Fujimori & Fujimori

Case [2024] FedCFamC1F 226

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Fujimori & Fujimori [2024] FedCFamC1F 226

File number(s): ADC 6246 of 2020
Judgment of: KARI J
Date of judgment: 8 April 2024
Catchwords: FAMILY LAW – PROPERTY – Interim application – Where the wife seeks orders for a company to be wound up pursuant to s 461(k) of the Corporations Act 2001 (Cth) – Where the company appears to be insolvent – Where the husband opposes the orders and seeks for the application to be dismissed – Where the original jurisdiction expressly conferred upon Division 1 is invoked – Consideration of the relevant legal principles and Rules –Orders made for the winding up.
Legislation:

Corporations Act 2001 (Cth) ss 9, 461, 462, 1337C

Federal Circuit and Family Court of Australia Act 2021 (Cth) s 29

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 1.18

Federal Court (Corporations Rules) 2000 (Cth) rr 2.4, 5.1, 5.4, 5.5, 5.6
Cases cited:

Eblin & Eblin and Ors [2020] FamCA 1

Gallieni & Gallieni & Ors [2012] FamCAFC 205

Leadarn & Leadarn (No 2) [2015] FamCA 895

Weir & Weir (1993) FLC 92-338
Number of paragraphs: 82
Date of hearing: 16 November 2023 and 19 December 2023
Place: Adelaide
Counsel for the Applicant: Mr Hay
Solicitor for the Applicant: Mens Legal Service
Counsel for the Respondent: Mr Tredrea
Solicitor for the Respondent: Precision Legal

ORDERS

ADC 6246 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR FUJIMORI

Applicant
AND:

MS FUJIMORI

Respondent

ORDER MADE BY:

KARI J

DATE OF ORDER:

8 APRIL 2024

THE COURT ORDERS THAT:

1.Pursuant to s 461(k) of the Corporations Act 2001 (Cth), B Pty Ltd (“the Company”) be wound up and Mr C and Mr D be appointed as joint and several liquidators (“the Liquidators”) of the Company forthwith.

2.In accordance with the relevant sections of the Corporations Act 2001 (Cth), the Liquidators have the powers to do all things necessary or convenient to:

(a)Secure and take into their possession any and all assets of the Company;

(b)Realise the assets of the Company;

(c)Effect the sale of the assets of the Company; and

(d)Pay the net proceeds from the realisation and/or sale of the Company’s assets into a trust account controlled by the Liquidator, less the Liquidators costs, expenses and remuneration.

3.The Liquidators be empowered to do all things necessary to investigate and report to the Court on voidable transactions in accordance with Part 5.7B of the Corporations Act 2001 (Cth).

4.The Liquidators be entitled to be paid from the Company’s assets their costs, expenses and remuneration in respect of work undertaken as Liquidators at the rates set out in annexure “MSF3” in the affidavit of Ms Fujimori filed 14 April 2023.

5.Liberty to the Liquidators to apply as to any consequential orders.

6.That save as to the question of costs, the Application in a Proceeding sealed 18 April 2023 and the Response sealed 11 May 2023 be dismissed.

Note:…

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AGLC
Fujimori & Fujimori [2024] FedCFamC1F 226
Case
[2024] FedCFamC1F 226
Decision Date

CaseChat Overview and Summary

The case of Fujimori & Fujimori was heard in the Federal Circuit and Family Court of Australia, Division 1. The wife, MS Fujimori, applied for an order for the winding up of a company, B Pty Ltd, under section 461(k) of the Corporations Act 2001 (Cth). The husband, MR Fujimori, who is the sole Director of the company, opposed the application and sought for it to be dismissed. The court was required to determine whether the company was insolvent and whether the application for winding up was warranted. The legal issues included whether the wife's application was valid under the relevant sections of the Corporations Act 2001 (Cth) and whether the company was insolvent. The court found that the company was insolvent and that the application for winding up was valid. The court ordered that B Pty Ltd be wound up and that two liquidators be appointed to manage the process. The liquidators were empowered to secure and realise the company’s assets and to investigate and report on voidable transactions. The husband’s opposition to the application was dismissed, and the application in the proceeding was also dismissed, save for the question of costs. The court's decision was based on the evidence presented, which demonstrated the company's insolvency and the wife's right to seek the winding up of the company as part of the property settlement in the family law proceedings.

Orders

Orders of the court

ADC 6246 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR FUJIMORI

Applicant

AND:

MS FUJIMORI

Respondent

ORDER MADE BY:

KARI J

DATE OF ORDER:

8 APRIL 2024

THE COURT ORDERS THAT:

1. Pursuant to s 461(k) of the Corporations Act 2001 (Cth), B Pty Ltd (“the Company”) be wound up and Mr C and Mr D be appointed as joint and several liquidators (“the Liquidators”) of the Company forthwith.

2. In accordance with the relevant sections of the Corporations Act 2001 (Cth), the Liquidators have the powers to do all things necessary or convenient to:

(a) Secure and take into their possession any and all assets of the Company;

(b) Realise the assets of the Company;

(c) Effect the sale of the assets of the Company; and

(d) Pay the net proceeds from the realisation and/or sale of the Company’s assets into a trust account controlled by the Liquidator, less the Liquidators costs, expenses and remuneration.

3. The Liquidators be empowered to do all things necessary to investigate and report to the Court on voidable transactions in accordance with Part 5.7B of the Corporations Act 2001 (Cth).

4. The Liquidators be entitled to be paid from the Company’s assets their costs, expenses and remuneration in respect of work undertaken as Liquidators at the rates set out in annexure “MSF3” in the affidavit of Ms Fujimori filed 14 April 2023.

5. Liberty to the Liquidators to apply as to any consequential orders.

6. That save as to the question of costs, the Application in a Proceeding sealed 18 April 2023 and the Response sealed 11 May 2023 be dismissed.

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.

Background

Background to the litigation

There are two children of the marriage:(a)Mr X, born 2004, and now aged 19; and(b)Y, born 2009, and now aged 14.BACKGROUND The husband is self-employed. He is the sole Director of B Pty Ltd. When the proceedings commenced, the husband described his businesses in the following terms (per affidavit of the husband filed 24 December 2020):16.I founded [B Pty Ltd] in 1999 and incorporated it as [B Pty Ltd] in the year 2003. The business grew during the period of the relationship up until 2018 and up until that time paid for us to lead a comfortable lifestyle.17.[B Pty Ltd] commenced trading in 1999 principally for the development of [technology services]. The business grew over time until changing market demands, commoditisation of web services and increasing competition reduced the profit margin of the business to a point where it was no longer viable to continue with the initial business model.18.A new business model was needed and an opportunity was identified to develop an application for the hospitality industry to provide [businesses] with an alternative [technology service] to the incumbent offerings. [E Pty Ltd] was incorporated as a dedicated vehicle for this new development.19.At the time I considered that the market required a product like [E Pty Ltd], and intended to attract investors into the business to grow it rapidly. However, as a startup business, [E Pty Ltd] was unsuccessful in attracting the right level of investment and ultimately the business failed.20.Financially, this was a very difficult period. [B Pty Ltd] was no longer providing the revenue to support the expenses and [E Pty Ltd] was not delivering any financial return. Debt was increasing and an alternative was required.21.As a result of this, [B Group Pty Ltd], (previously incorporated in 2012 for the acquisition of a small […] business called [F Business]), was used to pursue a new venture in the growing area of […] technology. This business was given a trading name of “[G Business]” and the initial foray was in consultation with businesses enquiring about the use of […] technology, education and training. An opportunity was subsequently identified by me to develop a [related product] which was developed during 2018 and 2019. The business attracted some investment in that period however is yet to gain traction having been detrimentally impacted by COVID-19 related travel restrictions and the cancellation of tradeshows globally.(As per the original) In that same affidavit, the husband disclosed that he had “businesses and entities” as follows: There is agreement between the parties that the wife received an income from B Pty Ltd from approximately 2004 until separation in February 2019. Prior to and following the breakdown of the marriage, the wife has been employed as an administrator.THE LITIGATION The litigation was commenced by the husband when he filed an Application for Final Orders on 24 December 2020. By that application the husband sought orders that would have the effect of equally dividing the property of the parties, both superannuation and non-superannuation assets.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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