Kushing and Kushing - [2008] FamCA 555

FAMILY COURT OF AUSTRALIA

KUSHING & KUSHING

[2008] FamCA 555

FAMILY LAW – PROPERTY - interim orders - injunctions - operation of a business - disclosure

Family Law Act 1975 (Cth)

APPLICANT:

Ms Kushing

RESPONDENT:

MR KUSHING

FILE NUMBER:

MLC

222

2007

DATE DELIVERED:

11 JULY 2008

PLACE DELIVERED:

MELBOURNE

PLACE HEARD:

MELBOURNE

JUDGMENT OF:

CARTER J

HEARING DATE:

6 MAY 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

MR DAVIS

SOLICITOR FOR THE APPLICANT:

MARIA BARBAYANNIS & CO

COUNSEL FOR THE RESPONDENT:

MR NORTH SC

SOLICITOR FOR THE RESPONDENT:

BERGER KORDOS LAWYERS

Orders

That a single expert witness be appointed to conduct an audit of the affairs of the company known as B Pty Ltd (“the Company”); the business known as T (“the Business”); and the … Family Trust (“the Trust”) commencing the 2004 financial year and the husband and the wife do all such things and provide all such documents as may be necessary to enable such expert to conduct the said Audit.
That the husband and the wife shall within 14 days from this day confer for the purpose of agreeing on the person to be appointed as Auditor pursuant to par (1) hereof.
That if the husband and the wife cannot agree on who should be appointed as the Auditor the proceedings be referred to the Judicial Duty List as soon as practicable, and in that event:
(a)the parties shall give the Court a list stating the names of four people who are experts and have consented to being appointed as Auditor and the fee each of the experts would accept for performing the Audit, preparing a report and attending Court to give evidence; and
(b)the Auditor shall be appointed from the list prepared by the husband and the wife or in some other way which may be determined by the presiding judicial officer.
That all instructions to the Auditor shall be in writing and approved by both the legal representatives for the husband and the legal representatives for the wife and without limiting the generality of any such instructions shall instruct the Auditor to have particular reference to:
(a)the husband’s allegation that the wife removed $67,500 from the business account on 28 December 2006 without authority;
(b)the husband’s allegation that the wife removed $121,849.89 from the business account, without authority, between 1 July 2006 and 18 January 2007;
(c)the expenditure by the husband specified in par (1) of the wife’s Application in a Case filed 19 February 2008;
(d)the transfers by the husband from the business account referred to in Annexure “B’ to the wife’s Application in a Case filed 19 February 2008;
(e)the wife’s allegation that the sum of $68,600 paid into the business account on 15 June 2007 was transferred by the husband into his Flexi Direct Account number ….
That the costs of the Auditor be paid in the first instance equally by the husband and the wife, provided that at trial, and subject to any order of the trial judge, they shall…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Kushing and Kushing

Details

AGLC: Kushing and Kushing [2008] FamCA 555
Case: [2008] FamCA 555
Decision Date: 11 July 2008

CaseChat Overview and Summary

This matter came before Carter J concerning a dispute between a husband and wife. The core of the dispute involved allegations of financial impropriety concerning a company, a business, and a family trust, with specific claims made by each party regarding the removal of funds and unauthorised expenditure.

The court was required to determine the appropriate procedural steps to facilitate a thorough investigation of the financial affairs of the entities in question. Key issues included the appointment of an independent expert to conduct an audit, the scope of that audit, and the mechanism for resolving disagreements regarding the expert's appointment and instructions. The court also had to address the disclosure of financial documents and records by both parties, as well as establish interim arrangements for salary, credit card expenditure, and the payment of specific debts and levies.

Carter J ordered the appointment of a single expert witness to conduct an audit of the company, business, and trust from the 2004 financial year onwards. The parties were directed to confer to agree on an auditor, with a fallback mechanism involving a list of proposed experts and court determination if agreement could not be reached. The court provided detailed instructions for the audit, including specific allegations of unauthorised fund removals by the wife and expenditure by the husband. Provisions were made for the equal sharing of the auditor's costs in the first instance, with liberty to seek adjustment at trial. The orders also mandated extensive disclosure of documents by both parties, established monthly reporting of expenditure, and prohibited cheques drawn to "Cash." Interim financial arrangements were put in place, including weekly salary payments and monthly credit card expenditure allowances for each party, along with the payment of specific debts and levies.

Orders

Orders of the court

That a single expert witness be appointed to conduct an audit of the affairs of the company known as B Pty Ltd (“the Company”); the business known as T (“the Business”); and the … Family Trust (“the Trust”) commencing the 2004 financial year and the husband and the wife do all such things and provide all such documents as may be necessary to enable such expert to conduct the said Audit.

That the husband and the wife shall within 14 days from this day confer for the purpose of agreeing on the person to be appointed as Auditor pursuant to par (1) hereof.

That if the husband and the wife cannot agree on who should be appointed as the Auditor the proceedings be referred to the Judicial Duty List as soon as practicable, and in that event:

(a) the parties shall give the Court a list stating the names of four people who are experts and have consented to being appointed as Auditor and the fee each of the experts would accept for performing the Audit, preparing a report and attending Court to give evidence; and

(b) the Auditor shall be appointed from the list prepared by the husband and the wife or in some other way which may be determined by the presiding judicial officer.

That all instructions to the Auditor shall be in writing and approved by both the legal representatives for the husband and the legal representatives for the wife and without limiting the generality of any such instructions shall instruct the Auditor to have particular reference to:

(a) the husband’s allegation that the wife removed $67,500 from the business account on 28 December 2006 without authority;

(b) the husband’s allegation that the wife removed $121,849.89 from the business account, without authority, between 1 July 2006 and 18 January 2007;

(d) the transfers by the husband from the business account referred to in Annexure “B’ to the wife’s Application in a Case filed 19 February 2008;

(e) the wife’s allegation that the sum of $68,600 paid into the business account on 15 June 2007 was transferred by the husband into his Flexi Direct Account number ….

That the costs of the Auditor be paid in the first instance equally by the husband and the wife, provided that at trial, and subject to any order of the trial judge, they shall be at liberty to bring sums paid to the Auditor into account.

That within 28 days of this day, the wife file and serve an affidavit deposing as to:

(a) her knowledge as to the whereabouts of the items referred to in par 9 of the husband’s Response filed 1 May 2008;

(b) whether or not, and if so when, she sold the Mercedes motor vehicle registration ... (“the motor vehicle”); and

(c) if relevant, the particulars of the sale of the motor vehicle, including the amount of the proceeds of sale, the name of the purchaser and the manner in which she used the proceeds of sale.

Within 28 days of this day the husband and the wife each serve on the other a List of Documents verified by affidavit identifying:

(a) all documents and records relating to the Company, the Business and the Trust to which the duty of disclosure applies;

(b) whether and if so, which such documents and records are in each party’s respective possession and/or in the possession of each party’s solicitor and/or in each party’s control;

(c) if any such documents or records are no longer in the possession of the respective parties and/or in the possession of their respective solicitors and/or in their respective control, when and how the said documents and/or records left such party’s possession and/or the possession of his or her solicitor and/or the control of such party.

Without limiting the generality of par (7) hereof documents and records relating to the Company, the Business and/or the Trust shall include the documents referred to in par (26) of the wife’s affidavit filed 19 February 2008; and the documents referred to in pars 9.3, 9.4, 9.5 and 9.6 of the orders made by Guest J on 18 January 2007.

Within 42 days of this day the husband and the wife each provide to the other for the purpose of inspection but only if requested to do so by the other:

(a) the documents referred to in par (7)(b) hereof; and

(b) the documents referred to in pars 9.1 and 9.9 of the orders made by Guest J on 18 January 2007.

10.

Until further order, at the end of each calendar month the husband and the wife each provide to the other by his or her respective solicitor a statement in writing setting out:

(a) all expenditure made or authorised during the preceding calendar month by whatever means (including but not limited to internet transfers) on behalf of the Company, the Business, and/or the Trust or drawn on the bank account or accounts of any of the said entities;

(b) the date of such expenditure;

(d) whether the expenditure was made by cheque or in some other manner, and if so, what manner.

11.

Until further order, where any expenditure was for business expenses, each party shall provide:

(a) details of any relevant cheque numbers;

(b) details of the payee of any cheque or the recipient of any internet transfer of funds;

(d) if requested, copies of such invoices and/or receipts.

12.

Until further order, neither party sign any cheque drawn on any account of the Business, the Company and/or the Trust drawn to “Cash”.

13.

To the extent it may be necessary, and in order to avoid doubt, the husband, until further order, authorise the wife to receive copies of all bank statements, monthly ledgers, trial balances and interim accounts of the Company, the Trust and the Business as well as the documents referred to in par (13) of the wife’s application filed 19 February 2008.

14.

In order to give effect to par (13) hereof the husband shall advise the wife’s solicitor forthwith in writing, the names and addresses of the person, persons and/or institutions from whom or from which those documents may be obtained.

15.

That each of the husband and the wife forthwith sign all documents and do all things necessary to cause the Company to pay from the Business account by direct debit facility for the benefit of each party until further order:

(a) the sum of $850 per week by way of salary, payable by no later than 5:00pm on Friday, 18 July 2008 and weekly thereafter;

(b) the sum of $3,000 per month by way of credit card expenditure payable by no later than 5:00pm on Friday, 18 July 2008 and monthly thereafter;

and that neither party be entitled to deduct any sums from the amounts payable pursuant to this order, without an order of the Court.

16.

That on or before 18 July 2008 the husband shall do all acts and things necessary to cause the Company to pay the wife from the Business account:

(a) the sum of $28,900 (comprising payments of $850 per week calculated from and commencing 29 November 2007, a period of 34 weeks); and

(b) the sum of $25,000 (comprising payments of $3,000 per month calculated from 14 December 2007, a period of eight months; together with the further sum of $1,000 being the “shortfall” of reimbursement for credit card expenditure)

provided that, and subject to verification, the husband shall be entitled to offset against the aforesaid moneys the payments referred to in par 56(d), (e), (f), (g), (h) and (i) of his affidavit filed 1 May 2008 and any payments of salary received by the wife and any credit card payments received by the wife from the business since 6 May 2008.

17.

That the husband and the wife forthwith authorise McCluskys Lawyers, to pay from the moneys held by them on trust for the husband and the wife and until further order to make on-going payments to the Wizard home loan secured over the property … in Queensland together with the rates and body corporate levies in respect of the said property and in order to give effect to this order each party forthwith do all acts and things as may be necessary to stop the direct debit from the National Australian Bank account number …in the name of T towards the Wizard Home Loan accounts numbered … and … .

18.

Subject to verification of payments made from the Business since 3 July 2007 towards the Wizard Home Loan (together with any additional amount paid by the business towards the Wizard Home Loan since 6 May 2008) in respect of the Queensland property, the husband and the wife forthwith authorise McCluskys Lawyers to pay from the moneys held by them on trust for the husband and the wife:

(a) the sum of $16,449.11 to the Business; and

(b) subject to verification of payments, to reimburse the wife for payments since in or about July 2007 for the rates and body corporate fees for the Queensland property and the property … in Melbourne.

19.

That all questions of costs be reserved.

20.

Save as aforesaid all interlocutory applications be dismissed and removed from the list of cases awaiting determination.

21.

That there be liberty to apply.

IT IS CERTIFIED

22.

That pursuant to r 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel, including Senior Counsel.

Background

Background to the litigation

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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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