Giacobbe v Giacobbe - [2012] VSC 285

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

COMMERCIAL COURT
CORPORATIONS LIST

No. SCI 2011 5191

IN THE MATTER of INON NOMINEES PTY LTD (ACN 005 076 317)

MICHELE GIACOBBE
JOSEPH GIACOBBE

Plaintiffs

ANTHONY GIACOBBE
INON NOMINEES PTY LTD

Defendants

---

JUDGE:	Ferguson J
WHERE HELD:	Melbourne
DATE OF HEARING:	25 June 2012
DATE OF JUDGMENT:	28 June 2012
CASE MAY BE CITED AS:	Giacobbe v Giacobbe & Anor
MEDIUM NEUTRAL CITATION:	[2012] VSC 285

---

CORPORATIONS – Winding up on just and equitable ground – Family trustee company - Deadlock between shareholders and beneficiaries of trust – Acrimonious relationship between two branches of family over 30 years – No ongoing business – Valuable land an asset but not generating income – Overdraft near limit - Corporations Act 2001 (Cth), s 461(1)(k).

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr T. Wodak	Pearsons Barristers & Solicitors
For the First Defendant	In person
For the Second Defendant	No appearance

TABLE OF CONTENTS

Introduction and parties................................................................................................................... 2

Should Inon be wound up on the ground that it is just and equitable?................................. 3

Conclusion........................................................................................................................................... 7

HER HONOUR:

Introduction and parties

Michele and Antonio Giacobbe are brothers. Michele is 86 years of age and Antonio is 91. In 1962, they went into business together, manufacturing and selling office furniture. They traded under the name “Giacobbe Bros.” In October 1974, a family trust was established and the furniture business became an asset of the trust. In essence, the beneficiaries of the trust are the two brothers and their respective family members, including Michele’s son, Joseph, and Antonio’s son, Anthony. Inon Nominees Pty Ltd was appointed as the trustee of the trust and was jointly controlled by the brothers.

In the early 1980s, Michele and Antonio fell out with one another. Since that time, there has been a bitter dispute between Michele and Joseph on the one hand and Antonio and Anthony on the other. Michele and Antonio have not seen or spoken to one another since 1991.

Despite this, the furniture business continued in operation until 2003, at which time it closed. The only remaining trust assets are three properties at Airport West which have been valued at more than $1 million.[1] The properties are not generating income. Inon has an overdraft liability of about $80,000 and ongoing liabilities of approximately $17,000 per year (which includes amounts for rates and taxes in relation to the properties). The trust no longer carries on any business.
[1]Herron Todd White provided a Court ordered valuation of the properties in January 2012. They valued the property at 25-27 Hawker Street, Airport West at $500,000, the property at 26 King Street, Airport West at $325,000 and the property at 28 King Street, Airport West at $325,000.

Fifty percent of the shares in Inon are held by Joseph with the remaining 50 percent held by Anthony.

Michele and Joseph want to bring an end to their financial relationship with Antonio and Joseph through the…

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.

Continue reading Giacobbe v Giacobbe

Details

AGLC: Giacobbe v Giacobbe [2012] VSC 285
Case: [2012] VSC 285
Decision Date: 28 June 2012

CaseChat Overview and Summary

The case of Giacobbe v Giacobbe involved a family dispute where the court was asked to consider whether the winding up of a company, a trustee for a family trust, was just and equitable. The primary parties involved were members of the Giacobbe family, divided over three decades by acrimony and mistrust. The company in question held valuable land but had ceased any active business operations and was operating at a significant loss, with an overdraft near its limit. The winding up was sought by some family members to address the deadlock and dysfunction within the family and the company's structure.

The central legal issue before the court was whether the conditions outlined in the Corporations Act 2001 (Cth) for a just and equitable winding up were met. Specifically, the court had to consider if the company's operations were so unfair to the applicants that it would be just to wind up the company. This involved examining the nature of the relationship between the shareholders and the beneficiaries, the cessation of the company's business activities, and the financial status of the company. The court also needed to determine whether the family's long-standing disputes and the company's financial position justified the dissolution of the company.

The court determined that the just and equitable ground for winding up was indeed satisfied. It recognised the prolonged and bitter family disputes that had led to a complete breakdown in the relationship between the shareholders and the beneficiaries. The court also noted the cessation of business activities and the company's financial difficulties, including the significant overdraft. Given the valuable but non-operational land asset and the family's dysfunctional relationship, the court concluded that the company should be wound up. The court's decision was influenced by the recognition that the company's existence was no longer serving any beneficial purpose for the shareholders or the beneficiaries, and that winding up was the fairest outcome given the circumstances.

The final orders of the court were to wind up the company on the just and equitable ground. The court directed that the assets, including the valuable land, be sold and the proceeds distributed according to the entitlements of the shareholders and beneficiaries. The winding up was intended to resolve the long-standing family disputes and to provide a resolution to the financial and operational impasse. The court's decision was definitive, aiming to bring closure to the family's conflicts and to address the financial and structural issues within the company.

Orders