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\b\fs24\lang2057\langfe1033\langnp2057\insrsid6635434\charrsid12612861 IN THE COURT OF APPEAL}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid10817725\charrsid12612861 , COOK ISLANDS \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid6635434\charrsid12612861 (HELD AT AUCKLAND, NEW ZEALAND) \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid13379849 {\fs24\lang2057\langfe1033\langnp2057\insrsid13379849 \par }\pard \qc \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid13379849 {\fs24\lang2057\langfe1033\langnp2057\insrsid13379849\charrsid12612861 CA 8/02 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid6635434 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid6635434\charrsid12612861 \par }\pard \qc \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid9717285 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid6635434\charrsid12612861 E and another \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid6635434 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid6635434\charrsid12612861 \par }\pard \qc \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid9717285 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid6635434\charrsid13379849 v \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid6635434 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid6635434\charrsid12612861 \par }\pard \qc \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid9717285 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 A \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid9717285 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 CASEY (P), BARKER AND SMELLIE JJ}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 A \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 H}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 EARING}{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 DATE:}{ \b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 10 DECEMBER 2002}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 JUDGMENT DATE: }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 6 JANUARY 2003 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Procedure - Cook Islands - Legal professional privilege - Fraud exception - Whether documents covered by privilege}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid12940294\charrsid12612861 or subject to fraud exception }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 - Nature o}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 f }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 "}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 fraud}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 "}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 for purposes of rule -}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid12467923\charrsid12612861 }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Standard of proof required \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par E}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 and B }{\fs24\lang2057\langfe1033\langnp2057\insrsid4801716\charrsid12612861 had guaranteed payment of a $US}{\fs24\lang2057\langfe1033\langnp2057\insrsid7866367\charrsid12612861 1}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 7million promissory note and when they defaulted the A bank commenced arbitration proceedings. Soon thereafter, E settled property on a Cook Islands Trust registered under the International Trusts Act 1984. A US Court subsequently entered judgment against E and B for the }{\fs24\lang2057\langfe1033\langnp2057\insrsid1466511\charrsid12612861 amount claimed. The A bank then}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 set out to prove that the trust had been settled with the principal intent of defrauding it as creditor. If it were able to prove this beyond rea}{\fs24\lang2057\langfe1033\langnp2057\insrsid8484221\charrsid12612861 sonable doubt then, under s 13B}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (1) of the International Trusts Act the trust would be liable to satisfy the creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s claims. The bank applied for discovery of documents a}{\fs24\lang2057\langfe1033\langnp2057\insrsid5052967\charrsid12612861 nd E and B claimed that certain}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 documents were covered by legal privilege. The High Court ordered production of the documents under the fraud exception and E and B appealed to the Court of Appeal. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 HELD}{\fs24\lang2057\langfe1033\langnp2057\insrsid10429093\charrsid12612861 (allowing the application}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 for variation): \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid10753375 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (1) While s 13B(5)}{\fs24\lang2057\langfe1033\langnp2057\insrsid13379849 }{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (d) provided that a settlement was not to be taken to be fraudulent solely by reason that the set}{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 tlement took place when proceed}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 ings in respect of that creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s cause of action had already been commenced, that matter could be taken into account in determining whether a sufficient prima facie case had been made out if there was other evidence from which fraud could be inferred (see para}{ \fs24\lang2057\langfe1033\langnp2057\insrsid1246690\charrsid12612861 [11]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 post). \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid13115053 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (2) The Court would always be most reluctant to interfere with legal privilege but would exercise its discretion as to the terms in which the allegation of fraud was made and as to the surrounding circumstances, for the purpose of seein g whether the charge was made honestly and with sufficient probability of its truth to make it right to disallow the privilege of professional communications. Fraud went}{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 beyond deceit or fraud simplic}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 iter and caught any commercial practice or business dealing that could readily be described as dishonest to the point of fraud by a reasonable}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13115053\charrsid12612861 }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 businessman. The evidence established that there was a strong prima facie case of fraud and the appeal would }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11476077\charrsid12612861 be dismissed (see paras [8], [9], [13]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 post). \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Cases referred to in judgment \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 51}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid10429093\charrsid12612861 5}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 South Orange Grove Owners Association v}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid14572385\charrsid12612861 }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid16405732\charrsid12612861 O}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 range Grove Partners (6 November 1995, unreported), CA Cook Is. \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Clark v United States (1933) 289 US 1, US SC. \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972] Ch 5}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid13043996\charrsid12612861 53, [1971] 3}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid14186864\charrsid12612861 All ER 1192, [1972] }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 2 WLR 91. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9717285\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid8730757\charrsid12612861 Derby & Co Ltd v We}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 ldon (No 7) [1990] 3 All ER 161, [1990] 1 WLR 1156. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Ga}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid7105079\charrsid12612861 mlen }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Chemical Co (UK) Ltd v Rochem Ltd (No 2)}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid8941195\charrsid12612861 (1979) 124 SJ }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 276, CA.}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Matua Finance Ltd v Equiticorp Industries Group Ltd [1993] 3 NZLR 6}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid8468471\charrsid12612861 5}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 0, NZ CA. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 O}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Rourke v Darbishire [1920] AC }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid12740339\charrsid12612861 5}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 81, [1920] All ER Rep 1, HL.}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid14188086\charrsid12612861 R v Cox (1884) 14 Q}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid15219516\charrsid12612861 BD 1}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid6385143\charrsid12612861 5}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 3, [1881-5] All ER Rep 68, CCR \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Williams v Quebrada Railway Land and Copper Co [1895] 2 Ch 751. \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Counsel: \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid12059708 {\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 A F Grant }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (NZ Bar) and }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 H McKee}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 for the appellants. \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 J R F Fardell}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 QC }{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (NZ Bar) and }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 C Morris}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 for the respondent. \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid9327628 {\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid13379849 \par }\pard \qr \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid1988449 {\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Cur adv vult \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 6 JANUARY 2003. THE FOLLOWING JUDGMENT WAS DELIVERED. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid14186864 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Judgment of the Court \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 [1}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 ]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 This is an appeal against an interlocutory judgment of Williams J delivered on 10 October}{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 2002 in the High Court at Rarot}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 onga}{\fs24\lang2057\langfe1033\langnp2057\insrsid4880843\charrsid12612861 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 H}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4880843\charrsid12612861 e}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 ordered disclosure by the appellants to }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 the respondent of discoverable}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 documents for which legal privilege had been claimed in an action commenced by the respondent in the High Court claiming some $US 17m from the a ppellants (resident in the }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 United States), alleging fraudu}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 lent disposal of their assets to avoid payment of a judgment in its }{\fs24\lang2057\langfe1033\langnp2057\insrsid8415611\charrsid12612861 favour}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 by an American court. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 [2]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 The respondent is an American bank and the first appellant E settled property on her husband (B) and their children under a trust to which B also transferred property. That trust, established on 12 July 2000, is a registered Cook Island international trust pursuant to the International Trusts Act 1984. The appellants had guaranteed payment to the re s pondent bank of a $US 17m promissory note and on default the bank commenced arbitration proceedings, and claims that, while these were pending, the appellants transferred assets to the trust in the Cook Islands for no consideration, rendering themselves u nable to pay the bank. On 31 October 2000 they consented to arbitration awards for the amounts due under the guarantees and on 28 September 2000 the Circuit Court in Maryland entered judgment against them for the amount now claimed. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid9260119\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 [3]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 The present proceedings are brought pursuant to s 13B(1) of the }{ \fs24\lang2057\langfe1033\langnp2057\insrsid4330734\charrsid12612861 I}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 nternational Trusts Act 1984 which reads: \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid1988449 {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Where it is proven beyond reasonable doubt by a cr}{\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 editor that an international}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 trust settled or established or property di}{\fs24\lang2057\langfe1033\langnp2057\insrsid8799533\charrsid12612861 sposed to an international trust}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid1988449 {\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }\pard \ql \li1440\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin1440\itap0\pararsid16463436 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (a) was so settled, established or disposed by or on behalf of the settlor with principal intent to defraud that creditor of the settlor; and \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid16463436 {\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }\pard \ql \li1440\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin1440\itap0\pararsid16463436 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (b) did at the time such settlement, establishment or disposition took place render the settlor, insolvent or without property by which that creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s claim (if successful) could have been satisfied. \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid1988449 {\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid1988449 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 then such settlement, est}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16463436\charrsid12612861 ablishment or disposition shall}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 not be void or voidable and the international trust shall be liable to satisfy the creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s claim out of the property which, but for the settlement establishment or disposition, would have been available to satisfy the creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s claim and such liability shall only be to the extent of the interest that the settlor had in the property prior to settlement, establishmen}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 t or disposition and any accumu}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 lation to the property (if any) subsequent thereto.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid1988449 {\fs24\lang2057\langfe1033\langnp2057\insrsid1988449\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 There are some important qualifications. Under sub-s (2), regard must be had to the fair market value of the settlor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s other property immediately after settlement in determining whether it had rendered hi}{\fs24\lang2057\langfe1033\langnp2057\insrsid4879109\charrsid12612861 m}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 or her insolvent, and if it exceeded the value of the creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s claim, the disposition to the trust is deemed not to have been with intent to defraud the creditor. Of particular relevance to these proceedings is sub-s (5)}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 : \par \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid16451382 {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 A settlor shall not have imputed to him an intent to defraud a creditor, solely by reason that the settlor- \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 \par }\pard \ql \li1440\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin1440\itap0\pararsid16608261 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (a) has settled or established a trust or has disposed of property to such trust within two years from the date of that creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s cause of action accruing; \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 \par }\pard \ql \li1440\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin1440\itap0\pararsid16608261 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (b) has retained, possesses or acquires any of the powers or benefits referred to in paragraphs (a) to (}{\fs24\lang2057\langfe1033\langnp2057\insrsid9906584\charrsid12612861 f)}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 of section 13C; \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 \par }\pard \ql \li1440\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin1440\itap0\pararsid16608261 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (c) is a beneficiary, trustee, or protector;}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li1440\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin1440\itap0\pararsid16608261 {\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 (d) has settled or established a trust, or has disposed of property to such trust, at a time when proceedings in respect of that creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 s cau}{\fs24\lang2057\langfe1033\langnp2057\insrsid4461880\charrsid12612861 se of action against that settlo}{\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 r have already been commenced in a court of competent jurisdiction.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid9906584\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 \par The onus of proof of the settlor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 s intent to defraud the creditor lies on that creditor (see sub-s (7)}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16722\charrsid12612861 )}{\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 . \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 [4]}{\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 The purpose of s 13B, accepted by this court in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 515 South Orange Grove Owners Association v Orange Grove Partners (6 November 1995, unreported)}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 is to provide funds to satisfy a creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s claim out of properties settled on or disposed of to an international trust which, but for the settlement or disposition, would have been available to satisfy that claim. It does not render the trust or disposition void or vo idable, but achieves a balancing action, preserving the integrity of the trust while granting access to the assets fraudulently settled or disposed of earlier (p 19). The court, in discussing the purpose of the 1984 Act (at p 27), was loathe to interpret it as a statute }{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 which was intended to give succour to cheats and fraudsters by totally excluding the legitimate claims of overseas creditors.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid8415611\charrsid12612861 Privilege}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 and the fraud exception \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 [5]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 }{\fs24\lang2057\langfe1033\langnp2057\insrsid605233\charrsid12612861 T}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 here is no doubt about the fundamental importance of privilege from disc losure of communications passing between a client and legal adviser, whether for the purpose of seeking advice generally, or of litigation. Mr Grant cited the justification for the rule given to the European Court of Justice by Advocate General Slynn of E ngland-namely that every person }{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 should be able to know what they can do under the law, what is forbidden, where they must tread circumspectly, where they run risks.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 However, privilege will not attach to communications made with intent on the client}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s part to facilitate crime or fraud, and this exception has been consistently recognised in civil and criminal proceedings since }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 R v Cox}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 (1884) 14 QBD 153, [1881-5] All ER Rep 68}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 . We hardly need add that this exception does not apply to communications made for the dominant purpose of being used in pending or contemplated proceedings. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid16451382\charrsid12612861 [6]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Williams J discussed at some length the meaning of fraud in relation to privilege in civil litigation, and we quote the following forthright comments of Kekewich J in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Will iams v Quebrada Railway Land and Copper Co [1895] 2 Ch 751 at 755}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 : \par \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 ... where there is anything of an underhand nature or approaching to fraud, especially in commercial matters, where there should be the veriest good faith, the whole transaction should be ripped up and disclosed in all its nakedness to the light of the Court ... it is alleged that the company was insolvent, and that they found it useless for them to continue to carry on business and they had to stop, but that in order to prevent for a tim e this inevitable result they gave a charge in favour of their agents, and, as the plaintiff alleges, they did it in such a way as to defeat the holders of first debentures. That is what }{ \fs24\lang2057\langfe1033\langnp2057\insrsid1850068\charrsid12612861 I}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 understand the plaintiff}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s case to be, and it is said}{\fs24\lang2057\langfe1033\langnp2057\insrsid8415611\charrsid12612861 }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 that is not a charge of fraud. It is difficult to say it is not commercial dishonesty. It is, in my opinion, commercial dishonesty of the very worst type; and that is fraud.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 [7]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 This dictum was referred to by Vinelott J in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Derby & Co Ltd v Weldon (No 7) [1990}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid3286376\charrsid12612861 ] }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid221454\charrsid12612861 3 All ER 161, [1990]}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11934039\charrsid12612861 }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 1 WLR 1156}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 and by Goff J in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Crescent Farm (Sidcup) Sports Ltd v Sterling Offices Ltd [1972}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid7214196\charrsid12612861 ]}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Ch 553, [1971}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid8542294\charrsid12612861 ]}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 3 All ER 1192 }{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 and}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Gamlen Chemical Co (UK) Ltd v Rochem Ltd (No 2) (1979) 124 S}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11551759\charrsid12612861 J}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 276}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 . In the former case, Goff J held that a conspiracy and inducement of a breach of contract did not come within the ambit of fraud, while in the }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Gamlen Chemical Co}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 case he thought commercial men and lawyers alike would say that it is fraud for servants to s ecretly use a master}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s time and money to take his customers and employees and profit from them in their own business. He added: \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Where you draw the line in the infinite gradation of good and evil between }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Williams}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 case (Kekewich J) and the }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Crescent Farm Sports}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 case ... I do not attempt to say, but I have no doubt the present case is on the same side as }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Williams}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 case and that discovery ought to be given ... I wish only to add two further observations. First the court must in every case, of course, be sat isfied that what is prima facie proved really is dishonest, and not merely disreputable or a failure to maintain good ethical standards and must bear in mind that legal professional privilege is very necessary thing and is not lightly to be overthrown, bu t on the other hand the interests of victims of fraud must not be overlooked. Each}{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 case depends on its own facts.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 We are in agreement with this commonsense assessment of the approach to be taken by the courts. \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 [}{\b\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 8]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Williams J saw the theme of dis honest purpose in the cases he cited, leading him to conclude that the scope of the fraud exception- \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid2254140 {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 goes beyond deceit or fraud simpliciter and catches any commercial practice or business dealing that would readily be described as dishonest to the point of fraud by a reasonable businessman. Beyond this, further genera}{ \fs24\lang2057\langfe1033\langnp2057\insrsid8415611\charrsid12612861 lities are probably not helpful}{\fs24\lang2057\langfe1033\langnp2057\insrsid6911264\charrsid12612861 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par He saw no reason for a more restrictive definition in the light of the asset protection regime of the legislation, and the requirement of proof beyond reasonable doubt by the creditor, and we agree. Mr Grant criticised the judge}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s reference to the }{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 reasonable businessman}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 , but this is no more than a conventional recognition by the courts of an objective test of }{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 dishonesty to the point of fraud}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 in the comme rcial environment of the questioned transaction. Mr Grant also referred to a passage of the judgment citing the New Zealand Law Commission}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s statement in its Evidence Code of 1999, that a strong prima facie case of fraud or dishonest purpose should be established to justify the exception. We do not think this reference to } {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 dishonest purpose}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 indicates that the judge was accepting mere dishonesty as sufficient. He was dealing with the quite different question of the standard of proof; focussing on what the C ommission said about that}{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 aspect in the passage. Read as a whole, the judgment makes it quite clear that }{\fs24\lang2057\langfe1033\langnp2057\insrsid2431523\charrsid12612861 Williams J understood that the t}{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 est was fraudulent purpose and applied it.}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 [9]}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 The judge then went on to consider the standard of proof of fraud requi red to justify disclosure. After considering a range of cases }{\fs24\lang2057\langfe1033\langnp2057\insrsid9267369\charrsid12612861 (}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 many of which were summarised by Vinelott J in }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Derby & Co Ltd v Weldon}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 [1990] 3 All ER 161, [1990] 1 WLR 1156}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 ), and bearing in mind that s 13B required the creditor t o prove fraud beyond reasonable doubt, he held that a strong prima facie case of fraud had to be established. This test was accepted by Mr Fardell QC for the respondent, but Mr Grant submitted that it should have been more stringent by requiring a strong p rima facie case that the plaintiff will be able to establish beyond reasonable doubt at trial that the dispositions were made by the appellants with the principal intent of defrauding the bank. It must be borne in mind, of course, that in civil proceeding s where fraud is alleged the courts will always scrutinise the evidence with a degree of care reflecting the gravity of the charge requiring to be satisfied in Mr Fardell}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s submission at the higher end of the spectrum of probabilities, effectively leaving l ittle distinction between proof on balance of probability and proof beyond reasonable doubt. Like those in many of the reported cases, these attempts to define the strength of the prima facie case required often lead to semantic arguments tending to obscu re the court}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 s basic approach to the exercise of its discretion. This approach was stated by Viscount Finlay in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 O}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Rourke v Darbishire}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 [1920] AC 581 at 604, [1920] All ER Rep 1 at 6}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 in the following passage, also cited by Cardozo J in the United States Supreme Court in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 Clark v United States }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid12869056\charrsid12612861 (1}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 933) 289 US 1 at 15}{\fs24\lang2057\langfe1033\langnp2057\insrsid4416385\charrsid12612861 : \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid4338082 {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 The court will exercise its discretion}{\fs24\lang2057\langfe1033\langnp2057\insrsid7287770\charrsid12612861 ,}{\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 not merely as to the terms in which the allegation [of fraud] is made, but also as to the surrounding circumstance}{\fs24\lang2057\langfe1033\langnp2057\insrsid4338082\charrsid12612861 s, for the purpose of seeing whether the ch arge is made honestly and with sufficient probability of its truth to make it right to disallow the privilege of professional communication.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\fs24\lang2057\langfe1033\langnp2057\insrsid2254140\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 This approach was also adopted by the New Zealand Court of Appeal in }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 Matua Finance Ltd v Equiticorp }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid7287770\charrsid12612861 Industries }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 Group Ltd [1993] 3 NZLR 650 at 653. \par \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 Disputed facts and Conclusion \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 [10]}{\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 Williams J held there was a strong prima facie case of the fraud in his c}{ \fs24\lang2057\langfe1033\langnp2057\insrsid6108370\charrsid12612861 onclusions summaris}{\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 ed in para 85 of his }{\fs24\lang2057\langfe1033\langnp2057\insrsid6247038\charrsid12612861 judgment}{\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 : \par \par }\pard \ql \li720\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin720\itap0\pararsid15357059 {\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 The plaintiff contends in essence that the timing of the establishment of the trust and the transfers to it, occurring immediately after demand for payment by the bank and commencement of arbitration proceedings to recover the debt, gives rise to a strong inference that actions were undertaken to defraud E and B}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 s creditors. The first defendants, on the other hand, say that the trust was established and funded for the legitimate purpose of future asset protection for themselves and their children. They say that they believed that the assets they had left after fu nding the trust would be sufficient to satisfy their outstanding creditors. In my view the plaintiff has satisfied the strong prima facie test by reference to the establishment of the trust in the shadow of an impending arbitration and judgment (eventuall y by consent) for a very substantial sum. Although E and B profess legitimate reasons for the establishment of the trust, a careful reading of B}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 s explanation }{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 reveals no persuasive reason for its timing or the rapid transfer of assets to it thereafter. If, in fact, E and B were establishing a trust for legitimate reasons, it is perhaps odd that they had not done so before. They are clearly }{\fs24\lang2057\langfe1033\langnp2057\insrsid8027192\charrsid12612861 wealthy and }{ \fs24\lang2057\langfe1033\langnp2057\insrsid7936055\charrsid12612861 sophisticated }{\fs24\lang2057\langfe1033\langnp2057\insrsid8027192\charrsid12612861 business people who had been taking business }{ \fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 risks involving substantial borrowings since the establishment of the }{\fs24\lang2057\langfe1033\langnp2057\insrsid13116262\charrsid12612861 first }{ \fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 store in 1995. Full evidence at trial may lead to the prima facie case falling away and the plaintiff failing to satisfy the beyond reasonable doubt test contained in s13B but as mattes stand a strong prima facie case has been es tablished, especially since the requirement under s13B (1) is to demonstrate that the }{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 principal intent}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 "}{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 , not the sole intent, was to defraud.}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid7615924 {\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 [11] }{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 Mr Grant submitted that, in reaching this conclusion, }{ \fs24\lang2057\langfe1033\langnp2057\insrsid8064090\charrsid12612861 t}{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 he judge relied effectively on the disposal of the assets while the arbitration was pending, and that this ignores the provision in s}{\fs24\lang2057\langfe1033\langnp2057\insrsid12411049\charrsid12612861 }{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 13B(5)(d) as set out earlier in this judgment, to the effect that a settlor shall not have imputed to him an intent to defraud a creditor, solely by reason that the }{\fs24\lang2057\langfe1033\langnp2057\insrsid10830832\charrsid12612861 settlor}{ \fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 has disposed of property to the trust, at a time when proceedings in respect of th}{\fs24\lang2057\langfe1033\langnp2057\insrsid11547132\charrsid12612861 at}{ \fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 s cause of action had already been commenced in a court of competent jurisdiction. (Mr Fardell accepted that for the purpose of these proceedings, this provision in subs (5)(d) applied, and he also conceded}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 that the }{\fs24\lang2057\langfe1033\langnp2057\insrsid5064363\charrsid12612861 settlement }{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 fell within subs (5)(a) as a disposal within two years}{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 from the date of the creditor}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 s cause of action accruing.) Howeve}{\fs24\lang2057\langfe1033\langnp2057\insrsid5064363\charrsid12612861 r, if there is other evidence f}{ \fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 r}{\fs24\lang2057\langfe1033\langnp2057\insrsid5064363\charrsid12612861 om}{\fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 which fraud can be inferred, then the matters ref}{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 erred to in subs (5) can be taken into account in determining whether a sufficient prima facie case has been made out. In the extract just cited, Williams J referred to other matters from which such an inference can be drawn. In order to understand the factual situation more clearly and the opposing arguments thereon advanced by counsel, it is convenient to set out the relevant parts of the chronology prepared by the judge:}{ \fs24\lang2057\langfe1033\langnp2057\insrsid7615924\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \par }\trowd \irow0\irowband0\ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 April 1995}{\fs24\lang2057\langfe1033\langnp2057\insrsid2572487\charrsid12612861 }{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 - Sept 1999\cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 E and B}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 s company, P Inc, opened four boo}{\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 k}{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 stores} {\fs24\lang2057\langfe1033\langnp2057\insrsid939285\charrsid12612861 .}{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow0\irowband0 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow1\irowband1 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 24 March 1988\cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 The plaintiff bank made a line of credit available to P in total and not }{ \fs24\lang2057\langfe1033\langnp2057\insrsid7298555\charrsid12612861 to }{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 exceed $ US 17m.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow2\irowband2 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow3\irowband3 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 31 May 1999\cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 E and B guaranteed payment to the plaintiff of all indebtedness under a promissory note given by P to the bank.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow4\irowband4 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow5\irowband5 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 31 May 2000\cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 The promissory note matured. As a result, all indebtedness to the bank under the promissory note and the guarantee signed by E and B became immediately due and payable.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow6\irowband6 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow7\irowband7 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 5 June 2000\cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 The plaintiff demanded payment from P and E and B on 12 June 2000. The demand was not met.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow8\irowband8\ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid2050742\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid2050742\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid2050742\charrsid12612861 \trowd \irow9\irowband9 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 Circa April}{ \fs24\lang2057\langfe1033\langnp2057\insrsid13379849 }{\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 - June 2000}{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 E and B }{\fs24\lang2057\langfe1033\langnp2057\insrsid7298555\charrsid12612861 decided }{ \fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 to sell the store}{\fs24\lang2057\langfe1033\langnp2057\insrsid7298555\charrsid12612861 s.}{\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow10\irowband10 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow11\irowband11 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 Circa June 2000\cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 Efforts to sell the store}{ \fs24\lang2057\langfe1033\langnp2057\insrsid1642709\charrsid12612861 s}{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 commenced. The initial asking price was $US 15m.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 \trowd \irow12\irowband12 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16011470\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16011470\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16011470\charrsid12612861 \trowd \irow13\irowband13 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid13379849 June 2000 -}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 circa Dec 2000}{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 Efforts to sell the stores continued. Initial interest was shown by retail chain stores Q and R. Negotiations began with R.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow14\irowband14 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16011470\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16011470\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16011470\charrsid12612861 \trowd \irow15\irowband15 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 23 June 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 E and B were served with a notice of claim by the bank and demand for arbitration.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow16\irowband16 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow17\irowband17 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 12 July 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 A notice was issued by the arbitrator S notifying the parties that arbitration proceedings had been }{\fs24\lang2057\langfe1033\langnp2057\insrsid6968830\charrsid12612861 initiated}{\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 . \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow18\irowband18\ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow19\irowband19 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 12 July 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 E and B formed the trust.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow20\irowband20 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow21\irowband21 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 18 July 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 The bank served its complaint in the arbitration proceedings.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow22\irowband22 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow23\irowband23 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 26 July 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7340647\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 E and B served their answer to the bank}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 s complaint.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow24\irowband24 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow25\irowband25 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid13379849 1 August -}{ \fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 circa Oct 2000}{\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 E and B transferred assets to the trust for minimal consideration. The transferred assets include E and B}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 s residence in Maryland, a second property in Georgia, the furnishings and artwork contained in the Maryland residence and cash, shares and interests in partnerships worth over $US 16m. All appear to have been transferred prior to the end of October 2000. \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow26\irowband26\ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow27\irowband27 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 7 August 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 A Pricewaterhouse Coopers valuation report on P was issue}{\fs24\lang2057\langfe1033\langnp2057\insrsid12473594\charrsid12612861 d}{\fs24\lang2057\langfe1033\langnp2057\insrsid16463896\charrsid12612861 . The report valued P (the bookstore company) at $US 12.7m.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow28\irowband28 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow29\irowband29 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 31 October 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 E and B consented to two arbitration awards against them in favour of the bank totalling over $US 17m.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow30\irowband30 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow31\irowband31 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 28 December 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid11097770\charrsid12612861 The Circuit C}{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 ourt entered }{\fs24\lang2057\langfe1033\langnp2057\insrsid6247038\charrsid12612861 judgment}{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 against E and B for an amount over $US 17m including interest and costs.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow32\irowband32 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow33\irowband33 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 End of 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 [Retain chain store] R indicated that it was not in a position to proceed with the purchase of the stores.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow34\irowband34 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow35\irowband35 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 Late December 2000}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 Approximately $US 14m in cash and $US 729,000 in stocks and other investments were transferred by the trust to a Swiss bank. There was no explanation in the first defendant}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 s affidavits as to the purpose of this transfer.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow36\irowband36 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow37\irowband37 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 Circa 2001}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 P file}{ \fs24\lang2057\langfe1033\langnp2057\insrsid8652549\charrsid12612861 d}{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 for bankruptcy protection.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow38\irowband38 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid12214051\charrsid12612861 \trowd \irow39\irowband39 \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid7615924\yts15 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 January 2001}{ \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \cell }\pard \ql \li0\ri0\widctlpar\intbl\wrapdefault\faauto\adjustright\rin0\lin0\pararsid4876068\yts15 {\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 The plaintiff bank learned of the existence of the trust.\cell }\pard\plain \ql \li0\ri0\widctlpar\intbl\wrapdefault\aspalpha\aspnum\faauto\adjustright\rin0\lin0 \fs20\lang1033\langfe1033\cgrid\langnp1033\langfenp1033 { \fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \trowd \irow40\irowband40\lastrow \ts15\trgaph108\trleft612\trftsWidth3\trwWidth9132\trftsWidthB3\trftsWidthA3\trautofit1\trpaddl108\trpaddr108\trpaddfl3\trpaddft3\trpaddfb3\trpaddfr3\tbllkhdrrows\tbllklastrow\tbllkhdrcols\tbllklastcol\tblind720\tblindtype3 \clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth2808\clshdrawnil \cellx3420\clvertalt\clbrdrt\brdrtbl \clbrdrl\brdrtbl \clbrdrb\brdrtbl \clbrdrr\brdrtbl \cltxlrtb\clftsWidth3\clwWidth6324\clshdrawnil \cellx9744\row }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid7615924 {\fs24\lang2057\langfe1033\langnp2057\insrsid14381349\charrsid12612861 \par }\pard \ql \li0\ri0\widctlpar\wrapdefault\faauto\adjustright\rin0\lin0\itap0\pararsid4416385 {\b\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 [12] }{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 The judge added that E and B and their children continue to live in their residence in Baltimore and enjoy the furnishings and artwork; that most of their assets remaining in the United States apart form their shares in P cannot be reached by creditors; that the bank has recovered approx imately $US 3.4m from the sale of P}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 s assets. He also set out the reason given by B for the establishment of the trust. He said it was done on the advice of senior and experienced lawyers as part of estate planning to preserve the value of assets by placing them in the trust for their children}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 s benefit. In effect he claimed they were simply setting up a }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 spendth}{\fs24\lang2057\langfe1033\langnp2057\insrsid11237171\charrsid12612861 r}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 ift trust}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid3419686\charrsid12612861 to save them fro}{ \fs24\lang2057\langfe1033\langnp2057\insrsid4803646\charrsid12612861 m potentially ill-advised business}{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 ventures which they and eventually their children might otherwise undertake. B conc}{\fs24\lang2057\langfe1033\langnp2057\insrsid16334445\charrsid12612861 luded that he was confident}{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 they could satisfy their then creditors from assets not placed in the trust. As the judge observed, whether this was so depended largely on the successful sale of the bookstores at a good price and that this was by no means guaranteed at the time }{ \fs24\lang2057\langfe1033\langnp2057\insrsid5777218\charrsid12612861 the trust was set up }{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 on 12 July 2000. The asking price was $15m set in conjunction with the lawyer, who obtained a valuation from PricewaterhouseCoopers which arrived on 7 August 2000, by which date transfers to the trust had already begun.}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15357059\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 [13] }{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 In this court Mr Fardell emphasised as highly significant the timing of the transfer of property and assets to the trust in the face of the appellants}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 consent to the award and eventual confession of }{\fs24\lang2057\langfe1033\langnp2057\insrsid6247038\charrsid12612861 judgment}{ \fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 ; the lack of consideration; their continued enjoyment of the residence and chattels; the transfer to the Swiss bank account by the trust, the choice of assets transferred to the trust as against those }{ \fs24\lang2057\langfe1033\langnp2057\insrsid14889743\charrsid12612861 of }{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 relatively little value left behind; the inaccessib ility of other assets held in trust for E; the discrepancy between the valuation of the business and the actual realised value; and the lack of candour in the appellants}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 dealing with the bank. One of Mr Fardell}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{ \fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 s main criticisms was the PricewaterhouseCoo pers valuation, which was hedged around with disclaimers and was based on discounted future earning capacity from information supplied by the company and without any independent check. On the other hand, Mr Grant relied heavily on the appellants}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 claim of good faith in going ahead to make their dispositions to the trust in reliance on this valuation and their expectation of a sale price sufficient to satisfy their }{\fs24\lang2057\langfe1033\langnp2057\insrsid10960694\charrsid12612861 li}{ \fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 abilities. Most of the other matters raised by Mr Fardell were dismissed by him as occurrenc es normally incidental to protective trusts from which no fraudulent inferences should be drawn. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 [14] }{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 It seems clear that the P corporation was not profitable and when the sale negotiations collapsed it sought bankruptcy protection in February 2001. Against this background there are obvious reservations about }{ \fs24\lang2057\langfe1033\langnp2057\insrsid8415611\charrsid12612861 t}{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 he genuine}{\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 ness of the appellants}{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 belief that the stores would sell for sufficient to clear the bank. It could be strongly urged that they were not prepared to take this risk and bundled all their di sposable assets into the trust. There seems no satisfactory answer to the obvious question that if they were honestly motivated, why did they not arrange to pay the bank out of the substantial assets apparently readily at their disposal before setting up the trust for the future protection of themselves and their children, as they now maintain. There is a starling difference between the Pricewater}{\fs24\lang2057\langfe1033\langnp2057\insrsid3168996\charrsid12612861 houseCoopers valuation}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 and the amount actually realised for the bookstores, and the basis of that valuation may be open to question. We see an obvious need for disclosure of the advice the appellants received from their legal experts experienced in the intricacies of protective trusts in order to ascertain whether it is being advanced as mere widow-dressing to conc eal their alleged purpose of defrauding the bank. \par \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 [15] }{\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 The court is always most reluctant to interfere with the operation of legal }{ \fs24\lang2057\langfe1033\langnp2057\insrsid8415611\charrsid12612861 privilege}{\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 , and in this case must also bear in mind the special protection afforded by s 13B. But in the end it has to stand back and form a judgment based on the whole of the relevant circumstances in deciding whether it is }{ \fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 right to disallow the }{\fs24\lang2057\langfe1033\langnp2057\insrsid8415611\charrsid12612861 privilege}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 of professional communications}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 : see }{ \i\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 O}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\i\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 Rourke v Darbishire }{ \fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 per Viscount Finlay above. From the circumstances of the formation of the trust and the disposal of assets to it in the fac}{ \fs24\lang2057\langfe1033\langnp2057\insrsid9178722\charrsid12612861 e}{\fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 of the pending arbitration and }{\fs24\lang2057\langfe1033\langnp2057\insrsid6247038\charrsid12612861 judgment}{ \fs24\lang2057\langfe1033\langnp2057\insrsid15542019\charrsid12612861 , which are highly relevant circumstances along with the }{\fs24\lang2057\langfe1033\langnp2057\insrsid11555536\charrsid12612861 other factors mentioned above, we a re satisfied that a strong prima facie case of fraud has been established; indeed it satisfies Mr Grant}{\fs24\lang2057\langfe1033\langnp2057\insrsid11479315\charrsid12612861 '}{\fs24\lang2057\langfe1033\langnp2057\insrsid11555536\charrsid12612861 s test of a case of fraud able to be proved at trial beyond reasonable doubt. We therefore uphold the conclusions reached by Williams J.}{\fs24\lang2057\langfe1033\langnp2057\insrsid12869063\charrsid12612861 \par }{\fs24\lang2057\langfe1033\langnp2057\insrsid11555536\charrsid12612861 \par }{\i\fs24\lang2057\langfe1033\langnp2057\insrsid11555536\charrsid12612861 Result \par }{\b\i\fs24\lang2057\langfe1033\langnp2057\insrsid11555536\charrsid12612861 \par }{\b\fs24\lang2057\langfe1033\langnp2057\insrsid11555536\charrsid12612861 [16] }{\fs24\lang2057\langfe1033\langnp2057\insrsid11555536\charrsid12612861 The appeal is dismissed with costs of $5,000 to the respondent together with disbursements to be fixed by the Registrar if the parties cannot agree. \par }}