CALDER & CALDER

[2011] FamCA 630

FAMILY COURT OF AUSTRALIA

CALDER & CALDER [2011] FamCA 630

FAMILY LAW – INJUNCTIONS – Preservation of property – Ex parte and Interlocutory – Where the applicant wife sought ex parte mareva orders against the respondent husband and proposed third parties not joined to the s 79 proceedings – Where the third parties were not resident or incorporated in Australia

Family Law Act 1975 (Cth), ss 34, 114
Family Law Rules 2004 (Cth), rr 5.12, 6.03

B Pty Ltd v K Anor [2008] FamCAFC 113
Ballabil Holdings Pty Ltd v Hospital Products Ltd (1985) 1 NSWLR 155
Cardile v LED builders Pty Ltd (1999) 198 CLR 380
Commissioner of State Taxation (WA) v Mechold Pty Ltd (1995) 30 ATR 69
Commissoner of Taxation (Cth) v Karageorge [1996) 34 ATR 196
Gould v Gould; Swire Investments Ltd (1993) FLC 92-434
Jackson v Sterling Industries Ltd (1987) 162 CLR 612
M v DB [2006] FamCA 1380
Mareva Compania Naviera SA v International Bulkcarriers SA (The Mareva) [1975] 2 Lloyd’s Rep 509.
National Australia Bank Ltd v Dessau [1988] VR 521.
Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319
Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 399
Waugh & Waugh (2000) 158 FLR 152
Yandil Holdings Pty Ltd v Insurance Co of America (1987) 7 NSWLR 571

APPLICANT: Ms Calder

RESPONDENT: Mr Calder

FILE NUMBER: MLC 9627 of 2009

DATE DELIVERED: 10 August 2011

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Young J

HEARING DATE: 9 August 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Wilson

SOLICITOR FOR THE APPLICANT: Kennedy Partners

COUNSEL FOR THE RESPONDENT: Heard ex parte

SOLICITOR FOR THE RESPONDENT:

EX PARTE ORDERS

IT IS ORDERED EX PARTE:

1. THAT leave be granted to Counsel for the wife to make an oral application for orders as contained in the draft minute of order sought, handed to the Court on 9 August 2011, marked “Exhibit W1” and to be retained on the Court file.

2. THAT the further hearing of that application be adjourned to the Judicial Duty List on Thursday 11 August 2011 at 10.00 a.m. and be consolidated and heard together with the interim orders sought in the wife’s Application in a Case, filed 9 August 2011.

3. THAT a transcript of the hearing for the morning of 9 August 2011 be prepared, placed on the court file, and made available to all parties and the proposed second to fifth respondents.

4. RESERVE the wife’s costs of and incidental to the ex parte hearing this day to the adjourned hearing date for further submissions and determination.

5. THAT leave be granted to the wife’s solicitors to forthwith file and serve the affidavit of Mr R, sworn 8 August 2011, and the annexed affidavit of Mr S.

IT IS NOTED that publication of this judgment under the pseudonym Calder & Calder has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9627  of 2009

Ms Calder

Applicant

And

Mr Calder

Respondent

REASONS FOR JUDGMENT

1. This matter came before me as a matter of urgency for hearing on an ex parte basis. The proceedings were conducted on oral submissions from Counsel appearing for the wife as evidenced from the transcript of the proceedings which I have directed that the Court obtain and make available to both parties and the other proposed respondents.  The hearing before me was undertaken in a busy Judicial Duty List and I reserved the reasons for judgment and orders until Wednesday 10 August 2011.  That was necessary as I sat and heard other cases throughout the afternoon and time did not permit the delivery of an ex tempore oral judgment.  Counsel for the wife indicated that, on instructions, he and his client did not seek detailed reasons but, given both the complexity of the issues and the seriousness of the matters that might arise from any orders pronounced, I considered it appropriate to reserve and deliver limited and urgently prepared reasons for judgment.

2. On 10 June 2011 the solicitors for the wife issued an Application in a Case and that document was served upon the husband’s solicitors.

3. That Application was supported by a substantial affidavit of the wife with voluminous annexures and a further affidavit of Mr Caldere, a solicitor practising in Scotland.

4. The Application was returnable on 29 June 2011 and was thereafter adjourned by consent, the most recent adjournment being pronounced by Registrar Mestrovic on 2 August 2011. On that occasion all extant Applications were adjourned to the Judicial Duty List and fixed for Thursday 11 August 2011 before me sitting as the Judicial Duty List Judge. 

5. Following upon the issue of that Application in a Case on 10 June 2011, various subpoenas have been issued and there have been other affidavits of service filed.  No substantive orders of the Court have been made in the interim period and the husband has not caused to be filed any Response or supporting affidavits.

6. A further Application in a Case was filed by the wife’s solicitors on 9 August 2011. That Application is supported by a further substantial affidavit of the wife filed that same day with numerous annexures.

7. That further Application in a Case is yet to be served upon the husband or upon the various other respondents that are sought to be joined and are named in that Application but are yet to be joined as parties to the proceedings pursuant to r 6.03 of the Family Law Rules 2004 (Cth) (“the Rules”), as amended by the Family Court Amendment Rules 2011 (No 1) (Cth) in force 1 March 2011.

8. Those further proposed respondents are the husband’s mother, the company Calder and Co incorporated in Scotland, a firm of solicitors, or at least the corporate trustee of that firm, T Trustees, and Mr U, a solicitor and partner of that Scottish firm of solicitors.  None of the respondents have, as yet, any notice of that issued Application or the wife’s affidavit in support. In this respect and in regard to the issue of joinder see the decisions of B Pty Ltd v K Anor [2008] FamCAFC 113 at [45] to [52], and Gould v Gould; Swire Investments Ltd (1993) FLC 92-434 at [80,449] to [80, 451].

9. That Application was, as Mr Wilson of Counsel appearing for the wife explained to the Court, presented before Registrar Field of this Court on Monday 8 August 2011. The Court was asked to list the matter on an urgent ex parte basis so that the wife could seek further and additional orders pending the service of the Application in a Case of 9 August 2011 upon the husband and each of the other proposed second to fifth respondents.

10. Letters were forwarded to the Court by the wife’s solicitors on 2 and 3 August 2011 and the matter was referred to Registrar Field for an administrative decision to be made on its further listing. 

11. The matter was listed before me in the Judicial Duty List on 9 August 2011 on an ex parte basis but without any further Application being filed.

12. The wife has urgently sought ex parte injunctive orders against the husband and each of the proposed second to fifth respondents for what she has asserted to be the preservation and protection of assets for two days pending the further listed hearing on Thursday 11 August 2011. The wife offered an undertaking to pay damages as may be properly incurred or assessed as a result of the making of urgent ex parte mareva orders.

13. I emphasise that there was no formal urgent Application previously filed with the Court and the proceedings were conducted on the basis that the wife’s Counsel (and instructing solicitor) appeared in Court and made submissions in support of the urgent ex parte interlocutory orders sought.

14. The wife was not present in Court. 

15. The orders sought on behalf of the wife were provided in a draft minute of order to the Court and were substantially different from the orders detailed in the wife’s Application in a Case, filed 9 August 2011, listed for hearing on Thursday 11 August 2011. The draft orders sought were as follows:

    Upon the Applicant Wife through her counsel giving an undertaking to pay any damages to the Respondents that the Court may assess as appropriate to be paid as a result of the making of these orders IT IS ORDERED

    1.That until the conclusion of the hearing listed for 11 August 2011 (or until the conclusion of any other adjourned hearing date in relation to the wife’s application filed this day, whichever is the later), the Husband and his servants and agents be and are hereby restrained from renouncing or relinquishing any interest he has in the [K Trust].

    2.That until the conclusion of the hearing listed for 11 August 2011 (or until the conclusion of any other adjourned hearing date in relation to the wife’s application filed this day, whichever is the later), each of the Second, Third, Fourth and Fifth Respondents and their servants and agents be and is hereby restrained from:-

    2.1causing the Husband to be removed as a trustee of the [K Trust];

    2.2causing any change in the Husband’s status as the primary beneficiary of the [K Trust];

    2.3causing the [K Trust] to be vested;

    2.4causing any change to the structure or operation of:

    2.4.1the [K Trust];  or

    2.4.2the Third Respondent [CALDER LIMITED];

    2.5diminishing or altering or disposing of the assets of:

    2.5.1the [K Trust];  or

    2.5.2Save in the ordinary course of business, the Third Respondent [Calder Limited].

    3.That the wife cause a sealed copy of these orders, her application filed 9 August 2011 and all affidavits in support of that application to be served forthwith upon:

    3.1the husband by email to the Husband’s solicitors, Nedovic & Co, to be sent to …;  and

    3.2each of the Second, Third, Fourth and Fifth Respondents by email to Turcan Connell, Solicitors of Edinburgh, and by email to the Second Respondent, to be sent to each of the following addresses:

    3.2.1     …

    3.2.2     …;

    3.2.3     …;  and

    3.2.4     …

    4.     That the wife’s costs of this day be reserved.

16. Counsel for the wife, on the instructions of his client, offered an undertaking as to damages in that his client would be:

    1.Responsible for any damages caused to the husband or any of the other respondents nominated in my Application for a Case dated 9 August 2011 which might arise from any orders being made in relation to my said Application on an ex parte basis;  and

    2.Bound by this undertaking until the date nominated by this Honourable Court but otherwise until excused by the Court.

17. The wife’s case proceeded on the basis that she sought all of the orders identified in the draft minute of orders provided to the Court. Specifically her Counsel initially declined to seek order 1 only, that is the order restraining the husband from renouncing or relinquishing any interest he has in the K Trust, on the basis that order 2 against each of the proposed second to fifth respondents could have been adjourned for further hearing on Thursday 11 August 2011.

18. I therefore proceeded to consider the evidence before the Court, in the context that the wife’s Application is made on an urgent ex parte basis, without service upon the husband’s solicitor in these proceedings, or the proposed second to fifth respondents, of any documents relevant to the Application, and in circumstances where the wife primarily sought all of the orders contained within the draft minute of ex parte orders.

19. After the lunch adjournment Mr Wilson submitted that he had received changed instructions from his client by telephone during the adjournment. The orders now sought by the wife were for, as a first priority all the orders sought upon the wife’s undertaking as to damages, but in the alternative only the orders sought in paragraph 2 of the minute of orders as against the husband and his mother but not the other proposed third, fourth and fifth respondents.  I have therefore in the course of these reasons for judgment considered the primary order sought and the order sought in the alternative.

20. I have taken the opportunity to briefly read the first filed affidavit of the wife setting out some factual background to the proceedings. The marriage between the parties was of approximately thirty three years in duration with the parties’ finally separating in late 2008. There are four adult children of the marriage.  These proceedings were commenced by the wife in this Court in October 2009.

21. I have carefully read and evaluated the wife’s affidavit sworn 29 July 2011 but formally filed in this Court on 9 August 2011. Given the letters that were written by the wife’s solicitors on 2 and 3 August 2011 I am not critical of any delay in the period following the wife’s swearing of her affidavit and the filing of documents in the Court. There however remains the fact that from the date of notification of the acquisition of the husband’s shareholding, in a letter from his Melbourne solicitor Mr Nedovic on or about 11 July 2011, there was a period in excess of two weeks taken for the preparation, swearing and completion of the wife’s affidavit of evidence to be presented to the Court in support of the urgent interim orders as drafted and filed on 9 August 2011.  Annexed to that affidavit is correspondence passing between the solicitors for the husband and wife and identified as exhibits “JEC-2” and “JEC-3”. I have carefully read those documents. Mr Wilson highlighted paragraph 1 of the letter of the husband’s solicitor dated 11 July 2011. It was submitted that only then and there were the wife and her solicitors given notice that the husband’s shares in Calder Limited (“the company”) had been compulsorily acquired. The attached letter from the Scottish firm of solicitors and asset managers addressed to the husband and dated 27 June 2011 confirmed that, pursuant to the Articles of Association of the Company, the Board had resolved to require him to retire totally from the company and demanded a transfer of his shares from him in favour of the company.

22. The husband then held a twenty per cent minority shareholding in the company and they were acquired at a total consideration of £200,000 (GBP).

23. It is of significance that the husband did not disclose that solicitor’s letter or its content to the wife or her solicitors for a period of approximately two weeks.

24. The wife’s affidavit identified this action in paragraphs 26 to 31 (inclusive) and I have read and considered her evidence in that regard. Likewise the issues concerning the proposed second to fifth respondents and the K Trust are identified in paragraphs 32 to 38 (inclusive) of the wife’s affidavit and I have read and considered that evidence.

25. The wife has prepared a detailed factual basis of evidence and property acquisitions throughout the marriage and that is contained within paragraphs 39 to 63 (inclusive) of that affidavit which I likewise have carefully read and evaluated.

26. Mr Wilson emphasised two earlier significant events which were that:

    (a)the husband changed his Will contrary to the interests of the wife in September 2008, immediately following upon the parties’ first separation;  and

    (b)in May 2010 the husband was removed as a director of Calder Limited, though he said that he objected to his removal and formally and forcefully opposed that outcome.  The wife does not accept that he so acted.

27. Again in submissions Counsel for the wife identified the range of gross assets that were said to be owned by, or within the control of, the husband and wife.  In Australia their assets were said to be valued at approximately $18 million and consist primarily of two substantial properties in the western district of Victoria. In Scotland the assets were largely comprised by a parcel of approximately 700 to 800 acres, previously agricultural and now re-zoneable land, which could be valued at or about £300m (GBP) based on an earlier disclosed sale of a parcel of 4.2 acres at a price of approximately £2m (GBP). Otherwise I have no particular evidence of valuation and I make no findings as to the size of the gross pool of assets that may one day be available for distribution between the parties subject to the claims of all other interested persons and other issues that no doubt will arise hereafter.

28. At the commencement of proceedings this day Counsel for the wife made available to the Court affidavits that were to be filed subject to the leave of the Court being granted. His instructing solicitor swore an affidavit in which he deposed that he had obtained an opinion from a qualified Scottish solicitor experienced in issues of taxation, property and trusts. That gentleman is Mr S whose affidavit is before the Court as an annexure to the affidavit of the wife’s solicitor.  In paragraphs 4 and 5 thereof he deposes to the following:

    4.I have been asked this week by the lawyers for the applicant wife in these proceedings, being Kennedy Partners, to comment as to whether, under the law of Scotland, a beneficiary of a Trust can renounce his or her entitlement orally, or whether such renunciation must be in writing.

    5.The answer to that question is that it is competent for a beneficiary to orally renounce his or her entitlement within a Trust, although renunciation in writing would be more usual.  It would also be necessary for the renunciation to be intimated to the Trustees.  While again writing is more common for such intimation, this could also be done orally.

1. Counsel for the wife relied heavily in his submissions upon that professional opinion to which I have given due weight and consideration but balanced in the context that it remains untested.

2. The very essence of the wife’s ex parte Application and the careful submissions of her Counsel is that these urgent draft ex parte orders are required to preserve and protect the husband’s ownership of or interest in the assets in Scotland.  Emphasis was placed upon their quantum being greatly in excess of the more modest Australian assets that otherwise would be available for distribution between the parties in the s 79 property application before the Court.  It was argued that the past conduct and behaviour of the husband both as to his change of the Will and his questionable removal as a Director of the Company highlighted that he has and would continue to act contrary to the interests of the wife in relation to ascertaining and maintaining the available pool of assets pending the hearing and judgment of the final property and financial proceedings.

3. When applications are brought without notice r 5.12 applies and the onus rests on the applicant seeking an ex parte interlocutory order to satisfy the Court as to why such an order should be made without notice to the other party or parties: r 5.12(a)(ii). Rule 5.12(b) further identifies the requirement for an applicant to, in affidavit or oral submissions before the Court, make full and frank disclosure of all of the facts relevant to the Application. In this case it is relevant to consider and evaluate in no particular order:

   (a)The fact that the husband has an appointed lawyer in Melbourne who has been involved in these proceedings but has not been provided with notice of this Application;

   (b)The capacity of the applicant wife to give an undertaking as to damages (and per Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 any difficulties that may be associated with the quantification and recovery of damages in the event that it is later determined that the order should not have been granted);

   (c)Whether there is likely to be any hardship, danger or prejudice to the respondent(s) or a third party if the order is made;

   (d)The nature of the damage or harm that may result if the draft order is not made;

   (e)Why the draft order must be urgently made; and

   (f)Whether there has been a breach of a previous order by either party to the case.

1. I have had regard to each of those matters in my considerations as to the just and proper outcome of this ex parte Application, notwithstanding that all matters have been evaluated and determined in very limited time as this matter was but one of eight matters in the Judicial Duty List on 9 August 2011.

2. Counsel for the wife highlighted that on 8 November 2010 Cronin J made orders by consent and which he asserted that the husband had directly or indirectly breached. Orders 4 and 5 provided:

   4.That until further order the husband and wife be and are hereby restrained (save and except in the normal and ordinary course of business or to pay reasonable and necessary living expenses) from dealing with, disposing of, diminishing the value of, or altering the structure of the following businesses and entities:-

   ..  .

   4.4 The husband’s interest in [Calder Limited]…

   5. That until further order the husband and wife be and are hereby restrained from resigning or relinquishing any position of officeholder, shareholder, trustee or beneficiary in any of the said business, companies and trust referred to in paragraph 4 hereof.

1. It may be that the wife’s assertion of the husband’s knowledge and breach of this order can be proven but that is not an assumption that I am presently prepared to make without hearing from the husband and the Company or its solicitors.  If I had in fact accepted, that the husband had likely breached, intentionally and with knowledge earlier orders of the Court that would have had a marked impact upon my considerations and the orders that I have now pronounced.

2. Those orders of 8 November 2010 also provided for the husband to make disclosure to the wife relating to Calder Limited and the K Trust.

3. I give substantial importance to the fact that the husband has a Melbourne lawyer acting for him. There has been correspondence between the parties and the husband has been represented by that law firm at earlier proceedings. The usual and proper requirement is that notice be given of any proceedings though Counsel for the wife has carefully explained that such notice could either negate or ultimately prove fatal to the wife’s current Application. I have balanced that submission against prejudice which might arise to the husband or the other proposed respondents and the extended hearing and other legal issues and appeals which could perhaps arise from the pronouncement of mareva orders on an ex parte basis. These are difficult considerations which I have endeavoured to finally weigh up in my determination of where the balance of convenience lies in relation to an appropriate outcome to this ex parte Application.

4. Additionally there is no suggestion in any of the correspondence from the husband’s solicitor in Melbourne, or from Scottish solicitors that the husband has been advised to act, or has acted contrary to the proper disclosure requirements of the 8 November 2010 orders in relation to either the Company or the K Trust.  Perhaps further time and disclosure will reveal other relevant matters and facts and of course any subsequent actions taken by, or on behalf of the husband, or the proposed respondents subsequent to the delivery and service of these orders and reasons for judgment may be telling.  Those matters remain to for potential determination upon further evidence and informed submissions.

5. As stated above the applicant wife in her Application and draft orders sought an interlocutory mareva order against the respondent husband for the preservation of assets including his interest in the Company and the K Trust held in Scotland, and the ex parte mareva injunction is also sought against the proposed second to fifth respondents that are persons and entities resident or incorporated in Scotland.

6. The Family Court may make interlocutory mareva orders for the preservation or freezing of assets in circumstances where the applicant demonstrates a strong prima facie case and a real risk of the disposal of assets where the balance of convenience favours the making of the order (see Jackson v Sterling Industries Ltd (1987) 162 CLR 612). The jurisdiction to make such an order is derived from s 114(3) and/or 34(1) of the Family Law Act 1975 (Cth) (see of M v DB [2006] FamCA 1380 at [43] citing the Full Court in Waugh & Waugh (2000) 158 FLR 152 at [32]. See also Mareva Compania Naviera SA v International Bulkcarriers SA (The Mareva) [1975] 2 Lloyd’s Rep 509).

7. Mareva injunctions can be granted in respect of foreign assets and in the absence of assets in Australia as at the date of an application in accordance with the decision of Ballabil Holdings Pty Ltd v Hospital Products Ltd (1985) 1 NSWLR 155. Such orders have been justified by reference to the notion that a court of equity acts in personam and consequently may make orders directed to a person amenable to its jurisdiction from refraining to do an act abroad (see National Australia Bank Ltd v Dessau [1988] VR 521).

8. However a number of decisions have highlighted that courts should exercise considerable care when making mareva orders in respect of assets held outside the jurisdiction (see Yandil Holdings Pty Ltd v Insurance Co of America (1987) 7 NSWLR 571 at 574 to 575 per Rogers J and Commissioner of State Taxation (WA) v Mechold Pty Ltd (1995) 30 ATR 69 at 73 per Parker J) and should only be made in exceptional cases (see Commissoner of Taxation (Cth) v Karageorge (1996) 34 ATR 196 at 202 per Hamilton AJ).

9. Further, courts have been reluctant to make mareva orders against third parties. The plurality of the High Court in the decision of Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 403 to 406, observed, in relation to mareva orders generally, and specifically as directed to third parties, that:

   We agree with the tenor of what was said with particular respect to Mareva relief before judgment by the Court of Appeal of New South Wales (Mason P, Sheller JA, Sheppard A-JA) in Frigo v Culhaci:

   “[A Mareva order] is a drastic remedy which should not be granted lightly...

   .  .  .

Another reason, unfortunately rarely adverted to in the cases, for care in exercising the power to grant a Mareva order is that there may be difficulties associated with the quantification and recovery of damages pursuant to the undertaking if it should turn out that the order should not have been granted. These matters were the subject of discussion by Aickin J in Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd. A further question to which a Mareva order gives rise is the identification of the events to trigger its dissolution or an entitlement to damages. So far as this is possible, some attention to that question should be given at the time that the order is framed in the first instance.

Discretionary considerations generally also should carefully be weighed before an order is made. Has the applicant proceeded diligently and expeditiously? Has a money judgment been recovered in the proceedings? Are proceedings (for example, civil conspiracy proceedings) available against the third party? Why, if some proceedings are available, have they not been taken? Why, if proceedings are available against the third party and have not been taken and the court is still minded to make a Mareva order, should not the grant of the relief be conditioned upon an undertaking by the applicant to commence, and ensure so far as is possible the expedition of, such proceedings? It is difficult to conceive of cases where such an undertaking would not be required. Questions of this kind may be just as relevant to the decision to grant Mareva relief as they are to a decision to dissolve it. These are matters to which courts should be alive. As will appear, they are matters which should have been considered by the Full Court in this case.

.  .  .

What then is the principle to guide the courts in determining whether to grant Mareva relief in a case such as the present where the activities of third parties are the object sought to be restrained? In our opinion such an order may, and we emphasise the word “may”, be appropriate, assuming the existence of other relevant criteria and discretionary factors, in circumstances in which: (i) the third party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in possession of, assets, including “claims and expectancies”, of the judgment debtor or potential judgment debtor; or (ii) some process, ultimately enforceable by the courts, is or may be available to the judgment creditor as a consequence of a judgment against that actual or potential judgment debtor, pursuant to which, whether by appointment of a liquidator, trustee in bankruptcy, receiver or otherwise, the third party may be obliged to disgorge property or otherwise contribute to the funds or property of the judgment debtor to help satisfy the judgment against the judgment debtor.

1. It has also been noted that where such third parties and the relevant assets are located in a foreign jurisdiction the court may qualify any order made (see Walter Rau Neusser Oel and Fett AG v Cross Pacific Trading Ltd [2005] FCA 399; and Federal Court of Australia, Practice Note CM 9 “Freezing Orders”, Keane CJ, 1 August 2011, note 17 in the “Example form of a Freezing Order made without Notice”).  

2. The applicant has offered to provide an undertaking as to damages but I am not satisfied that it is appropriate or sufficient or that there will not be difficulties associated with the third parties in Scotland recovering damages pursuant to the wife’s undertaking in the event that the order is made as sought in the first instance and it transpires that the order should not have been granted and damages are sustained by those third parties.

3. I am only partially satisfied that the applicant wife has demonstrated that there is a likelihood of a real risk of the disposal of assets by the respondent husband and a strong prima facie case. On the required standard of proof and to properly determine these questions evidence from the husband and others and a hearing in the presence of both or all parties would be more appropriate.  I am not satisfied that the applicant has demonstrated that there is a real risk of the disposal of assets, as more probable than not, in all the circumstances of this matter, by the third parties named as the proposed second to fifth respondents (see Patterson v BTR Engineering (Aust) Ltd (1989) 18 NSWLR 319). Additionally, discretionary factors that require consideration in relation to an assessment of where the balance of convenience lies, arise in relation to the applicant proceeding with the Application on 9 August 2011 when the solicitors acting for the applicant wife were aware in mid 2010 that the husband had been removed as a Director of the Company. Further, there exists a delay between 11 July 2011 and 29 July 2011 when the wife was giving instruction for and preparing her affidavit over that somewhat extended period. This suggests that the applicant may not have proceeded and given instructions as urgently or expeditiously as could have been contemplated in circumstances where such crucial disclosure of facts had been made and in regard to this Application where ex parte freezing orders were sought against proposed third parties in a foreign jurisdiction.

4. As a consequence, although I could have been satisfied that the balance of convenience supported an ex parte mareva order against only the respondent husband, I am not satisfied that the balance of convenience supported an order that extends, as indicated in the draft order, and in accordance with the oral submissions of counsel for the wife, to the husband’s mother (listed as the proposed second respondent) or any of the third to fifth respondents.

5. It may be that the significance of the final form of order sought on behalf of the wife as against only the husband and his mother is that it would likely prevent any change in the husband’s status as primary beneficiary of the K Trust or for the vesting of that Trust. By so injuncting the mother it might prevent the removal of the husband as trustee of that Trust. Those matters do require further considered evidence and submissions and I further do not comment upon any likely order to be made on the adjourned hearing date.

6. What I have concluded is the just and proper outcome is to adjourn the oral application made before me on 9 August 2011 and consolidate those orders sought with the Application issued for hearing on Thursday 11 August 2011 in the Judicial Duty List. That necessitates service of all documents, including applications and affidavits by proper means upon the husband and all other proposed respondents. That is the obligation of the wife’s solicitors and clearly time will be of the essence given the substantial documentation presented to to the Court.

7. I will permit service upon the proposed second, third, fourth and fifth respondents to be undertaken by email (in the first instance) to the Scottish solicitors, Turcan Connell, Edinburgh at each of the addresses provided in paragraph 3 of the draft minute of order sought. 

8. For completeness I will reserve the costs of the wife’s Counsel and solicitors attendance of and incidental to the hearing of 9 August 2011 but I otherwise fix no costs and make no order pending submissions from the legal practitioners representing the husband and the other proposed respondents.

9. The word of caution is that if this matter is not ready and able to proceed in the Judicial Duty List this Thursday 11 August 2011 there is no certainty when these matters can next be listed for any hearing of substance before the Court and that is a matter that will require consideration from and discussion with the lawyers representing the various parties on the adjourned hearing date.

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Young delivered on 10 August 2011.

Associate:

Date:  10 August 2011