Fonti & Lodato
[2024] FedCFamC2F 1294
•1 October 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fonti & Lodato [2024] FedCFamC2F 1294
File number(s): BRC 6384 of 2023 Judgment of: JUDGE BERTONE Date of judgment: 1 October 2024 Catchwords: FAMILY LAW – s 79 property adjustment – long post-separation period – unable to locate or serve husband – husband not on notice of proceedings – where husband has severe mental health issues - where initial financial contribution by husband was a springboard – where two properties sold pursuant to mortgagee sale post-separation – where wife made significant post-separation contributions – where it is just and equitable to make orders in the absence of the husband Legislation: Family Law Act 1975 (Cth) pt VIII, ss 75, 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.12
Cases cited: Allesch v Maunz [2000] HCA 40
Antmann & Antmann (1980) FLC 90-908
Barkley & Gammon [2021] FCCA 1444
Bevan & Bevan [2013] FamCAFC 116
Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395
Horrigan & Horrigan [2020] FamCAFC 154
Jabour & Jabour [2019] FamCAFC 78
Kowaliw & Kowaliw [1981] FamCA 70
Mallett & Mallett [1984] HCA 21
Marsh & Marsh [2014] FamCAFC 24
Stanford & Stanford [2012] HCA 52
Taylor v Taylor (1979) FLC 90-674
Whisprun Pty Ltd v Dixon [2003] HCA 48
Wilkes and Wilkes (1981) FLC 91-060
Division: Division 2 Family Law Number of paragraphs: 191 Date of last submission/s: 27 September 2024 Date of hearing: 29 July 2024 Place: Brisbane Counsel for the Applicant: Ms Barnes Solicitor for the Applicant: Catton & Tondelstrand Lawyers For the Respondent: There being no appearance by or on behalf of the Respondent Husband ORDERS
BRC 6384 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS FONTI
Applicant
AND: MR LODATO
Respondent
ORDER MADE BY:
JUDGE BERTONE
DATE OF ORDER:
1 OCTOBER 2024
THE COURT ORDERS ON A FINAL BASIS THAT:
1.These proceedings be determined on an undefended basis in the absence of the Husband.
2.Within fourteen (14) days of these Orders being made, funds in the sum of two hundred and thirty-two thousand seven hundred and seventy-six dollars and three cents ($232,776.03) held in the Federal Circuit and Family Court of Australia in the joint names of the Wife, Ms Fonti born in 1967, and the Husband, Mr Lodato born in 1960, be transferred to the trust account of the Solicitors for the Wife, Catton & Tondelstrand Lawyers.
3.The Husband shall retain to the exclusion of the Wife all of the funds held in his sole name in his Westpac account ending in …36.
4.Ms Fonti is hereby appointed trustee on behalf of the Husband, Mr Lodato to do all acts and things and to sign all documents necessary to give effect to Orders 5 and 6.
5.The Wife, in her capacity as trustee, do all acts and things and sign all documents necessary to cause Westpac banking corporation to pay to the Wife the sum of one hundred and one thousand two hundred and forty-six dollars and eighty-six cents ($101,246.86) from the funds held in the Westpac choice account ending in …12 in the sole name of the Husband.
6.Within fourteen (14) days of the date of these orders, the Wife do all acts and things and sign all documents necessary to cause Westpac banking corporation:
(a)to transfer to the Wife any and all funds held in the joint names of the parties; and
(b)to thereafter close any joint account.
7.Upon compliance with Orders 5 and 6, the appointment of the Wife as trustee for the Husband shall cease.
8.The Wife will retain absolutely, to the exclusion of the Husband, her interest in the following:
(a)the funds held in her NAB savings account ending in …80;
(b)the funds held in her NAB business account ending in …33;
(c)Motor Vehicle 1;
(d)all other personal items, furniture and chattels in her possession and control; and
(e)her current and future superannuation entitlements with Super Fund 1.
9.The Husband shall retain absolutely, to the exclusion of the Wife, his interest in the following:
(a)the funds held in any bank accounts in his name, subject to these Orders;
(b)all other personal items, furniture and chattels in his possession and control; and
(c)his current and future superannuation entitlements with Super Fund 2.
10.Each party will be solely responsible for, and shall forever indemnify the other, in respect of any liabilities in that party’s name, including but not limited to:
(a)any current or future liability encumbering any item of property in their possession or control;
(b)any current or future credit card debts, personal loans or leases whether solely in that party’s name or owed jointly with another person; and
(c)any current or future liabilities owing to the Australian Taxation Office.
11.Within fourteen (14) days of the date of these Orders, the Wife shall serve a copy of these Orders and the Reasons for Judgment on the Husband’s brother, Mr B, by ordinary mail to his residential address at C Street, Suburb D, Qld.
12.The Application otherwise be dismissed with each party bearing their own costs.
THE COURT NOTES THAT:
A.This matter has proceeded by way of undefended hearing in the absence of the Respondent and pursuant to Rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 the Respondent may apply to have these orders set aside.
B.These orders represent a division of the known assets as to 60% to the Applicant Wife and as to 40% to the Respondent Husband.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BERTONE
These are proceedings brought by the Wife under Part VIII of the Family Law Act 1975 (“the Act”).
The Husband and Wife commenced their relationship in 2001 and were married in 2004.
Their only daughter, X, was born in 2006 and has only recently turned 18 years of age. X lives with the Wife and is currently completing Year 12.
The parties separated 10 years ago in July 2014 and the divorce became final in mid-2022.
The Wife filed her Initiating Application on 22 May 2023 seeking property adjustment.
The Husband has not filed any material in these proceedings because he has not been served.
Issues For Determination
The issues for my determination are:
(1)Whether to hear and determine the proceedings in the absence of the Husband;
(2)Whether it is just and equitable to make any orders altering the parties’ respective legal interests in property; and
(3)In exercising my discretion under s 79 of the Act what orders are just and equitable in all the circumstances.
Material Relied Upon
The Wife relies on the following material:
(1)The further Amended Initiating Application filed 18 July 2024;
(2)The Affidavits of Ms Fonti filed 19 July 2024, 20 May 2024, 14 February 2024, 27 October 2023, 17 October 2023, 25 July 2023, and 22 May 2023;
(3)The Financial Statement filed 20 May 2024;
(4)The Affidavit of Mr B filed 28 May 2024;
(5)The Affidavit of Ms E filed 14 February 2024;
(6)The Notice of Payment into Court dated 13 December 2023;
(7)The Genuine Steps Certificate filed 22 May 2023;
(8)The Wife’s Written Submissions tendered as Exhibit 1;
(9)The bundle of documents tendered as Exhibit 2;
(10)The Queensland Health discharge summary dated 11 June 2020 tendered as Exhibit 3; and
(11)The Queensland Health progress notes dated 16 March 2020 tendered as Exhibit 4.
I have read and considered all of the documents relied upon by the Wife.
As the High Court has said, I am not required in these reasons to mention every fact or argument relied upon by the Wife.[1]
[1] Whisprun Pty Ltd v Dixon [2003] HCA 48.
Evidence and Findings of Fact
The Wife’s evidence before me is not tested or challenged by the Husband, given he is not on notice of these proceedings.
I have also had the benefit of collateral documents produced under subpoena from Queensland Health, the Queensland Police Service (“QPS”), and the Westpac bank.
The Wife has also tendered title searches for the various properties, together with settlement statements related to their sale.
Therefore, as I have no rebutting evidence from the Husband, I will accept the Wife’s evidence and make findings unless it appears to me to be inherently unreliable or otherwise unsatisfactory.[2]
[2] Ibid at paragraph 69.
Whether to Proceed with the Wife’s Application in the Absence of the Husband
The Husband has not been served and is not on notice of these proceedings.
In her Affidavit filed 22 May 2023, the Wife deposes to the last time she saw the Husband in late 2017. She and the parties’ child, X, went to see him at a location in Town F where he was staying. They gave him food and a pre-paid mobile telephone.
The Wife says that she barely recognised the Husband. He was unkempt and looked sick and gaunt. This was the last time she saw him.
The Wife’s evidence is that in 2018, the Husband phoned X on her mobile for her birthday and left a message wishing her a happy birthday. This was the last time the Wife and X had contact with the Husband.
Later in 2018, the Husband’s brother, Mr B, called the Wife and told her that the Husband could not be left alone in his house and that, at that time, the Husband was living in a car.
Mr B later called the Wife to tell her that he had arranged for the Husband to go back into hospital.
In early 2022, the Wife received a voicemail from a police officer of the City G Police Station to inform her that the Husband had been reported as a missing person. The Wife did not listen to the voicemail until a month later, whereupon she instructed her Solicitors to contact the QPS.
The Wife’s Affidavit filed 25 July 2023 deposes to the Husband being registered as a missing person with QPS, the steps taken by QPS to issue a media release, and their communications with the Wife and Solicitors acting on her behalf.
In her Affidavit filed 17 October 2023, the Wife deposed to receiving a telephone call from Mr B in mid-2023 to advise that QPS had located the Husband but that he (the Husband) did not want his whereabouts known to his family or to anyone.
In late 2023, the Wife attended the Suburb H Police Station to view a photograph taken of the Husband and she was able to confirm it was him. She noted that he looked dishevelled and the police indicated to her that they believed he was a homeless person. She had previously reached the conclusion that he had probably died.
In her Affidavit filed 14 February 2024, the Wife deposes to the further communications she had with QPS and their advice that they had “street checked” the Husband in Suburb D four times in 2020 and on the fourth occasion he was taken for assessment to Region J Hospital.
The Wife was told by QPS that in early 2021, the Husband was “street checked” and he stated he was homeless and refused referral.
The Wife also took the following steps as deposed to in her Affidavit filed 14 February 2024:
(1)She instructed her solicitors to engage K Company;
(2)A Subpoena had been issued on behalf of the Wife to Queensland Health which showed:
(a)some interactions with the Husband over a period from March 2020 to approximately August 2020;
(b)the Husband was an inpatient at Suburb L Hospital for three months in 2020, having been brought there by his brother, Mr B;
(c)a further diagnosis of major depressive disorder was made in relation to the Husband; and
(d)the Husband was referred to the homeless health outreach team upon discharge; he had no mobile phone, no Centrelink income, and was sleeping at the back of Suburb L Hospital.
(3)A review of documents returned under subpoena issued to various banks on behalf of the Wife showed the Husband had various bank accounts that had had no transactions listed from various dates including from 2015, April 2016, and May 2016. In respect of the Husband’s Westpac Mastercard ending “…54” with a credit limit of $30,000, it ceased being used in late 2017.
Acting on the instructions of the Wife, Ms E, employed by K Company, filed an Affidavit on 14 February 2024. Annexure MSE01 of Ms E’s Affidavit sets out the steps taken by K Company to attempt to locate the Husband as at 12 February 2024.
On 14 February 2024, a Judicial Registrar made an order dispensing with service of the documents on the Husband.
The Wife’s Affidavit filed 20 May 2024 deposes to further enquiries she, or her Solicitors, made in an attempt to locate the Husband. This included contacting various mental health services, homeless shelters, crisis care organisations, and a charity.[3]
[3] Paragraphs 48 – 51 of Affidavit of the Wife filed 20 May 2024.
The Wife relies on an Affidavit filed by the Husband’s brother, Mr B on 28 May 2024. Mr B’s evidence is that:
(1)He and his brother kept in touch but did not have a close relationship;
(2)He does not recall the Husband having a history of mental illness growing up or as a young adult;
(3)He is aware the relationship between the Husband and Wife broke down in July 2014;
(4)In late 2019, the Husband turned up at his house with a weeks’ notice and lived with him for a short period of time. During this time, he observed the Husband’s mental health deteriorating dramatically;
(5)Prior to turning up at his house, the Husband had been living at an address at Town F, and he is aware the Husband was removed from that property over a failure to meet his rental payments;
(6)He observed the Husband’s mental health and behaviour to continue to deteriorate and in late 2019 he felt forced to kick the Husband out of his home;
(7)He tried to convince the Husband to seek mental health support. In early 2020 he contacted the homeless outreach team in Region J who were able to have the Husband admitted to the psychiatric care unit at Suburb L Hospital;
(8)The Husband was there until discharge in mid-2020; and
(9)He has not personally seen the Husband since 2020 before he went into Suburb L Hospital. He has heard from the police and others that the Husband has been seen at the Suburb L Shopping Centre in early 2021 and in Region J during 2023.
I accept the evidence given by Mr B about his brother and his last known whereabouts. Both of the Husband’s parents have passed away and he has no other siblings.
Pursuant to orders made on 21 June 2024, the Wife filed an Affidavit on 19 July 2024 setting out her attempts to locate and serve the Husband.
This included contacting a police officer in mid-2024 during which meeting the officer told her that he had reviewed the Husband’s file and confirmed that he [the Husband] was reported as “being alive and well via a street check 2 months ago” which was in the vicinity of Suburb L.[4]
[4] Affidavit of the Wife filed 19 July 2024 at paragraph 7.
The Wife was further told that the Husband “declined to give any particulars about where he is living and continued to maintain that he did not want to be found or to let anyone know where he is.”[5]
[5] Ibid.
I accept the Wife’s evidence about her last contact with the Husband and all of her attempts to locate him.
I am satisfied that the Wife has taken all reasonable steps to locate the Husband, and to effect service of her application upon him.
It is a well-known principle of justice that a decision maker must ordinarily afford a person whose interests may be adversely affected by a decision an opportunity to present material information and submissions relevant to such a decision before it is made.[6]
[6] Allesch v Maunz [2000] HCA 40, at paragraph 35.
The Court is now faced with the unfortunate situation that the Wife wishes to have her application for property adjustment heard in circumstances where the Husband:
(1)Is unaware these proceedings have commenced;
(2)Is not on notice of the orders sought by the Wife; and
(3)Is unaware of his right to be heard.
The Wife has engaged Counsel, Ms Barnes, who has prepared written submissions and urges me to hear the Wife’s application in the absence of the Husband.[7]
[7] Wife’s Written Submissions Exhibit 1.
Rule 10.12 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) provides that:
The court may, at any stage in a proceeding on the application of a party, give any judgment or make any order.
In the High Court’s decision of Taylor v Taylor Aiken J said:[8]
The principle that parties to litigation are entitled to be present and heard, whether in person or by a duly authorized legal representative, is of fundamental importance and involves the consequence that, where through no fault of his own, a party is deprived of that entitlement, prima facie any order of a court made against him may be set aside by that court. I can see no basis for confining the application of that principle to cases where there has been a failure to serve the process or give other appropriate notice.
[8] Taylor v Taylor (1979) FLC 90-674, at page 78-599.
Justice Fogarty, when considering Taylor said:[9]
It appears to me that there is an inherent discretionary power in the Court to set aside an order obtained in the absence of the other party…In the exercise of this discretion, the Court must consider the whole of the relevant circumstances and history of the matter including (a) the need for an end to litigation; (b) the reason proffered for the non-appearance of the party in question; (c) delay; (d) any prejudice to the other party which could not be adequately compensated for by an order for costs; and (e) whether there appears to be a real issue to be tried on the merits.
[9] Wilkes and Wilkes (1981) FLC 91-060.
Ms Barnes referred me to the decision of Barkley & Gammon,[10] a decision of Judge Brown in what was then the Federal Circuit Court.
[10] Barkley & Gammon [2021] FCCA 1444.
Whilst not entirely similar, that case dealt with a property adjustment application where the Wife was on notice of the proceedings but did not participate fully.
Of relevance to this case, Judge Brown said:[11]
It is a significant thing for proceedings to be determined in the absence of one of the parties or if that party has not provided a proper level of evidence. The Court has an obligation to ensure that the parties to proceedings before it have an opportunity to participate in those proceedings.
However, the Applicant is not entitled, as of right, to the orders which he seeks. Rather, the onus remains on him to establish to the Court that the orders which she (sic) seeks, are just and equitable, according to law.
Essentially, Mr Barkley must lead sufficient evidence to establish his case to the Court and persuade it that the result he proposes is a just and equitable one. Otherwise, the Court should impose the result, in the case, it considers fair according to the law and evidence available to it.
[11] Ibid at paragraphs 56, 67, 68.
I am satisfied that:
(1)The Wife has taken all reasonable steps to try to serve the Husband;
(2)The Wife has complied with all Court orders; and
(3)The Wife has brought an application for property adjustment that she is entitled to have heard on the merits.
I am therefore satisfied that it is appropriate to determine the Wife’s application for property adjustment in the absence of the Husband.
Findings of fact
The Husband was born in 1960 and is now aged 64.
The Wife was born in 1967 and is now aged 57.
The parties commenced living together in 2001 and were married in 2004.
The parties separated in July 2014 and their divorce became final in mid-2022.
The parties have one child, X born in 2006. X is 18 years old and is completing year 12. She lives with the Wife and has not seen her father since late 2017.
At the commencement of their relationship, the Wife was working as a professional for M Company and the Husband worked as a professional for N Company.
The Wife does not recall each of their salaries, but her evidence is that both she and the Husband were working full-time, and their salaries were relatively equal.
The parties lived in a property that the Husband owned in Suburb O, Victoria (“the Suburb O property”). This property was unencumbered due to the Husband having received an inheritance from his late father’s estate.
The Wife concedes she owned nominal assets at the commencement of the relationship.
The Wife does not recall how much money the Husband received by way of inheritance.
The Wife paid all the bills, including gas and electricity, and any other bill that came up for the household.
When X was born in 2006, the Wife cared for her full-time and did not return to paid work for about 14 months.
The parties and X moved to Queensland in or about early 2008 and were living in rental accommodation in Suburb P. The parties sold the Suburb O property and then used those proceeds of sale to purchase the former matrimonial home at Q Street, Suburb R in which they lived until their separation.
In 2008, when the Wife returned to work, she worked as a professional for S Company and was working part-time earning $75,000 per annum. The Wife recalls the Husband was earning approximately $110,000 - $120,000 per annum.
The Wife’s evidence is that the Husband controlled the parties’ finances and that 75% of her salary would be transferred to his account. The Husband then would handle paying all the bills include the mortgage repayments, groceries, and other household outgoings.
The Wife retained $500 per month of her income to use for her personal expenditure, including buying clothes.
The Wife’s evidence is that she trusted the Husband to use the funds to pay bills and make investments and contribute to their savings. She did not have access to the Husband’s bank accounts.
In 2008, the Husband purchased a property at T Street, Suburb U in his sole name (“the Suburb U property”). The Wife estimates the cost was approximately $300,000 and says the property was purchased as an investment.
The Wife’s evidence is that the Husband made decisions regarding their finances, and she thought the property might have been sold by the Husband during their relationship.
After commencing these proceedings, the Wife ascertained that the Suburb U property had been sold in late 2023 for $315,000 pursuant to a mortgagee sale.
The net proceeds of sale were held in the trust account of V Law Firm (acting for Westpac bank) but on 14 December 2023, the sum of $122,807.87 was paid into Court and are included in the asset pool.
In or about 2013, the parties purchased a vacant block of land at W Street, Town Y (“the Town Y property”) for approximately $136,000 as joint tenants.
The Wife’s evidence is that she thought the Husband asked her to sign a contract for sale during the relationship and so she thought that property had also been sold.
Again, it became clear to the Wife after commencing these proceedings that the Town Y property had been sold in late 2023, pursuant to a mortgagee sale, and the proceeds were held in the trust account of V Law Firm (again acting for Westpac bank) on behalf of the parties.
The surplus funds from the Town Y property (in the sum of $109,968.16) were paid into Court by V Law Firm on 14 December 2023 and are included in the asset pool.
In 2012 the Husband lost his job and also was dealing with the grief associated with his mother’s death. It seems from that point on his mental health declined significantly.
The Wife’s evidence is that the Husband’s behaviour became very strange. He became verbally abusive and would often present in manic states.
The Wife encouraged him to attend upon his general medical practitioner and to engage with a psychologist. She recalls he was prescribed anti-depressants by his doctor and attended upon the psychologist twice but stopped taking the medication.
The Wife’s mother was diagnosed with an illness in 2013, and so the Wife was caring primarily for X, working part-time, and also caring for her own mother.
The parties’ relationship deteriorated from January 2014 until their final separation in July 2014.
The Wife and X left the former matrimonial home and moved in to live with the Wife’s father in Suburb Z, and the Husband remained living in the former matrimonial home.
For the first 6 months after separation X, who was 8, would spend 3 days with the Husband and 4 days with the Wife.
After about 6 months, the Husband called the Wife and said he did not have the mental capacity to have X. From that point onwards X lived solely with the Wife and did not spend time alone with her father.
The former matrimonial home was sold in late 2015 and the parties divided the net proceeds of sale equally, each receiving $350,000.
From 2016, the Wife became solely responsible for X’s care, including being solely financially responsible for X. This included the Wife financially supporting X to continue to attend the school the parties agreed she would attend, being AA School; a decision they made when X was aged 3.
The Wife’s father helped her financially after separation by allowing the Wife and X to live with him, assisting with their day to day living expenses, and paying some of X’s school fees. The Wife’s evidence is that she later paid her father back.
The Wife says that around the time of separation she was not in an emotional state to argue with the Husband about any property.
The Wife has now depleted her share of the net proceeds of sale of the former matrimonial home, having used those monies over the 10 years since separation to financially support herself and X.
The Wife’s father passed away in 2021. The Wife and X rent a unit owned by her father’s estate and she is driving his old car.
In 2024, the Wife received an inheritance of $100,000 from her father’s estate. She has used approximately $40,000 of these monies to pay for her credit card, which had a balance owing of $23,000, paid rate arrears, buying herself and X clothes, and also paying for a holiday.
I am satisfied the Wife appropriately used some of her inheritance for self-support and to help care for X. The balance of the inheritance of $60,000 is included in the asset pool.
The Wife’s Case
At the commencement of the hearing before me, the Wife’s case was to seek an overall property adjustment of the available assets as to 81.3% to her and as to 18.7% to the Husband.
This percentage seemed based on the claim that the Wife would receive all the available cash, including cash held in the Husband’s sole name with Westpac bank in the sum of $322,892.
This cash would be in addition to the Wife retaining her car, possessions and superannuation entitlements. The Husband would then otherwise retain his superannuation entitlements.
After making oral submissions, the Wife conceded, through her Counsel, that the sum of $100,000 ought to remain in the Husband’s Westpac bank account but that she would otherwise receive the balance.
This would then result in an overall property adjustment of 71% to the Wife and as to 29% to the Husband.
The thrust of the Wife’s argument is that:
(1)She, on the whole, has made the greater contributions during the parties’ relationship, including significant contributions during the 10-year post-separation period which was particularly stressful in light of the Husband’s mental health deterioration;
(2)She has received no financial support for X from the Husband for much of that 10-year period; and
(3)The Husband has by his conduct caused the forced mortgagee sale of the investment properties at Suburb U and Town Y which her Counsel argues fits within the principles espoused in Kowaliw & Kowaliw.[12]
[12] Kowaliw & Kowaliw [1981] FamCA 70; see Wife’s written submissions - Exhibit 1 – paragraphs 57 – 62.
Legal Principles
In considering the Wife’s application for property adjustment, I must first consider whether it is just and equitable to make any orders which alters the existing legal interests of the parties.
As the High Court said in Stanford & Stanford:[13]
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". 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.
And later:[14]
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).
[13] Stanford & Stanford [2012] HCA 52, at paragraph 37.
[14] Ibid at paragraph 42.
The parties have been separated for 10 years. They are no longer living in a marital relationship.
They sold the former matrimonial home and divided the net proceeds of sale equally at separation. However, they did not enter into any consent orders or sign any financial agreement under Part VIIIA of the Act to deal with their remaining assets.
The combined net proceeds of sale of the Town Y and Suburb U properties in the sum of $232,776.03, have not been divided. The parties’ respective superannuation entitlements accrued during their relationship have not been taken into account.
The fact the Wife has had the sole care of the parties’ only daughter for 10 years has not been considered.
The jurisdiction under s 79 has not been exhausted.
The High Court also said that “nothing in these reasons should be understood as attempting to chart the metes and bounds of what is just and equitable”.[15]
[15] Stanford & Stanford supra, at paragraph 46.
I am therefore satisfied that it is just and equitable to make an order under s 79.[16]
[16] Bevan & Bevan [2013] FamCAFC 116, at paragraph 89.
Having determined that it is just and equitable to make an order under s 79, I must:[17]
(1)Determine the assets and liabilities of the parties;
(2)Consider the weight to be attributed to the respective financial and non-financial contributions of the parties;
(3)Consider whether by reference to the factors in s 75(2) there ought to be an adjustment in favour of either party; and
(4)Take a step back and then consider whether the orders I propose to make are just and equitable.
[17] Hickey & Hickey & Attorney-General for the Commonwealth of Australia [2003] FamCA 395.
The Parties’ Assets and Liabilities
The Wife has provided evidence of the assets and liabilities of the parties as follows:
Property interests, superannuation and financial resources
Description
Ownership
Wife’s value
1
Funds from sale of Town Y Property
Joint
$109,968.16
2
Funds from sale of Suburb U property
Joint
$122,807.87
3
NAB Savings Account ending …80
Wife
$61,950.74
4
Motor Vehicle 1
Wife
$7,000
6
Household Contents
Wife
$20,000
7
Westpac Choice Account ending …12
Husband
$322,892.84
8
Westpac Business Account
Husband
$638.60
Assets Subtotal
$645,258.21
9
NAB Credit Card
Wife
($3,243.27)
Liabilities Subtotal
($3,243.27)
Net non-super Assets
$642,014.94
Name of Fund
Type of Interest
Member
Wife’s value
10
Super Fund 1
Accumulation Interest
Wife
$208,463.33
11
Super Fund 2
Accumulation Interest
Husband
$196,511.22
Superannuation subtotal
$404,974.55
TOTAL NET ASSETS (Assets – liabilities + super)
$1,046,989.49
I find that the assets available for division total $1,046,989.49.
Assessment of Contributions
The parties have been in a relationship from 2001 until their separation in 2014. They were divorced in 2022 and have one child who is now 18.
The parties have been separated for as long as they were together.
As the Full Court said in Marsh & Marsh:[18]
The expression “post-separation contributions” has, of course, been used widely in many authorities within the context of discussions about the assessment of contributions. But, importantly, it is not the fact of separation or when contributions are made that is the delineator. It remains crucial to analyse and weigh the nature, form and characteristics of all contributions across the whole of the period under consideration.
Often, but by no means invariably, the nature of contributions – particularly s 79(4)(c) contributions – will change with separation by reason of how the parties conduct their post-separation relationship. Equally, in many cases, particularly when children are being cared for predominantly by one party contributions of the same kind will continue despite the separation, and continue to be very significant.
[18] Marsh & Marsh [2014] FamCAFC 24, per Murphy J at paragraphs 107 – 108.
I am therefore required to consider the parties’ contributions over the whole period in an holistic way.[19] The Wife’s contributions to the home and family over the whole of the period must be given real, and not token, weight.[20]
[19] Horrigan & Horrigan [2020] FamCAFC 154.
[20] Mallett & Mallett [1984] HCA 21.
The Wife’s evidence is that at the commencement of the relationship, the parties lived in the property owned by the Husband in Suburb O free of encumbrance. She accepts she had only nominal assets.
The Suburb O property was sold in or about 2009 and the net proceeds of sale were used to purchase the former matrimonial home at Suburb R.
The Wife does not articulate either the net proceeds of sale obtained on the sale of the Suburb O property, nor does she articulate the purchase price of the former matrimonial home.
The net proceeds of sale from the Suburb O property were used to purchase the former matrimonial home which, when sold, netted the parties some $700,000 which they divided equally between them in 2015.
The Husband’s ownership of the Suburb O property was an initial financial contribution by him that provided the springboard from which the parties purchased the former matrimonial home. This is a greater initial financial contribution than the Wife’s.
However, I must consider the Husband’s initial financial contribution against the rubric of the financial and non-financial contributions made by both parties during their relationship, including since separation.[21]
[21] Jabour & Jabour [2019] FamCAFC 78, paragraph 55.
During the course of their relationship, the Husband seems to have earned more money per annum than did the Wife. However, I accept that the Wife worked part-time so as to accommodate her greater caring responsibilities for X.
I accept that the parties pooled their incomes to acquire property, including two investment properties, in addition to financially supporting the family.
Counsel for the Wife asserted that the parties’ contributions during the relationship were relatively equal,[22] and I accept that submission.
[22] Exhibit 1 written submissions at paragraph 46
From 2012, the Husband’s mental health began to deteriorate. This coincided with his grief over losing his mother in addition to losing his employment with N Company.
After losing his job in 2012, the Wife’s evidence is that the Husband started three separate businesses.
The Wife assisted with the advertising for these entities on social media at times. However, as she did not have access to the Husband’s bank accounts, she is unsure if the Husband ever generated a significant profit from any of these entities.
After receiving her half share of the net proceeds of sale of the former matrimonial home in 2015, the Wife has used those monies to support herself and X.
Having previously agreed to pay half X’s school fees, the Husband has not paid any school fees for X since 2012. This means the Wife has been solely responsible for paying X’s school fees, which she calculates to be in the order of $200,000, since 2012.
The Wife has also had to solely meet all of X’s other financial needs since 2012 in the context of the Husband not providing any financial support for X.
The Wife has also had to solely meet all of X’s care needs, including helping X to deal with her father’s absence, and suspected death, which would no doubt have been emotionally wrenching for this young person.
As I stated earlier in these reasons, the Wife received an inheritance from her late father’s estate of $100,000 in early 2024. I accept the Wife’s evidence that she used $40,000 of her inheritance to pay her credit card debt, arrears of rates, clothes for herself and X, and a holiday.
The balance of $60,000 from that inheritance is in the Wife’s NAB bank account, which is appropriately included in the schedule of assets and liabilities.[23]
[23] Jabour supra at paragraph 111.
I accept the Wife’s inheritance is a significant financial contribution made by her in the context of a relatively modest asset pool, made well after separation, and which has been used in part to financially provide for the parties’ daughter, X.
The Wife’s evidence about the purchase of the Town Y property is that whilst it was purchased as joint tenants, she thought the property had been sold in 2015.[24] The property was encumbered by a mortgage in favour of Westpac.
[24] Exhibit 2 page 6.
Similarly with the Suburb U property, the Wife did not know the property had been retained by the Husband, in his sole name, until she commenced these proceedings.[25] This property was also encumbered by a mortgage in favour of Westpac.
[25] Exhibit 2 page 4.
Exhibit 2 contains some bank statements for the Westpac account in the sole name of the Husband ending in …12.[26] There are no bank statements for the whole period from the date of separation to date. Whilst the Wife deposes to each party receiving the sum of $350,000 from the net proceeds of sale of the former matrimonial home, she does not expressly say that the Husband’s share of the net proceeds of sale were paid into this account …12.
[26] Ibid pages 2 - 3, and 8 – 25.
However, given the evidence is that the Husband was largely unemployed since his mental health deteriorated in 2012, I find on the balance of probabilities that the monies the Husband received from the net proceeds of sale of the former matrimonial home were paid into this …12 account.
It is clear from the bank statements contained in Exhibit 2 that periodic withdrawals were made from the …12 account titled “transfer/replenishment”. Ms Barnes concedes[27] that the Husband made some contributions between 2021 and 2023 in the order of $65,514.13 towards the Town Y and Suburb U mortgages.[28] She says that the loan accounts between separation and 2021 were serviced by direct debit from accounts …34 and …10 made largely on credit redraw, save for until 2016 when rental payments covered some of the mortgage repayments.
[27] Exhibit 1 at paragraph 50.
[28] Ibid at Annexure B page 19.
The balance remaining in the Husband’s …12 account is $322,892.84 and these funds are included in the asset pool.
Ms Barnes further submits that I would find that the Husband has failed to maintain the repayments on the mortgages owing on the investment properties which resulted in the forced sale by the mortgagee, Westpac bank.
Ms Barnes submits that, despite being unable to precisely quantify the waste, the Husband has caused loss by his reckless conduct within the meaning of the principles enunciated in the decision of Kowaliw & Kowaliw.
The submissions made on behalf of the Wife requires me to be satisfied that Husband has:
(1)Embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or
(2)Acted recklessly, negligently, or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.[29]
[29] Kowaliw & Kowaliw supra per Baker J.
For the reasons that follow, I am not satisfied that the Husband has engaged in wanton, reckless, or negligent conduct which has reduced or minimised the value of the matrimonial assets.
The evidence from the Wife and the Husband’s brother, Mr B, is that the Husband suffered a significant deterioration in his mental health from at least 2012, which became acute in late 2017 when the Husband called the wife and said he was in CC Hospital and that he had attempted to kill himself. He begged her not to tell their daughter, X.
Mr B’s evidence is that the Husband turned up at his house in late 2017 and lived with him for a short period. Over that time, Mr B observed the Husband’s mental health deteriorating dramatically.
The Husband’s mental health deteriorated so much that in late 2019 he refused to shower and urinated on the driveway. Mr B tried to get the Husband to seek mental health support at this time, but the Husband was unwilling to engage with any services. Mr B was forced to kick the Husband out of his house.
In early 2020, Mr B contacted the homeless outreach team in Region J and they were able to organise to get the Husband admitted to the psychiatric care unit at Suburb L Hospital, where he remained until mid-2020.
The medical evidence before me in Exhibits 3 and 4 showed that the Husband:
(1)Was unemployed and homeless, had no income and was neglecting self-care;
(2)Was diagnosed with major depressive disorder since 2012 and had one previous admission in 2016 to BB Hospital;
(3)Had previously been trialled on antidepressant medication;
(4)Had passive suicidal ideas;
(5)Said he had made some bad investments in business ventures that resulted in heavy financial losses and having to sell off some of his assets. This caused increased family stress along with marital problems.
(6)Stated he buried his head in the sand and hoped that one day he would wake up and his problems would be gone; and
(7)Diagnostically, presented with a treatment resistant depressive illness with melancholic features.
I am satisfied that from at least 2012 to mid-2020, the Husband was in the grips of severe mental health deterioration, to the point that he was unable to look after himself, let alone manage two investment properties.
I am not satisfied that there is evidence to support a submission that the Husband’s conduct was wanton, negligent or reckless.
I am not satisfied that the Husband’s inability to manage the investment properties has resulted in a reduction of value of the matrimonial assets because:
(1)There is no expert evidence before me as to the value of each of the Town Y and Suburb U properties at the time of their sale to support the submission that the properties were sold at a lower sale price;
(2)The settlement statement for the sale of the Suburb U property shows the mortgage paid was $161,886.78.[30] I have no evidence showing any alleged increase in the debt owing due to the Husband’s conduct;
(3)The settlement statement for the sale of the Town Y property shows the mortgage paid was $167,463.75.[31] I have no evidence showing any alleged increase in the debt owing due to the Husband’s conduct;
(4)There is no evidence before me that shows the sales fees, commissions and Solicitors fees are higher than would have otherwise been paid had the properties not been sold by mortgagee sale;
(5)The evidence shows that the mortgage repayments were made from the monies held in the Husband’s …12 account in 2021, 2022, and 2023, albeit due to a replenishment by authority; and
(6)Whilst I accept there have been bank fees and charges levied in the order of approximately $27,000,[32] I do not accept the fees were incurred recklessly or wantonly by the Husband.
[30] Exhibit 2 page 5.
[31] Exhibit 1 page 7.
[32] Ibid Annexure C pages 20 – 23.
I find that the Husband’s mental health deterioration impacted his ability to manage the investment properties, and indeed his life, generally. I do not consider it is appropriate to make any adjustment against the Husband in this regard in the exercise of my discretion under s 79(4).
I reject the oral submission by Ms Barnes that the Husband’s actions ought to be regarded as a negative contribution.[33]
[33] See Antmann & Antmann (1980) FLC 90-908.
Assessment of Contributions
Looking at the whole period of the parties’ marriage and long separation, I find that the initial financial contribution made by the Husband with the Suburb O property is but one of the myriad of contributions made by the parties since their cohabitation in 2001 which included a significant inheritance received by the Wife of $100,000 in 2024.[34]
[34] Jabour supra at paragraph 73
The Wife made the greater non-financial contributions caring for X, and being homemaker, in circumstances which were made more difficult from the time the Husband’s mental health deteriorated.
The Wife financially supported the family from the time the Husband lost his job in 2012 and thereafter solely supported X for the 10 years after separation.
Overall, I find that the Wife has made the greater financial and non-financial contributions.
I therefore I assess the parties’ respective contributions as to 70% to the Wife and as to 30% to the Husband.
Relevant s 75(2) Factors Pursuant to s 79(4)(e)
I now turn to consider the relevant s 75(2) factors.
Subsection (2)(a) – the age and state of health of each of the parties
The Wife is 57 and in good health.
The Husband is 64 and has been diagnosed with major depressive disorder. He has not engaged in medical treatment; save for the three-month period he was a patient at the mental health unit at Suburb L Hospital.
The Wife concedes that the Husband has had a deterioration in his mental health since 2012. She gives evidence that in late 2017 he told her he had attempted to kill himself and was an in‑patient at CC Hospital. The most recent medical evidence confirms that in 2020 the Husband’s mental health was so affected that he required in-patient care for 3 months.
I accept that there is no updated medical evidence about the Husband’s mental health since 2020. However, I must consider the long history of the Husband’s mental health deterioration, together with the fact that he has been reluctant to engage in appropriate treatment, and has not accepted help from his brother, Mr B, nor the homeless outreach team.
I am not satisfied that the absence of updated medical health is because the Husband’s mental health has improved. So much is supported by the communications with QPS coupled with the fact that the Husband has not accessed any of his bank accounts since mid-2018.[35]
[35] Exhibit 2 page 3.
I am satisfied that the Husband has significant mental health issues that require ongoing medical treatment, which whilst left untreated, is contributing to his transient lifestyle and his unemployment.
Subsection (2)(b) – the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The Wife works as a professional and has an average weekly income of $2,884.50. I am satisfied on the evidence that the Wife will continue to work in her current employment.
The Husband is not working. I am satisfied on the evidence that the Husband did some form of work between 2012 and 2014, but I am unable to find that during that time he was earning sufficient monies to support himself.
It is abundantly clear from the evidence that the Husband has not worked since 2014. Having obtained the Husband’s bank records, the Wife’s evidence is that he last accessed his bank accounts in mid-2018.
I am satisfied that the Husband cannot support himself financially and will need access to money.
Subsection (2)(c) – whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
The only child of the marriage, X, turned 18 in 2024.
I allowed evidence to be led from the Bar Table at the hearing before me that X is completing Year 12 and wishes to attend university next year.
The Wife’s evidence is that she will continue to financially support X through her tertiary studies.
Subsections (2)(d) and (e) – commitments of each of the parties that are necessary to enable the party to support himself or herself, and a child or another person that the party has a duty to maintain; and the responsibilities of either party to support any other person
The Wife can support herself financially. I am satisfied that the Wife has an obligation to financially support X through to the end of Year 12.
I also find that the Wife feels she has a moral obligation to continue to support X throughout her tertiary education.
The Husband is unable to financially support himself and he will need access to funds to support himself.
Subsection (2)(f) – the eligibility of either party for a pension, allowance or benefit under any law of the Commonwealth, of a State or Territory or of another country; or any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party
Exhibit 3 shows that whilst he was an in-patient at Suburb L Hospital, the Husband was deemed eligible to apply for Centrelink benefits but that he was not motivated to apply.
One of the objectives of his admission was to get social worker input mainly regarding his finances, Centrelink payment, and accommodation.
I therefore find that the Husband is eligible for some type of government allowance, but that he may not as yet have accessed same.
Subsection (2)(g) – where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The Wife lives with X in a home owned by her late father’s estate, where she has lived since separation.
I am satisfied that the Wife enjoys a reasonable standard of living.
I find that the Husband is unemployed and homeless. On the available evidence, I find that the Husband does not enjoy a standard of living that is reasonable in the circumstances. He will require access to funds to find appropriate housing and to support himself.
Subsection (2)(m) – if either party is cohabiting with another person—the financial circumstances relating to the cohabitation
The Wife has not re-partnered and does not live with anyone other than X.
The only evidence I have about the Husband is that he is unemployed and homeless.
Subsection (2)(n) – the terms of any order made or proposed to be made under section 79 in relation to the property of the parties; or vested bankruptcy property in relation to a bankrupt party
I propose to make orders that will ensure that the parties each have access to some cash and that they will each retain their superannuation entitlements.
Subsection (2)(na) – any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
I find that the Husband has not fulfilled his obligation to financially support X since separation.
That said, I note that as X has turned 18 and is about to finish Year 12, the Husband’s obligation to contribute to X’s financial support would shortly end.
Evaluation of s 75(2) factors
Having considered the relevant s 75(2) factors, I find that it is just and equitable to make an adjustment in favour of the Husband in the order of 10%.
Overall Evaluation
Having taken into account the relevant considerations under s 79, including s 75(2), I consider that there ought to be an overall adjustment of property in the order of 60% to the Wife and as to 40% to the Husband.
Outcome of Orders
The outcome of the orders I make will result in each party having a significant amount of cash at bank, in addition to retaining in their entirety their entitlements to superannuation.
I am satisfied that it is just and equitable to make orders which will result in the Wife receiving 60% of the available assets and the Husband to receive 40% as detailed in the table below.
Property interests, superannuation and financial resources
Description
Ownership
Wife retain
Husband retain
1
Funds from sale of Town Y Property
Joint
$109,968.16
-
2
Funds from sale of Suburb U property
Joint
$122,807.87
-
3
NAB Savings Account ending …80
Wife
$61,950.74
-
4
Motor Vehicle 1
Wife
$7,000
-
6
Household Contents
Wife
$20,000
-
7
Westpac Account ending …12
Husband
$101,246.86
$221,645.98
8
Westpac Business Account
Husband
-
$638.60
Assets Subtotal
$422,973.63
$222,284.58
9
NAB Credit Card
Wife
($3,243.27)
-
Liabilities Subtotal
($3,243.27)
NIL
Net non-super Assets
$419,730.36
$222,284.58
Name of Fund
Type of Interest
Member
Wife retain
Husband retain
10
Super Fund 1
Accumulation Interest
Wife
$208,463.33
-
11
Super Fund 2
Accumulation Interest
Husband
-
$196,511.22
TOTAL NET ASSETS (Assets – liabilities + super)
$628,193.69
$418,795.80
The orders I will make will result in the Wife receiving cash and superannuation totalling $628,193.69. This will include a payment to her from the Husband’s Westpac …12 account in the sum of $101,246.86.
The effect of the orders I will make will ensure the Husband will retain cash and superannuation totalling $418,795.80.
I am satisfied that the orders I make are just and equitable in all the circumstances.
I also make an order that the Wife serve a copy of my Orders and these Reasons on the brother of the Husband, Mr B, in the hope that at some point in time the Husband will make contact with his brother and will be made aware of these Orders.
I certify that the preceding one hundred and ninety-one (191) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bertone. Associate:
Dated: 1 October 2024
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