Neame & Neame (No 3)
[2025] FedCFamC1F 127
•3 March 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Neame & Neame (No 3) [2025] FedCFamC1F 127
File number(s): PAC 3201 of 2021 Judgment of: HARTNETT J Date of judgment: 3 March 2025 Catchwords: FAMILY LAW – PROPERTY – interim hearing – Where the substantive proceedings have been adjourned part-heard – Where the husband has since caused the wife to be removed as a director of a company (“the company”) – Where the husband has assumed the role of director of the company in the wife’s stead –Where the wife sought to be reinstated as director of the company – Where the wife’s application is unsuccessful– Application dismissed Legislation: Family Law Act 1975 (Cth)
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Division: Division 1 First Instance Number of paragraphs: 25 Date of hearing: 10 February 2025 Place: Melbourne (via video-link) Counsel for the Applicant: Mr Roberts Solicitor for the Applicant: Barkus Doolan Winning Counsel for the Respondent: Ms Hogan ORDERS
PAC 3201 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS NEAME
Applicant
AND: MR NEAME
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
28 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The Wife's Application in a Proceeding filed on 29 January 2025 be dismissed.
2.Orders 4, 5, 6, 8, 10, 11 and 12 of the Interim Orders made on 5 August 2022 be discharged.
3.Within seven (7) business days from the date of these Orders, the Husband shall irrevocably authorise and otherwise do all acts and things and sign all documents as may be required to give viewing only access to the Wife of:
(a)all online bank accounts and credit card accounts (including online transaction summaries and statements) for all business bank accounts and business credit card accounts of the company D Pty Ltd (“D Pty Ltd”); and
(b)all P Accounting software reports for D Pty Ltd trading as H Company – Suburb J subject to the Wife complying with Order 6 herein.
4.The Wife is restrained, pending further Order, from transacting upon any of the bank accounts or credit card accounts (and in any way altering any of the electronic records and/or documents) of D Pty Ltd to which she has viewing access pursuant to Order 3 herein.
5.Within three (3) business days from the date of these Orders, the Wife shall do all acts and things and sign all documents to instruct and direct U Accountants (the former accountants for D Pty Ltd) to transfer to V Accountants (the current accountants for D Pty Ltd):
(a)all documents, working papers and client files belonging to D Pty Ltd; and
(b)the P Accounting software Subscription and all other online software subscriptions of D Pty Ltd.
6.Within three (3) business days from the date of these Orders, the Wife do all acts and things to authorise and direct the head franchisor of H Company – Suburb J being W Company to pay all income payments due to D Pty Ltd to the bank account of D Pty Ltd as nominated by the Husband, and the Wife is restrained from doing any act or thing to cause any monies payable to D Pty Ltd to be paid to her or any other person or entity on her behalf.
7.As and from 5:00pm this day, the Wife is restrained from attending the premises of H Company – Suburb J as located at AA Street, Suburb J in the State of New South Wales unless agreed in writing with the Husband.
8.There is liberty to the husband to further apply for a sale of the property situate at BB Street, Town K.
9.The Husband’s party-party costs are reserved to trial.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Neame & Neame has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J
INTRODUCTION
The final hearing in this matter commenced on 2 December 2024 in Sydney and proceeded for three (3) days. The parties sought final parenting and property orders. On 3 December 2024, the parenting proceeding settled by consent, leaving only property matters outstanding. The matter was adjourned part-heard on 4 December 2024. The final hearing is set down to resume before me on 16 June 2025 in Sydney.
The subsequent interim proceeding to which these reasons relate, was commenced by way of an Application in a Proceeding filed by the Applicant wife (“the wife”) on 29 January 2025. The wife sought interim orders and restraints as canvassed later in these reasons. The Respondent husband (“the husband”) filed, on 6 February 2025, a Response to an Application in a Proceeding in which he sought that the wife’s Application be dismissed, along with other Orders also canvassed later in these reasons. The Court initially provided an urgent listing date which was then not required by the parties such that the matter proceeded later in time.
The wife relied upon:
(1)an Application in a Proceeding filed 29 January 2025;
(2)her affidavits filed 29 January 2025 and 6 February 2025; and
(3)Case Summary Document filed 6 February 2025.
The husband relied upon:
(1)Response to an Application in a Proceeding filed 6 February 2025;
(2)his affidavit, together with its annexures, filed 6 February 2025;
(3)Affidavit of Ms B filed 3 December 2024; and
(4)Case Summary Document filed 10 February 2025.
BRIEF BACKGROUND
In 2011, Neame Pty Ltd (“Neame Pty Ltd”) was incorporated, with the husband being the sole director. Neame Pty Ltd is the corporate trustee of the Neame Family Trust (“the Family Trust”).
In 2012, D Pty Ltd (“D Pty Ltd”) was incorporated with the company commencing to operate a franchise business known as H Company Suburb J (“H Company”). Neame Pty Ltd, through the family trust, owns all the shares in D Pty Ltd.
From 2012 until early 2020, the husband was the sole director of D Pty Ltd.
In early 2020, the wife became the sole director of D Pty Ltd.
On 5 August 2022, Orders were made by consent (“the August 2022 orders”), relevantly, that:
…
Ongoing Management of [D Pty Ltd] (trading as [H Company Suburb J])
5.Pending further Order, the wife in her capacity as the sole director of [D Pty Ltd], shall pay or cause to be paid, as and when the same falls due and payable, from the funds available to [D Pty Ltd], all of the following:
5.1.all franchise fees and all other monies payable to the head franchisor of [H Company] – [Suburb J];
5.2.all rent due and payable to the landlord of the commercial premises at which the business known as [H Company – Suburb J] is conducted (including bringing up to date all outstanding and unpaid rent arrears, penalties and interest);
5.3.all property utilities and outgoings payable by [D Pty Ltd] in relation to the commercial premises at which the business known as [H Company – Suburb J] is conducted;
5.4.all taxes and GST payable by [D Pty Ltd], and for abundant clarity the wife shall ensure that [D Pty Ltd] meets all of its obligations to pay all instalments of outstanding taxation to the Australian Taxation Office in accordance with all existing instalment programs entered into with the Australian Taxation Office;
5.5.all minimum repayments due and payable to National Australia Bank Ltd in respect of the NAB Business Loan;
5.6.all accounting fees and expenses due and payable to ASIC in relation to the company records and accounts of [D Pty Ltd] and of [Neame Pty Ltd];
5.7. all staff wages and contractual entitlements;
5.8. all minimum employee superannuation guarantee payments;
5.9.all minimum repayments due and payable in respect of all existing hire purchase and equipment finance liabilities;
5.10.all insurances required for the operation of [H Company – Suburb J]; and
5.11.all other legitimate costs and expenses incurred by [D Pty Ltd] in the ordinary course of its business as the operator of a […] business and the wife shall be at liberty to enter into arrangements for the payment of existing arrears by any creditor that may be necessary based on market conditions and [D Pty Ltd's] cash flow.
Further Injunctions
6.Pending further Order, and unless otherwise agreed in writing, the wife in her capacity as the sole director of [D Pty Ltd] is restrained from each of the following without first giving the husband 28 days written notice in advance of her intention of:
6.1.selling, transferring, disposing of, subleasing, or entering into any other commercial agreement in relation to the rights of [D Pty Ltd] under the existing franchise agreement entered into by [D Pty Ltd] to operate [H Company – Suburb J];
6.2.selling, transferring, disposing of in any way encumbering (or further encumbering) any plant or equipment of [D Pty Ltd] trading as [H Company – Suburb J];
6.3.causing for [D Pty Ltd] and/or the parties jointly to enter into any new finance facility, loan, lease, hire purchase arrangement or other form of credit (including the obtaining of credit card facilities);
6.4.increasing the amount owed by the wife to [D Pty Ltd] by way of director's loan, other than as may be required to fulfil the wife's payments obligations referred to in these Orders;
6.5.entering into any agreement for the sale, transfer, disposal, relinquishment by [D Pty Ltd] or acquisition by any third party (including by way of option) of the [Suburb CC] territory to which [D Pty Ltd/H Company – Suburb J] has rights under its franchise agreement;
6.6. entering into any new lease of commercial premises;
6.7. appointing any new director of [D Pty Ltd];
6.8.passing any resolution for the transfer of any shares in [D Pty Ltd] or the issue of any new shares in [D Pty Ltd]; and
6.9.transferring, selling, disposing or encumbering any shares held by the wife in [D Pty Ltd] and/or [Neame Pty Ltd].
7.Within five (5) business days of receipt, the wife shall provide to the husband copies of the following business records of [D Pty Ltd] trading as [H Company Suburb J]: all documents and records evidencing all periodic settlements/payments of income made by [H Company] (as franchisor) to [D Pty Ltd] as franchisee trading as [H Company – Suburb J].
8.Not later than the 7th day after the last day of each calendar month, and on a monthly basis pending further Order, the wife shall provide to the husband copies of the following:
8.1.all written communications received by [D Pty Ltd] from the head franchisor of [H Company]; and
8.2.copies of all statements of account, Tax Invoices, overdue notices, written demands and requests for the payment of monies in respect of liabilities of [D Pty Ltd] that are in arrears by more than seven (7) days.
9.Within seven (7) business days from the date of these Orders, the wife shall irrevocably authorise and otherwise do all acts and things and sign all documents as may be required for the relevant organisation or third party to give access to the husband (including through the provision of all necessary logins, passwords and client account details) to view (only) each of the following documents and records:
9.1.all online bank accounts and credit card accounts (including online transaction summaries and statements) for all business bank accounts and business credit card accounts of [D Pty Ltd] and all bank accounts held in the name of [D Pty Ltd] trading as [H Company – Suburb J];
9.2.all online client accounts for [D Pty Ltd] as kept by the Australian Taxation Office via its online portal (including [D Pty Ltd's] integrated client account and [D Pty Ltd's] taxation account); and
9.3.all [P Accounting software] reports for [D Pty Ltd] trading as [H Company – Suburb J].
10.In the event that any bank at which [D Pty Ltd] holds a business bank account and/or business credit card account is unable to provide to the husband login access and view (only) the bank account statements and account information for all business bank accounts and business credit card accounts of [D Pty Ltd], then at the same time as her compliance with the documents in Order 7 and pending further Order, the wife shall provide to the husband copies all statements of account AND all online banking transaction summaries (showing all transactions for) all each business bank account and business credit card account of [D Pty Ltd].
11.The husband is restrained, pending further Order, from transacting upon any of the bank accounts or credit cards and in any way altering any of the electronic records and/or documents of [D Pty Ltd] he is able to access online, pursuant to Order 9.
12.Within three (3) business days from the date of these Orders, the wife shall irrevocably authorise the accountants for [D Pty Ltd] trading as [H Company – Suburb J] to communicate with and provide all information and copies of all documents relating to [D Pty Ltd] to the husband as the husband may reasonably request.
…
The intention of the consent orders as set out above was to ensure that D Pty Ltd would be operated in a financially responsible way, with creditors being paid, and obligations met. It was at that time asserted to be struggling to meet its necessary expenses and service its outstanding debts. The intent was also to ensure that the mortgage payments in respect of the Town K property, both as to the business loan and the personal loan of the parties, were met. The Orders provided for the wife, as the sole director to have responsibility in respect of these matters.
At the end of the 2024 financial year, and despite the above Orders of August 2022, D Pty Ltd had outstanding debts of $443,839.52, plus unpaid GST and company tax in a total unknown quantum. The husband gave evidence that those combined debts included each of the following:
(1)unpaid GST for the period to 30 March 2024 – $145,270.06;
(2)unpaid company tax for the financial year ending 30 June 2023 – $30,113.35;
(3)unpaid compulsory staff/employee superannuation guarantee payments – $7,679.63;
(4)NAB Business loan (balance owed) – $206,899.90 (inclusive of $29,041.82 in unpaid amounts);
(5)unpaid rent on commercial premises – $11,871.80; and
(6)unpaid utilities of business premises – $42,004.78.
The wife, pursuant to the August 2022 Orders, was to meet the outgoings and various expenses relating to the property situate at BB Street, Town K, NSW (“the Town K property”) which is held in the parties’ joint names. It was the former matrimonial home. The wife and children of the marriage continue to reside in that property. The husband’s evidence is that the Town K property has arrears of debt in the total sum of $54,886.91, including unpaid home loan arrears capitalised in 2024 at $40,000, current unpaid home loan arrears, and unpaid council rates. The wife does not dispute the capitalised sum and finally agreed at the hearing that she had entered an arrangement with the NAB wherein all mortgage repayments to be made by her have been frozen until the end of February 2025.
In January 2025, the husband again became the sole director of D Pty Ltd upon a resolution being passed among members and shareholders of D Pty Ltd, which terminated the wife’s appointment as director and appointed the husband in her place. That action was the catalyst for the wife bringing her Application in a Proceeding.
As of 10 February 2025, the parties’ combined home loan and company debts were claimed by the husband to exceed $1,292,000 (comprised of company debts of approximately $443,839 and home loan debt of approximately $849,154). The parties only equity may be that as remains in the Town K property which is diminished by non-payment of personal debt.
ORDERS SOUGHT
The wife sought in her Application in a Proceeding filed 29 January 2025, relevantly, that: the resolution removing the wife as sole director of D Pty Ltd be discharged; the wife be restored as sole director of D Pty Ltd; any transactions entered into by the husband to divest the wife of her shares in Neame Pty Ltd and/or D Pty Ltd be set aside; the husband be held in contempt for his breach of Order 11 of the August 2022 orders; and the husband be restrained from doing any act or thing to change the shareholding or directorship of D Pty Ltd and Neame Pty Ltd, or interfere with the wife’s sole directorship of H Company.
I note that the context of the wife’s application is that she seeks as final orders that the Town K property, D Pty Ltd and business be retained by her.
The husband sought in his Response to an Application in a Proceeding filed 6 February 2025, relevantly, that: the wife’s Application be dismissed; Orders 4, 5, 6, 8, 10, 11 and 12 of the August 2022 Orders be discharged; the wife be restrained from transacting upon any account or credit card account of D Pty Ltd; the wife do all acts and things to direct the head franchisor of H Company to pay all income payments to a bank account of D Pty Ltd as nominated by the husband; the wife be restrained from attending upon H Company; the Town K property be listed for sale and sold, with the proceeds of sale being applied to all outgoings and expenses related to the sale of the property, payment to the wife by way of partial property settlement of such amount as is required by the wife to cause L Ltd to withdraw the caveat registered on title to the Town K property; and the husband be at liberty to provide a copy of any orders to the National Australia Bank (“NAB”) and to request that NAB delay and/or not enforce payment of any periodic home loan repayments that may fall due in respect of the Town K property pending its sale.
CONSIDERATION
The wife did not press her contravention nor contempt applications, and additionally conceded such applications were not in proper form.
Whilst the husband pressed for an immediate sale of the Town K property, he ultimately determined to not proceed with that application, for so long as there was not placed by the Court a positive obligation upon him to meet the mortgage repayments due, and for so long as the NAB did not seek to foreclose on the property .That was an appropriate concession by him.
It is necessary in the present circumstances for the husband to apply company funds to company debt that is pressing, to ensure the ongoing operation of D Pty Ltd. The company is in a dire financial position. Accordingly, the Court has determined that it is in the parties’ interests for the husband to not have a positive obligation to meet mortgage repayments in the short term, at least, in order to allow the husband to engage in the task of preservation of the parties’ assets. I observe this task was left to the wife following the making of the consent orders in August 2022, but that the consequence of that has been the accumulation of D Pty Ltd and personal debt of the parties with no clarity presently as to the application by the wife of company income. That will be a matter canvassed at the trial continuation.
The wife sought injunctive relief against the actions taken by the husband in him replacing her as the sole director of D Pty Ltd. The Court determines not to grant such relief.
The husband, acting in his capacity as the sole director of the trustee company of the trust which holds all the shares in D Pty Ltd, and is the sole member of D Pty Ltd, was entitled, and the husband asserts, obligated, to take the action that he did under the Corporations Act and the constitution of the company. Even were that not the case, the Court would nevertheless determine that in the interim, the husband should be the sole director of D Pty Ltd, and sole signatory to the business accounts of D Pty Ltd with the wife to have viewing only access to such accounts. The dire financial circumstances of D Pty Ltd, following a period of director control by the wife where various of the Orders made in August 2022 have not been complied with by the wife (there may have been reasonable excuse, a matter for trial), is a situation that requires urgent addressing.
The husband’s evidence is that he and the franchisor are engaging in a meaningful way, the husband asserting that the wife breached her obligations under the franchise agreement. I observe that the wife, following the husband removing her from the directorship of D Pty Ltd, told the franchisor to direct D Pty Ltd monies to accounts in her personal name. That occurred. To the present time there has been no accounting by the wife to the husband or the Court as to her application of those funds.
The husband gave evidence that the wife failed in her fiduciary obligations in her capacity as director of D Pty Ltd and placed her personal interests above the company’s best interests. The husband submitted that the wife breached statutory and/or general company director’s duties regarding D Pty Ltd as follows:
(1)the wife did not act in good faith and for a proper purpose in relation to financial transactions and records; the wife made decisions to advance her own interests rather than those of D Pty Ltd;
(2)the wife failed to act with reasonable care and diligence regarding financial record keeping including her failure to prepare and lodge business activity statements and fulfil tax obligations; and
(3)the wife withdrew and expended company money for personal use.
These are allegations to be established or otherwise at trial. I make no finding concerning them.
COSTS
Each party sought a costs order. The wife’s application was dismissed and no order for costs shall be made in her favour. She was entirely unsuccessful. The question of the wife’s payment of the husband’s costs on a party-party basis is reserved to the trial.
I certify that the preceding twenty- five (25) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 3 March 2025
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