Hui & Bai

[2021] FamCA 6

FAMILY COURT OF AUSTRALIA

Hui & Bai [2021] FamCA 6

File number(s):	MLC 14516 of 2019
Judgment of:	HARTNETT J
Date of judgment:	20 January 2021
Catchwords:	FAMILY LAW – PARENTING – interim application – with whom and on what basis the children spend time with – where the Applicant sought orders for the children to spend time with both parties on a week about basis – where Respondent sought orders for the children to spend substantial and significant time with the Applicant – where previous week about basis terminated unilaterally by Respondent upon allegations made by her against the Application of child abuse – where no evidence of child abuse by the Applicant – consideration of best interests of the children –primary and additional considerations pursuant to s 60CC of the Family Law Act 1975 (Cth) – where court expert appointed and prepared a family report pursuant to r 15.09 of the Family Law Rules 2004 (Cth) – where the children’s views as expressed to the court expert were considered and given weight in the circumstances. FAMILY LAW – PROPERTY – interim application – where the Applicant sought an injunction pursuant to s 114 of the Family Law Act 1975 (Cth) – where the Applicant sought orders for single expert business valuer for the parties’ corporate entities – where the Respondent sought orders for valuation of various other entities including property holding entities – where valuations of the real properties of the parties ordered to be paid equally – where the Respondent sought to be appointed co-director of the corporate entities – where co-director appointment opposed – where the Applicant was for the previous 13 years the sole director of the respective commercial entities – where the Respondent had already acted on director duties unofficially for the corporate entities – where the issue of insufficient commercial transparency between the parties is resolved by the appointment of the Respondent as co-director – where previous agreement between the parties to disperse a specific sum from joint funds monthly for living expenses – where the Respondent withdrew additional funds to those agreed between the parties and applied those additional funds towards legal costs – where ongoing issues of disclosure between the parties.
Legislation:	Family Law Act 1975 (Cth) ss 60B, 60CA, 60CC, 114; Family Law Rules 2004 (Cth) r 15.09.
Number of paragraphs:	45
Date of hearing:	12 January 2021
Place:	Melbourne
Counsel for the Applicant:	Dickson QC
Solicitor for the Applicant:	Coote Family Lawyers
Counsel for the Respondent:	Mr North SC
Solicitor for the Respondent:	Nicholes Family Lawyers

ORDERS

MLC 14516 of 2019
BETWEEN:	MR HUI Applicant
AND:	MS BAI Respondent

ORDER MADE BY:	HARTNETT J
DATE OF ORDER:	20 JANUARY 2021

THE COURT ORDERS THAT:

1.Each of orders 4 and 5 of the orders made by Senior Registrar Hoult on 5 November 2020 be discharged.

2.Until further order, each of orders 6; 7; and 8 of the orders made by Senior Registrar Hoult on 5 November 2020 shall remain in full force and effect.

3.The parties notify each other of any changes to their telephone numbers, email addresses or residential addresses within 24 hours of any said change.

4.Each of the Applicant and the Respondent be restrained by injunction from withdrawing funds from ANZ joint account ending #…42 or any other joint account held by the parties, including by their commercial entities, exceeding the sum of $18,000 per month unless otherwise agreed between the parties in writing.

5.The parties, at their equal shared expense, jointly appoint Mr B of C Company to value the following entities:-

(a)D5 Holdings Pty Ltd ATF the D Trust;

(b)E Group Pty Ltd;

(c)D1 Pty Ltd;

(d)D2 Pty Ltd;

(e)D3 Pty Ltd;

(f)D4 Pty Ltd; and

(g)any other entity as agreed between the parties.

6.The parties within seven days of a request by any single expert to do so, provide such documents or answers to any questions as may be required by the single expert for the purposes of their report.

7.The Applicant is at liberty to obtain an expert valuation by Mr L of N Company of the real property situate at and known as K Street Suburb M in the State of Victoria, subject to the agreement of the registered proprietor of that property being first obtained. The payment of any costs associated with the obtaining of such valuation be the responsibility of the Applicant in the first instance and the question of the Respondent’s liability as to payment of one half of that expense incurred is a matter reserved to trial.

8.Within 28 days from the date of this order, and subject to such appointment having no adverse impact on the credit and guarantee structure of the existing facilities advanced by the ANZ, the Applicant personally and in his capacity as director of the corporate entities that own the Q Street property/ies; the R Street property/ies; and the S Street property/ies (‘the corporate entities’) do all acts and things and sign all documents necessary to:-

(a)appoint the Respondent as a director of the corporate entities; and

(b)appoint the Respondent as a co-signatory on any bank accounts held by the corporate entities.

Note:   The form of the order is subject to the entry in the Court’s records.

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 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hui & Bai has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

HARTNETT J:

PARENTING

1. On 14 October 2020 the parties entered into interim consent orders which canvassed matters arising in respect of each of their parenting and property orders as sought in the Applicant de facto husband’s (‘the Applicant’) then Amended Initiating Application filed 13 October 2020 and the Respondent de facto wife’s (‘the Respondent’) then Response filed 27 April 2020. Since that time, and for the purposes of the competing orders sought in respect of the matters addressed in these reasons for judgment, the Applicant has filed a further Amended Initiating Application on 16 December 2020 in response to the Amended Response filed by the Respondent on 20 November 2020. Both those documents are relied upon by the parties.

2. An order made by Registrar Mestrovic on 14 October 2020 was, relevantly:-

   The parties and the children attend upon Mr T (the Family Consultant) on 8 December 2020 at equal shared expense between the parties for the purpose of the preparation of a Family Report.

3. Mr T, Clinical Psychologist and Family Consultant, was jointly instructed by the parties as a single expert to prepare his report which is dated 15 December 2020 and before the Court in evidence as annexure ‘T-1’ to the affidavit of Mr T sworn 17 December 2020.

4. Prior to the release of Mr T’s anticipated report, on 5 November 2020, Senior Registrar Hoult made further parenting orders by consent and pending the adjourned hearing date of 18 December 2020 which included, relevantly:-

   1.That the children X (female) born in 2006, Y 17 (female) born in 2008, and W (male) born in 2010 (“the children”) live with the parties as follows:

   (a)with the Father:

   A.Each alternate weekend from the conclusion of school on Friday (or 3:30pm on a non-school day) until the commencement of school on Monday (or 9am if a non-school day) commencing 6 November 2020;

   B.Each Wednesday from the conclusion of school (or 3:30pm on a non-school day) until 7.30pm

   C.On 1 December 2020 from the conclusion of school until 7.30pm; and

   D.On 17 December 2020 from 2.00pm until 7.30pm.

   (b)with the Mother at all other times.

   …

   4.That without admission as to the necessity of same, the Father be restrained from consuming alcohol in the presence of the children or for twelve (12) hours prior to and during time the children spend time with him.

   5.That without admission as to the necessity for same, each party be restrained from physically disciplining the children.

   6.That without admissions as to the necessity of same, the parties, their servants and agents are hereby restrained from making any derogatory comments about the other parent and/or his or her relatives in the absence of or within the hearing of the children and the parties be further restrained from commenting, discussing or referring to any part of family law communications, negotiations or proceedings, or allowing any other person to do so in the presence of or within the hearing of the children.

   7.That the parties keep each other advised of any medical or health issues relating to the children including but not limited to providing particulars of any medication that has been prescribed to the child and ensuring that the medication is provided to the other party at changeover, and the name and contact details of the treating practitioner.

   8.That the parties keep each other informed as soon as practicable of any significant injury or medical condition suffered or treatment undergone by the children while they are in their respective care and the parties are each permitted to liaise directly with the children’s treating medical practitioner, dental or other health specialist in relation to the children’s health and welfare.

   (as per the original)

5. On 18 December 2020 the Court made further interim orders by consent in respect of the parties competing parenting orders applications which included that:-

   (2)The Applicant and the Respondent have equal shared parental responsibility for the long-term decisions regarding the care, welfare, and development of the children, namely,  X born in 2006 ; Y born in 2008; and W  born in 2010 (‘the children’).

   (3)Until the determination of the adjourned application or earlier order of the Court, the children live with the parties on a week-about basis, with changeovers to occur at 4.00pm on Fridays and the children being in the care of the father from 4.00pm on 18 December 2020.

   …

   (6)The parties forthwith facilitate X’s attendance upon a psychologist to be agreed for counselling and the psychologist be provided with a copy of the family report by Mr T dated 15 December 2020.

   (7)Each parent shall facilitate telephone or video communication between the children and the other parent whilst the children are in their care as requested by the children.

   The Court notes both parties seek a final order for the presumption of equal shared parental responsibility for the children to apply.

6. On 12 January 2021 the Court made a further interim order as to parenting matters, not consented to by the parties, as follows:-

   Until further order, the children of the relationship X born in 2006 and Y born in 2008 and W born in 2010 (‘the children’) live with each of their mother and their father on a week about basis with changeover to occur at 6.00pm each Friday. The changeover location to be at each of the parties’ respective residences with the parent into whose care the children are to go collecting the children at the commencement of the live with period.

7. The father had sought the making of the above order in interim proceedings on 12 January 2021. The mother had sought the making of differing interim orders which limited the children’s time with the Applicant by reference to that which had occurred between the parties’ physical separation in March or April 2019 and October 2020, during which time the children had spent time with each of their parents on a week-about basis by agreement. This arrangement was terminated unilaterally by the mother on the basis that the father hit the child W over the head with a small textbook as a form of discipline for ignoring the Applicant’s direction to finish up what he was doing, and proceed to go and meet his mother who was waiting for him in her car outside the father’s property. The Respondent reported this incident to the police and an interim intervention order was obtained by the mother against the father which named all three children as Affected Family Members.

8. The mother essentially sought the children spend substantial and significant time with the father being five nights a fortnight, one half of school holidays and on special occasions.

9. The approach adopted by the mother was said to be based in large part on paragraph 49 of Mr T’s report which was as follows:-

   Ultimately, these proceedings are in relation to the time spent by the children with their parents. In this regard, there is no particular reason why there should not be a return to the previous arrangement, and the sharing of the children's time with both parents, including school holidays. I note that in Family Law literature, shared care represents somewhere between 5-9 nights with one parent in the 14 night cycle, and in my opinion, this should be reinstated. There is no particular reason why given the information available that the children should not be equally involved with both parents, why there should not be shared parental responsibility, or why there should not be a return to something approximating the status quo.

   The Court’s interpretation of this paragraph, however, in the context of the entirety of Mr T’s report, is that the children’s time should be shared with both parents equally.

10. Otherwise Senior Counsel for the mother submitted that the children were settled in the mother’s household and that it afforded to them “stability and routine during the school term periods”.[1]

    [1] Outline of Case of the Respondent filed 11 January 2021, [3.4].

11. Section 60CA of the Family Law Act 1975 (Cth) (‘the Act’) provides that:-

    In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.

12. Pursuant to s 60CC(1) of the Act “in determining what is in the child’s best interests, the court must consider the matters set out in subsections (2) and (3).” [2]

    [2] Family Law Act 1975 (Cth), ss 60CC(1) and 60CC(5).

13. Sections 60CC(2) and 60CC(2A) of the Act provide as follows:-

    (2)The primary considerations are:

    (a)the benefit to the child of having a meaningful relationship with both of the child’s parents; and

    (b)the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.

    Note:Making these considerations the primary ones is consistent with the objects of this Part set out in paragraphs 60B(1)(a) and (b).

    (2A)In applying the considerations set out in subsection (2), the court is to give greater weight to the consideration set out in paragraph (2)(b).

14. Whilst the mother agrees that the children should have a meaningful relationship with both parents, she earlier argued there was a need to protect the children from physical and psychological harm perpetrated by the father.[3] Thus, the mother’ earlier application for supervision of the children’s time spent with their father, with the father being restrained in respect of his alcohol consumption and in respect of the application by him of physical punishment. Her application before me, however, by January 2021, included the children spending five nights in each fortnight with their father and one half of school holidays. All of this time was to be unsupervised. It can be inferred from that application that the Respondent mother no longer considers s 60CC(2)(b) to apply. There is no issue that the children will benefit from having a meaningful relationship with both parents. The Court finds the children are not at risk in the father’s care. The evidence does not support a continuation of orders 4 and 5 of the orders made by Senior Registrar Hoult on 5 November 2020. Accordingly, those orders shall be discharged.

    [3] Outline of Case of the Respondent filed 11 January 2021, [3.1]-[3.2].

15. The additional considerations are listed in s 60CC(3) of the Act. The Court has taken into account only those considerations which are relevant to the facts and circumstances of this case.

16. Amongst other things, the Court may inform itself of views expressed by a child by having regard to anything contained in a report or by such other means as the Court thinks appropriate. In this case, I have had regard to the views of the children as expressed to Mr T and conveyed in his report. Those views are as follows:-

    (a)X aged 14 years: X told Mr T that she had become used to living in two houses, that she knew her parents did not like one another and that she did not really care about the outcome of the dispute between her parents and would happily do what the Court decided. X indicated to Mr T that “living into [sic] houses was just normal to her now”.[4] Mr T noted:-[5]

    [4] Family Report dated 15 December 2020, [30].

    [5] Family Report dated 15 December 2020, [31].

    31.X’s views were unexpected. Both her parents described her as happy and well-adjusted, that she was close to them, and that they had no concerns about her. X however told me that her parents were emotionally disconnected, were not attuned, were more consumed by their own interests and their own motivation, rather than their children, and that neither of them understood how she felt, what she was going through, or were aware of the impact that their actions were having upon [her]. She described both as consumed by their conflict, constantly involved with their lawyers, and that neither was particularly aware of or even noticed her, or the impact of their actions upon her. X told me that she thought her mother was more consumed and less aware than was her father.

    …

    33.X described life at the home of each of her parents as unremarkable, that there was no particular difference, that each home was normal, that she felt the same in each of the houses, and that it mattered little to her whether she spent more time with her mother or her father. What was more significant was that X conveyed a sense of disconnection, isolation and not having a particular emotional scaffold to either of her parents, that in part was a function of them being consumed by their own feelings, their conflict, this dispute and their problems. X conveyed a sense of disinterest in her parents’ allegations, and told me that there was nothing that was of particular concern, that she did not feel particularly frightened or worried in either home, albeit that she was also critical and negative in relation to both parents. Whether this portrayal is reflective of the reality of X’s situation or more reflective of adolescent angst, she certainly impressed as a more vulnerable girl, who felt that her parents focus was directed far from her, her needs and her well-being, in favour of ongoing conflict dispute and leveraging by her parents to align her to their side of the conflict.

    (b)Y aged 12 years: Y reported to Mr T that she liked living in two houses, that spending a week with each of her parents worked well and that the arrangement suited her as she was able to see her parents evenly. She could not recollect why the arrangement had changed or what brought about such change. Mr T stated:-[6]

    When asked directly, [Y] told me that her father was not abusive, that his attitude was normal and reasonable, that she was not frightened of either of her parents, that living with her father was a lot of fun, that he was very actively involved and engaged, but she was also aware that her parents were in competition, both wanted the children to live with them, and that she was happy for there to be a return to the previous status quo.

    (c)W aged 10 years: W told Mr T that living in a week about arrangement was his “preferred outcome”; “it was very normal to him”; “he had gotten used to it”; and that “he thought it worked well”.[7] Further, when asked by Mr T what he thought should happen with his living arrangement, W responded that he “hoped it would return to a week with each parent because that meant he would still get to see them both equally”.[8] W indicated to Mr T that he missed his father and did not understand why he did not see him as often as he used to.

    The Court takes the above views, as expressed by the children, in to account and gives them some weight.

    [6] Family Report dated 15 December 2020, [35].

    [7] Family Report dated 15 December 2020, [42].

    [8] Family Report dated 15 December 2020, [42].

1. The nature of the children’s relationship with each of the mother and father is equally supportive and involved in a physical, financial and general emotional sense, whilst acknowledging the issues as described by X as they applied to both the mother and father, resulting in her sense of disconnection.

2. I have considered the Applicant’s relationship with the children, in particular, especially the Applicant’s relationship with the child W, as described in Mr T’s report. This is obviously because of the allegations levelled against the father by the mother. The Applicant maintained that he is close to the children, that he and the children have a good relationship and that he has always prioritised them.[9] The children continued to have contact with the Applicant despite the restrictions imposed by the Respondent.

   [9] Family Report dated 15 December 2020, [12].

3. Following his observation of the Applicant with the children, Mr T stated:-[10]

   …there was a playful quality to the interaction between Mr Hui and the children, and that W in particular was physically affectionate, and during the interview itself initiated physical contact and playful banter with his father. He hugged his father, made playful fun of him, rubbing his father's head playfully whilst referring to his lack of hair. At the end of the interview, all three of the children gave their father a lingering hug and kiss goodbye, showing no hesitation or reluctance.

   [10] Family Report dated 15 December 2020, [15].

4. Mr T considered W’s lack of affect or concern in respect of the textbook incident “noteworthy”[11] given the enormity of the fallout of this single incident. W reported to Mr T that he did not hate the Applicant nor was he frightened of the Applicant. Indeed, W indicated that he missed his father. In particular, Mr T said as to W:-[12]

   W’s presentation was conspicuous at a number of levels. He impressed as immature for his age; he had trouble concentrating and had difficulty reflecting upon his own behaviour. He spoke about his parents in very concrete terms, but conveyed a sense of trust, reliance and confidence in them. He too shared with me the view that his parents tended to get angry, that they both yelled and screamed, and that by comparison “ …. when my dad gets angry it was more scary, but that when my mu [sic] gets angry it goes on for longer”. I was not left with the impression that, in relation to either parent, this was out of the ordinary, a source of great concern, or that W felt threatened or intimidated, but that rather he just accepted that this is how it was in the family. From a psychological perspective the more obvious themes to emerge related to the lack of safety about the future, uncertainty about his parents’ relationship, concern about their conflict, but that fundamentally he was happy and simply wanted to be able to have more involvement with his father and for family life to return to normal.

   [11] Family Report dated 15 December 2020, [42].

   [12] Family Report dated 15 December 2020, [43].

5. The Applicant reported to Mr T that he was “actively and enthusiastically” involved in supporting the children with their studies and that he worked cooperatively with the children, inviting them to express their views.[13] The Respondent was equally involved in all aspects of the children’s lives.

   [13] Family Report dated 15 December 2020, [12].

6. Otherwise in respect of the totality of the relevant s 60CC(3) of the Act matters, and in particular focusing on the Applicant and children’s relationship, given it was the Respondent who sought to alter a pre-existing status quo as referred to by Mr T, Mr T concluded relevantly:-[14]

   47.Given the focus and emphasis on W, his presentation was conspicuous at a number of levels. Both his sisters portrayed him as emotional, manipulative and inclined to say to his parents different things in order to get his own way. Even though W spoke about the incident in September 2020 as the reason for the current proceedings, he conveyed no real apprehension in relation to his father, told me that he was hopeful that there would be a return to the previous arrangement, that he enjoyed spending time with his father, and that he missed the equal care arrangement. My direct observation of him in the company of his father was unequivocally positive, playful and affectionate.

   48.Mr Hui and Ms Bai have very different perspectives as to their relationship, family life and the needs of the children. They present as very different personalities, and it is not surprising that they had conflict. The children perceive their mother as much more assertive, dominant and forthright; she portrays herself in a similar manner and sees these as positive qualities. Mr Hui is perceived by his children as being more passive, softly spoken and permissive. This is how he describes himself, but also highlighted how this created untenable problems in the relationship with Ms Bai, whom he described as aggressive, domineering and unrelenting The polarities of their presentation are likely to fuel this dispute, but all the while, their respective narratives ignore the reality of their children’s situation, and in particular the vulnerabilities with which X is presenting. It is important to recognise that children's emotional and behavioural problems do not occur in isolation, but rather occur in the context of their family environment, and it would be advisable, in my opinion, for Ms Bai and Mr Hui to reflect not upon the perceived shortcomings of the other parent, but rather to reflect upon their own actions, and some of the important statements being made by their children in relation to them, their conflict, the way they manage their own emotions, how they defer to, and refer to each other, and the problems that emerge as a consequence.

   [14] Family Report dated 15 December 2020, [47]-[48].

7. The children have been embroiled in the parties’ ongoing conflict. Indeed, Mr T expressed concern in relation to the psychological vulnerabilities of X and to a lesser extent, Y. The children are loved by their parents, both of whom are generally attuned to them and their needs and both of whom offer them a differing, but reliable and stable home environment. The children’s engagement (in observation by Mr T) with each of their parents was warm, reactive, appropriate and physically affectionate. There was nothing in the totality of Mr T’s report to suggest that the children should not spend equal time with each of their parents or that one parent should be preferred over the other by virtue of a consideration of those matters set out in s 60CC(3) of the Act.

8. As to the Respondent’s allegation that the father drinks alcohol to excess whilst the children are in his care, I note that the Applicant denies such allegation. Whilst W did tell Mr T W thought his father consumed too much alcohol,[15] Mr T overserved that it was difficult to quantify W’s concerns, and noted that W’s concerns were not shared by his sisters. There was no suggestion by Mr T that this was an issue for the children, nor that the children’s time spent with their father should be subject to injunction and/or supervised. Quite the contrary. Furthermore, the Applicant said in paragraph 12 of his affidavit (as noted by Mr T) of 4 November 2020:-

   Without admission of necessity of same and in order to alleviate Ms Bai’s apparent concerns, I attended upon my General Practitioner on 26 October 2020 to undertake a carbohydrate deficient transferrin (CDT) test for the purposes of assessing my alcohol consumption. On 30 October 2020, I received my results, which identify my CDT to be below an equivocal level, indicating low alcohol consumption.

   [15] Family Report dated 15 December 2020, [40].

   PROPERTY

9. The Applicant sought orders that Mr B of C Company be appointed as the single expert business valuer for the purposes of valuing the D Consolidated Group entities.

10. The Respondent proposed that Mr PP of U Limited be appointed as the single expert business valuer. Both parties sought through Senior Counsel’s submissions to the Court, that the Court appoint one or the other valuer as proposed by each of them. Neither put forward any alternative single expert business valuers or other method of selecting such a valuer. The Applicant argued that the experience of U Limited was limited and generally irrelevant to valuing businesses within the education industry and that conversely, Mr B had valued 2 similar businesses to the D Consolidated Group entities in the last 18 months. The Applicant sought recommendations from the parties’ accountant, Mr V, as to the appropriate business valuer for valuing educational institutions and one of the recommendations from Mr V was Mr B. All communications between Mr V, the Applicant and Mr B that the Applicant is aware of were provided to the Respondent’s solicitors upon request. The Respondent was not agreeable to the appointment of Mr B on the basis that her “enquiries would lead [her] to the view that they do not have any or any sufficient experience in valuing entities of the type that are operated by Mr Hui and me”.[16] On the basis of the stated actual experience of Mr B in valuing similar businesses, and given the recommendation of the parties’ accountant, Mr V, the Court shall accede to the application that Mr B be the appointed single expert.

    [16] Affidavit of the Respondent sworn 17 December 2020, [28].

11. The Respondent proposed to value various other entities, which are property holding entities only, and where the underlying real estate has itself been valued. The Applicant opposed those entities being valued at joint expense contending it would be a waste of money and that if the Respondent sought to engage her own valuer to assess those entities, she would be free to do so. The Court is of the view that the Respondent can embark upon this course upon her own instructions and at her own expense. If there is a need for an adjustment of this expense such that it be shared equally by the parties upon the evidence then before the Court at trial, an application can be made by the Respondent for any necessary adjustment of this expenditure. .

    Valuation of Suburb M and JJ Town

12. In respect of his seeking of orders for the valuation of real properties at K Street, Suburb M in the State of Victoria (‘the Suburb M property’) and KK Street JJ Town in the State of Victoria (‘the JJ Town property’), the Applicant sought for the valuations to be conducted by Mr L of N Company. The Applicant sought an order that such valuations should be solely at the expense of the Respondent.

13. The Respondent asserted that she loaned the sum of $589,156.17 to Mr MM (the registered sole proprietor of the Suburb M and JJ Town properties) so that he could purchase the properties for “charitable religious related projects”. The loan agreement in respect of the Suburb M property annexes an Option Deed which prescribes that the Respondent can purchase a half share interest in the Suburb M property from Mr MM for the sum of $1.00. The Respondent and Mr MM are the only parties’ to the loan agreement and mortgage. There is no reference to religious charities or the Respondent acting in her capacity as power of attorney for her father within the documents. The Respondent had not disclosed her interest in these real properties during the course of the proceeding to date and her interest was only identified from the Applicant’s discovery of an LL Real Estate transaction within the Respondent’s bank statements. Mr MM has not been joined to the proceeding and there is no evidence that he has been given notice of the application made by the Applicant to value properties in relation to which he is the sole registered proprietor. Absent any consent of the registered proprietor of the properties, any valuation of either property will be at best conducted without inspection of the property. There is no proper reason why the JJ Town property should be valued in this proceeding, as distinct from the Suburb M property, and in any event as conceded by Senior Counsel for the Applicant. Accordingly, the Court will not make any order with respect to a valuation being obtained of the JJ Town property but in light of the Option Deed as referred to above, the Court will order a valuation of the Suburb M property upon notice to the registered proprietor and at the cost of the Applicant solely. Again, if an adjustment of this costs is necessary at trial, on the evidence then before the Court, such that the Respondent should pay one half of this expense, then that adjustment can be made.

    Injunctions

14. The Applicant sought a restraint on the Respondent from withdrawing funds from the ANZ Business Advantage Account #…42 or any other joint account held by the parties, including by their commercial entities, exceeding the sum of $18,000 per month unless otherwise agreed between the parties in writing. This limit of $18,000 per month was agreed to by the parties in July 2020, being a sum for living expenses. Despite that agreement, the making of any order was opposed by the Respondent. Before seeking such an order, the Applicant had sought an undertaking from the Respondent in the terms of the parties’ agreement, however such undertaking was not given by the Respondent who made significant withdrawals from joint accounts in excess of $18,000 per month as described hereafter.

15. On 2 December 2020, the Respondent’s lawyers sent correspondence to the Applicant’s lawyer stating that during the relationship the Respondent transferred the amount of $35,800 to her late brother for a “family emergency”. No further details were provided to the Applicant regarding the transfer and the transactions occurred without the Applicant’s knowledge or consent.

16. The Applicant submitted that, as of 3 December 2020, the Respondent had unilaterally withdrawn the amount of $309,556.95 from joint funds for her “legal fees”.

17. On 11 January 2021, the Applicant discovered that the Respondent withdrew a further $40,000 from ANZ joint Account ending #…42 without the Applicant’s consent.

18. The Court concludes that the parties had an earlier agreement which set a monthly withdrawal figure of $18,000 by way of withdrawal capacity for each of the parties in respect of a certain type of expense. Clearly, there should be some equality of withdrawal of funds as between the parties and knowledge of and consent to the withdrawal of sums which exceed any earlier agreed figure, and which provide for other forms of expenditure including legal costs. There is not here, in these circumstances, an inadequacy of funds available to each of the parties. It is a matter of keeping a record of the advance of funds and the reasons for such advance. The existence of an injunction on an interim basis will preclude further unilateral behaviour by either of the parties. That is necessary given the conflict between the parties and the fact that they are in litigation. Of course a party’s consent to the other’s reasonable withdrawal of funds should not be unreasonably withheld.

    Should the Respondent be appointed a co-director?

19. The Applicant is agreeable to the Respondent being appointed as a co-director of all entities that own the parties’ S Street commercial properties. These are commercial properties of which Mr BB and CC Realtors are not property managers. The S Street commercial properties are properties in which the Applicant and the Respondent hold an interest. The Applicant does not seek to retain, as part of his final property settlement, the S Street commercial properties.

20. The Applicant has been the sole director of the various companies of the parties for the last 13 years. The Respondent sought an order appointing her as a co-director of all entities to which the parties hold entitlement. The Respondent submitted that she is not being included in significant commercial decisions that impact the value of the asset pool to which she has an entitlement and that without being appointed as a co-director she is not able to comply with her obligations under her Individual Guarantee and Indemnity with the ANZ Bank which thereby exposes her to a potential liability of up to an amount of $46,500,000.

21. Further, the Respondent submitted that the Applicant had not provided full and frank disclosure to her and that he is personal friends with Mr BB, the property manager of the significant commercial buildings at Q Street and R Street, Suburb F. If the Respondent were not appointed as a co-director of the entities, she submitted the Applicant and Mr BB would continue to make commercial decisions in respect of these properties without her approval or knowledge that may directly impact, adversely or not, the value to be attributed to the entities. There is no evidence filed by the Applicant as to why the Applicant resists the appointment of the Respondent as co-director of the entities.

22. The Applicant submitted:-

    (a)his position as sole director has proven to be very solid and successful in managing the commercial property business. The Respondent does not have the same experience. She has always accepted being a guarantor throughout the Applicant’s directorship. The Respondent pointed to no conduct that would justify a change to that position;

    (b)co-directors are required to cooperate in making financial decisions in the best interests of the company. Since December 2019, the parties have been engaged in highly contentious and acrimonious family law proceedings and it is therefore unlikely that the parties could share a workable business relationship. In the event the Respondent were to be appointed as co-director of the corporate entities, this would potentially increase the conflict between the parties, cause difficulty in making decisions on behalf of the companies, and therefore pose a significant risk to the operation and ongoing success of the business;

    (c)that a change of directorship would almost certainly trigger an immediate full credit review on all the loan facilities by ANZ bank. ANZ are fully aware of the current corporate structure and have continually supported the business’ existing loans. The sudden change of co-directorship would require ANZ to go through a formal credit assessment process and could impact the borrowing capacity of the entities;

    (d)the Respondent has full access to all financials, bank accounts and attends regular property management meetings. The Respondent therefore has the ability to receive documents and/or information about the entities without being appointed as a director; and

    (e)the Respondent’s failure to act in accordance with the parties’ earlier agreement in respect of the withdrawal of $18,000 monthly, as described elsewhere in the reasons, demonstrated the Respondent’s inability to uphold or respect agreements made with the Applicant which is fundamental to a functional co-directorship.

23. In response to the Applicant’s reliance on his historical success as sole director, and the Respondent’s historical acceptance of him holding that position solely, the Respondent submitted that whilst their relationship was intact, both parties were actively involved in decision making with respect to all entities, and given their relationship, there was no particular need for both to hold office. With the breakdown in their trust of each other, and separation, that past informality is no longer appropriate. The Respondent further submitted that as a consequence of the breakdown of their relationship it has become necessary for her to be on an equal footing with the Applicant in gaining access to information that may inform commercial decisions, and access, that is not dependent upon the other party’s compliance with his obligations about which the Respondent complains.

24. There are two significant commercial properties at Q Street, Suburb G and R Street, Suburb F which are registered in the name of corporate trustees of which the Applicant is the sole director. The property at Q Street is a commercial office building. It was valued in 2019 at $45 million. There is an ANZ mortgage of approximately $17 million encumbering this property. This property is leased for approximately $3,160,000 per annum.[17]

    [17] Affidavit of Ms Bai sworn 17 December 2020, [50].

1. On Wednesday, 18 November 2020 at 2.00pm the Respondent attended a property management meeting with the Applicant and Mr BB, Director of CC Realtors and Mr NN, Property Manager, to discuss the properties at Q Street and R Street. The Respondent’s evidence is that she was informed at that meeting that the Applicant, in his capacity as director of the entities that own these properties, had made a number of large commercial decisions with Mr BB, who is also a personal close friend of the Applicant’s, without any consultation with the Respondent, including:-

   (a)negotiating a lease for a new tenant moving into Q Street in 2021. The lease had been signed and executed. In 2020, the Applicant commenced the renovation works for a floor for Q Street which cost between approximately $250,000 and 280,000 without the Respondent’s knowledge until she overheard this in a property management meeting; [18]

   (b)three other leases in the building had been negotiated and renewed without any notice to the Respondent; [19] and

   (c)the Respondent had recently heard from the Applicant that he had drawn down $250,000 to $300,000 from ANZ facility to finance floor renovations for Q Street, without first obtaining the Respondent’s agreement.

   [18] Affidavit of Ms Bai sworn 17 December 2020, [52(a)].

   [19] Affidavit of Ms Bai sworn 17 December 2020, [52(b)].

2. The Respondent’s Individual Guarantee Indemnity with ANZ Bank is limited to $46,500,000 plus interests, costs and other amounts. In becoming a Guarantor, the Respondent was required to provide a number of undertakings and covenants in relation to the following entities, and as referred to in her affidavit evidence, as follows:-[20]

   (a)Z Pty Ltd ACN … in its own right and as trustee for the Z Trust ABN … . This entity owns properties at S Street Suburb G Mr Hui has offered to appoint me a co-director of this entity, providing that ANZ gives consent to this[;]

   (b)D Consolidated Group. These are the business entities[; and]

   (c)DD Pty. Ltd. ACN … in its own right and as trustee for the EE Trust ABN … . This entity owns the R Street properties.

   (d)FF Pty Ltd ACN … in its own right and as trustee for the GG Trust ABN … . This entity owns the Q Street property.

   [20] Affidavit of Ms Bai sworn 17 December 2020, [53].

3. In respect of the practicalities of making the Respondent a co-director, including the attitude of the ANZ bank in relation to any impact the appointment of the Respondent would have on the parties’ security structure, the Respondent gave the following evidence:-[21]

   55.On 30 November 2020, I sent email correspondence to HH Consultants seeking information as to what documents would be required to appoint me as a Director of Z Pty Ltd, being the entity that owns the S Street properties. On 1 December 2020 I received confirmation from Mr V of HH Consultants by email that “there will just be an ASIC form and a minute required to be prepared and signed to appoint” me as a Director.

   56.On 30 November 2020 and 1 December 2020, I made enquiries with ANZ in relation to any impact that my appointment as a Director would have on our security structure. On 2 December 2020, I received email correspondence from Mr AA, Relationship Credit Manager, Property ANZ confirming their consent to me being appointed co-director and confirming that there would be no adverse impact on the credit and guarantee structure of the existing facilities.

   [21] Affidavit of Ms Bai sworn 17 December 2020, [54].

4. The Court is of the view that, on the evidence before it, the Respondent would be afforded necessary transparency if she were to be appointed as a co-director of the entities that own the Q Street property/ies and the R Street property/ies and that in her role as a co-director the Respondent will be able to have input into commercial decisions made by the Applicant solely, or in conjunction with Mr BB, that may directly impact the value to be attributed to the entities. The Court notes that the evidence before it from the Respondent is that the appointment of the Respondent as a co-director will have no adverse impact on the credit and guarantee structure of the existing facilities advanced by the ANZ. The Respondent’s exposure as a guarantor to a significant sum, as described above, also makes the need for transparency to be more pressing. It is proper in the circumstances for the Applicant to do all acts and things necessary to permit the Respondent to be a co-director, to the extent that such appointment has no adverse impact on the credit and guarantee structure of the existing facilities advanced by the ANZ.

5. Full and frank disclosure is an ongoing obligation for each of the parties in this litigation. Significant disclosure has already been provided by the Applicant to the Respondent. Whilst the Respondent does not agree with this, the Respondent was not able in submissions to clarify which documents had been disclosed to her, and which had not. Now that the Respondent’s position is enhanced by an order which shall see her appointed as a co-director of those of the parties’ entities particularly addressed in the evidence and submissions as described above, the debate as to what constitutes proper disclosure, and claim that it has been inadequate, should no longer be an issue. In those instances where matters remain outstanding as between the parties, they are required to act in accordance with their ongoing obligations.

I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett.

Associate:

Dated:            20 January 2021