Chadbourne & Chadbourne

Case [2021] FCCA 378

FEDERAL CIRCUIT COURT OF AUSTRALIA

Chadbourne & Chadbourne [2021] FCCA 378   

File number(s): NCC 438 of 2021
Judgment of: JUDGE COSTIGAN
Date of judgment: 2 March 2021
Catchwords:  FAMILY LAW - interim property proceedings – orders with respect to the conduct of the parties’ business – joint expert valuation – wife’s application for exclusive occupation of the former matrimonial home – husband’s application for parenting orders  
Legislation:

Family Law Act 1975 (Cth) s 114 (1)(f)

Federal Circuit Court Rules 2001 (Cth) r 15.11

Corporations Act 2001 (Cth) s 290(1)
Cases cited:

Allesch v Maunz (2000) 203 CLR 172

Davis & Davis (1976) FLC 90-062

G and T (2004) FLC 93-176

MG & JGG [2004] FMCAfam 300

In the marriage of Harris (1980) 5 Fam LR 852

O’Dea & O’Dea (1980) FLC 90-896

Sieling v Sieling (1979) FLC 90-627

Sharpe v Grobel [2017] NSWSC 1065

Number of paragraphs: 61
Date of last submission/s: 24 February 2021
Date of hearing: 24 February 2021
Place: Newcastle
Solicitor for the Applicant: Powe & White Family Lawyers
Counsel for the Respondent: Mr Duane
Solicitor for the Respondent: Rankin Ellison Lawyers

ORDERS

NCC 438 of 2021
BETWEEN:

MS CHADBOURNE
Applicant
AND: MR CHADBOURNE
Respondent

ORDER MADE BY:

JUDGE COSTIGAN

DATE OF ORDER:

2 MARCH 2021

THE COURT ORDERS PENDING FURTHER ORDER THAT:

1.Within 72 hours the Husband must transfer all funds relating to B Group held in his personal accounts to the primary cheque account for B Group being D Company Cheque Account number ...07 (“the primary cheque account”).

2.The Wife is restrained by injunction from operating, withdrawing or otherwise dealing with the bank accounts of the company B Group Pty Ltd (“B Group”) including  causing any amount to be deducted by Paypal from those accounts.

3.The Husband forthwith do all acts necessary to cause B Group to sell the Mini-Excavator and plant trailer for the best price reasonable obtainable and pay the proceeds into the primary cheque account.

4.The Husband is restrained by injunction and/or restrained from permitting any agent or employee on his behalf from:

4.1Causing B Group to sell, transfer, dispose or otherwise divest itself of any other assets of the company outside of the Mini-Excavator without giving the wife 28 days’ notice in writing of his intention to cause the company to sell the asset, the proposed method of sale, estimated sale price and application of the funds.

4.2Giving any direction or authority to any customer or debtor of B Group to pay any amount due to the company to any account other than the primary cheque account.

5.These Orders are sufficient authority for the Wife to:

5.1Have ‘view’ access to any and all accounts operated by the husband in relation to B Group;

5.2Have full access to all records held by the Australian Taxation Office in relation to B Group;

5.3Receive all information held by B Group with any accountant and/or bookkeeper who works on behalf of the said company; and

5.4Have ‘view’ access to any business software package operated by…

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Chadbourne & Chadbourne [2021] FCCA 378
Case
[2021] FCCA 378
Decision Date

CaseChat Overview and Summary

This matter concerned interim proceedings between Ms Chadbourne (the wife) and Mr Chadbourne (the husband) regarding the conduct and valuation of their jointly owned business, B Group Pty Ltd, the exclusive occupancy of the former matrimonial home, and parenting arrangements for their two young children. The proceedings were before Justice Costigan in the Federal Circuit Court of Australia.

The court was required to determine several legal issues, including whether to grant the wife exclusive occupancy of the former matrimonial home, the terms of injunctions to preserve the assets of the business B Group Pty Ltd, and the process for valuing the business by a single court-appointed expert. Additionally, the court considered the parties' obligations regarding a child dispute conference.

Justice Costigan reasoned that due to the high level of conflict between the parties, it was necessary to grant one party exclusive occupation of the former matrimonial home to minimise further disputes. While acknowledging the wife's desire to remain in the home, the court found she had not established financial hardship and had alternative accommodation options. The court also noted the husband's need for a base to operate his business and store equipment. Consequently, the court made orders restraining both parties from dealing with the business's assets without proper notice, requiring the husband to transfer funds and sell specific equipment, and granting the wife access to business accounts and records. The court also ordered the appointment of a single expert to value the business, with costs to be borne equally.

The court ordered that the husband transfer specified funds within 72 hours and take steps to sell a mini-excavator and plant trailer, with the proceeds to be paid into a designated account. The wife was restrained from operating or withdrawing from the business's bank accounts. The husband was also restrained from divesting business assets without providing 28 days' written notice to the wife, detailing the sale method, price, and fund application. The wife was granted view access to business accounts and records. The parties were ordered to jointly instruct a court expert to value the company, with the wife's solicitor to prepare the letter of instruction within seven days. A child dispute conference was scheduled for 19 May 2021, and the matter was adjourned for an interim hearing on 9 June 2021.

Orders

Orders of the court

NCC 438 of 2021

BETWEEN:

MS CHADBOURNE

Applicant

AND:

MR CHADBOURNE

Respondent

ORDER MADE BY:

JUDGE COSTIGAN

DATE OF ORDER:

2 MARCH 2021

THE COURT ORDERS PENDING FURTHER ORDER THAT:

1. Within 72 hours the Husband must transfer all funds relating to B Group held in his personal accounts to the primary cheque account for B Group being D Company Cheque Account number ...07 (“the primary cheque account”).

2. The Wife is restrained by injunction from operating, withdrawing or otherwise dealing with the bank accounts of the company B Group Pty Ltd (“B Group”) including causing any amount to be deducted by Paypal from those accounts.

3. The Husband forthwith do all acts necessary to cause B Group to sell the Mini-Excavator and plant trailer for the best price reasonable obtainable and pay the proceeds into the primary cheque account.

4. The Husband is restrained by injunction and/or restrained from permitting any agent or employee on his behalf from:

4.1 Causing B Group to sell, transfer, dispose or otherwise divest itself of any other assets of the company outside of the Mini-Excavator without giving the wife 28 days’ notice in writing of his intention to cause the company to sell the asset, the proposed method of sale, estimated sale price and application of the funds.

4.2 Giving any direction or authority to any customer or debtor of B Group to pay any amount due to the company to any account other than the primary cheque account.

5. These Orders are sufficient authority for the Wife to:

5.1 Have ‘view’ access to any and all accounts operated by the husband in relation to B Group;

5.2 Have full access to all records held by the Australian Taxation Office in relation to B Group;

5.3 Receive all information held by B Group with any accountant and/or bookkeeper who works on behalf of the said company; and

5.4 Have ‘view’ access to any business software package operated by the business for example MYOB and Xero.

6. The parties shall do all acts and things necessary to instruct Mr E from F Partners to value the company and for this purpose:

6.1 Pursuant to rule 15.09 of the Federal Circuit Court Rules(2001), the said value will be the Court Expert for the purposes of valuing the company;

6.2 Within seven (7) days of date of these Order, the solicitor for the wife shall prepare a joint letter of instruction and within 14 days hereof, the husband or his solicitor is to sign and send the said letter to the valuer; and

6.3 The parties are to do all acts and things necessary to provide to the valuer any and all information requested by them to enable the valuation to be prepared.

7. That all costs associated with obtaining the valuation are to be borne equally by the parties.

8. Pursuant to section 11F of the Family Law Act 1975 the parties attend a child dispute conference with a family consultant in this Registry on 19 May 2021 at times to be advised AND the parties are advised that if a person fails to comply with this order or any instruction the consultant gives to the person the consultant must report the failure to the court AND the Applicant and Respondent are to do all things necessary to facilitate their attendance promptly at the commencement of the conference.

9. The matter is adjourned to 9 June 2021 at 10.00am for an interim hearing before Senior Registrar Crawford in the Federal Circuit Court sittings.

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.

Background

Background to the litigation

These are interim proceedings between the applicant wife Ms Chadbourne (‘the wife’) and respondent husband Mr Chadbourne (‘the husband’) in relation to the conduct of the business B Group Pty Ltd which is an asset of the marriage, the valuation of that asset by a jointly appointed single expert, exclusive occupancy of the former matrimonial home at Town G (‘the Town G property’) and the parties’ time with their two children.BACKGROUND The wife is 32 years of age and employed as an public servant at Employer L in Town M. She currently resides at the home of her mother and step-father and pays board of $200 per week. The husband is 37 year of age. He and the wife are directors and shareholders of the company B Group Pty Ltd (‘the business’). The husband currently resides in the Town G property from where machinery and equipment for the business is stored. He is the sole registered proprietor of the Town G property. The parties commenced cohabitation in 2011. They married in 2014 and separated in mid-January 2021. There are two children of the marriage, X aged 3 and Y aged 16 months. The children have remained in the care of the wife and have not spent any time with the husband since 17 January 2020. The wife’s evidence is that the parties separated around the 16 and 17 January 2021 and she alleges that the husband locked her out of the Town G property on 18 January 2021.[1] Since that time she has returned to the Town G property on several occasions to collect personal chattels belonging to her and the children. [1] Affidavit of Wife filed 15 February 2021 at [37] The Town G property was purchased by the husband in late 2011 and registered in his sole name. The husband says that the reason for this was ‘Ms Chadbourne and I had only been living together for about 9 months, I was contributing all of the deposit and the loan was in my name.’[2][2] Husband’s affidavit filed 23 February 2021 at [14] The wife commenced these proceedings within a month of separation seeking short listing of her application and property orders only. In his response the husband raised parenting issues. At the interim hearing on 24 February 2021 the wife was directed to file in reply by 4pm on 31 March 2021 in relation to parenting. The parties have not attended mediation. The first return date of the wife’s initiating application came before me in a duty list on 24 February 2021. The wife pressed her interim application for exclusive occupancy and the husband his application for time with the children.EVIDENCE The wife relied upon the following documents:(a)Initiating application filed 15 February 2021;(b)Affidavit filed 15 February 2021;(c)Financial Statement filed 15 February 2021;(d)Proposed Minute of Order (Exhibit A); and(e)Photographs of the former matrimonial home (Exhibit B). The husband relied upon the following documents:(a)Response filed 23 February 2021;(b)Affidavit filed 23 February 2021;(c)Financial Statement filed 23 February 2021;(d)Notice of Risk filed 23 February 2021;(e)Section 60I certificate filed 24 February 2021;(f)Minute of Interim Orders (Exhibit C);(g)Case Outline (Exhibit D); (h)Husband’s Tax Returns for financial years 2019 and 2020 (Exhibit E); and(i)Company Tax Returns for financial years 2019 and 2020 (Exhibit F).WIFE'S APPLICATION - SOLE OCCUPANCY

Evidence

Evidence Before The Court

The first return date of the wife’s initiating application came before me in a duty list on 24 February 2021. The wife pressed her interim application for exclusive occupancy and the husband his application for time with the children.EVIDENCE The wife relied upon the following documents:(a)Initiating application filed 15 February 2021;(b)Affidavit filed 15 February 2021;(c)Financial Statement filed 15 February 2021;(d)Proposed Minute of Order (Exhibit A); and(e)Photographs of the former matrimonial home (Exhibit B). The husband relied upon the following documents:(a)Response filed 23 February 2021;(b)Affidavit filed 23 February 2021;(c)Financial Statement filed 23 February 2021;(d)Notice of Risk filed 23 February 2021;(e)Section 60I certificate filed 24 February 2021;(f)Minute of Interim Orders (Exhibit C);(g)Case Outline (Exhibit D); (h)Husband’s Tax Returns for financial years 2019 and 2020 (Exhibit E); and(i)Company Tax Returns for financial years 2019 and 2020 (Exhibit F).WIFE'S APPLICATION - SOLE OCCUPANCY The wife seeks the following interim orders:7. As and from the making of these Orders and pending further Order:(a) The wife shall have exclusive occupation of the land at Town G in the State of New South Wales to the extent that such land covers the fenced area containing the main residence (‘the main residence’), and(b) The husband shall have exclusive use, between 6am and 6pm on a Monday to Saturday each week, of the land at Town G in the State of New South Wales to the extent that such land covers the fenced area containing vacant land which is used to store excavators and machinery on same (the “storage area”), provided that the husband does not linger on or in the storage area for any longer than what is necessary for the purposes of storing or retrieving the machinery or excavators which may be from time to time located there.(c) The wife shall have exclusive use and operate of the present vehicle which is in her possession which is otherwise registered to the company recorded below. The wife argues that she should have sole occupancy of the Town G property because: – (a)The two children live primarily with her and she currently resides with her parents at their home. (b)She seeks to retain the Town G property in the final property settlement. It is not clear at this early stage of the proceedings whether this is a realistic or viable option.(c)The husband has alternative accommodation with his parents in Suburb H. It is a two bedroom property and no-one else lives there.(d)In any event, the husband has an income stream from the business (cashflow she says of $240,000) which he could apply to rental accommodation for himself.(e)The husband is unable to operate the business from the Town G property despite having done so for several years, because of the zoning laws which do not permit those activities. (f)In the alternative, the Town G property is an acreage and the husband would be able to continue to access the machinery and equipment that are stored in sheds located on the property but some distance away from the residence. These sheds have a separate access road to the residence and the husband could have exclusive use during the daylight hours. There would be no prejudice or detriment to the husband as he could continue to store his machinery and equipment and the parties would not need to come into contact with each other. THE HUSBAND'S ARGUMENT - SOLE OCCUPATION

Decision

Reasons for decision

The wife has not facilitated time between the husband and the children since 15 January 2021. They have been in the sole care of the mother and living with the maternal grandparents for well over a month. I cannot be satisfied that the children would be returning to a familiar and comforting environment given their ages and the level of conflict described by the wife prior to separation.CONCLUSION There is a dispute as to the circumstances in which the wife left the Town G property. The wife says the husband locked her out but subsequently sent her an email saying she and the children could return. The husband says the wife told him she was going to stay with her parents for a few days and returned to the property on several occasions to collect items for her and the children. This is not a matter that can be determined at an interim hearing where the evidence cannot be tested by cross-examination. There was an incident on 9 February 2021 involving the parties and their entourage. The husband provides no detail in his affidavit of what occurred on that date. The wife portrays herself and her step-father as the innocent victims of an unprovoked attack by the father and the paternal grandfather. According to the wife, the paternal grandfather was arrested and charged with two counts of common assault. Whilst findings of fact cannot be made at an interim hearing as to the various allegations made against each other, it is clear that the parties and their family are in high conflict. This conflict requires the party living in the home to have exclusive occupation of the entire property so as to minimise further conflict. I accept the wife would like to live independently of her parents and close to the school where she works and the children’s daycare. I find, however, she is not without resources. She has a share portfolio and a reliable income from her employment as a public servant. The wife has not established financial hardship, or demonstrated incapacity to fund a rental property if her application to remain in the home is unsuccessful. I accept that the husband needs a base from which to operate his business and store his equipment and machinery. He says that the main customers of the business are based in the Town J area. He draws $1,000 per week from the business and other expenses which are applied to the mortgage and maintenance of the Town G property. The wife seeks orders that the husband or rather the business continue to meet the outgoings on the Town G property which would leave little money to pay for separate accommodation particularly accommodation large enough for the children to stay if his parenting application was successful. If he were to live with his parents it would involve not inconsiderable travel from his parent’s residence in Suburb H to the Town G property. The Town G property is located on an acreage with some livestock. The wife says she is competent to manage the farm by reason of her professional qualifications. However, she provides no evidence of undertaking these activities during the relationship and which must have fallen to the husband since the wife left the property. It would in my view be very difficult for the wife to attend to maintenance issues for the farm, care for the livestock, care for two young children and continue her employment as a public servant.

Ratio Decidendi

Legal Principle Established

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