Delistefano and Delistefano and Ors

[2015] FamCA 564

FAMILY COURT OF AUSTRALIA

DELISTEFANO & DELISTEFANO & ORS [2015] FamCA 564

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the wife sought an injunction that the husband be restrained from removing her from the unit in which she resides – Where the unit is trust property and the husband’s sister is director of the trustee company and its sole shareholder – Where the trustee company seeks that the wife vacate the unit – Whether the husband exerts control over said company – Where the Court is not satisfied he does – Where the Court also declines to  make orders for an interim lump sum payment – Application dismissed – Wife ordered to vacate the property within twenty-one days.   

Family Law Act 1975 (Cth)

APPLICANT: Ms Delistefano

1^ST RESPONDENT: Mr Delistefano

2^ND RESPONDENT: Ms Totti

3^RD RESPONDENT: B Pty Ltd

FILE NUMBER: SYC 1660 of 2015

DATE DELIVERED: 20 July 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 6 July 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Blank

SOLICITOR FOR THE APPLICANT: KP Lawyers & Barristers

SOLICITOR FOR THE 1^ST RESPONDENT: Ms Santo

SOLICITORS FOR THE 1^ST RESPONDENT: Gayle Meredith & Associates

COUNSEL FOR THE 2^ND & 3^RD RESPONDENTS: Mr Schonell SC

SOLICITOR FOR THE 2^ND & 3^RD RESPONDENTS Karras Partners Lawyers

Orders

1. That paragraphs 4 and 5 of the wife’s Application in a Case filed on 17 March 2015 are dismissed.

2. That the wife:

   (a)vacate the property C Street, Suburb D in the State of New South Wales within 21 days of the date of these orders

   (b)leave the property C Street, Suburb D in good order and condition upon her vacation of the premises.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Delistefano & Delistefano & Ors has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1660  of 2015

Ms Delistefano

Applicant

And

Mr Delistefano

1^st Respondent

And

Ms Totti

2^nd Respondent

And

B Pty Ltd ACN …

3^rd Respondent

REASONS FOR JUDGMENT

The Proceedings

1. By an Application in a Case filed on 17 March 2015, Ms Delistefano

   
   

   (“the wife”) sought several orders of an interim financial and injunctive nature.  At the interim hearing on 6 July 2015, the wife seemed to press for orders in terms of paragraphs 4 and 5, which read as follows:

   4.Upon the Applicant given an undertaking as to damages to pay such damages as she may be ordered to pay by the Court in respect of any loss suffered by the Respondents as a consequence of any injunctions made by the Court:

   (a)Pending further Orders, the Husband (First Respondent) and/or Third Respondent be restrained from taking any steps to remove the Applicant from the property at [C Street]

   (b)Pending further Orders the Husband himself and any agent or entity which he controls, be restrained from disposing of, removing, encumbering or otherwise dealing with any property of the parties or either of them, including but not limited to, real estate, businesses, shares, motor vehicles, furnishings, chattels and moneys held at any financial institution, other than in the usual course of business or with the prior written consent of the Applicant.

   (c)Until further Orders the husband be restrained and an injunction be granted restraining him from doing any act or thing or giving any direction other than with the agreement of the wife which might have the effect of:

   (i)Altering any of the rights of any existing shareholders in any company of which he is or was a member or in which he holds a beneficial interest;

   (ii)Altering the constitution of any company in which he is or was a member or which he controls;

   (iii)Issuing any new shares in any capital of any company of which he was a member or in which he has an interest.

   5.Within 14 days of making these Orders the husband to pay the wife the sum of $50,000.00 which sum is to be characterised in either of the following ways:

   (a)As an Order for the interim provision of litigation expenses pursuant to:

   (i)Section 117 of the Family Law Act (FLA); and/or

   (ii)Section 74 of the FLA.

   (b)By the Trial Judge upon the Court noting the power under Section 79 of the FLA in conjunction with Section 81(h); or

   (c)As and by way of an interim property settlement pursuant to Section 79 of the FLA in conjunction with Section 80(1)(h).”

1. The respondents to the Application in a Case were Mr Delistefano

   
   

   (“the husband”), his sister Ms Totti (“the 2^nd respondent”) and a company known as B Pty Ltd.  The husband sought a dismissal of the wife’s application and the 2^nd and 3^rd respondents sought orders to the effect that the wife vacate a home unit property at C Street, Suburb D (“the Suburb D property”).

Background

1. The husband and the wife, who are aged 51 and 34 respectively, began a relationship in late 2012/early 2013.  They married and began to live together in 2013.  Separation occurred in January 2015 or 18 February 2015 according to the wife and the husband respectively.

2. The parties have one child, B, who was born in 2013 and is aged approximately one-and-a-half years.  B lives with the mother in the Suburb D property.  The wife has a 13 year-old daughter, D, from a previous marriage.  D lives with the wife and B in the Suburb D property.

3. The registered proprietor of the Suburb D property is the company B Pty Ltd.  The current directors are the husband and the 2^nd respondent, with the latter holding the only issued share.  The wife was previously the holder of this share and a director of the company between 2 May 2014 and 13 February 2015.

4. Following their marriage, the parties lived in rented premises at E Street, Suburb F until March/April 2014.  They then moved into the home of the husband’s father at G Street, Suburb F.  In November/December 2014, they moved into the Suburb D property.  The wife changed the locks and excluded the husband from the premises on 18 February 2015.

5. It is necessary to record some of the history of corporate and trust entities held by the husband’s family for present purposes.  Initially, on 19 January 2001, a company known as H Pty Ltd was incorporated and subsequently acquired real estate at C Street, Suburb D.

6. On 21 October 2004 a trust known as the J Trust was established with the 2^nd respondent as appointor, trustee and principal beneficiary.  The trustee acquired all shares in H Pty Ltd and the trust thus became beneficially entitled to the Suburb D properties.

7. The J Trust changed its name to the K Trust on 29 November 2006.  On 9 September 2013 the 2^nd respondent, as appointor, caused the husband to replace her as trustee in circumstances where she was suffering from health problems.  She replaced the husband as trustee on 13 February 2015.

8. The company B Pty Ltd was incorporated on 2 May 2014, with the husband and wife as directors and the latter the holder of the only issued share.  As noted, the current directors are the husband and the 2^nd respondent and the latter now holds the only issued share.

9. On 13 February 2015, the 2^nd respondent exercised her powers as sole shareholder to remove the wife as a director of B Pty Ltd.  According to the husband, he “as the retiring trustee signed on behalf of the [K Trust] a transfer of shares in [B Pty Ltd] which was registered in the name of [Ms Delistefano] as bare nominee for the trustee of the [K Trust]”.  There was no evidence that the wife ever executed an acknowledgment that she held the share as a bare nominee for the trustee of the K Trust.

10. The company H Pty Ltd was placed into voluntary administration on 8 January 2015.  In 2012, this company had entered into a joint venture agreement for development of the Suburb D properties.  The joint venture entities were unrelated to the parties in these proceedings.

11. On 23 June 2014, units 1 and 2 of the Suburb D development were sold to B Pty Ltd.  The husband maintained that this company acquired the home units because H Pty Ltd was heading toward insolvency.

12. The L Super Fund was established on 1 July 2014 with B Pty Ltd as trustee.  The only members of the fund were the husband and wife.  According to the husband, the K Trust paid a sum of $538,890 into the superannuation fund “in consideration for work that I did in relation to the [Suburb D] development without payment to me.”

13. Mr M, who acts as accountant for the husband, the 2^nd respondent and various corporate entities, deposed to errors made by his assistant during the incorporation of the company B Pty Ltd.  He deposed that a document was incorrectly completed, with the result that the wife was shown as the beneficial owner of her share in B Holdings Pty Ltd, rather than trustee for the K Trust.  Mr M deposed that he advised the husband against any involvement of the wife in this company.

14. The balance sheet of the K Trust, as at 30 June 2014, included as an asset one share in B Pty Ltd.  This share must be identical to that issued to the wife on the incorporation of the company on 2 May 2014.

Exclusive occupation of the Suburb D property

1. There may well be doubts as to the validity of the transfer of the wife’s share in B Pty Ltd to the 2^nd respondent.  As the situation presently stands, however, the 2^nd respondent holds that share and thus has sole control over the company.  She will retain that control unless and until the transfer transaction is set aside at some future stage in these proceedings.  The 2^nd respondent thus has an absolute right to deal with the Suburb D property as she sees fit.

2. The issue then is whether, as the wife asserted, the company is the alter ego of the husband and subject to his control.  The wife relied upon a number of matters which were said to support that proposition but I am not satisfied that the company is, in fact, subject to the control of the husband.

3. Mr M gave evidence that the husband told him that he wanted “to look good in front of [Ms Delistefano]” and that he asked “Can I make her a director and shareholder without taking away rights from the trust?”  That evidence does not sit comfortably with any intention, on the part of the husband, to endow the wife with beneficial interest in that share.  Mr M gave uncontradicted evidence to the effect that the wife should have been constituted the shareholder as trustee for the K Trust.

4. The wife relied on statements allegedly made by the husband since the parties’ separation: “The apartment is mine”.  The husband denied that he said these words and contended that he made this statement: “The apartment is not mine. My sister on behalf of her trust is just letting us stay there.  She can take the apartment away from us at any time”.  This alleged statement reflects with the position according to law.

5. The wife also relied on a text message from the husband on 28 March 2015 in the following terms:

   You have 48 hours’ notice.  On Monday the new owners of the Units will be attending with the Police and locksmith.  To repossess their property.  You better remove [B’s] and [D’s] things because after Monday.  You will be charged with trespassing if you attempt to change the lock.  I can stop this if you and I meet up to talk tomorrow anywhere …

   That message does not establish that the husband exercises sole control over the Suburb D property.

6. On behalf of the wife, submissions were made to the effect that there may have been breaches of the law in relation to self-managed superannuation funds.  I agree with the submission of senior counsel for the 2^nd and 3^rd respondents that this issue is irrelevant for present purposes.

7. I am not satisfied that the matters raised by the wife establish that the husband exerts control over the company B Pty Ltd. Accordingly I will dismiss that part of the wife’s application.  The 2^nd and 3^rd respondents agreed to allow the wife three weeks to vacate the property.

8. The husband indicated, during the course of the interim hearing, that he would be willing to make his apartment at Suburb N available for the exclusive use of the wife.  This proposition was rejected out of hand by the wife.  Nonetheless, this offer indicates that alternative accommodation is available to the wife.  There was also evidence that members of her family live in the vicinity of the Suburb D property.

Injunctions

1. The wife sought wide-ranging injunctions to restrain the husband from dealing with property of any nature and from making any changes to a corporate entity in which he holds an interest.  It was not clear to me what precise orders the wife actually sought and there was no attempt to identify assets and entities which may be affected, if that application were to be successful.  It could be that third parties may be affected, without their having been given notice of the wife’s application.  I am not prepared to make orders in accordance with paragraphs 4(b) and 4(c) of the wife’s Application in a Case, if in fact she sought that I do so.

Lump sum payment

1. The wife sought an order that the husband pay to her a sum of $50,000 as an interim distribution of property.  One problem with this application was that the wife was unable to point to any fund from which the husband could draw such a sum.  In his Financial Statement, the husband deposed that he has $1,937 in a bank account.

2. It was submitted on behalf of the wife that the husband could borrow $50,000 on the security of his apartment at Suburb N, which he suggested has an equity of approximately $477,000.  There was no evidence from which it can be concluded that course is in fact open to the husband, in terms of the willingness of the mortgagee to extend its loan or his capacity to make increased repayments.

3. Another concern with this part of the wife’s application is that the marriage was of approximately one and-a-half years’ during and there was no evidence as to the value of the net pool of property.  It is conceivable that a payment of $50,000 to the wife at this stage may create an irretrievable situation at final hearing.

4. For these reasons, I will not accede to the wife’s application for payment to her by the husband of a sum of $50,000.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 20 July 2015.

Associate:

Date:  20 July 2015