Income Asset Management Group Limited v Henry

IAM’s pleaded final relief went beyond the freezing order. It sought declarations under s 1317E of the Corporations Act 2001 (Cth) for contraventions of s 182, declarations for breach of fiduciary duties and terms of employment, and orders for compensation under s 1317H as well as damages, account of profits and equitable compensation.

The judgment also records that IAM had initially sought a declaration concerning s 181 of the Corporations Act, but removed that prayer on 4 December 2025 when it filed an amended originating application.

That background matters because it shows the freezing order sat inside a broader civil claim. But the decision reported at [2026] FCA 326 was not about final liability. It was about whether the existing freezing order should be discharged after Mr Henry challenged it.

IAM relied on evidence from its Chief Operating Officer and General Counsel, Mr Cameron Coleman. He said that in September 2025 he became aware of potential irregular transfers from the Apex JPM account, which held funds that were revenue generated by IAM. An internal investigation by other IAM personnel examined transaction records and money movements. That investigation identified a transaction on 21 March 2025 that could not be traced to IAM’s settlement or trust accounts.

A search of Mr Henry’s email inbox then identified a manual payment instruction form sent by Mr Henry to Apex directing a transfer of $12,300 to a National Australia Bank account. IAM said the payee name function verified that account as being in the name of Kimberley Henry.

IAM further alleged that 64 transfers were made to that NAB account from an Apex account between 2 July 2024 and 12 May 2025, totalling about $1.5 million. It later accepted that the amount said to have been misappropriated should be reduced to $1,375,509.60.

IAM’s case was that Mr Henry falsified payment instructions by using Apex instruction forms that listed different IAM client account details but always the same NAB account number, after which Apex would submit the instruction and JP Morgan would deposit the funds into the NAB account.

The Court also referred to evidence suggesting that money entering the NAB account was then withdrawn or moved. Parts of the reasons dealing with those matters are redacted, but the visible reasons state that there was no legitimate explanation for the transfers either in or out of the account and that there was a strong case for protecting funds that appeared to be sourced from IAM from further dissipation.

Later in the reasons, the Court said it appeared that a lot of the money had been received in cash withdrawals and deposits into accounts in Mr Henry’s name.

For business readers, this is a reminder that urgent applications usually rise or fall on records that can be shown to the Court quickly. Here, the Court was not being asked to infer wrongdoing merely from messy books or unresolved reconciliations. It had evidence of specific transfers, a destination account said to belong to the respondent, and a payment instruction pathway that allegedly enabled the transfers to occur.

The Court’s reasons make clear what matters were central to that assessment. A freezing order exists to protect the Court’s process by reducing the risk that a future judgment will be frustrated. So the Court focused on whether there remained a real risk of dissipation of assets and whether the prima facie case for protective relief remained strong.

It also considered whether the practical burdens of the order had become so serious that discharge was justified, whether any alleged non-disclosures were truly material, and whether later developments had changed the factual basis for the order.

The judgment is also useful because it shows the difference between a challenge to the amount frozen and a challenge to the existence of the order itself. IAM accepted that the amount originally frozen should be reduced. That concession did not mean the order should disappear. It meant the Court had to decide whether variation, rather than discharge, was the proper response.

On oppressiveness, the Court distinguished between complete inability to access funds and administrative inconvenience. Mr Henry’s evidence was that the Commonwealth Bank had restricted digital and online banking and required a multi-stage in-branch process and repeated manual intervention to access funds for permitted purposes. The Court accepted that this was inconvenient, but said it was not the same as a refusal to release funds at all.

Given the seriousness of the allegations and the high risk of further dissipation, the inconvenience did not justify discharge.

On the undertaking as to damages, Mr Henry relied on an ASX announcement by IAM about a $2 million unsecured debt capital raising at 15% interest. He argued this cast doubt on the substance of IAM’s undertaking. The Court rejected that argument, noting that the announcement said the facility was to bolster liquidity and that the board considered IAM had sufficient cash resources to continue operating efficiently even without those funds.

On alleged non-disclosure, the Court was not persuaded there had been any material non-disclosure. Mr Henry pointed to reconciliation deficiencies, unresolved negative balances, incomplete monthly reconciliations and unallocated items in banking systems, and also raised an allegation about senior executives using client funds for their own investment accounts. The Court said that even if those matters were established, they were peripheral at best.

They might suggest that misappropriations should ideally have been detected earlier, but they did not materially undermine the prima facie evidence of misappropriation. The Court stressed that IAM’s case was not simply an inference drawn from unreconciled records. It was based on identified payments from an Apex account to Mr Henry’s personal bank account, with no apparent reason for IAM funds to be paid into that personal account, followed by withdrawals or transfers.

On balance of convenience and material change in circumstances, the Court again rejected discharge. It accepted that some prejudice was inevitable, but held that the prejudice identified did not outweigh the protective purpose of the order. The Court also said that most of the matters said to amount to changed circumstances were peripheral and that, if anything, the basis for the order had been strengthened by the bank statement evidence.

The one point on which Mr Henry succeeded was the amount. IAM accepted that the amount said to have been misappropriated had reduced. The Court therefore varied paragraph 5(a) of the earlier freezing orders so that the relevant amount became $1,375,509.60 rather than $1,528,621.71. The application to discharge the order was otherwise dismissed, and Mr Henry was ordered to pay IAM’s costs associated with that part of the interlocutory application.

There is also a defensive lesson. If a business owner, employee or officer is subject to a freezing order, the Court may be willing to adjust the order if the amount is too high or if practical carve-outs need refinement. But this case suggests that complaints about inconvenience, legal expense pressure or the applicant’s internal governance problems may not be enough to remove the order altogether where the evidence still points to a real risk of dissipation.

The Court repeatedly returned to the same practical point: there was no legitimate explanation on the material before it for the transfers into the NAB account and what happened to the money afterwards.

Another useful point is procedural. Mr Henry had twice consented to continuation of the freezing order before later seeking discharge. The judgment does not treat that as determinative, but it is part of the procedural setting. Businesses involved in urgent interlocutory disputes should keep in mind that interim arrangements can become entrenched if not challenged carefully and with evidence.