Sigley & De Santis - [2019] FamCA 271

FAMILY COURT OF AUSTRALIA

SIGLEY & DE SANTIS AND ORS

[2019] FamCA 271

FAMILY LAW – CORPORATIONS – complex tangle of interrelated companies and connected shareholders – family companies – family trusts.

FAMILY LAW – DE FACTO PARTNERS – financial agreement – de facto husband’s assets very substantial – agreement providing that upon breakdown of the de facto relationship the de facto husband would continue to meet mortgage payments under mortgage over the former de facto wife’s home – de facto husband terminating relationship and commencing to alter his extensive corporate arrangements.

FAMILY LAW – CORPORATIONS – member’s voluntary winding up – requirement for solvency – loans owed to the de facto husband’s company forgiven – no evidence of legitimate basis for forgiveness having the effect of rendering company solvent – whether proper.

FAMILY LAW – CORPORATIONS – charge of de facto husband’s single share in a two share company – charge given in favour of a company owned and controlled by the de facto husband’s parents – whether charge valid and legitimate – effect of charge – subsequent default by de facto husband in meeting obligations under charge – de facto husband allegedly surrendering charged share – effect thereof – de facto husband’s company thereafter under the effective control of his parents.

FAMILY LAW – ATTEMPT TO DEFEAT – s 106B of the Family Law Act.

FAMILY LAW – LIQUIDATORS – application by de facto wife for orders under schedule 2 to the Corporations Act for liquidators to provide a report on the external administration of de facto husband’s company.

FAMILY LAW – PRACTICE AND PROCEDURE – case management – this proceeding having been heard on 26 separate applications by 10 judicial officers – need for case to be tried.

Corporations Act 2001, ss 494, 536, 1274A, sch 2, ss 90‑5, 90‑15, 90‑20
Family Law Act 1975, ss 90, 106B, 114
Family Law Rules 2004, ch 13
Insolvency Law Reform Act 2016

ANZ Banking Group v Harper (1988) 11 Fam LR 649
Colonial Bank v Whinney [1886] 11 AC 426
Hall v Poolman (2009) 75 NSWLR 99
In the Marriage of Bassola (No 2) (1985) 10 Fam LR 413
In the Marriage of Gould (1993) 17 Fam LR 156
In the Marriage of Hudson (1986) 11 Fam LR 189
In the Marriage of Turnbull (1990) 15 Fam LR 81
In the Marriage of Whitaker (1980) 5 Fam LR 769
Knowles v Scott [1891] 1 Ch 717
Magarditch v Australia and New Zealand Building Group Ltd (1999) 32 ACSR 367
Re Alfred Priestman & Co [1936] 2 All ER 1340
Re Anglo‑Australian Investment Co (No 2) (1893) 14 LR (NSW) Eq 110
Re Bassi and KD Sales Force Specialists Pty Ltd (1999) 25 Fam LR 678
Re Evers Motor Co Ltd [1962] QWN 6
Re Hills Waterfall Estate & Goldmining Co [1896] 1 Ch 947
Re Jackson & Bassford Ltd [1906] 2 Ch 467
Re L.G. Batten Pty Ltd [1962] QWN 2
Re Marquette Motors Ltd (1928) 29…

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: Sigley & De Santis [2019] FamCA 271
Case: [2019] FamCA 271
Decision Date: 3 May 2019

CaseChat Overview and Summary

In the Family Court of Australia, Justice Wilson considered a dispute between a de facto wife and her de facto husband, who was involved in a complex web of interrelated companies and trusts. The de facto wife sought orders concerning the financial arrangements and corporate dealings of the de facto husband, particularly in light of the breakdown of their relationship and his subsequent actions to alter his corporate structures.

The central legal issues before the court involved the validity and effect of various corporate transactions undertaken by the de facto husband. These included the forgiveness of loans owed to his company, which potentially rendered the company insolvent, and the validity of a charge over his sole share in a two-share company, given in favour of a company controlled by his parents. The court also had to consider whether these actions were an attempt to defeat the de facto wife's claims under section 106B of the *Family Law Act 1975* (Cth). Furthermore, the court addressed an application by the de facto wife for orders under Schedule 2 of the *Corporations Act 2001* (Cth) for liquidators to provide a report on the external administration of one of the de facto husband's companies.

Justice Wilson noted the protracted and complex procedural history of the matter, having been heard on 26 separate applications by 10 judicial officers. The court reasoned that the validity of the corporate transactions, including the forgiveness of loans and the charge over the company share, required thorough examination to determine their legitimacy and their impact on the de facto husband's assets and liabilities. The court indicated that these matters needed to be tried to ascertain whether the de facto husband's actions were a genuine commercial arrangement or an attempt to dissipate assets or defeat the de facto wife's entitlements.

The court's ultimate orders were directed towards ensuring the matter proceeded to a trial on its merits, given the complexity and the need for detailed factual findings regarding the corporate dealings and their purpose.

Orders