Cappetto and Cappetto

[2012] FamCA 710

FAMILY COURT OF AUSTRALIA

CAPPETTO & CAPPETTO [2012] FamCA 710

FAMILY LAW - PROPERTY– Application by the husband for property orders on undefended basis – Where the wife’s evidence that she was unable to personally attend was unpersuasive – Where the approach to the distribution of sale proceeds and superannuation splitting is agreed – Where the husband’s contributions significantly exceed those made by the wife –  Where an adjustment pursuant to s 75(2) of 20 per cent to the wife is appropriate - Where an equal division of the sale proceeds and the husband’s superannuation is ordered
FAMILY LAW – SPOUSAL MAINTENANCE - Where the wife establishes threshold entitlement – Where the husband has no capacity to pay – Where the wife’s application for spousal maintenance is dismissed.
FAMILY LAW – CHILDREN – Communicate with – Provision for the husband to telephone the children during Christmas while in the care of the wife.

Family Law Act 1975 (Cth) ss 62B, 65DA(2), 72, 75(2), 75(3), 79(2), 79(4), 90MT(1)(b)
Family Law (Superannuation) Regulations 2001

In the Marriage of Clauson (1995) FLC 92-595
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626
Russell v Russell (1999) FLC 92-877

APPLICANT: Mr Cappetto

RESPONDENT: Ms Cappetto

FILE NUMBER: SYC 7342 of 2008

DATE DELIVERED: 23 August 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Ryan J

HEARING DATE: 15 August 2012

REPRESENTATION

ADVOCATE FOR THE APPLICANT: Mr Cappetto appeared on his own behalf

ADVOCATE FOR THE RESPONDENT: No appearance for or on behalf of the respondent

Orders

1. That each of the parties is entitled to one half of the monies held in a controlled monies account on their behalf by Goldrick Farrell Mullan solicitors which is to forthwith be distributed to them in equal shares.

2. That the husband (to the exclusion of the wife) is entitled to claim the TFN withholding tax accrued in relation to the Goldrick Farrell Mullan controlled monies account in the parties’ name referred to above.

3. If either party refuses or neglects to sign any document necessary to implement these orders, that a Registrar sign the necessary document on behalf of the defaulting party pursuant to section 106A of the Act

4. Unless otherwise specified in these orders each party is solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age and working future provides the conditions for payment out of such payment.

5. That the application of the wife for spousal maintenance be dismissed.

6. That Orders 7 to 10 have effect from the operative time.

7. The operative time for Orders 8 to 10 of this order is 9 weeks from the date of these orders.

8. That in accordance with s 90MT(4) of the Act, a base amount of $53,003.28 is allocated to the wife out of the husband’s interest in Superannuation Fund A (Member No. …573)

9. That, in accordance with paragraph 90MT(1)(a) of the Act:

   (a)the wife is entitled to be paid, using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

   (b)the entitlement of the husband in Superannuation Fund A is correspondingly reduced by force of this order.

10. That, upon the Trustee being accorded procedural fairness in relation to the making of this order, this order shall bind the trustee of Superannuation Fund A.

11. That the Trustee of Superannuation Fund A shall do all such acts and things and sign all such documents as may be necessary to:

    (a)calculate, in accordance with the requirements of the Act the entitlement awarded to the wife in Orders 8 and 9 above;

    (b)pay the entitlement whenever the Trustee makes a splittable payment from the husband’s interest in the Superannuation Fund A.

12. Orders 8 to 11 inclusive are stayed for eight (8) weeks from the date of these orders.

13. That the husband forthwith serves upon the Trustee referred to in Order 8 a copy of these orders.

14. That the Trustee referred to in Order 8 has liberty to apply in relation to the superannuation splitting orders.

15. That during the Christmas school holidays while the children are with the wife she shall facilitate telephone contact for the children with the husband each Tuesday and Thursday between 6.00 pm and 6.30 pm in relation to which the husband shall initiate the call.

16. Order 15 is stayed for a period of eight (8) weeks during which the wife has liberty to apply.

17. Pursuant to s 65DA(2) and s 62B of the Act, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

18. Excluding appeals, all outstanding applications are dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7342 of 2008

Mr Cappetto

Applicant

And

Ms Cappetto

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for property settlement pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).

2. Mr Cappetto (“the husband”) applies for orders as set out in his Amended Initiating Application filed on 30 May 2012.  Essentially, he proposes an equal distribution of the net sale proceeds of the parties’ home and his superannuation.  Otherwise that the parties each retain assets in their possession and are responsible for any liabilities in their respective names and, in relation to the sale proceeds of the family home, that he is able to claim withholding tax (in a trust fund).

3. Ms Cappetto (“the wife”) filed her Amended Response on 14 August 2012.  She agrees with the husband’s approach to the distribution of the sale proceeds and superannuation splitting, however, seeks an adjustment so that she receives half the value of a motor vehicle in his possession (said by her to be worth $7,500.00), a further adjustment of $3,000.00 in her favour being half storage expenses she says she has incurred post separation and “spousal maintenance/alimony due to [the wife’s] deteriorating medical conditions which has come upon her after she got married”.  The wife also seeks an order that the husband is required to file a divorce application within 14 days or, in the alternative, that she is granted an exemption from paying the filing fee for a divorce application.

4. The wife’s application for orders in relation to the divorce is beyond the Court’s power.  So that it is clear, she is able to seek an exemption from paying Court fees.  This, however, is an administrative matter and is not within my power. 

5. This hearing proceeded undefended.  Although the wife did not appear regard was had to documents filed by her, namely, her Amended Response already mentioned, her affidavit filed 10 August 2012 and Financial Statement filed 13 December 2011. 

6. As the Court file demonstrates, the property and spousal maintenance proceedings were case managed by a docket Registrar for some time.  On 4 April 2012 the docket Registrar recorded that the matter had been listed before her that day for a telephone procedural hearing at which the wife failed to appear.  It is noted that she failed to appear two previous Court allocated mentions (on 29 March 2012 and 2 April 2012) and that the Court had, without success, on a number of occasions attempted to contact her.  On that occasion, the docket Registrar listed the outstanding Application for Final Orders (property settlement) before a judge in a Judicial Duty List at 9.30 am on 16 July 2012.

7. The matter came before me on 16 July 2012 on which occasion the husband but not the wife appeared.  The following notations and orders were made:

   THE COURT NOTES

   1.Correspondence from the respondent wife dated 11 July 2012 informing the Court that she has been served with the husband’s property settlement application, is aware that the application was listed on 16 July 2012 for possible undefended hearing and advised that because of ill health she would not be in attendance.

   2.The medical certificates attached to the wife’s letter of 11 July 2012 do not establish to the Court’s satisfaction that for reasons of ill health [the wife] was unable to appear today.

   IT IS ORDERED

   3.The husband’s Amended Application for property settlement filed 30 May 2012 is listed for hearing on an undefended basis at 10.00 am on 15 August 2012 before Ryan J.

   4.The husband shall file and serve any further evidence upon which he relies on or before 1 August 2012.

   5.In the event the respondent wife seeks to defend the husband’s property settlement application she shall file and serve her Response and Financial Statement within seven days of the date of these orders.

   6.The parties have liberty to apply for further orders and directions in relation to the matter on seven days notice.

   7.These proceedings are docketed to Justice Ryan.

8. It is in response to those directions that the wife filed her Amended Response referred to above. 

9. On 13 August 2012, the wife wrote to the Court and explained that she was content to rely on an earlier Financial Statement and because of “16 medical conditions” and the reasons explained therein, she was unable to attend Court.  On the same day, the wife lodged a request to attend by electronic communication which was not granted.  In the event permission was granted, the wife explained that the nominated line “… is not reachable, switched off or sometimes while talking, the line gets cut off”.  She had not informed the husband of her application.

10. A variety of medical certificates have been provided by the wife, some from her general practitioner and a number from medical specialists.  In short, she has a prolapsed uterus which causes lower abdominal discomfort and vaginal bleeding.  As at 6 June 2012, she was unable to attend Court.  The same doctor provided a report to the Diabetes Educator at a Sydney Hospital on 1 August 2012.  This identifies “past history” family dysfunction (2008) and diabetes mellitus (2012).  Earlier reports from the same doctor indicate that the wife had been advised to avoid heavy lifting, prolonged standing and strenuous activities.  It is clear from reports that the wife’s general practitioner provided to Centrelink that she recommended exercise and diet as an aid to improved health.

11. The wife has regular contact with the parties’ children (who reside with the husband) in relation to which changeover takes place at a public venue.  The wife personally attends handover and is apparently physically able to manage their young children’s care. 

12. The preponderance of evidence did not persuade me that the wife was unable to personally attend the hearing.  She was informed of this decision by the Case Co-ordinator on 13 August 2012, orally and in writing. 

History

1. The husband is 51 years old.

2. The wife is 41 years old.

3. When the parties married in May 2003, the husband was resident in Australia where he has citizenship.  The wife lived in India which, it is understood, is her country of birth.  The parties’ marriage was arranged for them in relation to which the husband joined the wife in India for the marriage ceremony.

4. He returned to Australia and it was not until the wife was granted a spouse visa, some months later that she joined the husband in Australia.

5. Shortly prior to the wife’s arrival, from his premarital savings, the husband paid a 10 per cent deposit and acquisition costs on B Street, Sydney Suburb 1.  The purchase price was $308,000.00, the balance of which was borrowed.

6. Throughout cohabitation the husband was employed full-time and contributed his income and assets to the family.  The wife’s financial contributions, if any, at cohabitation and thereafter are not known.  So that the point is not overlooked, as at June 2003, the husband had superannuation worth $28,505.80.

7. The parties’ son was born in September 2005.

8. Their daughter was born in July 2007.

9. It is inferred that the wife was primarily responsible for the children’s care and, throughout cohabitation, made a significant contribution as a homemaker and to the welfare of the family.

10. The parties separated on 8 June 2008.  At separation, the children remained in the wife’s care at B Street, Sydney Suburb 1.  The husband paid the mortgage, rates and utilities on B Street, Sydney Suburb 1 after separation.  In circumstances where he has a modest income and was also assessed to pay child support, as well as paying rent on an apartment in which he then resided, he fell behind in the mortgage repayments, incurred credit card liabilities and borrowed money from friends.  Unable to continue, he listed B Street, Sydney Suburb 1 for sale. 

11. Settlement of the sale of B Street, Sydney Suburb 1 took place on 1 April 2009.  The unit sold for $343,000.00 in relation to which at the wife’s request the net sale proceeds of $74,026.02 were deposited into her then solicitor’s trust account.  The funds continue to be held with those solicitors, albeit pursuant to orders made by Watts J on 20 June 2011, $10,000.00 was released to the wife.  It would appear that her solicitors claimed the $10,000.00 and the funds were not personally received by the wife, albeit, her debt to her solicitors was reduced.  No argument was advanced that these funds should be notionally added back.  Given the wife’s parlous financial situation and that she had hoped to apply the funds to necessary living expenses the approach to not add back is adopted.

12. Interim parenting orders were made on 22 March 2011 to the effect that the children live with the husband and not have contact with the wife.  The children have lived with the husband ever since.

13. Final parenting orders were made on 11 May 2011 by reason of which the husband has sole parental responsibility, the children live with him and, following incremental increases in the children’s time with the wife, they now spend time with her each alternate weekend, for half of each school holiday periods and on special occasions referred to in the orders.

General principles for the adjustment of matrimonial property

1. The approach to the determination of an application under s 79 of the Act is well established (In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595). The process ordinarily involves a four step procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in s 79(4)(a), (b) and (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s 75(2) insofar as they are relevant, including any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 (Cth) (“CSAA”) that a party to the marriage is to provide, or might be liable to provide in the future, for a child of the marriage.

2. Lastly, in determining what orders should be made the Court must be satisfied in all the circumstances that it is just and equitable (s 79(2)).  It is the justice and equity of the actual orders that the Court must consider:   Russell v Russell (1999) FLC 92-877.

Assets, liabilities and financial resources at the date of hearing

1. The value and identity of the parties’ property, liabilities and financial resources as at the date of hearing are as follows:

   ·Net sale proceeds – B Street, Sydney Suburb 1 (as at 30 April 2012) $68,233.81

   ·Superannuation Fund A (as at 19 July 2012)  $106,006.56

2. In addition, the husband drives a Toyota motor vehicle which is comprehensively insured for $4,490.00.  Valuation evidence was not provided and it is not possible to discern whether the husband’s car is worth as much as he has it insured.  In a similar vein, it is not possible to determine the value of household items in either party’s possession.  Given both parties modest circumstances, it is likely that the household belongings and the car have little value.

3. It is understood that the wife seeks to include as a liability the amount she has paid post-separation for storage.  It is not apparent that this amount is outstanding and, even if it was, the evidence reveals that the husband offered to have her belongings stored at no cost to her, which offer she declined.  The costs of storage and any outstanding liability, therefore, is excluded from the asset pool.

Discussion

1. Section 79(4) requires that the Court looks at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense.

2. The evidence established that the husband made a greater initial contribution than the wife.  It was his ingestion of capital towards the acquisition of the property at B Street, Sydney Suburb 1 and payment of outgoings thereafter which has resulted in the capital sum available for distribution.  In a similar vein, he contributed superannuation in the amount already discussed and it is his financial contributions alone thereafter (which includes three years post-separation) which results in the superannuation now available for distribution.  It is inferred that his income earned during the marriage was applied to joint matrimonial purposes.

3. It is in her role as a homemaker and parent that the wife’s contributions gained particular significance, including the significant post-separation contribution made by her. 

4. The husband contributed too as a homemaker and parent, including being overwhelmingly responsible for the children’s care since March 2011. 

5. Post-separation the husband paid child support as set out in his affidavit. 

6. On balance, I am satisfied that overall the husband’s contributions significantly exceed those made by the wife and that the orders will not affect either party’s earning capacity. The overall effect of my findings expressed as a percentage of the net value of the parties’ property as at the date of hearing, is that the husband’s contributions and other s 79(4) factors favour him 70 per cent compared to the wife’s 30 per cent.

7. An adjustment of 20 per cent pursuant to s 75(2) in the wife’s favour is appropriate.  Although she has academic qualifications, her medical evidence reveals that she does not have paid employment.  In circumstances where it does not appear she has ever had paid employment in this country, it is appropriate to be very cautious about the probability she may secure employment in the future.  Presently, the wife is reliant on Centrelink benefits and it would appear that her rent may exceed her income.  On a day to day basis, she is in a terrible financial position.  Her position is exacerbated by her indebtedness to her former solicitor (with whom she is in dispute) and possibly also a debt in relation to ongoing storage expenses.

8. On the other hand, the husband has secure well paid employment in relation to which his pre-tax salary is $1,528.00 per week.  He receives $123.00 per week family tax benefits and his employer contributes $137.00 per week superannuation.  His expenses are set out in his Financial Statement and, for him it is very difficult to meet his and the children’s reasonable expenses from his income.  As was mentioned earlier, the children live with him and it appears he does not receive child support (perhaps other than the statutory minimum) and it is highly likely that long term he will support the children without financial contribution from the wife.  Notwithstanding these factors which weigh in the husband’s favour, the wife’s lack of employment, lack of obvious earning capacity and dire financial circumstances carry greater weight and warrant the adjustment mentioned in her favour.

1. On balance, an equal division of the sale proceeds and the husband’s superannuation, with the parties otherwise retaining assets in their name and possession as well as remaining liable for debts in their names is just and equitable within the meaning of s 79(2) of the Act.

2. Although the husband has been in contact with his superannuation trustee, neither he nor the wife, appear to have presented the trustee with a form of order in relation to the agreed superannuation split.  This matter has been before the Court on so many occasions that I was reluctant to adjourn it and, thus, a superannuation splitting order will be made but its operation stayed for eight weeks.  Notice of the order will be given to the trustee who will have the opportunity to relist the matter and be heard in relation to the superannuation splitting order before it becomes operative.

3. In relation to distribution of the sale proceeds, it would appear that the wife is in dispute with her former solicitors about outstanding legal expenses.  She seeks that the order not be addressed to those solicitors and the Court takes steps to ensure that the funds are received by her.  Contentious issues between the wife and her former solicitors need to be resolved by them.  If the solicitors are at law entitled to receive (and secure) the wife’s funds this Court does not seek to interfere.  The wife, on the other hand, should take advice about how resolution of the dispute with her former solicitors, whatever it might be, could be promptly resolved.

Spousal maintenance

1. In relation to the wife’s spousal maintenance application, the effect of s 75(3) of the Act is that the Court must disregard her Centrelink benefits. The effect of this is that she has neither income nor earning capacity and has thus established the s 72 threshold entitlement to spousal maintenance. However, an order can only be made if the Court is satisfied that the husband is reasonably able to pay. As was mentioned earlier, the husband supports the children who live with him. His financial circumstances are also difficult in relation to which I am satisfied he cannot afford spousal maintenance.

Other matters

1. An issue arose during the hearing in relation to parenting matters.  Essentially, the husband sought leave to make an oral application to vary the orders so that when the children are with the wife he is able to have telephone contact and to amend the parenting orders so that the first half of the Christmas school holidays alternates between the parties. 

2. It appears that the former issue was not raised in the recently completed parenting proceedings and the orders sought do not conflict with those made.  In circumstances where the husband had given the wife written notice that he sought to amend the orders and it could not be said that these orders would interfere with the children’s time with their mother, leave to make the oral application was given.

3. On the other hand, the Christmas school holiday order did seek to amend recently made orders and, in circumstances where there is an appeal pending in relation to the parenting orders, it was not considered appropriate to proceed without formal notice to the wife.  Self evidently that component of the husband’s oral application was refused.

4. The gravamen of the husband’s evidence in relation to the parenting matter is that tensions remain high between the parties and he is very anxious about the children whilst with the wife.  Only recently, the children were not returned on time and police intervention was required for their retrieval.  If the children have longer periods with the wife, as they will over the Christmas school holidays, the husband is concerned to ensure that he can remain in contact with them and thus become aware if problems are developing.  It is accepted that his approach is appropriate and in the children’s best interests.  Indeed, it is consistent with Order 9.9 of the orders which enables the wife to speak to the children whilst in the husband’s care.  For an abundance of caution, that order will also be stayed and the wife afforded the right to seek its discharge before it becomes operative.

I certify that the preceding forty six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 23 August 2012.

Associate:     

Date:              23 August 2012