the FLA, save for the bankruptcy amendments. The powers are considerable and allow a court to consider factors that may not be available under the BA.
113In contrast, if a PIA is executed, then with a payment of some 70 cents in the dollar to the creditors across the board, it may not necessarily provide equitably for creditors who are unrelated parties. It may have the effect of benefitting creditors directly related to the debtor, at the expense of arm’s length creditors. This needs to be considered given the issues here.
114It is difficult to see Mr Bond’s actions in taking steps to enter into the authority as a genuine response to a recently realised insolvency. However, whether the response was genuine or not, the actual effect and impact of the action he took allows him some form of reprieve from the Family Court proceedings.
115Mr Bond also gains an advantage, whether intended or not, that:
•there will be repayment of identified debts, albeit of a portion of the total amount owing, including to creditors closely related to Mr Bond who have made no demand;
•there will be repayment of debts prior to a complete investigation of the nature and circumstances of the debts as required by the FCA;
•there will be no priority in payment or discount in amount to reflect the circumstances of the debt; and
•the effect will be to stultify Family Court proceedings.
Solvency
116Obviously, the procedure set out in Part X is provided for in the BA. If a person is insolvent, he falls within that procedure.
117I am not persuaded that the fact the major creditors here were related to Mr Bond should impact on my decision as to his solvency or on the question of whether any debts are genuinely due and payable. I have, for the purpose of the BA, on the evidence before me, and at the particular time in question, found him to be insolvent, albeit temporarily.
118However, it was hoped that with a forensic investigation as anticipated in the Family Court these issues would be less opaque and far more apparent in the overall scheme of determining issues relating to Mr Bond’s financial or asset position. This course of investigation was derailed by the undertaking of s 188 procedures. The Family Court has not been in a position to fully consider all the information that may provide a clearer picture of the financial affairs of Mr Bond and as a consequence make orders affecting all interested parties in a just and equitable fashion.
The effect of releasing Mr Bond’s property from control
119In considering the BA proceedings it is helpful to consider the purpose of the controlling trustees, vis-à-vis Mr Bond’s property. There was no apparent or particular need advanced for their involvement here. There is no strong reason put forward and which I accept for the controlling trustees to maintain control of Mr Bond’s property. The major creditors, the inter-party creditors, have not sought repayment of their debts and they are already part of the Family Court proceedings. There is no suggestion that the controlling trustees are essential here to prevent the dissipation of assets or to stop further financial losses. There are presently injunctions in place by virtue of Family Court orders that prevent Mr Bond from dealing with the London property without consent from Ms Beaman. The Family Court has power to grant further injunctions if appropriate reasons for doing so exist.
120If it was not for the Family Court order for Mr Bond to provide some money to facilitate a forensic investigation, there is nothing to suggest he would not have continued to operate, in a financial sense, as he had always done.
121The effect of releasing Mr Bond’s property from control is to allow the continuation of the Family Court litigation, which has ensued for some considerable time, dealing with Mr Bond and his family’s financial dealings without prejudicing the position of the creditors in the Statement of Affairs.
122The proceedings in the Family Court are highly complex and include allegations of a failure by Mr Bond to disclose his relevant financial position in a timely fashion and an abuse by him of process generally. As is obvious, more than $4 million of Mr Bond’s debts are owed to trust companies controlled by family members and this is specifically under challenge in the Family Court. Ms Beaman seeks to set aside a transaction which relates to this debt.
The controlling trustees
123As noted, the Court is not critical of the controlling trustees in the role they have played in the BA proceedings. However, there is some disquiet on the part of Ms Beaman. This is based on a perception that those who, in the future, may be charged to further investigate the financial circumstances of Mr Bond under the BA, are less than impartial given the former relationship between them and his present lawyer. This is especially so in the manner this case was introduced to them. She says the controlling trustees may more readily adopt Mr Bond and his lawyer’s assertions of the financial situation. There is no such perception in the Family Court proceedings. Although this is not pivotal to the decision on special circumstances, it has been an issue consuming considerable time in the present proceedings.
Conclusion
124Modern bankruptcy law has undergone much reform in the areas of policy, detail and administration. The purpose of bankruptcy law as stated in The Laws of Australia (Thomson Reuters, The Laws of Australia (at 1 February 2014) 3.1.360) is:
[a representation of] an attempt to achieve a just and equitable balance between the rights of creditors and the rights of debtors, together with due regard to the public interest.
125The use of the phrase “just and equitable” and the balancing of the rights of creditors and debtors has resonance with the FCA objects in property settlements.
126These proceedings were cross-vested to the Family Court of Western Australia on the basis that the court was in an ideal position to determine questions that arose under the BA and the connection to family law matters. It continues to be in the best position to determine the rights of creditors and debtors and also of the de facto parties to the relationship, balanced with due regard for public interest.
127The irony of the situation whereby Mr Bond has now spent more on his legal fees in seeking to execute a PIA than the amount he was ordered to pay Ms Beaman and which he used as a catalyst to execute the s 188 authority is not lost on the Court. Conversely, the amount ordered by the Family Court to be paid by Mr Bond to assist Ms Beaman in her forensic investigations has well and truly been expended by her in the present proceedings, apparently from her own borrowings.
128The practical effect of the BA procedures has been to gain, what can only be termed, as some form of collateral advantage for Mr Bond. This is not a purpose contemplated by the BA and, using the words of earlier authority, is simply extraneous to that legislation. The issue of payment by Mr Bond of the $100,000 previously ordered is something that can be dealt with by the Family Court. Although there is a Form 2 application in a case filed 17 January 2014 before that Court for enforcement of the Court’s order any such enforcement is discretionary and all circumstances are considered.
129The conduct of matters in these proceedings confirm that Mr Bond’s asset position continues to be far from clear and that the steps undertaken in the Family Court have gone a considerable distance in trying to clarify the circumstances. This will be for nothing and will not necessarily be of any benefit to anyone apart from Mr Bond if the Family Court’s role is now extinguished.
130The considerable investment in the Family Court proceedings in terms of time, effort and investigation will effectively be frustrated if the PIA is executed and given effect. I find that the removal of Mr Bond’s property from the control of the trustees is unlikely to cause unfair prejudice to either the parties to the de facto marriage or to the creditors. The issues will still be resolved, but in one set of proceedings.
Orders
1The property of CRAIG DAVID BOND (debtor) be released from the control of CHRISTOPHER MICHAEL WILLIAMSON and DAVID ASHLEY NORMAN HURT (second respondents) who were appointed controlling trustees by authority signed 11 April 2013.
2 The application and response otherwise be dismissed.
I certify that the preceding [130] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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