Salim & Hakim
[2024] FedCFamC1F 615
•22 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Salim & Hakim [2024] FedCFamC1F 615
File number(s): PAC 5392 of 2020 Judgment of: JARRETT J Date of judgment: 22 March 2024 Catchwords: FAMILY LAW – PROPERTY – Application to re-open evidence – Application to remove administrators – Application to place company into liquidation Legislation: Corporations Act2001 (Cth)
Family Law Act 1975 (Cth) ss 106B, 117(1),117(2A), 121
Division: Division 1 First Instance Number of paragraphs: 21 Date of hearing: 22 March 2024 Place: Parramatta Counsel for the Applicant: Mr Givney Solicitor for the Applicant: Maclaren’s Lawyers Counsel for the First Respondent: Mr Pomare Solicitor for the First Respondent: The Norton Legal Group Lawyers Counsel for the Second & Third Respondents: Mr Reynolds Solicitor for the Second & Third Respondents: Assured Legal Solutions Solicitor for the Fourth Respondent: No appearance ORDERS
PAC 5392 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS SALIM
Applicant
AND: MR HAKIM
First Respondent
MR ALBREKTSON
Second Respondent
MR VILARO (and another named in the Schedule)
Third Respondent
ORDER MADE BY:
JARRETT J
DATE OF ORDER:
22 MARCH 2024
THE COURT ORDERS THAT:
1.The applicant has leave to reopen her case generally in respect of events that have occurred since the reservation of judgment on 22 February 2022.
2.Pursuant to s 121 of the Family Law Act 1975 (Cth), the applicant has leave to publish to the administrators of J4 Pty Ltd and Hakim Pty Ltd copies of any affidavits filed in these proceedings and copies of any exhibits in the trial of the proceedings that took place on 20-22 February 2024.
3.Paragraphs 7-9 of the amended application in a proceeding filed 11 March 2024 insofar as they relate to the order now sought by the applicant for the winding up of J Pty Ltd be adjourned for hearing to 11:30am AEST (12:30pm AEDT) on 27 March 2024 in the Federal Circuit and Family Court of Australia (Division 1) sitting in Brisbane.
4.All parties and their legal practitioners have leave to appear by telephone on 27 March 2024 by:
(a)dialling into the Court no later than 5 minutes prior to the commencement of the hearing; and
(b)using Conference ID to connect to the Court.
5.The amended application in a proceeding filed 11 March 2024 is otherwise dismissed.
6.By 4:00pm on 26 March 2024, the first respondent file and serve an affidavit deposing to:
(a)the names of all companies in respect of which he is a shareholder or director as at 22 March 2024; and
(b)details of businesses carried on by each of those companies and the first respondent’s role in each of those businesses.
7.The applicant comply with all relevant provisions of the Corporations Act 2001 (Cth) in respect of her application for the winding up of J Pty Ltd.
8.The first respondent produce to the applicant copies of bank statements from 2024 for any accounts in his name personally or in respect of any companies for which he is a director and shareholder by 4:00pm on 26 March 2024.
9.The applicant pay the second and third respondents’ costs of and incidental to the application in a proceeding filed 11 March 2024 as agreed between the applicant and second and third respondents, and failing agreement as assessed on a party and party basis pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
JARRETT J:
This is an application for a number of orders brought following the reservation of my reasons for judgment and orders after a two-day trial involving claims for property adjustment by the applicant against the first respondent. The proceedings, from the get-go, frankly, have been problematic.
At the conclusion of the trial, I was asked by the applicant to make an order that the first respondent pay to her a sum of money in excess of $1.7 million. The balance sheet contended for by the applicant recognised that the assets of the parties – and I use that term very loosely – were represented by assets that were owned by companies controlled by the first respondent. The significant assets were parcels of real property and the applicant contended for the add-back of a significant sum, which she says represents a premature distribution of the parties’ property.
The first respondent’s case was that, because there was a negative pool – that is to say, the value of the assets, both the parties’ personally and those of the companies, were exceeded by their liabilities – there was no occasion to make a property adjustment at all.
The evidence shows that following the trial, the husband caused administrators to be appointed to two companies that were the subject of some of the evidence before me: J Pty Ltd and Hakim Pty Ltd. The administrators took up their appointment. The administration is ongoing. The administrators are the second and third respondents to the present application.
By this application, as originally framed, the applicant sought the removal of the administrators and their replacement with a receiver, a Mr O, but upon the delivery of the applicant’s proposed minutes of order either last evening or this morning, her application changed such that instead of having Mr O appointed as a receiver, she now seeks that he be appointed as a liquidator of Hakim Pty Ltd and J Pty Ltd.
The application, insofar as the appointment of the liquidator is concerned, is opposed by the first respondent, the application for the removal of the administrators and their replacement by a liquidator is opposed by the administrators, and to bring all of this to the attention of the court, there was an application on the applicant’s part to reopen the proceedings. Presumably, that meant she wished for leave to reopen her case to lead further evidence on matters that had arisen post-judgment. There was additionally, I should say, orders sought pursuant to s 106B of the Family Law Act 1975 (Cth) whereby certain share transfers instigated by the first respondent were effectively undone.
When the application commenced before me, I dealt with the question of reopening. It was not opposed in the end and I gave the applicant leave to reopen the evidence in her case generally.
I was also told that the relief sought under s 106B of the Act was no longer required, because the relevant share transactions had been reversed. That left to be dealt with the questions involving the administrator and the application to appoint a liquidator.
Insofar as the application is an application to appoint a liquidator to J Pty Ltd, that application will need to be adjourned because it has not been foreshadowed to the first respondent, beyond the short minutes of order, and it is opposed.
He may wish to provide material in opposition to that application. Insofar as the application to remove or otherwise discharge the administrators of the companies, Hakim Pty Ltd and J Pty Ltd, I have been assisted by written submissions on behalf of the applicant, the first respondent and written submissions on behalf of the administrators.
There can be no question that I have power to order the removal or discharge of the administrators. As Mr Reynold’s submissions make clear, to do that requires an approach which is principled and which accords with the Corporations Act2001 (Cth).
His written submissions usefully and carefully traverse the relevant legislative provisions. This is an application which needs to be dealt with quickly, and so I do not intend to repeat those provisions in these reasons. But it is tolerably clear, and I am persuaded, that the applicant has not established any basis upon which it would be appropriate to remove the administrators here.
An order removing the administrators is, of course, discretionary. The discretion is best exercised when the company is solvent and the administrator is not required. It might also be exercised where there is some abuse of process or there might be some other good reason. The applicant establishes none of these matters.
I am not satisfied that either company is solvent. Although it may be the case that, on a closer examination, questions of solvency are not as easily determined as the evidence of the administrators might suggest, I accept the submissions from the administrators that, in the context of the present application the onus is on the applicant to demonstrate solvency and she does not do so.
Nor am I satisfied that the appointment of the administrators is an abuse of process. If the companies are truly insolvent, then the appointment of an administrator is appropriate and it may be that the administration moves to liquidation.
But the circumstances in which the administrators came to be appointed in this case quite properly gave rise to concerns on the part of the applicant about the first respondent’s motivations for taking this step. However, those concerns alone provide no foundation to interfere with the administrators’ appointments. I have no doubt that the appointment of the administrators is part of some stratagem on the part of the first respondent to ensure that whatever assets might be identified in this case, and which the applicant identified in the course of the property adjustment proceedings before me, are put as far away from her as they can be. But that motivation does nothing to deal with questions of solvency or insolvency, something about which the administrators must yet form their own view.
The material does not satisfy me that there is any reason to be concerned about the identity of the administrators and any connection that they might have with the first respondent. Insofar as there is an application to discharge the administrators, it will be dismissed.
Similarly, any application to enjoin or restrain the administrators from carrying out their obligations under the Corporations Act or taking any further steps in relation to the administration, is refused.
Whether the administration proceeds to liquidation will be a matter that will be answered by the administrators’ investigations and the attitude of creditors. There is nothing in the material before me, to which I have been taken, that suggests that there will be a deed of company arrangement entered into, though one can never discount that possibility. In the event that such a deed is proposed, no doubt consideration will be given to it, as is required by the Corporations Act.
Ordinarily, parties to proceedings under the Act bear their own costs, see s 117(1) of the Family Law Act 1975 (Cth). If there are justifying circumstances the Court can make an order as to costs, and when it determines whether and what order to make it needs to take into account the matters set out in s 117(2A) of the Act. Here the applicant for costs is a third party to these proceedings; they are administrators appointed by the first respondent to companies that were the subject of the proceeding. The application had been wholly unsuccessful, and, in my view, the application was misconceived and ill-advised.
On the applicant’s own case, as presented to me, it seems that liquidation of these companies - at least, her view is liquidation of these companies is inevitable. In those circumstances she should not have been surprised then by the information provided to her that the companies were going to be liquidated. The application has been wholly unsuccessful. There is no reason at all why these third parties should not have their costs.
I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Jarrett. Associate:
Dated: 13 September 2024
SCHEDULE OF PARTIES
PAC 5392 of 2020 Respondents
Fourth Respondent:
MR G
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