Rand and Rand and Ors - [2006] FamCA 1530

FAMILY COURT OF AUSTRALIA

RAND & RAND AND ORS

[2006] FamCA 1530

FAMILY LAW – PROPERTY SETTLEMENT – Where husband’s family has deliberately misdirected matrimonial assets

Family Law Act 1975 (Cth)

APPLICANT WIFE:

Ms S Rand

RESPONDENT HUSBAND:

Mr M Rand

2^nd RESPONDENT:

Mr G Rand

3^rd RESPONDENT:

Mrs N Rand

4^th RESPONDENT:

RE Pty Ltd (in Liq)

5^th RESPONDENT:

MI Pty Ltd

6^th RESPONDENT:

GD Pty Ltd

7^th RESPONDENT LIQUIDATOR OF 4^th

RESPONDENT:

Mr RMS

8^th RESPONDENT:

Mr PM

9^th RESPONDENT:

Mr WJ

10^th RESPONDENT:

S Pty Ltd

11^th RESPONDENT:

C Pty Ltd

12^th RESPONDENT:

H Pty Ltd

TRUSTEE IN BANKRUPTCY:

Mr PL

FILE NUMBER:

2153

2001

DATE DELIVERED:

10 January 2006

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Rowlands J

HEARING DATE:

9-13 and 23-27 September 2002; 2-5 December 2002; 14-18 and 21-25 November 2005

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Richardson SC

SOLICITOR FOR THE APPLICANT:

Adrian Twigg & Co

FOR THE RESPONDENT HUSBAND:

In person

COUNSEL FOR THE 2^ND, 3^RD, 4^TH, 5^TH, 6^TH

AND 11^TH RESPONDENTS:

Mr Auldridge SC

SOLICITOR FOR THE 2^ND, 3^RD, 4^TH, 5^TH, 6^TH

AND 11^TH RESPONDENTS:

Watts McCray

COUNSEL FOR THE 7^TH RESPONDENT:

Mr Simpson

SOLICITOR FOR THE 7^TH RESPONDENT:

NOT Lawyers

FOR THE 8^TH RESPONDENT:

In person

COUNSEL FOR THE 9^TH, 10^TH AND 12^TH

RESPONDENTS:

Mr Paul

SOLICITOR FOR THE 9^TH, 10^TH AND 12^TH

RESPONDENTS:

Paul and Paul Lawyers

COUNSEL FOR THE TRUSTEE:

SOLICITOR FOR THE TRUSTEE:

The Argyle Partnership

ORDERS

UPON THE APPLICATION OF THE WIFE TO THE COURT IT IS ORDERED:

That RE Pty Limited (in liquidation) and/or the liquidator of RE Pty Limited (in liquidation) forthwith execute a Deed of Assignment to assign to the Wife any entitlement it has in any debt owed to it by, or cause of action it has against, each of S Pty Limited, Mr G Rand (the husband’s father), Mrs N Rand (the husband’s mother), GD Pty Limited, and C Pty Limited.
That the Husband do all acts and things necessary to transfer to the Wife all of his entitlements in the Rand Family Trust and further, if requested to do so by the Wife in writing, cause to be transferred to the Wife all of the entitlements that the said trust may have in S Pty Limited, and then if requested to do so by the Wife in writing resign as trustee and appoint the Wife as trustee of the said trust, And thereafter be permanently restrained from exercising his power of appointment or removal in relation to the trust.
And Declared that the Wife (subject to Order 11 hereof) is entitled to one half of any profits arising out of the patents or other intellectual property relating to the conversation of waste material…

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.

Continue reading Rand and Rand and Ors

Details

AGLC: Rand and Rand and Ors [2006] FamCA 1530
Case: [2006] FamCA 1530
Decision Date: 10 January 2006

CaseChat Overview and Summary

This case involved an application by the Wife in proceedings before Rowlands J. The dispute concerned the division of property and the resolution of financial entitlements between the Husband and Wife, involving numerous companies and trusts, including RE Pty Limited (in liquidation), S Pty Limited, GD Pty Limited, C Pty Limited, and the Rand Family Trust. The Wife sought orders to assign entitlements and causes of action to her, transfer trust assets and trustee roles, and account for profits from intellectual property.

The court was required to determine the extent of the Wife's entitlement to profits arising from specific intellectual property, the appropriate mechanism for transferring various company shares and trust entitlements, and the extent to which the Husband should be substituted for the Wife in relation to certain alleged indebtedness. Further issues included the validity of share allotments in S Pty Limited and the winding up of that company, as well as the imposition of restraints on various parties from commencing legal actions. The court also considered the application of specific provisions of the Family Law Act 1975 and the Corporations Act 2001.

Rowlands J made extensive orders to effect a division of property and resolve financial claims. These included orders for the assignment of debts and causes of action, the transfer of entitlements in the Rand Family Trust, and the Wife's entitlement to half of the profits from certain intellectual property, capped at a specified sum plus costs and interest. The court also set aside certain share allotments in S Pty Limited, ordered its winding up, and restrained directors from altering its shareholding or assets without notice. Crucially, the Husband was substituted for the Wife in respect of certain alleged indebtedness to RE Pty Limited (in liquidation) and other entities, and the Wife was to transfer her shareholding in RE Pty Limited (in liquidation) to the Husband upon his compliance with specific orders. Restraints were imposed on numerous parties from commencing claims against the Husband or Wife.

Orders

Orders of the court

UPON THE APPLICATION OF THE WIFE TO THE COURT IT IS ORDERED:

That RE Pty Limited (in liquidation) and/or the liquidator of RE Pty Limited (in liquidation) forthwith execute a Deed of Assignment to assign to the Wife any entitlement it has in any debt owed to it by, or cause of action it has against, each of S Pty Limited, Mr G Rand (the husband’s father), Mrs N Rand (the husband’s mother), GD Pty Limited, and C Pty Limited.

That the Husband do all acts and things necessary to transfer to the Wife all of his entitlements in the Rand Family Trust and further, if requested to do so by the Wife in writing, cause to be transferred to the Wife all of the entitlements that the said trust may have in S Pty Limited, and then if requested to do so by the Wife in writing resign as trustee and appoint the Wife as trustee of the said trust, And thereafter be permanently restrained from exercising his power of appointment or removal in relation to the trust.

And Declared that the Wife (subject to Order 11 hereof) is entitled to one half of any profits arising out of the patents or other intellectual property relating to the conversation of waste material to building products and further order that the Husband account and (subject to Order 11 hereof) pay to the Wife one half of any profits received in respect of the intellectual property of the various companies known as NR Technology Pty Limited, NR Corporation SARL, B Pty Limited and related entities.

That upon the Husband and RE Pty Limited (in liquidation), complying with orders 1, and 2 hereof, the Wife transfer to the Husband all of her shareholding and entitlements in the company RE Pty Limited (in liquidation) and further order that the Wife resign any office she may hold in the said company upon the Husband indemnifying the Wife and saving her harmless forever in relation to any suits, claims, demands or liability in relation to her ever having held any office or shares in the said company.

That each of:

(a) the Husband's father, Mr G Rand,

(b) the Husband's mother, Mrs N Rand,

(d) Mr RMS as either liquidator or administrator of RE Pty Limited (in liquidation),

(e) GD Pty Limited,

(f) C Pty Limited,

(g) MI Pty Limited,

(h) NR Technology Pty Limited, and

(i) NR Corporation SARL.

be restrained pending further order from commencing, maintaining, or pursuing any claims, actions or suits against the Husband, the Wife, or RE Pty Limited (in liquidation), including, without limiting the generality thereof, any actions in relation to any director's loan accounts (whether joint or individual), or any actions arising from any assertions of insolvent trading by either the husband and/or the wife.

That pursuant to s9OAE(1)(b) of the Family Law Act, that in respect of any or all of the alleged indebtedness of the Wife to the entities and persons referred to in Order 6 hereof, the Husband be substituted for the Wife, and be solely responsible for the indebtedness.

That pursuant to s 106B of the Family Law Act:

(a) That the allotment of shares in S Pty Limited [ACN …] ("[S Pty Ltd]") on or about 31 October 2003 comprising 20,000 ordinary shares to C Pty Limited [ACN …] ("[C Pty Ltd]"), and 10,000 ordinary shares to H Pty Limited [ACN …] ("[H Pty Ltd]"), be set aside.

(b) That S Pty Ltd forthwith cancel any share certificates issued in respect of the allotment referred to in (a) and expunge the said allotted shares from the share register.

That pursuant to s233 of the Corporations Act 2001:

(a) That forthwith upon compliance with Order 7 S Pty Ltd be wound up and a liquidator appointed (if that has not already taken place)

(b) Mr WJ, the husband’s father, and each other director of the Company be restrained from:

(i) Doing any act or thing which has the effect of altering the shareholding in the company, except as sought in these orders, including issuing or allotting any shares;

(ii) Doing any act or thing which has the effect of altering the company's assets or liabilities, without giving the Wife and her solicitors 14 days' written notice setting out the proposed alteration, and providing details of the basis of such proposal.

(c) There forthwith be appointed an administrator (if one or like person has not already been appointed) pending the implementation of orders (a) and (b) above.

That pursuant to s90AE(1)(b) of the Family Law Act RE Pty Limited (in liquidation) shall forthwith do all acts and things necessary to substitute the Husband for any indebtedness to that company by the wife pursuant to any loan account or as a consequence of any alleged breach of the Corporations Law in respect of alleged insolvent trading.

10.

That pursuant to s106A of the Family Law Act, a Registrar or Deputy Registrar be empowered to sign any documents required to give effect to these orders in the event that the Husband, the husband’s father or any other person required to sign a document to give effect to these orders, fails to do so and return to the Wife's solicitor, within 7 days of being provided with the document to be signed.

11.

That the Wife's entitlement to profits pursuant to Order 3 above be limited in amount to the sum of:

(a) any balance outstanding in respect to the sum of $4,417,406 referred to in the final paragraph of the Reasons for Judgment of 10 January 2006, plus

(b) any costs ordered in favour of the Wife in respect of these proceedings including their enforcement, plus

(c) interest on sums outstanding referred to in (a) and (b) above, at the rate of interest prescribed by the Family Law Rules or as otherwise ordered.

12.

And Declared that nothing contained in these orders contemplates any limitation upon the rights of a party pursuant to Section 79A of the Family Law Act 1975.

13.

That a copy of these orders be served upon any liquidator or administrator or like person appointed in respect of S Pty Ltd.

14.

That each party have liberty to apply to the Court in respect to the implementation of these orders.

15.

That the costs of and incidental to these proceedings be 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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