Kain and Kain & Ors

In the Family Court of Australia, Justice Wilson considered an application by the applicant in a dispute involving the first respondent and other named individuals and entities, referred to collectively as the Kain Group. The core of the dispute concerned allegations of a serious issue to be tried regarding the good faith of the trustees of certain trusts and the natural persons controlling them, specifically whether they were preferring one category of beneficiary over another. The applicant sought prohibitory and mandatory injunctions, including a quia timet injunction, in circumstances where extremely large sums were in issue and the potential for irreversible property settlement orders was a significant concern.

The court was required to determine whether to grant the injunctions sought by the applicant. This involved assessing whether a "serious issue to be tried" existed concerning the conduct of the trustees and those controlling the Kain Group entities. Furthermore, the court had to consider the admissibility of evidence relating to negotiations at a mediation, specifically whether a document produced at mediation could be accurately described as a "heads of agreement" and whether the mediation had in fact resolved the proceeding, in light of sections 131(2)(f) and (g) of the relevant legislation. The court also had to decide on applications to remove affidavits from the court file and to disjoin certain respondents.

Justice Wilson reasoned that a serious issue to be tried did exist, justifying the grant of injunctions. The court found that evidence concerning whether the mediation proceeding had actually resolved was admissible. Consequently, the court dismissed applications to remove affidavits and to disjoin respondents, but made orders joining specific individuals and entities as parties to the proceeding. The court then made orders restraining the first respondent and certain individuals in their capacities as directors from dealing with property of the Kain Group entities without the applicant's consent or court order, including distributions to beneficiaries and restructuring of the entities. The court also dismissed a specific application for partial property settlement and set a timetable for pleadings and costs applications, transferring the proceeding to its own docket.