NORWOOD & LUCK - [2018] FamCA 141

FAMILY COURT OF AUSTRALIA

NORWOOD & LUCK

[2018] FamCA 141

FAMILY LAW – PROPERTY – INJUNCTIONS – Where orders are made for the disposition of funds from a company operated by the husband and the wife pursuant to s 114 of the Family Law Act 1975 (Cth) – Where restraints are placed on the husband from diverting any business or income away from the company – Where each party is to receive a specified sum each month from the income of the company.

FAMILY LAW – PRACTICE AND PROCEDURE – APPLICATION TO RE-OPEN – Where the husband filed an application for the interim proceedings to be re-opened – Where the application was not opposed – Where the wife had withdrawn funds from the company without notice to the husband – Where the wife used the funds to pay her tax liabilities and other joint expenses – Where the wife is not required to refund the amounts used by her.

Family Law Act 1975 (Cth) s 114

APPLICANT:

Ms Norwood

RESPONDENT:

Mr Luck

FILE NUMBER:

SYC

1490

2017

DATE DELIVERED:

8 March 2018

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Rees J

HEARING DATES:

21 February 2018 and 7 March 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Othen on 21 February 2018 and Mr Gould on 7 March 2018

SOLICITOR FOR THE APPLICANT:

Quinn Legal Advisory

COUNSEL FOR THE RESPONDENT:

Mr Lethbridge SC on 21 February 2018 and Mr Harper on 7 March 2018

SOLICITOR FOR THE RESPONDENT:

Michelle Lowy & Associates

Orders

Pending further order

That pursuant to s 114 of the Family Law Act 1975 (Cth) the husband and the wife shall direct B Pty Limited (“the Company”) as trustee of the B Family Trust to make the following payments on the 25^th day of every month in the following manner and priority:
(a)In payment of the properly incurred monthly overheads of the Company including but not limited to taxes, rent, utilities, mobile phones and staff costs.
(b)In payment of the mortgages currently secured over the property at D Street, Suburb G (“the home”).
(c)In payment of the council, rates, water rates, building and contents insurance, back to base alarm and gas relating to the home.
(d)In payment of health insurance premiums for the family.
(e)In payment of the costs of supervision pursuant to the current parenting orders.
(f)In payment of $5,000 to each of the husband and the wife.
That any funds remaining in the accounts of the Company after the payments in Order 1 be retained in those accounts and not dispersed unless by agreement between the parties.
That within 28 days the husband file and serve an affidavit which sets out the manner in which all funds, which were transferred by him from the business account ending …33, to any other account were spent.
That the husband is restrained from diverting away, approaching or soliciting the existing business of the Company to any other person or entity.
That the husband is restrained…

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.

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Details

AGLC: NORWOOD & LUCK [2018] FamCA 141
Case: [2018] FamCA 141
Decision Date: 8 March 2018

CaseChat Overview and Summary

In the matter of *Norwood & Luck*, Rees J of the Family Court of Australia considered a dispute concerning the disposition of funds from a company operated by the husband and wife, and related injunctive relief. The proceedings involved an application by the husband to re-open interim proceedings, which was not opposed. A key element of the dispute was the wife's withdrawal of funds from the company without prior notice to the husband, which she used to meet her tax liabilities and other joint expenses.

The court was required to determine the appropriate orders for the management and distribution of the company's income, including the priority of payments. It also had to consider whether the wife should be required to refund the amounts she had withdrawn from the company. Furthermore, the court addressed the husband's application to re-open the interim proceedings and the appropriateness of restraining the husband from diverting business or income away from the company.

Rees J applied principles of family law concerning property division and injunctive relief under s 114 of the *Family Law Act 1975* (Cth). The court ordered that the company, as trustee of the family trust, was to make specific monthly payments in a defined priority, commencing with the company's overheads, followed by mortgage and property expenses, health insurance, supervision costs for parenting orders, and finally, a specified sum to each party. The court also ordered that any remaining funds were to be retained in the company's accounts unless otherwise agreed. Crucially, the wife was not required to refund the amounts she had used for tax liabilities and joint expenses. The husband was ordered to provide an affidavit detailing the expenditure of funds transferred from the business account and was restrained from diverting business or engaging in transactions outside the company.

Orders

Orders of the court

Pending further order

That pursuant to s 114 of the Family Law Act 1975 (Cth) the husband and the wife shall direct B Pty Limited (“the Company”) as trustee of the B Family Trust to make the following payments on the 25th day of every month in the following manner and priority:

(a) In payment of the properly incurred monthly overheads of the Company including but not limited to taxes, rent, utilities, mobile phones and staff costs.

(b) In payment of the mortgages currently secured over the property at D Street, Suburb G (“the home”).

(c) In payment of the council, rates, water rates, building and contents insurance, back to base alarm and gas relating to the home.

(d) In payment of health insurance premiums for the family.

(e) In payment of the costs of supervision pursuant to the current parenting orders.

(f) In payment of $5,000 to each of the husband and the wife.

That any funds remaining in the accounts of the Company after the payments in Order 1 be retained in those accounts and not dispersed unless by agreement between the parties.

That within 28 days the husband file and serve an affidavit which sets out the manner in which all funds, which were transferred by him from the business account ending …33, to any other account were spent.

That the husband is restrained from diverting away, approaching or soliciting the existing business of the Company to any other person or entity.

That the husband is restrained from engaging in business transactions other than through the Company.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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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