HUSBAND SEEKS TRANSFER OF INSOLVENCY TRADING PROCEEDING TO THE FAMILY COURT
Shepard, in the matter of Grainpro Pty Ltd (in liq) v Bonfante [2020] FCA 1618 (9 November 2020)
This case is an application for transfer of insolvency trading proceeding to the Family Court of Australia on the ground that it is a matrimonial cause.
Facts:
Grainpro was incorporated on 16 November 2007. At that time Angela Gail Hawke (who later married Dr Bonfante and who I will refer to in these reasons as Mrs Bonfante) was the sole director and secretary of Grainpro.
On 16 June 2016 Dr Bonfante was appointed as a director and a secretary of Grainpro. Since 18 December 2017 Dr Bonfante has been the sole director and secretary of Grainpro. Mrs Bonfante’s continued role in Grainpro after she resigned as a director and secretary and the circumstances in which Dr Bonfante says she was subsequently dismissed as an employee of Grainpro.
On 28 February 2019 Mrs Bonfante as applicant commenced proceeding in the Family Court against Dr Bonfante as respondent. According to Dr Bonfante, in that proceeding Mrs Bonfante seeks orders for a property settlement and the following relief in relation to Grainpro.
Adam Shepard in his capacity as liquidator of Grainpro Pty Ltd (in liquidation) (Liquidator) and Grainpro Pty Ltd (in liquidation) (Grainpro) as first and second plaintiffs respectively commenced this proceeding against Mario Bonfante as defendant seeking declarations and orders pursuant to ss.180, 181, 588G, 588M and 1317H of the Corporations Act 2001 and, in the alternative, an order for equitable compensation or damages at common law (Insolvent Trading Proceeding).
Dr Bonfante filed an interlocutory application seeking an order pursuant to s.1337H of the Corporations Act that the Insolvent Trading Proceeding be transferred to the Family Court of Australia (Family Court). Dr Bonfante in fact brings his application for transfer of this proceeding to the Family Court on two bases: first, on the basis that the insolvent trading claim made in this proceeding is a matrimonial cause such that this Court has no jurisdiction to hear it; and secondly, in the alternative, on the basis that in the interests of justice the Insolvent Trading Proceeding should be transferred to the Family Court pursuant to s.1337H of the Corporations Act.
Issue: Should the insolvent trading be transferred to the family court?
Law:
- Corporations Act 2001 ss 1337C(1), 1337H(2), 1337L, 1337R(a)
Analysis:
While the court accepts the plaintiffs’ submission that the only matter that the Liquidator has raised for determination in the Family Court Proceeding concerns the Loan Claims, that factor is not conclusive of whether, having regard to the interests of justice, it is more appropriate for the Insolvent Trading Proceeding to be determined by the Family Court.
First, the Family Court has jurisdiction to determine all of the issues raised by the parties. That is, the claims made under the Corporations Act in the Insolvent Trading Proceeding as well as the claims made in the Family Law Proceeding.
Secondly, the potential burden and expense to all parties should be considered in assessing whether a proceeding should be transferred.
Thirdly, a transfer of the Insolvent Trading Proceeding will save unnecessary duplication of costs and valuable judicial and other public and private resources
Fourthly, the transfer of the Insolvent Trading Proceeding to the Family Court will guard against the risk of two courts determining the same or similar factual issues and thus avoid any potential Anshun or issue estoppel considerations arising against the parties to the two proceedings.
Fifthly, the evidence before me as to when the Insolvent Trading Proceeding and the Family Court Proceeding may be heard is inconclusive and their relative states of readiness for hearing do not persuade me that an order for transfer should not be made.
Conclusion: Pursuant to s1337H(2) of the Corporations Act 2001, this proceeding be transferred to the Family Court of Australia.
