FABRIZI and GRASSO (Deceased)

[2020] FCWA 164

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY COURT ACT 1997

LOCATION: PERTH

CITATION: FABRIZI and GRASSO (Deceased) [2020] FCWA 164

CORAM: DUNCANSON J

HEARD: 7 JULY 2020

DELIVERED : 24 SEPTEMBER 2020

FILE NO/S: PTW 1820 of 2018

BETWEEN: MS FABRIZI

Applicant

AND

MR GRASSO (JNR) as the legal personal representative of MR GRASSO (Deceased)

Respondent

Catchwords:

FAMILY LAW - Where the parties de facto relationship had not ended - Where the applicant applied for property settlement orders - Where the then respondent subsequently died - Where it is found had the deceased not died the Court would not have had a principled reason to interfere with the parties chosen arrangements - Where it is found it would not have been just and equitable to make an order with respect to the parties' property if the deceased had not died and consequently after his death it could not be found to still be appropriate to make an order - Where the applicant has commenced proceedings in the Supreme Court pursuant to the Family Provision Act 1972 (WA)

Legislation:

Family Court Act 1997 (WA) s 205ZG
Family Provision Act 1972 (WA)
Family Law Act 1975 (Cth) s 79

Category: Reportable

Representation:

Counsel:

Applicant	:	Mr J Lawley
Respondent	:	Dr A Dickey QC

Solicitors:

Applicant	:	Butlers
Respondent	:	Murcia Pestell Hillard

Case(s) referred to in decision(s):

Fabrizi and Grasso (Deceased) by his legal personal representative Grasso (Jnr) [2019] FCWA 176
Stanford v Stanford (2012) 247 CLR 108
Zaruba & Zaruba [2017] FamCAFC 91

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

IT IS NOTED that publication of this judgment by this Court under the pseudonym Fabrizi & Grasso has been approved by the Family Court of Western Australia pursuant to s 243(8)(g) of the Family Court Act 1997 (WA).

1On 19 February 2018 the applicant [Ms Fabrizi] filed an initiating application in which she sought orders for property settlement and/or spousal maintenance. The respondent in the application was [Mr Grasso] with whom the applicant, was at the time of filing her application, in a de facto relationship. Mr Grasso died [in early] 2018. For convenience I will refer to him respectfully as the deceased. On 1 November 2018 an order was made that the deceased be substituted in the proceedings by his son, [Mr Grasso Jnr], his legal personal representative.

2In these proceedings between the parties I was required to determine an issue as to whether a de facto relationship has to have ended before a party can commence proceedings under s 205ZG of the Family Court Act 1997 (WA) ("the Act") for alteration of property interests. I delivered my reasons in relation to that issue on 16 August 2019 ([2019] FCWA 176). I determined that there was no requirement in the Act for a de facto relationship to have ended before a party could commence proceedings for alteration of property interests.

The current proceedings

3The applicant has filed a number of applications in a case arising from which she seeks various orders as contained in a consolidated minute of orders sought as follows:

1The Respondent do all acts and things necessary, including making any and all payments as requested and/or scheduled, to ensure that the construction work at [Property A] proceeds in accordance with the WA Lump Sum Building Contract between [Mr Grasso], [Company A] and [Company B].

2The Respondent forthwith provide a written authority to the Applicant to enable her to give instructions to [Company B] to include variations the terms of the building contract, with the cost of any variations to be met solely by the Applicant.

3Within 21 days of the date of these Orders, the Respondent pay, or cause to be paid, to the Applicant the sum of $1,000,000.00 by way of partial property settlement.

4Until further Order, the Respondent be restrained by injunction and an injunction be granted, restraining him or his servants or agents, from:

a.Selling, disposing of, charging, encumbering or otherwise dealing (other than in the usual course of business) with the assets and financial resources of any entity controlled by, or on behalf of, the Estate of [Mr Grasso] or any entities which were controlled by the late [Mr Grasso];

b.Exercising any powers as Director, Secretary, Shareholder, Appointor, Guardian, Trustee or Executor of any entity controlled by or on behalf the Estate of [Mr Grasso], without first providing the Applicant with not less than 28 days prior written notice of his intention to do so; and

c.Entering into any Deed, undertaking any action or instructing any other person to undertake any action, in his capacity as the Executor or Legal Personal Representative of [Mr Grasso], that seeks to alter the control, interest or benefit of any entity that was controlled by the late [Mr Grasso].

5The Respondent pay the Applicant's costs of and associated with this Application.

6Such further Orders as this Honourable Court deems appropriate.

(As per the original)

4The respondent opposes the orders sought by the applicant. In his further amended response filed 27 March 2020, the respondent seeks a final order in the following terms:

PRINCIPAL FINAL ORDERS SOUGHT

1These proceedings be dismissed on the ground that, pursuant to section 205ZG(8)(b)(i) of the Family Court Act 1997 (WA), the Court would not have made an order with respect to property in favour of the Applicant if the deceased party, [Mr Grasso], had not died. As a consequence, the Court cannot make an order with respect to property in favour of the Applicant under section 205ZG now.

2The Applicant pay the Respondent's costs on an indemnity basis.

(As per the original)

5In the event the Court declines to make the foregoing principal final orders the respondent seeks various orders by way of property settlement to include orders for payment of money and transfer of motor vehicle to the applicant and orders setting aside a Trust Deed and transfer of property. The respondent also seeks miscellaneous orders to include a renunciation by the applicant of any interest she has under the deceased's Australian will made 21 February 2017 and codicil made 27 February 2018 and a withdrawal of her Supreme Court proceedings pursuant to the Family Provision Act 1972 (WA) ("the Family Provision Act").

THE FACTS

6The following facts are uncontentious. The applicant was born [in] 1952. She is 68 years of age. The deceased was born [in] 1947. He died [in] 2018.

7The parties met in 1996. In 1997 they commenced a de facto relationship which endured until the death of the deceased.

8On 14 February 2018, the Trustee of [Family Trust A], the deceased, the applicant, the respondent and his brother [Mr B] executed a Deed whereby the applicant was given a life interest in the properties at Property A and [Property B] both in [Suburb A], with the remainder in both properties to the respondent and Mr B as tenants in common in equal shares. In a separate will, the deceased left the applicant a life interest in a property in [Country A].

9The applicant learned of the contents of the deceased's will prior to his death. She was disappointed by the provision made for her in the will but she still loved the deceased and they remained in a relationship.

10The applicant commenced these proceedings when she filed an initiating application on 19 February 2018. The application was not served upon the deceased. At that time the parties were committed to a shared life together. Their relationship was intact and it remained intact until the death of the deceased.

11The applicant has made a claim against the deceased's estate under the Family Provision Act in proceedings in the Supreme Court of Western Australia (CIV XXXX of 2019).

THE SUBMISSIONS

12The respondent relied on Submissions on Jurisdiction filed 9 April 2020. The applicant relied on an Outline of Submissions filed 3 July 2020. Counsel for both parties made oral submissions.

The respondent's submissions

13Queen's Counsel for the respondent submitted that the applicant's claim for alteration of property interests cannot succeed on account of s 205ZG(8)(b)(i) of the Act which sets as a precondition for a court to make an order under s 205ZG that the Court "would have made an order with respect to property if the deceased party had not died".

14Queen's Counsel submitted that implicitly the Court must consider only the facts and circumstances that existed between the parties prior to the death of the deceased and not any hypothetical facts or circumstances, for example the possibility of separation between the parties.

15Queen's Counsel referred to my said reasons in ([2019] FCWA 176) and my finding at [3] that:

At the time of filing her application the applicant remained in a de facto relationship with the respondent and their relationship continued until the respondent's death [in early] 2018.

16Queen's Counsel submitted that regardless of any consequential estoppel, this finding is well supported by the evidence of the applicant who confirmed that up until the time of her de facto partner's death;

(a)the parties were still cohabiting in the same residence;

(b)the parties were still committed to a shared life together;

(c)the applicant was still performing personal services for the deceased;

(d)the deceased looked after the applicant financially; and

(e)the applicant still loved the deceased.

17Queen's Counsel referred to Stanford v Stanford (2012) 247 CLR 108 ("Stanford") where he said the majority of the High Court made two fundamental points at [39] and [41] namely:

•Whether it is "just and equitable" to make the property settlement order is not to be answered by assuming that the parties' rights to or interest in marital property are or should be different from those that then exist; and

•The fundamental propositions that have been identified require that a Court have a principled reason for interfering with the exiting legal and equitable interests of the parties.

18Queen's Counsel referred to Stanford at [44] where the High Court said in respect of parties who are competent that "… it can…be assumed that any necessary or desirable adjustment can be made to their property interests consensually." He submitted that is precisely what occurred in this case.

19On 14 February 2018 the applicant was a party to a Deed by which the deceased gave her a life interest in the matrimonial home at Property A and an adjacent property at Property B on which a new residence was being constructed as the parties' new matrimonial home.

20Queen's Counsel submitted that in Western Australia separate legislation enables a Court to make an order for financial provision for domestic partners in two situations; one where both parties are alive and the other where one has died and each Act involves separate conditions. These are the Family Law Act 1975 (Cth) and the Family Court Act1997 (WA) when both parties are alive and the Family Provision Act when a party has died. Queen's Counsel submitted a domestic partner cannot simply choose to commence proceedings under whichever Act he or she considers will produce the greater financial result and then try and fit circumstances of the case into the relevant statutory provisions "like a Procrustean bed".

21Queen's Counsel submitted the reason given by the applicant for commencing her proceedings under the Family Court Act prior to the death of the deceased was simply her view, on no convincing evidence, that otherwise she "…may not receive appropriate financial provision".

22Queen's Counsel tested the application of s 205ZG(8)(b)(i) by posing the hypothetical question that if the applicant's property proceedings filed 19 February 2018 were expedited on the ground that the deceased was dying, and if the Court was informed at a hearing that the parties were cohabiting in every way, common residence, personal services, mutual love and affection, would the Court have made a property order in the applicant's favour? He submitted the answer was "surely not". Queen's Counsel submitted as the relationship was intact and there was no intention to separate, the Court would question why the applicant wanted an order under the Family Court Act rather than waiting until the deceased died, in which case a Family Provision application would be appropriate.

23Queen's Counsel submitted the applicant's answer to that question seemed to be that the applicant would say she would receive more from the Family Court than the Supreme Court. The applicant deposed "… I am concerned that, when [Mr Grasso] passes, I may not receive appropriate financial provision." Queen's Counsel submitted this is mere surmise and not supported by the evidence.

24Queen's Counsel referred to the applicant's submissions filed on 3 July 2020, at [82] where it is submitted that the properties in which she was given a life interest are legally registered to trusts controlled by the deceased at the time of his death and consequently they fall outside of his estate. Queen's Counsel submitted this was misleading as it is the Deed of Trust that gave the applicant a life interest in the properties. He submitted the trust was executed [prior] to the death of the deceased, on 14 February 2018. There has never been a suggestion that the applicant was reluctant to enter into that Deed and no evidence that she was coerced into doing so.

25Queen's Counsel also referred to the applicant's said submissions at [85] where it is submitted as follows:

The Applicant deposes that, learning of the provision of [Mr Grasso's] Will would have, if it weren't for his state of health, been enough for the Applicant to leave the relationship. She chose not to do so. Instead, she continued to care for [Mr Grasso] in the manner to which he had become accustomed over the course of the relationship. Now, the Respondent seeks to punish that compassion.

26Queen's Counsel submitted there was a slight hint that the applicant would have separated from the deceased were it not for his illness. He described this as indicative of a type of "back pedalling" by the applicant because it was clear that she did not leave the relationship, she did not want to and would not in any circumstance have done so.

27Queen's Counsel contrasted this with the applicant's evidence in her affidavit filed 2 January 2020, at [40] and [84] where she deposed as follows:

40.As the Court is already aware following the interim hearing and [Mr Grasso Jnr's] Application to have my Form 1 Initiating Application dismissed, [Mr Grasso] and I were not separated at the time of his death. While learning of the contents of [Mr Grasso's] Will, prior to his death, was traumatising I still loved, and still love [Mr Grasso].

84.Following this meeting, [Mr Grasso] and I did not speak again about his Will. While I was disappointed, I still loved [Mr Grasso] and was not prepared to let the contents of his Will affect our remaining time together.

28Queen's Counsel submitted the relationship between the parties was intact until "the very last moment" and it was destroyed only by the deceased's death. He questioned whether the Court would ever make an order for property settlement when two parties are living together? He submitted the High Court in Stanford makes it quite clear there should be no property division except on a principled case and the fact that the applicant thought she would get more money by bringing proceedings in the Family Court than she would by the Family Provision proceedings in the Supreme Court does not get her anywhere.

The applicant's submissions

29Counsel for the applicant submitted that the respondent's submissions appear to suggest that the respondent was seeking to rely on two grounds:

(i)That the applicant's application should fail on the basis that if the deceased was still alive, the Court would not have made an order; and

(ii)Given that the deceased is not alive the appropriate venue for the application is the Supreme Court on the basis of an application for family provision.

30Counsel submitted both arguments fail. Counsel referred to the deceased's advice to the applicant, his partner of over 22 years, in January 2018 about the contents of his will. Despite there being an estate worth in excess of $50 million the deceased elected to leave only $500,000 (approximately 1%) to the applicant. In addition he provided her with the life interest in property, being the home she lives in, the property being built next door and their holiday home in Country A.

31Counsel submitted the two properties are legally registered to trusts controlled by the deceased and thus fall outside the deceased's estate. The Country A property was the subject of a separate will. Counsel submitted in total around $15 million falls outside the deceased's estate including the very home, be it current or anticipated future, the applicant seeks in her initiating application. He submitted the Supreme Court would not have jurisdiction to make orders in respect of either of these properties.

32Counsel referred to the applicant's affidavit filed 5 May 2020 at [12] and [13], where she deposed:

12.As [Ms C] began reading, it became clear that while [Mr Grasso] had always promised me that our home would be mine, he now only intended to give me a right to reside in our (new) home and that he intended for me to generate an income by renting our existing home. The [Country A] Property was not mentioned at that stage.

13.I burst into tears. I said words to [Mr Grasso] to the effect that I was devastated with what he was intending and that it was not only inconsistent with the promises he had made me over the years but that he had also disregarded the years we had shared together. I recall raising that I intended to leave our home to my children, and that his plans did not allow this.

33Counsel referred to the applicant deposing to being in a loving relationship with the deceased and that he valued their achievements and specifically her role therein.

34Counsel referred to the applicant deposing that learning of the deceased's will, had it not been for his state of health, would have been enough for her to leave the relationship, but she chose not to do so, and instead continued to care for him. Counsel submitted the respondent now seeks to punish that compassion.

35Counsel referred to the applicant deposing that her initiating application was filed to ensure her contributions to this long partnership were taken into account in the context of the entirety of what she and the deceased had built together, not simply those assets he held in his sole name.

36Counsel submitted that despite the applicant's feelings, the deceased continued with the codicil. Counsel referred to the Deed prepared for the deceased about which little is known in the context of its preparation and how it was presented to the applicant. Counsel questioned whether ultimately the applicant did not have a choice to sign it and counsel submitted there was no evidence that she freely signed it.

37In summary counsel for the applicant submitted that the respondent's argument is an attempt to reopen an argument that has already been argued, considered and determined. The Court has already determined there was no requirement for the parties to have been separated at the time of the application.

38With reference to the submissions made on behalf of the respondent, counsel adopted the same hypothetical argument as Queen's Counsel for the respondent. Counsel referred to the 22 year relationship between the parties and the deceased's diagnosis of [a terminal illness]. Counsel referred to the applicant finding out that he intended to leave her a life interest in properties and $500,000 in the context of an "enormous" asset pool in the region of $60 million. If the matter was expedited counsel questioned whether the Court would make orders in the context of the Deeds which deal only with two properties worth approximately $4.5 million combined, in the context of the asset pool of $60 million. Counsel submitted the Court would "absolutely" make an order in those circumstances.

39Counsel submitted the Deed provides for the applicant to have a life interest in two properties, Property A and Property B and a separate will gives her a life interest in the Country A property. Counsel for the applicant submitted this is important because the applicant seeks the transfer of those three properties to her. He submitted the Supreme Court would have no authority, power or jurisdiction to transfer them, whereas this Court does and that is why the applicant made her application to this Court.

40Counsel referred to the applicant's affidavit filed 5 May 2020 at [25], where she deposed:

25.On 19 February 2018 I filed my Application in the Family Court of Western Australia. While [Mr Grasso] and I were still in a relationship, it was clear to me that [Mr Grasso] had no intention of looking after me in the way he promised, and despite the wealth we had built together, that [Mr Grasso] sought to continue to control what money I had access to even after his death. At that stage, I did not know whether I should serve [Mr Grasso] with my Application or wait. I, without legal advice, made the decision to wait because I did not feel that I could physically leave [Mr Grasso] at that time, given the rapid deterioration in his health.

41Counsel submitted the applicant did what she perceived to be the right thing and stayed with her dying partner during a difficult time to enjoy what little time they had left together. However despite that she is criticised for not separating from him to seek more money, a criticism which counsel submitted is misplaced.

42Counsel questioned whether the Court would make an order if the deceased was still alive in the context of the applicant having assets worth approximately $1.5 million and a life interest in two properties. He submitted the Court would make an order because a life interest would not finally determine the financial relationship between the parties as the Court is required to consider.

43Counsel for the applicant submitted that the Family Court Act and the Family Provision Act deal with separate issues and have separate purposes. He submitted they coexist and are not mutually exclusive.

44Counsel submitted that s 205ZG(8)(b)(i) does not raise a jurisdictional issue but a matter of discretion. The Court has already concluded it has jurisdiction pursuant to s 205ZG and therefore the respondent cannot argue to the contrary.

45In reply, Queen's Counsel for the respondent dismissed completely the suggestion that the applicant was criticised for not separating from the deceased and repeated that the parties were living together "in a full de facto relationship" until the time of the deceased's death.

46Queen's Counsel submitted with respect to s 205ZG(8)(b)(i) the Court has jurisdiction to make property orders but no power to make an order in these circumstances.

THE LAW

47Section 205ZG of the Act provides:

205ZG. Alteration of property interests - FLA s. 79

(1)In proceedings with respect to the property of de facto partners, or either of them, the court may make such order as it considers appropriate altering the interests of the parties in the property, including an order for a settlement of property in substitution for any interest in the property and including an order requiring either or both of the partners to make, for the benefit of either or both of the partners or a child of the de facto relationship, such settlement or transfer of property as the court determines.

(2)……….

(3)The court must 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.

.…

(8)Where, before proceedings with respect to the property of de facto partners, or either of them are completed, either party to the proceedings dies -

(a)the proceedings may be continued by or against, as the case may be, the legal personal representative of the deceased party and the applicable rules may make provision in relation to the substitution of the legal personal representative as a party to the proceedings; and

(b)if the court is of the opinion —

(i)that it would have made an order with respect to property if the deceased party had not died; and

(ii)that it is still appropriate to make an order with respect to property,

the court may make such order as it considers appropriate with respect to any of the property of the de facto partners, or either of them; and

(c)an order made by the court pursuant to paragraph (b) may be enforced on behalf of, or against, as the case may be, the estate of the deceased party.

…

DISCUSSION AND CONCLUSION

48A party to a de facto relationship can commence proceedings for alteration of property interests under s 205ZG of the Act even though the de facto relationship has not ended.

49Pursuant to s 205ZG(1) in proceedings with respect to the property of de facto partners or either of them, the Court may make such order as it considers appropriate altering the interests of the parties in the property. Pursuant to s 205ZG(3) the Court must not make an order under subsection (1) "unless it is satisfied that, in all the circumstances, it is just and equitable to make the order".

50Pursuant to s 205ZG(8) where, before proceedings with respect to the property of de facto partners are completed, a party to the proceedings dies, the proceedings may be continued by or against the legal personal representative of the deceased party and the Court may make such order as it considers appropriate with respect to the property of the de facto partners if it is of the opinion:

(i)that it would have made an order with respect to property if the deceased party had not died; and

(ii)that it is still appropriate to make an order with respect to property.

51In Stanford the plurality said at [24]:

Section 79(8)(b) thus requires a court considering an application for a property settlement order which is continued by or against the legal personal representative of a deceased party to determine first, whether it would have made an order with respect to property if the deceased party had not died and second, whether, despite the death, it is still appropriate to make an order. Both of those inquiries require consideration of s 79(2) and its direction that the court not make an order unless “satisfied that, in all the circumstances, it is just and equitable” to do so. It follows that, in cases where s 79(8) applies, a court must consider whether, had the party not died, it would have been just and equitable to make an order and whether, the party having died, it is still just and equitable to make an order.

52The applicant must establish firstly that had the deceased not died, it would have been just and equitable for the Court to make an order with respect to property and secondly, the deceased having died, it is still just and equitable to make an order.

53In Stanford the plurality said in every case in which a property settlement order is sought it is necessary to satisfy the Court that, in all the circumstances it is just and equitable to make the order. They went on to say three fundamental propositions must not be obscured:

[37]First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to “altering the interests of the parties to the marriage in the property”. [Emphasis added.] The question posed by s 79(2) 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.

[38]Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth per Dixon CJ observed that a power to make such order with respect to property and costs “as [the judge] thinks fit”, in any question between husband and wife as to the title to or possession of property, is a power which “rests upon the law and not upon judicial discretion”. And as four members of this court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong. The judge called upon to decide proceedings of that kind is not entitled to do what has been described as “palm tree justice”. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down.

[39]Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, 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 marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that “[c]ommunity of ownership arising from marriage has no place in the common law”. Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are 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 79 is whether those rights and interests should be altered.

[40]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 marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.

(Footnotes omitted)

54The plurality explained:

[41]Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to “the need to preserve and protect the institution of marriage” identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.

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

[43]By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.

[44]When, as in this case, the separation of the parties is not voluntary, the bare fact of separation does not demonstrate that the husband and wife have any reason to alter the property interests that lie behind whatever common use they may have made of assets when they were able to and did live together. Common use of some assets may very well continue, as it did here when the husband made provision for the wife’s care and accommodation. Past arrangements that the parties have made about their property interests on the assumption, expressed or implicit, that those arrangements were sufficient and appropriate during the continuance of their marriage are not necessarily falsified. If both parties are competent, it can still be assumed that any necessary or desirable adjustment can be made to their property interests consensually. And if one of the parties has become incompetent it is not to be assumed that the other party lacks the will and ability to make those necessary or desirable adjustments.

(Footnotes omitted)

55The existing legal and equitable interests of the parties in their property can be identified by reference to the estimated schedule of assets and liabilities, which is Annexure B to the applicant's affidavit filed 5 May 2020.

56The applicant estimates her property, including real estate, bank accounts, investments, house contents and jewellery to have a total value of $734,412. The applicant has a liability of $2,647. The applicant has superannuation of $716,514.

57The applicant estimates the property held by the estate of the deceased, [Company C] and other entities as set out in the schedule to have an estimated value of $63,927,916. The applicant submits that on the respondent's case, conservatively there are assets exceeding $57 million. The respondent deposed that at the time of the deceased's death he had a net asset pool of approximately $40 million in Australia, with property in Country A worth approximately $1.3 million.

58On the uncontentious facts of this matter when the applicant filed her application the parties were not separated. The applicant cared for the deceased, she loved him and he provided for her financially. The applicant deposed as follows:

•…When I filed my Initiating Application and supporting Affidavit ("2018 affidavit"), I provided a limited summary of my relationship with [Mr Grasso], deposing to, amongst other things, our relationship being in excess of 21 years, our shared common residence and our commitment to a shared life together.

•As [Mr Grasso] deposed in the Affidavit I depose to above, I provided [Mr Grasso] with "significant domestic care and assistance". In addition to caring for [Mr Grasso] and creating fresh meals and juices, I continued to undertake all of our domestic chores including sweeping, mopping and vacuuming the floors, cleaning the kitchen and bathrooms and doing all or (sic) our laundry.

•… [Mr Grasso's] philosophy was that he looked after me and that if I wanted something I should buy it.

•…While learning of the contents of [Mr Grasso's] Will, prior to his death, was traumatising I still loved, and still love [Mr Grasso].

59When the applicant learned of the contents of the deceased's will, she told him she was not happy with it. She deposed to being shocked and horrified that he did not intend to adequately provide for her.

60On 14 February 2018 the parties together with two of the deceased's sons executed a Deed whereby the applicant was given a life tenancy in the Property A and Property B properties with the remainder in both properties to the respondent and his brother as tenants in common in equal shares. Paragraph 2 of the Deed provides:

2.1By this Deed, the Trustee and [Mr Grasso] give to [Ms Fabrizi] for natural love and affection an estate in fee simple in the Properties for life, and to [Mr Grasso Jnr] and [Mr B] an estate in fee simple as tenants in common in equal shares in remainder expectant upon the death of [Ms Fabrizi].

2.2The parties agree to promptly do all things as are reasonably necessary to be done to cause [Ms Fabrizi] to become registered as the registered proprietor of the Properties of an estate in fee simple for her life.

61The Court must exercise its power conferred by s 205ZG to make a property settlement order in accordance with the legal principles, including the principles which the Act itself lays down. The principles recognise the force of the stated and unstated assumptions between the parties that the arrangement of property interests during their relationship is sufficient for their purposes during their relationship.

62During their long relationship, the parties, of their choice, conducted their financial arrangements in such a way that significant assets were retained in the deceased's name, but he looked after the applicant and if she wanted something she could buy it. That is how the parties chose to conduct their financial relationship, with arrangements which were sufficient for their purposes.

63The arrangements to take effect upon the death of the deceased were not sufficient for the applicant. Subsequently the Deed was executed by the parties during their relationship and made specific arrangements with respect to their property. The Deed can be assumed to be a necessary or desirable adjustment made by the parties to their property interests consensually.

64The applicant commenced proceedings and sought an order for property settlement and/or spousal maintenance to be specified in a minute of orders sought to be filed within 28 days of service of the application.

65The reason the applicant brought her application was her concern that when the deceased passed she may not receive appropriate financial provision. In the applicant's affidavit affirmed 19 February 2018, which accompanied the filing of her Initiating Application on 19 February 2018, the applicant deposed:

Given the blended nature of our family, and the size of our asset pool, I am concerned that, when [Mr Grasso] passes, I may not receive appropriate financial provision.

66The fundamental propositions referred to above require the Court to have a principled reason for interfering with the existing interests of the parties in their property and what may be their stated or unstated assumptions about their property. The applicant and the deceased had not separated but as the Full Court said in Zaruba & Zaruba [2017] FamCAFC 91 at [34]:

Importantly, it is not the event of separation marking the end of the martial relationship that is important; rather it is the end of any existing “express and implicit assumptions that underpinned the existing property arrangement” which is important. Of course, that will very frequently occur upon the physical separation of the parties to the marriage, but not necessarily, as this case illustrates.

67It is not the applicant's case that the arrangements made by the parties with respect to their property during their relationship were not sufficient or appropriate. The applicant deposed to the deceased's limited provision for her in his will. The applicant's case is that upon the death of the deceased those arrangements may not be sufficient or appropriate. The applicant has made an application pursuant to the Family Provision Act.

68Had the deceased not died the Court would not have had a principled reason to interfere with their chosen arrangements. It would not have been just and equitable to make an order with respect to their property.

69I consider that the Court would not have made an order with respect to property if the deceased had not died and consequently after his death it could not be found to still be appropriate to make an order.

70With reference to my reasons ([2019] FCWA 176) I found that an application could be made for property settlement even though the parties had not separated. It does not however follow that the Court would make an order for property settlement. The requirements of s 205ZG(1), (2), (8) and (9) must be satisfied. In the circumstances of these parties they are not.

THE ORDERS

1The proceedings be and are hereby dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

RM
Associate

24 SEPTEMBER 2020