Madsen v Darmali

FREEZING AND PASSPORT ORDERS

1. A freezing order is an interlocutory injunction made to prevent the frustration of a court's process: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380; [1999] HCA 18 at [41]-[42] per Gaudron, McHugh, Gummow and Callinan JJ. The test in Australian law as to whether an interlocutory injunction should be granted is set out in Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 by Gummow and Hayne JJ (with whom Gleeson CJ and Crennan J agreed) at 81 [65] (quoting with approval Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] HCA 1): The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief … The second inquiry is … whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.
2. How strong the probability of success needs to be "depends upon the nature of the rights the plaintiff asserts and the practical consequences likely to flow from the orders the plaintiff seeks": ABC v O'Neil at [71] (per Gleeson CJ and Crennan J); Mineralogy Pty Ltd v Sino Iron Pty Ltd [2016] WASCA 105 at [87]. The plaintiff must also show that they are likely to suffer injury for which damages are not an adequate remedy: Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57 at [19].
3. Ancillary to a freezing or search order, the Court may make a "passport order" requiring the delivery up of the defendant's passport and restraining them from departing the jurisdiction: Self Care Corporation Pty Ltd v Green Forest International [2021] FCCA 129 at [53]. Passport orders are made only in a "clear and extreme case" where other forms of relief would not suffice: Peter Biscoe, Freezing and Search Orders (3rd ed, 2023, LexisNexis) at 195. It has been said that passport orders are "about as serious a thing as one can ask to be taken in civil proceedings, before judgment": Kodak (Australasia) Pty Ltd v Cochran (Supreme Court (NSW), Brownie J, 4 April 1996) at 1. Such an order may be made "[i]f the evidence, viewed objectively, demonstrates a real risk that the defendant will leave this country in order to frustrate the court's processes", provided that the restriction must be proportionate in all the circumstances of the case: JSC Mezhdunarodny Promyshlenniy Bank v Sergi Viktorovich Pugachev [2015] EWCA Civ 1108 at [68] (per Bean LJ).
4. In practice, passport orders are made to effect another order (or anticipated order) such as an order for asset disclosure or an order requiring the defendant to appear for cross-examination in relation to assets: for example, Lakatamia Shipping Company Ltd v Su [2021] EWCA Civ 1187. Such orders should be in place for a period no longer than is necessary, being typically to allow the plaintiff to serve their Mareva or Anton Piller orders: Bayer AG v Winter [1986] 1 All ER 733 at 738 (per Fox LJ).
5. When considering whether a passport order should be imposed, a degree of reticence is warranted. The Court must take "such steps as it can take to ensure that ... it does not restrain legitimate activity or paralyse the business operations of a defendant or otherwise prejudice in an unfair manner the interests of the defendant": Kodak (Australasia) Pty Ltd v Cochran (NSW Supreme Court, unreported 15-18 April 1996) at 6 (per McLelland J CJ in Eq). The observations of Bryson J Danieletto v Khera (Supreme Court (NSW), 17 February 1995, unrep) at 3-4 bear repetition: (emphasis added) I have known restraint of personal travel and the use of a passport to have been imposed in relation to Mareva orders, but such instances are rare, in my experience. It certainly would not be the usual course, even where very substantial grounds exist in terms of proof of actual measures taken to conceal or remove assets, that the personal movements of a defendant, either within or beyond Australia, should be restrained … Personal liberty or freedom of movement is, of course, a fundamental value which the common law protects and, indeed, much of the common law was formed around its protection. Interference with personal liberty is one of the things which the legal system exists to prevent, and lawful authority to interfere with personal liberty, when it exists, is exercised only under careful scrutiny.
6. The Court has inherent power to vary freezing or passport orders where new facts come into existence or are discovered which render enforcement of the order unjust: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc (1981) 148 CLR 170 at 178; [1981] HCA 39; Hutchinson v Nominal Defendant [1972] 1 NSWLR 443 at 447 per Isaacs J; RD Werner & Co Inc v Bailey Aluminium Products Pty Ltd (1988) 18 FCR 389 at 392-3; [1988] FCA 142 per Woodward and Foster JJ; Short v Crawley (No 42) [2009] NSWSC 1110 at [74]-[75] per White J.

DUTY OF CANDOUR

1. On an ex parte application, the applicant has a duty of candour as described by Allsop P in Walter Rau Neusser Oel und Fett AG v Cross Pacific Trading Ltd [2005] FCA 955 at [38]: (emphasis added) In an ex parte hearing, it is the obligation of the party seeking orders, through its representatives, to take the place of the absent party to the extent of bringing forward all the material facts which that party would have brought forward in defence of the application: Thomas A Edison Ltd v Bullock (1912) 15 CLR 678 at 681-82 per Isaacs J. That does not mean stating matters obliquely, including documents in voluminous exhibits, and merely not mis-stating the position. It means squarely putting the other side's case, if there is one, by coherently expressing the known facts in a way such that the Court can understand, in the urgent context in which the application is brought forward, what might be said against the making of the orders. It is not for the Court to search out, organise and bring together what can be said on the respondents' behalf. That is the responsibility of the applicant, through its representatives.
2. An ex parte injunction obtained following material non-disclosures may be discharged entirely or substituted for a new injunction, depending on the Court's discretion: Hislop v Paltar Petroleum Ltd (No 2) (2017) 122 ACSR 358 at [20] citing Brink's Mat Ltd v Elcombe [1988] 3 All ER 188 (per Balcombe LJ). The purpose of discharge is two-fold: to ensure that the wrongdoer is deprived of an advantage improperly obtained and to deter prospective ex parte applicants from breaching this duty of candour: Brink's Mat Ltd v Elcombe [1988] 3 All ER 18 at [68].
3. The party who applies to set aside an ex parte order on this basis bears the onus of showing that there has been such a non-disclosure: Brags Electrics Ltd v Gregory [2010] NSWSC 1205 at [10] per Brereton J. The test for determining whether a non-disclosure is "material" was explained by Ball J in Principal Financial Group Pty Ltd v Vella [2011] NSWSC 327 at [17] (cited with approval in Singtel Optus Pty Ltd v Almad Pty Ltd [2011] NSWSC 492 at [53] per Bergin CJ in Eq): In order for information to be material for this purpose, I do not think it is necessary that the information would have or was likely to have made a difference to the orders of the court. It is sufficient if the information is information that it could be expected that the opposing party would have wanted to bring to the court's attention and the court would have wanted to consider before making an order. It is only if the requirement of materiality is interpreted in that way that full disclosure is an adequate substitute for a party's right to be heard.
4. Obviously enough, an ex parte application for freezing and passport orders is the occasion for measured, highly accurate submissions, to assist a Duty Judge who likely has little time to review the underlying material and whose reliance on counsel is heavy. It is not the occasion for 'high, wide and handsome' submissions littered with exaggerated or salacious details which, on closer examination, are unfair, inaccurate, or just plain wrong.

FACTS

1. In what follows, I have focused on the contemporaneous documents, for two reasons. First, contemporaneous records are generally a more reliable guide to what happened than affidavits prepared some years later (and in urgent circumstances). Second, the contemporaneous documents were, by and large, in the possession of the plaintiff and his counsel when application was made to the vacation Duty Judges for ex parte orders. As such, the import of this material is relevant to consider the defendants' allegations of a lack of candour. Obviously, a different picture may emerge once all the evidence is on and tested at trial. In particular, the plaintiff, Mr Darmali and Ms Li have not been cross-examined.

The parties

1. The plaintiff hails from Denmark but has lived in Australia for many years. He owned and operated a caravan park at Wisemans Ferry through various corporate entities. The plaintiff's son, Steven, was a director of these companies, but was removed as a director in August 2019. Steven was then struggling with drug and alcohol addiction and related problems with the criminal justice system. The plaintiff then had in place complex estate planning arrangements involving various trusts; the plaintiff had three more children living in Denmark (Jimmy, Heidi and Danny) and former spouses to consider.
2. Mr Darmali is a financial adviser, having held a licence as a financial services representative with the Australian Securities & Investments Commission (ASIC) for 17 years. He is a director of Fiducia Asset Management Pty Ltd and Fiducia Wealth Management Pty Ltd. Both companies are wholly owned by a Singaporean company, Fiducia Resources Pte Ltd. Mr Darmali also appears to have used a British Virgin Islands company, FAM Global Holdings Ltd, in his business. Mr Darmali's mother, who lives in Indonesia, is the sole director and shareholder of FAM Global. FAM Global has a bank account in Singapore.
3. Mr Darmali and Ms Li hail from Indonesia and China respectively but live in Sydney. It has, however, been the couple's custom to visit Mr Darmali's mother in Indonesia for Chinese New Year and to return for the Qingming (Tomb-Sweeping) a few months later. Contemporaneous communications with the plaintiff refer to such trips: see [84].
4. Mr Darmali is an Australian citizen. He has lived in Australia for 37 years. Mr Darmali has two children and one grandchild, who are Australian. Mr Darmali's youngest son lives with him, having recently completed high school and commenced his studies at a Sydney university. He owns a property in Sydney. He conducts a business here. Mr Darmali is not a citizen of any other country.
5. Ms Li has lived in Australia for 17 years, undertaking her undergraduate and post-graduate studies here. She is a permanent resident of Australia, conducts a property project management business in Australia through two companies. Ms Li also owns a property in Sydney.

Selling the caravan park

1. By June 2020, the plaintiff was selling the caravan park. Mr Darmali was providing advice in respect of the sale; emails passed between them as to how the sale should be effected. The plaintiff and Mr Darmali also appear to have been working together to restructure the plaintiff's affairs. Two trusts were established. First, Trinity Horizon Pty Ltd was incorporated, of which Mr Darmali was sole director and shareholder. Trinity Horizon Trust was established. Trinity Horizon was the trustee. The plaintiff was the appointor and principal. Second, Hills Resort Pty Ltd was incorporated, of which Mr Darmali was sole director and shareholder. Hills Resort Fixed Unit Trust was established. Hills Resort was the trustee. The unitholder was Trinity Horizon.
2. In August 2020, a third company was incorporated, Benny Hill Pty Ltd. The plaintiff was the sole director and secretary of the company, whilst Trinity Horizon was the sole shareholder. Ms Li later became the sole director and secretary of Benny Hill, replacing the plaintiff.
3. It is apparent from the emails and text messages between the plaintiff, Mr Darmali and Ms Li in the years which followed that they formed a close friendship. All attended the same Baptist church in Sydney, which appears to have formed an element of the relationships between them. On the face of the contemporaneous communications, at least, there was nothing untoward in the emails and messages which passed between them; the relationship appears to have been based on a willingness to support each other, including when the plaintiff later became unwell. Where the plaintiff appears to have been then estranged from his family, he expressed gratitude for the support provided by Mr Darmali and Ms Li from time to time.
4. Mr Darmali and Ms Li also transferred funds to the plaintiff from time to time; on 10 September 2020, FAM Global transferred $108,315.50 to a car dealer, with the transaction description "Benny Hill". Mr Darmali said the money was to pay for a Landcruiser on which the plaintiff had placed a deposit; there is some support for this in the contemporaneous documents: see [54].
5. Meanwhile, relations between the plaintiff and Steven had not improved. In October 2020, an apprehended domestic violence order was made against Steven to protect the plaintiff for a two year period.

Transferring funds to Singapore

1. On 13 October 2020, a share sale agreement was executed in respect of the sale of the caravan park. On 14 December 2020, the sale completed. The plaintiff received $14,177,211.64 on settlement, of which $1 million was held in a bank guarantee to secure the vendor's obligations.
2. The proceeds of sale were transferred to a bank account in Singapore. Put shortly, the plaintiff said this was done at the suggestion of Mr Darmali, who he trusted implicitly. According to Mr Darmali, the plaintiff sought his assistance to place the money overseas as the plaintiff said "I can't have any money in my name in Australia. If certain people find out that I have money here, they will try to get it. … It has to be out of Australia and not in my name ASAP otherwise I am going to lose it."
3. The contemporaneous documents do suggest that the plaintiff was concerned that he should not be associated with the funds and that no assets should be held in his name, in case the purchaser of the caravan park make a claim against him: see [33], [37] [54], [57], [59], [80]. The plaintiff was then also defending litigation, including proceedings in the Land and Environment Court brought by the local council for remediation of the caravan park site.
4. According to Mr Darmali, the plaintiff asked him to set up a company in the British Virgin Islands, to which the plaintiff could transfer his money. On 15 December 2020, BigBlue Aster Ltd was incorporated in the British Virgin Islands. (The secretary of the company was a Seychelles company, Star Consulting Ltd.) The shareholder was Bartley Advisors Ltd. The plaintiff later became the beneficial shareholder of BigBlue Aster: on 23 March 2021, Bartley Advisers Ltd declared that it held its share in BigBlue Aster on trust for the plaintiff. (Artemis Enterprises Ltd also became the director of BigBlue Aster.)
5. According to Mr Darmali, the plaintiff did not want to wait until BigBlue Aster's bank account was operational before transferring his money out of Australia, but wanted the money transferred immediately. He asked Mr Darmali whether there was an overseas account that he could use to "park" the money until BigBlue Aster's bank account was open. (There is some support for Mr Darmali's evidence in the contemporaneous documents: see [89].) Mr Darmali said his mother had a company account in Singapore and he would ask her if she would agree to have the money temporarily "parked" in it.
6. The plaintiff experienced some difficulty transferring the funds to Singapore, where his bank declined to do so on the basis of a concern that the plaintiff may be the object of a scam. Ultimately, this was achieved by the plaintiff transferring the funds to a new account with the Bank of Queensland, then transferring the funds to the trust account of the law firm, Coleman Greig, and then onto FAM Global's bank account in Singapore. The contemporaneous documents indicate that the plaintiff was aware of, and involved in, each step taken in this regard.
7. Specifically, on 23 December 2020, Mr Darmali sent an email to Peter Bobbin at Coleman Greig, copied to the plaintiff, confirming that the plaintiff wanted to transfer some $14 million from his Commonwealth Bank account to the firm's trust account, to be transferred to FAM Global's bank account in Singapore. The firm's trust account details were sought, together with a letter to the Commonwealth Bank to assist with the transfer of funds. Mr Bobbin obliged, noting "[b]ecause we have an Australian account there is no necessity for 'an explanation' and for privacy reasons it is best that none be given."
8. On 25 January 2021, Ms Li reported to Mr Bobbin, copied to the plaintiff, on their failed efforts to transfer the funds to the firm's trust account. The plaintiff and Ms Li had gone to a Commonwealth Bank branch close to Coleman Greig's offices, but the bank refused to transfer the funds to the trust account or to the plaintiff's Macquarie Bank account. Mr Bobbin was asked to assist. Mr Bobbin agreed to discuss the matter "so that I can understand what the position of the Bank must be."
9. On 28 January 2021, the plaintiff withdrew some $13.75 million from the Blacktown branch of the Commonwealth Bank account. The same day, he opened a bank account with the Bank of Queensland, into which $14 million was deposited. Ms Li reported to Mr Bobbin, copied to the plaintiff, "I was told by Benny that he went to CBA with a Bank of Queensland manager, they have got personal Cheque and deposited to Benny's new personal account with BOQ. Benny will then arrange the bank transfer to Coleman [G]reig after the money is cleared."
10. On the same day that the plaintiff withdrew the funds from the Commonwealth Bank, he executed a Private Fund Management Agreement with FAM Global. Under the agreement, the plaintiff agreed to invest $14 million with FAM Global for a fee of 2% per annum and a 20% profit share. The agreement provided that FAM Global may further appoint Fiducia Asset Management to assist in its endeavours. The plaintiff's preferred holding entities for his investments were noted as BigBlue Aster (for market investments) and Trinity Horizon as trustee for Trinity Horizon Trust (for property investments).
11. On 11 February 2021, the plaintiff emailed Mr Bobbin, advising that he had started transferring money into the firm's trust account, "[t]here will be an amount of $14M coming in all over the next few days". Mr Bobbin was asked to transfer the funds onto FAM Global's Singaporean bank account. Coleman Greig provided the plaintiff with a costs agreement, which apparently caused some consternation. On 15 February 2021, Patrick Huang of Coleman Greig explained, by email to the plaintiff and Mr Darmali, that the file opened by the firm in relation to the sale of the caravan park had Mr Darmali listed as the client, "[a]t the time, this was deliberately done to protect Benny." Now, it was necessary to open a new file in the plaintiff's name to make plain that the $14 million came from a trust account held for the plaintiff and not for Mr Darmali.
12. Coleman Greig required information on the beneficiary of FAM Global in order to effect the transfer. On 22 February 2021, Mr Darmali advised, by email copied to the plaintiff, that the beneficiary was Darmawati Li, who resided in Indonesia. This is Mr Darmali's mother. According to his affidavit, the plaintiff was aware of this fact at the time.
13. On 1 March 2021, Ms Li transferred $50,000. According to Mr Darmali, the plaintiff told him that he urgently needed these funds to enable Benny Hill to pay certain business expenses. The plaintiff said the funds could be repaid from the money that was being transferred to FAM Global.
14. On 2 March 2021, $5,000 was transferred from Coleman Greig's trust account to FAM Global. Mr Darmali requested a copy of the transfer from the law firm, copied to the plaintiff. The law firm obliged, copied to the plaintiff, advising that it would cost $20 "to transfer the remaining $13,994,000 in one transaction by telegraphic transfer."

Lower Portland property

1. The plaintiff wanted to buy a property in Lower Portland. On 8 March 2021, contracts were exchanged to buy the property for $3 million. The purchaser was Hills Resort Pty Ltd as trustee for Hills Resort Fixed Unit Trust. The plaintiff witnessed the vendor's signature on the contract of sale. Mr Darmali provided the purchaser's solicitor with the front page of the contract, copied to the plaintiff.
2. As the plaintiff's funds had yet to arrive in Singapore, it appears that Mr Darmali arranged for FAM Global to provide funds to pay the deposit and legal fees in respect of the purchase, as a loan to the plaintiff. By then, a bank account had been opened for Trinity Horizon Trust at ANZ. (Mr Darmali said that the plaintiff was a signatory on all bank accounts opened for the companies and trusts in which he had an interest, including Trinity Horizon Trust and BigBlue Aster. Certainly, many of the entries on the Horizon Trust bank statements appear to relate to the plaintiff or his family.) On 10 March 2021, $160,000 was transferred from FAM Global's Singaporean bank account to Trinity Horizon Trust, with the transaction description "loan". Mr Darmali emailed the bank remittance to the plaintiff advising, "[p]lease see the attached transfer for Lower Portland. I will just make the payment for you first. We can't wait around for the incoming from Coleman [Greig]. I have also paid [the solicitor] from Benny Hill." A further bank remittance advice for $3,300 from Benny Hill to the solicitor acting in respect of the Land and Environment Court proceedings was attached. On 11 March 2021, Trinity Horizon Trust transferred $155,000 was transferred to an account ending 9554. I note that the deposit for the Lower Portland property was $150,000.
3. On 11 March 2021, the plaintiff's funds totalling $14 million finally arrived in FAM Global's bank account in Singapore. On 15 March 2021, $100,000 was transferred from FAM Global's Singaporean bank account to Trinity Horizon Trust bank account.
4. The plaintiff's funds were transferred from Singapore back to Australia to complete the purchase of the Lower Portland property. On 23 April 2021, $3.1 million was transferred from FAM Global's bank account to Trinity Horizon Trust. On 3 May 2021, purchase of the Lower Portland property was completed. No mortgage was registered on title. Presumably, the funds were used to pay for the property and associated costs. By my calculations, some $10.5 million of the plaintiff's funds remained with FAM Global, if one allows for repayment of the loans previously made to the plaintiff: see [24], [39], [42].

Bank of Singapore investment portfolio

1. As mentioned earlier, the plaintiff had signed a Private Fund Management Agreement with FAM Global. Insofar as it was envisaged that BigBlue Aster would invest in the equity market, this appears to have been undertaken using the services of the Bank of Singapore. Mr Darmali provided the plaintiff with a "pitchbook" from the Bank of Singapore.
2. According to a Portfolio Summary Statement issued by the Bank of Singapore, BigBlue Aster opened an account with the bank on 23 April 2021. In the months which followed, the bank invested in various money market funds, fixed income funds and equities on behalf of BigBlue Aster. The important thing to note for present purposes is that all deposits to and withdrawals from BigBlue Aster's accounts with the Bank of Singapore are recorded in the Portfolio Summary Statements provided by the Bank of Singapore from time to time. These reports also detailed how those funds were invested and how those investments performed. It is also relevant to note that these reports were in the possession of the plaintiff and his legal team, including at the ex parte hearings.
3. I note in passing that two payments were made from this account to Fiducia Asset Management that year, being some $25,000 in July 2021 and some $30,000 in October 2021. Similar payments were made in 2022. That is, as envisaged by the Private Fund Management Agreement, Fiducia Asset Management was paid for its services.

Gifts to children

1. In May 2021, Mr Darmali provided the plaintiff with loan agreements between FAM Global and the plaintiff's daughter and son, Heidi and Danny, for execution and return. Funds were transferred from BigBlue Aster's account at the Bank of Singapore to Danny and Heidi in May 2021, totalling $1.7 million.
2. As will be seen in what follows, further gifts were made to the children in due course, including after the plaintiff was diagnosed with cancer. Each of these transfers to the plaintiff's children were documented in the Portfolio Summary Statements, as well as contemporaneous text messages and emails between the plaintiff and the defendants.

Ebenezer property

1. The plaintiff told Mr Darmali that he wanted to buy a property in Ebenezer. In May 2021, a further trust was established. Tizzana Bay Pty Ltd was incorporated. Ms Li was appointed as director and secretary. Trinity Horizon became the sole shareholder. The Tizzana Bay Trust was established. Tizzana Bay Pty Ltd was appointed trustee. Trinity Horizon became the unitholder. Tizzana Bay exchanged contracts to buy a property in Ebenezer for $2.15 million as trustee for Tizzana Bay Trust. The plaintiff and Mr Darmali exchanged emails on this subject.
2. Further funds were transferred from FAM Global to pay for the Ebenezer property and for further investment by BigBlue Aster through the Bank of Singapore. On 5 May 2021, FAM Global's bank statement shows withdrawals of $5 million and $2.15 million. The Bank of Singapore Portfolio Summary Statement shows a receipt of some $5 million from FAM Global on 6 May 2021, which was credited to BigBlue Aster's account. Trinity Horizon Trust's bank account shows a receipt of some $2.15 million from FAM Global. By my calculations, this left some $3.35 million of the plaintiff's funds with FAM Global.
3. On 3 June 2021, FAM Global transferred $3.3 million to BigBlue Aster's bank of Singapore account. By my calculations, the balance of the plaintiff's funds with FAM Global was now $50,000.
4. On 28 June 2021, BigBlue Aster transferred $300,000 from its Bank of Singapore account to Trinity Horizon Trust. On 6 July 2021, purchase of the Ebenezer property was completed. Again, no mortgage was registered on title. Also in July 2021, Wisemans Ferry Resort Pty Ltd was incorporated. Mr Darmali became sole director, secretary and shareholder.
5. On 27 July 2021, the plaintiff exchanged text messages with Ms Li, "I need to get boats, cars and everything currently in my name transferred somewhere else. Should that be transferred to Benny Hill, like the new land cruiser?" Ms Li advised that she was organising transfer of "Lot 1 title" at the moment. On 24 August 2021, the plaintiff texted again, advising that he was going to transfer all the motor vehicles in his name to Hills Resort. Ms Li advised that she had talked to Mr Darmali, who said he should transfer the vehicles to Tizzana Bay Trust instead "[j]ust in case council hassle us on [L]ower Portland which [is] held by Hills Resort".
6. Mr Darmali said he was told by the plaintiff in September 2021 that he did not want to hold any money in his name and asked them to open a bank account for him. The contemporaneous documents provide some support of this evidence. On 16 September 2021, the plaintiff exchanged text messages with Ms Li, asking whether she had managed to set up the new bank account "we talked about". Ms Li replied that she had opened an account with HSBC. The plaintiff replied with thanks, "the account is in your name, right?". Ms Li provided the bank account details, which was in her name; see also [59].
7. On 20 September 2021, Mr Darmali said that the plaintiff asked to borrow $50,000. Ms Li withdrew the funds from the HSBC account on 20 September 2021 ($5,000) and 22 September 2021 ($45,000). I note in passing that, if these loans were offset against the remainder of the plaintiff's funds held with FAM Global, then the plaintiff's funds had now been returned by FAM Global in one form or another.
8. As I read the contemporaneous material, the plaintiff was keen to retrieve the $1 million secured by the bank guarantee, so that the purchaser could not access the funds. On 16 September 2021, the plaintiff texted Ms Li to ask Mr Darmali as to how the funds tied up in the bank guarantee could be moved, "If anyone takes me to court and wins, they'll take security in that." On 29 September 2021, the plaintiff exchanged text messages with Ms Li, enquiring as to progress on getting the name changed on the bank guarantee. Ms Li replied that she had instructed Coleman Greig to start working on the matter. Mr Darmali gave instructions to Connor & Co Lawyers, copied to the plaintiff, in respect of the bank guarantee. The solicitor offered to prepare and register a mortgage over the $1 million bank guarantee.
9. In October 2021, it appears that Steven was released from jail. Further problems ensued, resulting in Steven giving an undertaking not to threaten or blackmail his father, failing which his father would have him charged for breach of the AVO. Steven also agreed to stay 'clean' and provide his father with regular tests to prove it.
10. On 25 October 2021, $20,000 was withdrawn from Ms Li's HSBC account. Mr Darmali says this was for the plaintiff. On 17 November 2021, the Bank of Singapore transferred $100,000 from BigBlue Aster's account to Trinity Horizon Trust. On 6 December 2021, the plaintiff sent a text message to Mr Darmali asking him to transfer money into Benny Hill for him. Mr Darmali agreed, reminding him to use the funds for business only "and private stuff use Claire one", presumably a reference to the HSBC bank account opened by Ms Li. On 14 December 2021, the plaintiff enquired which entity he should "register the Mustang in" and was advised that, if payment came from Benny Hill, then it should be registered in the name of the company.
11. In early January 2022, the plaintiff gave instructions to Mr Darmali to transfer further funds from the Bank of Singapore to his son Danny. On 10 January 2022, $110,000 was transferred from BigBlue Aster's account to Danny. On 11 January 2022, the defendants transferred $4,000 to the plaintiff, and a further $12,000 on 31 January 2022, both from the HSBC account.

Cancer diagnosis

1. By late January 2022, the plaintiff was attending hospital having tests for what was later diagnosed as cancer. Text messages with Mr Darmali refer to his acquisition of a jet ski and buying a house for his son Jimmy "so there is no fighting later on." The plaintiff instructed Mr Darmali to transfer funds to Jimmy.
2. In early February 2022, the plaintiff sent a text message to Mr Darmali, asking to meet "to have a discussion about distribution of my wealth when I pass". Mr Darmali met with the plaintiff, Danny and Jimmy. The plaintiff involved Mr Darmali and Ms Li in his medical treatment and expressed his gratitude for their help with the sale of the caravan park and "all your help after that with all the property purchases and everything." On 21 February 2022, BigBlue Aster transferred $100,000 to Trinity Horizon Trust. On 28 February 2022, $20,000 was transferred to the plaintiff from the HSBC account. On 10 March 2022, a further $23,000 was transferred to the plaintiff from the HSBC account.
3. In March 2022, the plaintiff shared his medical reports with Mr Darmali and Ms Li and kept them appraised of his treatment, texting "I'm resting assured you'll manage my affairs after I'm gone, very, very important for my state of mind".

Reviewing estate planning

1. On 26 March 2022, the plaintiff attended a meeting with Mr Bobbin and Mr Darmali in respect of his estate planning. The plaintiff executed a Will, Appointment of Enduring Guardian and Enduring Power of Attorney. The plaintiff appointed Mr Darmali as executor of his Estate. He appointed the defendants as his enduring guardians and attorneys.
2. On 29 March 2022, the plaintiff emailed Mr Bobbin directly, not copied to Mr Darmali, raising a few issues which he wished to discuss further with the solicitor: How do we retain control of all these company structures in place with David and Claire as directors, into the future after I've passed, shouldn't you be on the boards of them? It seems very loose and out of control to me? We need more measures in place also regarding monies passed onto my kids and grandkids where and when. We probably need to stick our heads together before the final version comes out, hopefully we can get it closer this way. Noteworthy, the plaintiff was able to - and did - seek further legal advice directly from Mr Bobbin if he saw the need.
3. Mr Bobbin responded directly, not copied to Mr Darmali, noting: I am very conscious of the need to have certainty and transparency, this is why I drilled down on the formal structure, including what banks were involved and why I asked for the paperwork, including the bank statements. Key to this will also be the paper work that exists in Singapore, which I have also asked for. David is beginning to send the paperwork to me, but there is more to come. He will get this to me quickly. Allow me about one week to absorb all of it and then we can get together. So that we have something in the diary might the morning of Wednesday 27 April work for you?
4. Coleman Greig issued a costs agreement to Mr Darmali at Trinity Horizon, to review the terms of the Trinity Horizon Trust and the constitution of Trinity Horizon. Mr Darmali promptly signed and returned the costs agreement. On 20 April 2022, Coleman Greig acknowledged receipt of various documents from Mr Darmali in respect of Trinity Horizon, being the trust deed, the certificate of incorporation of BigBlue Aster and its memorandum and articles of association, together with a declaration of trust of Bartley Advisor. That is, Mr Darmali appears to have been forthcoming in providing the documents to the plaintiff's solicitor. On 20 April 2022, Mr Darmali followed up Mr Bobbin in respect of his review of the Trinity Horizon Trust Deed.
5. On 28 April 2022, Coleman Greig requested further documents from Mr Darmali as the firm was "in the process of preparing the necessary documents which reflect Benny's plan for his children and grandchildren." Further documents were sought in respect of the Trinity Horizon Trust, Tizzana Bay Unit Trust and Lower Portland Unit Trust. Mr Darmali queried the extent of the task being undertaken by Coleman Greig, where Mr Darmali understood that the firm was reviewing the Trinity Horizon Trust Deed only. Mr Huang confirmed that the firm was undertaking a wider review as "part and parcel with putting together rules by which Benny's children and grandchildren can benefit from Horizon and BigBlue Aster. This, we understand, was the plan as agreed between you, Benny and [Mr Bobbin] when the three of you last met." The trust deeds for the other trusts, and the constitutions of the corporate trustees, were sought "for the purpose of putting together Benny's rules." Mr Darmali did not respond to this request immediately, as he and Ms Li had departed Australia on 5 May 2022 for two weeks overseas.

Madsen Family Group Rules

1. On 17 May 2022, Coleman Greig emailed documents to the plaintiff in advance of a meeting the next day, for review and consideration. Amongst the documents was a document called "Madsen Family Group Rules", the purpose of which was to outline the rules that enabled the plaintiff's children and grandchildren to access funds from the group structure. A condition of access to the funds was that the plaintiff's family members were 'clean' and free from addiction. Presumably, the genesis of this condition was the plaintiff's difficulties with Steven. The document was to be signed by the plaintiff, and then signed by Mr Darmali, Ms Li and Mr Bobbin. Seven other documents were listed which, in short, made ancillary changes to the trust arrangements and recorded how the proceeds of sale of the caravan park had been sent to Singapore, that Mr Darmali had established various entities and acquired properties for the plaintiff, and how BigBlue Aster had lent funds to acquire the Lower Portland and Ebenezer properties.
2. On 18 May 2022, the plaintiff and Mr Bobbin executed the "Madsen Family Group Rules" and related documents. Relevantly, the plaintiff's signature was not witnessed by Mr Darmali or Ms Li, who were then overseas. Also noteworthy, the plaintiff signed a document addressed "To whom it may concern", setting out the nature of his friendship and professional relationship with Mr Darmali and Ms Li and their role in assisting him with the sale of the caravan park business and managing the sales proceeds for the benefit of himself and his family. The plaintiff set out in some detail how the funds had been transferred to Singapore, that he had then directed Mr Darmali to arrange for the establishment of BigBlue Aster, Trinity Horizon as trustee for the Trinity Horizon Trust, Tizzana Bay as trustee for the Tizzana Bay Unit Trust and Hills Resort as trustee for the Lower Portland Hills Resort Unit Trust. The plaintiff stated that he had also directed Mr Darmali to acquire the properties in Ebenezer and Lower Portland and continued to rely on Mr Darmali to manage his affairs.
3. On 19 May 2022, BigBlue Aster transferred $300,000 to Trinity Horizon Trust's bank account. On 25 May 2022, the plaintiff gave further instructions to Mr Darmali to transfer funds to his son Danny. On 1 June 2022, the defendants transferred $20,000 to the plaintiff from the HSBC account. On 22 June 2022, a further $3 million was deposited to BigBlue Aster's account with the Bank of Singapore. The source of these funds is not known.
4. In July 2022, the plaintiff sent text messages to Mr Darmali, asking to meet to discuss the current adverse economic climate. They met within the week. On 22 July 2022, the plaintiff texted Mr Darmali enquiring as to how he thought he would be able to work with the plaintiff's children after he died, and what to do if something happened to Mr Darmali and Ms Li. Mr Darmali offered to follow up Mr Bobbin, who was preparing an updated Will and related documents to address these issues, "[i]n princip[le], when you pass, we just follow your last instruction on how to manage the asset and supports for the kids". Mr Darmali offered to meet again. It would appear from Mr Darmali's text message that he was then unaware that the plaintiff had already executed the updated Will and related documents, whilst he and Ms Li were overseas in May 2022.
5. On 4 August 2022, BigBlue Aster transferred $100,000 to Trinity Horizon Trust. On 24 August 2022, the defendants transferred $20,000 to the plaintiff from the HSBC account. On 30 August 2022, BigBlue Aster transferred $200,000 to Trinity Horizon Trust. In September 2022, BigBlue Aster transferred some $1 million to the plaintiff's son Danny. A deposit of some $2.2 million was made to BigBlue Aster's account later that month; the source of these funds is not known. On 13 September 2022, the defendants transferred the balance of the HSBC account to the plaintiff, being some $1,200.
6. On 14 September 2022, Coleman Greig followed up the plaintiff in respect of payment of an invoice. The plaintiff passed the email onto the defendants. Mr Darmali emailed the firm, "[c]ould you please let us know what this invoice [is] in relation to?". The firm advised that the work was in relation to the Trinity Horizon Trust and group structure. Mr Darmali replied, "The work has not been done as yet and they [are] waiting for the documents from me. How can the billing start so high?" Mr Huang replied: Benny held a series of meetings with Peter Bobbin earlier in the year which followed on the broad discussion that you, Peter and Benny had before. As a result of these meetings, we have prepared a range of documents to ensure that there are rules in place to govern how and when Benny's family can access the family wealth (held through structures including the Trinity Horizon Trust). … Benny attended our offices on 18 May 2022 to sign these documents with Peter Bobbin. Benny indicated at the time that the documents could be revisited in 2 weeks' time, but Benny had postponed that meeting. We will reach out to Benny again if he would like to have these documents reviewed and adjusted. In any event, a review and refinement of these documents may be required upon receipt of outstanding financial information that you have not yet provided (and we'll ask for this again).
7. Mr Darmali replied on 20 September 2022, copied to the plaintiff: To be honest, I am not aware of any of these documents nor subsequent meeting and discussion between Benny and Peter. The last discussion we had is at my place and I had emailed from your office requesting company memorandum. Which I have mentioned that we adopt a general Corp constitution. There is no financial information requested by Benny from me nor from your office. I am honestly very confuse[d] and perplex[ed] which party are you representing? Benny have not instruct me nor make aware to me any of these documents. He also has not instruct me to pay for this bill. I think you better talk directly with Benny. Thank you.
8. Importantly for the purposes of this application, the contemporaneous records suggest that Mr Darmali was unaware that the Madsen Family Group Rules had been executed and, indeed, appears to have had little, if any, involvement in the preparation of the rules. Rather, the rules appear to have been prepared by Coleman Greig on, it would appear, the instructions of the plaintiff.
9. On 12 October 2022, Coleman Greig advised that a face to face meeting had been scheduled with the plaintiff, Mr Darmali and Mr Bobbin. Ms Li was also invited. The plaintiff texted Mr Darmali, requesting an update of his investments and how he thought the investments were being affected by the adverse economic environment. Mr Darmali promptly responded, "market is very bad on all ends." Mr Darmali offered to discuss the matter. The plaintiff texted "Any chance you can send me some sort of report on the overseas stuff, to put me in the picture". Mr Darmali agreed to do so.

Defendants step away

1. On 15 November 2022, the plaintiff texted Mr Darmali in respect of arrangements to move assets to his sons, noting "Steven is coming good now on his vices … so I'd like him to become involved in managing my affairs, how would you envisag[e] him working with you in a meaningful way?" The plaintiff asked for some insight in respect of what was happening with the investments in Singapore and what was happening overall. Mr Darmali responded "I think it's a great idea, let's talk about it tomorrow".
2. On 2 December 2022, BigBlue Aster transferred $100,000 to Trinity Horizon Trust. The plaintiff also instructed Mr Darmali to send further funds to his son Danny.
3. It would appear that Mr Darmali and Ms Li were more than happy to stand down as directors and secretaries of the companies established for the plaintiff, to make way for the plaintiff and his sons to take these positions. Coleman Greig prepared the documents to remove Mr Darmali and Ms Li as directors. Mr Darmali was keen to finalise this before Christmas. The plaintiff appears to have been suspicious that Mr Darmali was so keen to step down and sought advice from Coleman Greig in respect of his concerns. The plaintiff was also concerned about becoming a director himself, when there was still a chance that he would be sued by the purchaser of the caravan park business "so we need to make sure that I still don't own anything".
4. Mr Darmali and Ms Li sought a release and indemnity in respect of any liabilities incurred whilst serving as officeholders of the plaintiff's companies. The plaintiff sought advice from Coleman Greig on this subject as well, where he "felt somewhat uncomfortable" and "it feels like they're jumping ship, can't get out quick enough." Coleman Greig advised that Mr Darmali's request was "a good thing".
5. On 21 December 2022, Mr Darmali and Ms Li resigned as directors and secretary of the plaintiff's companies. A deed of release and indemnity was executed. On 22 December 2022, Steven replaced Mr Darmali and Ms Li as director, secretary and shareholder of Wisemans Ferry Resort, Trinity Horizon, Benny Hill, Tizzana Bay and Hills Resort.

Closing the Singapore investment account

1. On 17 January 2023, the plaintiff texted Mr Darmali, asking for information on the investments in Singapore and the procedures going forward, "[w]e're totally blindfolded at the moment with no idea as to what's going on." Mr Darmali suggested that they could sell everything and send the money to Australia, which may be easier for Steven to understand; the plaintiff's instructions were sought.
2. The plaintiff clarified that what he wanted was an understanding of what had been invested and how it was performing, "What sort of losses have been incurred and why?" Mr Darmali replied that he was about to go overseas for Chinese New Year, but "the losses [are] due to share market downturn as what I have explained before." When the sharemarket would recover was difficult to predict. On his return, Mr Darmali offered to meet "and show you both the statement of buy cost and current market price for the investments. I think Steve [is] better off [to] have the cash and use it for [what he thinks is] better for him."
3. Mr Darmali and Ms Li returned to Australia on 5 February 2023. The plaintiff pressed for a meeting "about our disastrous situation in Singapore, we really need to see both of you to make some serious decisions. " Ms Li offered to meet that day. After a discussion, Mr Darmali sought confirmation of the plaintiff's instructions "to sell off your limited portfolio with Bank of Singapore and close the account due to the changes in your personal circumstances. As you know, that would realise the capital lost within the portfolio."
4. In February 2023, BigBlue Aster's account with the Bank of Singapore was closed, with the balance transferred to the plaintiff.

Accusations and responses

1. It appears that the relationship between the plaintiff and the defendants had become strained. The plaintiff requested the return of title deeds, documents, account statements and passwords. Mr Darmali sent a long email setting out various concerns and problems experienced in their friendship, which he saw as leading to the end of their relationship. Mr Darmali advised that he would assemble all the documents for collection by Steven. Mr Darmali stated that he was not prepared to do business with the plaintiff anymore. The plaintiff defended his position in a long email reply, expressing disappointment with how the investments in Singapore had unfolded, "I feel you did the wrong thing there, still don't know how many millions we lost." The plaintiff looked to Mr Darmali to compensate him for the loss of his investments, and said he had never seen any bank statements from the Bank of Singapore.
2. In March 2023, Mr Darmali sent a lengthy email in reply, stating that he had done exactly what the plaintiff had instructed him to do throughout but the plaintiff had given instructions at odds with the original investment goals, resulting in assets being liquidated during a period of market downturn. On 8 March 2023, the plaintiff texted Ms Li, asking for a copy of the accounts in respect of the $14 million from when it arrived in Singapore to date. Ms Li replied that $8.3 million was transferred to the Bank of Singapore, the rest went to Trinity Horizon for the Lower Portland and Ebenezer properties plus stamp duty, "we gave the [Bank of Singapore] transactions to Steve on the other days. You can add [it] all up."
3. On 9 and 13 March 2023, the Bank of Singapore provided bank statements to the plaintiff. The plaintiff emailed Mr Darmali seeking an explanation of the losses, in an accusatory email. On 20 March 2023, Ms Li responded at length: After you sold the park, you seriously concerned a lots of things that you may lost the money …You decided to park the money overseas. You spent approx 5.7m on purchasing two properties, one in Ebenezer, another one in Lower Portland plus purchased luxury cars and machineries. The rest of the money went to your BOS account which you are the owner and beneficiary. From that account you gave away more than 3m to your children in Denmark (Danny and Heidi). You distributed more than 1m to your family trust to fund state significant development of Lower Portland property as well as funding all your business and personal expenses. You have the BOS statement to prove it. If you added all the numbers, you will find it is more than 14m because as a friend I am out of my own pocket to pay some expenses without even mentioning and asking from you. Did you do all the companies tax returns and your personal tax returns? You have to do it to reconcile all the transactions. Everything will be shown on the company financial reports and nothing is hidden. As you previously instructed, everything has been handed over to Steve Madsen. You should ask Steve to provide you with all the transaction details. I don't have any access to any bank statements. Ms Li sought an apology from the plaintiff for his behaviour and accusations.
4. The plaintiff sent a more conciliatory response on 21 March 2023 and, on 22 March 2023, pressed for a meeting with their pastor as mediator. On 23 March 2023, Mr Darmali sent an extensive email in respect of the matters raised by the plaintiff, advising that he and Ms Li had answered all of his questions already. Although Mr Darmali was prepared to meet or talk on the phone, he wrote "[t]his is my final email to you."
5. On 24 March 2023, the plaintiff texted Mr Darmali, asking "what happened to my money". On 1 April 2023, the plaintiff revoked the appointment of Mr Darmali and Ms Li as his enduring guardians and attorneys. The plaintiff met with the defendants on 4 April 2023 and, it would appear, demanded that they make good his losses in Singapore.

Plaintiff gets new lawyers

1. On 12 April 2023, the plaintiff retained new solicitors, being Ms Shah. On 27 April 2023, Ms Shah sent a letter of demand to the defendants, asserting that they had "financially entrapped" the plaintiff and "unlawfully obtained his money by deception for [their] financial gain" since the $14 million was deposited into the Singaporean bank account. The defendants were said to have "fraudulently transferred" the money to Fiducia Asset Management without the plaintiff's knowledge or consent and to have taken undue advantage of his age and trust. The plaintiff proposed to contact the police unless the defendants made good the losses on the money invested, said to be $2.9 million. The defendants did not respond. As it would appear that the defendants had endeavoured to address the plaintiff's accusations a number of times already, non-response might not be thought unreasonable.
2. In June 2023, Ms Shah requested Coleman Greig to hand over the plaintiff's files. The files were provided in August 2023, after arrangements were made in respect of unpaid invoices.
3. On 4 September 2023, the plaintiff obtained a "Background check report" on Mr Darmali and Mr Li from a private investigator. The contents of the report were unremarkable: the couple lived in Sydney and there was "no evidence that either have left the country". The report revealed the couple's home address in Sydney, together with the properties they owned in Sydney and the companies in which they were involved.
4. On 26 October 2023, the plaintiff retained Mr Stinson to review his estate planning. On 10 November 2023, the plaintiff appointed a new enduring guardian. On 15 December 2023, the plaintiff made a new Will and appointed new trustees and an attorney. On 22 December 2023, a medical certificate was issued in respect of the plaintiff's terminal illness and deterioration.
5. On 29 December 2023, Mr Stinson affirmed his affidavit in these proceedings. On 3 January 2024, the plaintiff affirmed an affidavit. Affidavits were also made by Ms Shah and Steven. It is apparent from these materials that the plaintiff's legal team had been working on the matter for some time. For example, the plaintiff's affidavit was 345 paragraphs in length.

Hearing before vacation Duty Judge

1. The plaintiff's counsel approached the vacation Duty Judge, Slattery J, on 5 January 2024. As far as the transcript reveals, the summons, affidavits (without exhibits) and proposed orders were emailed to the judge in chambers the day before.
2. The material presented to his Honour in Court appears to have been in a disordered state. The summons and affidavits were not in the prescribed form. The exhibits to the affidavits comprised USB sticks attached by a wax seal to an exhibit sheet. So far as the transcript reveals, his Honour was not provided with a copy of the documents stored on the USBs.
3. According to the transcript, the plaintiff's counsel submitted that the case was one of undue influence. The plaintiff had become estranged from his family. In the course of selling his caravan park business, he was befriended by Mr Darmali and Ms Li, who offered to advise him about the sale of the business. The plaintiff was said to have "unwaveringly accepted every suggestion they made and signed every document that was put in front of him." The defendants persuaded the plaintiff to allow them to manage his money, which was transferred to an account in Singapore. Mr Darmali was said to have advised the plaintiff that the money ought to be untraceable so that, if the plaintiff's children divorced, their ex-spouses would have no claim on the funds. However, two branches of the Commonwealth Bank of Australia refuse to effect the transfer and warned the plaintiff that he may be the victim of a scam. The bank went so far as to contact the police, who approached the plaintiff to enquire as to his welfare; the plaintiff assured the police that everything was under control. At the defendants' suggestion, the plaintiff transferred the funds into Coleman Greig's bank account. From there, the money was transferred to a company registered in the British Virgin Isles, FAM Global, which held a bank account in Singapore. The company was thought to be associated with Mr Darmali. (I note that the plaintiff's affidavit relied upon before Slattery J made plain that the plaintiff was aware that the bank account was associated with Mr Darmali's mother).
4. Counsel informed his Honour, "[a]fter that money was paid out to various entities, none of which were known to the plaintiff." (This, with respect, was an inaccurate overstatement). As to what had happened with the money, the plaintiff's counsel informed his Honour, "[t]here is a big black hole" but companies and trusts owning real property in Australia had been identified, which were under the control of the defendants. (I note that the defendants had ceased to be directors of the companies in December 2022, replaced by Steven.) His Honour enquired whether the plaintiff had traced the funds from Singapore into the Australian properties, and was informed that there was a "hole" and some $5 or $6 million was missing.
5. Unsurprisingly, Slattery J queried why the application was urgent, when the plaintiff's solicitors had been investigating the matter for some months. The plaintiff's counsel explained that the plaintiff's health condition had deteriorated, as he was terminally ill but was now refusing chemotherapy and treatment. His solicitor, Mr Stinson, had reviewed a series of trust and estate documents in December 2023 as part of estate planning and had turned up a document called Madsen Family Rules which, in short, had the effect that, if and when the plaintiff died, the $14 million would vest in the defendants, who could control the funds in accordance with the rules. The plaintiff's counsel submitted that this was "a very sophisticated equitable fraud". The plaintiff's legal representatives had found payments made to Mr Darmali's mother "but also to companies associated with him including a company based in Singapore." These arrangements were thought not to serve any legitimate purpose and were a major obstacle to giving effect to the plaintiff's testamentary wishes and estate planning. The plaintiff was said to have had executed the Madsen Family Rules whilst under the influence of the defendants.
6. The transcript does not reveal any discussion as to whether the defendants were a flight risk. The plaintiff's counsel had earlier mentioned that the defendants lived in Sydney and attended a local church, apparently apropos the suggested relationship of undue influence. Relevantly, the following orders were made: 6. Until further order, the first defendant and second defendant be restrained from leaving the Commonwealth of Australia. 7. Until further order, all defendants be restrained from: … (d) disposing, dealing with, or diminishing the value of any assets of (1) FAM Global Holdings Limited, a company incorporated under the laws of the British Virgin Islands … (7) Fiducia Asset Management Pty Ltd (8) Fiducia Wealth Management Pty Ltd (9) Fiducia Resources Pte Ltd, a company incorporated under the laws of Singapore under company number …

Service on defendants

1. The ex parte orders, supporting court documents and an explanatory letter were served on Mr Darmali and Ms Li by email and text message on the afternoon of 5 January 2024. A process server also delivered the material to the defendants' home. On 9 January 2024, the process server attended at the defendants' home again and took a photograph, which showed that the envelope left on the doorstep was no longer there.
2. The defendants said they paid the text message no heed and thought it was a scam. The email went into 'spam'. Although the envelope containing the material were retrieved from their doorstep, they did not then open it as they were both in "holiday mode".

Second hearing before vacation Duty Judge

1. The matter came before the vacation Duty Judge again on 10 January 2024, now Peden J. There was no appearance for Mr Darmali or Ms Li. The material relied upon before Slattery J had now been printed out and put into three lever-arch folders, the contents of which were somewhat chaotic. Her Honour enquired at the outset as to the cause for the concern that the defendants would flee the country. The plaintiff's counsel submitted: DOYLE GRAY: It arises from the evidence that they have assets in Singapore. They have already transferred assets to Singapore in the past. The first defendant's mother appears to live in Indonesia and she has been the recipient of funds that we say are the plaintiff's. The first and second defendant seem to operate through two Australian companies that are ultimately owned by a Singaporean company. The substance of this case is that the plaintiff's 14 million dollars was transferred to Singapore and is being managed or controlled by the first and second defendants out of Singapore. That would tend to suggest that their assets are in Singapore and that they are a flight risk. … in light of the fact that they have made no contact with ou[r] solicitor, we are concerned that they could be making preparations to flee the country. They have no assets in their own name here, but there is real estate in corporate assets and the inference is that ultimately everything is owned by their Singaporean holding company.
2. The plaintiff's counsel described the plaintiff as "an elderly, lonely, uneducated man" faced with a very complex transaction, who had come to rely on the defendants "who have shown an unusual and rapid enthusiasm for assistance" as soon as they learnt that the plaintiff's business was being sold. Counsel took her Honour through bank statements showing the transfer $14 million to the Singaporean bank account, submitting that there was "a black hole of information beyond Singapore … How money leaves the Bank of Singapore, and where it goes after that we simply don't know. What we have been able to do at best is to identify two properties in Australia that were purchased." It was said that "the trail really goes cold." Relevantly, the following orders were made: 1. Order that, by 4pm, 12 January 2024, the first defendant and second defendant surrender to the Registrar in Equity or such other person as the solicitor for the plaintiff agrees in writing with the solicitor(s) for the first defendant and second defendant, all passports that each defendant holds. … 5. Order that, by 4pm, 24 January 2024, the first defendant and second defendant serve an affidavit on the plaintiff stating the bank name(s), account name(s), account number(s), and swift code(s) of every bank account anywhere in the world that was open on or after 18 May 2022 to date that held funds for the benefit of any of the following: (a) the first defendant (b) the second defendant (c) each company listed above in prayer 12(d) of the Summons (d) each company coming within the definition of "Entity" in the document titled "Madsen Family Group Rules" dated 18 May 2022 not referred to in the section of the Summons "Relief Claimed".
3. Following the hearing, the plaintiff's solicitor sent a further text message to Ms Li, informing her of the orders. Ms Li read the text message and realised that the earlier text message was no scam. Ms Li located the earlier email in her 'spam' folder. Mr Darmali also became aware of these proceedings. They opened the envelope delivered earlier. On 11 January 2024, the defendants provided the court documents to a solicitor. On 12 January 2024, the defendants surrendered their passports and advised that they would vigorously defend the proceedings. On 16 January 2024, the defendants' solicitor requested a better copy of the exhibits placed before the Court. On 18 January 2024, the defendants obtained the transcript of the ex parte hearings. On 24 January 2024, the defendants affirmed affidavits in accordance with the order for disclosure.
4. On 30 January 2024, the defendants filed a motion seeking to vary or limit the orders made on 5 January 2024 and 10 January 2024. On 1 February 2024, the defendants affirmed further affidavits, vehemently denying the plaintiff's allegations. Further, Mr Darmali said he would like to travel overseas with his wife to visit his mother for Chinese New Year on 10 February 2024.
5. On 2 February 2024, the matter came before me in the Expedition List for directions, when I also heard the defendants' motion. Directions were made for the plaintiff to provide a note identifying the specific portions of the material relied upon, and for the defendants to put on further evidence in respect of their travel plans and any note in reply. The defendants served comprehensive written submissions in respect of their application, rather than in reply to the plaintiff's note. As the submissions should not have been sent, I have put those submissions to one side: Huynh v Attorney General (NSW) (2021) 107 NSWLR 75; [2021] NSWCA 297 at [249] (per Leeming JA) (successfully appealed on a separate issue); NT Power Generation Pty ltd v Power and Water Authority (2004) 219 CLR 90; [2004] HCA 48 at [192].

SUBMISSIONS

1. The defendants contend that the orders should be set aside given a lack of candour at the ex parte hearings. In addition, it was said that there was no serious question to be tried; the plaintiff's evidence was simply wrong. There was no proper basis for the orders made. Any case against the defendants was said to be extraordinarily weak, whilst the interlocutory orders made were draconian indeed. The interlocutory injunctions precluded the defendants from travel and from conducting their businesses. The defendants were restrained from dealing with their own companies, where the plaintiff had no interest in those companies.
2. The defendants submitted that there was no proper basis for seeking the orders on an ex parte basis during the holiday period, where the plaintiff's ill health was not new, the plaintiff's legal advisors had been working on the case for months and the plaintiff had been in possession of the Madsen Family Rules since he executed the document. Contemporaneous records indicated that Mr Darmali was not aware of the Madsen Family Rules at the time and was overseas with Ms Li when the document was executed. In these circumstances, it was difficult to see how the plaintiff would establish undue influence.
3. The plaintiff submitted that this was a case of undue influence and equitable fraud. The plaintiff had been unduly influenced by the defendants to transfer control of $14 million to them and it was not known what had happened to all of the money; some $7 million or $8 million could not be accounted for. Orders were sought for the defendants to give an account and for equitable compensation to make up the loss. The structure established to hold the plaintiff's assets was described as "very complicated". The Madsen Family Rules were said to contain "exceptionally unusual clauses" about how the defendants would control the assets. As to the passport order, the plaintiff submitted that $14 million had been transferred to FAM Global, of which Mr Darmali's mother was the director and the shareholder was incorporated in the British Virgin Islands. FAM Global had no presence in Australia. Mr Darmali and Ms Li wished to leave Australia to celebrate Chinese New Year "and they don't give any indication or promise of ever returning".

DISCHARGE OF FREEZING ORDERS

1. It is perhaps easiest to consider the freezing and passport orders separately, first, as to whether there was a lack of candour and, second, whether the orders should be maintained, varied or discharged on the evidence before the Court.
2. Dealing with the freezing orders first, the focus of the plaintiff's submissions to the Duty Judges was on the transfer of $14 million to FAM Global's bank account in Singapore and the suggested "black hole" of information as to what had happened with the money - or a large portion of it - since. A ready means of filling the asserted "black hole" was the bank statements, text messages and emails on the USB sticks, but not provided to the Court in hard copy on 5 January 2024. The only document from this material which was handed up on that occasion was Coleman Greig's trust account statement, recording the receipt of the plaintiff's $14 million and its transfer to FAM Global's bank account in Singapore. Of course, this document recorded that the plaintiff's funds had been sent to Singapore three years earlier, but revealed nothing about what had happened to the funds since; that material was on the USB sticks only. Those documents included the bank statements for Trinity Horizon Trust and BigBlue Aster's account with the Bank of Singapore, summarised earlier in these reasons, the contents of which paint quite a different picture to that portrayed to his Honour.
3. The bank statements, text messages and emails were printed out and provided to the Court on 10 January 2024 in three folders, but her Honour does not appear to have been taken to the documents when shed light on what had happened to the funds. According to the Trinity Horizon Trust bank statements and Bank of Singapore Portfolio Summary Statements, it would appear that the $14 million was returned to Australia to pay for the Lower Portland and Ebenezer properties, transferred to BigBlue Aster's account at the Bank of Singapore or transferred to Trinity Horizon's bank account at ANZ. As earlier noted, all deposits to and withdrawals from BigBlue Aster's accounts with the Bank of Singapore are recorded in the Portfolio Summary Statements, which detail how the funds were invested and how those investments performed. The plaintiff has had these documents since March 2023: see [89].
4. I accept that the plaintiff did not have FAM Global bank statements when making the ex parte applications. The plaintiff did, however, have the Trinity Horizon Trust and Bank of Singapore bank statements, where Trinity Horizon and BigBlue Aster were the counterparties to FAM Global's payment of the plaintiff's funds to Australia or Singapore. Trinity Horizon and BigBlue Aster's bank statements identify the payor as FAM Global. There was, with respect, no "black hole of information", nor a trail which had gone "really cold", but detailed documentation of where the funds had gone and why. The lever arch folders contained emails and text messages recording the plaintiff's instructions and the defendants' implementation of those instructions.
5. Whilst all funds appear to have been accounted for on the 'rough and ready' reconciliation which I have done, I accept that a more detailed reconciliation may reveal that some funds are 'missing'. But the thrust of the plaintiff's application for a freezing order - being that the funds were transferred to Singapore and there was a "black hole" as to what had happened to the funds - was wholly inaccurate, where the information to fill the void was before the Court, albeit the Court was not taken to it. This non-disclosure was material indeed.
6. The clear message conveyed by the plaintiff's counsel was that the defendants had scammed an unsophisticated, elderly man. This was, with respect, one-sided and called for counsel to put forward what the defendants might say if they were present. In observing the duty of candour, the plaintiff's counsel ought also to have informed their Honours that, on one reading, the contemporaneous text messages and emails did not suggest anything untoward in the personal relationship between the plaintiff and the defendants.
7. It is necessary to consider whether the freezing order should nonetheless stand or be varied as against FAM Global, Fiducia Asset Management, Fiducia Wealth Management and Fiducia Resources. I consider that the material non-disclosure is so significant that the orders should be vacated. If I am wrong about this, then I note that these companies are third-parties to this litigation. A freezing order may be made against a third party where that party holds, is using, or has exercised or is exercising a power of disposition over, or is otherwise in the possession of, assets of a potential judgment debtor, or may be obliged to disgorge property or contribute to the judgment debtor to help satisfy a judgment against it: Cardile v LED Builders Pty Ltd (1999) 198 CLR 380 at [57] (Gaudron, McHugh, Gummow and Callinan JJ).
8. So far as the evidence before the Court reveals, FAM Global held - but has not held for some time - the plaintiff's funds. FAM Global is owned by Mr Darmali's mother. The requisite criteria do not appear to exist to make a third party freezing order against FAM Global.
9. The Fiducia companies belong to Mr Darmali. If the plaintiff obtains a judgment against Mr Darmali, then it is not entirely clear why these companies would be obliged to satisfy that judgment. Where Mr Darmali owns shares in these companies, it may be said that these companies hold assets of a potential judgment debtor.
10. Turning then to whether a third party freezing order should be made against these companies, the first question is whether the plaintiff has made out a prima facie case against Mr Darmali. There is presently no Statement of Claim, but a Summons supported by the plaintiff's substantive affidavit and counsel's submissions as to the nature of his claim. I am prepared to accept that there is a serious question to be tried, noting the difficulties which the contemporaneous documents may pose to some of the plaintiff's allegations.
11. As to the balance of convenience, the Court is asked to freeze the assets of three companies which together comprise Mr Darmali's financial advice business. When granting interlocutory relief, the Court should generally grant the minimum relief necessary to do justice between the parties: Cardile v LED Builders at [70]. I consider that a third party freezing order against the three Fiducia companies goes well beyond this, where there is no evidence that Mr Darmali or his companies have, or will, take steps to frustrate the processes of the Court and where the inconvenience likely to be suffered by Mr Darmali's business far outweighs the inconvenience or injury which the plaintiff may suffer if an injunction is refused. On balancing these considerations, I do not consider that it is appropriate to make a freezing, or disclosure, order against these companies.

DISCHARGE OF PASSPORT ORDERS

1. Much of the information in respect of the defendants' connections with Australia was before the Court on 5 and 10 January 2024, although not readily accessible and not brought to the Court's attention. The materials before the Court - either on the USB sticks or printed out in the three folders - included searches undertaken with ASIC in respect of the defendants. The ASIC search in respect of Mr Darmali recorded that he was a licensed financial services representative and had held that licence for 17 years. He was also a director of six companies with an address at his Sydney home. The search for Ms Li revealed that she held an interest in two companies with an address at her home. This suggests that Ms Li was involved in corporate activity in Australia.
2. Also amongst this material were searches undertaken in the defendants' names with NSW Land Registry Services. Mr Darmali was the registered proprietor of a property in Sydney. The search for Ms Li revealed that she owned a property in Sydney as well.
3. Whilst the plaintiff's solicitor, Ms Shah, exhibited these documents to her affidavit, Ms Shah did not summarise the import of this material in the body of her affidavit. Nor did counsel take their Honours to, or indeed refer to, the company and property searches. The duty of candour is not discharged by "including documents in voluminous exhibits… [but] means squarely putting the other side's case … by coherently expressing the known facts in a way such that the Court can understand, in the urgent context in which the application is put forward, what might be said against the making of the orders": Walter Rau at [38].
4. At the hearing on 5 January 2024, this material was not referred to. Nor did counsel draw the Court's attention to the "Background check report", which suggested that the defendants were not a flight risk: see [94]. The defendants' significant connections with Australia were not disclosed. This is information that it could be expected that the defendants would have wanted to bring to his Honour's attention and the Court would have wanted to consider before making the orders sought. Where it appears that the plaintiff became a close family friend of the defendants, presumably he was aware of their close connection with Australia. The non-disclosure was material.
5. The problem was exacerbated at the hearing on 10 January 2024, when Peden J immediately enquired as to why the defendants were thought to be a flight risk. Counsel's submissions were neither measured nor accurate. True it was that the defendants had transferred the proceeds of sale of the caravan park to a Singaporean bank account three years earlier. But absent information as to what had happened to the money, this fact in isolation was apt to mislead. Further, it was incorrect to say that the defendants had no assets in their own names in Australia; each owned a property in a prestigious Sydney suburb. Her Honour was clearly interested to know of the defendants' connections with Australia. The duty of candour was not observed. The non-disclosure was material.
6. I consider that the non-disclosure is so significant that the orders should be vacated. If I am wrong about this, then the evidence now before the Court does not demonstrate a real risk that the defendants will leave the country in order to frustrate the processes of the Court. The defendants said that they consider Australia to be their permanent home and have no intention of leaving Australia to live elsewhere. The evidence already summarised supports this statement. This is not one of those rare, clear and extreme cases in which the Court will impinge upon the personal liberty or freedom of movement, this being a fundamental value which the common law protects: Danieletto v Khera.
7. For these reasons, the orders have been set aside, with costs.

Amendments 14 February 2024 - Amendment to representation on coversheet. 16 February 2024 - Amendment to coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 February 2024