BALDINI & BALDINI

[2020] FamCA 137

FAMILY COURT OF AUSTRALIA

BALDINI & BALDINI [2020] FamCA 137

FAMILY LAW – PROPERTY – Application for property settlement orders pursuant to s 79 of the Family Law Act 1975 (Cth) – Whether just and equitable to alter property interests and rights – Stanford v Stanford (2012) 293 ALR 70 considered – Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Where the parties’ contributions, as at the date of trial, are assessed as being equal – Consideration of Kennon & Kennon – Where the Kennon claim is not made out – Where it is just and equitable for the assets to be divided equally between the parties.

Family Law Act 1975 (Cth) ss 75(2), 79

Keating and Keating (2019) FLC 93-894
Kennon and Kennon (1997) FLC 92-757
Spagnardi and Spagnardi [2003] FamCA 905
Stanford v Stanford (2012) 293 ALR 70

APPLICANT: Mrs Baldini

RESPONDENT: Mr Baldini

FILE NUMBER: SYC 552 of 2015

DATE DELIVERED: 5 March 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Stevenson J

HEARING DATE: 14-18 October 2019 and 12 December 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Dr Barnett

SOLICITOR FOR THE APPLICANT: Rossi Simicic Lawyers

COUNSEL FOR THE RESPONDENT: Ms Christie

SOLICITOR FOR THE RESPONDENT: DGB Lawyers

Order

1. Within 28 days of the date of date of these Orders each of the parties do all things necessary to effect the transfer to the wife of the whole of the husband's right title and interest in the property situate at and known as J Street, Suburb B in the State of New South Wales and being the land comprised in title reference … ("the J Street Property").

2. Within 28 days of the date of these Orders, the husband pay to the wife a sum of $140,545.

3. Pending payment by the husband to the wife of such sum of $140,545 he is restrained, other than for the purpose of compliance with Order 2, from withdrawing, dissipating or disposing of:

   3.1      ANZ term deposit #…16

   3.2      ANZ term deposit #…44

   3.3      ANZ progress saver account #…56

   3.4      EE Company, BB Company, HH Limited, GG Company and Westpac shares.

4. Simultaneously with payment by the husband to the wife of the sum of $140,545 both parties do all things necessary to transfer to the husband the whole of the wife's interest in the properties situate at and include 7 units at K Street, L Town in the State of New South Wales and being the land contained in title references 7 Units Strata Plan … ("the L Town properties").

5. The wife indemnify the husband against all liabilities currently owing or accrued in respect of the J Street Property.

6. The husband indemnify the wife against all liabilities currently owing or accrued in respect of the L Town properties.

7. The husband do all things necessary to transfer to the wife the whole of his interest in the funds contained in ANZ Bank accounts #…91, #…41, #…54 and #…62 and Westpac Bank account #…11.

8. The wife do all things necessary to transfer to the husband the whole of her interest in NAB Street Property Account #…22.

9. Both parties do all things necessary to transfer to the wife the whole of the husband's interest in the burial plots at M City Cemetery.

10. Otherwise each of the parties is declared to be solely entitled to all property and superannuation as is presently in his and her respective possession and/or control.

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 Baldini & Baldini 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 552 of 2015

Mrs Baldini

Applicant

And

Mr Baldini

Respondent

REASONS FOR JUDGMENT

The proceedings

1. Mrs Baldini and Mr Baldini are parties to litigation concerning alteration of property interests.  Originally the parties' two daughters, Ms D and Ms F, and their son-in-law Mr G were respondents to the proceedings.  They were joined by the husband but he withdrew all claims against them during the first tranche of the trial in October 2019.

2. The parties consented to orders in relation to the second, third and fourth respondents on 17 October 2019.  These Orders provided as follows:

   1.     Order that the deed between the applicant, first respondent, second respondent and fourth respondent, dated 29 January 1993 be set aside.

   2.     Order that the proceedings brought by the first respondent against the second, third and fourth respondents be otherwise dismissed generally, to the intent that the relief sought against the second, third and fourth respondents not be brought again.

   3.     Remove the second, third and fourth respondents as parties to the proceedings.

   4.     Make no order as to costs as between the first respondent and the second, third and fourth respondents, to the intent that each bear their own costs of the proceedings.

   5.     Order that the Husband be released from his undertaking not to deal with the $70,000 from the J Street property Account insofar as it relates to the rights of the second, third and fourth respondents.

   6. Order that the second, third and fourth respondents not be required to account to the first respondent in respect of any rental income received for the property contained in Real Property Act 1900 folio identifier … situate at and known as J Street ("J Street Property").

   7.     Note the undertakings to the Court that:

   a.the husband shall not seek an order for the sale of the interests held by the second, third or fourth respondents in the Property;

   b.the second, third and fourth respondents shall not take any steps to sell the Property prior to 18 October 2024.

   8.     Note the agreement of the parties that:

   a.the first respondent on the one hand and the second, third and fourth respondents on the other, release each other from any claims that they may have against the other at law or in equity save for the right to enforce the terms of these orders and notations;

   b.the first respondent covenants with the second, third and fourth respondents not to sue any of them in respect of any agistment income received by them or to be received by them in the future for the Property.

3. The trial of the competing claims of the husband and the wife concluded on 12 December 2019.  The wife sought orders which may be summarised as follows:

   1.the husband transfer to the wife the whole of his interest in the property J Street, Suburb B ("the J Street Property") within 28 days

   2.the husband pay to the wife a sum of $300,000 within 28 days

   3.simultaneously the wife transfer to the husband the whole of her interest in the properties 7 Units of K Street, L Town ("the L Town property")

   4.the husband transfer to the wife his interest in burial plots at M City Cemetery

4. The husband sought orders which may be summarised as follows:

   1.        the wife pay to the husband a sum of $280,867 within 28 days

   2.simultaneously with this payment, the husband transfer to the wife the whole of his interest in the J Street Property

   3.both parties do all things necessary to effect the sale of the L Town property and to distribute the proceeds as follows:

   3.1      in payment of real estate agent's fees and commission

   3.2      in payment of legal costs and expenses incidental to the sale

   3.3      in payment of 50% of the balance to N Pty Ltd

   3.4in payment of 25% of the balance to each of the husband and the wife respectively

   4.the husband transfer to the wife the joint burial site.

Background

1. The husband was born in Country C in 1943 and migrated to Australia in 1964, at the age of 21 years.  He acquired Australian citizenship in 1986.  The wife was born in Country C in 1949 and came to Australia following the marriage of the parties in 1972.

2. The parties have two children, Ms D and Ms F, who were born in 1972 and in 1974 respectively.  Ms D married Mr G in 1996 and they are the parents of three daughters.  Ms F married Mr H in 1998 and they are the parents of two children. 

3. At the date of marriage the husband owned vacant land in Country C and at P Town.  He was a part-owner of a retail business, which he operated with his sister and brother-in-law.  The husband had some savings and a motor vehicle.  The wife owned real property in Country C and a "dowry" which consisted of household items.

4. In 1972 the husband sold the P Town property and purchased vacant land at Suburb R.  In approximately late 1973 the parties purchased jointly a residential property at 1 S Street, Suburb R.  In approximately 1975 they sold both of these properties and purchased a home at 2 S Street, Suburb R.

5. Between 1972 and 1975 the husband was a mechanical worker for a company.  Thereafter he was employed at a manufacturing company and also worked in sales for several years.  The husband became a public service employee in 1980 and ceased work completely in 1992-1993.

6. The husband suffered a fracture to his foot in the course of his employment in 1988 and received compensation of $11,624.  These funds were applied to the general living expenses of the family.

7. In 1988 the husband suffered a back injury at work and received compensation payments of $21,000 initially and later $30,000.  In 1995 the husband received a net sum of approximately $217,500 as compensation for this injury.

8. In 1980 the parties purchased a small business, in which the wife worked until its sale in approximately 1982.  For the next two years the wife earned income from handicraft work at home.  In 1984 the wife began part-time employment.  She worked for three to four days per week for approximately three years.

9. In November 1985 the parties purchased a double burial site at a price of $196 (page 4 exhibits to the affidavit of the husband).  There was a dispute as to the value of this asset, with the husband and the wife contending for figures of $200 and $8,000 respectively.

10. In July 1990 the wife commenced employment at a healthcare centre, initially for two days per week.  Gradually her hours increased to full-time employment.

11. In 1990 the parties purchased a half-interest in the J Street Property with their friends Mr and Mrs T.  The parties' share of the purchase money was $500,000, which came from the proceeds of sale of properties at Suburb U and Suburb R.

12. The parties' daughters were each included as registered proprietors as to a

    
    

    one-eighth share on the title to the J Street Property.  At this time they were teenagers and they made no contribution to the purchase money.

13. In July 1992 the parties' daughter Ms D purchased a property at V Street, Suburb W.  The parties provided a sum of $50,000 toward the purchase price.  In about 1998 Mr and Ms D paid a sum of $50,000 to Ms F, following a conversation with the husband.  In effect the husband indicated that his intention was that Ms F would benefit from half of the sum of $50,000 which was advanced at the time of the purchase of the Suburb W property.

14. On 29 January 1993 the husband arranged for the family to execute a deed in relation to the J Street Property.  This document provided that the daughters had a joint liability to the parties of $125,000, which was repayable on demand with interest.

15. In August 1999 a gas company acquired an easement in respect of the J Street Property, for which they paid $21,000.  These funds were deposited into an account conducted by a partnership consisting of the husband and wife and

    
    

    Mr and Mrs T.

16. In October 1999 Lot … of the J Street Property was sold for $640,000 to X Group.  The husband and the wife received approximately $313,000.  They used these funds for living expenses, the purchase of a motor vehicle and overseas travel.

17. Early in 2000 the husband reached an agreement with X Group in relation to a building on the property.  The company agreed to pay $12,000, rather than relocate the building to the portion of the property which was retained by the parties and the Mr and Mrs T.  Similarly X Group agreed to make a payment of $100,000 rather than relocate the second residence on the property.  These funds were used to construct a new building and a project home on the J Street Property.

18. In 2000 the parties and Ms Z purchased a commercial property at Y Street, Suburb B ("The Y Street Property").  The parties jointly and Ms Z each held a one-half interest in this property.  The purchase price was $515,000, of which the parties contributed $200,000 in cash.  They also assumed liability for a mortgage debt of $86,500.  This property was leased to the ANZ bank until 2013.

19. In August 2000 Mr and Mrs T sold their 50% interest in the J Street Property to Mr and Ms D for $310,000.  Thereafter, ownership of the J Street Property was constructed as follows:

    ●        ²/₈ interest by the husband and wife jointly

    ●        ¹/₈ interest by Ms D

    ●        ¹/₈ interest by Ms F

    ●        ⁴/₈ interest by Ms D and Mr G jointly.

20. The income generated by this property was deposited into "a J Street Property Account" and associated expenses were paid from these funds.  The husband and Mr G were signatories to this account.  The parties and Mr and Ms D also operated two joint ANZ bank accounts for J Street Property-related purposes.

21. On 1 January 2006 a physical altercation occurred between the parties.  They gave conflicting accounts of this incident, at least part of which was witnessed by Ms D.  I will consider below the evidence in relation to this incident, in the context of the wife's claim for a contribution adjustment in her favour on the basis of the authority of Kennon and Kennon (1997) FLC 92-757 ("Kennon").

22. The parties lived in a situation of separation under one roof for several years.  The husband and the wife asserted separation dates of approximately 2007 and 2013 respectively.  Ultimately, it seems to me that there is no necessity for a finding as to the date of separation for present purposes.  On any view, the parties cohabited for a very lengthy period.

23. In January 2008 the parties purchased jointly a one-half interest in the L Town property.  The remaining 50% interest was acquired by the company N Pty Ltd, which is owned and operated by Mr AA.  The parties and N Pty Ltd borrowed a total of $1,730,000 from CC Bank, on the security of the L Town and Bank properties.  The L Town property consisted of apartments and a retail outlet.

24. In March 2013 the wife withdrew $33,173 from her superannuation fund.  When she ceased work at the healthcare centre in March 2007, her superannuation fund had a balance of $59,520.  She added to the superannuation fund a sum of $50,000 from funds which she held in a DD Bank account.

25. In February 2013 the husband purchased a single burial site for $20,000.  The parties agreed for the purposes of these proceedings that this asset has a value of $20,000.

26. In July 2013 the wife gave to each of the parties' daughters a gift of $20,000.  The wife maintained that the daughters provided her with substantial assistance over a considerable period, including transport to her job at the healthcare centre.  The wife contended that she made these gifts in appreciation for the help which she received from the parties' children.

27. In 2013 the retail outlet elected not to renew its lease in respect of the L Town property.  CC Bank then required that all rental from the Y Street property to be applied to service its mortgage.

28. In June 2013 the husband paid a sum of $200,000 to reduce the principal sum pursuant to the CC Bank mortgage.  Mr AA also paid $200,000 in reduction of the CC Bank mortgage.  On 30 May 2013 the wife signed a document which purported to be an agreement that she would "repay my husband Mr Baldini all and any money contributed by him on my behalf towards the property at L Town" (page 29 exhibits to the affidavit of the husband).

29. In December 2013 one unit of the L Town property was sold for $160,000.  The net proceeds of $148,302 were paid to CC Bank in reduction of the mortgage.  Another unit was sold in April 2014 and the net proceeds of $136,698 likewise were applied in reduction of the mortgage.

30. In September 2013 the husband severed the joint tenancy with the wife in relation to the parties' interest in the J Street Property.  Thereafter they held their

    
    

    two-eighth interest as tenants-in-common in equal shares.

31. In December 2014 the husband filed a Statement of Claim in the Supreme Court of New South Wales.  The defendants named were the wife, the parties' daughters and their son-in-law Mr G.  The husband sought orders for the sale of the J Street Property and division of the net proceeds.

32. The Supreme Court proceedings were transferred to the Family Court of Australia on 8 May 2015 and the husband was ordered to pay costs.  He paid a sum of $16,500 on account of the wife's costs, being $3,300 to a real estate valuer and the balance to her solicitors.

33. Since approximately 2015 the husband and the wife have occupied separate floors of their house on the J Street Property.  It appeared to be common ground that they have had little interaction with each other for several years.

34. The Y Street property was sold for $1,250,000 in May 2015.  The husband and wife received a sum of $122,458 from the net sale proceeds, which they divided equally.

35. In January 2016 the husband withdrew $70,000 from the J Street Property Account, leaving a balance of $3,754.  He deposited this sum of $70,000 into an account in his sole name.

Approach to these proceedings

1. In Stanford v Stanford (2012) 293 ALR 70 the majority of the High Court of Australia held as follows:(paragraph 35)

   It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under this section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

2. Their Honours further observed as follows:

   In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).

3. I am comfortably satisfied that it is just and equitable that there be orders for alteration of property interests between the parties to these proceedings.  They have lived separate lives for several years and they both wish to sever their financial relationship.

1. It is first necessary to determine the nature, value and ownership or extent of assets, liabilities and financial resources of the parties. All relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other. The matters set out in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes up by reference the provisions of section 75(2), must be considered and a determination made as to what if any alteration should be made to the entitlements of the parties as earlier assessed on account of contribution.

The assets, superannuation, liabilities and financial resources

1. On the last day of the trial, counsel for the parties submitted a joint Balance Sheet in the following terms:

Ownership		Description	Wife / de facto partner's value	Husband / de facto
ASSETS
1.	W	12.5% share J Street Property	312,500	312,500
2.	H	12.5% share J Street Property	312,500	312,500
3.	J	50% share in L Town Property 7 Units	660,000	660,000
4.	H	100 EE Company Shares @ $36.53	3,522	3,522
5.	H	381 BB Company Shares @ $91.01	33,364	33,364
6.	H	3,288 HH Limited @ $8.00	25,055	25,055
7.	H	6000 GG Company @ $7.51	41,340	41,340
8.	H	264 Westpac Group @ $29.89	7,461	7,461
9.	H	2,177 FF Company @ $3.54	7,511	7,511
10.	H	300 JJ Limited @ $11.98	3,474	3,474
11.	H	1,100 KK Company @ $3.44	3,575	3,575
12.	H	100 LL Company @ $2.61	245	245
13.	H	Motor Vehicle 1, …	22,250	22,250
14.	H	ANZ Access Advantage cheque account #…97	12,729	12,729
15.	H	ANZ Progress Saver account #…56	20,000	20,000
16.	H	ANZ Access Advantage cheque (J Street Property) account #…91 held jointly with the Third Respondent	655	655
17.	H	ANZ Access Advantage cheque (J Street Property) account #…41 held jointly with the wife and Third Respondent	0	0
18.	J	ANZ Access Advantage cheque account #…54 held jointly with the wife, the Third Respondent and the Fourth Respondent	4,943	4,943
19.	J	ANZ Access Advantage cheque account #…62 held jointly with the wife, the Third Respondent and the Fourth Respondent	530	530
20.	H	ANZ Term deposit #…44	35,029	35,029
21.	H	ANZ Advance Notice Term deposit #…16	115,000	115,000
22.	H	Single crypt site	20,000	20,000
23.	W	MM Bank Account #…24	270	270
24.	W	PP Bank…2 Everyday account	4,929	4,929
25.	W	PP Bank term deposit …64	21,073	21,073
26.	W	920 FF Company shares @ $3.55	3,174	3,174
27.	W	1,000 KK Company shares @ $3.44	3,250	3,250
28.	J	Double burial site (M City Cemetery)	200	8,000
29.	J	Westpac Deeming Account …11	160	160
30.	J	NAB Street Property Account …27 held jointly with Mr AA	17	17
Total		$1,674,756	$1,682,556

ADDBACKS
32.	H	Husband's legal fees paid to DGB Family Law matter 04/09/2019 – 19/07/2016	$99,137
34.	H	Supreme Court costs Orders $16,500.00	$16,500	NIL
35.	W	Legal fees paid re Family Law matter	$1,182
36.	H	Legal fees paid to DGB 10/10/2019	$15,872
Total		$132,691	$0

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner's value	Husband / de facto partner's value
37.	W	NN Superannuation Fund as at 30/06/2019	Accumulation	$65,499	$65,499
Total		$65,499	$65,499

FINANCIAL RESOURCES
Ownership		Description	Wife / de facto partner's value	Husband / de facto partner's value
ASSETS
38.	$	$
Total		$0	$0

1. Accordingly, the disputed items and issues were as follows:

   1.        the value of the double burial site

   2.        the treatment of the husband's paid legal fees

   3.        the treatment of the wife's paid legal fees

   4.the treatment of the costs paid by the husband to the wife pursuant to orders of the Supreme Court.

The double burial site

1. There was no evidence as to the value of this asset.  It was open to either or both of the parties to obtain such evidence.  Each of the parties sought an order for transfer to the wife of the husband's interest in this asset.  I will make such an order but this asset will not appear in the Balance Sheet.

2. I do not accept the submission on behalf of the wife that the appropriate course would be to adopt the lower figure of $200, because there was no evidence of value of this asset.  Similarly, I do not accept the submission on behalf of the husband to the effect that the only just and equitable solution would be to remove both the single and double burial sites from the Balance Sheet.  There was an agreed value of $20,000 for the husband's single site and I see no valid reason to exclude that asset from consideration.  Accordingly, I will include the single burial site in the list of assets at a value of $20,000.

Paid Legal Fees

1. There was no evidence in relation to the quantum of legal fees paid by each of the parties, nor the source of these funds.  I assume that the solicitors for the parties would have included correct figures in the joint Balance Sheet submitted on 12 December 2019.  The husband appears to have paid a total of $115,009 to his solicitors and the wife a sum of $1,182.

2. To a significant extent, the parties have kept their financial affairs separate for at least the last ten years.  It appears that payments for legal fees came from accounts in the sole names of the husband and the wife.  On the available evidence, it is impossible that there be a finding to the effect that the funds expended by the parties on legal fees existed at the date of separation.

3. In my view, the appropriate course is to take the paid legal fees into account pursuant to section 75(2)(o) of the Family Law Act.  The fact that the husband has paid a significant amount for legal fees cannot be ignored but, in my view, it would be problematic if these funds were "added back" to the list of assets.

4. As to the sum of $16,500 paid to the wife by the husband pursuant to an Order of the Supreme Court, I accept the submission on her behalf that she should not effectively be required to pay part of her own costs.  The Supreme Court saw fit to make an order that the husband pay the costs of the wife.  I will not "add back" this sum of $16,500.

5. During the course of the trial, counsel for the wife conceded that a parcel of real estate in Country C is a financial resource in her hands.  The registered proprietors of this property are the parties' two daughters but there is no doubt that the wife provided funds for the purchase.  She occupies this property when she travels to Country C.  There was no evidence as to the value of the real estate in Country C.

6. Accordingly, I find that the parties hold the following assets, superannuation, liabilities and financial resources:

Assets

($)
1.	12.5% interest in J Street Property  (W)	312,500
2.	12.5% interest in J Street Property  (H)	312,500
3.	50% interest in Units 1, 2, 3, 4, 5, 6, 7, 8 and 12 of K Street, L Town property  (J)	660,000
4.	EE Company shares  (H)	3,522
5.	381 BB Company Shares shares  (H)	33,364
6.	3,288 HH Limited shares  (H)	25,055
7.	6,000 GG Company shares  (H)	41,340
8.	264 Westpac Bank shares  (H)	7,461
9.	2,177 FF Company shares  (H)	7,511
10.	300 JJ Limited shares  (H)	3,474
11.	1,100 KK Company shares  (H)	3,575
12.	100 LL Company shares  (H)	245
13.	Motor Vehicle 1  (H)	22,250
14.	ANZ Access Advantage cheque account  (H)	12,729
15.	ANZ Progress Saver account  (H)	20,000
16.	ANZ Advantage cheque (J Street Property) account held jointly with  Mr G  (H)	655
17.	ANZ Access Advantage cheque account held jointly with wife,  Mr G and Ms D	4,943
18.	ANZ Access cheque account held jointly with the wife,  Mr G and Ms D	530
19.	ANZ Term deposit  (H)	35,029
20.	ANZ Advance Notice Term deposit  (H)	115,000
21.	Single crypt burial site  (H)	20,000
22.	MM Bank Account  (W)	270
23.	DD Bank account  (W)	4,929
24.	DD Bank term deposit  (W)	21,073
25.	920 FF Company shares  (W)	3,174
26.	1,000  KK Company shares  (W)	3,250
27.	Westpac Deeming Account  (J)	160
30.	NAB Street Property Account held jointly with Mr AA  (J)	17
($)
$1,674,556

Superannuation

37.	NN superannuation fund  (W)	65,499
$1,740,055

Financial Resources

38. Real property in Country C  (W) NK

1. In the above table, the letters "H", "W" and "J" designate that the assets, superannuation and financial resources are held respectively by the husband, the wife or the parties' jointly.  Neither of the parties holds a liability.

The contributions of the parties

1. In final submissions, counsel for the wife contended that the contributions of the parties should be found to be equal, leaving aside a Kennon adjustment in her favour.  Senior counsel for the husband submitted that there should be a finding that the parties made equal contributions.

2. I agree that the contributions of the parties should be found to be equal, after a long relationship which involved several joint financial endeavours and the parenting of two children.  Accordingly, the only issue in relation to contribution is whether there should be a Kennon adjustment in favour of the wife.

3. The Full Court in Kennon said, inter alia, as follows at p 84,294:

   Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties' respective contributions within s.79. ...

4. The Full Court said also at 84,294 – 84,295:

   It is essential to bear in mind the relatively narrow band of cases to which these considerations apply.  To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernable impact upon the contributions of the other party.  ...

5. A later Full Court decision of Spagnardi and Spagnardi [2003] FamCA 905 appeared to impose an additional requirement for a successful Kennon claim.  The court said inter alia:

   47.An insufficiency of evidence in the present case leaves the Court with a limited ability to deal with allegations in the context of section 79 proceedings. As Kennon has established, it is necessary to provide evidence to establish:

   ●        The incidence of domestic violence;

   ●        The effect of domestic violence; and

   ●Evidence to enable the court to quantify the effect of that violence upon the parties capacity to "contribute" as defined by section 79(4).

6. In Spagnardi the Full Court said also:

   46.In addition to that stated by the trial Judge we would not want the reference in Kennon to "exceptional" on page 84,294 to be understood to mean rare. We do not agree with this qualitative description and would be more inclined to the view expressed by the trial Judge at paragraph 17:

   "In his submissions, [counsel for the husband], quite understandably and quite correctly, drew my attention to the strength of the language, referring to 'exceptional cases' and ' the relatively narrow band of cases'.  However, it seems to me that, reading these passages as a whole, the references to 'exceptional cases' and 'narrow band of cases' occurs in the context of the principle of misconduct in general rather than the more narrow formulation about domestic violence.  My reading of these passages, therefore, is that it is not necessarily correct that only cases of exceptional violence or a narrow band of domestic violence cases fall within the principles.  It seems to me that reading these passages carefully, the key words in a case where there are allegations of domestic violence are 'significant adverse impact' and 'discernable impact'.  That reading of the passage is, I think, given some additional force by the actual decision in the Doherty case and the judgments of Baker J in both Doherty and Kennon.

7. I am inclined to agree with the majority of the Full Court in Keating and Keating (2019) FLC 93-894 in relation to the need for "quantification" evidence for a successful Kennon claim.  The court there stated:

   38.Their Honours further noted at [48] that there was a "complete absence of evidence as to how the husband's conduct affected her ability to contribute".  At first blush the reference in Spagnardi to "quantification" seems to elevate the need for an evidentiary nexus or "discernable impact" between the conduct complained of and its effect on the party's ability to make relevant contributions, requiring expert or actuarial evidence of the effect of the violence.  That impression is reinforced by their Honours' reference to and comparison with the husband's failure to adduce evidence to demonstrate the impact on the value of the house by his renovations and improvements at [50] where their Honours said:

   An absence of quantification was also apparent in the appellant's case.  While the husband went to great lengths to identify each of the tasks undertaken by him in connection with renovations and improvements to the matrimonial property, he failed to provide evidence of the direct effect of his endeavours upon the value of the property.

   39.This uncomfortable analogy does not illuminate what "quantification" of the effect of violence on contributions might look like.  It suggests something more than the evidence by the victim spouse.  We struggle to understand what that "quantification" evidence might be beyond that given by the victim spouse as to the incidence and effect of the violence as identified in Spagnardi in the first two dot points at [47]. Furthermore, we fail to see how this third step accords with the decision in Kennon which the Full Court in Spagnardi said governed the situation.  Perhaps the use of the word "quantification" is infelicitous and has unintentionally added a gloss to the ratio in Kennon when, in truth, the Court in Spagnardi was merely reinforcing the need for there to be an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make relevant contributions.  And, depending upon the nature of the violence established, in the absence of express evidence about the effect that violence had on the victim spouse's contributions, how difficult it might be for the Court to draw inferences which would establish the evidentiary nexus (see Spagnardi at [42]).  But we did not have the benefit of argument on the point (nor it seems did the primary judge) and prefer to express no final view about it.

8. The wife alleged that the husband subjected her to family violence throughout their long marriage.  She contended that this violence consisted essentially of repeated physical assaults, verbal abuse and denigration.  The wife alleged further that the husband exerted financial control over her and made her life difficult by refusing to transport her to her workplace and medical appointments for herself and the children.

9. The wife contended that she experienced chronic anxiety and stress as a result of the husband's conduct.  Her counsel expressed the Kennon argument as follows in an Outline of Case document:

   7.10It is the Wife's case, which is supported by the affidavit evidence of the parties daughters’ [sic] that the Husband conducted himself in a belligerent, often violent, domineering and uncharitable way.  The Wife deposes to being physically injured a number of times such that she had to take time off of work.

   7.11Her contributions as a homemaker and worker were more arduous because the Husband chose to not drive her places.  The Wife asserts that she had to take the bus, walk places, ask for favours because of the Husband's conduct.

   7.12It is the impact on her emotional state which appears to have been the most significance and which made her contributions more significant.  The Wife deposes to the Husband treating her with contempt, yelling at her, threatening her which had the effect of her being anxious, afraid and having little self-esteem because of the way the Husband treated her.  The Wife deposes to frequently feeling embarrassed because of the way the Husband treated her.

10. Largely the husband denied these allegations but, in cross-examination, he stated that there were two physical altercations between the parties.  He alleged that the wife directed physical violence and verbal abuse at him on each of these occasions.

11. The wife deposed that the husband first struck her when Ms D was a baby, in the presence of her godmother.  The wife said that the husband slapped her on the face with his open hand with sufficient force to cause her to feel pain and lose an earring.  When asked about this allegation in cross-examination the husband said inter alia:

    "There is no way I would hit her in someone else's house."

12. The wife deposed to several additional physical assaults by the husband.  All of these alleged assaults were denied by the husband, who contended that there were frequent arguments between the parties which involved mutual swearing, shouting and verbal abuse.

13. The wife deposed to mutual verbal abuse between the parties.  She stated:

    42.I remember another time we argued at 1 S Street and the Husband said to me in Country C language "Get fucked, you and your mother"  I answered back "Get fucked you and you’re [sic] your family."  He immediately slapped me across the face.  I stopped still.

14. The last physical confrontation between the parties occurred on 1 January 2006.  The wife alleged that the husband hit and kicked her, so as to cause bruising and prevent her from attending work for several days.  The wife deposed to no other incident when an assault by the husband prevented her from attending her workplace.  The husband alleged that he slapped the wife when she scratched his face and drew blood.  The husband contended that the wife attempted to hit him with a step ladder, a chair and a broom during this incident.

15. The parties' daughter Ms D was present during at least part of this altercation.  She deposed that she saw the husband hit the wife and that she yelled "leave mum alone".  In cross-examination Ms D agreed that she called the husband "a fucking bastard" and indicated that she saw no scratch marks on his face.

16. Ms D deposed that she observed the husband hit the wife on numerous occasions.  She deposed that she saw the wife upset and crying after arguments and altercations between her parents.  She described an atmosphere of chronic anxiety and tension in the family home.  She stated in cross-examination that her parents yelled and swore at each other during their arguments.

17. Ms F deposed that she saw the husband hold a broken beer bottle at the throat of the wife when she was eight years old.  She deposed that she and her sister were present when the husband kicked the wife.

18. Ms F deposed that the husband denigrated the wife and frequently called her "stupid" and "good for nothing".  In cross-examination she said:

    "my mother swore at my father"

    and that:

    "she spoke badly about his family"

    during confrontations between her parents.

19. The wife deposed that the husband required her to account for all housekeeping money which he provided whilst she was out of the paid workforce.  She deposed also that the husband threw a $20 note on a table, if she asked for money for her personal expenses.  The wife gave evidence that she felt "demeaned and worthless" by this behaviour of the husband.

1. For considerable periods of the parties' cohabitation, however, the wife had control of her own income and operated bank accounts and credit cards in her sole name.  She made financial gifts to the parties' daughters at various times during the marriage.  She contributed funds to the purchase of the house in Country C in the names of the parties' children.  In these circumstances, I do not accept that the husband exerted financial control over the wife.

2. I accept entirely that the marriage caused deep unhappiness for the wife.  I accept that she felt obliged to remain in the relationship for religious and cultural reasons.  In my view, it seems most likely that all four members of the household were unhappy and that the wife and the parties' daughters lived in a state of chronic anxiety and stress.

3. It is evident that the parties' children have considerable antipathy are antipathetic toward the husband and are very supportive of the wife.  Nonetheless, they both describe mutual swearing and shouting during arguments between their parents.  They were unshaken in their evidence that they witnessed physical assaults of the wife by the husband.

4. I accept that the wife was subjected to reprehensible behaviour by the husband. In no way do I condone the mistreatment and abuse of the wife by the husband. I am not satisfied, however, that the husband's conduct had a discernable impact upon the capacity of the wife to make contributions for the purposes of section 79 of the Family Law Act.  I am mindful of the need for evidence of a "discernable impact" or “evidentiary nexus" as set out in the relevant authorities.

5. As noted above, the husband contended that the contributions of the parties should be found to be equal and the wife maintained that her Kennon argument is the only reason for departure from such a finding.  Having rejected the wife's Kennon argument, I find that the contributions of the parties should be found to be equal in all respects.

Section 75(2) factors

1. Counsel for the wife submitted that there is no basis for an adjustment in favour of either party on account of section 75(2) factors.  On behalf of the husband it was submitted that section 75(2) factors warrant a 5% adjustment in his favour.

2. Senior counsel for the husband submitted that the following matters justify such an adjustment:

   ●the wife receives the benefit of occupation of a home and income from agistment from the co-owners of the J Street Property

   ●the husband will be without accommodation upon the transfer to the wife of his interest in the J Street Property

   ●the wife receives the benefit of sharing of J Street Property expenses with the

   
   

   co-owners of the property

   ●the wife holds the financial resource of the house property in Country C.

3. I have no reason to suppose that the wife will lose the financial benefits of sharing of income and expenses associated with the J Street Property with the

   
   

   co-owners upon the transfer of the husband's interest.  The wife has a good relationship with Mr and Ms D and will continue to occupy her current home.

4. It was common ground that the wife should take the husband's interest in the J Street Property.  An integral part of this proposal is that she will have the benefit of ongoing accommodation in her current home.  The husband will have access to funds from which he can arrange accommodation for himself.  I do not consider that the wife's ongoing residence at the J Street Property warrants an adjustment in favour of the husband.

5. For reasons set out below, I will order that the wife transfer to the husband the whole of her interest in the L Town property.  Accordingly, the husband will take an asset which has the potential for production of income.  In my view, the wife's ongoing access to agistment income and sharing of J Street Property expenses does not warrant an adjustment in favour of the husband in these circumstances.

6. Even if all or any of these considerations warranted an adjustment in favour of the husband, I consider that his payment of approximately $115,000 on account of legal costs militates against such an outcome.  Overall, I see no reason for an adjustment in favour of either party on account of section 75(2) factors.  They are of similar age and neither has capacity to engage in gainful employment.  Realistically, the house property in Country C will be used as a residence by the wife and the families of the parties' children during holiday trips and will generate no finite financial benefit for the wife.

Result

1. I thus find that the assets and superannuation of the parties should be divided equally between them.  An issue then arises as to the form of the orders necessary to achieve that result.

2. As noted above, it was common ground that the wife receive the husband's interest in the J Street Property.  That being so, I will order that the husband transfer to the wife his interest in all of the bank accounts which he operates in conjunction with Mr and Ms D in relation to the J Street Property operations.

3. The wife sought orders to the effect that she transfer to the husband her interest in the L Town property and that he pay to her a sum of $300,000.  The husband sought orders to the effect that the parties join the sale of their interest in the L Town property and to divide their share of the net proceeds equally.  The husband sought an order that the wife pay to him a sum of $280,867, which would come from her share of the proceeds of sale.

4. It seems to me that the wife's problematic relationship with Mr AA causes difficulty with the orders proposed by the husband.  The wife deposed that she feels intimidated by Mr AA and he said that "[she] and I do not have a good working relationship."  Mr AA said also "My relationship with [Mrs Baldini] in particular has become fractured and on occasions confronting."

5. On the other hand, the husband and Mr AA have cooperated with regard to payments to CC Bank and outgoings for the L Town property.  It would seem that they have maintained a working relationship.

6. It seems to me that no good purpose would be served, if the wife and Mr AA were forced to continue their fractured working relationship until there is a sale of the parties' interest in the L Town property.  I am of the view that there is a much greater prospect that the husband and Mr AA will cooperate, to their mutual financial advantage, in relation to this property.  Accordingly, I will accede to the proposal of the wife that the husband receive her interest in the L Town assets.

7. The net pool of assets and superannuation has a value of $1,740,055, of which 50% equals $870,028.  The wife will receive or retain the following assets and superannuation:

($)
1.	12.5% interest in J Street Property	312,500
2.	12.5% interest in J Street Property	312,500
3.	ANZ J Street Property Account #…91	655
4.	ANZ J Street Property Account #…54	4,943
5.	ANZ J Street Property Account #…62	530
6.	MM Bank account	270
7.	DD Bank account	4,929
8.	DD Bank term deposit	21,073
9.	FF Company shares	3,174
10.	KK Company shares	3,250
11.	Westpac account	160
12.	NN Superannuation	65,499
$729,483

1. The wife thus requires an additional sum of $140,545 to constitute her entitlement of 50% of the net pool of assets and superannuation.  The husband holds sufficient liquid assets to make this payment to the wife.

2. The husband will take or retain the following assets:

($)
1.	50% interest in L Town property	660,000
2.	EE Company shares	3,522
3.	BB Company shares	33,364
4.	HH Limited shares	25,055
5.	GG Company shares	41,340
6.	Westpac shares	7,461
7.	FF Company shares	7,511
8.	JJ Limited shares	3,474
9.	KK Company shares	3,575
10.	LL Company shares	245
11.	Motor Vehicle 1	22,250
12.	ANZ account #…97	12,729
13.	ANZ account #…56	20,000
14.	ANZ Term Deposit account #…44	35,029
15.	ANZ Term Deposit account #…16	115,000
16.	Single crypt site	20,000
17.	NAB Street Property Account #…27	17
$1,010,572

This figure exceeds the husband's entitlement to 50% of the net pool of assets and superannuation by $140,544.

1. The husband holds cash reserves of $182,758 and shares to the value of $125,547.  After making a payment to the wife of $140,545, the husband will retain cash and/or shares to the value of about $167,760.  He will have sufficient funds to accommodate himself while he and Mr AA make decisions as to the future of the L Town properties.

2. I am satisfied that orders which reflect this outcome would be just and equitable in all of the circumstances.

I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 5 March 2020.

Associate:

Date:  5 March 2020