Finlay and Finlay
[2018] FCCA 117
•6 February 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FINLAY & FINLAY | [2018] FCCA 117 |
| Catchwords: FAMILY LAW – Interim property orders – not just and equitable to dissipate the only asset of known value. |
| Legislation: Family Law Act 1975, Pt VIII |
| Cases cited: Harris & Harris (1993) FLC 92-378 Strahan & Strahan [2009] FamCAFC 166 HMT & FHL [2006] FamCA 206 |
| Applicant: | MS FINLAY |
| Respondent: | MR FINLAY |
| File Number: | NCC 3061 of 2015 |
| Judgment of: | Judge Middleton |
| Hearing date: | 14 September 2017 |
| Date of Last Submission: | 14 September 2017 |
| Delivered at: | Newcastle |
| Delivered on: | 6 February 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Rugendyke |
| Solicitors for the Applicant: | East Coast Family Lawyers |
| Counsel for the Respondent: | Mr Bithrey |
| Solicitors for the Respondent: | Powe & White Lawyers |
ORDERS
The Application in a Case filed 25 August 2017 be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Finlay & Finlay is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 3061 of 2015
| MS FINLAY |
Applicant
And
| MR FINLAY |
Respondent
REASONS FOR JUDGMENT
Background
This matter concerns an Application in a Case where in the Applicant Husband seeks orders to utilise funds currently held in the trust account of his lawyers, pursuant to an order made on 24 March 2016.
The Respondent Wife commenced the substantive proceedings by filing an Initiating Application on 25 November 2015.
The husband filed his Response to the Initiating Application on 10 February 2016.
Shortly after filing the wife became aware that the husband had sold shares that (business omitted) ((business omitted)) held in (business omitted) and the (omitted) Unit Trust / (omitted) Property Investment (NSW) Pty Ltd. (business omitted) was the corporate entity that the parties have an interest in.
The wife filed an Application in a Case seeking orders relating to (business omitted).
On 24 March 2016 I made the following relevant orders:
a)The husband is restrained and an injunction is granted restraining him from:
i)Do any acts or things to affect the sale or transfer or other disposal or alienation of his shares in the companies (business omitted) ACN (omitted), (omitted) Property Investments (NSW) Pty Ltd ACN (omitted) or (business omitted) ABN (omitted) or any of them without the prior written consent from the wife;
ii)Charging, mortgaging or otherwise granting security over his shares in the companies (business omitted) ACN (omitted), (omitted) Property Investments (NSW) Pty Ltd ACN (omitted) or (business omitted) ABN (omitted) or any of them without the prior written consent from the wife
b)Within 24 hours of today's orders, the Respondent Husband is to transfer moneys totalling $75,000 into the trust account of his solicitor Powe & White Family Lawyers.
At the hearing of the Application in a Case the Husband disclosed that he had already sold his shares in the relevant companies and received $75,000 for that sale. The sale was made unilaterally and without any communication to the wife.
Since the making of the orders which were intended to preserve the sum of $75,000 the following disbursements have been made by consent:
a)$15,000 to each of the parties on 14 April 2016;
b)$869 for evaluation in May 2016;
c)$660 for valuation in June 2016;
d)$5500 part payment to (omitted) Accounting in July 2016;
e)$6200 each on 30 January 2017; and
f)$440 for the purpose of a revaluation of property in April 2017
As a result there is a balance in the solicitor's trust account of $25,131.
Prior to the sale of shares (business omitted) received a monthly profit split from (business omitted). Since the sale of the shares (business omitted) is no longer obliged to pay any money to (business omitted).
As a result (business omitted) no longer receives any income from (business omitted).
It is in this context that the husband brings his Application in a Case.
Orders sought
The husband seeks orders as follows:
a)The interim order made on 24 March 2016 which restrains the Husband from dealing with $75,000, being the proceeds of sale received by him be discharged.
b)Within 14 days of the date of this order, (omitted) Accounting (the “valuer”) be appointed to value the following entities:
i)(business omitted); and
ii)The Finlay Family Trust.
The wife seeks that the application be dismissed.
Material relied upon
The husband relies upon the following:
a)His Application in a Case filed 25 August 2017; and
b)His Affidavit filed on 25 August 2017.
The wife relies upon the following documents:
a)Her Response to the Application in a Case filed 13 September 2017; and
b)Her Affidavit in support filed 13 September 2017.
The law
The power to make an interim or partial property order has been widely considered in the Family and Full Court.
Clearly the power to make property orders comes from section 79 of the Family Law Act 1975 (Cth). Section 80 of the Family Law Act 1975 in particular section 80(1)(k) provides that I can make any order I think necessary to do justice.
Section 80 ‘adds to the armoury of section 79’, Harris (1993) FLC 92-378.
The Full Court in Strahan & Strahan (interim property orders) [2009] FamCAFC 166 held ‘it is not necessary to establish compelling reasons".
Justice Watts reviewed the cases concerning interim property orders in HMT & FHL [2006] FamCA 206 where he said:
‘there seems no doubt that interim orders can be made prior to matter reaching a final property hearing. These types of orders are to quote Harris, orders capable of being reversed or adjusted if it is subsequently considered necessary to do so.’
Submissions on behalf of the Respondent Wife were to the effect that the orders sought by the husband are an unreasonable depletion of trust funds. It was submitted that the husband should sell trust assets namely a (omitted) or transit van, the latter being purchased post separation, prior to using any further funds held in trust.
The wife further submitted that the husband has now received cash deposits, those cash amounts not being further disclosed to the wife, and that he could use those monies to meet the ongoing expenses.
The Respondent Wife argued that the sale of the shares was done unilaterally by the husband and not through the use of his proper exercise of his director duties.
Submissions on behalf of the Applicant Husband were to the effect that there is no need for compelling reasons to be established and that the payments being sought pursuant to the orders sought are reversible on their face.
As I said earlier the current balance in the solicitor's trust account is $25,131. At this stage that is the only item of property of which I have any evidence of value.
I note that despite there being valuations paid for, I have no evidence whatsoever as to the value of other items of property held by the parties jointly or in their own capacity.
In those circumstances I have no evidence before me that could support the notion that orders I make today disbursing funds in a trust account can be reversed by the making of orders subsequent. In short, I do not know the value of any other items of property.
As to whether it would be just and equitable to make such an order, it is a fact that the husband by his unilateral decisions has placed (business omitted) in this position. It was his decision to purchase a transit van and it was his decision to sell the shares in entities that provided income to (business omitted).
The husband now seeks orders to dissipate the monies he received from the sale of those shares in its entirety over a period of time. Whilst I note that the Respondent Wife has received some of the money held in trust by consent, if I were to make orders in accordance with the husband's application the wife would have no further access to money and in circumstances where the money held in trust may be the only asset left of value it would in my view be most unjust and unequitable to make the orders sought by the husband.
In those circumstances I will not make the orders sought by the husband.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of Judge Middleton
Date: 6 February 2018
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