INGLES & INGLES

[2018] FamCA 89

FAMILY COURT OF AUSTRALIA

INGLES & INGLES AND ANOR [2018] FamCA 89

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the wife seeks interim orders permitting her to maintain exclusive occupation of the former matrimonial home –  Where the wife does not seek final orders with respect to the house  – Where the former matrimonial home is owned by a company – Where the company claims rent of $1000 per week is owed – Where the wife seeks to restrain the company from selling, transferring or otherwise encumbering the property – Where the Court finds that the wife may remain in the home subject to payment of weekly rent

FAMILY LAW – INJUNCTIONS – INTERIM PROCEEDINGS –Preservation of property – Where the wife seeks restraints against the husband’s ability to exercise discretion with respect to the family trust that would impact on a third party trustee – Where an order sought by the wife goes beyond what is reasonably necessary – Section 90AF(3) considerations – Where the wife offers an undertaking as to damages – Where the husband is restrained from appointing any other trustee or appointor to the trust – Where the husband is restrained from resigning as the appointor of the trust – Where the husband shall advise the wife prior to approving any trust distributions his intention to do so and the amount to be distributed

FAMILY LAW – SPOUSAL MAINTENANCE – INTERIM PROCEEDINGS – Where the wife seeks spousal maintenance – Where details of discretionary expenditure are missing from the wife’s financial statement – Where the application is unable to proceed in the absence of the expenditure information – Where the application is dismissed

Family Law Act 1975 (Cth) ss 90AE, 90AF, 90AF(3), 114(1), 114(3)

Ascot Investments Pty Ltd v Harper & Harper (1981) FLC 91-006
Ashton & Ashton (1986) FLC 91-777
First Netcom Pty Ltd v Telstra Corporation Ltd [2000] 179 ALR 725
G & T (2004) FLC 93-176
In the Marriage of Farr (1976) FLC 90-133
Kennon & Spry (2008) 238 CLR
Lampros & Anor & Lampros & Anor (2012) FamCA 415
Martiniello & Martiniello (1981) FLC 91-056
Mullen & De Bry (2006) FLC 93-293
Sieling & Sieling (1979) FLC 90-627
Voth v Manildra Flour Mills (1990) 171 CLR 538
Yunghanns & Ors v Yunghanns & Ors; Yumghanns (1999) FLC 92-836

APPLICANT: Ms Ingles

1st RESPONDENT: Mr Ingles

2nd RESPONDENT: B Pty Ltd

INTERVENOR:

FILE NUMBER: DNC 270 of 2017

DATE DELIVERED: 22 February 2018

PLACE DELIVERED: Adelaide

PLACE HEARD: Darwin

JUDGMENT OF: Berman J

HEARING DATE: 22 and 23 January 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Pyke QC

SOLICITOR FOR THE APPLICANT: Norman Waterhouse Lawyers

COUNSEL FOR THE 1ST RESPONDENT: Mr Shoebridge

SOLICITOR FOR THE 1ST RESPONDENT: Murdoch Lawyers

COUNSEL FOR THE 2ND RESPONDENT: Mr Bonig

SOLICITOR FOR THE 2ND RESPONDENT: Finlaysons

upon noting:-

The wife’s undertaking as to damages in favour of B Pty Ltd and the Ingles Family Trust

UNTIL FURTHER ORDER:-

1. That an injunction be granted restraining B Pty Ltd (“BPL”) from selling, transferring or further encumbering the property situate at C Street, Suburb D, NT (“the Suburb D property”).

2. That BPL shall do all things necessary to enable the wife to occupy the Suburb D property conditional upon the payment by her to BPL of the weekly sum of THREE HUNDRED AND FIFTY DOLLARS ($350), with the first payment to be made on  26 February 2018 into such account as may be nominated by BPL.

3. That should the wife be in default of the payment of the weekly amount as provided in paragraph 2 hereof and should such payment be in default for a period of fourteen (14) days THEN the wife shall forthwith vacate the Suburb D property and paragraphs 1 and 2 hereof are discharged.

4. That the husband be restrained from resigning as appointor of the Ingles Family Trust (“IFT”) (NOTING the husband’s consent).

5. That the husband be restrained in his capacity as appointor of IFT from appointing any other person as trustee or appointor (NOTING the husband’s consent).

6. Not less than twenty one (21) days from the date of the meeting of the trustees of IFT to be convened to make, approve or determine the distributions of income or capital for IFT in respect of the 2018 financial year, the husband shall advise the wife of the following:-

   (a)Any advice that he has received from the accountants for IFT as to distributions of income and capital;

   (b)His intention to exercise his discretion as trustee of IFT to make, approve or determine a distribution of income or capital and the likely amount (or percentage entitlement) to be distributed to the beneficiaries.

7. That pursuant to Part 15.5 of the Family Law Rules, Mr E of F Accountants be appointed as the single expert to value the husband’s interest in BPL and IFT as at the date hereof and for that purpose the parties shall provide to the single expert all documentation information that single expert may request and that the husband do pay the costs of the single expert in the first instance with the wife to reimburse the husband one half of the said valuation costs as at the date of the final determination of the proceedings.

8. The application for interim orders 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 Ingles & Ingles and Anor has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: DNC 270  of 2017

Ms Ingles

Applicant

And

Mr Ingles
Respondent

And

B Pty Ltd

Second Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. By the Second Amended Initiating Application filed 22 December 2017, Ms Ingles (“the wife”) seeks final orders for settlement of property. The gravamen of her application is that she seeks a settlement sum of $1,700,000 together with a transfer of a splittable payment from the husband’s superannuation fund to her nominated fund in the sum of $200,000.

2. By Amended Response filed 18 January 2018, Mr Ingles (“the husband”) opposes the settlement sum sought by the wife and seeks orders that the parties each retain their interest in property currently held by them and concedes that in addition to the wife retaining her superannuation interest there should be an order transferring $200,000 from the husband’s splittable interest in his superannuation fund to the wife as she requests.

3. By Response filed 21 September 2017, B Pty Ltd (“BPL”) seeks that the wife pay rent for her continuing occupation of premises at C Street, Suburb D, Northern Territory (“the Suburb D property”) since April 2016 and that she vacate the premises.

4. Paragraphs 2, 3, 4 and 10 of the interim orders sought by the wife collectively seek to restrain the second respondent from taking any action either by way of vacant possession or the sale or transfer of the Suburb D property.

5. If BPL is successful in regaining the possession of the Suburb D property, the wife seeks an order for spousal maintenance in the sum of $1,000 per week.

6. The interim orders sought also focus on BPL and Ms G as trustee of the Ingles Family Trust (“IFT”). The wife seeks the husband be reappointed as a director of the second respondent and injunctions that would restrain the manner in which IFT conducts its affairs.

7. The parties are agreed as to the appointment of a single expert to value the husband’s interest (if any) in BPL and IFT. 

8. At the commencement of the proceedings it became apparent that the financial statement relied upon by the wife did not contain a Part N Statement as to the wife’s discretionary weekly expenditure.

9. Queen’s Counsel for the wife conceded that whilst the affidavit material was relatively extensive it did not contain sufficient information that in the absence of a properly completed Part N Statement would enable the Court to determine the wife’s application for spousal maintenance.

10. I have declined to adjourn the spousal maintenance application and accordingly dismiss the application.

B PTY LTD

1. The company BPL was originally incorporated in 1997 known as H Pty Ltd (HPL).  It changed its name to B Pty Ltd in 2001.

2. The change in name was consequent upon the sale of the HPL business.

3. The proceeds of sale were retained in BPL and it is the husband’s evidence that both he and Ms G (“the husband’s sister”) agreed to lend money to IFT to enable the trust to invest in real estate in Queensland and the Northern Territory. The husband and Ms G are equal shareholders.

4. In May 2007 BPL purchased the Suburb D property.  The husband contends that it was purchased as an investment property for the company, whereas the wife argues that its clear intention was for it to be retained as the family home.

5. The husband was a director and secretary of BPL until 1 May 2017 when he tendered his resignation from both roles. Ms G remains as the sole director.

6. The parties disagree as to the motive for the husband’s resignation.  For his part, the husband contends that he resigned as a director of the company when the wife indicated that she would allege that he was the perpetrator of domestic violence. The husband considered that if he remained as a director, particularly in circumstances where BPL was seeking to evict the wife and sell the property, this may be seen as an irreconcilable conflict.

7. The wife argues that the husband’s resignation as a director of BPL should be seen as part of an overall strategy of the husband to minimise his interest and therefore any value that might attach and make it difficult for her to obtain orders that would restrain BPL from its foreshadowed course of action.

8. By reference to the BPL balance sheet for the year ended 30 June 2017, the total net assets are $1,856,449 comprised predominantly of unsecured loans from IFT, a share portfolio, a beneficiary entitlement in IFT and the Suburb D property with a book value of $927,525.  There is some contention between the parties as to the likely current value of the Suburb D property, but for the purposes of this application the net value is estimated to be between $900,000 and $1,000,000.

THE SUBURB D PROPERTY

1. BPL purchased the Suburb D property in 2007 for $880,000. It was originally purchased by way of a secured mortgage which was subsequently refinanced in 2014. The contention between the parties is as to the status of the current secured mortgage loans.

2. The husband argues that the current mortgage should be considered as a secured liability in respect of the Suburb D property and upon its sale the loan should be repaid and the mortgage discharged.

3. The wife argues that the Suburb D property has been used as security for properties purchased and retained by IFT. 

4. By reference to the 2017 balance sheet for BPL, no secured liability appears.

5. Given the total assets (both current and non-current) are recorded at $1,863,363, the wife argues that the husband’s interest in 50 percent of the issued shares in BPL is a shareholding of value.

6. The husband disagrees with the wife’s assertion and in his response to paragraph 14 of the wife’s affidavit the following appears:-

   The house has always underpinned loans held with Westpac and NAB.  This will be evident from mortgages registered on the title.  Disclosure has also been made of same.

7. In answer to the wife’s broad proposition that the financial statements for BPL do not record any liability that relates to the Suburb D property, the husband’s response is that he is awaiting accounting advice and considers that the extent to which the assets of BPL should properly be the subject of liability is to be considered prior to a final hearing.

INGLES FAMILY TRUST

1. The husband is the appointor of IFT which was established in 1997. At the time of establishment the husband was the sole trustee. The class of beneficiaries is broad and includes members of the husband’s immediate and extended family (including his sister), a company of which a director is also within the class of beneficiaries of IFT and any other trust where the beneficiary is a beneficiary of IFT.

2. The only changes to the Trust Deed were the appointment of Ms G as a trustee of IFT in 1998, and then in 2009 her appointment as an appointor of IFT as and from the date of the husband’s death.

3. It appears uncontroversial that IFT holds a number of commercial investment properties which are variously subject to liability.

4. The inference is that the secured mortgages over the Suburb D property are in reality securing loans to enable the purchase of property by IFT.

5. The wife complains that by a capital distribution of $363,630 in November 2015 and a distribution of the entire trust income for the financial year ended 30 June 2017 of $234,070, the husband has effectively shifted substantial value from IFT.

6. The wife’s unease at the manner in which the trust has been conducted is also evident from her evidence that notwithstanding she is not a beneficiary of the trust, she has nonetheless received a distribution in the 30 June 2010 financial year and there has been a loan account which has fluctuated and ultimately extinguished as at 30 June 2017. The husband does not respond to the matters raised in paragraph 44 of the wife’s affidavit.

INJUNCTION

1. The Court has broad powers to grant injunctive relief including for the purpose of preserving the property of the parties or otherwise regulating the conduct of the parties pending final hearing (see G & T (2004) FLC 93-176 at[53] – [54]).

2. Whilst s 114(1) of the Family Law Act 1975 (Cth) (“the Act”) empowers the Court to make orders in positive as well as negative terms, as in the case of a mandatory injunction, such order must be consider proper. The term “proper” means “reasonable and just in the circumstances” (see In the Marriage of Farr (1976) FLC 90-133).

3. Pursuant to s 114(3) the Court must be satisfied that it is just or convenient to grant such an injunction or make an interlocutory order (see Mullen & De Bry (2006) FLC 93-293).

4. As was observed by Forrest J in the decision of Lampros & Anor & Lampros & Anor [2012] FamCA 415 at paragraph 50:-

   In this Court particularly, interim junctive relief is primarily utilised to maintain things as they are, or to restore things to as they were until they were abruptly changed to the prejudice of an interested party, to protect claims that parties have or may have to substantive relief after a final hearing.

5. In Sieling & Sieling (1979) FLC 90-627 at 78,264 the Full Court noted that:-

   The Court must balance the hardship to each party of granting or refusing an order, and frame its order in such a way as to impose no further restriction that is necessary to achieve protection of the applicant’s interest. 

6. In Martiniello & Martiniello (1981) FLC 91-056 at 76,421 the Court further suggested that unless a fear the party would deplete the funds could be demonstrated, the parties should not be restrained from using their money for ordinary business purposes.

7. The wife has offered an undertaking as to damages; however a question remains as to the extent to which the undertaking may be empty.

8. The Suburb D property forms part of the non-current assets of BPL.

9. It is not as yet alleged by the wife that BPL is either the alter-ego of the husband, that it is a sham entity and represents a device or vehicle for the husband to frustrate any order that might be made by way of settlement of property, or that it is his  puppet.

10. At this stage of the enquiry there is no suggestion that Ms G holds her 50 percent interest in the issued shares of BPL on trust for the husband.

11. Prior to the introduction of Part VIIIAA of the Act, the Court had limited power to restrain third party interests in a company. In Ascot Investments Pty Ltd v Harper & Harper (1981) FLC 91-006 Gibbs J said at 76,061:-

    It is one thing to order a party to a marriage to do whatever is within his power to comply with an order of the court, even if what he does may have some effect on the position of the third parties, but it is quite another to order third parties to do what they are not legally bound to do.

    …

    Except in the case of shams, and companies that are mere puppets of a party to the marriage, the Family Court must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it.

12. The provisions of Part VIIIAA enable the Court to make an order or injunction that binds third parties providing that the requirements of the Part are met (ss 90AE and 90AF of the Act).

13. When a Court grants an injunction or orders a third party to do something that alters their interests, rights or liabilities or property interests, regard must be had to s 90AF(3) of the Act which provides the conditions that must be met before a court can grant an injunction or make an order under s 90AF:-

    (a)That the injunction is reasonably necessary, appropriate and adapted to effect a division of property between the parties;

    (b)If the order or injunction concerns a debt of a party to the marriage at the time that the order is made it is not foreseeable that the debt would not be paid;

    (c)There is procedural fairness afforded to a third party;

    (d)The Court is satisfied that for an injunction under subsection 114(1) it is proper to make the order;

    (e)That it is just or convenient to grant the injunction; and

    (f)That the matters set out in section 90AF(4) are brought to account.

14. The power that the Court has available to it is wide and whilst the property interests of a third party may be affected, an order should not be made if it will ultimately function to the significant detriment of the third party.

PARAGRAPHS 2, 3, 4 AND 10 OF THE INTERIM ORDERS SOUGHT

1. The combined effect of the interim orders would be to allow the wife to remain in the Suburb D property and subject to certain terms and conditions restrain the second respondent from listing for sale or selling the property.

2. Whilst it is the preference of the second respondent to dispose of the property, it is conceded that the net proceeds of sale would not remain in an account to the credit of the second respondent but rather, would primarily be used to discharge liability. As discussed, the contention is whether the liability is a liability of BPL or a liability of IFT.

3. The second respondent does concede that if the wife paid rent then any prejudice to the second respondent in not being able to deal with the property would be minimised.

4. The payment of rent raises further disagreement between the parties.  The husband maintains that rent has been charged in the sum of $1,000 per week and a consideration of his loan account would demonstrate how the rental obligation has been accounted for.

5. I am uncertain as to the state of the evidence in relation to income of BPL reflecting rent received.

6. The financial statements for the 2014 – 2017 financial years  reflect rent received of $52,000. 

7. The purported cost to IFT in order to service the loans on an interest only basis is about $3,000 per month. That may or may not be a relevant consideration depending upon whether the loans should properly be paid by BPL as opposed to IFT where there appears to be substantial income available for distribution to the beneficiaries.

8. The husband argues that the wife does not seek to retain the Suburb D property as part of the final orders she seeks. The issue for the wife is not necessarily for her convenience in remaining in the property, but rather, that if the property is sold and the proceeds are used to discharge liability that is not the primary responsibility of BPL, that may have the effect of removing substantial value to the husband’s shares.

1. The husband concedes that there may well be more complex accounting issues that arise to explain why the financial statements of BPL do not reflect the liability that the husband purports should be brought to account.

2. It is reasonable in the circumstances that until the evidence establishes with some clarity whether the purported liabilities are those of BPL or IFT, that the asset be preserved (see Yunghanns & Ors v Yunghanns & Ors; Yumghanns (1999) FLC 92-836).

3. I am satisfied that at this stage of the evidence BPL is not the alter-ego of the husband, a sham entity or the husband’s puppet.  Orders that I make cannot ignore the proper interests of Ms G arising from her shareholding in the company.

4. Whilst I consider that there is merit in the wife’s application for the property to be retained by BPL until the factual dispute is resolved, there can be no good reason why the wife should remain in the property free of any financial obligation.

5. The wife offers an undertaking as to damages, but there is not as yet any demonstration as to whether she has the resources, either from an anticipated settlement or from separate resources, to ensure that if the evidence supports the contention of the second respondent that it bears the liability secured over the Suburb D property, the wife may well be obliged to reimburse BPL for its outgoings. Whilst the impecuniosity of the wife is not necessarily a barrier to the Court accepting the wife’s undertaking, the involvement of a third party requires caution (see First Netcom Pty Ltd v Telstra Corporation Ltd [2000] 179 ALR 725).

6. The husband currently lives in rental accommodation to the sum of $620 per week. The wife receives income excluding child support in the sum of $1,037. It is difficult to calculate her expenditure, but by reference to her financial statement she has fixed expenditure of $681 with discretionary expenditure of $195, being a total of $876.

7. There appears to be an error in the level of income tax at $583 per week in respect of the wife’s salary and income from her business totalling $1,037.

8. Whilst I have not been advised as to the extent of the outgoings, it would seem reasonable in the circumstances that the wife’s continued occupation of the Suburb D property is contingent upon her paying $350 per week to BPL as a condition of her undertaking.

9. BPL has commenced proceedings in the Northern Territory Civil and Administrative Tribunal (“NTCAT”) to require the wife to vacate the Suburb D property.

10. The wife seeks an order restraining the second respondent from taking or continuing any proceedings in NTCAT.  The effect of the wife’s application, if granted, is an anti-suit injunction.

11. The test is whether the NTCAT proceedings will be a clearly inappropriate forum if it could be seen that those proceedings might be oppressive (see generally Voth v Manildra Flour Mills (1990) 171 CLR 538).

12. Counsel for the second respondent conceded that if orders were made that preserved the Suburb D property pending further order or agreement, then the NTCAT proceedings should be either suspended or dismissed.

13. If I am wrong in that contention then that issue will need to be the subject of separate consideration. At this stage I propose to accept counsel’s intimation that the NTCAT proceedings will be suspended. In those circumstances I do not propose to make orders by way of an anti-suit injunction.

THE REAPPOINTMENT OF THE HUSBAND AS A DIRECTOR OF BPL

1. The husband is no longer a director of BPL.  Ms G remains as the sole director.

2. Whilst I am clearly able to order the husband to deal with his shares in a manner that is not inconsistent with the relevant Commonwealth Legislation or the Memorandum of Articles of Association of the company (including to order the husband to exercise his voting rights in a particular way), I do not consider that I have the power to order Ms G to join with the husband in reappointing him as a director.

3. Ms G is not a party to the proceedings. She has filed an affidavit of 21 September 2017, but that is in her capacity as the director of BPL.

4. In circumstances where I will injunct BPL from selling, disposing or further encumbering the Suburb D property, there appears little basis for the orders sought by the wife that a meeting of shareholders be convened and a requirement that the company and the husband cause him to be reappointed as a director.

INGLES FAMILY TRUST

1. The wife seeks to restrain the husband from resigning as appointor of the trust.  She also seeks that he not appoint any other person as either trustee or as an appointor. The husband concedes that orders can be made in terms of paragraph 11(i) and (ii) of the wife’s interim orders. The focus is on paragraph 11(iii). 

2. Queen’s Counsel for the wife sought leave to amend the proposed order by the deletion of the words “…and that if it shall be necessary…to remove a trustee of the trust”. There was no opposition to the application and leave was given.

3. It then became apparent that the amended proposed order as drafted is likely to be onerous in that it does not contemplate the trust being able to conduct itself in the ordinary course of business. This is a significant issue in respect of the business of the trust in that it buys and sells properties. Whilst it is not presently intended that the trust will significantly dispose of its property interests, it was conceded that the proposed order would not allow the trust to operate in the ordinary course of business.

4. The issue for the wife is not the trust taking steps to “sell, transfer, encumber or make any shift in the value of the assets” but rather to restrain the husband from approving any distribution of income or capital.

5. As currently drafted, the injunction would require the written consent of the wife with such consent to be not unreasonably withheld.

6. That would have the effect of bestowing upon the wife the status of a trustee.  That would not have been contemplated by the settlor and the Trust Deed makes no provision for same. In any event it would be problematic.  Whilst not yet determined, it is accepted that Ms G is a significant beneficiary of IFT and appears actively engaged in the day to day management of the trust and its investment portfolio.

7. In Ashton & Ashton (1986) FLC 91-777 the husband and a company were trustees of the Ashton Family Trust. The husband and his cousin were equal shareholders in that company and the cousin held his shares on trust for the husband. Strauss J said at 75,653:-

   The powers which the husband has in the Ashton Family Settlement give him control of the trust either as trustee or through a trustee which is his creature, and at the same time he is able to apply all the income and property of the trust for his own benefit. In my opinion, in a family situation such as the one here, this Court is not bound by formalities designed to obtain advantages and protection for the husband who stands in reality in the position of the owner. He has de facto legal and beneficial ownership.

8. A discretionary beneficiary has no interest or entitlement other than the due administration of the trust. In Kennon & Spry (2008) 238 CLR 366 the High Court considered whether property of a wholly discretionary trust was property capable of being subject to an order pursuant to s 79. As the settlor, trustee and appointor the husband had full control of the trust and as the sole trustee the husband had the legal title. French CJ said at paragraph 49:-

   Absent a specific application of Trust capital or income to one of the objects of the Trust, there was no equitable interest in its assets held by anyone...

9. The wife complains that in the 2014 financial year the trustees distributed capital to Ms G of $363,630 which when added to her credit loan account of $154,503, after subtracting the drawings of $54,446, left a debit loan account of $263,573.

10. By reference to the notes to the financial statement for the year ending 2015 and 2016 it is not clear how the debit loan account changes from $263,573 to $105,796 in credit.

11. In 2017 the net profit is $234,070. The notes to the financial statement reflect that the entirety of that income was distributed to Ms G with no distribution to the husband.

12. The documents produced by the wife contain the trustee resolutions for the financial years 2014 to 2017. Up until the most recent financial year all income has been divided equally and the trustees have resolved that they have the power to pay any of the capital of the trust before the vesting date to any of the beneficiaries as the trustees may decide. The entitlement that appears in the trustee resolution consistent across the previous three years is that the husband and Ms G are to share equally in any distribution of trust capital. The trustee resolution for the 2017 financial year is not provided.

13. The capital distribution was made to the husband’s sister in November 2015. At this stage I am not able to draw any conclusion and there may well be an explanation.

14. The husband has declined to provide any explanation as to the basis upon which he exercised his discretion as a trustee of IFT to distribute the entirety of the 2017 trust profit to Ms G.

15. In circumstances where I accept that Ms G has taken an active role in the management and operation of IFT, even were I to have the power to make orders against Ms G I would decline to do so in the circumstances of this case. Ms G is not a party to the proceedings. Accordingly, an injunction that seeks to bind the husband in terms of his ability to exercise his discretion to make a distribution of trust income or capital is likely to be without jurisdiction unless the Court can be persuaded to make an order under s 90AE and 90AF. At this stage of the proceedings and taking into account the difficulty arising from the drafting of the amended paragraph 11(iii), I decline to do so.

16. The income of the trust is however a relevant consideration if only because the husband’s beneficial interest is at least a financial resource.

17. I do not overlook that the husband is not a mere beneficiary but is also the appointor and co-trustee of IFT.

18. His income is a relevant consideration. 

19. In his Financial Statement filed 25 August 2017 the husband lists his income as $3,828 before tax.  The income is derived from his employment.

20. By reference to financial resources, the husband identifies his interest in IFT by reference to the total value of real estate owned by the trust of $5,385,000 with liabilities to NAB of $2,910,000.

21. The husband’s circumstances changed significantly in the Financial Statement filed 18 January 2018.  The husband’s income is now $8,318.

22. In the absence of any explanation as to why the husband considered that his discretion as trustee should be exercised in favour of Ms G as to 100 percent of the net income, there is the potential for the husband’s personal circumstances to be significantly diminished which may well impact adversely on the wife at least in terms of the financial circumstances relevant to each of the parties and possibly more directly in terms of any future application for spousal maintenance.

23. Whilst I am not prepared to grant the injunction as sought by the wife, I propose to order that on or before 1 June 2018 the husband advise the wife in writing of his best estimate (by reference to the trust’s accountants) and how the husband will exercise his discretion in respect of distribution of trust income for the 2018 financial year.

COSTS OF THE SINGLE EXPERT

1. The parties agree on the identity of a single expert to be appointed to value the husband’s interest in BPL and “the [Ingles] Family Trust as at the date hereof”.

2. The parties agree that they should provide the single expert with all documentation information as the single expert may request, but the outstanding issue is the payment of the single expert’s costs. The wife seeks that the husband pay the costs of the single expert in the first instance, with the question as to liability of the wife and the second respondent to be determined at trial.

3. Whilst I think it is proper that consideration be given to the husband paying the upfront cost of the single expert, there is no justification for any obligation to rest upon the second respondent, or  a suggestion that the wife should be relieved of any contribution.

4. By reference to the wife’s Affidavit of 22 December 2017, she has money in her Credit Union bank accounts with a combined balance of approximately $37,000.  She has substantial liabilities to both her former and current solicitors totalling $48,395.

5. For his part, the husband has money in his bank account of $12,091 and a share portfolio of $5,479.

6. He has a credit card liability of $6,084 and owes money to the Ingles Family Trust of $452,283 and has a potential liability for investment loans for commercial and residential property of $2,890,000.

7. The husband’s income is however substantial and in previous years he had the considerable advantage of receiving 50 percent of the trust income.

8. I accept that the wife is in a precarious financial position and as matters presently stand the way forward for the parties is to determine the value of the husband’s interest in BPL and IFT and subject to any concession that may be made by the parties as to the treatment of the husband’s beneficial interest, there will be little difficulty in concluding the pool of assets available for division.

9. The valuation report is critical to the parties being able to consider settlement options.

10. The husband is better suited than the wife to pay the anticipated costs of the single expert at first instance, but I propose to order that the wife be responsible for one half of the fees incurred to be reimbursed to the husband at the conclusion of the proceedings either from a settlement sum that she may receive, or in the absence of any sum paid then from her private resources.

11. I make orders that appear at the commencement of these reasons.

I certify that the preceding one hundred and four (104) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 22 February 2018.

Associate: 

Date:  19 February 2018