FRANCO and FRANCO

[2010] FCWA 111

[2010] FCWA 111

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY COURT ACT 1997
LOCATION	:	PERTH
CITATION	:	FRANCO and FRANCO [2010] FCWA 111
CORAM	:	CRISFORD J
HEARD	:	27, 28 & 29 OCTOBER 2010
DELIVERED	:	23 NOVEMBER 2010
FILE NO/S	:	PTW 5930 of 1998
BETWEEN	:	FRANCO Applicant/Wife
AND
FRANCO Respondent/Husband
Catchwords:

De facto property settlement - short period of cohabitation (2 years 7 months) after a marriage

- global approach appropriate - contributions and how assessed.

Legislation:

Family Court Act 1997 Interpretation Act 1984

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Self Represented Litigant
Respondent	:	Ms P Giles

[2010] FCWA 111

Solicitors:

Applicant	:	Self Represented Litigant
Respondent	:	Friedman Lurie Singh & D'Angelo

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

G and G (1984) FLC 91-582
Lenehan & Lenehan (1987) FLC 91-814
Norbis v Norbis (1986) FLC 91-712
Zyk & Zyk (1995) FLC 92-644

[2010] FCWA 111

1 [Ms Franco] and [Mr Franco] met when they were aged 12 and 15 years

respectively. Ms Franco is now aged 45 and Mr Franco is aged 48 years. Over the
last 33 years their relationship has had a number of reincarnations.

2 The issue now before the Court is what an appropriate division of their property following a de facto relationship is to be.

Brief relationship history

3 The parties met on 16 December 1977 and commenced living together on and

off from about 1983. They were married on 10 January 1987. There are two children of the relationship, [Anthony] Franco, born [in] March 1982 and is now aged 28 years, and [Donald] Franco, born [in] October 1985 and is now aged 25 years.

4 The parties separated on 26 October 1998. They reached agreement regarding a

settlement of their property and an agreement was registered in the Family Court of Western Australia at Perth on 5 November 1998 pursuant to s 86 of the Family Law Act 1975 (Cth).

5 The parties reconciled in 1999 and separated for a second time on 5 October

2001. On 21 August 2002 the Family Court of Western Australia pRonnyounced
orders in terms of a Minute of Consent Orders filed that day in the Court.

6 On 12 May 2003 the parties were divorced.

7 The parties again reconciled in March 2005. They resumed cohabitation on

24 February 2006 and separated on 16 October 2008. It is this last period of
cohabitation to which the present application relates.

Orders sought by each party

8 Briefly stated, Ms Franco is seeking an equal division of all the property the parties acquired during their de facto relationship.

9 Mr Franco, on the other hand, only seeks an equal division of a property the

parties acquired as tenants in common at [W Road]. He seeks any property otherwise acquired by or in the possession of one party only, be retained solely by that party. He says there are a number of assets which require different treatment by the Court.

10 However, if the pool of assets available for division is viewed by the Court as only one, his claim is for 69% of that asset pool.

Property settlement approach

11 I am required to follow a four step process in dealing with an application for

property settlement pursuant to the Family Court Act 1997 (“the Act”). These four
steps are:

[2010] FCWA 111

• To make findings as to the identity and value of the assets and liabilities of the parties;

• To identify and assess the contributions made by the parties to the assets;

• To identify and assess a range of factors as set out in subsection 205ZG(4)(d) to (g) of the Act; and

• To consider whether the orders proposed are just and equitable.

12 As already set out, Mr Franco argues that this is a case where there are distinct

categories of assets. On this basis he seeks the Court adopts what is commonly
referred to as an asset by asset approach.

13 In this regard, although he argues he made a greater financial contribution to the

W Road home in which the parties resided during their de facto relationship, he says that there should be an equal division of the value of that home. However, he says there is other property that he acquired solely and to which no contribution was made by Ms Franco. He says that assets in this category, to which he made 100% contribution, should be treated as his property alone.

14 His counsel, Ms Giles, distinguished this period of the parties’ relationship with

previous periods when they had been married. In this period their home was acquired jointly, but as tenants in common rather than as joint tenants. They each secured their own mortgage registered over the property to reflect individual borrowings and their bank accounts were kept separate.

15 Ms Franco argues that given the history of these parties over a lengthy period it

is appropriate there be an equal division of the present assets. She says this reflects not only the contributions during the de facto relationship, but also reflects the totality of their earlier periods together.

16 Each approach is permissible depending on the circumstances (Norbis v Norbis (1986) FLC 91-712, Lenehan & Lenehan (1987) FLC 91-814 and Zyk & Zyk (1995) FLC 92-644)

17 As the Full Court (Nicholson C J, Fogarty and Baker JJ) said in Zyk and Zyk at

82,509:

“The global approach enables the Court to assess the contributions aspect of the s. 79 exercise in an overall way by considering the parties’ contributions to their property as a whole although factoring into that exercise the circumstance, if it be so, that they may have made varying contributions to the total property at trial or which formed part of the history of their property during the marriage. It is the generally preferred and the generally adopted approach. It enables a broad approach to be taken to the varying contributions of the parties over the years of their marriage and in particular it usually has the advantage of more easily dealing with and giving proper recognition to paras. (b) and (c) contributions. However, where the contributions to the components to the total property are disparate, caution needs to be exercised in this approach and the overall conclusion tested against the requirement that the orders be

[2010] FCWA 111

“just and equitable”. Lenehan is an example of a case where difficulties
arose for that reason.

The asset by asset approach enables the Court to assess separately the parties’ contributions to particular assets or groups of assets. It is the less preferred approach largely because it can at times be an artificial exercise and also because it can create difficulties in the proper evaluation of paras. (b) and (c) contributions. But there are a number of circumstances where it may be appropriate to do so, for example an inheritance received post separation, or where the financial relationship of the parties during the marriage was such that they treated some property as exclusively the property of one party to which the other party made no, at least no para. (a), contributions to it. It may be convenient in cases like that to treat that property separately rather than assess the overall contributions of the parties to the totality of their property.

However, the trial Judge has a discretion as to which course to adopt and does so having regard to what appears more suitable to the circumstances of the particular case.”

18 I am mindful of the advice given by Nygh J in G and G (1984) FLC 91-582 (which was cited with approval by members of the High Court in Norbis (supra)) that Judges undertaking a purely asset by asset analysis sometimes risk mistaking trees for the forest.

19 I accept it is appropriate to take into account only the assets each party had at the

commencement of this last stage of their overall relationship and to the property acquired throughout the relationship rather than analysing all property acquired from, potentially, when the parties initially commenced cohabitation.

20 I only propose to deal with this latter period for the following reasons:

• After the first separation the parties entered into two s 86 agreements, each dealing with a different piece of real estate. On this occasion, according to Ms Franco, their assets were divided “in roughly a 50/50% split”. After this separation neither party sought to institute proceedings for property settlement.

• After the second separation the parties entered into consent orders on 21 August 2002. Ms Franco deposes their property at that time was divided in the following proportions – 46.2% to the wife and 53.8% to the husband. Ms Franco deposes she received a motor vehicle damages payout of $55,000 in July 2002. She deposes that this damages award was received after separation, although it appears clear the accident and steps taken to negotiate any payment were instituted prior to settlement. Given the payout the parties received much the same percentage of the assets. Mr Franco deposes to Ms Franco receiving a greater proportion than he did. Nothing turns on this aspect of the matter. Again, neither party sought to set aside or vary the orders made.

21 There has been no evidence brought before this Court at any stage to suggest that either party has had a complaint about either settlement.

[2010] FCWA 111

22 I intend to look at the financial relationship between the parties from the date

they commenced their de facto relationship. However, and as appropriately conceded by Ms Giles, the whole course of the relationship does have significant relevance as historical background and when assessing the behaviour of the parties. It provides a substantial backdrop usually absent in these matters.

23 Although I accept this was a short relationship and in such circumstances it is

not unusual to adopt an asset by asset approach, I do not intend to on this occasion. Given the long history of the relationship of these parties I consider that such an approach may not do justice between them. I intend to carefully consider the contributions made by each party to the various assets, mindful that some may or may not have been acquired with the input of one party only. However, their substantial history does impact on how their relationship was conducted.

24 I therefore intend to adopt a global approach.

Pool of assets

25 Ms Franco and Ms Giles were able to agree on a considerable number of items

and produce a useful common schedule of assets and liabilities. A number of matters
remain in contention. I will now deal with those items.

• 2004 Toyota Land Cruiser

26 When the parties were living together in 2007 Mr Franco purchased a 2004 Toyota Land Cruiser. The vehicle had previously been used in the mining industry. He then spent $11,000 on its repair. He sold the vehicle in 2010 for $20,000. He has, or has had, the use and sole benefit of that amount.

27 At trial he sought the Court take into account the amount he had previously spent on repairs. I am not prepared to do so. These repairs were undertaken in 2007 when the parties were cohabitating and they are now quite historic. The motor vehicle should reflect its recent resale value.

• Boat

28 This item was included in the common schedule at an agreed value of $18,000. However, a notation by Mr Franco indicated it was owned by one or both of his sons and simply insured by him.

29 I have little evidence about this aluminium boat. Annexed to the wife’s financial

statement filed 17 June 2010 is a schedule which includes this item. It is there commented that a letter from the husband's solicitors of 16 January 2009 said the boat was owned by the parties’ sons. One son had used $10,000 of the proceeds as the deposit on a home. The other son had utilised $5,000 for mortgage repayments and lap band surgery. Further monies were expended on the purchase of a Holden Commodore for one of the sons and on some legal fees for the husband.

30 In the husband’s financial statement which was also filed on 17 June 2010 in

relation to any disposal of property since separation he identifies the boat as being sold

[2010] FCWA 111

in December 2008 for $18,000. He simply said the proceeds went to the parties’ sons
and $3,000 to himself.

31 There is no evidence that persuades me this item should be included in the

schedule of assets and liabilities. Not only is the evidence uncertain, but the little evidence I do have suggests it is the parties’ sons who retained the bulk, if not all, of the proceeds of sale.

• Westpac Superannuation Fund

32 In December 2008 Ms Franco was able to persuade her existing superannuation

fund, full details of which were never provided to the Court, she was experiencing severe financial hardship. On this basis she was able to access $9,000 of the amount then in the fund. As at trial, $1,100 remains intact in that fund.

33 The parties separated on 16 October 2008. They remained living in the W Road

home until Mr Franco left on 1 November 2008 after Ms Franco had obtained an
ex parte Violence Restraining Order against him. This was later dismissed.

34 Ms Franco’s evidence is that she spent the superannuation money on day to day

living expenses, to include land rates and general daily expenses placed onto credit cards. She said she did not receive any financial support from Mr Franco at that time. She said she was taken completely by surprise at the breakdown of their relationship. She found out through her brother that there was to be a separation. It coincided with her mother being extremely ill. Her mother died in May 2009. At the time she had little, if no, employment.

35 I accept Ms Franco’s circumstances at that particular time were difficult. I

accept her evidence that the monies went to ameliorate financial hardship and were utilised in day to day living expenses. There is no evidence these expenses were unreasonably incurred.

36 I do not intend to add that money to the asset pool.

• ANZ account - $76,000

37 Ms Franco seeks that an amount of $76,000 she believed was in an ANZ bank

account operated by Mr Franco be included in the asset pool. Mr Franco says this is
money he owed to his brother. He says he repaid that money.

38 In his affidavit for trial Mr Franco sets out the history of his purchase of a

property at [C Road], in or about mid-2006. The total cost of purchasing the property was $392,583.83. He obtained a home loan of $260,000 secured by mortgage against the property. The balance he had available from the sale of a property at [N Street] acquired by him prior to his cohabitation with Ms Franco. This property was sold when the parties moved to live in the W Road property.

39 After he had owned the C Road property for several months his brother, Ronny,

and wife Marla, purchased a half interest in the property. In doing so they repaid Mr Franco’s home loan in full. As a result, Mr Franco owed his brother about $63,708. He borrowed a further sum of $10,000 from his brother in order to, amongst other things, install air conditioning in the W Road home.

[2010] FCWA 111

40 In paragraph 42 of his affidavit he states:

“On or about 20 July 2006 I borrowed about $80,000 against W Road, which monies I used to repay [Ronny] and [Marla] the sum of about $74,000 I owed them…”

41 Mr Ronny Franco deposes to having paid out the mortgage on C Road on his

brother’s behalf. He acquired a half interest in the property. He was then owed $63,708, but advanced an additional $10,000 to Mr Franco “so that all up [my brother] owed [Marla] and me about $74,000”.

42 He then goes on to depose that Mr Franco subsequently borrowed money against his interest in W Road and repaid to him the sum of about $74,000

43 At the end of the trial an ANZ V2Plus statement was produced by Ms Franco.

This statement shows that on 17 October 2008 a withdrawal of $70,000 was made from that account leaving a balance of $6,040.86. On 20 October 2008 a withdrawal of $6,000 was made. The account was then closed.

44 There is over two years between the date upon which Mr Franco deposes he

borrowed monies against W Road and the time he repaid his brother. The withdrawal
is in two amounts and does not reconcile exactly with the amount owing.

45 Both parties agree that the separation date was 16 October 2008, one day prior to the $70,000 withdrawal.

46 Mr Franco, in his cross-examination by Ms Franco, said his brother and wife had

moved into the C Road property in early 2007. He said the loan he had taken on the W Road property to repay his brother was in July 2008, some three months prior to the actual repaying and also the separation.

47 Although I am a little uncertain about the state of the evidence in relation to the

time frame of the loan and its repayment, I do not intend to add the amount back into the asset pool. I do accept money of around $74,000 was owed to Mr Franco’s brother and it was subsequently repaid. However, I will return to this issue in assessing contributions.

48 There are also a number of liabilities about which the parties are unable to agree.

49 Ms Franco has a personal loan of $45,000. That amount is not in doubt, but how

it should be treated is an issue between the parties. Ms Franco’s evidence is the
money was utilised as follows:

•  Around $29,000 to pay her former lawyer; and

•  Around $15,000 to pay debts and living expenses.

50 She said she paid $6,000 towards an ANZ credit card, but said the credit card

had been used for living expenses. For example, she paid some shire rates utilising the
card.

[2010] FCWA 111

51 She had originally borrowed $30,000 and later increased this by another

$15,000. The exact manner in which it was disbursed is a little unclear. The
approximate amounts set out above reflect, overall, her evidence.

52 It is agreed by the parties that legal fees should not be included as an add-back into the pool. The corresponding debt will thus not be included either.

53 I do intend to include the balance of the amount Ms Franco borrowed in the asset

pool. Again, I accept there was a period of time when Ms Franco was not working and receiving no financial support from Mr Franco. She had received such support during the course of the relationship. There is no evidence before me that this particular amount was spent unwisely or on anything save and except for reasonable living expenses.

• NAB credit card

54 Ms Franco presently has a debt of $12,000 on her credit card. Her evidence is this is and has been used for living expenses accumulated since July 2010.

55 I do not accept that this debt should be included in the asset pool. Ms Franco

now has employment. In all likelihood it is steady and ongoing. She has also utilised some money in taking a number of holidays. Although the Court does not suggest that on every occasion holiday expenses should not be categorised as reasonable expenses, I am not persuaded here that the economic arrangements for such holidays vis-à-vis both strangers and family members were appropriate or reasonable. In this respect it is appropriate this debt remain with Ms Franco.

56 I do not intend to take this debt into account as a liability of the parties, but will take it into account in a general sense pursuant to s 205AD(3) of the Act.

• Equity manager business overdraft account

57 Mr Franco had an overdraft account of $43,000 when he swore his financial

statement in June 2010. He now says it is about $64,000. The overdraft facility is used for both living and business expenses. The evidence about what this debt comprises is vague and unclear.

58 I accept that Mr Franco also had some difficulties after the parties’ de facto

relationship broke down. However, he has always been in a position to maintain his business. No breakdown between business expenses and personal expenses is provided. Later in the judgment I note that money provided to Ms Franco for household expenses was noted as “wages”. I do not intend to include this debt in the pool of assets.

• Loan from Ronny Franco

59 Mr Franco says he owes his brother $62,000.

60 In Mr Ronny Franco’s affidavit of 17 June 2010 he deposes to an amount of

$52,000 being owed. He says there was an original amount of $32,000 which was used for mortgage repayments, general living expenses and for his nephew’s wedding expenses. There is a signed agreement to that effect dated 18 January 2010.

[2010] FCWA 111

61 A second amount of $20,000 went directly to the husband’s lawyers for their fees. This, again, is evidenced in an agreement dated 19 March 2010.

62 Mr Ronny Franco confirmed his evidence at trial. The money is to be repaid after the property settlement between the parties.

63 In Mr Franco’s affidavit he again confirms that the amount of $52,000 is

outstanding.

64 As previously discussed, I do not intend to include any amount for legal fees in

the asset pool. The balance of the monies owing, in my view, should not be included in the pool of assets. The expenses were incurred post-separation at a time when Mr Franco was employed full-time. I was not pointed to any reason why he needed to have such borrowings for general living expenses or a wedding. There is also a conflict in the evidence about the exact amount that is owing.

65 I do not intend to take this into account here.

• Loan $4,000

66 Ms Franco gave evidence she borrowed $4,000 from her brother, [Paul Heath].

She said that immediately after separation she had no funds. She was not working at the time. Her brother lent her $650 on 3 November 2008. He paid her $350 in cash at that time. On 1 December 2008 and 13 January 2009 he deposited $900 on each occasion into her account and provided her with $100 cash on each occasion. He had documents to corroborate these transactions.

67 His evidence was that overall he was owed $4,000. He accepted that the last

amounts had not been documented. However, he had a clear recollection of the
amounts outstanding.

68 I found Mr Heath to be a credible witness. He explained that no interest was to

be paid on the outstanding amounts as the monies had been contained in an account that itself did not earn interest. He said that he was confident he would get the money from his sister once the Family Court proceedings were finalised.

69 Although I accept that $4,000 was borrowed from Mr Heath at a time of

financial need, I am also aware that Ms Franco had access to funds from her superannuation account of $9,000 and approximately $15,000 for general living expenses on credit cards over much the same period of time.

70 Like Mr Franco, I see it appropriate that each pay their family debts from their own sources. I do not intend to take it into account here.

71 I find the pool of assets to be:

Assets

Description of Assets Asset De facto husband De facto wife

W Road 565,000 565,000

[2010] FCWA 111

C Road,	420,000	420,000
Furniture	5,000	5,000
Camry	4,000	4,000

1998 Pajero 4WD 4,650 4,650

Truck & tools	5,000	5,000
Furniture	2,500	2,500

Holden Commodore 30,000 30,000

Superannuation, 1,100 1,100

MPG shares 900 x 0.04	36	36
2004 Land Cruiser	20,000	20,000

Sub total 1,057,286 482,186 575,100

Liabilities

Description of Liability De facto husband De facto wife

Liabilities

Mortgage on 87,855 87,855

W Road

Personal loan	15,000	15,000
Mortgage on	77,388	77,388

W Road

Mortgage on 231,000 231,000

C Road

Family Court hearing 1,398 1,398

fee

Unpaid rates as at 900 450 450

separation

W Road

Subtotal 413,541 308,838 104,703

Total net assets – 643,745 173,348 470,397

Contributions

72 In order to ascertain the property each party had at the beginning of this last

phase of their relationship it is necessary to determine when exactly it started. The
parties disagree on the date they resumed their relationship.

73 Ms Franco’s application is made under Part 5A of the Act, which confers

jurisdiction on the Family Court of Western Australia to make orders for settlement of
property owned by parties who lived in a “de facto relationship”.

74 The Interpretation Act 1984 provides the definition of a “de facto relationship”. The relevant provisions of that Act are set out below [emphasis added]:

13A. De facto relationship and de facto partner, references to

[2010] FCWA 111

(1)

A reference in a written law to a de facto relationship shall be construed as a reference to a relationship (other than a legal marriage) between 2 persons who live together in a marriage-like relationship.

(2)

The following factors are indicators of whether or not a de facto
relationship exists between 2 persons, but are not essential –

(a)	the length of the relationship between them;
(b)	whether the 2 persons have resided together;
(c)	the nature and extent of common residence;
(d)	whether there is, or has been, a sexual relationship between them;
(e)	the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(f)	the ownership, use and acquisition of their property (including property they own individually);
(g)	the degree of mutual commitment by them to a shared life;
(h)	whether they care for and support children;
(i)	the reputation, and public aspects, of the relationship between them.

75 Ms Franco says the parties reconciled and their de facto relationship commenced

in March 2005. Although Mr Franco accepts the parties then resumed their relationship, he says it was simply as girlfriend/boyfriend. In his trial affidavit he says they “reconciled” in about March 2005. They did not resume cohabitation until February 2006 when Ms Franco sold a property she had been living in at [A Road] and moved in with Mr Franco at his home in N Street.

76 Ms Franco points to the history of the relationship and says there was no

courtship but simply a complete resumption of their prior relationship. The parties wanted to be with each other and spent all their free time together. She said they spent most week nights at Mr Franco’s home and the weekends at her home at A Road. She says this was convenient in that Mr Franco’s work vehicle and tools were at his residence and during the week he often started work early. She said she would return to her home for periods during the week as there was a dog to feed and a garden to care for. However, in the main, on weeknights they slept at Mr Franco’s home and had weekends at her home.

77 Mr Franco’s evidence is that although the parties spent some nights together

between March 2005 and February 2006 they did not commence their actual de facto
relationship until cohabitation started. He says they maintained separate finances.

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78 Taking into account the background to this de facto relationship and the

evidence of Ms Franco, which I accept in this regard, I have little hesitation in concluding the de facto relationship started in March 2005. Their relationship was of 3 years and 7 months duration. I will consider what assets each brought into the relationship at March 2005.

• Initial contributions

79 Ms Franco says that as at March 2005 she had net assets, including

superannuation of $79,800. She estimates that Mr Franco had net assets at the time of $102,801. As a percentage split, this is 43.7%/56.3% in Mr Franco’s favour. She says the major asset of each party at the time was the real estate each had acquired prior to March 2005. Mr Franco had the N Street property. She attributes a value of $175,000 to that property with $70,000 owing on it. She says these figures were taken from the husband’s solicitor’s correspondence of 5 December 2008.

80 Mr Franco deposes as follows:

“26. When and I reconciled in about March 2005, I was the sole registered proprietor of the property at [N Street] worth about $175,000 and encumbered by a mortgage for $70,000 (net equity $105,000), a Nissan Patrol vehicle worth about $17,000 and household furniture.”

81 Ms Franco owned the property in A Road estimated to be worth $200,000. The mortgage registered over that property at that time was $140,000.

82 Mr Franco sold N Street for $375,000 in about April 2006. He deposes it was

unencumbered, but his evidence at trial was there was a small mortgage of perhaps
$5,000 on the property.

83 I am satisfied that Mr Franco made a greater initial financial contribution to this

relationship.

• Direct financial contributions during the relationship

84 On 16 March 2006 the parties became the registered proprietors as tenants in

common in equal shares in the property at W Road where they lived until separation. The purchase price of this property was about $400,000 and the parties agreed to contribute $200,000 each to its purchase.

85 Ms Franco sold her property in A Road in February 2006 for $265,000 and she

used the net amount received of $110,000 towards the acquisition of the property. The balance was funded by way of a loan from the ANZ Bank of about $90,000, which was secured by a mortgage registered over the property.

86 Mr Franco obtained a loan of $220,000 to fund his share of the property until his

home at N Street sold. On or about 13 April 2006 he received the net proceeds of sale of that property of $374,380. He paid $200,000 towards the loan for his part of the purchase of W Road. He reimbursed his business $20,000 advanced for stamp duty

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and an amount of $154,380 was placed into a term deposit account. This was applied
towards the purchase of a property in his sole name at C Road in the middle of 2006.

87 According to Mr Franco’s evidence in March 2005 he had a mortgage of

$70,000 registered over the N Street property. A year later, when it sold in about April 2006 he said it was unencumbered. In his evidence at trial he said there may have been a very small amount owing on it, perhaps $5,000.

88 In March 2005 Ms Franco had a mortgage of $140,000. The property sold for $265,000 in February 2006 and Ms Franco received net proceeds of about $110,000. Although there is a paucity of evidence there is nothing to suggest that there was anything other than the mortgage remaining to be paid from the balance. It appears the mortgage was then around $155,000.

89 In that first year of their de facto relationship Ms Franco did not reduce her

mortgage, but rather it increased. Mr Franco was able to reduce his mortgage by approximately $65,000 to $70,000. There is some suggestion he had some money from the parties’ son Domenic. However, the evidence was vague in this regard.

90 I have set out a comparative table of earnings of the parties during their period of

cohabitation. Mr Franco was a self-employed [tradesman] operating a business – “
[Franco & Sons]”. Ms Franco worked from time to time in a bank.

Year Mr Franco Ms Franco

2004-2005	42,977	26,905
2005-2006	28,156	22,350
2006-2007	37,957	8,919
2007-2008	19,157	20,665
2008-2009	43,804	22,601
2009-2010	29,070	18,883

91 Ms Franco accepts she made no direct financial contributions to the C Road

property. Mr Franco financed the original purchase of C Road by utilising funds from the property he had acquired prior to the parties reconciling, along with borrowings. I will return to this later.

92 Mr Franco deposes to having paid for carpets, curtains, painting and alfresco

areas of W Road which came to about $35,000. He also says he paid household bills and general living expenses for the parties. He purchased a car for Ms Franco for about $10,000. He installed air-conditioning of $4,000. None of this is denied by Ms Franco.

93 There was about a three month period when Ms Franco’s mother, who was very

ill and required care, lived in the family home. Ms Franco did not continue in paid employment at that time, although she received a carer’s benefit for this role. She also gave evidence, which I accept, that during that period of time she removed money

[2010] FCWA 111

from her mother’s pension account to cover her mother’s share of expenses, including
the paying of some monies towards the mortgage.

94 Ms Franco was primarily responsible for the payment of her part of the

mortgage. At times she assisted in payment of household expenses. Often she was
reimbursed by Mr Franco from his business overdraft under the guise of “wages”.

• Other contributions

95 Ms Franco says that although she made no financial contribution directly to C

Road, she has made an indirect contribution to it. She gave evidence that she had assisted in some gardening, including the fixing of reticulation for that property. This was denied by Mr Franco. I do accept that it is likely Ms Franco did some garden maintenance of a relatively minor nature to this property from time to time.

96 Importantly, when Mr Franco borrowed money to repay his brother Ronny in

relation to C Road, the loan of about $80,000 he acquired from the ANZ Bank was secured over the W Road property. His evidence is that eventually $74,000 of that was given to his brother and $4,000 was used for air conditioning on W Road. Ms Franco was required to sign bank documents and agree to the use of W Road in this manner. She facilitated his obtaining the loan to discharge borrowings relating to C Road.

97 Ms Franco’s evidence is that from time to time she was asked by Mr Franco to

go down to the bank with her pay slips in order to facilitate his obtaining other finance. She deposes on one occasion to this being in relation to a loan for a motor vehicle. I accept that she was of assistance to him in obtaining finance for his own endeavours and to that extent has made an indirect contribution to, amongst other assets, C Road.

98 Ms Franco also deposes she assisted him in doing his BAS statements and other

taxation documents after they reconciled in 2005. He was behind and she brought his
books up to date.

99 There was considerable dispute between the parties about the carrying out of

household chores, house maintenance and gardening. Ms Franco initially said she had assumed that role and undertook approximately 85-95% of those tasks. During the course of evidence it became clear that Mr Franco gave her assistance. In her closing Ms Franco accepted that at times when he was not working that he did provide assistance, but that in the main, overall, she did the majority of the work. This concession, in all the circumstances, was appropriate. Mr Heath and Mr Ronny Franco said both parties worked around the house and did housework. I accept that neither brother was there for any extended period of time, and thus had a limited opportunity to observe. I accept Ms Franco’s evidence that overall she did more of the housework. I accept that during this de facto relationship she was more available to do such tasks which included touch up painting and gardening. However, she did have some help from Mr Franco.

100 Ms Franco was able to have her mother stay in the home when she was ill.

During that time I accept that both parties assisted Ms Franco’s mother, although

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Ms Franco, as the carer, undertook the majority of that work. Mr Franco was employed full-time as a [tradesman] over that period.

• Post-separation contributions

101 Ms Franco has continued to reside in the W Road property. She says that when

the parties separated there was $900 in outstanding rates. There is now $2,900 in such rates, although she has paid some of these expenses and currently has an arrangement in place to pay the balance by instalments. She has continued to make all the mortgage repayments over her particular loan and has carried out some maintenance on the property. She deposes to having replaced a damaged hot water system. She has maintained the swimming pool and paid for any chemicals and repairs.

102 From time to time she has had a boarder and her son in the property. This has provided her with a small income, albeit very modest.

103 Mr Franco has continued to pay mortgage repayments for the loan he has

registered over W Road and some building insurance premiums. He resides in the C
Road property.

Assessment of contributions

104 When the parties commenced cohabitation in March 2005 Mr Franco had assets

of greater value. I accept Ms Franco’s assessment that if one is to view their respective contributions as a percentage, then Mr Franco contributed approximately 56% and Ms Franco approximately 44%.

105 By the time the parties purchased W Road there was a greater disparity in the

assets they held. The main reason for this appears to be the unexplained reduction in Mr Franco’s mortgage from $70,000 in March 2005 to little or nothing a year later. When one considers his earnings over that time from the schedule provided and based on his tax returns, the Court has some difficulty, without more, in understanding how it was possible. The evidence does not support it all coming from his income.

106 There is some suggestion by Mr Franco that money was provided to him by one

of the parties’ sons, Donald. This was not contained in his affidavit. Mr Franco said the money had been repaid by 2007. However, the source from which such repayment was made is not explained.

107 Ms Franco deposes to using her income during that first year after reconciliation

for, amongst other things, general joint living expenses. She says Mr Franco used his
income for the N Street mortgage and his personal bills.

108 When they moved into W Road Ms Franco says everything she earned went to

her part of the mortgage and the parties’ living expenses. She also used her mother’s pension to assist. It is clear that when she was caring for her mother or was unemployed there was a shortfall on her mortgage which was met, at times, by Mr Franco and at times by her mother’s pension. I accept she used all her income for either the mortgage or family purposes.

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109 In relation to W Road I am satisfied on the basis of their respective incomes alone, Mr Franco made a greater financial contribution during the marriage.

110 I find Ms Franco made a greater contribution to the care of the home and the

garden. She was more available to do such chores. Her affidavit indentifies routine upkeep, decorating and maintenance which I accept she attended to. Since separation she has been responsible for the maintenance and upkeep of the home, both inside and outside. Both parties have paid their share of the mortgage. Ms Franco has had the use of the property and the income from a boarder, but she has also been primarily responsible for the property. Overall, I find they made an equal contribution to this property.

111 Although these parties maintained separate bank accounts, I am satisfied that as

time went on and especially after they were living together, there was a mixing of their finances. Ms Franco would make certain household payments and on occasions these payments would be reimbursed to her from Mr Franco’s business account. On some occasions these payments were described as wages. Again, there was no adequate information from Mr Franco as to why they were so categorised.

112 Ms Franco assisted in Mr Franco obtaining loans and allowed his use of the W

Road property for guaranteeing borrowings to repay debts over the C Road property.
He had a tenant at C Road for five months and he received that income.

113 I am satisfied that she has made some indirect contribution to his acquisition of

other assets, including C Road. It is likely she assisted him in reducing the mortgage on N Street in the first year of their resumed relationship, she enabled him to access finance to acquire assets and she did some minor garden related tasks at C Road. She assisted his business by doing some of the financial bookkeeping.

114 Although this was a short de facto relationship the parties had roles I accept

were defined in earlier times and there was not a strict separation of their finances. They did things to help each other as they had done historically throughout earlier periods of cohabitation. It is simply not possible or appropriate to define contribution in these circumstances with mathematical precision.

115 Although I accept Mr Franco made a greater initial contribution I was left in

doubt about the source of some of his finances during the period the parties were together. I have particularly mentioned the reduction in the mortgage on N Street in the first year the parties were together.

116 Both parties were prone to exaggeration when it suited their case. Ms Franco, in

my view, was more credible, consistent and reliable in her version. I accept she assisted in Mr Franco’s living expenses to some extent and he was able to reduce his mortgage to an extent he may not otherwise have been able.

117 When I take into account his greater initial contribution and greater contribution to assets apart from W Road, I find his entitlement to the global pool to be 60%.

• Section 205ZD(3) matters

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118 At trial Ms Franco had obtained employment. I am satisfied she took active

steps to obtain such employment and retraining once she recovered from both the breakdown of the parties’ relationship and the death of her mother. Both of these matters had a enormous impact on her health and wellbeing. For a period of time I accept that she was simply unable to work for this reason. In recent times she had been proactive and accepted there was no need for any adjustment as a result of these matters.

119 In turn, Mr Franco appropriately, in my view, sought no adjustment.

120 However, as I have not included all the debts of the parties in the pool of assets,

it is important I now look at these in this context. As a result of my determination, Ms Franco has to repay a debt of $12,000 on her NAB credit card and a loan to her brother of $4,000 from her part of the settlement.

121 Mr Franco has his business overdraft account of about $64,000 and a loan to his

brother which, excluding legal fees, is $32,000. Both parties have debts for legal fees.

122 Although both brothers anticipate receiving the monies owed to them after

a property settlement, I am confident that there will be no immediate or unreasonable request for repayment if that is difficult for either party immediately following my orders.

123 Ms Franco continues to work and will need to make arrangements to repay her

credit card. In turn, Mr Franco has an overdraft facility which incorporates running his business. It is a fact of his life and has been so for a considerable period of time. I was not told the limit on that overdraft facility.

124 I am not satisfied that even taking into account the additional debts each will have to pay, including legal fees, that any adjustment should be made.

The effect of the orders – are they just and equitable

125 Working on the schedule of assets and liabilities provided by the parties as

amended by my findings and given there is no adjustment for the primarily prospective factors set out in s 205ZD(3) of the Act, the total value of net assets is $643,745. The 60% to be retained by Mr Franco represents $386,247. In turn, Ms Franco will retain net assets worth $257,498.

126 Presently Mr Franco holds net assets worth $173,348. This includes the

property at C Road and the other assets in his possession. It takes into account his two mortgage liabilities and some rates which were unpaid at separation. Ms Franco currently holds net assets worth $400,397. This includes W Road and assets in her possession. She has a mortgage, her personal loan, some rates and the Family Court hearing fee. In order to achieve the percentage adjustment it will be necessary for Ms Franco to pay Mr Franco the sum of $212,899 if she wishes to retain the W Road home.

127 Mr Franco would still have to discharge his own mortgage on W Road either

utilising the funds paid to him by Ms Franco or from some other source. The parties

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may wish to simply adjust the amount of money Ms Franco is to pay Mr Franco by deducting his mortgage on W Road. I will allow Ms Franco and counsel to have some discussions about the mechanics of any such payment.

128 Ms Franco does wish to retain W Road and I intend to give her the opportunity

to do so.

129 The parties each sold a property they had lived in prior to resuming their

cohabitation in order to purchase W Road. Mr Franco has been able to acquire a further property at C Road and in which he presently lives. Ms Franco has lived in W Road since separation and continues to do so.

130 Ms Franco indicated some ability to make further borrowings. If, however, she

is not able to arrange her finances fairly quickly, the property at W Road will need to
be sold.

131 I intend to order each party pay half of the rates outstanding at separation. The

rates accumulated since separation will need to be paid by Ms Franco. She has had the use of the modest funds from her boarder and some other rent from an adult son. She has had the use of the property.

• Tools of trade

132 In the Minute of Orders Sought filed by Mr Franco he agitates for the return of

his tools of trade including all of his [tools and equipment] at the side of the house at
W Road.

133 In Ms Franco’s Minute of Orders Sought at item 1.6 she states:

“The respondent retain Pajero, Land Cruiser, truck and tools, boat.”

134 The evidence in relation to the tools was unsatisfactory. Mr Heath gave

evidence that he had [some equipment] at his home. His evidence was that as far as he knew the equipment belonged to Anthony, the son of the parties. He was not sure that they belonged to Mr Franco.

135 Ms Franco was uncertain whether there were any tools remaining at the W Road

property. I consider it appropriate to make an order for the return of any tools at the W Road property to Mr Franco. I do not intend to make any order to facilitate the return of the equipment at Mr Heath’s home. However, if Mr Heath and Anthony can have some discussions, hopefully this matter can be resolved. The tools should be returned either to Mr Franco or his son.

136 Subject to any submissions about the form of orders I intend to make I will pronounce orders as follows:

Orders

1 Within 60 days of the date hereof the Applicant, Ms FRANCO, pay to the Respondent, Mr FRANCO, the sum of $212,899.

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2 Contemporaneously with the payment set out in paragraph 1 hereof, the Respondent:

(a)	do all acts and things and sign all deeds and documents necessary to transfer his interest in the property situate at and known as W Road, in the State of Western Australia and being more particularly known as Lot 11 on Diagram 1234 and being the whole of the land comprised in Certificate of Title Volume xx Folio xxx (“W Road”) to the Applicant;
(b)	discharge the home loan account number xxxx-xxxx secured by mortgage against the title to W Road.

3 In the event that the Applicant fails or is unable to comply with paragraph 1 hereof, parties shall forthwith do all acts and things and sign all deeds and documents necessary to effect the sale of the former matrimonial home at W Road, in the State of Western Australia

4 The property be listed for sale with such real estate agent and at such a price agreed to by the parties and if there is no agreement then with the real estate agent to be nominated by the President of the Real Estate Institute of Western Australia, such agent then to set the sale price.

5 Upon settlement of sale of W Road the proceeds of sale be applied as follows:

(a)	in payment of agents’ fees, commissions and costs of sale;
(b)	in payment of the usual conveyancing adjustments such as rates and taxes;
(c)	subject to subparagraphs (d), (e), (f) and (g) the balance be distributed such as to achieve a division of all the property of the parties available at trial as to 40% to the Applicant and 60% to the Respondent;
(d)	from the Applicant’s share of the proceeds, such sum be applied to discharge the home loan account number xxxx-xxxx secured by mortgage against the title to W Road;
(e)	from the Respondent’s share of the proceeds, such sum be applied to discharge the home loan account number xxxx-xxxx secured by mortgage against the title to W Road;
(f)	there be an adjustment of outstanding rates to reflect a payment by the Respondent of $450 from his share and the balance of any unpaid rates to be borne by the Applicant from her share;
(g)	from the Applicant’s share of the proceeds an amount of $1,398 to be reimbursed to the Respondent for the Family Court hearing fee at trial.

6 Pending settlement of the sale of W Road the Applicant is to be responsible for payment of outgoings in relation to the property, including instalments of principle and interest pursuant to the home loan account number xxxx –xxxx the municipal and water rates (incurred since separation), electricity, gas and water accounts.

7 Pending settlement of the sale of W Road the Respondent is to be responsible for payment of principle and interest pursuant to the home loan account number xxxx-xxxx and the building insurance.

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8 Any interest the Applicant has in the property situate at and known as C Road, vest in the Respondent absolutely.

9 Within 7 days of the date of making or orders, the Respondent transfer and assign to the Applicant all his right, title and interest in the following:

(a)	the furniture and chattel property in her possession save and except for his tools of trade situated at the house at W Road, which the Applicant is to make available for collection by the Respondent and/or his agent;
(b)	the 2000 Toyota Camry motor vehicle; and
(c)	the Applicant’s superannuation/life insurance entitlements.

10 Within 7 days of the date of making of orders, the Applicant transfer and assign to the Respondent all her right, title and interest in the following:

(a)	the furniture and chattel property in his possession;
(b)	the Mitsubishi Pajero and Toyota Landcruiser motor vehicles;
(c)	the Respondent’s truck and tools; and
(d)	the Respondent’s superannuation/life insurance entitlements.

11 Unless otherwise specified in these orders:

(a)	each party shall be solely entitled to the exclusion of the other party to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and for this purpose, bank accounts are deemed to be in the possession of the person whose name appears on the banks records thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements;
(b)	each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(c)	the Respondent shall forthwith do all necessary acts and things and sign all necessary documents to transfer to the Applicant at the expense of the Applicant, all his right, title and interest in the property and chattels in the Applicant’s possession; and
(d)	the Applicant shall forthwith do all necessary acts and things and sign all necessary documents to transfer to the Respondent at the expense of the Respondent, all her right, title and interest in the property and chattels in the Respondent’s possession.

12 The Applicant and the Respondent do all acts and things and sign all deeds and documents to give effect to these orders.

13 All applications and responses otherwise be dismissed.

I certify that the preceding [136] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

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Associate