FONTANO and FONTANO - [2022] FCWA 171

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: FONTANO and FONTANO [2022] FCWA 171
CORAM: SUTHERLAND CJ
HEARD: 14, 15, 16, 17, 18 MARCH 2022
DELIVERED : 17 AUGUST 2022
FILE NO/S: 2207 of 2018
BETWEEN: Mr FONTANO
Applicant
AND
Ms FONTANO
Respondent

Catchwords:

PROPERTY - treatment of total and permanent disability payments received by one party after separation - assessment of contributions and future needs - case turns on its own facts

INJUNCTIONS - ex-parte - to preserve total and permanent disability payments pending further order

CHILDREN - interim - schooling arrangements pending delivery of judgement in relation to parenting issues

Legislation:

Family Law Act 1975 (Cth) s 60B, s 60CA, s 60CC, s 75(2), s 79(4)

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Ms M
Respondent	:	Ms N
Independent Children's Lawyer	:	Ms O

Solicitors:

Applicant	:	Law Firm A
Respondent	:	Law Firm B
Independent Children's Lawyer	:	Law Firm C

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

Bilz & Breugelman [2013] FamCA 578
Eden & Eden-Proust [2011] FamCAFC 138
Falcken & Weule [2019] FamCAFC 140

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 Fontano and Fontano has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act1975 (Cth).

INTRODUCTION:

1[Mr Fontano] and [Ms Fontano] were unable to reach final agreement about: (1) parenting issues concerning their two young children, [Child A] and [Child B]; and (2) financial issues arising from the end of their marriage. These proceedings have a long, sad and increasingly complicated history.
2At the beginning of the trial, which started in March 2022, Ms Fontano sought final parenting orders, including that the children live with her. Mr Fontano faced a multitude of allegations made by Ms Fontano, including in relation to family violence and alcoholism. However, as the trial progressed, it quickly became apparent that those allegations had, by and large, been abandoned. Rather, by the end of the trial in March 2022, (prior to the reopening of the proceedings in relation to specific issues set out below), it appeared to be accepted by all parties that the deterioration in Ms Fontano's mental health in recent years had: (1) been catastrophic and devastating for the entire family; (2) significantly compromised Ms Fontano's ability to care for the children; and (3) over‑shadowed both the parenting and financial proceedings. Ms Fontano's counsel, [Ms N], conceded in her closing submissions that Mr Fontano had been doing a very good job since the children had moved into his primary care. On the other hand, in relation to Ms Fontano's live with application, Ms N submitted that: "the evidence spoke for itself", but the court should consider increasing Ms Fontano's time with the children.
3Aside from the issues surrounding Ms Fontano's mental health and her approach to the parenting aspects of the trial generally, the matter was further complicated by the following specific issues:

(a)Firstly, the parties' ongoing disagreements about the children's school enrolment. In particular, notwithstanding that the children have lived primarily with Mr Fontano in [Suburb A] since late May 2018, Ms Fontano did not agree to the children being enrolled at [School A], a school local to Mr Fontano's home, and instead insisted the children remain at [School B] in [Suburb B], which is located near to the former matrimonial home where Ms Fontano continued to reside ([Property A]). On 18 March 2022, at the conclusion of the trial, I made an interim order that Mr Fontano have liberty to enrol the children at School A, as from the commencement of Term 2, 2022, on the basis that I would provide reasons later.
(b)Secondly, in relation to the financial proceedings, how Ms Fontano's total and permanent disability payments (TPD payments) totalling over $2,200,000 and which were received into her two accounts with [Superannuation Fund A] in late 2021, should be treated. In particular: Ms Fontano maintained that the TPD payments should be effectively "quarantined" from the parties' property interests and retained by her in their entirety. On the other hand, Mr Fontano maintained that the TPD payments should be included as part of the parties' property interests and available for division between them.
(c)Thirdly, after the trial had been concluded in March 2022, I reserved my decision. Before I was able to publish my reasons for decision, Mr Fontano filed a Form 2 application to re-open the trial in relation to Ms Fontano's ongoing time with the children and to lead further evidence in relation to some very concerning events that had allegedly transpired since the trial. On 1 July 2022, Ms Fontano's solicitor, [Ms P], attended at the hearing and informed the Court that Ms Fontano had chosen not to attend but that she had provided specific instructions in relation to Mr Fontano's Form 2 application. I made consent orders that Mr Fontano have leave to reopen the proceedings in relation to the issue of Ms Fontano's ongoing time with the children and to rely upon the further affidavits.[1] I also made further orders (not by consent), inter alia, suspending Ms Fontano's time with the children and restraining Ms Fontano from attending at the children's school and/or from removing the children from Mr Fontano's care and/or from their school.[2] I also made various programming orders to enable the trial to resume in late August 2022.
(d)Fourthly, the matter became even more complicated when Ms Fontano's lawyers wrote to the Court on 19 July 2022, raising concerns about Ms Fontano's capacity to now give them instructions and seeking an urgent relisting for further procedural orders. On 29 July 2022, Ms Fontano's lawyers then filed a Form 2 application, inter alia, seeking the appointment of a Case Guardian for Ms Fontano. At the next hearing on 1 August 2022, I made various orders, including an ex-parte interim injunction restraining Ms Fontano from transferring, withdrawing or otherwise dealing with her interests in her two accounts with Superannuation Fund A (including the remaining TPD payments), on the basis that I would provide reasons later. I also vacated the trial which had been listed to resume in late August 2022.
[1] Refer to the father's affidavit filed on 23 June 2022 and the affidavits of Mr A and Ms B filed on 24 June 2022.
[2] I gave oral reasons for decision in relation to the interim parenting orders made by me at the hearing.

4During the hearing on 1 August 2022, I raised with counsel the question of whether I should proceed to publish my reasons for decision and make orders in relation to some issues dealt with at the trial, which were not the subject of the leave to re-open, and then stood the matter down to enable conferral to take place and thereafter hear further submissions. I am satisfied that it is appropriate to proceed to now issue reasons in relation to firstly, the interim schooling order made by me on 18 March 2022; secondly, the ex-parte interim injunction made by me on 1 August 2022; and thirdly, financial issues, particularly given that no party made an application (or evinced any intention to apply) to re-open the financial proceedings.

THE EVIDENCE AT THE TRIAL

Introduction

5Mr Fontano was represented by solicitors throughout the proceedings and by [Ms M] as counsel at the trial. Ms Fontano was represented by various solicitors at different times during the proceedings, including for the trial, and was also self-represented at various times. She was represented by Ms P, as solicitor, and by Ms N as counsel, at the trial. The ICL appeared as counsel at the trial.
6For the purposes of the trial, Mr Fontano relied upon his trial affidavit and financial statement,[3] updated / responsive trial affidavits and updated financial statement.[4] Mr Fontano's affidavit evidence was lengthy, detailed and included as annexures, copies of many relevant corroborative documents. Mr Fontano also relied upon the affidavits[5] of the following witnesses: his mother [Ms C]; his father [Mr D] and Mr D's wife (and Mr Fontano's stepmother) [Ms E]; his sister [Ms F], Ms Fontano's mother [Ms G], and Ms Fontano's sister [Ms H].
[3] Father's trial affidavit and financial statement filed 7 October 2019.
[4] Father's updating trial affidavits were filed on 29 October 2020, 19 July 2021 and 28 January 2022 and his updating financial statement was filed on 29 October 2020.
[5] Some of which also included pertinent annexures corroborating the evidence of the deponents.
7On the other hand, Ms Fontano relied on her trial affidavit and financial statement both filed on 22 April 2021,[6] and an up-to-date financial statement,[7] together with the affidavit of her current boyfriend, [Mr I]. Whilst Ms Fontano's trial affidavit was also lengthy, in my view it contained significant objectionable evidence, including material that was irrelevant and/or conclusionary.
[6] Refer to the mother's Papers for the Judicial Officer filed 11 March 2022 at page 2. I also observe that during the trial, some reference was made to earlier affidavits sworn by the mother.
[7] Mother's Form 13 financial statement filed 4 September 2020.
8In relation to financial matters, the parties also relied at the trial upon the affidavit and report of [Mr J] (the jointly appointed single expert valuer of Property A).[8]

[8] Filed 10 February 2022.

9For the purposes of the trial, the ICL relied upon the following witnesses in relation to the parenting proceedings: [Ms K], the single expert witness;[9] [Dr A], Ms Fontano's treating psychiatrist; and [Ms L], a primary school teacher and former Deputy Head of the Primary School – Early Learning Centre at School B.[10] The parties' counsel and the ICL were all given permission to cross-examine these witnesses.

The father

[9] Ms K's affidavit was filed on 20 December 2021.

[10] Ms L's affidavit was filed on 22 November 2021.

10 Mr Fontano was cross-examined by Ms N and the ICL, but only to a limited extent. Apart from some very specific issues which I refer to later in these Reasons, it appeared that there was little, if any, significant controversy about: (1) the parties' financial circumstances at the commencement of, and during, their relationship; and (2) the key financial events. In relation to parenting issues, much of Mr Fontano's affidavit evidence was also effectively unchallenged, including:
(a)His observations of Ms Fontano's deteriorating mental health from late 2015 onwards.
(b)Ms Fontano's erratic behaviour, including towards Mr Fontano and other paternal and maternal family members from late 2015 / early 2016 onwards and which, over time, became increasingly aggressive and abusive. Ms Fontano's aggressive and abusive behaviour regularly occurred in the presence of the children, and included her yelling and screaming at Mr Fontano, verbally abusing Mr Fontano and sending him multiple abusive / harassing text messages, including when he was at work.
(c)The detrimental impact that Ms Fontano's behaviour had on Mr Fontano's and children's emotional wellbeing, including the children becoming very distressed by Ms Fontano's behaviour.

(d)Ms Fontano's ongoing aggressive and abusive behaviour towards Mr Fontano after separation. This included Ms Fontano yelling at, screaming at, and verbally abusing Mr Fontano (and other paternal and maternal family members) at handovers and in public places; sending Mr Fontano multiple abusive text messages; and denigrating him to third parties, including to other parents and staff at School B.
(e)Ms Fontano's inability to meet the children's basic needs after separation, resulting in the children becoming sickly and malnourished.
(f)The parties' inability to communicate with each other, including because: (1) Ms Fontano used such opportunities to continue to abuse Mr Fontano; and (2) Ms Fontano's practice of sending Mr Fontano voluminous written communications that were not only abusive, but also rambling and/or nonsensical.

11While giving his oral evidence, Mr Fontano impressed as being polite, calm, thoughtful and helpful, but also as being quite worn down by his family's circumstances. He responded to questions in an open and transparent manner. He was a good historian, with a clear and consistent recollection of relevant events. Mr Fontano also readily made concessions against interest, including acknowledging Ms Fontano's positive attributes and that the children loved her. In summary, I considered that Mr Fontano was an impressive witness, who gave his evidence honestly and without embellishment.

The father's witnesses

12In her closing submissions, Ms N submitted, and I agree, that the father's witnesses were straightforward in giving their evidence and they impressed as being focussed on the children.

13 Mr D was briefly cross-examined by Ms Fontano's counsel and the ICL, primarily about his willingness to continue to assist Mr Fontano with the children if they continued to attend School B and/or Mr Fontano moved to live closer to School B. As such, much of his evidence was effectively unchallenged, including about the role he and other family members play in getting the children to and from school and otherwise providing support to Mr Fontano with the children's care. From the little time I had to observe Mr D under cross‑examination, I considered he gave his evidence openly and honestly.
14 Ms E was cross-examined by Ms Fontano's counsel and the ICL, primarily regarding her observations of the children and her willingness to continue to assist Mr Fontano with the children if they continued to attend School B and/or Mr Fontano moved to live closer to that school. As such, much of her evidence was also unchallenged, including: (1) about the role she and other family members play in getting the children to and from school and otherwise providing support to Mr Fontano with the children's care; and (2) details of the loan she and Mr D have made to Mr Fontano to enable him to meet his litigation costs. I considered that Ms E gave her evidence in an open, honest and thoughtful manner.
15 Ms C was cross-examined for a short time by Ms Fontano's counsel only, primarily in relation to: (1) her observations of the children after separation; (2) her interactions with Ms Fontano before and after separation; (3) her ongoing involvement in assisting Mr Fontano with the children, including with the school run to and from School B; and (4) her willingness to continue to assist Mr Fontano with the children if they continued to attend School B and/or Mr Fontano moved to live closer to School B. As such, much of her evidence was also unchallenged, including: her observations of Ms Fontano's deteriorating behaviour, particularly after Child B's birth. I considered that Ms C also gave her evidence in an open, honest and thoughtful manner.
16Mr Fontano's remaining witnesses were not required for cross‑examination, and accordingly I accept their evidence as being unchallenged. In particular: I accept Ms G's evidence in relation to: (1) her observations of Ms Fontano's deteriorating mental health from early 2016 onwards; and (2) the loan that Ms G and her husband provided to the parties to enable them to purchase Property A.

The mother and her witness

17 Ms Fontano was extensively cross-examined by Ms M and by the ICL. In my view, it was clear that Ms Fontano not only struggled with her evidence, (such that I was satisfied that I should be cautious in accepting aspects of her evidence) but she also struggled with her responsibilities in the litigation process more broadly. In particular: on the night of 15 March 2022, whilst Ms Fontano was still under cross‑examination, she sent numerous emails to her solicitor, including one email setting out categories of questions that her partner Mr I "hopes to be asked about" when he gave his evidence later during the trial.[11] When Ms Fontano's cross-examination resumed the next morning, it quickly became evident that Ms Fontano had engaged in discussions with Mr I the previous night about the trial and evidence to be given by him.
[11] I concur with the submission of Mr Fontano's Counsel that Ms Fontano's solicitor and counsel responded entirely appropriately when they became aware of the emails from Ms Fontano, including promptly disclosing their existence and making copies available to Mr Fontano's legal representatives.
18Ms K described Ms Fontano's communication style during her assessment process as both very detailed and tangential, including excessive information about Mr Fontano and other family members, but very little information about herself. That was also my view of Ms Fontano, after observing her under cross-examination. In her closing submissions, Ms N appropriately acknowledged that Ms Fontano's evidence was subjective, inconsistent and at times unhelpful to her own case; and that her presentation under cross‑examination was consistent with her diagnosis of Attention Deficit Hyperactivity Disorder (ADHD). In my view, there was no doubt that Ms Fontano struggled to stay "on topic" under cross‑examination: she regularly either failed to respond to the question put to her, or went off on rambling expositions about various matters, that had little, if anything, to do with the question. It was also clear that she harboured extremely negative views of Mr Fontano, the wider [paternal] family and many of her own extended family members. Ms N also appropriately acknowledged that Ms Fontano's distress about her circumstances was "close to the surface" during the trial. At times, Ms Fontano became so distressed and/or dysregulated that I called a temporary halt to her cross-examination and adjourned briefly, so that she could compose herself.

19 Mr I was cross-examined by Ms M and by the ICL. I concur with Ms N's submission that Mr I presented as a "straightforward bloke" who answered questions under cross‑examination in an open fashion. I considered that Mr I was generally candid in giving his evidence, including that he stays with Ms Fontano at Property A on a regular basis, including until approximately midnight on the nights when the children were staying at the home.

The non-family witnesses

20 Mr J prepared a licenced valuation of Property A. The parties accepted the valuation (and apart from the production of his physical file), Mr J was not required for cross-examination. Accordingly, I accept his valuation evidence as being unchallenged.
21 Ms L, Dr A and Ms K were all cross-examined by counsel. I considered that they were each very helpful and considered in their respective evidence and I had no hesitation in accepting their evidence. In particular: I accept Dr A's evidence that he has been Ms Fontano's treating psychiatrist since August 2017. As such, he provided various medical reports to support Ms Fontano's TPD claims. He has diagnosed Ms Fontano with (1) adjustment disorder with mixed anxiety and depressed mood; and (2) ADHD - Predominantly Inattentive. Although Ms Fontano was high functioning, Dr A opined that she has had attentional symptoms, including poor concentration and planning difficulties, and tended to messiness and disorganisation. Ms Fontano's ability to compensate for these attentional issues was detrimentally impacted by various factors, such as when Ms Fontano was dealing with more complex situations (rather than simple situations), or was under significant stress, or was highly distressed. Dr A opined that a key aspect in Ms Fontano's case was that she felt intense distress due to her sense of being controlled by others and "invalidation" around the legal processes that have followed the breakdown of the parties' marriage and their separation. He also opined that Ms Fontano tended to ruminate about issues and that she found it difficult to "move on".

INTERIM SCHOOLING ORDER MADE ON 18 MARCH 2022

22These proceedings are determined under Part VII of the Family Law Act 1975 (Cth) (the Act). In reaching my decision I will be guided by the objects of that Part and the principles underlining those objects. Section 60B sets out the objects and the principles underlying them. I must, pursuant to s 60CA of the Act, consider the best interests of the children as the paramount consideration. In determining what is in the children's best interests I must consider the matters set out in s 60CC of the Act.
23In Eden & Eden-Proust [2011] FamCAFC 138, Thackray J stated:
Decisions made by parents in "intact" families about the education of their children commonly take into account the convenience of the parents, especially in working out transport arrangements. Financial concerns are routinely taken into account. Consideration of these factors should not be seen as affording primacy to them over the interests of the children, since children's interests cannot be viewed in isolation from the convenience and financial stability of their parents.

24In Bilz & Breugelman [2013] FamCA 578, Austin J summarised the principles governing the resolution of schooling disputes as follows:
[81]Schooling disputes are not resolved by application of a "blanket presumption" or preference for the views held by the residential parent (Re G at [29], [45], [65]). The Court is required to apply the objects and principles of Part VII of the Act and to consider the statutory criteria in forming conclusions about the child's best interests (Re G at [66]-[68]).
[82]That is probably self-evident, but other more generalised observations were made by the Full Court. In particular, the process of evaluation should not entail an assessment of the relative merits of the schools preferred by the parties, at least in circumstances where the competing schools are prima facie satisfactory (Re G at [91]-[92]). Ordinarily, it will be in the child's best interests to attend a school close to his or her residence, and further, it is proper to consider evidence as to any greater effect of the decision upon the resident rather than non‑resident parent (Re G at [92]-[93]), but that does not mean the convenience of the non-resident parent is ignored (Eden‑Proust at [56]-[63]). While the views of the child are relevant to the inquiry, as s 60CC(3)(a) of the Act now stipulates, those views are usually not determinative. That is because, unless a child is actively unhappy in a particular school environment, it is not at all unusual for the child to express a desire to remain at his or her existing school (see Re G at [96]).
[83]There is conflict in the authorities about whether any prior agreement between the parties concerning the child's schooling is influential (see Re G at [92]; Eden-Proust at [48]). There also seems a difference of opinion about the need to refer specifically to each of the factors enumerated in s 60CC or whether it is permissible to simply analyse the evidence discursively with those factors in mind (see Re G at [67]-[90]; Eden-Proust at [69]).

25 I now turn to a consideration of the relevant factors as required by the legislation. Where I do not refer to a factor, it is because I consider that it is not relevant in this case.
26I am satisfied that since Ms Fontano's mental health deteriorated in late 2015, Ms Fontano has subjected Mr Fontano to persistent, ongoing family violence (and exposed the children to that family violence), including but not limited to denigrating Mr Fontano to other parents and staff at School B. I also accept Ms L's evidence that at various times, the School B kindergarten and primary school staff members, including Ms L herself, had significant concerns about Ms Fontano's behaviour at school, including attending at the school unannounced and/or in a heightened and/or aggressive state, arguing with other parents and/or staff, and discussing inappropriate matters with other parents in front of children. Ms L became so concerned about Ms Fontano's aggressive behaviour escalating that she sought advice from the school's Legal and Compliance Office about the school's lockdown procedures. However, there was little, if any, evidence of these specific issues continuing since the children moved to live primarily with Mr Fontano. It was clear from Ms L's evidence that Ms Fontano's behaviour had detrimentally impacted on Ms Fontano's, Mr Fontano's (and possibly even the children's) relationships with the School B community, including school staff and other parents. I am satisfied that the change of school, as proposed by Mr Fontano, gives the children and the parties the opportunity to "reset" their relationships with the new school community.
27There was no evidence of the children's views as to their future schooling arrangements. In any event, in my view the children are too young and developmentally immature for their views, even if known, to be given any significant weight in this decision.

28I am satisfied that Mr Fontano has taken every opportunity to participate in making decisions about major long-term issues in relation to the children, to spend time with the children and communicate with them. On the other hand, whilst I am satisfied that Ms Fontano loves the children very much and wants to have an active role in their lives, including in relation to their schooling, I am satisfied that her ability to do so has been severely compromised by her mental health issues and related to this, her inability to communicate with Mr Fontano in a respectful and functional manner about the children.
29Neither Mr Fontano nor Ms Fontano pay child support for the children to the other parent and instead, each party financially supports the children when in their respective care. Although Ms Fontano has been notionally responsible for paying the children's school fees at School B, she is in substantial arrears.
30At the time of the trial, Mr Fontano and the children lived in Suburb A, Mr Fontano worked in the [Suburb C] and the children continued to attend school in Suburb B. I accept the evidence variously given by Mr Fontano, Mr D, Ms E and Ms C that: (1) the school is over 30 kilometres from the children's home in Suburb A (but less than one kilometre from Property A); (2) the children generally have to leave home by 7.50 am each morning and usually only get home after school at around 4.10 pm; (3) the commute is tiring on the children and onerous on Mr Fontano and the various family members who assist with the commute each day; and (4) the distances involved limit the children's ability to engage in after school activities and socialise with their friends.
31I accept Ms K's evidence that the children should continue to live with Mr Fontano, given that he had been able to provide the children with a safe, predictable and loving home environment that has well‑supported their needs. If the children continued to live primarily with Mr Fontano, then it was imperative that they be enrolled to attend at a school local to Mr Fontano's home. This would reduce the burden of the long commute on the children's daily routine and enable the children to establish a local social network (and, for example, attend play dates with classmates after school). As I have earlier observed, although the parenting proceedings remain in issue, having regard to: (1) the undoubted detrimental impact that Ms Fontano's mental health has had on her capacity to adequately care for the children, even for limited periods of time; and (2) Ms N's concession in closing submissions in relation to Ms Fontano's "live with" application, the reality is that Mr Fontano will continue to be primarily responsible for the care of the children into the foreseeable future. I also accept the evidence of Ms K that in addition to the disadvantages of the long commute that the children faced in attending School B, she was concerned at the level of weekend activities the children engaged in when with Ms Fontano. Ms K opined that the children needed time to wind down, engage in unstructured play as well as structured activities; and that if the children continued to live with Ms Fontano, then they should attend school in the local area (and reduce their extracurricular activities).
32Although Ms Fontano raised some concerns about her ability to drive herself to School A to collect the children, she conceded that she could undertake the trip by Uber, if at any time she didn't feel up to the drive (and she preferred that arrangement to Mr Fontano delivering the children to her home on Friday afternoons).
33I am satisfied that Mr Fontano has demonstrated a very positive attitude to the responsibilities of parenthood. I agree with the submissions of Ms M, that Mr Fontano: (1) has made decisions concerning the children in a child focussed and reasonable way, (2) has shown considerable compassion about the deterioration in Ms Fontano's mental health and her current circumstances, (3) has supported the children having an ongoing relationship with Ms Fontano, and (4) has attempted to resolve issues with Ms Fontano in a sensible fashion, including offering to facilitate the transport of the children from School A to her home on Fridays after school. On the other hand, I am satisfied that Ms Fontano's ability to take a positive and child focussed approach to her parenting responsibilities has been severely undermined by: (1) her mental health issues; and (2) her very negative attitude towards Mr Fontano. I am also satisfied that having regard to Ms Fontano's mental health issues, attitude towards Mr Fontano and inability to communicate with Mr Fontano in a respectful and functional manner, the parties simply have no ability to effectively co‑parent the children or co-operatively make long term decisions concerning the children, including in relation to the children's future schooling.
34Having regard to my findings at [26] to [33] inclusive, I consider that it is in the children's best interests and reasonably practicable for Mr Fontano to have liberty to enrol the children at School A, as from the commencement of Term 2, 2022.

INTERIM INJUNCTION ORDER MADE ON 1 AUGUST 2022

35On 23 June 2022, Mr Fontano filed an urgent Form 2 application, inter alia seeking orders: (1) for leave to re-open the trial in relation to extent to which, and the conditions upon which, the children spend time with Ms Fontano; and (2) that on an interim basis, Ms Fontano's time with the children be suspended. In support of his application, Mr Fontano relied upon his affidavit filed in support of his application, together with the affidavits of Ms Fontano's cousin Ms B, and her husband Mr A.[12] I have summarised the relevant evidence below. The basis for the application primarily arose out of the events which occurred when the children were spending time with Ms Fontano on the evening of Friday 17 June 2022 at the [Apartment Complex A]. I readily acknowledge that the evidence is untested at this stage.
[12] Refer to the father's affidavit filed on 23 June 2022 and the affidavits of Mr A and Ms B filed on 24 June 2022.
(a)At approximately 9pm on 17 June 2022, Ms B and Mr A unexpectedly ran into Ms Fontano and the children in the complex. The children were still in their school uniforms and were hungry as they had not yet had any dinner.
(b)Notwithstanding that Mr A and Ms B had little, if any contact, with Ms Fontano for some years (and it appears the children did not know Mr A and Ms B), Ms Fontano asked Mr A and Ms B to babysit the children and then left the children in their care.
(c)When Ms Fontano eventually returned, she appeared disorganised and went into a long, incoherent story, including that she had lost her identification, keys, wallet and phone, that she was about to be "kicked out" of Apartment Complex A, and she proposed that Mr A and Ms B take her and the children back to [Suburb D], but that she would need to "jump the fence" to get into the unit. Ms Fontano's conversation with Mr A and Ms B became increasingly bizarre.

(d)Mr A and Ms B became increasingly concerned about Ms Fontano's mental health state, including the possibility that she may be drug affected, and very concerned about the children's wellbeing with Ms Fontano. They proposed, and Ms Fontano agreed, that they would take the children to their home for the night and leave Ms Fontano to sort out whatever she needed to do. Ms Fontano also requested that Mr A and Ms B take the children to a pre-arranged activity the following day. Mr A and Ms B then took the children to their home (picking up takeaway on the way so that the children could finally have some dinner). Once home, they contacted Ms G, who in turn contacted Mr Fontano, who then made immediate arrangements to attend at Mr A and Ms B's home and collect the children.
(e)Since the trial, Ms Fontano had continued to spend time with the two children in hotels / resorts, rather than at Property A. She had also regularly used taxis and Ubers to transport herself and the children, rather than her own vehicle. The reasons for this conduct are unknown. It is also not known why Ms Fontano sought to go to a unit in Suburb D on the night of 17 June 2022, rather than back to her own home in [Suburb E].

36At the hearing on 1 July 2022, Ms Fontano's solicitor attended, but Ms Fontano did not. Ms Fontano's solicitor informed the court that Ms Fontano preferred not to attend the hearing, had not filed any documents in response but sought a further 28 days to do so. Ms Fontano's solicitor also informed the court that she had limited instructions, including that Ms Fontano: (1) denied the children were ever at risk of harm; (2) denied that she was misusing substances and would not undertake any further drug testing; and (3) did not agree to her time with the children being suspended.

37At the conclusion of the hearing, I made consent orders for Mr Fontano to have leave to re-open the proceedings and to rely on his affidavit, together with the affidavits of Mr A and Ms B. I also made interim orders: (1) suspending Ms Fontano's time with the children; (2) requiring Ms Fontano to undergo hair strand drug analysis testing for the detection of various substances, (3) restraining Ms Fontano by injunction from attending at the children's school and/or removing the children from Mr Fontano's care or from their school. I also made various procedural orders for the trial to be resumed, on the basis that the parties and any witnesses filing affidavits for the purposes of the resumed hearing would be required for cross-examination.
38Ms Fontano failed to comply with the order made by me on 1 July 2022 to undergo a further hair strand drug analysis test.
39On 29 July 2022, Ms Fontano's lawyers then filed a Form 2 application, inter alia, seeking the appointment of a Case Guardian for Ms Fontano. At the next hearing on 1 August 2022, Ms P confirmed that: (1) Ms Fontano was aware of the hearing but had again chosen not to attend; (2) Ms Fontano's lawyers had separately made an application to the State Administrative Tribunal (SAT) for the appointment of a guardian and trustee with plenary powers for Ms Fontano; (3) Ms Fontano opposed the orders sought by her lawyers in the application to SAT and for the appointment of a Case Guardian in these proceedings; and (4) Ms Fontano refused to undertake a psychiatric assessment. Ms P also appropriately conceded the evidentiary difficulties, given Ms Fontano's refusal to undertake a psychiatric assessment and the fact that the communications from Ms Fontano that caused her solicitors to be concerned about her capacity were the subject of legal professional privilege.
40During the hearing, Mr Fontano's counsel made an oral application for Ms Fontano to be restrained by injunction from withdrawing, transferring or otherwise dealing with her two accounts with Superannuation Fund A, pending further order.

41I was satisfied that it was appropriate to grant the interim injunction on an ex parte basis because: Firstly, whilst the granting of the ex parte order involved a departure from one of the primary rules of natural justice, I was satisfied in this case that the protection of Mr Fontano's interests (and given the current concerns around Ms Fontano's capacity – her interests) demanded the immediate intervention of the Court. Secondly, having regard to the following matters I was satisfied of the imminence of the risk to Mr Fontano, and the hardship/prejudice that would be caused to Mr Fontano, if the injunction was not granted and that risk materialised. In particular: (1) the two accounts with Superannuation Fund A were in the payment phase and together, amounted to approximately 78 per cent of the parties' total property interests at the time of the trial; (2) Ms Fontano had previously unilaterally withdrawn funds from Superannuation Fund B; (3) Ms Fontano continued to have an unfettered ability to unilaterally withdraw further funds from the two accounts with Superannuation Fund A; and (4) the prejudice to Ms Fontano in the making of the injunction was ameliorated by the fact that she continued to have access to funds, including her income protection insurance payments (IPI Payments) and any savings in her bank accounts. Thirdly, I was satisfied that it was not appropriate to delay the order until Ms Fontano was given formal notice thereof and the right to be heard, in circumstances where Ms Fontano’s lawyers (who were present at the hearing) had formed the view that Ms Fontano's mental health / capacity had deteriorated to such an extent that they had made the applications to SAT and this Court referred to above. Fourthly, it was possible that the giving of notice to Ms Fontano in relation to the proposed order would give Ms Fontano the opportunity to effectively defeat the order.

THE FINANCIAL PROCEEDINGS

Orders sought by the parties

42In the lead up to the trial in March 2022, both parties filed Minutes setting out the final orders sought by each of them.[13]

[13] Refer to the father's Minute filed on 28 January 2022 and the mother's Minute filed on 9 February 2022.

43In summary, Mr Fontano sought that he received 60 per cent of the parties' total property interests, including Ms Fontano's TPD payments. To give effect to the division: (1) Mr Fontano had no objection to Ms Fontano retaining Property A, provided she re-financed the mortgages into her own name. (2) Mr Fontano sought that Ms Fontano assumed sole liability for various specified debts. (3) Subject to the payment to him of such sum as would enable him to receive a 60 per cent division, Mr Fontano otherwise sought that each party retain their respective savings, shares, motor vehicles, household contents and superannuation entitlements.
44On the other hand, Ms Fontano proposed a 'two-pool' approach to the division of the parties' property interests, on the basis that her TPD payments were quarantined from all the other property interests and retained by her. Ms Fontano otherwise sought that Mr Fontano transfer all his interest in Property A to her (subject to Ms Fontano refinancing the mortgages in her sole name), and that each party retain their respective savings, shares, motor vehicles, household contents and superannuation entitlements. Although it was not apparent from Ms Fontano's Minute, her position was that effectively she should receive approximately 90 per cent of the total property interests of the parties, including her TPD payments.
45The parties agreed some limited financial issues, including that if Ms Fontano was unable to refinance the Property A mortgages into her sole name, then the property would be sold.

Legal principles – property proceedings

46The property proceedings are determined pursuant to Part VIII of the Act. I must firstly determine whether it is just and equitable to make an order,[14] having regard to the parties' existing legal and equitable interests in property.[15] If I so determine, then I must consider the factors set out in the legislation.[16] In this case both parties maintained and I am satisfied that having regard to their property interests as set out later in these Reasons, it was just and equitable to make an order by way of alteration of property interests. The parties separated on a final basis in August 2017 and have now divorced. Both sought to sever their financial relationship with each other, including but not limited to their joint ownership of Property A and their joint liability for the home loans encumbering the property.

The parties' property interests

[14] Refer to section 79(2) of the Act.

[15] Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52.

[16] Refer to section 79(4) of the Act.

47I am satisfied that the property interests of the parties are as set out in the following table, which largely follows the format of the joint schedule filed by the parties on 11 March 2022.

Item	Asset	$ Value
1	Property A (joint)	$770,000.00
2	Wife's bank accounts	$9,607.93
3	[Bank Account A] (husband)	$0.00
4	[Bank Account B] (husband)	$0.00
5	[Bank Account C] (husband)	$954.00
6	[Bank Account D] (husband)	$2,002.00
7	[Bank Account E] (Child B account)	$370.00
8	[Bank Account F] (Child A account)	$370.00
9	[Bank Account G] (husband)	$0.00
10	Husband's [car]	$4,000.00
11	Wife's [car]	$15,000.00
12	[Share Plan A] (husband)	$1,253.00
13	Wife's personal possessions & furniture	$0.00
14	Husband's Micro investment account	$1,613.00
15	Husband's personal possessions & furniture	$0.00
16	Husband's paid legal fees	$0.00
17	Wife's paid legal fees	$0.00
Liabilities	$ Value
18	[Home Loan A] (joint)	-$229,817.19
19	[Home Loan B] (joint)	-$358,898.80
20	[Loan C] (joint)	$0.00
21	[Credit Card A] (wife)	$0.00
22	Wife's debt to [Dr B]	$0.00
23	[Loan D] (wife)	-$2,848.54
24	[Credit Card B] (husband)	-$2,641.00
25	School B arrears of school fees	-$15,175.00
26	Husband's debt to Mr D and Ms E	$0.00
27	Wife's tax liability	$0.00
Superannuation	$ value
28	Husband's Superannuation Fund C	$116,089.00
29	Husband’s Superannuation Fund D	$141,229.00
30	Wife's Superannuation Fund A	$129,971.00
31	Wife's Superannuation Fund B	$49,495.00
32	Wife's Superannuation Fund A TPD payment	$786,414.00
33	Wife's Superannuation Fund B TPD payment	$1,438,123.00
TOTAL	$2,857,110.00[17]

[17] Rounded down to the nearest dollar.

48Each party handed up a further schedule of property interests during their respective closing submissions. It was apparent from a comparison of the two schedules, that the identification and value of the parties' property interests was largely agreed by the end of the trial.[18] I now consider those issues that were not agreed.
[18] In particular, the parties both excluded from their respective schedules handed up during closing submissions, their paid litigation costs and in the case of Mr Fontano, his debt to his father and stepmother in relation to his litigation costs.
49 Item 20: In 2015 Mr Fontano and Ms Fontano approached Ms Fontano's parents and requested some financial assistance, to enable them to purchase Property A. I accept Ms G's evidence that she and her husband discussed the issue and eventually agreed to lend the parties the amount of $150,000 (Loan C), by drawing down on a loan facility, with monthly repayments of approximately $1,300 to $1,400. I also accept Ms G's evidence that at the time she and her husband advanced the funds she expected the parties to repay the debt.
50In September 2018, (approximately one year after the parties' final separation) Mr Fontano stopped making any further payments on Loan C as he could no longer afford them. I accept Ms G's evidence that although Ms Fontano assured her that she would repay Loan C, she did not. As Ms G and her husband could not afford to meet the monthly loan repayments from their own income, they withdrew funds from their superannuation to pay off the loan. They paid out the amount of $110,816.39. I also accept Ms G's evidence that she and her husband have taken no action to try to recover the debt; and she does not expect to be repaid.

51Both parties' positions in relation to Loan C changed during the trial. At the commencement of the trial, Ms Fontano maintained that the parties did not receive a loan from her parents, and that rather the funds were advanced as a gift. However, by the end of the trial, she maintained that the amount of approximately $110,000 remained outstanding, and that she should assume sole responsibility for the debt. On the other hand, at the commencement of the trial, Mr Fontano maintained that it was a debt, for which the parties should be jointly liable. However, by the end of the trial, Mr Fontano maintained, and I agree, that it was not appropriate to include the liability in the schedule because recovery of the debt was likely to be statute barred, and even if that was not the case, Ms G's evidence was that she and her husband did not expect that the debt would ever be repaid and had taken no action to recover it.
52 Items 30 to 33 inclusive: Firstly, Ms Fontano's position was that her TPD payments should be treated separately from the remainder of the parties' property interests. I do not agree. It was common ground that the TPD payments have been received into Ms Fontano's two accounts with Superannuation Fund A and they are now in the payment phase. Secondly, the parties largely agreed the total value of Ms Fontano's two accounts with Superannuation Fund A, except for the amount of $40,000. It is common ground that shortly after receiving the TPD payments in late 2021, Ms Fontano withdrew the sum of $40,000 from her account with Superannuation Fund B and paid the funds into her bank account (and thereafter used part or all the funds on meeting her living costs). I am not satisfied it is appropriate to effectively "add back" the $40,000, in circumstances where most, if not all, of the funds have been spent and/or any remaining funds are already reflected in Ms Fontano's savings in her bank accounts. I am satisfied that the balances of the TPD payments remaining at the time of the trial total $2,224,537 (being $786,414.00 plus $1,438,123.00).

SECTION 79(4) (a), (b) (c) FACTORS

Introduction

53The parties commenced cohabitation in December 2007 and married [in] November 2012. Child A was born [in] 2014, followed by Child B [in] 2015. In August 2017, the parties separated on a final basis.
54At the commencement of cohabitation, each party had modest net assets, including a motor vehicle and some household effects, and each had some superannuation entitlements.[19]

Parties' employment arrangements during the relationship

[19] The parties conceded that apart from their own estimates, which were not agreed, there was no reliable evidence from which I could make findings about the value of the net assets and superannuation entitlements of the parties at this time.

55At the commencement of cohabitation, Ms Fontano worked on a full‑time basis as a [professional] at [redacted] and Mr Fontano worked as a [florist]. It was common ground that at the start, Ms Fontano's income was somewhat greater than Mr Fontano's (albeit he surpassed her income over time).
56In 2008, Mr Fontano also commenced employment with [redacted]. By 2010, Mr Fontano had progressed to become a [professional]. In 2014, Mr Fontano moved to a different company where he continued to be employed as a professional. Mr Fontano has continued in that role since 2014.
57Ms Fontano continued full time employment at [redacted] as a professional until 2014, when she went on maternity leave with Child A. Thereafter, Ms Fontano took further leave (paid and unpaid), including after Child B's birth.
58After the birth of Child A, Mr Fontano was the primary income earner and Ms Fontano was the primary homemaker and parent. I accept the evidence of Mr Fontano, Ms C, Mr D, Ms E and Ms G regarding their observations of Ms Fontano's deteriorating mental health from late 2015 and/or early 2016 onwards and the detrimental impact thereof on Ms Fontano's capacity to care for the children. As Ms Fontano's mental health deteriorated, I am satisfied that Mr Fontano became increasingly responsible for the homemaking / parenting duties, including attending to the household chores and grocery shopping.

59In early 2017, Ms Fontano started receiving the IPI payments. Although it was somewhat unclear from the evidence, it appeared to be common ground that Ms Fontano qualified for the IPI payments on the basis that her mental health issues precluded her from being able to return to work. While she has performed some limited work as volunteer, Ms Fontano has not engaged in any remunerative employment since the births of the children. Ms Fontano continues to receive her IPI payments.

Gifts from parents

60During the relationship, the parties each received some financial assistance from their respective parents. Mr Fontano received gifts totalling $18,500, as well as a contribution of $6,000 towards the costs of the parties' wedding in 2012. Ms Fontano received a gift of $20,000 which was applied in reduction of her motor vehicle loan.

Financial arrangements during the relationship

61I accept Mr Fontano's evidence that prior to Child A's birth in 2014, the parties discussed and jointly agreed to increase their respective insurances to financially provide for their family, if one or both died or were unable to work in the future. To that end, the parties increased and/or took out additional insurance products (some within their respective superannuation funds, and some outside of superannuation), including life insurance, total and permanent disability insurance, trauma insurance and income protection insurance. The premiums for the insurance products that sat within the superannuation accounts were paid for by the superannuation accounts. The premiums for the insurance products that sat outside of the parties' superannuation were paid through Mr Fontano's credit card facility (which in turn was paid from the parties' joint account).

Acquisition of Property A

62The parties purchased Property A in May 2015. The purchase of Property A was funded by way of: (1) Home Loan A and Home Loan B which were secured against Property A; and (2) Loan C.

Parenting arrangements after separation and family law litigation is commenced

63After separation in August 2017, Ms Fontano remained in Property A and the children and Mr Fontano stayed with Ms G for two weeks. From September 2017, the children lived with Ms Fontano and spent time with Mr Fontano each weekend. In December 2017, the parties reached an agreement for the children to live with Ms Fontano and spend three nights per fortnight with Mr Fontano, and equal time during holidays. Mr Fontano continued to live at Ms G's home until approximately March / April 2018, when he obtained separate accommodation in Suburb A, which was closer to the homes of his own extended family members.
64Mr Fontano commenced the parenting proceedings in March 2018. I do not intend to provide a detailed summary of the proceedings, but instead simply highlight the key events and interim orders made. At the first return date on 10 May 2018, interim orders were made for the children to live with Ms Fontano and spend time with Mr Fontano each weekend, subject to him having satisfactory accommodation. On 30 May 2018, interim orders were then made for the children to live with Mr Fontano from Monday to Friday each week, and with Ms Fontano from Friday after school until Monday before school. In July 2018, Mr Fontano filed an amended application, to include financial issues. Ms Fontano then filed her responding documents in August 2018. The parties attended a Conciliation Conference in relation to financial issues in October 2018, but no agreement was reached. In April 2019, after ongoing issues with Ms Fontano not getting the children to school on time or at all on Mondays, the court made further interim orders for the children to live with Mr Fontano and spend time with Ms Fontano each week from Friday after school until Sunday afternoon. The April 2019 interim parenting orders remained in effect as at the start of the trial in March 2022.

Financial arrangements after separation

65After the parties' separation, Mr Fontano continued to make the repayments on Home Loan A and Home Loan B and on Loan C. Ms Fontano also made some limited payments towards Home Loan A and Home Loan B, but not to Loan C. In January 2018, Mr Fontano stopped making any further repayments on Home Loan A and Home Loan B and in September 2018, he stopped making any further payments on Loan C. I am satisfied that Mr Fontano could not afford to continue meeting the repayments on the loans, given that he was also paying rent for his and the children's accommodation in Suburb A and (apart from the school fees) was primarily financially supporting the children. Ms Fontano has been solely responsible for Home Loan A and Home Loan B since early 2018. From time to time Home Loan A and Home Loan B have fallen into arrears and [Bank A] has taken default action. It appears that Ms Fontano and/or her advisors have been able to negotiate arrangements with Bank A to stave off recovery proceedings, including placing the loans into "hardship" status from time to time. As a result, the balances owing on the loans have increased over time.
66In November 2018, Ms Fontano was made redundant by [redacted] and received a redundancy payment of approximately $85,000. Ms Fontano applied little, if any, of the funds towards the repayment of Home Loan A or Home Loan B or Loan C. Instead, she paid off some minor debts and otherwise used the funds to supplement her income from the IPI payments.
67In January 2020, Ms Fontano lodged a claim in relation to the TPD payments. In late 2021, the claim was accepted, on the bases of her mental health diagnoses, and Ms Fontano received over $2,200,000 into her two accounts with Superannuation Fund A. The two accounts with Superannuation Fund A are now in the payment phase. Accordingly, Ms Fontano can access the funds in her superannuation (and at the time of trial had withdrawn the sum of $40,000), subject to the payment of tax. Notwithstanding that the TPD claims have been paid out, Ms Fontano is separately entitled to continue to receive her IPI payments.

Conclusions

68At the commencement of cohabitation, each party had modest net assets. During their relationship, each party contributed their respective incomes. Each party also made important contributions to the welfare of the family, however Mr Fontano's contributions in this regard increased as Ms Fontano's mental health deteriorated after late 2015. The parties separated on a final basis in August 2017. Although the children largely remained in the primary care of Ms Fontano after separation, Ms Fontano's capacity to care for the children was severely compromised by her ongoing mental health issues. Since late May 2018, the children have lived primarily with Mr Fontano and (leaving aside the payment of the school fees), he has been primarily responsible for financially supporting the children. Ms Fontano has not paid child support to Mr Fontano for the children since they commenced living primarily with him. Instead, each party financially supported the children when in their respective care.
69In late 2021, Ms Fontano received the TPD payments totalling over $2,200,000. The remaining TPD payments represents approximately 78 per cent of the value of the parties' existing property interests. Whilst I accept the parties made a joint decision to increase their respective insurances to financially provide for their family, if one or both died or were unable to work in the future, the reality is that the TPD payments were only received due to Ms Fontano suffering a catastrophic deterioration in her mental health.
70In Falcken & Weule [2019] FamCAFC 140 the Full Court said at [21]:

Finally, we are content to adopt the following statement made by Strickland J in Miller & Miller [2009] FamCAFC 121:
101.…This payment was not a windfall. It was a payment received by the husband because he suffered a heart attack. It matters not that it was a minor attack from which he recovered. Despite the husband's good fortune in this regard, his health into the future is "significantly compromised" as a result according to the evidence of his cardiologist. Thus, although the fact that it was a joint decision to take out the insurance and the fact that the premiums were maintained out of the parties' joint funds can be treated as contributions by each of the parties, there still needed to be a life-threatening event before a payment could be made. It is simply not open to the wife to argue that the parties have contributed equally to this payout. It is the husband's money to which the wife has made an indirect contribution of a relatively minor nature…

71I respectfully agree with the statements above. In my view, in this case, it cannot be said that the parties have contributed equally to the TPD payments. Rather, Ms Fontano suffered the catastrophic deterioration in her mental health, which deterioration has triggered the TPD payments; and Mr Fontano has made an indirect contribution to the TPD payments of a relatively minor nature.
72Having carefully considered all the factors set out above, I am satisfied that overall, contributions should be assessed as to 70 per cent to Ms Fontano and 30 per cent to Mr Fontano.

SECTION 79(4)(e) / SECTION 75(2) FACTORS

73I will now consider the relevant factors as required by the legislation. If I do not refer to a factor, it is because I consider the matter is not relevant in this case.
74Mr Fontano was born [in 1974] and at the time of trial was 47 years of age. There was no evidence to suggest that Mr Fontano suffered from any health issues that detrimentally impacted on his income earning capacity. Mr Fontano continued to work full time as a professional and earned approximately $130,000 per annum (plus superannuation).[20]

[20] As at October 2020: refer to the father's Form 13 Financial Statement filed 29 October 2020.

75At the time of the trial, Mr Fontano continued to live with the two children in rental accommodation in Suburb A. Although the parenting proceedings remain in issue, having regard to: (1) the undoubted detrimental impact that Ms Fontano's mental health has had on her capacity to adequately care for the children, even for limited periods of time; and (2) Ms N's concession in closing submissions in relation to Ms Fontano's "live with" application, the reality is that Mr Fontano will continue to be primarily responsible for the care of the children into the foreseeable future.
76Mr Fontano has not re-partnered, and aside from the children, has no responsibility to financially support any other person. As at the time of the trial, Mr Fontano had incurred litigation costs of $364,721. He borrowed funds from Mr D and Ms E to pay his litigation costs, and currently owes them $295,559.00.

77Ms Fontano was born [in] 1975 and at the time of trial was 46 years of age. Ms Fontano previously worked as a [professional] but has not worked since the birth of Child A. Ms Fontano suffers from significant mental health issues that have detrimentally impacted on her income earning capacity. In early 2017 Ms Fontano commenced receiving IPI payments; and in late 2021 she received the TPD payments due to her being assessed as having a total and permanent disability due to her mental health diagnoses. Ms Fontano continued to receive her IPI payments in the amount of approximately $1,500.00 per week (net of tax).[21] Ms Fontano is entitled to continue to receive the IPI payments until she turns 65 years of age.
[21] As at 21 April 2021: refer to the mother's Form 13 Financial Statement filed 22 April 2021.
78As at the time of the trial, Ms Fontano was living in Property A. Her boyfriend, Mr I, also stayed at the property on a regular basis (albeit it was unclear under what, if any, financial arrangement).
79At the time of the trial, Ms Fontano was spending time with the children on a regular basis. Neither Mr Fontano nor Ms Fontano paid child support for the children to the other parent and instead, each party financially supported the children when in their respective care. On the evidence, it was very unclear whether Ms Fontano will contribute financially to the children's support in the future, in addition to when they were spending time with her. Since the trial, Ms Fontano's time with the children has been suspended and her ongoing time with the children remains in issue.
80As at the time of the trial Ms Fontano had incurred litigation costs of approximately $40,000. Her former solicitors have lodged a caveat over Ms Fontano's interest in Property A, which indicates that she still owes a debt to them in relation to her litigation costs. Ms Fontano will also incur a taxation liability in relation to the $40,000 lump sum withdrawal from her Superannuation Fund B account, albeit there was no evidence as to the amount of the tax liability and/or whether funds were withheld from the superannuation fund by Superannuation Fund B at the time of the withdrawal to meet the tax liability and/or when any tax liability is due to be paid.
81Weighing the various factors identified by me I am satisfied that there should be a further adjustment of 10 per cent in favour of Mr Fontano, particularly having regard to Mr Fontano's ongoing significant parenting responsibilities for the two children, in circumstances where Ms Fontano's mental health has detrimentally impacted on her capacity to adequately care for the children.

SECTION 79(4)(d),(f) & (g) FACTORS

82The orders proposed by Mr Fontano and Ms Fontano have no impact on the earning capacity of either party. I have already dealt with the remaining factors, in so far as they are relevant.

PROPERTY PROCEEDINGS –DISCUSSION AND CONCLUSIONS

83I intend to order that the property interests of the parties be divided 60:40 in Ms Fontano's favour and in accordance with the following table:

Ms Fontano / Wife	$ Value	Mr Fontano / Husband	$ Value
Property A	$770,000.00	Bank Account A	$0.00
Wife's bank accounts	$9,607.93	Bank Account B	$0.00
Wife's Car	$15,000.00	Bank Account C	$954.00
Wife's personal possessions & furniture	$0.00	Bank Account D	$2,002.00
Wife's paid legal fees	$0.00	Bank Account E	$370.00
Home Loan A	-$229,817.19	Bank Account F	$370.00
Home Loan B	-$358,898.80	Bank Account G	$0.00
Credit Card A	$0.00	Husband's Car	$4,000.00
Wife's debt to Dr B	$0.00	Husband's Share Plan A	$1,253.00
Wife's Loan D	-$2,848.54	Husband's Micro investment account	$1,613.00
School B arrears of school fees	-$15,175.00	Husband's personal possessions & furniture	$0.00
Wife's tax liability	$0.00	Husband's paid legal fees	$0.00
Wife's Superannuation Fund A	$129,971.00	Husband's Credit Card B	-$2,641.00
Wife's Superannuation Fund B	$49,495.00	Husband's debt to Mr D and Ms E	$0.00
Wife's Superannuation Fund A TPD payment	$786,414.00	Husband's Superannuation Fund C	$116,089.00
Wife's Superannuation Fund B TPD payment	$1,438,123.00	Husband's Superannuation Fund D	$141,229.00

Adjustment to husband	To be calculated[22]	Adjustment from wife	To be calculated[23]
TOTAL	$1,714,266.00[24]	TOTAL	$1,142,844.00[25]

[22] To be calculated. Estimated to be $877,605, less the tax payable if payment is made from Ms Fontano's superannuation accounts.

[23] To be calculated. Estimated to be $877,605, less the tax payable if payment is made from Ms Fontano's superannuation accounts.

[24] Rounded down to the nearest dollar.

[25] Rounded down to the nearest dollar.

84During the trial, the parties gave little, if any, consideration to the specifics of how any adjusting payment would be made to Mr Fontano.[26] Neither Mr Fontano nor Ms Fontano proposed that a superannuation splitting order be made to Mr Fontano to enable him to receive his full entitlements. Mr Fontano simply sought an order for Ms Fontano to make a lump sum payment to him, without identifying the source of the payment. Ms N informed the Court that if the lump sum payment was to be made from one or other of the two accounts with Superannuation Fund A, then Ms Fontano would need to obtain taxation advice. There was certainly no evidence at trial in relation to the tax payable on any such withdrawal, although it was clearly accepted by both parties that tax would be payable. In my view, the parties should have liberty to make further submissions in relation to the mechanics of how the adjustment to Mr Fontano should be made to enable him to receive his full entitlements. If Ms Fontano makes the lump sum payment to Mr Fontano by making a withdrawal from one or other of her two accounts with Superannuation Fund A, then in my view, any taxation liability triggered by the withdrawal should also be taken into account as between the parties in the same proportions as the overall division.

[26] Including but not limited to whether the Full Court decision of Mackah & Mackah [2018] FLC 93-770 had any bearing on the issue.

85Assuming Ms Fontano withdraws funds from one or other of her two accounts with Superannuation Fund A to make a lump sum payment to Mr Fontano, then pursuant to the settlement, Ms Fontano will receive property with a total value of $1,714,266.00[27] including Property A, subject to Home Loan A and Home Loan B, and her two accounts with Superannuation Fund A. Assuming Ms Fontano also withdraws funds from her two accounts with Superannuation Fund A to discharge her liabilities, including Home Loan A and Home Loan B and the arrears of school fees, then Ms Fontano will retain an unencumbered home, a motor vehicle, furniture and contents, together with approximately $900,000.00 in superannuation, which can be invested and used to supplement her income from her IPI payments. On the other hand, pursuant to the settlement, Mr Fontano will receive property with a total value of $1,142,844.00,[28] including his existing superannuation entitlements of $257,318 and assuming Ms Fontano withdraws funds from her superannuation accounts to make a lump sum to Mr Fontano, a sizeable lump sum. Mr Fontano will have a significant liability to Mr D and Ms E in relation to the loan for his litigation costs. Nevertheless, even after the payment of that debt, Mr Fontano will still retain a significant lump sum to use towards acquiring a residence for himself and the children, should he choose to do so.
[27] Less any adjustment for tax.
[28] Less any adjustment for tax.
86In the circumstances, I am satisfied that the proposed financial division is just and equitable and otherwise proper.
87In relation to the proposed financial orders, I make the following further observations:

(a)At paragraph [1] of his Minute, Mr Fontano effectively sought an "overarching" order setting out the division of the parties' property interests pursuant to judgment. Subsequently, at paragraph [4(j)(vi)] of Mr Fontano's Minute, he referred back to the overarching order, in the event of the default sale of Property A. I am satisfied that such orders are appropriate but have amended both orders to: (1) set out the actual property division pursuant to my reasons; and (2) subject to the parties having liberty to make further submissions, to take into account any taxation liability arising if the adjustment to Mr Fontano is made by means of Ms Fontano withdrawing the funds from her superannuation.
(b)Both parties agreed that Ms Fontano should retain Property A, on the basis that Ms Fontano refinanced Home Loan A and Home Loan B into her sole name. Mr Fontano proposed that the transfer and refinancing take place within 42 days. On the other hand, although Ms Fontano proposed that it take place within 12 months, Ms N conceded that it could take place sooner. I am not persuaded that it is reasonable to expect Mr Fontano to wait 12 months, particularly in circumstances where it is open to Ms Fontano to payout Home Loan A and Home Loan B, rather than seek to refinance them. Mr Fontano also sought an order that as part of the transfer and refinancing arrangements, Ms Fontano pay out not only various liabilities of her own, but also his liability to Legal Aid WA, which was secured by caveat against his interest in Property A.[29] Given that this issue was simply ignored by the parties during the trial itself, I am not satisfied it is appropriate to make such order.
[29] Refer to paragraph [3] of Mr Fontano's Minute – Financial.

(c)Both parties agreed that if Ms Fontano was unable to refinance Home Loan A and Home Loan B into her sole name, then Property A should be sold. I generally preferred the orders proposed by Mr Fontano (including in relation to the payment of outgoings and loan repayments pending the sale) because they were clearer in its terms and less likely to lead the parties into further unnecessary disputes. In addition, Ms Fontano proposed that in the event of default of refinance, she should have a further 90 days before Property A was placed on the market for sale. I am not satisfied that an additional 90 days in the event of default is appropriate. I am satisfied that in the event of default, Property A should be placed on the market immediately (as sought by Mr Fontano). However:
(i)At paragraph [4(d)] of his Minute, Mr Fontano sought that Ms Fontano be required to vacate the property within seven days of its listing. Given that this issue was simply ignored by the parties during the trial itself, I am not satisfied it is appropriate to make such an order.
(ii)At paragraph [4(i)] of his Minute, Mr Fontano sought that Ms Fontano be required to discharge any liabilities secured over Property A prior to settlement (save for Home Loan A and Home Loan B which would be discharged at settlement). Again, the effect of the order sought by Mr Fontano would be to require Ms Fontano to pay out his liability to Legal Aid WA, which is secured by caveat against his interest in Property A. Given that this issue was simply ignored by the parties during the trial itself, I am not satisfied it is appropriate to make the order sought by Mr Fontano, either in relation to his secured debt, or any of the other secured debts.

(iii)At paragraph [6] of his Minute, Mr Fontano sought detailed orders for Property A to be sold by auction if it failed to sell within six months. Given that this issue was simply ignored by the parties during the trial itself, I am not satisfied it is appropriate to make such an order.

(d)At paragraph [9] of his Minute, Mr Fontano sought that Ms Fontano otherwise make the lump sum payment to him within 42 days to enable him to receive his full property entitlements. At paragraph [17] of his Minute, Mr Fontano also sought the payment of an outstanding costs order within 42 days. Whilst I have no difficulty with the proposed order in relation to the outstanding costs, given the liberty I have given the parties referred to in paragraph [84] of these Reasons, I am satisfied that the parties should also be given a liberty to make further submissions about the mechanism for the necessary adjustment to be made to Mr Fontano to receive his full entitlements.
(e)At paragraph [10] of his Minute, Mr Fontano sought an order that Ms Fontano pay and indemnify him in relation to Loan C. Having regard to my acceptance of Mr Fontano's closing submission in relation to Loan C (referred to in paragraph [54] of these Reasons), I am not satisfied that it is appropriate that Mr Fontano should receive an indemnity in relation to Loan C, if Ms G and her husband do take recovery action. I decline to make the order sought by Mr Fontano.
(f)At paragraph [11] of his Minute, Mr Fontano sought an order that any school fees owed by the parties jointly to School B be "assigned" to Ms Fontano and she otherwise indemnify him in relation thereto. I am not satisfied that I should make an order for the "assignment" of the debt, in circumstances where there was no evidence that School B had been given notice of the proposed order and an opportunity to be heard. Instead, I simply propose to make an order that Ms Fontano do pay the liability and indemnify Mr Fontano in relation thereto.
(g)Paragraphs [16(c)] and [16(d)] of Mr Fontano's Minute directly contradicted each other. Given that the intention of paragraph [16] appeared to be a general "catch-all" paragraph deal with the parties' remaining property, I prefer paragraph [16(c)] because it thereby permits each party to retain their own bank account savings, rather than all such accounts becoming the sole property of the father - as paragraph [16(d)] provides.
(h)At paragraphs [7] and [8] of his Minute, Mr Fontano also sought orders pursuant to s 106A of the Act, if Ms Fontano failed to comply with any orders made by the court, for example, requiring her to sign documents. I am satisfied that such orders are appropriate, given Ms Fontano's recent failure to comply with a court order (to undergo drug testing).

ORDERS:

1The property interests of the parties (as set out in paragraph [50] of the Reasons) be divided such that the applicant MR FONTANO (the father) receives 40% and the respondent MS FONTANO (the mother) receives 60%, net of any taxation assessed or hereinafter assessed as a direct consequence of these orders being put into effect.
2Within 42 days of the date of the publication of these orders to the parties or their solicitors, the father do all things and sign such documents necessary to transfer to the mother all right, title, estate and interest in Property A.
3Simultaneously with the preceding order:
(a)The mother do all acts and things and sign all documents necessary to refinance into her sole name Home Loan A and Home Loan B which are secured against the title of Property A or otherwise effect or cause to be effected absolutely the release of the father from liability for those borrowings.
(b)The father do all things and sign all documents necessary to facilitate sub-paragraph (a) above, including but not limited to discharging the mortgage secured against the title of Property A.

4If the mother is unable to refinance Home Loan A and Home Loan B into her sole name in accordance with the preceding paragraph, then immediately the father and the mother do all things and sign all documents necessary to put on the market for sale and then sell Property A on the following terms:
(a)The parties do all acts and things and sign all necessary documents to cause the sale of Property A with either an agreed listing agent or they each appoint an agent on the basis it is a joint listing (the Agent).
(b)The listing price of Property A shall be that recommended by the Agent or such amount as is agreed between the parties.
(c)The parties shall not unreasonably refuse to accept any offer to purchase Property A made within 5% of the listing price and the parties have liberty to apply as to the implementation of this provision on short notice.
(d)The mother do co-operate in every reasonable way in relation to the marketing of Property A for sale including making the key readily available, allowing inspections and home opens of the property at all times reasonably requested by the Agent and ensuring that the property is clean, neat and in good order at the time of inspection by any prospective buyer, and any home open.
(e)The father be at liberty to attend Property A every second home open (at his discretion) and for that purpose, the mother do vacate the property for the period of the home open.
(f)Upon agreement being reached for sale of Property A, the parties shall promptly execute the contract of sale and all other documents necessary to complete the sale of the property including all transfer documentation forthwith upon its submission to them by the Agent, settlement agent or solicitor.
(g)Unless otherwise agreed, the contract of sale shall provide for settlement within 60 days after the date of the contract.
(h)At the settlement of the sale, the proceeds of sale shall be paid in the following manner and priority:
(i)To discharge Home Loan A and Home Loan B secured by mortgage against Property A;
(ii)In payment of the Agent's commission and advertising or other expenses payable on the sale;
(iii)In reimbursement of any Agent's commission and advertising or other expenses, should any amount have been previously paid by a party or a third party;
(iv)In payment of any legal costs, settlement agent's fees and outlays related to the sale;
(v)In payment to the father of the amount of $1,000 in payment of the costs owed to him by the mother pursuant to the orders made by the court on 12 April 2019;
(vi)The balance to be distributed such that each party receives their overall property interests as set out in paragraph [1] of these orders.

5Pending the settlement of the sale of Property A, the mother meet all outgoings on the property, including loan repayments, as and when they fall due.
6Order(s) in relation to adjustment / payment to the father: subject to a liberty to make further submissions.
7Within 42 days of the date of publication of these orders to the parties or their solicitors, the mother pay to the father the sum of $1,000 owing by the mother to the father pursuant to paragraph 14 of the orders made by the court on 19 April 2019.
8The mother do pay any school fees owing to School B and the mother do indemnify the father and keep him indemnified from any such fees.
9That any interest the mother may have in:
(a)the home contents currently in the possession of the father;
(b)any vehicle registered in the father's name;
(c)any bank accounts in the father's sole name;
(d)any superannuation accrued or accruing to the father's benefit;

forthwith vest in the father.
10That any interest the father may have in:
(a)any shares in the sole name of the mother;
(b)the home contents currently in the possession of the mother;
(c)any vehicle registered in the mother's name;
(d)any bank accounts in the mother's sole name;

(e)any superannuation accrued or accruing to the mother's benefit;

forthwith vest in the mother.
11That the mother indemnify the father with regard to any liabilities she has incurred in her sole name during the marriage and after separation, including any money owed to her former solicitors Kim Wilson & Co.

12That the father indemnify the mother with regard to any liabilities he had incurred in his sole name during the marriage and after separation.
13That unless otherwise specified in these orders:
(a)each party be solely entitled to all other property (including choses in action) in the possession of that party as at the date of these orders;
(b)each party forego any claims they might have to any superannuation benefits or entitlements belonging to or earned by the other and those entitlements have accrued;
(c)money standing to the credit of the parties in any bank account is to become the sole property of the holder of that account;
(d)insurance policies remain the sole property of the owner named therein; and
(e)each party be solely liable for and indemnify the other against any other liability encumbering any item of property to which that party is entitled pursuant to these orders.

14That in the event that the mother does not do all things necessary to enable compliance with any of these orders, then the Registrar of the Family Court of Western Australia be appointed pursuant to section 106A of the Family Law Act 1975 to execute such documents as may be necessary to give effect to these orders.
15That to give effect to the immediately preceding order, the father's solicitors be at liberty to write to the Family Court on the next business day following a default by the mother with a request that the Registrar sign the relevant documents.

16The financial proceedings otherwise be dismissed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.
RM
Associate
17 AUGUST 2022