Eccheli & Eccheli (No 5)
[2025] FedCFamC1F 301
•8 May 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Eccheli & Eccheli (No 5) [2025] FedCFamC1F 301
File number: SYC 1191 of 2024 Judgment of: CAMPTON J Date of judgment: 8 May 2025 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband seeks leave to amend his Initiating Application pursuant to r 2.50 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) and to join the adult daughter of the parties to the proceeding – Where the husband contends that the parties adult daughter holds her legal interest in a real property on trust for him – Where the wife contends their adult daughter holds her interest on trust for both she and the husband – Where there is an inconsistency in the husband’s evidence as to the contended beneficial interest – Where the proposed respondent daughter has not been served with the Amended Application in a Proceeding or any draft amended Initiating Application incorporating pleadings by way of Points of Claim as to the legal and factual basis grounding his contention as to that beneficial interest – Application for leave to amend substantive relief and for the joinder of an additional party refused. Legislation: Family Law Act 1975 (Cth) ss 78, 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 2.50, 3.01
Division: Division 1 First Instance Number of paragraphs: 27 Date of hearing: 8 May 2025 Place: Sydney Solicitor for the Applicant: Ms Burrows, Zali Burrows Lawyers Counsel for the First Respondent: Mr Dura SC Solicitor for the Respondent: Watts McCray The Second Respondent: Did not participate ORDERS
SYC 1191 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR ECCHELI
Applicant
AND: MS ECCHELI
First Respondent
MS C ECCHELI
Second Respondent
ORDER MADE BY:
CAMPTON J
DATE OF ORDER:
8 MAY 2025
THE COURT ORDERS THAT:
1.The husband’s application for leave to amend his Initiating Application filed on 21 February 2024 is dismissed.
2.The husband’s application to join Ms N to the proceedings is dismissed.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 Eccheli & Eccheli has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
Mr Eccheli (“the husband”) commenced proceedings in the Federal Circuit and Family Court of Australia (Division 2) by way of an Initiating Application filed on 21 February 2024 seeking orders adjusting property between he and Ms Eccheli (“the wife”) pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
On 22 February 2024 the proceedings were transferred to this Court.
On 22 March 2024 the wife filed a Response to an Initiating Application seeking different orders adjusting that same property.
These reasons determine an application of the husband for leave to amend his Initiating Application and to join an adult child of the marriage, Ms N, as a party to the proceeding.
BACKGROUND
The wife was born in 1965 and is currently 59 years old. The husband was born in 1965 and is also 59 years old. They commenced cohabitation in 1990. They married in 1992. There are three children of the marriage, Ms N who was born in 1993 and is currently 31 years old, Ms C Eccheli who was born in 1995 and is currently 29 years old, Mr P who was born in 1999 and is currently and 26 years old.
The husband and the wife effected a separation in December 2015. An order for divorce was made in 2017.
Sometime in 2018 they recommenced cohabitation. In 2019 they remarried, and on 17 November 2023 affected a final separation.
In late 2021 a property at D Street, Suburb E NSW (“the Suburb E property”) was acquired for the sum of approximately $9 million. The evidence is scant, but it appears the acquisition was funded by way of a sale of a property at Suburb B owned by the parties or a corporate entity or trust in which they had a direct or indirect interest. The parties agree that the Suburb E property was acquired without encumbrance by way of mortgage. The legal title of the Suburb E property is held 80 per cent by Ms N and 20 per cent by the wife. The husband estimates its current value to be in the range of $13 million.
In or about September 2023 AA Pty Ltd, in its own right and in its capacity as trustee of the AA Family Trust, obtained by way of a loan agreement an advance of $6 million. That liability of the AA Family Trust was secured upon the title of the Suburb E property. Each of the husband, the wife, and Ms N provided, by way of deed, guaranteed the AA Family Trust performance and compliance with the terms of the loan agreement. The loan agreement and guarantee is secured by way of real property mortgage on the title of the Suburb E property entered on 17 October 2023 by the wife and Ms N.
It is uncontroversial that:
(a)By way of an order made as to spouse maintenance on 12 April 2024, the husband was directed to pay the mortgage instalments due on the loan agreement entered by the AA Family Trust secured upon the Suburb E property as and when they fell due; and
(b)As between the husband and the wife, the wife was to have exclusive occupation of the Suburb E property; and
(c)The mortgage payments in respect of the Suburb E property loan advance payable in the first instance by the AA Family Trust were in arrears in the sum of $285,540 as at 30 April 2025; and
(d)On 6 May 2025 CC Pty Ltd on behalf of DD Ltd, the lender and holder of the mortgage security, issued a notice of default and demand seeking repayment of the principle of $6,261,505 and arrears due under the Suburb E loan and mortgage agreement (Exhibit 6).
It is the husband’s contention that Ms N holds her legal interest in the Suburb E property beneficially for him. It is the wife’s contention that Ms N holds her legal interest in the Suburb E property beneficially for she and the husband.
On 2 April 2024 consent orders were made providing for another daughter of the married parties, Ms C Eccheli, to be joined as a respondent to the proceedings. The purpose of the joinder was to direct the proceeds of sale of a property at H Street, Suburb J (“the H Street property”) after selling expenses and other payments to be applied to any taxation liability of Ms C Eccheli arising from the disposal with the balance to be then held in a solicitor’s trust account. Ms C Eccheli did not appear in the proceedings on 2 April 2024. A notation was made that Ms C Eccheli be excused from any further attendance in the proceeding, and that if any party requires her attendance, then she is to be given not less than 14 days’ notice in writing. Ms C Eccheli did not appear at the hearing today.
Subject to evidence, I am told that the capital gains tax payable by Ms C Eccheli on the disposal of the H Street property has been assessed and its payment been the subject provision. I am further told, albeit no evidence has been adduced at this point, that approximately $35,000 remains available for distribution from the proceeds of sale of the H Street property currently held in a solicitor’s trust account.
THE LAW
The husband contends Ms N is a necessary party to these proceedings. In paragraph 6 of his amended Application in a Proceeding filed on 24 April 2025 he seeks a bare declaration pursuant to s 78 of the Act that Ms N holds her interest in the Suburb E property, or its proceeds of sale, on trust for him.
The husband contends that Ms N is necessary for the purposes of r 3.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), which provides:
3.01 Necessary parties
A person whose rights may be directly affected by an issue in a proceeding, and whose participation as a party is necessary for the court to determine all issues in dispute in the proceeding, must be included as a party to the proceeding
The rule mandates that a necessary party to a proceeding must be joined. The rule prescribes satisfaction of two conjunctive thresholds, being:
·Firstly, that the party who is proposed to be joined has rights that will be directly affected by the proceeding; and
·Secondly, that their participation in the proceedings is necessary to determine all issues in dispute in the proceeding.
If the evidence, and I stress the evidence, grounds such satisfaction, the rule obliges a joinder.
CONSIDERATION
By way of his Initiating Application filed on 26 February 2025, the husband does not seek any final orders relating to the Suburb E Property. By way of her Response to an Initiating Application filed on 22 March 2024, the wife also does not seek any orders adjusting the legal interest in the Suburb E property.
The husband seeks leave to file an Amended Initiating Application setting out with particularity the final orders he seeks. He has not adduced into evidence a draft of that proposed amended initiating application to be filed, should leave be achieved.
A reading of the evidence of the husband, including that contained in his financial statement filed on 16 April 2025 identifies that the AA Family Trust (the borrower of the loan advance) is a discretionary trust of which he is “the principal” and primary beneficiary. The tenor of his documents leads to a conclusion the AA Family Trust is his property amenable to adjustment in the s 79 proceedings.
The husband contends that the 80 per cent legal interest of Ms N in the Suburb E property was a construction for “asset protection and estate planning purposes only”. That said, the husband gives evidence that he and the wife advanced funds to Ms N to acquire her interest in the Suburb E property by way of a written loan agreement. His evidence suggests the written loan agreement, which is yet to be received in evidence, was made between he and the wife as “the lenders”, and Ms N as “the borrower”.
Standing back, and at this time in the proceedings, there is an inherent inconsistency between the contention as to there being an advance from the husband and the wife to Ms N to acquire the Suburb E property in her own right, and a contention made by each of the husband and the wife as to Ms N beneficially holding her legal interest in that property for them. Neither the husband nor the wife has explained the inconsistency. They have each had the opportunity to do so.
It is uncontroversial that Ms N currently resides with wife in Suburb E property. The husband concedes that she has not been served with his Amended Application in a Proceeding or any of the affidavit or other evidence he relies upon today. She could not have been served with proposed his draft Amended Initiating Application for which he seeks leave to file and progress. It appears yet to be drafted.
In the ordinary course, an application for leave to amend substantive relief by way of r 2.50 of the Rules would, as a matter of procedural fairness, at least require service of that document upon Ms N, affording her an opportunity to engage with the application for joinder. Additionally, the draft Amended Initiating Application in these circumstances would include a pleading by way of Points of Claim identifying the foundation of his case for the substantive claim made against a third party to the marriage. To be clear, that document ought to include the legal and factual particulars grounding the relief sought affecting the interests of Ms N as the proposed joined party.
A consideration of these matters leads to conclusion that:
(a)Ms N not been afforded procedural fairness as to the fact and terms of her father’s application to join her as a party to the proceeding; and
(b)While the husband has broadly identified what he contends to be the rights of Ms N directly affected by the proceeding, he has not proffered a foundation for what appears to be a fundamental identifiable inconsistency between his evidence and the case he seeks to promote. Cast in that light, it may be a futile endeavour to join a party to the proceedings if the case they prosecute, at least on a prima facie basis, accepting their own evidence, has no merit.
On one view, the husband’s application at this time, having regard to the evidentiary foundations supporting it, was misconceived.
For all of the above reasons, orders will be made refusing the husband’s application, at this time, for leave to amend his substantive relief by filing an Amended Initiating Application and his application for the joinder of Ms N will be refused.
I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 8 May 2025
0
2