Campos & Fossen
[2024] FedCFamC2F 922
•16 July 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Campos & Fossen [2024] FedCFamC2F 922
File number(s): NCC 218 of 2023 Judgment of: JUDGE BETTS Date of judgment: 16 July 2024 Catchwords: FAMILY LAW – Property proceedings – seven year de facto relationship – mature aged couple – where the parties lived in the property owned by the respondent – where the parties did not acquire any joint assets or liabilities during their relationship – where the applicant seeks a cash settlement equal to 30% of the value of the net equity in the property – where the respondent seeks that the applicant’s application for a property settlement be dismissed – where the Court considers it would not be just and equitable to make an order altering the parties’ respective property interests – application dismissed – just and equitable outcome. Legislation: Family Law Act 1975 (Cth) (“the Act”), Part VIIIAB, ss 90SM, 90SF Cases cited: Cosola & Moretto [2023] FedCFamC1A 61
Kennon & Kennon (1997) FLC 92-757
Moretto & Cosola (No.2) [2022] FedCFamC1F 924
Robb & Robb (1995) FLC 92-555
Stanford & Stanford (2012) 247 CLR 108
Division: Division 2 Family Law Number of paragraphs: 79 Date of last submission/s: 4 June 2024 Date of hearing: 3 & 4 June 2024 Place: Newcastle Counsel for the Applicant: Ms Court Solicitors for the Applicant: Koulouris & Associates Pty Ltd Counsel for the Respondent: Ms Ticehurst Solicitors for the Respondent: Nash Allen Williams & Wotton ORDERS
NCC 218 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CAMPOS
Applicant
AND: MR FOSSEN
Respondent
ORDER MADE BY:
JUDGE BETTS
DATE OF ORDER:
16 JULY 2024
THE COURT ORDERS THAT:
1.Ms Campos’ application for a property settlement order pursuant to Part VIIIAB of the Family Law Act 1975 (Cth) is dismissed.
2.The Orders of 22 May 2024 are discharged.
3.The court will hear from the parties on the question of costs.
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 a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BETTS
INTRODUCTION
Following the breakdown of a seven year childless de facto relationship between a mature-aged couple who, during their relationship neither acquired any joint assets nor incurred any joint liabilities, Ms Campos now seeks a cash settlement from Mr Fossen in an amount equal to thirty percent (30%) of the value of the net equity of his home at City B, USA which he owned when they met and where the parties (and some of the Wife’s children) lived during the relationship.
Mr Fossen contends that it would not be ‘just and equitable’ to make any order altering the parties’ respective property interests. For the reasons which follow, I agree.
THE LAW
These proceedings are governed by the provisions of Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”).
The court has power to make orders altering the parties’ respective property interests: s 90SM(1) of the Act. In considering what property settlement order should be made (if any), the court must consider the respective parties’ contributions of a financial, non‑financial, homemaking and parenting nature: s 90SM(4)(a), (b) & (c) of the Act. The court must also consider the various matters prescribed in s 90SM(4)(d), (e), (f) & (g) of the Act, noting that s 90SM(4)(e) specifically takes up any relevant ‘spousal maintenance’ considerations as prescribed in s 90SF(3) of the Act.
Critically, the court must not make any property settlement order unless it is satisfied that in all the circumstances it is ‘just and equitable’ to do so: s 90SM(3). The effect of the High Court’s decision in Stanford & Stanford (2012) 247 CLR 108 is that:
·in every de facto property case in which a property settlement order is sought, it is necessary to satisfy the ‘just and equitable’ requirement in s 90SM(3);
·the expression ‘just and equitable’ is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations and does not admit of exhaustive definition. It is not possible to chart its metes and bounds;
·a consideration of whether it is ‘just and equitable’ to make a property settlement order should begin firstly by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. The question posed by s 90SM(3) is thus whether, having regard to those existing interests, the court is satisfied that it is ‘just and equitable’ to make a property settlement order;
·second, although the court has broad power to make a property settlement order, whether it is ‘just and equitable’ to make the order is not to be answered by assuming that the parties’ rights to or interests in their property are or should be different from those that then exist. De facto relationships do not give rise to ‘community of ownership’ of their property. Ownership of their property is to be “decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses”. The question presented by s 90SM(3) is whether those rights and interests should be altered;
·third, whether making a property settlement order is ‘just and equitable’ is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in property which is fixed by reference to the various matters (including financial and other contributions) set out in s 90SM(4). To conclude that making an order is ‘just and equitable’ only because of and by reference to various matters in s 90SM(4), without a separate consideration of s 90SM(3), would be to conflate the statutory requirements and ignore the principles laid down by the Act.[1]
In deciding the ‘just and equitable’ question posed by s 90SM(3), the court is not required to take into consideration the matters prescribed in s 90SM(4), although it is permissible to do so and in most cases it will be informative: Cosola & Moretto [2023] FedCFamC1A 61.
THE HEARING
The final hearing took place on 3 & 4 June 2024.
Ms Campos was represented by Ms Court of counsel, who relied upon the following documents:
·Case Outline Document filed 03/06/24 (which included a proposed Minute of Order);
·Ms Campos’ Trial Affidavit filed 10/05/24; and
·Ms Campos’ Financial Statement filed 03/06/24.
Mr Fossen was represented by Ms Ticehurst of counsel, who relied upon the following documents:
·Case Outline Document filed 31/05/24 (which included a proposed Minute of Order);
·Mr Fossen’s Trial Affidavit filed 06/05/24; and
·Mr Fossen’s Financial Statement filed 06/05/24.
During the hearing the parties tendered numerous exhibits which I will refer to as relevant.
Before proceeding further, I make the following general observations about the evidence.
Ms Campos’ Trial Affidavit should have set out why it was ‘just and equitable’ to make a property settlement order pursuant to s 90SM(3), if not directly then at least inferentially. Yet it did not adequately do so. All it did was plead factual matters pursuant to s 90SM(4) and s 90SF(3) of the Act which, as Stanford warned, cannot be conflated with the matters arising pursuant to s 90SM(3).
Ms Campos’ Trial Affidavit deliberately omitted to mention that she received rent assistance from Centrelink throughout the relationship. I say ‘deliberately’ because its inclusion would have grated against her narrative in this court, namely that she did not rent from Mr Fossen at any stage.
Significantly, both parties had been knowingly dishonest in affidavit material. By way of background:
(a)Mr Fossen and his former partner Ms C had two children together: D born in 2007 and E born in 2009. Throughout the relationship between Ms Campos and Mr Fossen, D and E lived with Ms C and, broadly, they spent alternate weekends and half holidays at Mr Fossen’s home. Ms Campos had four children: Mr J born in 1989; Ms F born in 1991; Mr G born in 1994 and Mr H born in 1998. Three of her children – Mr J, Mr G and Mr H - lived in the home at different times;
(b)Ms C twice brought parenting proceedings against Mr Fossen. The first proceedings were brought in the then Federal Circuit Court (“FCC”). Ms C alleged that their children were at risk of harm in Mr Fossen’s home as a result of alleged family violence involving Mr Fossen, Ms Campos and Mr J. On 26 April 2018 the FCC proceedings were resolved by final orders which, inter alia, restrained the parents from either exposing D or E to family violence, or leaving the children alone with Mr J unless Mr Fossen, Ms Campos or Mr H was present;[2]
(c)in 2019 Ms C instituted proceedings in the Family Court of Australia (“FCA”) as a result of E allegedly disclosing that Mr H had sexually abused him. Ms C again raised concerns about family violence in Mr Fossen’s home. On 30 October 2020 the FCA proceedings were resolved by final orders which, inter alia, restrained Mr Fossen from allowing D or E to remain in the company of Mr H for the following twelve months unless he or Ms Campos was supervising, and Mr Fossen was restrained indefinitely from allowing D or E to remain in the company of Mr J unless he or Ms Campos was supervising.[3]
That Ms Campos and Mr Fossen had been knowingly dishonest is apparent from comparing and contrasting their home life as described in their FCA affidavits with the home life described in their Trial Affidavits.
Ms Campos’ Trial Affidavit tried to mount a Kennon argument[4] based on the Husband’s alleged family violence towards her during the relationship. Yet her FCA affidavit had “categorically denied” family violence[5] and she had even gone as far as to tell the FCA that:
14.I have been in a domestically violent relationship before, where violence was perpetrated upon me. I say that I would never put myself in a situation again where I am in a domestically violent relationship.[6]
Ms Campos’ Trial Affidavit tried to deal with this problem by deposing that she only realised that she and Mr Fossen were in a domestically violent relationship when she listened to Ms C give evidence to the Family Court.[7] I reject this explanation. Ms Campos herself admitted in cross-examination that she had perjured herself in the FCA affidavit.
Mr Fossen’s conflicting affidavits were no better. In his FCA affidavit he deposed to having a healthy and non-violent relationship with Mr J.[8] Yet his Trial Affidavit painted Mr J as a violent and intimidating bully. One of those versions is knowingly untrue.
In the circumstances I am unable to rely upon either party as being a reliable witness, which in turn makes the court’s fact-finding task more difficult. Moreover, there were gaps in each party’s financial disclosure; neither of them had a complete ‘documentary trail’ in terms of bank statements and expenditure records. For completeness I also record that Mr Fossen also has literacy issues and he admitted that he was not good with dates in particular.
ASSETS, LIABILITIES & FINANCIAL RESOURCES OF THE PARTIES
The focus of the hearing was whether or not there should be a cash settlement in favour of Ms Campos, on her case fixed as a percentage of the net equity in his home. In the circumstances, the parties conceded that for practical purposes the only relevant asset was that net equity.
Mr Fossen conceded that any order for a cash settlement would necessitate the sale of the home; its value would therefore be determined by the market. The home had not been formally valued but for the purposes of the hearing the parties proceeded on the basis of a real estate appraisal[9] setting its value in the range of $650,000 - $700,000. As the mortgage balance was $309,000, the net equity in the home was therefore $341,000 - $391,000 less costs of sale.
For completeness I record that the parties do have other modest assets. Ms Campos has bank account balances, furniture and Motor Vehicle 1 collectively worth about $4,200, together with superannuation of just under $29,000.[10] Mr Fossen has bank account balances, furniture and a Motor Vehicle 2 collectively worth about $15,000, together with superannuation of $10,000.[11]
CHRONOLOGY OF RELATIONSHIP & CONTRIBUTIONS
Ms Campos was born in 1968 and Mr Fossen in 1964.
The parties cohabited from February 2014 until 22 February 2021.
Initial financial contributions
At commencement of cohabitation, Ms Campos was forty-five and Mr Fossen was forty-nine.
Ms Campos’ assets consisted of (inferentially modest) bank account balances, furniture and her Motor Vehicle 1. Her superannuation balance was approximately $8,117.[12]
At that stage Mr Fossen and Ms C still co-owned the home. They had purchased it for $275,500 in 2011, taking out a mortgage of $265,000. He and Ms C had separated not long after and Mr Fossen had retained occupation of the home and assumed sole responsibility for the mortgage payments. The value of the home as at February 2014, and the associated mortgage balance, are unknown. Apart from the home, Mr Fossen had nominal bank account balances, furniture, a Motor Vehicle 3 and around $82,000 in superannuation with Super Fund 1.
Financial contributions during the relationship
Both parties worked throughout.
Mr Fossen was the primary breadwinner, working full-time as a tradesperson including half a day on Saturdays, and earning approximately $83,000 per annum. From his income, he paid child support to Ms C in respect of D and E.
Ms Campos worked part-time in hospitality, earning approximately $19,000 per annum. Additionally, she received Centrelink benefits including rent assistance, some Family Tax benefits and some child support from Mr H’s father. Her taxable income for FY 2020 and FY 2021 was $32,432 and $38,110 respectively; her taxable income in the earlier years of the relationship is not in evidence but was likely in a similar range.[13]
The parties always kept their bank accounts separate. During the relationship Ms Campos’ primary bank account (ending #...15) was held with K Bank although she also operated an account in her maiden name with L Bank which she closed during what she called the “second Covid lockdown”.[14]
Mr Fossen solely met the mortgage repayments and home insurance costs throughout. In mid‑2014, some six months into the relationship, Ms C transferred her interest in the home to Mr Fossen and he contemporaneously refinanced the joint mortgage into his sole name.[15]
Both parties bought groceries and they otherwise shared household expenses broadly in proportion with their incomes.
Broadly, Mr Fossen’s children D and E spent alternate weekends and half school holidays at the home during the relationship. As children, they were not required at any time to pay rent or make any regular financial contributions towards the household. To the extent that Ms Campos was buying groceries for their consumption, or otherwise buying them food or paying for their outings, she was subsidising their living expenses which is a financial contribution on her part.[16]
In relation to Ms Campos’ children:
(a)Mr H moved into the home with Ms Campos; he was then aged fifteen. He stayed living in the home up until separation. He was unemployed throughout and did not pay rent or make any regular financial contributions towards the household. Mr Fossen was thus subsidising his living expenses, which is a financial contribution on his part;[17]
(b)Mr J lived in the home for about four years from 2014 to 2018. He worked for around two of those four years but I accept Mr Fossen’s evidence that at no time did he pay rent or make any regular financial contributions towards the household. I reject Ms Campos’ evidence, which only emerged in cross-examination, that Mr J paid cash rent to Mr Fossen. Mr Fossen was thus subsidising his living expenses, which is a financial contribution on his part;[18]
(c)Mr G (and his then-partner) lived at the home for several months from late 2014 to early 2015. During this time they paid agreed rent to Mr Fossen of $120 per week.
There is a factual dispute between the parties as to whether the nature of their relationship, including their financial arrangements, changed in 2016 or early 2017. Mr Fossen asserts that by that stage their relationship was so strained that he had been asking Ms Campos, Mr J and Mr H to move out – and they wouldn’t. His evidence is that he and Ms Campos reached an agreement that Ms Campos would start paying “rent” of $150 per week to cover Rates (including water charges) and the electricity bills.
Ms Campos disputes that their relationship changed or that they reached any such agreement. Nonetheless, the evidence establishes that in early 2016 the water account was in arrears and that from early 2016 onwards, Ms Campos began directly transferring moneys from her bank account/s to M Council in respect of Rates and/or water charges. Given this objective evidence, I am satisfied that the parties did agree that Ms Campos would pay the Rates and water charges, and electricity accounts, albeit they reached such agreement several months to a year earlier than Mr Fossen suggested. I also note that the term “rent” is Mr Fossen’s loose description; Ms Campos did not pay moneys direct to Mr Fossen himself.
In early 2017 Ms Campos received a compensation payment of $85,941 arising out of some personal injuries she had sustained in a motor vehicle accident.[19]
Ms Campos applied some of those moneys towards improving the home and surrounds. In particular:
(a)in early 2017 Ms Campos paid a total of $800 for skip bins to remove rubbish which had been at the property since she first moved in;[20]
(b)In early 2017 Ms Campos paid a total of $1,700 to N Business for landscaping supplies, including various plants.[21] Though the receipts are in Mr Fossen’s name, the source of the funds was Ms Campos’ compensation moneys;
(c)early 2017 Ms Campos paid $2,511 to O Store for a new air conditioning unit.[22] Ms Campos also paid $2,095 for roof repairs, inferentially at or around the same time as she purchased the new air conditioning unit;
(d)at or around that time, Ms Campos paid approximately $1,000 for some new window coverings;
(e)at or around that time, Ms Campos paid approximately $4,000 for a new outbuilding, fencing and gates. The outbuilding was used to store her children’s items as well as some of Mr Fossen’s tools. As for the fences, I accept Ms Campos’ oral evidence that they were partly rotten and dilapidated. I also accept Mr Fossen’s evidence that part of the rationale for upgrading the fencing and gates was because they had dogs which needed to be more safely secured, particularly Ms Campos’ dog;
(f)Ms Campos replaced a fitting in the bathroom and some door handles at a total cost of around $1,000;
(g)In early 2018 Ms Campos paid $1,368 to purchase a new oven for the home.[23]
At least some of the above items were purchased by Mr J using Ms Campos’ keycard while he and Mr Fossen were out shopping together. I am satisfied that the parties discussed the purchases beforehand, though not necessarily the exact amounts to be spent.
At or around the same time, Mr Fossen and Mr J purchased a motor vehicle using Ms Campos’ compensation money; this was registered in Mr Fossen’s name.
Upon reviewing the bundle of Ms Campos’ bank statements which constitutes exhibit 10, it appears that she spent a total of $10,700 at P Store during the course of the relationship[24] but her Trial Affidavit does not particularise her payments in this respect and at least some of that figure would be accounted for above (eg. the $4,000 for the outbuilding, fencing and gates). Notably, Ms Campos also appears to have paid a total of $900 to the Child Support Agency seemingly on account of Mr Fossen’s child support liability yet neither party made mention of such payments in their respective Trial Affidavits.
During the relationship Mr Fossen repainted the interior and exterior of the home on a number of occasions.
As at mid-2017, Mr Fossen owed a total of $225,393 on his home loan. In late 2017 he refinanced the loan, borrowing an additional $90,000.[25] At least part of the refinance relates to the FCA proceedings between he and Ms C.
By late 2017 the Rates for the home had fallen into arrears. Mr Fossen’s expectation was that Ms Campos would pay them.
In mid-2018 Mr Fossen suffered a medical episode, requiring an operation. As a result, he had three months off work. He was able to claim on some disability insurance, which was a component of his superannuation fund. The insurance benefits covered his first two months of expenses, including mortgage repayments. For the third month, he used his sick leave and holiday pay to cover those expenses. Unbeknownst to him, his life insurance premium then increased from $13,000 to $22,000 for the ensuing two years. When he discovered this, he promptly cancelled his life insurance policy but by then his superannuation account had already been substantially depleted.
A Council representative had attended the home in mid-2018 while Mr Fossen was in hospital; Ms Campos was home and they left her a calling card. Mr Fossen only became aware of the Rates arrears sometime after returning home. Given his literacy issues, Mr Fossen did now own a computer and had no computer skills and so his usual method of dealing with organisations such as the Council was to either call them or attend their office in person. When he discovered the arrears, he therefore rang the Council to inform them that Ms Campos was making the payments; they settled upon some form of payment plan.
The Rates arrears were a significant source of tension in the parties’ relationship as Ms Campos was supposed to pay them and Mr Fossen did not want to have to deal with the Council himself. He was annoyed at Ms Campos and would periodically ask her what was happening but otherwise preferred to ‘bury his head in the sand’ about it.
Ultimately by 2019 the Council had referred the outstanding Rates and water arrears to their debt collection agent, Q Company, who wrote letters of demand and ultimately filed a Statement of Claim against Mr Fossen. In late 2019 Ms Campos emailed Q Company in Mr Fossen’s name (purporting in the email to be him) and offering to pay $100 per week towards the Rates and $100 per week towards the water charges. But that payment plan was not adhered to and ultimately Q Company obtained default judgment against Mr Fossen. In mid-2020 Ms Campos again emailed Q Company in Mr Fossen’s name advising that the debt would be cleared by mid-2020.[26] It is unclear whether or not Mr Fossen knew about these emails but in any case Ms Campos wrote them in an effort to remedy the arrears and to uphold the parties’ agreement that she would pay the Rates.
The evidence establishes that Ms Campos paid a total of $11,769 to M Council in the period from early 2016 until early 2021. This included two payments of $2,500 each in late 2020, both being sourced from “Covid” withdrawals Ms Campos was able to access through her superannuation fund.[27]
In relation to the electricity bills, Ms Campos conceded that she had taken over payment from Mr Fossen. At some stage prior to separation she had the electricity account placed into her own name, although a residual debt remained in Mr Fossen’s name as referred to later.
Homemaking contributions
During the relationship Ms Campos did most of the ‘indoor’ housework, including cooking and cleaning, although Mr Fossen assisted. Mr Fossen did the gardening and ‘outdoor’ jobs around the home.
Ms Campos assisted with the care of Mr Fossen’s children, including taking them to activities, cooking for them and generally making sure that they were looked after. She sometimes bought them toys, books, clothing or paid their entertainment expenses (eg. if they went to sports matches). She did the ‘school run’ when required and liaised with the boys’ schools about educational matters, she being the more ‘savvy’ of the two in terms of email communication. For this reason she was also the main point of contact between Mr Fossen and Ms C – an unenviable role. In short, Ms Campos was an attentive stepmother.[28]
Because both parties worked on weekends, Mr H was initially tasked with supervising D and E on Saturday mornings – although this arrangement had to be ended around early 2019 when E allegedly accused Mr H of sexually abusing him as referred to earlier. (Police also took out an AVO which protected E from Mr H for a period.)
Ms Campos’ Kennon claim
As noted earlier, Ms Campos’ Trial Affidavit[29] alleged that Mr Fossen perpetrated family violence upon her, thereby rendering her contributions ‘significantly more arduous’ and warranting a contributions uplift in her favour pursuant to the principles in Kennon & Kennon (1997) FLC 92-757.
At the hearing, I ruled her evidence to be irrelevant as her Trial Affidavit did not in any way particularise what she said was the impact upon her of the alleged violence. Nor did it permit the court to safely infer such adverse impact. To be clear, I make no findings about whether family violence occurred or did not occur as alleged.
Post-separation contributions
At separation Ms Campos vacated the home with Mr H. In the course of vacating the home, or shortly thereafter, Ms Campos (and/or her children) removed the following items from the home which she had paid for:
(a)fridge;
(b)washing machine;
(c)television and entertainment unit;
(d)vacuum cleaner;
(e)rugs;
(f)the window coverings referred to in paragraph [39] of these Reasons.
I accept Mr Fossen’s evidence that the home was left in an untidy and somewhat damaged state. Some of this damage occurred during the course of the relationship but some was recklessly, carelessly or even deliberately inflicted. For instance, when the window coverings were removed, the window architraves were clearly left damaged. The front and back doors were smashed in and someone - inferentially Mr J - had cut power to the home by deliberately removing the main fuse from the electricity box. Smashing in the doors, and removing the main electricity fuse, were deliberate acts of sabotage. Some of Mr Fossen’s tools were also removed from the home.[30] Mr J also took possession of Motor Vehicle 4.
Mr Fossen has had sole use of the home. After Ms Campos left, she did make some further payments to Council totalling $180, the last of which was in early 2021.[31] Nonetheless, Mr Fossen still found himself in debt to the Council in the amount of $6,522 for outstanding Rates and water fees, plus legal fees of $600. He paid these amounts.
Mr Fossen alleges that Ms Campos also left him with an unpaid electricity bill of $920. In support of that allegation, he tendered an account statement for the period from mid-2018 to mid-2019 showing that outstanding balance.[32] Moreover, he tendered a bank statement showing that this balance was still outstanding as at mid-2022 when he paid it in full.[33] Ms Campos disputed that she had left him with an unpaid electricity bill; she produced documents from the electricity company showing an account in her name with a ‘credit’ balance of $120 as at early 2021 and $250 as at early 2021.[34] On balance I am satisfied that Ms Campos opened up a separate electricity account for the home in her own name sometime after Mr Fossen accrued the electricity bill in 2018/2019. While she paid the account in her own name thereafter, she did not pay Mr Fossen’s outstanding account – which was contrary to their agreement.
For about a year, Mr Fossen housed and fed Ms Campos’ dog.
In 2022, Mr Fossen again refinanced his home loan, borrowing another $30,000.
SECTION 90SM(4)(D), (E), (F) & (G) & SECTION 90SF(3) OF THE ACT
In the event that the court determined that it was ‘just and equitable’ to make an order, each party conceded that there should be no adjustment on account of these considerations. Nonetheless, I will make some brief observations to the extent that they inform my decision.
Neither party’s proposed order will affect the earning capacity of the other. There are no relevant orders under the Act affecting either party and there are no children of the relationship.
In relation to s 90SM(4)(e) & s 90SF(3) of the Act:
(a)Ms Campos recently turned fifty-six; she holds qualifications in the allied health sector and continues to work part-time in hospitality. She has some physical infirmity and pain consequent upon her motor vehicle accident and a medical condition and can only realistically work part-time. Her income is supplemented by Jobseeker benefits from Centrelink of $286 per week. Her overall income and assets are modest;
(b)Mr Fossen is sixty; he holds qualifications as a tradesperson and continues to work full‑time. He earns around $83,000 per annum. He too has health issues as he suffers from a medical condition;
(c)on the face of their respective Financial Statements, each of the parties can meet their expenses each week although obviously Mr Fossen is in a much stronger financial position given his equity in the home;
(d)Mr Fossen is still obliged to financially support D and E. He is presently assessed to pay child support to Ms C of $174 per week;
(e)Ms Campos has more superannuation than Mr Fossen;
(f)both parties enjoy a reasonable standard of living, albeit that Ms Campos lives in rental accommodation;
(g)the length of the relationship did not impact either party’s income-earning capacity and neither party seeks maintenance from the other;
(h)Mr H still lives with Ms Campos; he is unemployed and in receipt of Centrelink benefits. Mr Fossen lives alone, save for the times when D and E are staying at the home;
(i)there are no other relevant facts or circumstances arising under s 90SF(3).
WHY IT IS NOT ‘JUST & EQUITABLE’ TO MAKE AN ORDER
This was not a young and naïve couple. When they commenced cohabitation, each party had children and each had their own assets and income.
During the relationship, the parties consciously decided to keep their finances largely separate. The parties did not acquire any joint assets nor did they incur any joint liabilities. They continued to operate separate bank accounts throughout; at no time did they open a joint account. Mr Fossen initially co-owned the home with Ms C but it was then transferred to him solely. He met all mortgage and home insurance costs throughout, including while convalescing after his surgery. There is no suggestion that he expected Ms Campos to contribute to the mortgage or the home insurance at any time. When he refinanced the home mortgage and increased the borrowings, there is no suggestion that either he or Ms Campos proposed that she become a joint borrower or go on title.
In terms of household expenses, these were shared although in Ms Campos’ case she reneged on their agreement that she would pay the Rates and water bills, and the electricity accounts, with Mr Fossen ultimately left in the position of having to pay the arrears after separation.
I say that the parties kept their finances largely separate because it is true that Ms Campos invested her compensation moneys into the home, which was done with Mr Fossen’s knowledge and approval. Moreover, Ms Campos particularly points to the following paragraphs of Mr Fossen’s FCA affidavit on 19 March 2020 which she submits highlight the ‘true’ nature of the de facto relationship (underlining added):[35]
87…[A]t no time have I had a conversation with [Ms C] about [Ms Campos] taking my house. It is both [Ms Campos]’s and my home, I have made sure that the house will be [Ms Campos]’s if anything happens to me…
90…[M]y partner and I have our arguments, mostly over [Ms C] and her desire to control me and my relationship with the boys. Other than that trivial things like other couples. We work as a team and communicate with each other in all areas of our lives. I believe that [Ms C] has been discussing the financial aspect of our relationship, as when she hits me up for extra money on top of child support I tell her that I need to discuss it with [Ms Campos]. Many times over the years she has ridiculed me over this aspect of our relationship, these are similar to the comments she has made previously. I discuss things with my partner about [Ms C] as I trust her input and involvement.
When Mr Fossen was cross-examined about paragraph 87 in particular, he admitted that at that stage he had drawn a will which provided for Ms Campos to retain the benefit of the home in the event of his death, though he did not have a copy of the will and it is not clear whether the will conferred title, or some lesser interest such as a life tenancy. In any case, he accepted that the will did provide a benefit to Ms Campos in respect of the home, and that he had informed her about it. Notably, Ms Campos’ Trial Affidavit was silent about any such discussions or expectation on her part.
Overall, Ms Court submitted that Mr Fossen’s FCA affidavit quoted above, in combination with Ms Campos’ financial and non-financial contributions during the relationship, was sufficient to make out the ‘just and equitable’ requirement. In terms of contributions, she placed particular emphasis on Ms Campos paying for renovations, meeting household expenses and her homemaking and parenting contributions. She submitted that the court must not “mis‑characterise” the relationship and that the court needed to recognise that Mr Fossen benefitted substantially from the contributions made by Ms Campos during the relationship. Ms Court submitted that Ms Campos’ contributions should be assessed at thirty percent (30%) of the value of the net equity in the home.
On the ‘just and equitable’ issue, Ms Ticehurst conceded that Mr Fossen’s FCA affidavit was problematic for his case. But she submitted that his willingness to vest her with a benefit on death is distinguishable from doing so while both parties are alive. She submitted that the court needed to look at the totality of the evidence, including the parties’ separate finances throughout. As evidence of their financial ‘separateness’ she pointed to Ms Campos physically removing property from the home after separation, including window coverings which would ordinarily be fixtures. She asked the rhetorical question: how could Ms Campos have considered the home to be a ‘joint’ asset if, as she was leaving, she was pulling the curtains down and damaging the architraves? Ms Ticehurst also submitted that in any event there is no evidence as to the value, if any, added to the home as a result of the renovations paid for by Ms Campos.
Ms Ticehurst submitted that Ms Campos and her sons derived a significant rental benefit during their occupation of the home, which she attempted to quantify as being at least half of the home’s rental value during the relationship. In broad terms, the rental value of the home was in the order of $350 per week from 2014 to 2020 (approximately $18,000 per annum for six (6) years), increasing to $400 per week by the end of the relationship (approximately $21,000 per annum).[36] Ms Campos and Mr H had the benefit of living there throughout the relationship, and Mr J lived there for four years. Ms Ticehurst submitted that this financial contribution by Mr Fossen was a substantial ‘offsetting benefit’ to Ms Campos, adding weight to her submission that it would not be ‘just and equitable’ to make an order.
I accept Ms Ticehurst’s submissions set out in paragraphs [72] & [73] above; they carry force. Ms Ticehurst separately submitted that Ms Campos’ dishonesty with Centrelink, in combination with her incomplete disclosure of bank accounts, was a separate basis for the court to find against her on the ‘just and equitable’ requirement. I am respectfully unable to agree with that submission as, while it is not possible to chart the metes and bounds of what is ‘just and equitable’, I rather doubt that general dishonesty exhibited to Centrelink or a revenue authority would be a proper basis to deprive an otherwise deserving claimant in a case of this nature. In hearing a property settlement application, the court would ordinarily be concerned with the conduct of the parties inter se rather than their conduct in respect of Centrelink or revenue authorities.[37] This is not to condone such conduct.
Ultimately Ms Ticehurst contended that if Ms Campos had a legitimate claim to a share of the net equity in the home, then, at best, such claim was de minimis. I respectfully agree.
Ultimately, having regard to the manner in which the parties conducted their affairs, there is no principled reason for this court to now interfere with their existing property interests. In similar circumstances to this case, Schonell J dismissed the wife’s application in Moretto & Cosola (No.2) [2022] FedCFamC1F 924.[38]
CONCLUSION & ORDERS
Following the conclusion of the hearing, the parties tendered a joint Minute to facilitate Ms Campos collecting her property from the home. This order was made in chambers on 17 June 2024. [39]
I will discharge the orders of 22 May 2024 which specifically provided a mechanism for sale of the home in the event that Ms Campos’ claim for a cash settlement was successful.
I will hear from the parties on the question of costs, but both parties should be mindful of the adverse findings I have made at paragraphs [14] – [19] inclusive, which I regard as highly relevant to any costs application.
I certify that the preceding seventy-nine (79) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 16 July 2024
[1] Taken from the plurality judgment of French CJ, Hayne, Kiefel & Bell JJ. Though the case concerned married couples within Part VIII of the Act, the corresponding provisions for de facto couples in Part VIIIAB are identical
[2] Exhibit 14. See particularly orders 15(a) & 15(f) of 26/04/18 (Judge Costigan)
[3] Exhibit 14. See particularly orders 7 & 8 of 30/10/20 (Austin J)
[4] Kennon & Kennon (1997) FLC 92-757
[5] Exhibit 23, paragraph 13. See generally paragraphs 13 – 24 (inclusive) and 26
[6] Exhibit 23. For what it is worth, I also do not understand how Ms Campos could have been sitting in court when Ms C gave her evidence. Ms C is nominated as the applicant in the order, so presumably she would have been the first witness and Ms Campos should have been outside the court room when she gave evidence.
[7] Ms Campos’ Trial Affidavit, paragraph 49
[8] Exhibit 12.
[9] Exhibit 1
[10] As per Ms Campos’ Financial Statement filed 03/06/24. See also exhibits 2 & 3
[11] As per Mr Fossen’s Financial Statement filed 06/05/24
[12] Ms Campos’ Trial Affidavit, paragraph 16
[13] Exhibit 22
[14] See exhibit 10
[15] Mr Fossen’s Trial Affidavit, paragraph 13. He does not positively depose to refinancing the mortgage but I infer that he did so.
[16] Robb & Robb (1995) FLC 92-555
[17] Ibid.
[18] Ibid.
[19] Exhibit 8
[20] See exhibits 5 & 8
[21] Exhibit 6
[22] Exhibit 7
[23] Exhibit 7
[24] See Ms Campos’ bank statements which are exhibits 4, 8, 9 & 10 (Unhelpfully, they overlap but I have endeavoured to avoid double-counting)
[25] Exhibit 21
[26] See exhibits 17 & 18
[27] Exhibit 10
[28] See Mr Fossen’s and Ms Campos’ Family Court affidavits each filed 19/3/20 (exhibits 12 & 23 respectively)
[29] Paragraphs 48 - 66
[30] See exhibit 20. Mr Fossen later obtained an AVO against Mr J.
[31] Exhibit 10
[32] Exhibit 15
[33] Exhibit 16
[34] Exhibit 11
[35] Exhibit 12
[36] Exhibit 19
[37] Particularly where a party’s dishonest representations result in more money coming into the household, which usually, if not invariably, benefits both parties in any event
[38] Upheld on appeal in Cosola & Moretto [2023] FedCFamC1A 61
[39] Exhibit 26
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