Marion’s husband was jealous of her contact with work colleagues and pressured her to give up her nursing job. When she decided to run a small cleaning business, the coercive control escalated.
Marion’s husband insisted she not do paperwork at home and took control over the business finances. He controlled every aspect of her life, refusing to let her see a doctor for pain in her arms, insisting she take sedatives he provided. When Marion tried to sell the business, he sabotaged the sale by being abusive in front of potential buyers.
Marion escaped the relationship when she found out she was pregnant but found herself with a heap of debt. On an accountant’s advice, Marion and her husband were both company directors, but although jointly responsible, her husband disappeared and couldn’t be found by creditors.
Marion was left with nothing, went bankrupt and struggled to start her life again.
Reina owed almost $10 million in relation to an IT business run by her husband. Her husband forced her to sign to be a director of his company, right at a time the business was getting into financial trouble. Reina received no benefit from the business as her husband controlled her access to funds, and she was not involved in running the business. Her husband coerced her to sign, or forged her signature on director’s guarantees for loans, and unbeknown to her, was incurring debt that the business couldn’t pay. As a director, this meant that Reina could be prosecuted for the business trading while insolvent. With the assistance of a specialist family violence financial counsellor, and pro-bono legal help, she has been released from liability of about $8.2 million of the debt fraudulently obtained by her husband, but Reina continues to battle with liquidators, creditors, and the tax office.
Financial abuse is a common form of family violence, and most women who seek help from family violence services have experienced it. Victim survivors can struggle to re-establish themselves due to the financial impacts, which are even more complex when company directorships and business debts are added to the mix. Perpetrators of family violence often set up complex webs of companies to hide assets from their partners in anticipation of Family Court proceedings.
In addition to massive debt obligations, company directors who breach their obligations can receive significant civil or criminal penalties.
Advocates want to see more awareness of the impacts of family violence by liquidators and the Australian Securities and Investments Commission, when considering whether to prosecute a director for insolvent trading or other offences. Advocates argue that defences to some breaches of director obligations should be broadened to recognise family violence, separately to illness, as a reason a director may not have been able to meet their legal responsibilities.
Advocates claim that the Australian Taxation Office should be more alert to the impact of family violence, and like many financial services businesses, they should have staff who are specially trained to identify and respond to these cases when dealing with debt recovery or penalty notices.
We understand the importance of retaining the integrity of the system, but as the community better understands family violence and coercive control, the laws need to respond.
These cases are complex and time-consuming to untangle, and most people can’t get the help they need. Pro-bono lawyers and insolvency specialists provide some assistance, but we need better recognition of family violence in the system to prevent business debt being used as a weapon by perpetrators of family violence.
Names have been changed.