Cirillo & Cirillo

[2021] FamCA 2

FAMILY COURT OF AUSTRALIA

Cirillo & Cirillo [2021] FamCA 2

File number(s):	SYC 4192 of 2020
Judgment of:	HARPER J
Date of judgment:	11 January 2021
Catchwords:	FAMILY LAW – PROPERTY – Procedure – Urgent Application – Where the second and third respondents privately appointed by bank, then by order of the Supreme Court of NSW, as joint and several receivers and managers of certain assets and undertakings of a trust associated with the husband - Where the second and third respondents are parties to proceedings in Family Court of Australia only by reason of their appointment as joint receivers and managers – Where the respondent husband seeks to have the second and third respondents removed as receivers and managers in separate proceedings in the Supreme Court of NSW – Where the respondent husband seeks conditional orders to have the second and third respondents removed as parties to the proceedings in the event they cease to be joint receivers and managers – Where the second and third respondents consent to the orders sought – Where the applicant wife concedes the second and third respondents would have no role in proceedings in the Family Court if removed as receivers and managers – Where the applicant wife opposes the orders sought – Orders made.
Legislation:	Family Law Act 1975 (Cth)
Number of paragraphs:	11
Date of hearing:	11 January 2021
Place:	Sydney
Counsel for the Applicant:	Mr Richardson (SC)
Solicitor for the First Respondent:	Mr Reeve
Counsel for the Second and Third Respondents:	Mr Hynes (SC)

ORDERS

SYC 4192 of 2020

BETWEEN:

MS CIRILLO

Applicant

AND:

MR CIRILLO

First Respondent

MR BIRD

Second Respondent

MR TOBLER

Third Respondent

ORDER MADE BY:	HARPER J
DATE OF ORDER:	11 JANUARY 2021

THE COURT ORDERS THAT:

1. Upon the retirement of the Second and Third Respondents from any private appointment as joint and several receivers and managers of the assets and undertaking of B Pty Ltd (Receivers & Managers Appointed) ACN … in its own capacity or as Trustee of D Trust (“the Trust”), and upon the termination of the appointment of the Second and Third Respondents as joint and several receivers and managers of the Trust and the assets and undertaking of C Pty Ltd (Receivers & Managers Appointed) ACN … (“the Company”), whether in its own capacity or as Trustee of the Trust in Supreme Court Proceeding No. 2020/…, the Second and Third Respondents shall thereby and thereafter be removed as parties to these proceeding, with the intent that upon such removal any applications against them or to which they are a party shall stand dismissed.

IT IS NOTED THAT: 

1. The Second and Third Respondents are not subject to any costs order made against them in this proceeding or any application made in this proceeding

2. All costs, remuneration and expenses of the Second and Third Respondents in this proceeding or any application made in this proceeding are to be costs in the receiverships of the Company, the Trust and B Pty Ltd (Receivers & Managers Appointed) ACN ….

3. The First Respondent Husband has proffered an undertaking to the Court, which the Court has accepted, in the following terms:

   Pending the hearing of the Applicant Wife’s Application in a Case filed 23 December 2020, the Husband undertakes to the Court that he will not do any act or thing, or permit any act or thing to be done, to have the assets of the Trust dealt with, other than in the ordinary course of business.

IT IS FURTHER ORDERED THAT:

1. All questions of costs as between the Applicant Wife and the First Respondent Husband be reserved. 

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Cirillo & Cirillo has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE REASONS FOR JUDGMENT

HARPER J:

1. These proceedings came before me on 11 January 2021 on an urgent basis in the judicial duty list.  The proceedings have some complication and, according to submissions made to me, involve an asset pool somewhere between $80 million and $110 million.  Among those assets are property assets held by a trust called D Trust. 

2. There was no dispute that on 9 September 2020 the National Australia Bank, by instrument, appointed, pursuant to its security documentation, the second and third respondents as receivers and managers of, in substance, the assets and undertakings of the businesses held in D Trust.  In September 2020, Black J of the Supreme Court of New South Wales made orders appointing the same individuals as receivers and managers of D Trust and the C Pty Limited which, it appears, was substituted for B Pty Ltd as trustee of D Trust by reason of a range of dealings and transactions undertaken by, amongst others, Mr Cirillo (“the husband”).

3. On an urgent basis the husband seeks an order which would be a conditional order that the participation of the receivers and managers as respondents in the proceedings in this Court terminate upon their termination as receivers and managers in proceedings in the Supreme Court and upon the retirement of their private appointment made on 9 September 2020. 

4. The receivers and managers support the order sought by the husband on an urgent basis.  The reason why the order is said to be urgent is that the husband has negotiated a refinance of D Trust assets which will retire the existing debt owed to the National Australia Bank, but this deal is subject to certain conditions precedent which are set out in a document called an “Implementation Deed” the operation of which is itself subject to two condition precedents.

5. The condition precedents are that the receivers and managers be terminated by the Supreme Court of New South Wales and that they be removed from these proceedings as respondents.  The further requirement of the “Implementation Deed” is that the drawdown of the refinance take place by 20 January 2021, which is in nine days’ time, and there is a risk that if drawdown does not happen by that date the refinance will not be carried to completion.

6. Ms Cirillo (“the wife”) resists the order sought by the husband on the basis that, according to her submissions, there are a range of other factors involved which suggest there may be reasons to doubt the commercial prudence of the refinance negotiated by the husband and that she has had insufficient time to consider the material provided by the husband in support of his application in circumstances where there has been a history of difficulties in obtaining disclosure in these proceedings.

7. The effect of the order proposed by the husband is simply that in the event the receivers and managers cease to be receivers and managers, they then cease to be parties to the proceedings in this Court.  Mr Reeve, who appeared for the wife, properly conceded that if they cease to be receivers and managers, there was no role that they could usefully play in these proceedings. 

8. It seems to me that an order of a conditional nature such as that proposed by the husband is reasonable in the circumstances and may well be for the benefit of all parties, although no final view can be formed about that at this stage.  I am also satisfied that an order should be made today so that any refinance can proceed in an orderly fashion.

9. I note here that I was told from the notional bar table that there are proceedings listed before Black J in the Supreme Court of New South Wales on 13 January 2020 to consider an application for the termination of the appointment of the receivers and managers.  It did not seem to be in dispute that the wife has been served with the material in relation to that application, and it appears to me that she would be in a position to make submissions resisting the termination of the appointment of the receivers and managers in the Supreme Court proceedings if she so chooses to do so.

10. It is certainly not open to this Court to form any view about whether or not the receivers and managers appointment should be terminated.  That is a question which reposes with the Supreme Court of New South Wales.  The only order that I am asked to make is one which will be consequential upon the termination and retirement of the receivers and managers.  If that does not happen, then they will remain in place and the order which is proposed by the husband would not be triggered so as to remove the receivers and managers as parties to the proceedings in this Court.

11. Accordingly, I make the orders set out at the commencement of these reasons.

I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper.

Associate:

Dated:      11 January 2021