Giacobetti & Giacobetti (No 4)

Case [2024] FedCFamC1F 43

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Giacobetti & Giacobetti (No 4) [2024] FedCFamC1F 43

File number(s): SYC 5998 of 2021
Judgment of: CURRAN J
Date of judgment: 6 February 2024
Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Final hearing – Where the parties were married for 26 years – Where the husband has significantly greater earning capacity – Where the husband has ongoing health issues – Where the husband’s working capacity is reduced – Where the parties share the care of their son equally – Contributions – Whether funds advanced by the wife’s parents are contributions – Where the husband has been paying spouse maintenance to the wife – Where the husband contends he has a contingent liability The value of motor vehicles – The valuation of shares in a company of which the husband is a director – Where no value is able to be determined – Where the justice and equity requires the transfer of the shares – Where a two pools approach is appropriate – Consideration of s 81 of the Act – Where contributions are equal – Where five per cent adjustment to be made in favour of the wife following consideration of s 75(2) factors
Legislation:

Family Law Act 1975 (Cth) ss 75, 79, 81

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.06

Cases cited:

Black & Kellner (1992) FLC 92-2872

Briese and Briese (1986) FLC 91-713

Commonwealth v Milledge (1953) 90 CLR 157

Giacobetti & Giacobetti(No 3) [2023] FedCFamC1F 1126

Gibbs & Gibbs [2023] FedCFamC1A 37

Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006

In the Marriage of Hickey (2003) 30 Fam LR 355

In the Marriage of Mallet (1984) 156 CLR 605

Kannis & Kannis [2002] FamCA 1150

Little & Little (1990) FLC 92-147

Norbis & Norbis (1986) 161 CLR 513

Stanford v Stanford (2012) 247 CLR 108

Weir & Weir (1993) FLC 92-338

Y & Y [2004] FamCA 799

Division: Division 1 First Instance
Number of paragraphs: 253
Date of hearing: 15, 18-20 December
Place: Sydney
Counsel for the Applicant: Mr Harper
Solicitor for the Applicant: Uther Webster & Evans
Counsel for the Respondent: Mr Othen
Solicitor for the Respondent: Newnhams Solicitors

ORDERS

SYC 5998 of 2021

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

MS GIACOBETTI

Applicant
AND:

MR GIACOBETTI

Respondent

ORDER MADE BY:

CURRAN J

DATE OF ORDER:

6 FEBRUARY 2024

THE COURT ORDERS THAT:

Ownership of Assets and Liabilities

1.Ms Giacobetti (hereinafter referred to as “the wife”) be declared the sole owner in law and equity in:

(a)All bank accounts in her name;

(b)Motor Vehicle 1;

(c)The proceeds held in the Controlled Monies Account in the name of Newnhams Solicitors and Uther Webster & Evans Solicitors and

(d)Her superannuation interest.

2.Mr Giacobetti (hereinafter referred to as “the husband”) be declared the sole owner in law and equity in:

(a)All bank accounts in his name;

(b)Motor Vehicle 2;

(c)One third share in real property…

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Giacobetti & Giacobetti (No 4) [2024] FedCFamC1F 43
Case
[2024] FedCFamC1F 43
Decision Date

CaseChat Overview and Summary

The case of Giacobetti & Giacobetti (No 4) involved a protracted and complex property settlement hearing, where the parties had been married for 26 years and had three children together. The primary issue was the equitable division of the matrimonial assets, including shares in a company, motor vehicles, and the valuation of various properties. Additionally, the court had to determine whether certain funds provided by the wife's parents constituted contributions or repayable debts. Another central issue was the non-disclosure by the husband of certain share transfers made in breach of a court order. The court was also tasked with deciding the appropriate date of separation between the parties.

The court examined the nature of the contributions made by each party over the course of the marriage, taking into account both financial and non-financial contributions. The wife had provided evidence of funds advanced by her parents for various expenses, which she sought to have recognised as contributions. The court acknowledged some of these as contributions but did not accept all the claims. The court assessed the contributions as equal, considering the husband's superior earning capacity and post-separation contributions. The court also found that the husband had breached a court order by failing to disclose certain share transfers, leading to a finding of non-disclosure.

The court ultimately ordered that the assets be divided between the parties in a manner it deemed just and equitable. The wife was declared the sole owner of certain assets, including bank accounts, a motor vehicle, and her superannuation interest. The husband retained ownership of other assets, including his superannuation interest and shares in a property. The court also ordered the transfer of shares in two companies, N Limited and B Pty Ltd, between the parties. Furthermore, the husband was ordered to make a payment to the wife to equalise the division of the non-shares pool of assets. The court also appointed a Registrar to enforce the orders if either party failed to comply.

In conclusion, the court's orders reflect a balanced approach to the division of the parties' assets, taking into account their contributions, the husband's superior earning capacity, and the need for a just and equitable outcome. The non-disclosure by the husband was noted, but the primary focus remained on achieving a fair division of the matrimonial property.

Orders

Orders of the court

SYC 5998 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS GIACOBETTI

Applicant

AND:

MR GIACOBETTI

Respondent

ORDER MADE BY:

CURRAN J

DATE OF ORDER:

6 FEBRUARY 2024

THE COURT ORDERS THAT:

Ownership of Assets and Liabilities

1. Ms Giacobetti (hereinafter referred to as “the wife”) be declared the sole owner in law and equity in:

(a) All bank accounts in her name;

(b) Motor Vehicle 1;

(c) The proceeds held in the Controlled Monies Account in the name of Newnhams Solicitors and Uther Webster & Evans Solicitors and

(d) Her superannuation interest.

2. Mr Giacobetti (hereinafter referred to as “the husband”) be declared the sole owner in law and equity in:

(a) All bank accounts in his name;

(b) Motor Vehicle 2;

(c) One third share in real property at F Street, Town G NSW;

(d) Motor Vehicle 3;

(e) Motor Vehicle 4;

(f) Motor Vehicle 5;

(g) Motor Vehicle 6; and

(h) His superannuation interest.

3. Except as otherwise provided for by these orders, the husband and the wife:

(a) Be solely, legally, and beneficially entitled to the exclusion of the other party, to all other real and personal property and superannuation of whatsoever nature and kind as is in their respective ownership, possession and/or control as at the date of these orders; and

(b) Be and remain liable for any debts in his or her own name at the date of these orders and in this respect indemnify and hold harmless the other from any liability in relation thereto.

Transfers

4. The wife transfer to the husband 50% of the shares held in N Limited within 14 days.

5. The husband transfer to the wife 40% of the shares held in B Pty Ltd within 14 days.

6. The husband do all acts and things within his power to cause the share transfer pursuant to order 5 to be registered.

Adjusting Payment

7. Within 45 days of the date of these orders, the husband pay to the wife $514,566.20 to give effect to an overall division of 55% to the wife and 45% to the husband of the net value of pool two, as defined in these reasons for judgment as all property excluding the shares in B Pty Ltd and the attached liability to L Holdings.

Section 106A

8. In the event that either party refuses or neglects to do all acts and things and sign any document necessary to give effect to these Orders then pursuant to Section 106A of the Family Law Act 1975 (Cth) a Registry or a Deputy Registrar of the Federal Circuit and Family Court of Australia at Sydney is hereby appointed to execute all Deeds and documents in the name of the wife or the husband and do all acts and things necessary to give validity and operation to the said Orders.

Discharge

9. Order 5 made on 19 September 2023 and Order 2 made on 18 October 2021 be discharged.

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).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

Background

Background to the litigation

The matter was heard for four days commencing on 15 December 2023. BACKGROUND The husband was born in 1967 in the United Kingdom and was aged 56 at the time of the hearing. The wife was born in 1969 in Australia and was aged 54 at the time of the hearing. The husband is a health professional. He has suffered health issues which have reduced his capacity to work since about 2018. The wife was not in paid employment from approximately 2000 to early 2018, and currently works in administration earning approximately $59,000 per annum. The parties commenced cohabitation in late 1994 at the home of the wife’s parents and were married in 1995. There are three children of the marriage. The parties separated on a final basis in or around April or May 2021, the date of separation is not agreed. In 1995, the parties moved to the United Kingdom and resided there at the home of the husband’s parents for nearly three years, during which time the husband worked as a health professional. In early 1998, the parties returned to Sydney. In or around early 1998, the husband received an $80,000 inheritance from his grandfather’s estate. In late 1998, the parties purchased a property situated at P Street, Suburb Q (“the Suburb Q property”) for $400,000 in the name of Giacobetti Services, funded by the husband’s inheritance and a loan from ANZ bank in the sum of $360,000. In early 1999, the parties were both appointed as directors and shareholders of Giacobetti Services. In 2000, the parties’ first child Ms T was born. In 2002, the parties’ second child Mr S was born. In 2004, the parties invested in a property in Suburb U with a number of others which became a business location. The investment was made through a unit trust and the wife’s evidence is that from 2004-2016 she received annual distributions of $13,700 deposited into the parties’ joint account. In early 2004, the parties vacated the Suburb Q property and rented it out and then resided in rented accommodation in Suburb V. In 2006, the husband purchased shares in N Limited for $30,000 using funds from the parties’ joint account, in the name of the wife on advice from their accountant. In late 2006, the parties purchased a property at Y Street, Suburb Z (“the Suburb Z property”) for $1,300,000 in the sole name of the wife. It was purchased by securing $300,000 over the Suburb Q property as collateral and the balance by way of finance with NAB. This property became the former matrimonial home. From early 2007-September 2010 the parties resided in rental accommodation in Suburb BB whilst the Suburb Z property underwent a rebuild which cost approximately $700,000. In early 2007, the Suburb Q property was sold for $600,000 to the wife’s sister Ms Fathy. In 2007, R Services Pty Ltd was deregistered. In 2007, the parties’ third child X was born. In late 2010, the parties moved into the Suburb Z property. In or around 2014, the parties purchased a third of a property situated at F Street, Town G (“the F Street property”) paying a deposit of $50,000 and borrowing $460,000 as an interest free loan from the bank for the one-third share.

Evidence

Evidence Before The Court

The wife initially claimed the funds as repayable debts but abandoned that position and instead sought that the matter be dealt with as contributions. The husband did not accept the funds as alleged by the wife were ever received by the wife or were used by the parties. The wife’s evidence was that she did not tell the husband of the financial contributions she received, because she “did not feel comfortable raising this loan at this time as I was afraid that in learning of the total amount that he would wish to end our marriage.”The evidence about the funds the wife contends were received by her from her family. The wife contends that it was discussed and agreed between herself, her parents, and the husband that they would pay $250 per week rent during the period they resided with the wife’s family in around 1994. The wife deposed that the husband said words to the effect of “I can pay them back later when I get a good job. $250 a week is very fair when it includes everything.” The husband denied that this conversation occurred or that there was any arrangement to pay rent. The provision of accommodation by the wife’s parents is a contribution on behalf of the wife, although I am not satisfied on the evidence that a debt existed for unpaid rent. The wife deposed that she and the husband borrowed $74,000 from her parents to fund a bridal shower, pre-wedding celebration and wedding. The wife deposed that there was 150 guests for the bridal shower which was held at her parents’ house with a marquee, tables and chairs, and a live band, and that the wedding was held at a venue in Sydney for 110 guests. The wife asserts she recalls the figure being $74,000 because she and her mother sat down and calculated the amount that had been lent shortly after the wedding. The wife contends that there was a conversation that took place between her and the husband to the following effect:I said: “You know in our culture it is tradition for there to be a [bridal shower] which is paid for by the bride and groom. It is important for me that occurs .”He said : “I don ‘t have that kind of money. Look I’ll pay for 12 guests. My parents wont pay for this. They would prefer to hold a party of their own when we go to [the UK]. “ I said : “ It is important and if necessary, my parents can lend us money to pay towards it and also the wedding. “He said: “ Okay, I would really appreciate that. Of course, we will pay them back. “ The husband denied that this occurred and contends that he paid for the wedding from his savings and income. The husband’s evidence was that the wife’s brother, Mr O, contributed $7,000 towards the wedding as a gift from the family. The wife deposes that during the course of their residence in the UK, her parents provided $40,000 to the parties and that this was expended on their honeymoon, trips to City RR, City SS, Country OO, Country PP and to Country QQ, and returning to Australia in late 1995 for a friend’s wedding and in 1997 for the wedding of her brother Mr O. The wife says that there was a conversation that occurred with her mother where she said words to the effect of “I’ve been keeping a tally of the funds we have advanced to you while you’ve been away. It comes to $40,000.”

Decision

Reasons for decision

If the shares are ultimately worth nil as contended by the husband the effect is of no consequence. If the shares are worth over $10,000,000 as suggested by Ms D the division would be $6 million to the husband and $4 million to the wife. The significant difference retains his superior voting power and will be reflective of the ongoing commitment, effort and contribution on the part of the husband. In all of the circumstances with real questions as to the value and the limitations of the evidence it is the best that can be done to achieve a just and equitable outcome.Conclusion on contributions of the non-shares pool (pool 2) The husband submitted that the initial contributions made by the husband, including his inheritance and how it was applied warrants an adjustment in his favour. The wife submitted that contributions should be assessed as equal. The initial contributions made by the husband are acknowledged by the wife. However, they are one category of contribution over the course of a long marriage. In the context of a long marriage, weighing up the many and varied contributions of the husband and wife, that were both direct and indirect, financial and non-financial, including as a homemaker and parent, I am not satisfied that there should be any further adjustment to the husband arising from his greater initial contribution at the commencement of and in the first years of their marriage. The husband has made post-separation contributions, as detailed above, paying expenses for the wife and the children of the parties, and has paid spouse maintenance since October 2021 and has had the capacity to do so by reason of his vastly superior income. When considering contributions holistically as required, I do not accept that a contributions adjustment is appropriate in this case and assess the contributions of the non-shares pool as equal.Alleged non-disclosure by the husbandThe share transfers The husband, in breach of an order made on 15 November 2021, made three share transfers from Giacobetti Investments to AA Pty Ltd, without providing the wife 21 days’ notice in writing. The transfers were as follows:(a)In October 2022, for the sum of $40,314.40; (b)In September 2022, for the sum of $47,185; and (c)In November 2022, for the sum of $87,500. The husband disclosed these transfers in a letter dated 8 August 2023, following the wife’s request for disclosure. The transfer of the shares was not disclosed by the husband at the time or pursuant to his ongoing obligation for full and frank disclosure. The wife’s evidence is that she became aware of this issue by coming across articles through a Google search of B Pty Ltd which revealed the business combination agreement with R Inc and subsequently undertaking ASIC searches. Subsequently, on 3 August 2023 the wife instructed her lawyers to send a letter to the husband’s lawyers seeking disclosure in relation to the changes in shareholding amongst other things. The evidence from the husband in cross examination was that his understanding of disclosure was that he would disclose if he was asked. The following exchange occurred in cross-examination:So your understanding of your duty to disclose was you only had to disclose something if it changes the value of the company?---No, my duty of disclosure was when – if I’m asked to disclose something. So when I was asked, I’ve provided it. Is that – that’s my understanding.

Ratio Decidendi

Legal Principle Established

I am not satisfied on the evidence that there was or is a loan that was repayable and do not accept the contention that there remains a moral or legal obligation to repay the estate as claimed. The assistance from time to time provided by the wife’s family in the form of free accommodation and board or contributions to other expenses such as the $7,000 provided by the wife’s family for the wedding is a contribution by her. I am not satisfied on the balance of probabilities that the other amounts alleged to have been paid were lent to the parties for the reasons set out above.Date of separation and contributions after separation The wife contends that the parties’ separation occurred on 23 May 2021. The husband contends that it occurred on 25 April 2021. The letter from DD Lawyers which became Exhibit 6 supports a finding that wife instructed her lawyer that the parties had separated at some time before 30 April 2021. The letter sets out that the wife’s lawyers “are instructed by our client that the marriage relationship appears to have come to an end. We advise that our client wishes to resolve all matrimonial matters, including property issues on an amicable basis.” Nothing, in my view, turns on the question of the date of the separation. The parties had a long marriage of 26 years and had three children, the youngest of whom is 16 years of age and is in the care of the parties on a shared basis. Following separation and until 1 September 2021 the husband paid rent of $1,650 per week for the Suburb CC property, where the wife resided. The husband continued to pay for NBN at that property, mobile telephone plans for the children, private health insurance for the children as well as Disney, Netflix, and Spotify accounts. The husband paid the wife’s credit cards until August 2021. Pursuant to Orders made by a Senior Judicial Registrar on 18 October 2021, the husband paid to the wife $12,207 on 2 November 2021 and thereafter $11,123 per month by way of spouse maintenance. The amount was varied following interim hearing on 19 September 2023 where orders were made for the husband to pay the wife the sum of $1,283.50 per week and she was able to draw down up to the same amount from the controlled monies account. The wife is also in receipt of child support paid by the husband.Contributions in respect of the B Pty Ltd shares The husband submitted that:While it is a public company it has not been listed on any exchange. The company has a product it has patented but has not yet been able to take to market. The three founder directors have given the company their expertise and time for nil remuneration for some 8 years. One of them is the respondent, who will be bound by the order sought to the applicant, who he distrusts and who he blames in part for his poor mental health, for as long as he remains a member and director of the company. This outcome is one which it is submitted the Court would strive to avoid. The husband acknowledges in his submissions that he, and the other directors, have devoted significant time over many years and their own expertise without remuneration to its endeavours. The Specific Security Deed executed July 2021 points out at recitals B & C that “The Grantor[the husband] has contributed considerable time and his expertise in developing the reagents and hence in [B Pty Ltd] being granted the patents held in its name” and “The Secured Party has incurred expenses in the total sum of One Million three hundred and eighty five thousand and one dollar (AUD $1,385,001.00) during the development of the reagents and the granting of the patents and intellectual property expenses of [B Pty Ltd] pre incorporation.”