Carmelo Dimarti v Danielle Dimarti as Administratrix of the Estate of the Late Antonio Dimarti

Carmelo Dimarti commenced proceedings against Danielle Dimarti, as the administratrix of the estate of the late Antonio Dimarti, and others, seeking an order that the share register of the fourth cross-defendant be rectified to reflect the correct share ownership. The crux of the dispute was whether the first cross-defendant had entered into an agreement under duress, whether the brother of the first cross-defendant had transferred his shares, and whether the second cross-defendant held half of the shares on trust for the brother of the first cross-defendant. The Federal Circuit and Family Court of Australia was tasked with determining these issues.

The primary legal issues before the court were whether the agreement was entered into under duress, whether the brother of the first cross-defendant had effectively transferred his shares, and whether the second cross-defendant held the shares on constructive trust for the brother of the first cross-defendant. The court needed to examine the circumstances surrounding the agreement, the validity of the transfer of shares, and the nature of the second cross-defendant's interest in the shares.

The court found that the first cross-defendant had not entered into the agreement under duress, as evidenced by his subsequent actions to enforce the agreement. The court also determined that the brother of the first cross-defendant had not transferred his shares, and that passive shareholders do not lose their rights by not asserting any interest in their shares. The court doubted the proposition that a member of a company could cease to be entitled to shares by abandonment. Finally, the court held that the second cross-defendant had held half of the shares on constructive trust for the brother of the first cross-defendant, as she became the registered holder either by a forged transfer or without a transfer, had actual notice of the brother’s interest, and did not acquire the shares for value. Therefore, the cross-claimant was entitled to have the share register rectified.

The court ordered that the share register of the fourth cross-defendant be rectified to record the cross-claimant as the holder of half of the shares in the company.