Wife Seeks Partial Property Settlement Orders
Cirillo & Cirillo (No 3) [2022] FedCFamC1F 207 (1 April 2022)
Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208 (4 April 2022)
The parties agreed that there should be partial property settlement to each of them. The respondents seek an order for real estate agents and prospective purchases of the former matrimonial home to be admitted for inspection of the property for the purposes of sale. The applicant seeks an adjournment to put on evidence and issue a subpoena. The Court, in adjudicating this case, relied upon the Federal Circuit and Family Court of Australia Act 2021 (Cth).
Facts:
The applicant, Ms Cirillo (“the wife”) sought a suite of orders, but the submissions of the parties focused mainly on the partial property settlement that was sought by her and on the similar orders sought by the first respondent, Mr Cirillo (“the husband”).
In her Amended Application in a Proceeding filed on 9 March 2022, the wife sought the payment to her of $1,269,396.35 for the payment of outstanding legal fees in this matter; $500,000 on the legal fees to be incurred in these proceedings; and $3 million generally.
Senior counsel for the wife modified the application so as to seek $2.5 million be paid to each party by way of partial property settlement, together with a further payment of $250,000 to the wife for urgent repairs to the property situated at RR Street, Suburb P (“the Suburb P property”).
The husband seeks orders that there be a partial property settlement by payment of $2.5 million to the wife; $2.5 million to the husband and the second respondent; and $2,404,070.51 to the second respondent for the purpose of paying the expenses of that company.
It is common ground between the parties that there should be a partial property settlement to each of them, but they could not agree on orders being made due to the differences that remained between them.
The only source of funds to make these payments is the controlled monies account that was set up pursuant to orders made on 8 October 2021. The second respondent was the owner of a commercial property, “LL Property”, which was sold and the net proceeds of sale were paid into the account. A mechanism for the payment of expenses was put in place under the orders, but that has not been entirely successful in that the wife has refused to agree to, in effect, any further payments being made from it.
The parties estimate that there will be net property available for division of between $90 million and $120 million. One of the significant assets is the Suburb P property, the former matrimonial home, which has been variously valued but, according to the wife, is worth approximately $40 million.
The wife wishes to retain the Suburb P property as part of the property settlement. The remaining potential asset, although the funds are presently held by the second respondent, is the controlled monies account which has a current balance of $14,980,345.59. Of that amount, $9,216,734 is marked for payment of the capital gains tax payable on the sale of LL Property, which is due in 2023.
A sum of just in excess of $1.7 million was said to be required for building works on the MM Property. The unchallenged evidence is that the Suburb P property was significantly damaged in the recent severe Sydney weather and needs urgent repairs in the sum of approximately $245,000 and overall needs repairs and renovations that will cost between $1.4–$1.6 million. The wife also seeks just under $1.8 million for the payment of past legal fees and those to be incurred.
By an Application in a Proceeding filed on 30 March 2022, the husband and second respondent seek an order that licensed real estate agents and prospective purchasers of a property at RR Street, Suburb P (“the Suburb P property”) be admitted for inspection of the property for the purpose of sale, for no longer than one hour in duration on each occasion. The wife seeks an adjournment of the application to put on evidence and to issue a subpoena.
Where the matter was filed in the Family Court of Australia (as it was then known) – Where the matter has never been in Federal Circuit and Family Court of Australia (Division 2) and consequently could never have been transferred to Division 1 as required by s 25 of the Act – Legislative intent that the jurisdiction of the Family Court of Australia continue in Division 1 in respect of proceedings filed in it – No provision that provides otherwise – Where the Chief Justice made orders for transfer under specific jurisdiction – Where those orders, even if jurisdiction was lost, were effective to confer jurisdiction on Division 1 – The Court is satisfied that Division 1 has the jurisdiction to hear and determine the application in this matter.
Issues:
I. Whether or not orders should be made for partial property settlement as sought by the wife.
II. Whether or not the Federal Circuit and Family Court of Australia (Division 1) (“Division 1”) has jurisdiction in the matter consequent upon the passing of the Federal Circuit and Family Court of Australia 2021 (Cth) (“the Act”)
Applicable law:
Family Law Act 1975 (Cth) s 79 - provides that in property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
(b) in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage--altering the interests of the bankruptcy trustee in the vested bankruptcy property.
Analysis:
The wife does not give any evidence as to any particular need for the sum of $3 million. The wife received $1.5 million as partial property settlement pursuant to the orders made on 1 October 2021. $500,000 was provided to enable the wife to fund the final hearing of the property application. The wife has not used the funds for that purpose but has imprudently given away in excess of that sum, by providing cash gifts to her children and son in law and buying an expensive motor vehicle for another.
The husband also received $1.5 million as partial property settlement pursuant to the orders of 8 October 2021. The husband says he spent $175,350 in repaying a loan and meeting and rent and outgoings, paid $95,900.24 to reimburse the second respondent for payment of personal expenses in Country H and applied $1,230,240.22 towards the purchase of shares. The husband has sold some of those shares for $100,084.96, which he transferred to his personal account for living expenses. Unfortunately, the husband’s share portfolio is now worth $823,485.84 which he says he does not want to sell until the market returns so as to avoid making a loss on them.
The wife was unable to identify any particular document which ought to have been disclosed and has not. The last category of documents sought would, in the absence of the final accounts, in effect oblige the disclosure of all the primary accounts of the various entities. Such a request is too broad and onerous. Where a person has had limited notice of the application, as has the wife in these proceedings, an adjournment to enable her to prepare and defend the application would be looked upon favourably. However, regard must be had to the nature of the application before the Court. The application simply seeks that access be granted to enable a prospective purchaser to inspect the property and do no more.
If there is a genuine purchaser, such a course may scare them off. The Court does not see how such a subpoena would necessarily result in information that would indicate the bona fides or otherwise of the prospective purchaser. The issue of such subpoena and related issues that are likely to arise would be another dissent into satellite litigation which has marked these proceedings and is to be deprecated and avoided at all costs.
Conclusion:
The Court ordered that the applicant and first respondent will each be paid $2.75 million and $2.5 million respectively from the controlled monies account operated by TT Lawyers by way of interim partial property settlement. Pending further order, the first respondent should do all acts and things necessary to cause repayments to be made for the mortgage over the property situated at RR Street, Suburb P, as and when they fall due.
Conclusion in Cirillo & Cirillo (No 4) [2022] FedCFamC1F 208 (4 April 2022):
Within two days of written request by the husband’s solicitors to the wife’s solicitors, the wife shall do all things and sign all documents necessary to provide access to the formal matrimonial home at RR Street, Suburb P and its grounds to the licensed real estate agent and prospective purchaser identified in the letter from AG Real Estate Suburb AF dated 7 March 2022, so that they may enter and inspect the property for purpose of sale for not longer than one hour in duration. The costs of this application are reserved to the final hearing.
