Rizvi & Rizvi & Ors
[2020] FamCA 355
•13 May 2020
FAMILY COURT OF AUSTRALIA
| RIZVI & RIZVI AND ORS | [2020] FamCA 355 |
| FAMILY LAW – PROPERTY – Interim – partial property distribution – Where the corporate interests under the control of the husband have the capacity to pay the wife a partial property distribution – Where it is just and equitable to do so – Where the wife seeks restraints on the husband’s corporate interests – Order for the companies to be restrained from any dealings except in the ordinary course of business – Order for the wife to be provided the financial records of the companies – Order restraining the sale of property. |
| Family Law Act 1975 (Cth) ss 82, 114(e), 117 Family Law Rules 2004 r 19.04 |
| APPLICANT: | Ms Rizvi |
| 1st RESPONDENT: | Mr Rizvi |
| 2nd RESPONDENT: | B Capital Pty Ltd ACN … |
| 3rd RESPONDENT: | C Pty Ltd ATF C Trust ACN … |
| 4th RESPONDENT: | Ms D |
| 5th RESPONDENT: | Mr E Rizvi |
| 6th RESPONDENT: | Mr F |
| 7th RESPONDENT: | G Pty Ltd ACN … |
| 8th RESPONDENT: | H Pty Ltd ACN … |
| 9th RESPONDENT: | J Pty Ltd ACN … |
| 10th RESPONDENT: | B Pty Ltd ACN … |
| 11th RESPONDENT: | B Investments Pty Ltd ACN … |
| 12th RESPONDENT: | K Pty Ltd ATF The Rizvi Family Trust ACN … |
| FILE NUMBER: | SYC | 4032 | of | 2017 |
| DATE DELIVERED: | 13 May 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Rees J |
| HEARING DATE: | 6 May 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Campton SC |
| SOLICITOR FOR THE APPLICANT: | York Law Family Law Specialists |
| COUNSEL FOR THE 1ST RESPONDENT: | Mr Lethbridge SC with Mr Dura |
| SOLICITOR FOR THE 1ST RESPONDENT: | KPL Lawyers |
| COUNSEL FOR THE 2ND, 10TH, 11TH AND 12TH RESPONDENTS: | Mr Cheshire SC |
| SOLICITOR FOR THE 2ND, 10TH, 11TH AND 12TH RESPONDENTS: | Mills Oakley |
Orders
THE COURT DECLARES
(A)That as at 16 December 2019, the husband owed the wife the sum of $56,719.84.
IT IS ORDERED PENDING FURTHER ORDER
That within 14 days of the date of these orders, the husband pay to the wife, by way of partial property settlement, the sum of $600,000.
That the application of the wife to vary Order 7 made on 9 May 2018 is dismissed.
That the husband in his personal capacity or in his capacity as a director of R Pty Ltd or of B Group Pty Limited is restrained from selling the property known as L Street.
That within 14 days the husband cause the Financial Statements for the year ended 30 June 2018 to be provided to Ms N in relation to the following companies (hereafter “the companies”), namely:
(a)K Pty Ltd as Trustee for the Rizvi Family Trust, noting that this will require a valuation of the Trust’s interest in the underlying entities, including:
(i)B Capital Pty Ltd;
(ii)B Property Pty Limited;
(iii)B Group Pty Limited;
(iv)B Investments Pty Ltd;
(v)B Pty Ltd;
(vi)O Pty Ltd;
(vii)O2 Pty Ltd;
(viii)O3 Pty Ltd;
(ix)P Pty Ltd;
(x)B Developments Pty Ltd as Trustee for the B2 Pty Ltd;
(xi)B Funds Management Trust;
(xii)B2 Pty Ltd;
(xiii)B3 Pty Ltd;
(xiv)Q Pty Ltd.
(b)B Investments No. 2 Pty Ltd as Trustee for the B Investments No. 2 Trust;
(c) S Pty Ltd;
(d) R Super Fund.
That within 28 days the husband cause the Financial Statements for the year ended 30 June 2019 to be provided to Ms N in relation to the companies referred to in Order 4.
That the husband in his capacity as director of each of the entities referred to below, is restrained from dealing with, encumbering, further encumbering, selling, transferring, disposing of or dealing with any asset of the company, including transferring funds to any other company or entity, except in the ordinary course of business:
(a) The shareholding in respect of each of the entities below;
(b)The underlying assets and liabilities of each of the entities listed below, the entities being:
(i)B Property Pty Limited;
(ii)B Funds Management Trust;
(iii)B Investments Pty Ltd;
(iv)B2 Pty Ltd;
(v)B Limited;
(vi)B Group Pty Limited;
(vii)B Pty Ltd;
(viii)O3 Pty Ltd;
(ix)B Capital Pty Ltd;
(x)S Pty Ltd;
(xi)O Pty Ltd;
(xii)B3 Pty Ltd;
(xiii)B Investments No. 2 Pty Ltd;
(xiv)B Developments Pty Ltd;
(xv)C Pty Ltd;
(xvi)O2 Pty Ltd;
(xvii)O Pty Ltd;
(xviii)P2 Pty Ltd;
(xix)P Pty Ltd;
(xx)T Property Pty Ltd;
(xxi)T Pty Ltd;
(xxii)R Pty Ltd;
(xxiii)Rizvi Family Trust;
(xxiv)C Trust;
(xxv)B Funds Management Trust;
(xxvi)B Investments No. 2 Trust.
That in relation to the corporate entities referred to in Order 6, the husband cause the wife to be provided with printed copies of all banking records of each entity by 4pm on the last Friday of each calendar month.
That in the event that any of the entities referred to in Order 6, or the husband, enters into a contract for the purchase, sale or disposition of real property, the husband shall, within 48 hours of the exchange of such contract, provide a copy to the wife.
That by 4pm on the last Friday of each calendar month the husband shall identify and provide to the wife the banking records relating to any payment or transfer of funds from any entity referred to in Order 6 to the husband, on behalf of the husband or for the benefit of the husband.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Rizvi & Rizvi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 4032 of 2017
| Ms Rizvi |
Applicant
And
| Mr Rizvi |
1st Respondent
And
| B Capital Pty Ltd ACN … |
2nd Respondent
And
| C Pty Ltd ATF C Trust ACN … |
3rd Respondent
And
| Ms D |
4th Respondent
And
| Mr E Rizvi |
5th Respondent
And
| Mr F |
6th Respondent
And
| G Pty Ltd ACN … |
7th Respondent
And
| H Pty Ltd ACN … |
8th Respondent
And
| J Pty Ltd ACN … |
9th Respondent
And
| B Pty Ltd ACN … |
10th Respondent
And
| B Investments Pty Ltd ACN … |
11th Respondent
And
| K Pty Ltd ATF The Rizvi Family Trust ACN … |
12th Respondent
REASONS FOR JUDGMENT
Property settlement proceedings between Ms Rizvi (“the wife”) and Mr Rizvi (“the husband”) have been on foot since October 2017 and appear to be no closer to readiness for hearing.
The matter is made complex by the myriad corporate entities through which the husband conducts his business.
The proceedings presently before the Court for determination arise out of the Amended Application in a Case of the Wife filed 6 April 2020 and the husband’s Response filed 27 April 2020.
For the purpose of this application, four of the corporate entities were represented by senior counsel. Those entities are B Capital Pty Ltd, B Pty Ltd, B Investments Pty Ltd and R Pty Ltd as trustee of the Rizvi Family Trust (“the Trust”) (“the represented companies”). The remaining Respondents were excused from attending.
The issues for determination were grouped into the following categories and heard seriatim:
· The wife’s application for declarations by way of enforcement of orders made 15 November 2017 and 16 December 2019 for payment of money to the wife and the husband’s application to discharge Order 15 made 15 November 2017.
· The husband’s application to sell the property known as L Street, Suburb M (“L Street”) and the wife’s application to restrain the sale.
· The wife’s application for litigation funding by way of interim property settlement or, in the alternate, pursuant to s117(2) of the Family Law Act 1975 (Cth) (“the Act”). The husband opposes that application.
· The wife’s application for orders restraining the husband from acting in his capacity as a director or shareholder of the corporate entities to encumber or alienate the assets of those entities. That application was opposed by the husband and, in part, by the companies.
· The wife’s application to discharge orders for valuations by single experts.
The wife relied on an affidavit sworn by her on 17 October 2019 and a Financial Statement sworn the same day. The husband relied on an affidavit sworn by him of 27 April 2020 and a Financial Statement sworn 11 December 2019.
Both the husband and the wife filed tender bundles.
No documents were filed on behalf of the represented companies.
THE PERIODIC PAYMENT ORDERS
The wife seeks a declaration that specified amounts are owed by the husband as a result of non-compliance with orders for specified payments and interest.
The husband opposes the making of such a declaration and submits that, by virtue of the wife’s remarriage, either the orders ceased to be operative or, if they operate in part, the arrears are insignificant.
It is necessary to look at the orders that have been made having regard to the chronology of relevant events and the applications which were before the Court when the orders were made.
By her Amended Initiating Application filed 18 October 2017, the wife sought an order, pending further order, that by way of spousal maintenance, the husband pay the mortgage payments and outgoings on the Suburb M (Order 14) and she also sought a further order for weekly maintenance in a specified sum (Order 15).
Order 17 of the wife’s application sought the following order:
That the husband be and is hereby restrained by injunction from doing any act or thing, or causing any other party or entity to do any act or thing, that would have the effect of ceasing or reducing the current salary received by the wife from the B Group (or any entity associated with the husband and/or the B Group.
Order 17 is not expressed to be an order for spousal maintenance. Although the source of power to make Order 17 is not specified in the application, power could be found in section 114(e) of the Act.
On 15 November 2017, orders were made by consent, relevantly, in the following terms:
13.The Court NOTES that the wife intends to amend her Amended Application filed 18 October 2017 by deleting the words "for a period of 6 months from the date of these Orders" to the end of the order at Order 4 of the interim Orders sought.
14.That the parties' competing interim applications as contained in the wife's Amended Initiating Application filed 18 October 2017 and the husband's Response filed 13 November 2017 be referred to the listing co-ordinator for the allocation of a hearing estimated at not less than half a day.
15.That the husband cause the following to be paid:-
15.1 The mortgage and outgoings in relation to the home at V Street, Suburb M;
15.2Those expenses referred to in Notation B of the husband's Response filed 13 November 2017 and annexed to these Orders;
15.3The wife's salary of $60,000 per annum from B Capital Pty Ltd.
16.That for the purposes of Order 15.1 above, "outgoings" shall mean:-
16.1utility accounts including but not limited to gas, electricity, water rates and usage charges;
16.2home and contents insurance premiums for the existing policy; and
16.3Council rates.
17.That without prejudice to the husband's Response to Initiating Application (Interim Orders) the husband shall cause to be paid to the wife the sum of $15,000 within 21 days with such payment to be characterised at trial.
On 14 March 2018, further orders were made by consent, relevantly in the following terms:
1.The Court notes that the husband is to pay the wife the amounts payable to her pursuant to the Orders 15(i), 15(iii) and 16 of Rees, J of 15 November 2017, and that otherwise Order 9 remains in place.
2.That in addition to the monies payable pursuant to those Orders, the husband shall pay to the wife or as she may direct in writing the sum of $300,000, payable no later than 4pm on 14 June 2018, such sum being interim property settlement.
3.That in respect of her application for interim Orders contained in the wife's Amended Initiating Application filed 18 October 2017, her application for spousal maintenance referred to at Order 15 and 18 be dismissed.
Thus the wife’s application for spousal maintenance (Order 15) was dismissed as was her application that the husband indemnify her in respect of any tax payable on the salary she received pursuant to Order 15.3 made on 15 November 2017.
At some time in 2018, the wife remarried. The wife gives no evidence about the date of her remarriage. The husband deposed that he has been provided with a Marriage Certificate in relation to an Islamic Marriage between the wife and her new husband in 2018 in Country W and that the wife’s solicitor, in correspondence dated 5 December 2018, advised that the wife remarried in 2018 in Country X.
Section 82 of the Act provides:
(1) An order with respect to the maintenance of a party to a marriage ceases to have effect upon the death of the party.
(2) Subject to subsection (3), an order with respect to the maintenance of a party to a marriage ceases to have effect upon the death of the person liable to make payments under the order.
(3) Subsection (2) does not apply in relation to an order made before the date of commencement of section 38 of the Family Law Amendment Act 1983 if the order is expressed to continue in force throughout the life of the person for whose benefit the order was made or for a period that had not expired at the time of the death of the person liable to make payments under the order and, in that case, the order is binding upon the legal personal representative of the deceased person.
(4) An order with respect to the maintenance of a party to a marriage ceases to have effect upon the re‑marriage of the party unless in special circumstances a court having jurisdiction under this Act otherwise orders.
(6) Where a re‑marriage referred to in subsection (4) takes place, it is the duty of the person for whose benefit the order was made to inform without delay the person liable to make payments under the order of the date of the re‑marriage.
(7) Any moneys paid in respect of a period after the event referred to in subsection (4) may be recovered in a court having jurisdiction under this Act.
(8) Nothing in this section affects the recovery of arrears due under an order at the time when the order ceased to have effect.
Thus the husband contends that from either 25 April 2018 or from 7 November 2018, any order for spousal maintenance ceased to have effect.
I accept that Orders 15.1 and 15.2 made on 15 November 2017 were orders for spousal maintenance having been specifically sought as such.
I do not accept that Order 15.3 is an order for spousal maintenance. It was not sought in reliance on the maintenance power and is not expressed to be made as a maintenance order.
However, on 16 December 2019, when the husband was represented by experienced solicitors and counsel, further orders were made by consent in the following terms.
2.That the Court declare that the amounts payable to the wife pursuant to Order 15.3 made 17 November 2017 as at the date of these Orders is:
2.1 $60,577.77; and
2.2 $2,835.71 by way of interest.
Total $63,413.48
3.That the husband take all necessary steps to cause B Capital Pty Ltd to pay by way of enforcement of Order 15.3 made 17 November 2017 to the account of the wife at ANZ BSB … Acc … the sum of $63,413.48 due as identified in Order 2 hereof by way of instalments as follows:
3.1 As to the sum of $20,000 on or before 20 December 2019;
3.2 As to the sum of $15,000 on or before 20 January 2020;
3.3 As to the sum of $15,000 on or before 20 January 2020;
3.4 As to the balance of $13,413.48 on or before 20 March 2020.
4.That the payment due to the wife pursuant to Order 15.3 made 17 November 2017 of salary $60,000 per annum shall recommence on 27 December 2019 to the account of the wife identified in Order 3 hereof and shall be paid fortnightly thereafter.
5.That the wife’s costs of enforcement of the Orders made 17 November 2017 be reserved to the hearing of interim issues to be allocated by the Judicial Services Team pursuant Orders made by Senior Registrar Campbell today.
6.That all parties costs relating to the wife’s Application in a Case 21 October 2019 be reserved to the hearing of interim issues to be allocated by the Judicial Services Team pursuant to Orders made by Senior Registrar today.
The husband and those advising him knew, on 5 December 2018, that the wife had remarried.
The husband consented to a declaration of the amount of the arrears and orders for payment of the arrears by instalments.
The husband did not, on 16 December 2018, assert that the order for the payment of the wife’s salary was a maintenance order.
Whilst neither consent nor acquiescence can give the Court power it does not otherwise have, nothing in the Orders made on 16 December 2019 supports the contention made on behalf of the husband that the orders for the payment of salary were maintenance orders.
I do not understand there to be any dispute about the calculation of the amount owed in the event that I were to find that the amount is payable.
I find, therefore, that as at 16 December 2019, the husband owed the wife $56,719.84.
The husband’s obligation to pay the wife’s salary continues.
SALE OF L STREET
The L Street property is one of two parcels of real property which, combined, make up the former matrimonial home at Suburb M.
By the operation of Order 9 made on 15 November 2017, the wife has the sole use and occupation of Suburb M. She lives there with the three children.
The wife, in her substantive application, seeks to retain the Suburb M, including L Street.
L Street is owned by B Group Pty Limited which is not one of the represented companies. The shareholders of B Group Pty Limited are the wife as to one third, R Pty Ltd as to one third and B Capital Pty Ltd as to one third. In turn, the shares in B Capital Pty Ltd are owned by R Pty Ltd. The husband is the appointer of the Trust and the husband and the wife are the shareholders of R Pty Ltd.
Thus the corporate owner of L Street is wholly controlled by the husband and the wife.
The husband has given notice that he wishes to sell L Street.
He deposes in his affidavit to “financial stress within the B businesses” however, why that financial stress should be alleviated by the sale of the very property that the wife wants to keep is not explained.
The husband tenders no evidence to support his assertion of the need to sell property.
Other than the bald assertion that every one of the companies associated with the husband has an excess of liabilities over assets, there is no evidence of the financial position of the companies, other than the husband’s unsupported assertions.
The Court was not referred to any Financial Statements for any company for any year.
The husband has deposed that the Trust owns properties at V Street, Suburb W; 1 & 2 X Street, Suburb Z; BB Street, Suburb DD and 1 & 2 EE Street, Suburb CC. There is no evidence of the values of those properties or the amounts, if any, of any encumbrances.
It is not necessary to detail here the other real estate holdings in which the Trust or the husband or companies in which the husband is a shareholder have an interest.
The husband has not demonstrated that it is necessary to sell any property and nor has he demonstrated that it is necessary to sell L Street.
Orders will be made restraining the husband from doing any act relating to the sale of L Street.
In his response the husband seeks an order to the effect that the net sale proceeds of L Street, after payment of selling costs and the mortgage, be equally divided between the husband and the wife. That division does not accord with the legal ownership of the property. The husband is not one of the registered proprietors. However, that application strongly suggests that the husband regards himself as controlling R Pty Ltd.
LITIGATION FUNDING
The wife seeks an order for the payment of $600,000 by way of interim property settlement or, in the alternate, payment of $200,000 by way of interim property settlement and $400,000 pursuant to s117(2) of the Act.
The Suburb M is estimated to be worth $4,000,000. The wife in her Financial Statement sworn 17 October 2019, deposes to a mortgage outstanding of $1,213,040 leaving net equity of about $2,787,000.
The wife is the registered proprietor as to 99 per cent and the husband as to one percent.
The husband, in his response filed 13 November 2017, seeks an order that the wife receive 35 per cent of the net assets of the marriage.
It would seem, therefore, that there is adequate equity in the Suburb M for any partial property order made in favour of the wife to be adjusted in the final determination.
The wife has no assets upon which she can call to fund her legal costs in these proceedings and no capacity to borrow.
At the present time, the husband has the control of all of the assets of the parties except the Suburb M. In 2013, the husband, without notice to the wife, caused her to be removed as a director of R Pty Ltd. Thereafter, he has dealt with the assets of the trust without reference to the wife.
The business in which R Pty Ltd has an interest conduct finance and property development activities.
The narrative below is not complete and may contain inaccuracies. There are discrepancies between the information about the companies provided in the husband’s Financial Statement and that provided in his affidavit. Entities referred to in the affidavit are not referred to in the Financial Statement.
R Pty Ltd is the sole shareholder of B Capital Pty Ltd which carries on business, inter alia, as a mortgage broker. The husband in his affidavit escribes the company as a “finance company”.
R Pty Ltd is the sole shareholder of B Property Pty Limited which is the entity that on-sells the properties “acquired by the B businesses”.
R Pty Ltd owns half of the shares in B Investments No. 2 Pty Ltd. That company is in the process of developing land at Suburb QQ.
R Pty Ltd owns the shares in B Investments Pty Ltd. The development at Suburb PP has now been finalised, according to the husband.
R Pty Ltd owns the shares in B3 Pty Ltd.
R Pty Ltd is the beneficial owner of the shares in S Pty Limited.
R Pty Ltd owns the shares in B Pty Ltd. The Suburb GG developments is completed but the company retains a property at FF Street, Suburb GG.
R Pty Ltd owns the shares in B2 Pty Ltd which provides financial planning services.
R Pty Ltd owns half of the shares in O Pty Ltd. That company is developing property at Suburb HH.
R Pty Ltd owns half of the shares in O2 Pty Ltd. That company is developing property at Suburb JJ.
R Pty Ltd owns half of the shares in O3 Pty Ltd. That company is developing property at Suburb KK.
R Pty Ltd has a one third interest in the B Funds Management Trust.
Because the husband is the sole director of R Pty Ltd, he is able to determine how the assets and the income of the trust is distributed and to distribute income to himself or for is benefit.
Thus in considering the income and financial resources of the husband, it is necessary to know the assets and income of the companies within the control of the Trust.
That information is within the husband’s sole control and no attempt has been made by the husband to provide it.
The Financial Statements for the entities for the years 2018 and 2019 have not been provided to the wife and are not in evidence before me.
The husband has an absolute obligation of full disclosure. He cannot rely on his own failure to make disclosure to defeat the wife’s claim for partial property settlement.
Further, it is apparent that such disclosure as has been given cannot be relied upon.
The husband relies on a Financial Statement sworn 11 December 2019, in which he deposes to a weekly income of $2,464 and weekly outgoings of $9,172. That discrepancy is explained, in part, by the husband’s evidence that “B corporate group” pays the following weekly expenses:
· Mortgage, rates and house insurance on the husband’s home at LL Street, Suburb MM $3,219
· Petrol and car maintenance $328
· Children’s dental and education $423
· Family health insurance $114
· Credit card $50
· Dry cleaning $30
· Fares, car parking $50
Further the husband deposes that B corporate group pays “Expenses referred to at Part H paid on my behalf to [the wife]” of $2,033 per week.
Whether that is an accurate assessment of the income received by the husband cannot be tested. The husband provides no documents to support his assertions.
In about July 2018, the husband purchased the property in which he now lives at NN Street, Suburb MM (“NN Street”). The purchase price of the two lots comprising the property was $3,750,000. The husband is the sole registered proprietor.
In a letter dated 13 March 2018, the husband’s solicitors advised the wife’s solicitors that the purchase would be funded by the sale of the property owned by R Pty Ltd in V Street, Suburb W and that the LL Street property would be owned by R Pty Ltd, not by the husband.
On 14 March 2018, as part of consent orders made that day, the Court was asked to note the following:
The Court notes that the husband contends that the apartment at V Street, Suburb W is in the process of being sold by him or an entity associated by him, and that he is in the process of purchasing the property at [LL Street] and that the security which is required for a borrowing will be “transferred” from one to the other in accordance with the letter on the letterhead of the NAB dated 4 March 2018.
As at the date the husband swore his Financial Statement in December 2019, R Pty Ltd still owned the V Street property.
On 25 July 2018, the husband authorised solicitors who were holding $1,590,000 on behalf of “B Businesses” to transfer those funds for use in the purchase of LL Street.
Documents tendered in the wife’s case show that the husband personally raised $2,268,000 by way of mortgage over LL Street to complete the purchase.
This transaction raises a number of relevant matters:
· The husband was able to take $1,590,000 from an unspecified company in the B group and use those funds for his own purchase.
· The husband was able to borrow $2,268,000.
· The representations by the husband to the wife and to the Court about the circumstances of the purchase of LL Street were false.
· One of the B companies services the repayments on the borrowing for the husband’
B Capital Pty Ltd pays personal expenses on behalf of the husband. From the bank statements which have been produced for B Capital Pty Ltd for 2019, the wife calculates that an amount of $80,219 was paid by B Capital Pty Ltd for expenses such as restaurants, clothing, jewellery and the like between January 2019 and November 2019.
The bank statements of B Capital Pty Ltd for January to November 2019 (excluding June for which no statements were provided) show cash withdrawals of $61,700 in amounts of $1,000 every few days. The wife asserts that these withdrawals are made by the husband.
On behalf of the husband, it was submitted that the Court would not make a further order for the provision of funds to the wife where, it is asserted, she has not adequately accounted for her expenditure of the sum of $300,000 which she received pursuant to orders made on 14 March 2018.
It is accepted that the wife paid $100,000 to her previous solicitors and she has deposed to other, specific payments totalling about $54,000. She deposes to having spent the remaining amount on living expenses for herself and the three children.
The wife deposed to having received income of $11,253 in the financial year ended 30 June 2019 from B Capital Pty Ltd but no income from the company in 2020. She now has obtained a job earning $501 per week or $26,000 per annum. She deposed that her weekly expenses are $2,455 or $127,660 per annum. I accept that it is reasonable that, over the past two years, the $146,000 remaining from the sum of $300,000 received in March 2018 would have been used for living expenses.
On the husband’s own evidence, he has available to him some $8,711 per week or $453,000 per annum, on which amount, he deposes, he pays tax of $435 per week or $22,620.
A further matter relating to the husband’s financial position arises from the costs disclosure notices filed pursuant to Rule 19.04 of the Family Law Rules 2004.
In relation to some of the represented companies, namely B Capital Pty Ltd and B Pty Ltd (both owned by R Pty Ltd) and R Pty Ltd (which is solely controlled by the husband) the husband’s solicitors state that no costs have yet been paid but the anticipated future costs, including costs of senior counsel, are $300,000 in addition to costs already incurred of $39,383. The notice states:
We understand that you intend to pay our invoices from any available cash or property of B Capital Pty Ltd, B Pty Ltd, B Investments Pty Ltd, K Pty Ltd and/or the Rizvi Family Trust.
The solicitor for the husband in the costs notice discloses unpaid costs of $246,006 and estimated future costs of $270,000. The solicitors state:
We confirm, pursuant to your instructions, it is anticipated the source of monies to be utilised in payment of your outstanding and anticipated legal costs and disbursements is your property distributions at the finalisation of these proceedings.
Thus it would appear that both the solicitors for the husband and the solicitors for the represented companies which he controls, have accepted that he will be in a position to pay, from his share of the property, some $855,000 in costs. This is somewhat at odds with the submission made by senior counsel for the husband that the parties’ assets do not exceed their liabilities.
The husband has not demonstrated, and I do not accept, that the corporate interests controlled by the husband, which were able to facilitate the purchase by him of a property in 2018 for $3,750,000, are unable to facilitate the payment of $600,000 to the wife by way of partial property settlement.
In all the circumstances it is just and equitable to make the order sought by the wife.
RESTRAINING ORDERS
The wife seeks orders to the effect that the husband in his capacity as a director of named entities, be restrained from “dealing with, encumbering, further encumbering, selling, transferring, disposing of or dealing with, except in the ordinary course of business,” the assets and shareholding of the named companies of which he is a director or sole director.
That application is not opposed.
The wife also seeks further orders restraining the husband in the following terms:
That the husband is to do all acts and things and provide the wife with complete access (electronically and in hard copy) of all records of the entities referred to in Order 8 such access to be as follows:-
(a)In relation to banking records, viewing access to all accounts at all times;
(b)In relation to any other records, unless there is urgency, the records to be provided to the wife once every week on a Friday by no later than 5pm;
(c)In relation to the sale by any of the entities of any property or land, the husband is to provide copy of first page of contract, details of the proposed purchaser, undertaking as to whether he or any employee of the B group of companies have any relations to the proposed purchaser undertaking confirming the sale is at an arms [sic] length and the proposed use of an application of the proceeds once settlement has taken place. The wife is to respond to the Husband’s request within 48 hours and must not unreasonably withhold her consent for the entry into the contract and otherwise dealing with the proceeds.
(d)In relation to any withdrawals or transfers of funds from any of the entities referred to in Order 8 [sic], the husband is restrained from making any payment (including electronically or by way of a cheque or by way of a credit card payment) or transferring any funds in a sum greater than $25,000 until the Wife has approved the withdrawal or transfer, with the Wife not to unreasonably withhold the transfer or withdrawal if it is in the ordinary course of business.
That application is opposed both by the husband and the represented companies.
The gravamen of the submissions made by senior counsel for the husband and senior counsel for the represented companies, is that the order as sought is too wide, unnecessary and overly onerous. There is some force in that submission.
It would appear from the submissions of senior counsel for the wife in relation to this application, that the wife seeks to remedy the failure by the husband to comply with previous orders relating to disclosure and to ensure that she is kept informed of the position of the companies and, in particular, movements in the bank accounts, proposed sale of properties and payments of money for the benefit of the husband.
There is no evidence that there exists a mechanism for the wife to have “viewing” access, which I interpret to mean “read only” access, to the bank records of the companies. It is appropriate that the wife receive the bank records of the companies. I do not accept that, as submitted by senior counsel for the husband and for the represented companies, quarterly provision is adequate. The orders will require the husband to provide printed copies of the banking records monthly.
In relation to Order 10(c) as sought by the wife, I accept that the wife should be advised if any real estate is to be purchased, sold or otherwise disposed of but I am not satisfied that it is necessary for the wife to approve all such dispositions. The orders will require the husband to provide to the wife a copy of any contract within 48 hours of exchange.
Order 10(d) relates to transfers of funds and can be dealt with by including the transfer of funds in the orders relating to Order 8 (mistakenly referred to as Order 9). However, it is appropriate that the wife be advised if any corporate entity transfer funds to the husband or makes any payment for his benefit and the husband will be ordered to advise the wife, on a monthly basis, of any payment made to him or on his behalf or for his benefit.
VALUATION
The wife seeks to discharge Order 7 made on 9 May 2018 and for the husband to pay the costs of the single experts appointed pursuant to those orders.
The husband opposes those applications.
Order 7 provided for the parties to pay the costs of the valuations jointly.
In support of that application, the wife asserts that the information which has been provided to the valuers by the husband is inaccurate.
I do not accept that this is a basis to vary the existing order.
If, at trial, either party contends that the cost of the valuations has been exacerbated by the conduct of the other, then an application can be made accordingly.
However, the valuation of the corporate entities cannot proceed until the Financial Statements have been produced and only the husband is in possession of the relevant information.
On behalf of the husband and the represented companies, it was conceded that the 2018 Financial Statements for all the corporate entities would be provided to the relevant valuers within 14 days and the 2019 Financial Statements would be provided within 28 days.
I certify that the preceding one hundred and eleven (111) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 13 May 2020.
Associate:
Date: 13/05/2020
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Injunction
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Remedies
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Procedural Fairness
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Discovery
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