Emsden & Emsden & Anor

[2017] FamCA 1095

FAMILY COURT OF AUSTRALIA

EMSDEN & EMSDEN AND ANOR [2017] FamCA 1095

FAMILY LAW – INJUNCTIONS – relating to preventing the continuation of a liquidation process in City AA and to direct the husband to direct the liquidator to cease action.  Leaving aside power to make such an order, the evidence whilst emotive, did not support the assertions that the arrangement was a sham.  Application dismissed.

Family Law Act 1975 (Cth)

APPLICANT: Ms Emsden

RESPONDENT: Mr Emsden

INTERVENOR: Commissioner Of Taxation For The Commonwealth Of Australia

FILE NUMBER: MLC 4374 of 2007

DATE DELIVERED: 30 November 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 30 November 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Harriss

SOLICITOR FOR THE APPLICANT: Mills Oakley Lawyers

COUNSEL FOR THE RESPONDENT: Mr Henderson

SOLICITOR FOR THE RESPONDENT: Lander & Rogers

COUNSEL FOR THE INTERVENOR: Ms Mavroudis

SOLICITOR FOR THE INTERVENOR: Commissioner Of Taxation

Orders

1. That all outstanding applications for interlocutory orders are adjourned to 10.00am on 2 March 2018 as a one day matter.

2. That the husband file and serve any affidavit upon which he intends to rely for that hearing by 4.00pm on 20 December 2017.

3. That the wife and the Australian Commissioner for Taxation file and serve such material upon which they intend to rely by 4.00pm on 19 January 2018.

4. That each party provide an outline of argument to the court and to each other by 4.00pm on 23 February 2018.

5. That in respect of the discrete issue of the inspection of the court file by the Australian Commissioner for Taxation, the husband file and serve any written submission upon which he intends to rely by 4.00pm on 14 December 2017 and the Australian Commissioner for Taxation file and serve any reply upon which he intends to rely by 4.00pm on 17 January 2018 and that issue be determined in chambers.

6. That the application in a case filed by the wife on 30 November 2017 is adjourned to 9.00am on 14 December 2017.

7. That until the conclusion of the hearing set for 14 December 2017, the husband is restrained from taking any further steps in respect of the liquidation of D Limited.

8. That all parties have leave to file such material for the hearing on 14 December 2017 as they are so advised.

9. That the court provide a copy of these orders and the reasons for judgment arising from them to Ms Y at the Australian Taxation Office.

10. That the reasons for judgment arising out of these orders this day be made available to all parties as soon as practicable.

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 Emsden & Emsden 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 MELBOURNE

FILE NUMBER: MLC 4374  of 2007

Ms Emsden

Applicant

And

Mr Emsden

Respondent

And

Commissioner Of Taxation For The Commonwealth Of Australia

Intervener

REASONS FOR JUDGMENT

1. On the morning of 30 November 2017, Ms Emsden (“the wife”) filed a response to an application in a case supported by an affidavit of the same date.  The husband, Mr Emsden opposed the orders sought.

2. The matter was before the court on that day primarily as a result of a dispute between the Commissioner of Taxation for the Commonwealth of Australia and the husband over the inspection of and copying of, documents on the court file.  It was in the context of a discussion about those matters that the wife’s application for urgent interim orders was raised.

3. At the conclusion of the hearing, I rejected the wife’s application and indicated that I would subsequently give reasons.  These are those reasons.

4. The proposed orders of the wife were that the husband, his servants, employees and agents, including but not limited to Mr Z of City AA, Country I be restrained from taking “any further step” to liquidate the company D Limited and/or to cause D Ltd to enter a deed of company arrangement and/or similar arrangement and/or from taking any step to wind up, liquidate, dissipate, transfer or otherwise dispose of the assets of D Ltd except by order of the court or with the written consent of the wife.

5. A further order was sought arising out of what I have just said requiring the husband to direct Mr Z from ceasing all and any action, steps or procedures, hither to taken by him in respect of the said liquidation.

6. Other orders were made at the hearing but they are not relevant to this ruling.

7. The evidence upon which the wife relied was that the husband had already deposed in an affidavit sworn 29 November 2017 that D Limited was in liquidation and that the liquidation had been expected to take at least 12 months.  The husband deposed that he did not expect any distribution from the liquidation.

8. Arising out of the husband’s statement, and obviously without any specific knowledge, the wife said that this was the first time the liquidation of D Limited had been communicated to her.  She then said:

   [13]I do not accept the liquidation of [D] Limited is bona fide .

9. In the husband’s affidavit sworn the day before, he said that he did not have the cash or liquid assets to meet the costs of, and incidental to, the current dispute with the Australian Taxation Commissioner not to mention these proceedings and proceedings in the County Court of Victoria.  He then said:

   I have not been able to achieve commercial success overseas and [D Limited] is now in liquidation.

10. I am not sure what the correct spelling of the name of the company is but it remains clear that the husband asserts that it is not trading successfully.

11. In this court on 20 November 2015, Macmillan J granted the wife an ex parte injunction freezing assets and gave reasons in which her Honour reiterated the wife’s concern that the husband was the alter ego of the company.

12. Macmillan J did not restrain the husband from liquidating the company.

13. In her affidavit, the wife asserted that she did not accept that the company was in financial difficulty or unable to meet its liabilities such as to warrant its liquidation but it is evident from the affidavit that she did not have any knowledge to found that assertion or if she did, the assertion was not explained.  She attached a batch of documents said to have been received the previous evening from lawyers that she had engaged in City AA but a perusal of those does not take the matter any further.  It evidences changes of company structure but I am not able to discern the financial position from those documents.

14. The wife’s assertion went further and said that the person named as the sole director Mr BB of City AA was “in all likelihood a nominee shareholder appointed by the corporate register (of the company)”.  Nothing supported that assertion.  Conjecture is unhelpful.

15. It is clear however that the appointment of the liquidator has occurred.  The wife said:

    [20]I say that the liquidation or alleged liquidation is a sham and is nothing more than a crude attempt on the part of the respondent husband as the controller of [D] Limited to put the assets of that entity beyond the reach of this Honourable Court and the Commissioner of Taxation.

16. That assertion too whilst emotive, was not supported by any foundation.  True it is that the material arose from the wife seeing the husband’s affidavit from a previous day but I am unsure whether there is any logic in what was asserted.

17. Leaving aside the question of whether or not there is power for the court to stop a liquidation once it has been commenced, the foundation for the assertion that the court should direct the husband to “cease all and any action, steps or procedures” taken by Mr Z in respect of the liquidation, requires a consideration of the power of the court.

18. Mr Harriss, solicitor for the wife was unable to point to any specific power for the court to be able to effectively stop a liquidation that has already been commenced.

19. In my view, the evidence does not support the exercise of any injunctive power by the court and accordingly, the application for those orders is dismissed.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 30 November 2017.

Associate: 

Date:  20 December 2017