Castelli & Castelli
[2023] FedCFamC2F 1172
•7 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Castelli & Castelli [2023] FedCFamC2F 1172
File number(s): PAC 866 of 2021 Judgment of: JUDGE STREET Date of judgment: 7 September 2023 Catchwords: FAMILY LAW – PROPERTY – alteration of property interest – Kennon factor- transfer of matrimonial home to applicant subject to mortgage for particular loan account- liberty to apply to severe cross collateralised security Legislation: Family Law Act 1975 (Cth) Cases cited: Babett & Falconer (2015) FLC 98-067
Briginshaw & Briginshaw (1938) 60 CLR 336
C & C (2005) FLC 93-220
Dickons & Dickons [2012] FamCAFC 154
DJM v JLM (1998) FLC 92-816
Dovgan & Dovgan [2021] FamCA 306
Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143
Jabour & Jabour [2019] FamCAFC 78
Kennon & Kennon [1997] FamCA 27
Kildea v Kildea (2007) 38 Fam LR 347
Kowaliw & Kowaliw (1981) FLC 91-092
Manolis v Manolis (No 2) [2011] FamCAFC 105
AJO & GRO (2005) FLC 93-218
Perrin & Perrin (No 2) [2018] FamCAFC 122
Stanford v Stanford (2012) 247 CLR 108
Townsend & Townsend (1995) FLC 92-569
Division: Division 2 Family Law Number of paragraphs: 101 Date of hearing: 2, 8 and 10 May 2023 Place: Sydney Counsel for the Applicant: Ms M Tovey Solicitor for the Applicant: Smythe Wozniak Solicitors Counsel for the Respondent: Mr S K Hartwell Solicitor for the Respondent: SCB Legal Pty Ltd ORDERS
PAC 866 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CASTELLI
Applicant
AND: MR CASTELLI
Respondent
ORDER MADE BY:
JUDGE STREET
DATE OF ORDER:
10 MAY 2023
THE COURT ORDERS THAT:
1.Subject to Order 3, within ninety (90) days the respondent do all acts and sign all documents as are necessary to transfer B Street, Suburb D in the state of NSW, being land described in certificate of title folio identifier ... (the ‘B Street property’) to the applicant and if the applicant wishes, a joint tenant or tenant-in-common, subject to the existing mortgage to Westpac … encumbering the property only with the home loan …27 as it exists to date free of any cross-securitisation.
2.The applicant and if the applicant wishes, a joint tenant or tenant-in-common, do all necessary acts and sign all necessary documents to receive title to the B Street property encumbered by the Westpac mortgage for the said home loan account in accordance with Order 1.
3.Should within ninety (90) days Westpac Banking Corporation as a creditor decline to lift the cross-securitisation under the said mortgage for other debts or liabilities of the respondent to Westpac Banking Corporation, the applicant may file an application in a proceeding seeking an order expunging the cross-securitisation for the other debts or loans of the respondent owing to Westpac Banking Corporation, on the B Street property.
4.That if the B Street property is so transferred under Order 1 into the name of the applicant and if the applicant wishes, a joint tenant or tenant-in-common, with the encumbrance for the said Westpac home loan …27, the respondent is to take all steps necessary to indemnify the applicant in respect of any other debts or loans relating to the B Street property.
5.There is an automatic extension of time under Order 1, if an application in a proceeding of the kind identified is filed in accordance with Order 3, and until the determination thereof, if in favour of the applicant an additional thirty (30) days is provided for the applicant to comply with Order 1.
6.If the applicant and if the applicant wishes, a joint tenant or tenant-in-common, is unable to refinance the mortgage on the B Street property with the said home loan debt then the respondent shall do all acts and things and sign all necessary documents to effect the sale of the B Street property and C Street, Suburb D (the ‘C Street property’) in the state of NSW, being the land in certificate of title folio identifier …, and the B Street property and for that purpose the following shall apply:
(a)The B Street property and the C Street property shall be listed for sale by private treaty with such real estate agent as is selected by the respondent, the price of the property shall be an amount, in the absence of agreement between the parties, as nominated by an independent valuer, the sale price of the property shall not be less than 90% of the independent valuer’s valuation. The applicant and the respondent are to cooperate with the real estate agent in relation to the marketing and sale of the B Street property and the C Street property including making a key readily available, allowing inspection of the respective property at times reasonably requested by the agent, ensuring the respective property is clean, neat and in good order at the time of inspection by any prospective buyer and vacating the respective property prior to settlement, in good order.
(b)That upon agreement being reached for the sale of the respective property, on ordinary terms, to an arms-length buyer, the respondent shall execute the contract for sale and all other documents necessary to complete the sale of the respective property, including all transfer documentation.
(c)The contract for sale shall provide for completion within six (6) weeks from the date of contract and require payment and receipt of 10% deposit for the respective property.
(d)Upon completion of the sale of each property the proceeds shall be paid in the following manner and priority:
(i)For the B Street property to discharge mortgage number … of the Westpac Banking Corporation.
(ii)For the C Street property to discharge mortgage number … of the Westpac Banking Corporation.
(iii)Payment of agent’s commission, advertising or other expenses, if any.
(iv)Payment of the legal costs and outlays for the sale.
(v)The balance 60% to the applicant and 40% to the respondent for the respective property.
(e)In the event that one or both properties are not sold by private treaty within three (3) months of listing for private sale, then the respondent shall do all acts and sign all documents as are necessary to sell the relevant properties by auction and the following shall apply:
(i)The property shall be listed with an agent for sale by auction selected by the respondent within a further three weeks.
(ii)The respondent shall execute all documents requested by the auctioneer for the sale of the properties by auction.
(iii)The reserve price of the property shall be agreed by the parties or fixed by an independent valuer.
(iv)The respondent shall pay to the auctioneer any sums requested for agreed advertising and for auction expenses.
(v)The respondent shall give such instructions as are necessary to the solicitor and auctioneer to provide for the auction to take place no later than a further eight weeks.
(vi)The respondent agrees to cooperate in every way with the auctioneer in relation to the sale by auction and to the extent applicable, each party shall allow inspection of the relevant property at times reasonably requested by the auctioneer and ensuring the property is neat, clean and in good order at the time of any inspection and on the day of auction and vacate the premises, leaving the same in good order prior to settlement.
(vii)The respondent shall attend the auction and negotiate with the highest bidder in the event that the reserve price valuation is not reached and may agree a price that is no less than 80% of the valuation.
(viii)Upon agreement being reached for the sale of the property, settlement for the respective property shall, to the extent applicable, be in the manner and priority in the Order 6(d) above.
7.That until transfer under Order 1 has been effected and/or sale of property under Order 6, the respondent shall meet the ongoing mortgage payments and shall not further encumber the B Street property or the C Street property and the applicant shall remain responsible for council and water rates, electricity and other utilities for the B Street property whilst occupying the same.
8.That until transfer under Order 1 has been effected and/or sale of property under Order 6, the applicant and if the applicant wishes, a joint tenant or tenant-in-common have sole occupancy of the B Street property.
9.If the B Street property is transferred to the applicant, and if the applicant wishes a joint tenant or tenant-in-common, encumbered by the said mortgage and in accordance with Order 1 above, the respondent shall remain the sole owner of the C Street property to the exclusion to any claim or interest by the applicant.
10.That except as provided in these orders, the applicant and the respondent are the owner of and entitled to the property, bank accounts and superannuation, if any, in their respective names or in their respective possession.
11.That except as provided in these orders, the applicant and the respondent are solely liable for any debts in their name.
12.Under s 106A of the Family Law Act 1975 (Cth) the Court appoints any senior registrar or principal registrar as an officer of the Court to execute any deed or instrument in the name of the respondent to give effect to the above orders made against the respondent.
13.Liberty to apply is granted to the applicant in respect to an application in a proceeding identified in Order 3 above and for the enforcement of these orders.
14.The Court declines to make an order under s 117 of the Family Law Act 1975 (Cth), including in respect to reserved costs.
15.The Court reserves its written reasons.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE STREET
INTRODUCTION
These are property proceedings under Part VIII of the Family Law Act 1975 (Cth) (‘the Act’) that were commenced on 19 February 2021 by the applicant who married the respondent in 1977. A divorce order was made in 1991, however, the parties remained living under one roof until 2005.
The parties had three children being Ms E, born in 1983, Mr F, born in 1985, and Ms G, born in 1990.
The property at B Street, Suburb D (the matrimonial home) was purchased in 1977, and the parties commenced cohabiting at the matrimonial home from 1977. Although the applicant wife requested the respondent husband cease living under the same roof in 2001, it was not until 2004 that the respondent husband left the matrimonial home.
Following the commencement of these proceedings on 22 February 2022, this Court granted leave pursuant to s 44(3) of the Act for the bringing of these proceedings. On 15 March 2023, the Court fixed the matter for a final hearing. The trial commenced on 2 May 2023 and continued on 8 and 9 May 2023.
At the time of hearing, the applicant wife remains living in the matrimonial home and the respondent is living at C Street, Suburb D (‘C Street property’). The applicant lives in the matrimonial home on her own and is now aged 66. The respondent was born in 1953 and at the time of hearing was aged 69. The substantive issue in the proceedings is what orders should be made under s 79 of the Act.
The matrimonial home and the C Street property are, in substance, the only real assets in the matrimonial pool. Both properties are in the name of the respondent and encumbered by mortgage to Westpac Banking Corporation. There are two different home loan accounts. It appears that the mortgages has cross-secured the respondent’s home loan indebtedness to Westpac.
The applicant, in summary, seeks orders for the transfer of the matrimonial home from the respondent to the applicant, subject to the existing home loan …27. The respondent initially sought the dismissal of the application for the alteration of property interests. However, on the third day, the respondent identified supporting an order altering the property interests by a fifty-fifty split of all existing debt by the respondent to Westpac and the transfer of the matrimonial home by the respondent to the applicant subject to the existing mortgage covering 50 per cent of the liabilities of the respondent to Westpac.
It is apparent that the superannuation interest of the applicant in the amount of approximately $36,680 was, as the Court finds, derived from the applicant’s work after the divorce. The respondent, having retired in or about 2010, had no superannuation interest. In the circumstances of this case, the Court was satisfied that it was appropriate to treat the superannuation interest of the wife as a separate property pool from the rest of the party’s property. The Court finds that the respondent wife’s superannuation interest was accumulated without any contribution by the respondent.
While the Court will address the four steps in relation to the whole of the party’s property, no order was sought by the respondent in relation to the applicant’s superannuation interest and the Court is satisfied that there should be no alteration of the applicant’s superannuation property interest. The Court finds that it would not be just and equitable to make an order, in the circumstances of this case, altering the superannuation property interests of the applicant.
EVIDENCE RELIED UPON
The following affidavits were treated as read:
(a)Affidavit of Ms Castelli filed 14 March 2023;
(b)Affidavit of Ms G filed 25 January 2022;
(c)Affidavit of Mr F filed 25 January 2022;
(d)Affidavit of Ms E filed 25 May 2021;
(e)Affidavit of Mr Castelli filed 21 February 2023;
The following documents where admitted into evidence and marked as exhibits:
(a)Exhibit A: Respondent’s Financial Statement dated 7 February 2023;
(b)Exhibit B: Respondent’s Tender Bundle (Excerpt Sleeve 1) MFI1
(c)Exhibit C: Updated joint Balance Sheet dated 8 May 2023;
(d)Exhibit D: Applicant’s Financial Statement dated 25 October 2022;
(e)Exhibit E: Applicant’s Tender Bundle dated 2 May 2023;
(f)Exhibit F: Complete ADVO application dated 10 May 2023;
(g)Exhibit G: Westpac Bank extracts from Sleeve 1 material dated 10 May 2023;
(h)Exhibit H: Tender summary of cash withdrawals dated 10 May 2023;
(i)Exhibit I: Applicant’s proposed minute of order dated 10 May 2023.
CHRONOLOGY
Date Event 1953 Respondent born 1957 Applicant born 1977 Applicant complete three year trades course 1977 Parties purchase B Street, Suburb D (B Street) for $29,950 – property purchased in the sole name of the respondent. 1977 Parties marry and begin cohabitation at B Street 1977 Parties access applicant’s tertiary education trust account for use on purchase of B Street 1978 Applicant’s mother passes away and parties move in with applicant’s father Within 1978-1982 · Respondent holds loaded gun to applicant’s head
· Respondent begins financial control over applicant
· Respondent refuses to put applicant on title to B Street
· Respondent begins emotionally and verbally abusing applicant
· Respondent begins forcing applicant to isolate from family.
1982 Parties move to B Street 1983 Ms E is born 1983 Respondent begins having affairs 1983 Applicant granted a small weekly allowance for shopping Within 1982-1983 Respondent continues to refuse to put applicant on title for B Street 1985 Mr F is born 1985 Respondent continues verbal, physical and emotional abuse of applicant and children 1985 Respondent does not allow applicant to return to work 1989 Respondent admits to having an affair with a girl (beginning in 1983) 1990 Ms G is born 1990 onwards Respondent continues verbal, physical and emotional abuse of applicant and children. 1991 Respondent becomes engaged to another woman, request divorce to prove to fiancé he is “serious” but intends to remain living married to applicant and that it could be “undone”. 1992 Respondent’s engagement ends and AVO in place 1993 Respondent purchases C Street, Suburb D (C Street) for $98,000 (borrowed $100,000) 1995 Ms E witnesses respondent’s physical abuse of the applicant 1995 onwards Ms E witnesses the respondent’s continued physical abuse of the applicant 1996 Respondent make claim as married, refers to applicant as spouse 1996 Mr F intervenes in physical altercation between respondent and applicant and is physically assaulted by the respondent. 1999 Applicant receives inheritance from father’s estate 2001 Ms E suffers mental breakdown and psychotic and paranoid delusions triggered and caused by the respondent 2001 Ms E emotionally and mentally abused by the respondent. 2002 Mr F contemplates suicide 2002 Respondent contends that he leaves matrimonial home- B Street 2003 Respondent refinances C Street 2002 –2002 Respondent refinances B Street and purchased unit at H Street, Suburb J (H Street) for $120,000 (refinances $160,000) 2002 Respondent refinances C Street and B Street and purchases unit at K Street, Suburb L (K Street) for $340,000 (refinanced $672,000) 2003 Respondent pressures applicant to use inheritance to purchase investment property 2003 Respondent purchases H(2) Street, Suburb J (H(2) Street) for $115,000 (borrowed $768,000) 2005 Respondent ceases living at B Street– continued to treat B Street as a home for meals, washing to be carried out by applicant. 2005 Respondent refinances H Street, borrowing $1,002,000 2007 Respondent excessively violent to eldest child, Ms E 2008 Respondent sells H Street – received $143,000 2009 Respondent sells K Street – received $360,000 2009 Respondent ceases requiring applicant to cook and wash for him 2009 Respondent refers to B Street as applicant’s house 2009 Ms G diagnosed with major depression and anxiety 2011 Respondent sells H(2) Street – received $157,000 2011 P born 2012 Respondent refinances C Street and B Street 2012 Q born 2015 Respondent purchases M Street, Suburb N for $580,000 (borrowed $650,000) 2015 Respondent promises B Street to applicant and children in written letter 2015 Respondent promises B Street to applicant and children in written letter 2016 Mr F contemplates suicide 2018 Investment property sold for loss 2018 Respondent begins campaign to sell B Street 2018 Applicant’s anxiety intensifies 2019 Respondent sells M Street for $570,000 2019 Applicant approaches O Health Centre and Legal Aid NSW APPLICANT’S EVIDENCE
The applicant stated she has lived at the B Street property since 1982, where she raised the parties’ children, Ms E, Mr F and Ms G. The applicant alleged that the respondent did not allow her to go back to work after the birth of Mr F and she focused on home-making duties.
The applicant alleged that the B Street property was purchased as the matrimonial home in 1977 for $29,950. The applicant alleged that in 1977 she accessed a $3,000 trust account through her father to assist with the solicitor’s fees and living expenses for the B Street property.
The applicant alleged that the respondent dismissed the idea that the property should be held in joint names. The applicant attempted to bring the idea of having her name of title many times but alleged that the respondent would gaslight her. The applicant alleged that this was the early stages of the respondent’s financial control and abuse as she never had control over the family’s finances and was only granted a small weekly shopping allowance.
Shortly after acquiring the matrimonial home, the parties moved back with the applicant’s father from 1978 to 1982 as the applicant’s mother had recently passed away. During this time the applicant alleged that the matrimonial home was rented out, which met the mortgage repayments and that the parties lived rent-free in the applicant father’s home. During this time, the applicant alleged that one day while she was in the kitchen with her back turned that the respondent approached her with a rifle, pointing it at her. The applicant alleged that she feared her death in that moment.
The applicant alleged that the respondent was jealous of her close relationship with her family and would often emotionally blackmail her by threatening divorce if she didn’t listen to him. The applicant alleged that the respondent would try control how she would interact with her family.
The applicant alleges that the respondent had engaged in multiple affairs over the course of their marriage demanded a divorce around 1991 so that he could pursue a woman he was seeing. The applicant alleged that she felt ashamed of the divorce, due in part to her religious upbringing, and did not reveal the divorce to her family until around 2015. The applicant alleged that even when the respondent had left the home she still assisted him by cooking, cleaning and doing his laundry.
The applicant alleged that she has minimal assets and resources and suffered significant stress and severe anxiety when she attempted to pursue legal assistance in relation to her property claim. The applicant’s request for assistance was denied by Legal Aid in October 2019. At that time the applicant alleged that the respondent would repeatedly convey to her that they already had a property settlement namely the B Street property was hers and after it would be left to their children. The applicant alleged that the respondent convinced her to keep things under his name so he would be responsible for things such as the rates. The applicant stated that the respondent conveyed to her that she didn’t have to pay rent to live at that property.
The applicant alleged that the respondent was a perpetrator of family violence throughout their marriage. The applicant alleged that over the years the respondent was verbally abusive, body-shaming her and calling her names in front of their children. The applicant alleged as the children grew up that they would begin to intervene in their arguments and that this would usually result in the respondent physically punishing the children.
In 1999, pursuant to the applicant’s father’s estate distribution, the applicant alleged that the respondent coerced her into using $80,000 of the inheritance to purchase the property B Street, as an investment property. The applicant alleges that the home was purchased for $235,000 and was later sold at a loss for $215,000 in 2018.
An AVO application was made by the applicant in 2017 to protect her from the respondent which was not granted. The applicant had alleged that the respondent would constantly drive by the B Street property and that she felt fearful.
RESPONDENT’S EVIDENCE
The respondent initially alleged that the applicant’s claim was out of time and her application should be dismissed.
The respondent alleged that he met the applicant in or around 1976 and married in 1977. The respondent denied that the applicant contributed financially to the purchase of the B Street property as he had paid the deposit of $6,000 against the purchase price of $30,000 and that he serviced the remaining mortgage in the amount of approximately $23,000 to $25,000. The respondent alleged that he attended to many repairs relating to the home and making improvements to the property. The respondent maintains that he attended to all the financial affairs of the relationship and that the applicant had a fulltime caring role for the children.
After living in the B Street property for four to five months, the respondent alleged that the applicant’s father forced the couple to move into his property after the passing of the applicant’s mother.
The respondent alleged his best estimate as to the rent received at the B Street property during that time was up to $100 per week.
The respondent alleged that he feared living in the applicant father’s home due to threats involving firearms and moved back to the B Street property around 1981 to 1982.
The respondent alleged that the applicant was not engaged in consistent employment and any earnings was kept for her own use.
The respondent alleged that he worked full-time almost consistently and that the only gaps in employment were when he was in between jobs.
The respondent stated that he had separated from the applicant in 1990 and was legally divorced from her in 1991. The respondent alleged that he remained living with the applicant in separate rooms and for the benefit of the children and in the interests of financial convenience.
The respondent alleged that in 1992 he had purchased the C Street property for about $98,000, using his own money and savings and inheritance.
The respondent alleged violence perpetrated by the applicant, including death threats. As a result the respondent alleged he moved out of the former matrimonial home into the C Street property. The respondent broadly denied that he had perpetrated violence against the applicant.
Following the parties separation, the respondent alleged a property settlement was wholly executed. Being that “If finances allow, [the applicant] could live at the B Street property rent free with our children until our children had moved out and established independent lives and that I could remain living at the property.”
The respondent alleged that before and after separation, he played an active role in the children’s lives.
The respondent expressed disquiet that between 1991 and 2014 that he could have rented out the B Street property for approximately $200 to $400 a week, and beyond 2014, a figure around $400 to $500 per week. The respondent noted that the applicant lived rent free in the B Street property. The respondent accepted that after 2004, the applicant partially contributed to rates and after 2007 or 2008 fully contributed to the rates.
The respondent alleged that the applicant had bought the neighbouring B Street property in between 2001 and 2003. The respondent alleged that that property was subsequently sold and the applicant retained the proceeds of sale and all the rental income that was generated when it was held.
FIRST ADULT CHILD’S EVIDENCE
Ms E (nee Castelli) is the eldest child of the parties’ relationship and gave evidence for the applicant in these proceedings. Ms E recalled that around 1995 she witnessed the respondent hitting the applicant violently. She alleged that her brother and herself tried to unsuccessfully break up the quarrel. Ms E alleged that the respondent yanked out a substantial quantity of the applicant’s hair. Ms E alleged that she went with her siblings and the applicant to see Dr R to assess the applicant’s condition who inquired as to whether authorities should be notified. She alleged that the applicant refused at that time.
Ms E alleges that the respondent was extremely controlling of the applicant, using her lack of license against her. Ms E alleges that the respondent would verbally abuse the applicant frequently throughout her childhood. Ms E alleges that at vulnerable times, the respondent would not be emotionally supportive, especially at the time she had a breakdown during her final year of high school. Ms E alleges that the stressful home environment contributed to her ongoing struggles with her mental health.
Ms E recalled that she and her brother would attend sports in primary school and that the respondent would hit her with his belt. Ms E recalled that her and her brother would often lock themselves in the bathroom to escape the physical abuse. Ms E alleged that her father was controlling in the way she interacted with other people.
Ms E recalled being constantly fearful of her mother’s safety whenever she was at school. Ms E alleged that the respondent was unemployed for many consecutive years. Ms E alleged that she was aware that her father was seeing other women, intending on settling down with another person and visiting prostitutes.
SECOND ADULT CHILD’S EVIDENCE
Mr F is the second child of the parties’ relationship and gave evidence for the applicant in these proceedings. The witness alleged that in 2016 he was diagnosed with anxiety, depression and PTSD by a clinical psychologist who attributed the majority of his mental health issues with the alleged mental, physical and psychological abuse subjected by him from his father, the respondent.
The witness alleged that there was a physical incident in 1996 when he was ten years old between the respondent and applicant in which he attempted to intervene. The witness alleged that the respondent kicked him in the shoulder which resulted in a chronic pain that persists to this day.
The witness alleged that the respondent would constantly torment him through name-calling. The witness alleged recalling often locking himself, along with his sisters in the toilet to avoid physical confrontation with the respondent.
The witness recalled going to S Medical Centre in Suburb T after a physical incident. He went with the applicant and his sisters where the consulting doctor asked if the applicant wanted to press charges against the respondent. The witness alleged that the respondent would often blame the applicant for his violent behaviour.
THIRD ADULT CHILD’S EVIDENCE
Ms G is the third child of the parties’ relationship and gave evidence for the applicant in these proceedings.
The witness alleged that the respondent would frequently verbally abuse the applicant when she was growing up. The witness alleged that the respondent would accuse the applicant of having romantic involvement with close male figures in her life.
The witness alleged that the period between 2001 and 2002 was a particularly violent time. The witness alleged that her sister Ms E experienced a psychotic episode during her final school year as a result of the respondent’s abuse. The witness alleged that the respondent would emotionally torment Ms E in arguments that would last hours. The witness recalled being ten years old around this time and feeling deeply distressed and anxious seeing her sister in that state.
The witness alleged that in one altercation during that time period a physical fight led to the respondent indiscriminately hitting the rest of the family with closed fist punches.
The witness alleged that throughout her childhood, the respondent would leave age-inappropriate and sexually-explicit television programs on while she and her siblings were in the room. The witness alleged that the respondent would be crude in his comments about women and he was particularly perverted.
THE BALANCE SHEET
The Court finds this is not a case where there should be any add-backs in respect of the balance sheet, which relevantly is as follows:
Ownership Description Applicant Wife’s Value Respondent Husband’s Value Court’s Findings ASSETS H B Street, Suburb D E$760,000 E$625,000 $760,000 H C Street, Suburb D E$730,000 E$625,000 $730,000 W NAB Account ending #...78 as at 26 April 2023 E$12 E$12 $12 W NAB Account ending #...53 as at 26 April 2023 E$70 E$70 $70 H CBA Account ending #...20 as at 28 April 2023 E$4 E$4 $4 H Westpac Account ending #...52 as at 15 November 2022 E$28 E$28 $28 H Shares 1 x514 E$2,580 E$2,500 $2,500 H Motor Vehicle 1 E$15,000 E$5,000 $5,000 H U Company NK 0 0 W Furniture E$500 E$500 0 H Furniture E$1,000 E$100,000 $1,000 H Westpac Bank e saver ending #...65 0 0 0 TOTAL E$1,509,194 E$1,358,114 $1,498,614 LIABILITIES W Centrelink Debt as at 26 April 2023 $8,983 $8,983 $8,983 H Westpac Home Loan #...27 as at 29 March 2023 E$327,432 E$327,432 $327,432 H Westpac Home Loan #...22 as at 28 November 2022 E$418,354 E$418,354 $418,354 H Westpac Visa Card #...18 $25,610 $25,610 $25,610 H ANZ Frequent Flyer Platinum as at 3 November 2022 $15,069 $15,069 $15,069 H NAB #...58 as at 24 October 2022 E$413 E$413 $413 H NAB #...19 as at 24 October 2022 E$182 E$182 $182 H Credit Card as at 4 December 2022 0 0 0 TOTAL E$796,043 E$796,043 $796,043 SUPERANNUATION Ownership Description Type of Interest Applicant’s Value Respondent’s Value Court’s Findings W Super Fund 1 Accumulation $36,680 $36,680 $36,680 LEGAL PRINCIPLES – PROPERTY ASPECT OF DISPUTE.
The Court has taken into account the principles in s 43 and the definition of Family Violence in s 4AB(1) and the definition of abuse in s 4 of the Act. In respect to the parties dispute regarding the division of their property these proceedings, s 79 of the Act sets out the following:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2) The 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.
In exercising that discretion, the court is required to take into account the matters set out in s 79(4) of the Act, as follows:
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The High Court in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”), at [35] confirmed that before an order is made adjusting the parties property the court is required to make a determination that it is just and equitable to do so. That determination is to be made, however, not as a discrete or preliminary issue but requires the Court to consider the matters set out in section 79(4) of the Act.
In the leading case of Hickey and Hickey and Attorney-General (Cth) (2003) FLC 93-143, the Full Court held at [39] that, in considering the matters set out in section 79 (4) of the Act the preferred approach was to adhere to the following four steps:
(a)Identify and determine the value of the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both the assets and liabilities);
(b)Identify and assess each of the parties’ financial and other contributions up until the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(c)Assess how future and other events may have a financial impact on either of the parties, such as their age and state of health and their income and property or financial resources (known as the s 75(2) factors); and
(d)Step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
That approach had been endorsed many times: see, for example, Manolis v Manolis (No 2) [2011] FamCAFC 105 at [63] (per Coleman, May and Ainslie-Wallace JJ); Kildea v Kildea (2007) 38 Fam LR 347 at [104] (per Finn, May and Boland JJ); C and C (2005) FLC 93-220 at [22] (per Bryant CJ, Finn and Coleman JJ) and [142] (per O’Ryan J). However, as the High Court noted at [35] in Stanford, s 79(2) of the Act provides that the Court shall not make an order altering the interests of the parties to the matrimonial property, “unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Accordingly, since Stanford, it has generally been the practice of the Court to determine, as an initial issue, whether it is just and equitable to make an adjustment of marital property.
The Full Court in Perrin & Perrin (No 2) [2018] FamCAFC 122 cited at [57]–[58] with approval, the decision in Babett & Falconer (2015) FLC 98-067 at [44]:
Within the family law context, those comments [in respect to the adequacy of reasons] should be seen as reinforced by the fact that the nature of the s 79 inquiry is, in essence, a broad discretionary assessment, which is neither an accounting nor mathematical exercise and which, effectively as a corollary, requires a "broad-brush approach".(Citations omitted)
Addbacks
In AJO and GRO (2005) FLC 93-218 at 79,617, the Full Court identified three categories where it may be appropriate to notionally add back an item of expenditure, as follows:
(2)Where the parties have expended money on legal fees: see DJM v JLM (1998) FLC 92-816 at 85,262;
(3)Where there has been a premature distribution of matrimonial assets: see Townsend & Townsend (1995) FLC 92-569 at 81,654; and
(4)In the circumstances outlined by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644, including:
(a)Where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
(b)Where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Contributions
The Court is required to make an assessment of the nature and quality of the totality of the parties’ contributions throughout the entirety of their relationship, together with their contributions in the period subsequent to their separation. In [29] Dickons & Dickons [2012] FamCAFC 154, [14] (Bryant CJ, Faulks DCJ, Murphy J); Jabour & Jabour [2019] FamCAFC 78, [61] (Alstergren CJ, Ryan and Aldridge JJ). See also Dovgan & Dovgan [2021] FamCA 306, [347] (Harper J), which restates the need to holistically assess contributions following the case of Dickons, and that ‘all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder’.
Kennon Issue
The Kennon principle has established that the Court can take into account family violence in calculating contributions in property disputes.
The Full Court in Kennon & Kennon [1997] FamCA 27 said:
‘… 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, to 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.’
The Court established that three (3) elements need to be satisfied, to make an adjustment to a contribution assessment on the basis of family violence:
(a)A course of violent conduct can be established;
(b)The violent conduct has a discernible impact on the victim; AND
(c)The contributions to the marriage or relationship were significantly more arduous because of the family violence.
The applicant sought transfer of the matrimonial home from the respondent unencumbered and that the respondent retain the encumbered C Street property. The applicant also sought an adjustment in her favour based on the principles underlying Kennon.
The applicant referred to the respondent continuing to live in the matrimonial home until 2005 and says she provided $3000 contribution towards the acquisition of the matrimonial home in 1977. The applicant maintained part of her inheritance was applied to outgoings on the matrimonial home and to home renovations.
The applicant carried out the majority of household duties and was the primary care giver for the three children and shared in outdoor chores. The matrimonial home was unencumbered at the time the respondent ceased living there in 2005 and the respondent made numerous purchases using the matrimonial home as collateral security.
The applicant contended her contributions were made significantly more onerous as a result of the family violence of the respondent. The wastage argument was not pressed in closing address. The applicant is 66 years old and lives alone in the matrimonial home. The applicant works part time as a retail worker and earns approximately $700 per week and has minimal superannuation of $43,600 but otherwise has no assets. The applicant has a debt to Centrelink and suffers from severe anxiety, depression and PTSD as a result of the abuse to herself and the children by the respondent.
The respondent contended neither party has any major assets or liabilities when they commenced living together. The matrimonial home was purchased in 1977 for approximately $30,000 with the respondent paying a deposit of $6000. The respondent met the outgoings and expenses.
The respondent contributed to the maintenance of the matrimonial home whilst living there and added an extension. The respondent maintained that there was a small mortgage at the time of separation in the order of $10,000 and that he bought and sold several properties using the matrimonial home as security without any significant profit.
The C Street property was purchased by the respondent in 1992 for about $98,000 using his savings and $10,000 inherited from his father. The respondent received $90,000 TPD payment in 2011 and $50,000 for a personal injury claim in 2017 which were applied to mortgage payments and/or credit card debts. The applicant only partially contributed to the outgoings on the matrimonial home since separation and has not paid rent. The respondent continued to provide maintenance to the matrimonial home after separation and has met mortgage payments secured on the property.
The respondent referred to a property purchase by the applicant that was sold in 2008 and to which the respondent assisted in some mortgage payments and some maintenance. The applicant was said to have been sporadically employed between 1970 and 1981, retained the income earnt and received a family allowance. The respondent was employed almost throughout the relationship.
The respondent accepted that the applicant predominantly attended house hold chores and was the fulltime carer for the children whilst he was at work. The respondent alleged sharing responsibilities when not at work and paying for the children’s expenses including after moving out of the matrimonial home. The respondent denied any family violence and asserted he was the subject of abuse. The respondent is 69 years of age and the children of the relationship are 33,38 and 40 years of age. The respondent is the father of children now aged 11 and 12. The respondent retired in 2010 and receives weekly pension of $578 and family tax benefit of $4390 and child support of $4183 per week.
The respondent suffers depression, has had COVID, and other medical conditions. The respondent has credit card debts and cross collateralised mortgages totalling $940,000 and pays interest of $6000 per month. The mortgages are said to be $166,000 in arrears. The applicant has a weekly income of $713 and expenses of $255 with no dependents.
The respondent contended that the applicant has had 32 years living free in the matrimonial home and that the respondent is responsible for 2 dependents, retired and in extreme financial distress. Initially it was contended that there should be no property alteration and this changed to a 50% sharing of the Westpac debt and a transfer of the matrimonial home in final address.
FINDINGS AND CONCLUSIONS
The Court turns to the first property step and finds that the assets of the parties are as identified in the above Court findings as to the balance sheet. The Court heard evidence from the applicant and the parties’ three children.
There were competing valuations in relation to the matrimonial property and in relation to the C Street property. The Court prefers the valuations that had comparable data, in the applicant’s evidence, and finds that the value of the matrimonial home, as of the date of hearing, is $760,000, and finds the value of the C Street property at the date of hearing, is $730,000.
There was a dispute in relation to the value of other minor items of property, including in relation to a Motor Vehicle 2 owned by the husband. Given the age of the vehicle, the Court prefers the value identified by the husband in respect of his eleven year old vehicle, and finds the value is $5,000. There was a dispute in relation to the husband’s furniture. A very robust version of assets was presented by the respondent in a bank loan that referred to furniture worth $100,000. The content of the bank loan application, however, was replete with unsustained assertions of earnings and assets. Accordingly, the Court finds that the husband’s furniture, as described in the Westpac banking loan application, was not accurate, and finds that the value of the same is $1,000.
There was no clear evidence adduced in relation to home loan …27, applying to the matrimonial home, and the possibility was raised that it may relate to the C Street property. The Court, however, has treated the home loan …27 as secured on the matrimonial home and the home loan …22 as being secured on the C Street property. The Court will return to the issue of collateralised security in due course.
There was an initial dispute in relation to liabilities in respect of the home loans. However, the parties, in final address, accepted that the amounts identified by the applicant were the values the Court should adopt and that the home loan secured on the matrimonial home to Westpac was in the amount $327,432 and that the home loan on the C Street property owing to Westpac is $418,354.
There was no other dispute in relation to the liabilities. In relation to the asset position of the parties, there was a suggested add-back by the applicant in relation to alleged waste from gambling by the respondent. The respondent admitted having a level of depression that caused him to engage in gambling for approximately three to four years at a point of time after he had left the matrimonial home. The Court does not accept that the gambling expenditure by the respondent was of a kind, in the circumstances of this case, taking into account the depression of the respondent, for which there should be any add-back. The applicant did not press such an add-back in the final address. The difference in value of the Shares 1 is nominal and of no significance.
There was also a suggestion of an add-back in relation to the receipt of alleged surplus funds. The calculation of alleged surplus funds was derived from stamp duty records relating to the value of secured property and did not support the receipt of surpluses as initially alleged by the applicant. Those surplus add-backs were not pressed in the final hearing by the applicant. In any event, the Court is not satisfied that the security value in the stamp duty records reflects a surplus of proceeds received by the respondent.
The Court is satisfied that an alteration of property interests of the parties is just and equitable.
Turning to the second step the Court finds that the applicant provided significant contributions to the property of the parties as homemaker, parent and indirectly in facilitating through her full time caring role the employment income contributions by the respondent during the marriage. The applicant identified a real albeit modest monetary contribution which the Court accepts was made to the legal costs in the acquisition of the matrimonial home and equates with half of the deposit that was paid by the respondent.
The Court accepts that the matrimonial home was otherwise acquired in the name of the respondent, through funds of the respondent, with a security on the property. The Court finds that, at the time of divorce, the amount secured on the matrimonial home was only in the order of $10,000.
The Court finds that after the divorce, and to date, the respondent has used the matrimonial home as security in his property transactions. The Court finds that the mortgage repayments have, since the time of acquisition, been met by the respondent, including the refinanced liabilities created by the respondent on the matrimonial home. The Court finds that most of the outgoings in relation to council rates were paid for by the respondent, with the applicant making some payments towards council rates and utilities.
The applicant gave evidence that she was, in substance, the primary caregiver for the three children, with very little assistance by the respondent. The Court accepts the evidence of the applicant in that regard. The Court prefers the evidence of the applicant to that of the respondent in relation to contributions and in relation to family violence. The applicant’s evidence was relevantly corroborated by the evidence of the adult children.
The applicant also gave evidence as to the difficulty she faced in providing her indirect contributions as a homemaker, given what the Court accepts was the family violence which included financial controlling behaviour engaged in by the respondent. The Court accepts the applicant’s evidence that the respondent’s acts of family violence and controlling financial behaviour materially contributed to the applicant becoming significantly depressed and that that depression has been of a lasting and continuing kind in respect of which the applicant is still, to date, taking medication.
The Court has taken into account also the alleged behaviour of the respondent, which the applicant identified, of regularly driving past the property on a weekly basis in circumstances where it was unnecessary for him to do so since leaving the property and this has continued to impact on her depression and anxiety. The Court accepts the applicant’s evidence that her depression and anxiety has materially impacted on her limited ability to now work.
There were significant incidents of the applicant that were corroborated by the three children. In the circumstances of this case, it is not necessary for the Court to descend into the incidents, the subject of that corroborative evidence, beyond describing the same as constituting family violence. The Court does not propose to make express findings on each of the incidents and has taken into account the standard in Briginshaw & Briginshaw (1938) 60 CLR 336 making the finding that the applicant’s contributions as a homemaker were materially impaired by the family violence of the respondent. The Court finds that the applicant suffered depression and anxiety by reason of that conduct. That family violence was prolonged and has had a lasting effect on the applicant for which she still takes prescribed medication. The conduct of the respondent affected the applicant’s breathing by restricting the same, increased asthma attacks and headaches requiring medical attention and medication. The applicant also suffered anguish due to the cruel behaviour of the respondent to her children and what they endured as children at the hands of the respondent.
The Court assessed the initial financial and non- financial contributions of the applicant to the property of the parties to the marriage to be almost equal. The Court finds that the contributions during the marriage and up to separation by the applicant to the welfare of the family, as homemaker and parent were greater than that of the respondent. The Court assess the contributions by the applicant in relation to s79(4)(a), (b) and (c) to be greater than that of the respondent. The Court assess the overall contributions of the applicant to the property of the parties to the marriage to be 55% in favour of the applicant and 45% to the respondent. The Court finds that there has been established a course of family violence by the respondent during the marriage and the relationship. The Court finds that conduct has had a discernible effect upon the applicant in that she consequentially suffers from anxiety and depression required prescribed medication. The contributions of the applicant were more arduous because of that family violence. In light of the above findings as to the significant arduous impairment in the provision of those contributions by the applicant a Kennon factor of a further 5% should be taken into account so that the contributions are in fact assessed as 60% in favour of the applicant and 40% to the respondent.
In relation to the third step in assessing the future the applicant has been living in the matrimonial home since 1977 and is now 66 years of age suffering from anxiety and depression. The applicant has been working part time for 10 hours as a retail worker earning about $650 before tax per week, receives $62.50 from the Government each week and other than a small amount of superannuation has no other relevant assets. The applicant’s future earning capacity is obviously curtailed due to her age and health.
The respondent has retired, is aged 70 and has two dependent children, a daughter aged 12 and a son aged 10, and receives a pension of $196 per week and family tax benefit of $196 per week and receives maintenance from as child support in the total amount of $183 per week. The respondent has been living in the C Street property since about 2005. The respondent has the two properties identified in the above balance sheet encumbered to Westpac. The Court has taken these matters into account under s75(2) (a), (b) and (c).
In relation to s75(2)(d) the applicant is likely to be able to continue to support herself and meet the outgoings necessary to service the relevant Westpac loan on the matrimonial property and other necessary expenses if that property were transferred into her name subject to the relevant Westpac loan. The respondent is also likely to be capable of servicing the relevant Westpac loan that will remain on the C Street property and to support himself and his two dependents. The respondent may need to relocate to rented premises and sell the C Street property and is likely to be able to support himself and his two dependent children if that were to occur.
The Court takes into account under s75(2)(e)the respondent’s parental responsibility for his two children aged 12 and 10. The Court has taken into account the benefits being received by the applicant and the respondent referred to above in accordance with s75(2)(f).
The Court has taken into account under s75(2)(g) that the parties separated in 2005 preferring the evidence of the applicant to the contention of the respondent as to leaving the matrimonial home allegedly in 2002. The parties married in 1977, were divorced in 1991. The standard of living for the applicant that is reasonable in all the circumstances is to be able to continue to live in the matrimonial home. The proposed orders will provide a standard of living that is reasonable for the respondent in all the circumstances.
The considerations in s75(2)(h), (j), (naa), (na), (p) and (q) are not relevant. In relation to s75(2)(ha) the Court has taken into account the two loans on the respective properties secured by mortgages in favour of Westpac. The Court has power to consider severing the cross collateralised security if the creditor declines to accommodate the same and the orders provide for this issue to be addressed if it arises. Those loans are identified in the above balance sheet. The marriage lasted 14 years and the relationship lasted 28 years in relation to s75(2)(k).
The Court has taken into account the respondent’s need to protect the two children aged 12 and 10 and to discharge his parental responsibilities in accordance with s75(2)(l).
In relation to s75(2)(m) the applicant is living on her own in the matrimonial property and the respondent is living with his two dependent children in the C Street property receiving maintenance and family support in relation to the two children.
The Court has taken into account the terms of the order to be made by the Court in accordance with s75(2)(n).
In relation to s75(2)(o) justice requires that there be taken into account the promises made by the respondent to the applicant in signed letters dated August 2015 and October 2015. The Court also prefers the applicant’s evidence in that regard that the matrimonial home that she has lived in since 1982 was hers. The Court regards these facts in relation to the justice of the case as strongly supporting orders that permit the applicant being able to continue to reside in that matrimonial home.
The Court notes that the applicant has a limited earning capacity as identified above and the respondent has no income earning capacity in relation to s79(4)(d). There is no relevant order in relation to s79(4)(f) and s79(4)(g) has no relevance. Given all the circumstances and the future assessment factors referred to above, the Court is satisfied that no other alternation is necessary if the matrimonial home with the existing loan of $327,432 is transferred to the applicant. The Court does not accept that sharing of the Westpac loans 50/50 in the transfer of the matrimonial home interest to the applicant is just and equitable. The Court finds it is just and equitable for the respondent to carry the greater loan on the C Street property.
In relation to the fourth step, the Court is satisfied that the proposed orders that facilitate a transfer of the matrimonial home to the applicant encumbered by the loan account mortgage of $327,432 leaving the respondent with the C Street property encumbered by the mortgage of $418,354 is just and equitable. The two properties reflect of gross pool of $1,490,000 less the Westpac mortgages leaves a net pool of $744,214. Applying 60% to that net pool would reflect the applicant receiving $416,782 and the respondent receiving $297,685. If the properties are transferred as proposed in the Court orders the applicant obtains slightly more than 60% of the net pool being $446,528. The respondent on transfer of the C Street property receives $311,646 which is slightly more than 40% of the net pool. The Court is satisfied that the proposed orders, for alteration of property interests and the consequences as to alteration of interest, if the properties must be sold by public auction are just and equitable.
The Court has taken into account the whole of the assets and liabilities and is satisfied that the proposed alteration of property interests reflected in the orders of the Court are just and equitable. The Court is satisfied that further adjustment in favour of the respondent because of his two dependent children would not in all the circumstances be just and equitable.
The Court finds that the property interests of the parties should be altered in the manner identified in the orders now made and that this alteration is just and equitable.
I certify that the preceding one hundred and one (101) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Street. Associate:
Dated: 7 September 2023
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