Charisteas & Charisteas
[2015] FCWA 15
•10 FEBRUARY 2015
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: CHARISTEAS and CHARISTEAS [2015] FCWA 15
CORAM: WALTERS J
HEARD: 22-23 JANUARY 2014
DELIVERED : 10 FEBRUARY 2015
FILE NO/S: PTW 4624 of 2006
BETWEEN: MRS CHARISTEAS
Applicant
AND
MR CHARISTEAS
First RespondentAND
LEWIS BARTON AND ANGELINA CHARISTEAS
Second RespondentsAND
XYZ PTY LTD
Third RespondentAND
LEWIS BARTON
Fourth RespondentAND
ANGELINA CHARISTEAS
Fifth Respondent
Catchwords:
PROPERTY SETTLEMENT – Where the husband, the wife and their three children were specified beneficiaries of a discretionary trust – Where the husband's mother controls the trust – Where the trial judge ordered that the vesting date of the trust be brought forward and the trust fund be distributed among the five specified beneficiaries (subject to payment of a specified sum to the husband's mother to satisfy her future entitlements under the trust) – Where the husband's mother and other parties appealed – Where the Full Court held that the entitlement of the husband and the wife to share in the trust fund on vesting was property for the purposes of s 79 of the Family Law Act 1975 – Where the Full Court concluded that Pt VIIIAA of the Family Law Act 1975 can be used to require a trustee (including a third party trustee) to bring forward the vesting date of a trust fund in order to value and distribute an irrevocable entitlement to a share in the trust fund and that the powers under Pt VIIIAA can be validly exercised at the expense of third party interests provided the requirements in ss 90AE(3) and (4) and ss 90AF(3) and (4) are met – Where the Full Court found that such statutory requirements had not been met – Where the Full Court set aside the early vesting orders – Where the proceedings were not remitted for rehearing – Where the parties disagree as to the future conduct of the proceedings – Where the wife sought a finding that the orders of the trial judge were not final orders or, in the alternative, that the power of the Court to make orders under s 79 had not been exhausted or "spent" – where the husband, the husband's mother and other parties argued that the orders of the trial judge were final and sought enforcement of the orders remaining after the excision of the early vesting orders – Consideration of the nature, meaning and effect of the orders of the trial judge – Where it was held that the orders of the trial judge were valid orders under s 79 but were not "final" orders – Where it was held that the various paragraphs of the orders of the trial judge should not be read in isolation but comprise a suite or parcel of orders made under s 79 – Where it was held that the substantive proceedings remain on foot, including the wife's right to apply for orders for the early vesting of the trust
Legislation:
Family Law Act 1975 (Cth), s 79, s 79A, s 90AE, s 90AF, s 106B
Category: Not Reportable
Representation:
Counsel:
Applicant : Professor P Parkinson & Ms P Giles
First Respondent : Mr P Dowding SC
Second Respondents : Mr S Penglis
Third Respondent : Mr S Penglis
Fourth Respondent : Mr S Penglis
Fifth Respondent : Mr S Penglis
Solicitors:
Applicant : Butlers
First Respondent : Slater Gordon
Second Respondents : West End Legal
Third Respondent : West End Legal
Fourth Respondent : West End Legal
Fifth Respondent : West End Legal
Case(s) referred to in judgment(s):
AG and Ors & VC and Anor [2013] FamCAFC 60
Attorney-General (Cth) v Davids Holdings Pty Ltd [1993] ATPR 41-247
Banque Commerciale SA v Akhil Holdings Ltd [1990] 169 CLR 279
Chance v Henderson (1999) 134 NC App 657
Charisteas & Charisteas [2008] FCWA 148
Charisteas & Charisteas [2008] FCWA 40
Charisteas & Charisteas [2009] FCWA 119
Charisteas & Charisteas [2012] FCWA 1
Davidson and Davidson (No 2) (1994) FLC 92-469
Gabel & Yardley (2008) FLC 93-386
Herridge & Handerson [2011] FamCAFC 156
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Kowaliw & Kowaliw (1981) FLC 92-092
Lippman & Lippman (2010) FLC 93-439
McLennan & McCallum [2010] WASCA 45
Millar & Millar (1983) 9 Fam LR 5
Selen & Selen (2013) FLC 93-533
VC & GC and Ors [2010] FamCAFC 62
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL
JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN
CHANGED
Introduction
1On 1 October 2013, orders were made – by consent – defining a number of issues as "disputed issues". The disputed issues, and only the disputed issues, were adjourned to be dealt with at trial on a date to be fixed.
2The disputed issues were as follows:
a)Should certain declarations be made regarding the validity of orders made by Crisford J on 9 December 2011 ("the property orders")?
b)If the Court is satisfied that the property orders are "final" orders, should they be set aside pursuant to s 79A(1)(b)?
c)Should the property orders be enforced?
d)Should certain injunctions be made restraining some of the respondents from dealing with property without notice to the applicant?
e)Should the Family Court proceedings be adjourned until certain proceedings in the Supreme Court of Queensland (which proceedings have been or are likely to be transferred to the Supreme Court of Western Australia) have been resolved?
3The trial took place on 22 and 23 January 2014. Prof Parkinson and Ms Giles appeared for the wife. Mr Dowding SC appeared for the husband and Mr Penglis appeared for the other respondents.
4None of the parties gave evidence during the trial, which involved issues of law and associated matters.
5At the completion of the trial, judgment was reserved.
General observations
6I am painfully aware of the very lengthy delay between the completion of the hearing and the delivery of these Reasons. In Rollings & Rollings [2009] FamCAFC 87, the Full Court said at [67]:
The authorities … establish that if there is a delay between the conclusion of the hearing and judgment, presumably with contemporaneity of reasons, the delay is not in itself a ground of appeal and it is not … a denial of a fair trial and/or a miscarriage of justice. However the delay does mean that on appeal there has to be greater scrutiny of the findings made by the trial judge. As Giles JA said in Monie v the Commonwealth (2005) 63 NSWLR 729 at [3]: “extensive delay may cause an appellate court to take a more stringent approach in determining whether error has been demonstrated in the trial judge’s findings or whether the trial judge’s reasons are adequate”.
7Similarly, the Full Court in Herridge & Handerson [2011] FamCAFC 156 said that the "real issue" may be –
… whether material findings of fact made by the trial Judge, and/or conclusions reached by him in reliance upon them, could be unsafe by virtue of the time which elapsed between the conclusion of the evidence and the delivery of judgment. That in turn is more referable to a consideration of contested findings or conclusions, and the evidence upon which they were, or could be based, or its absence. If those challenges were made out, the fact that the trial Judge’s delay in delivery of judgment may have caused, or contributed to his error(s) is irrelevant. If they are not, it is difficult to see how his delay could change anything.
8Their Honours added at [22]-[23]:
If … findings of fact made by the trial Judge were not reasonably open to him, it does not matter whether that occurred because of the time his Honour took to deliver his judgment or for some other reason. That is also the case if such findings are shown to have been “unsafe”... If it is demonstrated that his Honour’s discretion was exercised in reliance upon material errors of fact, appellate intervention is likely to be enlivened. …
What we have said ought not be misconstrued, however. It is regrettable that judgment was not delivered more expeditiously than it was in this case. In a case where impressions of parties and witnesses clearly assumed considerable significance, a delay of eight months had the potential to diminish the clarity of the trial Judge’s recollection of their evidence, and his assessment of its reliability. We shall subject the trial Judge’s judgment to closer than usual scrutiny …
9The delay between the conclusion of the hearing and judgment in this case is longer than the delay with which the Full Court was concerned in Herridge & Handerson (supra). The parties, let alone the Full Court, are perfectly entitled to subject these Reasons to "closer than usual scrutiny". Having said that, I would record the following:
a)The delay in the delivery of these Reasons arises from workload issues affecting the trial judge. It is not the fault of the parties or their legal advisers, who have taken appropriate steps to inquire as to the progress of the judgment.
b)Notwithstanding the lengthy delay that has occurred since the completion of the hearing, none of the parties has applied to reopen.
c)The hearing before me did not involve the giving of evidence. It involved legal argument and submissions only. In that regard, I was provided with written submissions and made full notes of all relevant oral submissions presented during the course of the hearing.
d)I have had the opportunity to listen to the audio recording of the hearing where I felt that my notes or my recollection may have been insufficient.
10In these Reasons, and unless otherwise indicated:
a)all statements of fact comprise findings of fact;
b)I have referred to the applicant and the first respondent as the wife and the husband respectively (and I mean them no disrespect by doing so) – because, although they are divorced, it is less confusing to refer to them in these terms;
c)I have referred to the husband and the wife, collectively, as "the spouses";
d)I have referred to the husband's late father, [D] (known as [J]) [Charisteas] as "the husband's father";
e)I have referred to the husband's mother, [A] (known as [S]) [Charisteas] as "the husband's mother";
f)I have referred to the third, fourth and fifth respondents, collectively, as "the third parties";
g)I have not drawn a distinction between proceedings or events before a family law magistrate and proceedings or events in the Family Court of Western Australia; and
h)I have referred to all affidavits filed by or on behalf of the parties or their witnesses as being "sworn", even if they were affirmed by the deponents (and I note that, in a slightly different context, s 5 of the Interpretation Act 1984 (WA) provides, among other things, that "to swear" includes "to affirm").
The parties
11The husband, [Mr Charisteas], and the wife, [Mrs Charisteas] , are aged approximately 61 and 54 respectively. They married on [in] 1979 and separated in early 2005. They divorced in May 2007.
12The spouses continued to live in the former matrimonial home at [Suburb S] from the date of separation until the husband moved out in November 2006 – a period of just under two years.
13The spouses have three children: [E] (who is now approximately 33) and twins, [K] and [S] (who are now approximately 31). All three adult children continued to live with the wife at [the former matrimonial home] after the husband moved out. They are aligned with the wife and estranged from their father. They are also estranged from their paternal grandmother – who, as will quickly become apparent, is a party to these proceedings in her own right, as one of the executors of the estate of her late husband (the husband's father) and as one of the directors of a company called [XYZ] Pty Ltd.
14The husband's father died in February 2008, aged 80. The executors of his estate are [Lewis Barton] and the husband's mother. In their roles as the executors of the estate of the husband's father, they are the second respondents in these proceedings.
15XYZ Pty Ltd ("[XYZ]") is the third respondent. XYZ is the trustee of the [XYZ] Trust ("the Trust"). The Trust was settled in June 1985 and is currently due to vest in June 2064. The husband was the original guardian and appointor of the Trust. The specified beneficiaries of the Trust are the husband, the wife and their three adult children (E, K and S). The husband's father was a general beneficiary of the Trust prior to his death. The husband's mother, and his sister, [Ms Leva], remain general beneficiaries of the Trust.
16The property orders made by Crisford J included a provision requiring XYZ to exercise its powers under the Trust's deed of settlement to bring forward the vesting date of the Trust from June 2064 to 30 June 2010. That provision was set aside by the Full Court when it allowed an appeal against paragraphs 2, 3 and 4 of the property orders on 11 April 2013.
17The fourth respondent is Mr Barton in his personal capacity. Mr Barton is a director of the accounting firm [Barton] Partners Pty Ltd. He is also a director of XYZ, and has been since 2006.
18The fifth respondent is the husband's mother in her personal capacity. The husband's mother is approximately 83. Like Mr Barton, she has been a director of XYZ since 2006.
19Although not a party to the proceedings, the husband's sister, Ms Leva, has had some ongoing involvement with the case. She is a general beneficiary of the Trust.
Background
20A useful summary of relevant historical material is contained in the decision of the Full Court in VC & GC and Ors [2010] FamCAFC 62 (which I have referred to elsewhere in these Reasons as "the 2010 appeal judgment"). Given that the 2010 appeal judgment was delivered well before the trial in the substantive proceedings – which took place before Crisford J in early 2011 – I accept that the summary may contain some inaccuracies. Such inaccuracies, if they exist, are comparatively minor and do not detract from the utility of the outline. The summary is as follows:
16.The husband’s parents were both originally from Greece. They had two children, a daughter, [R], and the husband. In the early 1950s they lived in [a town on the Western Australian coast] where the husband’s father was a baker. They moved to Perth in about 1972. At that time they were semi-retired, and had what the trial Judge described as “considerable assets”. The husband’s father could speak but not write in English. The husband’s mother speaks in Macedonian. The trial Judge recorded that the husband’s mother had difficulty speaking in English. The husband’s parents relied on the husband and his sister for assistance with financial documents and other arrangements, including their dealings with banks, doctors and accountants.
17.In 1976 the husband purchased a property in [Y, a northern Perth surburb] financed almost entirely with the assistance of his parents. The spouses lived in that home after their marriage.
18.In 1977 the husband and his parents purchased the business known as [X Liquor Store]. The business was purchased by way of a cash deposit of $40,000.00 paid by the husband’s father and the balance from borrowings of $100,000.00, which borrowings were secured on investment units owned by the husband’s father. The husband left his position as an accountant with a large accounting firm and commenced working in the liquor store for a salary. The husband’s parents also worked in the store. It was intended to be a family business operated as a partnership.
19.In about 1984 the husband and his parents purchased, in their joint names, the land and buildings where the liquor store business operated. The premises were rebuilt. The purchase price for the real estate was borrowed using the husband’s parents’ assets as security. Repayments were made from the cashflow of the business.
20.In about 1985 the husband’s father said he was advised by his accountant, Mr [F], to set up a family trust to hold his and his wife’s assets.
21.On 28 June 1985 [the Trust] was settled. The guardian and appointor of [the Trust] was the husband and the specified beneficiaries were the husband, the wife and their children. The trustee of [the Trust] was the husband’s father.
22.The [X Liquor Store] business became an asset of [the Trust].
23.On 30 August 1985, by deed of appointment, the husband exercised his power of appointment and removed his father as trustee and substituted in lieu a corporate trustee, [XYZ]. The husband and his father each held one of the two issued shares in [XYZ]. The trust deed of [the Trust] was varied to enable, subject to the guardian’s approval, by declaration of the trustee in writing, expansion of the class of general beneficiaries.
24.Between 1986 and 1999 the husband’s parents, although not named beneficiaries, received distributions from [the Trust] and [the Trust's] financial statements recorded beneficiary loan accounts in their names.
25.In April 1987 properties at [C, a Perth suburb,] (“the [C] properties”) were purchased and became assets of [the Trust]. The spouses guaranteed a loan by [XYZ] to effect the purchase. The husband’s father was identified as, and signed documents as, the appointor of [the Trust] (it is not in dispute that at that time the husband’s father was not the appointor of [the Trust]).
26.In 1987 a second trust, the [DC] Trust, was settled. The husband’s father was the guardian and appointor of this trust, and the husband’s parents and their children were named as beneficiaries.
27.In November 1988 the husband’s father signed a mortgage document in respect of the purchase by [the Trust] of a property at [B].
28.In 1989 the [X Liquor Store] was sold. The premises were sold subsequently. The husband received one third of the profits. He commenced working in real estate….
29.In January 1995 the spouses signed the directors’ report of [XYZ] for the year ended 1994 (it is not in dispute that the wife was not a director of [XYZ] at that time or at all).
30.In February 1996 the husband’s parents gifted to the husband the sum of $500,000.00 which he subsequently lent to [the Trust].
31.In July 1996 the spouses purchased [[the matrimonial home]], and in October that year, sold the husband’s [Y] property.
32.In February 1997 a third party made offers to purchase the [C] properties. No sale eventuated. The husband asserted he had a dispute with his father who did not agree to the sale.
33.On 27 February 1997 the husband forwarded a letter to Mr F, [the Trust’s] accountant, in which he resigned as a director of [XYZ] and as appointor and guardian of [the Trust]. The resignations were expressed to be effective from that date. The husband asserted his resignations were as a result of the dispute with his father.
34.In March 1997 the wife’s brother separated from his wife. The husband and the wife’s brother had discussions about the wife’s brother’s family law proceedings.
35.On 9 May 1997 the husband signed income tax returns for [XYZ].
36.On 9 June 1997 the husband’s Notice of Change of Address as director of [XYZ] was received at ASIC.
37.On 24 June 1997 the husband wrote to Mr F requesting him to provide appropriate documentation to complete the matters relevant to his resignations prior to 30 June 1997.
38.By memorandum of resolution dated 25 June 1997 the directors of [XYZ] noted the husband’s resignation as secretary and director of that company and as appointor and guardian of [the Trust].
39.On 9 July 1997 ASIC received the annual return of [XYZ] signed by the husband as a director and dated 9 May 1997.
40.On 6 August 1997 the wife’s then solicitors, Holden Barlow, wrote to the husband advising him the wife had formed the view that the marriage had irretrievably broken down. The letter recorded there had been no communication between the spouses for some weeks prior to the wife instructing solicitors in July 1997.
41.In September 1997 the husband had further discussions, which discussions continued until about July 1998, with the wife’s brother about the wife’s brother’s family law matters, including the relevance of the role of an appointor of a discretionary trust.
42.On 9 October 1997 a document notifying a change of officeholders of [XYZ] was lodged with ASIC. This document noted the husband ceased holding the position of director and secretary of [XYZ] as at 25 June 1997.
43.On 13 July 1998 the directors of [XYZ] resolved to pay the husband $15,000.00 per annum and expenses for working for [the Trust].
44.On 3 August 1998 a deed purporting to vary the trust deed was prepared and subsequently executed. Recital C of the deed recorded that the husband retired as guardian and appointor of [the Trust] on 27 February 1997 and that there was no current guardian or appointor of [the Trust]. The deed of variation was stamped on 10 August 1998.
45.In April 2001 the husband wrote to Mr F about the husband’s father’s Will, and further shares in [XYZ] were allocated to the husband’s father.
46.On 26 November 2001 the husband wrote to Mr F requesting he transfer records of various persons and entities to new accountants. [XYZ] remained the trustee of the spouses’ self-managed superannuation fund (“the [GC & SC] Superannuation Fund”) and Mr F remained the accountant for the fund.
47.On 4 December 2001 [BDE], a company which the husband retained for financial advice, wrote to the husband advising that his “removal” from [the Trust] in February 1997 had not been acted upon and he still held relevant offices in accordance with the trust deed.
48.On 10 December 2001 a further deed of variation of [the Trust] was executed. By the deed of variation the husband’s father was appointed sole guardian and appointor of [the Trust] with purported effect from 27 February 1997.
49.In late 2001 the husband instructed solicitors to prepare two enduring powers of attorney to be executed by his parents in his favour. The powers of attorney were executed by the husband’s parents on 11 December 2001. The husband’s father became the sole shareholder of [XYZ].
50.In November 2003 solicitors then acting for the wife wrote to the husband asserting the spouses’ marriage had irretrievably broken down. The husband instructed solicitors to reply to the wife’s solicitors on his behalf denying that the marriage had broken down.
51.On 16 August 2004 [XYZ] granted a power of attorney to the husband for him to act on behalf of [XYZ] as trustee of [the Trust] and as trustee of the spouses’ superannuation fund.
52.Also on 16 August 2004 the husband’s father executed an unlimited enduring power of attorney to the husband to act on his behalf in respect of his personal affairs.
53.In June 2005 the husband negotiated a loan of $2.7 million for [XYZ] from a lending institution, Members Equity… The spouses gave joint and several personal guarantees in respect of this loan. The wife did not receive independent legal advice before signing the guarantee and the husband acknowledged that the purported witness to the wife’s signature had not been present when she signed the document.
54.The loan funds were utilised to discharge three existing loans of the spouses from the National Australia Bank registered over the title of [their matrimonial home] and the balance was applied for the needs of [XYZ]. As a result of the transaction:
a)the spouses “effectively borrowed” $707,000.00 from [XYZ];
b)the terms of the loan as minuted at a meeting of [XYZ] and signed by the spouses were that:
•the spouses’ three existing NAB loans would be discharged;
•the terms of the loan would apply to any additional loans and any current and future beneficiary loans from [XYZ]; and
•repayment of the loan is required on the occurrence of specified events, including the spouses’ divorce;
c)[XYZ] registered a first mortgage over the matrimonial home on 29 July 2005. Pursuant to the deed of guarantee and indemnity a collateral mortgage was to be registered over the matrimonial home. No collateral mortgage had been registered at the date of hearing.
55.The husband conceded he prepared the minute recording the terms of the loan which was signed by the spouses.
56.On 23 November 2006 the husband’s father revoked the unrestricted power of attorney in favour of the husband. [XYZ] also revoked a power of attorney in favour of the husband and executed a power of attorney in favour of the husband’s mother and [LB] [Mr Barton].
57.On 27 November 2006 the husband’s father signed a letter of wishes in which he said he did not wish to make provision for the husband in his Will because of the expense of the family law proceedings and by reason of the provisions he had made for the husband during his lifetime.
58.On 8 December 2006 [XYZ], with the consent of the husband’s father as appointor of [the Trust], appointed the husband’s father and mother as beneficiaries of [the Trust]. On the same day [XYZ], with the consent of the husband’s father (and subject to any order of the Family Court of Western Australia), excluded the spouses as beneficiaries of [the Trust].
59.Also on 8 December 2006 the directors of [XYZ] resolved that the husband’s mother and [LB] be appointed as additional directors of [XYZ] and that they be irrevocably appointed as succeeding guardians and appointors of [the Trust].
60.On 15 March 2007 [XYZ] resolved that all further communications with Members Equity be through [LB], that no further distributions of income be made to the husband, and that [XYZ] resign as trustee of the [GC & SC] Superannuation Fund.
61.On 25 June 2007 the wife filed an application in the Court seeking injunctive relief. Included in the wife’s application was an application for an injunction to restrain [XYZ] from distributing income to any beneficiary without 21 days notice to the wife. On 30 June 2007 [XYZ] resolved to distribute the income of [XYZ] equally between the husband’s parents.
21To this historical material should be added the following:
a)As indicated above, the Trust was established on 28 June 1985. The deed of settlement provided that the vesting date for the Trust was 30 June 2064.
b)The husband did not appoint another appointor or guardian prior to his resignation from these roles by letter dated 27 February 1997. As a result, and consistent with the provisions of the deed of settlement, the Trust has been without an appointor or guardian since that time.
c)As a consequence of the death of the husband's father in 2008, the husband’s mother now holds the entire shareholding (12 shares) in [XYZ]. The husband's mother and Mr [Barton] are now the only directors of [XYZ].
d)The husband's mother is "presently the controller" of [XYZ] and the Trust: see the decision of the Full Court in AG and Ors & VC and Anor [2013] FamCAFC 60 (which I have referred to elsewhere in these Reasons as "the 2013 appeal judgment") at [23].
e)The specified beneficiaries of the Trust are the spouses and their three children. The general beneficiaries of the Trust comprise a much broader group of people and entities (but include the specified beneficiaries, the husband's parents and Ms [Leva]).
f)As a consequence of the Trust no longer having a guardian or appointor, [XYZ] cannot be replaced as the trustee of the Trust. Similarly, the spouses, as specified beneficiaries, are each entitled to a "fixed and irrevocable entitlement to a share of capital upon a vesting of the Trust": see the 2013 appeal judgment at [30], [32] and [81].
g)It is "undoubtedly correct" that the entitlement of the spouses to a share of the capital of the Trust upon vesting is "property" for the purposes of proceedings for property settlement under s 79: see the 2013 appeal judgment at [82].
Abbreviated (and selective) procedural history of the proceedings
22A number of judgments have been delivered since the proceedings commenced in 2006:
a)Crisford J's Reasons delivered 10 April 2008 ("[2008] FCWA 40");
b)Crisford J's Reasons delivered 18 December 2008 ("[2008] FCWA 148");
c)Crisford J's Reasons delivered 29 April 2009 ("[2009] FCWA 42");
d)Crisford J's Reasons delivered 10 September 2009 ("[2009] FCWA 119");
e)the Reasons of the Full Court (comprising Warnick, Boland and Thackray JJ) delivered 29 March 2010 ("the 2010 appeal judgment");
f)the Reasons of the Full Court (comprising Boland and Thackray JJ – Warnick J having retired after the delivery of the 2010 appeal judgment) delivered 5 November 2010 (dealing with the issue of costs);
g)Crisford J's Reasons delivered 9 December 2011 ("the trial judgment");
h)Crisford J's Reasons delivered 11 January 2012 ("the stay judgment"); and
i)the Reasons of the Full Court (comprising Bryant CJ, Finn and Strickland JJ) delivered 11 April 2013 ("the 2013 appeal judgment").
23The history of the proceedings is set out in considerable detail in those judgments (particularly the trial judgment). There is no need for me to revisit that history in these Reasons, beyond what I have set out under the heading Background above. It is sufficient to refer to relevant events when necessary.
24The husband commenced proceedings for property settlement in August 2006. The wife responded in October 2006. They each sought that they should receive a total of 70% of the parties' net assets, and that the other spouse should receive 30%. The wife also sought an order to the effect that a deed dated 3 August 2001 "whereby the husband resigned as a guardian and appointor of the [XYZ] Trust" be set aside (together with any other instruments by which the husband purported to resign as guardian and appointor of the [XYZ] Trust). The wife's response was amended and re‑amended in March and June 2007 respectively. It was further re-amended in September and November 2007. The various amendments were included in a consolidated minute of orders dated 17 September 2007. In large part, the amendments related to the addition of further instruments or dispositions to be set aside. By January 2008, the wife was seeking to set aside some 13 instruments or dispositions relating to the husband's involvement in [XYZ] and the Trust. Her applications in this regard were made pursuant to s 106B of the Family Law Act 1975 ("the Act").
25Due largely to the failing health of the husband's father, it was determined that the s 106B applications should be dealt with on a preliminary basis. Crisford J dealt with them in January 2008. At the hearing, the husband and the third parties made an application for summary dismissal of the orders sought by the wife pursuant to s 106B.
26In her judgment delivered on 10 April 2008, Crisford J dismissed the application for summary dismissal of the s 106B applications: see [Charisteas & Charisteas] [2008] FCWA 40.
27The substantive issues relating to the s 106B applications formed the primary subject of a subsequent hearing before Crisford J in July 2008, although her Honour also took into account the evidence presented during the January hearing.
28In [Charisteas & Charisteas] [2008] FCWA 148, which was delivered on 18 December 2008, her Honour made a number of significant findings, including that –
a)the husband was not the "controller and owner" of the Trust when it was established in 1985, or at any time thereafter; and
b)the husband's father was the "ultimate controller and patriarch" of the Trust – irrespective of what was said and done by the husband and in spite of the fact that the husband treated the assets of the Trust is his own from time to time.
29In addition to making the above findings, Crisford J declined to draw certain inferences pressed upon her by the wife. The inferences would have supported findings contrary to those set out in the preceding paragraph. In declining to draw the inferences, her Honour said at [157]:
Although never stated openly or directly [the wife] is effectively alleging a complicated web of deceit between [the husband] and, given his sworn evidence, [the husband's father] and also [the family's then accountant, Mr F]. Some of the incidents referred to may have suspicious features but this falls far short of collusion or fraud.
30Crisford J was not satisfied on the balance of probabilities that the instruments or dispositions that had been attacked in the s 106B applications were entered into with the intention of defeating a court order. In particular, her Honour accepted that a letter sent to Mr F on 27 February 1997 evidencing the husband's resignation as appointor and guardian of the Trust and his resignation as director of [XYZ] was indeed sent on that date, and that it was effective in causing his resignation from those offices. The wife had submitted that the letter had been prepared many months later, as part of a strategy to prevent her from gaining access to the Trust's assets (as it were) in the course of the property settlement proceedings. Her Honour found that the letter was sent by the husband as a result of a disagreement with his father over a business issue.
31Crisford J concluded at [160] that –
… the practical effect of the resignation by [the husband] in February 1997 was to regularise the real position of ownership and control. His resignation may have been done in a fit of pique but it really reflected what always was the case – he was not ultimately in control of [XYZ] and its assets.
32The wife also sought orders pursuant to s 106B setting aside transactions relating to a mortgage registered over [the former matrimonial home] by [XYZ] as trustee for the Trust. Crisford J described the background to these transactions as follows:
163.The parties experienced … matrimonial problems in about February 2005. Stella says they separated at that time although both remained living at the [the former matrimonial home] property.
164.In around June 2005 [the husband] entered into discussions and negotiations with Members Equity, a lending institution, to obtain finance of $2.7 million for [XYZ]. [The husband] deposes that it was suggested Members Equity could provide more favourable repayment terms including lower fees, interest rates and a better line of credit than the existing provider, National Australia Bank. The $2.7 million included provision not only for [XYZ’s] needs but also for the paying out of three existing loans [the husband and the wife] already had personally with the NAB. These loans were registered over [the former matrimonial home].
165.A finance proposal was put forward to [XYZ] on 10 June 2005 by Members Equity. This included the taking of a mortgage over [the former matrimonial home] and a personal guarantee and indemnity from [the husband and the wife] as proposed security for the total loan facility.
166.[XYZ] agreed to discharge [the spouses'] three NAB loans on certain provisos and to consolidate all its other NAB loans in the single new loan from Members Equity.
167.The terms of the loan from [XYZ] to [the spouses] were minuted at a meeting of directors of [XYZ] dated 16 June 2005. [The husband and the wife] agreed to the minutes and signed their acceptance of them.
168.[The spouses'] loan is defined as the three NAB accounts paid out by [XYZ], any additional loans and any current and future beneficiary loans from [XYZ].
169.[The spouses] effectively borrowed $707,000 from [XYZ] and in return [XYZ] registered a first mortgage as security over [the former matrimonial home] on 29 July 2005. There are no other encumbrances on [the former matrimonial home] as ultimately Members Equity did not register any such mortgage over it.
170.The features of the [XYZ] mortgage are different from the NAB mortgages it replaced. The repayment of [the spouses'] loan is required immediately upon the occurrence of a number of events, including their divorce. [The spouses] were divorced on 25 May 2007.…
33Her Honour found that the transactions had the "likely and actual effect" of defeating an anticipated order for property settlement in the wife's favour, but was not prepared to exercise her discretion in favour of setting them aside. Her Honour observed at [188] that setting aside the transactions would not "solve" the wife's liability to repay the amounts now owing and, further, that the wife "… signed the documents in the context of a separation and had every opportunity to take steps at that time to fully understand her position".
34The wife also sought orders pursuant to s 106B setting aside eight transactions that occurred after she filed her response in October 2006. The overall effect of the transactions sought to be set aside was to prevent the husband from receiving any present or future benefits from the Trust: see [2008] FCWA 148 at [192]-[193].
35The wife drew the Court's attention to a number of events which occurred after the eight transactions:
197.On 8 December 2006 Mr [Barton] was appointed director of [XYZ] Pty Ltd. Following his appointment there was a resolution of the company on 15 March 2007 that all further communications with Members Equity be through Mr [Barton], that no further distributions of income be made to [the husband], and that [the Trust] resign as a trustee for the [GC & SC] Superannuation Fund, a position the company had held until then.
198.The Court was referred to the wife’s application filed on 25 June 2007 for injunctive relief seeking, inter alia, to restrain [XYZ] from distributing income to any beneficiaries without 21 days notice to the wife. A resolution of the company was subsequently made on 30 June 2007 to distribute the income of [XYZ ] Pty Ltd equally between the husband’s parents.
199.In late 2001 [the husband] instructed solicitors to prepare two enduring powers of attorney to be executed by his parents in his favour. The powers of attorney were executed by his parents on 11 December 2001. [The wife] alleges these powers of attorney were never disclosed in an appropriate or timely fashion.
200.[The wife] argues that if the Court accepts [the husband] ceased to be the appointor and guardian of [the Trust] in 1997 then according to the terms of the Deed it was not open for any other appointor and guardian to be validly appointed. Thus at the close of all the evidence [the husband], with the enduring power of attorney from his mother, had effective control over the trustee of the Trust.
201.Prior to [the wife's] counsel completing his closing submissions this power of attorney was revoked.
202.[The wife] says these ongoing and persistent steps to distance [the husband] from the Trust furnishes the Court with evidence as to an intention, deliberately held, to defeat orders she seeks.
36Her Honour declined to set aside these transactions as well:
207.I accept the instruments or dispositions were carried out, no doubt, in the context of these proceedings. However, they were not, on evidence which I accept, done to defeat an anticipated order which [the wife] could rightfully seek. They were done to reflect the position the parties had always intended when the Trust was initially established in 1985. I am not satisfied that anything took place in the ensuing years to change that original intention. Given the course of events [the husband's father] simply curtailed his previous generosity.
208.Without the marital disharmony it is likely the instruments or dispositions in this … category would not have taken place. Business and life would have continued on. [The husband] and thus, [the wife], may have been in a much better position but this remains now in [the husband's mother's] gift.
37The wife appealed from her Honour's orders (made on 18 December 2008) dismissing the applications under s 106B.
38In April 2009, Crisford J dealt with the wife's application for interim spousal maintenance. Her Honour ordered the husband to pay interim spousal maintenance at the rate of $350 per week, but warned that a review of that amount would be appropriate if further evidence became available: see [2009] FCWA 42.
39In August 2009, Crisford J heard further submissions from the parties regarding the quantum of interim spousal maintenance. Her Honour also dealt with applications made by the husband and the third parties for the sale of the former matrimonial home. Pursuant to Reasons delivered on 10 September 2009, her Honour ordered that the quantum of interim spousal maintenance be increased from $350 per week to $500 per week. Her Honour also dismissed the applications for the sale of the former matrimonial home. In doing so, however, her Honour said at [36]:
No doubt the wife accepts the risks she runs in relation, among other things, to such arrangements as are set out by Baker J in Kowaliw & Kowaliw (1981) FLC 92-092.
40The reference to Kowaliw & Kowaliw was intended, of course, to remind the wife of the Court's powers to notionally add-back moneys to the pool of property available for distribution between parties to proceedings if it is satisfied that a party has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of the other party's property, or has acted "recklessly, negligently or wantonly" with property, or perhaps simply wasted it. Moneys added back in such circumstances would ordinarily be credited to the party who had conducted himself or herself in the manner described. Crisford J clearly regarded such a comment as pertinent in the light of submissions such as that made by on behalf of the husband to the effect that the former matrimonial home should be sold to reduce the financial pressure on the parties. It was argued on behalf the husband that if the former matrimonial home were to be sold, sufficient funds would become available to both pay some of the spouses' outstanding debts (including the amount of approximately $780,000 then owing to XYZ and secured by first mortgage over the former matrimonial home) and provide the wife with the source of ongoing maintenance.
41Crisford J also made orders effectively appointing the spouses joint trustees of the GC & SC Superannuation Fund, appointing the husband as the manager of the Fund and requiring the spouses to ensure that the Fund complies with all relevant regulations: see Charisteas & Charisteas [2009] FCWA 119.
42The wife's appeal against the orders of 18 December 2008 dismissing the s 106B applications was argued on 22 October 2009. The Full Court delivered Reasons for Judgment on 29 March 2010. The appeal was allowed: see the 2010 appeal judgment.
43Early in the 2010 appeal judgment, the Full Court said:
8.Why the s 106B proceedings were determined as they were is understandable when regard is had to the circumstances which confronted the trial Judge. However, we discern many of the issues which have arisen in this appeal could probably have been avoided if the wife’s applications under s 106B had not been “severed” from the substantive proceedings under s 79, and we think it is appropriate we should express our view that it is generally undesirable to have a discrete hearing of a s 106B application. This is especially so where, as was the case here, findings of credibility are likely to be important. The judge may well make a favourable or unfavourable finding in determining the s 106B questions but, in the light of what subsequently transpires in the balance of the s 79 proceedings, wish that he or she had not done so.
9.Also the questions that are answerable in a discrete hearing may be more limited than is often appreciated. Questions of intention and whether an order was “anticipated” or not may be answerable, but whether, even if those questions are answered affirmatively, an anticipated order is likely to be defeated, might well not be answerable until the completion of s 79 proceedings
44In its review of the evidence in the 2010 appeal judgment, the Full Court concluded at [136] and [149] that the husband's appointment as guardian and appointor of the Trust when it was established in 1985 was "not a mistake". In other words, the appointment was clear and intentional.
45The Full Court continued:
149.… [Her] Honour did not adequately explain why the complete removal of the spouses as beneficiaries of [the Trust] could possibly have been a reflection of what was intended at the time of the creation of [the Trust] in 1985 when they and their children were nominated as the only specified beneficiaries.… [It] is clear from the evidence of the husband’s father there was no mistake in the husband having been nominated as appointor and guardian of [the Trust]. In such circumstances it is difficult to see how there could have been any mistake in the spouses and their children having been nominated as the specified beneficiaries of [the Trust]. Their removal as specified beneficiaries must also be considered in light of the fact that they had been the recipients of the great majority of the funds distributed from [the Trust] since its inception.
150.… [We] are unable to reconcile her Honour’s finding… that the 8 December 2006 transactions were not “done to defeat an anticipated order” with her other findings… that:
•“the instruments or dispositions, were carried out, no doubt, in the context of these proceedings”;
•“given the course of events [the husband’s father] simply curtailed his previous generosity”;
•“[w]ithout the marital disharmony it is likely the instruments or dispositions … would not have taken place”; and
•“[b]usiness and life would have continued on. [The husband] and thus, [the wife] may have been in a much better position...”
151.All of these findings were strong indicators that the real purpose of the instruments and dispositions was to defeat an anticipated order…
152.These transactions were entered into at a time when the proceedings were in progress, and after the husband had prepared documentation which, if put into effect, required the repayment of the loan to [XYZ]. We also observe the third parties sought the sale of the matrimonial home requiring the discharge of the mortgage. Such relief, if granted, would defeat the orders sought by the wife that she receive the matrimonial home unencumbered.
46When discussing the various grounds of appeal, the Full Court considered the weight given by Crisford J to the affidavit evidence of the husband's father (who had died and was therefore unavailable for cross-examination when the proceedings were dealt with before her Honour in 2008). Their Honours said at [236]:
… Her Honour’s reasons gave no explanation of the weight she afforded to the husband’s father’s evidence. As the authorities… make clear, evidence which is not subject to cross-examination must be regarded with circumspection, particularly if not otherwise corroborated. The trial Judge’s conclusions… that “ultimate control of financial matters rested with [the husband’s father]” and her findings… that he “was the ultimate controller and patriarch no matter what was said and done by [the husband]” appear to us to have been based substantially on the husband’s father’s evidence, including his expressed intentions which were specifically recorded by her Honour… The reliance on this evidence flows through to her Honour’s ultimate conclusion… We are satisfied that the failure to discuss the weight given to the husband’s father’s evidence, and the clear inference from the conclusions drawn by the trial Judge that she gave his evidence considerable weight, constitute appealable error.
47Although the wife's appeal against certain of the orders made by Crisford J on 18 December 2008 was successful, she was not successful in challenging her Honour's conclusions regarding the 1997 and 2001 transactions. The ultimate fate of the s 106B applications (other than those relating to the 1997 and 2001 transactions) was ordered to be determined by Crisford J at the same time as the competing applications for property settlement; in other words, at trial.
The trial and the trial judgment
48The trial was held in February and March 2011. It occupied approximately 11 days.
49The trial judgment deals with the evidence before Crisford J. There is no need to summarise that evidence, and her Honour's findings, in these Reasons. The trial judgment speaks for itself.
50It is clear from the trial judgment that her Honour followed the steps which were then required of her in property settlement proceedings. Those steps were summarised in the trial judgment at [35], under the heading Applicable law:
The approach to be taken in relation to an application for property settlement pursuant to s 79 of the Act is a four step process (Hickey and Hickey and Attorney‑General for the Commonwealth of Australia (Intervener) (2003) FLC 93‑143). Those steps are:
•to make findings as to the identity and value of the assets and liabilities of the parties;
•to identify and assess the contributions made by the parties within s 79(4)(a), (b) and (c);
•to identify and assess the s 75(2) factors, together with any matters relevant pursuant to section 79(4)(d)-(g); and
•consider whether the proposed orders are just and equitable.
51The relevant assets and liabilities are set out in a schedule appearing in the trial judgment at [346]. Her Honour included two fifths of the net value of the Trust (after deducting $338,000, which was to be allocated to the husband's mother in circumstances discussed in the trial judgment and analysed in the 2013 appeal judgment) in the schedule. Her Honour was able to do so because she had concluded that the Court had power under Pt VIIIAA of the Act to order an early vesting of the Trust, and that it was appropriate to exercise that power. Her Honour said that the spouses, as specified beneficiaries, were each entitled to a "fixed and irrevocable entitlement to a share of capital upon a vesting of the Trust": see the 2013 appeal judgment at [30], [32] and [81]. That share comprised one fifth of the Trust's capital each. The spouses' children were entitled to the remaining three fifths.
52The total net value of the property available for distribution between the spouses, including their share of the Trust's capital, was found to be $5,351,135. In addition, the spouses had superannuation entitlements valued at approximately $716,533: see the trial judgment at [346]. As her Honour said at [374]:
The total asset pool is E$6,067,668. This can be broken down into two fifths of the gross value of the Trust of E$2,490,956 and the other largely joint matrimonial assets of $2,860,179. These two total $5,351,135. The superannuation asset is $716,533 and I will treat that separately.
53Crisford J's conclusion in relation to the issue of contributions was as follows:
381.Of the $5,351,135 of the net asset pool excluding superannuation, roughly 53.5% is represented by what can loosely be called joint matrimonial assets. I am satisfied that given the length of the marriage and the contributions of each spouse it should be assessed at an equal entitlement. Having said this, I have not ignored the contributions of the husband’s parents, but I consider there has been a counter balancing of contributions.
382.The Trust assets represent approximately 46.5% of the total pool. The entire initial input into that pool was funded by the husband’s parents. The husband has had the hands on management role in relation to the funds and the assets. As I have canvassed, the wife has made some direct and indirect contribution to it. In relation to this part of the pool I would assess contributions to be about 80% in favour of the husband. When I consider all matters, I am satisfied there should be an overall division in the husband’s favour of 67%. This is excluding the superannuation.
383.In summary, of the combined joint matrimonial assets and Trust assets there should be a division of the assets in favour of the husband of 67%. In relation to the superannuation assets, this should be divided 50% with the splitting order as sought by the wife.
384.The effect and practical terms of the adjustment I intend to make in relation to contributions is that of the asset pool the wife will retain the value of 50% of the superannuation asset of $358,266.50.
385.Of the joint and Trust assets the husband at 67% will retain $3,585,260 and the wife at 33% will retain $1,765,875 worth of assets.
54Her Honour's conclusion in relation to the s 75(2) factors was as follows:
427.When I marry all these different considerations together I propose to make an adjustment of 5% in the wife’s favour. In an asset pool of this size the differential is 10% and in real terms this reflects $535,113. I do not see this as being inappropriate in the circumstances of this case.
428.The wife will therefore receive 38% of the assets (excluding superannuation), or $2,033,431. The husband will received 62% or $3,317,704. I do not consider that the 5% adjustment should also apply to the otherwise equal division of superannuation assets as my view is the wife’s likely future and other requirements can be met by the adjustment being made simply on the non-superannuation assets.
55Her Honour's conclusion in relation to the issue of whether the proposed outcome of the proceedings could be regarded as just and equitable was as follows:
429.It is now important to stand back and look at the result of these adjustments and how it affects the orders I will make.
430.In my view, the spouses will need to sell the home. The wife sought to retain it, but with the vesting of the Trust, unless there is some agreement, I consider it will be sold. Along with the monies received from the vesting of the Trust, I am satisfied that each party will be in a position to move forward if the funds are managed wisely.
431.The husband will retain his business, which is not only a valuable source of income, but a valuable asset in itself. Whilst I have taken into account the fact he may have some difficulty in a sale of that business, I do not see this as impacting to any great extent on the intrinsic worth of it to him.
432.The wife will need to rehouse into much more appropriate accommodation. However, she will have some money to invest and will be in a position to genuinely and realistically apply herself in the workforce. She has debts, but I am satisfied she will have or can access funds to satisfy those debts, even if over time.
433.I again consider the appropriateness or otherwise of the vesting order given I have now arrived at the percentage division of the parties’ assets. Without a vesting of the Trust the spouses’ assets available for division would be less. This, in turn, would have impacted on the wife’s ability to support herself and live a standard anticipated during marriage.
434.In all the circumstances I consider the orders I will make to reflect a just and equitable outcome. The orders in relation to a vesting of the Trust are proper in all the circumstances.
56After completing these "steps", Crisford J dealt with the wife's claim for spousal maintenance. As has been explained elsewhere in these Reasons, interim spousal maintenance orders had been made during the proceedings. The wife wanted the quantum of maintenance increased; the husband wanted the maintenance orders discharged.
57Her Honour summarised the husband's spousal maintenance payments to the wife and continued:
440.Given the orders I have made for settlement of the spouses’ property, I am left with some uncertainty about the likely reasonable future expenses of each party. I would like this information before varying or discharging the current order (for spousal maintenance). I intend to adjourn this aspect of the proceedings pending the outcome, in a financial sense, of the vesting of the Trust and a sale of the property. I will not discharge or vary the current order in the meantime as it will not be until either, or both, of these happen that the financial situation will be clear.
441.I will hear from counsel about the form of orders I intend to pronounce. There may need to be some consideration given to the vesting date and timing of certain orders. There are other machinery orders that may be required. Counsel can address me on these issues in due course.
58In an Addendum to the trial judgment, Crisford J recorded that she had arranged for a copy of the trial judgment to be sent to the parties' lawyers on 5 October 2011. It was her Honour's intention "to give everyone a short period of time to consider both the content of the judgment and the likely orders to be made when it was published": see the trial judgment at [442]. About a month later, her Honour received a document from the wife's solicitors referring to certain "errata" in the trial judgment. The document also referred to other matters.
59Her Honour dealt with the matters raised in this communication in the trial judgment at [446] to [459]. Some of them resulted in comparatively minor changes to the trial judgment (which changes are incorporated in the passages from the trial judgment quoted above).
60Overall, the changes made by Crisford J (as explained in the trial judgment at [446] to [459]) have no bearing on the outcome of the dispute I am required to determine.
The 9 December 2011 orders
61Thus, on 9 December 2011 Crisford J made orders with respect to property settlement: see the 2013 appeal judgment at [1]. It is clear that her Honour intended to make orders pursuant to the trial judgment. As I have said, I shall refer to the orders made on 9 December 2011 as "the property orders".
62The meaning and effect of the property orders form the bases of the dispute presently before the Court. In those circumstances, I propose to set out the property orders in their entirety. They are as follows:
1)The net assets of the parties (excluding superannuation) as set out in the schedule contained at paragraph 346 of these reasons be divided between the wife and the husband as to 38% to the wife and 62% to the husband.
2)The Trustee of the [XYZ] Trust exercise its powers pursuant to clause 1(12)(a)(ii) of the [XYZ] Trust Deed of Settlement dated 28 June 1985 (the trust deed) to appoint 30 June 2010 as the vesting day for the [XYZ] Trust.
3)Upon the vesting of the [XYZ] Trust the trustee distribute the trust fund and income in accordance with clause 4(2)(a) of the trust deed.
4)Subject to any submissions of counsel, prior to any distribution referred to in paragraph 3 hereof the fifth respondent is to receive the sum of $338,000.
5)In order to facilitate implementation of these orders the husband and the wife do all acts and things and sign all documents necessary to forthwith place [[the former matrimonial home]] on the market for sale on the following terms and conditions:
a)Mack Hall & Associates or such other agent as is agreed between the parties be appointed the exclusive agent for sale;
b)The wife do facilitate the agent inspecting [[the former matrimonial home]] within 7 days for the purpose of providing a marketing proposal to [XYZ] Pty Ltd;
c)[[the former matrimonial home]] be offered for sale by public auction or private treaty, as recommended by the agent for sale;
195On 14 March 2014, the wife filed an affidavit in response to the husband's application in a case.
196On 18 March 2014, the following orders were made:
1.All parties have liberty to reopen their cases to the extent necessary to tender and rely upon the letter from Williams & Hughes (referred to above) and the amended defence attached to the affidavit of the wife sworn 14 March 2014.
2.The Form 2 application in a case filed 6 March 2014 otherwise be dismissed.
3.The husband's application for costs be dismissed.
4.All parties pay their own costs of and incidental to the said Form 2 application in a case.
197The application in a case and the orders of 18 March 2014 have no direct bearing on the matters dealt with in these Reasons.
ASK Funding Ltd
198On 9 September 2014, ASK Funding Ltd filed an application in a case seeking, among other things, leave to intervene in the proceedings. The application resulted in the making of consent orders on 13 October 2014. The orders are set out above under the heading Adjournment pending resolution of the ASK Funding Ltd litigation.
The Leva application
199On 8 October 2014, the third parties filed an application in a case. They sought the following orders:
1.There be a declaration that the interim orders dated 5 August 2010 restraining the third parties by injunction "until further order" ceased to have effect on 9 December 2011.
2.In the alternative, paragraph 1 of the said interim orders is hereby dismissed.
3.In the alternative, paragraph 1(e) of the said interim orders be varied to the extent necessary to (facilitate) the husband's mother voting in favour of appointing Ms [Leva] (the husband's sister) as an additional director of [XYZ].
4.The wife pay the third parties' costs of and incidental to this application.
200I shall refer to this application as "the [Leva] application".
201The Leva application came on for hearing before me on 9 December 2014. The wife represented herself. Mr Redman appeared for the husband and Mr Elder appeared for the third parties.
202Mr Elder handed up written submissions at the hearing.
203The relevant parts of the orders made by Crisford J on 5 August 2010 are as follows:
Upon the Undertaking as to Damages filed by the wife, the following orders be made until further order:
1.[The third parties] be restrained by injunction until further order from:
a)causing or permitting any variation to the terms of [the Trust];
b)appointing any further or alternative attorneys for [the third parties] unless otherwise agreed to by the wife;
c)voting in favour of any resolution to pay, apply or set aside income or capital or otherwise any portion of the Trust Fund to any beneficiary of [the Trust] or otherwise causing or permitting any such payment, application or setting aside of income or capital, or otherwise any portion of the Trust Fund whether by way of resolution or otherwise without first providing not less than 28 days written notice to the wife of the proposed resolution payment, application or setting aside;
d)voting in favour of any resolution whereby [[XYZ]] resigns or ceases to act as trustee of [the Trust]; and
e)voting in favour of any resolution to appoint any further directors of [[XYZ]].
…
7.Each party is granted liberty to apply at short notice in relation to the implementation or variation of these orders.
204The Leva application focuses on paragraph 1(e) of these orders.
205As explained elsewhere in these Reasons, the husband's mother is the sole shareholder of [XYZ]. As such, she is able to appoint directors as she sees fit – subject to any court orders which may restrict her ability to do so.
206The husband's mother, who is 83 years of age, wishes to appoint her daughter, Ms Leva, as an additional director. Her reasons for wishing to make this appointment are set out in her affidavit sworn 10 October 2014:
5.… [I have] decided to leave my estate to [Ms [Leva]] and her family.…
6.I confirm I have not executed any new Will and I have not revoked my Enduring Power of Attorney.
7.As a result of my Will, [Ms [Leva]] will receive my shares in [XYZ]. This means that [Ms [Leva]] will ultimately be able to control who the directors are in [XYZ] as the sole shareholder.
8.I seek to appoint [Ms [Leva]] as an additional director of [XYZ].
9.I have been informed by my solicitor and verily believe it to be true that as I am the sole shareholder of [XYZ], that pursuant to [XYZ’s] constitution I have the right to appoint a third director to [XYZ].
10.The reason I want [Ms [Leva]] to be appointed as a third director of [XYZ] is so that I can mentors her in the duties as a director and the operation of [the Trust] as part of my succession planning. I have spoken to [Ms [Leva]] about being appointed and she is agreeable.
11.I am still in relatively good health but realise given my age that will not continue for ever. I want to put a plan into place now for the future while I am still healthy enough to oversee these plans.
207Copies of the husband's mother's Will and the Enduring Power of Attorney are attached to her affidavit.
208Ms Leva swore an affidavit in support of the Leva application on 2 October 2014. In it, she says little other than that she speaks Macedonian and English, that she has seen her mother's will dated 31 January 2011 and understands that she will be receiving her mother's shares in XYZ and that her mother has asked her to become a director of XYZ (and that she consents to that request).
209The wife opposes the orders sought in the Leva application. She filed a response to the Leva application on 9 December 2014. On the same day (being the date of the hearing) she was given leave to rely on her affidavit sworn 8 December 2014. She also sought to rely on an affidavit sworn by her daughter, but I did not give her leave to do so.
210During the course of argument on 9 December 2014, Mr Elder said that "it is difficult for the husband's mother to talk to Mr [Barton]" (who is the other director of XYZ), that Ms Leva is "often involved in those meetings" and that "she (Ms Leva) wants to become a director". He also suggested that it was some form of infringement of the husband's mother's "rights" to be restrained from appointing Ms Leva a director of XYZ, if she wishes to do so.
211Mr Elder explained that his client's communication difficulties with Mr Barton stem from language difficulties (the husband's mother speaks Macedonian and Greek and has limited English language skills) and not from any form of friction between them.
212In her affidavit opposing the Leva application, the wife deposes to being concerned that "further changes to [the Trust] could defeat or adversely affect" her claim in the substantive proceedings. She refers to the history of the proceedings and various comments made by Crisford J in the trial judgment regarding actions or attempts to distance the spouses from the Trust or to reduce their potential entitlements within it: see, for example, the trial judgment at [200], [202], [203], [208], [212] and [233].
213The wife argues that the husband's mother is not in a position to "mentor" Ms Leva as "she herself, by reason of her language limitations, limited education and lack of business experience and sophistication lacks the ability to manage [the Trust]". She points out that the husband's mother "has previously given evidence in these proceedings that she relies on [Ms Leva] to assist her with daily activities including banking, shopping etc".
214The wife also says that Ms Leva "does not get along with me or my children and has actively participated in these proceedings". She questions whether Ms Leva is likely to exercise her duties as a director of XYZ in an impartial and unbiased manner in respect of the wife and her interest as a specified beneficiary, and in respect of the spouses' children and their interests as specified beneficiaries.
215The wife added that she has no objection to the appointment of "an independent director" to assist the husband's mother, but she does not regard Ms Leva as "independent".
216The first issue relates to whether the orders made on 5 August 2010 remain in force. It was argued on behalf of the husband's mother that, because the orders were made "until further order", they ceased to have effect on 9 December 2011 (when the property orders were made) or, at the latest, on 11 April 2013 when the Full Court handed down its judgment on the appeal from the early vesting orders.
217I accept that orders expressed to be "until further order" (or similarly worded) are interlocutory orders which adhere until the disposal of the substantive proceedings in which they are made. Relevantly, interlocutory injunctions in this form are intended to operate until the rights of the parties have been determined by the making of orders disposing of the substantive proceedings: see Millar & Millar (1983) 9 Fam LR 5; Attorney-General (Cth) v Davids Holdings Pty Ltd [1993] ATPR 41-247.
218In the light of the conclusions I have reached to the effect that the power of the Court to make orders under s 79 has not been exhausted or "spent" and that the substantive proceedings for property settlement (including the associated application or applications for orders designed to bring about an early vesting of the Trust) remain on foot, I am satisfied that the orders of 5 August 2010 have not been discharged. They remain in full force and effect.
219The question becomes, therefore, whether paragraph 1(e) of the orders should be varied in the manner sought by the husband's mother in order to permit the appointment of Ms Leva as an additional director of XYZ. I am satisfied that it should not. The only real reason given by the husband's mother (in her affidavit) for wishing to appoint Ms Leva to this position is so that she can "mentor her in the duties as a director and the operation of (the Trust)" as part of her "succession planning". There is no reason, however, why Ms Leva must be appointed a director in order to be "mentored" in this way. Nor has the husband's mother explained why her "succession planning" necessitates the appointment of Ms Leva as a director of XYZ.
220It is clear from the documents attached to the affidavit of the husband's mother that Ms Leva can, ultimately, "appoint herself" as a director of XYZ if that should become necessary due to the incapacity of the husband's mother or her demise.
221As I commented to Mr Elder during the hearing on 9 December 2014, the husband's mother provided three "justifications" for the proposed appointment of Ms Leva as a director of XYZ. The first related to "mentoring" and "succession planning" and was referred to in the affidavit filed in support of the Leva application. The second related to communication difficulties with the other director (Mr Barton) and the third related to the husband's mother's "rights" to do as she sees fit. The second and third justifications were first mentioned at the hearing.
222It is apparent from Mr Elder's submissions that Ms Leva already attends meetings of the directors of XYZ with her mother, and that she assists her mother at those meetings by interpreting or translating for her when necessary. It is also apparent from Mr Elder's submissions that Ms Leva "wants" to be a director, as opposed to the husband's mother wishing to appoint Ms Leva to "mentor" her. I infer from Mr Elder's submissions, from the affidavit material relied upon in support of the Leva application and from the previous judgments (both at first instance and on appeal) in these proceedings, that Ms Leva is already very familiar with the structure and functioning of XYZ and the Trust. It is difficult to see, therefore, why she needs to be appointed as a director for her mother to "mentor" her in the manner suggested (if, indeed, the husband's mother is capable of "mentoring" Ms Leva at all).
223As for Mr Elder's submission regarding the "rights" of the husband's mother, little needs to be said apart from observing that those rights are subject to the powers of the Court, properly exercised.
224The various judgments delivered during the course of the substantive proceedings (at both first instance and appeal levels) reveal that Ms Leva has been interested in the proceedings at all relevant times. She has occasionally participated in aspects of the proceedings. I am satisfied – on the very limited evidence currently available to me – that she is not a disinterested observer of the substantive proceedings. It is arguable that she may be minded to approach her role as a director of XYZ (if she were to be appointed to that role) in something other than a neutral or dispassionate manner where the wife is concerned, and where the spouses' children are concerned. That is not to say, however, that she is incapable of properly discharging her role as a director of XYZ in other respects.
225The long and bitter history of the disputes between the parties in the current proceedings compels the Court to approach an application such as the Leva application with caution. The relevant injunctions were put in place by Crisford J (who had an intimate knowledge of the proceedings) and have remained in force for some four and a half years. No adequate reason has been given to support a conclusion that they should be varied or discharged at this stage. Relevantly, no adequate reason has been given to support a conclusion that they should be varied or discharged now that it is clear (on the basis of these Reasons) that the substantive proceedings are to continue. They seem a long way from being resolved on a final basis.
226I propose to order that the Leva application be dismissed.
Orders
227I now return to the "disputed issues" referred to in the orders of 1 October 2013.
228Having regard to the orders of 5 August 2010 (which remain in full force and effect), it seems unnecessary to make the order contained in paragraph (8) of the wife's amended initiating application filed 24 September 2013. I propose, therefore, to dismiss the application for the order – but I am prepared to hear the parties further if any of them considers that the order has some utility.
229Similarly, it seems unnecessary to make the orders contained in paragraphs (1) and (2) of the wife's response filed 14 June 2013. Again, I propose to dismiss the application for these orders – but to hear the parties further if any of them considers that the orders have some utility.
230The other orders I propose to make in relation to the "disputed issues" follow from the conclusions reached in these Reasons.
231As indicated above, I also propose to dismiss the Leva application.
232Thus, the orders I propose to make are as follows:
(1)The application for an order in terms of paragraph 1 of the orders set out in Schedule "A" attached to the orders of 1 October 2013 ("the Schedule") be dismissed.
(2)The application for orders in terms of paragraphs 2, 3, 4 and 5 of the Schedule be dismissed.
(3)The application for orders in terms of paragraphs 6, 7, 8 and 9 of the Schedule be adjourned generally, with the third parties having liberty to apply to relist the application for orders in terms of the said paragraphs –
(a)on not less than 28 days notice, in writing, to all other parties and interested persons (including all persons or entities who or which have or may have a legal or equitable interest in the former matrimonial home , whether as Caveator, mortgagee, chargee or otherwise); but
(b)not earlier than 56 days after the directions hearing on 16 March 2015.
(4)The application for orders in terms of paragraphs 10 and 11 of the Schedule be dismissed.
(5)The application for orders in terms of paragraph 12 of the Schedule be dismissed.
(6)The third parties' application in a case filed 8 October 2014 and the wife's response to an application in a case filed 9 December 2014 be dismissed.
(7)All parties must file and serve a Minute of Proposed Procedural Orders Sought relating to the further conduct of the substantive proceedings by not later than close of Registry business on Tuesday, 3 March 2015.
(8)All extant applications otherwise be adjourned to 16 March 2015 at 10 a.m. before Walters J in the Judicial Duty List, for directions only.
I certify that the preceding [232] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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