Cirillo & Cirrillo (No 6)
[2022] FedCFamC1F 889
Federal Circuit and Family Court of Australia
(DIVISION 1)
Cirillo & Cirrillo (No 6) [2022] FedCFamC1F 889
File number(s): SYC 4129 of 2020 Judgment of: ALDRIDGE J Date of judgment: 11 November 2022 Catchwords: FAMILY LAW – INTERIM – Application for interim property settlement – Where there is no dispute as to whether an interim property settlement order should be made – Where the amount that should be paid to the wife is in dispute – Consideration of the depletion of the controlled monies account – Order made for the wife to be paid $750,000 as interim property settlement. Division: Division 1 First Instance Number of paragraphs: 12 Date of hearing: 4 November 2022 Place: Sydney Counsel for the Applicant: Mr Condon SC Solicitor for the Applicant: Watson Webb Solicitor for the Respondents: Boyce Family Law & Mediation ORDERS
SYC 4129 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CIRRILLO
Applicant
AND: MR CIRRILLO
First Respondent
B PTY LTD
Second Respondent
order made by:
ALDRIDGE J
DATE OF ORDER:
11 NOVEMBER 2022
THE COURT ORDERS THAT:
1.There be forthwith paid out of the TT Lawyers controlled monies account by way of an interim property settlement the sum of $750,000, which is to be paid to the wife.
2.The parties have liberty to apply on seven days’ notice.
3.Each party is to file and serve a written submission within seven days, not exceeding five pages as to the effect, if any, of the above orders on the final orders to be made and what adjustments should be made to the balance sheet to take them into account.
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.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cirillo & Cirillo (No 6) has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE J:
On 4 November 2022, I heard two applications for interim property settlement orders. The application brought by the husband for the release of $1.9 million to pay for an urgent operation in the United States of America was not opposed and an order to that effect was made on that date.
In her Amended Application in a Proceeding, the wife sought payment of $1.9 million, $1,805,827.71 and $1,428,680. The first sum was said to be as an interim property settlement. The second was expressed not to be such a settlement and an order was sought that the amount paid not be counted as part of the wife’s property settlement. The legal basis for making such an order was not explained. The last is said to be for the sole purpose of paying repairs of a house in which the wife currently lives. Again, the legal basis for making that order was not identified.
It is well established that a court making interim orders for the payment of money must identify the source of power relied on to make the order so that the relevant considerations that apply to that exercise of power can be taken into account. The court cannot make an order and leave the characterisation of that order to a later date.
In addition to the above orders, the wife sought the immediate sale of one of the party’s properties in Country H and the payment of the proceeds of sale to the TT Lawyers controlled monies account (“the CMA”).
The CMA is an account that was set up pursuant to earlier orders of the Court to hold the balance of the proceeds of the sale of one of the party’s significant assets, LL Property. The funds in that account have been used for a number of purposes including recently payment to the parties of interim property settlement orders.
As is apparent from the various judgments dealing with those applications over time, it has been the aim of the Court, if not the parties, to retain sufficient funds in the CMA to pay the capital gains tax due on the sale of LL Property, estimated to be approximately $9.587 million. The account, prior to the making of the order in favour of the husband on 4 November 2022, held $8,614,662. It was agreed between the parties at the recently concluded final property hearing in which judgment is yet to be delivered, that the husband would ultimately bear the liability of that outstanding capital gains tax in one way or another. The CMA is the parties’ only ready source of liquid funds as the rest of their assets consist of operating businesses and real estate.
The wife claimed that the parties’ net assets available for distribution were $183,152,681 which included add backs for notional property, that is, property that no longer exists, of $51,710,035. The husband’s contention that the net assets available for distribution were in the sum of $116,486,273. It is obvious that on either view of the assets available for distribution that any interim property settlement will form but a small part of the total assets that the wife will receive in due course. In the unlikely event that an order for such a settlement should not have been made there will be no difficulty whatsoever in taking that payment into account in due course.
In preparing these reasons, I have worked on the assumption that the final orders in the property settlement proceedings will be made this year. If that proves to be overly optimistic, liberty to apply will be granted to each party.
The wife deposed that she currently has $1,238,787.70 owing in outstanding legal expenses and future expenses for legal, medical, insurance and other living expenses for herself, her daughters and her grandchild said to be estimated at $514,000. The wife supports her daughter and the daughter’s husband by a payment of rent of $2,000 a week and upkeep towards their premises of $50,000 per year. She also pays for her grandson’s education including school fees, which has been $45,000 since the commencement of these proceedings and activities of $400 a week. As she has described in earlier applications, her home needs renovations and repairs, some of which are more urgent than others. The wife also referred to an action for recovery of fees by a solicitor but those contentions were withdrawn by a later affidavit.
The wife did not deign to refer to the earlier interim property settlements that have been made in her favour or say what had happened to the funds that had been received, some of which had been specifically provided for urgent repairs to her home. Nonetheless, she deposed to having scarcely any funds available to her. At the conclusion of the hearing, in lieu of the orders outlined earlier, the wife sought a payment of $1.9 million. The husband conceded that an order in the sum of $500,000 was appropriate in all of the circumstances.
There being no dispute as to whether such an interim property settlement order should be made, the next question is what amount should now be paid to the wife. The significant factor to bear in mind is the depletion of the CMA, which will in due course make the payment of capital gains tax due early next year more difficult. As a result of the order made last week, the account will have a balance of about $6.7 million.
There is no suggestion that the lawyers are immediately pressing for payment, particularly having regard to the extent and timeframe for judgment. Recognising, however, the need for the other expenditure as identified by the wife and taking all of the above matters into account, I am of the view that an appropriate order is that there be an immediate payment of $750,000 and that such an order will be just and equitable in all of the circumstances.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Aldridge. Associate:
Dated: 11 November 2022
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