A Hawkes Bay couple who jointly own a successful business are facing challenges following a Family Court proceeding. While the couple separated approximately three years ago there are lasting disputes which have placed their business operations in limbo.

The husband had filed proceedings in the High Court in an attempt to break the deadlock.

He had two main claims against his ex-wife:

·         Seeking the reversal of an unauthorised transfer of $620,000 from the company accounts by the wife; and

·         The wife’s refusal to uphold her Director duties such as signing financial statements, purchasing equipment, and agreeing to distributions of monies to carry out business.

The husband sought an expert valuation of the business which he hoped would assist him with purchasing the wife’s shares and paying outstanding debts, with any remaining funds to be divided upon resolution of dividing their relationship property.

The counter argument from the wife was that the dispute should solely be heard in the Family Court instead of the High Court, pointing out that the business in question was jointly owned and thus part of their relationship property.

The High Court found that in many circumstances, the Family Court did not have exclusive jurisdiction on all types of claims between spouses or partners, especially where claims related to oppressive shareholders and directorships of companies of the relationship- thereby falling into the jurisdiction of the High Court.

There have been longstanding challenges regarding the classification and division of relationship property whereby directorships and shareholdings of jointly-owned companies are involved, and whether such claims can be exclusively heard before the Family Court.

It is generally found that for claims of such nature, the High Court will be best placed to hear them.

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Shaun Cousins and Raiyan Azmi

 

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