BALDONI & BALDONI
[2019] FamCA 446
•10 July 2019
FAMILY COURT OF AUSTRALIA
| BALDONI & BALDONI | [2019] FamCA 446 |
| FAMILY LAW – PROPERTY – Injunctions – Preservation of property – Single expert valuation fees – Orders |
| Family Law Rules 2004 (Cth) ch 15 |
| APPLICANT: | Ms Baldoni |
| RESPONDENT: | Mr Baldoni |
| FILE NUMBER: | SYC | 1234 | of | 2019 |
| DATE DELIVERED: | 10 July 2019 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Berman J |
| HEARING DATE: | 13 June 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Rosic |
| SOLICITOR FOR THE APPLICANT: | Watson & Watson Solicitors |
| COUNSEL FOR THE RESPONDENT: | Ms Coulton |
| SOLICITOR FOR THE RESPONDENT: | Kyle Family Lawyers |
THE COURT ORDERS UNTIL FURTHER ORDER:
That each party shall use the assets and income under his or her effective control only in the ordinary course of business, unless otherwise agreed in writing.
The wife shall have exclusive occupancy of the farm known as “G Property” situate at B Street, Town C, NSW to the exclusion of the husband together with the Vehicle 1 registration number ….
The husband shall have exclusive occupation of the property situate at D Street, Suburb F NSW to the exclusion of the wife.
Each party be restrained by injunction from assigning, transferring, further encumbering by mortgage or charge or otherwise dealing with or disposing of his or her interest in the following:
(a) “G Property”, B Street, Town C NSW;
(b) H Street, Suburb L NSW;
(c) 1 K Street, Suburb M NSW;
(d) 2 K Street, Suburb M NSW;
(e) 2 H Street, Suburb L NSW;
(f) J Street, Suburb M NSW;
(g) D Street, Suburb F NSW;
(h) N Street, City P
Each party shall forthwith do all things necessary to authorise and direct or otherwise cause the rental income, net of property management fees, received from the leasing agents of the properties;
(a) 1 K Street, Suburb M, NSW;
(b) 1 H Street, Suburb L NSW;
(c) 2 H Street, Suburb L NSW; and
(d) N Street, City P:
to be paid towards the required repayments on the loans secured against each of the properties, rates, and any other costs the parties as landlords are legally obliged to pay in respect to each property, with any surplus or shortfall to be shared equally between the parties.
The wife be restrained from:
(a)Attending any premises at which the company R Pty Ltd carries on business;
(b)Disclosing to any third party any information about R Pty Ltd disclosed by the husband for the purposes of these proceedings.
The husband be restrained from:
(a) Attending any premises at which the company T Pty Ltd carries on business;
(a) Disclosing to any third party any information about T Pty Ltd disclosed by the wife for the purposes of these proceedings.
By 29 July 2019 and each month thereafter the husband shall provide to the wife:
(a)A copy of all and any Business Activity Statement(s) lodged for the preceding month on behalf of R Pty Ltd or any other business operated by the husband;
(b)A copy of the profit and loss statement of R Pty Ltd and any other entity operated by the husband for the preceding month;
(c)A copy of the bank statements for the preceding month for each bank account held in the name of R Pty Ltd, V Pty Ltd, S Pty Ltd and E Pty Ltd and any other interest that the husband has in a business or enterprise.
(d)A copy of the contract report and a copy of all aged creditors and debtors each month including a balance sheet for R Pty Ltd NOTING that the names of creditors and debtors are not to be redacted.
By 29 July 2019 each month thereafter the wife shall provide to the husband:
(a)A copy of all and any business activity statement lodged for the preceding month on behalf of T Pty Ltd and the U Trust interest that the wife has in a business or enterprise.
(b)A copy of the profit and loss statements for the preceding month for T Pty Ltd and any other business operated by the wife including but not limited to business conducted by the wife as a sole trader or through the U Trust.
(c)A copy of the bank statements for the preceding month for each bank account held in the name of T Pty Ltd and any other business entity operated by the wife including the bank accounts held by any person or entity as trustee for the enterprise trust.
If either party registers a company or business name with ASIC for the purpose of trading commodities, that party must notify the other in writing within 24 hours of the said registration.
A single expert witness is to be agreed between the parties within 21 days, or as ordered by the court in the absence of agreement, to provide an opinion to the value, if any, of the parties’ interests in the following entities:
·The U Trust;
·T Pty Ltd;
·R Pty Ltd;
·V Pty Ltd;
·S Pty Ltd;
·E Pty Ltd;
noting that the single expert may be requested to consider the loan accounts (credit and debit) for the parties and any inter entity loans together with a consideration of any misappropriation of assets.
For the purpose of the appointment of a single expert and the valuations of the parties’ interests in the named entities;
(a)Within 14 days the applicant’s solicitor will provide the respondent’s solicitor a list of at least three names of appropriately qualified and experience forensic accountants;
(b)Within 7 days of receipt of the list referred to in paragraph 12(a) the respondent’s solicitors will advise the applicant’s solicitors of the expert nominated by the respondent; and
(c)Within a further 7 days the parties shall jointly instruct the nominated expert or experts to provide a report addressing the valuation issues as set out herein in accordance with chapter 15 rules.
The husband will be responsible for the payment of any single expert fees at first instance but the wife shall be responsible for one half of the said fees to be paid as part of the final settlement or such earlier times as circumstances may determine.
Within 14 days the wife shall;
(a)File and serve a financial statement;
(b)Provide to the husband, detailed disclosure about the disposal of the whole or part of the $136,000.00 including documents in support.
Within 21 days the parties shall provide to the court and each other a statement setting out the costs incurred to that date and from what source those funds have been paid and what costs are expected to be incurred until the completion of the hearing.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Baldoni & Baldoni has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: SYC 1234 of 2019
| Ms Baldoni |
Applicant
And
| Mr Baldoni |
Respondent
REASONS FOR JUDGMENT
Introduction
The Amended Initiating Application filed 18 April 2019 by Ms Baldoni (“the wife”) concerns orders for settlement of property.
She seeks that Mr Baldoni (“the husband”) resign as a director of R Pty Ltd and that he transfer his shares in the company to the wife.
In addition, the wife seeks to retain the following properties:
·D Street, Suburb F;
·1 K Street, Suburb M;
·2 K Street, Suburb M;
·1 H Street, Suburb L;
·2 H Street, Suburb L;
·G Property, B Street, Town C (“G Property”); and
·N Street, City P (the City P property);
provided that the wife indemnify the husband in respect of any mortgage secured over any of the properties.
The husband is to retain his interest in the property at J Street, Suburb M and each party is to retain their interest in all other personal property and superannuation entitlement free from claim of the other.
By Amended Response filed 11 April 2019 the husband seeks that he receive assets and a cash settlement sum to equal 50 per cent of the net property of the parties.
The interim orders as set out in the wife’s Amended Initiating Application are opposed by the husband in his Amended Response.
Orders made on 15 April 2019 resolved a number of contentious issues between the parties.
At the interim hearing each party relied upon a case outline document and a proposed minute of order.
The husband’s case outline document dated 13 June 2019 contained an extensive proposed minute of order which was ultimately used by the court to determine the areas of agreement and the matters that remained for determination.
The wife’s case outline document will be Exhibit “…” in the proceedings and the husband’s case outline document will be Exhibit “…” in the proceedings.
By reference to the husbands interim orders sought, orders by consent can be made in respect of paragraphs 1.1 to 1.5 inclusive, 1.6(a) and (b), 1.7(a), 2, 3, 4, 5, 6, 9.1 and 9.2.
The husband abandons 1.7(b) and 9.3.
The matters remaining for determination are as follows:
·1.6(c) – the wife be restrained from disclosing to any third party any information about R Pty Ltd disclosed by the husband for the purposes of these proceedings;
·1.7(c) – the husband be restrained from disclosing to any third party any information about T Pty Ltd disclosed by the wife for the purposes of these proceedings; and
·7 – the parties will contribute equally to the single expert fees.
In addition, the parties agree that 2.3 will also require the husband to provide bank statements for any other legal entity in which the husband holds an interest.
The parties also agree to a further order that the husband provide a copy of the contract position report and a copy of all creditors and debtors each month including a balance sheet for R Pty Ltd however whilst the husband is prepared to provide the information he seeks to redact the names of any third party with whom R Pty Ltd does business.
Background
The parties’ commenced cohabitation in March 2015, married in 2015 and separated on 4 December 2018.
The wife contends that at the commencement of the relationship she owned an interest in the City P property, an interest in properties at G Property, and Q Street city P and the sole interest in R Pty Ltd and T Pty Ltd.
She had been conducting the business for a significant period of time prior to the commencement of the relationship.
The husband seeks to preserve the assets of the parties until final determination. He is concerned that the wife may conduct herself in a manner which would be detrimental to the interests of R Pty Ltd and in particular as to its profitability and confidential commercial information.
The husband acknowledges that he was appointed as a director and shareholder of R Pty Ltd on 16 June 2016 and considers that following the wife’s voluntary resignation as a director on 18 December 2017 he was entrusted with the ongoing management of the company.
He considers that far from the allegations of the wife that he has mismanaged R Pty Ltd and has engaged in physical impropriety, he contends that his involvement has saved R Pty Ltd from financial disaster.
The wife acknowledges that after she ceased employment with R Pty Ltd and no longer received an income, she withdrew the sum of $136,000 from the R Pty Ltd business account to meet her living expenses and mortgage liabilities.
Discussion
The husband seeks that the wife be restrained from contacting customers, staff, suppliers, agents and or contractors of R Pty Ltd and from disclosing to any third party any information about R Pty Ltd as disclosed by the husband for the purposes of these proceedings.
If such an order is made, the husband concedes that he should also be restrained in similar terms in respect of the wife’s new business T Pty Ltd.
The husband does not now object to the wife trading in competition with R Pty Ltd but does not wish to reveal commercially sensitive information which might give the wife an unfair advantage.
The wife argues that preventing her from contacting any customers, suppliers and contractors of R Pty Ltd would amount to a restraint of trade. The injunction sought by the husband is not directed to the preservation of R Pty Ltd as to its value but rather would stop or significantly hamper the wife from pursuing her own business venture.
The wife bases her opposition to the injunction sought by the husband by highlighting her involvement in the industry. Whilst there may be a dispute between the parties as to the value of R Pty Ltd at the commencement of cohabitation the wife contends that the business was successful and that she had operated for more than 10 years prior to cohabitation.
In addition the wife highlights that she holds a Bachelor degree with a focus on subjects relevant to their businesses.
She worked for a company and brought her cumulative experience to bear when a decision was made to set up R Pty Ltd.
I consider that an order of injunction that would amount to a restraint of trade should only be made where there is clear evidence of malicious intention by the wife.
The order sought by the husband would disadvantage the wife not just in respect of her ability to compete with the husband but also in respect of unrelated third parties who would not be so constrained.
There is scant evidence put by the husband in favour of the orders he seeks and there is no evidence other than his concern that the primary focus of the wife is to cause financial harm to R Pty Ltd.
The concession by the husband that he should also be the subject of restraint in relation to the T Pty Ltd business is not an antidote to the wife’s opposition.
There is merit in each of the parties being restrained from disclosing to any third party any information of either R Pty Ltd or T Pty Ltd that arises in respect of the proceedings subject to the parties being able to consult with their legal advisers and experts engaged to assist in litigation.
The wife’s’ case outline document includes a balance sheet. Whilst it is not intended to represent a joint position of the parties it nonetheless identifies the assets and liabilities of the parties.
The parties are not as yet agreed to the value of the real estate and it is likely that R Pty Ltd, T Pty Ltd and possibly the interests of the parties in the following entities:
·The U Trust;
·V Pty Ltd;
·S Pty Ltd; and
·E Pty Ltd;
will need to be valued.
The parties agree that a single expert should be appointed in accordance with ch 15 of the Family Law Rules 2004 (Cth) but are not agreed as to the how the single expert fees will be paid.
It is reasonable that the parties should contribute equally to the fees of any nominated or appointed single expert. The issue is whether the wife has the capacity to contribute at this stage or whether the husband should pay at first instance and be reimbursed by the wife at a later stage in the proceedings.
There is little that assists the court in making that determination. The financial statement of the wife reveals a weekly income of $234.00 which is comprised of child support payments.
At the date of the hearing the wife still retained a balance of about $40,000.00 from the monies taken by her from R Pty Ltd following the termination of her employment.
The husband’s financial statement records his income at $4766.00 per week. His expenses are recorded at $3885.00 per week.
Whilst the parties are possessed of valuable real estate, neither seeks that any property be sold at this stage.
I am satisfied that the husband’s current control of R Pty Ltd provides him with both a superior income to the wife and the capacity to access cash flow of the company in a manner not available to the wife.
Moreover I note that the parties remain in dispute as to the instruction to be given to a livestock agent to pay the proceeds of the sale of livestock on 8 April 2019 to R Pty Ltd.
The information in respect of the cattle sale is only understood by reference to the husband’s chronology in his case outline document which refers to the sale of 38 head of cattle on 8 April 2019 for the sum of $28,916.84.
I am not told what has happened in respect of the sum available but based upon the husband’s contention that the cattle were owned by R Pty Ltd, it seems that this also further enhances the financial ability of the husband to access money through R Pty Ltd to pay the single expert witnesses.
I propose to order that whilst the parties will be equally liable for the fees of any expert witness, the husband will be obliged to pay the fees at first instance.
I do not propose to make any order that requires the wife to deposit $136,000.00 into the R Pty Ltd account being the amount that she removed on 6 December 2018.
I accept that the majority of the amount has been spent and it is likely that the costs of litigation will significantly exhaust any balance remaining.
It is however reasonable that an order should be made that the wife provide detailed disclosure about the disposal of the proceeds she received.
It also an opportune time for the parties to exchange a statement of their costs to date and what is anticipated to bring the matter to trial. I suspect that the parties’ costs will be significant and future consideration may need to be given to the disposal of some of the properties owned jointly and severally by the parties to fund the litigation.
I make orders as appear at the commencement of these reasons.
I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 10 July 2019.
Associate:
Date: 10 July 2019
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