Eccheli and Eccheli

[2017] FamCA 218

FAMILY COURT OF AUSTRALIA

ECCHELI & ECCHELI [2017] FamCA 218

FAMILY LAW – PROPERTY – INTERIM PROPERTY SETTLEMENT – Where the parties have eight million dollars in a controlled money account – Where the wife seeks an interim property settlement of seven million dollars so she can buy a property – Where the wife’s monthly expenses are greater than her monthly income – Where it was not contended that the wife was likely to receive a sum less than seven million dollars in final property settlement – Where the wife consented to an order that she be restrained from seeking spousal maintenance without leave of the Court – Application allowed. 

Family Law Act 1975 (Cth)

Marello & Marello (No 2) [2011] FamCA 799

APPLICANT: Ms Eccheli

RESPONDENT: Mr Eccheli

FILE NUMBER: SYC 8378 of 2016

DATE DELIVERED: 11 April 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rees J

HEARING DATE: 5 April 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lethbridge SC

SOLICITOR FOR THE APPLICANT: Armstrong Legal

COUNSEL FOR THE RESPONDENT: Mr Richardson SC

SOLICITOR FOR THE RESPONDENT: Barkus Doolan

Orders

IT IS ORDERED

1. That the parties do all things necessary to pay out to the wife from the controlled monies account held in the names of the husband and the wife, being account number …76 with St George Bank, the sum of seven million dollars.

2. That the wife be restrained from making any application for interim or urgent spousal maintenance without first obtaining the leave of the Court.

IT IS NOTED

1. That the wife makes the following concessions:

   (a)   That any amount received by the wife by way of interim property settlement will be included in the balance sheet for the final hearing in the full amount; and

   (b)  That if the wife receives seven million dollars she will be in a position to support herself from her own resources.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

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 r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 8378 of 2016

Ms Eccheli

Applicant

And

Mr Eccheli

Respondent

REASONS FOR JUDGMENT

1. Ms Eccheli (“the wife”) and Mr Eccheli (“the husband”) are engaged in property settlement proceedings.

2. They commenced living together in 1990 and separated in 2015. They have three adult children.

3. In December 2016, their former matrimonial home, of which the wife was the registered proprietor, was sold and the net proceeds of the sale, approximately eight million dollars, were placed in a controlled monies account.

4. The wife now seeks an order, by way of interim property settlement, that she be paid seven million dollars.

5. For the purpose of these proceedings, it is agreed that the property pool is approximately 25 million dollars net.

6. The husband’s application for substantive orders seeks a final order that the wife receive 45 per cent of the net assets, or approximately $11,250,000.

7. The husband opposed the wife’s application for interim property settlement.

8. The basis of the husband’s opposition is set out in an Outline of Case Document and was further enunciated by senior counsel for the husband at hearing.

9. It was not contended on behalf of the husband that the wife was ultimately likely to receive an amount less than seven million dollars, or that there was any risk that the amount would not be brought into account in the substantive proceedings.

10. The husband’s submission from his Outline of Case document is set out below:

    2.8The wife’s solicitors attempted to have the funds placed in the control of the wife unilaterally and as a consequence the husband filed an urgent application on 15 December 2016 with that application being listed on 11 January 2017.

    2.9On 11 January 2017 orders were made by consent for the sum of $100,000 to be released to the wife and the balance to be held in an interest bearing controlled monies account pending further order.

    2.10In addition an order was made providing for the release of 50% of the interest earned on the controlled monies account to the wife by way of interim spouse maintenance. The balance of the interest was to be paid to the husband.

    2.11Certain orders were also made requiring the parties to obtain valuations of the matrimonial pool of property.

    2.128 days following the interim orders the wife sought to release the sum of $5,300,000 to her so that she could complete on the purchase of a property at [Suburb B].

    2.13The parties each receive approximately $6,000 per month by way of interest earned on the funds held in the controlled monies account, the interest rate being 1.8% per annum.

    …

    2.16The wife now seeks to have certain funds released to her from the controlled monies account to enable her to purchase a property.

    2.17The application to re-litigate the compromise of rights comprised in te (sic) agreement recorded in the orders of 11 January 2017 so shortly after comprises an abuse of process. The wife does not contend that new facts have come into existence or have been discovered which would render the former interlocutory order unjust: Adama (sic) P Brown Male Fashions Pty Limitedv Philip Morris Inc (1981) 148CLR 170.

    2.18It is important to recognise that the departure from their recent compromise that she seeks not only seeks a benefit for herself but to deprive the husband of his agreed share of interest and then when he is denuded of that sum to impose upon him the obligation of paying maintenance for her because she has chosen to depart from the agreement and seeks to extinguish the stream of interest income she was receiving.

    2.19In the way described above she seeks to create her own incapacity to support herself – a feature generally depriving her of an entitlement to maintenance – see discussion of election to make oneself asset rich but income poor in Berta v Berta (1988) FLC91-916 at 76, 647, an outcome that the Full Court there described as plainly contrary to the justice of the case.

    (Emphasis in original)

11. There are two aspects of the husband’s submissions. The first is his submission that the wife’s application for interim property settlement is an abuse of process. The second is his contention that the wife, I infer by spending the whole of the sum she seeks for the purchase of a home, will elect to render herself in need of spousal maintenance.   

IS THE APPLICATION AN ABUSE OF PROCESS?

1. The orders made on 11 January 2017 were made on the application of the husband filed on 15 December 2016. The wife in her response sought orders that she be entitled to the whole of the net proceeds of sale of the former matrimonial home.

2. The orders that were made on 11 January 2017 were made by consent and provided, inter alia, for the release of $100,000 to the wife from the proceeds of sale and for the balance to be placed in a controlled monies account.

3. The wife deposed that on about 14 January 2017 she became aware that an apartment, which she wished to purchase, was on the market with an asking price of less than five million dollars. She requested the release of $5,300,000 from the controlled monies account to purchase the apartment. The husband refused. The wife was not able to buy the apartment.

4. On 24 January 2017 the wife filed an Application in a Case, which she subsequently amended on 3 April 2017.

5. In the amended application, the wife sought, inter alia, the release to her of seven million dollars.

6. In her affidavit affirmed on 31 March 2017, the wife deposed that she is continuing to look for a property similar to the apartment she was unable to buy and has instructed a real estate agent to commence negotiations with an owner. She does not want to be in a position where she will again be unable to purchase a suitable property because the husband will not agree to the release of the funds.

7. The wife deposed that she pays rent of $8,039 per month and receives approximately $6,000 per month from the interest on the controlled monies account.

8. Senior counsel for the husband relied upon a decision of Kent J in Marello & Marello (No 2) [2011] FamCA 799 where his Honour held, in relation to an application to vary an interim undertaking (not an order for interim property settlement as in this case):

   26. …

   c) The party seeking discharge or modification carries an onus. The onus is not simply to establish that the discharge or modification would be just. The onus is to establish (from the starting point that the correctness of the undertaking given is assumed) that continued enforcement of the undertaking would be unjust in the circumstances of the case.

   d) Without being exhaustive, to discharge that onus, the party must ordinarily establish a ground for the exercise of that discretion and, having established such a ground, demonstrate that its existence renders continued enforcement of the undertaking unjust. Thus ordinarily, a party must establish

   i)the existence of material facts which the party could not reasonably have known or found out about at the time of giving the undertaking; or

   ii)the occurrence, or discovery, of circumstances which, at the time the undertaking was given, were not reasonably in contemplation or were, reasonably, not accorded the significance they later assumed; or

   iii)some significant change in circumstances;

   which renders enforcement of the undertaking unjust. Thus, for example, even where new facts or a significant change in circumstances can be established, the justice of the case may result in the conclusion that continued adherence to the undertaking is not unjust in the circumstances of the case.

9. It is not necessary to consider, as I am urged to do by senior counsel for the husband, the correctness of the principles stated by his Honour because I am of the view that, if his Honour is correct, the circumstances upon which the wife now relies in seeking an order for interim property settlement – that is, that the interest payable to her from the controlled monies account does not meet her rent – constitute new facts. In addition, it would be unjust in the circumstances of this case to require the fund to be retained at a low rate of interest and deny the wife the opportunity to purchase property for her own occupation, requiring her to continue to pay rent unnecessarily.

IS THE WIFE CREATING A SITUATION WHERE SHE WILL BE INCAPABLE OF SUPPORTING HERSELF?

1. There would be some merit in the husband’s position if the wife were to receive seven million dollars and spend the entire amount on a house.

2. However, in the course of submissions, senior counsel for the wife made the following concessions:

   (a)That any amount received by the wife by way of interim property settlement would be included in the balance sheet for the final hearing in the full amount; and

   (b)That if the wife received seven million dollars she would be in a position to support herself from her own resources; and

   (c)That in those circumstances, the wife would consent to an order that she be restrained from making any application for interim spousal maintenance without first obtaining the leave of the Court.  

3. Having regard to those concessions, the husband’s objection based on his fear that the wife would render herself incapable of self-support must fall away.

I certify that the preceding twenty-three (23) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 11 April 2017.

Associate: 

Date:  11/04/2017