Winter and Winter and Ors

[2008] FamCA 1097

FAMILY COURT OF AUSTRALIA

WINTER & WINTER AND ORS [2008] FamCA 1097

FAMILY LAW – PRACTICE AND PROCEDURE – Injunctions – Serious question to be tried – Balance of convenience – Undertakings – Worth of undertakings – Mareva orders – Risk of dissipation – Restraint to be no wider than necessary

Family Law Act 1975 (Cth) ss 79A, 138, 114(3)

Abella v Anderson (1987) 2 Qd R 1
Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57
Barker & Barker [2007] FamCA 13
Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618
Bigg v Suzi (1998) FLC 92-799
Blueseas Investments Pty Ltd v Mitchell & McGillivray (1999) FLC 92-856
Briginshaw v Briginshaw (1938) 60 CLR 336
Cardisle v LED Builders Ltd (1999) 198 CLR 380
Farmer and Bramley (2000) FLC 93-060
Jackson v Sterling Ltd (1987) 162 CLR 612
Livesey v Jenkins [1985] 1 All ER 106
Morrison v Morrison (1995) FLC 92-573
Mullen & De Bry (2006) FLC 93-293
National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170; (1992) 110 ALR 449
Waugh v Waugh (2000) FLC 93-052
Yunghanns v Yunghanns (1999) FLC 92-836

APPLICANT: Ms Winter

FIRST RESPONDENT: Mr M Winter

SECOND RESPONDENT: Mr A Winter

THIRD RESPONDENT : AC Ltd

FOURTH RESPONDENT  : AC (Aust) Pty Ltd

FIFTH RESPONDENT : V Inc

SIXTH  RESPONDENT: V Pty Ltd

FILE NUMBER: BRC3781 of 2008

DATE DELIVERED: 3 October 2008

PLACE DELIVERED: Brisbane

JUDGMENT OF: O'Reilly J

HEARING DATE: 9, 10 & 11 July, 24 & 25 September and 3 October 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Stewart SC and Mr Pyle (9, 10 & 11 July), Mr Crawford (24 September) and Mr Travis (25 September and 3 October)

SOLICITOR FOR THE 

APPLICANT:

Mr Quinn, Q5 Law (9, 10 & 11 July)

SECOND RESPONDENT:  No appearance

COUNSEL FOR THE FIRST, THIRD, FOURTH, FIFTH & SIXTH RESPONDENTS: Mr Bowden  

SOLICITOR FOR THE FIRST, THIRD, FOURTH, FIFTH & SIXTH RESPONDENTS:  Mr Challen, Hawthorn Cuppaidge & Badgery

Orders

UPON THE UNDERTAKING OF THE APPLICANT TO INDEMNIFY AND KEEP INDEMNIFIED THE RESPONDENTS IN RELATION TO ANY LOSS OR DAMAGE AS A RESULT OF THESE ORDERS

IT IS ORDERED UNTIL FURTHER ORDER

1. In the terms set out in Annexure A.

AND IT IS FURTHER ORDERED

1. The minute or orders Annexure A be placed and kept on the Court file.

2. The costs of and incidental to the hearing on the dates referred to above of the wife’s application filed on 28 April 2008 in so far as it relates to interlocutory relief are reserved.

NOTATION:

The effect of these orders is that the interim ex parte orders made by the Honourable Justice Bell on 29 April 2008 continue in relation the second respondent only who has neither been served nor sought to set aside those orders.

IT IS NOTED that publication of this judgment under the pseudonym Winter & Winter is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

ANNEXURE A

1. Documents. The First, Third, Fourth and Fifth Respondents and each of them by themselves, their servants and agents are restrained from disposing of:

   (a) all of the documents (whether in paper writing or electronically stored) comprising the books of account of each of the Third, Fourth and Fifth Respondents (“the Corporate Respondents”), including but not limited to bank statements, cheque books, accounting ledgers, the Company Register, any Minutes of company meetings or resolutions of the directors, share registers, deposit books, correspondence, any record of the company balance sheets, taxation returns and/or notices of assessment, profit and loss statements or other financial management records for the period 1 July 2001 to date;

   (b) documents concerning the financing and refinancing by mortgage or other secured or unsecured borrowing in respect of the following real properties:

   (i) Lot 2 on RP … County M, Parish …, Title Reference …;

   (ii) Lot 3 on RP …, County M, Parish …, Title Reference …;

   (iii) Lot 5 on RP …, County M, Parish …. Title Reference …;

   (iv) Lot 10 on SP …, County M, Parish …, Title Reference …;

   (v) Lot 11 on SP …, County M, Parish …, Title Reference …;

   (vi) Lot 44 on RP …, County F, Parish … Title Reference …;

   (vii) Lot 37 on CP …, County F, Parish …, Title Reference …;

   (viii) Lot 312 on CP…, County F, Parish …, Title Reference …;

   (“the Real Properties”).

2. Items at the Real Properties. The First, Third, Fourth and Fifth Respondents and each of them by themselves, their servants and agents are restrained from removing, disposing of, selling, mortgaging, encumbering or any way dealing with any motor vehicle, machinery, livestock or other property situated at the Real Properties (“the Items”), provided always that:

   (a) The First Respondent may remove any personal or household items belonging to him, his wife or child, at any time, where any such item has a fair value of less than $1500; and

   (b) The First, Third, Fourth and Fiflh Respondents may remove, dispose of, sell, mortgage, encumber or deal with the Items upon obtaining the prior written consent of the Applicant or by leave of the Court upon application on not less than three (3) day notice — in both cases, supported by an affidavit filed in this Honourable Court identifying the Items proposed to be removed, disposed of, sold, mortgaged, encumbered or dealt with, the location where the Items are to be situated if they are to be removed, the arrangements for their preservation and security, and an inventory of the Items remaining at the Real Properties (if any).

3. Shares in the Corporate Respondents. The First, Third, Fourth and Fifth Respondents and each of them by themselves, their servants and agents are restrained from disposing of, selling, mortgaging, encumbering or in any way dealing with any shares owned (or beneficially held) by them in the Third, Fourth and Fifth Respondents (“the Corporate Respondents”) and from issuing, or causing to be issued, or otherwise dealing in or with, shares in the Corporate Respondents, without the prior written consent of the Applicant or by leave of the Court.

4. Other Property of the First Respondent. The First Respondent by himself, his servants and agents is restrained from:

   (a) selling, leasing, mortgaging, charging, encumbering or otherwise dealing with all, or any part of his interest in any real property;

   (b) withdrawing or causing to be withdrawn or transferring or causing to be transferred any sum from any account with a financial institution in the name of the First Respondent, either in his own name or jointly with another person, except for asum totalling not more than $500 in any seven (7) day period for the First Respondent’s support, the support of his wife and child, and payment of child support payments owing to the Applicant, without the consent of the Applicant or by leave of the Court.

FAMILY COURT OF AUSTRALIA AT BRISBANE  

FILE NUMBER: BRC3781/2008

MS WINTER

Applicant

And

MR M WINTER

First Respondent

And

MR A WINTER

Second Respondent

And

AC LTD

Third Respondent

And

AC (AUST) PTY LTD

Fourth Respondent

And

V INC

Fifth Respondent

And

V PTY LTD

Sixth Respondent

REASONS FOR JUDGMENT

Relief claimed by the wife in the principal proceedings

1. The applicant (the wife) claims against the first respondent (the husband) relief under s 79A of the Family Law Act 1975 (Cth) (the Act) that a consent property order made on 7 March 2005 should be set aside and there be fresh proceedings between them on the basis of a miscarriage of justice by reason of alleged fraud, suppression of evidence, failure to disclose relevant information and the giving of false evidence.

Ex parte interim injunctions 28 April 2008

1. In aid of that ultimate relief, on 28 April 2008 the wife sought and on 29 April 2008 obtained from Bell J ex parte interim orders restraining the husband and the second to sixth respondents from (1) disposing of documents; (2) dealing with certain real properties (the Real Properties) and any motor vehicle, machinery, livestock and other property situated on them; (3) dealing with shares in the corporate respondents and issuing shares in the fifth respondent without the wife's consent or leave of the Court; and further against the husband (4) dealing with real property or money except for a sum weekly for his support or for mortgage payments without the wife's consent or leave of the Court.

2. Although the orders were expressed to be "until further order", in essence they were interim rather than interlocutory orders, with the matter otherwise adjourned until 12 May 2008.

The second respondent

1. The second respondent is the husband's brother.  He has not been served with the wife's application. Service has been attempted, but it has been unsuccessful.

2. Nor has any application been filed by the second respondent to set aside the ex parte orders made by Bell J.  It is not in evidence, however, whether he has been given notice of those orders. In relation to the second respondent, therefore, the effect is that the orders made by his Honour will continue against him, at least until there be some next procedural step taken, either by or concerning him.

Application by the husband and the third to sixth respondents/the wife has carriage in relation to the interlocutory orders she now seeks

1. On 19 May 2008, the husband and the third to sixth respondents, by intimation by me on 12 May 2008, filed an application that orders 1 to 4 of the orders made on 29 April 2008 be set aside.

2. However, as the orders initially had been obtained ex parte, on reflection, it is plain that the wife carries the onus of establishing the matters required to be established for the grant of orders now on the interlocutory basis, which she seeks, but with modification as set out in a document provided by Mr Travis, having regard to developments since the ex parte orders were made, in particular the deletion of relief concerning the Real Properties, which titles collectively are properties known as M Property and F Property, each now in the hands of receivers, with the effect that the wife does not now seek the continuance of restraining orders concerning the Real Properties. Further, the orders now sought are modified to seek restraint in relation to the issue of or dealing with shares in all of the corporate respondents rather than just the fifth respondent without the wife’s consent or leave of the Court.

The corporate respondents

1. The third respondent, AC Limited (ACL), wholly owns the fourth respondent AC (Aust) Pty Ltd (ACAPL). The husband says that he and the second respondent are the directors of ACL and ACAPL.  (The second respondent says he is the sole director of ACL). According to the husband's material, all of the shares in ACL are owned by the second respondent.

2. The fifth respondent, V Inc (VI), is a public company registered in the United States of America.  The sixth respondent, V Pty Ltd (VPL), is wholly owned by VI.  According to the husband’s material, the husband and the second respondent are two of four directors of VI, and the husband is also a director of VPL.  Whilst the shareholding in VI is unclear, the material includes that the husband holds four million shares issued in 2007.

The wife’s case

1. The wife's case is that at the time the consent property order was made on 7 March 2005 she relied on the following evidence by the husband as to his property, assets and financial circumstances as contained in the husband's affidavit filed on 23 February 2004:

   15. The Respondent has claimed throughout the property proceedings that I possess and/or control a large amount of wealth in certain Companies.  This is despite my providing evidence to the contrary.  I have been employed as a company director of [AC Ltd] since August 2001.  I receive an income of $500.00 gross per week if funds are available in the Company.  My employer pays for my rent of $675.00 and motor vehicle loan expenses of $250.00 per week as part of the employment contract as I use my home as my fulltime office and I need the vehicle for work related travel.  These are my only sources of income and beneficial payments.

   16. Further, I have had to obtain loans in excess of $150,000.00 to assist in payment of debts, including legal fees and living expenses.  I continue to borrow money when necessary to pay for my expenses.  I currently owe in excess of $30,000.00 in legal fees.  Annexed and marked with the letter "H" is a copy of the Affidavit of the Director of [AC Ltd] and my tax returns for the years 1997 to 2002 together with a letter of my solicitors dated 12 December 2003 explaining in detail that the alleged wealth does not exist and the respondent's perceptions that I have access to large quantities of money either directly or by way of financial resources is without foundation.

   17. I do not have an interest in any other company by way of shares, beneficial interest or otherwise.

2. It may be noted that the husband's description of ACL, in that affidavit, is in the form “[AC]”.

3. The husband exhibited to that affidavit a letter from his solicitors to the wife's solicitors dated 12 December 2003, annexure H, in which it was asserted that the husband had not "secreted away wealth", “particularly in the United States”, and that "the only assets available are those being the proceeds of the sale of [D Street property] and the household furniture and effects …".

4. It is self evident by these materials that the wife, prior to the making of the consent property order, had alleged that the husband had assets which he had failed to disclose to her.

5. The wife, in her affidavit filed on 28 April 2008, in support of the current proceedings, said:

   6. In settling all claims that I had against [the husband] in the original proceedings, I relied on his evidence in his affidavit sworn on 20 February 2004 and his Financial Statement filed in the original proceedings.  Specifically I relied upon [the husband’s] sworn evidence that he had no assets and earned a weekly wage of $500 per week.

6. The wife's case is that throughout the earlier property proceedings disclosure by the husband was “always difficult” and that she had “held suspicion” that information was being withheld.  In her affidavit filed on 16 May 2008 she provides detail of the effort made by her solicitors to obtain full disclosure by the husband of his assets: see pars 3-34 and 40 of that affidavit, and par 41, in which she deposes as to her reliance on the information provided by the husband in entering into the consent property order.

The value received by the wife pursuant to the consent property order

1. In terms, the consent property order provided, by par 1, that subject to pars 6 and 7, the wife receive a cash sum, the amount of which is not set out in the order, but $50,000 of which, by par 7 of the order, was nominated as spousal maintenance.  The order otherwise referred to the retention by each of the husband and the wife of furniture, bank accounts, superannuation entitlements, personal property and chattels in their respective name or possession (pars 3 and 4) and that the husband indemnify the wife in relation to liabilities including taxation liabilities (par 5).

2. Today, Mr Bowden of Counsel, for the husband and the corporate respondents, and Mr Travis of Counsel, for the wife, tendered by consent exhibits 27, 28, 29 and 30, showing that pursuant to par 1 the wife received about $350,000, which by reference to exhibit 29 can be demonstrated as follows.  Pursuant to par 1, the wife was to receive the balance proceeds of sale of the former matrimonial home (D Street) held in the trust account of Barry & Nilsson.  As at 14 March 2005 that amount was $473,655.20. Paragraph 6 of the order required $70,000 to be retained in that firm’s trust account for child support for the child of the wife and the husband, leaving about $400,000 (rounded) for payment to the wife.  Par 7 of the order nominated $50,000 spousal maintenance for the wife, subject to the matters referred to in par 7.  Leaving aside, thus, the amount for spousal maintenance, it is plain that the balance cash amount the wife received pursuant to par 1 of the order amounted to about $350,000.

3. I have referred already to the remaining provisions of the order.  In relation to pars 3 and 4 of it, Mr Bowden today tendered, over the objection of Mr Travis, on which I have given a ruling earlier today and need not repeat, an affidavit of the husband seeking to give flesh to pars 3 and 4 of the orders as to the exact furniture, chattels and property each party received, seeking to show that the wife received the greater portion and the greater value of it. However, as I made clear in the ruling this morning, this matter has been on foot since April.  The husband has had opportunity to adduce this evidence since April or May this year, including in listings before me in May, July and September, and has failed to do so.  The wife was not here today to give instructions to her Counsel to respond to the husband’s new affidavit and thus in relation to procedural fairness has not had opportunity to respond to the precise matters in that affidavit of the husband.  Thus, in order to avoid further adjournment of the matter I allowed it to be read on the basis that I would give it such weight in the circumstances as I consider appropriate.

4. Mr Bowden also today, in relation to the amount the wife received pursuant to the consent property order, has sought to refer to the order of Bell J made on 26 July 2002, by par 2 of which his Honour ordered that the wife receive $50,000 held in the Barry & Nilsson trust account by way of partial property settlement. Exhibit 30, also tendered by consent today, shows such a payment out of the Barry & Nilsson trust account. The evidence indicates that the wife may have purchased a motor vehicle with that money or part of it.

5. Be that as it may, it is plain the parties have not, despite opportunity, put forward in a timely way evidence as to the value each received under pars 3 and 4 of the consent property order.  Arguably, if the wife did purchase a motor vehicle with the $50,000 she received by way of partial property settlement, it would fall into par 3 of the order, namely, property and chattels in her name or possession; and if she did not, arguably it would fall into par 3 in any event, namely, bank accounts in her name.

6. The unsatisfactory state of the evidence has the result that I am not able to ascertain today the value which each party received pursuant to pars 3 and 4 of the consent property order, nor the value to the wife of the indemnity granted by the husband pursuant to par 5, because the parties have not placed that evidence before me.  The evidence to which I have referred thus is the extent of which I am able to consider.

Objections to evidence – s 138 Evidence Act 1995 (Cth)

1. In the current proceedings, the wife sought to rely on information disclosed to her on 5 April 2008 by a Mr MC; documents provided by him to her after that date; documents annexed to his affidavit; and expert opinion by him based upon that information and those documents. 

2. The husband and the third to sixth respondents took objection to that material under s 138 of The Evidence Act 1995 (Cth) which, with cross-examination and argument, occupied all of 9 and 10 July 2008 and the morning of 11 July 2008 until the matter was adjourned part heard and not able to be further listed until 24 September 2008.

3. Initially, the s 138 objections were based upon allegations that Mr MC’s evidence was obtained by misuse of confidential information and/or in breach of a fiduciary duty owed to the fifth and sixth respondents, having regard to the capacity in which he received the information and documents. 

4. On 11 July 2008, as I was about to deliver an ex tempore judgment in relation to the objections, Mr Bowden of Counsel applied to reopen the evidence on the basis that the objection was to be widened to include an allegation that the information and documents had been obtained pursuant to a conspiracy between Mr MC and others to deprive the fifth respondent of its confidential information and use it to establish a business competing with the business of the fifth respondent (but with the effect of annihilation of the business of the fifth respondent) and provided the information that an Anton Piller order had been obtained against the alleged conspirators the previous evening in the Supreme Court of Queensland.  In support of his application Mr Bowden tendered exs 9-13, being copies of extensive affidavit material used in the Supreme Court to obtain the Anton Piller order.

1. After argument, I allowed the application to reopen the evidence to widen the grounds of objection and, as was inevitable in the circumstances, adjourned the matter part heard.  This course caused me, inevitably, to refrain from delivering the ex tempore judgment, fully prepared, on the s 138 objections heard and argued on 9 and 10 July, and to adjourn the matter part heard until the next available Court date.

2. On 24 September 2008, after further voluminous evidence filed on behalf of the husband and the third to sixth respondents, and further argument, I deferred a decision on the objections until the trial, if any, of the current proceedings, for reasons which I gave on that date.  Principally, I determined that the allegation of conspiracy  could not be determined on the interlocutory basis; the objection necessitated a finding as to whether there had been a conspiracy in order to rule on the s 138 objections based on the alleged conspiracy; and further, the matter of the alleged conspiracy being already the subject of action before the Supreme Court of Queensland it would be desirable to await the outcome of those proceedings so that the same issue not require determination before two superior courts.

3. In the circumstances I told the parties that I would decide the matter whether the restraining orders should continue without any regard to Mr MC’s evidence or any evidence based on it.  Accordingly that is how I approach the matter.

The evidence

1. In support of her case that there has been a miscarriage of justice by reason of fraud, suppression of evidence, failure to disclose relevant information and the giving of false evidence, the wife points to evidence as at the date of the consent property order concerning (1) a yacht; (2) a property at B in New South Wales; (3) a Mercedes motor vehicle and a Prime Mover; and (4) also capable of showing the husband's potential beneficial interest in and control as at the date of the consent property order of the third to sixth respondents.  Based on this evidence, she raises also the wider case of the possibility, put as a probability, of concealment by him of other assets and/or interests.

The yacht

1. Documents were produced by the Cruising Yacht Club of Australia pursuant to a subpoena issued to its proper officer on 11 June 2008 in relation to the entry of the yacht “N” in the 2004 Rolex Sydney Hobart Yacht Race.  The documents tendered into evidence from the documents produced pursuant to that subpoena include one annexed to the affidavit of Ms KN filed on 10 July 2008 and exhibits 14 to 26.

2. The document annexed to Ms KN’s affidavit is an application dated 4 November 2004 for entry for the yacht “N” into the 2004 Sydney Hobart Yacht Race.  The information in that document includes the husband's name against a box ticked "Owner", an address for him at H and a mobile telephone number for him which the wife identified in evidence (wife's affidavit filed on 10 July 2008) as the husband's then residential address and his mobile telephone number.  Originally the wife said in the same affidavit that she identified the signature on that document as the husband's signature, however, in brief oral evidence subsequently she resiled from that.  The signature, it appears from other evidence, seems to be that of a Mr BY, described as the “media contact” for the yacht.

3. Exhibits 14 to 26 were the subject of extensive submissions on 25 September 2006 by Mr Travis and Mr Bowden.  It is not necessary to set out all of their observations in relation to these documents which are available on transcript if required.  It is sufficient for present purposes to observe that exhibits 21, 22, 25 and 26 describe the husband as the “owner” of the yacht, with exhibit 21 (at least) appearing to bear the husband's signature as “owner”.  In this regard, I have compared the husband's signature and initials on his affidavits filed on 19 May 2008 and 7 July 2008 with the signature on exhibit 21 and also with several of the signatures and initials on other of the exhibits 14 to 26 appearing to be his: see for example, exhibit 14 (third and fourth pages) and exhibit 22.  In other documents, emphasised by Mr Bowden, ACL, the third respondent, or ACAPL, the fourth respondent, are named variously as owner and/or the insured: see exhibit 14 (third page) showing against the entry "Owner’s/ Charterer’s name" the names "[AC (Aust) Pty Ltd]/[Mr M Winter]"; and exhibit 17 being a certificate of currency of insurance in the name AAC Pty Ltd (there apparently being no such entity).

4. In yet further documents, for example, exhibits 19, 20, 23, 24, 25 and 26 the husband is described as the owner, although those documents, it appears, either were signed by other persons or are unsigned.  In a few of the documents Mr BY has signed as “representative” of the owner: see, for example, exhibits 15, 16 and 24.  The documents variously are dated between 4 November 2004 and 26 December 2004 (the start date of the race as to which I think I can take judicial notice).

5. Mr MW, in an affidavit filed on 10 June 2008, deposed that in the latter part of 2004 the husband asked him to assist in financing "his acquisition" of a yacht that he wished to sail in the 2004 Sydney Hobart Yacht Race, and he was puzzled to see on the transfer papers that the yacht already was in the name AC Limited.  Mr MW assisted in obtaining finance of $150,000 from CBFC Limited, deposing that "whilst we agreed the vessel would be owned in my name … [the husband] would have sole use of the vessel and make all loan repayments to the finance company". 

6. Later, R Company sued the husband in the New South Wales District Court for $75,000 as moneys owing for storage of the yacht.  Mr MW deposed that after certain difficulties the husband told him subsequently that the "agreement" in relation to the yacht could not be changed because otherwise the husband would have to disclose the yacht to his ex wife and he was "in the middle of a nasty property settlement".

7. In a subsequent affidavit filed on 9 July 2008, Mr MW deposed that before the events described in his earlier affidavit the husband had told him that the reason he needed his "assistance" was that he "could not be seen to have any assets in his name as he was involved in Family Court proceedings and wished to keep his assets out of the reach of his wife until some time after he had sorted things out with her". 

8. The husband, in an affidavit filed on 7 July 2008, said he believes the yacht was "paid for by [ACL]", and that it is the "current beneficial owner".  He referred to an affidavit of Mr MW filed in the New South Wales District Court proceedings (annexure MGW2) in which Mr MW had sworn on 24 April 2007 "I am the owner of the yacht [“N”]", annexing the 2006 registration certificate and asserting that in about July 2004 he had "lent" the yacht to the third respondent "for promotional purposes".  As to this, in his affidavit filed on 9 July 2008, Mr MW deposed to the circumstances of his signing the affidavit MGW2, which he then described.

9. Mr A Winter, the husband’s brother and the second respondent, in an affidavit filed on 9 July 2008 deposed that ACAPL is a wholly owned subsidiary of ACL of which he is the sole director and shareholder.  He referred to the yacht as being used in marketing as an advertising device in a context more fully set out in his affidavit to which I will refer in more detail below.  Although not stated directly, the effect of his affidavit is that the yacht was and is owned by either the third or the fourth respondent.  The husband’s brother deposed also that the husband has never contributed capital or lent moneys to ACL or ACAPL and has the role only of conducting ACAPL’s day to day operations.

10. The husband's affidavit filed on 7 July 2008 (larger affidavit) annexes a file note (annexure MW1, page 24) made by his solicitor on 14 January 2005 recording the husband's instructions to him which bears setting out.

    … He advised that he didn't want his wife aware of the ownership of the boat, because it is actually owned by [Mr MW] and they believe that as soon as she finds that out she will be on the phone to [Mr MW’s] wife, causing him a lot of angst for something that she is not really entitled to get.

    …

    In any event I believe that the registration would be able to be searched, so it shouldn't be an issue anyway.

    He instructed me just to simply write back and tell them that he wasn't the owner of any assets and as such he wasn't required to provide any proof thereof.

The B property 

1. Mr GR in an affidavit filed on 9 July 2008 deposed that he met the husband in October 2003 at which time he (Mr GR) was the registered owner of property at B in New South Wales.  He deposed that on 18 February 2004 the husband presented him with a contract naming AC (Aust) Pty Ltd as purchaser of the property.  The contract, annexure GNR1, shows the purchase price as $400,000.  Mr GR deposed:

   6. … The First Respondent had always expressed to me that he was purchasing the property and I verily believed that he would be purchasing it himself.

   7. When the First Respondent presented the contract to me I questioned him as to why the name of the purchaser was [AC (Aust) Pty Ltd] and I became concerned about the transaction.

   8. On 18 February 2004, prior to executing the contract, the First Respondent stated to me words to the effect that he had a problem with his ex wife and a property settlement that he was involved in with her.  He explained that [AC (Aust) Pty Ltd] was his company and that he used it to purchase any assets that he wished to keep out of the reach of his ex wife. 

   9. The First Respondent said words to the effect that via a combination of [AC (Aust) Pty Ltd] and a New Zealand company controlled by his brother, the First Respondent was able to keep any assets he owned or acquired away from the reach of his ex wife.

   10. We conversed about this for some time as I had recently experienced a relationship breakdown and was keenly interested in the strategies that the First Respondent was relaying to me.

   11. The contract was completed in about late June 2004.  I did not receive any funds at settlement.  There was a mortgage registered over the property approximating $100,000, which was discharged. The balance of the purchase price was retained by the purchaser upon the First Respondent's promise to issue me with shares in the Fifth Respondent to an equivalent value.

   12. I have not yet received shares to that value as promised to me by the First Respondent.

2. In relation to this evidence the husband, in an affidavit filed on 7 July 2008 (shorter affidavit), said:

   2.I believe that at the relevant times in 2003 and 2004 that Mr [GR] was an electrician who owned an investment property at [B].  I recall that he did some electrical work for [V Company] and at his request he was given shares in consideration of such work and I believe that he remains a shareholder of the company.

   3. In respect to paragraph 4, I recall that a Mr [FA] who was at the time involved in investor relations approached me and told me that Mr  [GR] wanted to do a deal to sell an investment property, for shares in [V]. [V] could not sell shares to buy a property however [ACL] my brother's company decided that it could trade some of the [V] shares it held for the property.  As I recall the transfer occurred and all the documentation was prepared and completed by Mr [GR’s] lawyers and the [V] shares owned by [ACL] were transferred to Mr [GR] in consideration of the purchase.  As I recollect there was some funding required by [ACL] to complete the purchase although I do not recall the precise details.

   4. I had no interest in purchasing this property personally and I never had any beneficial interest in the property.

   5. In relation to paragraph 6, I do recall Mr [GR] saying to me words to the effect of "What a great investment the property would be for [AC]".  This proved not to be the case and [ACL] has subsequently sold the property at a loss.

   6. In relation to paragraph 7, I have no recollection of any such conversation and in light of the circumstances I consider it unlikely any such conversation soon place.

   7. In relation to paragraph 9, to refute this allegation. I have never discussed any of my personal affairs with Mr [GR].

   8. In relation to paragraph 10, I say that I was never aware of Mr [GR] having a relationship break down and indeed in about 2004 I and my present wife […], had a pleasant dinner one evening with Mr [GR] and his wife [Mrs GR].  I have never discussed anything with him about his personal relationship or mine.

The motor vehicles

1. Mr MW in his affidavits filed on 10 June 2008 and 9 July 2008, to which I have referred already, deposed to the purchase in late 2003 of a Mercedes vehicle and the purchase in early 2004 of a Prime Mover, each in Mr MW’s name, at the request of the husband, with finance arranged in Mr MW’s name, but with the husband to be responsible for the payments.

2. Mr MW deposed that he has never had possession of either vehicle and that since the transactions they have been in the husband's sole possession and to the best of his knowledge are on a property in Queensland owned by the third respondent.

3. The husband in his larger affidavit filed on 7 July 2008, par 24, relies on a document annexure MCW6 to Mr MW’s affidavit as evidencing that on 18 February 2004 the two vehicles were purchased from Mr MW by ACL, with effect that from that date he had no beneficial interest in them to disclose to the wife in the property proceedings.

Other evidence concerning the husband and the four corporate respondents

1. The husband says he is a director of the third, fourth, fifth and sixth respondents.  He has deposed that he does not hold any shares in the third, fourth or sixth respondents but has four million shares in the fifth respondent issued to him in 2007.

2. He denies that any of the third, fourth, fifth or six respondents is his alter ego.

3. He deposed that premises at T are leased by the sixth respondent.

4. The husband’s brother, the second respondent, deposed that the husband has never contributed capital nor lent moneys to ACL or ACAPL and has the role only of conducting ACAPL’s day to day operations.

5. I have referred above to involvement of ACL and ACAPL in relation to the yacht and the B property.

6. There is reference also in the material, in the husband’s brother’s affidavit, to the purchase in 2004 by ACAPL of nine horses for $180,000.  The husband’s brother said that the funds used to purchase the horses "were those of [AC] being monies provided to it by [ACL]", “[AC]” here plainly being a reference to ACAPL.  The husband’s brother said further that he saw the purchase of the horses as a way to promote the business interests of “[AC] and [V]” and described use of the name “N” on the side of the yacht and the logo on the sails, being the name of the product of V Company.

7. Thus, there is evidence of a business link of some kind, at least, between the two AC companies and the two V companies, the details of which are unclear.

8. The material in part refers to “[V]” without differentiating between the fifth and sixth respondents. 

9. Mr MW deposed that he is an investor in “[V]”.  In the affidavit in which he referred to the Mercedes vehicle purchased in late 2003, he said that he arranged finance with CBFC Limited in his name, but said that the husband promised to repay the loan to CBFC Limited.  He said the cost of the vehicle was $76,574 with the amount financed $51,574.  He deposed that the husband was to pay out the loan within three months, and at the conclusion of “the transaction” he (Mr MW) was to be issued “additional shares” in “[V]” that would compensate him for the risk he was assuming in the transaction.

10. Mr MW deposed that after completing “the transaction” in relation to the yacht (referred to in detail earlier) he became agitated because his investment in “[V]” had not increased and he discussed various matters with the husband (set out in Mr MW’s affidavit) which culminated in a compromise agreement between himself and husband, annexure MCW6.  Notably however the document annexure MCW6 is styled "Agreement between [AC Ltd] and [Mr MW]", and is signed by the husband in his capacity as a director of ACL.

11. The document in part refers to ACL as holding shares in V Company and that Mr MW "has arranged loan funds to the amount of AUD$200,000 in favour of [ACL] for the purchase of x1 2001 Mercedes [motor vehicle] and x1 2001 [Prime mover]".  It is not necessary to refer to all of the terms of the agreement.  The husband deposes to his understanding of it in his affidavit filed on 7 July 2008 (larger affidavit), par 24.

12. For present purposes, however, the annexure is evidence of the husband's ability to deal with ACL's assets, apparently for ACL's purposes, according to the document, by apparent purchase by ACL of the two vehicles from Mr MW with effect, as the husband deposed, that he had no beneficial interest in them to disclose in the property proceedings with the wife.  That does not explain, however, his ability to deal with ACL’s assets in the manner described in the annexure.

13. Mr GR deposed, in relation to the purchase by ACAPL of the B property, that the contract was completed in June 2004.  He deposed that he did not receive any funds at settlement, however a mortgage of $100,000 was discharged with the balance of the purchase price retained by the purchaser upon the husband's promise to issue Mr GR with shares in the fifth respondent “to an equivalent value”, but that as yet he has not received the promised shares.

14. In relation to this evidence the husband deposed (shorter affidavit filed on 7 July 2008) that he was approached by a Mr FA who told him that Mr GR wanted to "do a deal" to sell an investment property "for shares in [V Company]".  He deposed that “[V Company]” could not sell shares to buy a property, however ACP "my brother's company" decided it could trade some “[V]” shares it held for the property and as far as he is aware that occurred.  (In this text “ACP” plainly is a reference to ACL).

15. The husband further deposed that he recollects there was some funding required by ACL to complete the purchase although he does not recall the precise details.

16. The difficulty here for the husband however is that the purchase contract was in the name AC (Aust) Pty Ltd (ACAPL), not “ACP” (ACL), perhaps demonstrating (as in the example of the horses) some apparent but not real division in the assets of ACL and ACAPL (although I recognise the latter is a wholly owned subsidiary). A further difficulty for the husband is that the B property transaction and the annexure MCW6 transaction tend to show the husband's ability to use the assets of ACL and/or ACAPL as if his own, tending on balance to show a strong case that either or both are and at all times have been his alter ego.

17. As to the V companies, I have mentioned the husband deposed that the premises at T are or were leased by VPL, the sixth respondent, of which he is a director.  Several of the documents produced by the Cruising Yacht Club, exhibits 14-26, bear the facsimile imprint “[V Company]”, and one (exhibit 18) bears an email imprint showing it as being sent from "[the husband] […@....net] on behalf of [AC] […@....net]".  VPL, the sixth respondent, as mentioned, is wholly owned by VI, the fifth respondent.  However, the facsimile and emails, if emanating from the T premises leased by the sixth respondent, show some ability at least on the part of the husband to use its leased premises and office equipment as if his own.

The principles relevant to the application of s 79A 

1. In Barker & Barker [2007] FamCA13 the Full Court referred to Bigg v Suzi (1998) FLC 92-799 and the line of authority following it:

   120.A miscarriage of justice under s 79A(1)(a) will occur if circumstances exist which “for some significant reason, make the order contrary to law and justice according to law as it relates to the integrity of the judicial process [original emphasis]” (Bigg v Suzi (supra) at 84,982). See also Suiker (supra); Public Trustee (as executor of the estate of Gilbert) v Gilbert (supra)).  Whilst cases such as Suiker (supra), Holland v Holland (1982) FLC ¶91-243 and Gebert v Gebert (1990) FLC ¶92-137 indicate that the words “miscarriage of justice” should not be construed narrowly and the phrase “integrity of the judicial process” should not be taken only to refer to the hearing in the court, the circumstances creating the miscarriage must nevertheless have been such as to have had an influence on the outcome of the litigation. As the Full Court said in Holland (supra):

   To succeed in an application under section 79A, the wife must show some circumstance leading to a miscarriage of justice. Agreement to a consent order which may not adequately reflect a party’s entitlements under sec. 79 does not, of itself, show that there has been a miscarriage of justice. There may be cases where the order consented to is so far outside the ambit of what is just and equitable that the Court may infer that a party has acted under duress, in ignorance or as a result of incompetent advice.

   …

   122.There will thus be many cases in which an order will be made, by consent or otherwise, based upon an agreed valuation which has been prepared many months earlier.  There may be factors in the intervening period which have affected the value so agreed.  Unless there is some particular act which impugns the process by which the orders were obtained, the mere effluxion of time and the consequent changes in the market during that period, whether they be upward or downward, will not of themselves create an injustice, nor require either of the parties to make further investigations of value if they choose not to do so.

   123.As previously discussed, in order for a claim under s 79A(1) to succeed, the Court must be satisfied that a miscarriage of justice has resulted. It is not sufficient to merely establish the existence of one or more of the stated grounds, such as suppression of evidence. In Livesey v Jenkins (supra), Brandon LJ had this to say about the nexus between non-disclosure and setting an order aside (at 445-6):

   I would end with an emphatic word of warning. It is not every failure of frank and full disclosure which would justify a court in setting aside an order of the kind concerned in this appeal. On the contrary, it will only be in cases when the absence of full and frank disclosure has led to the court making, either in contested proceedings or by consent, an order which is substantially different from the order which it would have made if such disclosure had taken place that a case for setting aside can possibly be made good. Parties who apply to set aside orders on the ground of failure to disclose some relatively minor matter or matters, the disclosure of which would not have made any substantial difference to the order which the court would have made or approved, are likely to find their applications being summarily dismissed, with costs against them, or, if they are legally aided, against the legal aid fund.

   We agree with this statement.

Power to grant injunctions

1. Section 114(3) of the Act provides relevantly that a Court may grant an injunction in any case in which it is just and convenient to do so either conditionally or unconditionally or upon such terms and conditions as the Court considers appropriate.

2. Rule 14.05(1) of the Family Law Rules 2004 provides that a party may apply for a Mareva order if the order will be incidental to an existing or prospective order made in favour of the applicant or the applicant has an existing or prospective claim that is able to be decided in Australia.

3. Rule 14.05(2) provides procedural requirements, however, they are subservient to and thus unable to fetter exercise of the power and discretion provided in s 114(3).

The principles relevant to the grant of interlocutory injunctions

1. In applications for interlocutory injunctions the Court addresses itself to two main issues.  The first is whether there is a serious question to be tried, being one which carries sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.  The second is whether the inconvenience or injury which the applicant would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the respondent would suffer if an injunction is granted. See Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-3, as explained in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at [65]-[70] per Gummow and Hayne JJ. In this Court, see also Blueseas Investments Pty Ltd v Mitchell & McGillivray (1999) FLC 92-856 at [56], citing Yunghanns v Yunghanns (1999) FLC 92-836 at [109(7)].

The principles relevant to the grant of Mareva injunctions 

1. The principles relevant to the grant of Mareva injunctions may be shortly stated, extracted from the authorities referred to below.  In applications for Mareva or "asset preservation" orders, the applicant must establish, in addition to the conditions ordinary to the grant of injunctive relief, that unless restrained there is a real risk or danger that a respondent will dispose of or dissipate assets in Australia in his possession or under his control or remove them from Australia so as to defeat any judgment which the applicant may obtain.

2. The remedy, described in the authorities as a "drastic remedy", is one which should not be granted lightly.  The purpose of the remedy is not to provide security to the applicant, but to prevent the abuse or frustration of the Court's process in relation to a matter within its jurisdiction.  It is a requirement thus, that the Court consider whether the restraint sought is necessary, and no wider than necessary, to achieve this end.  The grant of the relief is discretionary, but often will be provided in urgent circumstances where a propensity to shift assets, apparently to defeat a judgment, has already been manifested. See Cardisle v LED Builders Ltd (1999) 198 CLR 380; Jackson v Sterling Ltd (1987) 162 CLR 612. In this Court, see also Waugh v Waugh (2000) FLC 93-052 at [32]‑[44]; and Mullen & De Bry (2006) FLC 93-293 at [41]-[44], explaining pars [45]-[46] in Waugh.  In Mullen the Full Court concluded:

   46. Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in s 114(3).

   A Court … may grant an injunction … in any case in which it is just or convenient to do so … .

   47. Ultimately, each case will involve an overall assessment of a number of factors to determine the just or convenient result.  Not all cases with the same identity of factors will necessarily produce the same result because of varying weight individually and comparatively.

The submissions 

1. Mr Travis submitted that the evidence shows a serious question to be tried being one which carries sufficient likelihood of success to justify preservation of the status quo pending the trial, namely, having regard to s 79A(1):

   (a)whether for the purpose of s 79A(1)(a) the wife is likely to establish at the trial one of the four grounds raised by her in her s 79A application, namely fraud, suppression of evidence, failure to disclose relevant information or the giving of false evidence;

   (b)whether one of those grounds amounted to or caused a miscarriage of justice in that circumstances existed which for a significant reason made the order contrary to law and justice according to law as it relates to the integrity of the judicial process;

   (c)whether in all of the circumstances at trial the discretion would be exercised to vary or set aside the consent property order; and

   (d)whether in all of the circumstances at trial the discretion would be exercised to make another order under s 79 in substitution for the order if it be set aside.

2. Mr Travis submitted that if I am satisfied there is a serious question to be tried in relation to any one of the four s 79A(1)(a) grounds raised by the wife then it is plain there will be found to have been a grave miscarriage of justice and the discretion thus enlivened in relation to (c) and (d) above, namely, the varying or setting aside of the consent property order and if it be set aside an order made in substitution.

3. Mr Travis referred to the evidence as to the husband's ownership or likely ownership at the time that the consent orders were made of the yacht and the B property, submitting that if that ownership be proved at the trial the husband's evidence in pars 15-17 of his affidavit filed on 23 February 2004 in the parties' property proceedings will be shown to amount to the giving of false evidence in those proceedings, there being evidence by the wife that despite her suspicion that the husband had withheld information, she relied on the information and disclosure by the husband in giving her consent to the property order.

4. Mr Travis submitted that the evidence of Mr GR, especially at pars 6-9, shows that ACAPL played a significant role as a device to keep property away from the wife, including real property, and that the document annexed to Ms KN’s affidavit and the documentary exhibits 14-26 concerning the yacht, together with Mr MW’s evidence concerning the yacht, show that ACAPL was used by the husband as his alter ego company so that regardless of whether the yacht initially had been held by ACL or the husband before its "transfer" to Mr MW, the husband held the beneficial ownership.

5. Mr Travis submitted that whilst there may be various explanations as to these matters as proffered by the husband in his evidence, the question is whether the wife has raised a serious question to be tried as to concealment leading to a miscarriage of justice so as to enliven exercise of the discretion in s 79A in her favour and that on the evidence that she has presented there is a sufficient likelihood of success to warrant the matters she has raised being litigated at the trial.

6. Further, Mr Travis referred to the husband's solicitor's file note 14 January 2005, annexure MGW1, page 24, to the husband's affidavit filed on 7 July 2008 (larger affidavit), an extract from which is set out above, as raising the question whether the husband gave his own solicitors a false account of his assets, submitting that if the documentary exhibits as to the ownership of the yacht are true, the husband has involved his solicitors in his own deception of the Court and these matters alone raise the further serious question to be tried whether any explanation by the husband can be maintained given his own earlier evidence concerning the yacht.

7. As to the risk of dissipation or disposal if the Mareva orders are not granted, Mr Travis referred to par 9 of Mr GR’s affidavit and par 3 of Mr MW’s affidavit (second affidavit, filed 9 July 2008) as evidencing the husband having a history of hiding assets from the wife in the context of judicial proceedings.  He referred to the evidence of the yacht being held by ACL, then being transferred to Mr MW, submitting that these matters raise the husband’s ability again to hide or conceal assets if not restrained by injunction.

8. As to the balance of convenience, Mr Travis submitted that if the injunctions are not continued, given the evidence supporting a real risk of dissipation of assets, the injury to the wife outweighs any injury to the husband because the wife would suffer the Court process being wasted in that even if she succeeded she would be defeated.

9. Mr Travis referred to the undertaking as to damages by the wife in relation to the existing restraint orders, which undertaking is further offered.  As to worth of the undertaking, given the wife's lack of means deposed to in her material, Mr Travis referred to the nature of the restraints sought and the underlying reason and necessity for them, submitting that although the wife's material does not show significant capacity to make good an undertaking there is, in all of the circumstances, a remote risk it would ever be called upon.

10. Mr Bowden submitted that the only person who can be liable to the wife is the husband, so that before the third to sixth respondents be further enjoined the wife needs to establish that they are harbouring assets of the husband or that assets are being held in trust by them for the husband.

11. He referred to the serious nature of the wife's allegations, and thus the need, even at this interlocutory stage, of having regard to the principles in Briginshaw v Briginshaw (1938) 60 CLR 336 and in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; (1992) 67 ALJR 170; (1992) 110 ALR 449 to the effect that a degree of precision in the wife's evidence is required having regard to the gravity of the allegations and their consequences, emphasising that the wife's onus of showing a serious question to be tried must be discharged in relation to all of the respondents, not just the husband, such that in respect of any respondents against whom a serious question to be tried is not shown the injunctions against those respondents should be dissolved.

12. Mr Bowden referred to Abella v Anderson (1987) 2 Qd R 1 per McPherson J to the effect that the function of a Mareva order is not to provide security in advance to an applicant for judgment he hopes to obtain and fears may not be satisfied; and to the principles summarised in Waugh (above), especially that a Mareva order is a drastic remedy not to be granted lightly and that there must be established a real risk or likelihood of the disposition of assets, being an objective risk.

13. Mr Bowden submitted that having regard to these principles there must be objective evidence of facts establishing the risk or likelihood of dissipation and that, as the case developed, there are "only two or three assets" which it is alleged the husband failed to disclose in 2005.

14. Mr Bowden referred to the affidavit of the husband's brother as explaining that the husband has never contributed capital or lent moneys to ACAPL and has no beneficial interest in it and the role only of conducting its day to day operations which was the position throughout 2004 and remains so today.

15. He submitted in relation to the yacht that Mr MW’s affidavit, annexure MGW2 to the husband's affidavit filed on 7 July 2008 (the larger affidavit), in which Mr MW swore for the purpose of New South Wales court proceedings that he was the owner of the yacht, casts doubt upon the evidence of Mr MW now sworn in support of the wife with effect that, having regard to the gravity of the matter and s 140 of The Evidence Act1995 (Cth) I ought not be satisfied as to the truth of Mr MW’s evidence sworn in the wife's case.

16. Mr Bowden submitted that the documentary exhibits produced by the Cruising Yacht Club of Australia, when analysed objectively, are consistent with the circumstance of ACL and/or ACAPL wanting to use the yacht as an advertising device.  He pointed to the insurance certificate (exhibit 17) showing AAC Pty Ltd (though there is no such entity) as the insured as evidence supporting that the husband did not own the yacht; and made other observations as to the documents annexed to Ms KN’s affidavit and exhibits 14-26 generally (which I need not set out) as showing such "variability" in the evidence that it does not meet the Briginshaw/s140 Evidence Act test as reliable evidence to show a serious question to be tried that the yacht was owned by the husband beneficially as at the date of the consent property order and that he thus failed to disclose that ownership.

17. As to the B property, Mr Bowden referred to the evidence of Mr GR that the contract showed ACAPL as the purchaser, and to the husband's affidavit filed on 7 July 2008 (shorter affidavit) that he had no interest in purchasing the property personally and that he never had a beneficial interest in it.

18. Mr Bowden said that in summary the wife could point to only two substantial assets, the yacht and the B property, and that her evidence falls far short of showing a serious question to be tried that the husband owned those assets and failed to disclose them or that he gave false evidence or was fraudulent or failed to disclose relevant information in the earlier proceedings between the husband and the wife.

19. Mr Bowden submitted further that the husband's evidence that the B property was sold at a loss, and that there is no evidence as to the value of the yacht, or of any equity in it, has the effect that there is no evidence on which I am able to conclude that if these two assets were the husband's and he failed to disclose them, there would have been any appreciable increase in the size of the pool or that in consequence the wife would have achieved a property settlement greater than she received so that there is no likelihood or sufficient likelihood of the wife at trial succeeding in showing a miscarriage of justice.

20. Mr Bowden referred to Bigg v Suzi (above) at [6.37], emphasising that to demonstrate a miscarriage of justice circumstances must exist which, for some significant reason, make the earlier order contrary to law and justice according to law as it relates to the integrity of the judicial process, and that the miscarriage must arise out of that process, not after it, submitting that "on both points" the evidence relied on by the wife "could not lead anywhere" so that it is not established that there is any serious question to be tried as to whether a miscarriage of justice has occurred.

21. As to risk of dissipation or disposal of assets, if not restrained, Mr Bowden submitted there is no evidence that the husband will flee the country or dissipate assets to render nugatory any judgment the wife may obtain and that “quantum is relevant to the risk of dissipation”.

22. Mr Bowden submitted in the alternative that if there is evidence sufficient to restrain the husband there is no evidence sufficient to restrain the corporate respondents, and that the position of each of them must be considered separately.  He submitted that there is no evidence that any of the corporate respondents is the alter ego of the husband, nor for example that ACL or ACAPL, or VI or VPL is, as alleged, the disguising vehicle which the husband used to conceal assets from the wife.

23. My notes do not include a specific submission by Mr Bowden as to the balance of convenience.  However, it is implicit in the husband’s and the third to sixth respondents’ case that the balance of convenience does not favour the wife, because restraint would jeopardise their legitimate ongoing personal and business interests, and further that the wife’s undertaking is worthless.

24. In reply, Mr Travis submitted that the “higher end” of the gravity test (Briginshaw/s140 Evidence Act) is not necessarily attracted because it is possible to show a serious question to be tried by, for example, a single failure to make full and frank disclosure by the application of an objective test.

Serious question

The husband/ the AC companies/the V companies

1. In my view, the evidence shows a serious question to be tried, being one which carries a sufficient likelihood of success to justify in the circumstances the preservation of the status quo in relation to the assets of the husband, to the more limited extent now sought than previously ordered; and, to the extent that the wife has shown that his affairs and assets are or may be bound up with those of the corporate respondents, similarly, with the exception of the sixth respondent, to which I will refer in more detail below, a serious question to be tried, being one which carries a sufficient likelihood of success to justify in the circumstances the preservation of the status quo concerning them, to the limited extent sought, namely that they not deal with or issue shares without the consent of the applicant or the leave of the Court.

2. In the balance of these reasons, for convenience, I will use the short form "serious question to be tried" as meaning and signifying serious question to be tried being one which carries a sufficient likelihood of success to justify in the circumstances the preservation of the status quo.

3. The serious question to be tried to which I refer is whether at the time the consent property order was made a miscarriage of justice occurred, that is, whether for some significant reason the order was contrary to law and justice as it relates to the integrity of the judicial process, by reason of, at least, suppression of evidence by the husband as to his beneficial ownership of the yacht; and/or his beneficial interest in ACAPL, which on the evidence owned the B property, that beneficial interest being concealed in that company by the husband's use of it as his alter ego or alternatively as a device to conceal assets; and also his beneficial ownership of the two Mercedes motor vehicles initially held in Mr MW’s name; and/or by reason of the giving of false evidence by the husband in pars 15-17 of his affidavit filed on 23 February 2004 in the property proceedings between the husband and the wife in which the consent order was made.

4. In the analysis of the evidence which follows, I have had full regard to the gravity of the matters alleged, and the need for the evidence to be particular, having regard to Briginshaw/ s140 of Evidence Act and I am satisfied that the evidence analysed below is of the requisite quality to show such serious question to be tried.

5. It may be, although it is not necessary for me to decide, that the wife's evidence shows also a serious question as to a miscarriage of justice having occurred by reason of fraud and/or failure to disclose relevant information. In this regard, however, I accept Mr Travis's submission that the wife needs to demonstrate a serious question to be tried as to only one ground in s 79A(1)(a), not four grounds.

6. Mr GR and Mr MW, who appear to bear no relationship to each other, and thus are unlikely to have colluded, have separately and independently sworn that in their dealings with the husband he told them he wished, in the context of the earlier proceedings, to not have any assets in his own name to keep them out of reach of the wife in those proceedings:  Mr GR’s affidavit pars 8 and 9 and Mr MW’s first affidavit par 9 and second affidavit par 3.

7. Even if it be shown that Mr GR and Mr MW did bear relationship one to the other nonetheless there is no suggestion of collusion in relation to their similar evidence concerning the husband stating to each that he wished to keep assets out of reach of his ex wife.

8. The evidence concerning ownership of the yacht includes that prior to the transfer of the registration of ownership to Mr MW’s name, it had been registered in the name ACL who was the transferee to Mr MW.  There is evidence by Mr GR (par 8) that the husband told him that ACAPL was "his company" and that he "used it to purchase any assets that he wished to keep out of the reach of his ex wife", and (par 9) that “with a combination” of ACAPL and “a New Zealand company controlled by his brother” (plainly, ACL), he was “able to keep any assets he owned or acquired away from the reach of his ex wife”.  Thus there is plausible evidence that even if prior to the transfer of ownership to Mr MW the yacht was owned by ACL it was so held as a disguise to conceal from the wife the husband's ownership. 

1. I appreciate that the husband's brother has sworn that ACAPL is wholly owned by ACL of which he is the sole director and the sole shareholder.  However, the husband has sworn that he is a director of both ACL and ACAPL.  Moreover, in the case of alleged disguise or concealment formal ownership of shares may be examined as to whether in truth they are held on trust for another, that is, in this case whether the husband’s brother’s shares in ACL are or may be held on trust for the husband.  The husband’s brother has sworn further that the husband has not contributed or lent money to ACL or to ACAPL and the husband has sworn he has no beneficial interest in either.  However, having regard to the nature of the wife's allegations and the independent evidence of Mr GR and Mr MW, the husband's and his brother’s evidence is under strong suspicion as to its veracity in this regard.

2. Moreover, the documents produced by the Cruising Yacht Club of Australia, comprising the annexure to Ms KN’s affidavit and exhibits 14-26, contain at least one document, exhibit 21, appearing to bear the husband's signature as owner of the yacht and several other documents describing the husband as its owner as at December 2004.  Added to this there is Mr MW’s evidence that in relation to a finance agreement concerning the yacht although in Mr MW’s name as borrower, the husband was fully responsible for all payments and the husband was to have and in fact had sole possession and use of the yacht.  Further, there is the husband's solicitor's file note, 14 January 2005, which at the very least raises the question in the light of Mr MW’s evidence and the Cruising Yacht Club documents whether the husband gave his own solicitors false evidence that Mr MW was the true owner of the yacht.

3. The evidence concerning ownership of the B property is that it was purchased by ACAPL by contract dated 18 February 2004 which was completed in late June 2004.  However, Mr GR has sworn that it was the husband who approached him about the purchase and the husband who presented him with the purchase contract which was completed on the basis of the purchaser providing $100,000 for the discharge of a mortgage on the property and the husband's promise subsequently to provide the balance purchase price by the issue of shares in VI, the fifth respondent, to an equivalent value.

4. In relation to the purchase of the B property by ACAPL I would refer to the evidence and observations already made, in particular Mr GR’s affidavit at pars 8 and 9 as to the husband's use of ACAPL to conceal assets from the wife in the context of the Court proceedings in which the consent property order was made; and the husband's apparent ability to control ACAPL to the extent of causing it to enter into and complete the B property purchase.

5. In their submissions, Counsel did not refer expressly to the two Mercedes motor vehicles the subject of Mr MW’s evidence.  However it ought not be overlooked.  Its effect is that Mr MW is still the registered owner of a Mercedes motor vehicle purchased by the husband in late 2003, upon the same pretence as used in relation to the yacht, which vehicle is and always has been in the husband's possession, with similar pretence in early 2004 in relation to the Prime Mover which from the time of acquisition the husband has had sole use.  There is also the complexity of the document dated 18 February 2006 annexure MCW6 to Mr MW’s affidavit, to which I have referred, by which ACL apparently became the owner of those two vehicles.  However, for present purposes, Mr MW’s evidence strongly suggests concealment of the husband’s initial (and perhaps continuing) beneficial ownership of them.

6. It is plain, in my view, that the wife has a strong case to present at the trial to establish at least two of the four s 79A(1) grounds relied upon by her as against the husband, that is, suppression of evidence by him and the giving of false evidence by him.

7. I will deal separately below with the role of the corporate respondents and the evidence concerning the husband's relationship with them.

8. It is axiomatic however that the wife must show not just a serious question to be tried as to one or some of the s 79A(1) grounds, but a serious question to be tried as to whether by reason of one or some of those grounds at the time the consent property order was made a miscarriage of justice occurred in the sense already explained and as set out in Barker (above) at [120], [122] and [123].

9. Thus, in the s 79A context, the wife must show a nexus between the grounds relied upon and the likelihood of success at the trial in showing, relevantly, that suppression of evidence by the husband or the giving of false evidence by him led the Court into making an order substantially different from the order which it would have made if, relevantly, the suppression of evidence or the giving of false evidence had not occurred, particularly because relatively minor matters of non-disclosure will not lead to that result: Barker at [123], citing Livesey v Jenkins [1985] 1 All ER 106.

10. Critical regard therefore must be given to the question whether, even if the wife at the trial should prove that the husband suppressed evidence or gave false evidence in relation to the yacht, the B property and/or the motor vehicles, a substantially different order may be likely to have been made, which invites consideration of the value the wife received under the consent property order compared with the value she may have received if the husband had not suppressed evidence or given false evidence (as to which I have determined already there is a serious question to be tried).

11. The evidence adduced by consent today, and the further evidence tendered by Mr Bowden today, have the effect that pursuant to par 1 of the consent property order the wife received about $350,000 and other property to which I have already extensively referred earlier in these reasons and need not further set out as well as to the indemnity to which I have referred. Apart from those observations as to the division of property between the parties pursuant to the consent property order, it may be observed, significantly, particularly having regard to the husband's financial statements filed on 25 February 2002 and 11 December 2003 (annexures ALW1 and ALW7 to the wife's affidavit filed on 16 May 2008, showing nil superannuation interests), that the wife, it appears, on any view, received all or most of the value of the pool as known to her and also was relieved of all liabilities.

12. However, in Barker at [69], the Full Court made clear that in considering whether there has been a miscarriage of justice, there is no requirement for the trial judge to make findings as to precise values and (in effect) that it is sufficient to find on the balance of probabilities that the pool at the time of the consent order was significantly undervalued. In Barker, the Full Court dealt with the factual circumstance of a consent order based upon an estimated percentage apportionment, there being no issue that the percentage apportionment was not a fair outcome, but whether having regard to the real value of the pool, in light of the particular orders made, the wife did or did not receive the percentage to which she was entitled: see at [41], [45].

13. In the present case, there is no evidence adduced in this application that the consent property order was based upon any agreed or notional percentage for the husband or the wife, and indeed no such percentage is referred to in the order.  Rather, as observed, it appears that the wife received all or most of the value of the pool as known to her and was relieved of all liabilities.

14. It is true, as Mr Bowden submitted, that there is no evidence as to the amount of value by which the pool may have increased, if at all, if the values of the assets said to have been hidden or concealed had been included in the pool and valued, nor as to the value of encumbrances, if any, on those assets.  Mr MW deposed that the husband borrowed $150,000 as "the purchase price" of the yacht.  However, the yacht already was owned by ACL so it is uncertain what was done by the husband with the $150,000 which Mr MW deposed the husband received from CBFC.  Certainly, it would be surprising if the original cost of the yacht, when ACL purchased it, was as little as $150,000.  The husband and/or ACL have this knowledge and have not disclosed the relevant purchase documents.  In these circumstances, I am entitled to be robust, particularly having regard to the principle in Morrison v Morrison (1995) FLC 92-573 at 81, 671, cited by the Full Court in Barker at [112]:

    The obligation to make a full and frank disclosure is regarded as so crucial to the functioning of this jurisdiction that the deliberate failure by one party to meet that obligation may result in the Court drawing adverse inferences against the non-disclosing party where there is material upon which such inferences can be based.  See Stein and Stein (1986) FLC 91-779, Mezzacappa and Mezzacappa (1987) FLC 91-853; Giunti and Giunti (1986) FLC 91-759.

15. Although the passage cited refers to full and frank disclosure, it is equally applicable, if not more so, to circumstances of alleged suppression of evidence and alleged giving of false evidence. Thus I am able to infer, for the purpose of the wife's case, at least at this interlocutory stage of the proceedings, that it is more likely than not that inclusion in the pool of the assets alleged to have been hidden or concealed by the husband may have been likely to have increased the value of the pool so that at the time the consent property order was made, on the balance of probabilities, the pool significantly was undervalued, there thus being a sufficient nexus shown between the s 79A(1)(a) grounds relied upon by the wife and the likelihood (relevantly) that the husband's alleged suppression of evidence or his alleged giving of false evidence led the Court into making an order substantially different from the order which would have been made if (relevantly) the alleged suppression of evidence or giving of false evidence had not occurred.

16. I am satisfied, thus, that the wife has established a serious question to be tried as to whether a miscarriage of justice occurred by reason of the husband's alleged suppression of evidence and/or alleged giving of false evidence, as to which I have determined already there is a serious question to be tried.

17. I am satisfied also that the serious question to be tried as to whether a miscarriage of justice occurred, as explained, carries with it the further serious question to be tried as to whether there is a sufficient likelihood of success in the wife persuading the Court at the trial that in the exercise of the discretion under s 79A(1) the consent property order should be varied or set aside and, if it be set aside, there be a different order being one potentially more favourable to the wife. In this regard, it is not to the point that the B property has now been sold. The yacht, and the two Mercedes vehicles, on the evidence, are still in the possession of either ACL or the husband. Moreover, the husband, on the evidence, owns four million shares in VI, the fifth respondent, acquired in 2007. The value of those shares is unknown. However, the fact that they were acquired in 2007 does not have the effect that they are immune from a future property order if one ultimately may be made in the exercise of the Court's discretion, for the reason that under a s 79 order the Court may deal with the property of the parties of the marriage or either of them, and for the further reason that there is nothing in the legislation that requires s 79(4)(a),(b) and (c) contributions to be measured only in terms of what either party contributed to the assets of which the parties are presently possessed: Farmer and Bramley (2000) FLC 93-060 at [69] per Kay J.

18. In summary, I am satisfied there is a serious question to be tried as against the husband in respect of the wife’s s 79A(1) case.

More detail as to the AC companies and the V companies

1. I turn now to deal in more detail with the position of the corporate respondents. 

2. Plainly, no case is mounted that they, as opposed to the husband, caused the miscarriage of justice, the wife's allegation of fraud, suppression of evidence, failure to disclose relevant information and the giving of false evidence being directed only to the husband.

3. However, they are sought to be enjoined on the broader basis that the preservation of the status quo in relation to the husband's assets must extend to them to the extent to which a serious question to be tried may be established that each either holds or may hold assets of the husband, or are or may be devices used by him to conceal his assets or are entities in which the husband has or may have beneficial interest and indeed control.

4. In this regard, it is necessary to deal separately with the two AC companies and then the two V companies.  

The AC companies

1. ACL, the third respondent, wholly owns ACAPL, the fourth respondent, whose shares are wholly owned by the husband's brother, who is the second respondent.  The husband says he is a director of ACL and ACAPL, although the husband’s brother says he is the sole director of ACL.  I have referred sufficiently to the evidence concerning the husband's use of ACAPL as his alter ego and for the suppression of evidence concerning at least the B property which the husband told Mr GR was purchased in the name ACAPL so as to be concealed from the wife.

2. This and other evidence establishes a serious question to be tried as to whether other assets, if any, owned by ACAPL similarly are and were as at the date of the consent property order in truth assets of the husband held by ACAPL to disguise his ownership.  It is not to the point that the wife has not been able to demonstrate at this stage other assets owned by ACAPL which may fall into this category, particular in light of the very strong evidence to which I have referred as to the husband's past concealment and non‑disclosure.

3. There is evidence that the husband has the ability to use ACL's assets for his own purposes.  First, in relation to the B property, the husband deposed that ACL traded shares it had in VI to make up part of the purchase price, although the property was not in ACL's name.  Secondly, Mr MW’s annexure MCW6 shows the husband using ACL's assets in relation to his transaction with Mr MW to transfer, according to Mr MW, the husband's two motor vehicles from Mr MW’s ownership to ACL's ownership against the background of Mr MW also having deposed that the original purchase by the husband in Mr MW’s name expressly was to conceal these two assets from the wife.

4. As mentioned, ACAPL is wholly owned by ACL. The husband says he is a director of each, although the husband’s brother says he is the sole director of ACL.  It is not known as yet whether the husband (or the second respondent) is the effective controller of ACL (as perhaps indicated by the two matters to which I have just referred) and thus also the effective controller of ACAPL.  What is plain, however, is that unless restrained ACL as the owner of all of the shares in ACAPL has the ability to dispose of them.  The husband's affairs, on the evidence, are bound up with ACL as much as with ACAPL and there is thus a serious question to be tried as to the extent of the husband's control of ACL as a director and the extent to which its control of ACAPL may have facilitated concealment of the husband's assets as at the date of the consent property order as part of a two tier concealment device.

5. I have referred already to exhibit 14 showing as “Owner/Charterer” of the yacht “[AC Ltd]/[the husband]” and to the evidence of Mr GR and Mr MW of promises by the husband that ACL (there called ACP) would "trade" or "sell" ACL shares it held in VI for “property”.

The V companies

1. VI, the fifth respondent, is a public company registered in the United States.  The number and value of issued shares is not in evidence.  It is in evidence however that the husband holds four million shares and that the husband and the husband's brother are two of four directors of it.  Moreover, there is evidence that the husband has at least represented to others that he has the ability to control the issue or allotment of shares in VI: see the evidence of Mr GR and Mr MW referred to already, in the context of the promise of the issue of shares in VI to Mr MW for his assumption of risk in relation to the Mercedes motor vehicle transaction; the MCW6 document showing the husband's ability to "sell" ACL's shares in VI to Mr MW; and the promise of the "trade" of ACL's shares in VI as part of the purchase price by ACAPL of the B property.

2. It is one thing to restrain the husband from dealing with his shares in VI, but another thing to restrain VI from issuing, allocating or trading its shares, particularly as it is a public company.  However, the concern of the wife is that unless restrained VI would be able, for example, to issue and allot shares to dilute the value of the husband's shares, particularly as he is a director of VI and as yet the extent of his control by way of the value of his shareholding or otherwise is uncertain.  There is therefore a serious question to be tried as to the husband’s involvement with, interest in and possibly the extent of his control of VI as at the date of the consent property order.

3. The position as to VPL, the sixth respondent, is less strong.  I have referred to examples of the use of its premises and facilities by the husband for his own purposes.  This alone is not strong evidence of any alter ego use by the husband of VPL.  Moreover, there is no evidence that the husband has shares in VPL (the evidence being that it is wholly owned by VI), nor that the husband has used it as a vehicle to conceal assets. Indeed, there is no evidence as to what, if any, assets VPL may own.  There is thus no present basis in my view to restrain VPL from issuing or allotting shares.  There is no shareholder interest of the husband to dilute.

4. In my view, therefore, unless strong evidence in the future can be brought in I am unable to conclude that there is any serious question to be tried concerning VPL, its assets or the husband's directorship of it.

5. In short, the wife's case in relation to VPL, at best, is that the husband did not disclose his directorship.  His obligation was to disclose his assets not his directorships. 

Risk of dissipation

1. I accept Mr Travis's submissions, which I need not set out again, as to the history of the matter showing the real risk of the husband dissipating his assets.  In that context, the restraint sought against him is shown to be necessary, and no wider than necessary, by objective evidence, and objective assessment of the evidence, to avoid the risk of the defeat of any judgment which the wife may obtain against him. In particular, the evidence to which I have referred sufficiently already shows a history of the husband having the propensity to “shift assets”, and to conceal them from the wife in the earlier property proceedings so that the propensity has "already manifested".  In this regard, the case squarely fits the observations of Kirby J in Cardisle at [122], referred to in Waugh at [44].

2. Further, although the focus of the risk of dissipation must be on the husband, the serious questions to be tried in relation to ACL, ACAPL and VI, in particular as to the extent of the husband's ability to control them, has the effect that the real risk of dissipation must extend to the restraints the wife seeks against those entities.  The particular relief sought in relation to those three entities, according to the document provided by Mr Travis, to which I have referred, is that the husband and they be restrained from disposing of, selling, mortgaging, encumbering or in any way dealing with any shares owned or beneficially held by them and from issuing or causing to be issued or otherwise dealing in or with shares in them without the prior written consent of the wife or the leave of the Court.

1. I am satisfied, having regard to the proposed formulation of those orders, that they are necessary, and no wider than necessary, for the wife's asset preservation purpose, and note in particular that expressly the orders allow them to issue or deal with shares in them by the consent of the wife or with the leave of the Court.

2. I am conscious, as made clear in the authorities, and as put by Mr Bowden, that the remedy of a Mareva order is a drastic remedy not to be granted lightly.  However, I am satisfied that the remedy is necessary, as explained, to prevent the abuse or frustration of the Court's process in relation to a matter within its jurisdiction.

3. Subject, therefore, to the consideration of the balance of convenience, the evidence shows an urgent need for the restraints sought.

Balance of convenience

1. As made clear in Beecham (and see also O'Neill at [65]) the test is whether the inconvenience or injury which the wife would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the husband and ACL, ACAPL and VI would suffer if an injunction were granted.

2. I have referred to Mr Travis's submissions to the effect that if the injunctions are not continued, given the evidence supporting a real risk of dissipation of assets, the injury to the wife outweighs any injury to the husband because the wife would suffer the Court process being wasted in that even if she succeeded she would be defeated.

3. Mr Bowden, according to my notes, as I have mentioned, did not expressly address balance of convenience. However, I take into account that it is implicit in the husband’s, ACL’s, ACAPL’s and VI’s case that the balance of convenience does not favour the wife.  Further, I take into account the evidence of Mr ME, the Chief Executive Officer of VI, in his affidavit filed on 19 May 2008:

   28.The existence of the Order of 24 April 2008 if it was allowed to continue would in my opinion severely impact on the ability of the Fifth and Sixth Respondents to continue to operate in a normal and effective manner. In particular, they are involved in the development and marketing of a product called ‘[P Product]’.  A major order has recently been obtained in excess of $10million and [P Product] needs to be made available within the coming months for the buyer.  Accordingly there is a need for the Fifth and Sixth Respondents to continue to raise money by way of issuing shares and loans to ensure that this objective is achieved and if the Order remains in existence then this would be a barrier causing potential investors and potential lenders to reframe (sic) from dealing with the Fifth and Sixth Respondents.

4. There is similar evidence by the husband in his affidavit filed on 19 May 2008:

   27.The Fifth Respondent is in the process of developing its [P] products for the market place and has recently announced receipt of an Order for product to the value of $10.8million dollars.  It is important for the shareholders of the Fifth Respondent that it continues to develop and grow its business as a matter of urgency.

5. However, the limited extent of the restraint sought against VI ought not unduly interfere with its business and operations in that it is couched in terms that allow it to seek the consent of the wife or the leave of the Court if, for example, it seeks to raise money by the further issue of shares, whereas, having regard to the serious questions to be tried the wife has a legitimate interest in seeking to avoid the dilution of the value of the husband's VI shares, these two matters requiring careful balance.

6. In my view, having regard to all of the matters to which I have referred, the balance of convenience favours the grant of the injunctions in the terms sought,  for the reasons put by Mr Travis, with minor changes which I will suggest.

The wife's undertaking

1. As observed by Kirby J in Cardisle at [122], referred to in Waugh at [44], an undertaking as to damages is essential in relation to Mareva orders such that "No such relief should be contemplated without the provision of an undertaking as to damages", citing National Australia Bank Ltd v Bond Brewing Holdings Ltd (1990) 169 CLR 271 at 277.

2. However, whilst an undertaking as to damages may be regarded as mandatory, the effect of its worth is a matter to be taken into account in the exercise of the discretion to grant or refuse the injunctions sought.

3. Further, if all other requirements for the grant of the injunctions are present, in some circumstances it would be unreasonable to refuse relief because of impecuniosity. See Blueseas Investments (above) at [57], to the effect that in family law cases, the inability to give a worthwhile undertaking ought not prevent injunctions being made in cases where otherwise all of the requirements for its making are made out.

Decision

1. The relief the wife seeks is discretionary.

2. Having considered all of the evidence, and all of the submissions, I have determined that there are serious questions to be tried, as explained, that there is a real risk as to dissipation of assets, as explained, and that the balance of convenience favours the grant of the injunctions sought, with minor modifications, except as against the sixth respondent, as explained.

3. The proper exercise of my discretion therefore is to grant the injunctions sought by the wife against the husband and the third, fourth and fifth respondents, with minor modifications, as explained.

4. They will be the orders, and I will include an order that costs be reserved.

I certify that the preceding one hundred and fifty (150) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O'Reilly

Associate: 

Date: