Hillier v Martin (No 11)

In Hillier v Martin (No 11), the applicant, Mr Hillier, sought to restrain the respondents from using the income and assets of the Nordburger businesses for any purpose other than the payment of the businesses' expenses. The legal owner of the assets is Nordburger Operations Pty Ltd, and the parties dispute their equitable interests in the trust assets and the terms of the trust. The financial reports showed that the entities holding the assets had outstanding payables to the Australian Taxation Office and a supplier, a decline in profits, and loans made to the respondents or their associates, which were not for a business purpose. The court was required to decide whether it was appropriate to grant an order to protect the assets from diminution. The court found that there was a likelihood that the respondents would engage in transactions that would breach the trust, and that the restraint was necessary to protect the assets. The order was granted with liberty to apply to vary the restraint.

The court considered the financial reports and the past transactions of the respondents, which showed that they had caused the entities to advance loans to themselves or their associates. The court inferred that these loans were not for a business purpose and had affected the relevant entities' cash flows. The court found that the restraint was necessary to protect the assets from diminution and that the respondents had not demonstrated any prejudice arising from the restraint. The court also noted that the respondents' lawful interests were protected by the grant of liberty to apply to vary the restraint. The court granted the order with injunction and set out the terms of the order, including the duration of the restraint and the respondents' liberty to apply to vary the orders. The court also set out the case management directions for the interlocutory application for an order in terms of paragraph 7 of the interlocutory application dated 4 April 2022.