The de facto Husband sought orders to join a company to the family law proceedings and for the company to be restrained from continuing proceedings against him in the District Court. The application was rejected.
The relevant facts and considerations
- The parties were in a de facto relationship from 2011 until 2021.
- The de facto Wife was the sole director and shareholder of the company
- The company commenced proceedings in the District Court of New South Wales with Mr Bow as the defendant. Mr Bow was an employee of the company and unspecified damages were sought against him.
- Mr Bow sought for the company to be joined to the family law proceedings and be restrained from taking further steps in the District Court.
The outcome
The Court stated:
- The long standing principle that 'claims grounded solely in contract, tort, equity or some other form of non-martial relationship…are not likely to attract jurisdiction as matrimonial cause when the spouses’ marriage is purely coincidental to the dispute'.
- It was not persuaded to restrain the continuation of the District Court proceedings. These were not proceedings which 'arise out of the same sub-stratum of fact' or were 'with respect to the same controversy'. Further, the Court was not satisfied that the District Court proceedings were 'vexatious' or 'oppressive'.
- The Court drew attention to the difference in the relief sought in the two separate proceedings and issues of the employment contract, retainer and consent to transactions being key issues in the District Court proceedings, whereas the focus of the family law proceedings was whether it was just and equitable to alter the parties’ interests in property, their contributions and future needs.
- The District Court proceedings were well advanced and would likely be determined within a matter of months before the matter could be determined in the Family Law Court. The District Court proceedings would also determine whether there was a liability of the de facto husband to the company to be crystalised on the balance sheet.
Issues to note
- Issues about commercial law and family law often intersect. It is important the family law solicitors work in consultation with the commercial solicitors and financial advisers to properly assess the potential impacts of any such proceedings and/or whether steps should be taken for proceedings in the state Court to be transferred to the Family Law Courts.
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