In the Marriage of Stowe1
| Author | Philippa Lynch |
| Published date | 01 December 1981 |
| Date | 01 December 1981 |
| DOI | http://doi.org/10.1177/0067205X8101200404 |
| Subject Matter | Case Notes |
CASE NOTES
IN
THE
MARRIAGE OF STOWE1
Family Law,_... Property
settlements-
Companies own matrimonial assets
-Interim injunctions -Whether the position
of
third party shareholders
is a relevant
consideration-
Family Law
Act
1975 (Cth)
s.
114
In recent years, more and more married couples have resorted to placing
assets in family companies and trusts to avoid death duties and tax liabilities.
This frequently creates problems on divorce as the Family Court can deal
only with the property of the parties to the marriage. In order to ensure a
just and equitable settlement of property under section 79 of the Family
Law Act 197
5 ( Cth)
,2
the Court has had to explore its power under
section 114 to prevent such assets being removed from the reach of a party
to the marriage.
In Stowe, the matrimonial home of the parties was a property known as
Bullsbrook, on which the wife managed a cattle stud. When the parties
separated, she remained there with the children. Bullsbrook was owned by
Devereaux Holdings Pty Ltd (Devereaux), a company in which the
husband was the managing director with an annual salary of $30,000.
It
was conceded that he was the guiding force of the company although he
had no direct shareholding interest in it.
Ninety one percent of the shares in Devereaux were owned by Stofam
Proprietary Limited (Stofam), a company incorporated by the husband as
trustee for the Stowe family trust. Stofam's two issued shares were held by
the husband and his solicitor. The income of the trust was held on a
discretionary trust for a class which included the wife and children, but not
the husband. The capital beneficiary was Stokid Pty Ltd, another company
incorporated by the husband with two issued shares which were held by the
husband and his solicitor. The husband claimed that he held his interest in
the shares on trust for his executor for distribution in accordance with his
will.
The remaining shares in Devereaux were held by Seeko Ltd ( Seeko), a
listed public company. Devereaux held shares in Seeko and both companies
held shares in Griffin Coal Mining Ltd. To finance the purchase of these
shares, Devereaux had charged its assets (presumably by
way
of floating
charge) to the Rural and Industries Bank (the Bank). Such charge extended
to Bullsbrook.
After being asked by Devereaux to leave the property, the wife applied
to the Family Court of Western Australia for various orders, including
maintenance for herself and the children, occupation of the matrimonial
property and injunctions restraining the husband personally and
as
a director
from dealing with the assets of Devereaux. On 4 August 1980 Anderson J.
made an ex parte interim order which, in summary, restrained the husband
1 (1980) 6 Pam. L.R. 757; [1981] F.L.C. 91-027. Full Court
of
the Family Court
of
Australia; Evatt C.J., Murray and Gibson JJ.
2 ''The Act".
362
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