HAMLYN & MANSFIELD - [2019] FamCA 842

FAMILY COURT OF AUSTRALIA

HAMLYN & MANSFIELD

[2019] FamCA 842

FAMILY LAW – PROPERTY – Interim distribution – Where the proceeds of sale of the former matrimonial home are held in a controlled monies account (“the account”) – Where the husband seeks to obtain funds from the account to discharge various debts – Where the wife seeks that the husband’s application be dismissed – Where the former matrimonial home was in the sole name of the husband – Where the financial contributions of the husband were greater than those of the wife – Where the husband has no other funds available to meet his debts and living expenses – Orders made – Husband to receive a payment from the account.

FAMILY LAW – INJUNCTION – Where the wife seeks to be reinstated as a director of a company of which the husband is the sole director and shareholder – Where the wife’s removal was due to the parties’ inability to co-operate and due to the husband’s contention that a third party with whom the wife was in communication may be hostile to the parties’ interests – Where the latter point was largely conceded by the wife – Where there is no evidence that the husband had acted against the parties’ interests in his role as sole director – Application dismissed.

Family Law Act 1975 (Cth) ss 79, 80, 114

Harris & Harris (1993) 16 Fam LR 579
In the Marriage of Waugh (2000) FLC 93-052
Mullen & De Bry (2006) FLC 93-293
Paris King Investments Pty Ltd v Rayhill [2006] NSWSC 578
Stanford v Stanford (2012) 247 CLR 108
Strahan & Strahan (2009) 42 Fam LR 203

APPLICANT:

Ms Hamlyn

RESPONDENT:

Mr Mansfield

FILE NUMBER:

SYC

8581

2017

DATE DELIVERED:

15 November 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Loughnan J

HEARING DATE:

11 November 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Coleman SC

SOLICITOR FOR THE APPLICANT:

Lander & Rogers

COUNSEL FOR THE RESPONDENT:

Mr Campton SC

SOLICITOR FOR THE RESPONDENT:

Mills Oakley

Orders

By way of partial property settlement, the parties shall forthwith do all acts and things necessary to cause $400,000 to be paid to the husband from the proceeds of sale of the Suburb A property currently held in the Controlled Monies Account by B Company.
The application of the wife for orders in terms of a Minute of Order lodged on 8 November 2019 is dismissed.

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 Mansfield & Hamlyn 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 rYw 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 SYDNEY

FILE NUMBER: SYC8581 of 2017

Ms Hamlyn

Applicant

And

Mr Mansfield

Respondent

REASONS FOR JUDGMENT

Introduction

There are substantive proceedings before the Court between Mr Mansfield (“the husband”) and Ms Hamlyn (“the wife”) in respect of property settlement and parenting issues. In the financial proceedings a number of interlocutory issues have been raised by the parties, including the husband’s application for interim property settlement and the wife’s application in respect of the governance of the corporate trustee of a family trust. What follows are the reasons for the orders set out above.

Applications

Pursuant to paragraph 3 of his Response to an Application in a Case filed 26 September 2019 the husband seeks:
…
3.That by way of partial property settlement, the parties do all acts and things necessary to cause $500,000 to be paid to the Husband from the proceeds of sale of the Suburb A property currently held in the Controlled Monies Account by B Company.
By a Minute of Order lodged on 8 November 2019 the wife seeks:
1.That the Husband forthwith do all acts and things and sign all documents necessary, in his capacity as sole Director and shareholder of C Pty Limited, to reinstate the Wife as a Director of C Pty Limited.
2.That following his compliance with Order 1 above, the Husband shall be and hereby is restrained, pending further Order, from removing, or causing to be removed, the Wife is a Director of C Pty Limited.
Orders in the alternative to 1 and 2
3.That the Undertaking entered into by the Wife pursuant to Order 3 of the Orders made by the Court on 30 September 2019 shall be and hereby is discharged.
4.That Order 4 of the Orders made by the Court on 30 September 2019 shall be and hereby is discharged.
Further orders sought by the Wife
5.That the husband’s application for a distribution of $500,000 from the controlled monies account shall be and hereby is dismissed.
6.That the Husband pay the Wife’s costs of, and incidental to, this application.
The husband opposes the orders sought by the wife.

Evidence

The husband relied on:
Affidavit of the husband filed 26 September 2019; and
Financial Statement filed 26 September 2019.
The wife relied on:
Affidavit of the wife filed 20 August 2019; and
Further Affidavit of the wife filed 1 November 2019.

Short history

The husband is 52 years of age and the wife is 49 years of age. They commenced living together in late 2006 and were married in 2007. They separated on 25 August 2016 when the husband moved out of the former matrimonial home at D Street, Suburb A.
The parties’ divorce became final in 2018.
The parties have two children:
X born in 2008 – 11 years of age; and
Y born in 2014 - five years of age.
In accordance with Orders made by the Senior Registrar on 15 May 2019, the children live with the husband for five nights a fortnight and some of the school holidays and otherwise they live with the wife.
Neither of the parties is in paid employment. The husband is the founder and former CEO of E Company. which is a company based in the United States of America. The husband resigned as CEO in 2017 and remains an unpaid director of that company. The wife left the workforce in 2006 to travel to the United States to support the husband with E Company. Since 2008 the wife has been the primary carer of the children.

Background facts

These proceedings were commenced by the husband on 22 December 2017.
The parties separated on 25 August 2016. The parties sold the former matrimonial home for $4 million and $1.7 million was paid to discharge at least some of the parties’ debts.
C Pty Limited is the corporate trustee of the C Pty Limited Trust. The wife became a director of C Pty Limited in 2010.
The husband resigned from his position of CEO of E Company. on 13 November 2017. He continues as a director of E Company.
The wife has become aware that the husband on behalf of C Pty Limited has been negotiating a potential sale of E Company. for $16,000,400. The wife is also concerned that the husband may have taken steps to reduce the shareholding in E Company. held by C Pty Limited.
It is the wife’s evidence that in May 2017 the husband peremptorily and without notice drained the joint bank account leaving the wife with less than $50 and at the same time ceased making payments which had been made at the rate of $3,000 a month. The balance of the net proceeds of sale of the former matrimonial home are held by the wife’s former solicitors in a controlled monies account.
The wife lived on the remainder of her personal savings and she borrowed funds from her brother.
In July 2017 the husband commenced paying child support at the rate of approximately $2,180 a month and recommenced paying school fees for X (at F School) together with a portion of the fees for Y to attend at daycare.
In November 2017 the husband voluntarily resigned from his position as CEO at E Company. Thereupon the child support payments reduced. In about May 2018 the husband ceased making any child support payments to the wife. The current assessment for child support is $118 per month.
The husband’s mother died in 2017 and it is the wife’s understanding that the husband was to receive $110,000 from her estate.
It is the husband’s case that he is engaged in negotiations in respect of E Company. on behalf of C Pty Limited and that he is working to maximise the parties’ return from E Company. It is the husband’s contention that the wife has been misled by a hostile third party seeking to cause mischief at the cost of the parties’ interests.
On 30 September 2019 the following orders were made:
1.The proceedings in relation to interim property settlement are adjourned 10.00 am on 11 November 2019.
2.By consent, orders and notations are made in accordance with the document titled “Consent Orders” (Exhibit 1 dated 30 September 2019), as set out hereunder:
The Court Notes:
1.The following definitions for the purposes of the following Consent Orders:
1.1“The Act” means the Family Law Act 1975 (Cth);
1.2“The Husband” means Mr Mansfield;
1.3“The Wife” means Ms Hamlyn;
1.4“E Company.” means E Company., a company incorporated in the S State in the United States of America. The Husband is a co-Director of E Company.
1.5“The Trust”‘ means the C Pty Limited Trust. The Husband is the Appointor of the Trust.
1.6“C Pty Limited” means C Pty Limited, the corporate trustee of the Trust. The Husband and Wife are the directors of C Pty Limited.
ORDERS BY CONSENT AND PENDING FURTHER ORDER:
1.That the Husband shall cause to be provided to the Wife, within seven (7) days of receipt by him of the same, copies of the following documents:
1.1E Company. board minutes for E Company. board meetings held after April 2019;

1.2Any proposed resolution/s of E Company. to:
1.2.1Issue shares in E Company.;
1.2.2Redeem or acquire shares in E Company.;
1.2.3Sell shares in E Company.;

1.3Any loan account statement/s of C Pty Limited and/ or the Husband, personally in E Company.

2.That the Husband undertakes not to transfer, sell, dispose of or encumber the E Company shares without first giving the Wife not less than twenty eight (28) days written notice of:
2.1His intention to do so; and
2.2The intended directors’ meeting of C Pty Limited at which any such transaction is proposed.

3.That the Wife undertakes not to orally communicate with G Pty Ltd and/or his or its advisers in respect of the operations of E Company. or with respect to a potential sale of E Company. and/ or for any other reason.
4.That in the event any letter, email or facsimile is received from G Pty Ltd and/or his or its advisers by the Wife with respect to a potential sale of E Company. and/ or C Pty Limited’s interest in E Company.:
4.1The Wife shall provide such correspondence to the Husband within forty-eight (48) hours of receipt; and
4.2Any response by the Wife to G Pty Ltd and/or his advisers, shall be provided to the Husband or his advisers within forty-eight (48) hours of release.

5.That pursuant to Rule 15.64B of the Family Law Rules 2004 the parties be at liberty to attend a conference with the single expert Mr Q to clarify his expert report and, following that conference, that Mr Q be jointly directed by the parties to provide any further clarification of his opinion and the Husband shall meet the costs of the expert attending the said conference.

3.Any further material on which the wife seeks to rely be filed and served within 28 days from today’s date.

On or about 14 October 2019 the husband caused the wife to be removed as a director of C Pty Limited. There is no suggestion that the removal was unlawful but the complaint on behalf of the wife is that it was unheralded and arguably inconsistent with the wording of the orders of 30 September 2019[1].
[1] Such as the reference in paragraph 2 2.2 of the orders to “The intended directors’ meeting of C Pty Limited.”

The Relevant Legal Principles

Although the written submissions prepared by learned senior counsel for the parties were made on different bases, I do not believe that there is any room for controversy about the relevant legal principles. Rather than s 114 of the Family Law Act 1975 (Cth) (“the Act”) as is referred to on behalf of the husband, the application is made and will be addressed by reference to s 79. The principles are to be found in the decision of the Full Court in Harris & Harris (1993) 16 Fam LR 579 as later addressed in the decision in Strahan & Strahan (2009) 42 Fam LR 203.
The principles include the following:
·there is power to make an interim or partial order for settlement of property by virtue of ss 79 and 80(1)(h) of the Act;[2]
[2] There may be other sources of power for an order for interim costs, such as ss 72 and 74 or 117 – see Brereton J in Paris King Investments Pty Ltd v Rayhill[2006] NSWSC 578.
·the process involves two stages:
ofirst, there must be circumstances warranting an interim order. The test is whether it would be “appropriate” to make an interim order, with the overarching consideration being the interests of justice. The applicant is not required to demonstrate compelling circumstances for the making of an order; and
osecond, the relevant matters in s 79 are to be considered. It is now understood that before applying, what has been described as the four step process for addressing claims under s 79, there is a preliminary issue as to whether it would be just and equitable to make any order[3].
·there is only one exercise of power under s 79 of the Act and it is preferable that there be one final hearing of s 79 proceedings.
·it needs to be kept in mind that the final outcome of property settlement should not be compromised by an interim property order. Either the remaining property needs to be adequate to meet the legitimate expectations of both parties at the final hearing or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so. In my respectful opinion, this requirement cannot be expressed in mandatory terms. By definition, interim orders are likely to be considered at a time prior to the final hearing. In most cases it would be impossible to exclude all risk that the remaining property will not prove to be adequate to meet the legitimate expectations of both parties or that the order will not be capable of being reversed or adjusted. For example the financial institution holding the parties’ wealth could fail; the value of shares could be wiped out in a stock market crash; improvements on real estate could be lost in a natural disaster; or assets could be lost in subsequent but unheralded litigation by a third party.
·a detailed inquiry is not required, but there must be some assessment of s 79 factors;
·“However consideration of such matters may be brief and if it is established that ‘it seems likely to the Court that ... the applicant ... will be likely receive by way of property settlement a sum sufficient to cover the advance, that would seem to be sufficient to enable the order sought to be made.” [4] That is not to say that such a finding alone will justify an order.
·the applicant should have “at least an arguable case for substantive relief which deserves to be heard.” Further, in determining at the procedural stage whether to exercise the jurisdiction there may need to be evidence of the applicant’s “likely costs of the litigation” if the circumstance propounded for seeking an order, include the need for funds to defray litigation costs and expenses.
·in relation to an application for the purposes of meeting legal costs, it is not an essential precondition that the applicant’s legal representatives will not continue to act unless the costs are paid or secured on an ongoing basis.
[3] See Stanford v Stanford (2012) 247 CLR 108.
[4] See Strahan & Strahan (2009) 42 Fam LR 203at 137 where reference is made to Zschokke and Zschokke (1996) FLC 92-693; Poletti and Poletti (Unreported, Family Court of Australia, Nygh J, 2 March 1990; and Wenz v Archer (2008) 40 Fam LR 212.
In respect of injunctions, s 114 of the Act provides:
(1) In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:
(a) an injunction for the personal protection of a party to the marriage;
(b) an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;
(c) an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;
(d) an injunction for the protection of the marital relationship;
(e) an injunction in relation to the property of a party to the marriage; or
(f) an injunction relating to the use or occupancy of the matrimonial home.
(2A) In a de facto financial cause (other than proceedings referred to in, or relating to, paragraph (e) or (f) of the definition of de facto financial cause in subsection 4(1)) the court may:
(a) make such order or grant such injunction as it considers proper with respect to the use or occupancy of a specified residence of the parties to the de facto relationship or either of them; and
(b) if it makes an order or grants an injunction under paragraph (a)--make such order or grant such injunction as it considers proper with respect to restraining a party to the de facto relationship from entering or remaining in:
(i) that residence; or

(ii) a specified area in which that residence is situated; and

(c) make such order or grant such injunction as it considers proper with respect to the property of the parties to the de facto relationship or either of them.

Sections 90SB and 90SK apply in relation to an order or injunction under this subsection in a corresponding way to the way in which those sections apply in relation to an order under section 90SM.
Note 1: This subsection does not apply to proceedings referred to in paragraph (g) of the definition of de facto financial cause that relate to proceedings referred to in paragraph (e) or (f) of that definition.

Note 2: The same requirements in sections 90SB (length of relationship etc.) and 90SK (geographical requirements) for section 90SM orders must be satisfied for orders and injunctions under this subsection.
(3) A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.
(4) If a party to a marriage is a bankrupt, a court may, on the application of the other party to the marriage, by interlocutory order, grant an injunction under subsection (3) restraining the bankruptcy trustee from declaring and distributing dividends amongst the bankrupt's creditors.
(5) Subsection (4) does not limit subsection (3).
(6) If a party to a marriage is a debtor subject to a personal insolvency agreement, a court may, on the application of the other party to the marriage, by interlocutory order, grant an injunction under subsection (3) restraining the trustee of the agreement from disposing of (whether by sale, gift or otherwise) property subject to the agreement.

(7) Subsection (6) does not limit subsection (3).

Interim Property Settlement

As to the first step, the husband seeks an interim distribution of property because he has outstanding debts to his lawyers and to his brother. The wife disputes the need for the husband to pay his brother. In addition, the husband says that he needs money to live on and to meet future legal expenses.
It is the husband’s evidence that as the wife has secured litigation funding, the funder will not extend such a facility to him, as a matter of policy. There was no challenge to those propositions.
In my view the reasons identified by the husband are legitimate categories to justify an interim order. There are questions about the debt to the husband’s brother and about the husband’s legal fees but I will address them below. There is no suggestion that there are other sources of funds available to the husband to meet his debts and expenses. Subject to the quantum of the order, in my view, the circumstances warrant an order for interim property settlement.
The balance sheet settled by the parties on 16 April 2019[5] puts the net assets of the parties at $4,628,014 on the husband’s estimate and $4,907,621 on the wife’s estimate. In each case those estimates include amounts sought to be added back, being $400,000 on the husband’s case and $300,000 on the wife’s case. Therefore, most if not all of those amounts no longer exist.
[5] Exhibit H-05 to the husband’s affidavit.
The wife asserts that the two most significant assets of the marriage are:
(a)the balance of proceeds of sale of the former matrimonial home in the amount of $1,833,805 presently held in a controlled monies account by her former solicitors; and
(b)the husband’s interest in E Company. which has been valued by the single expert on 18 February 2019 at $1,527,846 and which the husband contends has a value of $1,317,679. The parties have agreed to meet with the expert valuer to address that controversy.
There is a dispute between the parties as to the nature of the wife’s interest in her parents’ home at H Street, Suburb J. The property is held in the names of the wife’s parents, the wife and her brother, Mr K. The wife’s father died on in 2011. The wife’s mother continues to reside in the property. It is contended by the wife that she and her brother went on the title of the property at the time of its purchase for the purpose only of securing finance for that purchase. The parties’ balance sheet puts the value of the wife’s one third interest at $1,033,333, subject to a mortgage, the wife’s component[6] of which is estimated at just over $200,000. However, the notes to the balance sheet record the wife’s contention that her mother has an equitable interest as to the whole value of the property.
[6] It is likely that each of the owners owes all of the debt but for this purpose, I will divide the debt between them.
As to the parties’ contributions, those by the husband would seem to be greater than those by the wife.
It is the wife’s evidence that at the commencement of cohabitation (late 2006) she had $50,000 in savings and $15,000 in superannuation.
The husband contends that he brought $2.7 million into the marriage made up of a property at L Street, Suburb M, an interest in C Pty Limited Trust, a Motor Vehicle 1 and cash savings from the sale of shares. The wife is concerned that the husband may have also had a tax bill of the order of $1 million. The husband rejects the wife’s assertion and importantly, I was taken to no evidence to suggest that there was such a debt.
The husband’s initial contributions outweighed those of the wife by more than $2.5 million.
It is the wife’s case that when the parties met they were each receiving an income involving a base salary of $200,000 plus bonuses. It is the wife’s evidence that three months into the marriage the husband asked her to resign from her employment and moved back to the United States to support him in the newly established E Company. Thereafter the wife acted as the primary carer for the children.
It is the wife’s contention that in 2015 she received the payment of $120,000 by way of compensation from a medical negligence claim and an inheritance in the sum of $10,000.
This was a marriage spanning nearly 10 years with contributions continuing, particularly to the children, to the current time. The likely finding would be that the husband’s contributions were significantly greater than those of the wife. That tendency would be exacerbated if the wife is correct about her interest in the Suburb J property.
As to adjustments, there may be none. Neither of the parties is in paid employment. Of course, of the parties, the husband has had paid employment more recently than the wife and his entrepreneurial skills may soon be again deployed to valuable effect. Albeit uneven, the parties have a shared care arrangement for the children. Again, if the wife is correct about the Suburb J property, a financial resource having a net value of the order of $800,000, would weigh against an adjustment in her favour.
The next question is whether there should any exercise of power under s 79. The legal interests have the main assets, save for the Suburb J property in the hands of the husband. The Suburb A property was in his sole name and subject to action under s 79, the net proceeds, although held by the wife’s former solicitor, are his. Similarly, the husband is the only shareholder of C Pty Limited and save for action pursuant to the trust, he holds the E Company. interest. Even if the wife is beneficially entitled to half of the assets of C Pty Limited, in my view s 79 orders are warranted to change the interests in those assets.
The husband seeks to retain $500,000 from the account holding the net proceeds of sale of his property at Suburb A. On the most conservative application of s 79, he will achieve such an outcome and a payment in that amount would not jeopardise the wife’s legitimate property settlement expectations on a final basis.
There remains a question about the appropriate quantum of a payment. The husband says[7] that he seeks $500,000 to:
(a)Repay funds I’ve loaned [sic] from my brother. I am indebted to my brother in the amount of $199,341. My brother has requested that I access my share of the proceeds of sale of the Suburb A property to repay him those funds.
(b)To pay my legal fees.
(c)Some further funds to pay for my daily needs and living expenses.
[7] At paragraph 65 of his affidavit filed 26 September 2019.
As to the debt asserted to the husband’s brother, it is the husband’s evidence[8] that he borrowed a total of $199,341 from his brother, Mr N. The husband says that his brother:
… has agreed to loan me money on a basis that I will repay to him, without interest, all monies that he advances to me for my living expenses including the payment of X’s private school fees, upon me being able to access my money from the sale of the Suburb A property. There is no written loan agreement between my brother and I.
[8] Paragraph 66 of the husband’s affidavit.
The wife disputes the debt. I was taken to no evidence from the husband’s brother. Once paid out there is no meaningful opportunity for the wife to test the need to apply matrimonial funds to the asserted liability. As to the terms of the loan asserted by the husband, there is no indication as to why the debt was not paid, for example, when the proceeds of the 2018 sale of the Suburb A property were first available. On the other hand, there is no evidence of the husband having any source of income following his resignation as CEO of E Company.
Of course life does not stop just because the parties are engaged in property settlement proceedings. There is no obvious reason why the husband should not use funds that are unambiguously his, to meet his outgoings. In my view it would meet the justice of the case if the husband is able to discharge the asserted debt to his brother. If it transpires that there was no such debt, nothing changes. He will have received the value of the debt by way of interim property settlement order.
As to his obligation for legal fees, the husband owes $136,819.08 in fees and disbursements to his current solicitor for work done. [9] As to the entitlement of his lawyers to charge, there are in evidence the fees agreements[10] signed by the father with his solicitors and his counsel. This is a proper basis for interim property settlement orders. The husband has incurred a debt, the lawyers are entitled to be paid on invoice. Invoices have issued as to $107,405.02 and there is $29,414.06 that has yet to be invoiced.
[9] Exhibit 1 – Husband’s costs notice dated 11 November 2019 which discloses unpaid costs of $107,405.02 together with $18,029.06 in unbilled work in progress and $11,385 in unbilled disbursements. In addition, the husband has already paid $45,333.15.
[10] Exhibits H-06 and H-07 to the husband’s affidavit
I gather that part of the husband’s claim for interim property orders relates to his future costs. The husband has been advised[11] of estimated fees and disbursements of $156,300. The difficulty with this aspect of the claim is that it is unlikely that the fees (or at least, all of the fees) will be needed. For the 2018-2019 year, final trials commenced in only 25 percent of cases[12]. It is likely that the proceedings will be resolved by agreement before that stage is reached. The costs notice does not permit me to identify further fees that will arise in the immediate future. The husband has no present obligation for the fees associated with a final trial and it is likely that he will never have that obligation. The future legal fees identified in the husband’s case may never be incurred.
[11] See husband’s costs notice (above).
[12] Family Court of Australia Annual Report for 2018-2019 page 18.
Finally, the husband seeks an unquantified allowance for his daily needs and living expenses. In his Financial Statement the husband deposes to a weekly expenditure of $2,462. I will make provision for about six months of the husband’s living expenses. That would seem to strike a balance between him having meaningful respite from the need to address his weekly needs and the unnecessary provision for those needs by way of interim property settlement orders.
The husband owes his brother $199,341. His current legal costs are $136,819.08. Six months of living expenses at the rate currently disclosed by the husband would be $64,012. I will round down the combined amount to $400,000. It is not possible to account for all eventualities but a payment to the husband of $400,000 is comfortably within the husband’s entitlement to property settlement and therefore an order in that amount would be a very conservative exercise of power under s 79. In that event, the need to adjust or claw back the moneys should never arise.
Finally, it was submitted on behalf of the wife and at the heel of the hunt, that if I made a provision by way of interim property settlement for the husband, it would be appropriate to also make some provision for the wife. I am not sure if there is a case for the wife to have an interim property settlement, however, such a case was not made to me. Although refreshing condensed, “me too” is not a proper basis on which the Court should act.
Hopefully, if a further need for interim relief is identified, a practical accommodation might be made, rather than the parties paying legal fees to obtain access to their own money. There are probably sillier things to litigate about but none come immediately to mind

Injunctions

The wife seeks to be restored as a director of C Pty Limited and in the alternative:
(a)That she be relieved of the undertaking she gave on 30 September 2019 not to orally communicate with G Pty Ltd and/or his or its advisers in respect of the operations of E Company. or with respect to a potential sale of E Company. and/ or for any other reason; and
(b)That the Court discharge order 4 made on that date. Order 4 provided:
4.That in the event any letter, email or facsimile is received from G Pty Ltd and/or his or its advisers by the Wife with respect to a potential sale of E Company. and/ or C Pty Limited’s interest in E Company.:
4.1The Wife shall provide such correspondence to the Husband within forty-eight (48) hours of receipt; and
4.2Any response by the Wife to G Pty Ltd and/or his advisers, shall be provided to the Husband or his advisers within forty-eight (48) hours of release.
The husband removed the wife as a director of C Pty Limited as they could not effectively work together to discharge the business of the board and the wife was in communication with a third party who the husband contends is hostile to the interests of the parties in their investment in E Company.
I asked learned senior counsel for the wife what would be the alternate course where the board was in conflict and he suggested that corporate trustee for the C Pty Limited Trust could be replaced. That highlights the problem. There is no doubt that the wife has every right to the proper administration of the trust and that she has the right to disclosure of all relevant information about C Pty Limited’s (the parties’) interest in E Company. However, in my view there is no practicable way of the parties jointly engaging with E Company. and the agencies dealing with it. The appointment of an independent person to undertake the role is likely to be expensive and may not be easily achieved. The husband established E Company. and he ran it. The wife makes no general criticism of the husband’s stewardship of the family interests in [E Company]. It was fairly conceded in the wife’s case that the third party with whom she had communication through P Solicitors may be hostile to the interests of the parties.
On the face of it, the husband and the wife are in exactly the same interest in respect of C Pty Limited’s dealing with E Company. There is no evidence that the husband has ever taken a step that is inconsistent with his obligations as a director of the trustee company or inimical to the shared interest of the parties in maximising their wealth. That said, despite the wording used by an earlier Full Court[13] when dealing with injunctions for the preservation of property, the Full Court[14] has made plain that in applying s 114(3), there is no fundamental obligation imposed on an applicant to find “evidence of any intention by the husband to dispose of any assets pursuant to any scheme to defeat any judgment which the wife might obtain in the substantive proceedings”. As set out in s 114(3), the Court:
...may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.
(emphasis added)
[13]In the Marriage of Waugh (2000) FLC 93-052 at 87,810.
[14]Mullen& De Bry(2006) FLC 93-293.
Beyond a bare assertion there is no case made out about the potential for the husband to make secret arrangements in the United States, adverse to the interests of the wife. Even if he did, the husband is available to answer for such matters in Australia. Although the husband has lived overseas, he is tied to this jurisdiction by a shared care parenting order. In my view it would be neither just nor convenient to require by mandatory injunction the husband to restore the wife as a director of C Pty Limited.
As to the alternative orders proposed by the wife, if the husband is correct, the parties’ position has been potentially damaged by the communication already made between the wife and the third party interests from [E Company].
There is no basis for relieving the wife of her undertaking. Albeit that the order specifies time limits, Order 4 of 30 September 2019 simply reflects the wife’s obligation of disclosure to the husband. The alternative orders sought by the wife will not be made.
Circumstances have left the husband to manage C Pty Limited and to deal with its interests in E Company. The wife has ceased to have a direct role in C Pty Limited and there is potential for the parties to be in a different interest. It is more important than ever that the husband provide timely disclosure to the wife about C Pty Limited and E Company. In particular he must keep the wife appraised of communications and dealing with the third party interests in [E Company].

I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 15 November 2019.

Legal Associate:

Date: 15 November 2019