Bowen Buchbinder Vilensky

Archive for April, 2015

Getting a Divorce – What happens if She Empties the Joint Account?
Thursday, April 30th, 2015

Damien Bowen

By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

30 April 2015

A question that we family lawyers are often asked is: what happens if she empties the joint account and spends it? Does she have to give it back, or is it taken into account in some way?

When a couple separates, and emotions are often highly charged, their behaviour can be unpredictable.  What happens if she spends their money on a new car?  Or he spends it on a holiday with his new girlfriend?

First, a distinction can be made between money used to buy an asset, like a new car, versus money spent on a holiday.

In the case of the car, it is an asset to be included in the pool of matrimonial assets for division between the parties.  So no, the money hasn’t evaporated.

However, if the money is spent on a holiday with the new girlfriend, it’s gone. It is not available to for division between the parties.

What does a judge do? Can the cost of the holiday be  notionally added back to the pool of assets?  Unfortunately, there is no certain answer to that.

Up until 2012, a Family Court judge may have notionally “added back” to the matrimonial pool of assets the money spent on the holiday with the new girlfriend, treated it as an early distribution of assets and taken the money from the share the husband would otherwise have received.

But in 2012 the High Court in the case of Stanford and later in 2013 the Full Court of the Family Court in the case of Bevan dealt with the issue of (“add-backs”).

Instead of ruling that “add-backs’ should always be applied, what the Courts  said is that where the money has been spent, where an asset or property no longer exists, the judge must “take it into account” in arriving at a just and equitable outcome for both parties.  Family Court judges therefore have a wide discretion to take all the facts and circumstances of every case into account to arrive at a just and equitable outcome for both parties.

This stipulation that a judge “take it into account” introduces a level of uncertainty and unpredictability which generally did not exist previously.

The law changes constantly. Sometimes the changes bring certainty  and sometimes uncertainty. It is an unfortunate fact of life that the consequences of one party’s bad or unreasonable conduct cannot always be fairly recompensed in a settlement or court judgment.

What can we learn from this?    More than anything, that if you are considering separating, or if separation has occurred, get  prompt advice from a competent family lawyer.

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Why Liquidators Must be Independent – and Seen to be Independent
Tuesday, April 21st, 2015

Craig pic

By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

(with assistance from Henry Burke)

21 April 2014

Liquidators and administrators should be aware that they are required to be independent, and may be disqualified from that role even if they only appear not to be independent. In ASIC V Franklin [2014] FCFCA 85, which was a recent appeal by ASIC to the Full Court of the Federal Court, ASIC successfully applied to have three experienced insolvency professionals disqualified as liquidators for precisely this reason.


In early 2013, Walton Group engaged Mawson Group (“Mawson”), a business advisory and corporate restructuring firm, to assess its restructuring options.

In late September 2013, Walton Group sold off a significant part of its business to entities created in July and August 2013 and owned and/or directed by persons closely connected with Mawson. This business included construction contracts, intellectual property, business records, plant equipment and stock.

Shortly after these transactions had taken place, Mawson referred Walton Group to accounting firm Lawler Draper Dillon (“LDD”) to undertake a voluntary administration of the Walton Group. Mawson had commenced referring other insolvency work to LDD since about February 2012, and the revenue from this referral relationship comprised about $750,000 in the 2012/2013 financial years.

The Corporations Act requires the administrators of a company to give a ‘declaration of relevant relationships and indemnities’ (“DIRRI”) to creditors, which enables them to resolve at a first creditors’ meeting whether they wish to retain or replace the administrators over concerns of independence.

The LDD DIRRI document stated that “… [Walton Group was] referred by .. Mawson Group, who refers us insolvency type matters from time to time. Referrals from solicitors, business advisors and accountants are common place and do not impact on our independence in carrying out our function as administrators. Other than this, there are no other known relevant relationships …”.

LDD selected insolvency professionals Glenn Franklin, Stirling Horne and Jason Stone to undertake the voluntary administration of Walton Group. Mawson was influential in the selection process.

On 8 November 2013, the creditors resolved to undertake a voluntary liquidation of Walton Group. It was agreed by the administrators at least by 15 October 2013 that liquidation would require them as liquidators to investigate six of the pre-administration transactions and eight links between the parties to those transactions and Mawson. This was in order to ascertain whether they might have been voidable or uncommercial transactions.

On 16 December 2013, ASIC commenced to have Franklin, Horne and Stone removed as liquidators on the ground that there was a reasonable apprehension of bias of the liquidators.


The judge decided that a reasonable fair-minded observer might reasonably decide that because of the respondents’ interest in not jeopardising future income, they might not discharge their duties with independence and impartiality. The fact that Mawson influenced the selection of the administrators added to this concern.

On this basis, the judge held that the liquidators should be removed as liquidators of Walton Group.


 Insolvency practitioners should be careful when they consider the possible conflicts that might arise out of referral relationships. If there is even any appearance of bias in this relationship, they should consider seeking legal advice as to the possible impact that this relationship has on their ability to act independently during the insolvency process.

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