Hunter and Hunter
[2012] FamCA 49
•9 February 2012
FAMILY COURT OF AUSTRALIA
| HUNTER & HUNTER | [2012] FamCA 49 |
| FAMILY LAW – PROPERTY – Interim – Where Wife seeks interim injunction restraining Husband from dealing with any of their property without her agreement – whether injunction should be granted – where jointly appointed valuers ordered - Where appointment of single expert witness for valuation of real property and corporate entities – where partial property settlement effecting payment of $75,000 to each party – where procedural orders with respect to disclosure |
| Family Law Act 1975 s.114(3) |
| APPLICANT: | Ms Hunter |
| RESPONDENT: | Mr Hunter |
| FILE NUMBER: | BRC | 10255 | of | 2011 |
| DATE DELIVERED: | 9 February 2012 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Forrest J |
| HEARING DATE: | 3 February 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Carew of Counsel |
| SOLICITOR FOR THE APPLICANT: | Condon Charles Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Page of Senior Counsel |
| SOLICITOR FOR THE RESPONDENT: | Hartley Healy |
Orders
BY CONSENT IT IS ORDERED UNTIL FURTHER ORDER THAT
Appointment of Court Experts
Real Properties
NSW
Pursuant to Division 15.5.2 of the Family Law Rules 2004, the parties jointly appoint H Company to value the following properties in New South Wales:
a.the property known as the “C”, being more particularly described as Lot … on DP … Parish of … (“the C property”) together with any improvements, plant, machinery, equipment, stored grain, diesel, chemicals or other inventories;
b.the property being part of the property known as “O” (“the O property”) more particularly described as Lot … on DP … Parish of … County of … together with all improvements, plant, machinery and equipment.
Queensland
Pursuant to Division 15.5.2 of the Family Law Rules 2004, the parties jointly appoint H Company to value the following property in Queensland:
a.the property and improvements known as the “W” property, being all that property situated at (“the W property”).
The valuation process
The Husband and the Wife shall sign all documents and do all things necessary for H Company to be engaged as the single expert witness as appointed in Order 1 and 2 above including:
a.the Court Expert shall be provide with a joint letter of instructions to be prepared by the Husband’s solicitors (including any instructions that may be given by the Court) but if the parties are unable to agree or for any reason that joint instructions cannot be obtained then they shall each provide a letter of instructions to the Court Expert within 14 days after the appointment.
b.arranging inspection of the “C” property and the W property at a time and date as nominated by H Company for the purposes of the valuations.
c.the parties shall advise the Court Expert the date before which the reports are required.
The parties shall comply with any reasonable request of the Court Expert to provide information and documents to complete the reports.
The Court Expert shall provide the reports of the value of the “C” property, the W property and the O property to the parties, at least 14 working days before the Mediation event.
The costs of the Court Expert valuations are to be paid by the parties equally.
The Court Experts and the parties shall have liberty to apply to list the matter on the giving of two (2) days notice for any further directions and for that mention the Court Expert shall have leave to appear via the telephone.
The parties shall provide a copy of these orders to the Court Experts.
Corporate Entities
Pursuant to Division 15.5.2 of the Family Law Rules 2004, the parties jointly appoint P Company to value any entities in which the Husband and the Wife have an interest in (save for the shares in E Pty Ltd and G Pty Ltd) within two (2) months from the date of these orders, including but not limited to the following:
a.Mr Hunter Family Holdings Pty Ltd;
b.Hunter Family Trust;
c.B Pty Ltd.
The Husband the Wife shall sign all documents and do all things necessary for P Company to be engaged as the single expert witness as appointed in Order 9 on the same terms and conditions as set out in Orders 3 (3a and 3c only) – 8 above.
Disclosure of Documents
Each party must (if they have not already done so) provide to the other party (or parties) a copy of the following documents in the time prescribed (the obligation to disclose continues up to and including the hearing):
a.the documents contained in Attachment A hereto within 28 days;
b.any document requested and particularised in writing by the other party (subject to relevance and any objection or claim of privilege which shall be particularised in writing) within 28 days of the request and at the cost of the party requesting the documents;
c.any document that that party intends to rely upon in support of their application before the Court (save for subpoenaed documents for which no leave to copy has been given) within 28 days;
d.any document which, to a material extent, adversely effects his/her own case (subject to any claim of privilege) within 28 days;
e.any document requested by any Court Expert within 21 days of receiving notice of the request.
and that the disclosure be made by the parties by way of Affidavit of Documents and the duty to disclose imposed by these Orders and Directions is as identified in Family Court Rules 2004, rule 13.07, and will include but not be limited to the documents identified in this Order.
IT IS FURTHER ORDERED UNTIL FURTHER ORDER AND upon the undertaking of the husband given to the Court on 3 February, 2012 to pay all monies from the farming enterprise carried out on C and O into the account with the Commonwealth Bank in the name of Mr Hunter Family Holdings Pty Ltd account number… .
Injunctions
The Husband is restrained and an injunction issues restraining him from selling, charging, further encumbering, or disposing of assets that are solely owned by him or jointly owned with the Wife or any other person, or from causing any company or trust in which he or the Wife have an interest to sell, charge, further encumber, or dispose of assets including but not limited to shares, real estate, superannuation, motor vehicles, plant, equipment, livestock, crops and grain unless he firstly obtains the written consent of the Wife.
The Husband is restrained and an injunction issues restraining him from:-
a.incurring any liability in excess of $5,000 on account of himself and the Wife jointly; or
b.causing any company or trust in which he or the Wife have an interest to incur any liability in excess of $5,000;
without the prior written consent of the Wife.
Any agreed expenditure of in excess of $5,000 shall, unless otherwise agreed between the parties in writing, be facilitated by the Husband sending the requisite invoice to the Wife together with a cheque on the Mr Hunter Family Holdings Pty Ltd account number … signed by him for the Wife to counter sign and then to send the cheque to the creditor before sending written confirmation of payment and a copy of the said invoice back to the Husband.
IT IS FURTHER ORDERED BY CONSENT UNTIL FURTHER ORDER
Pending completion of these proceedings the Wife continue her role as bookkeeper for all of the financial interests of the parties and for that purpose the Husband provide to the Wife forthwith upon receipt any document that relates to the operation of such interests.
The Wife, or her nominated agent, be at liberty to attend at the properties situated at Z and Y Streets, NSW Town N including the “C” property and the “O” property on one occasion each month in the company of her nephew or daughters for the purposes of inspecting the said properties and for that purpose the Husband forthwith provide to the applicant a key to the front gate for the properties at “C” and “O”.
The Husband facilitate the collection by the parties’ children of the 6 head of cattle currently at the “O” property, Z Street.
IT IS FURTHER ORDERED
Partial Property Distribution
The Wife and Husband do all things and sign all documents necessary to provide the Wife with the sum of $75,000 by way of partial property settlement.
The Wife and Husband do all things and sign all documents necessary to provide the Husband with the sum of $75,000 by way of partial property settlement.
IT IS FURTHER ORDERED BY CONSENT
Liberty to Apply
The parties have liberty to apply on the giving of seven (7) days notice in writing to the other party and the Court in relation to these directions.
Resolution Event
The parties and lawyers on the record must attend on a date to be agreed in April 2012 at the offices of Hartley Healy in Brisbane for a mediation with the Honourable Brian Jordan.
The costs of the Mediator shall be shared equally between the parties.
The matter shall be listed for further directions on a date to be fixed after the mediation.
Attachment A
Each party must exchange at least 21 days before the mediation the following documents if relevant and not already exchanged:
The party’s three most recent taxation returns and assessments.
The party’s three most recent wage/salary certificates.
Any superannuation documents for each superannuation interest of the party including:
·the completed Superannuation Information Form;
·for self-managed superannuation fund, the trust deed and the last three financial statements.
For a corporation (business), trust or partnership where the party has a duty of disclosure under Rule 13.04 of the Family Law Rules (FLR):
·financial statements for each (including balance sheets, profit and loss accounts, depreciation schedules and taxation returns) for the three last financial years.
For the party or a corporation (business), trust or partnership where the party has a duty of disclosure under Rule 13.04 of the FLR:
·any Business Activity Statement for the 12 months ending immediately before the first Court date.
For any corporation, its most recent annual return, listing Directors and Shareholders; and the corporation’s memorandum and articles of association.
For any Trust, the trust deed.
For any Partnership, the partnership agreement.
All documents containing evidence about:
(a)the financial matters mentioned in the party’s Financial Statement (Form 13);
(b)the financial contributions made at the commencement of cohabitation;
(c)any inheritances, gifts or compensation payments received during cohabitation;
(d)any purchase or disposal of property in the 12 months prior to and since separation;
(e)any increase or reduction of liabilities since separation;
(f)the value of any superannuation interest of a party, including the basis on which the value has been calculated and any documents used to calculate the value.
Such documents shall include but not limited to:
(a)in relation to accounts in any financial institutions (including but not limited to banks) details of account numbers, passbook and bank statements for the previous 12 months;
(b)written records of any investments including stocks and shares;
(c)Social Security pension information or payment details;
(d)details/records of long service leave accrued;
(e)details/records of overtime worked in the previous 12 months;
(f)records/details of any life assurance or disability insurance;
(g)details/ records of any of the above re children;
(h)Medical or psychiatric reports.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hunter & Hunter has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 10255 of 2011
| Ms Hunter |
Applicant
And
| Mr Hunter |
Respondent
REASONS FOR JUDGMENT
Introduction
In this matter, the wife makes application for numerous orders pending finalisation of financial matters between the parties by resolution or at trial. Her Initiating Application and supporting affidavit were filed on 17 November, 2011. In that, she sought an interim injunction restraining the husband from dealing with any of their property without her agreement, a payment of a lump sum of $100,000 to her by way of interim distribution of property, procedural orders with respect to disclosure and the appointment of experts for the valuation of the property. The hearing of the application seeking interim orders was listed in the duty list on 3 February, 2012.
The husband filed his Response and supporting affidavit on 25 January, 2012. In that, he also sought orders on an interim basis dealing largely with the issues of disclosure and appointment of expert valuers, but also sought an order for the return to him of a dog, the dismissal of the wife’s application for an injunction and an order for the payment to each of him and the wife of a sum of $20,000 on an interim basis.
At the hearing the wife filed an Amended Application and a further affidavit in support. The effect of her amendment was to change the wording of the injunction she was seeking and to include, along with the order for a lump sum payment to her of a $100,000, a lump sum payment of $20,000 to the husband.
When the matter came before me on 3 February, 2012, counsel for the applicant wife handed me a minute of proposed orders and informed me that many of the orders were agreed between the parties and could be made by consent. Those that were agreed dealt principally with the disclosure issues and the appointment of expert valuers. There remained dispute about the injunction sought by the wife and the issue of the lump sum payment to each of the parties. The wife still sought an injunction against the husband whilst the husband proffered an undertaking to the court. The wife also still sought lump sum payments of $100,000 to her and $20,000 to the husband. The husband argued for lump sum payments of $50,000 to each of the parties. In addition, the husband continued to seek the order for the return to him of the dog.
Injunction sought by the Wife
The injunction that the wife sought and that the husband opposed was worded as follows:
That the husband be restrained and injunction issue restraining him from selling, charging, disposing of, damaging or otherwise dealing with the assets in his sole name, joint name with the applicant (or other person), or in the name of any entity in which he or the Wife have an interest including but not limited to shares, real estate, superannuation, bank accounts (other than for purchases of $5,000 or less), motor vehicles, plant, equipment, livestock, crops and grain without the prior written consent of the applicant.
Further to that, the wife sought an order in the following terms:
That any agreed purchase for $5,000 or more be made jointly by the parties with the Husband to send the invoice to the Wife together with a cheque signed by him with the Wife to counter sign the said cheque and sent it to the creditor and then send to the Husband a copy of the receipt.
The background factual circumstances
The parties are involved in agricultural enterprise, principally as grain growers. They married in 1984 and separated, after 27 years of marriage, in September, 2011. They have two young adult daughters.
They live at Qld Town W near Qld Town Q and grow grain on a broad acre basis on land near NSW Town N in north-west New South Wales. In various forms and through various corporate structures and trusts (including a self-managed superannuation fund) the parties have valuable real property at Qld Town W and at NSW Town N. Their family farming enterprise has been successful as it is agreed there is little in the way of debt owed to banks or financial institutions. The net value of all of the property owned and controlled by them appears to run into several million dollars.
Whilst there is disputed evidence about the extent to which the wife was actually involved in the decision making and actual physical work required to operate the farming enterprise, it appears agreed that the wife at least acted as bookkeeper for the parties in respect of the farming enterprise and all of their financial interests.
The wife asserts in evidence that there is plant and equipment located on the NSW Town N properties that she estimates to be valued at around $600,000. She further asserts in evidence that grain is stored in large holding silos on the NSW Town N property. Apparently, it is stored as it is harvested and later sold into the market by the parties on a needs basis and according to the market conditions. In evidence, she asserts that the value of the grain currently stored at the property is around $800,000.
In his evidence, the husband does not dispute the wife’s evidence in respect of the plant and equipment located at the NSW Town N property or that grain is stored as the wife asserts. Senior counsel for the husband did inform the Court at the hearing though that the husband instructed that the stored grain was worth something less than the $800,000 estimated by the wife.
In evidence, the wife asserts that the marriage relationship was a volatile one, that the husband has an anger management issue and that he treated her poorly during the course of their marriage, including by trying to control her financially. For his part, the husband denied the wife’s assertions in this regard. Of course, I can make no findings in respect of these factual allegations at this stage in the proceedings.
What is not in dispute is the fact that since separation the wife has continued to live at the Qld Town W home of the family along with the parties’ two young adult daughters. The husband has taken up full time residence at the NSW Town N property. The parties have remained in dispute about matters such as the wife’s access to the NSW Town N properties, ongoing decision making in respect of the farming enterprise, possession of various personal items and access to and use of the parties’ income and cash reserves.
There is no dispute that at or around the time of separation the husband caused the sum of approximately $204,000 to be withdrawn from the parties’ farming enterprise’s working bank account and caused it to be deposited to new accounts that he established in his sole name. In evidence, the wife asserts that this inflamed matters between them. She caused solicitors to write immediately to the husband demanding action in respect of that withdrawal. She proposed a payment to her of $50,000 for her immediate needs, a similar payment of $50,000 to the husband for his immediate needs and return of the balance to the working account. A few weeks thereafter, after obtaining his own legal advice, the husband did forward the sum of $50,000 to the wife but apparently did not comply with the balance of the wife’s initial demands in respect of that money.
That is evidence that the wife points to as supporting the need for the asset preservation injunction that she seeks.
In his affidavit filed on 25 January, 2012, the husband gives evidence in respect of the withdrawal and transfer. He said:
36.It is important that I continue to operate the farming enterprises and have the financial freedom to bank proceeds and to pay all creditors on a day to day basis.
37.After separation, a sum of $204,000.00 was paid by my pension fund into the Family Trust to assist with ongoing business expenses. This transaction occurred on 20 September 2011.
38.I wish to have funds readily available to me to be able to properly operate the farming business and ensure that all expenses are paid on time. [The wife] had been querying me constantly and sending faxes (and continues to do so) querying me about every expense and income item in relation to the farming business that I operate.
39.I therefore set up a Gold Saver Account in my name and also a Commonwealth Bank Business Cheque Account to ensure that monies would be available to properly pay for expenses.
It became clear at the hearing on 3 February, 2012, that the contents of paragraph 37 were not entirely correct. It was actually the withdrawal of the money from the working account that occurred on 20 September, 2011. That aside, the evidence does not satisfy me that there was any pressing need for the husband to unilaterally withdraw and transfer the funds as he did in order to ensure the continued sound operation of the farming enterprise and the preservation of the parties’ property. I accept that the husband’s unilateral actions caused the wife serious concern as to his intentions in respect of the parties’ assets and the continued involvement of the wife in the parties’ farming enterprise.
In the same affidavit the husband deposes to having given the wife $50,000 of that money and retaining the balance in his own sole control for his own use and for use in continuing to operate the farming enterprise. He deposed to having spent at least $94,305 on necessary and important expenses of the business. Although on his affidavit evidence it was not clear that the said amount had actually been spent out of the balance of the withdrawn and transferred funds retained by the husband, the implication was such. The Court was also informed by Senior Counsel for the husband that his instructions were that those expenses were paid from that same money.
Indeed, Senior Counsel for the husband forwarded a supplementary written submission on behalf of the husband to the Court on the first working day after the hearing, attaching copies of bank statements and a schedule in which it was asserted that of the $204,364 originally withdrawn and transferred by the husband, some $95,480.60 was used to pay farming expenses, $50,000 was paid to the wife, $56,065.90 was spent by the husband (by implication, on non-farm expenses), with a balance of $2,819.48 remaining.
The wife complains in her evidence about some of the large items of expenditure that the husband made in respect of the farming enterprise out of that money. Specifically, she points to $46,929 being spent on fuel and oil and the $18,700 being spent on chemicals. She asserts that such expenditure was unnecessary and points to it as an example of the husband acting unilaterally without apparent regard for her interests. In fairness to the husband, although there was no objection to that evidence being relied on by the wife, he had no real chance to respond to it. I do not make a finding that there was anything actually untoward about his expenditure in respect of the fuel and chemicals but do accept that the unilateral nature of the expenditure has caused the wife a great deal of concern. As I have said, I am not persuaded, on the evidence, there is any pressing need for the husband to have unilateral control of such expenditure on an ongoing basis.
The wife also put into evidence a copy of a transaction statement printed via their internet banking facility in respect of the parties’ farming enterprise’s working account. It shows that at the 1st of February, 2012 there was a credit balance of $210,168 in that account. It also shows that the parties have access to a $400,000 line of credit on that account. The parties agree in respect to that fact. Accordingly, the evidence before the Court establishes that the parties have immediate access to $210,000 in cash reserves and an additional $400,000 in a line of credit, and that they have saleable grain stored at the NSW Town N property worth possibly as much as $800,000. The wife points to those funds as the funds from which the lump sum payments of $100,000 and $20,000 can be made to her and the husband respectively.
Another relevant matter of fact that the parties agreed upon was that withdrawals, by cheque or otherwise, from the parties’ farming enterprise’s working bank account could now only occur on the joint signature of the parties. The undisputed evidence before the Court in the form of the transaction statement just referred to proved that regular, sometimes large withdrawals had been occurring on that basis since shortly after separation. That is evidence that the parties have been able to agree as to items of expenditure on an ongoing basis, even during a period when relations have been tumultuous between them.
Further, large deposits, presumably income received on the sale of grain, had been made to that account in the same period. The husband gave an undertaking to the Court during the hearing on 3 February, 2012, on a “without admissions” basis, that he would continue to pay all receipts from the NSW Town N farming enterprise into the same working account.
Should the Injunction be granted?
There is no doubt that the Court has the power to grant the injunction sought. It can do so “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.” (s 114(3) of the FLA)
Senior Counsel for the husband submitted that there was an absence of need for the injunction and no basis for it. He submitted that an injunction was not necessary as the parties remain accountable in the proceedings for what they spend.
Although, of course, parties remain accountable in property proceedings, in certain circumstances, for money they spend and for property they encumber or dispose of between separation and finalisation of property division, I respectfully reject the submission that there is an absence of need and no basis for an injunction in this case. I am satisfied that:-
(i)the husband acted unilaterally in withdrawing a very large sum of the parties’ cash reserves at around separation and transferring it to new bank accounts opened solely in his name; and
(ii)he was apparently unwilling to account to the wife for the use of that money until just prior to or at the hearing of the wife’s injunction application; and
(iii)the evidence given by him in explanation of his actions fails to establish that such unilateral action was necessary to preserve those cash reserves and to ensure continued smooth operation of the farming enterprise.
These matters satisfy me that there is an objective risk of the husband disposing of or dealing with property in such a manner as may defeat a final order if he is left unrestrained.
The husband’s proffering, close to the date of the hearing, of an undertaking not to do so without giving written notice to the wife is not enough to persuade me that it is not just or convenient to grant an interim injunction. The evidence does not persuade me that the balance of convenience favours leaving the husband in a position where he can unilaterally determine to sell, dispose of, deal with or encumber the property of the parties simply on the giving of written notice to the wife or where he can spend the money of the parties or, at least, unilaterally pledge their credit or incur their liability in respect of the running of their farming enterprise, without regard to the views or interests of the wife. Although there is some evidence of some disagreement about the purchase of a new harvester late last year, the evidence does not otherwise satisfy me that the farming enterprise cannot continue to be operated smoothly and efficiently with the continuing requirement for agreement between the parties as to the major financial decisions in its operation.
Accordingly, I am persuaded by the evidence and submissions in this case that I should grant an injunction on the application of the wife for the preservation of the property of the parties pending finalisation of the proceedings. However, I am not prepared to grant the injunction in the exact form sought by the Wife.
I am not satisfied, on the evidence before me, that there is a need to include restraint against damaging property. I have not included that. I also consider that there is a need to vary the wording of the injunction sought by the Wife to more appropriately reflect the fact that the parties have different interests in a number of different corporate and trust entities and to more appropriately restrain the husband from causing any of those entities to sell, charge, further encumber or dispose of any assets.
Further, I am satisfied, on the evidence, that as part of the preservation of property the wife seeks on this interim basis that the husband should be restrained from incurring liability on behalf of himself and the wife or causing any corporate or trust entity in which they have an interest to incur liability in excess of $5,000 without the prior written agreement of the wife. I consider that is effectively what the wife was seeking in her amended Application and draft minute of order. I consider that an appropriate order to make having regard to the evidence, but consider that the wording of the orders I intend to make more appropriately achieves what the wife is seeking.
What lump sum cash distributions should be made?
As I have discussed, the parties agree that there should be lump sum cash distributions made to each of them that are treated and described in the orders as partial property distributions. They simply disagree on the amounts that should be distributed to each of them.
The wife’s application that she receive $100,000 and the husband receive $20,000 seems, at first blush, inexplicably uneven. With respect, I conclude that it cannot be justified on the evidence. In fairness to the wife, it seems as if the disparity in that which she seeks may be attributable to a belief that the husband already had access to $154,000 whilst she only had $50,000. However, the evidence satisfies me, at least at this point in time, that the husband spent some $95,480.60 on farm expenses sourced from that $154,000 that he retained. Putting that aside, he still appears to have had access to slightly more of the parties’ cash reserves than the wife has had. Nevertheless, I do not consider it just or equitable at this point in time to accede to the wife’s application on that basis alone.
The parties clearly need to be able to meet their own maintenance needs and to pay legal fees on an ongoing basis. The parties agree to attend mediation in the near future. There was approximately $210,000 cash credit balance in the working account just before the hearing, a further $400,000 line of credit facility available to the parties and substantial grain reserves stored at the NSW Town N property that can be sold if still further funds are needed for farming or otherwise by the parties pending finalisation of their financial dispute.
I am satisfied that the just and equitable result at this interim stage in respect of this disputed partial property distribution issue is for each to receive an equal amount. I am not convinced that the wife needs $100,000 just now. Although she deposes to that, she deposes to no particulars as to how that might be calculated and quantified. I am also not convinced that it is in the parties’ interests to distribute to them at this moment all of their cash reserves. Accordingly, I consider the sum of $75,000, which is the middle point between what each of them argues for, to be appropriate to meet their immediate personal expenditure needs and to fund their legal representation for some time yet. That is what I will order.
Should the dog be returned to the Husband?
Each party gives conflicting evidence about actual ownership of the dog. The husband says it is his. The wife says it is their daughters’ pet. In the light of that, Senior Counsel for the husband appropriately conceded that there was no proper basis for making the order the husband seeks for the dog to be delivered to him at this interim stage. I shall not make such an order.
I make the orders the parties ask me to make with their consent as well as the other orders as set out at the commencement of this judgment.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 9 February 2012.
Associate:
Date: 9 February 2012
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
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Property Law
Legal Concepts
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Injunction
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Costs
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Consent
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Remedies
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Fiduciary Duty
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