Pond and Thurga and Ors (No. 3)

[2007] FamCA 838

FAMILY COURT OF AUSTRALIA

POND & THURGA (NO. 3) [2007] FamCA 838

FAMILY LAW – INJUNCTIONS – Preservation of property

Family Law Act 1975 (Cth)

APPLICANT: Ms Pond

RESPONDENT: Mr Thurga

SECOND RESPONDENT: Mr Hedger

THIRD RESPONDENT: B Pty Ltd

FOURTH RESPONDENT: X & T Pty Ltd

FIFTH RESPONDENT: S Ltd

SIXTH RESPONDENT: Ms Thurga

SEVENTH RESPONDENT: Mr Bradbury

FILE NUMBER: SYF 3665 of 2005

DATE DELIVERED: 9 August 2007

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: O'Ryan J

HEARING DATE: 8 August 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Harris

SOLICITOR FOR THE APPLICANT: Cameron & Myers

SOLICITOR FOR THE RESPONDENT: Mr Wahhab of York Family Law

SECOND RESPONDENT: In person.

COUNSEL FOR THE THIRD AND FOURTH RESPONDENTS: Mr Newlinds

SOLICITOR FOR THE THIRD AND FOURTH RESPONDENTS: Clayton Utz

SIXTH RESPONDENT: Ms Thurga appeared in person.

Orders

1. Until further order the husband’s sister is restrained by injunction from selling, transferring, assigning or encumbering by mortgage or charge or otherwise or further encumbering by mortgage or charge or otherwise or in any way dealing with her interest in the property situate at and known as H in the State of New South Wales.

2. All parties have liberty to apply in relation to order 1 hereof on giving to the Court and all other parties not less than 48 hours written notice.

3. Order 1 hereof is made on the basis of the undertaking as to damages given by the Husband.

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 Pond & Thurga

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 3665  of 2005

Ms Pond

Applicant

And

Mr Thurga

Respondent

And

Mr Hedger

Second Respondent

And

B Pty Ltd

Third Respondent

And

X & T Pty Ltd

Fourth Respondent

And

O Ltd

Fifth Respondent

And

Ms Thurga

Sixth Respondent

And

Mr Bradbury

Seventh Respondent

REASONS FOR JUDGMENT

Introduction

1. Before me for hearing is an application by the husband in which he seeks the following:

   15.    That [the husband’s sister] be restrained by injunction from selling, encumbering, further encumbering or any way dealing with the property at [H] in the State of New South Wales and to better secure this Order, the applicant [husband], be at liberty to register a caveat over the [H] property pending further order of the Court.

   The application is opposed by the husband’s sister. 

2. There are pending proceedings for settlement of property.  In those proceedings the Wife is Ms Pond.  The Husband is Mr Thurga.  The Second Respondent is Mr Hedger.  The Third Respondent is B Pty Ltd.  The Fourth Respondent is X & T Pty Ltd.  The Fifth Respondent is O Ltd.  The husband’s sister is not a party to those proceedings.

3. B Pty Ltd and X & T Pty Ltd are now in liquidation and the liquidator is Mr Bradbury.  Mr Bradbury is a partner of a firm of accountants, GR Company.

4. The property proceedings were commenced by application filed on behalf of the Wife in the Local Court at F on 5 July 2005.  The proceedings were later transferred to the Family Court.

5. The final order sought by the Wife is set out in a further amended application filed on 20 September 2006.  She seeks:

   1.     A declaration that the first respondent husband is beneficially entitled to a 50% interest in the company [B] Pty Ltd.

   2.     That the first, second, third and fourth respondents do all acts and things, pass all necessary motions, give all necessary consents and authorities and transfer all necessary shareholdings to cause the first respondent husband to hold a 50% interest in the company [B] Pty Ltd.

   3.     An order pursuant to s 79 that the husband pay to the wife an amount equal to 75% of the value of his interest in [B] Pty Ltd.

   4.     That the First, Second, Third, Fourth and Fifth Respondents pay the applicant wife’s costs of these proceedings.

6. In an amended response filed on 10 January 2007 the Husband seeks the following:

   Husband’s Interests in [X & T] Pty Limited

   1.     That the transfer of the two shares owned by the First Respondent Husband, [Mr Thurga], in the Fourth Respondent Company [X & T] Pty Limited, which occurred on 17 January 2005, be set aside.

   2.     That in the alternative to Order 1 hereof, within seven days from the date of the making of these Orders, the Second Respondent, [Mr Hedger], do all acts and things and pay to the First Respondent Husband the sum of $330,000 together with interest pursant to the Family Law Rules as and from the date of payment pursuant to the informal agreement reached between the First and Second Respondent of 17 January 2005, which sum represents the balance of the sum agreed between the First and Second Respondents in relation to the value of the two shares owned by the First Respondent in the Fourth Respondent Company, [X & T] Pty Limited.

   [O] Limited Bearer Share Certificates and Company Register

   3.     That the First Respondent Husband be entitled to receive the share certificates and the company register of [O] Limited being three binders seized during the execution of an Anton Pillar Order at the home of the Second Respondent.

   Reinstatement of Husband as director of 3^rd and 4^th Respondents

   4.     That the Second, Third and Fourth Respondents do all acts and things and sign all necessary documents to reinstate the First Respondent as a director of the Companies, [B] Pty Limited and [X & T] Pty Limited.

   Sale of [C] Lots

   5.     That the Third Respondent forthwith do all acts and things and sign all necessary documents and sell for the best price reasonably obtainable the balance of the blocks of land situated at [C] in the State of New South Wales as follows (“the [C] Lots”):

   (a)list the [C] Lots for sale by private treaty with such agent as the Parties may agree to appoint and in default of agreement as to agent within fourteen (14) days with such agent as the President of the Real Estate Institute of New South Wales shall appoint (“the agent”) the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;

   (b)the sale price at which the [C] Lots shall be listed shall be mutually agreed upon by the Parties or, in the absence of agreement reached within fourteen (14) days of the date of these Orders shall be the price nominated as the fair market value thereof by a valuer appointed by the President for the time being of the New South Wales Division of Australian Institute of Valuers and Land Administrators (Incorporated) (“the valuer”), the costs of and incidental to such appointment and valuation to be borne equally by the parties as and when same fall due;

   (c)the valuer shall, if requested by either the husband or the wife at a date three calendar months after the date upon which the [C] Lots are first listed pursuant to paragraph (a) hereof and thereafter at three (3) calendar monthly intervals until the [C] Lots are sold, nominate a sale price other than the originally nominated sale price;

   (d)the Parties shall each co-operate in every way with the agent including (without limiting the generality of the foregoing):

   (i)allowing inspection of the [C] Lots at all reasonable times requested by the agent;

   (ii)doing or saying nothing to hinder or prevent a sale being affected;

   (iii)ensuring the [C] Lots including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers; and

   (iv)signing all documents requested by the agents in relating to the listing for sale of the [C] Lots except a contract or agreement for sale which has not been authorised by the parties solicitors;

   (e)the Third Respondent shall execute a contract for sale in the form prepared by the solicitors having the conduct of the sale at a price agreed upon by the parties or, in the absence of any agreement, at or above the price nominated by the valuer pursuant to paragraphs (b) and (c) hereof;

   (f)the parties shall instruct such solicitor as they agree upon to have the conduct of the sale on behalf of both parties or, in the absence of agreement reached within fourteen (14) days of the date of these Orders, shall instruct such solicitor as may be appointed by the President for the time being of the Law Society of New South Wales (“the solicitor”) the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;

   (g)no party to these Orders may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the [C] Lots or to any commission;

   (h)the party not in possession shall be entitled once per fortnight to attend upon and view the [C] Lots;

   (i)if the agent shall certify in writing to the parties’ solicitors it is reasonably necessary for the work specified in such notice to be carried out to the [C] Lots so as to assist in effecting a sale and provided the cost of any such work is less than $1,500 for each lot any of the Parties to these Orders may cause such work to be carried out and the costs thereof shall be recoverable by that party from the proceeds of sale.

   6.     In the event either or both of the [C] Lots are not sold by private treaty within three calendar months from the date of these Orders, then:

   (a)the parties shall list the [C] Lots (whichever of them not sold) for sale by public auction with the agent appointed pursuant to Order 5(a) hereof;

   (b)the reserve price for the purpose of such auction shall be such as the parties agree upon within fourteen (14) days after the date upon which the [C] Lots remaining for sale are first listed for auction in accordance with Order 6(a) hereof or in the absence of agreement a price determined by the valuer appointed pursuant to Order 5 (b) and (c) hereof;

   (c)in the event the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the [C] Lots at a price which is not more than 10% below the reserve price;

   (d)if the [C] Lots remain unsold, the parties shall do all acts and things and sign all documents necessary to immediately relist the [C] Lots for sale by public auction again, on a date nominated by the said agent until the [C] Lots are sold and to this extent Orders 5 and 6 herein shall apply mutatis mutandis.

   7.     That on settlement of the sale of the [C] Lots, the proceeds of sale shall be applied in the following manner and priority:

   (a)all costs and expenses of sale including legal costs and disbursements, agents commission, valuers fees, and auction expenses (including repayment of any such expenses as have been paid by any of the Parties to these Orders);

   (b)the amounts required to pay all municipal and water rates adjustments outstanding with respect to the [C] Lots;

   (c)the amount required to repay to the party carrying out work for the [C] Lots for the cost of such work carried out in accordance with Order 5(i) hereof;

   (d)the balance then remaining shall be deposited in a controlled monies account in the names of the Parties solicitors to be disbursed in accordance with these Orders.

   Dealing with the Assets and Winding up of the 3^rd and 4^th Respondents

   8.     That within 30 days from the date of settlement of the sale of the [C] Lots, the First, Second and Third Respondent:

   (a)join in holding a meeting of the directors and then a meeting of the shareholders of the Third and Fourth Respondents;

   (b)at such meeting or meetings to pass all such resolutions as may be necessary as to solvency and a resolution resolving voluntarily to wind up the Third and Fourth Respondents;

   (c)appoint a Chartered Accountant as the Parties may agree upon within 14 days after settlement of the sale of the [C] Lots and in the absence of agreement such Chartered Accountant as appointed by the President of the Institute of Chartered Accountants to act as liquidator of the Third and Fourth Respondents; and

   (d)do all acts and things and sign all documents as may be required pursuant to the provisions of the Corporations Act or otherwise required by ASIC in respect of the winding up of the Third and Fourth Respondents.

   9.     That the Fourth Respondent, [X & T] Pty Limited, as the shareholder of the Third Respondent join in requesting the liquidator as their agent to distribute all the assets including cash, bank accounts and interest bearing deposits less any liabilities of the Third Respondent by paying or transferring in specie all such assets to the Fourth Respondent.

   10.    That the Second Respondent in his personal capacity and in his capacity as Director and shareholder of [Q] Limited, the First Respondent in his personal capacity (if Order 1 hereof is made) and in his capacity as director and shareholder of [O] Limited (if Order 3 hereof is made) or otherwise in relation to the balance of the shareholdings of the Fourth Respondent as this Honourable Court determines, join in requesting the liquidator of the Fourth Respondent as their agent to distribute all the assets including cash, bank accounts and interest bearing deposits less any liabilities of the Third Respondent by paying or transferring in specie all such assets to the shareholders of the Fourth Respondent equally after paying the liquidator’s fees expenses, all taxes including capital gains tax, income tax of the Third Respondent.

   11.    That the Parties indemnify the liquidator in respect of any liability of the Third and Fourth Respondents for any income and tax.

   12.    That the liquidator so appointed must prior to compliance with Order 10 hereof attend to the following:

   (a)Investigate the operation of the Third and Fourth Respondents and audit the accounts so as to ascertain the true trading of the Third and Fourth Respondents and in particular the sale proceeds of the whole of the [C] development site and all expenses paid towards the development site;

   (b)Investigate the operation of any loan accounts by any of the directors of the Third and Fourth Respondents and ascertain whether any loans obtained or advanced have been paid back;

   (c)Adjust the entitlement of each of the shareholders of the Third Respondent by reason of any matter that arises in the investigation of the Third Respondent’s operations pursuant to this Order.

   Property Settlement Orders between Husband and Wife

   13.    That after compliance with Order 10 hereof, and as between the Applicant Wife and the First Respondent Husband, the Wife shall be entitled to 30% of the net property pool of the Husband and the Wife taking into account the Husband and the Wife’s assets, liabilities, superannuation and financial resources as at the date of hearing of this matter.

   Costs

   14.    That the Wife pay the Husband’s costs of and incidental to these proceedings insofar as they relate to the family law issues between the Husband and the Wife and otherwise that the Second, Third and Fourth Respondents pay the husband’s costs of and incidental to the husband having to enter in relation to the proceedings against the Second, Third and Fourth Respondents.

   The orders sought by the Husband may have to be amended having regard to the appointment of a liquidator of B Pty Ltd and X & T Pty Ltd.

7. Mr Hedger is the Husband’s brother in law.  He is married to Mrs Hedger who is the Husband’s sister.  The Husband’s father was Mr Thurga Snr who is now deceased.

8. In the property settlement proceedings the significant issue involves determination of the extent and value of the Husband’s assets.  This in turn, amongst other things, involves determination of who is the ultimate beneficial owner of B Pty Ltd and what has happened to the proceeds of sale of a large property development at [C].

9. The current director of B Pty Ltd is Mr Hedger.  The Husband was a director from 3 October 1996 to 14 January 2005.  There are currently 1,595,918 issued ordinary shares.  The current shareholder is X & T Pty Ltd and an Australian Securities and Investments Commission company extract revealed that it beneficially holds all of the issued share capital.  The extract revealed that at one time X & T Pty Ltd previously held nine ordinary shares; the Husband beneficially held one ordinary share and O Limited beneficially held one ordinary share.

10. The current director of X & T Pty Ltd is Mr Hedger.  The Husband was a director from 3 October 1996 to 14 January 2005.  An Australian Securities and Investments Commission company extract revealed that there are 20 issued ordinary shares.  The current shareholders are O Ltd which beneficially holds eight ordinary shares, S Ltd which beneficially holds eight ordinary shares and Mr Hedger who beneficially holds four ordinary shares.  The extract revealed that previously the Husband beneficially held two ordinary shares; O Ltd held one ordinary share and S Ltd held one ordinary share.  The address given for O Ltd and S Ltd is in Singapore.  There is an issue as to whether Mr Hedger presently holds two of the four shares in trust for the Husband.

11. In March 2007 an affidavit was sworn by Mr R who is an advocate and solicitor and the managing director of a law corporation in Singapore called P, Solicitors.  As a result of this evidence it was contended by the Second, Third and Fourth Respondents that through a complex structure involving corporations resident in various overseas countries, the ultimate beneficial owner of B Pty Ltd is Mr PW who is Mr R’s father.  Mr R contends that Mr PW holds one bearer share in a company which is resident in the Pacific Islands called G Ltd. Mr R contends that the directors of this Pacific Islands company are Mr PW, Mr Hedger and the husband’s mother.  Mr R contends that G Ltd holds one “named share” being the whole of the issued capital of a company which is resident in the British Virgin Islands called A Ltd.  Mr R contends that the directors of this British Virgin Islands company are himself and the husband’s mother.  Mr R contends that A Ltd holds “one named share” being all of the issued capital of a company resident in the British Virgin Islands called S Ltd.  Mr R contends that he is the sole director of S Ltd.  Mr R contends that A Ltd also holds “one named share” being all of the issued capital of another company resident in the British Virgin Islands called Q Ltd.  Mr R contends that he is the sole director of Q Ltd.  There are 20 issued shares of X & T Pty Ltd.  Mr R contends that S Ltd owns eight shares in X & T Pty Ltd.  Mr R contends that the Q Ltd also owns eight shares in X & T Pty Ltd.  Mr R contends that Mr Hedger owns four shares in X & T Pty Ltd.  Mr R contends that X & T Pty Ltd then owns 1,595,918 shares in B Pty Ltd. 

Background

1. The proceedings have been before me on a number of occasions and I have delivered a number of judgments including more recently on 8 May 2007.  In my 8 May 2007 judgment I attempted to set out what has happened since the proceedings commenced and the issues.  In dealing with this current application I take into account what I previously said in various judgments. 

2. In the 8 May 2007 judgment I said that the proceedings had reached a point where it is at least now known who the Second, Third and Fourth Respondents contend is the ultimate beneficial owner of B Pty Ltd namely Mr PW and that there is an issue in relation to this contention.  I said and remain of the view that the evidence of Mr R will require considerable and detailed investigation and enquiry and at the final hearing, in the absence of admissions, the originals of documents to corroborate his contentions will be required.  I also said and remain of the view that what has to be undertaken, amongst other things, is a very considerable and detailed financial enquiry in relation to the financial circumstances of all of the entities named by Mr R including Mr and Mrs Hedger and Mr PW.

1. On 9 March 1995 V Pty Ltd was registered in New South Wales.  It later changed its name to X & T Pty Ltd.  The Husband gave evidence about a conversation his late father had with the Husband and Mr Hedger.  The Husband said that in relation to X & T Pty Ltd the initial “X” stands for the Husband’s sister Xenia and the initial “T” stands for the Husband.  The principal place of business of X & T Pty Ltd is H and this is also the registered office of the company. 

2. On 16 June 1995 N Pty Ltd was registered in New South Wales.  It later changed its name to B Pty Ltd.  The registered office of the company is L and the principal place of business is H. 

3. On 26 June 1995 Mr Hedger was appointed a director of B Pty Ltd.  He resides at H.

4. Mr Hedger contends that B Pty Ltd was incorporated for the purposes of development of 31 acres at C into community title residential estate.  I note that on 23 July 2007 counsel for Mr Hedger who had previously also acted for the Second and Third Respondents confirmed what the Husband had previously said namely that the money to acquire the land came from the Husband’s late father and was about $3 million.

5. There was attached to an affidavit of the Husband a diagram which revealed that G Ltd owned 100 per cent of S Ltd and Q Ltd and that it was proposed to prepare an acknowledgement of debt of $3,405,315.20 from S Ltd and Q Ltd in favour of G Ltd and that all monies for loans came from the Husband’s father.  There is a diagram attached to the affidavit of Mr R which shows that A Ltd owns 100 per cent of S Ltd and Q Ltd.

6. B Pty Ltd had 10 issued shares.  Nine shares were held by X & T Pty Ltd and one share was held by the Husband’s father.  X & T Pty Ltd borrowed funds from related parties outside Australia to finance the C project.  Those funds were borrowed from companies which were resident in the British Virgin Islands being Q Ltd (incorporated as Z Ltd) and S Ltd. (incorporated as E Ltd)

7. The Husband contends that shelf companies were established in the British Virgin Islands to own the majority of the shareholding in X & T Pty Ltd and they were E Ltd and Z Ltd and that the name of E Ltd was changed to S Ltd which he described as “my company” and the name of Z Ltd was changed to Q Ltd being Mr Hedger’s company.

8. The Husband contends that the known single issued share in each of Q Ltd and SLtd are “bearer shares” – that is, that the bearer of the share certificate is entitled to the said share.  The Husband held the bearer share in S Ltd and Mr Hedger held the bearer share in QLtd.

9. On 3 October 1996 the Husband was appointed a director of B Pty Ltd. 

10. On 5 November 1996 Blake Dawson Waldron wrote to Mr Hedger.  In this document under the heading “Structure after the proposed restructure” it was stated that all loans will be made by E Holdings Ltd (now S Ltd) and Z Ltd (now Q Ltd) to X & T Pty Ltd in equal shares and all loans to B Pty Ltd will be provided by X & T Pty Ltd.  It was stated that all shares in B Pty Ltd are held by X & T Pty Ltd (nine shares) and the husband’s father as to one share.  However, various documents were enclosed including powers of attorney for each of E Ltd and Z Ltd.

11. Mr R gave evidence that in 1996 he was instructed by the Husband’s late father to set up and maintain a corporate structure for his overseas holdings.  Mr R said that he was instructed that the Husband’s late father required two British Virgin Island companies and accordingly Mr R acquired two shelf companies that had already be registered.  The companies were known as E Ltd and Z Ltd and were renamed S Ltd and Q Ltd respectively.  At that time they were bearer share companies and one bearer share for S Ltd was issued to the Husband and one bearer share for Q Ltd was issued to Mr Hedger.  Mr R annexed to his affidavit a copy of the acknowledgments of receipt of the bearer shares signed by the husband and Mr Hedger.  This is consistent with the evidence of the Husband.

12. On 1 October 1997 Mr Hedger tendered his resignation as a director of S Ltd.  On 1 October 1997 the Husband tendered his resignation as a director of S Ltd.  According to a document which purports to be a director’s resolution signed by both the Husband and Mr Hedger, Mr R was appointed a director of S Ltd as from 30 September 1997.  The Husband contends that this was done for reasons associated with tax and estate planning and at the direction of his father.  Then, the Husband and Mr Hedger, at the direction of the Husband’s father, appointed Mr R as a director of both companies.  The Husband however, contends that the resignation notices were never put into effect and accordingly he and Mr Hedger continued to be directors of both companies referring to both S Ltd and Q Ltd.  The Husband contends that notwithstanding the Husband and Mr Hedger signed resignations as directors of the said entities in 1997, such resignations were not effected.  Between 1999 and 2003 the Husband and Mr Hedger signed a number of documents guaranteeing and indemnifying loans made between B Pty Ltd, X & T Pty Ltd, S Ltd and Q Ltd.

13. Mr R contends that in 1997 it was his understanding that the business interests of B Pty Ltd and X & T Pty Ltd had begun to progress and the Husband’s late father wanted a “proper holding company structure established”.  The Husband’s late father owned a bearer share company called G Ltd which he had initially used to use as a holding company for all his international business interests.  Mr R contends that nothing had come of the other international opportunities the Husband’s late father had been pursuing.  Mr R was instructed to use G Ltd as a holding company for the Husband’s late father’s Australian interests.  He was instructed to insert S Ltd and Q Ltd between G Ltd and X & T Pty Ltd so that if the Husband’s late father ever wished to sell X & T Pty Ltd he would not need to sell G Ltd.

14. Mr R contends that on 1 May 1997 S Ltd and Q Ltd had no assets, had never been capitalised and did not have bank accounts.  They were incurring registration fees every year but were otherwise dormant. 

15. Mr R contends that on 1 May 1997 a number of events occurred.  The Husband sold his interest in S Ltd to G Ltd for US$1.  Mr R annexed to his affidavit a copy of the transfer and register of transfers.  As well, on 1 May 1997 Mr Hedger sold his interest in Q Ltd to G Ltd for US$1 and again Mr R annexed to his affidavit a copy of transfer and register of transfers.  As well on 1 May 1997 director’s resolutions and releases were executed cancelling the original bearer shares for S Pty Ltd and Q Ltd as they had been misplaced and new share certificates were issued in the name of G Ltd.  Mr R annexed to his affidavit a copy of the director’s resolutions.

16. Mr R contends that on 1 May 1997 the bearer shares for Q Ltd and S Ltd were cancelled and a share register was set up.  Mr R contends that accordingly since 1 May 1997 the bearer shares initially issued for these two companies have been worthless as ownership as recorded in the share register of each company and the bearer shares were cancelled.

17. Mr R contends that in 1997 the Husband was pursuing a business opportunity in the software industry and Mr Hedger was travelling extensively.  The Husband’s late father asked Mr R to become a director of each company so that there would not be any difficulty in the event that S Ltd and Q Ltd needed to be dealt with.

18. Mr R contends that on 30 September 1997 he became a director of S Ltd and Q Ltd and he annexed to his affidavit a copy of the director’s resolutions which confirmed his appointment as a director.

19. Mr R contends that both the Husband and Mr Hedger resigned as directors of S Ltd and Q Holdings Ltd on 1 October 1997 and he annexed to his affidavit a copy of the resignations.  In summary, Mr R contends that since 1 May 1997 the Husband has not had an interest, beneficial or otherwise, in S Ltd and since 1 May 1997 Mr Hedger has not had an interest, beneficial or otherwise, in Q Ltd.  The consequence of this evidence is that it is contended by the Second, Third and Fourth respondents that at no time have the Husband or Mr Hedger had a beneficial interest in the C development.

20. The husband’s sister contends that on 13 May 1998 she lent $130,000 to B Pty Ltd and on 21 May 1998 she lent $48,213.36 to the company.

21. The Husband contends that in 1999 his father considered restructuring B Pty Ltd and a meeting was held between the Husband’s father, the Husband and Mr Hedger and also meetings with Y Company.  The Husband attached to his affidavit a copy of a report prepared by Y Company dated 2 December 1999 titled “Proposed restructure of [B] Group”.  The Husband contends that in 1999 a re-structuring of the shareholdings in X & T Pty Ltd occurred and extensive advice was obtained as to related party loans so that Q Ltd held eight shares; S Ltd held eight shares; the Husband held two shares and Mr Hedger held two shares. 

22. On 6 February 2001 B Pty Ltd registered a plan of subdivision of blocks at C which resulted in the registration of 20 new lots in Deposited Plan … .  Since about February 2001 B Pty Ltd has sold 15 of the blocks of land for a total consideration of $10,872,500.  Mr Hedger contends that B Pty Ltd arranged for all relevant infrastructure such as roads, sewerage, water and electricity to be installed in respect of all 19 lots.  Mr Hedger said that the C properties “have been on sale” since early 2000.  It will be necessary to investigate what has happened to the proceeds of sale.

23. Mr R contends that “prior to 2002” Mr PW acquired the bearer shares in G Ltd from the Husband’s late father.  Mr R contends that in 2002 he was instructed by Mr PW and the Husband’s late father to restructure the holding companies.  He said that on 1 March 2002 G Ltd transferred its ownership of S Ltd and Q Ltd to A Ltd.  Mr R annexed to his affidavit a copy of the register of transfers which records the share transfer.  He also annexed copies of the cancelled share certificates issued to G Ltd.  He also annexed copies of the director’s resolutions for Q Ltd and S Ltd.  Mr R contends that it was his understanding that the restructure in 2002 was for the purpose of reducing maintenance costs of the corporate structure.  G Ltd was registered in the Bahamas which had higher registration costs than companies in the British Virgin Islands or the Pacific Islands.  A Ltd being a British Virgin Islands company was inserted below G Ltd with the ultimate aim of striking off G Ltd.  Mr R contends however that the removal G Ltd was held back to see if prior losses suffered by G Ltd could be set off.  The inference that I draw is that there exist documents relating to the financial affairs of G Ltd and they will have to be produced.

24. There was put into evidence a number of Commonwealth Bank International Money Transfer Application forms and one is dated 13 February 2002.  It records the payment of $197,355.44 by B Pty Ltd to an account in Singapore in the name of Mr PR.  The money may have ended up in an account with a bank in the United States. In my view it may be necessary to obtain the records of various bank accounts that are located overseas.

25. The Husband’s father died in December 2002.

26. On 17 December 2002 an amount of $30,000 was transferred to an account in Singapore in the name of the husband’s father.  This account may have to be examined.

27. There was put into evidence a number of cheque stubs said to relate to an account in the name of B Pty Ltd.  Examination of the stubs reveals a number of payments to the husband’s sister in perhaps November and December 2002 said to be in repayment of a loan.  This raises for consideration the financial circumstances of the husband’s sister

28. In 2003 an amount of in excess of $350,000 may have been paid to CG Company in relation to the costs of alterations and additions to the H property and the issue will be the source of the funds to pay the costs.  The Husband contends the funds came from B Pty Ltd.  This brings into issue whether B Pty Ltd has an interest in this property.

29. On 27 August 2003 an amount of US$19,155 may have been transferred overseas to an account in the name of the husband’s sister.

30. On 21 January 2004 an amount of $600,000 was sent by Mr Hedger to Mr PW and A Ltd Clients Account in Singapore.  On the same day an amount of $88,051.96 was sent from B Pty Ltd to an account in the name of the husband’s sister in Singapore.  These accounts will have to be examined.

31. The Husband contends that by approximately 2004 he and Mr Hedger had a “falling out” as the Husband had not received any money from the C development and he was also concerned as to the running of B Pty Ltd and the lack of accounting by Mr Hedger.  He contends that he had numerous discussions with Mr Hedger.  The Husband gave evidence about a meeting held in January 2003 at Mr Hedger’s home.  The Husband also contends that later in 2003 and in 2004 on many occasions he said to Mr Hedger that he wanted certain documents of S Holdings Ltd and share certificates and Mr Hedger stated that he did not have them and had never seen them.

32. The Husband gave evidence about a conversation he had with Mr Hedger in September 2004.  In about mid November 2004 the Husband received from Mr Hedger a document titled “Offer” stated to be “valid” until 17 November 2004.  The Husband contends that by late 2004 he was becoming desperate for money and had a lot of debts including legal expenses.  He also contends that he was suffering from significant back problems and required an operation.

33. On 13 December 2004 the Husband commenced proceedings in the Supreme Court of New South Wales for the appointment of a provisional liquidator of B Pty Ltd. 

34. Mr R contends that on 21 December 2004 G Ltd was “redomociled” to the Pacific Islands to take advantage of the lower company fees.  This will have to be explained.

35. The Husband contends that in early January 2005 he met with Mr Hedger and they had a conversation.  The Husband contends that Mr Hedger stated that if the Husband transferred the two shares he owned in X & T Pty Ltd to Mr Hedger, Mr Hedger would pay the Husband $400,000 by instalments.  Mr Hedger would pay an amount of $45,000 and thereafter as from 1 July 2005 for a period of 12 months an amount of $2,500 per month and on 1 July 2006 he would pay the remainder in one lump sum.  The Husband agreed.

36. On 6 January 2005 the Husband commenced further proceedings seeking that Mr Hedger hand over various records concerning S Ltd.  On 6 January 2005 the Husband swore an affidavit which was filed in proceedings in the Supreme Court of New South Wales, Equity Division.  These proceedings “were resolved on 31 January 2005”. 

37. The Husband contends that on 17 January 2005 he again met Mr Hedger who gave him certain documents to sign which he did.  The Husband contends that he felt under duress and needed money and he reluctantly signed a resignation as a director of B Pty Ltd and X & T Pty Ltd and also signed a share transfer whereby he transferred his two shares in X & T Pty Ltd to Mr Hedger.  Mr Hedger then handed the Husband a cheque for $45,000.

38. The Husband contends that what occurred is summarised as follows.  On 6 January 2005 the Husband filed a claim in the Supreme Court for the appointment of a provisional liquidator of, and otherwise seeking the records of S Ltd.  The First Defendant to those proceedings was X & T Pty Ltd, the Second Defendant was B Pty Ltd, and the Third Defendant was Mr Hedger.  During the course of the Supreme Court proceedings, Minter Ellison held instructions to act for X & T Pty Ltd, B Pty Ltd and Mr Hedger.  The Husband objected to Minter Ellison acting for the Defendants.  However the objection did not proceed upon a compromise being achieved later that month.  Against the background of the Supreme Court proceedings, the Husband entered an agreement with Mr Hedger to transfer his two shares in X & T Pty Ltd to Mr Hedger for a consideration of $400,000.  The Husband thereafter executed documents transferring his shareholding in X & T Pty Ltd and resigned as a director of B Pty Ltd.  Mr Hedger provided to the Husband a sum of $45,000 at the time of such transfer and subsequent sums of $15,000.

39. According to an Australian Securities and Investments Commission company extract the Husband ceased to be a director of B Pty Ltd on 14 January 2005.  He also ceased to be a director of X & T Pty Ltd on 14 January 2005. 

40. On 14 February 2005 an amount of US$105,583.50 may have been transferred overseas to an account in the name of the husband’s sister.

41. It appears that Mr Hedger and the husband’s sister may have had a mortgage loan secured over the title of H property in favour of I Ltd.  The mortgage secured an amount of $799,000.  Over a period of years interest payments were made and the funds came from an account in the name of B Pty Ltd with the Commonwealth Bank at a Sydney suburb.  This borrowing and the repayments may have to be investigated.

42. The Husband said that on 1 July 2005 Mr Hedger gave him $2,500.

43. On 5 July 2005 the application for final orders was filed in the Local Court at F by the Wife in which she sought final parenting orders, spousal maintenance and property settlement.  By way of property settlement she sought that the Husband pay $250,000 on or before 1 July 2006 on the basis that the Husband retain all his right, title and interest in the development project at C owned by B Pty Ltd.

44. On 26 July 2005 a response was filed on behalf of the Husband.  In the response he also sought parenting orders.  In relation to the Wife’s application for property settlement and spousal maintenance the Husband sought that the application be dismissed.  On 25 July 2005 the Husband swore a Financial Statement and he gave his occupation as chef and company director.  He identified his employer as ST and CB Pty Ltd.  In relation to his assets he contended that he had “possible investment in [B] Pty Ltd”.

45. The Husband said that in about August 2005 Mr Hedger gave him $2,500.

46. On 2 August 2005 an order was made in the Local Court that the proceedings in that Court be transferred to the Family Court.

47. The Husband said that in September 2005 Mr Hedger gave him a cheque for $10,000.  The Husband contends that thereafter Mr Hedger ceased making the instalments and failed to make the final payment which was due on 1 July 2006.

48. On 30 January 2006 Judicial Registrar Johnston made a number of orders including an Anton Pillar order.  On 1 February 2006 at 7.00 am the orders made on 30 January 2006 were executed at the home of Mr Hedger and the husband’s sister.

49. In an earlier judgment I said that it is clear and has been known by all parties for a considerable period of time, that the Wife and those advising her had been attempting to ascertain the ultimate beneficial ownership of X & T Pty Ltd a company which according to Mr G from Minter Ellison was controlled by Mr Hedger and in which the Husband was a shareholder at the time of separation.  Mr Hedger, B Pty Ltd and X & T Pty Ltd ultimately agreed to file affidavits providing evidence in relation to each of their contentions as to the beneficial ownership of the shareholdings of B Pty Ltd and X & T Pty Ltd and also annex all source documents supporting their contentions and assertions. 

50. On 9 March 2006 a Notice to Dispute Facts was filed by Mr Hedger.  It was in answer to the Notice to Admit dated 23 February 2006.  I refer to what I said in an earlier judgment about what Mr Hedger said.  In an affidavit of 20 February 2006 Mr Hedger gave no evidence in relation to the shareholding in X & T Pty Ltd or the ownership of the shares in Q Ltd and S Ltd.

51. Mr K who is an accountant retained by the Wife swore an affidavit on 27 July 2006.  Mr K gave evidence that he viewed documents produced on subpoena by X & T Pty Ltd and B Pty Ltd and a set of accounts produced by B Pty Ltd.  Mr K was of the belief that the accounts produced were inadequate and had items of information removed or left out of them.  He stated that the accounts referred to scheduled items, however the schedules had not been produced and the author of the accounts was not disclosed.  He said that loans recorded in the accounts of B Pty Ltd referred to “other loans” with no record as to who the loans were from.  He also contended that documents produced did not enable him to value the costs of the C development and therefore calculate the profit and in turn the value of the company.  These matters may be investigated by Mr Bradbury and if not may have to be investigated by an expert accountant.

1. On 28 July 2006 Judicial Registrar Loughnan made certain orders including an Anton Pillar order.

2. On 12 September 2006 I made the following orders:

   1.     Upon the Applicant Wife by her Counsel proffering to the Court the usual undertaking as to damages, until further order:

   1.1An amount of $305,000 (three hundred and five thousand dollars) from the proceeds of Lot […] Deposited Plan […] be deposited into an interest bearing controlled money account to be opened for the purpose by Minter Ellison, Lawyers (“Account”).

   1.2All interest accruing on the balance of the Account be credited to the Account; and

   1.3There be no withdrawals from the Account.

3. On 13 October 2006 I made certain orders.  On 20 November 2006 I made a number of orders including:

   11.    Upon the Applicant Wife by her Counsel giving to the Court the usual undertaking as to damages, until further order or 4.00 pm on 10 February 2007:

   11.1100% of the net proceeds of sale of Lot […] Deposited Plan […] be deposited into the controlled money account established by Minter Ellison Lawyers pursuant to the orders of the Court on 12 September 2006 (‘Account’).

   11.2All interest accruing on the Account be credited to the Account.

   11.3There be no withdrawals from the Account.

   12.    It be NOTED that in Order 11.1 the description “net proceeds of sale” is intended to be the balance of the sale price after the payment of all costs and associated disbursements relating to the sale of the said property.

4. On 11 December 2006 I made certain orders.  On 16 February 2007 I made certain orders including:

   3.     The application by the Second, Third and Fourth Respondents for a variation of order 1 made on 12 September 2006 and/or order 11 made on 20 November 2006 to enable the payment of the legal costs in the invoices rendered by Minter Ellison, Lawyers identified in Exhibit B of 9 February 2007 be dismissed.

5. Mr Bradbury gave evidence that on 20 March 2007 he was requested by his Singapore office to undertake a conflict check and provide a consent to act as the liquidator of X & T Pty Ltd and B Pty Ltd.  He undertook such a check and found no conflicts and provided his verbal consent.  Mr Bradbury did not identify who gave instructions to his Singapore office.

6. Then on 22 March 2007 an affidavit was sworn on behalf of the Second, Third and Fourth Respondents by Mr R.  Mr R is advocate and solicitor and managing director of P, Solicitors a law corporation in Singapore.  He said that he has been admitted as an advocate and solicitor in Singapore since 1994.  For a number of years he acted for the Husband’s late father.  I have already set out in parts of this judgment what Mr R said.  The contentions of the Second, Third and Fourth Respondents as to the beneficial owner of X & T Pty Ltd and in turn the C development are now known.  As I previously said the amount of litigation that transpired to get to this point was significant and at some point there will probably be issues as to costs.  Mr R said nothing about giving instructions to Mr Bradbury’s firm in Singapore.

7. On 22 March 2007 an affidavit was sworn by Mr Hedger.  His evidence is consistent with the evidence given by Mr R namely he contends that S Ltd is wholly owned by V Ltd and that Mr R became a director on 30 September 1997 and Mr Hedger and the Husband resigned as directors shortly thereafter”.  He also gave evidence that Q Ltd is also wholly owned by V Ltd and that again he has been informed that Mr R became a Director on 30 September 1997 and that he and the Husband resigned as directors shortly thereafter.  He also said that V Ltd is wholly owned by G Ltd and that he has never been a director or shareholder of V Ltd and has never been a shareholder in G Ltd.  He said that the directors of V Ltd are Mr R and Mrs LT who is the Husband’s mother.  Mr Hedger said that G Ltd is a bearer share company and the directors are himself, Mr PW and his mother-in-law.  He said “I do not have any personal knowledge of who holds the bearer share and is therefore the owner of [G Ltd]”.  He went on to say “I am informed and believe that my solicitor Ms W has asked Mr R who the owner of [G Ltd] is and that [Mr R] has stated that it is [Mr PW], the Principal of [P, Solicitors]”.  Thus the inference that can be drawn is that Mr Hedger is contending that he only ascertained the ultimate beneficial ownership of the bearer share from his solicitor Ms W although he did not say when he gained this knowledge.  He said that although he proposes to or will “deny on oath” a great deal of what the Husband and the Wife have said in affidavits, his affidavit was “limited to the [C Company] corporate structure and ultimate ownership”.  I have no doubt that his evidence will have to go a lot further.  All of what Mr Hedger contends for will have to be investigated.  The inference that can be drawn is that Mr Hedger is contending that at the time he swore his affidavit on 20 February 2006 he had no knowledge of a number of the matters dealt with by Mr R.   Further Mr Hedger said nothing about instructions to Mr Bradbury’s firm in Singapore.

8. On 15 June 2007 I made an order dismissing an application by the Husband that Minter Ellison be restrained from acting for the Second, Third and Fourth Respondents.  Interestingly Minter Ellison are no longer appearing for any party and Mr Hedger is now without legal representation.  At some point it may be necessary to know how much Minter Ellison have been paid.

9. Mr Bradbury gave evidence that on 5 July 2007 he was advised by his Singapore office that the matter was now ready to proceed and he was provided with the contact details of the company’s recorded director, Mr Hedger.  Again, Mr Bradbury did not identify who gave the instructions to his Singapore office.  At this stage there is no evidence explaining why the instructions were given to Mr Bradbury at this time, from whom the instructions were received and what the instructions were.  Mr Bradbury may have to provide evidence of these matters.  I note that on 23 July 2007 counsel for Mr Bradbury said that Mr Bradbury was appointed by Mr Hedger.

10. Mr Bradbury said that he then met with Mr Hedger on 9 July 2007 and discussed the financial position of the companies. He said he was advised that the loans to X & T Pty Ltd from S Ltd and Q Ltd had been called in and that X & T Pty Ltd could not pay them. He said that Mr Hedger advised that X & T Pty Ltd had in turn called in its loan to B Pty Ltd which was also unable to pay the debt due. There will have to be evidence in relation to when and how the loans were called. In any event Mr Bradbury said that he advised Mr Hedger of his obligations under the Corporations Act to avoid trading the companies insolvently and suggested he appoint a voluntary administrator. Mr Bradbury said he followed this verbal advice with a letter of 10 July 2007 wherein he provided instruction on the necessary process to follow in making such an appointment.

11. Mr Bradbury said that on 13 July 2007 Mr Hedger advised him that he had “put the matter on hold until Wednesday”.  I am not sure what this means and it may have to be explained.  Mr Bradbury said that Mr Hedger subsequently attended his office and executed the necessary appointment documentation.

12. Mr Bradbury said that on 17 July 2007 he was appointed voluntary administrator of X & T Pty Ltd and B Pty Ltd. 

13. On 23 July 2007 Cohen J made the following orders:

    1. That pursuant to s440D(1)(b) of the Corporations Act 2001 leave is hereby granted to the first respondent husband to begin and proceed with the application in his application in a case filed 19 July 2007.

    2. That the first meetings of creditors of the third and fourth respondents namely [B] Pty Limited and [X & T] Pty Limited to be convened pursuant to s436E of the Corporations Act 2001 are pursuant to ss439A(6) and 447A(1) of the said act hereby adjourned for 21 days.

    3.     That liberty to apply to further adjourn or to advance the date for the meetings subject of order 2. herein is hereby granted to each party.

    4.     The husband's said application is adjourned for hearing or mention to 2:00pm on 31 July 2007 before O'Ryan J..

    5.     Costs of and incidental to today's hearing are reserved for determination by O'Ryan J. on applicaiton to him.

    6.     Any further affidavits to be relied on by the first respondent husband or the first respondent wife shall be filed and served not later than 5:30pm on 26 July 2007.

    7.     Any further affidavits to be relied on by the other respondents to the application namely [Mr Hedger] the second respondent, [B] Pty Limited the third respondent, [X & T] Pty Ltd the forth respondent, [Mr Bradbury] the fifth respondent and [the husband’s sister] the sixth respondent shall be filed and served not later than 5:30pm on 30 July 2007.

    IT IS NOTED

    8.     That counsel for the husband has informed the Court that the husband will make the usual written undertaking as to damages and that the above orders are conditional upon such underaking being made by 4:00pm today.

    9.     That when the matter is next before the Court the husband will seek leave to orally examine the second respondent and who is personally present in Court today seeks his personal attendance at Court for that purpose on that day.

    The matter was stood over until 31 July 2007.  I have read the transcript of the hearing before Cohen J.

14. Mr Bradbury then prepared a report to update creditors on what he described as the current financial position and assist the Court on 31 July 2007 to understand the financial position of the companies.  He attached a copy of this report to an affidavit he swore on 30 July 2007. 

15. In his report Mr Bradbury contended that B Pty Ltd statements indicate that the company had carried forward losses at 30 June 2005 of $427,503 and although it had a net asset position it has had a significant deficiency of working capital since at least 30 June 2002.  Mr Bradbury also said that the financial statements of X & T Pty Ltd indicate that this company recorded a net accumulated loss for the year ended 30 June 2005 but was in a net asset position as at that date.

16. Mr Bradbury then said that Mr Hedger provided “special purpose” financial reports for the years ended 30 June 2002 to 30 June 2005 inclusive of B Pty Ltd and provided special purpose financial reports for the years ended 30 June 2003 to 30 June 2005 inclusive of [X & T] Pty Ltd.  I am going to require that the tax returns and financial statements of all relevant entities since establishment or registration be provided. 

17. Mr Bradbury said that he was informed that B Pty Ltd has $4,500 cash at bank and owns two properties which are valued for a total of about $1,100,000.  As well, the company has $987,052.31 held in a trust account by Minter Ellison, Lawyers.  He said that the accessibility and ownership of these assets are being contested in this Court.

18. Mr Bradbury contended that the most recent financial statement of B Pty Ltd revealed that as at 30 June 2005 B Pty Ltd has a debt of $1,116,551 to X & T Pty Ltd and that this is pursuant to a loan agreement dated 14 April 1997.  Mr Bradbury said that repayment of this loan account was demanded by X & T Pty Ltd on 22 June 2007.  There will have to be evidence of this demand.

19. As to X & T Pty Ltd Mr Bradbury said that the balance sheet reflects that its assets comprise the loan account receivable of $1,441,983 and share capital investment in B Pty Ltd at $1,595,918.  He was of a preliminary opinion that there will be no return to the shareholders of B Pty Ltd. 

20. Mr Bradbury said that the only liability of X & T Pty Ltd according to the 2005 financial statements is “other loans” and he was advised by Mr Hedger that this represents monies owed to Q Ltd and S Ltd pursuant to loan agreements dated 14 April 1997.  Mr Bradbury said that repayment of these loans account was demanded by Q Ltd and S Ltd on 18 June 2007.  There will have to be evidence of this demand.

21. Mr Bradbury then said that B Pty Ltd has estimated realisable assets of $2,187,465 and priority creditors of $946,400 and unsecured creditors of $2,693,216 and thus has a deficiency of assets to liabilities before administrative costs of $1,452,152.

22. The priority creditors of B Pty Ltd are said to comprise director’s wages, holiday pay, long service leave and superannuation.  This will have to be investigated and Mr Hedger and the husband’s sister will have to provide copies of their tax returns.  The unsecured creditors include X & T Pty Ltd for $1,459,243, Mr Hedger for $271,624 and the husband’s sister for $284,576.  Presumably there will be various accounting records such as journal and ledgers and also primary records required to establish these debts

23. Mr Bradbury then said that X & T Pty Ltd has estimated realisable assets of $1,459,243 being the loan to B Pty Ltd and unsecured creditors of $1,459,243.  The unsecured creditors include Q Ltd for $729,621, S Ltd for $729,621 and Minter Ellison for $27,957. Again I will assume that there will be various accounting records such as journal and ledgers and also primary records required to establish these debts

24. In summary it is clear from the preliminary report of Mr Bradbury that if the administration and now liquidation proceeded as he outlined then all of the realisable assets of B Pty Ltd would be applied to pay creditors including X & T Pty Ltd and all of the realisable assets of X & T Pty Ltd would be applied to pay creditors including Q Ltd and S Ltd.  There would be nothing left in the Australian companies and $1,459,243 would have gone overseas.  The C development would be largely completed and all of the proceeds of sale disbursed in circumstances where there has been no accounting for what happened and no dividend ever declared. 

25. I repeat that prima facie I can understand why the Husband seeks a full accounting for the C development since its inception and the financial affairs of B Pty Ltd and X & T Pty Ltd and perhaps other entities.  This inquiry will also involve consideration of the contention of Mr Hedger that he, the husband’s sister and the Husband’s mother lent money to the Husband’s late father to “help keep his business ventures” and that the funds to make such loans came from savings and a mortgage loan.  As I have said before the financial affairs of Mr Hedger and the husband’s sister will probably also have to be investigated.  This and other issues may not be dealt with by Mr Bradbury and thus as I said in discussion I accept that the Husband and or the Wife may still require that an expert investigation be undertaken

26. On 31 July 2007 I made the following orders:

    1. The Third and Fourth Respondents be wound up in insolvency pursuant to s. 459P of the Corporations Act 2001. 

    2.     [Mr Bradbury] be appointed as liquidator of the Third and Fourth Respondents (“the Liquidator”). 

    3.     The costs and expenses incurred by [Mr Bradbury] as voluntary administrator of the Third and Fourth Respondents form part of the costs and expenses of the windings up. 

    4.     The monies in the controlled monies account held by Minter Ellison be forthwith paid to the Liquidator. 

    5.     Dissolves Order 4 made on 21 February 2006 upon the Liquidator undertaking not to complete any sale of [A property] (“the property”) without first giving the parties to these proceedings 7 days written notice. 

    6. Direct the Liquidator to forthwith call for formal proofs of debt in the manner prescribed by the Corporations Act and Rules but thereafter to take no steps to investigate any proof of debt lodged by any person identified in the Schedule hereto.

    SCHEDULE

    1.   [S] Limited

    2.   [Q] Limited

    3.   Mrs [Hedger (the husband’s sister)]

    4.   Mrs [LT (the husband’s mother)]

    5.   Mr [Hedger]

    6.   Mr [PW] of Singapore

    7.   Minter Ellison

    8.   Mr [R] of Singapore

    9.   [P], Solicitors of Singapore

    10.     [V] Limited

    11.     [G] Limited ([Pacific Islands])

    7.     Direct the Liquidator to notify all parties to these proceedings of all proofs of debt received by him. 

    8.     These orders do not prevent the Liquidator admitting creditors for the purpose of voting at meetings of creditors. 

    9.     An order be made that the Liquidator make no distribution of any money to any creditor or shareholder of the Third and/or Fourth Respondents without first obtaining the consent in writing of the parties to these proceedings or a direction of this Court.

    10.    I NOTE the identity of the persons and identities in the schedule to the Minute.

    11.    A copy of the transcript of today’s proceedings be taken out.

    12.    I NOTE the understandings and accommodations that were identified in discussion with the Counsel for the liquidator as to the intention of these Orders.

    13.    I NOTE that the undertaking as to damages given by the Husband on 24 July 2007 be continued.

    14.    The hearing of paragraph 15 of the amended application in a case filed on 25 July 2007 on behalf of the Husband is adjourned to 9.30 am on 8 August 2007.

27. At the hearing before me on August 2007 the husband’s sister appeared with out legal representation as did Mr Hedger.  Mr Hedger informed me that he is intending to travel overseas for the purposes of seeking employment.

Conclusion

1. This case is very troubling for a number of reasons including the manner in which to date the litigation has been conducted.  I have both in this and earlier judgments identified the possible areas that will have to be inquired into.   In determining this current application I have taken into account what has transpired to date 

2. The Husband is seeking to restrain his sister from dealing with the property at H pending the resolution of the issues.  He contends that Mr Hedger and his sister have wrongly taken funds from B Pty Ltd and that such payments include payments in relation to the cost of improvements to the H property and a mortgage secured over the title of this property.  He contends that effectively Mr Hedger and his sister have wrongly taken all of the profits from the C development to his significant disadvantage.  Mr Hedger and the husband’s sister deny these allegations and contend that any amounts they received were in repayment of loans they made to B Pty Ltd.

3. At this stage of the proceedings as I have pointed out before I am unable to form any view about the respective contentions.  What I have tried to do is identify the issues and some progress is finally being made.  However there remains a lot to be done by all parties in relation to proof of their respective contentions.  As I have indicated this will probably involve evidence from various persons resident overseas and obtaining documents that may be located overseas.

4. As a result of the appointment of Mr Bradbury there was the possibility that without the existence of the proceedings in this court all or the majority of the remaining assets of B Pty Ltd could have been remitted overseas through X & T Pty Ltd.  Ultimately this may still happen if the contentions of Mr Hedger and the husband’s sister and perhaps others are established.  On the other hand if the contentions of the Husband are established then not only may he indirectly through various entities have an entitlement to an interest in B Pty Ltd but the net assets of this company may be more that what Mr Bradbury’s preliminary report suggests.  B Pty Ltd may not only be entitled to resist a number of the claims of priority and unsecured creditors but also be entitled to obtain the benefit of assets of others including of Mr Hedger and the husband’s such as an interest in H property.  It may all be adequately explained and Husband fail however prima facie the evidence demonstrates that significant funds from the realisation of the C development have been disbursed for reasons to be ascertained and B Pty Ltd is now said to be insolvent.

5. In this case there are serious issues to be tried.  I accept that if an order was not made and the husband’s sister dealt with the property at H then there is a real risk that if the Husband’s contentions were accepted his interest would be defeated.  There is evidence that prima facie demonstrates that funds of B Pty Ltd have been spent on the H property.

1. I have come to the conclusion that pending the resolution of the issues the order sought by the Husband should be made.  Obviously if pending the hearing the husband’s sister seeks to deal with her property for a specified reason such as obtaining funds to pay legal costs or for some other purpose then she can seek to have the injunction discharged or modified.  Further I am mindful that the husband’s sister was unrepresented and it may be that if she obtains legal representation there are other matters that on advise she may wish to put to support the discharge or modification of the injunction.  However I am concerned to maintain the status quo in relation to various assets remaining pending the final hearing and this includes assets that may be the subject of the claims by entitles in which the Husband directly or indirectly may have an interest.  The history of what has happened to date clearly demonstrates why the balance of convenience supports the making of an order.

I certify that the preceding paragraphs are
a true copy of the reasons for judgment
of the Honourable Justice O’Ryan

………………………………………………………..
Associate: 
          Date:  9 August 2007