ZUNINO & ZUNINO - [2019] FamCA 845

FAMILY COURT OF AUSTRALIA

ZUNINO & ZUNINO

[2019] FamCA 845

FAMILY LAW – PRACTICE AND PROCEDURE – Where application by additional respondents for orders removing them as parties to the proceedings – Where application dismissed – Where costs reserved.

FAMILY LAW – PRACTICE AND PROCEDURE – Where application for Rule 10.12 summary orders seeking dismissal of the wife’s claim as against the additional respondents – Where discussion of applicable principles – Where application for summary relief dismissed – Where costs reserved.

FAMILY LAW – PRACTICE AND PROCEDURE – Where application for order under s 198F of the Corporations Act 2001 (Cth) requiring husband to inspect corporate records as previous director of various entities – Where applicable principles considered – Where application dismissed – Where costs reserved.

Corporations Act 2001 (Cth) s 58AA, 198F
Family Law Rules 2004 (Cth) r 6.02, 10.12

Ebner & Pappas [2014] FamCAFC 229
Friar & Friar [2011] FamCAFC 71
Kelly & Lomax [2014] FamCA 431
Hardcastle v Advanced Mining Technologies Pty Ltd [2001] FCA 1846
In the Matter of Motasea Pty Ltd [2014] NSWSC 69
Lindon v Commonwealth of Australia(No. 2) [1996] HCA 14
McWilliam v Penthouse Publications [2001] NSWCA 237
Oswal v Burrup Holdings Ltd [2011] FCA 609
Sharpe v Grobel [2017] NSWSC 1065
Stewart v Normandy NFM Ltd [2000] SASC 344

APPLICANT:

Ms Zunino

FIRST RESPONDENT:

Mr Zunino

SECOND RESPONDENT:

C Pty Ltd

THIRD RESPONDENT:

D Pty Ltd

FOURTH RESPONDENT:

E Pty Ltd

FIFTH RESPONDENT:

F Pty Ltd (ACN …)

SIXTH RESPONDENT:

F2 Pty Ltd (ACN …)

FILE NUMBER:

PAC

1885

2019

DATE DELIVERED:

15 November 2019

PLACE DELIVERED:

Parramatta

PLACE HEARD:

Parramatta

JUDGMENT OF:

Foster J

HEARING DATE:

12 August 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Coleman SC

SOLICITOR FOR THE APPLICANT:

Hammond Nguyen Turnbull

COUNSEL FOR THE FIRST RESPONDENT:

Mr Sansom SC

SOLICITOR FOR THE FIRST RESPONDENT:

Longton Legal

COUNSEL FOR THE SECOND, THIRD, FOURTH, FIFTH AND SIXTH RESPONDENTS:

Mr Campton SC

SOLICITOR FOR THE SECOND, THIRD, FOURTH, FIFTH AND SIXTH RESPONDENTS:

Matthews Folbigg Pty Ltd

Orders

That the applications by the Fourth, Fifth and Sixth respondents to be removed as parties to these proceedings be dismissed.
That the applications by the Fourth, Fifth and Sixth respondents for summary orders under Rule 10.12 of the Family Law Rules 2004 (Cth) as to the relief sought against them by the wife be dismissed.
That the application by the wife for orders as to s 198F of the Corporations Act 2001 be dismissed.
That costs of and incidental to the present applications be reserved.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Zunino & Zunino has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b)…

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

Case: [2019] FamCA 845
Decision Date: 15 November 2019

CaseChat Overview and Summary

The proceedings involved applications by the Fourth, Fifth, and Sixth respondents seeking to be removed as parties to the proceedings and for summary dismissal of the wife's claims against them. Additionally, the wife sought an order under section 198F of the *Corporations Act 2001* (Cth) compelling the husband to inspect corporate records. The court was presided over by Foster J.

The legal issues before the court were whether the Fourth, Fifth, and Sixth respondents should be removed as parties, whether the wife's claims against these respondents should be summarily dismissed, and whether the husband should be ordered to inspect corporate records under section 198F of the *Corporations Act 2001* (Cth).

Foster J dismissed the applications by the Fourth, Fifth, and Sixth respondents to be removed as parties and their applications for summary dismissal of the wife's claims. The court also dismissed the wife's application for an order under section 198F of the *Corporations Act 2001* (Cth). The reasoning for dismissing the section 198F application was that the right of a director to inspect company books is not unfettered and requires the applicant to establish the factual background to the request with particularity. The court noted that the wife, in seeking the order, had not sufficiently particularised the nature and extent of the documents sought, and that considerations such as the request being unduly onerous or the company bearing excessive costs were relevant. The costs of and incidental to all these applications were reserved.

Orders

Orders of the court

That the applications by the Fourth, Fifth and Sixth respondents to be removed as parties to these proceedings be dismissed.

That the applications by the Fourth, Fifth and Sixth respondents for summary orders under Rule 10.12 of the Family Law Rules 2004 (Cth) as to the relief sought against them by the wife be dismissed.

That the application by the wife for orders as to s 198F of the Corporations Act 2001 be dismissed.

That costs of and incidental to the present applications be reserved.

Note: The form of the order is subject to the entry of the order in the Court’s records.

Background

Background to the litigation

A director or former director’s right to inspect company books under s 198F is not at large. As said by Black J in In the Matter of Motasea Pty Ltd [2014] NSWSC 69 at [51]:It is essential to the exercise of a director's right to inspect books under these sections that the director be, actually or prospectively, a party to litigation, and the director must establish the factual background to the application by more than unsubstantiated assertions (emphasis added): Stewart v Normandy NFM Ltd [2000] SASC 344; (2000) 18 ACLC 814 at [10]; Boulos v Carter; Re TARBS World TV Australia Pty Ltd [2005] NSWSC 891; (2005) 220 ALR 572; (2005) 54 ACSR 827 at [28], [31]; Re Jervois Mining Ltd; Campbell v Jervois Mining Ltd [2009] FCA 316 at [48] . … In Sharpe v Grobel [2017] NSWSC 1065 Brereton J observed:[21]Moreover, directors are entitled, at common law, to access the books and records of the company as a necessary incident of the office of director, in order that they may properly perform their duties. The statutory right of access under Corporations Act, s 198F, now permits access for the purpose of legal proceedings to which a director or former director is or may become a party, notwithstanding that the director’s purpose may be a private one. (emphasis added) Yet the right to access is a constrained one, being limited to books of the company material to the legal proceeding: Stewart v Normandy NFM Ltd [2000] SASC 344 at [10]. It has been held that because s 198F refers to a director inspecting the books of the company, the section does not permit an agent of the director to inspect the books: Oswal v Burrup Holdings Ltd [2011] FCA 609 at [22]–[25]. Thus the right of the husband under the section is to have access to and copy such documents as may be material for the purpose of the present legal proceedings notwithstanding the proceedings are of a private nature. Such a right carries with it the obligation on the husband, or in this matter the wife who seeks to promote the order for the s 198F request, to establish the factual background to the request. As such it is incumbent of the wife to identify with some particularity the nature and extent of the documents sought to be included in the request. Some of the considerations that might be relevant, in particular, circumstances to whether the Court will make an order to comply with s 198F include that the request is unduly onerous, that the company should not be expected to bear the cost of a very large inspection of documents, and that the party requesting the documents already has them: Oswal v Burrup Holdings Ltd [2011] FCA 609 at [17]. The wife seeks an order ultimately directed to four corporate entities in which the husband was until recently a director. The nature of documents sought are in a broad category of general financial and corporate records (some of which are public records) over a period of five years and in one respect seek to have the company or companies compile a list of all assets and liabilities.

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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