Federal Circuit and Family Court of Australia
(DIVISION 1)

Galip & Galip (No 5) [2025] FedCFamC1F 11  
File number:	SYC 1278 of 2023	
		
Judgment of:	SCHONELL J	
		
Date of judgment:	17 January 2025	
		
Catchwords:	FAMILY LAW – PRACTICE AND PROCEDURE – Application to set aside an order – Application to vary an order – Orders made on 27 October 2023 – Where the wife sought to be appointed trustee for the husband in relation to his interests in a series of companies seeking a realization of the assets of those companies – Where the respondents opposed the wife being appointed trustee contending the more appropriate remedy being the appointment of a receiver – Where a failure to accede to the wife’s application would not frustrate her ability to take part in the final hearing – Application dismissed. 	
		
Legislation:	Family Law Act 1975 (Cth) s 106B
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.13 	
		
Cases cited:	Adam P Brown Male Fashions Pty Ltd v Phillip Morris Incorporated (1981) 148 CLR 170; [1981] HCA 39
Australian Securities and Investments Commission & Rich  (2003) FLC 93–171; [2003] FamCA 1114
Shamon & Shamon [2021] FamCA 417	
		
Division:	Division 1 First Instance	
		
Number of paragraphs:	20	
		
Date of hearing:	10 January 2025 	
		
Place:	Sydney	
		
Counsel for the Applicant:	Mr Young	
		
Solicitor for the Applicant:	Abbas Jacobs Lawyers	
		
Counsel for the First Respondent:	Mr McCrudden	
		
The First Respondent:	Litigant in person	
		
Counsel for the Second Respondent:	Mr Nelson	
		
Solicitor for the Second Respondent:	JB Solicitors	
		
Counsel for the Third Respondent:	Mr Ratham	
		
Solicitor for the Third Respondent:	Bartier Perry Lawyers	
		
Solicitor for the Fourth Respondent:	George Xylas Solicitor	
		
Counsel for the Fifth and Sixth Respondents:	Ms Bromberger	
		
Solicitor for the Fifth and Sixth Respondents:	Origin Lawyers	
		
The Seventh, Eighth and Ninth Respondents:	Did not participate	

ORDERS
	SYC 1278 of 2023	
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)	
BETWEEN:	MS GALIP
Applicant
	
AND:	MR GALIP
First Respondent

MR DONNELLY
Second Respondent

XX PTY LTD (and others named in the Schedule)
Third Respondent

order made by:	SCHONELL J	
DATE OF ORDER:	10 JANUARY 2025	

THE COURT ORDERS THAT:

THE COURT ORDERS THAT:
1.	Orders are made in accordance with paragraphs 1 to 22 of a document titled “Third Respondent’s Proposed Orders – 10 January 2025” filed 10 January 2025 (as amended and marked as Exhibit 1) as set out hereunder:
“1.	[Ms WW] be joined as the fourth respondent.
2.	[Mr AC] be joined as the fifth respondent. 
3.	[AL Pty Ltd] ACN […] be joined as the sixth respondent.
4.	[Ms YY] be joined as the seventh respondent. 
5.	[Mr AF] be joined as the eighth respondent. 
6.	[Mr AG] be joined as the ninth respondent. 
7.	That forthwith the Husband, in his capacity as director and shareholder of the relevant entity which is the registered proprietor of the following properties, will do all acts and things and sign and provide all documents necessary within 3 business days of demand by any party, to effect the market and sale of the:
(a)	property known as [BB STREET, SUBURB CC], NSW […]  being the whole of the land comprised in Certificate of Title Folio Identifier […];
(b)	property known as  [3 PP STREET, SUBURB QQ], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifier […];
(c)	property known as [1 PP STREET, SUBURB QQ], NSW[…]  being the whole of the land comprised in Certificate of Title Folio Identifier […];
(d)	property known as [2 PP STREET, SUBURB QQ], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifier […];
(e)	property known as [LL STREET, SUBURB MM], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifier […];
(f)	property known as [NN STREET, SUBURB CC], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifiers […], […] and […];
(g)	property known as [K STREET, SUBURB L], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifier […];
(h)	property known as [SS STREET, SUBURB H], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifiers […], […], […], […];
(i)	property known as [AM STREET, SUBURB AN], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifier […];
(j)	property known as [RR STREET, SUBURB AO], NSW […] being the whole of the land comprised in Certificate of Title Folio Identifier […];
(together, “the Properties”) and in particular will:
(i)	list the Properties for sale with [AS Real Estate] (“the Agent”);
(ii)	execute all documents requested by the Agent for the sale of the Properties including the Agent’s contract in a form agreed upon by the Husband and the Wife and in the event that the Husband and the Wife cannot agree on the terms of the Agent’s contract within seven days of the agent being selected, the contract is to be in the agent’s standard terms and with the agent’s standard fees;
(iii)	give such instructions as are necessary to a legal practitioner agreed upon by the Husband and the Wife within seven days of the date of this Order and failing agreement the Husband shall forthwith in writing nominate two legal practitioners from which the Wife shall within a further seven days select one and failing which the Husband will select one who shall be the legal practitioner appointed (“the Legal Practitioner”);
(iv)	market the Properties for sale by public auction on a date within six weeks of the date of the selection of the Agent (“the First Auction”) at a reserve price agreed between the Husband and the Wife and the Third Respondent and failing agreement within 14 days of the date of this order in the sum to be determined by an independent valuer with the Third Respondent to nominate three valuers within a further 7 days and the wife to select one within a further 7 days failing which the Third Respondent shall nominate the valuer with the Husband to pay the costs of the valuer;
(v)	in the event that the Properties do not sell at the First Auction, market the property for sale with the Agent by way of private treaty for a period of 12 weeks during which time accept any offer made to purchase the Property within 5% of the reserve price of the First Auction unless the Husband and the Wife otherwise agree;
(vi)	in the event that the Properties are not sold at the First Auction and is not sold in the period provided for sale by private treaty, market the Property for sale by public auction with the Agent on a date within six weeks of the date of the conclusion of the period of sale by private treaty at a reserve price agreed between the Husband and the Wife and failing agreement 5% below the reserve price at the First Auction;
(vii)	attend any auction pursuant to this Order and in the event that the reserve price set for that auction is not reached will negotiate with the highest bidder and the second highest bidder and will accept the highest offer to purchase made within 5% of the reserve price set for that auction unless the Husband and the Wife otherwise agree;
(viii)	execute the contract for sale in a form agreed to by the Husband and the Wife and in the event that the Husband and the Wife fail to agree on the terms of the contract for sale the terms recommended by the Legal Practitioner will be adopted;
(ix)	co-operate in every way with the Agent in relation to the sale of the Properties at all times requested by the agent and ensure that the Properties are in a neat and clean condition;
(x)	execute all other documents necessary to complete the sale within the time required by the contract for sale to ensure that the purchasers do not have a right to terminate or rescind due to failure to do so;
(xi)	the Husband is to provide the Wife and/or any party to the proceeding with any document including any communication relevant to undertaking or carrying out any task referred above;
(xii)	the Husband and Wife are to ensure that any costs to be incurred in effecting these orders are reasonable and necessary; 
(xiii)	the Husband and Wife must do all things necessary to achieve a sale price of the Properties at market value; and
(xiv)	the Husband is directed to not act unreasonably in effecting these orders.
8.	That on settlement of the sale of the Properties the Husband and Wife will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
(i)	payment of the agent’s commission, marketing and advertising costs, auctioneer’s fees and any other expense properly incurred in respect of the sale of the Properties;
(ii)	payment of legal costs of sale;
(iii)	payment of any amount outstanding to any water authority or local council in respect of the Properties not otherwise taken up as a credit in favour of the vendor;
(iv)	payment of the amount required to effect a discharge of the registered mortgagees secured on the title of the Properties;
(v)	the balance being the net sale proceeds to be paid into Court if appropriate or otherwise a controlled monies account, or alternatively, the Wife’s solicitor’s trust account, earning interest pending further order.
9.	Pursuant to Section 106A of the Act, in the event either party refuses or neglects to execute any deed or instrument necessary to give effect to Order 7 then the Registrar of a Court of competent jurisdiction in relation to the Act is appointed to execute such deed or instrument in the name of the defaulting party and do all acts and things necessary to give validity and operation to the deed or instrument.
10.	That pending further order of the Court, and other than complying with Order 7 above, the Husband is restrained by way of injunction from selling, disposing, transferring, dealing with or further encumbering any real property in his sole name, or held jointly with any other person including  by which the husband is a director of and has a beneficial entitlement to any real property as shareholder in the following entities:
(a)	[GG Pty Ltd].
(b)	[KK Pty Ltd].
(c)	[AP Pty Ltd].
(d)	[Q Pty Ltd].
(e)	[J Pty Ltd]].
(f)	[EE Pty Ltd].
(g)	[FF Pty Ltd].
(h)	[Galip Investments Pty Ltd].
(i)	[AQ Pty Ltd].
(j)	[AR Pty Ltd].
(k)	[JJ Pty Ltd].
(l)	[P Pty Ltd].
11.	By 14 February 2025, the fourth, fifth, sixth, seventh, eighth and ninth respondents file any Points of Defence.
12.	By 28 February 2025, the fourth, fifth, sixth, seventh, eighth and ninth respondents file any affidavits in opposition to the applicant’s points of claim.
13.	By 14 February 2025, any of the respondents file or amend their applications claiming the final relief they seek against those properties together with the basis upon their respective entitlements. 
14.	By 28 March 2025, the applicant file her trial affidavit and any further affidavits which she relies on at trial. 
15.	By 30 April 2025, any of the respondents to file their trial affidavits and any further affidavits which they intend to rely on at trial. 
16.	By 20 May 2025, any of the parties to file any affidavits in reply to the trial affidavits.
17.	The proceedings be listed for a Trial Management Hearing on 20 June 2025.
18.	List the matter for final hearing commencing 5 days on 14 July 2025.
19.	Within 14 days of the date of these orders, the Husband provide to the solicitors for the parties all financial documents previously disclosed to the Wife in these proceedings.
20.	Within 14 days of the date of these orders, to the extent not already provided in Order 19 above, the Husband is to provide to the solicitors for the parties the documents referred to in Annexure A to these orders in respect of the entities referred to in Order 10 above for the period 1 January 2021 to 1 January 2025.
21.	Liberty to restore the matter on 3 days’ notice.
22.	The Court notes that, in these orders “Encumber” means: mortgaging, charging, pledging, granting any other security over title to the Properties or its sale proceeds in any way so as to restrict free and clear title from being passed, or increasing the indebtedness to any person holding a current security over the Properties or its sale proceeds.
Annexure A
1.	financial statements and financial accounts;
2.	company taxation returns;
3.	business activity statement returns;
4.	bank statements, records of term deposits, financial investments, and accounting statements (to the extent they exist);
5.	documents recording the companies present net asset position;
6.	documents recording cash on hand presently held by the companies;
7.	documents recording assets, including real property, presently held by the companies for its own benefit (including assets which the companies may hold on trust);
8.	in respect of 7 above, any document recording any encumbrance[s], including but not limited to any mortgage[s] over any such assets including the present value of such encumbrance as at 10 January 2025;
9.	default notices or demands made by any lender claiming any rights in relation to any property;
10.	any document recording the companies shareholding or interests in any entity in Australia or overseas; and
11.	any document recording any of the companies assets being used or applied as any form of security including collateral security.”
AND THE COURT LATER ORDERS IN CHAMBERS THAT:
2.	Pursuant to s 68 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) the parties are to note and comply with the overarching purpose as identified in s 67 of the Act and r 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Court Event
3.	The proceedings are listed for trial for five days commencing on 14 July 2025.
Hearing fees
4.	The Applicant and the Respondent must pay the setting down and hearing fees in equal amounts (or seek an exemption) no later than 28 days prior to the trial date.
Material to be filed 
5.	On or before 13 June 2025 each of the applicant and first respondent are to file and serve:
(a)	an updating Financial Statement
(b)	an undertaking as to disclosure in accordance with r 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
6.	Except as already provided by these orders, the parties will not be permitted to file any further affidavits and may not rely upon any past affidavits at trial without the leave of the Court.
Non-compliance
7.	The compliance with these directions is not optional.  The consequences of non‑compliance can include orders for costs, including on an indemnity basis.
8.	In the event that a party does not comply with these directions the court will give consideration to proceeding with the matter on the basis of evidence filed to the date of non-compliance.
9.	In the event that any party becomes aware of any matter that would prevent the proceedings commencing on the first date allocated or continuing to conclusion on the last date allocated including non-compliance, that party is to forthwith restore the proceedings to the list on 48 hours’ notice to the Court and to each other party.
Balance Sheet
10.	The Applicant shall not later than 28 days prior to the trial date serve upon the Respondent a joint draft balance sheet to include all assets, liabilities, superannuation interests, financial resources and property suggested to be relevant and to include values as alleged by each party and:
(a)	the Respondent shall within 7 days of receipt of the draft balance sheet make any additions to the balance sheet as required to reflect contra allegations by the Respondent and any values that are agreed (if applicable)
(b)	wheresoever controversy exists as to the inclusion of an item or the value of an item a footnote shall be appended to explain the controversy
(c)	upon completion of any Single expert valuation the balance sheet shall be amended to reflect determined/agreed values and
a final, settled version of the joint balance sheet shall be filed not later than 7 days prior to the trial date.
Subpoenas
11.	Each party is at liberty to issue such subpoena as they consider relevant to the issues in these proceedings and such subpoena shall be made returnable not later than 14 days prior to the trial date and are to be inspected prior to the first day of hearing.
Documents to be prepared for the Court
Objections
12.	Each party shall, not later than 28 days prior to the trial date:
(a)	notify the other party in writing of any objection to any material in any affidavit filed by the other party
(b)	specify the paragraph or part of the paragraph objected to and
(c)	detail the grounds of the objection. 
The other party shall reply to the objections in writing within 7 days.
The parties before the Trial shall confer in relation to any objections and provide to the Court not later than 7 days prior to the trial date a list setting out:
(a)	the agreed deletions from each affidavit and 
(b)	the objections to be argued on the hearing date and the ground for the objections.
Case Outline
13.	Not later than 14 days prior to the trial date, each party is to file and serve a Case Outline document in the approved form which shall not, without leave, exceed 5 pages in respect of parenting issues and 5 pages in respect of financial issues and shall include:
(a)	a list of the material relied upon
(b)	a brief chronology listing significant events that are relevant to the issues to be determined by the Court
(c)	a summary of argument outlining the legal and factual basis for their claimed relief
(d)	a minute of order sought 
Joint Chronology
14.	Not later than 7 days prior to the trial date the parties are to confer and thereafter forward to my Associate a joint chronology in Microsoft Word format setting out all agreed facts that the parties ask the Court to take into account.
List of Issues
15.	Not later than 7 days prior to the trial date each party is to file and serve the other parties with a document setting out with precision what that party contends to be the issues in the proceedings.
Factual Findings
16.	Not later than 7 days prior to the trial date each party is to file and serve the other parties with a document setting out with precision the factual findings that party will contend should be made by the Court and in relation to each factual finding there is to be referenced the paragraph number in the Affidavit and/or a precise reference to the document in the Annexures or Exhibits that supports the making of the factual finding. 
Trial Plan
17.	Not later than 48 hours prior to the trial date the parties are to confer and prepare a trial plan allowing for the matter to complete within the allocated time including submissions. 

Note:	The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Galip & Galip has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT
SCHONELL J:
1	Before the Court are further interlocutory proceedings arising as a consequence of various transactions undertaken by the husband which the wife seeks at a final hearing to set aside pursuant to s 106B of the Family Law Act 1975 (Cth). The applications seek the realization of the assets of various companies owned and controlled by the first respondent husband.
2	At the interlocutory hearing on 10 January 2025 the parties reached agreement as embodied in orders made by consent in relation to many aspects of the present dispute including the issue of joinder such that there are now nine respondents to the proceedings including the husband. 
3	The wife relies upon what she says is a chronic and deliberate failure by the husband to comply with orders. It is not in issue that the husband is in default of orders to pay monies to the wife pursuant to orders made by Campton J on 27 October 2023 and in default of disclosure obligations. The Court has allocated five days for a final hearing in the matter commencing on 14 July 2025 and part of the orders made on 10 January 2025 were to prepare the matter for that final hearing. In the event that there is non-compliance with the orders, then the matter will proceed on the basis of evidence filed by those parties who have complied with the orders.
4	While the parties reached agreement about many aspects of the interlocutory dispute, they remained apart on two issues. The first was whether orders should be made as sought by the wife for her to be appointed trustee for the husband in relation to his interests in a series of companies to affect a realization of the assets of those companies. The wife’s orders sought amongst other orders that she be registered as a sole member of each of the companies enabling her to pass resolutions, to be appointed as a director, to thereafter wind up each of the companies, and for there to be a distribution to her as a member of the company the proceeds on a winding up in satisfaction of the husband’s obligation pursuant to the orders made by Campton J.  
5	The relief sought by the wife was opposed in part by all of the respondents. The respondents were content for the company assets to be realized and deposited in an account to await the final determination but opposed the wife being appointed trustee, contending the more appropriate remedy was the appointment of a receiver and opposed the wife seeking a sum in preference to their claims against the husband and the companies.
6	I made orders as largely sought by the respondents and indicated I would deliver reasons in due course. These are those reasons.
The Wife’s Submissions 
7	The wife submitted that the respondents are not secured creditors. Her Case Outline filed 8 January 2025 contended as follows:
20.	Consequently, there is no basis for the Court to make orders which restrain the applicant and first respondent from dealing with the asset pool or provide for the second and third respondent to receive payment in priority to other unsecured creditors of the first respondent.
21.	In light of the first respondent’s assertion that he is insolvent, it is accepted that the Court would find there is a real risk that the first respondent will be unable to repay his unsecured creditors. It is also accepted that the Court will need to make findings about the nature and extent of the first respondent’s indebtedness to his unsecured creditors at trial, in order to determine the net value of the pool and the final adjustment of interests which is just and equitable under s 79 of the Act. Those findings will also be relevant to the orders which the Court makes under s 106B of the Act, in respect of which the Court must have regard to the second and third respondent’s position as “other persons interested” under s 106B(3).
22.	None of these matters justify the grant of interim relief by this Court which will determine the extent of the first respondent’s indebtedness to the second and third respondent before the applicant’s s 106B application is heard at trial.
23.	If the applicant’s s 106B application is unsuccessful then it is likely that the Court would find the first respondent’s net asset position to be negative and take that into account in determining the appropriate order under s 79 of the Act, having regard to the interests of all parties. Should the respondents take further steps to enforce the debts which the Court, on this hypothesis, has upheld, the first respondent would likely become bankrupt and the respondents would receive an appropriate share of his bankrupt estate in due course. The fact that the respondents would not be paid in full in this situation is simply a consequence of being an unsecured creditor. It is not a kind of unfair prejudice which the Court should prevent by making interim orders.
…
31.	Consequently, the applicant seeks order 8 below which will provide for her to take control of the first respondent’s companies, wind them up (which will involve the payment of all secured creditors and finalisation of claims by any unsecured creditors), use the proceeds to pay her outstanding entitlement to interim property settlement under the orders of 27 October 2023, and hold any further proceeds in her solicitor’s trust account until the final determination of these proceedings.
32.	Although framed as an interim exercise of power pursuant to s 79, and designed to reflect the orders of 27 October 2023 by appointing the applicant as trustee for the sale of the first respondent’s interest in the specified companies, the proposed order does not provide for the applicant to receive anything more than her accrued entitlement under the orders of 27 October 2023 (that is, the net sale proceeds of the [Suburb C] property plus $700,000 which remains outstanding under order 3).
33.	Rather, the proposed order will give effect to the Court’s intention, on 27 October 2023, that the equity remaining in the various properties held by the first respondent’s companies not be dissipated, hence the injunction in order 7. That intention was partially defeated by the first respondent’s conduct to 18 November 2024. His conduct since then suggests that he intends to continue defying the Court’s orders.
34.	It is in the interests of justice for the Court to protect the interest of all parties, including the second to eighth respondents who may ultimately be found to be unsecured creditors of the first respondent, against further dissipation of the asset pool by way of interest accrued to secured creditors or further undisclosed dealings by the first respondent in contravention of the orders of 27 October 2023.  
The Respondents’ Submissions
8	Each of the respondents made brief submissions, albeit they adopted the submissions of counsel for the third respondent. The third respondent’s counsel sought to contend that his client was in a somewhat different position to that of the other respondents. His counsel in his Case Outline filed 8 January 2025 submitted:
31	To the extent any of the lenders have rights over any property owned or controlled by the husband, there must be a determination of priority interests by each of the respective lenders. There is without question competing interests as between the lenders to be determined. There remains one now between [Mr Donnelly] and [XX Pty Ltd]. [Mr Donnelly] seeks to be paid his debt ahead of [XX Pty Ltd], which [XX Pty Ltd] challenges. It is likely the other parties yet to be joined will contend they should be paid in priority to other lenders.
32	It is unknown at this point of the proceedings if the Court should allow all debts be paid first prior to awarding the proportion the wife and husband are entitled to from the matrimonial pool of assets, or whether the husband is liable from his proportion so determined for all loans subject to unregistered security interests.
33	It is not suggested that the wife not be entitled to an interim property distribution. However, the interests of [XX Pty Ltd] much like the registered interests of the Commonwealth Bank of Australia ought to be taken into account. It is apparent [XX Pty Ltd’s] interests were not taken into account in any meaningful way when Campton J made orders. That criticism is not leveled at the wife but at the husband as disclosure of [XX Pty Ltd’s] loan and other loans ought to have been disclosed for the Court’s consideration with some precision. Further, when Campton J made orders, [XX Pty Ltd] did not have an opportunity to put forward any argument.
34	The determination of the matters above (in large part), is necessary before the wife and/or husband can deal with any property (subject to the matrimonial pool of assets). After all, no order sought by them to date takes into account [XX Pty Ltd’s] debt before property is to be divided or a proportional split is made pursuant to section 79 of the Act. To deal with the husband and wife’s entitlement under 79 without regard to [XX Pty Ltd’s] rights, puts [XX Pty Ltd] at risk that its loan funds will not be repaid from the security interest it contends it has recourse to on default.
35	For example, if the wife is entitled to proceed to enforce Campton’s J’s orders, which remain on foot, the Commonwealth Bank of Australia and other creditors involved in the sale of the [Suburb C] Property will be paid in priority, with any residual sum paid in its entirety to the sole benefit of the wife. In those circumstances it follows the [Suburb C Property] will no longer be available to [XX Pty Ltd] to enforce its interests against, nor will there be any proceeds of the sale quarantined for the benefit of [XX Pty Ltd]. The short point is [XX Pty Ltd] pursuant to Campton J’s orders will lose any benefit over the [Suburb C] Property if its rights are not preserved.
36	Additionally, if the wife and husband can deal with other properties, there remains the risk that [XX Pty Ltd] also loses rights of recoverability over those properties if its interests are not preserved. To that end, when one looks to the Final Minute of Orders contended for by the wife (order 2(a)), if the Court where to make that order until [XX Pty Ltd’s] rights are determined, there is risk that the utility of [XX Pty Ltd] rights of enforcing is security interests are futile. 
9	Each of the respondents contend that their claims may be compromised by a payment to the wife.
DISPOSITION
10	I have read the documents relied upon by each of the parties as set out in their Case Outlines.
11	As these are interlocutory proceedings and all of the evidence that would be available at a final hearing is not before me, I need to proceed with caution.
12	I am not satisfied that the wife should be appointed trustee for the husband. To do so could create a fiduciary relationship between them. Given the current level of distrust and conflict, I am not satisfied that she can carry out the task consistent with the obligations imposed upon her as a trustee. I am also concerned that it could expand, not limit, the level of disputation between them. I further note there is no evidence on the part of the wife that indicates her consent to act as trustee, nor any evidence that she is aware of the obligations imposed upon her by undertaking such a task. I am satisfied that the more appropriate course would be for the appointment of a receiver which is supported by all respondents. 
13	Nor am I satisfied that I should at this stage apply the proceeds of the realization of company assets to the wife. In that respect, the order as cast by Campton J imposed the obligation on the husband, not the companies. The order the wife seeks is a variation of the order made by his Honour.
14	The Court’s power to vary and/or set aside orders is both inherent and recorded in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) at r 10.13, which provides that the Court may at any time vary or set aside an order if it is interlocutory. The High Court in Adam P Brown Male Fashions Pty Ltd v Phillip Morris Incorporated (1981) 148 CLR 170 (“Adam P Brown”) observed in relation to interlocutory orders as follows at 178:
… Just as an interlocutory injunction continues “until further order”, so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust: cf. Woods v. Sheriff of Queensland; Hutchinson v. Nominal Defendant; Chanel Ltd. v. F. W Woolworth & Co. Ltd. Of course, the changed circumstances must be established by evidence: Cutler v. Wandsworth Stadium Ltd.
(Footnotes omitted)  
15	As McClelland DCJ observed in Shamon & Shamon [2021] FamCA 417 in referencing Adam P Brown:
96	… The High Court in that decision applied Cutler v Wandsworth Stadium Limited [1945] 1 All ER 103 in confirming that the onus rests on the person seeking to vary the consent or interim order to establish those changed circumstances. 
16	I am not satisfied, beyond the fact that the husband has not complied, that the wife has established a change of circumstances sufficient to warrant the Court varying the orders to the extent she seeks when I have regard to the fact that orders were made at a time when none of the respondents were before the Court.
17	I also note the observations of O’Ryan J in Australian Securities and Investments Commission & Rich (2003) FLC 93–171 as follows:
35	Ordinarily there is no issue in relation to the interests of secured creditors as the secured creditor has an interest in that part of the property of the debtor over which the security is taken.  The Court cannot make an order altering the interests in property to the extent that a secured creditor’s rights in property are affected because the property, to the extent of the security, is not the property of the parties.  This is consistent with Ascot Investments namely that the Court cannot make an order that operates to the detriment of the rights and interests of a third party. 
36	Unsecured creditors however have no right to a particular part of the debtor’s property.  The unsecured creditor has a right to sue the debtor, recover judgment and prove in bankruptcy.  However, the usual practice described in Prince, and other cases, also applies to unsecured creditors.  The Court will deduct the amounts owed to unsecured creditors in order to arrive at the net property of the parties.  In Re Bailey the Full Court said that the liabilities may be secured or unsecured.  In Biltoft and Biltoft the Full Court said:
“A general practice has developed over the years that, in relation to applications pursuant to the provisions of s 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities. In the case of encumbered assets, the value thereof is ascertained by deducting the amount of the secured liability from the gross value of the asset. See, Ascot Investments Pty Ltd v. Harper & Anor (1981) 148 CLR 337 where Gibbs J. (as he then was) pointed out at p 355 that the Court “must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it”. Where the assets are not encumbered and moneys are owed by the parties or one of them to unsecured creditors, the court ascertains the value of their property by deducting from the value of their assets the value of their total liabilities, including the unsecured liabilities.”
37	In some circumstances, as between the parties, the Court may come to the conclusion that there are sufficient uncertainties as to the liability to lead the Court to disregard it entirely or partly.  In Prince Evatt CJ. said:
“The assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases.  While some liabilities are charges upon the property which can be accurately assessed at a certain date, others are at large, or have not been precisely determined, e.g. tax liabilities (Kelly and Kelly (No. 2) (1981) FLC 91-108 p. 76,801). In some cases the amount of the liability can only be estimated generally (Albany (supra), p. 75,717).  The Court can make an allowance for a particular liability if appropriate to do so.  In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (e.g. a loan from a parent of the party not likely to be enforced; Af Petersens (supra); Quirk (1983) unreported). In other cases, the Court may take the view that because of the circumstances surrounding the incurring of the liability it ought in justice and equity to be wholly or partly disregarded in determining the appropriate order to make under sec. 79 as between the parties to the marriage. Such a result could be reached where a spouse had incurred a liability in deliberate or reckless disregard of the other party’s potential entitlement under sec. 79 (Kimber and Kimber (1981) FLC 91-085; Kowaliw and Kowaliw (1981) FLC 91-092; Antmann and Antmann (1980) FLC 90-908; Af Petersens (supra)).  Complex issues can arise in regard to liabilities to third parties (see, e.g. Pockran and Crewes; Pockran (1983) FLC 91-311).
Of course, the Court cannot ignore the fact that there is or may be a liability; the effect is simply that it does not consider that the other spouse should be called upon to in effect “contribute” to the liability by having that spouse’s fair share in the parties’ property reduced by virtue of its existence. The effect may be that the party who has incurred the liability will be left to meet it out of whatever funds remain to that party after satisfying the property order made under sec. 79 (Af Petersens (supra)).”
38	This approach was affirmed by the Full Court in Biltoft. 
18	There has been no testing of the competing assertions of the respondents. There is no up-to-date Balance Sheet that would enable the Court to be satisfied that a payment to the wife from company funds would not compromise the position of any of the respondents. 
19	I note that a failure to accede to the wife’s application would not frustrate her ability to take part in the final hearing. The orders made by Justice Campton provided for her to receive the net proceeds of sale of a property at Suburb C in addition to the further sum she now seeks to obtain from the proceeds of sale of company assets. Her counsel informed The Court today that it is anticipated that if the property sells for the price anticipated, then after discharge of the secured mortgage to the Commonwealth Bank, the wife should receive some $2.5 million. In those circumstances, it could not be said that the wife is without means to litigate in this court.
20	These are my reasons for refusing the relief sought by the wife and making the orders as sought by the respondents.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell.	

Associate: 

Dated:	17 January 2025

SCHEDULE OF PARTIES

	SYC 1278 of 2023	
Respondents		
Putative Fourth Respondent:	MS WW	
Putative Fifth Respondent:	MR AC	
Putative Sixth Respondent:	AL PTY LTD	
Putative Seventh Respondent:	MS YY	
Putative Eighth Respondent:	MR AF	
Putative Ninth Respondent:	MR AG