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Property – husband appointed co-director of corporate trustee but fails in application for removal of wife as director

In Crawford [2021] FamCA 15 (29 January 2021) Berman J allowed a husband’s interim application to be made a director of G Pty Ltd, which was a corporate trustee of a family trust and owned land associated with the husband’s family’s business operations.

The husband sought orders compelling the removal of the wife as director, arguing that the company required finance for the development of the real property it owned so as to sustain business operations, which would ordinarily be sourced from his father, but where his father had refused to assist financially so long as the wife participated in the business structure.

The wife consented to the appointment of the husband as co-director, but opposed her removal as director. The wife also sought that she be appointed as co-director of another corporate trustee, V Pty Ltd, which owned shares in the family business.

The court said (from [48]):

“[The husband’s father] … considers that G Pty Ltd would not be able to obtain commercial finance whilst the wife remains in control [and further] … considers that the finance arrangements would in any event be unsuccessful unless he was prepared to commit $1 million in support of the finance application. He is not prepared to do so whilst the wife remains involved.

[51] There has not been evidence presented that would support the financial viability and implication for [the business] … and therefore the husband’s direct and indirect interest in same.

[52] There is potential merit in the position adopted by each of the parties. In the absence of evidence the Court has no ability to determine, whether if orders are made as sought by the husband, they will have the effect of preserving the value of the assets of the parties.

[53] I do not ignore the potential for difficulty to be created … [difficulties for the business] in the absence of a suitable business venue development (…)

[55] I accept that at this stage there is not sufficient evidence that would enable the Court to make an informed decision and on that basis whilst I consider there is merit in the husband becoming a co-director of G Pty Ltd, I am not prepared to order the wife’s removal as a director …”

The parties were directed to appoint the husband as co-director of G Pty Ltd and also directed to appoint the wife as co-director of V Pty Ltd.

Craig Nicol is the editor of The Family Law Book and Keleigh Robinson is the co-editor. Both are Accredited Specialists in family law (Queensland and Victoria, respectively). The Family Law Book is a one-volume loose-leaf and online family law service (thefamilylawbook.com.au).

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