Lawson & Crawford and Ors - [2014] FamCA 1012

FAMILY COURT OF AUSTRALIA

LAWSON & CRAWFORD AND ORS

[2014] FamCA 1012

FAMILY LAW – PRACTICE AND PROCEDURE – INJUNCTIONS – Wife’s application for interlocutory injunctions and orders for discovery and disclosure by the husband –where the wife alleges the husband and other respondents are dealing with property to her detriment – where the husband and other respondents deny any impropriety – consideration of the prejudice to the parties.

Family Law Act 1975 (Cth) s 114

Family Law Rules 2004 (Cth)

Mullen and De Bry (2006) FLC 93-293
Waugh and Waugh (2000) FLC 93-052

APPLICANT:

Ms Lawson

RESPONDENT:

Mr Crawford

THIRD RESPONDENT:

Ms A Crawford

FOURTH RESPONDENT:

Mr B Crawford

FIFTH RESPONDENT:

D Pty Ltd (in its own capacity and D Trust)

SIXTH RESPONDENT:

E Pty Ltd (in its own capacity and E Trust)

SEVENTH RESPONDENT:

F Pty Ltd (in its own capacity and F Trust)

FILE NUMBER:

MLC

4101

2013

DATE DELIVERED:

14 November 2014

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Macmillan J

HEARING DATE:

2 October 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr O’Bryan QC

SOLICITOR FOR THE APPLICANT:

Lander & Rogers

COUNSEL FOR THE RESPONDENT AND THE SEVENTH RESPONDENT:

Mr Bartfeld QC
with Mr Mellas

SOLICITOR FOR THE RESPONDENT AND THE SEVENTH RESPONDENT:	Taussig Cherrie Fildes
COUNSEL FOR THE THIRD, FOURTH, FIFTH AND SIXTH RESPONDENTS:	Mr Corbett QC

SOLICITOR FOR THE THIRD, FOURTH FIFTH AND SIXTH RESPONDENTS:

Kenna Teasdale Lawyers

ORDERS*

IT IS ORDERED THAT

Until further order the husband and the third and fourth respondents be restrained in their capacities as directors of Crawford Developments Pty Ltd (“Crawford Developments”) from:
1.1voting in favour of any resolution or taking any steps which would have the effect of issuing further shares in Crawford Developments;
1.2appointing any other person as a director or office holder;
1.3voting in favour of any resolution or taking any steps which would have the effect of distributing funds to the unit holders of Crawford Developments Unit Trust (of which Crawford Developments is trustee);

save with the wife’s prior written consent, and provided further that transactions for which the wife’s consent is sought are documented in full to the wife and any reasonable queries made by the wife are addressed, not less than 14 days prior to any of the transactions proposed in paragraphs 1.1, 1.2 or 1.3 hereof.

Until further order the husband and the third and fourth respondents provide the wife with 14 days prior notice of the proposed incorporation of any new corporate entity (and the intended purpose of said entity) which they or any of them seek to incorporate, in which:
2.1they or any of them are to become director or shareholder;
2.2any corporate entity in which they or any of them currently hold an interest (or of which they or any of them are currently a director or shareholder) is to hold shares in the proposed new corporate entity;
2.3they or any of them (or any corporate entity of which they are currently a director or shareholder)…

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 Lawson & Crawford and Ors

Details

AGLC: Lawson & Crawford and Ors [2014] FamCA 1012
Case: [2014] FamCA 1012
Decision Date: 14 November 2014

CaseChat Overview and Summary

In Lawson & Crawford and Ors, the Full Court considered an application for an injunction brought by the wife. The husband and third and fourth respondents argued that the Court should not exercise its discretion to grant the injunction. The husband had previously given an undertaking to the Court not to deal with certain company, partnership, business, or trust interests without the wife's consent, beyond the ordinary course of business. A dispute arose concerning the husband's resignation as secretary of Crawford Developments and the appointment of the third respondent as director and secretary, which the husband contended was in the normal course of business.

The central legal issue before the Court was whether to exercise its discretion under s 114(3) of the Act to grant the injunction sought by the wife. This required the Court to assess whether it was "just or convenient" to do so, considering the circumstances of the case. A related issue was how to evaluate the evidence concerning the husband's intention or any scheme to dispose of assets, in relation to the objective risk of such disposal.

The Court clarified that the power to grant an injunction under s 114(3) involves an overall assessment of various factors to determine the just and convenient outcome, with no single factor necessarily determining the result. It distinguished between establishing a risk of disposal to defeat an order and proving an independent scheme to do so. While evidence of intention or a scheme can be a factor in establishing the objective risk of disposal, it is not the sole determinant. The Court cautioned against a rigid focus on proving specific factors at a particular standard of proof, emphasizing that these are subsidiary to the ultimate question of whether an injunction is just and convenient. The Court noted that the husband's resignation and the appointment of the third respondent were presented as occurring in the normal course of business, a submission that was part of the overall assessment of whether to grant the injunction.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

The Full Court went on to say as follows:46. Finally, we think it helpful to recognise that the essential power being exercised in this case is simply described in s 114(3).“A court … may grant an injunction … in any case in which it is just or convenient to do so…”47. Ultimately, each case will involve an overall assessment on a number of factors to determine the just or convenient result. Not all cases with the same identity of factors will necessarily produce the same result because of varying weight individually and comparatively.48. We perceive that a real, though perhaps subtle, difference exists between, on the one hand, establishing on the balance of probabilities a risk or danger of a disposal of property intended to defeat an order and, on the other hand, proving to the civil standard and as an independent issue that a scheme to defeat an order exists.49. In some cases, the possibility (based on some evidence) of an intention or scheme may, with other factors, be sufficient to establish the probability of an objective risk of disposal with intent to defeat an order.50. It follows that we do not say that, in addressing the question of whether there is a risk of disposal of assets to defeat an order, it is unnecessary to enquire whether there is any evidence of an intention, plan or scheme to dispose of assets. But in an enquiry into the risk of disposal, the question of intention or scheme is but one of a number of factors relevant to the objective risk of disposition to defeat an order.51. Moreover, while ultimately a particular factor may overwhelm others, it is generally unwise to commence with a rigid focus on finding, to a particular standard of proof, one or more of a number of factors relevant only at a discretionary level and subsidiary to the ultimate question.[Emphasis in original] It is not in dispute that this Court has the power pursuant to s 114(3) of the Act to make the injunctions sought by the wife. However, it is submitted on behalf of the husband and the third and fourth respondents that the Court should not exercise its discretion in the wife’s favour in this case. The husband in this case previously gave an undertaking to this Court that he would not deal with any interests or shareholding in any company, partnership, business or trust that he and/or the wife have an interest in save in the ordinary course of business or with the wife’s consent including but not limited to:·selling, disposing of, transferring or otherwise parting with possession or control of any shares in his name;·resigning from any directorship or position of office; and·from voting in favour of any resolution which may have the effect of issuing further shares in any of the entities or altering the constitution, memorandum of articles of association of trust deeds of any entities. There is no dispute that at the directors’ meeting on 11 July 2014 the husband resigned as secretary of Crawford Developments and that the third respondent was appointed as a director and as secretary in his stead. It is the husband’s case and that of the third and fourth respondents that this occurred in the normal course of business.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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