Kendling and Kendling

[2008] FamCA 31

FAMILY COURT OF AUSTRALIA

KENDLING & KENDLING AND ORS [2008] FamCA 31

FAMILY LAW – COSTS - Between parties

Family Law Act 1975 (Cth)

Marriage of Poletti (unreported, 2 March 1990)

APPLICANT: Mrs Kendling

RESPONDENT:	Mr Kendling
SECOND RESPONDENT	T Pty Ltd
THIRD RESPONDENT	Jeremy Kendling
FOURTH RESPONDENT	Penelope Kendling
FIFTH RESPONDENT	L Pty Ltd
SIXTH RESPONDENT	A Pty Ltd
SEVENTH RESPONDENT	Mr Z
EIGHTH RESPONDENT	B Ltd
NINTH RESPONDENT	I Pty Ltd
TENTH RESPONDENT	Mr PS
FILE NUMBER:		SYF	2903	of		2003

DATE DELIVERED: 25 January 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice O'Ryan

HEARING DATE: 14 December 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Richardson

SOLICITOR FOR THE APPLICANT: Michael Conley Lawyers

COUNSEL FOR THE RESPONDENT: Mr Baron

SOLICITOR FOR THE RESPONDENT: Dorrough Smart Solicitors

Orders

1. By 4.00 pm on 29 February 2008 the Husband pay into the trust account of the Wife’s Solicitors, Messrs Michael Conley Solicitors, the sum of $1,000,000.

2. The determination as to whether the sum referred to in Order 1 hereof be treated as part of the Wife’s entitlement to property settlement, the provision of maintenance for the Wife, or in payment by the Husband of the costs of and incidental to these proceedings, be reserved to the trial judge at the final hearing of these proceedings.

3. Any monies received by or on behalf of the Wife pursuant to Order 1 hereof be utilised on account of the Wife’s costs in prosecuting her claims in these proceedings, including costs (outstanding and future) in relation to solicitors, counsel, accountants, valuers, and other legal costs and disbursements including process servers fees and conduct money.

4. The Wife is to account at the final hearing for monies so received and disbursed

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice O’Ryan delivered this day will for all publication and reporting purposes be referred to as Kendling & Kendling and Ors

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2903 / of 2003

Mrs Kendling

Applicant

And

T Pty Ltd

Second Respondent

And

Mr Kendling

Third Respondent

And

Penelope Kendling

Fourth Respondent

And

L Pty Ltd

Fifth Respondent

And

A Pty Ltd

Sixth Respondent

And

Mr Z

Seventh Respondent

And

B Ltd

Eighth Respondent

And

I Pty Ltd

Ninth Respondent

And

Mr Pearce

Tenth Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. Before me for hearing is an application for costs filed on 30 November 2007 by Mrs Kendling, who I shall refer to as the Wife.  The Wife is seeking an amount of $1,484,650.  The Respondent is Mr Kendling who I shall refer to as the Husband. 

2. There are pending proceedings for property settlement which were commenced by an amended Response filed by the Wife on 10 March 2006.  In an earlier judgment I set out the final orders sought by each of the Wife and the Husband.

3. There are a number of respondents.  The Second Respondent is T Pty Ltd.  The Third Respondent is Jeremy Kendling.  The Fourth Respondent is Penelope Kendling.  The Fifth Respondent is L Pty Ltd.  The Sixth Respondent is A Pty Ltd.  The Seventh Respondent is Mr Z.  The Eighth Respondent is B Ltd.  The Ninth Respondent is I Pty Ltd.  The Tenth Respondent is Mr Pearce.

4. On 4 October 2006 a response objecting to jurisdiction was filed on behalf of the Third, Fourth and Fifth Respondents.  It is contended that the Wife’s claims against the Third, Fourth and Fifth Respondents be dismissed because the Family Court lacks jurisdiction to make the orders and the Wife’s claims have no or no reasonable prospect of success and that the orders sought are “grounded upon laws of the Commonwealth that are invalid and unconstitutional”.

5. In the property proceedings the Wife contends that the matrimonial asset pool is very significant and includes interests in businesses, companies, real estate and personalty.  The Wife contends that the parties own assets of considerable value.  In an earlier judgment I said that the Wife contends that she is unable to determine the asset pool although the value is probably in excess of $100 million.  I also said that the Husband contends that there are property interests of a value in excess of $40 million.

6. On 25 May 2007 I made the following orders:

   1.The Husband pay into the trust account of the Wife’s Solicitors, Messrs Michael Conley Solicitors, of […], the sum of $1,100,000 such sum to be paid as follows:

   1.1 by 4.00 pm on 20 June 2007 the amount of $550,000.

   1.2by 4.00 pm on 28 July 2007 the amount of $550,000.

   2The determination as to whether the sum referred to in Order 1 hereof be treated as part of the Wife’s entitlement to property settlement, the provision of maintenance for the Wife, or in payment by the Husband of the costs of and incidental to these proceedings, be reserved to the trial judge at the final hearing of these proceedings.

   3Any monies received by or on behalf of the Wife pursuant to Order 1 hereof be utilised on account of the Wife’s costs in prosecuting her claims in these proceedings, including costs (outstanding and future) in relation to solicitors, counsel, accountants, valuers, and other legal costs and disbursements including process servers fees and conduct money.

   4.The Wife shall account at the final hearing for monies so received and disbursed.

   Thus the Wife has already received $1,100,000 to assist her defraying her costs of the proceedings.  She now seeks a further $1,484,650.

7. In support of the present application the Wife swore an affidavit on 13 November 2007.  The Wife contends that the reason for the current application for further costs is a result of a number of unforseen developments in the case giving rise to the need for what she described as multiple and protracted interlocutory applications.  The Wife also said that she has expended almost all of the monies which were previously provided to her in accordance with the order I made on 25 May 2007.

8. The Wife contends that during the period pending ultimate compliance on 27 July 2007 with the order I made on 25 May 2007 so that her solicitors would continue representing her she obtained a further advance from SF Company of $550,000 gross and after payment on 26 June 2007 of an administration fee of $27,500 the amount of $522,500 was deposited into the trust account of her solicitors.  On receipt of the monies in satisfaction of the costs order of 25 May 2007, the Wife paid $550,000 to SF Company on 13 July 2007 and she was immediately out of pocket in the sum of $27,500 she was charged with respect to the establishment of the application.

9. With respect to the monies the Wife received they were disbursed as follows:

   ·payment of legal fees and disbursements outstanding of $324,317.68;

   ·     payment to counsel and forensic accountant outstanding of $54,098;

   ·     payment to Mr P of $4,000;

   ·     payment of legal fees and disbursements billed from 1 March 2007 through to and including 31 October 2007 of $827,814.21;

   ·     payment of disbursements of $112,457.

10. The Wife referred to an affidavit sworn by her solicitor Michael Conley in which the total estimate for future legal fees at that time was $88,850 for the parenting proceedings, $335,776 for the financial proceedings and $38,232 for the first costs proceedings.  The Wife contends that as a result of interlocutory applications and unforseen circumstances not anticipated in March 2007 the costs will now greatly exceed that estimate and that an amount of only $129,900 remains in the trust account of her solicitor.

11. The Wife contends that a number of other things have changed.  In March 2007 the assumption was that the hearing of the applications for final property settlement orders would be listed for 10 days where it is now listed for 30 days.  In fact it may take longer than six weeks.

12. The Wife contends that the assumption was that all documents sought would be provided and there would be no further issues relating to the provision of financial information whereas she contends there have been continuing and significant issues concerning non-production of documentation and a failure to provide information.  The issues concerning non-production of documentation and a failure to provide information are longstanding.

13. The Wife contends the estimate took no account of the number or nature of any interlocutory applications and that there have been a number of such applications taking up to 11 days or part days of court time.  Further that prior to these issues there has been a significant volume of correspondence between the parties’ respective lawyers.

14. In relation to the first costs application the Wife contended that it was anticipated that the hearing would last one day, however as my judgment of 25 May 2007 reveals it occurred over a number of days and not less than four separate days.

BACKGROUND

1. I refer to my judgment delivered on 25 May 2007 and also a judgment I delivered on 17 October 2007.  In my judgment of 17 October 2007 I set out a deal of what has happened since 25 May 2007 particularly in relation to the sale by B Ltd of an asset called B Facility and the disbursement of the proceeds of sale.  I will hereafter set out some of what else has happened since 25 May 2007. 

2. On 12 June 2007 the then solicitors for the Husband wrote to the solicitors for the Wife and advised that they were instructed by the Husband that he had unsuccessfully sought to borrow money against his shareholding in B Ltd.  The solicitors enclosed copies of correspondence.  It was said that the Husband was therefore unable to borrow funds to meet his obligation to comply with the interim costs order.  Further that the solicitors were instructed that the Husband had sought expressions of interest in respect of a sale of 10 per cent of his shares in B Ltd to fund payment of the interim costs order and to meet his ongoing legal costs and disbursements.  Copies of correspondence were enclosed which was said to be in respect of that possible sale.  It was said that the Husband had no means other than by way of the sale of part of his shares in B Ltd to meet his obligations under the order.  Further, that if no objection was received from the Wife to the proposed sale the Husband intended to proceed with the sale at 5.00 pm on Friday 15 June 2007 and enter into a contract for sale on Monday 18 June 2007.

3. On 18 June 2007 the solicitors for the Wife wrote to the solicitors for T Pty Ltd and stated that in order to ensure that there was no ambiguity, the solicitors wished to make it clear that in the claims concerning T Pty Ltd the Wife will pursue a number of fundamental findings in the alternative.  There is set out what the Wife’s contentions will be.  I do not propose to refer to all of what is in the letter however, I will identify some matters.  The Wife contends that the Husband is the true owner of the whole of the issued share capital of T Pty Ltd.  The Wife contends that T Pty Ltd is the alter ego or puppet of the Husband.  In the event that these contentions are unsuccessful then the Wife will contend that B Ltd is the true owner of all of the property and liabilities of T Pty Ltd including subsidiary companies as a consequence of the operation of the principal in Barnes v Addy (1974) LR 9 Ch App 244. Further, that T Pty Ltd holds all of its property upon trust for B Ltd. It was further contended that in the event that the Barns v Addy (supra) contention was unsuccessful then there were certain transactions between B Ltd and T Pty Ltd or outlays by B Ltd for the benefit of T Pty Ltd whereby T Pty Ltd has been the recipient of value and such transactions ought to be set aside pursuant to s 106B of the Family Law Act 1975 (Cth) or s 37A of the Conveyancing Act1919 (NSW).

4. On 18 June 2007 the solicitors for the Wife wrote to the solicitors for Jeremy Kendling, Penelope Kendling, L Pty Ltd and others.  This letter was very similar to the letter of the same date that was written to the solicitors of T Pty Ltd.  It was stated that at the hearing the Wife proposes to pursue a number of fundamental findings in the alternative including that the Husband is the true owner of the whole of the issued share capital in T Pty Ltd and that T Pty Ltd is the alter ego or puppet of the Husband and so on. 

5. On 21 June 2007 an application was filed on behalf of the Husband.  The Husband sought to vary the costs order and sell part of his shares in B Ltd and this application was opposed by the Wife.  The issue was ultimately determined by Cohen J by orders made on 29 June 2007 and 4 July 2007.  The Wife contends that it required attendance at court on two days and the Husband was unsuccessful. 

6. On 26 June 2007 the then solicitors for the Husband wrote to the solicitors for the Wife and advised that they were instructed that the Husband had no means to meet his obligation to comply with the interim costs order unless he disposed of some assets.  It was said that the Husband had no option but to proceed with a sale of part of his shareholding in B Ltd and as previously indicated he was hopeful of being able to sell a 10 per cent parcel of his shareholding for $2,500,000.  It was stated that the Husband was hopeful that the sale could be completed on or before 4 July 2007. 

7. In her affidavit of 17 December 2007 Penelope Kendling gave evidence that on 2 July 2007 she executed a loan agreement for $1.5 million with the Husband.  Penelope Kendling contends that she borrowed the monies from T Pty Ltd and that her loan is secured by a registered mortgage on real estate owned by her which is valued at about $2 million.  She said that the monies which she borrowed and then on lent to her father represented part of the proceeds of sale of P Business, settlement of which took place in early May 2007.  She said the proceeds of the sale of the P business have now been exhausted.

8. On 4 July 2007 Cohen J made the following order:

   1.That pending further or final the husband is hereby restrained from assigning, transferring, selling, encumbering by mortgage, charge or by any means dealing with or disposing of his interest or any part of his interest at law or in equity in [B] Ltd and from doing or failing to do any act, or thing, or executing any document which has the effect of diminishing the value of [B] Ltd except in the course of managing the day to day business of the said company.

9. The Wife received payment of $1,100,000 pursuant to the order I made on 25 May 2007.  She then caused her solicitors to make enquiries as to the source of the funds to enable the Husband to comply with the order and she contends that to date no satisfactory response has been forthcoming.  However it may be that the response is now set out in the affidavit of Penelope Kendling of 17 December 2007.

10. The parenting proceedings were listed for five days commencing on 16 July 2007.  On 19 July 2007 the proceedings were adjourned because of something which happened on 18 July 2007 in consequence of which on 19 July 2007 Penelope Kendling was charged with contempt of court.  As a result the hearing did not resume on 20 July 2007 and was then listed for a further four days commencing on 26 October 2007 and concluded on 2 November 2007.

11. The Husband filed an application in a case seeking leave to confer with Penelope Kendling prior to the resumption of the hearing of the parenting applications, despite the fact that Penelope Kendling was in the process of being cross-examined.  The Wife contends that this required an attendance before Cronin J.

12. On 30 July 2007 an application was made on behalf of the Husband seeking that I disqualify myself from hearing any further proceedings between the Husband and the Wife and the application was opposed by the Wife.  The hearing took approximately one day and was ultimately determined by me on 30 August 2007. 

13. The contempt proceedings were before Watts J on 30 July 2007.

14. In July 2007 W Pty Ltd caused vacant land at PP to be placed on the market for sale but to date the land has not been sold.  The service facility business operated by W Pty Ltd and the fixed assets are not able to be sold as there is currently a dispute as to the ownership of the land where the business is located.

15. The contempt proceedings were again before Watts J on 2 August 2007.

16. On 9 August 2007 an amended response was filed on behalf of the Wife.

17. The proceedings were before Cohen J on 15 August 2007.

18. On 16 August 2007 I made the following orders:

    1.Adjourn to 4 September 2007 the amended response filed on behalf of the Wife of 9 August 2007.

    2.Insofar as it is necessary in relation to such relief sought in that amended response that relies upon the provisions of the Corporations Law all rules of Court including rules under the Corporations Law in respect of that relief sought are suspended until further order.

    3.I NOTE that the Wife is wishing to pursue on 4 September 2007 her application for costs of the proceedings determined by orders made on 25 May 2007.

    4.In relation to the service on [Mr PS] of the amended response I refer to the affidavit of service of [Ms M] of 15 August 2007 and am satisfied that service has been effected (r 7.02 Family Law Rules).

    5.I NOTE that the Wife’s solicitor will give written notice to Mr [PS] and also [I] Pty Ltd that all proceedings are before the Court on 4 September 2007 including the amended response of the Wife filed on 9 August 2007.

    6.All parties are to lodge with my Associate by 4.00 pm on 3 September 2007 a draft minute of all directions sought in respect of the further conduct of the proceedings.

    7.It be NOTED that insofar as [A] Pty Ltd seeks to participate in the proceedings there should be an appearance by or on behalf of that company on the adjourned date namely 4 September 2007.

19. The contempt proceedings were again before Watts J on 21 August 2007.

20. A copy of a settlement adjustment sheet dated 31 August 2007 in relation to completion of the sale by B Ltd of B Facility revealed:

    $    

    ·Amount due under sale contract  38,961,548.18

    ·Amount due pursuant to conditional agreement  15,016,753.00

    Total funds available  53,978,301.18

    Less:

    ·Payment to G City Council  19,410.36

    ·Payment to G City Council  58,991.31

    ·Payment to National Australia Bank  3,400,000.00

    ·Payment to Industry Funds Management (Nominees 2) Pty Ltd 10,048,364.27

    ·Payments for redemptions as per contract  4,681,105.71

    ·Payment to Westpac Bank to discharge overdraft facility        1,025,388.00

    ·Payment to Westpac Bank re maintenance account                   1,300,000.00

    Total  20,533,259.65

    Balance  $33,445,041.53

    The settlement adjustment sheet goes on to record that the available funds were distributed as to payment of $30,081,322.15 to Industry Funds Management (Nominees 2) Pty Ltd as part of a loan facility to T Pty Ltd and payment of the balance of $3,353,719.38 to B Ltd.  There are now other issues that were not foreshadowed on 25 May 2007 including in relation to completion of the sale of B Facility and disbursement of the proceeds of sale.  I identified some of these issues in my judgment of 17 October 2007.

21. On 30 August 2007 I made the following order:

    1.The application for disqualification filed on 30 July 2007 on behalf of the Husband, […], be dismissed.

22. On 3 September 2007 an email was received from the solicitor for the Third to Fifth Respondents seeking the following directions:

    1.That the third to fifth respondents be at liberty to issue a request for answers to specific questions within 21 days.

    2.That the wife’s verified answers thereto are to be filed and served 21 days thereafter.

    3.That the wife file and serve Updated and Verified Points of Claim in which she shall set out all material facts and circumstances giving rise to each order sought against the third, fourth or fifth respondents in these proceedings. Where the said Points of Claim relate to a document a copy of the document is to be annexed to the Verified Points of Claim. Where relief is sought based upon provisions of the Family Law Act (other than ss 74, 79, 117) of the Act then the Points of Claim are to be accompanied by a short statement which sets out

    (a)The section of the Family Law Act upon which each prayer is based;

    (b)The accrued or other jurisdiction upon which the claim to relief is based.  

    4.That the husband and wife file and serve her affidavit together with the affidavit of any lay witness by…………

    5.That the third to fifth respondents file their affidavits together with the affidavit of any third party by……………

    6.Grant leave to the third and fourth respondents to file more than one affidavit in the proceedings provided however that they shall only file one affidavit in the various capacities in which they are parties in these proceedings.        

    7.Order any party who contends that any issue arises pursuant to The Constitution to file and serve the requisite s 78 B Notices within 14 days after the filing of the affidavits of all third parties in the proceedings.

    8.Direct that should any issue under The Constitution be said to arise then that matter be determined at the conclusion of the substantive hearing.          

    9.The wife shall submit to each other party, in draft form, a trial plan following compliance with directions 1-7.

    10.In the event of any dispute concerning the trial plan liberty to restore the matter on 48 hours notice.  

    11.The parties are to exchange, in writing, any objections to the affidavits of any other party 2 weeks prior to the hearing.

    12.The legal representatives for the parties are to confer no less than 7 days prior to the hearing and at that conference are to settle a list setting out all objections taken by or on behalf of a party to any affidavit together with any agreement reached concerning the disputed evidence.

    13.No less than 21 days prior to the date fixed for hearing the husband and wife are to file a case outline document together with a detailed outline of submissions.

    14.No less than 14 days prior to the date fixed for hearing all third parties are to file and serve a case outline document together with a detailed outline of submissions.

    15.Liberty to apply on 7 days notice. 

1. On 4 September 2007 the matter came before me and orders were sought by the Husband and the Wife and other parties.  The Husband sought an order that the Husband and the Wife file and serve all affidavit material in respect of the valuation of assets and liabilities owned by them within 28 days.  Pausing there, it will be seen shortly that the Husband’s evidence of value of the shares in B Ltd will now not be available until sometime in March 2008.

2. On 4 September 2007 an oral application was made on behalf of the Wife for an interim injunction. 

3. On 4 September 2007 the best part of one full day was then spent arguing the various orders and directions and ultimately orders were made by me on 17 October 2007.  The Wife contended that the orders required significant work including filing an affidavit of evidence in chief by 7 December 2007 and a valuers report by 15 February 2008.

4. On 4 September 2007 I made the following orders:

   1.Until further order the proceeds of sale referred to in paragraph 2 of a letter of 13 August 2007 written by the solicitors for [B] Ltd to the solicitors for the Wife be dealt with as set out in that letter namely payment of the current mortgagee, payment of all outstanding redemptions, payment to trade creditors of [B] Ltd and payment of current debts incurred in the course of business with the balance of approximately $35,000,000 to be invested with the National Australia Bank or another other bank or financial institution resident with the Commonwealth of Australia and the Husband and [B] Ltd each be restrained from assigning, transferring, encumbering by mortgage or charge or otherwise or in anyway dealing with the said balance of proceeds of sale namely $35,000,000.

   2.The injunction in order I hereof is made on the basis that the Wife will file and serve by 12 noon on 5 September 2007 an undertaking as to damages.

   3.The Wife file and serve by 4.00 pm on 5 September 2007 an application for injunctions together with any further evidence in support of the said application.

   4.It be NOTED that although order I hereof is expressed to continue until further order it is intended that the continuation or discharge of the said order will be dealt with on Thursday 6 September 2007.

   5.The matter be adjourned to 9.30 am on 6 September 2007.

   6.Liberty to all parties to apply to seek modification or discharge of order I hereof on giving to the Court and the other parties written notice.

5. On 5 September 2007 the Wife filed an application in a case seeking various injunctions. 

6. On 6 September 2007 on the application of the Wife I made the following orders:

   Subject to the undertaking as to damages by the Wife:

   1.Until further order the Husband, […], be restrained from departing the Commonwealth of Australia and the Australian Federal Police and the Police of various Australian states and territories are requested to assist in implementation of these Orders.

   2.The Husband surrender his passports, Australian and and any other passport he holds, to the Registrar of the Family Court of Australia, Sydney Registry by 4.00 pm on Monday 10 September 2007 where they shall remain until further order of this Court.

   3.The Australian Federal Police forthwith place the name of the Husband, […], on the Airport Watch List, in force at all international points of arrival and departure in the Commonwealth of Australia and maintain the Husband’s name on the Watch List (PASS system at all points of arrival and departure in the Commonwealth of Australia) until further order of the Court.

   4.Until further order [T] Pty Ltd is restrained from selling, transferring, disposing of, mortgaging, charging or further encumbering any and all real property which it owns or has any beneficial interest in without the consent in writing of the Wife, first had and obtained or order of this Court.

   5.Until further order the Husband be and is restrained from doing any act or thing that has the effect of selling, transferring, disposing of, mortgaging, charging or further encumbering any and all real property which he owns or has any beneficial interest in, including but not limited to the property known as [G Property] without the consent in writing of the Wife, first had and obtained or order of this Court.

   6.Until further order [B] Ltd be and is restrained from doing any act or thing that has the effect of selling, transferring, disposing of, mortgaging, charging or further encumbering any and all real property which it owns or has any beneficial interest in, including but not limited to the property known as [G2] without the consent in writing of the Wife, first had and obtained or order of this Court.

   9.The Wife be granted leave to amend the terms of the order sought in paragraph 9 of her amended response filed 9 August 2007 by adding the words: “together with all mortgages between [B Ltd] as mortgagee and [T Ltd] as mortgagor” at the end of the existing paragraph.

   10.The Wife file and serve by 4.00 pm on 10 September 2007 an application together with any further affidavit material in support.

   11.The Wife file and serve by 4.00 pm on 10 September 2007 a written undertaking as to damages.

   12.Each of the Husband, [T] Pty Ltd and [B] Ltd file and serve by 10.00 am on Thursday 13 September 2007 a response together with any affidavit material on which they would seek to rely.

   13.The matter be adjourned to 10.00 am on Friday 14 September 2007.

7. On 10 September 2007 an application for injunctions was filed on behalf of the Wife.  The Wife sought a continuation of the orders I made on 6 September 2007.  The application was opposed by the Husband, B Ltd and T Pty Ltd and required attendance at court on no less than three occasions being 4, 6, and 13 September 2007. 

8. On 10 September 2007 the Wife swore an affidavit in support of her application filed on the same day.

9. On 12 September 2007 an affidavit was sworn by Penelope Kendling on behalf of T Pty Ltd. 

10. On 12 September 2007 Megan Dorrough, who is the present solicitor for the Husband and B Ltd, received instructions to act for the Husband.

11. On 13 September 2007 an affidavit was sworn by the Husband on behalf of B Ltd in his capacity as the managing director of that company.

12. On 13 September 2007 a response to an application in a case was filed on behalf of T Pty Ltd seeking that the application of the Wife filed on 10 September 2007 be dismissed and Order 4 made on 6 September 2007 be discharged.

13. On 14 September 2007 the Husband sought an adjournment as he had recently changed solicitors.  The adjournment was not opposed by the Wife on the basis that the interim injunction remained in force. 

14. On 14 September 2007 a response to an application in a case was filed on behalf of B Ltd seeking that the application in a case of the Wife filed on 10 September 2007 be dismissed and that Order 1 made on 4 September 2007 be discharged and Order 8 made on 6 September 2007 be discharged.

15. On 14 September 2007 I made the following orders:

    1.The proceedings are adjourned to 10.00 am on Wednesday 19 September 2007.

    2.It be NOTED that the injunctions made on 6 September 2007 will continue.

    3.Grant leave to [B] Ltd and [T] Pty Ltd to inspect documents produced to the Court in response to subpoena by [X and Co], Lawyers.

    4.It be NOTED that the lawyers for [B] Ltd and [T] Pty Ltd will advise the lawyers for the Wife by 12.30 pm today whether or not it is intended that an application will be made in relation to whether or not the Wife and her legal representatives be granted leave to inspect those documents.  In the event that the lawyers for the Wife are advised that no such application will be made by [B] Ltd and/or [T] Pty Ltd then the Wife and her legal representatives also have leave to inspect those documents.

    5.In relation to the subpoena issued on behalf of the Wife to Members’ Equity Ltd that subpoena be adjourned to 10.00 am on 19 September 2007.

    6.The costs of all parties of and incidental to the proceedings today be reserved.

    7.All parties are granted liberty to apply.

16. The matter then came back on 17 and 19 September 2007.  On 27 September 2007 I made the following orders:

    1.Until further order [T] Pty Ltd is restrained from selling, transferring or disposing of any and all real property which it owns or has any beneficial interest in.

    2.Until further order [T] Pty Ltd is restrained from further encumbering by mortgage or charge or otherwise any and all real property which it owns or has any beneficial interest in.

    3.Liberty be granted to [T] Pty Ltd and the Wife to apply in relation to Orders 1 and 2 hereof.

    4.Until further order [T] Pty Ltd is restrained from making any loans or advances to or for the benefit of any person or persons or any other entity.

    5.Until further order [T] Pty Ltd provide to the Husband and to the Wife within the first week of each calendar month a cash flow statement providing particulars of all cash receipts and cash payments received and made by the company during the previous calendar month and the first such statement to be provided by 4.00 pm on 12 October 2007 and such statement to be verified by each of the directors of [T] Pty Ltd.

    6.Until further order [B] Ltd is restrained from selling, transferring or disposing of any and all real property which it owns or has any beneficial interest in. 

    7.Until further order [B] Ltd is restrained from further encumbering by mortgage or charge or otherwise any and all real property which it owns or has any beneficial interest in except for the purpose of obtaining an overdraft/line of credit up to a level not exceeding $3,300,000 to meet the general requirements of the company identified in the affidavit of the Husband sworn on 13 September 2007.

    8.Liberty be granted to [B] Ltd and the Wife to apply in relation to Orders 6 and 7 hereof.

    9.Until further order [B] Ltd is restrained from making any loans or advances to or for the benefit of any person or persons or any other entity.

    10.Until further order [B] Ltd provide to the Husband and to the Wife within the first week of each calendar month a cash flow statement providing particulars of all cash receipts and cash payments received and made by the company during the previous calendar month and the first such statement to be provided by 4.00 pm on 12 October 2007 and such statement to be verified by each of the directors of [B] Ltd. 

    11.Until further order the Husband is restrained from selling, transferring or disposing of any and all real property which he owns or has any beneficial interest in.

    12.Until further order the Husband is restrained from further encumbering by mortgage or charge or otherwise any and all real property which he owns or has any beneficial interest in.

    13.It be NOTED that [B] Ltd will forthwith register the mortgage granted by [T] Pty Ltd to [B] Ltd executed on 31 August 2007.

    14.It be NOTED that [T] Pty Ltd may apply and seek a discharge or modification of Orders I and 2 hereof so as to commence construction […] on what is described as the [R Development site] and the renovation of two substantial [properties] also in [R].

    15.It be NOTED that [B] Ltd may apply and seek a discharge or modification of Orders 6 and 7 hereof so as to commence construction [at G2 Property].

    16.Orders 1, 2, 4, 6, 7, 9, 11 and 12 are made on the basis of an undertaking as to damages by the Wife such undertaking to be filed and served by 4.00 pm on 2 October 2007.

    17.Order 1 made on 4 December 2007 be discharged.

    18.Orders 1, 2, 3, 4, 5 and 6 made on 6 September 2007 be discharged.

17. On 29 September 2007 the Husband filed an application in a case seeking orders permitting him to take the children to travel overseas for a week during the September/October school holiday period.  The application was opposed by the Wife and the hearing concluded before Cronin J.

18. In early October 2007 the Husband gave instructions to C Partners Pty Ltd to act as his accountant in all his personal matters and also all financial matters relating to B Ltd.

19. On 15 October 2007 Mr John Wenden, the previous solicitor for B Ltd, wrote to the Court advising that his retainer for B Ltd had been terminated.

20. On 17 October 2007 I made the following orders in chambers:

    1.By 4.00 pm on 7 December 2007 the Husband file and serve an affidavit setting out his evidence in chief in relation to the financial proceedings.

    2.By 4.00 pm on 7 December 2007 the Wife file and serve an affidavit setting out her evidence in chief in relation to the financial proceedings.

    3.By 4.00 pm on 7 December 2007 the Husband file and serve an affidavit(s) setting out the evidence in chief of each lay witness he proposes to rely upon at the hearing.

    4.By 4.00 pm on 7 December 2007 the Wife file and serve an affidavit(s) setting out the evidence in chief of each lay witness she proposes to rely upon at the hearing.

    5.By 4.00 pm on 7 December 2007 the Husband file and serve all affidavits setting out the evidence upon which he proposes to rely in respect to the value of:

    5.1     The Husband’s shareholding in [B] Ltd;

    5.2     The Wife’s shareholding in [W] Pty Ltd;

    5.3     [T] Pty Ltd;

    5.4     [L] Pty Ltd;

    5.5     [I] Pty Ltd;

    5.6     “[RI]” , [MX];

    5.7     [G property];

    5.8     [the Netherlands Property];

    5.9     [T5 Property];

    5.10   [T6 Property];

    5.11   [T4 Property];

    5.12   [Apartment in Germany];

    5.13   Artwork and objects d’art situated at “[RI]”, [MX] and at [G Property];

    5.14   Artwork and objects d’art situated at [the Netherlands Property]; and

    5.15   Motor vehicles owned by the Wife.

    6.The Husband do all acts and things necessary to enable a valuer nominated by the Wife to have access to:

    6.1     [G Property];

    6.2     Artwork, objects d’art and furniture situated at [G Property];

    6.3     [T4 Property];

    6.4     [T5 Property];

    6.5     [Apartment in Germany].

    upon being given seven days notice requesting such access and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

    7.By 4.00 pm on 7 December 2007 [B] Ltd file and serve any evidence of value of the company that the company may seek to rely on at the final hearing and [B] Ltd is not entitled to rely upon any other evidence of value of the company in these proceedings without leave of the Court.

    8.[B] Ltd grant access to all real estate owned by the company to any valuer appointed by the Wife on seven days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

    9.By 4.00 pm on 7 December 2007 [T] Pty Ltd file and serve any evidence of value of the company that the company may seek to rely on at the final hearing and [T] Pty Ltd is not entitled to rely upon any other evidence of value of the company in these proceedings without leave of the Court.

    10.[T] Pty Ltd grant access to all real estate owned by the company to any valuer appointed by the Wife on seven days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

    11.[Penelope Kendling] grant access to the property situated at [T6] being properly described as folio identifier […] to any valuer appointed by the Wife on seven days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

    12.[I]Pty Ltd grant access to all real estate owned by the company to any valuer appointed by the Wife on seven days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

    13.That the Wife grant access to a valuer appointed by [B] Ltd to value the painting known as […] at a time to be agreed between the valuer and the Wife.

    14.The relevant parties execute all documents and writings and do all acts and things and pay all moneys necessary to cause the financial accounts and income tax returns to be finalised for the financial year ended 30 June 2007 for the following entities:

    14.1   [B] Ltd.

    14.2   [T] Pty Ltd.

    14.3   [T(A)] Pty Ltd.

    14.4   [T(G)] Pty Ltd.

    14.5   [L] Pty. Ltd.

    14.6   [I] Pty. Ltd.

    14.7   [W] Pty Ltd.

    It is noted that there may be an issue in relation to [I] Pty Ltd.

    15.By 4.00 pm on 30 November 2007 copies of the finalised financial accounts and tax returns referred to in Order 14 hereof be provided to the solicitors for the Wife.

    16.In the circumstances of this case the parties are not required to attend a Conciliation Conference.

    17.All parties to the proceedings provide a list of documents in accordance with rule 13.20 of the Family Law Rules within 21 days from receipt of a written notice requesting such a list.

    18.Within 21 days of the date of this Order [T] Pty Ltd and the Husband do all acts and things and pay all moneys necessary to cause [Mr M] to provide to the solicitors for the Wife a statement annexing and verifying copies of the financial statements and tax returns compiled, prepared and/or audited by [Mr M] for each of the financial years ended 30 June 2000 to 30 June 2006 for:

    18.1.  [T] Pty Ltd.

    18.2   [T(A)] Pty Ltd.

    18.3   [T(G)] Pty Ltd.

    18.4   [T1]Pty Ltd.

    18.5   [T2] Pty Ltd.

    18.6   [T4] Pty Ltd.

    18.7   Any other company with a name including the words “[T]”.

    19.Within 21 days of the date of this Order [B] Ltd and the Husband do all acts and things and pay all moneys necessary to cause [Mr M] to provide to the solicitors for the Wife a statement annexing and verifying a copy of the financial statements and tax returns compiled, prepared and/or audited by [Mr M] for the financial year ended 30 June 2006 for [B] Ltd.

    20.It be NOTED that Orders 18 and 19 are made notwithstanding that as at the date of these Orders [Mr M] may no longer be the accountant or auditor for the companies identified in those Orders.

    21.Within 21 days of the date of this Order [B] Ltd and the Husband cause to be provided to the solicitors for the Wife a verified complete and detailed explanation as to the reasons for the losses incurred by [B] Ltd for the financial years ended 30 June 2005 and 30 June 2006.

    22.Within 21 days of the date of this Order [B] Ltd and the Husband cause to be provided to the solicitors for the Wife a copy of the work in progress ledger account of [B] Ltd since 30 June 2003 and a verified complete and detailed answer to the following together with copies of supporting documents:

    22.1   What did the work in progress at 30 June 2004 shown in the audited financial statements of $18,225,000 comprise?  A detailed schedule is to be provided indicating the amounts relating to each property/development on which monies were expended and identifying whether the relevant developments were on sites owned by [B] Ltd or owned by other persons and if so who.

    22.2   What was the status of each of the projects referred to in 22.1 hereof as at 30 June 2005?  If the relevant costs were billed to a third party and no income is recorded details and explanation as to why no income is recorded is to be provided.  If the costs were capitalised as part of the carrying value of a fixed asset details are to be provided.  If the relevant costs were not billed to a third party or capitalised as part of the carrying value of a fixed asset an explanation is to be provided as to why the relevant amounts are not included in closing work in progress at 30 June 2005?  If any amount was transferred to the account of [T] Pty Ltd and no income is recorded then a detailed explanation is to be provided as to why no income was recorded.

    22.3   What did the work in progress at 30 June 2005 of $8,654,000 comprise?  A detailed schedule is to be provided indicating the amounts relating to each property/development on which monies were expended and identifying whether the relevant developments were on sites owned by [B] Ltd or owned by other persons and if so who?

    22.4   Why was the closing work in progress at 30 June 2005 of some $8,600,000 written off in full in the 2006 trading account?

    22.5   What comprised the $5,700,000 of other costs in 2006 written off in the trading account?

    22.6   What was the status as at 30 June 2006 of:

    22.6.1each of the projects referred to comprising work in progress at 30 June 2004 of $18,225,000;

    22.6.2each of the projects referred to comprising work in progress at 30 June 2005 of $8,560,000;

    If the relevant costs were billed to a third party and no income is recorded there is to be provided details and explanation why no income is recorded.  If the relevant costs were capitalised as part of the carrying value of a fixed asset details are to be provided.  If the relevant costs were not billed to a third party or capitalised as part of the carrying value of a fixed asset why are the relevant amounts not included in closing work in progress at 30 June 2006?  If any amount was transferred to the account of [T] Pty Ltd and no income is recorded then a detailed explanation was to why no income was recorded is to be provided.

    22.7   What did the work in progress at 30 June 2006 of $4,685,000 or whatever figure appears in the final 2006 audited accounts comprise?  A detailed schedule is to be provided indicating the amounts relating to each property/development on which monies had been expended and identifying whether the relevant developments were on sites owned by [B] Ltd or owned by other persons and if so who?

    22.8   Were the financiers to [B] Ltd, including Members Equity Ltd and Westpac Bank provided with a copy of the 2005 financial statements in the same form and showing the same trading results and net asset position as that shown in the financial statements provided to the Australian Securities and Investments Commission?  If not, a copy of the financial statements provided to financiers is to be provided and an explanation as to how the differences came about.

    23.Within 21 days of the date of this Order [T] Pty Ltd and [Jeremy Kendling] and [Penelope Kendling] provide to the Wife’s solicitors a verified complete and detailed statement setting out:

    23.1   The nature of the activities of [T] Pty Ltd, [T(A)] Pty Ltd and [T(G)] Pty Ltd including details of the real estate held by each company (including title reference) and other material assets held by each company, the businesses conducted by each company and the shareholders of each company.

    23.2   Whether or not there exists or has ever existed, companies now known as, or formerly known as, [T1] Pty Ltd, [T2] Pty Ltd, [T4] Pty Ltd or any other company with a name including the words “[T]”, and if so, details of any real estate held by each company (including title reference) and other material assets held by each company, the businesses conducted by each company and the shareholders of each company.

    23.3   An explanation as to how it can be that the income and expenses and assets relating to the business known as the [D Business] are shown both in the audited 2004 and 2005 financial statements of [T(G)] Pty Ltd and in the audited 2004 and 2005 financial statements of [T] Pty Ltd.

    23.4   An explanation as to how it can be that the income and expenses and assets relating to the business known as the [ML] Facility are shown both in the audited 2004 and 2005 financial statements of [T(A) Pty Ltd] and in the audited 2004 and 2005 financial statements of [T] Pty Ltd.

    23.5   An explanation as to whether [T] Pty Ltd ever conducted the businesses known as the [D Business] or the [ML] Facility and, if so, when it ceased to operate those businesses and whether it received any consideration for the transfer of the businesses to any other party.

    23.6   An explanation as to when the [D Business] commenced to be operated by [T(G)] Pty Ltd and who holds the relevant licenses relating to this facility.

    23.7   An explanation as to when the [ML] Facility commenced to be operated by [T(A)] Pty Ltd and who holds the relevant licenses relating to this facility.

    24.Within 21 days of the date of this Order the Husband provide to the Wife’s solicitors a verified complete and detailed statement setting out what is known by the Husband as to each of the following entities including the nature of their business activities, details of any shares held by the Husband in each company or loans by the Husband to each company, the nature of dealings of each company with [B] Ltd since 30 June 2000 and details of the nature and value of assets held by each company.  If the entities no longer trade then details as to the former business activities of the companies.  If any company was previously known by the name shown details of the current name:

    24.1   [B Services] Pty Ltd;

    24.2   [B No 2] Pty Ltd;

    […]

    24.5 [L] Pty Ltd

    […]

    24.12 [T No 2] Pty Ltd;

    24.13 [ML Facility] Pty Ltd;

    […]

    24.16 [I] Pty Ltd;

    […]

    24.25 [A] Pty Ltd;

    24.26 Any other company with which [B] Ltd now deals, or has dealt since 30 June 2000 where, to the Husband’s knowledge, [Jeremy Kendling], [Penelope Kendling], [Mr M], or [Ms W], [Ms R] or any employee of [B] Ltd is now, or was during the relevant time, a director or shareholder or employee.

    25.Within seven days of the date of this Order the Husband execute the irrevocable authority annexed hereto and marked with the letter “A” addressed to ABN Amro and forward the said authority to the solicitor for the Wife.

    26.Within seven days of the date of this Order the Husband provide to the solicitors for the Wife copies of all bank statements for account Westpac […] together with all documents evidencing the source of funds utilised by the Husband to satisfy the Court orders dated 25 May 2007.

    27.Within 14 days of the date of this Order the Husband execute all documents and writings and do all acts and things necessary to provide to the solicitors for the Wife:

    27.1   Copies of all income tax returns filed, at any time, for or on behalf of:

    27.1.1[David Kendling];

    27.1.2[Marc Kendling];

    27.1.3any trust of which [David Kendling] or [Marc Kendling] is a beneficiary.

    27.2   Verified details of all items of property to which [David Kendling] or [Marc Kendling] is presently entitled or held by any trustee of a trust of which [David Kendling] or [Mark Kendling] is a beneficiary or object;

    27.3   To the extent to which the information is not disclosed pursuant to the requests in Orders 27.1 and 27.2:

    27.3.1a full accounting of monies received and disbursed by, or on behalf of (including by any trustee for) [David Kendling] or [Marc Kendling], in relation to the purchase or sale of any real property, shares or any other asset, or income derived from any asset, or expenditure incurred in relation to the acquisition of, or derivation of income from, any such asset.

    27.3.2details of all items of property held by [David Kendling] or [Marc Kendling]or to which those persons are presently or contingently entitled, including property held by any trustee of a trust of which either of them is a beneficiary or object.

    27.3.3details of the source of funds used to acquire the items of property referred to in Order 27.3.2 hereof including but not limited to the properties situated at [T5] being properly identified as […] and [T4] being more properly described as […].

    27.3.4details of the quantum of and nature of any indebtedness of [David Kendling] or [Marc Kendling] or of any trustee of any trust for the benefit of [David Kendling] or [Marc Kendling] in respect of which the trustee is entitled to claim an indemnity against trust assets, including copies of any loan agreements.

    27.3.5 copies of any lease agreements relating to any real property held by or on behalf of [David Kendling] or [Marc Kendling].

    27.3.6any documents evidencing the source of funding for, and the acquisition of, any real estate or other property held by or on behalf of [David Kendling] or [Marc Kendling] including loan agreements and correspondence with solicitors relating to settlement of the purchase.

    28.Within 14 days of the date of Order [B] Ltd provide to the Wife’s solicitor all such documents as set out in Schedule 1 hereto as may exist and in the event the documents do not exist then [B] Ltd to clearly identify those documents that they say do not exist.

    29.Within seven days from the date of this Order [B] Ltd execute the irrevocable authority annexed hereto and marked with the letter “B” addressed to ABN Amro and forward the said authority to the solicitor for the Wife.

    30.Within seven days of the date of this Order [B] Ltd provide to the Wife’s solicitors copies of all Minutes of Directors Meetings for the period from 1 September 1995 to date.

    31.Within 21 days of the date of this Order the Husband provide to the Wife’s solicitors a verified complete and detailed statement setting out:

    31.1   The nature of the activities of [T] Pty Ltd, [T(E)] Pty Ltd and [T(G)] Pty Ltd including details of the real estate held by each company (by title reference), the businesses conducted by each company and the shareholders of each company.

    31.2   Whether or not there exists or has ever existed, to his knowledge, companies now known as, or formerly known as, [T (1)] Pty Ltd.  [T(2)] Pty Ltd, [T(4)] Pty Ltd or any other company with a name including the words “[T]”, and if so, details of the real estate held by each such company (by title reference), the businesses conducted by each such company and the shareholders of each such company.

    32.Within 14 days from the date of this Order [T] Pty Ltd provide to the Wife’s solicitor all such documents as set out in Schedule 2 hereto as may exist and in the event the documents do not exist then [B] Ltd to clearly identify those documents.

    33.Within seven days of the date of this Order [T] Pty Ltd provide to the Wife’s solicitors copies of all Minutes of Directors Meetings for the period from 6 September 1995 to date.

    34.[A] Pty Ltd grant access to the property situated [in  the Netherlands] to any valuer appointed by the Wife on 14 days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

    35.Within 14 days of the date of this Order [A] Pty Ltd provide to the Wife’s solicitor a list of all items referred to as ‘movable property at the [Netherlands] property’ and identify any disposition of the said items, the consideration paid and the date of disposal and thereafter on 14 days notice [A Pty Ltd] to provide access to the Wife’s valuer to such movable property for the purpose of valuing the said items.

    36.Within seven days of the date of Order [A] Pty Ltd provide to the Wife’s solicitor information and documentation as sought in the letter from the Wife’s solicitor to the Sixth Respondent’s solicitor dated 6 October 2006.

    37.Within 21 days of the date of this Order each party who has filed a notice objecting to jurisdiction provide to all parties a brief but concise summary of the of basis of such objection.

    38.By 4.00 pm on 16 November 2007 each of [Jeremy Kendling] and [Penelope Kendling] file a financial statement in accordance with rule 13.05 of the Family Law Rules.

    39.Subject to the Husband and each of the Second to Tenth Respondents inclusive complying with these directions the Wife to file and serve by 4.00 pm on 15 February 2008 all affidavits setting out the evidence upon which she proposes to rely on in respect to the value of the following:

    39.1   The Husband’s shareholding in [B] Ltd;

    39.2   The Wife’s shareholding in [W] Pty Ltd;

    39.3   [T] Pty Ltd;

    39.4   [L] Pty Ltd;

    39.5   [I] Pty Ltd;

    39.6   “[RI]” , [MX];

    39.7   [G Property];

    39.8   [the Netherlands Property];

    39.9   [T5 Property];

    39.10 [T6 Property];

    39.11 [T4 Property];

    39.12 [the Apartment in Germany];

    39.13 Artwork and objects d’art situated at “[RI Property]”, and at [G Property];

    39.14 Artwork and objects d’art situated at [the Netherlands property]; and

    39.15 Motor vehicles owned by the Wife.

    40.All parties are granted at their cost photocopying access to the documents produced by Members Equity Ltd in compliance with subpoenas issued in these proceedings.

    41.The Husband, [B] Ltd, [T] Pty Ltd and [Mr M] provide to [Mr V] on seven days notice (and on multiple occasions if requested) access to the audit working papers (including access to any working papers prepared in electronic form) for [B] Ltd, [T] Pty Ltd, [T(E)] Pty Ltd and [T(G)]  Pty Ltd in respect of the audits conducted by [M and Co] for the years ended 30 June 2003 to 30 June 2006 inclusive and that [Mr M] provide to [Mr V] any explanations sought about the audit.

    42.The Husband, [B] Ltd, [T] Pty Ltd and [Mr M] provide to [Mr V] copies of any documents contained in the audit files referred to in Order 41 of which a copy is sought by [Mr V].

    43.The Sixth Respondent and the Tenth Respondent file and serve within seven days an application for security for costs together with any affidavits in support of the application.

    44.Any party who contends that any issue arises pursuant to the Constitution file and serve the requisite s 78B Notices within 14 days after the filing of the affidavits of all third parties in the proceedings.

    45.Any issue under the Constitution said to arise be determined during the substantive hearing in accordance with a trial plan to be agreed between the various parties.

    46.It be NOTED that orders are yet to be made for the filing of affidavits of evidence in chief by each of the Second to Tenth Respondents.

1. Penelope Kendling said that Jeremy Kendling went overseas shortly after the orders were made and returned on 15 December 2007.

2. On 18 October 2007 an application was filed on behalf of T Pty Ltd and it seeks a variation of Order 2 made on 27 December 2007 so as to permit the Company to grant to the National Australia Bank a mortgage over certain property.  This application has yet to be dealt with.

3. On 22 October 2007 Mr Wenden wrote to the Court advising that as of 19 October 2007 his retainer for Mr X had been terminated.

4. On 23 October 2007 I made the following orders:

   1.Each of [T] Pty Ltd and [B] Ltd produce to the Court by 4.00 pm on 30 October 2007 the documents identified in the notice to produce served on them on 18 October 2007.

2.Each of the Wife and [B] Ltd file and serve by 4.00 pm on 6 November 2007 a response to the application in a case referred to above together with any affidavit material in support of that response.

3.     That application be listed before me at 9.30 am on 19 November 2007.

4.I grant leave to the Wife to make an application for orders as set out in a document entitled Minute of orders Sought by the wife 23 October 2007 in relation to particulars of cashflow summaries.

5.I NOTE that each of [T] Pty Ltd and [B] Ltd oppose the orders set out in that Minute.

6.Each of [T] Pty Ltd and [B] Ltd file and serve within seven days any affidavit material on which they would seek to rely in support of their opposition to that Minute.

7.     That application be listed for hearing before me at 9.30 am on 19 November 2007.

8.The Husband and [B] Ltd file and serve within seven days an application setting out the amendments they seek to the orders made on 17 October 2007 together with any affidavit material in support of that application.

9.     That application be listed for hearing before me at 9.30 am on 19 November 2007.

10.The Wife have leave to obtain a date for hearing of her application for costs of the following proceedings:

10.1        The interim costs proceedings concluded by me on 25 May 2007
10.2        The disqualification proceedings concluded by me on 30 August 2007
10.3        The proceedings concluded before Cohen J on 11 July 2007

such date to be arranged with my Associate.  [5 March 2008]

1. The hearing of the parenting proceedings was listed for a further four days commencing on 26 October 2007 and concluded on 2 November 2007.  In relation to the parenting proceedings in March 2007 the estimate was that such proceedings would be listed for four days and on the basis that there would be no further interlocutory or interim applications.  However as it transpired the trial of the applications for final parenting orders occurred over a total period of nine days having been declared part-heard at the conclusion of the first four days.  Further there were two interlocutory applications made on behalf of the Husband.  Initially the Wife had not retained junior counsel but ultimately junior counsel was retained.

2. By letter dated 12 November 2007 Mr M wrote to the solicitors for the Wife and advised that on 28 October 2007 he had resigned as the accountant and auditor of B Ltd, T Pty Ltd, T(G) Pty Ltd and T(E) Pty Ltd.  Mr M said that “Our” office building has been sold to developers and he is retiring at the end of the year and had not acquired or leased out any new office space. 

3. On 31 October 2007 an application was filed on behalf of the Wife seeking costs of certain applications.  This application has yet to be determined.

4. For several months the Wife’s solicitors sought the Husband’s authority to obtain copies of statements and other documents relating to an account in the Netherlands with ABM Amro. The orders made on 17 October 2007 required that the authorities be signed and provided by 24 October 2007.  However the orders were not complied with.  On 19 November 2007 I requested that on that day the Husband sign the authorities.  The Wife contends that the authorities signed by the Husband on that day bore a signature that does not resemble his usual signature and as a result her solicitors were required to write to the Husband’s solicitors and forward a further copy of the authority for execution by the Husband.  The letter was written on 19 November 2007.

5. On 6 November 2007 an application was filed on behalf of the Wife.  The Wife sought orders in relation to cash flow summaries from B Ltd and T Pty Ltd.  The Wife also sought orders in relation to the loan by B Ltd to T Pty Ltd (Orders 3, 4, 5 and 6) and these orders have yet to be determined.

6. On 6 November 2007 an affidavit was sworn on behalf of the Wife by Mr V.

7. On 7 November 2007 Mr M handed approximately 17 boxes of documents relating to the Husband and B Ltd to Mr S who is a partner of a firm of accountants, advisors and consultants called C Partners.

8. On 8 November 2007 Ms Dorrough received files from Mr Wenden the former solicitor for B Ltd and Mr X.

9. On 14 November 2007 Penelope Kendling swore an affidavit in support of the application of T Pty Ltd seeking a variation of Order 2 of 27 September 2007 and also orders I made in relation to a periodic cash flow summary.

10. By letter dated 14 November 2007 the solicitors for the Wife wrote to Ms Dorrough and said that Mr M had advised that he resigned as the accountant and auditor for B Ltd.  The solicitors sought advise as to what action had been taken to comply with Order 41 made on 17 October 2007.

11. On 15 November 2007 a letter was written by the Wife’s solicitors to the Husband’s solicitors requesting an advance payment of $1.3 million dollars to enable the Wife to continue the proceedings.

12. On 16 November 2007 an application in a case was filed on behalf of the Husband in which he sought a variation of a number of the orders made on 17 October 2007.  The Husband also sought a variation of Order 10 made on 27 September 2007 and orders in relation to the Westpac Bank mortgage secured on the title of the property “[RI]”.  In support of the application the Husband swore an affidavit on 16 November 2007 and he stated that he made this affidavit both on his behalf personally and also on behalf of B Ltd.  He then gave reasons why he contended he was unable to comply with the orders of 17 October 2007 and he referred to an affidavit of Mr F who is a partner of C Partners.  As indicated in discussion with counsel for the Husband, consideration of the affidavit satisfied me that the Husband gave no adequate reasons why he was unable to comply with the orders made on 17 October 2007. 

13. On 16 November 2007 an affidavit was sworn by Ms Dorrough on behalf of the Husband and also B Ltd.  She contends that her clients could not comply with the orders made on 17 and 23 October 2007.

14. On 16 November 2007 an affidavit was sworn by Mr S and he said that he recently received instructions from the Husband to act as his accountant in all his personal matters and also to take over acting in all financial matters relating to B Ltd.  Mr S said that he briefly reviewed work carried out by M & Co and assessed that much of that work required being redone as the work was incorrect and did not reflect the accurate financial situation of the Husband and B Ltd.  I am not going to repeat in these reasons all of what Mr S said.

15. On 16 November 2007 a letter was written by the solicitors for T Pty Ltd said to be in compliance with Order 37 made on 17 October 2007.

16. On 16 November 2007 Mr X produced certain documents to the Court in answer to a subpoena that was returnable on 31 October 2007.

17. On 19 November 2007 I made the following orders:

    1.Until further, [T] Pty Limited is hereby restrained from instituting any proceeding in any court in any way arising in respect of any mortgage to or indebtedness to the National Australia Bank Limited and / or [B] Limited without first obtaining leave of the Family Court of Australia.

    2.Each of [T] Pty Limited and the National Australia Bank Limited have liberty to apply pursuant to the foregoing order, or to apply to vary or discharge the foregoing order on short notice by arrangement with the Associate to Justice O’Ryan.

    3.The Wife have leave to serve a copy of these orders upon the National Australia Bank Limited.

    4.     I NOTE the undertaking as to damages given by the Wife.

    5.In relation to the above orders the further hearing of that proceeding take place on a date to be arranged between the parties’ legal representatives and my Associate.

    6.In respect of the other issues raised in the course of discussion that the further hearing in relation to such matters also be adjourned to a date to be arranged with my Associate.

    7.It be NOTED that the Wife proposes to make an application for further interim costs and in the event that such application is filed then the return date of the application is to be arranged with my Associate.

18. By letter dated 20 November 2007 the solicitors for the Wife wrote to the solicitors for the Husband requesting information as to the source of funds to enable the Husband to pay his legal costs. 

19. By letter dated 27 November 2007 the solicitors for the Husband wrote to the solicitors for the Wife and enclosed three authorities, two executed by the Husband on behalf of B Ltd and one executed by the Husband in his personal capacity.  The Wife contends that the three versions of the Husband’s signature on the three authorities did not bear any resemblance to his usual signature.

20. In November 2007 the Husband filed an application in a case seeking orders enabling him to travel overseas with the children during the 2007/2008 Christmas holidays.  The Wife does not know the source from which the Husband intended to pay for the costs of this trip.

21. On 30 November 2007 an affidavit was sworn by the Wife.

22. On 30 November 2007 the application which I am presently dealing with was filed.  The Wife accepts that Orders 9, 11 and 12 made on 27 September 2007 may have to be modified to enable the Husband to borrow funds from B Ltd to satisfy any order I may make.

23. On 7 December 2007 Mr M gave a disk to Mr S containing further financial material of B Ltd.

24. On 10 December 2007 Mr M electronically sent further material to Mr S with respect to B Ltd.

25. On 13 December 2007 a response was filed on behalf of the Husband in which he sought that the application by the Wife of 30 November 2007 be dismissed.

26. On 13 December 2007 an application was filed on behalf of the Husband in which he sought orders in relation to the mortgage to Westpac Bank on the title of “RI”.

27. The Husband swore an affidavit on 13 December 2007.  He contends that he cannot pay the amount sought by the Wife as at this time he does not have access to the amount of money sought even if an order was made.  He stated that orders of this court prevent him from dealing with his shares in B Ltd as and how he chooses and he is restricted in the operation of the business.  He contends that in the circumstances he is unable to access further funds to satisfy any order made in favour of the Wife.  The Husband contends that he was able to obtain $1.1 million dollars by borrowing this amount from Penelope Kendling and he annexed to his affidavit a copy of a loan agreement with Penelope Kendling which incorporated the monies which he paid to the Wife.  This is the explanation that the Wife had been seeking however there may now be an issue as to how Penelope Kendling obtained the amount of $1.1 million given, among other things, the significant loan by B Ltd to T Pty Ltd.

28. The property “[RI]” in MX secured a debt in favour of Westpac Bank of approximately $1.4 million.  The Deed of Forbearance by the bank terminated on 20 December 2007 and the Husband was informed by the bank that the Husband and Wife would not be granted the opportunity for the deed to continue after that date.  As a result an application was filed on behalf of the Husband in which he sought orders in relation to the Westpac Bank debt.  In the affidavit on 13 December 2007 the Husband stated that what he sought to do was to borrow the funds from B Ltd.  On 13 December 2007 the Husband also swore an affidavit on behalf of B Ltd in relation to the Westpac Bank debt.

29. On 13 December 2007 I commenced to hear six applications.  On that day I made orders in relation to some of the applications.

30. Ms Dorrough swore a further affidavit on 14 December 2007 and she gave evidence explaining that there was the death of a close family relative on 25 November 2007 and as well a need to nurse her mother who is aged 82 years during this unfortunate period and as a result she had been unable to undertake various tasks which she should have attended to in relation to this matter.

31. On 14 December 2007 an affidavit was sworn by Mr M.

32. On 14 December 2007 an affidavit was sworn by Mr S.  He said that having viewed the work carried out by M and Co he remained of the opinion that much of the work required being reviewed as it appears that some of the work is incorrect and does not reflect the accurate financial position of the Husband and B Ltd.  Mr S said that he remained of the opinion that the 2004/2005 taxation returns of the Husband and of B Ltd are incorrect and will have to be reviewed and amended.  Mr S was instructed by the Husband to attend to the preparation and completion of the financial statements and taxation returns for the Husband and B Ltd for the 2005/2006 and 2006/2007 years.

33. On 14 December 2007 an affidavit was sworn by the Husband and he conceded that he was in default of Orders 1, 3, 5, 7, 14, 15, 19, 21, 22, 24, 25, 26 and 27 of the orders of 17 October 2007.  He explained that there are a number of orders he cannot comply with or are not applicable.  For example in relation to Order 27.1.3 he contends that the order “…[i]s not applicable” as there are no trusts of which the children David Kendling and Marc Kendling  “…[i]s a beneficiary”.  In earlier judgments I have referred to issues in relation to the financial circumstances of the two children and evidence given by Mr X.

34. On 14 December 2007 I made the following orders:

    1.Within 7 days [T] Pty Ltd provide to the Wife and to the Husband  a cash flow summary providing particulars of all cash receipts and cash payments received and made by the company specifying:-

    1.1     the identity of the payer in the case of each payment made to the company in the relevant month, and the purpose of the payment;

    1.2     the identity of any payee from the company included in the cash flow in the relevant month, and the purpose for the payment;

    1.3     the opening cash balance, the closing cash balance, a statement of cash movement, both for the opening and closing for the month, and for the opening and closing of each day.

    and thereafter on a monthly basis such cashflow statement to be provided within the first week of each calendar month.

    2.Within 7 days [B] Limited provide to the Wife and to the Husband  a cash flow summary providing particulars of all cash receipts and cash payments received and made by the company specifying:-

    2.1     the identity of the payer in the case of each payment made to the company in the relevant month, and the purpose of the payment;

    2.2     the identity of any payee from the company included in the cash flow in the relevant month, and the purpose for the payment;

    2.3     the opening cash balance, the closing cash balance, a statement of cash movement, both for the opening and closing of each day,

    and thereafter on a monthly basis such cashflow statement to be provided within the first week of each calendar month

    3.In relation to orders 1 and 2 that such statements be verified by each of the directors of [T] Pty Limited so far as it effects that company and [B] Limited so far as it affects that company and that such statements identified in orders 1 and 2 hereof also be provided for the months of September, October, November and December 2007.

    4.In relation to the application in a case filed on behalf of the Wife with respect to the refinancing of the facility from [B] Ltd to [T] Pty Ltd, I give leave to obtain a date for hearing before me at the earliest possible opportunity on or after the 21 January 2008 by arrangement with my associate.

    5.[T Pty Ltd] file and serve by 4 pm on Thursday 31 January 2008 an amended application together with any affidavit material in support and that the hearing of that application also be listed by arrangement with my associate at the same time as the hearing of the application in the preceding order.

    7.The application filed on behalf of 6^th, 9^th and 10^th Respondents on 13 December 2007 be adjourned to 9.30 am on Wednesday the 19 December 2007.

    8.In the event that Mr Edwards has legal instructions from the 9^th Respondent, a notice of address for service be filed and served by 4pm on 18 December 2007.

    9.The proposed application on behalf of the 4^th Respondent to vacate the trial dates allocated to the hearing of the applications  for final orders be listed before me at 9.30 am on 22 January 2008, and all affidavits in support of that application are to be filed and served by no later than  4 pm on Monday 14 January 2008.

    10.The application of the Husband and also on behalf of [T] Pty Ltd and the 3^rd, 4^th, and 5^th Respondents seeking a variation of the directions made on 17 October 2007 stand adjourned to 9.30 am on Wednesday 19 December 2007.

    11.By 5 pm today the Husband file and serve all affidavits on which he would seek to rely in support of the orders sought for a variation of the directions made on the 17 October 2007 with respect to the filing of evidence.  Such affidavits to include an explanation for non-compliance with any orders and directions that I have made on or subsequent to the 17 October 2007 and also to provide an explanation for the delay with respect to the execution of the authority and also with respect to the date of a loan agreement between [the husband] and the [Penelope Kendling] forming annexure B of the affidavit sworn by [the husband] on 13 December 2007.  Such affidavits to include an affidavit of the Husband and an affidavit of his solicitor Ms Dorrough.

    12.In relation to the proposed affidavit of Mr [S] and Mr [K], such affidavits be filed and served by 10 am on Monday 18 December 2007.

35. On 16 December 2007 a further affidavit was sworn by Ms Dorrough on behalf of the Husband and B Ltd.

36. On 17 December 2007 a further affidavit was sworn by Mr S.  He said that he found anomalies of detail in the accounts supplied; that they appear to provide an inaccurate view of the state of affairs of B Ltd and T Pty Ltd; that the financial documents require inclusions to the end of September 2007 of B Ltd to reflect an accurate financial view of the Company; that on his current reading of the files, documents, accounts and balance sheets, among other things, the period required to be reviewed covers the financial years 2004, 2005, 2006 to 30 June 2007 and that other journals and adjustments are required to complete the financial statements and accounts to enable income tax returns to be completed.  In his affidavit of 14 December 2007 Mr S had identified the years ended 20 June 2006 and 30 June 2007.  In any event, this evidence has added a further and perhaps significant dimension to this case.  Consideration of what I said in earlier judgments demonstrates that for a considerable period of time the Wife raised issues about the disclosed financial position of the Husband and B Ltd and T Pty Ltd.  Mr V had sworn a number of affidavits dealing with these issues.  As seen above, on 4 September 2007 the Husband sought an order that within 28 days both the Husband and the Wife file and serve all affidavit material in respect of the valuation of assets and liabilities owned by them.  I assume that at this time the Husband was confident that if what he sought had come to pass then all of the evidence of valuation would have been filed by the end of October 2007.

1. On 17 December 2007 an application was filed by T Pty Ltd seeking a variation of the orders of 17 October 2007.

2. On 17 December 2007 an affidavit was sworn by Penelope Kendling and she said that T Pty Ltd had complied with, albeit out of time, Orders 10, 33 and 37 of 17 October 2007 and she had complied with, albeit out of time, Order 11.  Penelope Kendling said that T Pty Ltd had not complied with Orders 9, 15, 17, 18, 23, 35, and 41 of the orders of 17 October 2007 and further that she and her brother Jeremy Kendling had not complied with Orders 17, 23, and 38.

3. In her affidavit of 17 December 2007 Penelope Kendling said that she is concerned about the accuracy of the 2005 and 2006 accounts for T Pty Ltd and she gave reasons why she had these concerns.  She referred to a conference that took place pursuant to orders I made, which was attended by Mr Burraket, the solicitor for Penelope Kendling, Jeremy Kendling and T Pty Ltd, Ms J, Ms A, Mr M and Mr V at which Mr M was asked by Mr V to provide answers to a range of queries in relation to the accounts prepared by him concerning the T companies and that Mr M repeatedly said that he would “have to look at that and will get back to you with an answer” and that she understands that no such answers have ever been provided.  Penelope Kendling said that she has read numerous affidavits of Mr V and in these affidavits Mr V raised a range of queries in relation to the accounts produced for T Pty Ltd and other entities.  She said that she had telephone conversations with Mr M and referred him to some if not all of the affidavits of Mr V and asked him for an explanation and that she did not receive any satisfactory response from Mr M “to those matters”.  She said that as a consequence of the affidavits of Mr V, the failure of Mr M to provide an answer to the queries raised in conference with Mr V, and the failure of Mr M to provide her with answers, she no longer had confidence in Mr M and that she does not therefore know if the 2005 and 2006 accounts of T Pty Ltd are correct.  It will be observed that I had previously made orders requiring Mr M to do certain things.

4. On 19 December 2007 I made the following orders:

1.Each of the Husband and the Wife and the legal and accounting representatives for each of the Husband and the Wife and [B] Pty Ltd and [T] Pty Ltd are hereby permitted to attend at the business premises of [C] Partners Pty Ltd at 9.00 am on 20 December 2007 for the purpose of identifying and inspecting the documents of the Husband, [B] Ltd and [T] Pty Ltd that were received by [C] Partners Pty Ltd from [M & Co] and which are more particularly identified in the affidavits of [Mr S] of 14 and 17 December 2007.

2.It be noted that [Mr S] informed counsel for the Husband that [C] Partners Pty Ltd does not oppose order 1 hereof and will facilitate the implementation of the said order.

1. On 19 December 2007 I made the following orders:

   1.The Husband and the Wife enter into a mortgage incorporating a loan agreement in favour of [B] Limited secured on [RI] being the property situated at [MX] and being more fully described as folio identifier […] (“[RI]”) subject to [B] Limited providing funds (of approximately $1.4 million)) to pay out the debt of the Husband and the Wife to Westpac presently secured on [RI].

   2.The mortgage referred to in the preceding Order prescribe a rate of interest not greater than the benchmark rate prescribed pursuant to s.109N Income Tax Assessment Act.

   3.With respect to the mortgage referred to in Order 1, the Husband pay all interest payment to [B] Limited and at his election he may capitalise such interest, on such terms as are not inconsistent with the terms of these orders.

   4.That the terms of repayment be subject to final orders in these proceedings.

   It is Noted:

   5.The foregoing is without admission by the Wife as to any matter concerning the existing mortgage to [B] Limited or what amount is presently secured under it.

1. On 19 December 2007 I made the following orders:

1.Orders 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 14, 15, 17, 18, 19, 21, 22, 23, 24, 26, 27, 28, 30, 31, 33, 34, 35, 36, 38, 39, 41 and 42 made on 17 October 2007 be discharged

2.By 4.00 pm on 15 February 2008 the Husband file and serve an affidavit setting out his evidence in chief in relation to the financial proceedings.

3.By 4.00 pm on 15 February 2008 the Husband file and serve an affidavit(s) setting out the evidence in chief of each lay witness he proposes to rely upon at the hearing.

4.The Husband file and serve all affidavits setting out the evidence in chief upon which he proposes to rely with respect to the value of:

4.1    The Wife’s shareholding in [W] Pty Ltd by 4.00 pm on 15 February 2008;

4.2     [L] Pty Ltd by 4.00 pm on 15 February 2008;

4.3     [I] Pty Ltd by 4.00 pm on 15 February 2008;

4.4     “[RI]” , [MX] by 4.00 pm on 21 December 2007;

4.5     [G Property] by 4.00 pm on 21 December 2007;

4.6     [Netherlands property] by 4.00 pm on 21 December 2007;

4.7     [T5 property] by 4.00 pm on 21 December 2007;

4.8     [T6 property] by 4.00 pm on 21 December 2007;

4.9     [T4 property] by 4.00 pm on 21 December 2007;

4.10   [Apartment in Germany] by 4.00 pm on 21 December 2007;

4.11   Artwork and objects d’art situated at “[RI]”, [MX] and at [G Property] by 4.00 pm on 21 December 2007;

4.12   Artwork and objects d’art situated at [the Netherlands property] by 4.00 pm on 21 December 2007; and

4.13   Motor vehicles owned by the Wife by 4.00 pm on 21 December 2007.

5.It be noted that it is accepted that Order 5 hereof may in some instances first be complied with by the service by the due date of the valuation report on the basis that an affidavit verifying the report will be filed and served subsequent to the due date.

6.By 4.00 pm on 28 March 2008 the Husband file and serve all affidavits setting out the evidence in chief upon which he proposes to rely with respect to the value of:

6.1     The Husband’s shareholding in [B] Ltd;

6.3     [T] Pty Ltd.

7.The Husband do all acts and things necessary to enable a valuer nominated by the Wife to have access to:

7.1     [The G Property];

7.2     Artwork, objects d’art and furniture situated at [the G property];

7.3     [T4 property];

7.4     [T5 property];

7.5     [Apartment in Germany].

upon being given seven days notice requesting such access and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

8.By 4.00 pm on 28 March 2008 [B] Ltd file and serve any evidence in chief of the value of the Company that the Company may seek to rely on at the final hearing and [B] Ltd is not entitled to rely upon any other evidence of value of the Company in these proceedings without leave of the Court.

9.[B] Ltd grant access to all real estate owned by the Company to any valuer appointed by the Wife on seven days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

10.By 4.00 pm on 28 March 2008 [T] Pty Ltd file and serve any evidence in chief of the value of the Company that the Company may seek to rely on at the final hearing and [T] Pty Ltd is not entitled to rely upon any other evidence of value of the Company in these proceedings without leave of the Court.

11.[T] Pty Ltd make available to a valuer appointed by the Wife any financial or other information reasonably necessary for a valuation within seven days of a request being made.

12.The Husband and or [B] Ltd and or [T] Pty Ltd file and serve by 4.00 pm on 7 March 2008 an affidavit sworn by [Mr S], Accountant setting out the evidence in chief of [Mr S] in relation to the following:

12.1   what work does he contend as identified in pa 20 of his affidavit of 14 December 2007 was “incorrect” in relation the Husband and [B] Ltd and the basis of this opinion.

12.2   what amendments did he make and if so why to the income tax returns and financial statements of the Husband, [B] Ltd and or [T] Pty Ltd for the financial years ended 30 June 2005 and 30 June 2006 as foreshadowed in pa 21 of his affidavit of 14 December 2007.

12.3   What amendments were then required to the accounting and statutory records of [B] Ltd and or [T] Pty Ltd.

12.4   the precise terms and source of his instructions as to errors or irregularities in the records of each of the Husband; [B] Ltd and or [T] Pty Ltd.

13.By 4.00 pm on 14 March 2008 the Husband file and serve an affidavit in which he sets out any further evidence in chief on which he would seek to rely in consequence of the amendments made to the income tax returns, financial statement and accounting and statutory records of the Husband, [B] Ltd and/or [T] Pty Ltd as identified in order 12 hereof.

14.[Penelope Kendling] grant access to the property situated at [T6] being properly described as folio identifier […] to any valuer appointed by the Wife on seven days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

15.The relevant parties execute all documents and writings and do all acts and things and pay all moneys necessary to cause the financial accounts and income tax returns to be finalised for the financial year ended 30 June 2007 for the following entities:

15.1   [B] Ltd.

15.2   [T] Pty Ltd.

15.3   [T(E)] Pty Ltd.

15.4   [T(G)] Pty Ltd.

15.5   [L] Pty. Ltd.

15.6   [I] Pty. Ltd.

15.7   [W] Pty Ltd.

by 4.00 pm on 28 February 2008.  It be noted that there may be an issue in relation to [I] Pty Ltd.

16.By 4.00 pm on 29 February 2008 copies of the finalised financial accounts and tax returns referred to in Order 15 hereof be provided to the solicitors for the Wife.

17.All parties (with the exception of the Wife) to the proceedings provide a list of documents in accordance with rule 13.20 of the Family Law Rules by 4.00 pm on 15 February 2008.

18.By 4.00 pm on 21 December 2007 [T] Pty Ltd and or the Husband do all acts and things and pay all moneys necessary to cause to be provided to the solicitors for the Wife a statement annexing and verifying copies of the financial statements and tax returns compiled, prepared and/or audited by [Mr M] for each of the financial years ended 30 June 2000 to 30 June 2006 for:

18.1.  [T] Pty Ltd.

18.2   [T(E)] Pty Ltd.

18.3   [T(G)] Pty Ltd.

18.4   [T(1)] Pty Ltd.

18.5   [T(2)] Pty Ltd.

18.6   [T(4)] Pty Ltd.

18.7   Any other company with a name including the words “[T]”.

19.By 4.00 pm on 21 December 2007 [B] Ltd and the Husband do all acts and things and pay all moneys necessary to cause to be provided to the solicitors for the Wife a statement annexing and verifying a copy of the financial statements and tax returns compiled, prepared and/or audited by [Mr} for the financial year ended 30 June 2005 and 30 June 2006 for [B] Ltd.

20.By 4.00 pm on 15 February 2008 [B] Ltd and the Husband cause to be provided to the solicitors for the Wife a verified complete and detailed explanation as to the reasons for the losses incurred by [B] Ltd for the financial years ended 30 June 2005 and 30 June 2006.

21.By 4.00 pm on 15 February 2008 [B] Ltd and the Husband cause to be provided to the solicitors for the Wife a copy of the work in progress ledger account of [B] Ltd since 30 June 2003 and a verified complete and detailed answer to the following together with copies of supporting documents:

21.1   What did the work in progress at 30 June 2004 shown in the audited financial statements of $18,225,000 comprise?  A detailed schedule is to be provided indicating the amounts relating to each property/development on which monies were expended and identifying whether the relevant developments were on sites owned by [B] Ltd or owned by other persons and if so who.

21.2   What was the status of each of the projects referred to in 21.1 hereof as at 30 June 2005?  If the relevant costs were billed to a third party and no income is recorded details and explanation as to why no income is recorded is to be provided.  If the costs were capitalised as part of the carrying value of a fixed asset details are to be provided.  If the relevant costs were not billed to a third party or capitalised as part of the carrying value of a fixed asset an explanation is to be provided as to why the relevant amounts are not included in closing work in progress at 30 June 2005?  If any amount was transferred to the account of [T] Pty Ltd and no income is recorded then a detailed explanation is to be provided as to why no income was recorded.

21.3   What did the work in progress at 30 June 2005 of $8,654,000 comprise?  A detailed schedule is to be provided indicating the amounts relating to each property/development on which monies were expended and identifying whether the relevant developments were on sites owned by [B] Ltd or owned by other persons and if so who?

21.4   Why was the closing work in progress at 30 June 2005 of some $8,600,000 written off in full in the 2006 trading account?

21.5   What comprised the $5,700,000 of other costs in 2006 written off in the trading account?

21.6   What was the status as at 30 June 2006 of:

21.6.1each of the projects referred to comprising work in progress at 30 June 2004 of $18,225,000;

21.6.2each of the projects referred to comprising work in progress at 30 June 2005 of $8,560,000;

If the relevant costs were billed to a third party and no income is recorded there is to be provided details and explanation why no income is recorded.  If the relevant costs were capitalised as part of the carrying value of a fixed asset details are to be provided.  If the relevant costs were not billed to a third party or capitalised as part of the carrying value of a fixed asset why are the relevant amounts not included in closing work in progress at 30 June 2006?  If any amount was transferred to the account of [T] Pty Ltd and no income is recorded then a detailed explanation was to why no income was recorded is to be provided.

21.7   What did the work in progress at 30 June 2006 of $4,685,000 or whatever figure appears in the final 2006 audited accounts comprise?  A detailed schedule is to be provided indicating the amounts relating to each property/development on which monies had been expended and identifying whether the relevant developments were on sites owned by [B] Ltd or owned by other persons and if so who?

21.8   Were the financiers to [B] Ltd, including Members Equity Ltd and Westpac Bank provided with a copy of the 2005 financial statements in the same form and showing the same trading results and net asset position as that shown in the financial statements provided to the Australian Securities and Investments Commission?  If not, a copy of the financial statements provided to financiers is to be provided and an explanation as to how the differences came about.

22.By 4.00 pm on 15 February 2008 [T] Pty Ltd and [Jeremy Kendling] and [Penelope Kendling] provide to the Wife’s solicitors a verified complete and detailed statement setting out:

22.1   The nature of the activities of [T] Pty Ltd, [T(E)] Pty Ltd and [T(G)] Pty Ltd including details of the real estate held by each company (including title reference) and other material assets held by each company, the businesses conducted by each company and the shareholders of each company.

22.2   Whether or not there exists or has ever existed, companies now known as, or formerly known as, [T(1)] Pty Ltd, [T(2)] Pty Ltd, [T(4)] Pty Ltd or any other company with a name including the words “T”, and if so, details of any real estate held by each company (including title reference) and other material assets held by each company, the businesses conducted by each company and the shareholders of each company.

22.3   An explanation as to how it can be that the income and expenses and assets relating to the business known as the [D Business] are shown both in the audited 2004 and 2005 financial statements of [T(G)] Pty Ltd and in the audited 2004 and 2005 financial statements of [T] Pty Ltd.

22.4   An explanation as to how it can be that the income and expenses and assets relating to the business known as the [ML Facility] are shown both in the audited 2004 and 2005 financial statements of [T(E)] and in the audited 2004 and 2005 financial statements of [T] Pty Ltd.

22.5   An explanation as to whether [T] Pty Ltd ever conducted the businesses known as the [D Business] or the [ML Facility] and, if so, when it ceased to operate those businesses and whether it received any consideration for the transfer of the businesses to any other party.

22.6   An explanation as to when the [D Business] commenced to be operated by [T(G)] Pty Ltd and who holds the relevant licenses relating to this facility.

22.7   An explanation as to when the [ML Facility] commenced to be operated by [T(E)] Pty Ltd and who holds the relevant licenses relating to this facility.

23.By 4.00 pm on 15 February 2008 the Husband provide to the Wife’s solicitors a verified complete and detailed statement setting out what is known by the Husband as to each of the following entities including the nature of their business activities, details of any shares held by the Husband in each company or loans by the Husband to each company, the nature of dealings of each company with [B] Ltd since 30 June 2000 and details of the nature and value of assets held by each company.  If the entities no longer trade then details as to the former business activities of the companies.  If any company was previously known by the name shown details of the current name:

23.1   [B Services] Pty Ltd;

23.2   [B No 2] Pty Ltd;

[…]

23.5   [L] Pty Ltd;

[…]

23.12 [T(2)] Pty Ltd;

23.13 [ML Facility]Pty Ltd;

[…]

23.16 [I] Pty Ltd;

[…]

23.25 [A] Pty Ltd;

23.26 Any other company with which [B] Ltd now deals, or has dealt since 30 June 2000 where, to the Husband’s knowledge, [Jeremy Kendling], [Penelope Kendling], [Mr M], or [Ms W], [Ms R] or any employee of [B] Ltd is now, or was during the relevant time, a director or shareholder or employee.

24.By 4.00 pm on 21 December 2007 the Husband provide to the solicitors for the Wife copies of all bank statements for account Westpac […] together with all documents evidencing the source of funds utilised by the Husband to satisfy the Court orders dated 25 May 2007.

25.By 4.00 pm on 21 December 2007 the Husband execute all documents and writings and do all acts and things necessary to provide to the solicitors for the Wife:

25.1   Copies of all income tax returns filed, at any time, for or on behalf of:

25.1.1[David Kendling];

25.1.2[Marc Kendling];

25.1.3any trust of which [David Kendling] or [Marc Kendling] is a beneficiary.

25.2   Verified details of all items of property to which [David Kendling] or [Marc Kendling] is presently entitled or held by any trustee of a trust of which [David Kendling] or [Marc Kendling] is a beneficiary or object;

25.3   To the extent to which the information is not disclosed pursuant to the requests in Orders 25.1 and 25.2:

25.3.1a full accounting of monies received and disbursed by, or on behalf of (including by any trustee for) [David Kendling] or [Marc Kendling], in relation to the purchase or sale of any real property, shares or any other asset, or income derived from any asset, or expenditure incurred in relation to the acquisition of, or derivation of income from, any such asset.

25.3.2details of all items of property held by [David Kendling] or [Marc Kendling] or to which those persons are presently or contingently entitled, including property held by any trustee of a trust of which either of them is a beneficiary or object.

25.3.3details of the source of funds used to acquire the items of property referred to in Order 25.3.2 hereof including but not limited to the properties situated at [T5] being properly identified as […] and [T4] being more properly described as […].

25.3.4details of the quantum of and nature of any indebtedness of [David Kendling] or [Marc Kendling] or of any trustee of any trust for the benefit of [David Kendling] or [Marc Kendling] in respect of which the trustee is entitled to claim an indemnity against trust assets, including copies of any loan agreements.

25.3.5 copies of any lease agreements relating to any real property held by or on behalf of [David Kendling] or [Marc Kendling].

25.3.6any documents evidencing the source of funding for, and the acquisition of, any real estate or other property held by or on behalf of [David Kendling] or [Marc Kendling] including loan agreements and correspondence with solicitors relating to settlement of the purchase.

26.By 4.00 pm on 15 February 2008 the Husband provide to the Wife’s solicitor all such documents as set out in Schedule 1 to the orders of 17 October 2007 as may exist and in the event the documents do not exist then [B] Ltd to clearly identify those documents that they say do not exist.

27.[B] Ltd forthwith execute the irrevocable authority annexed to the orders of 17 October 2007 and marked with the letter “B” addressed to ABN Amro and forward the said authority to the solicitor for the Wife.

28.By 4.00 pm on 15 February 2008 [B] Ltd provide to the Wife’s solicitors copies of all Minutes of Directors Meetings for the period from 1 September 1995 to date.

29.By 4.00 pm on 15 February 2008 the Husband provide to the Wife’s solicitors a verified complete and detailed statement setting out:

29.1   The nature of the activities of [T] Pty Ltd, [T(E)] Pty Ltd and [T(G)] Pty Ltd including details of the real estate held by each company (by title reference), the businesses conducted by each company and the shareholders of each company.

29.2   Whether or not there exists or has ever existed, to his knowledge, companies now known as, or formerly known as, [T(1)] Pty Ltd.  [T(2)] Pty Ltd, [T(4)] Pty Ltd or any other company with a name including the words “[T]”, and if so, details of the real estate held by each such company (by title reference), the businesses conducted by each such company and the shareholders of each such company.

30.By 4.00 pm on 15 January 2008 [T] Pty Ltd provide to the Wife’s solicitors copies of all Minutes of Directors Meetings for the period from 6 September 1995 to date.

31.[A] Pty Ltd grant access to the property situated [in the Netherlands], to any valuer appointed by the Wife on 14 days notice and make available to such valuer any financial or other information reasonably necessary for the valuation within seven days of a request being made.

32.By 4.00 pm on 15 February 2008 [A] Pty Ltd provide to the Wife’s solicitor a list of all items referred to as ‘movable property at the [Netherlands] property’ and identify any disposition of the said items, the consideration paid and the date of disposal and thereafter on 14 days notice [A Pty Ltd] to provide access to the Wife’s valuer to such movable property for the purpose of valuing the said items.

33.By 4.00 pm on 15 February 2008 [A] Pty Ltd provide to the Wife’s solicitor information and documentation as sought in the letter from the Wife’s solicitor to the Sixth Respondent’s solicitor dated 6 October 2006.

34.By 4.00 pm on 31 January 2008 each of [Jeremy kendling] and [Penelope Kendling] file a financial statement in accordance with rule 13.05 of the Family Law Rules.

35.The Husband, [B] Ltd, [T] Pty Ltd and [Mr S] provide to [Mr V] on seven days notice (and on multiple occasions if requested) access to the audit working papers (including access to any working papers prepared in electronic form) for [B] Ltd, [T] Pty Ltd, [T(E)] Pty Ltd and [T(G)]  Pty Ltd in respect of the audits conducted by [M & Co] for the years ended 30 June 2003 to 30 June 2006 inclusive and that [Mr S] provide to [Mr V] any explanations sought about the audit.  It be noted that the explanations sought about the audit may first have to be directed to Mr [M].

36.The Husband, [B] Ltd, [T] Pty Ltd and [Mr S] provide to Mr [V] copies of any documents contained in the audit files referred to in Order 35 of which a copy is sought by Mr [V].

37.It be noted that in so far as any of the above orders and or any of the orders of 17 October 2007 have been complied with and this is agreed to in writing by the Wife then repeated/continued compliance with such orders is not required.

1. I have not included appearances that have been made from time to time before Registrars.

RELEVANT PRINCIPLES

1. I simply refer to what I said in my judgment of 25 May 2007.  However for present purposes I refer particularly to the decision of Nygh J in the Marriage of Poletti (unreported, 2 March 1990) and on appeal (1990) 15 Fam LR 794.

CONCLUSION

1. This is an extraordinary piece of litigation and is very troublesome.  As I indicated in discussion it is my understanding that as yet not one affidavit has been filed for the hearing of the applications for final orders notwithstanding the proceedings have been before the Court since late 2005.

2. On behalf of the Husband a number of submissions were made and they can be summarised as follows.  First, it was contemplated by me on 25 May 2007 that there would be further proceedings and my order was a “once and for all” order.  Second, the amounts claimed by the Wife are excessive.  Third, the Husband cannot pay the amount sought.  Fourth, the Wife has her own resources.

3. As to the first matter, at the time of making the orders on 25 May 2007 I did not have in mind that anything like what has transpired since then would happen.  For example, it was not foreshadowed that B Ltd would lend the net proceeds of sale of B Facility to T Pty Ltd.  Further, it was not foreshadowed that the accounts of B Ltd and T Pty Ltd may have to be redone.

4. As to the second matter in my judgment of 25 May 2007 I set out my understanding of the quantum of costs and disbursements incurred by each of the Husband and the Wife including anticipated future costs.  I was of the view that the costs of the Husband would probably be well in excess of $1 million.  I found that the estimated combined costs of the Husband and B Ltd were in excess of $1.2 million.  I did not include any estimate of costs for T Pty Ltd.  As to the Wife I was satisfied that she had anticipated total costs of the proceedings including disbursements already paid of in excess of $1.2 million.

5. I am satisfied, for reasons which include what has happened since 25 May 2007, that the costs of all parties will now be significantly greater than what I had previously anticipated.  For example I said that in an affidavit of 19 April 2007 the Husband contended that his solicitors estimated that he would require an amount of $320,000 to pay his legal costs to the conclusion of the parenting and property proceedings.  There was put in evidence documents that reveal that the following payments may have been made by the Husband:

   ·16 July 2007      Barkus Edwards Doolan  150,878

   ·16 July 2007      Barkus Edwards Doolan  100,000

   ·13 September 2007 Barkus Edwards Doolan             125,757

   As well there was a schedule of fees for a total of $233,180 due to Ms Dorrough, and counsel instructed by her, for work done between 10 September 2007 and 10 December 2007.

6. In my opinion, the amount sought by the Wife is significant but not controversial when consideration is given, amongst other things, to the costs of the Husband and B Ltd and T Pty Ltd and what has happened in these proceedings.

7. As to the third and fourth matters, in my judgment of 25 May 2007 I dealt with the disclosed financial circumstances of each of the Husband and the Wife.

8. As to the Wife I was satisfied that she did not have sufficient resources to enable her to pay the then anticipated costs.  The Wife has now expended most of the $1.1 million she received pursuant to the order of 25 May 2007.

9. The Wife attached to her affidavit a copy of a letter dated 27 November 2007 she received from her solicitors, which it is contended provides a summary of the legal fees and disbursements paid by the Wife to date, and the legal fees and disbursements estimated to conclude the preparation of the property case and to conduct a trial for six weeks.  It is contended as follows:

   ·estimate of fees of costs application of $76 740;

   ·estimate of fees of application by T Pty Ltd to vary orders of 17 October 2007 of $50,000;

   ·estimate of fees of senior counsel for the final hearing excluding any interlocutory applications of $369,600;

   ·estimate of fees of junior counsel excluding any interlocutory applications of $207,900;

   ·estimate of solicitors fees for final hearing including preparatory work, real property valuations, and expert accountant report of $1,270,000.

   The total estimate of future legal fees excluding any interlocutory applications is $1,396,740.

10. The Wife also seeks an amount of $88,910 to reimburse Mr P for monies which she borrowed from him to pay her legal fees and disbursements.

11. The Wife contends that she does not have the financial means or resources to pay the estimated ongoing legal fees and that if she is unable to pay those fees then she will not have the benefit of legal representation.

12. The Wife has made an application to SF Company to borrow a further sum of $967,500 and she is presently awaiting approval of that application.  However she stated that the interest on the loan would not be sustainable and accordingly she is applying for the loan purely as an interim step pending the determination of the current costs application.  To offset the interest charged by SF Company the Wife intends to deposit the sum of $577,500 being the total of the monies required by senior and junior counsel for the six week final hearing and preparation time until such time as she is required to draw on the funds.

13. The Wife gave evidence that the financial accounts for W Pty Ltd for the financial year ended 30 June 2007 have been completed and that she has a loan account with this company of $1,478,906.  However the Company does not have sufficient cash flow to repay the debt.

14. I am satisfied that the Wife’s financial circumstances are largely as they were before.  The Wife has attempted to sell the PP land.  I understand that the litigation between W Pty Ltd and T Pty Ltd is unresolved.

15. In conclusion, I accept that the Wife does not have sufficient resources to enable her to pay the anticipated costs outlined above.

16. As to the financial circumstances of the Husband in my judgment of 25 May 2007 I set out what the Husband contended in a number of affidavits and financial statements.  As well, given the evidence of the concluded sale of B Facility I endeavoured to calculate what the Husband contends to be the net value of the assets and arrived at an amount of $44,287,062.  I calculated that if I took into account the approach suggested by Mr V then the net value was $72,985,756.  As seen above, Penelope Kendling suggested that some of the matters raised by Mr V have to be dealt with.  However notwithstanding the sale of B Facility the Husband contends that he does not have the capacity to meet the amount sought by the Wife. 

17. I made very clear before, and of course remain of the view, that I cannot make any concluded findings as to the extent and value of the financial circumstances of the parties.  The effect of the orders of 19 December 2007 is to give the Husband some further time to file his evidence in chief including valuation evidence.

18. The Husband still maintains that he does not have the capacity to meet the payment sought by the Wife.  I assume that the reason why he currently maintains this position is because of the loan by B Ltd to T Pty Ltd of the majority of the proceeds of sale of the B Facility.  I dealt with this in my judgment of 17 October 2007.  In any event I previously calculated that according to the Husband there are property interests of a net value in excess of $40 million.

19. Notwithstanding the above, the Husband still seeks by way of property settlement the order as set out in the amended reply filed on 18 May 2007.  In summary, the Husband proposes that the Wife receive an entitlement equal to 20 per cent of the net assets.  This means that the Husband proposes, on the evidence currently available, that the Wife receive an entitlement of a value of $8,857,412 (20 per cent of $44,287,062) or $14,597,151 (20 per cent of $72,985,756).

20. If the Wife received $8,857,412 then according to the Husband her entitlement would be satisfied as follows:

    $

    ·“[RI]” at MX       4,500,000.00

    ·Shares, W Pty Ltd  nk

    ·Loan account, W Pty Ltd  1,599,094.00

    ·Household contents   50,000.00

    ·Debt owed for child support   10,000.00

    ·Debt owed to Husband   500,000.00

    ·Costs paid  1,100,000.00

    ·Payment by Husband  1,098,318.00

    Total  8,857,412.00

21. Now obviously there remain issues in relation to the above.  It may ultimately be found that the net assets are greater than $44,387,062.  Depending on the outcome of the Supreme Court litigation it may be that the shares in W Pty Ltd have a value.  It may be that the loan to W Pty Ltd is not recoverable and/or that the Wife does not owe $510,000 to the Husband.  Further, there will be applications that one or more parties pay the costs of one or more of the other parties of the proceedings; for example there is yet to be determined the application for costs filed on behalf of the Wife on 31 October 2007.

22. What is clear is that the Husband will have to pay an amount of money to the Wife and other amounts so as to enable the Wife to receive what the Husband contends is the Wife’s entitlement.  The other amounts are various debts which total in excess of $7 million.  The Husband has not filed any further amended reply notwithstanding the advance of the proceeds of sale of B Facility to T Pty Ltd and thus I infer that the Husband has the resources to enable him to readily achieve what he asks this Court to order him to do. 

23. In the circumstances of this case it would be unjust and oppressive if an order was not made.  In my view, from the Wife’s perspective it would stifle her ability to conduct the litigation.  I propose to make an order that the Husband pay to the Wife an amount of $1 million.  It may be that further applications for costs are made.  This amount is consistent with the amount that the Wife said she has recently sought to borrow.

24. I am satisfied that the amount I am persuaded to order the Husband pay to the Wife is reversible given the property settlement the Husband proposes the Wife will receive.

ORDERS

1. By 4.00 pm on 29 February 2008 the Husband pay into the trust account of the Wife’s Solicitors, Messrs Michael Conley Solicitors, of Level 5, 14 Martin Place Sydney, the sum of $1,000,000.

2. The determination as to whether the sum referred to in Order 1 hereof be treated as part of the Wife’s entitlement to property settlement, the provision of maintenance for the Wife, or in payment by the Husband of the costs of and incidental to these proceedings, be reserved to the trial judge at the final hearing of these proceedings.

3. Any monies received by or on behalf of the Wife pursuant to Order 1 hereof be utilised on account of the Wife’s costs in prosecuting her claims in these proceedings, including costs (outstanding and future) in relation to solicitors, counsel, accountants, valuers, and other legal costs and disbursements including process servers fees and conduct money.

4. The Wife is to account at the final hearing for monies so received and disbursed.

I certify that the preceding one hundred and twenty eight (128) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Ryan

Associate: 

Date:  25 January 2008