Oswal v Carson

1. be at liberty to encumber the property in the amount of not more than $6,000,000, and provided that any amount borrowed pursuant to that encumbrance to be applied to development and operational costs of HH Pty Ltd and that property as part of his ordinary course of business including the repayment of inter-entity loans and/or the payment of his reasonable living expenses (not to exceed $27,500 per calendar month), and/or the payment of his proper legal expenses; and/or

a) be permitted to offer the property as security as part of his ordinary course of business and the Husband provide the Wife with written notice of same within 7 days of such security being offered.

1. No further Applications in a Proceeding be filed in this matter without first obtaining leave of the Court.
2. Paragraph 2 of the Husband's Application in a Proceeding filed on 19 March 2025 be dismissed.
3. There be Orders in accordance with the Minute of Proposed Consent Orders, marked Annexure "A" and attached hereto AND IT IS DIRECTED that such Minute remain upon the Court file.

1. Paragraph 3 of the Orders made by the Honourable Justice Strum on 21 February 2025 be varied to provide:

The Husband forthwith cause Z Pty Ltd and its related entity, OO Pty Ltd to pay to the Australian Taxation Office, in full, the sum of $1,161,770.73 of the $1,300,000 transferred by him or caused to be transferred from the HH Pty Ltd account to Z Pty Ltd on 17 January 2025.

1. Save for paragraph 2 of the Husband's Application in a Proceeding filed 19 March 2025 (19 March Application), the Husband's 19 March Application and the Wife's Response to the Application in a Proceeding filed 2 April 2025 be dismissed.
2. Certify for Counsel including Senior Counsel.

1. The Wife has informed the Court that she will cause the unregistered caveat over the real property situate at O Street, Melbourne to be withdrawn by 4.00pm on 4 April 2025 and the Husband's consent to the dismissal of paragraph 1 of the 19 March Application is as a result of the Court so informed.

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

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

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

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

1. This is the seventh Application in a Proceeding filed by the husband in this matter. The wife has previously filed six Applications in a Proceeding. It follows that, for each of those Applications in a Proceeding by each of the parties, the other party filed a Response to an Application in a Proceeding in which that responding party has also sought orders. Accordingly, to observe that there has been an overabundance of applications in this case would be an understatement.
2. I have before me today an Application in a Proceeding filed by the husband on 19 March 2025 and a Response to an Application in a Proceeding filed by the wife on 2 April 2025. It was listed only for mention today. After some displeasure initially expressed by me regarding the interlocutory litigation in which these rich people think they can indulge, I stood the matter down for discussions. All issues were resolved, save for one which, in the course of subsequent argument, also resolved in part. Given that there was only a discrete issue remaining, and the parties informed me that they were ready to run their case today, I agreed to allow that to occur.
3. By way of background, injunctions were made against the husband on 14 June 2024 ("the June 2024 orders"). They were varied, on his application, on 14 October 2024 ("the October 2024 orders") and, on 21 February 2025, I found that the husband had breached certain of those injunctions, as varied, and I was critical of him.
4. These reasons for judgment should be read in conjunction with the reasons for judgment delivered by me on 14 June 2024 (Shuren & Fang (No 6) [2024] FedCFamC1F 444), 14 October 2024 (Shuren & Fang (No 7) [2024] FedCFamC1F 716) ("the October 2024 reasons") and 21 February 2025 (Shuren & Fang (No 9) [2025] FedCFamC1F 104) ("the February 2025 reasons"). Notwithstanding that I was critical of the husband in the February 2025 reasons, and without in any way resiling therefrom, it would not be unfair to describe his breaches as being technical in nature.
5. At [27] of the February 2025 reasons, I referred to there being only two exceptions to the injunction contained in Order 4 of the June 2024 orders, as amended by Order 5 of the October 2024 orders, which permitted the encumbrance of the GG Street property: first, to borrow funds to be applied only to development and operational costs of HH Pty Ltd ("HH Pty Ltd"); and/or, secondly, to borrow funds for application in the ordinary course of the husband's business which, as I previously noted, is as a property developer, the payment of his reasonable living expenses, and/or the payment of his proper legal expenses.
6. At [28], I observed that:

Notwithstanding the conjunctive / disjunctive words "and/or" between sub-paragraphs (a) and (b) of Order 4 of the June orders (as amended), they do not permit funds borrowed for the specific purpose permitted by the former paragraph to be applied to purposes permitted by the latter paragraph, all the more so in circumstances where notice of borrowings is required for those within sub-paragraph (b) but not sub-paragraph (a).

It is clear, on the husband's own evidence, that he has borrowed funds for the former purpose and not applied them thereto but, rather, at least in part, for the latter purpose. ...

1. I said that it was not for the husband to arrogate to himself the right to do so, and that he could and should have made an application to the Court in the absence of consent by the wife, which I speculated would be unlikely. That speculation has come to fruition because that is the gravamen of the issue that I have to decide today.
2. By the husband's Application in a Proceeding before the Court today, he seeks to further vary the injunction to enable him to apply the funds borrowed pursuant to the exception in sub-paragraph 4(a) of the June 2024 orders (as amended by the October 2024 orders) in largely the same way that he could apply any funds borrowed pursuant to sub-paragraph (b) thereof.
3. He seeks to be able to apply borrowings of $6,000,000, which were raised by him pursuant to the exception to the injunction contained in Order 4(a) (as amended), which funds have been received by him but cannot be applied for their intended property development purpose in the short to medium term, and he seeks to be able to apply those borrowed funds as follows: first, as part of his ordinary course of business; secondly, in repayment of inter-entity loan accounts; thirdly, in payment of his reasonable living expenses; and, fourthly, in payment of his proper legal expenses.
4. In the course of the hearing before me this morning, it was conceded by the wife that he should be allowed, and a variation should be made to enable him, to apply the borrowed funds for the first and fourth of the proposed purposes, namely, in the ordinary course of his business and in the payment of his proper legal expenses. That leaves in dispute between the parties whether he should also be able to apply the funds in repayment of inter-entity loans and for the payment of his reasonable living expenses.
5. In exchanges with counsel this day, I queried whether an application pursuant to s 79A of the Family Law Act 1975 (Cth) ("the Act"), or an application to review out of time orders made pursuant to s 79 of the Act, as is the case in these proceedings, should be approached any differently to an appeal. Counsel for the wife, who is the applicant in the substantive proceedings, was unable to distinguish why each party should not be able to enjoy the fruits of the judgment which was regularly made. True, it is, that judgment might be set aside on review (if time be extended) or pursuant to s 79A of the Act, but that is as speculative as the outcome of an appeal.
6. In relation to the exception sought by the husband for repayment of inter-entity loans and the related minimisation of interest payments, I have already dealt with that issue in the February 2025 reasons at [33] and [38].
7. At [33], I observed inter alia that:

... I do not accept that repayments of loans between inter-related parties, whether by the husband or [Z Pty Ltd] to [HH Pty Ltd], especially in circumstances where he solely controls (whether directly or indirectly) those two corporate entities, constitute "operational costs" of [HH Pty Ltd]. The husband's mere deposition that because "money is moved from each entity to pay down the outstanding debts of another related company by way of a loan, if that entity's debts are more pressing", does not make such inter-entity transfers operational costs. ...

Insofar as the husband asserts prejudice, in terms of inter-entity interest payments, if the relevant January 2025 withdrawals (namely $1,300,000 and $100,000) are required to be returned by [Z Pty Ltd] to [HH Pty Ltd], he controls those entities. Further, there is no evidence, nor could there credibly be in the present circumstances, of any demand by [Z Pty Ltd] for repayment by [HH Pty Ltd].

1. In his written submissions filed on 2 April 2025, the husband points to [26] of the October 2024 reasons, where I referred to the decision of the Supreme Court of Victoria in Oswal v Carson (No 3) [2011] VSC 193, where Ferguson J, as her Honour then was, said at [10]:

An interlocutory injunction granted until trial or further order will be varied or discharged where there has been a material change of circumstances since the injunction was first granted. The application for variation or discharge is not a vehicle for a rehearing of the original application on the same material nor is it a substitute for an appeal from the original orders granting the injunction.

(Footnotes omitted)

1. In the husband's affidavit filed on 19 March 2025, in support of his present Application in a Proceeding, he relevantly deposes at paragraphs 31-33 as follows:
   1. As deposed in my prior affidavits filed in this proceeding, I do not draw a wage. I support myself and my family through loans from the companies I manage and upon a sale of a property. As a property developer, the only times that I would earn money is upon a sale of a unit or property that I have developed. I do not draw a wage and in order to support myself and my family during the course of a development, I would borrow from the various companies I manage and I would also loan the companies from my own funds as well.
   2. Generally, money is moved from each entity to pay down the outstanding debts of another related company by way of a loan, if that entity's debts are more pressing. I deposed to this in paragraph 51 of my affidavit of 26 September 2024 and further deposed that I intended to use a portion of the [QQ Group] loan to repay a loan to [Z Pty Ltd] which will then be used to pay the current ATO debt.
   3. At present, there is minimal monthly revenue received by the entities that I control. The expenses that I depose to in paragraph 35 below far exceeds the income derived from the entities I control. I highlight below the income received by my entities for the months of October, November and December 2024 and January and February 2025.
2. Whilst, at paragraph 33, he refers to the income received by the entities and asserts that the expenses set out at paragraph 35 far exceed it, there is no mention of any expenses in that latter paragraph. This lacuna was not addressed in oral submissions. If this is a drafting error on the part of the husband's solicitor, and the husband failed to notice it when he swore the affidavit, that is not a matter that I can speculate about. In any event, the income to which he refers in paragraph 33, and which he deposes to being minimal monthly revenue, when tallied up, totals about $760,000 over the course of five months, which averages about $152,000 per calendar month. In my view, there is no change of circumstances on the evidence to warrant a variation the injunction to enable the repayment of inter-entity loans when the entities remain controlled by him. He did not appeal the October 2024 orders.
3. The wife submits, and the husband himself points to the fact, that "[t]he application for variation or discharge is not a vehicle for a rehearing of the original application on the same material nor is it a substitute for an appeal from the original orders granting the injunction": Oswal v Carson at [10]. In my view, that is precisely what the husband is trying to do insofar as his application to vary the injunction to permit the repayment of inter-entity loans is concerned, and that proposed variation will not be granted.
4. Insofar as living expenses are concerned, I expressed concern in my exchanges with Senior Counsel for the husband regarding the breadth of that proposed exception. Senior Counsel conceded that reasonable living expenses could be capped. He pointed to paragraph 40 of the husband's affidavit, in which the husband deposes to living expenses of $50,000 per calendar month for four adults, three children and a nanny. He explained that those eight people are comprised of the husband's new partner, himself, their three infant children, his new partner's parents, and the nanny. It is trite to observe that this is not a maintenance application. In any event, the husband has no obligation at law to pay the expenses of his partner's parents or, indeed, any expenses of the nanny. I know nothing about his partner's parents; they may be very wealthy people.
5. Conversely, in relation to what should be the maximum amount allowed for living expenses, counsel for the wife pointed to the husband's income in his Financial Statement filed on 13 September 2024, where he deposed to an income of $2,827 per week.
6. In my view, both the husband and the wife are wildly unrealistic in the maximum reasonable living expenses for which they each contend, namely, $50,000 in the case of the husband and about $3,000 in the case of the wife.
7. In addition to the husband being under no obligation at law to pay the expenses of his partner's parents, I was told by his Senior Counsel that his new partner is engaged in home duties, so I find there is no need for a nanny. Indeed, when I turn to his Financial Statement, there are house cleaning expenses of approximately $250 per week. As with the nanny, I consider that, in circumstances where the husband's new partner is engaged in home duties, "house cleaning expenses" form part of exactly what she was described to be doing.
8. In the absence of any further assistance from counsel, on instructions, I am left to look again at the husband's Financial Statement. In Part G, at paragraph 32, he asserts that the total of all other expenditure is in the order of $13,235 per week, which roughly approximates the sum of $50,000 to which he deposes in his March 2025 affidavit. After discussions with his Senior Counsel and examination of some of those expenses, in circumstances where I was not assisted by anything other than an ambit claim of $50,000 on his behalf, and the polar opposite on the wife's behalf, I have considered Appendix A to the husband's Financial Statement, which particularises how the sum $13,235 per week is calculated. Counsel told me that they were content for me, effectively, to "pick a figure" and, in the circumstances, I consider that to be appropriate.
9. I do not understand how, especially in circumstances where the husband has no obligation whatsoever to support his partner's parents, nor a need to pay a nanny, even if he was simply supporting his partner and himself and their three children, they could have a food bill of $1,850 per week. For want of anything more specific, I consider that $750 is more than ample for two adults and three children.
10. It is hard to see how household supplies, which ordinarily comprise items such as toilet paper, tissues, washing detergent and the like, could total $600 per week and there is no evidence to support it. Accordingly, as invited by counsel to do, I consider that $250 a week is an adequate amount.
11. A weekly gas bill of $349 again seems wildly inflated and I consider $200 per week to be a reasonable amount.
12. Irrespective of the number of motor vehicles owned by the parties - and I note from the husband's Financial Statement that he appears to own only a single vehicle, albeit a luxury brand, valued at $200,000, which he may be required to sell if he is experiencing financial difficulties - I do not understand how he can assert to have car maintenance expenses, excluding petrol, of $753 per week. I consider a weekly figure of $100 to be reasonable.
13. Similarly, expenses for clothing and shoes (excluding the nanny but presumably including his partner's parents) of $750 a week seem to be wildly inflated. Allowing for the husband, his new partner and their three children, a sum of $200 per week would seem to be reasonable.
14. With respect to medical expenses, there is simply no evidence to corroborate why the husband, his new partner, and their three children would have such high medical, dental and optical expenses as to total $402 per week, not including health insurance premiums. If they include his partner's parents, and if they be elderly, that is not his problem.
15. I consider the expenses of $231 per week for entertainment and hobbies, and $423 per week for holidays, to be discretionary and do not take them into account. As I have observed above, I consider house cleaning expenses of $250 per week, when his new partner is engaged in "homemaker and parent" contributions, to be unnecessary.
16. Expenses of $100 a week for dry-cleaning again seem wildly inflated and I disregard that amount.
17. With regard to expenses for baby products of $300 per week, there is simply no explanation of what that is and I shall ascribe a figure of $100 for that.
18. As I have previously indicated, I consider the payment of $2,625 per week for the nanny to be unnecessary when the children's mother is available to care for them.
19. When I recalculate the total weekly expenditure of $13,235, with the amounts reduced or disregarded as I have outlined, I calculate a total of $6,302 per week. If I annualise that and then divide it by 12 months, I reach a figure of $27,305, which I shall round up to $27,500 per month, which I observe is slightly more than half the figure contended by the husband. The payment of the husband's reasonable living expenses will be capped at that amount per month.
20. Finally, and to make it abundantly clear, if either party wishes to file an Application in a Proceeding seeking any relief, they will need to seek the leave of the Court. This Court's Family Law Case Management Central Practice Direction provides:

6.16 After a proceeding has commenced, unless a relevant exemption applies, a party may not file an Application in a Proceeding seeking interim orders, without complying with rule 4.03 of the Family Law Rules, which requires the parties to make a reasonable and genuine attempt to settle the issue to which the application relates.

6.17 Other than in urgent circumstances relating to issues of high risk, or where the application is made by an Independent Children's Lawyer, parties may seek interim orders:

a. as set out in their initiating application or response; or

1. by filing a maximum of one additional Application in a Proceeding without leave.

6.18 Leave of the Court must be sought as part of any additional interlocutory application. A leave application may be determined by a Registrar in chambers.

1. The parties and their lawyers must understand that they cannot keep coming back to court and, save for extenuating circumstances, I do not want to see them in my Court again until trial. I and other people within the Court, including other Judges, as well as Senior Judicial Registrars, have given these rich people far more time than they deserve. If they think that they can keep coming back to litigate their squabbles, I remind them of what Austin J said in Agnarsson & Agnarsson (No 2) [2023] FedCFamC1F 1066 at [30]:

The Court has no business meddling in the parties' complicated financial affairs in a piecemeal and arbitrary way in advance of the trial, which is when their financial circumstances can be addressed comprehensively. If they are in a mess, it is by reason of their own conduct. It is not for the Court to extricate them when the posited interlocutory solutions are hotly contested.

I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Strum.