Willmot & Willmot (No. 2)

[2021] FamCA 320

FAMILY COURT OF AUSTRALIA

Willmot & Willmot (No. 2) [2021] FamCA 320

File number(s):	PAC 556 of 2020
Judgment of:	FOSTER J
Date of judgment:	21 May 2021
Catchwords:	FAMILY LAW – PROPERTY – where application for variation of previous injunctive orders – where orders sought by the wife would place previously restrained funds or funds to be realised on sale into a controlled monies account in her name – where orders sought by the husband would vary injunctions to facilitate the application of unrelated funds to the debts of a corporate entity in voluntary administration – where such funds would not be recoverable – where consideration of applicable principles as to injunctive relief and variation thereof – where orders sought by both parties in all the circumstances not proper – where both applications are dismissed.
Legislation:	Family Law Act 1975 (Cth) s 114(1)
Number of paragraphs:	33
Date of hearing:	29 April 2021
Place:	Parramatta
Counsel for the Applicant:	Mr Campton SC
Solicitor for the Applicant:	RR Company Solicitors
Counsel for the Respondent:	Mr Richardson SC
Solicitor for the Respondent:	Barkus Doolan

ORDERS

PAC 556 of 2020

BETWEEN:

MS WILLMOT

Applicant

AND:

MR WILLMOT

Respondent

ORDER MADE BY:	FOSTER J
DATE OF ORDER:	21 MAY 2021

THE COURT ORDERS THAT:

1.All outstanding interlocutory applications be dismissed.

2.That any application for costs be made by way of written submissions filed and served within 14 days from this date with any submissions in response to be made by way of written submissions filed and served within a further 14 days thereafter with judgment thereafter reserved to chambers.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Willmot & Willmot has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

FOSTER J:

1. In ongoing property proceedings between the primary applicant wife and the respondent husband previous interim financial orders were made on 12 February 2021.

2. Those orders provided as follows:

   Interim Distribution

   1.That within seven days from this date the husband do all things necessary to pay to the wife the sum of $300,000 from the proceeds of sale of the B Street property with the categorisation of such sum reserved to agreement or final trial.

   2.That within seven days from this date the husband be at liberty to pay to himself or as he may direct the sum of $150,000 from the proceeds of sale of the B Street property with the categorisation of such sum reserved to agreement of final trial.

   Injunctions

   3.That the husband and wife be restrained from selling, disposing of, or encumbering any asset to which he or she may be entitled or in which he or she has an interest without giving to the other written notice of such intention with such notice to be not less than 28 days save and except for the purposes of complying with the orders made herein.

   4.That the wife do all things necessary to authorise and direct that all rental income received in relation to the property at X Street, Suburb C as and from this date to be paid to the husband or as he may direct in writing and that as and from this date the husband be authorised to manage the said property and make all reasonable decisions necessary as to its proper management.

   5.That the husband pay as they fall due and payable all mortgage payments and property outgoings including insurances in relation to the property at X Street, Suburb C.

   6.That the wife do all things necessary to ensure that all rental income derived from the properties at D Street, Suburb C and Y Street, G Town be applied to mortgage payments and property outgoings including insurances as they fall due and payable.

   Costs

   7.        That costs of the present application be reserved to final trial.

3. These reasons for judgment in this further interlocutory application assume familiarity with reasons for judgment delivered on 12 February 2021.

4. In the earlier judgment the context of the parties’ relationship and the application before the Court at that time were considered as follows:

   Context

   12       The wife is presently aged 47 and the husband aged 50.

   13The parties commenced cohabitation in late 1994 and married in 1996.  The parties separated on a final basis in early June 2018.

   14       There are four children of the parties’ marriage now aged 21, 19, 17 and 13.

   15At the commencement of the relationship the husband was aged 23 and the wife 21.  Neither party had any assets of significance.

   The wife’s contention

   16Early in the parties’ relationship R Pty Ltd was incorporated and through the entity the husband was engaged in building and construction.  The company trades as “R Commercial”. The wife was employed and assisted the husband with significant clerical duties in relation to the company.

   Property dealings

   17Prior to marriage the parties resided in rented premises for a period. After marriage the parties resided in the wife’s parents’ property at Suburb S rent free until 2001. During this period the parties purchased a property at Suburb T for $140,000 with joint savings and a mortgage advance for the balance of purchase price.  The Suburb T property was tenanted until sold.

   18The Suburb T property was sold in 2001 with the net proceeds of sale being approximately $200,000. The proceeds of sale were applied to purchase a property at Suburb C with the balance of purchase money comprising a mortgage advance. The Suburb C property was sold in about early 2005 for about $500,000.

   19Whilst owning the Suburb C property the parties purchased a property at Suburb V for $130,000 with the purchase price funded from savings and a collateral mortgage secured over their Suburb C property.  This Suburb V property was sold in about 2014 for $220,000.

   20In 2005 the parties purchased a property at Suburb W for $560,000.  The purchase price comprised the proceeds of sale of the Suburb C property and a mortgage advance of about $500,000.  The parties occupied this property as the matrimonial home until its later sale in 2012.  In 2012 Suburb W was sold for $1.1 million with the net proceeds of sale being about $390,000.

   21In 2010 the parties purchased in the name of the wife the property being vacant land at H Street, Suburb J (“the Suburb J property”) for $890,000.  The parties subsequently constructed a home on the property at a cost of over $1 million.  The parties commenced to occupy this property as the matrimonial home in about 2012 after the sale of the Suburb W property.

   22Subsequent to the parties’ separation in June 2018, the wife and children have remained in occupation of the Suburb J property.

   23In 2013 the parties entered into a development arrangement in relation to vacant land purchased at Suburb C for the sum of $550,000.  Subsequent to the development, the wife retained in her name a property known as D Street, Suburb C.  The property was acquired for $550,000 and was subject at that time to a mortgage of $365,000.  The property has been tenanted since purchase.  Otherwise, the parties realised funds from the balance of the development.

   24In 2016 parties entered into another development agreement in relation to a property at X Street, Suburb C.  Subsequently, the wife retained in her name the property at X Street, Suburb C.  The property was acquired for the sum of $560,000 with a mortgage of approximately $500,000.  Otherwise, the parties realised funds from the balance of the development.

   25In 2016 the parties purchased the property at Y Street, G Town for the sum of $620,000 with a mortgage advance of about $500,000.  The property has been tenanted from time to time.

   26Vacant land was acquired at B Street, Suburb P using, it appears, the corporate entity R Company as Trustee of the R Trust (“R Trust”).  The husband, through R Investment Pty Ltd as trustee of the R Investment Trust, holds 90 of the 100 Units in the R Trust.  The husband’s contribution to the purchase, says the wife, was about $1.2 million funded from monies realised through the Suburb C developments.  This property was developed and sold in late July 2020 with the husband, says the wife, not responding to requests for disclosure as to the circumstances of that sale. The husband says that the property has now been sold for $4.6 million plus GST with the husband asserting he has been paid $1 million representing return of his capital investment and a further sum of $300,000 paid to his company account as at 16 September 2020. Otherwise, the husband asserts that a further sum of $648,550 in the Trust Bank account is payable to him, all other parties having been paid.

   27In about 2015 R Investment No 1 Pty Ltd purchased commercial premises at N Street, Suburb M for about $350,000 partly financed by way of mortgage advance from the ANZ Bank.  The wife asserts that the husband is a shareholder of the company.

   28Otherwise, the wife asserts that the husband has purchased two home units off the plan in L Street, Suburb M paying a small deposit and now seeking to finance the balance of the purchase price.  She further asserts that the husband is a unit holder in AA Trust that has completed a three townhouse development at BB Street, Suburb C. The wife is uncertain as to the present circumstances of that development and asserts that the husband has a one third interest in the enterprise.  The wife also asserts that the husband through an entity FF Holdings has an interest in commercial vacant land at Suburb CC.

   29The husband owns a boat 1 purchased in 2014/2015 for the sum of about $1.1 million.  The wife asserts that the funds borrowed to finance the boat were repaid during the parties’ relationship.  The boat is usually moored at a marina in respect to which there are significant mooring fees. The husband has relocated the boat to Queensland with an arrangement to reduce costs. He opposes any sale of the boat and seeks to retain it.

   30The wife, otherwise, asserts that the husband has spent significant funds on refurbishing the boat referred to above and now has available to him through his company a motor vehicle 2 having a value of $200,000.  Prior to the purchase of the motor vehicle 2 the husband sold the business motor vehicle 5 and motor vehicle 3 in May 2020 for a total of about $218,000. He asserts that funds were used to discharge finance attached to those vehicles. Yet he then financed the purchase price of the motor vehicle 2.

   31Yet on 30 June 2020, by way of chattel mortgage, the husband borrowed $236,000 against the security of the boat. Repayments are $4,362 per month. Yet this further borrowing was obtained at a time he asserts was when he had sold two luxury cars to reduce outgoings. These funds were, he asserts, deposited to the account of his company that had paid significant funds in the mooring, maintenance and repair of the boat totalling about $85,000 in the year ended 30 June 2020. The husband somewhat ingeniously asserts that the boat is used for business purposes including entertaining and parties.

   32Save for the husband’s desire to retain the boat there is no other need for its retention if funds are needed to be realised.

   33It was later disclosed that the husband had purchased a one half share in a boat 2 in June 2020. He asserts it was to replace the previous tender for boat 1. The purchase price was in all $241,990. The husband’s share was funded in part from his inheritance from his one eighth interest in his late father’s estate in the sum of $65,000 from which he paid about $45,000 and a further chattel mortgage in the sum of $152,403 with the husband responsible for one half thereof. Loan payments are $3,252 per month with, it appears, the husband to pay half thereof.

   Parenting

   34The wife ceased her employment in child care shortly before the birth of the parties’ first child in 2001.  She thereafter continued significant engagement in clerical duties and administrative tasks for the company in addition to primary parenting responsibilities in relation to the parties’ children.  For a period, the wife worked from home but returned to work in the company offices for a time in 2012.

   35The wife asserts that throughout cohabitation she was the primary carer for the parties’ children with the husband attending to building and development.  She asserts that the husband had only modest involvement in the day-to-day care of the children and that since separation spent little time with the two youngest children until March 2020 when he commenced to spend alternate weekend time and some time during school holidays with the children. 

   Financial circumstances

   36The wife obtained an administrative assessment of child support and on 17 July 2020 the husband was assessed to pay child support in the sum of $2,507 per month in respect of the two youngest children of the parties’ relationship.

   37The wife has not worked in any capacity since she ceased work for the company in about 2014.  Her only formal qualification is an associate diploma of early childhood education obtained some 21 years ago.

   38The wife has sought assistance from her general practitioner and treating psychologist to deal with issues relating to the parties’ separation and thereafter.

   39As at the interim hearing, the wife had available funds at bank of about $6,300 and credit card debt of about $7,500.

   40The wife has remained in occupation of the former matrimonial home at Suburb J.  The property is subject to a mortgage of $1.66 million in favour of Westpac.  As at separation in June 2018 there were funds of approximately $140,000 standing to the credit of a mortgage offset account with Westpac.  In the period from June 2018 to June 2019 the wife asserts that she has mostly expended that sum in paying for living expenses, holidays, mortgage payments and property outgoings in relation to rental properties in her name.

   41In the period from separation to January 2020 deposits have been made by the husband to the offset account totalling $216,000 in addition to which the husband has facilitated the payment of running expenses in relation to the Suburb J property.  Otherwise, the husband has maintained the wife’s use of a motor vehicle 4 in respect to which she meets petrol and maintenance costs.  The husband provides for the wife’s mobile phone.  Until March 2020 the husband paid $800 per week to the wife’s account but as at that date reduced those payments to $400 per week in addition to which the wife receives a salary from the company of $740 per week.

   42Subsequent to commencement of proceedings by the wife in March 2020, the husband, she says, ceased making mortgage payments in relation to properties at D Street, Suburb C, X Street, Suburb C and Y Street, G Town.  The wife arranged a mortgage moratorium in relation to these properties and a mortgage moratorium in relation to the Suburb J property until early November 2020.  As at August 2020 overall mortgage arrears had accrued to the sum of approximately $30,000. The husband complains that the wife has failed to apply rental income from the investment properties in her name to the payment of property mortgages and outgoings.

   43It is readily apparent that rental income should be applied to these property outgoings. Should the wife not do so, the mortgagees will take appropriate action.

   44The wife primarily asserts that the husband has used the finances and resources of his company for his living and other expenses since separation, many of such expenses being run through the company credit card account to which deposits totalling $1.437 million were paid in the period from February 2018 to March 2020. The husband asserts that primarily the credit card is used for company business purposes including the purchase of materials for commercial projects undertaken and payment of subcontractors.

   45The husband’s income assessed for the 2018/2019 was $4.872 million, which he asserts was a consequence of Division 7A loan accounts being assessed as income by the ATO. Such loan accounts accrued as a result of funds drawn by him to meet the family expenses and other expenditure over some years. The husband now contends that his business has suffered a downturn as a consequence of the present community pandemic. He has sought to sublet his commercial business premises and to move the business to premises at a luxury accommodation in part owned by the self-managed superannuation fund. The husband asserts that the business is struggling to stay afloat yet it has financed the purchase of a motor vehicle 2 for his use and appears to meet significant personal expenses for him including boat 1. Otherwise, the husband asserts significant ill-health that impacts on his ability to attend to his business.

   46It is readily apparent from the discussion above, that legal costs in these proceedings absent resolution will be significant.  As at the interim hearing the wife had outstanding legal fees of about $40,000.

   47It is also readily apparent that any capital sum provided to the wife to use pending hearing will be, if necessary, able to be clawed back at final trial from her own assets.

   The husband

   48Since separation the husband has paid mortgage payments on the parties’ home and investment properties and school fees and other expenses for the children.

   49The husband asserts that the trading circumstances of his business have been adversely impacted by the community Covid pandemic resulting in a significant decrease in turnover commencing in April 2020. He has sought to relocate the business premises to premises owned in part by him and the parties’ self-managed superfund save rental outgoings.

   50       He asserts ill-health including depression and anxiety.

   51He complains that the wife has failed to rent the parties’ holiday property at G Town and failed to apply rents to the payment of mortgages secured over other properties in her control.

   52He asserts that he has relocated boat 1 to EE Marina, Queensland to reduce mooring and maintenance costs. Yet historically the business has paid out substantial sums for the maintenance and upkeep of the boat. The boat, he asserts, is used for “promotion” and entertaining. He asserts the boat has a value of about $800,000.

   53       He has moved his residence to a cheaper rental property at Suburb DD.

   54The B Street property sold in July 2020 for $4.6 million plus GST. On sale the husband received a repayment of his initial capital investment of $1 million.

   55It appears readily apparent that the lifestyle expenses of boats and expensive cars are not sustainable in circumstances where the husband is clearly concerned as to the viability of his business.

   56There are funds from the sale on the B Street property held by the husband of about $301,000 and further undistributed funds payable to him of about $648,000.  These are available for distribution with the husband seeking orders as to the distribution of $450,000 therefrom as referred to above.

   57Should he require capital funds to support his ongoing business then he can have recourse to selling his boat that clearly appears redolent to the core business of his company. He will of course be required to notify the wife of such intention and she may make such application as she may wish at her peril as to costs.

1. After orders made on 12 February 2021 it came to the wife’s knowledge that the husband had set up a separate corporate entity, GG Pty Ltd, that had assumed the trading operations of R Pty Ltd and that R Pty Ltd had been placed in voluntary administration. It later became apparent that the husband, in addition to the new corporate entity, had established the HH Trust with the company HH Pty Ltd as trustee.

2. The present interlocutory application arose as a consequence of the Application in a Case filed by the wife on 24 February 2021.  That Application in a Case was later amended by an Amended Application in a Case filed 11 March 2021.

3. Subsequently on 26 February 2020 further orders were made in the following terms:

   WITHOUT PREJUDICE AND WITHOUT ADMISSION, IT IS ORDERED THAT

   1.On the wife’s undertaking as to damages, the husband in his personal capacity and in his capacity as a director and shareholder of R Pty Ltd be restrained from doing any act or thing so as to:

   (a)causing or progressing or proceeding with the winding up or liquidation of R Pty Ltd; and

   (b)dealing with or disposing of or adversely affecting any property or other interest of R Pty Ltd valued at greater than $5,000 including but not limited to the trading enterprise known as R Commercial.

   2.Within 48 hours of the making of these Orders, the husband provide to the solicitors for the wife by way of disclosure any documents or information as to or recording the winding up or liquidation of R Pty Ltd and the disposal by R Pty Ltd of the trading entity R Commercial to GG Pty Ltd including but not limited to:

   (a)the corporate company management accounts, tax returns, financial statements, profit and loss statements, balance sheets, depreciation schedules, BAS statements, loan account ledgers and tax portal print outs for R Pty Ltd for the period 30 June 2020 to the present time;

   (b)any documents recording accountancy advice and/or financial advice and/or taxation advice obtained by the husband as to liquidation of or disposal of R Pty Ltd or any of the information the husband has received from advisors on that subject matter;

   (c)all documents recording the liquidation of R Pty Ltd including but not limited to correspondence to and from the proposed liquidator and details of all debtors and creditors of R Pty Ltd;

   (d)documents recording bank statements for all accounts operated in the name of R Pty Ltd for the period 1 January 2020 to date;

   (e)credit card statements for all accounts operated in the name of R Pty Ltd for the period 1 January 2020 to date;

   (f)minutes of meeting, resolutions, notices of meetings, agendas concerning any of the matters identified in Barkus Doolan’s letter to RR Company of 19 February 2021.

   3.That within 48 hours of the date of these Orders, the husband is to disclose all documents and information as to the incorporation of GG Pty Ltd, the legal and beneficial interest in the shareholding of GG Pty Ltd and R Pty Ltd, and any agreements as between the husband and Mr JJ.

   4.A sealed copy of the Orders be forwarded to the registered office of R Pty Ltd.

   5.Leave is granted to Mr KK, director/secretary of R Pty Ltd should he be so advised to make application to relist the proceedings on short notice on behalf of the company and to seek such orders as he may be advised in that event.

4. On 26 March 2021 further orders were made by consent between the parties as follows:

   1.The husband acknowledges and agrees as a fact pursuant to Section 190 of the Evidence Act 1995 and for the purposes of Section 79 of the Family Law Act 1975 in these proceedings, that the HH Trust (“the Trust”) and its trustee HH Pty Ltd (“the Trustee”) and GG Pty Ltd are his puppets or alter egos or creatures.

   2.That R Pty Ltd be joined as a party to these proceedings.

   3.That within seven (7) days from the date of these Orders the Respondent do all acts and things and sign all necessary documents to remove Mr JJ as a director/secretary of GG Pty Ltd ACN … in order that he is the sole director/secretary thereof.

   4.That upon the implementation of Order 3, the Respondent be restrained from doing any act or thing or signing any document so as to remove himself as the sole director/secretary of GG Pty Ltd ACN ….

   5.That within 7 days the husband do all acts and things and sign all necessary documents to remove Mr JJ as the sole director/secretary of HH Pty Ltd and cause himself to be the sole director of same, and cause her shareholding in same to be transferred to himself, and thereafter the husband be restrained from transferring his shareholding in the corporation to any other person or entity, or appointing any further directors of the corporate Trustee. 

   6.That if the husband is unable to comply with order 5 within 14 days then he shall thereafter forthwith do all acts and things and sign all necessary documents in his capacity as the Appointor of the HH Trust to remove HH Pty Ltd as trustee of the said trust and replace the trustee with a new corporate trustee of the Trust, of which the husband be the sole director/shareholder, and that thereafter he be restrained from resigning as a director or transferring his shareholding in the new corporate Trustee or removing the new trustee or appointing any other Trustee.  

   IT IS FURTHER ORDERED THAT

   7.The solicitor for the Applicant wife is to forward an electronic typescript of the document marked “A” as amended to the Court within two business days.

   BY CONSENT, IT IS FURTHER ORDERED THAT

   8.That in relation to Order 4 as sought by the Wife in her Amended Application in a Case filed 11 March, 2021:-

   8.1The husband contends that he has provided documents requested by the wife insofar as order 4 (a) to (f), 5, and 10 exist as identified in the letters and index's to Affidavits attached marked "A".

   8.2The wife records that as to the documents sought in orders 4 (a) to (f), 5 and 10 –

   (i)The following documents have been provided by the husband:-

   4 a.the husband has only produced the management accounts for R Pty Ltd.

   4 b.the only document provided is the letter addressed to the husband from LL Company dated 5 March, 2021 which was tendered and marked Exhibit A on 10 March, 2021;

   4 d. documents recording bank statements for all accounts operated in the name of R Pty Ltd for the period 1 January, 2020 to date;

   4 e.credit card statements for all accounts operated in the name of R Pty Ltd for the period 1 January, 2020 to date;

   5.all documents and information as to the incorporation of GG Pty Ltd, the legal and beneficial interest in the shareholding of GG Pty Ltd and R Pty Ltd

   10.a.      management accounts, ledgers (including but not limited to the ledgers for the rent concerning the Suburb MM property, the Suburb DD property, the Suburb M property and the storage property), draft financial statements including loan account ledgers and distribution statements for R Pty Ltd for the period 1 July, 2020 to date;

   b.management accounts, ledgers (including but not limited to the ledgers for the rent concerning the Suburb MM property, the Suburb DD property, the Suburb M property and the storage property), draft financial statements including loan account ledgers and distribution statements for GG Pty Ltd for the period 1 January, 2021 to 28 February, 2021;

   c.all benefits and/or income including but not limited to dividends, drawings, fringe benefits and allowances received by the husband from R Pty Ltd or GG Pty Ltd for the period 1 October, 2020 to date;

   d.all benefits and/or income including but not limited to dividends, drawings, fringe benefits and allowances, paid by R Pty Ltd and/or GG Pty Ltd to Mr JJ, Mr NN, Mr PP and Mr QQ for the period 1 October, 2020 to date;

   e.bank statements for all accounts operated by R Pty Ltd for the period 1 January, 2021 to date;

   f.bank statements for all accounts operated by GG Pty Ltd for the period 1 January, 2021 to date;

   (ii)The following documents have not been provided by the husband –

   4 a.the tax returns, financial statements, profit and loss statements, balance sheets, depreciation schedules, BAS statements, loan account ledgers and tax portal print outs for R Pty Ltd for the period 30 June, 2020 to the present time. No documents have been produced for GG Pty Ltd;

   4 b.any documents recording accountancy advice and/or financial advice and/or taxation advice obtained by the husband as to liquidation of or disposal of R Pty Ltd or any of the information the husband has received from advisors on that subject matter;

   4 c. all documents recording the liquidation of R Pty Ltd including but not limited to correspondence to and from the proposed liquidator and details of all debtors and creditors of R Pty Ltd;

   4 f. minutes of meeting, resolutions, notices of meetings, agendas concerning any of the matters identified in Barkus Doolan’s letter to RR Company of 19 February 2021.

   5.any agreements as between the husband and Mr JJ concerning incorporation of GG Pty Ltd, the legal and beneficial interest in the shareholding of GG Pty Ltd and R Pty Ltd;

   10. g.       the disposal by R Pty Ltd to GG Pty Ltd of the trading enterprise R Commercial, including the date of the disposition, the consideration paid, the terms of such disposal, the source of funds concerning such consideration, and the valuation of the trading enterprise that was transferred.

   9.That Order 4 of the Orders made on 19 March, 2020 be amended to include valuations of:

   9.1      GG Pty Ltd ACN …; and

   9.2      HH Family Trust.

   10.That within fourteen (14) days from the date of these Orders the Respondent cause a response to be provided to Mr TT of SS Accountants in response to SS Accountant’s initial request dated 30 July, 2020 concerning the corporate valuations, including the provision of all particulars and documentation requested therein and in the checklist enclosed under cover of such request dated 30 July, 2020.

   11.That the Respondent will provide information and documents within 21 days of receipt of a request from SS Accountants for information and documents related to the valuations of GG Pty Ltd and HH Family Trust.

   12.That the Court record that the husband advises that the draft 2020 financial statements for R Pty Ltd are available and he will within seven (7) days from the date of these Orders provide them to SS Accountants and to the wife’s solicitor.

   13.That the parties forthwith jointly instruct SS Accountants that the relevant date for the respective valuations of each of R Pty Ltd, GG Pty Ltd, HH Family Trust and  K Pty Ltd be 30 March, 2021.

   14.That the Respondent expeditiously reply to any further requests made by SS Accountants within twenty one (21) days of such further request(s) being made.

   15.That the Respondent grant access or cause access to be granted to the real estate valuer namely Mr VV for the purposes of conducting the valuations of each piece of realty referred to in the orders of 19 March, 2020 (excluding the Money Place property) such that Mr VV undertakes his real property valuations at a time as close as possible to the completion of SS Accountant’s opinion.

   16.That within twenty one (21) days from the date of these Orders, the Respondent disclose to the wife all of the documents and information requested in the letter from RR Company Solicitors to Barkus Doolan Family Lawyers dated 23 March, 2021 attached to these Orders and marked “B”.

   17.That within 14 days the wife produce the following documents to the husband's solicitors:

   17.1All documents relating to the wife's entitlements under the estate of her late mother including but not limited to a copy of the last will and testament of her mother, affidavit of the executor identifying the inventory of the estate, the grant of probate.

   17.2A copy of the bank statements for each of the bank accounts in the wife's name for the past 12 months.

5. As can be gleaned from the nature and extent of the interlocutory orders made above, the wife has little confidence in the nature and extent of the husband’s disclosure of his financial circumstances, his corporate machinations and his frankness with the Court.

6. Concerningly, it became known to the wife that on 7 April 2021, after the husband had resigned as a director of R Pty Ltd and appointed effectively a “puppet director”, that puppet director placed the company in voluntary administration.  None of this was communicated to the wife or the wife’s solicitors in a timely manner.

7. The wife’s further interlocutory application was listed for hearing on 29 April 2021.  The wife’s amended minute of orders sought on that day (Exh “C”), in summary, sought orders as follows:

   (a)that the husband do all things necessary to authorise the wife to transfer the balance of the B Street sale proceeds in the sum of approximately $326,186 to a controlled money account operated by the wife;

   (b)that the parties do all things necessary to sell boat 1: see the consent orders below;

   (c)that the parties do all things necessary to sell boat 2 with the net proceeds of sale to be deposited into a controlled monies account operated by the wife;

   (d)that the wife facilitate the proceeds realised from the previous orders being invested in an interest-bearing account in her name and that she be restrained from dealing with such monies without the written consent of both parties or court order;

   (e)costs.

8. The husband, in summary, at the interlocutory hearing sought orders as follows:

   (a)that the husband be permitted, subject to the Deed of Company Arrangement in relation to R Pty Ltd being approved, to utilise funds representing the balance of the proceeds of sale of the B Street property to purchase the assets and equipment of the said company;

   (b)that in the event that the Administrator of R Pty Ltd does not approve the proposed Deed of Company Arrangement the husband be permitted to use the said funds to purchase the assets and equipment of the said company on the open market at market value;

   (c)that the husband be permitted to cause a license agreement to be entered into between R Investment No. 2 Pty Ltd and GG Pty Ltd for the assets and equipment acquired by R Investment No. 2 Pty Ltd;

   (d)the sale of boat 1 with the sale proceeds to be used as follows:

   (i)in accordance with the Deed of Company Arrangement in payment of the creditors of R Pty Ltd;

   (ii)the balance to be paid into a controlled monies account in the names of both parties pending joint written instructions from the parties order of the court.

   (e)That subject to the Deed of Company arrangement being approved that the wife be permitted to sell the property at Y Street, G Town and that after contract adjustments, discharge of mortgage, selling agent’s fees, payment of legal fees on sale the net proceeds of sale be applied:

   (i)in payment of outstanding creditors of R Pty Ltd in accordance with the Deed of Company arrangement;

   (ii)the balance to be paid into a controlled monies account in the names of both parties pending joint written instructions from the parties order of the court.

9. It is to be noted that the property at Y Street, G Town is sought to be retained by the wife on a final basis.

10. On 29 April 2021 further orders were made by consent as follows:

    Orders:

    DEFINITIONS:

    A."boat" means boat 1 having serial number …, …;

    B.       "agent" means Mr WW of XX.

    PENDING FURTHER ORDER, THE COURT ORDERS:

    1.That the husband do all acts and things and sign all documents necessary to list for sale and sell the boat for the best price reasonably attainable in the following manner:

    1.1      That the agency be appointed to sell the boat;

    1.2That all communications between the husband and the agent be in writing and copied in to the wife directly by email;

    1.3That the husband bear all costs of and incidental to the boat being returned to Sydney should the boat be required to be returned to Sydney for the purpose of the sale proceeding;

    1.4That the husband continue to bear the costs associated with the boat including its mooring costs, service costs and other costs incidental to the boat;

    1.5That the boat be advertised with a sales price of $1.3 million unless otherwise agreed by the wife in writing;

    1.6That the husband only execute agreements for the sale of the boat at a value of $1.2 million or more without the written agreement of the wife;

    1.7Pending the sale of the boat, the husband pay as and when they fall due the instalments due under the chattel mortgage secured over the boat.

    2.That upon the sale of the boat being achieved, the proceeds of sale be paid in the following manner and priority:

    2.1      In payment of all sales costs and commissions owing to the agent;

    2.2In payment of such sum as required to discharge the chattel mortgage secured over the boat in favour of the National Australia Bank Ltd noted to be in the sum of about $221,000;

    2.3That the remaining proceeds of sale of the boat be invested in a controlled monies account to be operated by Barkus Doolan and held in that account pending further Order of the Court.

    3.That the Court notes that the interim hearing listed to occur on 29 April 2021 remains and the issues are not resolved by the making of these Orders.

    4.It is also noted that the husband in agreeing to allow the funds to be invested into a controlled monies account representing the proceeds of sale still seeks that those funds be available to him for the purposes of purchasing equipment for the business and paying creditors.

11. The notation agreed to by the parties as set out above in bold is of some significance in the context of the present application.

12. The interlocutory issues for determination during the course of submissions were fined tuned by senior counsel for both of the parties.

    The proposed Deed of Company Arrangement

13. The Deed of Company arrangement proposed by the husband provided a contribution of 100 cents in the dollar to the payment of certain debts and liabilities of the company totalling about $1.28 million, excluding any debts to the Australian Taxation Office, to be funded from the following sources:

    (a)$335,775 representing the balance of proceeds of sale of the B Street property owned by R Investment No. 2 Pty Ltd as referred to above;

    (b)$945,277 from the proceeds of sale of boat 1 as referred to above and the husband’s proposed sale of the wife’s property at Y Street;

    (c)funds to be paid within four months from the date of the Deed of Company Arrangement.

14. The husband asserted through his counsel that the accumulation of creditors was as a consequence of reduced trading circumstances during the present COVID-19 pandemic.  The husband exhibits to his supporting affidavit affirmed 27 April 2021 an Aged Payable Summary as to the creditors of R Pty Ltd as at 26 April 2021.  It must be assumed that he obtained that document from the administrator appointed for the purposes of the voluntary administration.  The totality of creditors aged three months or older is in the sum of about $492,000 of a total of $960,351.  About $215,000 of the company debt is asserted to be owed to accountants from whom the company and/or the husband has sought financial advice. The husband has provided no working accounts for R Pty Ltd up-to-date and the trading circumstances of the company remain something of a mystery.

15. Quite properly, there was complaint by senior counsel for the wife as to the husband’s more recent corporate machinations caught by orders on 26 March 2021 and an assertion by senior counsel for the wife that those corporate machinations and the husband’s financial dealings since the making of interlocutory injunctions in 2020 represent a breach of those injunctions.  It is readily apparent that the husband’s more recent conduct has been as a consequence of certain advices procured by him.

1. It is to be noted that the husband’s corporate entities are presently the subject of an outstanding single expert valuation.

2. There is no issue as a consequence of orders made 26 March 2021 that the new entity GG Pty Ltd and the associated trust are the alter ego of the husband.  It is noted that on 24 and 25 March 2021 sums totalling $126,794 were deposited to the trading account of GG Pty Ltd.  It can be inferred that these funds represented income previously accrued to the enterprise conducted by R Pty Ltd.

3. There are also significant outstanding issues in relation to the husband’s personal income, in particular, arising from his personal income tax return for the 2020 financial year.

4. Otherwise, the husband’s present application is as contended by senior counsel for the wife “absent commercial revenue and accounting support”.  There has been no documentation provided by the husband such as may reflect the Administrator’s analysis of the company circumstances, especially where the husband proposes a Deed of Company Arrangement that he asserts will pay the totality of the outstanding creditors of the company, save for certain exclusions including the Australian Taxation Office.

5. The husband’s proposal represents on the wife’s case an unwelcome intermingling of personal and other corporate assets in the voluntary administration of R Pty Ltd, in circumstances where funds paid into the administration from other sources would not be recoverable.

6. It is the husband who has had the sole control of R Pty Ltd, who has intimate knowledge of the trading circumstances of that company, who has engaged in corporate machinations to phoenix the operations of R Pty Ltd to another corporate entity and trust in circumstances where he had no alternative but to concede in earlier court orders that that other corporate entity and trust were his alter egos.

7. It is the husband who seeks to disturb the terms of previous injunctive orders made in circumstances where there is a significant suspicion that he has, in any event, breached those orders.  It is the husband who asserts that notwithstanding $7.7 million worth of work in the pipeline that the trading circumstances are being fettered by the spectre of outstanding creditors.  Yet, he provides no financial documents save for a bank statement for GG Pty Ltd evidencing a significant credit balance that might give the Court an updated view of the trading circumstances of the company, details as to income received and how applied, details of funds that may or may not be owing by him to the company by way of directors loan accounts and objective evidence of any engagement with the Australian Taxation Office in respect to what were previously represented were significant Division 7A director’s loan accounts and the husband’s personal taxation circumstances.

8. In substance, the application by the husband seeks orders that would lift in part previously made injunctive orders such as to permit him to apply funds as discussed above.

9. The powers of the Court in relation to injunctive relief and variation of such relief are governed by the provisions of s 114(1) of the Family Law Act 1975 (Cth) (“the Act”). The section provides:

   the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate….

10. The earlier injunctive relief of February 2021 was in the following terms:

    3.That the husband and wife be restrained from selling, disposing of, or encumbering any asset to which he or she may be entitled or in which he or she has an interest without giving to the other written notice of such intention with such notice to be not less than 28 days save and except for the purposes of complying with the orders made herein.

    4.That the wife do all things necessary to authorise and direct that all rental income received in relation to the property at X Street, Suburb C as and from this date to be paid to the husband or as he may direct in writing and that as and from this date the husband be authorised to manage the said property and make all reasonable decisions necessary as to its proper management.

    5.That the husband pay as they fall due and payable all mortgage payments and property outgoings including insurances in relation to the property at X Street, Suburb C.

    6.That the wife do all things necessary to ensure that all rental income derived from the properties at D Street, Suburb C and Y Street, G Town be applied to mortgage payments and property outgoings including insurances as they fall due and payable.

11. The wife in substance simply seeks to move funds that may be available into a controlled monies account in her name.  Otherwise, the orders sought by her in relation to the sale of boat 1 have been made by consent and an order will see realised funds held in a controlled monies account pending further order. Her present application is of little utility where orders are in place.

12. The husband for his part seeks orders as set out above. He has been less than forthcoming in terms of objective evidence to support his contentions. Indeed, what is adduced appears to be selective at best and less than frank and forthcoming at worst.

13. By reason of the discussion set out above, it is not considered that orders sought by either party are in all the circumstances proper.

14. An order will be made dismissing all outstanding interlocutory applications.

I certify that the preceding thirty-three (33) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Foster.

Associate:       

Dated:       21 May 2021