Cappelleri v Cappelleri (No 3) - [2023] VSC 485

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST

S CI 2017 00286

LEONIE CAPPELLERI (by her Litigation Guardian VINCENZO NICOLA CAPPELLERI)	First Plaintiff
VINCENZO NICOLA CAPPELLERI (as the Administrator of the Estate of FRANK CAPPELLERI, deceased)	Second Plaintiff
VINCENZO NICOLA CAPPELLERI	Third Plaintiff
v
DOMENICO CAPPELLERI	First Defendant
MARIO CAPPELLERI	Second Defendant
F & L PTY LTD (ACN 006187873)	Third Defendant
REGISTRAR OF TITLES	Fourth Defendant

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JUDGE:	Moore J
WHERE HELD:	Melbourne
DATE OF HEARING:	24 – 25 November 2022; written submissions filed 2 December and 9 December 2022
DATE OF JUDGMENT:	16 August 2023
CASE MAY BE CITED AS:	Cappelleri v Cappelleri (No 3)
MEDIUM NEUTRAL CITATION:	[2023] VSC 485

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COMPANIES – Share transfers – Where plaintiffs seek declaratory relief in respect of purported historical share transfers by deceased former director of company – Where plaintiffs seek rectification of ASIC register – Where shares alleged to have been transferred without knowledge of shareholders – Whether purported share transfers effective – Whether first plaintiff held share on trust for deceased – Whether plaintiffs claim statute barred – Held purported share transfers ineffective – Held first plaintiff has beneficial entitlement to share – Held plaintiffs’ claim not statute barred – Milroy v Lord (1862) 4 De G. F. & J. 264; Anning v Anning (1907) 4 CLR 1049; Waltons Store (Interstate) Ltd v Maher (1988) 164 CLR 387; Orr v Ford (1989) 167 CLR 316 ; Corin v Patton (1990) 169 CLR 540 ; Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388; Director of Consumer Affairs Victoria v Mecon Insurance Pty Ltd [2016] VSC 42; Waddington v State of Victoria & Ors [2018] VSC 746 – Limitation of Actions Act 1958, ss 5(1)(a) and 21 – Supreme Court Act 1986, s 36 – Corporations Act 2001 (Cth), ss 9, 231, 1070A(1)(b)(i), 1070C, 1071B and 1322(4)(b) – Corporations Regulations 2001 (Cth), pt 7.11 – Supreme Court (General Civil Procedure) Rules 2015, r 23.05.

COMPANIES – Directorships – Where plaintiffs seek declaratory relief in respect of historical changes in directorship actioned by deceased former director of company – Where defendants allege first plaintiff acquiesced to her removal as director – Held first plaintiff’s removal as director invalid – Ambridge Investments Pty Ltd v Baker & Ors [2010] VSC 59.

LOAN – Where plaintiffs allege funds paid by deceased to first defendant were by way of a loan – Where first defendant alleges such funds were a gift – Held funds advanced as gift to first defendant – Heydon v The Perpetual Executors Trustees & Agency Co (WA) Ltd (1930) 45 CLR 111.

EQUITY AND TRUSTS – Where plaintiffs allege company property held on resulting trust for deceased and first plaintiff – Where deceased made financial contributions to properties – Where first plaintiff made no financial contribution other than guarantee – Held company property held on trust for deceased…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] VSC 485
Decision Date: 16 August 2023

CaseChat Overview and Summary

In the case of Cappelleri v Cappelleri (No 3), the plaintiffs sought relief in relation to a series of complex transactions involving the deceased's shares in a company, as well as the validity of his removal as a director. The matter was heard in the Supreme Court of Victoria. The plaintiffs, who were the deceased's daughters, sought a declaration that share transfers were ineffective, sought rectification of the Australian Securities and Investments Commission (ASIC) register, and contended that the company property was held on trust for the deceased and themselves. The defendants, the deceased's widow and their son, contested the claims.

The court was required to determine the validity of purported historical share transfers by the deceased, whether the first plaintiff held shares on trust for the deceased, and whether the plaintiffs' claims were statute-barred. The court also needed to ascertain whether the deceased had validly removed the first plaintiff as a director and whether funds advanced to the first defendant were a gift or a loan.

The court found that the purported share transfers were ineffective as they did not comply with the statutory requirements under the Corporations Act 2001. The court held that the first plaintiff had a beneficial entitlement to the share, which had not been transferred. The court also found that the first plaintiff's removal as a director was invalid and that the funds advanced to the first defendant were a gift. Finally, the court determined that the plaintiffs' claims were not statute-barred.

The court ordered that the ASIC register be rectified to reflect the correct share ownership, and that the company property be held on trust for the deceased and the first plaintiff pursuant to a purchase money trust.

Orders