FAMILY COURT OF AUSTRALIA
| POND & THURGA (NO. 2) | [2007] FamCA 587 |
| FAMILY LAW - INJUNCTION - Legal practitioners - Conflict of interest |
| Family Law Act 1975 (Cth) |
Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501
Geelong School Supplies Pty Ltd v Dean [2006] FCA 1404
Prince Jefri Bolkiah v KPMG [1999] 2 AC 222
Belan v Casey [2002] NSWSC 58
British American Tobacco Australia Services Ltd v Blance [2004] NSWSC 70
Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550
Kallinicos v Hunt (2005) 64 NSWLR 561
McMillan v McMillan (2000) FLC 93-048
Mills v Day Dawn Block Gold Mining Company Ltd [1082] QLJ 62
In the Marriage of Thevanaz (1986) 11 Fam LR 95; FLC 91-748
Magro and Magro (1989) FLC 92-005
Griffis and Griffis (1991) FLC 92-233
Kossatz and Kossatz (1993) FLC 92-386
Grimwade v Meagher [1995] 1 VR 446
Bowen v Stott [2004] WASC 94
| WIFE: | Ms Pond |
| HUSBAND: | Mr Thurga |
| SECOND RESPONDENT: | Mr Hedger |
| THIRD RESPONDENT: | B Pty Ltd |
| FOURTH RESPONDENT: | X & T Pty Ltd |
| FIFTH RESPONDENT: | S Ltd |
| FILE NUMBER: | SYF | 3665 | of | 2005 |
| DATE DELIVERED: | 15 June 2007 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | O'Ryan J |
| HEARING DATE: | 8 May 2007 |
REPRESENTATION
| COUNSEL FOR THE WIFE: | Mr Batey with Ms Harris |
| SOLICITOR FOR THE WIFE: | Cameron & Myers |
| COUNSEL FOR THE HUSBAND: | Mr Campton |
| SOLICITOR FOR THE HUSBAND: | York Family Law |
| COUNSEL FOR THE SECOND, THIRD AND FOURTH RESPONDENTS: | Mr Campton |
| SOLICITOR FOR THE SECOND THIRD AND FOURTH RESPONDENTS: | York Family Law |
Orders
The application of the Husband and the Wife that Minter Ellison Lawyers be restrained by injunction from acting on behalf of the Second, Third and Fourth Respondents in these proceedings be dismissed.
The costs of all parties be reserved.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYF 3665 of 2005
| Ms Pond |
Wife
And
| Mr Thurga |
Husband
And
| Mr Hedger |
Second Respondent
And
| B Pty Ltd |
Third Respondent
And
| X & T Pty Ltd |
Fourth Respondent
And
| S Ltd |
Fifth Respondent
REASONS FOR JUDGMENT
Introduction
Before me for hearing is an application by the husband in which he seeks the following:
12.That the second, third and fourth respondents be restrained by injunction from giving instructions or retaining Minter Ellison lawyers to act on their behalf in these proceedings in the Family Court.
13.That in the alternative to order 12 hereof, Minter Ellison lawyers be restrained by injunction from acting on behalf of the second, third and fourth respondents in these proceedings.
The application is opposed by Minter Ellison.
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 S Ltd. Minter Ellison are the solicitors for the Second, Third and Fourth respondents.
The property proceedings were commenced by application filed on behalf of the Wife…
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- Pond & Thurga (No 2) [2007] FamCA 587
- Case
- [2007] FamCA 587
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was whether Minter Ellison Lawyers should be restrained by injunction from acting for the Second, Third, and Fourth Respondents. This question arose in the context of extensive litigation concerning the division of property, where allegations of impropriety and conflicts of interest were raised by the Husband. The court was required to determine if the circumstances warranted the disqualification of Minter Ellison from representing their clients in these proceedings.
In dismissing the application, O'Ryan J found that the evidence did not establish a sufficient conflict of interest to justify an injunction restraining Minter Ellison from acting for the Second, Third, and Fourth Respondents. The court considered the history of Minter Ellison's involvement with the parties and the companies, noting that while there had been prior dealings, the specific nature of those dealings and the current proceedings did not, in the court's view, create a conflict that would necessitate disqualification. The court applied principles relating to the duty of solicitors to avoid conflicts of interest, but concluded that these principles were not breached to the extent required to grant the relief sought. The application was therefore dismissed.
Orders
Orders of the court
1.
The application of the Husband and the Wife that Minter Ellison Lawyers be restrained by injunction from acting on behalf of the Second, Third and Fourth Respondents in these proceedings be dismissed.
2.
The costs of all parties be reserved.
FAMILY COURT OF AUSTRALIA AT SYDNEY
FILE NUMBER: SYF 3665 of 2005
Ms Pond
Wife
And
Mr Thurga
Husband
And
Mr Hedger
Second Respondent
And
B Pty Ltd
Third Respondent
And
X & T Pty Ltd
Fourth Respondent
And
S Ltd
Fifth Respondent
REASONS FOR JUDGMENT
Introduction
1.
Before me for hearing is an application by the husband in which he seeks the following:
12. That the second, third and fourth respondents be restrained by injunction from giving instructions or retaining Minter Ellison lawyers to act on their behalf in these proceedings in the Family Court.
13. That in the alternative to order 12 hereof, Minter Ellison lawyers be restrained by injunction from acting on behalf of the second, third and fourth respondents in these proceedings.
2.
The application is opposed by Minter Ellison.
3.
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 S Ltd. Minter Ellison are the solicitors for the Second, Third and Fourth respondents.
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 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.
[S] 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 [S] 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 3rd and 4th 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 3rd and 4th 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 [S] 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.
7.
Mr Hedger is the Husband’s brother in law. He is married to the Husband’s sister. The Husband’s father was … who is now deceased.
8.
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 beneficially held one ordinary share.
9.
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 Q 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; Q Ltd held one ordinary share and S Ltd held one ordinary share. The address given for Q Ltd and S Ltd is […], Singapore. There is an issue as to whether Mr Hedger presently holds two of the four shares in trust for the Husband.
10.
There was no appearance by or on behalf of the Fifth Respondent. For reasons that hereafter appear there may also be other parties to the proceedings.
11.
The Husband and Wife commenced cohabitation in 1998 and were married on 14 September 2001. They separated in February 2004. There are two children of the marriage T born in October 1999 and L born in May 2003. The children reside with the Wife.
12.
I had a number of affidavits including of the Husband, Mr M solicitor, Mr G solicitor, Ms W, solicitor, Mr Hedger and Mr R. Mr G is a partner of Minter Ellison. Ms W is an employee of Minter Ellison. The Husband and Mr G were cross-examined. I also had regard to a judgment I delivered in February 2007. For reasons I will hereafter explain I will repeat a great deal of what I said in the earlier judgment.
13.
The partner of Minter Ellison who carries out the work for the Second, Third and Fourth Respondents is Mr G and he is assisted by Ms W.
14.
The solicitors for the Wife are Cameron & Myers. The partner who carries out the work is Mr M.
15.
It will be seen shortly that 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 is now 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 his father 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 Island company are Mr R’s father, 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. Mark Wong 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.
16.
As I indicated in discussion the proceedings have 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 R’s father. There is of course an issue in relation to this. 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 the documents to corroborate his contentions will be required. What also now 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 R’s father.
Background
17.
Given the relief sought which I am currently dealing with it is necessary to put the application into some context and this requires an understanding of what this case is about, the issues involved, what has happened since the proceedings were commenced and what the evidence currently reveals. I hasten to say that I have no doubt that in the pending proceedings there is still a great deal of evidence to be placed before the court.
18.
As I have also said before given the duration of the cohabitation of the parties to the marriage, and other matters, I am concerned about the cost of the litigation. The ultimate entitlement of the Wife will obviously depend upon what is found to be the extent and value of the assets of the Husband. In my view, this is the significant issue.
19.
Mr Hedger was born in California in the United States in July 1961. It may be necessary to obtain information from the Department of Immigration and Citizenship in relation to the residence status in this country of a number of relevant individuals.
20.
The Husband was born in the United States in June 1971. The Wife was born in April 1973.
21.
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.
22.
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.
23.
On 26 June 1995 Mr Hedger was appointed a director of B Pty Ltd. He resides at H.
24.
Mr Hedger contends that B Pty Ltd was incorporated for the purposes of development of 31 acres at C into community title residential estate. In the period May/June 1995 B Pty Ltd acquired three parcels of land at C which together comprised the estate which is called “K”.
25.
The Husband contends that in about 1995 his late father bought land at C. He contends that the land was purchased with funds his father paid of approximately $3,000,000.
26.
On behalf of the Wife evidence has been given by Mr K who is an accountant. Mr K contends that in about October 1995 B Pty Ltd purchased three blocks of land in C for a total price of $2,050,000.
27.
There was attached to an affidavit of the Husband a diagram which revealed that G Ltd owned 100% 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% of S and Q Ltd.
28.
The Husband contends that in 1995 his father by way of B Pty Ltd acquired land at C for $3 million. 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)
29.
On 23 June 1995 Mr AB was appointed a director of V Pty Ltd. On 26 June 1995 V Pty Ltd changed its name to X & T Pty Ltd. On 28 June 1995 Mr BB was appointed a director of X & T Pty Ltd.
30.
On 6 February 1996 Mr BB and Mr AB ceased to be directors of X & T Pty Ltd. On 6 February 1996 the Husband and Mr Hedger were appointed directors of X & T Pty Ltd.
31.
The Wife annexed to an affidavit a copy of a letter dated 24 April 1996 from P, Advocates & Solicitors in Singapore addressed to Mr Hedger and the Husband, care of “[…], Singapore”. The document was headed “Incorporation of Companies in the British Virgin Islands (BVI)”. The letter was signed by Mr R. In the letter Mr R referred to a telephone conversation he had with Mr Hedger wherein Mr Hedger requested that two companies be incorporated for Mr Hedger and the Husband. Mr R said that on their behalf two British Virgin Island companies were purchased namely, Z Ltd and E Ltd. Mr R requested confirmation as to which company Mr R would hold and which company the Husband would hold. In respect of each of the companies Mr R identified certain documents he enclosed which included a share certificate and bearer share certificate. He said that with regards to the share certificates there are normal share certificates and there are bearer share certificates and that if the shares are issued to a named shareholder the death or incapacity of the shareholder would hinder the operation of the company and it was therefore more advisable to issue bearer share certificates. A request was made for instructions as to whether or not normal share certificates are issued or bearer certificates. A request was made that the Husband and Mr Hedger sign various documents for each of the companies and return them to Mr R. There was also enclosed an invoice addressed to both the Husband and Mr Hedger.
32.
The Wife also annexed to an affidavit a copy of a letter dated 21 May 1996 written by Mr Hedger to Mr R in which was enclosed the British Virgin Island company documents signed as requested and as well, the bearer share certificates also signed. It was stated by Mr Hedger that the Husband was to hold E Ltd and Mr Hedger was to hold Z Ltd. Mr Hedger advised Mr R that the Husband wished to change the name of his company to S Ltd and Mr Hedger wished to change the name of his company to Q Ltd. A request was also made that Mr R’s firm maintain the company books and that the address of P, Solicitors in Singapore be used to receive “official correspondence”. The Wife also annexed a copy of a bearer share certificate which revealed one share issued on 21 May 1996 in E Holdings Ltd. This certificate was signed by Mr Hedger as a director/secretary and the Husband as a director.
33.
The Husband contends that the shelf companies Mr R obtained and established in the British Virgin Islands to own the majority of the shareholding S Ltd which he described as “my company” and the name of Z Ltd was changed to Q Ltd being Mr Hedger’s company.
34.
The Husband contends that the known single issued shares in each of Q Ltd and S Ltd 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 Q Ltd.
35.
On 3 October 1996 the Husband was appointed a director of B Pty Ltd.
36.
In a letter dated 5 November 1996 written by Blake Dawson Waldron, Solicitors, to Mr Hedger it was stated that X & T Pty Ltd was introduced because the proposed development was originally proposed as a joint venture arrangement between “[O] and the [Thurga] Family”. However the joint venture arrangement “is no longer in place”. It was stated that consideration should be given to winding up X & T Pty Ltd and that the only rationale for retaining the company was for the company to act as the holding company of the “[Thurga] Investments in Australia”. Elsewhere, it was stated that Mr Hedger was not proposing to wind up X & T Pty Ltd.
37.
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. Obviously the matters raised will have to be investigated. However, various documents were enclosed including powers of attorney for each of E Ltd and Z Ltd.
38.
The Husband contends that from 1995-1996 Mr Hedger undertook the role of managing the development undertaken by B Pty Ltd and that the Husband was working on other projects for companies associated with his father and also the development of a software program. He was travelling extensively around the United States, Europe and Australia. The Husband contends that notwithstanding he was not involved on a day to day basis with the management of B Pty Ltd he and Mr Hedger had many meetings regarding the progress of the development. However, at no time has B Pty Ltd accounted to X & T Pty Ltd in relation to the financial aspects of the development project.
39.
The Wife contends that during the relationship of the parties to the marriage, the Husband spoke to her about his involvement in the subdivision of 18 or 19 blocks of land at C and that he spent “literally hundreds of hours” working on the [C] subdivision.
40.
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.
41.
Mr R said that he was not instructed to provide any tax, commercial or estate planning advice to the Husband’s late father, nor was he instructed to provide any “structuring” advice to the Husband or Mr Hedger. Mr R contends that he received his instructions from the Husband’s late father including advice that the Husband and Mr Hedger would be attending Mr R’s office to execute the documents. Mr R said that it was his understanding that the Husband’s late father ultimately wished to set up a holding structure for his estate and business interests which were B Pty Ltd and X & T Pty Ltd although Mr R never had any involvement with either of these companies.
42.
In an affidavit of 22 March 2007 Mr G gave evidence of the only possible relevant matters in which Minter Ellison may have acted for any of the parties to these proceedings. The first such matter related to proceedings in the Land and Environment Court in 1996 which related to a development application for the K Development at C. It will be seen shortly that the next matter was not until 2001. It may be that the Husband would contend that at this time he and Mr Hedger were the ultimate beneficial owners however it is now clear that Mr R and others including Mr Hedger contend that the ultimate beneficial owner was the Husband’s father.
43.
The Husband and the Wife met in October 1997 and began going out in about December 1997. They commenced cohabitation in 1998.
44.
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.
45.
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.
46.
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.
47.
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.
48.
Mr R contends that in the result 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.
49.
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.
50.
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.
51.
Mr R contends that both the Husband and Mr Hedger resigned as directors of S Ltd and Q 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.
52.
In 1998 the Husband and the Wife went to the British Virgin Islands and the Husband told the Wife that he needed to do some business setting up some companies.
53.
Mr G said that Mr B of Minter Ellison “Banking and Finance Group” acted for B Pty Ltd in late 1998 and early 1999 in respect of a “finance proposal” for the K development.
54.
On 31 March 1999 a Loan Agreement was entered into by I Pty Ltd as lender and B Pty Ltd as borrower for an advance of $500,000, secured by registered mortgage over C2, and guaranteed by the Husband, his father, Mr Hedger, X & T Pty Ltd, Q Ltd and S Ltd. There were variations of the loan agreement on 27 May 1999, 10 August 1999, 7 September 1999, 13 October 1999, 12 November 1999, 7 January 1999, 2 February 2000 and 23 March 2000.
Mr K said that the documents were executed on behalf of Q Ltd by Mr Hedger as director and by the Husband as director and secretary and on behalf of S Ltd by the Husband as director and by Mr Hedger as director and secretary. According to Mr R at this time the Husband and Mr Hedger were not officers of Q Ltd or S Ltd.
55.
Mr K gave evidence that S Ltd and Q Ltd are companies with the registered offices in Singapore but are incorporated in the British Virgin Islands. He said that the British Virgin Islands is a tax haven and a non financial disclosure country. He contends it is not possible to obtain searches to determine the true owners of Q Ltd and S Ltd and that having looked at documentation he was of the belief and opinion that the companies are beneficially owned by Mr Hedger and the Husband respectively. This is what the Husband contends. This was made very clear in a letter dated 4 January 2005 written by Dennis and Company to Minter Ellison. Mr K gave this evidence before Mr R gave evidence.
56.
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. It is contended by the Husband that Minter Ellison provided advice to the shareholders as to the taxation and other effects and impacts of the re-structuring and as to the recovery of related party loan arrangements. This is denied by Mr G.
57.
There was put in evidence a memorandum dated 11 June 1999 prepared by Mr J. It is instructive to read this document. It dealt with tax issues, corporate estate planning and a blind trust structure. What is said in this document is obviously relevant and will have to be investigated. Amongst other things the inference I draw is that loans were made by S Ltd and Q Ltd for X & T Pty Limited. Mr J may be a barrister and solicitor resident in Victoria who, amongst other things, has extensive experience in corporate structuring, tax planning, international cross border transactions and so on.
58.
Mr Hedger swore an affidavit on 27 April 2007 in relation to an application by the Wife to issue a subpoena to Mr J. Mr Hedger said that he was introduced to Mr J in 1999 by Mr PW and the Husband’s father and that he retained Mr J to provide legal advice to B Australia Pty Ltd. He contended that the legal services included advice with respect to financing the C development and that Mr J continued to provide legal advice to B Australia Ltd until some time in 2000.
59.
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.
60.
The Husband contended that Minter Ellison received instructions from, and were retained by B Pty Ltd as vendor in relation to the sale of five parcels of the C land between 6 March 2001 and 5 February 2004. The transfer documents completing such sales were allegedly executed by the Husband in his capacity as a director of that entity. The Husband contends that his signature on such documents is a forgery.
61.
The Husband also contends that at no time has B Pty Ltd accounted to X & T Pty Ltd in relation to “the financial aspects of the [C] Development Project”. Additionally, that B Pty Ltd has not attended to the preparation of statutory financial statements and/or taxation returns since 2001 and 2002, nor has B Pty Ltd declared any dividends in favour of X & T Pty Ltd. These matters will have to be investigated.
62.
Mr G contends that since 2001 solicitors in the Minter Ellison property group have acted for B Pty Ltd in respect of the sale of properties at K owned by the company. One such solicitor was Ms B. Mr G said that he was informed by Ms B that in relation to all of the sales of the K properties Minter Ellison was provided with signed copies of relevant documents and that they were not executed at the offices of Minter Ellison. Mr G also said I assume based on what she told him, that Ms B had no knowledge of any allegation of forgery until Mr G contacted her.
Mr G said that no documents which are now the subject of the Husband’s allegation were signed at the office of Minter Ellison.
63.
According to Mr K documents produced by I Pty Ltd reveal a peak debt of $4,924,000 on 14 June 2001 and interest charged of $663,978.95. The debt was finally repaid in full on 22 June 2005.
64.
There was put into evidence during the current proceedings on behalf of Minter Ellison a number of loan agreements. One loan agreement was between I Ltd and Mr Hedger and his wife … dated 21June 2001 for an advance of $599,000. I have no idea what the relevance of this document was.
65.
The Husband and Wife were married in San Francisco in September 2001.
66.
Mr R contends that “prior to 2002” Mr PW had 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 W 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.
67.
The Husband’s father died in December 2002.
68.
On 16 June 2003 a Guarantee and Indemnity was entered into between I Pty Ltd as lender and B Pty Ltd as borrower for an advance of $500,000 secured by registered mortgage over C2] and guaranteed by the Husband, his father, Mr Hedger, X & T Pty Ltd, Q Ltd and S Holdings Ltd. The address of Q Ltd was shown as H.
69.
In the current proceedings there was also put into evidence on behalf of Minter Ellison a loan agreement dated 16 June 2003 between I Ltd and B Pty Ltd. I believe that the agreement was prepared by a firm of lawyers in Victoria acting for the lender. In the document the borrower was identified as B Pty Ltd and it related to an advance for $2,300,000 for a period of three years. The security for the advance was a registered mortgage on the title of C1 and C2 and other properties at C identified in a schedule to the agreement. The agreement was also between the parties named as a guarantor and according to the schedule the guarantors were Mr Hedger, the Husband, the Husband’s late father, X & T Pty Ltd, Q Ltd and S Ltd. The loan agreement was executed by Mr Hedger, the Husband and the Husband’s mother and I believe that their signatures were witnessed by Mr Hedger’s wife. The document was executed on behalf of Q Ltd and S Ltd by Mr Hedger and the Husband as directors and secretaries of these companies. There was also put into evidence a Guarantee and Indemnity dated 16 June 2003 given to I Pty Ltd by Mr Hedger, the Husband, the Husband’s late father, X & T Pty Ltd, Q Ltd and S Ltd. I am not sure what the relevance of these documents is to the current proceedings. However, they may be important in the pending proceedings as the documents were executed by the Husband and Mr Hedger as directors and secretaries of Q Ltd and S Ltd. According to Mr R both Mr Hedger and the Husband ceased to be directors of S Ltd and Q Ltd in October 1997. I also assume from the evidence of Mr G that Minter Ellison played no part in and had no knowledge of these loan agreements, guarantee and indemnity and gave no advice to any of the named parties in relation to the transactions which these documents evidenced.
70.
The Wife contends that the Husband and Wife separated in February 2004 although they remained residing in the same residence until 26 June 2004.
71.
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.
72.
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 Ltd and share certificates and Mr Hedger stated that he did not have them and had never seen them.
73.
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.
74.
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.
75.
Mr G said that Mr V at Minter Ellison’s “Dispute Resolution Group” acted for Mr Hedger and B Pty Ltd in these proceedings. Mr G said that the proceedings were dismissed as the Husband was found to have no standing to bring the proceedings.
76.
Mr R contends that on 21 December 2004 G Ltd was “redomociled” to the Pacific Islands to take advantage of the lower company fees. As I have said, 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.
77.
Attached to an affidavit of Mr M of 27 April 2007 is a document which appears to be dated December 2004. It will be necessary to identify the author of this document and the purpose of its preparation. Mr M contends that he believes that it was prepared by Mr Hedger. There is nothing, however, on the face of the document that suggests it was given to Minter Ellison or represents instructions given to that firm.
78.
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.
79.
On 4 January 2005 Mr Bruce Dennis solicitor wrote to Minter Ellison on behalf of the Husband and complained that there appeared to be a conflict of interest for Minter Ellison to continue to act for Mr Hedger. Mr Dennis contended that Minter Ellison has assisted in issuing notices that sought to remove the Husband as a director of X & T Pty Ltd and B Pty Ltd. A number of other matters were identified. It was contended that Minter Ellison was instrumental in setting up the structure whereby the Husband holds shares directly in X & T Pty Ltd and indirectly through Q Ltd. Notice was also given that the Husband had no option to but to make an application to the Supreme Court in relation to X & T Pty Ltd seeking access to company records.
80.
On 6 January 2005 the Husband commenced further proceedings seeking that Mr Hedger hand over various records concerning X 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. Mr G contends that Mr V of Minter Ellison also acted in relation to these proceedings. Mr G said that these proceedings “were resolved on 31 January 2005”.
81.
Mr G said that Mr V of the Minter Ellison “Dispute Resolution Group” acted for Mr Hedger and B Pty Ltd in 2004 and 2005 in respect of a private arbitration between B Pty Ltd and a firm of architects in relation to the development at C. It was not explained why Minter Ellison were acting for Mr Hedger in relation to this private arbitration.
82.
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.
83.
The Wife annexed to an affidavit a document dated 14 January 2005 which purported to be signed by the Husband and was addressed to Mr Hedger. In the document the Husband stated that he resigned as a director of B Pty Ltd and X & T Pty Ltd and transferred his entire shareholding in X & T Pty Ltd to Mr Hedger for two dollars. The Wife also annexed documents titled “Notice of Resignation” dated 17 January 2005 signed by the Husband wherein he resigned as a director of B Pty Ltd and X & T Pty Ltd. The Wife also annexed a document titled “Transfer of Shares” dated 17 January 2005 wherein the Husband transferred his two ordinary shares in X & T Pty Ltd to Mr Hedger.
84.
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, such 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.
85.
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.
86.
The debt owed to I Pty Ltd was finally repaid in full on 22 June 2005.
87.
The Husband said that on 1 July 2005 Mr Hedger gave him $2,500.
88.
The Husband said that in about August 2005 Mr Hedger gave him $2,500.
89.
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.
90.
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”.
91.
On 2 August 2005 an order was made in the Local Court that the proceedings in that Court be transferred to the Family Court.
92.
On 12 September 2005 an affidavit was sworn by the Wife. On 12 September 2005 an affidavit was sworn by Mr N on behalf of the Wife. In these affidavits evidence was given about the behaviour of the Husband. The affidavits appear to have been for use in the parenting proceedings although they were relied upon by Mr Hedger, B Pty Ltd and X & T Pty Ltd in earlier proceedings. In those proceedings counsel for Mr Hedger, B Pty Ltd and X & T Pty Ltd submitted that at the time of the application for a second Anton Piller order there was no disclosure of the unreliability of the Husband’s evidence. It was submitted that according to the Wife’s evidence the Husband is a mentally unbalanced, drug addicted and violent individual. The Husband has now been cross examined. However Mr Hedger has not yet been cross examined.
93.
On 15 September 2005 orders were made by consent resolving the parenting proceedings.
94.
A Case Assessment Conference was held on 22 September 2005 before a Registrar and during this conference the Husband said that he had transferred his shares to Mr Hedger for no consideration although he had done a handshake deal with Mr Hedger that he would pay around $350,000. Further, Mr Hedger pays him $2,500 per month from B Pty Ltd.
95.
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.
96.
On 5 October 2005 an application was filed on behalf of the Wife in which she sought that
Mr Hedger be joined as a party to proceedings. I can understand why the Wife sought to involve Mr Hedger given, amongst other things, what the Husband had said about his financial circumstances and the property order he sought. On 5 October 2005 the Wife lodged a caveat over properties owned by Mr Hedger.
97.
On 31 October 2005 an amended application was filed on behalf of the Wife. In this application, amongst other things, she sought that until further order Mr Hedger hold the two shares transferred to him by the Husband and X & T Pty Ltd upon trust for the Husband.
98.
On 4 November 2005 an amended application for final orders was filed on behalf of the Wife in which she sought spousal maintenance, a property settlement of $750,000 and relief pursuant to s 106B Family Law Act in relation to the transfer by the Husband of the two shares previously held by him in X & T Pty Ltd to Mr Hedger.
99.
Mr G contends that in November 2005 he was instructed by Mr Hedger in relation to the proceedings in this Court and was later retained to act for B Pty Limited and X & T Pty Limited.
100.
On 10 November 2005 Mr G received two letters from Mr M. On 21 November 2005 Mr G wrote to Mr M setting out orders that Mr Hedger would consent to on a without admission basis. On 21 November 2005 Mr M wrote to Mr G indicating that the Wife did not consent to the orders proposed by Mr Hedger.
101.
On 21 November 2005 by facsimile transmission Mr G wrote to Mr M and contended that the Wife was funded in the Family Court proceedings by Mr N and that Mr M was in fact obtaining his instructions from Mr N. Mr G asked Mr M certain questions and contended that the answers would enable Mr G to advise his client as to whether or not he should seek a stay of the proceedings on the basis that they are an abuse of process. It was responded to by a facsimile transmission also dated 21 November 2005 written by Mr M to Mr G. Mr M said that he does not and has not received instructions from Mr N in relation to the proceedings. He went on to state that Mr Hedger had not filed a response nor filed any affidavit material “in support of his position”. Further, that Mr G had previously contended that valuable consideration was paid for the shares transferred to Mr Hedger in X & T Pty Ltd by the Husband. Mr M then said “for the third time we again ask that you provide us the following documentation that would support your client’s contention” and requested a stamped copy of the share transfer and a copy of any ruling with regard to stamp duty and the valuation that was used to calculate the stamp duty. I am of the view that the request for a copy of the transfer was reasonable. I was unable to locate a response to the request although I do not suggest that I have identified all of the correspondence. I am also of the opinion that what Mr G contended about the relationship of the Wife and Mr N is irrelevant and the correspondence should not have been written.
102.
On 23 November 2005 Judicial Registrar Johnston made the following orders:
1. That by consent and without admissions orders are made in accordance with paragraphs 2, 3 and 4 of the wife’s Amended Application in a Case filed on 31 October 2005 as set out hereunder:-
“2. That [Mr Hedger] of [H] be joined as a party to proceedings no. SYF 3665 of 2005 in the Family Court Sydney Registry.
3. That until further order [Mr Hedger] hold the two shares transferred to him by the husband in [X & T] Pty Ltd (“the company”) upon trust for the husband.
4. That until further order [Mr Hedger] be restrained from exercising any rights or powers attaching to those shares without the prior consent in writing of the wife".
2. That [Mr Hedger] may be excused from these immediate proceedings.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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