Imbardelli and Imbardelli and Anor

[2016] FamCA 452

FAMILY COURT OF AUSTRALIA

IMBARDELLI & IMBARDELLI AND ANOR [2016] FamCA 452

FAMILY LAW – PRACTICE AND PROCEDURE – Disjoinder – Where the second respondent company seeks to be removed as a party to the proceedings – Where the second respondent company is owned by the husband’s parents – Where the wife is yet to have her application for orders under section 106B determined by the Court – Where the transactions sought to be set aside were made by the husband to the second respondent company – Second respondent company to remain a party to the proceedings.

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth) rr 6.03, 6.04

Pelerman & Pelerman (2000) FLC 93-037

APPLICANT: Ms Imbardelli

1^st RESPONDENT: Mr Imbardelli

2^nd RESPONDENT: Imbardelli Pty Ltd (ACN …)

FILE NUMBER: MLC 1157 of 2016

DATE DELIVERED: 9 June 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Melbourne

JUDGMENT OF: Stevenson J

HEARING DATE: 3 May 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dickson QC

SOLICITOR FOR THE APPLICANT: M & K Lawyers

COUNSEL FOR THE 1^st RESPONDENT: Ms McRedie

SOLICITOR FOR THE 1^st RESPONDENT: Lander & Rogers

COUNSEL FOR THE 2^nd RESPONDENT: Mr Craig

SOLICITOR FOR THE 2^nd RESPONDENT: Arnold Bloch Leibler

Orders

1. Pending further order, the company known as Imbardelli Pty Ltd will be a respondent to these proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Imbardelli & Imbardelli and Anor 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: MLC 1157 of 2016

Ms Imbardelli

Applicant

And

Mr Imbardelli

1^st Respondent

And

Imbardelli Pty Ltd (ACN …)

2^nd Respondent

REASONS FOR JUDGMENT

The proceedings

1. Ms Imbardelli and Mr Imbardelli are engaged in litigation concerning parenting and financial issues, following the breakdown of their relationship and marriage of some ten years duration.  By her Initiating Application filed on 12 February 2016 the wife joined as respondents both the husband and a company known as Imbardelli Pty Ltd (“IPL”).

2. The husband’s parents Mr B (“Mr B”) and Ms C (“Ms C”) Imbardelli each hold two of four issued shares in IPL. Mr B Imbardelli is the sole director of this company. The wife’s Initiating Application sought, inter alia, orders to set aside various share transfers pursuant to section 106B of the Family Law Act 1975 (Cth). These transactions involved the transfer in 2015 by the husband to IPL of shares which he held in various companies.

3. By an Amended Initiating Application filed on 29 April 2016 the wife effectively abandoned her position in relation to a number of these share transfers.  Relevantly, the orders which are now sought by the wife include the following:

   14.That pursuant to s 106B of the Family Law Act 1975 (Cth) the Court set aside the following instruments and dispositions:

   14.1ASIC instrument number … purporting to forfeit 1 ordinary share of the First Respondent in the company [D Pty Ltd] (ACN …);

   14.2K Discretionary Trust Deed of Appointment dated 29 July 2015;

   14.3K Discretionary Trust Deed of Resignation dated 29 July 2015; and

   14.4L Discretionary Trust Deed of Amendment dated 29 July 2015

   and within 14 days the First and Second Respondent’s do all acts and things and sign all documents required to transfer the shares referred to in Orders 14.1 back to the First Respondent and to set aside the Deeds of Appointment and/or Deeds of Resignation referred to in Orders 14.2 to 14.4.

According to her counsel, the wife changed her position after she and her legal advisors inspected documents produced by IPL.

1. On the first return date, being 2 March 2016, orders and directions were made by consent before a Registrar.  One such direction was “the question of whether Imbardelli Pty Ltd ought to be joined to the proceedings is adjourned for determination on 3 May 2016”.  In fact, it appeared that IPL had already been joined as a respondent pursuant to Rule 6.03(1) which provides as follows:

   RULE 6.03 ADDING A PARTY

   6.03(1)    (Omitted by SLI No 286 of 2011, Sch 1[9].)

   6.03(2)    A party may add another party after a case has started by amending the application or response to add the name of the party.

   6.03(3)    A party who relies on subrule (2) must:

   (a)file an affidavit setting out the facts relied on to support the addition of the new party, including a statement of the new party’s relationship (if any) to the other parties; and

   (b)serve on the new party:

   (i)a copy of the application, amended application, response or amended response; and

   (ii)the affidavit mentioned in paragraph (a); and

   (iii)any other relevant document filed in the case.

1. Effectively, therefore, the issue before the Court on 3 May 2016 was whether IPL should be removed as party to the proceedings pursuant to Rule 6.04.  This Rule provides as follows:

   RULE 6.04 REMOVING A PARTY

   6.04        A party may apply to be removed as a party to a case.

Background

1. The husband and the wife, who are aged 42 and 44 respectively, began to live together in 2005 and married in 2007.  They separated on 29 November 2015, when the husband left the former matrimonial home.  The husband and wife have two children, E and F.  E and F are aged 7 and 3 respectively and they live with the wife.

2. The husband’s family operate a business known as G.  Mr H, the accountant for Mr and Ms Imbardelli Senior, sworn an affidavit on 8 April 2016 in which he provided information in relation to the corporate structure of the Imbardelli Group.

3. Mr H deposed inter alia as follows:

   ·The assets of the Imbardelli Group are held beneficially by a number of discretionary trusts.

   ·These trusts were established at various times and have different trustee companies.

   ·The shareholding and directorships of the trustee companies varied but usually consisted of a combination of the husband, his parents and his brother Mr I Imbardelli.

   ·None of the trustee companies holds assets beneficially.

   ·Mr B Imbardelli was the appointor of all these trusts until about 2013, when he and his accountants J Accountants began to implement an estate plan for himself and his wife.

4. Mr H deposed further that in 2014 and 2015 he advised Mr B Imbardelli to establish a new company, to which would be transferred all appointment powers in relation to the trusts.  The new company would be under the control of Mr B Imbardelli and his wife, consistently with his wish to retain control of the Imbardelli Group until his death.

5. Mr H deposed that IPL was incorporated on 13 May 2015.  Between that date and December 2015, the various trusts executed deeds which had the effect of transferring powers of appointment to the new company IPL.  On 2 December 2015 J Accountants received instructions for the transfer of ownership of shares of certain of the trustee companies to IPL.  These transfers, which were lodged with ASIC around 21 December 2015, constituted IPL the shareholder of each trustee company.

6. In an affidavit of 29 April 2016 the wife identified the transactions which she seeks to impugn by her Amended Initiating Application.  She stated that she had extracted this information from documents produced by IPL and J Accountants.  The source documents were annexed to this affidavit of the wife.  These transactions involve the husband’s dealings with a company D Pty Ltd, the K Discretionary Trust and the L Discretionary Trust.

7. The wife deposed that the K Trust was established on 22 October 2012, with the husband as appointor and primary beneficiary.  The trustee is the company D Pty Ltd, of which the husband was the sole director and shareholder.

8. The wife deposed further that on 29 July 2015 the husband executed a deed whereby he caused IPL to become the appointor of the K Trust and he resigned as guardian of that trust.  The husband also transferred his shareholding in the trustee company D Pty Ltd to IPL.

9. The wife deposed further that the L Trust was established on 24 November 2003, with the husband and his brother Mr I as appointors.  The trustee was and remains the company L Pty Ltd, of which the husband was the only director and his mother the sole shareholder.  The husband ceased to be a director of this company on 22 December 2009 and he caused IPL to become the sole appointor by deed dated 29 July 2015.

10. The wife deposed that, also on 24 November 2003 the M Trust was established with the company N Pty Ltd as trustee.  The husband was a director of N Pty Ltd until 22 December 2009 and his mother has been the sole shareholder at all times.  The M Trust issued 100 units to L Pty Ltd as trustee for the L Trust.

Consideration

1. I accept the contention on behalf of the wife that “the net effect of the company’s submissions is the equivalent of summary dismissal”.  Counsel for the wife drew attention to the Full Court decision of Pelerman & Pelerman (2000) FLC 93-037 where the principles in relation to summary dismissal were set out as follows:

   The gravaman of the appeal is that the trial Judge erred in the exercise of the discretionary power to summarily dismiss the application.  It is well established that the following principles apply as were recently reviewed and stated in Bigg v Suzi:

   (a)       The power for summary relief is a discretionary one.

   (b)      Relief “is rarely and sparingly provided.”

   (c)The parties seeking summary dismissal must show that the application is “doomed to fail” or as has been otherwise described that “the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious”.

   (d)A weak or one that is unlikely to succeed is not “sufficient to warrant termination”.

   (e)“If there is a serious legal question to be determined, it should ordinarily be determined at a trial.”

   (f)“If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party reframe its pleadings.”

2. Counsel for the wife pointed out that the transactions in question took place approximately three months before the final separation of the parties, at a time when they both considered that escalating levels of conflict existed between them.  The wife deposed “there [had] been an increasing level of disharmony in our marriage”.  The husband deposed “... in the lead up to the final separation there was an increasing level of unhappiness in our marriage.”

3. Counsel for the wife also drew attention to her evidence that she had no knowledge of an alleged debt of the parties of $1.1 million to the husband’s mother, until she saw a letter dated 11 December 2015 from the husband’s solicitor to her legal representative.  This letter enclosed an unsigned mortgage document, which the wife deposed that she had never seen previously.  This sum of $1.1 million was provided to the parties by the husband’s parents at the time that they purchased their former matrimonial home O Street, Suburb P.

4. Counsel for the wife also pointed to a file note made by a member of the staff of J Accountants, dated 17 December 2014, which read in part “family law protection big issue” (wife’s affidavit 29 April 2016 at Annexures page 2).  As counsel rightly observed, no explanation was forthcoming for this notation.

5. The wife deposed that she “[has] always been in the dark about our finances and in particular, finances in relation to [Mr Imbardelli’s] family business”.  I can see some force in the submission of her counsel to the effect that her claim against IPL should not be terminated at this stage because she cannot yet articulate her proposed orders “in dollar terms”.  I am inclined to agree with counsel’s suggestion that such a step would mean that “no wife in the dark could make a claim”.

6. It may be that the wife ultimately will be unsuccessful against IPL but, in my view, that determination must await another day. It is not for me, in the context of the current proceedings, to determine whether her applications for orders pursuant to section 106B will be successful. I consider that the wife should be permitted to pursue her action in relation to IPL at this stage and that she be afforded a proper and appropriately informed opportunity to formulate her case.

7. Another approach might be to consider whether IPL should have been joined as a respondent to the proceedings in the first place.  I am of the view that IPL would likely have been joined as a respondent in circumstances where the parties’ financial affairs have been closely connected with the Imbardelli Group throughout their cohabitation.  The husband has always been employed within the Imbardelli Group, leaving aside some periods when he was dismissed due to conflict with his father.  As noted, the husband’s parents provided funds to the parties when they purchased the former matrimonial home.  As further noted, the wife maintained that she has “always been in the dark” concerning the parties’ finances.  In these circumstances it is my view that the wife would have been permitted to join IPL for the purpose of advancing the proceedings.

8. I am conscious of the cost to IPL of remaining in the proceedings as a respondent.  That matter, however, must be balanced in a consideration of the overall justice of the situation for all parties.  No doubt the wife has been advised clearly of the potential costs implication of her continuing to pursue IPL as a respondent.

9. Counsel for IPL submitted that the company could be re-joined as a respondent at a later stage of the proceedings “if something emerges”.  The converse is also a correct proposition, that being that the company is at liberty to make another application for disjoinder if the wife ultimately is unable to articulate her case.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 9 June 2016.

Associate: 

Date:  9 June 2016