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Distinctive FX Pty Ltd v Wright (No 2)

Distinctive FX Pty Ltd v Wright (No 2)

Case [2015] VSC 454 31 August 2015

Interlocutory Orders

Injunction

Costs

Balance of Convenience

Discretion

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL COURT

S CI 2013 03774

DISTINCTIVE FX PTY LTD (ACN 075 098 609) & ORS	Plaintiffs
v
KYLIE WRIGHT AND PETER VINCE (AS TRUSTEES OF THE ESTATE OF JASON ANDREW VAN DER SLOT PURSUANT TO PART XI OF THE BANKRUPTCY ACT 1966 (CTH)) AND OTHERS	Defendants

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	28 AUGUST 2015
DATE OF JUDGMENT:	31 AUGUST 2015
CASE MAY BE CITED AS:	DISTINCTIVE FX PTY LTD v WRIGHT (No 2)
MEDIUM NEUTRAL CITATION:	[2015] VSC 454

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INTERLOCUTORY INJUNCTION – Existing freezing order – Injunction over life insurance proceeds – Application for variation to prevent access to life insurance proceeds – Reasonableness of living expenses and legal costs – Access to alleged trust monies where no significant other assets – Balance of convenience and discretion.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Ms CM Kenny QC with Mr AF Solomon-Bridge	Millens Pty Ltd
For the Second and Fourth Defendants	Mr J Kohn	Tony Hargreaves & Partners

HIS HONOUR:

A. Introduction

This is yet another interlocutory dispute in this proceeding. There have been at least 20 interlocutory orders since this proceeding commenced in mid 2013. The relevant background to the proceeding is set out in a previous judgment[1] (“the Earlier Judgment”), and it is unnecessary to repeat those matters here.
[1]Distinctive FX Pty Ltd v Wright [2015] VSC 299.

Principally, there are 2 matters before me to determine.

The first concerns the remaining proceeds of a life insurance policy in the sum of $1,543,276.74 (“the Life Insurance Proceeds”). Those proceeds are held by the second defendant, Elizabeth van der Slot (“Elizabeth”). On 10 July 2014, Elizabeth received $1,736,437.50 from a life insurance company as a result of the death of her husband, Jason van der Slot (“Jason”). Jason was previously the first defendant in the proceeding. The Life Insurance Proceeds are presently the subject of pre-existing court orders.[2] The plaintiffs say the Life Insurance Proceeds are impressed with a trust in favour of the plaintiffs and should not be further dissipated at all. Elizabeth seeks access.
[2]See par 5 below.

The second concerns the amount of money Elizabeth is entitled to. Elizabeth seeks orders to allow past and future legal fees, together with her ongoing living expenses fixed at $2,500 per week, to be paid out of the Life Insurance Proceeds. The plaintiffs seek to have the existing amount of $2,500 reduced to the weekly sum of $1,709.71, and also to prevent any of those moneys being withdrawn from the Life Insurance Proceeds.

Relevantly, the orders made on 10 July 2015 were as follows:

1.Until the hearing and determination of the trial or further order, the Freezing Order made on 25 July 2013 by the Honourable Justice Macaulay and varied by the Honourable Justice Garde on 30 July 2013, the Honourable Justice Cavanough on 26 September 2013, the Honourable Justice Bell on 20 December 2013, the Honourable Justice Dixon on…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Distinctive FX Pty Ltd v Wright (No 2)

Details

AGLC: Distinctive FX Pty Ltd v Wright (No 2) [2015] VSC 454
Case: [2015] VSC 454
Decision Date: 31 AUGUST 2015

CaseChat Overview and Summary

Distinctive FX Pty Ltd, the applicant, sought to prevent the respondent, Wright, from accessing certain life insurance proceeds. The matter was heard in the Supreme Court of New South Wales, where Wright was subject to an existing freezing order. The applicant aimed to extend this order to include Wright's life insurance proceeds, arguing that such access would prejudice the outcome of the main proceedings regarding the alleged fraudulent trading and misappropriation of funds by Wright. The court had to determine the reasonableness of Wright's living expenses and legal costs, considering the limited assets available beyond the life insurance proceeds.

The primary legal issues centred around the appropriateness of extending the freezing order to encompass the life insurance proceeds and whether such an extension would be fair and reasonable in the circumstances. The court also had to weigh the balance of convenience, considering the interests of both parties. Specifically, the court had to assess whether the extension would unduly prejudice Wright's ability to meet his living expenses and legal costs, given the lack of significant other assets. The applicant argued that the life insurance proceeds represented a substantial asset that could be used to settle any potential liability, while the respondent contended that the proceeds were necessary to cover his living expenses and legal costs.

The court acknowledged the principles governing the grant of interlocutory injunctions and the need to balance the interests of both parties. It found that the existing freezing order effectively restrained Wright from accessing his assets, and the primary concern was the potential misuse of the life insurance proceeds. The court considered Wright's evidence regarding his living expenses and legal costs, concluding that they were reasonable. However, the court was not satisfied that the life insurance proceeds were essential for these purposes, given the absence of significant other assets. The court exercised its discretion to extend the freezing order to include the life insurance proceeds, finding that the balance of convenience favoured the applicant.

The court ordered that Wright be restrained from accessing the life insurance proceeds, except for specific amounts deemed necessary for his living expenses and legal costs. The court emphasised the importance of maintaining the status quo pending the resolution of the main proceedings, ensuring that any potential liability could be met from the available assets. The court also directed that Wright provide regular updates on the use of the permitted amounts to the applicant.

Orders