Patton & Patton

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.