CAO & HONG

The case of CAO & HONG involved an application before Forrest J in the Federal Circuit Court of Australia. The dispute concerned the financial affairs of the parties, specifically relating to a group of Australian corporate and trust entities referred to as "the B Group" and a separate group of corporate and trust entities in "Country D," collectively termed "their Country D interests." The court was asked to make orders concerning the management and disposition of assets within these entities.

The primary legal issues before the court were whether to discharge previous orders made by Judge Coates and, more significantly, to implement new injunctive orders. These proposed orders aimed to restrain both parties from taking certain actions concerning the B Group and their Country D interests. Specifically, the court had to consider restraining the parties from removing each other from offices held within these entities, dealing with or disposing of shares, withdrawing funds in excess of a specified amount, increasing liabilities, or increasing salaries, director's fees, or dividends paid to themselves or certain family members, without the other party's consent or a court order.

Forrest J reasoned that it was necessary to discharge paragraphs 3 to 9 of the previous order made by Judge Coates. The court then made extensive orders restraining both parties, and entities controlled by them, from taking actions that could dissipate or improperly deal with assets within the B Group and their Country D interests. These restraints included prohibitions on removing each other from offices, disposing of shares, withdrawing significant funds, increasing liabilities, and increasing payments of salaries, fees, or dividends, subject to certain exceptions. The exceptions allowed for the ordinary and proper course of business, discharging pre-existing contractual obligations with notice, and specific monthly drawing limits for personal expenses for the Wife, and a limited amount for legal fees for both parties. The court also made orders for ongoing monthly disclosure of legal fees and specific disclosure obligations regarding lines of credit and other documents within 21 days.