Stone and Stone
[2011] FMCAfam 1483
•12 September 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| STONE & STONE | [2011] FMCAfam 1483 |
| FAMILY LAW – Property adjustment – interim injunction – serious issue to be tried – balance of convenience not demonstrated to favour grant of injunction – application refused. |
| Family Law Act 1975, s.114(3) |
| Yunghanns v Yunghanns (1999) 24 Fam LR 400 Blue Seas Investments Pty Ltd v Mitchell (1999) 25 Fam LR 65 CTP Custodian Pty Ltd v Commissioner of State Revenue (2005) 79 ALJR 1724 |
| Applicant: | MR STONE |
| Respondent: | MS STONE |
| File Number: | BRC 1645 of 2011 |
| Judgment of: | Jarrett FM |
| Hearing date: | 12 September 2011 |
| Date of Last Submission: | 12 September 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 12 September 2011 |
REPRESENTATION
| Solicitor for the Applicant: | Mr Madsen |
| Solicitors for the Applicant: | Madsen Law |
| Counsel for the Respondent: | Mr Neilson |
| Solicitors for the Respondent: | Butlers |
ORDERS
THE COURT DECLARES THAT:
It is appropriate, in the interests of the administration of justice, to allow discovery pursuant to s.45(1) of the Federal Magistrates Act 1999 in this proceeding;
THE COURT ORDERS THAT:
The Husband and Wife make disclosure in accordance with Division 14.02 of the Federal Magistrates Court Rules 2001 in respect of the following classes of documents.
In relation to [Company B] (in liquidation) and [Company A]:
(a)All bank statements (including Credit Card statements) for the three (3) year period up to the date of liquidation (05/09/2011);
(b)The prime books of account (MYOB or similar software programme) for the three (3) year period up to the date of liquidation (05/09/2011);
(c)Software programme date and/or spreadsheets for the company’s transportation booking and permit system for the three (3) year period up to the date of liquidation (05/09/2011);
(d)The prime books of account (MYOB or similar software programme) for the wages or contractor payments and/or Director loans for the three (3) year period up to the date of liquidation (05/09/2011);
(e)The Tax Returns for the said company for the past three (3) financial years;
(f)BAS Statements for the company for the past three (3) years up to and including the 03/06/2011;
(g)Details of all insurance claims made against the company since date of separation.
By virtue of this order the solicitors for the applicant and the respondent are hereby authorized to communicate with and obtain information or such documents as they may request from the accountant and/or liquidator or administrator for the time being of the following:
(a)[Company B];
(b)[Company A];
(c)The Stone Family Trust.
Each party within fourteen (14) days of the date of this order file and serve an affidavit in precise terms outlining each and every asset owned by the business “[Company A]”.
The parties do all acts and sign all documents so as to enrol at [organisation omitted] in [Suburb A] for the purpose of arranging a changeover venue for the care of the children with the father to deliver the children from [organisation omitted] in [Suburb A] at the conclusion of the children’s time with the father and the mother to deliver the children to [organisation omitted] in [Suburb A] at the commencement of the children’s time with the father.
The children [X] born [in] 2005 and [Y] born [in] 2006 be represented in these proceedings and it is requested that Legal Aid Queensland arrange such representation, and that the Independent Children’s Lawyer be at liberty to peruse and/or take copies of all documents filed in these proceedings upon the making of an appointment to do so with the Registrar of the Family Court of Australia at Brisbane.
The parties within seven (7) days of the date of this order contact the Relationships Australia (or their nominee) on telephone number 1300 364 277 for intake in the “Post Separation Parenting” Program or such other Parenting orders Program as recommended by that organisation.
The parties shall comply with any reasonable direction of the Program Co-ordinator and in particular:
(a)attend as requested for the purposes of assessment as to whether they are suitable for participation in the program;
(b)advise the Co-ordinator of their contact telephone number and advise the Co-ordinator of any change in that number;
(c)attend and participate in the program as requested including attending referrals to treating health professionals as recommended by the Program Co-ordinator.
In the event that either party refuses or fails to attend the program or any part thereof without reasonable excuse or refuses to accept a reasonable direction of the Co-ordinator, then the matter may be re-listed by either party on the giving of twenty four (24) hours notice.
All outstanding contravention application be stayed.
The parties are restrained, pursuant to s.118 of the Family Law Act 1975 from bringing any further contravention applications without leave of the Court first had and obtained.
This matter be adjourned for directions by telephone to 9.30am on 19 September 2011 in the Federal Magistrates Court of Australia at Coffs Harbour.
IT IS NOTED that publication of this judgment under the pseudonym Stone & Stone is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 1645 of 2011
| MR STONE |
Applicant
And
| MS STONE |
Respondent
REASONS FOR JUDGMENT
(ex tempore)
As to the application in a case filed on 29 July 2011, the relief in that application appears to be repeated word for word in the amended response filed on 23 August 2011 under the heading Interim or Procedural orders sought. In those circumstances, the application in a case filed on 29 July 2011 will be dismissed.
In respect of the interim relief and in particular paragraph 9 of the interim relief sought in the amended response filed on 23 August 2011, the position seems to me to be this. The parties conduct a family trust of which the husband, the wife and their children are the beneficiaries, at least according to the evidence of the wife. The trust deed does not seem to be in evidence. The trustee of the trust is a company called [Company A].
It is an asset holding company. It holds the assets presumably on trust for the beneficiaries of the family trust although, as I remarked during the course of argument, there is some authority for the proposition that in a case involving a discretionary trust like this, depending upon the terms of the trust, the trustee holds the legal and beneficial ownership of the relevant assets subject at all times to the terms and conditions of the trust: CTP Custodian Pty Ltd v Commissioner of State Revenue (2005) 79 ALJR 1724
So what the position is here is not entirely clear. There is another company, [Company B], which conducts a business using the assets owned by [Company A] under licence. The holding company generates an income through the receipt of licence fees, it seems, from the operating company. The operating company no doubt generates its income by employing the assets owned by the holding company in a business conducted by the operating company. Nothing remarkable in any of that so far.
The operating company is in liquidation. It was subject to a deed of company arrangement but liquidators have recently been appointed. That liquidators have been appointed tends to indicate that it is insolvent. The directors of the operating company are the wife and her father. The shareholders are her father, the wife and the husband. The husband is the sole director of the holding company. Although the shareholders are the husband and the wife, there may be another one. I am not sure; it does not matter.
The conundrum that the wife says she faces is that the holding company has a number of assets and these are not insignificant assets. These are assets of some worth which are not presently being employed in the business of earning an income and if she was given control over them, she would be able to employ them in some income-earning activities which would create, if not preserve, an asset of the parties’: that is a business, a transport operation business, and which would give her the opportunity to earn some income presumably for the support of herself and the children.
The husband says that that should not happen. She should not be put in control of the business for two reasons; first of all she has had control of it up until now and she does not need any particular orders about that to continue, particularly not an order that he be removed as a director and that the wife be appointed the sole director of the holding company, and; secondly he says that while she has had the opportunity to run the business, there have arisen a whole range anomalies which require explanation and which ultimately may mean that she is unsuitable to run the business.
Both parties have filed an affidavit. The wife’s affidavit is less than fulsome on the relevant issues. Her case as set out in the affidavit does not really match the case that she made in submissions. I do not say that critically, just an observation. She does not give much evidence about her involvement in the companies, her role, her experience, her ability to run the particular business.
Paragraph 78 onwards seems to deal by and large with her case about the interim relief in respect of the holding company and it ultimately amounts to the fact that the applicant has failed, refused or neglected to pay a renewal fee or a registration fee due to ASIC resulting in striking off proceedings being taken against the company or soon to be taken against the company and her desire to “preserve the assets of the marriage.”
The husband’s affidavit filed on 9 September, which the wife points out she has not had much opportunity to answer but nonetheless does not ask for an adjournment to do so, points out that there are a number of anomalies. He takes issue with a number of statements of fact by the wife, in particular and by way of example only without attaching any particular significance to it, that anybody can pay the outstanding ASIC fee. It does not have to be a director of the company. The wife could simply pay the fee on behalf of the holding company and thereby save that company from the striking off proceedings that ASIC might bring.
The husband says that for some time the wife has in fact had control of the business and a whole range of anomalies which I will not detail in these reasons but which are set out in his affidavit in paragraphs 45 onwards have arisen.
Goode & Goode is a case that deals with interim parenting orders and so one might wonder what it has got to do with what it is that I have to decide in this case. But in Goode & Goode the Full Court pointed out something very pertinent in relation to the conduct of interim applications like this. The applications need to be decided on the papers. There is no opportunity to cross-examine witnesses and no opportunity, generally speaking, for the court to make findings of fact where the facts are in dispute. The facts here about the whereabouts of various pieces of equipment, the use to which they have been put, and who can and in what circumstances the ASIC fee can be paid, all of those things are in dispute. I cannot make a finding one way or the other about who is telling the truth about those relevant issues other than to note that there is a dispute about them.
If I was to accept in large measure the husband’s evidence, then to make the wife the sole director of the holding company and give her control of all the assets of the holding company would be like putting a fox in charge of the henhouse. If I was to accept the wife’s case holus-bolus rather than the husband’s, then there are some very serious questions for the husband to answer and it would be appropriate to make the order. But I cannot make findings one way or the other.
The test to be applied in an application for an interim or interlocutory injunction like this is whether there is a serious issue to be tried and if so where the balance of convenience lies. I do not understand section 114(3) to approach the matter in any different way, certainly since Yunghanns v Yunghanns (1999) 24 Fam LR 400 and Blue Seas Investments Pty Ltd v Mitchell (1999) 25 Fam LR 65.
Is there a serious issue to be tried in this case? There is. There are several serious issues to be tried concerning the activities of each of the parties in respect of the relevant assets - what has happened with them, what has been done with them, what has become of some of them and how that might in the wash figure in the contribution based assessment that the court will ultimately have to perform in these proceedings under s.79(4) of the Act.
Where does the balance of convenience lie? The answer to that is something that I cannot answer. I run into the difficulties that I have earlier talked about in terms of making decisions on the facts where the facts are in dispute.
In those circumstances, the wife has failed to discharge the onus on her to demonstrate that the balance of convenience favours the grant of the relevant orders and, to use the words of s.114(3) of the Act, that it is just and convenient to make the orders.
In those circumstances, her application set out in paragraph 9 of the amended response filed on 23 August 2011 will be dismissed.
ORDERS DELIVERED
I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Jarrett FM
Date:16 January 2012
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