1. In her Form 13 Financial Statement filed 1 October 2024, the wife asserted the net property and superannuation interests of the parties was worth $4,435,111, broken down as follows:
   1. Real estate (five properties): $5,075,000 with a reduction of $994,500 to take account of the asserted beneficial of the wife's parents in the Suburb B property, equals $4,080,500.
   2. Bank accounts: $1,253,666.
   3. Motor vehicles: $70,000.

4, Company A Pty Ltd as trustee for the Company A Trust trading as [the practice]: $1,982,628.

1. Cryptocurrency: $72,167.
2. Mortgage liabilities: ($2,765,227).
3. Business loan: ($675,234).
4. Credit cards: ($30,635).
5. Estimated capital gains tax for sale of three properties: ($66,000).
6. Wife's estimated taxation liability at 30 June 2024: ($30,000).
7. Estimated sales commission on sale of two properties: ($35,000).
8. Superannuation interests of parties: $578,246.
9. As indicated earlier, since this financial statement was filed, the parties have sold real estate and discharged some mortgage liabilities and the business loan.
10. The wife has not done payroll since 11 April 2024. The wife was not a fee earner in the practice but has worked for an unrelated practice in Perth.

1. Before determining the husband's application, the parties' business structure must first be analysed to determine, so far as possible, the parties' personal legal obligations, including whether the pre-payments retained by the practice are potentially personal liabilities of the husband and the wife.
2. The parties established the Company A Trust by deed dated 5 October 2014. At the time the trust was created, the husband and the wife were the trustees and joint appointors. Company A Pty Ltd was registered [in late] May 2021. By Deed of Appointment of Trustee executed [in] June 2021, Company A Pty Ltd replaced the husband and the wife as trustees of the trust.
3. The husband and the wife each hold one ordinary share and were each directors of Company A Pty Ltd until the wife resigned on 28 November 2024.
4. The husband and the wife purchased the practice for $872,000, by way of loan from [Financial Institution A]. The Court infers from the wife's evidence and the financial statements tendered into evidence that the loan was obtained by Company A Pty Ltd as trustee for the Company A Trust trading as the practice. The parties provided a personal guarantee for this loan. The evidence does not disclose whether Financial Institution A also required the parties to permit the registration of a mortgage over real estate owned by either or both of the parties, to secure the loan. The balance of the business loan was reduced to $762,812 at 30 June 2023. The business loan was discharged on or around 17 December 2024.
5. Under the effective ownership of the husband and the wife, the practice commenced operations in about October 2021. According to the wife, the husband operated under a Services and Facilities Agreement (SFA). A copy of that agreement was not adduced in evidence. The manner in which the SFA operates is not entirely clear. According to the wife, she and the husband operated the practice together until late February 2024. During this time, the husband undertook all work and the wife administered the practice, with the assistance of the receptionist and [another health professional]. The receptionist and the other health professional have since resigned. The wife deposed that it was not intended that she would work in the practice.
6. The wife deposed:

[The husband] operated as an SFA which is a Services and Facilities Agreement. This meant that [the husband] had to invoice the [practice] each month for his commission for the services he provided. I calculated the fees rendered by [the husband] for each month less the lab bills and arranged for [the husband]'s commission to be paid to his NAB Account ending [number redacted].

1. The Court received into evidence a copy of the financial statements and income tax return for the Company A Trust trading as the practice for the financial year ending 30 June 2023. These documents do not reflect the arrangements deposed to by the wife about the SFA. The husband and the wife's income tax returns for the financial year ending 30 June 2023, or any other financial year, were not adduced in evidence.
2. In 2023, the trading income of the Company A Trust comprised management fees of $776,798 and lab fees of $52,429. The components of the income means that the professional fees of the practice are not earned by the trust. The Court infers that the professional fees of the practice are earned by the husband who is required to pay a management fee to the trust. There is no evidence of the total professional fees earned by the practice in 2023.
3. In 2023, the financial statements show the trust earned a profit of $106,948. According to the trust's tax return, its taxable income was $103,659 and this was distributed to the wife.
4. In the 2023 financial year, the trustee received $501,218 by way of income in advance, being pre-payments from patients for work yet to be done. This sum is recorded as a current liability. The husband is recorded as owing the trustee the sum of $130,786 as a non‑ current liability. The husband and the wife are jointly recorded as owing the trustee the sum of $616,030 as a non-current liability. The wife gave evidence that, on the advice of the accountant, she transferred six sums of $100,000 each (four withdrawals in May 2023 and two withdrawals in June 2023) from the business account held by the trustee to the personal mortgage offset account of the husband and the wife.

1. The evidence of the husband and the wife satisfies the Court that patients were paying the practice pre-payments which the husband and the wife then withdrew from the practice. The trustee and the trust is interposed between the husband and the wife and the patients. The legal relationship evidenced by the financial statements appears to be one of creditor - debtor as between the patients who have made pre‑payments, as creditors, and the trustee and the trust, as debtor. The same legal relationship of creditor - debtor exists in reverse between the husband and wife, as debtors, and the trustee and trust, as creditors.
2. The wife gave evidence that four further payments of $100,000 were drawn from the business expenses account in October, November and December of 2023 and paid to the parties' mortgage offset account.
3. Given the husband's evidence in support of his application, a serious issue to be tried is whether the manner in which the financial statements have been prepared is consistent with the mutual intention of the patients and the practice when pre-payments were made. That is, does the practice hold those funds on trust, or otherwise subject to a condition, that the funds are required to be applied by the practice only for the purpose for which they were advanced, namely to complete the work and associated services, and in the event such is not done within a reasonable time, then the funds revert back to the patient. As discussed later in these reasons, a real issue arises as to the existence of a Quistclose trust.
4. By consent orders made [in early] November 2024 and [mid] December 2024, the parties discharged the business loan owed by the trustee. At 30 October 2024, the payout figure was $672,257. According to counsel for the wife, the parties paid a top up figure to discharge the total loan in the sum of $684,152. In making this payment, the Court observes that the business loan was recorded in the financial statements as a non-current liability while the pre-payments remain recorded in the financial statements as a current liability. The business loan was not secured by any business assets, however the parties did each provide a personal guarantee.
5. Based upon the available evidence, which is sketchy and incomplete, the parties individually and jointly owed $746,816 to the trustee at 30 June 2023, and then drew a further $400,000 from the business account held by the trustee in the second half of 2023, increasing their personal indebtedness to $1,146,816.
6. In December 2024, the parties discharged the business loan owed by the trustee and discharged their guarantees. If this payment was in the total sum of $684,152, then the parties' individual and joint personal debt to the trustee is reduced to $462,664.
7. The balance sheet records the wife, as beneficiary, is owed $272,936 by the trust (as a current liability) at 30 June 2023. This means that even though the trust's income in the 2023 and the 2022 financial year may have distributed to the wife for taxation purposes, such funds were not paid to her but retained by the trust. If the wife's beneficiary loan is offset against the balance which the parties owe the trustee, the parties owe around $189,728 to the trustee.
8. This is the outdated and incomplete information available to the Court on the evidence given in support of the application. Circumstances are likely to have changed subsequently.

1. The husband asserts that the total money owed to patients who have made pre-payments is $432,051. However, he is not presently seeking an order for this total sum to be repaid to these patients. The husband does maintain that these funds do not belong to the parties or their practice but rather to the patients. The husband's evidence implicitly asserts that the income paid in advance by patients for services is held on trust for those patients.
2. The husband says some patients require urgent work, that the wife managed the financial side and he did the work. The husband says on many occasions patients would obtain money from their superannuation funds to make the pre-payments.
3. The husband asserts that the parties paid the pre-payments into their joint personal joint mortgage offset account. The balance of the offset account is $316,376.91. The husband says this is a shortfall of $116,675 used by the parties. That is, the husband says he and the wife have used pre-payments made by patients of the practice for their personal use without providing any services or alternatively without completing the services for which the patients have paid.

1. The wife argues that the husband's application should be dismissed.
2. She says that the application cannot be considered by the Court in circumstances where the financial position of the practice is not known. The wife says that advice must be obtained from an experienced liquidator on the current financial position of the practice. If the practice is insolvent, then orders in terms of those sought by the husband are said to create a risk of giving preferential treatment to potential creditors.
3. In relation to the five patients in respect of which the husband applies for repayments, the wife specifically responds. The wife does not deny that patients paid pre-payment money and the wife does not deny that monies were transferred to the joint offset account. However, the wife is unable to say with any certainty what the amount of unprocessed pre-payment is and where those funds may be held. The wife maintains that the starting point is the financial position of the practice and if found to be insolvent, whether there should be a winding up and a liquidator appointed to deal with the resulting position of the closure of the practice, investigate patient creditor claims and deal with all creditors of the practice and if possible, pay a dividend to the creditors.
4. The wife says that while solicitors may be required to maintain a statutory trust account, the arrangement does not exist for [their qualifications] and the practice has never held a trust account.
5. As earlier stated, the wife's evidence is that between May 2023 and December 2023, ten payments of $100,000 each were transferred from a business bank account held by the trustee for the business to the parties' personal joint mortgage offset account.
6. At 7 March 2025, the balance of the joint offset account is $289,712.

1. The starting point is that the parties and the Court must not treat the liabilities of a company which the husband and wife control as personal liabilities of the husband and the wife, for such is a legal error.[1]
2. While the corporate liabilities in question in Oldham[2] and Pavlic[3] were taxation liabilities of the corporation in each case being incorrectly treated as personal liabilities of the spouses, there may be no material difference (subject to the following discussion) justifying the treatment of the funds advanced by patients to Company A Pty Ltd as corporate trustee for the Company A Trust as a personal liability of the husband and wife or either of them.
3. The Court is entitled to order the husband and the wife to pay funds owed by them personally or jointly to third parties.[4] However, if the patients are treated as creditor of the trustee in respect of the funds they have pre-paid, the funds owed to them are not owed by the spouses personally, but rather are owed by the trustee (which is the alter ego of the husband and the wife).
4. At trial the Court is obliged to consider the existing legal and equitable rights and interests in any property of the parties to the marriage or either of them and the existing liabilities of the parties to the marriage or either of them.[5] Therefore, the correct characterisation of the pre-payments made to the practice is significant both for the patients who made the payments, especially if the practice is insolvent, as identified by the wife, and for the parties, who may either 'walk away' from such liabilities if they are treated as debts of the practice, or be treated as personally liable to account for such monies if the funds were held on trust by the practice and are no longer available, or if not held on trust whether all the circumstances of the case require the Court to impose a constructive trust requiring a personal accounting from the parties.

1. The Court is also required to make orders which are just and equitable in the s 79 proceedings. This exercise requires close attention to characterising the nature of the assets and liabilities of each party.[6] The Court should not make orders on an interim basis which have a realistic prospect of prejudicing this exercise.
2. Therefore, the preliminary question to determine is the nature of the relationship between the patients who have made pre-payments for services yet to be performed and the service provider who performs the work. An associated preliminary question is the proper characterisation of the transaction between the patients who have made pre-payments and the recipient of those pre-payments (the corporate alter ego of the husband and the wife).
3. Given the husband's evidence, a Quistclose trust may arise.[7] That is, all patients who have made pre-payments to the practice may have done so for an agreed purpose and on an agreed condition that, if the condition or purpose fails (namely the service is not provided, or able to be provided, within a reasonable time), the pre-payments must be repaid to any patient who has made a pre-payment.
4. Writing for the House of Lords in Quistclose, Lord Wilberforce stated there was no reason why "the flexible interplay of law and equity cannot let in . . . practical arrangements".[8] The context of those remarks distinguished a primary purpose and a secondary purpose. Analogous to this case, the primary purpose is the right of the patient to have the pre-paid funds applied by the trustee to his or her treatment. Upon that treatment being performed, the practice is entitled to apply the pre-paid funds for that treatment. The secondary purpose arises if the primary purpose cannot be carried out. Is there an express or implicit agreement for the pre-paid funds be returned to the patients by the trustee if the treatment is unable to be or is not performed within a reasonable time?
5. If a Quistclose trust arises, the funds made by way of pre‑payment are held on trust by the practice until the work is done for each patient. In the event of insolvency, those funds are protected. If those funds are no longer available, then legal or equitable remedies against the directors of the trustee to account may be available.
6. What compounds this question is the further relevant enquiry as to whether the parties, as health professionals, have a fiduciary relationship with the patients which extends beyond treatment to the conditions upon which treatment is given, if not by their practice, then able to be given by other practices if they cannot do so. Is there a Code of Conduct which imposes duties on health professionals in respect of patient treatment, fees for treatment (and pre-paid fees), explanation of payments for treatment, conflicts of interest for health professionals with third parties (including corporate and trust structures under their control which may put pre-paid patient funds beyond the patients' reach in times of need)?
7. Does such a Code of Conduct inform the exercise of the Court's discretion in considering any of the flexible equitable remedies which may arise on further consideration of relevant facts? Is there a possibility of the parties being personally liable in the context of an insolvent practice to these patients who have made pre-payments?
8. The Court does not have sufficient information to answer these questions. The Court requires the following information to further consider this question:

(i) any Code of Practice which applies to [their qualifications] under the consumer law or by the Australian Health Practitioners Regulation Agency;

(ii) each party's income tax returns (including any amended income tax returns) and notices of assessment (including any amended notices of assessment) for the financial years ending 30 June 2023 and 30 June 2024;

(iii) financial statement and income tax returns for Company A Pty Ltd, in its own right and as trustee for the Company A Trust trading as the practice for the financial year ending 30 June 2024;

(iv) whether patients or prospective patients who have made the payments recorded as 'Income in advance' in the financial statements of the Company A Trust trading as the practice for the financial year ending 30 June 2023, or subsequently, signed standard form agreements or were otherwise provided with standard form documents from the practice before paying the money;

(v) copies of any such standard form agreements or standard form documents provided to patients or prospective patients;

(vi) the basis for determining how much each patient or prospective patient pre-paid and what written information was given to the patient or prospective patient in respect of such pre-payment including about the time frame for the delivery of services in respect of each such pre-payment;

(vii) the basis on which the money was pre-paid and the basis on which the money would be re-paid to the patient or prospective patient;

(viii) copy statements for all bank accounts, credit cards or loan facilities operated by Company A Pty Ltd, in its own right and as trustee for the Company A Trust trading as the practice for the period from 1 July 2023 to date;

(ix) the current amount of pre-payments owed to patients or prospective patients;

(x) the current amount recorded as 'Income in advance';

(xi) any executed Services & Facilities Agreement, or any other written instrument, recording the financial relationship between either party and Company A Pty Ltd, both in its own right or in its capacity as trustee for the Company A Trust; and

(xii) draft financial statements and draft income tax return for Company A Pty Ltd, both in its own right or in its capacity as trustee for the Company A Trust trading as the practice, for financial year ending 30 June 2025.

1. Subject to hearing further submissions in any subsequent application, it appears to the Court that either all the patients or none of patients who have made pre-payments are entitled to repayment, if treatment has not been done and is unlikely to be done. There is no basis in principle to distinguish the five patients identified by the husband in his application from the rest of the patients falling into the same class.
2. The Court will dismiss the husband's application and the wife's response.
3. Subject to hearing further submissions in any subsequent application, the balance of convenience presently justifies the Court granting injunctive relief to secure sufficient of the parties' assets of approximately equal value to the asserted pre-payments balance, because there is a serious issue to be tried in respect of determining whether the parties are personally liable to repay all patients who have made pre-payments for services if such services are not provided and the funds are not repaid.[9]
4. The Court is satisfied that the parties should do all acts and things necessary to cause the draft financial statements and draft income tax return for Company A Pty Ltd, in its own right and as trustee for the Company A Trust trading as the practice to be prepared, for the financial year ending 30 June 2025. This is necessary to provide clarity in answer to the question of the current solvency of the practice and the current level of indebtedness to patients who have made pre-payments.
5. [In early] April 2025, consent orders were made varying orders made [in early] November 2024, to the effect that the net proceeds of sale of the State A property are required to be held in a controlled monies account in the names of the parties but held by the wife's solicitors and accessed either by the consent of the parties or pursuant to Court order. Pursuant to the orders made [in early] November 2024, the net proceeds of sale were to be held in the parties' offset account.
6. The State A property net proceeds of sale are approximately $482,100. [In early] August 2025, the Court made ex parte orders in Chambers restraining the parties from accessing those funds pending delivery of judgment and the making of further orders. The reasons just given support that order.

1. Until further order, the Applicant, [RHEA KULKARNI], and the First Respondent, [MICAH PRASAD], are restrained by injunction from causing or permitting [Company A Pty Ltd], in its own right and as trustee for the [Company A Trust] trading as [the practice]:

(a) from disposing of any assets, save in the ordinary course of business;

(b) from incurring any liabilities, save in the ordinary course of business;

(c) from receiving any further funds from patients or prospective patients as 'income in advance', unless such pre-paid funds are stated to the patients or prospective patients in writing to be held on trust (for the specific purpose of the treatment and any associated services for which the funds are pre-paid in each case) and deposited into a separate bank account designated as 'Pre‑payments trust account';

(d) from resolving to distribute any trust income to any person other than the Applicant or the First Respondent;

(e) without prejudice to the preceding sub-paragraph of this order, from paying to the Applicant or the First Respondent any trust income distributed to either of them pursuant to the preceding sub-paragraph of these orders;

(f) from paying to the Applicant or the First Respondent any portion of any credit balance in that party's beneficiary loan account;

(g) from otherwise doing any acts or things which reduce any credit balance in any beneficiary loan account of the Applicant or the First Respondent.

1. Until further order, the Applicant and the First Respondent are restrained by injunction from disposing of or otherwise dealing with any portion of the funds held in the Controlled Monies Account Term Deposit Account ending [number redacted].

1. The Applicant and the First Respondent are each granted liberty to apply to vary or discharge paragraphs 1 and 2 of these orders following oral or face to face conferral between them and upon that party filing:

(a) a Form 2 Application;

(b) an affidavit in support, including evidence adduced about the following matters:

(i) each party's income tax returns (including any amended income tax returns) and notices of assessment (including any amended notices of assessment) for the financial years ending 30 June 2023 and 30 June 2024;

(ii) financial statement and income tax returns for [Company A Pty Ltd] in its own right and as trustee for the [Company A Trust] trading as [the practice] for the financial year ending 30 June 2024;

(iii) whether patients or prospective patients who have made the payments recorded as 'Income in advance' in the financial statements of the [Company A Trust] trading as [the practice] for the financial year ending 30 June 2023, or subsequently, signed standard form agreements or were otherwise provided with standard form documents from the [the practice] before paying the money;

(iv) copies of any such standard form agreements or standard form documents provided to patients or prospective patients;

(v) the basis for determining how much each patient or prospective patient pre-paid and what written information was given to the patient or prospective patient in respect of such pre‑payment including about the time frame for the delivery of [services] in respect of each such pre-payment;

(vi) the basis on which the money was pre-paid and the basis on which the money would be re-paid to the patient or prospective patient;

(vii) copy statements for all bank accounts, credit cards or loan facilities operated by [Company A Pty Ltd], in its own right and as trustee for the [Company A Trust] trading as [the practice] for the period from 1 July 2023 to date;

(viii) the current amount of pre-payments owed to patients or prospective patients;

(ix) the current amount recorded as 'Income in advance';

(x) any executed Services & Facilities Agreement, or any other written instrument, recording the financial relationship between either party and [Company A Pty Ltd], both in its own right or in its capacity as trustee for the [Company A Trust];

(xi) any Code of Practice which applies to [their qualifications] under the Australian Consumer Law or as regulated by the Australian Health Practitioners Regulation Agency;

(xii) draft financial statements and draft income tax returns for [Company A Pty Ltd], both in its own right or in its capacity as trustee for the [Company A Trust] trading as [the practice] for financial year ending 30 June 2025; and

(c) a Form 13 Financial Statement.

1. The Applicant and the First Respondent forthwith do all acts and things necessary to cause the draft financial statements and draft income tax returns for [Company A Pty Ltd], in its own right and as trustee for the [Company A Trust] trading as [the practice], for the financial year ending 30 June 2025, to be prepared.
2. The Applicant's Form 2 Application filed 27 February 2025 and the Respondent's Form 2A Response be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

[1] Oldham v Krantz (No 2) [2024] FedCFamC1A 238 ("Oldham"), [17], [22] citing Pavlic & Pavlic [2023] FedCFamC1A 54; (2023) FLC 94-139 ("Pavlic").

[4] Zdravkovic v Zdravkovic [1982] FamCA 23; (1982) FLC 91-220, 77,205 - 77,206.

[5] Family Law Act 1975 (Cth), s 79(3)(a).

[6] Martin & Newton [2011] FamCAFC 233; (2011) FLC 93-490.

[7] Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 ("Quistclose").

[9] Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57; [2006] HCA 46, [65].