Dudley and Ryecroft - [2019] FamCA 752

FAMILY COURT OF AUSTRALIA

DUDLEY & RYECROFT

[2019] FamCA 752

FAMILY LAW – PROPERTY – Interim – Where the Respondent seeks an order for the sale of a property that is registered in the sole name of the Applicant, though in which the Respondent lives, and to restrain the funds the Applicant can draw against a line of credit secured by the mortgage of that property or alternatively to limit the amount that can be drawn by the Applicant – Where this is opposed by the Applicant who also seeks an order that the Respondent cause outstanding financial documents to be prepared and lodged with the Australian Taxation Office and to disclose certain financial documents – Where the Respondent’s applications are dismissed, but the Applicant is required to disclose to the Respondent on a monthly basis her drawings on the line of credit – Where the Respondent is ordered to take all reasonable steps to prepare and lodge the particular outstanding financial documents and to disclose particular financial documents to the Applicant as set out in the Orders.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Broxham & Broxham and Ors [2012] FamCA 775
In the Marriage of Waugh (2000) FLC 93-052
Mullen v De Bry (2006) FLC 93-293

APPLICANT:

Ms Dudley

RESPONDENT:

Mr Ryecroft

FILE NUMBER:

BRC

7473

2018

DATE DELIVERED:

18 October 2019

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Forrest J

HEARING DATE:

30 September 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Looney QC

SOLICITOR FOR THE APPLICANT:

NR Barbi Solicitor

COUNSEL FOR THE RESPONDENT:

Mr Drysdale

SOLICITOR FOR THE RESPONDENT:

Hirst & Co

Orders

That the Respondent’s application for orders that the real property situated at R Street, Suburb S in the State of Queensland registered in the sole name of the Applicant be sold, is dismissed.
That the Respondent’s application for orders restraining the Applicant from drawing further funds against a line of credit facility secured by mortgage against the said Suburb S property, is dismissed.
That the Respondent’s alternative application for an order limiting the amount of funds the Applicant can draw against that line of credit facility secured by mortgage against the said Suburb S property, is also dismissed.
That the Respondent take all reasonable steps to cause outstanding financial statements and annual tax returns for the entities listed in the table included at paragraph 30 of his affidavit filed in these proceedings on 20 September 2019 to be prepared within the limits of the timetable set out by him in that table, if not before, and lodged by no later than the dates allowed for by the Australian Taxation Office as deposed to by the Respondent in paragraph 48 of that same affidavit.
That Order (2) of the Orders of Registrar Coutts of 29 August 2018 be discharged.
That for the purposes of this Order “the companies and trusts” means the following entities:
(i)C Pty Ltd ATF the C Trust;
(ii)F Pty Ltd;
(iii)G Pty Ltd;
(iv)B Pty Ltd ATF the B Trust;
(v)J Investments Pty Ltd;
(vi)J Pty Ltd;
(vii)L Pty Ltd ATF the L Trust;
(viii)J Pty Ltd ATF the E Trust; and
(ix)J Pty Ltd ATF the D Trust.
That within seven (7) days of the end of each month, the Respondent shall provide to the solicitors for the Applicant the following:
(i)Copies of the bank statements for all accounts, including loan accounts and credit card accounts, held in his name;
(ii)Copies of the bank statements for all accounts, including loan accounts and credit card accounts, held in the name of each of the companies and trusts;
(iii)Copies of the end of the month reports and financial statements for each of the companies and trusts;
(iv)Copies of any Business Activity Statements prepared for any of the companies and trusts in the immediately preceding month;
(v)Electronic copies in “read only” form of the MYOB backup files for each of the companies and trusts for all of the month just ended.
That within fourteen (14) days of the date of these orders, the Respondent shall provide to the solicitors for the Applicant electronic copies in “read only” form of the MYOB backup files for each of the companies and trusts for the financial years ended 30 June 2015, 30 June 2016, 30 June 2017, 30 June 2018 and 30 June 2019 and for this financial year to date in their current form regardless of whether they have been corrected or amended as yet.
That within seven (7) days of the finalisation of the amendment and correction of the MYOB backup files for each of the companies and trusts for the financial years ended 30 June 2015, 30 June 2016, 30 June 2017, 30 June 2018 and 30 June 2019 currently being undertaken by the Respondent’s accountant, the Respondent shall provide to the solicitors for the Applicant electronic copies of those amended files.
That within seven (7) days of the end of each month, the Applicant shall provide to the solicitors for the Respondent copies of bank statements and credit card statements for all accounts, including loan accounts, held in her name and to the extent that those statements do not reveal what the wife’s drawings against the line of credit facility are actually used for, the Applicant shall cause that information to be provided in writing to the solicitors for the Respondent at the same time.
That the directions hearing listed before Registrar Coutts on 17 December 2019, be vacated.
That the matter be listed before his Honour Justice Forrest for further mention and the making of any directions necessary to continue to ready the matter for trial at 10.00 am on Thursday, 19 December 2019.

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 Dudley & Ryecroft 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 7473 of 2018

Ms Dudley

Applicant

And

Mr Ryecroft

Respondent

REASONS FOR JUDGMENT

For immediate determination are competing interim applications in pending property adjustment proceedings between these two former partners of a de facto relationship.
The proceedings were initially commenced in July last year by the Applicant (who I shall call “the wife”). There is a significant dispute about the date of their final separation. It is relevant because on the case of the Respondent (who I shall call “the husband”) the wife’s application was filed well outside the limitation period. That said, the husband has conceded that even if that is correct, leave to proceed would be granted to the wife. Accordingly, he does not oppose the matter proceeding to trial and determination, even if the factual determination of the date of final separation will put the wife’s application out of time.
Already, late last year, I made some interim orders in the matter after a hearing. Some of those orders were made by consent, some were made by me on contested applications. Earlier that year, the former couple had already been involved in Supreme Court proceedings arising out of the breakdown of their relationship. Again this year, a number of further interim orders have been made by a Registrar and by another judge of this Court. This former de facto couple are clearly in relatively high conflict over the resolution of their financial relationship, yet it is not nearly ready to list for a final hearing.
Of most significance, at this point in time, is their disagreement about a real property in a Brisbane suburb that is registered in the sole name of the wife. It has been valued at around $2,000,000. It is subject to a mortgage in favour of a bank securing a “line of credit” loan facility that has a borrowing limit of $1,350,000. Only the wife is able to draw down on that facility. The liability for it is in her sole name and is not guaranteed by the husband. As at the end of August this year, the liability on that facility was approximately $574,920. Accordingly, there is an additional amount of credit of approximately $775,000 available on that facility as well as a further $650,000 of equity in the property.
Though it is registered in the wife’s sole name, the husband lives in that property and has since the former couple separated, when the wife and their only child, a teenage girl, moved out of that property on a final basis. Although worth approximately $2,000,000, it is a relatively recently constructed house that is not completely finished. The unfinished state presents some inconvenience to whoever would be occupying it. The wife rents an apartment for herself and the child elsewhere in Brisbane.
The husband has come to the Court this time asking for an order that the property be sold and that the sale proceeds be used to discharge the line of credit facility it secures with the balance to be used to pay tax liabilities “that will be incurred upon the lodgement of tax returns associated with the husband’s property development and construction business for 2015-2019”. He also asks for the wife to be restrained from drawing against the line of credit facility pending the sale of the property.
At the hearing of the husband’s application, the wife sought the dismissal of the husband’s application, orders that the husband cause the preparation and lodgement of income returns for the financial years from 2016 to 2019 inclusive for entities controlled by him, and orders providing her with “access to the information in the accounting databases and programs operated for the husband and related entities”.

Some relevant background

The former couple had commenced living together in a de facto relationship in Sydney in or around 2001. The husband had been involved in the construction and development industry in New South Wales and the Australian Capital Territory. The couple and their young daughter then moved to live and work in Brisbane in 2004. After an initial small property development was undertaken, they acquired the real property that is now the subject of the dispute. It was registered in the sole name of the wife, apparently for asset protection reasons.
After acquiring the property, the existing dwelling was demolished and a new one constructed by a company owned and controlled by the husband. At the same time, the husband became involved in the construction and development industry here in Brisbane, undertaking a number of property development projects through various corporate and trust entities. The wife was employed in administrative roles by one or more of these entities during the course of their ongoing relationship in Brisbane. The husband wrote a letter to the bank supporting her application for the line of credit facility in which he told the bank the wife was employed by his companies and paid a salary of $250,000 gross per year.
Their relationship began to deteriorate in recent years and ultimately broke down. As I have said, there is disagreement as to the date of final separation. That does not need to be determined now.
The following facts are, seemingly, not in dispute:
(1)The line of credit facility had been used to meet some costs on a property development project undertaken at P Street, Suburb Q in Brisbane undertaken by a company owned and controlled by the husband but the debit balance had been paid down using funds generated by sales of units in that development over time;
(2)In early 2018, the line of credit facility had a nominal credit balance;
(3)In March 2018, after the breakdown of property settlement negotiations between the former couple, the wife unilaterally transferred approximately $520,000 from a bank account of the husband’s company that had undertaken the Suburb Q development to the line of credit account that only she could access;
(4)The husband then caused that company to commence proceedings in the Supreme Court of Queensland against the wife to recover those funds;
(5)The wife was ordered to repay the funds to the company and ordered to pay the company’s costs that were assessed at approximately $41,000;
(6)The funds that the wife repaid were drawn against the line of credit facility;
(7)After the wife repaid the sum of $520,000 the line of credit was about $165,000 in debit, the wife having made other drawings against it in the meantime, including to pay for the purchase of a new motor car for herself ($61,250) and the payment of some legal fees;
(8)The wife has been using the line of credit facility ever since to meet her rent and all her other living expenses (including costs of some interstate and overseas travel), to financially support the parties’ child and to pay her legal costs and outlays;
(9)The wife also used the line of credit facility to pay the amount of approximately $41,000 in costs to the husband’s company arising out of the Supreme Court proceedings;
(10)The wife drew a further lump sum down from the line of credit facility after being put on notice of the husband’s application to sell the property and to restrain her from drawing against it. She used that amount to pay several months’ worth of rent on her apartment in advance;
(11)The wife has not been employed in the last 18 months, though she has done some work assisting her friend, about which no further particulars have been given;
(12)The husband has continued to work in the development and construction industry, attempting to cause the remaining unsold units in the Suburb Q development project to be sold and commencing work required to get development approval and financing in place for his next development project to take place on land already acquired by one of his companies in T Street, Suburb Q.
At the hearing before me, the husband’s solicitors’ costs notice was admitted into evidence. Though dated 30 October 2018, an obvious mistake, it recorded that the husband had incurred legal costs and outlays of $241,244 that he had paid in the matter to that point in time, with a further $6,314 outstanding. It asserted that those fees had been paid by him using credit cards or on his behalf by one of his construction companies.
The wife’s solicitors’ costs notice, dated 19 September 2019, asserted that the wife’s costs and outlays to that date had totalled $169,601 and advised that the costs of the appearance at the hearing before me on 30 September would be between $8,000 and $15,000. Despite the obligation imposed by r 19.04(5) of the Family Law Rules 2004 (Cth) (“Family Law Rules”) for the costs notice to “specify the source of the funds for the costs paid” the wife’s solicitors’ costs notice did not do so. Nevertheless, I am satisfied the wife has paid her costs and outlays by drawing against the line of credit facility secured against the Brisbane property registered in her sole name.
The real properties on which the T Street development is proposed to be undertaken have been valued as they currently are at $3,000,000. The properties are owned by a trust which the husband controls. There are two secured loans said to relate to that development site. As at the end of August 2019, the liability on those two loans totalled approximately $1,470,000. The husband also deposes to there being some unsecured loans owing to third parties in respect of this development. He asserts that approximately $300,000 is owing on those. Accordingly, there is currently equity of $1,230,000 in that property. The husband asserts he can make $2,000,000 profit on the development he plans to construct there, after allowing for all costs of the project. That would be $770,000 more than the equity currently in the properties.
At the completed P Street site, there were 10 units not yet sold at the time of the hearing. Those have been valued at a total of $3,892,500. There is an overdraft facility secured by mortgages over some but not all of those units. It was said to be in debit to the extent of $297,357 at the time of the hearing before me but there were also said to be two accounts in the name of the developer company with credit balances totalling approximately $97,000.
The husband also deposed to another account in the name of another company he controls that owns all of the shares in the P Street developer company with $20,000 in it. That same company, he has deposed, has taken out not one but two leases on very expensive, luxury motor cars – one in 2016 and a second last year. The husband says that each car is currently worth less than the payout figure on their respective finance deals. That is probably correct. It is notoriously so. Just why the husband needs two such motor cars is not clear to me.
Another company that the husband owns and controls, through which he says he conducts his construction business, has $25,593 in a bank account and three motor vehicles worth a total of $76,000 with a debt of $25,000 owing in respect of one of them.
Another company through which the husband and a business partner conduct a concrete polishing business owns tools and equipment worth just under $50,000 and has $2,164 in its bank account. It owes $13,000 on the finance deal relating to one of the motor vehicles of the three said to be owned by the construction company.
Another trust controlled by the husband is said to have $50,800 in its bank account, whilst yet another company owned by one of the trusts controlled by the husband is said to have just under $8,500 in its bank account.
There are even more trusts and companies to which the husband attributes no assets or liabilities.
The husband says he has $102,000 and the wife has approximately $16,000 in superannuation in industry superannuation funds.
The husband deposed to credit card liabilities in his name of around $12,500 and $71,000.

Unassessed and unpaid tax liabilities

The husband has set out in his affidavit filed 20 September 2019 a table that lists details of 10 companies and trusts that he says he has “an interest” in. I do not understand there is dispute that he owns and/or controls most of them. He has also included himself personally in this table. In the table, the husband tells this Court that for four of these companies (including the company that is the P Street developer and the company that is his construction company) annual tax returns for the five financial years ending 30 June 2015, 2016, 2017, 2018 and 2019 have not yet been lodged. Though the returns for the 2015 financial year have, he says, been finalised, all of the others have not.
That table reveals that one other company has not lodged returns for the 2016, 2017, 2018 and 2019 financial years in its own right and has not lodged returns in its role as trustee of another trust for the 2018 and 2019 financial years and in its role as trustee of yet another trust for the 2016, 2017, 2018 and 2019 financial years. It also reveals that the husband has not lodged his own personal income tax returns for the 2017, 2018 and 2019 financial years.
It is not necessary for me to set out the reasons given by the husband as to the very long delays in the preparation and filing of these annual tax returns. One thing the parties agree upon in respect of this issue is that the valuation of the husband’s interests in all of these entities cannot be meaningfully completed in so far as is necessary to assist the parties or the Court, if ultimately required, to resolve their financial dispute until the financial statements and outstanding annual tax returns for each of the entities are completed and lodged with the Australian Taxation Office (“ATO”).

Though this matter was commenced in this Court in the middle of last year, it is barely any closer to being ready to be listed for a trial than it was then because of this fact that there are several years of outstanding financial statements and tax returns that are holding up the process. There is evidence that supports a finding that the wife, through her solicitors, has been pressing, repeatedly, for this issue to be addressed since she commenced the proceedings over 15 months ago. It also appears that steps have been taken by the husband to cause the issue to be addressed that are now, at least, coming to fruition.
Though not yet lodged at the date of the hearing, the annual returns for the 2015 year that remained unprepared have now been prepared and are ready to be lodged. None of those were adduced into evidence. The husband deposed to receiving advice from the accountant who has prepared them to the effect that the entities will be liable to the ATO to the estimated sum of $444,348 for the 2015 financial year alone in unpaid tax, and also approximately $160,000 in interest on the unpaid tax. He supports that evidence by adducing a copy of a letter from the accountant that says that, though it gives no particularised breakdown of the amount estimated to be owed on an entity by entity basis.
The husband goes on to depose to understanding “from discussions with” the accountant that the net estimated tax liability that will be incurred upon the lodgement of all outstanding tax returns for all of the years for which they are to be done is “approximately $1.2 to $1.6 million” plus interest on those amounts of unpaid tax.
The husband, through the accountant, has obtained extensions of the dates by which the outstanding returns are to be lodged. He says in his affidavit that the 2015 to 2018 returns are due to be lodged by 3 February 2020 and that the 2019 return is due to be lodged by 15 May 2020.
Clearly, if they are not lodged before those dates, a valuation of the husband’s interests in all of the entities as at the 30 June 2019 will not be able to be undertaken by a single expert before 15 May 2020. Furthermore, the actual liabilities that will be owed to the ATO will not be known until the returns for all the entities are lodged and the ATO’s assessments issue.

The husband’s proposed course

Initially, on filing his application for interim orders, the husband sought the discharge of the line of credit and an equal distribution of the balance sale proceeds of the property that is registered in the wife’s sole name, by way of partial property settlement. However, he now asks for the balance sale proceeds to be used to meet the “anticipated tax liabilities” of all the entities.
The husband says he does not want to sell the T Street properties now in their undeveloped state to pay tax liabilities. He says that would deny him the opportunity to press on with the development and make a greater profit. It would, he says, cause him to lose the money that he has invested into the development already, though it is not clear to me whether that is more than the secured and unsecured debt that he says relates to the property or included in that total.
It is to be noted again at this point that the unsold units in the P Street development are worth $3,892,500 and that $298,456 is owing on the overdraft account that is secured by some of those units. That equates to equity of just under $3,600,000. The husband says that the overdraft account has a limit of $999,999. He asserts that he does not want to use the additional $700,000 funds available in that overdraft facility to pay the total estimated liability of $604,348 of tax and interest in respect of the 2015 financial year as he requires those funds to complete the T Street development. He also gives evidence that there are other legal actions in which he and his legal entities are involved that expose him and his entities to significant further costs and potentially a very large fine.
The husband also asserts that as the wife was always wanting to sell the property that is registered in her name, there should now be no restraint on it being sold. He argues that the wife should, by now, have been able to obtain employment from which she supports herself financially rather than continuing to rely on capital in a way that also incurs further interest charges that further reduces the equity in that particular property. He does not offer any further form of financial support for the wife, asserting that he has no capacity to do so.
The husband also argued for orders restraining the wife from accessing the funds in the line of credit facility pending the sale of the property, except to meet her reasonable legal fees, without his consent or, as an alternative, orders limiting her access to that facility to the amount of $1,500 per week.
In short, the husband has interests that currently have a net value of around $5,000,000. He supports himself and pays for his own legal costs and outlays in these proceedings using some of that equity as well as a currently unknown income from building and concrete polishing. Without any certainty or particularity, he asserts that his entities may be assessed in excess of $2,000,000 in several years of unassessed and unpaid tax and interest thereon. He says when those liabilities are determined they should be paid for by the equity in the one piece of real property that is owned by the wife in which she currently has about $1,526,000 in equity. If that were to happen before the finalisation of this dispute, the wife would be left with no capital or savings from which she could pay her legal costs and outlays or support herself.

The wife’s position

For the wife, Queen’s Counsel submitted that it was simply premature to make the orders sought by the husband where:
(a)The husband currently asserts the wife is entitled to 40% of the value of the parties’ interests in property which on current equity of at least $6,526,000 (not including any amount for tax liabilities yet to be determined) is greater than the equity in the property registered in her sole name;
(b)The wife no longer wants that property sold on an interim basis and reserves her position in respect to the final determination of property adjustment as between them;
(c)The husband controls the entities to which the anticipated tax liabilities relate, to the complete exclusion of the wife;
(d)The financial statements and annual tax returns for the most important entities have not yet even been prepared for the 2016 to 2019 financial years and, as such, the financial position of those entities remains uncertain;
(e)The amount “estimated” to be the tax liability for “the group” for the 2015 financial year has not yet been determined by the ATO and the husband has not even proffered evidence particularising which entities in “the group” might be assessed as owing that amount or the quantum of each of the entities anticipated liability or as to when and on what terms the liabilities would be payable.

My determination on the point

I accept the submissions of Queen’s Counsel for the wife that the application for orders that require the property to be sold and the net sale proceeds be “earmarked” for the payment of tax liabilities that are yet to be assessed is premature.
Counsel for the husband referred the Court to the judgment of Murphy J in Broxham & Broxham and Ors [2012] FamCA 775 (“Broxham”) at [24]-[31] in which the relevant principles were “conveniently summarised” by his Honour. His Honour referred to relevant High Court authority dealing with applications for interim injunctive relief seeking to preserve property pending final determination of the proceedings. He then referred to decisions of the Full Court of this Court considering these principles in the context of matrimonial litigation. Particularly, his Honour referred to In the Marriage of Waugh (2000) FLC 93-052 and the subsequent case of Mullen v De Bry (2006) FLC 93-293 (“Mullen”). I respectfully adopt all that his Honour said in those paragraphs counsel for the husband referred to, observing that though these are proceedings between parties to a former de facto relationship, the principles being applied are the same.
Notably, the essential power being exercised is that conferred by s 114(3) of the Family Law Act 1975 (Cth) which provides that the Court may grant an injunction in any case in which it is “just or convenient to do so”. As Murphy J noted, this is to be determined by an “overall assessment of a number of factors to determine the just or convenient result” (Mullen at 80,999 [47]) with “the grant of relief being dependent upon the circumstances of the particular case and the requirements of justice” (Broxham at [31]).
It would be a severe restriction on the wife’s right to determine how to deal with her asset – the real property registered in her sole name – to order that she must now sell it, to restrain her from using any of the substantial equity she has in it pending its sale, and to direct that all of the proceeds of its sale are to be utilised or preserved to be later utilised to meet anticipated liabilities of the entities that the husband owns and controls or has interests in.
As the evidence stands, I am not persuaded by the submissions made by counsel for the husband that the husband has made out a good case for the exercise of the power he seeks to invoke. The wife only has access to a line of credit facility that is limited to an amount substantially less than the current value of the property that secures that line of credit. On the evidence, the total of the amount of equity in that property that she would have accessed even if she was to access it all before the matter gets to trial, would be the equivalent of 20% of the current total of the parties’ property interests of at least $6,526,000 (not including their superannuation interests). If the estimate of future liabilities for unpaid tax and interest thereon of around $2,000,000 is correct, that goes up to around 29%. The husband’s case is that the wife should get 40% of their net property interests.
If the wife was to use all of the line of credit facility available to her and the tax liabilities ultimately reduce the net property interests of the parties by $2,000,000, with other as yet undetermined liabilities such as a potential fine of $1,500,000 in pending legal proceedings further reducing the net value of their property interests, only then would her use of the $1,350,000 in the line of credit, if determined ultimately all to have been property already received by her, exceed the 40% the husband says she should receive. The wife is still $775,000 short of using all of that amount and she has used less than that amount in the last 15 months.
If the husband is concerned about the amount the wife is drawing from the line of credit as he says he is then, as I pointed out at the hearing, he could be expected to be doing everything he possibly can to ready the matter for a final trial as quickly as possible. One might expect that would include instructing his accountant to have the financial statements and returns for all of his entities for all of the years for which they are still outstanding finalised and lodged as soon as possible rather than using all of the time the ATO has given the entities. Then one might expect him to cause the single expert valuer to have his interests in the entities valued as quickly as possible. All of those matters lie exclusively in his realm and totally outside of the control of the wife.
In addition, the tax liabilities of the entities are not yet actually determined. One of the relevant entities, which is likely to be liable for some of the tax yet to be assessed, has assets in the form of nearly $4,000,000 worth of units in a building that are currently on the market. Though the husband expressed some pessimism as to the immediate sale prospects of those units, he did say that he is motivated to sell them and they are currently being marketed. One or more of them may sell in the meantime, particularly if the husband as controller of the vendor meets the market. Such sales would allow the proceeds to be used to pay the tax as it is assessed. Further, once the financial statements of the entities are brought up to date, the company that owns all those unsold units might be able to secure some further finance that could be used to pay tax as it is assessed, even if it cannot sell any of the units.
I will not order the immediate sale of the wife’s property and I will not, at this point in time, restrain her from drawing further against the line of credit facility. I will not, at this point in time, limit her drawings against that facility, though I will require her to continue to disclose to the husband on a monthly basis her drawings against the facility and the purposes for which she is drawing and spending the money.
As became clear at the hearing, each of the parties is acutely aware of the focus that will be brought to bear on the wife’s expenditure of funds from that facility when this matter ultimately goes to trial. The reasonableness of her expenditure, the reasonableness or otherwise of her efforts to obtain employment or to generate income rather than simply relying on the expensive use of this capital since before the middle of last year will be serious matters for consideration at a trial, if the matter is not resolved beforehand. In the meantime, the wife continues to draw on the line of credit facility conscious of the fact that she may indeed be already spending her property settlement entitlement.

Orders in respect of the preparation and lodgement of income tax returns

The wife came to the Court on an application in which she was seeking orders that included obligation on the husband to cause the outstanding income tax returns to be prepared for lodging within a week. Queen’s Counsel sensibly acknowledged, in the face of the husband’s evidence about the timetable that has been negotiated by his accountant with the ATO, that was impracticable. Ultimately, the submission for the wife in this respect was that orders should be made requiring the husband to take all reasonable steps to complete such returns within the timetable allowed for by the ATO.
I did not understand that position to be opposed by the husband. Accordingly, I consider it appropriate to make such an order in the circumstances of this case.

Disclosure issues

Order 2 of the Orders made by Registrar Coutts on 29 August 2018 provided:
On the first of each month the Respondent provide to the solicitors for the Applicant a copy of the bank statements for all accounts, including loan accounts, for the companies and the trusts together with a copy of the end of month reports and financial statements, and Business Activity Statement for each entity where such statement is to be prepared in the immediately preceding month.
Order 2 of those Orders also provided for extensive disclosure by both parties.
For the wife it is asserted that the husband’s compliance with his disclosure obligations has not always been reliable or consistent. A very extensive schedule prepared on behalf of the wife and adduced into evidence was referred to as evidence supporting that assertion.
The husband, in his affidavit, takes issue with the assertions about his disclosure, specifically the assertion that his compliance has been “inconsistent”.
The wife came to Court seeking an order that she be given “read only” access to the accounting database programs that she thought were stored by the husband in the “Cloud”. The husband denied that the programs were accessible through the “Cloud” and opposed the wife being given physical or online access to his or his accountant’s computer network to access these programs. He went on to assert that he is “happy to provide [the wife] with electronic copies of the MYOB backup files for each of [his] legal entities” (save for two that he particularly refers to as entities in which he has interests with third parties).
The husband said he agreed to provide the wife with electronic copies of the MYOB backup files for each of his legal entities (with the two exceptions) for the financial year ended 30 June 2015 in a “read only” format. He also said that he agreed to provide “the same with respect to each subsequent financial year as the data becomes available and all issues in the data have been resolved (which [he] anticipate[s] will coincide with the finalisation of the outstanding tax returns and financial accounts)”.
The husband’s approach is based on assertions that there are substantial errors in the accounting data maintained over the years for the entities for which the wife was responsible when she was the bookkeeper. His counsel submitted that the husband “agrees to provide the Wife with access to the databases upon his accountant verifying in writing that those errors have been resolved”. He further submitted that this course “will minimise unnecessary conflict between the parties given the dispute that already exists between them” about the extent to which the wife was responsible for the errors in the accounting data. He also submitted that, in the meantime, by reference to Order 2 of the Orders of 29 August 2018, the husband is already obliged to produce monthly management accounts and other documents to the wife.
For the wife, Queen’s Counsel submitted that the husband “recognises that he can provide electronic data to the wife” but that there is no reason why such disclosure should not be ordered monthly within seven days of the end of each month in respect of the year to date to the end of the last month.
That last submission appears to address the question of ongoing disclosure but not the issue of whether the wife should have to wait until, according to the husband, the errors in the databases that already exist “have been resolved”.
Having regard to the obligation for full and frank disclosure (the full extent of which I discussed and set out in my judgment in this matter delivered on 12 November 2018 at [10]-[16]) and the nature of the dispute between the parties in this case, I am satisfied that further disclosure orders should be made requiring the husband to disclose to the wife in electronic “read only” form all of the database records that he has from the relevant entities, whether they have been corrected or errors “have been resolved” or not. I refer particularly again to r 13.01(1) of the Family Law Rules which requires full and frank disclosure of all information relevant to the case, in a timely manner.
Just because the husband asserts that the particular records the wife seeks to have disclosed contain errors that she is responsible for that are being corrected by his accountant, a process that will take time, that is not, in my determination, a reason justifying non-disclosure of those records now in whatever form they currently take. If they are subsequently amended or corrected, of course, those amended or corrected records will become new documents that the husband will be required to disclose.
I will also make an order requiring the husband to provide the monthly reports on an ongoing basis in electronic “read only” form within seven days of the end of each month in respect of the year to date to the end of the last month as sought by the wife. I do not consider that unreasonable in circumstances where the husband asserts he has been complying with the previous order to date.
I am also satisfied that this matter requires judge management to ensure that it moves towards trial in a timely manner. I will vacate the current directions hearing set before a Registrar on 17 December 2019 and take the matter into my docket. I will list the matter for further mention and for any necessary directions before me in December instead.
I make the orders set out at the commencement of these reasons.

I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 18 October 2019.

Associate:

Date: 18 October 2019