Giacobetti & Giacobetti
[2025] FedCFamC1F 319
•19 May 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Giacobetti & Giacobetti [2025] FedCFamC1F 319
File number: SYC 6643 of 2024 Judgment of: BOYLE J Date of judgment: 19 May 2025 Catchwords: FAMILY LAW – PROPERTY – Application pursuant to s 79A(1)(b) and (c) of the Family Law Act 1975 (Cth) to set aside final orders – Grounds not made out – Where principles of estoppel apply – Application dismissed Legislation: Family Law Act 1975 (Cth) ss 79, 79A, 81 Cases cited: Cawthorn & Cawthorn (1998) 23 Fam LR 86
CDK & Ors v AMA [2009] QSC 190
Clayton v Bant [2020] HCA 44; 272 CLR 1
Giacobetti & Giacobetti (No 4) [2024] FedCFamC1F 43
Giacobetti & Giacobetti (No 5) [2024] FedCFamC1F 379
La Rocca & La Rocca (1991) FLC 92-222
Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507
Division: Division 1 First Instance Number of paragraphs: 44 Date of hearing: 12 May 2025 Place: Sydney Counsel for the Applicant: Mr Dura SC with Ms Reid Solicitor for the Applicant: Thurlows Family Lawyers Counsel for the First and Second Respondents: Mr Othen SC Solicitor for the First and Second Respondents: Newnhams Solicitors Counsel for the Third Respondent: Mr Young Solicitor for the Third Respondent: Hegarty Legal ORDERS
SYC 6643 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS GIACOBETTI
Applicant
AND: MR GIACOBETTI
First Respondent
GIACOBETTI INVESTMENTS PTY LTD
Second Respondent
L HOLDINGS PTY LTD
Third Respondent
ORDER MADE BY:
BOYLE J
DATE OF ORDER:
19 MAY 2025
THE COURT ORDERS THAT:
1.The Wife’s Initiating Application filed 27 August 2024 is dismissed.
2.All outstanding applications are dismissed and the proceedings are removed from the list of matters awaiting finalisation.
3.Any application for costs shall be made within 14 days of today’s date along with brief written submissions in support, and any Response shall be filed within 7 days thereafter.
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.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BOYLE J:
The wife applies under section 79A(1)(b) and (c) of the Family Law Act 1975 (Cth) (“the Act”) to set aside orders made pursuant to section 79 of the Act. The Application is opposed by the husband and the Second and Third Respondents.
The property application was determined by Justice Curran on 6 February 2024 after a four-day hearing. The parties in that application were the husband and the wife.
Subsequent to the hearing before Justice Curran, the wife made an Application under the slip rule to vary the prior orders. That Application was unsuccessful.
For the reasons set out below I do not propose granting the Application sought by the wife.
DOCUMENTS RELIED UPON
I have Case Outline Documents which list the documents relied on. The affidavits are read with the attached annexures.
I have by consent before me the two Judgments of Justice Curran dated 6 February 2024 and 4 June 2024.
By agreement the matter was conducted on the basis of submissions.
BACKGROUND
The parties married in 1995. Separation occurred in April/May 2021.
In 2004, B Pty Ltd was incorporated. It is an unlisted public company. B Pty Ltd is a research company, and the husband is one of six directors. Giacobetti Investments Pty Ltd ATF the Giacobetti Family Trust (“Giacobetti Investments”) acquired 24.72 per cent of the issued shares in B Pty Ltd.
The shares in B Pty Ltd are subject to a Specific Security Deed entered into by the husband on 24 July 2021, which was varied by deed on 29 September 2021. The Deed secures $461,667 against the whole of the Trust’s shareholding on behalf of L Holdings Pty Ltd (“L Holdings”). The wife was not aware of the Specific Security Deed nor the Deed of Acknowledgement of Debt, nor the Deed of Variation being executed at the dates of execution. She was aware of those documents prior to the final hearing.
L Holdings was not a party to the prior proceedings, nor was Giacobetti Investments.
At the time of the first hearing the Expert appointed as valuer of the B Pty Ltd shares referred to the difficulties in ascribing a value to the shares. At that time the shares held numbered 12,070,379, which it was agreed represent a 22.7 per cent interest in the company. She considered the value of B Pty Ltd on the basis of its net assets at 30 June 2023 as $235,349. She then considered a second scenario on an implied price per share based on a listing of share transfers on 4 December 2023. The difference between the two valuations was over $10 million.
Ultimately Her Honour took a two-pool approach where the first pool comprised the 12,070,379 shares with a value ranging between nil and $10,258,822. The pool also contained a liability of up to $461,667. The other assets and liabilities of the parties were dealt with in pool two.
Her Honour determined it was a just and equitable outcome for the wife to retain an interest in the shares of B Pty Ltd in circumstances where the parties made many and varied contributions during the course of the relationship. Her Honour noted, “if it comes to nought, they share in the loss and if as hoped it becomes a valuable asset, developed over many years during the marriage, then they share in the success of the endeavour” (Giacobetti & Giacobetti (No 4) [2024] FedCFamC1F 43 at [186]). Orders were made that the husband transfer 40 per cent of the shares held in B Pty Ltd, and the husband do all acts and things within his power to cause the share transfer to be registered. The transfer was ordered to occur within 14 days.
The wife signed a share transfer and forwarded it to the husband on 13 February 2024. The husband signed the transfer on 19 February 2024. On 19 February 2024, L Holdings transferred to itself the parcel of 12,070,379 shares held by Giacobetti Investments in B Pty Ltd. The Third Respondent did so pursuant to a power of attorney under clause 16.1 of the Specific Security Deed on the basis that Giacobetti Investments had committed an event of default under the Deed.
SUBPOENA TO B PTY LTD
The wife issued a subpoena for a broad category of financial records including business activity statements, balance sheets, tax returns for financial years 2023 and 2024 and details of the “[Product 1]” and any other patent lodged by B Pty Ltd. An objection to the subpoena was filed by the husband. This was dealt with prior to submissions.
Counsel for the wife advised at the outset of the subpoena argument that correspondence was received from the recipient of the subpoena that they could not produce documents until 30 May 2025. Nonetheless, access to the subpoenaed documents was sought.
The issue before me is confined to matters relevant to a determination of the threshold argument under section 79A(1)(b) and (c). I accept that this argument does not turn on what the value or financial position of B Pty Ltd might be. Were the threshold argument successful the financial position of B Pty Ltd would be relevant to the determination of the matter under section 79. The subpoena is struck out.
THE LAW
The grounds relied on by the wife under section 79A are:
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
…
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
The wife bears the onus of establishing that one of the grounds under section 79A has been met.
IMPRACTICABILITY – S 79A(1)(B)
This ground has been considered in a number of decisions. It was described by Kay J in La Rocca & La Rocca (1991) FLC 92-222 (“La Rocca”) at 78,538 as:
… akin to the application of the doctrine of frustration in contractual matters. What the Parliament is concerned with and what ought to be concerning the Court is the happening of events which cannot be reasonably foreseen, which will have the effect of causing an injustice to one of the parties if the happening of such events is not given effect to.
… circumstances that have arisen in which it becomes impracticable to carry out the orders are circumstances that could not reasonably have been contemplated and that in such circumstances, whilst impossibility is not the test and impracticability is, it may then become just and equitable to change the orders. The potential insolvency of one of the parties in the future is not such a matter, in my view. In every case before the Court property values may change, go up or down, business may flourish or not flourish, the vicissitudes of life may affect one of the parties.
Senior counsel for the wife referred to CDK & Ors v AMA [2009] QSC 190 (“CDK”) at [119], where the Supreme Court of Queensland in a single Judge decision took a different approach to the line of authority from La Rocca:
It seems to me that the Full Court of the Family Court has not determined … as a matter of law consequent on the proper construction of s 79A, that an event which was foreseeable cannot give rise to impracticability that would satisfy the test in s 79A(1)(b).
I am not bound to follow this decision. What was foreseeable at the time of the hearing in this matter is important. That is because there were options the wife could have taken to deal with that foreseeable issue, such as joining L Holdings, which she chose not to do.
The decision in La Rocca was approved by the Full Court in Cawthorn & Cawthorn (1998) 23 Fam LR 86 (“Cawthorn”) at 95:
In our view, it is important to preserve the dichotomy between maintenance orders which are variable as provided for in the Act and orders for settlement of property which are basically permanent in their nature. This concept has underpinned the Family Law Act from its inception. For that reason, we agree with the approach adopted by Kay J. that the provisions of s.79A should be construed strictly.
Section 79A(1)(b) requires that following final orders circumstances must arise which make the carrying out of the order impracticable. The Specific Security Deed was entered into in July 2021. The wife was on notice of the terms of the Deed throughout the proceeding, although it is conceded she was not aware at the time the Deed was entered. In correspondence with solicitors for the wife dated 3 November 2023, the solicitors for the Third Respondent advised:
Our client neither consents to nor opposes any orders of the Court in the proceedings to the effect that part of the shares held by [Giacobetti Investments Pty Ltd] ATF the [Giacobetti Family Trust] in the company [B Pty Ltd] be transferred to your client.
Our client otherwise reserves all its rights under the Specific Security Deed dated 24 July 2021, the Deed of Acknowledgement of Debt dated 24 July 2021 and the Deed of Variation dated 29 September 2021. This includes any rights which may arise upon there being an event of default under the Specific Security Deed.
This correspondence was received more than a month prior to the commencement of the final hearing on 15 December 2023. In written submissions relied on by the husband at the conclusion of that hearing, counsel noted the terms of the Specific Security Deed, including clause 5.1 which did not permit the trust to dispose of or cause or permit any person to acquire any interest in the shares without the prior written consent of L Holdings. I accept that L Holdings’ response to the wife, as set out above, could not be construed as consent. Amongst the range of options available in the event of default, demand could be made for payment in full of amounts owed under the Specific Security Deed, and a sale of the shares. It was explicit that making an order for transfer of the shares was a triggering event of default under the deed.
In Giacobetti & Giacobetti (No 5) [2024] FedCFamC1F 379, Justice Curran observed at [83]:
It was a forensic decision that neither party sought to join L Holdings. The parties were well on notice that the outcome might have been “mutually assured destruction” if there was not co-operation. The prospect was understood as was submitted at the final hearing by counsel for the wife:
It could be that the whole house of cards come falling down and that [L Holdings] takes advantage of the situation and effectively exercises his rights and takes all of the shares. That’s a possibility.
Leaving aside issues of estoppel which additionally arise, the content of the Deeds and the options available to L Holdings were known prior to the final hearing. The wife did not join L Holdings, for example, and seek to set aside the Deeds entered into. To suggest critically as does counsel for the wife, that the Third Respondent did not seek to be joined to these proceedings does not, in my view, make sense of the position of the Third Respondent. They had the remedies available to them pursuant to the Specific Security Deed. There was no need for them to participate in proceedings with the attendant expense involved. The way the wife chose to conduct the litigation was a matter for her including any application for joinder.
“Impracticable” was interpreted in La Rocca at 78,538 to mean “circumstances that have arisen in which it becomes impracticable to carry out the orders are circumstances that could not reasonably have been contemplated”. This approach was approved in Cawthorn. The actions taken by L Holdings are not outside what could reasonably have been contemplated, given they did not consent to the proposed orders sought by the wife, and reserved all rights in the event of default. The husband’s submissions make that possibility by L Holdings explicit.
The submission that Justice Curran’s observations that justice and equity could not be done without a transfer of the shares to the wife do not address the other aspect of the matter. That is, L Holdings has taken all the shares including those held by the husband. It demonstrates the sense of Justice Curran’s approach in placing the shares, and liability, in a separate pool. Neither party now has the benefit of the shares held in that pool. In considering the position of the parties as a whole, the liability remains, for which the husband is responsible. No issue has been taken about that on the husband’s behalf. I do not accept justice and equity would require the matter be re-litigated.
The wife took issue with the failure by the husband and the Third Respondent to effectively account for the difference between the 9,661,667 shares initially held by Giacobetti Investments, and the increase to 12,070,379 shares. It was argued that the shares that make up the difference were not part of the security for the loan and should not have been transferred by L Holdings to itself. There should therefore be shares available for distribution in the percentage indicated by Justice Curran.
Counsel for the husband pointed to the valuation of the shares relied on in the final hearing. The valuation was of 12,070,379 shares. There was a share subdivision of 1.28 shares for each share held on 1 May 2023. This was done to address liquidity issues in the company at an extraordinary general meeting later in May 2023. The details are set out in the Director’s Report for B Pty Ltd annexed to the wife’s affidavit relied on in these proceedings. This occurred prior to the hearing. It did not involve the issue of additional shares but rather a subdivision of existing shares. I accept that that did not affect the security of L Holdings over the whole of the parcel of the shares.
DEFAULT – S79A(1)(C)
The orders required the husband to transfer 40 per cent of the B Pty Ltd shares held by Giacobetti Investments to the wife. The evidence is that the wife forwarded to the husband a signed transfer on 13 February 2024. He signed the share transfer on 19 February 2024. This was the same date that the Third Respondent signed the transfer form to transfer to itself the entirety of the shares. In those circumstances the husband did not return the share transfer to the wife.
The wife argues the husband could have discharged the debt owed. He was not obliged to do so pursuant to the orders.
If these were matters the wife disputed, the husband was available and she could have cross-examined him. She did not do so.
I do not regard the wife as making out the ground of default pursuant to s 79A.
ESTOPPEL
The wife is seeking to relitigate issues already resolved by Curran J. Counsel for the Third Respondent raised that the principles of res judicata, issue estoppel and Anshun estoppel would prevent her from doing so. I agree.
The principal of finality to litigation in property proceedings is enshrined in the Act at s 81:
Duty of court to end financial relations
In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.
The High Court in Clayton v Bant [2020] HCA 44; 272 CLR 1 applied the principles set out in Tomlinson v Ramsey Food Processing Pty Ltd [2015] HCA 28; (2015) 256 CLR 507 at [20]:
An exercise of judicial power … involves “as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons”. The rendering of a final judgment in that way “quells” the controversy between those persons. The rights and obligations in controversy, as between those persons, cease to have an independent existence: they “merge” in that final judgment. That merger has long been treated in Australia as equating to “res judicata” in the strict sense.
L Holdings acted on the Specific Security Deed. The wife was on notice of the terms of the Deed, and was aware of that possibility during the hearing. The Deed was considered by Justice Curran in the original and slip rule Judgments as is obvious from the slip rule decision’s reference to “mutually assured destruction”, as quoted previously in these reasons. I accept these matters fall within res judicata.
The ground of issue estoppel is satisfied because the case was conducted on the basis that the parties knew of the terms of the Security Documents, including L Holdings’ rights of enforcement. This was part of the controversy determined by the decision of Justice Curran.
Had the wife wanted to set aside the Security Documents she could have sought to do so in the original hearing. The decision not to do so gives rise to Anshun estoppel. It would be unreasonable to permit the wife to now bring further proceedings as it “was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it” (Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589 at 602).
The wife made forensic decisions about the conduct of the earlier proceedings. She did not join L Holdings. She did not seek to set aside the Deeds. She did not appeal the original Judgment nor the slip rule Judgment. The orders she now seeks involve issues which were well within the scope the previous proceedings.
The Orders of Curran J are final. The grounds under section 79A have not been met. It would be contrary to the law and to established principles of estoppel for me to permit the wife’s Application.
I certify that the preceding forty-four (44) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Boyle. Associate:
Dated: 19 May 2025
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