Cao & Hong (No 2)
[2018] FamCA 788
•3 October 2018
FAMILY COURT OF AUSTRALIA
| CAO & HONG (NO. 2) | [2018] FamCA 788 |
| FAMILY LAW – PROPERTY – INTERIM – Application to vary injunctions to allow funds to be raised for legal costs in Taiwan legal proceedings and working capital – Application for further discovery orders and direction to single expert. |
| Family Law Act 1975 (Cth) |
| Cao & Hong [2015] FamCA 884 Cao & Hong [2016] FamCA 605 Cao & Hong (No. 2) [2016] FamCA 909 Hong & Cao [2018] FamCA 40 Hong & Cao (No. 2) [2018] FamCA 41 Cao & Hong [2018] FamCA 196 |
| APPLICANT: | Ms Cao |
| RESPONDENT: | Mr Hong |
| FILE NUMBER: | BRC | 5044 | of | 2015 |
| DATE DELIVERED: | 3 October 2018 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Baumann J |
| HEARING DATE: | 28 June 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr P Hackett |
| SOLICITOR FOR THE APPLICANT: | Accuro Legal (Sydney) |
| COUNSEL FOR THE RESPONDENT: | Mr S Williams |
| SOLICITOR FOR THE RESPONDENT: | Bespoke Family Lawyers Pty Ltd |
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cao & Hong has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 5044 of 2015
| Ms Cao |
Applicant
And
| Mr Hong |
Respondent
REASONS FOR JUDGMENT
Introduction
The proceedings involving a property dispute have been before members of this Court on a number of occasions since proceedings were commenced by the Applicant wife (Ms Cao) (“the wife”) in June 2015. The Respondent husband (Mr Hong) (“the husband”) lives in Taiwan where substantial corporate and personal business interests exist. The wife resides in Australia.
Earlier substantive judgments have been published which give an overview of the history of the relationship and the pending litigation, being Cao & Hong [2015] FamCA 884; Cao & Hong [2016] FamCA 605; Cao & Hong(No. 2) [2016] FamCA 909; Hong & Cao [2018] FamCA 40; Hong & Cao (No. 2) [2018] FamCA 41 and Cao & Hong [2018] FamCA 196. I see no useful purpose being served in reciting, yet again, that history, save so far as is relevant to the determination of issues raised before me on 28 June 2018.
Every Application in a Case requires voluminous annexures and exhibits. It is apparent, notwithstanding the asserted size of the assets available for distribution, that the sooner these proceedings progress to a final hearing the better.
To a large extent, the continued operation of injunctions ordered by Forrest J on 22 October 2015 which seek to regulate the conduct of the parties pending a final determination (which have now been in existence for nearly three years), continue to be the subject of dispute as various corporate activities evolve.
Recent history
On 29 March 2018, I made the following orders, for reasons published at the time, namely:
(1) That the Respondent forthwith provide the financial statements for the Taiwanese entities as listed herein to P Accountants (“PA”) to assist with the cost estimates and engagement process of PA to value the Taiwanese interests and at the same time provide a copy to the solicitors for the Applicant:
(a) B Development;
(b) Company FF;
(c) B Incorporated;
(d) B Limited;
(e) H Incorporated;
(f) C Incorporated;
(g) B Development Incorporated;
(h) C Incorporated;
(i) B2 Co;
(j) F Pty Ltd;
(k) G Pty Ltd; and
(l) B Enterprises Pty Ltd.
(2) That the Applicant forthwith provide the financial statements for the Taiwanese entities as listed herein to PA to assist with the cost estimates and engagement process of PA to value the Taiwanese interests and at the same time provide a copy to the solicitors for the Respondent:
(a) J Pty Ltd; and
(b) End of Liquidation Report for I Pty Ltd
(3) That by 5 April 2018 the parties shall provide an updated joint letter of instruction (including any instructions that may be given by the Court) to the nominated Single Experts, but if the parties are unable to agree or for any reason the joint instructions cannot be obtained, then each party shall provide a letter of instruction to the Single Experts.
(4) That the Orders dated 31 January 2018 of Senior Registrar Spink be discharged.
(5) That Order 21 of the Orders dated 12 July 2016 of Registrar Stoneham be varied to substitute the amount of $1,500,000 for the amount of $500,000.
(6) That each party have leave to issue up to eight (8) subpoenae for the production of documents without firstly having to seek leave of the Court.
(7) That the parties shall complete disclosure as ordered on 12 November 2015 by 16 April 2018.
(8) That the Applicant’s application to be restored as a Statutory Supervisor be dismissed.
(9) That the wife’s Application in a Case filed 23 December 2016 be otherwise dismissed, with the costs of both parties reserved.
(10) That these proceedings be adjourned for further mention and directions before the Honourable Justice Baumann at 9.30am on 5 September 2018 in the Family Court of Australia at Brisbane.
As the Orders reflect, the matter was to return to my list on 5 September 2018 for case management, at which time it was hoped that an analysis by a Taiwanese based forensic accountant would have crystallised in a report establishing valuations, such that a major aspect of the pool of assets might be agreed.
However, the husband caused to file, for urgent determination, an Application in a case on 11 June 2018 (amended 21 June 2018) seeking inter alia:
1. Orders 4 to 12 made on 22 October 2015 be varied or discharged to enable the Husband to deal with, call in or otherwise draw on any line of credit held by the Taiwanese Interests or the [B Group] or utilise or call in any assets held by the Taiwanese Interests or the [B Group] up to the value of NTD$100,000,000 for the purpose of litigating a dispute in Taiwan with respect to the purported termination of a Service Agreement and a Trademark Agreement between [B Ltd] and [C1 Ltd], including:
(a) paying a security bond in relation to a provisional attachment order obtained by [C2 Ltd];
(b) paying any court or legal costs associated with any cause of action that [C2 Ltd] brings with respect to the termination of the Service Agreement and/or the Trademark Agreement by [B Ltd]
2. Orders 4 to 12 made on 22 October 2015 be varied or discharged to enable the Husband to apply for a line of credit up to the value of NTD$150,000,000 on behalf of any of the Taiwanese Interests on reasonable commercial terms for the purpose of paying businesses expenses bona fide and properly incurred in the ordina1y and proper course of business of the Taiwanese Interests.
3. That the Initiating Application filed by [Ms Cao] on 4 June 2015 be dismissed and all Orders made in the proceedings be discharged in full, having regard to the Wife’s repeated failure to make full and frank disclosure.
4. That the parties take all steps and sign all documents necessary to cause the valuation of the Taiwanese Interests to be undertaken by [P Accountants] (“PA”) as provided for within Orders 7 to 9 of Orders made on 8 December 2015 and Orders 2 to 4 of Orders dated 12 July 2016 to be undertaken with a valuation date of 31 December 2018. To give effect to this Order:
a. The Applicant shall use his best endeavours to have all financial statements prepared and audited by 28 February 2019;
b. The parties provide all relevant financial documents to [PA] within fourteen (14) days of the audited financials being received by the Applicant;
c. The parties sign any letter of engagement provided by [PA] within 7 days of provision;
d. The parties co-operate with [PA] to provide any additional documents or information requested to facilitate the valuation process.
5. That the parties take all steps and sign all documents necessary to cause the valuation of the B Group to be undertaken by [CC Valuers] and [DD Valuers] ("”the Australian Valuers'”) as provided for within Orders 7 to 9 of Orders made on 8 December 2015 and Orders 2 to 4 of Orders dated 12 July 2016 to be undertaken with a valuation date of 31 December 2018. To give effect to this Order:
a. The parties provide an updated letter of valuation to the Australian Valuers contemporaneously with the provision of documents to [PA];
b. The Respondent provide all relevant financial documents to [CC Valuers] contemporaneously with the provision of documents [to PA];
c. The parties sign any letter of engagement provided by the Australian Valuers within 7 days of provision;
d. The parties co-operate with the Australian Valuers to provide any additional documents or information requested to facilitate the valuation process.”
The amended Application in a Case sought an order, somewhat bravely in my view, that “…the Initiating Application filed by [Ms Cao] on 4 June 2015 be dismissed and all Orders made in the proceedings be discharged in full, having regard to the Wife’s repeated failure to make full and frank disclosure.” Mr Williams for the husband, did not press that application.
The further application for orders relating to the appointment and terms of retainer of a single expert were less contentious.
The wife filed a Response on 22 June 218 seeking a dismissal of the husband’s Application and, so as to take advantage of the opportunity generated by the listing of the husband’s Application in a Case, the wife by her own Application in a Case filed 27 June 2018 seeks orders for further and better disclosure by the husband.
Experienced Counsel for the parties – Mr Williams for the husband and Mr Hackett for the wife made both oral and written submissions. The fact that these Reasons do not recite the totality of submissions received is not to be construed as a failure to consider those submissions.
The issues to be determined on an interim basis
Each Counsel helpfully provided a minute of order sought, and marked Appendix One to these Reasons are the orders sought by the husband and marked Appendix Two to these Reasons are the orders sought by the wife.
As is apparent, some agreement had been reached about some issues such that I have identified the matters requiring determination are essentially:
(a)should the “freezing orders” of October 2015 be varied, as sought by the husband to enable him use or raise funds up to a value of NTD$100,000,000 (approximately AUD$4,400,000) “for the purpose of litigating a dispute in Taiwan with respect to the purported termination of a Service Agreement and a Trademark Agreement between [B Ltd] and [C1 Ltd]…”;
(b)should the said “freezing orders” be varied or discharged to enable the husband to apply for a line of credit up to a value of NTD$150,000,000 (approximately AUD$6,600,000) on reasonable commercial terms “for the purpose of paying business expenses bona fide and properly incurred”;
(c)should the valuation date to be applied by the single expert P Accountants (“PA”) as set out in earlier Orders, be 31December 2017 (as the wife contends) or 31 December 2018 (as the husband contends);
(d)if the husband’s general and specific obligations to make full and complete discovery are to be shaped by an alleged Confidentiality Agreement and/or by the domestic law of Taiwan relating to the disclosure of “trade secrets”; and
(e)further specific orders for discovery as sought by both parties.
Principles to be applied
No dispute arises as to the principles to be applied when the Court is asked to vary an earlier injunction (characterised by the parties as “freezing” orders), and in that regard I adopt as an accurate statement of applicable principles, paragraphs 6 to 9 of the wife’s written submissions.
In short, it is necessary to establish a change of such significance since the orders were made, to cause the Court to exercise its discretion to vary the earlier Orders. The onus rests upon the husband to establish the change and that the interests of justice compel a variation.
In this regard, the wife concedes that new matters have arisen since the Orders were made, said by her to be the “purported” termination by B Ltd (BL) of the Service Agreement and Trademark Agreement with C2 Incorporated (C2L).
The change that is alleged to have occurred
The husband, in his Affidavit filed in support of his Application in a Case filed 11 June 2018 deposes to events and possible adverse consequences from those events, which have occurred in the Taiwanese entities. In short, he says, and at this stage the Court accepts on an interim basis, that:
(a)the Taiwanese corporations (identified in paragraph 5 of the husband’s Affidavit) have a range of commercial interests in shopping centres, movie cinemas, commercial real estate and a 36 hole golf course;
(b)B Development (BD) operates a property known as “B Property”, and with the creation of an “alliance” (or understanding) between the husband, his cousin (Mr EE) and his youngest sister (Ms FF) and some other minority shareholders the group have maintained control of BD though a shareholding of greater than 51 per cent;
(c)the husband has been a director and the chairperson of C2L for the past 12 years. C2L, which is wholly owned by BD, operates a business facility within the B property;
(d)B Corporation (BC) was established by the husband, his cousin and his youngest sister to lease, operate and manage property assets;
(e)at paragraphs 21 and 22 of the husband’s Affidavit, details of a Service Agreement underpinning commercial arrangements are given. At paragraph 26, the husband gives details of a Trademark Agreement between C2L and BL, by which all facilities operated by C2L use the name and brand of “B”, which the husband says is a well-known in Taiwan;
(f)the alliance the husband previously enjoyed, he says, has now broken down such that:
i)on 29 March 2018, despite the husband’s opposition, the husband was removed as the director and chairperson of B Ltd;
ii)on 1 April 2018, the board of C2L advised staff they “were taking control” of the facility at the B Property;
iii)on 3 May 2018, BL (by letter from the husband’s youngest sister as the new chairperson) purported to terminate the Service Agreement with C2L, the effect of such termination means C2L will no longer hold the management rights to operate the B facility and will no longer receive the service fee of approximately AUD$440,000 per annum; and
iv)at the same time the husband received a further letter from BL terminating the Trademark Agreement. The husband asserts the effect of such a termination means that C2L “can no longer use the ‘[B]’ brand or name for any cinemas managed, operated or leased by C2 without an obligation to pay royalties or licence fees to [BL] ”
At paragraphs 43, 57 and 58 of the husband’s Affidavit filed 11 June 2018 and paragraph 8 of his Affidavit filed 27 June 2018, the husband articulates what he says are the potential consequences to the husband and his corporate interests resulting in a loss of revenue and profits and the likely, in his view, substantial decrease in value of property interests. He says such a decrease will have an adverse effect on both the husband and the wife’s claims in this litigation and he must be able to preserve the property if possible.
The wife, through her Counsel’s submissions, challenges the likely need or success of any litigation undertaken by the husband as he contemplates, and opposes the use or raising of funds for that purpose.
It is conceded by the husband that an urgent application for a “provisional attachment order’ in Taiwan to freeze the assets of his youngest sister and C2L to the value of NTD$150,000,000 made on 24 May 2018 was not successful. He wishes to file a further application, although a letter from the husband’s lawyers in Taiwan dated 21 June 2018 states “it is very unlikely that the Court in Taiwan will grant an order of provisional injunction”.
Funds for legal proceedings
At this early stage the evidence relied upon by the husband to support use of funds for a further provisional attachment order, is not compelling. It is far from clear whether, in the face of the current legal advice, the husband sees fresh proceedings as a tactical measure likely to put some pressure on the other parties. However, I am not satisfied on the evidence before me at this stage that the risks of pursuing legal action again for a provisional attachment order are outweighed by the possible benefits. It is not, in my view, unreasonable for the wife to oppose the use of funds for such an application at this time.
Counsel for the wife, in both written and oral submissions, contends in essence:
(a)any action by the husband (or his corporate entities) to seek injunctive relief for the wrongful termination of the Service Agreement is doomed to fail; and
(b)the action that lies against wrongful termination of the Service Agreement can only be for damages and the damages, considering when the Agreement ends in 2019 under its current terms, could not be more than approximately AUD$600,000; and
(c)if the husband continues to assert that the Trademark Agreement has been wrongfully terminated (as he does), then it is a matter for C2L to take action under the Agreement against BL. In effect, Mr Hackett says BL needs to do nothing at this time.
Counsel for the husband says, the effect of these terminations and loss of control could have a catastrophic effect on the value of the Taiwanese interests. As an adjunct to the submissions, Mr Williams says requiring the single expert to adopt the valuation date of 31 December 2018 (rather than 31 December 2017) means the forensic accountant can pay some regard to the events of March/April 2018 set out above and consider whether or not these events have an effect on the valuation. I am prepared to accept that if the standard nett maintainable earnings methodology is adopted, it could have an effect.
The submissions of Counsel for the wife are, at first blush, supportable however in the absence of better advice from legal experts in Taiwanese domestic law, I am not convinced that the pursuit of remedies available to preserve the rights under the Service Agreement and/or Trademark Agreement are totally devoid of merit. I accept that the husband bears the onus, however I am concerned that the wide application of the October 2015 “freezing orders” can stifle legitimate commercial actions, where the wife, who clearly holds little trust in the husband’s business activities, requires every detail to be scrutinised.
I also take into account that it is said these interests represent about 25 per cent of the Taiwanese interests (which total in excess of AUD$170,000,000 when one considers the Australian interests available). I am not satisfied that the wife’s overall entitlements are likely to be at risk of being unavailable, out of all the remaining assets available.
This, of course, is not an invitation for the husband to spend what he likes on the basis he will then meet the negative impact from his ultimate share of the pool – but it is a matter I take into consideration.
In the end analysis, rather than dismiss the husband’s Application (which is only likely to require a further application in this fast moving matter), I propose to order (subject to hearing further submissions) that the husband be entitled to raise funds to either commence or defend legal proceedings in Taiwan conditional upon:
(a)the wife receiving from the husband written legal advice that the prospects of success are reasonable to pursue or defend such proceedings (other than for a provisional attachment order or injunction);
(b)if the prospects of legal success are low, but that commercial benefits can be identified that make such legal actions a proper exercise of commercial authority, what are those benefits?
(c)an estimate, with particulars, of the likely costs of pursuing or defending such actions; and
(d)if such actions are ultimately unsuccessful, what adverse costs consequences could flow (whether on a party and party basis or indemnity basis)?
Such raising should take into account the availability of funds which the Court will allow to be raised as discussed next.
In forming this view, I am aware that a further Application in a Case was filed by the wife on 27 July 2018 and some evidence in that Application (or the Response by the husband filed only recently on 15 September 2018) might shape the order for raising of funds for legal costs now being discussed.
Access to funds for additional operating expenses
The husband says that the loss of income arising from the termination of the Service Agreement and Trademark Agreement (which is purported to take effect from 3 August 2018), will have a significant effect on cash flow and on the capacity of various entities to pay normal business expenses.
The husband, who has not been of course the subject of cross examination on the concerns and anticipated loses he raises, gives details at paragraph 15 of the source of funds to meet the ongoing operation expenses.
The wife, in response says at paragraphs 21 to 23 of the written submissions that:
21. The premises for the application is:
(a) a loss of annual revenue of NTD$10,000,000 (AUS$441,398) from the termination of the Service Agreement;
(b) without bringing to account any saving of operating costs flowing from the termination; and
(c) costs associated with the termination of the Trademark Agreement, all of which are speculative, particularly given the purported termination is disputed.
22. The application is unsupported by any evidence by an Accountant.
23. In the above circumstances, the variation of the freezing orders for operating expenses and additional anticipated costs of up to NTD$150,000,000 (AUS$6,633,015) should be refused.
I cannot, and do not, ignore the concerns raised by the husband. It is common ground that he has personally managed for most of the parties’ relationship, the Taiwanese interests, returning to live there permanently in 1997/98 whilst the wife remained living in Australia. He seems to have been quite successful in so doing, and I accept the wife contends she has made a contribution to that success since the parties commenced a relationship in 1986.
The husband has not provided any accounting evidence to support his Application, however I am prepared to accept the husband’s evidence that having the funds necessary for future general operation expenses available (if needed), is reasonable. Having raised or arranged such accommodation, the husband would still be bound by the terms of the injunction, namely payments “in the ordinary and proper course of business, including paying business expenses bona fide and properly incurred” (see Order 10(a)).
In respect of the level of accommodation sought of NTD$150,000,000, the quantification of this total sought is difficult to assess from the husband’s evidence. I accept a significant component relates to anticipated future expenses around:
(a)rebranding (NTD$50,000,000 over three years);
(b)normal marketing and advertising activities; and
(c)additional operating costs likely to increase once the B property opens in December 2018 not offset by increased revenue from the new facility, at least initially.
On the present state of the evidence, I am prepared to order that funds can be raised of up to NTD$50,000,000 at this stage. It may well be that when the report of PA is available (anticipated by March 2019) further clarification of the operating environment and challenges will have been assessed.
I should note, that although the husband may feel the wife is impermissibly imposing hurdles on his proper operation of the Taiwanese interests, I am not currently so persuaded. She takes a very cautious and considered approach to requests the husband is required to make so as not to contravene the current injunctions. Again I say the sooner these parties can get on with the individual business interests and activities without these impediments, the better.
In that regard, during oral submissions, and based on a draft document not ultimately tendered, the husband’s Counsel raised some concerns about the wife’s use of funds or interests in various Australian entities (of which the husband is a director, but where it is acknowledged the wife exercises day to day control). Naturally, the wife continues to have a duty for full and continuing disclosure, and I anticipate any concerns of the husband in respect of the Australian operations will be raised in an appropriate written manner.
valuation date
Having considered the submissions and whilst I acknowledge that there have been some delays in the single expert report being obtained, I agree that the efficient use of valuation fees is best achieved by adopting a valuation date of 31 December 2018, rather than 31 December 2017 because:
(a)any assessment will enable the expert to consider the effect (if any) arising from the events of March/April 2018;
(b)otherwise, it would be inevitable some form of update would be required;
(c)preliminary work can be undertaken now, with final figures to 31 December 2018 being available in early 2019, to allow the report to be finalised; and
(d)considering this report is a fundamental piece of evidence likely to assist the attempts of resolution by mediation and, if unsuccessful, for a hearing during the first half of 2019, the most accurate and up to date valuation is desirable.
Confidentiality on disclosure
On 7 June 2018 the wife, via solicitors, made a request for further discovery. The nature of the request appears to be an attempt to pursue third party discovery against a number of persons or entities in Taiwan.
Whilst I can understand that the wife wants as much information as possible about the B Corporation and associated entities, the husband says under Taiwanese domestic law, he faces criminal penalties if he discloses “trade secrets” which, he interprets some of the information sought would offend. I am not prepared to simply ignore possible consequences of the Taiwanese domestic law in this way. A Court in Australia should be reluctant to make an order that could expose a party to criminal sanctions in another country.
Furthermore, whilst of course the husband has a duty to produce documents in his possession and control, I am, for example, not satisfied an order directed to the persons and entities sought in the wife’s Application in a Case are more than a fishing exercise.
It seems to me, that when the report of the single expert is available, subject to the following caveat, the wife might have a foundation for her recent request. Until then, I am prepared to accept the husband’s assertions as to the confidentiality. I am also aware that there is probably pending litigation between the husband and some of the entities/persons identified.
The caveat I refer to, is if the single expert indicates during the preparation of their valuation that other documents are required by them. If, on making that request, the parties are unable to agree or to facilitate such documents being produced, then a fresh application could be filed.
Form of order
Considering the matters raised above, and the concessions made on 28 June 2018 as to the agreed form of some orders, coupled with the further pending application listed before me today, after today’s hearing I propose to direct the solicitors for the parties to formulate an order consistent with these Reasons.
I certify that the preceding forty-five (45) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 3 October 2018.
Associate:
Date: 3 October 2018
APPENDIX ONE
It is noted:
That for the purposes of these Orders, the term “the B Group” means all of the corporate and/or trust entities which the Applicant and the Respondent have an interest in, including but not limited to the following entities:
(e)B Australia Pty Ltd ACN …;
(f)B Australia Holdings Pty Ltd ACN …;
(g)B Constructions Pty Ltd ACN …;
(h)B Property Pty Ltd ACN …;
(i)B Realty Pty Ltd ACN …;
(j)B International Holdings Pty Ltd ACN …;
(k)II Pty Ltd ACN …;
(l)B Finance Pty Ltd ACN …; and
(m)C Australia Pty Ltd ACN ….
That for the purposes of these Orders, the term “Taiwanese interests” means all of the corporate and/or trust entities which the Applicant and the Respondent have an interest in, including but not limited to the following entities:
(a)B Property Incorporated;
(b)Company EE Incorporated;
(c)C1 Incorporated;
(d)B Industrial Limited;
(e)B Industrial Incorporated;
(f)C2 Incorporated;
(g)B Development Incorporated;
(h)Company F;
(i)G Pty Ltd;
(j)B Enterprises Pty Ltd;
(k)H Incorporated;
(l)I Co.; and
(m)J Pty Ltd.
Second Amended Application in a Case filed 21 June 2018
Orders 4 to 12 made on 22 October 2015 be varied or discharged to enable the Respondent to deal with, call in or otherwise draw on any line of credit held by the Taiwanese Interests or the B Group or utilise or call in any assets held by the Taiwanese Interests or the B Group up to the value of NTD$100,000,000 for the purpose of litigating a dispute in Taiwan with respect to the purported termination of a Service Agreement and a Trademark Agreement between B Ltd and C1 Ltd, including:
(a)paying a security bond in relation to a provisional attachment order obtained by C2 Ltd;
(b)paying any court or legal costs associated with any cause of action that C2 Ltd brings with respect to the tem1ination of the Service Agreement and/or the Trademark Agreement by B Ltd
Orders 4 to 12 made on 22 October 2015 be varied or discharged to enable the Respondent to apply for a line of credit up to the value of NTD$150,000,000 on behalf of any of the Taiwanese Interests on reasonable commercial terms for the purpose of paying businesses expenses bona fide and properly incurred in the ordinary and proper course of business of the Taiwanese Interests.
That the parties take all steps and sign all documents necessary to cause the valuation of the Taiwanese Interests to be undertaken by P Accountants (“PA”) as provided for within Orders 7 to 9 of Orders made on 8 December 2015 and Orders 2 to 4 of Orders dated 12 July 2016 to be undertaken with a valuation date of 31 December 2018. To give effect to this Order:
(a)The Respondent shall use his best endeavours to have all financial statements prepared and audited by 28 February 2019;
(b)The parties provide all relevant financial documents to PA within fourteen (14) days of the audited financials being received by the Applicant;
(c)The parties sign any letter of engagement provided by PA within 7 days of provision;
(d)The parties co-operate with PA to provide any additional documents or information requested to facilitate the valuation process.
That the parties take all steps and sign all documents necessary to cause the valuation of the B Group to be undertaken by CC Valuers and DD Valuers (“the Australian Valuers”) as provided for within Orders 7 to 9 of Orders made on 8 December 2015 and Orders 2 to 4 of Orders dated 12 July 2016 to be unde1iaken with a valuation date of 31 December 2018. To give effect to this Order:
(a)The parties provide an updated letter of valuation to the Australian Valuers contemporaneously with the provision of documents to PA;
(b)The Respondent provide all relevant financial documents to CC Valuers contemporaneously with the provision of documents to PA;
(c)The parties sign any letter of engagement provided by the Australian Valuers within 7 days of provision; and
(d)The parties co-operate with the Australian Valuers to provide any additional documents or information requested to facilitate the valuation process.
Pursuant to Rule 13.1 of the Family Law Rules 2004, within forty-five (45) days of these Orders the Applicant provide to the Respondent and/or disclose to the Respondent the following:
(a)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following persons or entities for the period from I January 2015 to date:
i)Ms Cao including all bank accounts jointly held with Mr R, Mr S or Mr GG or all bank accounts that are held in the name of Mr R, Mr S or Mr GG for the benefit of Ms Cao.
(b)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following entities for the period from 30 June 2008 to date:
i)B Australia Pty Ltd;
ii)C Australia Pty Ltd;
iii)B International Holdings Pty Ltd;
iv)B Realty Pty; and
v)B Property Pty Ltd.
Application in a Case filed 26 June 2018
Pursuant to Rule 13.l of the Family Law Rules 2004, within forty-five (45) days of these Orders the Respondent provide to the Applicant and/or disclose to the Applicant the following:
(a)a copy of all documents relating to the increase in share capital of B Corporation by NTD $30,000,000.00 between 18 November 2015 and 26 December 2016;
(b)a copy of all documents showing the source of the funding used to finance the operating costs for B Corp for the past 2 years;
(c)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following persons or entities for the period from 1 January 2015 to date:
i)Mr Hong;
ii)Company EE Incorporated;
iii)C2 Incorporated;
iv)C1 Incorporated; and
v)Company F.
(d)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following persons or entities for the period from 1 January 2016 to date:
i)B Industrial Incorporated; and
ii)B Corporation.
(e)a copy of all documents showing the proceeds received by Mr Hong or entities controlled by him with respect to the sale of the land at Parcel …, HH District, City O, Taiwan.
In the event that either party is unable to disclose any document listed herein then that party shall file and serve an Affidavit deposing to the attempts made to obtain copies of any such document.
APPENDIX TWO
It is noted:
That for the purposes of these Orders, the term “the B Group” means all of the corporate and/or trust entities which the Applicant and the Respondent have an interest in, including but not limited to the following entities:
(a)B Australia Pty Ltd ACN …;
(b)B Australia Holdings Pty Ltd ACN …;
(c)B Constructions Pty Ltd ACN …;
(d)B Property Pty Ltd ACN …;
(e)B Realty Pty Ltd ACN …;
(f)B International Holdings Pty Ltd …;
(g)II Pty Ltd ACN …;
(h)B Finance Pty Ltd ACN …; and
(i)C Australia Pty Ltd ACN ….
That for the purposes of these Orders, the term “Taiwanese interests” means all of the corporate and/or trust entities which the Applicant and the Respondent have an interest in, including but not limited to the following entities:
(a)B Property Incorporated;
(b)Company EE Incorporated;
(c)C1 Incorporated;
(d)B Industrial Limited;
(e)B Industrial Incorporated;
(f)C2 Incorporated;
(g)B Development Incorporated;
(h)Company F;
(i)G Pty Ltd;
(j)B Enterprises Pty Ltd;
(k)H Incorporated;
(l)I Co.; and
(m)J Pty Ltd.
Second Amended Application in a Case filed 21 June 2018
Paragraphs 1, 2 and 3 of the Second Amended Application in a Case filed 21 June 2018 be dismissed.
That the parties take all steps and sign all documents necessary to cause the valuation of the Taiwanese Interests to be undertaken by P Accountants (“PA”) as provided for within Orders 7 to 9 of Orders made on 8 December 2015 and Orders 2 to 4 of Orders dated 12 July 2016 to be undertaken with a valuation date of 31 December 2017. To give effect to this Order:
(a)The parties sign any letter of engagement provided by PA within 7 days of provision;
(b)The parties co-operate with PA to provide any additional documents or information requested to facilitate the valuation process.
That the parties take all steps and sign all documents necessary to cause the valuation of the B Group to be undertaken by CC Valuers and DD Valuers (“the Australian Valuers”) as provided for within Orders 7 to 9 of Orders made on 8 December 2015 and Orders 2 to 4 of Orders dated 12 July 2016 to be undertaken with a valuation date of 30 June 2017. To give effect to this Order:
(a)The parties provide an updated letter of valuation to the Australian Valuers;
(b)The Respondent provide all relevant financial documents to CC Valuers;
(c)The parties sign any letter of engagement provided by the Australian Valuers within 7 days of provision; and
(d)The parties co-operate with the Australian Valuers to provide any additional documents or information requested to facilitate the valuation process.
Pursuant to Rule 13.1 of the Family Law Rules 2004, within forty-five (45) days of these Orders the Applicant provide to the Respondent and/or disclose to the Respondent the following:
(a)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following persons or entities for the period from 1 January 2015 to date:
i)Ms Cao including all bank accounts jointly held with Mr R, Mr S or Mr GG or all bank accounts that are held in the name of Mr R, Mr S or Mr GG for the benefit of Ms Cao.
(b)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following entities for the period from 30 June 2008 to date:
i)B Australia Pty Ltd;
ii)C Australia Pty Ltd;
iii)B International Holdings Pty Ltd;
iv)B Realty Pty; and
v)B Property Pty Ltd.
Application in a Case filed 26 June 2018
Pursuant to Rule 13.1 of the Family Law Rules 2004, within forty-five (45) days of these Orders the Respondent provide to the Applicant and/or disclose to the Applicant the following:
(a)a copy of all documents relating to the increase in share capital of B Corporation by NTD $30,000,000.00 between 18 November 2015 and 26 December 2016;
(b)a copy of all documents used in and relating to the increase in share capital of B Corporation by NTD $80,000.000.00 between 26 December 2016 and 12 April 2018:
(c)a copy of all documents showing the source of the funding used to finance the operating costs for B Corp for the past 2 years;
(d)a copy of all documents showing the source of the funding used to finance the loss in the amount of NTD $200,000,000.00 incurred by C property in the last 2 years;
(e)a copy of all documents showing the date on which distributions from the B property will be paid;
(f)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following persons or entities for the period from 1 January 2015 to date:
i)Mr Hong;
ii)Company EE Incorporated;
iii)C2 Incorporated;
iv)C1 Incorporated; and
v)Company F.
(g)a copy of the statements for all bank accounts held in the sole name of, or in joint names with another person or entity, in the name(s) of another person or entity but under the control of or for the benefit of the following persons or entities for the period from 1 January 2016 to date:
i)B Industrial Incorporated; and
ii)B Corporation.
(h)A copy of all documents showing the proceeds received by Mr Hong or entities controlled by him with respect to the sale of the land at Parcel …, HH District, City O, Taiwan.
In the event that either party is unable to disclose any document listed herein then that party shall file and serve an Affidavit deposing to the attempts made to obtain copies of any such document.
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