Patton & Patton

Case [2015] FamCA 1083

FAMILY COURT OF AUSTRALIA

PATTON & PATTON [2015] FamCA 1083

FAMILY LAW – PROPERTY – INTERLOCUTORY INJUNCTION – asset preservation where the parties are engaged in substantive property settlement and spousal maintenance proceedings – where the applicant seeks that proceeds of sale of real property be held on trust – whether the applicant can demonstrate that her claim would otherwise be prejudiced – where the respondent asserts there is no prejudice if the sale proceeds were to not be held on trust – where the applicant has foreshadowed an application for partial property settlement – where such application would be prejudiced by the diminution of the proceeds of sale – where the applicant’s substantive property application would be prejudiced by the disbursement of the proceeds of sale – where there would be no prejudice for the proceeds of sale to be applied to reduce an inter-entity loan – whether such funds may be re-drawn and applied to specified uses – balance of convenience.

FAMILY LAW – PRACTICE & PROCEDURE – INJUNCTION – restraining the appointment of a further director to corporate trustee – where the injunction is refused.

Family Law Act 1975 (Cth)
Income Tax Assessment Act 1936 (Cth)
Beacham Group Ltd v Bristol LaboratoriesPty Ltd (1968) 118 CLR 618
Blue Seas Investments Pty Ltd v Mitchell & McGillivray (1999) FLC 92-856
Cardile v LED Builders Pty Ltd (1999) 198 CLR 380
Giumelli v Giumelli (1999) 196 CLR 101
Malec v J C Hutton Pty Ltd (1990) 169 CLR 638
Martinello & Martinello (1981) FLC 91-050
Mullen & De Bry (2006) FLC 93-293
Norton & Locke (2013) FLC 93-567
Sieling & Sieling (1979) FLC 90-627
Stowe & Stowe (1981) FLC 91-027
Waugh & Waugh (2000) FLC 93-052
Yunghanns & Ors v Yunghanns & Ors (1999) FLC 92-836
APPLICANT: Ms Patton
RESPONDENT: Mr Patton
FILE NUMBER: BRC 4411 of 2013
DATE DELIVERED: 4 December 2015
PLACE DELIVERED: Brisbane
PLACE HEARD: Brisbane
JUDGMENT OF: Kent J
HEARING DATE: 23 November 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms McMillan QC with
Mr Cameron
SOLICITOR FOR THE APPLICANT: Butler McDermott Lawyers
COUNSEL FOR THE RESPONDENT: Mr Kirk QC
SOLICITOR FOR THE RESPONDENT: Nita Stratton-Funk & Associates

Orders

it is ordered until further order that:

  1. The Husband cause the remaining net sale proceeds of sale of the property known as the B Town property in the amount of approximately $1.6 million to be paid by C Pty Ltd as trustee for the Patton Family Trust (“PFT”) to Patton Holdings Pty Ltd (“PH”) in repayment/reduction of Division 7A loans.

  2. The Husband be permitted to cause re-draws of loans from PH from the above payment to be made to meet:

    (a)       payment to Mr D as vendor in respect of the purchase by PFT of           stock in the amount of approximately $230,000;

    (b)       payment to PwC for their outstanding costs in the amount of $278,598;

    (c)       payment to the Husband’s solicitors in respect of his outstanding and    future legal costs in respect of these proceedings…

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AGLC
Patton & Patton [2015] FamCA 1083
Case
[2015] FamCA 1083
Decision Date

CaseChat Overview and Summary

In *Patton & Patton*, the applicant wife sought interlocutory relief in family law proceedings concerning property settlement and spousal maintenance. The primary dispute involved the preservation of sale proceeds from a property, with the wife seeking that these funds be held on trust to prevent prejudice to her substantive claims. The husband contended that no prejudice would arise if the sale proceeds were not held on trust, particularly if they were applied to reduce an inter-entity loan, with the possibility of re-drawing funds for specified purposes.

The court was required to determine whether the wife could demonstrate that her property settlement claims would be prejudiced by the diminution or disbursement of the sale proceeds. Additionally, the court considered an application to restrain the appointment of a further director to a corporate trustee, which was also part of the wife's interlocutory application. The overarching consideration was the balance of convenience between the parties.

Kent J reasoned that the wife's substantive property application would be prejudiced by the disbursement of the sale proceeds. However, the court found that applying the proceeds to reduce inter-entity loans, with the potential for re-draws for specific, identified expenses, would not cause prejudice. The court also refused the injunction restraining the appointment of a further director to the corporate trustee.

Consequently, the court ordered that the net sale proceeds of the B Town property be paid to Patton Holdings Pty Ltd to reduce Division 7A loans. The husband was permitted to cause re-draws from these funds to meet specific payments for stock, outstanding costs to PwC, and his legal costs. Crucially, the husband was restrained from causing any further re-draws without the wife's written consent or further court order. The wife's application for an order for partial or interim property settlement was otherwise dismissed without prejudice to her making further applications. Costs were reserved.

Orders

Orders of the court

it is ordered until further order that:

1.

The Husband cause the remaining net sale proceeds of sale of the property known as the B Town property in the amount of approximately $1.6 million to be paid by C Pty Ltd as trustee for the Patton Family Trust (“PFT”) to Patton Holdings Pty Ltd (“PH”) in repayment/reduction of Division 7A loans.

2.

The Husband be permitted to cause re-draws of loans from PH from the above payment to be made to meet:

(a) payment to Mr D as vendor in respect of the purchase by PFT of stock in the amount of approximately $230,000;

(b) payment to PwC for their outstanding costs in the amount of $278,598;

(c) payment to the Husband’s solicitors in respect of his outstanding and future legal costs in respect of these proceedings in the amount of $76,155.

3.

The Husband be restrained and an injunction is granted restraining the Husband by himself or by his servants or agents causing or permitting any further

re-draws from the said sum paid to PH without the express written consent of the Wife or further order of the Court.

4.

The Amended Application in a Case of the Wife filed on 20 November 2015 is otherwise dismissed without prejudice to the Wife making further application for an order for partial or interim property.

5.

In the event that neither party makes any application for costs in respect of this application within twenty-one (21) days of the date of these Orders, the costs of each party of and incidental to this application are reserved.

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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