Federal Circuit and Family Court of Australia
(DIVISION 1)
Berrell & Tily (No 2) [2022] FedCFamC1F 715
File number(s): SYC 3428 of 2018 Judgment of: CHRISTIE J Date of judgment: 21 September 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – where the respondent seeks to appoint an administrator for a company – where the applicant seeks a restraint on the respondent from appointing an administrator - where the applicant instead seeks to appoint a liquidator and for the winding up of the company – where the applicant could not demonstrate the need for an injunction. Legislation: Corporations Act 2001 (Cth), ss 461, 436A Cases cited: Allstate Exploration v Batepro [2004] NSWSC 261
Bishop and Bishop (2003) FLC 93-144
Freihart Pty Limited ACN 085 174 830 and the Corporations Act [2001] ACTSC 95
Norton & Locke (2013) FLC 93-567
Division: Division 1 First Instance Number of paragraphs: 42 Date of hearing: 16 September 2022 Place: Sydney Solicitor for the Applicant: Mr Hall, Hall Partners Solicitors Counsel for the Respondent: Mr Gray Solicitor for the Respondent: Lander and Rogers ORDERS
SYC 3428 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BERRELL
First Applicant
AND: MR B BERRELL
Second ApplicantAND: MS C BERRELL
Third ApplicantAND: MR TILY
Respondent
order made by:
CHRISTIE J
DATE OF ORDER:
21 September 2022
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed on 8 September 2022 and amended on 16 September 2022 is dismissed.
2.Costs of the Application in a Proceeding be stood over to 28 November 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Berrell & Tily has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
This is an interim application for an injunction restraining the appointment of an administrator and seeking the appointment of a liquidator to a company. It is opposed. It is necessary to set out the context in which the application is made to understand the nature and scope of the legal and factual issues which arise.
Background
The substantive matter is listed before me for hearing of a threshold issue, namely whether or not there was a de facto relationship between Mr Berrell (“Mr Berrell”) and Mr Tily (“the respondent” or “Mr Tily”). Those proceedings are listed for…
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- Case
- [2022] FedCFamC1F 715
- Decision Date
CaseChat Overview and Summary
The Court had to determine two key issues: whether Mr Tily should be restrained from appointing an administrator, and whether Mr Berrell should be permitted to appoint a liquidator. The Court considered the statutory requirements for such appointments, existing court orders, and the lack of evidence suggesting that the appointment of an administrator would prejudice the interests of the Berrell family. The Court also examined the potential impact of the de facto relationship determination on its jurisdiction over the property adjustment application.
In its reasoning, the Court noted that the transfer of the proceedings to the Family Court had made all parties legitimate participants in the litigation, with corresponding rights and responsibilities. However, before granting injunctive relief or permitting the appointment of a liquidator, the Court needed to be satisfied that such actions were necessary. The Court found that Mr Tily's intention to appoint an administrator complied with existing court orders and was regularly given by a person with the requisite authority. Moreover, there was no evidence that the appointment of an administrator would adversely affect the Berrell family's interests.
The Court concluded that it was not yet clear whether it would have jurisdiction to hear and determine the application for property adjustment. This would depend on the outcome of the threshold issue regarding the de facto relationship between Mr Berrell and Mr Tily. If the relationship was found to exist, the Court would have jurisdiction over the entire controversy. However, if the relationship did not exist, the proceedings would be returned to the Supreme Court.
Orders
Orders of the court
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Background
Background to the litigation
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
The parties agreed that legal requirements for appointment of an administrator had been met: s 436A of the Corporations Act. Consideration I accept that in late 2017 an order was made transferring the whole of the proceedings before the Supreme Court to this Court. The effect of that order for transfer was that the competing positions of, on the one hand, Mr Tily and M Pty Ltd and, on the other, the Berrell family, fell to be determined by this Court pursuant to its accrued jurisdiction. I pause to note that this Court will have accrued jurisdiction where there is a single justiciable controversy. This has not been interpreted as requiring there to be only a single justiciable issue and may include circumstances where there are “many issues but one broad controversy”: Bishop and Bishop (2003) FLC 93-144. It is usual to describe cases of this nature as containing a “common sub-stratum of facts” such that the resolution of the non-federal aspect of the controversy is necessary in order to make a determination as to the issues as between the spouse parties. The difficulty that arises in the circumstances of this case arises because it is not yet plain that this Court will ultimately have jurisdiction to hear and determine the application for property adjustment. That jurisdiction will exist if the threshold question is answered by the conclusion that Mr Berrell and Mr Tily were in a de facto relationship as that is understood by the Family Law Act 1975 (Cth). If we assume that the threshold issue will be answered in the affirmative then it follows that all of the issues as between the parties to the Supreme Court litigation will fall to be considered in the context of the relationship between Mr Berrell and Mr Tily, including the consideration of debts owed to third parties. If the threshold issue is determined with a finding that those men were not in a de facto relationship, this Court will cease to have any common sub-stratum of facts and it follows that the proceedings as between the parties to the Supreme Court litigation would be returned to that court. I accept at this stage of the proceedings that all of the parties to the litigation before this Court are, as a consequence of the transfer orders, legitimately parties to proceedings before the Court with all of the rights and responsibilities which flow and may move the Court for orders. However, before the Court would use its injunctive powers to restrain a party from taking an action, and similarly, before it would make orders permitting a party to take action, at this preliminary stage of the proceedings it would be necessary to satisfy the Court that such injunctions or orders are required. There were two effective questions for determination:(1)Should Mr Tily be restrained from appointing an administrator?(2)Should Mr B Berrell be permitted by court order to appoint a liquidator? In respect of orders for the appointment of a liquidator, there are other statutory requirements which would need to be satisfied before such an order could be made. It is important in respect of the notice given by Mr Tily of his intention to appoint an administrator, to understand that: (a)such notice was given in accordance with existing court orders;(b)such notice was given regularly by a person with the power to effect the appointment of an administrator, namely a director of the company; and(c)there is no evidence before the Court to suggest that the appointment of an administrator would function in a manner such as to prejudice the interests of the Berrell family.