MARING & MARING

[2020] FCCA 2915

FEDERAL CIRCUIT COURT OF AUSTRALIA

MARING & MARING [2020] FCCA 2915

Catchwords:
FAMILY LAW – Application by husband for interim orders that he be solely entitled to manage and operate a business to the exclusion of the wife – application dismissed.

Legislation:

Family Law Act 1975 (Cth)

Cases cited:

Tsiang & Wu & Ors [2019] FLC 93-911

Lesley & Lesley [2015] FamCA 894
Sieling and Sieling (1979) FLC 90-627

Applicant: MR MARING

Respondent: MS MARING

File Number: LNC 573 of 2020

Judgment of: Judge McGuire

Hearing date: 21 October 2020

Date of Last Submission: 21 October 2020

Delivered at: Hobart

Delivered on: 5 November 2020

REPRESENTATION

Counsel for the Applicant: Mr M Trezise

Solicitors for the Applicant: Rae & Partners

Counsel for the Respondent: Mr M Turnbull

Solicitors for the Respondent: Bishops

ORDERS

1. That the husband’s application for injunctive orders be dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Maring & Maring is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

LNC 573 of 2020

MR MARING

Applicant

And

MS MARING

Respondent

REASONS FOR JUDGMENT

Applications

1. The wife commenced parenting proceedings in an initiating application filed 20 August 2020. The husband’s Response filed 28 September 2020 seeks financial orders. In that Response he asks for interlocutory/injunctive orders which would effectively remove the wife from and give him sole management in the interim of the parties business known as [A Pty Ltd] which operates under a company umbrella A Pty Ltd for the Maring Family Trust and Maring Pty Ltd. Specifically he seeks the following orders:

   1.Until further order, the wife be restrained by injunction from:

   (a)participating in the management or operation of the relevant entities which are associated with the commercial activities of the business known as “A Pty Ltd” and, without limitation, A Pty Ltd for the Maring Family Trust and Maring Pty Ltd;

   (b)changing any passwords or access codes for any email account, server facilities, bank facilities other commercial facilities associated with A Pty Ltd;

   (c)doing any act which interferes in, disrupts or adversely impacts upon the husband’s efforts to operate and/or to sell A Pty Ltd.

   2.The husband will account to the wife on a monthly basis as to the management and operation of A Pty Ltd by the provision of a profit and loss statement to her legal practitioners by the seventh day of each month from the date of this order.

   3.Within seven (7) days the wife must provide to the husband a photocopy of the Pink password book and return to the husband all equipment in her possession belong to A Pty Ltd, save and except motor vehicle B.

2. The application is opposed.

3. Both parties are represented, have filed affidavit material, and the matter proceeded by way of submissions without sworn evidence in the Federal Circuit Court at Launceston on 21 October 2020.

4. The husband is the sole director of the company, A Pty Ltd (Australia) Pty Ltd, which is based in the Launceston area and is a non-destructive testing business. The parties are equal shareholders in the relevant company. The evidence suggests that ultimately both parties seek orders for the sale of the business.

5. Broadly speaking, the evidence is that the husband is now the only ‘employee’ of the business in a practical sense whereas the wife has historically been the bookkeeper for the business. The wife has separate employment as a commercial technician and/or administrative manager.

The Husband’s Case

1. At [108] of his affidavit affirmed 28 September 2020 the husband deposes that he is ‘unable to operate the business effectively with Ms Maring in it due to her obstructionist behaviour.’ He particularises his assertions at [109] as follows:

   (a)Deliberately deleting unpaid invoices I have not seen without my knowledge;

   (b)Not paying invoices as they fall due;

   (c)Taking the scanner/laminator from the office and not returning it;

   (d)Removing the keys to the filing cabinet (She has since returned these.);

   (e)Removing the business/personal password book, preventing me from accessing files, Xero, business applications, email accounts, office 365, dropbox etc;

   (f)Continually questioning business decisions and purchases;

   (g)Refusing to do the latest BAS statement;

   (h)Using the company vehicle for her own employment at Company C and travelling between locations when working including using the A Pty Ltd credit card to pay for the vehicle servicing and fuel;

   (i)Collecting business mail from the post office and not passing it onto me;

   (j)Retaining business emails and not forwarding them to me.

2. The husband particularises one example of the wife not paying an invoice and asserts that this was personally and professionally embarrassing for him.  He says that the wife borrowed the scanner from the office on 4 June 2020 and it has not been returned.  He says that the wife has removed the passbook containing passwords for the business as well as filing cabinet keys and that, without it, he cannot effective and safely manage the business.

3. At [114] he deposes:

   Ms Maring continually questions business purchases and asks me to justify them. I do not feel that I should need to do this as I am running the business as I always have as the managing director.

4. Generally, the husband’s says that there is significant tension and no trust between the parties since their separation.  The husband raises a collateral argument in respect of the best interests of the parties’ children presumably as to quarantining them from parental conflict.

5. The husband proposes to engage accountants in Brisbane as an alternative to the wife’s bookkeeping duties.

The Wife’s Case

1. At [32] of her affidavit affirmed 16 October 2020 the wife particularises the husband’s roles within the business. She then deposes:

   33. My role was in the business has been an accounting role (sic) which I have undertaken over the last ten years. I am the bookkeeper. We have an accountant as well which I liaise with.

   34.My hours of work vary subject to the month and the quarterly requirements. I would generally work 2.5 days a week but not set hours.

   35.In addition to this, I also managed our rental properties and holiday home which we rent out.

   36.I do not need to be at the matrimonial home or working alongside Mr Maring to undertake my role. I can carry out my role remotely using the laptop, phone app and email.

   37.My role involves management of the pay roll; developing, reviewing and improving administrative systems, policies and procedures. I pay the invoices and supplies. I undertake the weekly reconciliation of the bank accounts including accounts for our other company. I do the end of financial year tax collation. I was the one who would communicate with the Accountant. I do the monthly profit and loss reports and reconciliation. I also do the quarterly BAS and PAYGI instalments and reconciliations. I did the filing of paper work but this is now electronic. I deal with email enquiries.

   …

   43.I have continued in my role as bookkeeper in the business since separation. I have been working remotely with my laptop. I get invoices generally sent to me via email or mail which I pay. Some mail is sent to the post office box, but I have been reluctant to remove the mail from there. I check and I generally know what the letters are by the envelope. I have been doing that for quite some time. I check the accounting software most days and the bank account to what activity has taken place and make any follow ups. I reconcile the accounts remotely. I make calls and email if I notice anything I have not been notified about. I have continued to follow with outstanding debtors via email. I copy Mr Maring in any email I send. Mr Maring never replies. I have emailed Mr Maring on a few occasions with questions and have not received a response. This makes it difficult for me to operate. Mr Maring does not provide to me any receipts in relation to purchases. Mr Maring could email those receipts to me. I therefore have to operate off the bank statements. The business uses an app for timesheets which is where employees clock on daily. I have still been in contact with employees with any questions. I log into the app fortnightly and then run the payroll data and do the pays. Earlier in the year things were a little easier because Mr Maring was talking to me. Mr Maring does not now talk to me so that does make it difficult for me to undertake my role, but I can undertake this role if Mr Maring communicates with me via email.

2. The wife says that she is willing to remain in the role of bookkeeper pending finalisation of the property settlement; that she would work from home and without the need to see the husband; that they could communicate via email.

3. The wife acknowledges that the husband proposes orders for the business to be sold. She says at [50] of her affidavit that she is concerned that the husband wants to ‘abandon’ the business without value being placed on it and then to look at re-starting the business post settlement. As such, she wants to remain involved in the business to protect both parties’ interests and, if sold, to obtain the optimum price.

4. Contrary to the husband’s evidence, the wife says at [54] that the business is healthy and proceeding relative to previous years.

5. In respect of the husband’s complaints against the wife in her role as bookkeeper she says at [67] and following:

   (a)That she lives in close proximity to the matrimonial home and did take one of the business laptops and laminator. She says that the laminator is owned by the business but not used in its day-to-day operations;

   (b)That she continues in her dedicated role as bookkeeper and has not attempted to frustrate the business operations but rather the husband has ignored emails and texts from her requesting relevant information;

   (c)That she works in her other employment part-time and that she can maintain her role as bookkeeper for the business;

   (d)That she does have possession of the company vehicle but that this has been the case historically and that she does not have another vehicle. She says that the husband similarly has a work vehicle which she uses for both work and personal reasons;

   (e)She says that she has paid all invoices as they have been issued but questioned the invoice from Company D (mentioned in the husband’s affidavit) which she says related to the changing of locks on the matrimonial home where the husband has remained, and that this is not a business expense;

   (f)She says that both she and the husband have access to the passwords and that each is personal allowing the husband to access Xero and business applications with his own passwords;

   (g)The wife says that, as a shareholder, she should be permitted to ask reasonable questions about business purchases and practices;

   (h)The wife says she was unable to complete the relevant BAS statement as she did not have all the information and that there is nothing unusual in respect to this particular BAS statement;

   (i)The wife says that she does forward relevant business emails to the husband but that this courtesy is not necessarily reciprocated; and

   (j)The wife says that she has not been back to the matrimonial home for months. She says she does not work from that premises and does not have access to the office in that former matrimonial home. She says that she does not have a key. She says that she can continue her role remotely so long as the husband passes on relevant invoices and information via email.

Consideration

1. I am satisfied on the evidence before me, albeit untested, that the parties have historically together operated a ‘husband and wife’ business. Not unusually their roles have been delineated with the husband operating the technical side of the business and the wife being responsible for the bookkeeping role.

2. I accept that the parties are not on good personal terms following their separation and that communication is tense and limited.

3. Whilst the husband is the sole director of the parent company, the wife is an equal shareholder and hence has an actual and tangible interest in the business.

4. The business is a continuing operation in circumstances where the trial in this matter is some eight months away and where I have no current interim application for immediate sale of the business despite references to the same by each of the parties.

5. The husband says that his major role in operating the business is obstructed by the wife either actually or by reason of their non-communicative and mistrustful relationship.  He says that he will report to the wife and her legal advisors frequently and regularly.  He says that the wife would not be financially disadvantaged in that the husband has a ‘stake’ in maintaining the business as a successful operation in order to maximise its sale price. The husband is prepared to give any appropriate undertaking as to damages.

6. Counsel for both parties refer me to the well-known decision of the Full Court in Tsiang & Wu & Ors[1] which is a decision involving injunctive orders to preserve or ‘freeze’ assets pending final trial. A number of broad considerations or principles can be extracted from their Honours’ reasons including the following:

   [1] [2019] FLC 93-911

   (a)The grant of an injunction is discretionary;

   (b)An applicant for the order must demonstrate a serious issue to be tried in the sense of a prima facie arguable case;

   (c)The applicant must demonstrate that the balance of convenience favours the making of the order;

   (d)The Court is required to undertake a qualitative evaluation of the available evidence as, in this case, for the preservation of the asset(s) or ultimately a risk of ‘judgment frustration’;

   (e)It is unnecessary to demonstrate a positive intention but merely the possibility of the event occurring;

   (f)It is not the role of the judge determining the interim injunctive order to, in effect, conduct the trial of the disputed evidence to resolve such disputes between the parties;

   (g)The determination of whether there is a sufficiently serious risk of the dissipation of assets or frustration involves the evaluation of future possibilities rather than the ascertainment of historical fact; and

   (h)The risk must be ‘real’ and not merely a theoretical one and as such must have an evidentiary basis.

7. Counsel for the wife also referred me to a decision of the Full Court in Lesley & Lesley[2] where their Honours provide a set of principles relevant to the consideration of the imposition of injunctive orders including many of the above but also specifically at [74]:

   …

   g.The applicant seeking an injunction order bears the onus of satisfying the Court that the circumstances justify the making of that Order (Sieling & Sieling (1979) FLC 90-627;

   h.In considering the nature of the injunctive relief, it is important to be aware of the general principle that “equity intervenes to the minimum extent necessary to do justice;”

   i.In the context of family law, in Sieling and Sieling (1979) FLC 90-627 at 78,265, the Full Court said:

   The power to grant injunctions is, of course, a discretionary power, not to be exercised lightly. The Court must balance the hardship to each party of granting or refusing an order and frame its order in such a way to impose no further restriction than is necessary to achieve the protection of the applicant’s interest. It will not likely interfere with the rights of an owner of property on the basis of a vague or uncertain claim.

   [2] [2015] FamCA 894

Conclusions

1. Undoubtedly relations between these parties are tense following their separation and whilst embroiled in family law litigation.  However, the parties’ roles in the business are delineated and long established. There is little if any overlap. The parties both retain interests in the business both at law by reason of being shareholders and in respect of their rights under the Family Law Act 1975. The wife is not required to attend at the ‘business office’ located in the former matrimonial home in which the husband continues to reside. She can conduct all of her role and responsibilities ‘remotely’. The untested evidence of the parties is that the husband claims obstruction by the wife in respect his operation of the business whereas the wife claims that the husband is himself the ‘author’ of the difficulties that he claims and relies upon in that he himself will not communicate and with the inference that the husband should not be accorded sole operation of the joint asset/business by reason of his own obstructive conduct.

2. The wife gives credible and plausible responses to the particulars set out in the husband’s affidavit of her claimed obstruction of the business. I am not able to find that the wife has acted in any way to put in jeopardy the operation of the business or even to impact negatively on its value.

3. On consideration, I am of the view that the wife, or more particularly neither of these parties, should be removed in the interim from their precise and different roles within their joint business operation which is, of course, a valuable asset relevant to their property settlement. Rather, I find some merit in the submissions of Counsel for the wife that the wife’s removal will result in some, at least short term, jeopardy for the business in obtaining an alternative bookkeeper and involving the wife ‘handing over’ to that person.  I am of the view that any ‘conveniences’ relate to communication between the parties themselves and not directly in respect of the operation of the business in which, again, their roles are separate and not overlapping.  In summary, the applicant does not, in my view, discharge his onus to prove that the failure to grant the injunction will impact on the existence of or value of the assets.  I find no relevant or factual connection to the children’s interests save and except they should not be exposed to any conflict between their parents.

4. The application for the injunction is dismissed.

I certify that the preceding twenty six (26) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Associate: 

Date: 5 November 2020