When business interests collide in family law


11 In relation to property interest and corporations in Tuck v Tuck (1981) FLC 91-021 at 76, 219 the Court commented that where property interests of parties to a marriage are bound up with their interests in a private company, the Court often faced with a difficulty that it may not be able to make direct orders for the transfer or settlement of property held in the name of the companies. Nevertheless, the Court can and should look at the whole property relationship of the parties, and the part which the company and its interests play as a part of that whole relationship.

HEIDNER & HEIDNER [2015] FamCA 105

93. Mr Jackson, counsel for the wife, referred to the Full Court’s judgment in Tuck and Tuck (1981) FLC 91-021, as providing assistance about this matter. I note at 76,224 Strauss J said as follows:
… it might be pointed out in passing that in other jurisdictions too, the wife might have had remedies in respect of the unauthorised use by the husband for his own purposes of partnership funds or of other funds in which the wife had an interest. As a matter of partnership law, the unauthorised use by a partner for his own benefit of partnership assets makes him accountable to the partnership for the benefits so received. See Lindley on Partnership, 13th ed., pp. 337-343 and 352. The fact that the benefit was obtained after the dissolution of the partnership would not relieve him of his obligation to account for it. Pathirana v. Pathirana (1967) 1 A.C. 233. Similarly, the course of dealings between the husband and wife may well support the conclusion that he stood in a fiduciary relationship towards the wife, which might have obliged him to use moneys in which she had an interest in accordance with the mandate or trust, upon which he was authorised to deal with them. That mandate or trust would have been to use them for their mutual benefit and that of the family, but not to benefit himself alone and to her detriment. And if this be so, then he might well have been accountable for the benefits derived by him personally as a result of this breach of his fiduciary duties. See generally Meagher Gummow & Lehane, Equity, Chapter 5.
However, in view of the nature of the jurisdiction conferred upon this Court, it is not necessary to determine what the result of proceedings in other jurisdictions might have been. [The trial Judge] made no findings what the total assets or the income of the parties was. In the circumstances of this case, I consider that regard must be had to the whole of the financial position of these parties in order to make such adjustments of the property rights of the parties, as was just and equitable consequent upon the breakdown and the dissolution of the marriage. Such an adjustment did not necessarily depend on what their precise rights at law or in equity might have been. This was not an action or suit for debt, or for partnership accounts or for breach of fiduciary duty. It is often difficult to determine the strict legal rights of the spouses, particularly where, as here, transactions are in question which extended over many years, and in which the personal finances of the parties were mixed up with their business dealings. The Family Law Act 1975 provides an elastic method of deciding what is just and equitable in all the circumstances. Cf. Fielding v. Fielding (1978) 1 All E.R. 267 at pp. 268 and 270.

MISTLE & MISTLE [2010] FamCA 29

6. In Af Petersens and Af Petersens (1981) FLC 91-095, Nigh J at 76,669 stated:
“Normally the Court will distribute amongst the parties the net value of their assets after deduction of all debts. But this is not invariably the case: the Court will not normally take account of debts incurred after separation and on some occasions has ignored debts, although incurred during the marriage for which it felt one of the parties should bear exclusive responsibility: Antmann v Antmann (1980) FLC 90-908. Needless to say, a debt due does not diminish the property of the parties until it is paid or execution is levied. Nor, as has been pointed out earlier, is there anything in the decision of the High Court in Ascot Investments Pty Ltd v Harper & Harper to suggest that this Court cannot make an order dividing the assets of the parties because such a division might hamper a third party in his or her chances of the recovery of a debt.”
7. This position was also endorsed by the Full Court in Biltoft and Biltoft (1995) FLC 92-614 at 82,124.