Yates & Wilcox & Ors

[2016] FamCA 518

FAMILY COURT OF AUSTRALIA

YATES & WILCOX AND ORS [2016] FamCA 518

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the husband seeks an interim property settlement – Where there are numerous issues in dispute between the parties – Where the Court is unable to determine the size and extent of the property pool – Where the Court is unable to determine whether an interim property settlement in favour of the husband can be accommodated at final hearing – Where the Court is unable to find that the interests of justice require an interim property settlement in favour of the husband – Application dismissed.

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Injunctions – Where both parties seek various injunctions restraining the other – Where the Court finds there is a real risk that both parties will engage in conduct to deplete the property pool – Whether the wife should be restrained in dealing with the proceeds of sale of the former matrimonial home – Whether the husband should be restrained from making demands for payment from one of the parties’ corporate entities, a partnership and the wife – Whether the husband should be restrained from taking action in relation to a Statutory Demand issued by him to one of the parties’ corporate entities – Whether the husband should be restrained from seeking to terminate a partnership –  Whether the husband should be restrained as a director of the parties’ corporate entities – Orders made.

FAMILY LAW – PRACTICE AND PROCEDURE – Disclosure – Where both parties make allegations of inadequate financial disclosure by the other – Where orders have been previously made for the provision of financial disclosure – Orders made for the parties to each file and serve an affidavit in relation to documents produced or not produced by them.

Family Law Act 1975 (Cth) ss 114(3)
Family Law Rules 2004 (Cth) rr 13.07, 13.22

Hughes & Hughes [2014] FamCA 12
K & K [2008] FamCA 957
Kelleher & Anderson [2007] FamCA 137
Lederer & Hunt (2007) FLC 93-311
Martiniello and Martiniello (1981) FLC 91-050
Medlow & Medlow (2016) FLC 93-692
Menotti & Lamb [2014] FamCA 518
Mullen and De Bry (2006) FLC 93-293
Sieling and Sieling (1979) FLC 90-627
Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466
Woodgate (Trustee) v Northop Hall Pty Ltd [2016] FCA 370

APPLICANT: Ms Yates

1^st RESPONDENT: Mr Wilcox

2^nd RESPONDENT: B Bank

3^rd RESPONDENT: Wilcox Consolidated (Holdings) Pty Ltd

FILE NUMBER: SYC 7648 of 2014

DATE DELIVERED: 28 June 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: McClelland J

HEARING DATE: 19 February 2016,  3 and 11 May 2016 and by way of written submissions

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lawrence

SOLICITOR FOR THE APPLICANT: Etheringtons Solicitors

COUNSEL FOR THE 1^ST RESPONDENT: Mr Bell

SOLICITOR FOR THE 1^ST RESPONDENT: Horowitz & Bilinsky

FOR THE 2^ND  RESPONDENT: No appearance

FOR THE 3^RD  RESPONDENT: No appearance

Orders pending further order

The Suburb D unit

1. Subject to Order (2) below, the wife is at liberty to apply the sum of $109 910 from the trust account in the name of Paul Etherington Solicitor to pay stamp duty on the contract for the purchase of unit C Street, Suburb D (“the Suburb D unit”).

2. The husband is at liberty to lodge a caveat over the Suburb D unit, being the property situate and known as unit … at C Street, Suburb D being Lot … in an unregistered strata plan which is part of the land comprised in Certificates of Title Auto-Consol … and Folio Identifier ...

3. The wife is restrained from doing any act or thing to prevent the husband from lodging a caveat, pursuant to Order (2) above, over the interest of the wife in the Suburb D unit and from taking any steps to have such caveats removed, except with the written consent of the husband or by Order of the Court.

4. The wife is otherwise restrained by injunction from selling, mortgaging, assigning, alienating or otherwise encumbering the Suburb D unit, except with the written consent of the husband or by Order of the Court.

Injunctions

1. Subject to the wife providing the husband with an Undertaking as to Damages, the husband is restrained by injunction from resigning as a director of Wilcox Consolidated (Holdings) Pty Limited (ACN …). 

2. Subject to the wife providing the husband with an Undertaking as to Damages, the husband is restrained by injunction from terminating or seeking to terminate the Wilcox Yates Partnership.

3. The Orders of 11 May 2016 and 3 May 2016 are otherwise to continue.

Disclosure

1. Within twenty-one (21) days, the parties are to each file and serve an affidavit that:

   (a)Identifies the document or category of documents that have been provided to the other party pursuant to each parties obligation of disclosure;

   (b)       To the extent that either party has not provided documentation as sought      by the other party, states:

   (i)that the specified document or documents do not exist or has never existed;

   (ii)the circumstances in which a specified document ceased to exist or passed out of the position or control of the party; and

   (iii)why any document or documents that do exist have not been provided to the other party.

   (c)       Without limiting Orders 8(a) and 8(b) above, those documents should          include documents detailing the parties’ respective interests in and/or  control of the following entities:

   (i)Wilcox Yates Pty Ltd;

   (ii)Wilcox Consolidated (Holdings) Pty Ltd;

   (iii)E1 Pty Ltd;

   (iv)E2 Pty Ltd;

   (v)E3 Pty Ltd;

   (vi)F Pty Ltd;

   (vii)G1 Pty Ltd;

   (viii)G2 Pty Ltd;

   (ix)H Pty Ltd;

   (x)I Pty Ltd;

   (xi)J Pty Ltd;

   (xii)K Pty Ltd;

   (xiii)Wilcox Yates Family Trust;

   (xiv)Wilcox Yates Partnership;

   (xv)I Partnership; and

   (xvi)L Superannuation Fund.

Interim applications

1. All Applications in a Case, and subsequently amended Applications in a Case, filed on or before 11 May 2016 are otherwise dismissed.

2. All Responses to an Application in a Case, and subsequently amended Responses to an Application in a Case, filed on or before 11 May 2016 are otherwise dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7648 of 2014

Ms Yates

Applicant

And

Mr Wilcox

1^st Respondent

And

B Bank

2^nd Respondent

And

Wilcox Consolidated (Holdings) Pty Ltd

3^rd Respondent

REASONS FOR JUDGMENT

Introduction

1. This matter concerns competing applications for interim orders. The applications have been made in the context where the parties separated on 11 October 2014 after fourteen years of marriage. Since the Initiating Application was filed by the wife on 5 December 2014, there have been thirteen Applications in a Case or Amended Applications in a Case filed for the purpose of seeking interim orders. There have been at least ten occasions when orders have been made by a judge of the Court; albeit, on some occasions, those orders have been made by consent.

2. The parties have filed voluminous material in this matter. Subsequent affidavits have referred to earlier affidavits filed. Among the annexures to the affidavits of the parties in these proceedings is voluminous correspondence between the parties’ solicitors. Much of that correspondence is self-serving and of little evidentiary value.

3. Proceedings have also been commenced in the Supreme Court of New South Wales. Those proceedings have now been transferred to this Court. Despite the frequency with which this matter has returned to the Court, the parties appear to be no closer to resolving the matters in dispute between them, let alone achieving a holding pattern that accommodates the interests of both parties until such time as the substantive issues are dealt with at final hearing.

4. Both parties have incurred considerable legal costs. If the present trajectory of litigation continues, the parties will find that they are in dispute over an ever decreasing property pool.

5. In short, the time for a common sense approach has well and truly arrived.

Orders sought

1. In light of the multiplicity of interim applications that have been filed in these proceedings, it was requested that the parties each file and serve a consolidated Minute of Proposed Orders in respect to all outstanding interim issues raised by the parties in their respective applications.

2. The orders sought by Ms Yates (“the wife”) were marked as Exhibit 17 in the proceedings and are as follows:

   A.     In relation to the Amended Application in a Case filed by the Husband on 5 June 2015:

   (1)   Within 14 days:

   (a)The Husband shall provide disclosure as sought in the letter dated 7 December 2015 from Etheringtons Solicitors to Horowitz & Bilinsky Solicitors;

   (b)If and to the extent the Husband does not provide disclosure of each specified document as set out in subparagraph (a), the Husband shall file and serve an affidavit stating:

   (i)  that a specified document does not exist or has never existed; or

   (ii)  the circumstances in which a specified document ceased to exist or passed out of the possession or control of the Husband.

   (2)Until further order, the Husband is restrained by injunction from making any demands for payment or taking any other action in respect of any sums said to be owed to him by:

   1.      [Wilcox] Consolidated (Holdings) Pty Limited (A.C.N. …);

   2.      The [Wilcox Yates] Partnership;

   3.      The Wife.

   (3)Until further order, the Husband is restrained by injunction from taking any action, including making any application to a Court other than the Family Court of Australia in these proceedings, in relation to the Statutory Demand dated 17 July 2015 purportedly issued by the Husband to [Wilcox] Consolidated (Holdings) Pty Limited (A.C.N. …) under section 459E of the Corporations Act 2001 (Cth).

   (4)Until further order, the Husband is restrained by injunction from selling, transferring or otherwise disposing of or dealing with any shares or other interest, beneficial or legal, he has in any company, trust, superannuation fund or partnership unless agreed to in writing by the Wife.

   (5)Until further order, the Husband is restrained from resigning or from exercising or seeking to exercise any powers, duties or authority as director or secretary of [Wilcox] Consolidated (Holdings) Pty Limited (A.C.N. …).

   (6)Until further order, the Husband is restrained from terminating or seeking to terminate the [Wilcox Yates] Partnership. 

   (7)The Amended Application in a Case filed on 5 June 2015 is otherwise dismissed.

   B.     In relation to the Application in a Case filed by the Husband on 24 December 2015:

   (8)The Application in a Case filed on 24 December 2015 is dismissed.

   (9)The Wife be at liberty to apply $109,000 from the Controlled Monies Account to pay Stamp Duty on the contract for the purchase of the [Suburb D] property.

   C.     In relation to the Application in a Case filed by the Wife on 7 January 2016:

   (10)The Husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authority as director, officer or representative of [Wilcox-Yates] Pty Ltd (A.C.N. …).

   (11)The Husband is restrained by injunction from exercising or seeking to exercise any powers, duties or functions as a member of the Committee of Management of the [I Partnership].

   D.     Further and procedural orders:

   (12)If a party seeks orders in relation to costs of any of the above Applications in a Case, the party is to file and serve within 14 days of these Orders, a minute of the costs orders sought by the party together with written submissions and any affidavit in support and the other party is to file and serve within a further 14 days, written submissions in response and any affidavit in support.  The question of costs (if any) shall be dealt with in Chambers.  

   (13)In the event that either party refuses or neglects to execute any deed, instrument or document that may be considered necessary, the Registrar of the Family Court of Australia be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed, instrument or document in the name of such party and to do all acts and things necessary to give validity to the operation of the deed, instrument or document. 

   (14)The parties are at liberty to furnish sealed copies of these Orders on the Second Respondent and non-parties as is necessary to give effect to the force and effect of these Orders.

   (15)The parties to have liberty to apply to the List Clerk to restore the matter to the Judicial Duty List on seven (7) days’ notice in relation to these Orders. 

3. Exhibit 17 also contained an “Addendum to short Minute of Orders proposed by the wife”. It included the following orders sought by the wife:

   (11A) The Husband shall comply with all reasonable requests made by the Wife from time to time for information and documents in relation to the I Partnership and its related entities and activities within 3 days of any such requests.

   (11B) The Husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authority as a director, officer or representative of [I Pty Ltd] (…), without the prior written consent of the Wife.

4. The orders sought by Mr Mr Wilcox (“the husband”) were marked as Exhibit 16 in the proceedings and are as follows:

   1.         Direct that within 14 days the Wife shall provide disclosure as sought in the letter dated 14 April, 2016 from Horowitz & Bilinsky Solicitors to Etheringtons Solicitors.

   2.         If the Wife cannot provide such disclosure, then within 14 days she shall file and serve an affidavit identifying and particularising particulars as to:

   i.any document which does not exist now or has not existed as the case may be; or

   ii.the circumstances in which such document ceased to exist or is no longer in the Wife’s possession or control.

   3.          Until further order, the Wife be restrained by injunction from drawing down or taking  steps (including giving notice) to draw down funds from the Controlled Monies Account

   4. Direct the Wife to file and serve within 7 days an Affidavit setting out her provision of Undertaking as to damages and compliance with the Rules.

   5.         Direct the Wife to file and serve within 14 days an Affidavit setting out the basis on which she can meet such Undertaking as to Damages including to the husband and all affected parties or entities including PROVIDED further the Wife has first provided to the satisfaction of the Court and the husband has been fully heard as to evidence of her capacity to meet any such damages

   6.         Without limiting the foregoing DIRECT the Applicant Wife to provide to the Respondent husband within 14 days an accounting of monies expended from the controlled monies account (being the proceeds of sale of the former matrimonial home)

   7.         Direct that within 14 days Applicant Wife provide particularised responses  to the letter from Horowitz & Bilinsky to Etheringtons dated 14 April, 2016 and relevant supporting material

   8.         Direct the proceedings transferred from the Supreme Court under Supreme Court file reference number … be listed for directions on _____, 2016.

   9.         Direct the Respondent file and serve any evidence in response to the Applicant’s Application in a Case, as filed on 7 January, 2016 by 27 May, 2016.

   10.       Direct the applicant file and serve any evidence in reply by 7 June, 2016.

   Further or alternately

   11.       The Wife’s Application in a Case filed 7 January 2016 be dismissed. 

   12.       Alternately in the event the Court grants any injunction sought by the Wife (including any amendments sought by the Wife or variations by the Court) it be;

   i.Stayed for 28 days; and

   ii.Be and remain conditional on the Wife providing and the Court accepting her Undertaking as to Damages including the husband and all affected parties or entities including PROVIDED the Wife has first provided to the satisfaction of the Court and the husband has been fully heard as to evidence of her capacity to meet any such damages.

   13.       That the wife be restrained from dealing with the sale proceeds from the sale of [L Street, Suburb D] as held in the controlled monies account with B Bank in the name of the Applicant’s solicitor as trustee unless the First Respondent consents thereto.

   14.       That the wife be restrained from withdrawing the sum of $109,910 from the controlled monies account in the name of Paul Etherington.

   15.       That the Second Respondent (B Bank) be restrained from allowing the sum of $109,910 or any other amount to be withdrawn from a controlled monies account in the name of Paul Etherington.

   16.       That the wife shall within 48 hours do all things and sign all necessary documents and cause all instructions to be given to pay the sum of $674,020 to the husband

   17. In the event of the wife refuses or neglects to execute any deed, instrument or document that may be considered necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975 to execute such deed, instrument or document in the name of the wife and to do all acts and things necessary to give validity to the operation of the deed, instrument or document.

Factual contentions

1. In interim proceedings the Court is not in a position to make findings of fact other than in circumstances where those facts are agreed, are supported by objective evidence, or, for the purpose of a particular application, a party is prepared to concede the facts asserted by the other party. With respect to the parties, they each failed to appreciate these limitations with the consequence that a substantial amount of the material filed has been irrelevant or superfluous to the role of the Court in exercising its discretion in these interim proceedings.

2. Nevertheless, to assist the parties in identifying the issues in dispute between them, as well as the impact each party’s conduct is having on the other and the potential impact it will have on the property pool available for distribution, I have spent some considerable time setting out the relevant facts and, where not agreed, the contentions of each of the parties. These are as follows:

   oThe husband was born in 1956 and is currently aged 59.

   oThe wife was born in 1958 and is currently aged 57.

   oIn or about 1983 the husband formed a company, E1 Pty Ltd, with Mr M.

   oIn 1992 the husband and Mr M formed two further companies - E3 Pty Ltd and E2 Pty Ltd. The three companies thereafter became known as “the E Group”.

   oIn 1992 Wilcox Yates Consolidated (Holdings) Pty Ltd (“Wilcox Consolidated”) was also formed.

   oIn March 1996 the husband bought Mr M’s interests in the E Group and became its sole director and shareholder.

   oIn 1997 the parties met through mutual friends. The husband asserts that the wife was then unemployed, having recently been made redundant. This is denied by the wife.

   oAt some point between 1998 and 1999 the parties commenced their relationship. On the wife’s account the relationship commenced in approximately November 1999.

   oIn May 1999 a property was purchased at L Street, Suburb D (“the L property”) in the wife’s sole name. The wife asserts that the purchase was made prior to the parties commencing their relationship. The husband asserts that he was involved in the purchase of the L property and that the property was purchased in the wife’s name in order to quarantine it from possible claims against the E Group.

   oBetween 1999 and 2014 the husband asserts that the E Group undertook substantial work to modify and renovate the L property. The husband asserts that the work was provided to the parties at no cost or substantially under cost. The wife asserts that the work was paid for at commercial rates.

   oIn November 1999 the boat “N” was purchased in the wife’s sole name. Again the wife asserts that she was the sole purchaser. The husband asserts that the receipt for the purchase was in his name and that he, through the E Group, subsequently undertook substantial renovations to the boat.

   oIn 2001 the wife asserts the parties commenced cohabitation at the L property.

   oIn 2002 the parties were married. This was the second marriage for each of the parties.

   oIn approximately 2002 the Wilcox Yates Partnership was formed. No written Partnership Agreement was entered into by the parties.

   oOn 28 August 2003 K Pty Ltd was formed by the parties with Mr O (“Mr O”) and Mr P. K Pty Ltd was created to facilitate a purchase of fifty-seven hectares of land for residential development. The parties, through Wilcox-Yates Pty Ltd, hold a one third interest.

   oOn 20 October 2003 Wilcox-Yates Pty Ltd (“Wilcox-Yates”) was registered with the parties as its joint directors and shareholders.

   oIn July 2006 the wife asserts that she entered into a portfolio facility with the B Bank (“the B Bank portfolio facility”) with a limit at that time of $2.2 million.

   oIn March 2008 the business formerly known as “Q” and now known as “R” (“Q”) was formed. The business is owned by Wilcox Consolidated. The husband asserts that the establishment of the business was initially for the purpose of providing financial assistance to the wife’s brother, Mr S.

   oIn January 2009 the husband alleges that the wife ceased formal employment. This is denied by the wife, who asserts that she managed the private and business dealings of the parties throughout their marriage and subsequent to their separation.

   oIn March 2009 the husband inherited $1 761 276.41 from his late mother’s estate. The husband deposed that those funds were distributed on or about 6 March 2009 as follows:

   §     $906 000 to “Wilcox Yates Account ending …”;

   §     $255 000 to the L Superannuation Fund;

   §     $600 000 to K as a formal loan at 10 per cent p.a. from Mr T      Wilcox as directed by Mr U Accountant.

   oThe wife acknowledges that the B Bank portfolio facility benefited from the husband’s inheritance in the sum of $599 276.41.

   oBy Deed dated 11 June 2010 the Wilcox Yates Family Trust was established with Wilcox-Yates as its trustee company.  The beneficiaries of the Wilcox Yates Family Trust include the parties and their respective children from previous marriages.  

   oOn 15 June 2010 Wilcox-Yates as trustee for the Wilcox Yates Family Trust and W Pty Ltd as trustee for the X Trust entered into a Partnership Agreement forming the I Partnership (“the IP”) for the development of land known as Y Street, Z Town, Victoria.

   oThe husband alleges that during the course of 2010, the wife caused a payment to be made to her brother, Mr AA, in the sum of $62 000.

   oOn 29 August 2011 the wife’s other brother, Mr S, was appointed as a director of Wilcox Consolidated. The wife alleges that since that time the husband has had very little involvement with Wilcox Consolidated, despite remaining a director.

   oThe wife alleges that in October 2012 the B Bank portfolio facility was extended for a third time to a limit of $3.96 million. The security for the extension was registered over the L property and a property subsequently owned by the Wilcox Yates Partnership. One of the E Group companies also provided a company guarantee to the B Bank.

   oThe wife alleges that as a result of the extension of the B Bank portfolio facility, the husband was subsequently given access to her B Bank account no…. (“B Bank account ending in ...”) on the basis that he agreed to make regular monthly contributions to support the household.

   oThe wife asserts that in January 2013, the husband agreed to start making contributions to the B Bank portfolio facility but she asserts that the payments were “spasmodic” and recorded as loans from the husband’s E Group companies to the wife.

   oThe wife alleges that in January 2014 she discovered four payments totalling $900 000 had been made from the IP to the husband’s personal bank account. The wife asserts that the payments should have been made to the joint account for the Wilcox Yates Family Trust as a partner in the IP.

   oThe wife alleges that she subsequently undertook further investigations and found other payments that had been made by the husband to one of the E Group companies. As a result of those discoveries, the wife says she instructed a forensic accountant to investigate the transactions. Whilst the husband says he agreed to the preparation of the report by the accountant, he alleges that the report subsequently prepared was “biased in the extreme and incorrect in [its] findings”.

   oOn 28 April 2014, the partners of the IP entered into a Variation of Partnership Agreement forming the IB Partnership (“the IB”), in relation to the development of 2 Y Street, Z Town, Victoria.

   oThat day I Pty Ltd and the partners of the IB also entered into a Deed of Trust for the purchase of 2 Y Street, Z Town, Victoria. The husband and Mr O are joint directors and shareholders of I Pty Ltd, which is also bare trustee for the IB.

   oOn 30 July 2014 the partners entered into a further Variation of Partnership Agreement changing the name of the partnership from the IB to I Partnership (“the IP”).

   oClause 5 of the Variation of Partnership Agreement entered into on 28 April 2014 also established the Committee of Management for, what is now known as, the IP. The husband is the representative for Wilcox-Yates on the Committee. The parties are in dispute, however, as to whether his appointment to the Committee was made with the consent of the wife.

   oThe parties agree that both parties are beneficiaries to the Wilcox Yates Family Trust and that the financial obligations to the IP of Wilcox-Yates (as trustee for the Wilcox Yates Family Trust) are ultimately a joint responsibility of the parties.

   oOn 8 September 2014 the parties became joint appointors of the Wilcox Yates Family Trust.

   oBetween September 2014 and May 2015, the husband alleges that the wife took “$1.54 million for her personal use” from accounts associated with Wilcox-Yates.

   oIn early October 2014 the wife spent a week in a health retreat in preparation for anticipated surgery.

   oOn 11 October 2014 the parties separated.

   oThe wife asserts that on 10 November 2014 she paid the husband a first of four monthly payments of $10 000 and subsequently made five monthly payments of $5540 to the husband pursuant to orders made by consent on 8 December 2014.

   oThe wife alleges that the period from 29 September 2014 until 17 November 2014 the husband withdrew the following amounts from the B Bank account ending in ...:

   §$8000 in cash withdrawals;

   §$850 to his personal trainer;

   §$41 387 to Australian Taxation Office on behalf of his companies;

   §$4985 to the Australian Tax Office for his personal taxation liability;

   §$10 852 to his personal American Express credit card; and

   §$22 922.34 to his Citibank credit card.

   oThe wife further alleges that on 27 August 2014 the husband paid the amount of $61 266 from the B Bank account ending in ... to the Australian Tax Office.

   oOn 17 November 2014 the husband was, at the request of the wife, removed as a signatory to the B Bank account ending in .... There are competing allegations as to the effect of the removal of the husband’s access on the parties’ ability to meet their financial obligations in respect of Wilcox-Yates, the IP and the L Superannuation Fund.

   oOn 19 November 2014 the wife exchanged contracts to purchase a unit off the plan at C Street, Suburb D (“the Suburb D unit”) for $2.26 million.

   oOn 20 November 2014 the husband was admitted to hospital for heart surgery.

   oThe husband asserts that in November 2014 the wife accessed and transferred in excess of $400 000 out of an account in their joint names. The husband asserts that the wife lent, by way of director’s loans, an amount in excess of $270 000 to Q.

   oThe wife asserts that on 4 December 2014 she became aware that the husband had transferred $1 million from an account in their joint names into an account solely in the husband’s name. The transfer allegedly placed the account in deficit of over $700 000.

   oOn 5 December 2014 the wife asserts that the husband transferred an additional sum of $10 000 from an account of Wilcox-Yates to an account in his sole name.

   oOn that same day, the wife filed her Initiating Application commencing these proceedings.

   oOn 8 December 2014, orders were made, by consent, restraining the parties by injunction from withdrawing, transferring or drawing down on various bank accounts in their individual or joint names.  

   oFollowing the making of the consent orders, the wife opened new bank accounts with the Commonwealth Bank of Australia. The wife asserts that she advised the husband about these new accounts on 13 January 2015 as well as the fact that they related to the business operations of Q.

   oOn 21 January 2015 the wife alleges that the husband accessed these Commonwealth Bank accounts without her authority and transferred the sum of $76 000 into his personal account. The wife asserts this left a credit balance of $5352 in the operating account of Q, thereby jeopardising the business’ solvency.

   oOn 28 January 2015 the Committee of Management for the IP appointed a company of the E Group as Project Manager. By letter dated same, sent to the husband as director, Mr O advised on behalf of the Committee that the terms of the appointment included:

   §A monthly retainer fixed at $5000 (plus GST) per month backdated as from 1 July 2014;

   §The retainer period being from 1 July 2014 until the commencement of business;

   §The retainer will increased to $15 000 (plus GST) per month upon the commencement of business;

   §An increase of the retainer by 5 per cent as from 1 July each year thereafter for the life of the project; and

   §Reimbursement of all reasonable travel expenses, e.g. car parking, car rental/insurance, meals and other necessary out-of-pocket expenses.

   oOn 28 January 2015 the Committee also advised BB Pty Ltd – a company of which Mr O is a director – that it had been appointed as Project Consultant.  By letter dated same, the husband advised on behalf of the Committee that the appointment as Project Consultant was to provide finance and administration services. The terms of appointment were also outlined and were identical to that of the Project Manager.

   oThe wife alleges that neither herself, nor Wilcox-Yates as a partner in the IP, had been informed about the appointments of a Project Manager and Project Consultant by the Committee. The husband asserts that both appointments were authorised and appropriate.

   oOn 3 February 2015 the husband’s solicitor sought an undertaking from the wife to preserve the proceeds of sale of the L property pending resolution of the proceedings or further orders of the Court.

   oOn 12 February 2015 contracts were exchanged for the sale of the L property.

   oOn 27 February 2015 Wilcox-Yates as trustee for Wilcox Yates Family Trust was served by the solicitors for the IP with a Notice of Breach for the sum of $80 000. The husband asserts this breach occurred due to the wife’s failure to sign transfer forms to transfer funds in accordance with the obligations of Wilcox-Yates under the Partnership Agreement.

   oOn 9 March 2015 the parties attended a meeting at the office of the wife’s solicitors. The husband was self-represented at the time. The parties give conflicting evidence as to what occurred at the meeting and the terms of the agreement said to have been reached between them. The husband alleges that he was misled by the wife and her solicitor.

   oOn 11 March 2015 the matter was listed for hearing before Rees J. The husband appeared in person whilst the wife was represented by counsel. The parties entered into consent orders and directions. These orders and directions had been the subject of discussion between the parties at the meeting on 9 March 2015. The orders restrained the husband from dealing with the Commonwealth Bank account set up by the wife for the operation of Q. The husband was also ordered to return the sums of $1 million and $10 000 which he is said to have previously transferred out of joint accounts. The orders further facilitated various payments to be made to and from the L Superannuation Fund.

   oOn 13 March 2015 the husband’s solicitors sought confirmation that the wife would not be able to draw down on the relevant B Bank account to which the husband was required to transfer $1 million into pursuant to the orders made on 11 March 2015.On 26 March 2015 the Notice of Breach was rectified by Wilcox-Yates with payment of the sum of $80 000 to the IP.

   oOn 30 March 2015 further consent orders were made which inter alia provided for the wife to deposit the net proceeds of sale from the L property into a controlled monies account. The wife was also restrained from dealing with the proceeds except where she had provided twenty-eight days written notice to the husband.

   oOn 1 April 2015 the wife says that, pursuant to the consent orders of 30 March 2015, she paid to the husband an amount of $165 000. This was in addition to an amount of $11 000 transferred to the husband by the wife on 22 January 2015.

   oOn 5 June 2015, the husband sent an email to the wife enclosing a formal notice to Wilcox Consolidated seeking repayment of an alleged director’s loan of $440 000.  

   oOn 15 June 2015 settlement occurred in respect to the sale of the L property. From the net proceeds of sale the sum of $5 022 407.15 was paid off the B Bank portfolio facility. The balance of $2 542 684 was placed in the controlled monies account, pursuant to the orders of 30 March 2015.

   oOn 22 June 2015 the husband sent an email enclosing what the wife described as a “purported resignation” as director and secretary of Wilcox Consolidated. The wife asserts the “resignation” has not been accepted by Wilcox Consolidated nor presented to ASIC. This is possibly due to the effect of the orders made on 11 March 2015, which restrained the husband by injunction from “exercising or seeking to exercise any powers, duties or authority as a director” of Wilcox Consolidated.

   oOn the same day, the husband also emailed the wife enclosing what the wife described as a “purported Notice under the Partnership Act” seeking the dissolution of the Wilcox Yates Partnership and the return of monies said to be owed to him.

   oOn 25 June 2015 CC Council issued a permit to the IP. On 25 September 2015 an amendment was submitted to CC Council. The parties are in dispute as to what phase the IP project is now in.

   oIn July 2015 the wife alleges that the husband disposed of a shareholding and resigned as director of three companies, without any notice or disclosure to her.

   oOn 3 July 2015 the wife asserts that she received an email from Mr DD of Company EE seeking to change the address of the L Superannuation Fund to the husband’s personal post office box, as requested by the husband.

   oOn 6 July 2015 the wife alleges that the husband advised the L Superannuation Fund’s Superannuation Manager not to submit its tax return without his authority, despite the Australian Taxation Authority advising it only required one of the trustee’s signatures. The wife alleges the husband has often failed or refused to comply with authorisations to meet the financial obligations of the Fund.

   oOn 17 July 2015 the husband issued a Statutory Demand to Wilcox Consolidated in respect to a director’s loan that the husband alleges is owing to him.

   oOn 21 July 2015 the solicitors for the IP replied to a letter from the solicitors for the wife declining to provide certain financial information concerning the IP to the wife. The letter stated inter alia:

   For our client to be liable to comply with the demand, it would be necessary for you to provide us with evidence that the demand is being made on the half of [Wilcox-Yates], based on a resolution of its directors and until such time as we have such evidence, our client is not required to comply with your demand.

   oOn 23 July 2015 Mr O sent an email to the partners of the IP which put them on notice to ensure that they had the sum of $500 000 - $750 000 available to contribute towards an anticipated project funding shortfall for the project.

   oOn 10 August 2015 Wilcox Consolidated filed an application to set aside the Statutory Demand issued by the husband in the Supreme Court of New South Wales. The application was listed for hearing on 18 August 2015. Those proceedings have subsequently been transferred to this Court.

   oOn 21 August 2015 the wife sent an email to Mr O with a copy to Mr Wilcox seeking information regarding the commencement of the IP project.

   oOn 22 August 2015 the husband replied to the wife’s email, copying in Mr O,  stating:

   [Mr O] there is no dispute as to the [business] commencement.

   [The wife] you have no authority here as was delivered to your solicitor when last you put these 2 [the IP].

   oOn 8 September 2015 the husband authorised the accountants for Wilcox-Yates to lodge its company tax return.

   oOn 15 September 2015, the interim proceedings were first listed before me.

   oOn 29 September 2015 the husband further authorised the accountants for the Wilcox Yates Family Trust to lodge its tax return. The wife alleges the tax returns of Wilcox-Yates and the Wilcox Yates Family Trust were lodged without her knowledge or authorisation.

   oOn 1 October 2015 Wilcox-Yates as trustee for the Wilcox Yates Family Trust was served with another Notice of Breach for the sum of $35 000 by the solicitor for the IP. The husband, again, asserts this occurred as a result of the wife’s failure to comply with obligations under the Partnership Agreement.

   oOn 27 November 2015 the IP Partnership Agreement was further varied to reduce the time for compliance with a Notice of Breach by Wilcox-Yates, as trustee for the Wilcox Yates Family Trust, from thirty days to seven days. The wife asserts that this variation was made without her knowledge and there was no resolution by the directors of Wilcox-Yates to agree to such a variation.

   oOn 30 November 2015 Wilcox-Yates as trustee for the Wilcox Yates Family Trust was served with a Notice of Breach for the sum of $30 000 by the solicitors for the IP.

   oOn 7 December 2015 the Notice of Breach was rectified. The wife asserts that the Notice of Breach was rectified by her, despite her concerns about the involvement of Wilcox-Yates as trustee for the Wilcox Yates Family Trust in the IP.

   oOn 22 December 2015 the wife paid expenses in respect to Q in the amount of $176 959.96. From this, the sum of $169 679.84 was added to her director’s loan account with Wilcox Consolidated.

   oThe wife asserts that Wilcox-Yates as trustee for the Wilcox Yates Family Trust has contributed the sum of $2 469 250 to the IP as at 31 October 2015. The husband disputes this and asserts that it has contributed the sum of $1 424 250.90 to the IP as at 31 October 2015.

   oAs at 23 December 2015 the bank account balance for Wilcox-Yates was $98 729.84.

   oAs at 23 December 2015 the bank account balance for the Wilcox Yates Family Trust was $370.58

   oThe wife asserts that neither of the partners in the IP is in a position to finance the pending work to complete the IP project and, as a result, the project is at risk.

   oThe husband on the other hand asserts that the wife has never raised any concerns as to the financial viability of the IP project. He alleges that the wife’s actions in directing the funds of Wilcox-Yates has “significantly hampered” Wilcox-Yates’s ability to contribute financially to the project. He further asserts that the project, and the third parties involved, will be at risk if the wife “continues to breach partnership arrangements and refuses to contribute”. The husband otherwise asserts that the IP and K have “a long-term, continuing high credit rating and top client rating” with the B Bank in Melbourne.

   oThe wife asserts that as at December 2015, being when her affidavit was sworn, it is in anticipated that it will be necessary for the IP to borrow $29.5 million to complete the IP project. The husband asserts that as at May 2016, being when his affidavit was sworn, the anticipated borrowings are in fact $11 million.

1. On 19 February 2016, some five months after the matter’s initial listing before me, the interim proceedings were finally heard. This was following a number of adjournment applications, withdrawn applications and consent orders being entered into by the parties. I made the following orders at the conclusion of the hearing:

   1.Within 14 days of today each party file and serve written submissions which are to:

   a.identify the orders they each seek; and,

   b.refer to relevant paragraphs contained in affidavits relied upon today or included in affidavits previously filed by parties in the proceedings in support orders each party is seeking.

   2.         Within a further 14 days the parties are to file submissions in reply.

   3.         Judgment is otherwise reserved pending written submissions.

2. Following receipt of the parties’ written submissions, I sought that the matter be re-listed on 3 May 2016 for counsel to address me in respect of their written submissions. I further requested that, on that date, the parties be in a position to address all interim applications filed to date and provide a consolidated Minute of Proposed Order.

3. On 3 May 2016, I consolidated the transferred Supreme Court of New South Wales proceedings with these proceedings, ordered that Wilcox Consolidated be joined as the third respondent and referred the substantive proceedings to the List Clerk for an allocation of a 1st Day before a Judge. Consent orders were also made for the husband to produce documents to the office of the wife’s solicitors pursuant to a Notice to Produce issued by the wife.

4. I further made the following orders, which were to apply until the matter came next before the Court on 11 May 2016 for the purposes of completing oral submissions:

   THE COURT ORDERS PENDING FURTHER ORDER THAT:

   1.The husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authority as director, officer or representative of [Wilcox-Yates Pty Ltd] (A.C.N….) other than in ordinary course of business, without wife’s written consent.

   2.The husband is restrained by injunction from exercising or seeking to exercise any powers, duties or functions as a member of the Committee of Management of the [I Partnership], other than in ordinary course of business without wife’s written consent.

   3.For purposes of Order 1 and 2 above, a decision to call on funds from the partners of the [I Partnership] would not be a decision made in the ordinary course of business.

   4.Orders 1, 2 and 3 of the Orders made today are to apply until 5.00 pm on 11 May 2016.

   5.The matter is adjourned to 2.00 pm 11 May 2016 for the purposes of completing oral submissions.

   6.The legal representatives for [Wilcox] Consolidated (Holdings) Pty Ltd are excused from attending on 11 May 2016.

   THE COURT NOTES THAT:

   A.The wife provides an undertaking as to damages in respect to Orders 1, 2 and 3 above for the adjourned period specified in these orders, being until 5.00 pm on 11 May 2016.

5. On 11 May 2016, at the conclusion of the hearing, I made the following orders:

   THE COURT ORDERS PENDING FURTHER ORDER THAT:

   1.Leave is granted to the respondent husband to, within 7 days of the date of these Orders and in so far as it is necessary, provide a document of no more than two (2) pages which refers to relevant evidence contained in existing documentation and within a further 7 days the applicant wife is to provide a response to the husband’s document in document of her own of no more than two (2) pages in length.

   2.The Orders made on 3 May 2016 are to continue and in addition to those Orders, the husband is to comply with all reasonable requests made from time to time by the wife for information and documentation in relation to the [I Partnership] and its related entities and activities within 3 days of any such request.

   3.The husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authorities as director, officer or representative of [I Pty Ltd] (A.C.N. …) other than in the ordinary course of business, without the prior written consent of the wife.

   4.The wife’s undertaking as to damages set out in the Orders made 3 May 2016 is to continue until further order of the Court.

6. My judgment was therefore reserved on 11 May 2016, some eight months after the initial listing of these interim proceedings before me.

Issues

1. It is convenient to deal with the issues to be resolved in these interim proceedings in the following order:

   ·Should the wife pay the sum of $674 020 to the husband by way of an interim property distribution?

   ·Should the wife be restrained from:

   oapplying the sum of $109 910 currently held in the wife’s solicitor’s trust account towards the payment of stamp duty owing in respect to the purchase of the Suburb D unit; and

   oexpending money that is currently held in the controlled monies account other than with the agreement of the husband?

   ·Should the husband be restrained from:

   omaking any demands for payment or taking any other action in respect to any sums said to be owed to him by:

   §Wilcox Consolidated;

   §The Wilcox Yates Partnership; and/or

   §The wife?

   otaking any action including making any application to a court, other than the Family Court of Australia, in these proceedings in relation to the Statutory Demand dated 17 July 2015 issued by the husband to Wilcox Consolidated under section 459E of the Corporations Act 2001 (Cth)?

   oselling, transferring or otherwise disposing of or dealing with any shares or other interests, beneficial or legal he has in any company, trust, superannuation fund or partnership unless agreed to in writing by the wife?

   oresigning from or exercising or seeking to exercise any powers, duties or authorities as a director or secretary of Wilcox Consolidated?

   oterminating or seeking to terminate the Wilcox Yates Partnership?

   oexercising or seeking to exercise any powers, duties or authority as director, officer or representative of Wilcox-Yates?

   oexercising or seeking to exercise any powers, duties or functions as a member of the Committee of Management of the IP?

   oexercising or seeking to exercise any powers, duties or functions as a director, officer or representative of I Pty Ltd without the prior written consent of the wife?

   ·Should the wife be required to provide an Undertaking as to Damages in respect to the restraints she seeks against the husband and if so, what form should that take?

   ·Should the parties be required to provide further disclosure and/or file and serve an affidavit explaining why they are unable to produce relevant documents sought by the other party?

   ·What directions should be made for the further conduct of the proceedings transferred from the Supreme Court?

Consideration

Should the wife pay the sum of $674 020 to the husband by way of an interim property distribution?

The Law

1. The relevant principles in respect to interim property settlements are as follows:

   a)Together, sections 79 and s 80(1)(h) confer a power on the Court to make orders for interim property settlement.

   b)Section 79 confers a discreet power to make orders for property settlement and the Court may exercise the power conferred by section 79 through “a succession of orders until the power ... is exhausted” or until a final order dealing with all the known property of the parties is made.[1]

   [1] Gabel v Yardley (2008) FLC 93-386, as cited in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [113] at 85, 640.

   c)Section 80 is not in itself a source of jurisdiction for such an order to be made. Rather, the section is an “enabling provision” that provides various ways in which the general power in section 79 may be exercised in individual cases.[2] This includes, by section 80(1)(h), making “a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order”.

   [2] Davidson & Davidson (No. 2) (1994) FLC 92-469 at 80, 875; Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836 at [118] at 85,725.

   d)The starting point for considering section 79 applications, including interim or partial property applications, is to identify the parties’ property and their interests in it.[3]

   [3] Medlow & Medlow (2016) FLC 93-692 at 81,088.

   e)In that respect the applicant carries the onus of establishing that there are sufficient assets available for the interim distribution and that “the effect of any interim order is capable of being reversed as part of the final hearing or, at least, would not defeat” the other party’s property claims.[4]

   [4] Ibid at 81,090.

   f)Nevertheless, because the very nature of an interim hearing is such the Court is not in a position to properly evaluate the evidence, the Court should take a conservative approach including in respect to determining whether there are likely to be sufficient resources of the parties available at final hearing to accommodate any “adjustment issue”.[5]

   [5] Harris & Harris (1993) FLC 92-378 at 79,930 as referred to in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at 85,646.

   g)Having determined the interim property order sought would not give a party “so much that it could not be adjusted on a final hearing”[6] there are then essentially two stages to the consideration of an application for interim property orders:[7]

   [6] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [136] at 85,646 and its importance was also stressed by the Full Court in Zschokke & Zschokke (1996) FLC 92-693 at 83,220-83,221.

   [7] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at [118] at 85,641.

   i)The first stage is a “procedural step” which requires an analysis of whether the circumstances of the case trigger the Court’s power to invoke s 80(1)(h) to make an order for interim property settlement before a final hearing. At this stage, the “overarching consideration” is the interests of justice.[8]

   [8] Ibid at [132] at 85,645.

   ii)The second stage is the “substantive step” where the provisions of section 79 must be considered and applied but with limitations, given that it is not the final hearing. [9]

   [9] Ibid at [135] at 85,645.

   h)There is no barrier or threshold requiring an applicant to establish “compelling circumstances” at either the first or second stages of the Court’s consideration.[10]

   [10] Ibid.

   i)Sufficient particulars of the purpose for which the funds are to be used must nonetheless be provided to enable the Court to determine:

   i)that the application is “genuine”; [11]

   [11] Ibid at [227] at 85,657.

   ii)to “identify the circumstances that make it appropriate to give consideration to exercising its power”;[12] and

   [12] Ibid at [226] at 85,657.

   iii)to sufficiently weigh the identified need “against the benefit of having only one exercise of a s.79 power”.[13]

   [13] Ibid at [222] at 85-656 citing with approval of Reithmuller FM in Wenz v Archer (2008) 40 FamLR 212.

   j)The exercise of the jurisdiction should be conducted in the context of and with an appreciation that “as a generality, the interests of the parties and the Court are better served by there being one final hearing of section 79 proceedings”[14]

   [14] Ibid at [223] at 85,656 citing Harris & Harris (1993) FLC 92-378 at 79,929-79,930.

   k)The overriding consideration at all stages of the process is that the Court is satisfied that it is “just and equitable” to make the order in circumstances before the Court.[15]

   [15] Stanford & Stanford (2012) FLC 93-518 at 86,640 – 86,642.

   l)Whilst often cases in which interim property orders have been made relate to applications to obtain funds to conduct litigation,[16] that is by no means the only instance where such orders of been made. Other instances include:

   i)situations where a party may need access to resources “to meet debts which may result in the party being pursued by creditors”,[17]

   ii)the “need for the party to make payments to the benefit of the children”;[18] or

   iii)to “take advantage of other financial opportunities (for example the superannuation contribution cases)”;[19] or

   iv)where the parties consent;[20] or

   v)where there are “urgent situations” such as:

   (i)“where it is necessary to exercise this power if injustice to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and

   (ii)cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.”[21]

   [16] Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at 85,631 and cases referred to therein.

   [17] Ibid at 85,643 quoting Wenz v Archer (2008) 40 FamLR 212.

   [18] Ibid.

   [19] Ibid.

   [20] Harris & Harris (1993) FLC 92-378 at 79-930.

   [21] Ibid.

Consideration

1. Counsel for the husband contended that, at paragraph 52 of the wife's affidavit filed 12 February 2015, the wife concedes that the potential matrimonial property pool is at least $7 985 600. In that paragraph, the wife deposed:

   I believe after [L property] has been sold the pool of assets within the marriage will approximately be represented as follows:

Proceeds of sale of [L property]	$2,230,000.00
Interest in [Wilcox Yates] Family Trust	$1,349,000.00
Interest in [Wilcox Yates] Pty Limited	$2,000,000.00
Interest in [Wilcox Yates] Partnership	$266,660.00
Interest in [Wilcox] Consolidated (Holdings) Pty Ltd trading as [Q]	$177,000.00
Outstanding company loans	Not known
Artwork	$50,000.00
Cruiser boat	$300,000.00
Superannuation	$1,613,000.00
$7,985,600.00

1. In submissions in reply, counsel for the wife submitted that the size of the matrimonial property pool is in issue stating:

   The parties have numerous interests in various companies, trusts, partnerships and other ventures as well as interrelated loans. Expert evaluation of these interests is pending by the single expert.

2. Further, counsel for the wife submitted that there had been a lack of financial disclosure by the husband which had made it difficult to carry out a “reliable rudimentary assessment” of the property pool.

3. Finally, it was submitted that “both parties have raised arguments which suggest add-backs and negative contributions are likely to be issues at final hearing”.

4. Having submitted that the matrimonial property pool is in the order of $7.985 million, counsel for the husband argued that, having regard to the husband’s contributions, it was likely that, at final hearing, an outcome may be an equal adjustment of the property pool before any consideration of his inheritance from his late mother’s estate.

5. It was submitted that those contributions were as follows:

   a)The husband’s companies, the E Group, had provided a company guarantee for the loan used to secure the purchase of the L property.

   b)The husband assisted the wife in the purchase of L property by participating in discussions with financiers, marketing and other representatives in respect to the property.

   c)The husband, through the E Group, had made extensive improvements to L property at no cost or substantially under cost.

   d)The husband, through the E Group, made significant improvements to the boat “N”.

   e)The husband contributed a substantial amount of his inheritance from his late mother’s estate to the matrimonial property pool, including as follows:

   a)$906 000 to a Wilcox-Yates account ending #...;

   b)$255 000 to the L Superannuation Fund; and

   c)$600 000 to the K Pty Ltd as a formal loan.

6. Finally, counsel referred to the legal fees paid by the wife from joint monies which, it was submitted, should be added back into the matrimonial property pool. Those sums of $80 950 and $50 000 appear to have been paid by the wife from the B Bank account ending in ... which, up until 17 November 2014, had been accessible by both parties.

7. Counsel for the wife submitted that, even if the husband established that there were sufficient funds available within the matrimonial property pool to enable an appropriate adjustment to be made at final hearing, the husband had nonetheless failed to "demonstrate a genuine need for an interim property settlement".

8. In his affidavit filed 29 January 2016, the husband asserted that he, and some of the entities that he has interests in, could “be crippled and or sustain substantial loss” if the Court does not accede to his application. Specifically, the husband deposed at paragraph 47:

   I have monthly commitments to meet business activities that will be jeopardised if funds are not made available to me urgently…

   Monthly payments that I need to make are estimated to be as follows:

a.    Motor vehicle lease	$2,168.20
b.   MV running expenses	$500.00
c.    Average [E Group] Expenses	$4,500.00
d.   Rent	$2,960.00
e.    Insurances – health care and a life policy	$1,070.34
f.     Utilities, storage, security	$480.00
g.   Groceries, living & entertainment	$1,350.00
h.   Travel, accommodation & motor vehicle hire	$3,000.00
i.     Credit card	$800.00
j.     Medical gap and memberships, etc	$700.00
k.   Telephone	$400.00
l.     Miscellaneous holidays, licenses & air charter	$1,500.00

1. In addition, the husband said that as at October 2015 he was responsible for the following liabilities to the Australian Taxation Office:

a.    [E3 Pty Ltd] for GST	$11,807.00
b.   [Wilcox Yates] Family Trust	$120,589.06.
c.    [The husband’s] superannuation tax	$1,403.55
d.   Superannuation contributions for 2014 and 2015	$70,000.00
TOTAL	$203,799.61

1. Further, at paragraph 50, the husband asserted that:

   a)The IP is owed contributions of $750 000 by Wilcox-Yates as trustee for the Wilcox Yates Family Trust.

   b)He has outstanding credit card and motor vehicle bills in the sum of $99 792.77.

   c)He owes his solicitors and accountants at least the sum of $117 156, a sum separate from unbilled counsel’s fees.

2. In reply, it was submitted on behalf of the wife that “the items of expenditure doubtful on their face and should not be accepted”. In that respect it was submitted that:

   a)There is no evidence to substantiate the monthly motor vehicle lease and running costs of $2600.

   b)The amount of $4500 for “Average E Group Expenses” is that of the E Group companies and not a personal expense of the husband. It was submitted that the Court should not accept that the companies are unable to meet these expenses or that the expenses asserted are accurate.

   c)The claimed amount of $4500 per month in travel expenses, which included accommodation, car hire, miscellaneous holidays, "licences" and "air charter", should not be accepted as proper expenses of the husband as they may in part be business expenses. Alternatively, they are discretionary expenses of the husband and are excessive.

   d)In respect of the $15 000 per month for superannuation and the IP, it was submitted that these are not expenses met by the husband. In that respect, reference was made to paragraphs 12 to 124 and 128 of the wife's affidavit filed 18 February 2016.

3. Counsel for the wife further denied the husband's assertions that he had the various tax obligations as set out from paragraph 49 of his affidavit filed 29 January 2016 or, if he did, they were not solely his to meet.

1. Further, it was disputed that the IP is owed contributions of $750 000. In that respect counsel for the wife submitted that there has been no actual call for funds and that the husband’s submissions were disingenuous as the husband controls any calls for such funds.

2. Counsel for the wife also submitted that there was no evidence that the husband’s solicitors and an accountancy firm, which is owned by his brother, are owed the sum of $117 156. It was also submitted that the husband’s claim in respect to legal expenses must fail as there is no satisfactory evidence of the likely costs of the litigation.

3. It is, with respect, unreasonable of the wife not to concede that, at final hearing, there is likely to be a property settlement that results in a portion of the matrimonial property pool being distributed to the husband. Leaving aside any arguments in respect to contributions, the husband's inheritance is a matter that the Court would clearly have regard to.

4. However, the evidence that is available in these interim proceedings suggests that there has been a substantial decline in the potential property pool since the wife filed her affidavit on 12 February 2015. I note for instance it appeared to be agreed between the parties that, as at late December 2015, the bank account balance for Wilcox Yates has been reduced to $98 729.84 and the bank balance for the Wilcox Yates Family Trust has been reduced to $370.58. While these are only two of the many entities owned or controlled by the parties, individually and collectively, it is a stark demonstration of the impact of the parties’ conduct on their assets.

5. In the context of the competing factual contentions, and in the absence of agreement between the parties as to the quantum and nature of the matrimonial property pool and the matters which the Court would have regard to pursuant to sub-sections 79(4) and 75(2), I am not, in these interim proceedings, in a position to determine the extent of the matrimonial property pool.

6. I note that both parties argued that there has been inadequate financial disclosure on the part of the other party in respect to potential assets and liabilities.

7. I further note that both parties have questioned the appropriateness of various transactions entered into by the other since the wife stated in her affidavit that the potential property pool is at least $7 985 600. In that respect I agree with the submissions on behalf of the wife that, at final hearing, it is likely the Court will have to consider the parties’ respective arguments concerning potential add-backs and negative contributions.

8. In those circumstances, I am unable to determine, with a sufficient degree of confidence, that the likely distribution to the husband at final hearing would exceed the amount of $674 020 as sought by the husband in his application.

9. Further, the husband has failed to satisfy me that he has an inability to raise funds from an alternative financial resource pending final hearing. In that respect I note that at paragraph 47 of his affidavit filed 29 January 2016, the husband acknowledges that the financial obligations to which he has referred, include some obligations that relate to him personally and some that relate to entities in which he has an interest. I accept the wife's argument that, in respect to a number of those items, the husband has failed to distinguish between his own financial obligations and those of the entities in which he has an interest. Further, the husband has failed to produce evidence to the Court which satisfactorily explains why the entities to which he has referred are unable to meet their financial obligation. In that respect I also note that the husband’s Financial Statement filed 5 June 2015 provided the following summary of “Group Income” as at 1 March 2015:

E2 – Income from 2001 - 2013	$18,926,879.31
E3 – Income from 2001 – 2013	$2,531,130.93
E1 Pty Ltd – Income from 2001 – 2013	$3,476,925.01
Wilcox Consolidated Holdings 2001 – 2013	$18,020,114.61
Wilcox – Yates Partnership 2004 – 2013	$4,046,329.00
J Pty Ltd – 2001 – 2013	$365,000.00
Mr T Wilcox Personal Income – 2001 – 2014	$1,984,831.02
Total	$49,351,209.88

1. Leaving aside Wilcox Consolidated and the Wilcox Yates Partnership, where the husband’s interests overlap with that of the wife, at least until 2013/2014, there appeared to be substantial financial resources available to the husband. In the absence of updated financial disclosure, the husband has failed to satisfy the Court that those entities do not still remain a substantial financial resource to him.

2. I am not satisfied that those items of expenditure that can be identified as personal expenditure of the husband are reasonable and, in the absence of disclosure, cannot be met from other financial resources available to the husband. In that respect I note, for example, that by email dated 7 December 2015 the husband advised the wife that he was in a position to loan Wilcox-Yates the sum of $30,000 as a cash advance from his credit card. The wife asserts that particulars of that facility have not been disclosed by the husband. I note that the husband’s Financial Statement filed 5 June 2015 refers to credit card liabilities in the sum of approximately $45 550. However, in the absence of additional disclosure being provided by the husband, I am not in a position to determine the extent to which the credit card facility he refers to in his email is a financial resource that is available to the husband to meet those items of expenditure that are of a personal nature.

3. Further, the letter from Mr O to the husband dated 28 January 2015 appoints one of the E Group companies as the Project Manager of the development being undertaken by the IP. As noted in the list of contentions, the monthly retainer, which was backdated to 1 July 2014, was specified as being $5 000 per month. The full extent of that retainer does not appear to have been disclosed in the husband’s Financial Statement filed 5 June 2015. It was not disputed that the retainer is currently $15 000 per month as result of the Committee of Management for the IP, regarding the project being in “development phase”.

4. In those circumstances, I am unable to find that the interests of justice require an interim property distribution in favour of the husband. Specifically, I am unable to find that the needs of the husband are such that they outweigh the public interest in there being a single determination of the parties’ property interests at final hearing. In that respect I note the complexity of the parties’ financial position as a result of the structure of the various corporate entities through which the parties’ property is held. That complexity has been added to by the conduct of the parties which has resulted in each party making allegations against the other regarding unethical conduct, entering into unauthorised transactions, engaging in unnecessary and inappropriate expenditure and so forth. Further, as result of inadequate financial disclosure by each of the parties at this stage of the proceedings, the Court is not in a position to resolve the factual controversies that exist between the parties.

5. Finally, I note that it is not uncommon for orders to be made providing for an interim property distribution for the purposes of ensuring that the parties are able to pay their legal fees to ensure that they can adequately present their case before the Court. By letter dated 11 May 2016, the husband’s solicitors identified legal fees incurred by the husband as at that date as being in the sum of $200 463.26. The letter notes, however that at least a portion of the funds have been met from “credit cards and from monies paid pursuant to Orders ($176,000)”. I agree with counsel for the wife that the wife was not in a position to respond to this information at the hearing and it would therefore be a denial of procedural fairness to make an order based on the letter from the husband’s solicitor dated 11 May 2016. Further, in the absence of the husband presenting evidence as to his anticipated legal fees, above those which have been paid, the Court is not in a position to determine whether the interests of justice are such that an interim property distribution should be made in favour of the husband in respect to his anticipated legal fees.

6. I note, however, that the wife has herself applied funds from the matrimonial property pool towards the payment of her own legal fees. It would therefore be appropriate for her to give realistic consideration to a properly particularised application on the part of the husband for an interim property distribution to meet any anticipated legal fees or a part of those fees.

Should the injunctions sought by the husband against the wife and the injunctions sought by the wife against the husband be granted?

The Law

1. When proceedings are before the Court, the Court has broad powers to grant injunctive relief including for the purpose of preserving the status quo, and/or otherwise regulating the conduct of the parties, pending final hearing.[22]

   [22] See G and T (2004) FLC 93-176 at [53] – [54] and where it is “just or convenient to do so”: see Mullen & De Bry (2006) FLC 93-293 applying section 114(3).

2. Before an injunctive order is made, pursuant to section 114(3) of the Family Law Act 1975 (Cth) (“the Act”), the Court must be satisfied that it is “just or convenient” to grant such an injunction or make an interlocutory order.

3. By way of summary, the following principles are relevant to the Court’s consideration of the parties’ respective applications in this matter:

   a)In so far as the purpose of the proposed injunction is to restrain dealing with property pending the final hearing, the Court must address the question as to whether there is evidence of a risk of the disposal of any assets that would defeat any anticipated order in the substantive proceedings. However, that is but one of a number of factors to be considered.[23]

   [23] Lawson & Crawford and Ors [2014] FamCA 1012 at [52] referring to Mullen and De Bry (2006) FLC 93-293.

   b)The applicant seeking such orders must establish “a real risk of assets being disposed of” prior to final hearing.[24]

   [24] Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at 428[122].

   c)In assessing that risk, it is not necessary for the applicant to satisfy the Court as to the probability of success of the applicant’s case.[25]

   [25] Beacham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618 at 622-623.

   d)In that context, as was noted in Kelleher & Anderson:[26]

   [26] [2007] FamCA 137 at [195].

   [The applicant] for injunctive relief… bears the onus of establishing, on the evidence, a real risk of assets being disposed of and also that such disposal may cause [his or her] claim to be defeated or prejudiced. It would not be sufficient merely to show that there is a risk of disposal of assets, or the asset pool being diminished, without also establishing that there is a risk that the [party’s] claim may be defeated or prejudiced if the injunction is not granted.

   e)A precondition to the Court granting injunctive relief is that the Court finds that “there is a serious issue to be tried and that the balance of convenience supports the making of an order”.[27]

   f)In considering the nature of the injunctive relief sought by the applicant, it is important to be aware of the general principle that “equity intervenes to the minimum extent necessary to do justice”.[28]

   g)In the context of family law proceedings, in Sieling and Sieling (1979) FLC 90-627 at 78,265, the Full Court said:

   The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly. The Court must balance the hardship to each party of granting or refusing an order and frame its order in such a way to impose no further restriction than is necessary to achieve the protection of the applicant’s interest. It will not lightly interfere with the rights of an owner of property on the basis of a vague or uncertain claim.

   h)In Martiniello and Martiniello (1981) FLC 91-050, it was suggested that a party should not be restrained from using their money for ordinary business purposes unless “it could be shown that there was a fear that [the party] would dissipate [the] funds.”[29]

Is there a real risk that the matrimonial property will be dealt with by the parties such that it will impact upon the ability of the Court to make appropriate orders at final hearing?

[27] Blue Seas Investments Pty Ltd v Mitchell and McGillivray (1999) FLC 92-856 at 86,128 and Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836 at 85,723.

[28] Giumelli v Giumelli (1999) 196 CLR 101 at [10] referred to in Norton & Locke (2013) 284 FLR 51 at [72].

[29] at 76,422.

1. The conduct of both parties satisfies me that, if unrestrained, there is a real risk that each of them will deal with the matrimonial property such that it may be reduced to such an extent that it is not possible for the Court to make appropriate orders to do justice between the parties at final hearing.

2. In that respect, I have had regard to paragraph 45 of the husband’s affidavit filed 26 March 2015 wherein the husband acknowledges arranging for the transfer of $1 million from a joint account into an account in his sole name. Further at paragraph 48 of that affidavit, the husband acknowledges accessing a Commonwealth Bank account established for the operation of the company, Q, and withdrawing the sum of $76 000 from that account.

3. In January 2015, in his capacity as one of the two members of the Committee of Management of the IP, the husband, along with Mr O, appointed a company of the husband’s E Group as Project Manager of the project being undertaken by IP. They also appointed a company of which Mr O is director as Project Consultant. In each case the companies appointed were to be paid a retainer of $5000 per month backdated to 1 July 2014. As a result of the Committee of Management, constituted by the husband and Mr O, deciding that the project is now in development phase, the retainer has been increased to $15 000 per month.

4. This decision was allegedly made without notice to Wilcox-Yates whose interests the husband represents on the Committee. By email dated 22 August 2015 the husband advised the wife that she had “no authority” to question the decision of the Committee of Management that the development phase of the IP project had commenced.

5. In so advising the wife, the husband referred to legal advice from the solicitors for the IP to the solicitors for the wife. That advice appears to be a letter dated 21 July 2015 noting that information sought by the wife in respect to the operation and management of the IP could only be sought by Wilcox-Yates as one of the partners to the IP, and not by the wife in a personal capacity. The letter further advised that, in circumstances where the request has not been made based on a resolution of Wilcox-Yates’s directors (the directors being the wife and the husband), such information would not be provided.

6. The wife is justifiably concerned about her inability to obtain information regarding the management and operation of the IP. The factual contentions, as set out earlier in these Reasons, list instances where the Committee of Management has called for funds from the partners.  Further, notice has been given that the partners may be required to make a contribution to the IP in the sum of $750 000.

7. This has occurred in circumstances where, on 27 November 2015, the IP Partnership Agreement was varied to reduce the time for compliance with a Notice of Breach from thirty days to seven days. That decision was made in circumstances which, prima facie, suggest that the husband as the representative of Wilcox-Yates on the Committee of Management, made a decision that was contrary to the interests of Wilcox-Yates. This occurred in circumstances where it appears that he had not informed the wife, as a director of Wilcox-Yates, of the decision or sought authorisation by way of a directors’ resolution.

8. The consequence of the time for compliance with a Notice of Breach being reduced to seven days has potentially serious repercussions for Wilcox-Yates. Failure to comply with a Notice of Breach within the required time could result in Wilcox-Yates being in default. In that event clause 14.1 of the IP Partnership Agreement provides that “the defaulting party is deemed to have issued a transfer notice… for all of its interest”. The consequences of issuing a transfer notice are set out in clauses 9 and 10 of the Partnership Agreement. Significantly, clause 10 of the partnership agreement limits the sale price that can be obtained by the defaulting partner to:

   …the amount contributed towards the partnership by the defaulting party in the form of monetary contribution only (not taking into account any other contribution by the defaulting party including but not limited to contributions of time and effort of the director or directors of a party) and such monetary amount contributed towards the partnership by the defaulting party shall be the sale price for its interest in the partnership for the purposes of this clause. For the avoidance of any doubt the assessment shall not include any amount representing profit or uplift in the value of the Assets.

9. In other words, by virtue of his position as the representative of Wilcox-Yates on the Committee of Management, the husband with Mr O is in a position to determine the calls for funding that will be made to the partners, including Wilcox-Yates. In the event of default Wilcox-Yates could be removed as a partner, in which case it would only receive “monetary contributions” rather than any “profit or uplift” in the value of the IP including as result of the current project in Victoria.

10. In terms of actions by the wife that have allegedly depleted the matrimonial property pool, the husband refers to what he alleges to be excessive expenditure by the wife in the period between September 2014 and May 2015.

11. In the wife’s affidavit filed 18 February 2016, she sets out extensive schedules detailing her expenditure in respect to the period between 10 October 2014 until 29 May 2015 from the B Bank account ending in ... and an account of Wilcox-Yates. At the hearing, counsel for the wife provided an aid memoire which summarised that expenditure. The aide memoire summarised the wife’s expenditure from the B Bank account ending in ... as follows:

Interest	$154,404
Repay [Mr FF Yates] for [Wilcox Yates] Partnership loan	$105,640
Reimburse WYP for House Sale marketing program	$28,281
12 months rent set aside (subsequently used for legal expenses)	$58,500
Shopping & Personal expenditure (less $10k cc for unit deposit)	$157,922
Medical & fitness	$8,817
House & boat maintenance	$52,166
German Motor vehicle – (Ms Yates)	$65,000
Japanese motor vehicle (son’s car)	$34,000
Suburb D Unit deposit	$226,000
Loans to [Q]	$261,406
Legal and accounting	$155,568
[Monies paid to the husband]	$103,736
[The wife] income	$18,839

1. The wife’s expenditure from the B Bank account ending in ... therefore totalled approximately $1.430 million over a thirty-three week period.

2. The wife’s expenditure from an account of Wilcox-Yates totalled, according to the aid memoire, approximately $634 000 over that same period.

3. It is to be noted that the amounts in respect to the husband include monthly payments that were agreed between the parties to be made to the husband. It is also to be noted that some items include necessary expenses such as marketing for the sale of the L property. Nevertheless, the pattern of expenditure is such that the husband is entitled to be concerned that it is excessive and, if continued, constitutes a real risk that the pattern of spending would significantly deplete the matrimonial property pool such that it may impact upon the ability of the Court to make appropriate orders at final hearing.

1. For instance, the exhibits to the wife’s affidavits show that on 19 November 2014 there was a purchase of a Japanese motor vehicle in the sum of $34 012 and on 30 April 2015 there was a payment for the purchase of another motor vehicle in the sum of $65 000. Further, on 30 April 2015, there was a credit card payment of $150 000. There was also a loan to a family member for the sum of $58 500 and a repayment of an alleged loan to another family member for $105 640.

2. The question becomes, however, what orders should be made in light of these findings that there is a real risk that both parties will engage in conduct to deplete the matrimonial property pool such that it may impact upon the ability of the Court to make appropriate orders at final hearing.

Injunctions sought by the husband: Consideration

1. The husband seeks the following injunctions:

   a)That the wife be restrained from withdrawing the sum of $109 910 from the controlled monies account in the name of her solicitor.

   b)That the wife be restrained from dealing with the sale proceeds from the sale of the L property, as held in the controlled monies account with B Bank in the name of her solicitor, unless the husband consents.

   c)Until further order, the wife be restrained by injunction from drawing down or taking steps (including giving notice) to draw down funds from the controlled monies account.

2. Other than the amount of $109 910, the proceeds of sale of the L property are currently held in a controlled monies account in the name of the wife’s solicitor. Pursuant to the consent orders made 30 March 2015, the wife is currently restrained from dealing with those sale proceeds except by providing twenty-eight days’ written notice to the husband of any intention to do so. The husband has not alleged that the funds in that account have been applied other than in accordance with those orders.

3. The primary argument of the husband is, however, that he consented to the orders, including the restraints in relation to the proceeds of sale, without the benefit of legal advice and contrary to his understanding that his consent was to be obtained before funds were released from the account to the wife.

4. In respect to the sum of $109 910, those funds were initially held in the controlled monies account but have now been transferred to the wife’s solicitor’s trust account in anticipation of the wife’s payment of stamp duty associated with the purchase of the Suburb D unit.

5. Counsel for the wife submitted that the payment of the stamp duty is a necessary consequence of the wife’s decision to purchase the Suburb D unit. Reference was made to additional interest and potential penalties that may apply if the amount is not paid in time. It was also argued that, in so far as the payment of stamp duty is related to the purchase of a property, the interests of the parties will be protected in so far as it will be converting liquid funds into “bricks and mortar”.

6. Indeed, the potential for loss occurring as result of the wife not proceeding with the purchase appeared to be conceded by the husband in his affidavit filed 26 March 2015. At paragraph 55, the husband said:

   I am aware that [the wife] needs the sum of $176,000 to meet her commitment in relation to the purchase of property in [Suburb D]. I have consented, via my solicitors to her paying that money so as to obviate any possible loss or claim to damages which would diminish our pool of assets.

7. The husband also annexed to his affidavit a copy of a letter from his solicitors to the wife's solicitors dated 13 March 2015, which stated:

   Our instructions are to note that [the husband] will facilitate in making funds available to pay the deposit for the [Suburb D] unit contracted for by [the wife].

8. Section 114(3) of the Act provides:

   (3)  A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.

   (Emphasis added)

9. As noted by Cronin J in Menotti & Lamb,[30] the words “just or convenient to do so” include the Court giving consideration to the equitable principle that “if the applicant comes to equity seeking justice, he or she must come with clean hands”.

   [30] [2014] FamCA 518 at [9].

10. It is unnecessary, in these proceedings, to determine whether the concept of “clean hands” which applies in equity, is directly applicable to proceedings under the Act. Nevertheless, in contemplating the exercise of power pursuant to section 114(3) of the Act, it is necessary for the Court to consider whether it would be “just or convenient” to make orders of an injunctive nature.

11. By agreeing to the wife accessing funds to pay the deposit on the Suburb D unit, the wife was entitled to have a legitimate expectation that the husband would consent to her taking such steps as were necessary to complete the transaction. Indeed, the potential for loss as result of not proceeding was acknowledged by the husband in his affidavit to which I have referred.

12. In the circumstances, I do not consider that it would be just or convenient to make the orders sought by the husband which would restrain the wife from paying the stamp duty that is payable in respect to the Suburb D unit. To do so would be contrary to the legitimate expectation, that the wife was entitled to have, that the husband would agree for the exchange of contracts to occur. The requirement to pay stamp duty is a necessary consequence of that exchange of contacts.

13. However, in so far as the payment of the stamp duty relates to the purchase of the Suburb D unit, I will make orders permitting the wife to pay the stamp duty subject to the husband being at liberty to lodge a caveat with a related order restraining the wife from seeking to prevent the husband lodging that caveat or seeking to have the cavaet removed.

14. I will further make an order preventing the wife from dealing with the Suburb D unit without the written consent of the husband or without further order of the Court.

15. Counsel for the wife, correctly in my view, argued that the second and third restraints sought by the husband essentially seek a variation of the consent orders made 30 March 2015. As noted, those orders require the wife to provide the husband with twenty-eight days’ written notice of any intended use by her of the funds in the controlled monies account. The order did not otherwise restrict the wife or require her to obtain the husband’s consent. Instead the provision of the twenty-eight days’ notice period places an onus on the husband to take action to restrain the wife dealing with the funds held in the controlled monies account should he take issue with her intended actions. The husband’s proposed orders seek to reverse that situation by placing the onus on the wife to obtain the husband’s consent prior to her dealing with the funds from the controlled monies account.

16. In Woodgate (Trustee) v Northop Hall Pty Ltd [2016] FCA 370 Rares J considered an application to vary consent orders in respect to funds paid into court pending resolution of the substantive proceedings at final hearing. His Honour held that the fact that the consent orders were arrived at as a result of a compromise between the parties was significant. His Honour said at [31] - [32]:

    The court retains control of any interlocutory order that it makes. Ordinarily, a further order will be appropriate when, for example, new facts come existence or are discovered which render the enforcement of an interlocutory order unjust: Adam P. Brown Male Fashion Pty Ltd v Philip Morris Inc [1981] HCA 39; (1981) 148 CLR 170 at 178 per Gibbs CJ, Aickin, Wilson and Brennan JJ; see too r 39.05(c).

    Here, the only persons with an actual or potential interest in the funds in court are Ms Smith and Mr Woodgate as trustee of the bankrupt’s estate. The consent order for payment into court was interlocutory. It did not resolve any controversy on a final basis. But, the interlocutory order for payment into court in this matter involved a compromise between the parties as to how the proceeds of sale of the Mosman property would be dealt with both immediately (by 40 per cent being paid to the trustee) and in the period up to final determinations by the Court of the controversies in the three proceedings between the parties.

17. In the present case, counsel for the wife notes that the consent orders made 30 March 2015 were also as result of compromise in which both parties benefited. Most significantly, reference was made to the fact that pursuant to Order 6, the wife was required to transfer the additional sum of $165 000 to the husband. That amount was soon after paid by her.

18. The fact that the wife has given notice to the husband that she intends to apply the sum of $109 910 towards the payment of stamp duty on the Suburb D unit is not a newly discovered fact that now renders enforcement of the consent order unjust. Specifically, I note that by letter dated 13 March 2015, the solicitors for the husband were instructed that the husband would “facilitate”  the wife accessing funds to pay the deposit on the Suburb D unit and, in his affidavit filed 26 March 2015, the husband noted the detrimental consequences for the parties’ combined asset position should the sale not proceed. It could reasonably have been contemplated by both parties that as result of paying the deposit, upon exchange of contract, the wife would also be required to pay stamp duty on the purchase of the Suburb D unit.

19. Accordingly, I do not in these interim proceedings propose to make the injunctions as sought by the husband in respect to the controlled monies account.

20. During the course of the proceedings I expressed concern that the wife had not stated a clear position as to whether it was her intention to access the controlled monies account for the purpose of obtaining funds to complete the settlement of the Suburb D unit. The concern I expressed related to the potential for further litigation in the event that the wife subsequently provided the husband with twenty-eight days’ notice of her intention to deal with the funds held in the controlled monies account for the purpose of completing the purchase of the Suburb D unit.

21. My invitation to the wife to deal with that issue was declined and as such, given the history of this matter, it can unfortunately be anticipated that there will be yet further litigation in the event that the wife gives such notice to the husband.

Injunctions sought by the wife: Consideration

1. As noted, the injunctions sought by the wife were follows:

   (1)   Until further order, the Husband is restrained by injunction from making any demands for payment or taking any other action in respect of any sums said to be owed to him by:

   1.      [Wilcox] Consolidated (Holdings) Pty Limited (A.C.N. …);

   2.      The [Wilcox Yates] Partnership;

   3.      The Wife.

   (2)Until further order, the Husband is restrained by injunction from taking any action, including making any application to a Court other than the Family Court of Australia in these proceedings, in relation to the Statutory Demand dated 17 July 2015 purportedly issued by the Husband to [Wilcox] Consolidated (Holdings) Pty Limited (A.C.N. …) under section 459E of the Corporations Act 2001 (Cth).

   (3)Until further order, the Husband is restrained by injunction from selling, transferring or otherwise disposing of or dealing with any shares or other interest, beneficial or legal, he has in any company, trust, superannuation fund or partnership unless agreed to in writing by the Wife.

   (4)Until further order, the Husband is restrained from resigning or from exercising or seeking to exercise any powers, duties or authority as director or secretary of [Wilcox] Consolidated (Holdings) Pty Limited (A.C.N. …).

   (5)Until further order, the Husband is restrained from terminating or seeking to terminate the [Wilcox Yates] Partnership. 

   (6)The Husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authority as director, officer or representative of [Wilcox-Yates] Pty Ltd (A.C.N. …).

   (7)The Husband is restrained by injunction from exercising or seeking to exercise any powers, duties or functions as a member of the Committee of Management of the [I Partnership].

   (8)The Husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authority as a director, officer or representative of [I Pty Ltd] (A.C.N. …), without the prior written consent of the Wife.

2. It is convenient that I first deal with the second injunction sought by the wife as it relates to the Supreme Court proceedings that have already been transferred to this Court.

3. There is no doubt that this Court has jurisdiction to restrain a party from commencing or proceeding with an action in another forum if it is necessary to do so to protect the integrity of the proceedings before this Court. The Court has that power pursuant to section 34 of the Act, the Court’s accrued jurisdiction or, potentially, section 114(3) of the Act. In Hughes & Hughes [2014] FamCA 12 MacMillan J said at [45]:

   This Court has the inherent power to make orders to protect its own processes being abused and an implied power to make orders necessary and appropriate to avoid an injustice (CSR Ltd v Cigna Insurance Australia Ltd [1997] HCA 33… and Lederer & Hunt [2007] FamCA 55 at [33]). As the majority of the High Court said in CSR v Cigna, “[o]ne well established category of case in which an injunction may be granted in the exercise of equitable jurisdiction is that involving proceedings in another court, including in a foreign court, which are, according to the principles of equity, vexatious or oppressive”.

4. However, the power to restrain a party form pursuing their legal rights in another forum is a rarity. 

5. Counsel for the wife submitted that the injunctions sought are not in the nature of anti-suit injunctions. However, in the alternative, counsel submitted that the husband’s actions are vexatious and/or oppressive in the sense referred to by the Full Court in Teo & Guan (2015) FLC 93-653 at [146].

6. In particular, counsel for the wife argued that “[t]he loans subject of the demands made by the Husband, including the Statutory Demand, are in dispute and are to be subject of evaluation… and likely some determination by the Court at final hearing”. Reference was made to paragraphs 43(a) and (b) of the wife’s supplementary submissions filed 7 March 2016. By way of summary, paragraph 43(a) argued in respect to the husband’s Statutory Demand issued to Wilcox Consolidated that:

   a)The loans made by the husband to Wilcox Consolidated as well is the company itself are subject to valuation and assessment by the single expert in these family law proceedings;

   b)The Statutory Demand made by the husband puts the company at risk in so far as a failure to comply gives rise to a presumption of insolvency. The company is a trading entity with ongoing business operations and staff;

   c)The company is an important asset which should be preserved pending the outcome of the proceedings; and

   d)The wife is employed by the company and her primary income is derived from it.

7. Paragraph 43(b) of the wife’s supplementary submissions related to the husband’s “purported Notice under the Partnership Act” seeking dissolution of the Wilcox Yates Partnership. However, it is not relevant to the Court’s consideration of whether husband’s issuing of the Statutory Demand was vexatious, unreasonably issued or otherwise constitute an abuse of process.

8. In these interim proceedings it is not necessary to make findings as to whether the husband’s Statutory Demand issued to Wilcox Consolidated on 17 July 2015 was of substance or was vexatious or otherwise an abuse of process. On 4 March 2016, Black J made an order transferring those proceedings to this Court. In so doing his Honour noted that this Court will, in the context of the wider proceedings, be in a position to determine whether there is a genuine dispute as to the debt specified in the husband’s Statutory Demand.

9. As noted, on 3 May 2016, I made orders consolidating the transferred Supreme Court proceedings with the substantive family law proceedings with both proceedings to be heard concurrently. In due course, appropriate findings will be made regarding the merits of the husband’s Statutory Demand.

10. In those circumstances, it is unnecessary for the Court to make orders in terms of the second injunction as sought by the wife.

11. The first injunction sought by the wife seeks a similar outcome in respect to other possible requests for payment (and associated claims) that may be made by the husband to not only Wilcox Consolidated, but to the Wilcox Yates Partnership and the wife.

12. The difficulty with the proposed injunctions is that it seeks to pre-emptively restrain the husband’s conduct before it occurs on the assumption that any such demand or claim made by him will be vexatious or otherwise oppressive if it is pursued outside of these proceedings. In Lederer & Hunt (2007) FLC 93-311 the Full Court agreed with Nygh J in Baba & Jarvinen (1980) FLC 90-882 that the Family Court has the power to restrain proceedings commenced in another Australian court even though such proceedings were validly instituted before that other court. The Full Court also agreed with his Honour where he said:

    This Court can only take such an extreme step when it is absolutely essential and I would respectfully agree with the statement of the Full Court in Tansell and Tansell… that the Family Court ought to avoid making orders which in terms restrain a party from continuing with proceedings validly instituted in another court.

13. The difficulty for the wife is that, given the speculative nature of the first injunction sought by her, there is a complete absence of evidence before the Court that justifies the “extreme step” of restraining an individual from pursuing their legal rights in an appropriate forum even though that forum may be one other than the Family Court of Australia.

14. Further, given the speculative nature of the proposed injunction, I cannot determine whether this Court would have jurisdiction to deal with any such demand or claim or, alternatively, whether there is a common substratum of facts between any such possible claim and the proceedings before this Court, such that it would justify the exercise of this Court’s accrued jurisdiction.

15. Finally, if any such demand or claim was made by the husband or, for that matter the wife, which the other party regarded as causing embarrassment or potentially frustrating these proceedings, they would be free to make an application for those proceedings to be transferred to this Court.

16. Accordingly, I do not propose to make orders in terms of the first injunction sought by the wife.

17. The third injunction sought by the wife seeks to restrain the husband “from selling, transferring or otherwise disposing of or dealing with any shares or other interest, beneficial or legal, he has in any company, trust, superannuation fund or partnership unless agreed to in writing by the Wife.” (Emphasis added)

18. In [52]-[59] above, I have noted the wife’s allegations in respect to the husband’s conduct, which I find would cause the wife to have a justifiable concern. That conduct primarily relates to representations purportedly made by the husband on the behalf of Wilcox-Yates. The conduct also relates to action which the husband taken on behalf of Wilcox-Yates as a member of the Committee of Management of the IP. In the latter case, allegations have been made which, if substantiated, may establish that the husband has engaged in conduct that may well be in breach of relevant corporations legislation in relation to his duties as a director of Wilcox-Yates. However, the wife has not established a basis for the Court to assume that the conduct she has accused the husband will necessarily be or can be extrapolated to “any company, trust, superannuation fund or partnership” in which the husband has a beneficial or legal interest.

1. Accordingly, the third restraint sought by the wife is unnecessarily broad and, as such, offends the principle, as applied in the context of these proceedings, that this Court should only restrain conduct to “the minimum extent necessary to do justice” [31]  and thereby, protect the subject matter of the litigation and the integrity of the proceedings before it.

   [31] Giumelli v Giumelli (1999) 196 CLR 101 at [10] referred to in Norton & Locke (2013) 284 FLR 51 at [72].

2. In determining that the third restraint sought by the wife is unnecessarily broad, I also note, as will be discussed shortly, that Order 13 of the consent orders made on 11 March 2015 already applies to the husband’s position as a director of Wilcox Consolidated. Further, the wife has also sought specific injunctions as to the husband’s role in Wilcox Consolidated, the Wilcox Yates Partnership and the IP.

3. The fourth and fifth injunctions sought by the wife seek to restrain the husband from resigning as a director of Wilcox Consolidated and from terminating or seeking to terminate the Wilcox Yates Partnership. 

4. The wife seeks the fourth injunction as a consequence of the husband sending an email on 22 June 2015 which read, in part:

   …Attached is the formal notice of my resignation as Secretary, at 17 June 2017 and Director, at 19 June, 2017 of [Wilcox Consolidated].

5. The purported resignation, it was argued, was contrary to Order 13 of the consent orders made 11 March 2015 which relevantly provided:

   [The husband] be restrained by injunction from exercising or seeking to exercise any powers, duties or authority as a director of Wilcox Consolidated Holdings Pty Ltd (ACN …) henceforth.

6. Order 13 appears to have been made in the context where on 21 January 2015, the husband withdrew the sum of $76 000 from a trading bank account for Q.

7. It was argued by the wife that the restraint on the husband resigning as a director of Wilcox Consolidated is necessary because the husband’s resignation would have adverse repercussions for the company’s governance, including its ability to achieve a quorum at directors’ meetings. This, in turn, would have adverse implications for the matrimonial property pool in so far as Wilcox Consolidated is the owner of Q which is a viable business and retains several employees.

8. Weighing up the balance of convenience, on the condition that the wife provide an undertaking as to damages which includes an agreement by her to indemnify the husband in respect to any future liability he may incur as a result of holding office as a director of Wilcox Consolidated, I propose to make an that that the husband be restrained from resigning as a director of Wilcox Consolidated. This will be in addition to Order 13 made 11 March 2015 to which I have referred.  

9. Counsel for the wife argued that it is necessary to restrain the husband from terminating or seeking to terminate the Wilcox Yates Partnership in order to preserve the Partnership pending final hearing. In that respect, counsel for the wife noted that the husband’s Financial Statement states that the Partnership earnings between 2004 and 2013 were approximately $4 046 329. While that amount is not accepted by the wife, the wife asserts that it is an acknowledgement by the husband as to the value of the Partnership.

10. The wife also refers to the fact that the husband's solicitors have not responded to a letter from her solicitors dated 29 June 2015 stating that dissolution of the Partnership may impact adversely on the assets of the parties.

11. In these proceedings I am not in a position to make findings of fact as to the extent to which dissolution of the Wilcox Yates Partnership may adversely impact upon the assets of the parties. Nevertheless, based on the husband's own acknowledgement as to the potential value of the Partnership, the balance of convenience favours the making of an order to preserve the Partnership pending final hearing. Once again, the order will be subject to the wife providing an appropriate Undertaking as to Damages, including agreeing to indemnify the husband in respect to any future liability he may incur as a result of his remaining as a partner of the Wilcox Yates Partnership.

12. As result of the conduct of the husband, the wife has sought the sixth and seventh injunctions which relate to the husband’s role in Wilcox-Yates and as a member of the Committee of Management of the IP. Further, the wife has sought the eighth injunction relating to the husband’s role in I Pty Ltd, which as previously noted, entered into a Deed of Trust with the IP and is also bare trustee for the IP. As a result of the conduct referred to in [52] to [59] above, I am again of the opinion that the balance of convenience favours restraints being imposed upon the husband in respect to his role with those two entities.

13. However, the restraints sought by the wife go beyond that which are reasonably required to protect the matrimonial property pool and would impact upon the day-to-day operations of the IP. While I am unable to make findings of fact in these interim proceedings, I am satisfied that the husband has superior experience and expertise in the area of the business such that there is a risk that imposing the restraints as sought by the wife on him would have an adverse impact on the operations of the IP. In particular, that adverse impact would be upon the project that the IP has been undertaking in Victoria, which is allegedly in development phase.

14. Further, I am not satisfied that in the absence of the husband exercising powers as a director of Wilcox-Yates that there is a mechanism whereby that company could resolve to replace the husband as its representative on Committee of Management of the IP.

15. Such a lacuna on the Committee of Management may adversely impact upon the project in Victoria and hence the matrimonial property pool. It is also a relevant consideration that there is a real risk that such a lacuna on the Committee of Management of the IP may adversely impact upon third parties’ rights including the other partner of the IP who has not been made a party to these proceedings.

16. Accordingly, recognising that some restraint on the husband’s activities in respect to Wilcox-Yates, the IP and I Pty Ltd is appropriate, I propose to continue the interim orders made 11 May 2016 which were as follows:

    THE COURT ORDERS PENDING FURTHER ORDER THAT:

    1.….

    2.The Orders made on 3 May 2016 are to continue and in addition to those Orders, the husband is to comply with all reasonable requests made from time to time by the wife for information and documentation in relation to the [I Partnership] and its related entities and activities within 3 days of any such request.

    3.The husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authorities as director, officer or representative of [I Pty Ltd] (A.C.N. …) other than in the ordinary course of business, without the prior written consent of the wife.

    4.The wife’s undertaking as to damages set out in the Orders made 3 May 2016 is to continue until further order of the Court.

17. In turn, the interim orders made on 3 May 2016 were:

    THE COURT ORDERS PENDING FURTHER ORDER THAT:

    1.The husband is restrained by injunction from exercising or seeking to exercise any powers, duties or authority as director, officer or representative of [Wilcox-Yates Pty Ltd] (A.C.N. …) other than in ordinary course of business, without wife’s written consent.

    2.The husband is restrained by injunction from exercising or seeking to exercise any powers, duties or functions as a member of the Committee of Management of the [I Partnership], other than in ordinary course of business without wife’s written consent.

    3.For purposes of Order 1 and 2 above, a decision to call on funds from the partners of the [I Partnership] would not be a decision made in the ordinary course of business.

    4.Orders 1, 2 and 3 of the Orders made today are to apply until 5.00 pm on 11 May 2016.

    5.The matter is adjourned to 2.00 pm 11 May 2016 for the purposes of completing oral submissions.

    6.The legal representatives for [Wilcox] Consolidated (Holdings) Pty Ltd are excused from attending on 11 May 2016.

    THE COURT NOTES THAT:

    A.    The wife provides an undertaking as to damages in respect to Orders 1, 2 and 3 above for the adjourned period specified in these orders, being until 5.00 pm on 11 May 2016.

18. The husband’s Minute of Order, as contained in Exhibit 16, sought that should the Court grant any of the injunctions sought by the wife, they be stayed and made conditional on the wife satisfying the Court that she has the capacity to meet such damages and that the husband be heard as to the wife’s capacity to meet such damages. I have declined to include such a prescriptive order as I anticipate a real risk that such an order would result in yet further litigation between the parties. The effect of the orders would be to stay the operation of the injunctions pending resolution of the issue of wife’s capacity to meet potential damages. The capacity for protracted litigation over that issue would delay the operation of the injunctions that I have made. That delay could, in turn, result in matrimonial property being depleted to such an extent that the Court would be unable to make fair, equitable and appropriate orders at final hearing.

Should the parties be required to provide further disclosure and/or file and serve an affidavit explaining why s/he is unable to produce relevant documents?

1. On 15 September 2015 by consent I made the following orders:

   1.2. By 22 September 2015, the Husband and the Wife shall confirm in writing or documents required by way of disclosure.

   1.3 By 5 October 2015 the Husband and the Wife shall provide disclosure is required by order 2 hereof.

2. On 3 December 2015 I made the following order:

   3. The parties are to provide any documents by way of outstanding disclosure by 14 December 2015.

3. It is disappointing that there continues to remain a dispute about financial disclosure and that both parties continue to level allegations of inadequate disclosure against the other.

The Law

1. Rule 13.07 of the Family Law Rules 2004 (Cth) (“the Rules”) relevantly provides:

   Duty of disclosure--documents

   The duty of disclosure applies to each document that:

   (a) is or has been in the possession, or under the control, of the party disclosing the document; and

   (b) is relevant to an issue in the case.

   (Emphasis added)

2. Rule 13.22 of the Rules empower a party to apply for an order for disclosure. It relevantly provides:

   Application for order for disclosure

   (1) A party may seek an order that:

   (a) another party comply with a request for a list of documents in accordance with rule 13.20;

   (b) another party disclose a specified document, or class of documents, by providing to the other party a copy of the document, or each document in the class, for inspection by the other party;

   (c) another party produce a document for inspection;

   (d) a party file an affidavit stating:

   (i) that a specified document, or class of documents, does not exist or has never existed; or

   (ii) the circumstances in which a specified document or class of documents ceased to exist or passed out of the possession or control of that party; or

   (e) the party be partly or fully relieved of the duty of disclosure.

   (2) A party making an application under subrule (1) must satisfy the court that the order is necessary for disposing of the case or an issue or reducing costs.

   (3) In making an order under subrule (1), the court may consider:

   (a) whether the disclosure sought is relevant to an issue in dispute;

   (b) the relative importance of the issue to which the document or class of documents relates;

   (c) the likely time, cost and inconvenience involved in disclosing a document or class of documents taking into account the amount of the property, or complexity of the corporate, trust or partnership interests (if any), involved in the case; and

   (d) the likely effect on the outcome of the case of disclosing, or not disclosing, the document or class of documents.

   (4) If the disclosure of a document is necessary for the purpose of resolving a case at the conciliation conference, a party (the requesting party ) may, at the first court event, seek an order that another party:

   (a) provide a copy of the document to the requesting party; or

   (b) produce the document to the requesting party for inspection and copying.

   (5) The court may only make an order under subrule (4) in exceptional circumstances.

   (6) If a party objects to the production of a document for inspection or copying, the court may inspect the document to decide the objection.

3. Sub-rule 13.22(2) is clear that the onus of satisfying the Court that the order “…is necessary for disposing of the case or an issue or reducing costs” rests on the party making the application. In this matter, both parties have sought orders for disclosure from the other.

4. There is a question as to whether a document or documents being “relevant” for the purpose of rule 13.07 is a reference to the document being “directly relevant” to an issue in the case.[32]

   [32] See Strahan & Strahan (Interim Financial Orders) [2010] FamCA 423.

5. The Explanatory Statement, which accompanied the introduction of the Rules,[33] states:

   [Rule 13.07] imposes a duty on a party to disclosure documents in the party’s possession or control that are ‘directly’ relevant to an issue…

   The requirement for disclosure ‘directly relevant’ will introduce a higher standard of assessment in the shifting and examination of a client’s documents. This will oblige parties and lawyers to focus attention at an early stage upon the real issues in dispute and the documentary evidence that goes directly to those issues.

   Notwithstanding the apparent strictness of the rule, the focus must really be on relevance at a particular time of the documents or the information being pursued. The same principle of relevance applies in respect of the disclosure and discovery of documents as it does in relation to the pursuit of documents by a party of non-parties under subpoena.

   [33] Family Law Rules 2004, Explanatory Statement Statutory Rules 2003 No. 375.

6. Despite the reference in the Explanatory Statement to the need for a document or class of documents being “directly” relevant, I am reluctant to adopt a construction that imports an additional qualification to the concept of relevance when the word “directly” does not appear in the wording of rule 13.07.

7. I agree with the suggestion of Cronin J in K & K [2008] FamCA 957, wherein his Honour stated that a less strict approach than the “direct relevance” test should be applied in the preliminary stages of disclosure as between the parties when the issues in the proceedings are yet to fully crystallise.[34]

   [34] at [19].

8. The Court has a limited ability to consider whether the parties have complied with their obligations of disclosure pursuant to the Act and the Rules. They are important obligations and, in many ways, foundational to the effective operation of the Court. The issue of disclosure is one where the Court expects the parties’ solicitors to play a constructive role and provide the appropriate advice to their clients in the context of the solicitors upholding their duties as officers of the Court.

9. At this stage of the proceedings, and given the nature of issues in dispute that involve a multiplicity of entities that the parties’ control and/or have an interest in, it is simply not possible for the Court to examine each and every document that has been produced by the parties in response to requests that have been made for their production.

10. I note that both parties assert that they have complied or largely complied with their obligations of disclosure. The issue nonetheless remains in dispute. In the circumstances, I will make orders that require each party, within twenty-one days, to file and serve an affidavit that:

    a)Identifies the document or category of documents that have been provided to the other party;

    b)To the extent that either party has not provided documentation as sought by the other party, states:

    i.that the specified document or documents do not exist or has never existed;

    ii.the circumstances in which a specified document ceased to exist or passed out of the position or control of the party; and

    iii.why any document or documents that do exist have not been provided to the other party.

    c)Without limiting a) and b) above, those documents should include documents detailing the parties’ respective interests in and/or control of the following entities:

    i.Wilcox Yates Pty Ltd;

    ii.Wilcox Consolidated (Holdings) Pty Ltd;

    iii.E1 Pty Ltd;

    iv.E2 Pty Ltd;

    v.E3 Pty Ltd;

    vi.F Pty Ltd;

    vii.G1 Pty Ltd;

    viii.G2 Pty Ltd;

    ix.H Pty Ltd;

    x.I Pty Ltd;

    xi.J Pty Ltd;

    xii.K Pty Ltd;

    xiii.Wilcox Yates Family Trust;

    xiv.Wilcox Yates Partnership;

    xv.I Partnership; and

    xvi.L Superannuation Fund.

11. In making those orders, I note that the obligation of disclosure is ongoing. It should not be assumed by the parties that either party is excused from providing documents in his or her possession or control, or in the possession or control of an entity in which a party has an interest or exercises control, that otherwise falls within the obligations set out in the Rules.

What directions should be made for the further conduct of the proceedings transferred from the Supreme Court?

1. In circumstances where orders have been made in respect to the future progress of the proceedings transferred from the Supreme Court of New South Wales to this Court, it is unnecessary to further consider that matter.

Orders

1. For all these reasons I make the orders set out at the commencement of these Reasons for Judgment.

I certify that the preceding one hundred and thirty-nine (139) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 28 June 2016.

Associate: 

Date:  28 June 2016