Genesalio & Genesalio (No 5)

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Genesalio & Genesalio (No 5) [2024] FedCFamC1F 450

File number(s): MLC 7657 of 2018
Judgment of: JOHNS J
Date of judgment: 2 July 2024
Catchwords:

FAMILY LAW – PRACTICE AND PROCEDURE – property – where the wife seeks to file an amended Statement of Claim – where the respondents oppose the amendments – where the wife submits the amendments do not substantially alter the claim or materially change her case – where the wife submits the amendments arise out of the late disclosure by the respondents – where the husband submits there is no adequate reason for the amendments – where the second respondent challenges the substance of the wife’s pleadings – amendment permitted

FAMILY LAW – PRACTICE AND PROCEDURE – joinder – where the wife seeks to join entities in which the second respondent is the sole director and shareholder – where both respondents oppose the joinder –– where the entities are necessary parties – order for joinder

FAMILY LAW – PRACTICE AND PROCEDURE –summary dismissal – where the second respondent seeks the wife’s application be summarily dismissed – where the wife has a triable cause of action – where factual disputes exist between the parties as to their property interests – where it cannot be said the wife has no reasonable prospect of success
Legislation:

Family Law Act 1975 (Cth) ss 79, 79(10)(b), 102QAB(1), (2) & (3), 106B

Family Law Amendment Act2023, Schedule 5

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 56, 62, 67, 69

Federal Circuit and Family Court of Australia Rules 2021 (Cth) rr 6.23, 3.01, 3.03

High Court Rules 2004, r 27.04

Partnership Act 1958 (Vic)

Cases cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175;

Curtain & Curtain [2022] FedCFamC1A 134;

Genesalio & Genesalio [2023] FedCFamC1F 160;

Jordan & Sutton (No 2) [2022] FedCFamC1F 850;

Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251;

Lund & Whittall [2024] FedCFamC1F 271;

Mir v Mir [2023] NSWSC 408;

Mummery v Irvings Pty Ltd (1956) 96 CLR 99;

Palermo v Palermo [2015] WASCA 49;

Quincey & Quincey [2023] FedCFamC2F 791;

Ritter & Ritter and Anor (2020) FLC 93-957;

Trustee of the Bankrupt Estate of Nagarno & Talbert [2024] FedCFamC1F 19;

Wayne & Dillon & Anor [2008] FamCAFC 204

Division: Division 1 First Instance
Number of paragraphs: 97
Date of hearing: 17 May 2024
Place: Melbourne
Counsel for the Applicant: Dr Dinelli KC & Ms Frederico
Solicitor for the Applicant: Mazzeo Lawyers
Counsel for the First Respondent: Ms Sparke KC
Solicitor for the First Respondent: Matthew Oldham Barrister & Solicitor
Counsel for the Second Respondent: Mr Fray SC & Mr Fuller
Solicitor for the Second Respondent: Franzese & Associates

ORDERS

MLC 7657 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS GENESALIO

Applicant
AND:

MR GENESALIO

First Respondent

MR M…

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Details
Case
[2024] FedCFamC1F 450
Decision Date

CaseChat Overview and Summary

In the case of MLC 7657 of 2018, the Federal Circuit and Family Court of Australia (Division 1) was asked to decide several issues related to an application for amendments to a Statement of Claim and the joinder of additional parties in a family law proceeding. The wife sought to file an amended Statement of Claim and join certain entities in which the second respondent was the sole director and shareholder. The respondents opposed both the amendments and the joinder of the entities.

The central legal issues before the court were whether the wife's proposed amendments to the Statement of Claim should be permitted, given the late disclosure by the respondents, and whether the entities in question should be joined as parties to the proceedings. The court considered the arguments presented by both parties, including the wife's contention that the amendments were necessary due to the respondents' failure to comply with disclosure orders, and the respondents' opposition on the grounds that there was no adequate reason for the amendments and that the wife had no reasonable prospect of success.

The court held that the wife's proposed amendments did not substantially alter the claims made in her original Statement of Claim. The amendments expanded on particulars and material facts but did not significantly change the nature of her claims. The court also found that the entities in question were necessary parties to the proceedings as their interests would be affected by the making of the orders sought by the parties. Therefore, the wife was granted leave to file an amended Statement of Claim, and the entities were ordered to be joined as respondents.

The court further found that there was a triable cause of action and that factual disputes existed between the parties regarding their property interests. Given these circumstances, the second respondent's application for summary dismissal was dismissed. The court's decision provided clarity on the procedural aspects of the case, setting the stage for a final hearing to resolve the substantive issues between the parties.

Orders

Orders of the court

MLC 7657 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS GENESALIO

Applicant

AND:

MR GENESALIO

First Respondent

MR M GENESALIO

Second Respondent

ORDER MADE BY:

JOHNS J

DATE OF ORDER:

2 JULY 2024

THE COURT ORDERS THAT:

1. That the wife have leave to file and serve the Amended Statement of Claim substantially in the form of Schedule A to the Application in a Proceeding filed 18 April 2024 by 4.00pm on 2 July 2024.

2. That N Pty Ltd be joined to the proceedings as the Third Respondent.

3. That E Pty Ltd be joined to the proceedings as the Fourth Respondent.

4. That AA Pty Ltd be joined to the proceedings as the Fifth Respondent.

5. That the Response to Application in a Proceeding filed by the First Respondent on 10 May 2024 be otherwise dismissed.

6. That the Response to Application in a Proceeding filed by the Second Respondent on 14 May 2024 be otherwise dismissed.

7. That paragraphs 1 to 10 and 14 to 26 inclusive of the wife's Application in a Proceeding filed 18 April 2024 be otherwise dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

Having regard to the decisions of both Palermo and Mir, I am satisfied that the position contended for by the wife, that is, that there is an overarching agreement between the husband and the second respondent, described in the original Statement of Claim and the proposed Amended Claim as the Genesalio Partnership Agreement, which provides for a sharing by them “in equal parts” of the wealth generated by the businesses and investments acquired by them and/or companies controlled by them, is arguable. The observations made by me in the judgment handed down on 26 April 2023 (Genesalio & Genesalio [2023] FedCFamC1F 160) continue to apply. There I stated as follows:-[113]As to the outcome of the wife’s claim, that will turn upon the testing of evidence at a final hearing. It is evident from the material filed by the parties that underpinning the wife’s claim is a complex factual matrix, involving a number of entities in which the husband and his brother have held or continue to hold office, and of which in relation to one of those entities, the husband is a specified beneficiary. As discussed in my determination of the original joinder application, the resolution of that dispute will only be achieved upon a testing of the evidence at final hearing. Conclusion The central issue in the case is whether there is an overarching partnership or agreement as between the husband and the second respondent, the effect of which is to give rise to the husband having interest in property otherwise held by the second respondent, or entities controlled by him. As is set out in the Amended Claim and also confirmed by Senior Counsel for the wife, she seeks declaratory relief in relation to the property and assets of the Genesalio Partnership Agreement in accordance with the terms of that “overarching agreement”. As earlier noted, that dispute can only be resolved upon the testing of evidence at trial. Senior Counsel for the wife submitted that the principles enunciated in Aon should not be used as a weapon to shut out amendment of pleadings in circumstances where the late amendment of pleadings is due to the second respondent’s failure to comply with orders of this Court for disclosure. I agree with and accept that submission. I also accept the submission made on behalf of the wife that there is no substantial alteration to the claims made by her as against the husband and the second respondent. The proposed amendments expand particulars and material facts relied upon by her but otherwise do not significantly alter the nature of her claims. Accordingly, I will make orders permitting the amendment of her Statement of Claim as sought. SHOULD THE PROPOSED FOURTH TO SIXTH RESPONDENTS BE JOINED? Section 79(10)(b) of the Family Law Act 1975 (Cth) (“the Act”) states that "any other person whose interests would be affected by the making of the order", as sought by the parties, are entitled to be joined as a party to the proceeding. Rule 3.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) ("the Rules") prescribes the procedure for joining a party to proceedings. That Rule provides as follows:-A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding.

Ratio Decidendi

Legal Principle Established

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