LUCCI and FREDA

[2022] FCWA 103

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: LUCCI and FREDA [2022] FCWA 103

CORAM: DUNCANSON J

HEARD: 1, 2 DECEMBER 2014, 28, 29 APRIL 2015, 9, 10, 11, 12, 13, 16, 17 NOVEMBER 2015, 28, 29 APRIL 2016, 2, 3 MAY 2016, 5, 6 OCTOBER 2016, 19, 20 JULY 2021

DELIVERED : 17 MAY 2022

FILE NO/S: [Redacted]

BETWEEN: MR LUCCI

Applicant

AND

MS FREDA

Respondent

Catchwords:

PROPERTY - where the parties have property in Australia and Italy - identification of the existing legal and equitable interests of the parties in their property - where it is found the husband does not have an equitable interest in a property owned by the wife - where funds provided by the wife's mother are not taken into account as a liability of the wife - where it is just and equitable to make a property settlement order - where the parties have been separated for a lengthy period - where a two pool approach is taken to the assessment of contributions - where the wife made the greater contributions - consideration of a just and equitable outcome

Legislation:

Family Law Act 1975 (Cth) s 75(2), s 78, s 79
Stamp Act 1921 (WA) s 27

Category: Reportable

Representation:

Counsel:

Applicant	:	Mr M Ryan / Ms K Smith
Respondent	:	Ms G Anderson / Self-Represented Litigant

Solicitors:

Applicant	:	Bostock & Ryan / Meillon & Bright
Respondent	:	Direct Brief / In Person

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

Biltoft and Biltoft (1995) FLC 92-614.

Browne v Green (1999) FLC 92-873.

Chorn and Hopkins (2004) FLC 93-204.

Horrigan & Horrigan [2020] FamCAFC 25.

Jabour and Jabour [2019] FamCAFC 78.

Jarrott & Jarrott [2012] FamCAFC 29.

Kowaliw and Kowaliw (1981) FLC 91-092.

Lucci and Freda [2020] FCWA 142.

Lucci and Freda [2021] FCWA 129.

Polonius & York [2010] FamCAFC 228.

Rodgers & Rodgers (No 2) (2016) FLC 93-712.

Trevi & Trevi (2018) FLC 93-858.

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lucci and Freda has been approved by the Family Court of Western Australia pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 312(b) Family Court Rules 2021 (WA)), or to record a variation to the order pursuant to r 311 of the Family Court Rules 2021 (WA).

1[Mr Lucci], the husband and [Ms Freda], the wife were in a relationship for over 17 years. They separated in 2008. The wife resides in Italy. The husband resides in Australia.

2The parties' dispute centres on a property in [Suburb A], Western Australia. In that respect they are significantly far apart. It is not in issue that the parties will retain their respective properties in Italy subject to the outcome of Italian proceedings.

THE ORDERS SOUGHT BY THE HUSBAND

3The orders sought by the husband are contained in a minute of proposed final orders filed 28 April 2015. The orders sought by him are amplified in his closing submissions filed 30 August 2021.

4The husband seeks a declaration pursuant to s 78 of the Family Law Act 1975 (Cth) ("the Act") that the wife holds [Property A] on trust for the parties as joint tenants, or in the alternative that she holds the title to Property A in trust for the parties as tenants in common in equal shares.

5The husband seeks an order pursuant to s 79 of the Act that the wife pay to him a cash sum equivalent to 50% of the agreed value of Property A. In the event the wife is unable to do so, the husband seeks the sale of Property A and to be appointed as sole trustee for sale.

6The husband's position is that Property A is likely to be worth more than the estimated value of $925,000 and accordingly he seeks an order for payment based on a percentage division of the proceeds.

7In the event orders are not made for the sale of Property A, the husband seeks an order that the wife pay to him the sum of $462,500.

8The husband proposes that otherwise the parties retain the assets and superannuation in their respective names. He proposes the parties be responsible for and indemnify each other in respect of any liabilities in their respective names.

THE ORDERS SOUGHT BY THE WIFE

9The orders sought by the wife are contained in a minute of final orders sought in her papers for the Judicial Officer filed 15 July 2021.

10The wife seeks an order that Property A and its rental income past and future vest in her absolutely, that any encumbrances placed upon Property A by the husband be withdrawn, and that the proceedings commenced by the husband in the Supreme Court of Western Australia be withdrawn.

11The wife proposes that no payment be made to the husband, either by her or by her mother, [Ms A], in relation to Property A.

12The wife proposes any liabilities in the husband's name be his sole responsibility and any property in her name vest in her absolutely.

13The wife seeks orders that the [Suburb B Properties], and [Business A] and its income, were "in commonship" between the parties. She seeks orders that the vehicles in the husband's name during the marriage and funds transferred by the husband from Australia to Italy between 2006 and 2009 are equally owned by the parties.

14The wife seeks an order that the husband repay to her the sum of $38,000 with interest, for the money he borrowed from her late father [Mr B Freda]. The wife seeks an order that the husband reimburse Ms A 14,800 euros which he "seized" from her.

15The wife seeks the return of her personal photographs and effects. She proposes that the furniture in Property A in 2006 be equally shared between the parties, and antique furniture and household effects that belonged to Ms A "be returned to her or paid back".

16The wife seeks an order that the husband pay to Ms A the sum of 23,072 euros plus interest by way of legal costs as ordered in Italian judgments.

17The wife seeks an order that no "welfare payments" are to be paid to the husband whether for himself or to reimburse him in respect of the children's welfare paid to date.

18The wife seeks an order that all her Italian properties remain vested in her, with "no rental present or past" due to the husband.

BACKGROUND

19The husband was born [in] 1961 in Italy. He is 60 years of age. He lives in Perth. He is [self-employed].

20The wife was born [in] 1960 in Australia. She is 62 years of age. She lives in [City A, Italy]. She is a [carer].

21The parties began living together in mid-1990 in Italy. They married [in] August 1995 in Italy. They have two daughters, [Child A] born [in] 1995 and [Child B] born [in] 1998. The parties and Child A immigrated to Australia in July 1996. In January 2007 the wife and children migrated back to Italy. The husband joined them in December 2007. The parties separated in early January 2008 in Italy. The husband subsequently returned to Australia. The parties were divorced [in] June 2012.

THE PARTIES AND THE EVIDENCE

22The trial commenced on 1 December 2014. It concluded on 20 July 2021 after 19 hearing days. The reasons for the delays in concluding the proceedings were many and varied and included ongoing Italian proceedings, the attendance of Italian witnesses by video link, and the requirement for interpreters. Several valuation issues arose, and the availability of expert witnesses had to be accommodated. There was a significant delay in relation to the appointment of a further single expert witness and in the receipt of his report and the translation of it. Further delays were occasioned by the COVID-19 pandemic. Several interim judgments have issued.

23There were 76 exhibits including translations of Italian documents. The exhibits extended to over 1,300 pages.

24I have considered all of the evidence very carefully. In these reasons I have not referred to all of the evidence as I do not consider it necessary, nor is it practicable to do so. If I do not refer to part of the evidence of a party or witness, it should not be assumed that I have ignored or overlooked it.

25The difficulties associated with the trial being heard over seven years are self-evident. There have been changes in the asset and liability schedule in that property has been acquired or sold, and values changed. Ultimately an exchange rate was agreed. There were intermingling references to Italian lire, euros and Australian dollars. I have had to do the best I can with the evidence in that respect.

26The husband was represented by counsel. As with the wife, these proceedings for him have been time consuming and financially draining. The husband endeavoured to give truthful evidence but, as with the wife, his evidence was coloured by the outcome he desires. He gave his evidence to the best of his recollection, but in many respects his evidence was vague and unsupported by documents. To an extent, that is understandable given the length of time that has passed since the parties separated and given that much of the evidence related to property in Italy and events which took place over decade ago. Nevertheless, there were aspects of the husband's evidence which I considered to be unclear and unreliable, for example in relation to his asserted acquisition of an interest in Property A.

27An important aspect of the husband's case was that he had acquired a 50% interest in Property A from Ms A. He gave numerous explanations as to the financial arrangements by which he said he acquired that interest. Those explanations were not always consistent and, in many respects, were not supported by documents. As discussed below, I do not accept that he acquired an interest in Property A.

28On the other hand, notwithstanding some deficiencies in the evidence, for reasons set out at [130 and 131] below, I accept the husband's evidence regarding the [Italian townhouses] to the effect he sustained an overall loss after their construction and sale.

29Another aspect of contention between the parties was the extent to which the husband had carried out work to Property A. I consider the husband sought to exaggerate the work and in particular payments made by him in that respect. Receipts were produced but some had been altered and were unreliable. I consider the wife sought to minimise the husband's efforts in this respect and I prefer the husband's evidence in relation to his non-financial contributions to Property A.

30The husband's disclosure was lacking. He used bank accounts in Italy, including in the names of relatives. In aspects of his case, he did not produce documentary evidence. For example, he failed to produce documentary evidence in relation to his savings, funds received from the sale of two of the Italian townhouses, and relevant bank statements.

31The wife was represented by counsel by way of a direct brief during part of the trial. Latterly she was a self-represented litigant. The wife gave detailed evidence often supported with documents. It appeared she had devoted considerable time to resurrecting the financial history. At times, I consider the wife lost sight of the issues, and at times focussed on minute detail which she maintained proved a particular point, for example in relation to the improvements to Property A.

32I consider the wife's evidence as to her initial contributions, and also as to the funds which were transferred to Italy in respect of the Italian townhouses, to be reliable. I also accept the wife's evidence that the husband did not acquire an interest in Property A from Ms A, or at all.

33In relation to the construction and sale of the Italian townhouses, the wife was excluded from progress and has made assumptions as to their value and the prices achieved for them, which are not supported by the evidence. She believes the husband has not disclosed the full picture in relation to the townhouses, but as discussed below that was not established upon the evidence.

34The wife cross-examined the husband in minute detail. On one occasion he simply replied "If it’s stated [in] the document, I … only can agree".

35The parties have different recollections of each other's efforts in relation to Property A.

36The wife provided a considerable amount of information which supported her position in relation to various issues. Her disclosure was however lacking. It was not until late in the proceedings that she disclosed she had sold a property in Italy and when she did so, she did not account for the entire sale proceeds. Despite requests to disclose, and her duty of disclosure, she did not give ongoing disclosure in relation to the rent received from Property A. She said in cross-examination that she did not want the husband to have any information about the rent received from Property A.

37Notwithstanding the wife's determination to question the husband in considerable detail, I am satisfied I understood her questions and the purpose of them during the time she was a self-represented litigant. Having considered the husband's evidence in answer, I was able to make findings which I am satisfied are appropriate based on the evidence which emerged from that cross-examination.

38Both parties were in no doubt about the outcome they sought in respect of the various issues. By reason of the passage of time, the reconstruction of history, and my concerns about the reliability of some of the evidence of both parties, there are aspects of this case which cannot be known or established satisfactorily. I have had to do the best I can in the circumstances.

SHORT RELEVANT FINANCIAL HISTORY

39At the time the parties met in May 1989 the husband owned and managed [Business B] in Italy. At that time the wife worked as a [clerk].

40The wife purchased a block of land at Property A for $113,000 in December 1989. It was registered in her name in January 1990.

41The parties disagree as to the date of commencement of cohabitation. The husband deposed the parties commenced cohabitation in November 1989. However, the husband also deposed to having commenced cohabitation in approximately 1993. In evidence the husband said the parties commenced cohabitation in 1993. The wife deposed the parties commenced cohabitation in mid-1990. I accept the wife's evidence in this respect as it is consistent whereas that of the husband is not.

42A house was built on Property A. Ms A provided $150,000 to the wife to fund the building of the house and the wife deposed to also using her term deposit funds of $71,000.

43The wife borrowed $30,000 from her father.

44The wife deposed she purchased a 50% share in Business B between 1990 and 1991. The husband disagreed. In 1995 the husband sold Business B for $48,000.

45The proceeds of sale were applied to joint purposes.

46In about January 1996 the husband inherited land from his mother at [Region A] in Italy.

47The husband deposed he purchased Ms A's half interest in Property A. The wife denied this. She deposed he made no financial contribution to Property A, nor did he pay any money to her or Ms A towards the loan. I refer to this further below.

48In about August 1997 the parties purchased [Property B1, Australia] in joint names for a price of $140,000. The property was secured by way of mortgage of $135,000 from [Bank B].

49In about November 1997 the parties purchased [Property B2, Australia] as an investment property in the wife's name. They paid $130,000 and borrowed $170,000 from [Bank C] secured over Property A which, at the time, was leased.

50In 1998 the parties occupied Property A.

51In mid-2001 the parties sold Property B2 for $206,250 and Property B1 for $212,500 ("the Suburb B Properties"). The net proceeds of about $108,000 were applied to the purchase of motor vehicles, shares and investments, the purchase of an interest in Business A and improvements to Property A.

52[In] September 2001 the husband commenced a partnership in Business A. He paid $22,500 for a half share in the business. Business A opened [in] October 2001.

53In June 2003 the husband's mother died in Italy.

54The wife deposed that in October 2003 Ms A and Ms A's partner, Mr C, purchased [Property C, Italy] for equivalent to $219,042 in the wife's name with the wife's power of attorney.

55The parties agreed to build on the [land in Region A]. At the end of 2006 or beginning of 2007, construction of three townhouses commenced on the land. As discussed below the townhouses were built and subsequently sold by the husband.

56After the wife and children returned to Italy to live in January 2007, Property A was placed on the market. The parties received an offer to purchase Property A [in] February 2007 which the wife did not accept.

57The husband remained in Perth to sell Business A.

58Property A was leased. Rental proceeds were initially transferred to the parties' joint account. The husband subsequently took over the management of Property A. He received the rent from about May 2007 to February 2008. Thereafter and since, the wife has received the rent.

59[In] November 2007 Business A was sold for $125,034 inclusive of stock. The husband received $61,153 for his share [in] December 2007.

60The husband returned to Italy to join the wife and children on 29 December 2007.

61The parties disagree as to the date of separation although the difference is of no consequence. The husband said they separated on 7 January 2008 and the wife said they separated on 8 January 2008.

62In February 2008 the tenants of Property A informed the husband that from March 2008 rental payments would be made to a bank account of the wife, and communications in relation to the rental would be with her.

63In about March or April 2008 the husband commenced separation and property proceedings in Italy.

64On 18 July 2008 [the Italian Court] ordered that the husband pay 500 euros per month by way of child maintenance.

65On 19 September 2009 the husband lodged a caveat over Property A.

66In late 2009 the husband returned to Australia from Italy. He proposed to move back into Property A following the end of the tenancy in May 2010. The wife refused the husband permission to occupy Property A.

67[In] January 2010 the wife's father died and his estate was divided equally between the wife and her sister. The wife received $81,688. The wife's father's property in [Suburb C, Perth] was sold in August 2011 and she received $222,622 of the proceeds. Part of these funds were applied towards the bank loan repayments and improvements in respect of [Property D, Italy]. The balance of $208,000 was invested in a term deposit with [Bank D]. The wife also inherited a 50% share in the property at [Unit E1, Italy]. Her sister inherited the other 50% share.

68The husband commenced proceedings in the Supreme Court of Western Australia. [In] July 2010 the husband obtained an order in the Supreme Court extending the caveat.

69The husband commenced proceedings in this Court on 18 August 2010. His application for property orders included interim orders for occupancy of Property A.

70On 8 September 2010 by consent, an injunction was made restraining the wife from dealing with Property A.

71On 27 September 2011 the wife’s application for a stay of the Australian proceedings was dismissed. The proceedings in the [Italian Court] and in this Court were to continue simultaneously.

72[In] November 2010 the wife purchased Property D for 290,000 euros, "@ $0.70c = equivalent to $414,285.71". In July 2011 the wife and the children moved into this property.

73On 23 October 2012 the husband was ordered to pay 800 euros per month by way of child maintenance, together with additional expenses totalling 1000 euros per month.

74The wife renewed the lease on Property A, and she continued to let the property.

75In 2013 the wife purchased her sister's 50% share in Unit E1 in Child A's name, using funds inherited from her father. She repaid Mr C funds which he had provided to her for the purchase of Property C.

76In November 2019 the wife and Child A sold Unit E1 for 143,000 euros, equivalent to $224,510. With the proceeds the wife paid a tax debt of 2,200 euros, repaid Mr C $64,000 and repaid Ms A $95,000 for loans in respect of Property D.

Property A

77The husband seeks a declaration pursuant to s 78 of the Act that the wife holds Property A on trust for both parties as joint tenants, or in the alternative as tenants in common in equal shares. This gives rise to the question as to whether he acquired an equitable interest in Property A.

78The husband deposed he and the wife agreed with Ms A that he would purchase Ms A's 50% interest in the Property A for $150,000.

79The husband deposed that he paid Ms A "the equivalent of $150,000 in Italian lira, approximately 182 million lira", and this was money that he had saved in Italy following the sale of his business after six years of work in it. At [55] of his trial affidavit filed 5 August 2013, the husband deposed the money was received by Ms A, and paid at different times as follows:

(a)90 million lira from income saved in six years of work in my business.

(b)65 million lira drawn by [Ms A] drawn from my account with my permission.

(c)18 million lira paid cash to [Ms Freda] so [Ms A] could pay her debt for three apartments [the E Units].

(d)9 million lira for expenses paid in cash by me for tradespeople for maintenance and improvements to the three [E Units] during 1989 to 1994 whilst I was looking after them. This included paining the property, erecting a pergola and putting in a waterfall, a new hot water system, new hot water radiator and a new door. I did this because [Ms A] was in Australia at that time.

(as per the original)

80In 1995 the husband and the wife entered into a preliminary purchase contract with Ms A and her siblings to purchase from them [Unit E2, Italy]. A translated copy of the preliminary contract became exhibit 19.

81The husband deposed that Ms A had not repaid him 118 million lire which she owed him, and he wanted to find a way to get his money back. He thought of a solution whereby he would buy Ms A's 50% share in Property A applying the debt owing to him as part of the purchase price. He deposed the wife said to him it was a good idea. As discussed below, I do not accept that she did. Further, I do not accept the husband's evidence of a "solution" in the absence of reliable evidence as to the basis upon which he arrived at it.

82The wife did not recall a conversation with the husband about the return of 118 million lire which he said was owed by Ms A. The wife did not agree there was ever a discussion about the value of Property A at that time being $320,000, or that the husband had acquired an interest in it.

83In relation to the preliminary contract for the purchase of the Unit E2, the husband said 20 million lire was paid from his savings prior to signing the preliminary contract and a further 70 million lire was paid upon signing the contract, a total of 90 million lire in all.

84The purchase of Unit E2 did not proceed. The husband's position is that Ms A received the 90 million lire paid.

85The wife agreed there was an intention to purchase the apartment from Ms A and her siblings, but the contract did not go ahead. She said only 20 million lire had been paid upon the preliminary contract and that comprised funds from their term deposit and savings from Business B. The wife deposed the parties got these funds back in May 1995 when the funds were deposited into their joint account with [Bank A].

86The husband gave various explanations for the transfer of funds to purchase an interest in Property A.

87In his affidavit in support of the originating summons in the Supreme Court of Western Australia, the husband deposed:

I paid [Ms A] the $150,000 equivalent in Italian lira for the property. The amount of 182 million lira was paid to her in three separate payments. 65 million lira was withdrawn from my account with [Bank A]. The balance of funds came from the sale of my [Business B].

(as per the original)

88In March 2008, the husband filed an Appeal for Judicial Separation in the Italian proceedings, a translated copy of which was included in exhibit 17 at 80T. He stated:

8.after a temporary cohabitation with the in-laws, the spouses, after living in a leased property, bought an apartment in Australia [one of the Australian Suburb B properties] and after a further year (2002) also bought the apartment next door (both later resold), and this exclusively with the savings of [Lucci] generated by his own business activity;

9.about two years later (2004) [Property A] became co-ownership of spouses [Lucci – Freda], since [Ms A] transferred her share to [Lucci] acknowledging to have received in the past, the following amounts of money:

-45,000,000 lire paid by [Lucci] to the Italian Treasury on behalf of his mother-in-law [Ms A] as an amnesty for [the E units] built in the 90's in the absence of a building permit;

-L.90,000,000 delivered by [Lucci] to [Ms A] at the time of conclusion of the purchase of [Unit E2];

-L. 50,000,000 withdrawn by [Ms A] from the bank account in the name of [Mr Lucci] and being [Bank A]

(as per the original)

89Exhibit 24 was a document prepared on behalf of the husband in the Italian proceedings which refers to a hearing in November 2008. In this document it is stated that Ms A transferred her 50% share in [Property A] to the husband, acknowledging to have received from same the following amounts of money:

- Lire 45,000,000 paid by [Mr Lucci] to the Italian Revenue Office on behalf of his mother-in- law [Ms A] as amnesty for [the E Units, Italy];

- Lire 90,000,000 given by [Mr Lucci] to [Ms A] for drawing up of the contract of sale for [one of the E Units, Italy] (attachment 10);

- Lire 50,000,000 withdrawn by [Ms A] from current account held in the name of [Mr Lucci] at [Bank A]

(as per the original)

90In evidence, the husband said he gave the wife 28 million lire to give to Ms A to pay to the shire/revenue in relation to [the E Units], which were owned by Ms A and her siblings. He said he did this because she needed money in Australia to pay for the four apartments in Italy.

91The husband said he had not separated this out from other monies spent on the apartment when the parties were living there, which amounted to 45 million lire.

92The husband said Ms A received 90 million lire from the preliminary contract for Unit E1, and the rest was taken from a bank account originating in the sale proceeds of Business B, which he recalled was about 60 to 65 million lire.

93The husband said Ms A took 60 million lire from Bank A, which were the proceeds of the sale of Business B, and that she had a power of attorney to withdraw those funds.

94The husband denied the wife was a partner in Business B. She worked in Business B, from which they earned a living, and the intention was that they would share the profit. The money withdrawn by Ms A was from a joint account. The husband said the wife gave Ms A authority to withdraw the funds from the bank account which were the sale proceeds of Business B.

95Business B was sold in 1995. The husband said it was sold for 60 million lire or $46,000 which included his capital of 12 million lire or $9,500, and the entire proceeds were placed in the parties' joint account.

96There were no documents to vouch these amounts. The husband said the funds came from his savings.

97The husband gave a slightly different account of the payments to Ms A in an affidavit filed 23 March 2011. In this affidavit the husband deposed at paragraph [5]:

… The $150,000 was the equivalent of 118 million lira or thereabouts. This amount was paid by:

(a)the cancellation of a 28 million lira debt which was money from the operation of [Business B] in [City A] which I lent to [Ms A] (by payment to her via the wife in 1999).

(b)the cancellation of the 90 million lira debt which was money from the operation of my mini market business in [City A] which I lent to [Ms A] to enable her to purchase the property referred to in paragraph 16 of my said affidavit.

(c)The remaining monies (some 65 million lira, which was more than the balance owing) paid to [Ms A] by her withdrawing that sum from my account in [Bank A], which was then closed.

(as per the original)

98The wife denied the husband's accounts of events. Her position was that he was a man of modest means and the funds he said were paid for an interest in Property A were not available to him at the time. The wife denied there was an agreement by which the husband acquired an interest in Property A. There is no evidence to suggest that she agreed to this course of action or was party to it.

99I am not persuaded that the husband acquired a half interest in Property A or that he paid $150,000 to Ms A for an interest in it. Property A has always been owned by the wife. The husband may have understood that Ms A had a half interest in it, but she did not. She did not therefore have an interest to dispose of to the husband.

100The husband's evidence as to the payments to Ms A was mostly unsupported and conflictual. As to the differences in his evidence in respect of payments made, the husband said he could not remember details properly. Mostly his evidence was not substantiated by documents demonstrating the transfer of funds as asserted by him, for example, bank statements or receipts. No documentary evidence was produced in respect of a debt due by Ms A to the Italian Revenue Office, nor was documentary evidence that it was paid by the husband.

101The husband said he had about 60 million lire or $48,000 in savings after working in Italy for about 14 years and thereafter he worked in [City A] for about five years. These were not substantiated.

102With respect to his savings, the husband said he earned around 90 million lire or about $54,000 as net profit per year from Business B. Exhibit 18 was a summary of the husband's declared business income from 1991 to 1995, which demonstrated that he was earning between about 12 to 19 million lire per year. The husband said the wife was operating the cash register and a lot of cash was not put on the books. I consider it is unlikely he accumulated savings of 60 million lire from his income.

103Exhibit 22 was a statement from Bank A in which the balance as at 28 December 1995 was 60,206,549 lire. The husband said this was the account from which Ms A withdrew funds, although this statement was to 31 December 1995 and as such did not show that withdrawal which the husband said Ms A made after 11 July 1996.

104There was no evidence to establish payment of 90 million lire for purchase of Unit E1. It was not in dispute that a 20 million lire deposit had been paid, but payment of the balance of 70 million lire was not substantiated. Payment and possession were to occur following the signing of the deed. As the sale did not proceed, I am satisfied that the balance of 70 million lire was not paid. The wife said that 20 million lire was repaid.

105There was no evidence that established an intention by the wife, who was the owner of Property A, that the husband should acquire a half interest in it. I am not persuaded that the funds which the husband said were paid to or received by Ms A for an interest in Property A were in fact paid, although there was some intermingling of finances between the parties and Ms A. The husband's position was not established on the evidence.

106I accept that the husband lived in Property A, which was the family home, and that he improved it and maintained it. This will be taken into account when considering the parties' respective contributions.

The Italian townhouses

107In January 1996 the husband inherited land from his mother at Region A in Italy. The husband denied the parties spent joint funds on the land before the parties started building on it, although the wife's position was that they did.

108In evidence the husband said the parties agreed to build on the land as an investment. Construction began in late 2006 or early 2007. The husband deposed that the parties agreed that he use some of the funds from the sale of Business A towards construction of three townhouses on the land.

109Exhibit 37 was a document titled "Schedule of money transferred to Italy by telephonic transfer". It was established and not ultimately disputed that between March 2006 and June 2008 funds totalling $213,030 were transferred from Australia to Italy to pay for the construction of the townhouses, and included joint funds from the sale of assets, savings, rental income and funds which the husband borrowed. The wife submitted the amount transferred was $232,000.

110The three townhouses were built and in September 2008 were registered in the husband's name. The townhouses were retrospectively valued by the single expert witness, [Mr D]. His findings and valuations were contained in exhibit 74. The husband accepted Mr D's valuations. The wife did not accept his valuations, but her application for a further single expert witness to revalue the properties was refused. ([2021] FCWA 129) The townhouses were valued as follows:

•[Villa Number 1].

Valued at 183,333 euros as at 3 December 2008;

•[Villa Number 2].

Valued at 178,444 euros as at 26 June 2009; and

•[Villa Number 3].

Valued at 137,209 euros as at 2 January 2014.

111The wife's contention was that Mr D's report was based only on the "cadastral floor area" of the townhouses. Mr D explained the valuation process included looking at comparable properties. The unit of measurement Mr D used was the cadastral floor area, which he had for the comparable properties.

112The townhouses were valued at Category A7, but in Mr D's research he found only properties of Category A2. Mr D explained that A2 is a civil house, whereas A7 is a property which has commercial characteristics and is characterised by an outdoor area of exclusive use. Mr D explained he took into consideration the difference in category and made a final correction to his final valuation to keep in mind that difference. Mr D explained that he could not use different units of measurement.

113Mr D explained that the wife's observations arose from the floor areas of the properties, because she thought that for the valuation of the areas of the townhouses, it was necessary to consider the external areas as well. He explained the wife was correct, but said the difficulty was that for the other properties that was not possible, and the only way to compare the properties was to consider the cadastral floor area present in the land registry search.

114Mr D stated:

So I could not consider a commercial area for a property and the cadastral area for another property for which I did not have a commercial area value available. But I took this into consideration and I actually increased the value of the properties of around 22 per cent so that I could actually make an adequate valuation comparing A2 category to A7 category.

115Mr D further explained that he chose the comparison method for valuation firstly because he had some comparable properties and secondly it involved less assumptions to be made.

116I accept Mr D's evidence.

117The husband deposed Villa Number 1 was sold off the plan in December 2008 for approximately 160,000 euros. The wife asserted it was sold for 180,000 euros in total.

118Villa Number 2 was sold to the husband's brother in June 2009 for approximately 120,000 euros. This townhouse had extra land and garden. Villa Number 2 was sold off the plan and was incomplete. The husband said he was struggling financially, and his brother completed the work.

119Villa Number 3 was sold in January 2014 for approximately 145,000 euros off the plan. Prior to its sale, the husband leased the property. The rent was paid to his sister's bank account. He did not recall producing the bank statements. He said the funds were used to pay maintenance for the children.

120The husband deposed he and the wife spent 515,539 euros on the development of the Italian townhouses as set out in the summary which became exhibit 15. This amount included funds sent from Australia, and the sale proceeds of at least the first townhouse sold. The husband deposed the total funds received from the sale of the Italian townhouses was 425,000 euros, and the net total loss from the build and sale was 90,539 euros.

121The wife's position was that the townhouses were sold for more than the husband said. She asserted the husband did not disclose the full purchase price. She said each was sold for about 180,000 euros, and the sale proceeds should be added back to the asset pool although she did not specify an amount.

122The husband was extensively cross-examined about the construction of the townhouses and payment of the sale prices. Initially he agreed he received cheques for Villas Numbers 1 and 2. He was asked for bank statements for the Italian accounts showing the deposit of the sale price of Villas Numbers 1 and 2. The husband said the amounts were included in his tax returns. He then said it was mostly cash.

123Bank statements showing the deposit of sale prices for Villa Numbers 1 and 2 were not produced. The husband explained that funds received from the sale of Villa Number 1 went directly from the purchaser to the builder and did not go into his account. With respect to Villa Number 2, the husband said it was a skeleton and sold as such and that the purchaser, his brother, completed the work. Villa Number 2 was sold for 120,000 euros.

124With respect to Villa Number 3, the sale proceeds were placed in the husband's sister's bank account as he did not have an account in Italy. The husband explained that, as his sister was not confident with transfers, on 10 February 2014 his niece transferred the amount of $218,668 to him in Australia. Subsequently, on 31 March 2014 he received a payment of $29,718 from his niece. The husband's recollection was that the later funds were not from the sale of the unit but were his savings from work done in Italy. The wife put to the husband that the second payment was the "extra". He denied there was an "extra".

125Upon the evidence, I conclude only the sale proceeds of Villa Number 3 were paid into a bank account. The husband retained these funds.

126Exhibit 15 was a bundle of documents referred to in a list headed "Summary of [Italian townhouse] Expenses". The wife disputed all handwritten notes, documents which are undated, untitled and unsigned.

127Exhibit 44 was a bundle of documents relating to the sale of the townhouses. The wife disputed the documents contained in this exhibit and was critical of them in a number of respects, including that only photocopies were provided, documents were not stamped or witnessed, and she referred to the absence of bank records, cheques and bank statements. She submitted these documents should not be relied upon.

128The documents tendered by the husband in relation to the construction of the Italian townhouses suggest complex financial transactions. Many of the wife's criticisms of the evidence are justified, nevertheless as set out below, it does not persuade me on the balance of probabilities that the husband knowingly undersold the properties or that he retained additional funds arising from the sale.

129I am satisfied that joint funds amounting to at least $213,030 were applied to the building of the Italian townhouses.

130I consider it more probable than not that the husband sustained the overall loss to which he deposed. I accept that the payments the husband received for the sale of two of the townhouses were used to pay the builder. He received the funds from Villa Number 3 and applied them to his own purposes. I will take that into account. The husband was short of funds for the construction and borrowed from friends and the wife's father. He sold the townhouses at less than the retrospective valuation, but it does not follow, and it has not been established, that he received the difference or additional funds which he did not disclose.

131The construction of the townhouses commenced as a joint venture by the parties as an investment. They separated before Villa Number 1 was completed and sold. After separation the husband had control of the building and the subsequent sales. The wife was ignorant of the financial transactions. She did not trust the husband.

132In Kowaliw and Kowaliw (1981) FLC 91-092, Baker J said at paragraph 76,644:

As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:

(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or

(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

133In Browne v Green (1999) FLC 92-873, the Full Court assessed the Kowaliw guidelines. The Full Court considered an appeal from the decision of the trial judge that the husband should be solely responsible for the loss caused by his investment in a failed business venture. The Full Court noted that the trial judge's reasons for attributing sole responsibility for the financial losses to the husband seemed to be that he was the initiator of the project and had control of it.

134The Full Court referred to the general principle that losses incurred in a marriage should be shared absent any negligence, recklessness or deliberate dissipation of assets by one party. To depart from that principle there should be "good and substantial reasons" for doing so.

135The construction of the townhouses commenced during the parties' marriage. It was completed after they separated at which time the wife may not have been "a willing participant" as described in BrownevGreen (supra). Nevertheless, the evidence does not establish a course of conduct or the type of behaviour by the husband as described in Kowaliw (supra). In these circumstances the loss sustained will not be visited solely upon the husband by adding back an amount as an asset of the husband or by any other means.

The husband's loans from the wife's father

136The wife's position is that the husband borrowed $38,000 from her father in 2008 after she left Australia and has not repaid it. The wife seeks an order that the husband pay this amount to her. The husband said he borrowed two amounts, one of which he repaid and the other was forgiven.

137The husband said he firstly borrowed an amount of $20,000 and subsequently borrowed an amount of $18,000 perhaps three or four months later. He said he repaid the first amount of $20,000 after about four months by paying $1,000 a week from his income as he had the restaurant at that time. He said the wife's father "scraped off" the second lot and told the husband "you don't owe me nothing", by which I assume he meant the wife's father wrote-off the second amount before he passed away.

138Exhibit 46 was a document headed "Money Borrowed from Friends" which is a summary of funds borrowed by the husband to build the Italian townhouses. It refers to two amounts borrowed from the wife's father, namely $10,000 on 19 February 2008 and $8,000 on 15 October 2008. In the document these amounts were described as "paid", although that is slightly different to his evidence which was that the wife's father forgave that debt.

139The husband subsequently said he only received $18,000 or $20,000 from the wife's father. I am unsure if he was referring only to funds borrowed for the purpose of the Italian townhouses, as set out in exhibit 46.

140It has not been established to me that an amount of $38,000 remains owing to the wife's father's estate and should be paid to the wife.

THE LAW

141These proceedings are governed by s 79 of the Act. Orders altering the property interests of the parties may only be made if the Court is satisfied that it is just and equitable to make such orders. The Court's discretion must be exercised in accordance with legal principles and the Court must not assume the parties' interests in their property are, or should be, different from those determined by common law and equity.

142It is necessary firstly to identify the existing legal and equitable interests of the parties in their property.

143Having identified the existing legal and equitable interests of the parties in their property, it is necessary to ascertain whether it is just and equitable to make an order altering the interests of the parties in their property. In that process it is permissible to consider the contributions of the parties, but to do so is not mandatory, nor is it conclusive as to whether the just and equitable test has been met.

144If and when the Court determines it is just and equitable for the parties' interests in their property to be altered, the Court must identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) of the Act. The Court must then identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g) of the Act which include those in s 75(2).

THE EXISTING PROPERTY INTERESTS OF THE PARTIES

145An amended schedule of assets and liabilities was provided and became exhibit 52. By agreement the exchange rate to be applied to the values was 1.59 Australian dollars to 1 euro.

146The values of assets were agreed as at 26 April 2016 in exhibit 52, with the exception of the value of Property D to which I refer below. In other respects, the schedule was updated to date of trial, for example in relation to bank accounts, legal costs and liabilities.

147Arising from the schedule of assets and liabilities the following items were in dispute.

Line items 7 and 8 – [Toyota vehicle] and [Motorcycle]

148These vehicles are owned by the husband and in his possession. He estimated the value of the Toyota vehicle to be $9,500 and the value of motorcycle to be $5,500. The wife did not agree these values. The only evidence with which I was provided was the Red Book values upon which the husband relied, which became exhibit 75. The wife had no information as to the value of these items. The vehicles are in the possession of the husband. He is likely to be aware of their condition. Doing the best I can, I accept his estimates of value.

Line items 9 and 34 - furniture

149The wife seeks orders with respect to furniture which was held in Property A as at 2006. The husband cleared the house when the wife returned to Italy and stored the furniture. He subsequently disposed of it by giving it to friends. He sold a bicycle for $80.

150The parties otherwise have the furniture in their respective possessions as listed at line items 9 and 34 of the balance sheet.

Line item 23 - Property D

151Property D is owned by the wife and is in her sole name. This property has been the subject of several interlocutory applications and decisions. On 5 October 2016, the value was agreed in the sum of 237,000 euros based on the revised valuation of the single expert witness, [Mr E]. The wife sought to depart from this agreement, but her applications in this respect were refused and my reasons of [2020] FCWA 142 and [2021] FCWA 129 refer. Applying the agreed exchange rate, the value of Property D has been included in the balance sheet at $376,830.

Line item 24 - Property A

152The parties agreed the value of Property A to be $925,000. The husband believes its value has increased. In closing the husband referred to exhibit 72, a letter of advice providing an approximation of capital gains tax based on information provided by the wife, which included an estimated sale price for the Property A of $1 million. The husband submitted that if that was the wife's position, he would adopt that valuation.

153I am not persuaded that the wife agreed $1 million should be the value of Property A for the purpose of these proceedings. In these circumstances I have included the value of the property at the previously agreed value of $925,000. If orders are made for payment of funds to the husband, the property will have to be sold. In that way it will determine its own value. The wife's position was that the effect of the husband's proposed orders was that Property A would need to be sold.

Line item 25 - Property C

154The husband asserted that in 2003 the wife purchased the Property C in her sole name. The wife deposed that in October 2003 Ms A and Mr C purchased this property for 123,000 euros "(@ 0.56 equivalent to $219,643)" in the wife's name. I accept the wife's evidence in this respect.

155Ownership of the property is registered in the wife's name, the wife said for tax purposes. The husband alleged he did not know about the purchase of this property until 2008, and he believed that part of the price might have been paid with money withdrawn by the wife from the parties' joint account. He referred to a number of withdrawals from their joint [account with Bank C] between 2002 and 2005 and alleged the amount in question was about $20,000. His allegations in this respect were not substantiated with bank statements. I accept the wife's evidence as to her acquisition of this property. The husband has not established that any part of the price was paid with joint funds.

156Ms A and Mr C lived in this property between 2003 and 2007.

157At the date of trial this property was in the wife's sole name. It has been the subject of proceedings in Italy. In 2014 the Italian Court ruled that each party had a 50% interest in it. Upon appeal in 2017 the Italian Court ruled that the wife was the 100% owner of the property. The husband has appealed this decision. At the date of trial, the Italian appeal had not been heard. As the property was determined as 100% owned by the wife, it has been included in the balance sheet as her asset.

Line item 38 – [Unit E3, Italy]

158The wife described this commercial property as a financial resource. She is the owner of the property and deposed Ms A is registered as usufructuary, meaning she has the use of the property and is responsible for its maintenance and expenses during her lifetime. The wife acquired this property in 1985. Ms A receives the rent.

159This property is in the wife's name. She owns it. The agreed value of 50,800 euros (or $80,772) will be included in the balance sheet below.

Line item 49 – wife's loan from Ms A to build Property A

160The wife said Ms A lent her $150,000 in 1992 to build Property A. The wife stated the loan was the subject of a deed of loan between her and Ms A. Exhibit 16 contains a mortgage agreement and translation of the same between the wife and Ms A dated 18 May 1990. The initial sum provided was $150,000 and the deed provides that compound interest of 9% will be applied to all amounts borrowed. The wife did not remember if the deed had been disclosed.

161On 2 December 2014, I ruled that the document was inadmissible to the extent that the wife sought to establish a mortgage over Property A by reason of s 27 of the Stamp Act 1921 (WA).

162The wife has made no repayment in respect of the funds received. The wife said the agreement was that Ms A will get her share when the house is sold.

163The husband deposed he was not told of any money owing to Ms A, and the wife did not disclose a debt against the property.

164Ms A deposed that she and the wife's father lent the wife funds to build the home on Property A, and the wife signed an agreement for the amounts loaned.

165In Biltoft and Biltoft (1995) FLC 92-614 the Full Court said at paragraph 82,127:

Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred.

166The Full Court in Rodgers & Rodgers (No 2) (2016) FLC 93-712 confirmed what was said in Biltoft (supra) at [41] where it said:

The usual practice or “rule” sits comfortably and conformably within that rubric — in many cases, perhaps almost all, liabilities will be deducted from the “gross” value of the property because it will be clear (and even if not expressly stated, determined) that the justice and equity of the case demands that the liabilities should be met by the parties in the proportions in which the court determines the property is to be divided. Liabilities that are vague, uncertain, unlikely to be enforced and the like might be treated differently because those circumstances might, in the circumstances of the particular case, render it unjust and inequitable for liabilities to be deducted in that manner. Those so-called “exceptional cases” are but instances of the broader consideration of the justice and equity of the particular case.

167The wife did not quantify an amount outstanding inclusive of interest. Although almost 32 years has passed since the date of the deed upon which the wife sought to rely, as at trial nothing had been repaid.

168I have regard to the relationship between the wife and Ms A. I take into account the intermingling of their property and income, for example, Ms A having lent the wife money to purchase Property D which the wife has since repaid. A further example is the commercial property at Unit E3 which the wife owns and of which Ms A has the usufruct. I have also taken into account the wife's inadequate disclosure in other respects. In all the circumstances, I consider this liability to be vague, uncertain, and unlikely to be enforced.

169Property A has been leased by the wife and she has received the rent. There was no suggestion that any attempt has been made to repay Ms A or that there has been a request for payment. I am not persuaded that repayment of any amount, including with 32 years of interest at 9%, will be required.

170I consider this loan is vague and uncertain and unlikely to be enforced. In these circumstances I do not intend to take this alleged liability into account in determining the existing interests of the parties in their property.

Line items 55 and 56 - wife’s loan from Mr C

171The wife owes Mr C $30,369. He has passed away and she said this money is owed to his family. She borrowed amounts of 14,600 euros and 4,500 euros from him for legal costs and travelling expenses. Applying the agreed exchange rate of 1.59 the amount owing is $30,369. I have added back legal costs paid. I will include these loans.

Legal costs

172The husband's costs notice dated 19 July 2021 became exhibit 76. He had paid legal costs of $208,263 and the source of the funds applied to paid legal costs was his capital and monies loaned from friends. At trial the husband had outstanding legal costs to his lawyers of $25,861.

173The wife has paid legal costs of $146,277. She has outstanding legal costs owed to a firm of lawyers, the recovery of which is in the hands of the liquidator of that firm. Exhibit 68 was a handwritten costs notice. It did not specify the source or sources of funds used by the wife to pay legal costs. The wife said the sources of funds from which she paid legal costs were her inheritance from her father, income from Property A, and a loan from Mr C. She did not provide further detail about this and I have had to do the best I can with the evidence in this respect.

174In Trevi & Trevi (2018) FLC 93-858 ("Trevi") Murphy J, with whom Alstergren DCJ and Kent J agreed, referred to the "guidelines" for adding back expenditure on legal fees contained within Chorn and Hopkins (2004) FLC 93-204 and subsequent cases. His Honour said:

36.Paid legal fees occupy a particular position in the consideration of addbacks by reason of s 117(1) of the Act; a matter not relevant to any other form of expenditure or dissipation of property the subject of an addback claim.

37.An order failing to addback legal costs is a pre-emptive decision about one party paying the other's legal costs. The statutorily prescribed default position is that neither party pays all or some of the other party's costs.

175At [39] of Trevi, Murphy J said the guidelines "guide the exercise of a discretion". The decision to add back, or not to add back paid legal fees is a matter for my discretion. As Murphy J pointed out:

39.… a finding that it is just and equitable to not addback an amount of legal fees so paid is a finding that it is just and equitable for the other party to contribute to the costs of the first party in that proportion as part of an overall assessment of the justice and equity governing their property division.

176In my discretion I intend to add back the paid legal costs of both parties. Had these funds not been paid in legal costs, they are likely to have been available.

THE BALANCE SHEET

177I find the property of the parties to be as set out in the balance sheet below.

178The balance sheet has been drawn from exhibit 52 and applies the same numbering. Various items have been deleted as they no longer exist.

1	HUSBAND'S ASSETS	Value $
3	[Property F]	11,130
4	[Bank E account] (Child B)	1,374
6	[Bank E account (business)] [Bank E account (life)] [Bank E business account]	349 100 1,758
7	Toyota Vehicle	E9,500
8	Motorcycle	E5,500
9	Furniture and household effects	E2,000
Paid legal costs – added back	208,263
10	TOTAL HUSBAND'S ASSETS	239,974

21	WIFE'S ASSETS	Value $
23	Property D	376,830
24	Property A	925,000
25	Property C	218,943
26	[Bank D Saver Account 1]	256
27	[Bank D Saver Account 2]	1,050
28	[Bank D Saver Account 3]	966
29	[Bank F Account]	398
34	Furniture and household effects	2,500
36	[Shares]	43,885
38	Unit E3 (commercial premises)	80,772
Paid legal costs – added back	146,277
40	TOTAL WIFE'S ASSETS	1,796,877
44	WIFE'S LIABILITIES
46	[Bank F Mortgage]	183,244
55	Mr C (personal loan)	23,214
56	Mr C (personal loan)	7,155
77	TOTAL WIFE'S LIABILITIES	213,613
78	WIFE'S NET ASSETS	1,583,264
TOTAL NET ASSETS	1,823,238
84	Husband's Superannuation	Value $
85	[Superannuation Fund A]	62,418
90	TOTAL SUPERANNUATION	62,418
95	TOTAL NET ASSETS AND SUPERANNUATION	1,885,656

179I find the total value of the parties' property to be $1,885,656.

IS IT JUST AND EQUITABLE TO MAKE A PROPERTY SETTLEMENT ORDER?

180The parties separated over 14 years ago. They are divorced.

181Following the irretrievable breakdown of their marriage and in circumstances where there is no longer any common use of property, both parties seek to alter their property interests. The wife opposes the order sought by the husband for a payment of a sum of money representing a share of Property A. She seeks an order for payment of money from him. The parties have litigated extensively in Italy and Australia and their proceedings in this Court have been lengthy and protracted. The parties seek to finalise their financial relations but that is not possible until the issues between them have been determined. In these circumstances I find it is just and equitable to make a property settlement order.

CONTRIBUTIONS

182The parties have been separated for over 14 years. In Polonius & York [2010] FamCAFC 228 the Full Court said:

93.… In a case such as this, where there was a marriage of long duration and a lengthy period of separation before the hearing of applications for property settlement, during which time significant assets were accumulated by one or both parties, it should indicate that in such circumstances it may be more useful to undertake an assessment of contributions on an asset by asset, or, category of asset by category of asset basis: see Norbis v Norbis (1986) 161 CLR 513…

183I consider it appropriate to adopt a two pool approach to the assessment of contributions. There is a division of the parties' property between their assets in Italy and those in Australia. Each party made little or no contribution to the property of the other in Italy. Further, the wife inherited funds after the parties separated and applied part of those funds to acquire her sister's share in Unit E1 in Child A's name. A careful assessment of the parties' contributions to the property in each pool is required.

184Pool A will therefore contain the parties' property, except for their property in Italy which will be contained within Pool B.

185The parties agreed that their non-financial contributions throughout the relationship were equal, however their financial contributions and their contributions of whatever kind to Property A are in dispute.

Contributions to Pool A

186Pool A comprises the following:

HUSBAND'S ASSETS	Value $
4	Bank E account (Child B)	1,374
6	Bank E account (business) Bank E account (life) Bank E business account	349 100 1758
7	Toyota Vehicle	E9,500
8	Motorcycle	E5,500
9	Furniture and household effects	E2,000
Paid legal costs – added back	208,263
TOTAL HUSBAND'S ASSETS	228,844

WIFE'S ASSETS	Value $
24	Property A	925,000
26	Bank D Saver Account 1	256
27	Bank D Saver Account 2	1,050
28	Bank D Saver Account 3	966
34	Furniture and household effects	2,500
36	Shares	43,885
Paid legal costs – added back	146,277
TOTAL WIFE'S ASSETS	1,119,934
WIFE'S LIABILITIES
55	Mr C (personal loan)	23,214
56	Mr C (personal loan)	7,155
TOTAL WIFE'S LIABILITIES	30,369
TOTAL WIFE'S NET ASSETS	1,089,565
Husband's Superannuation
85	Superannuation Fund A	62,418
TOTAL POOL A NET ASSETS AND SUPERANNUATION	1,380,827

187At the commencement of cohabitation, the husband had a one‑third share in Business B. In 1991 he acquired the business in his sole name and commenced working with the wife. The husband said that in 1991 the net profit of the business was about 90 million lire. However, exhibit 17 at 90T, the husband's tax documents, showed his earnings from Business B for 1991 to be 12,227,000 lire. The husband said the business also received cash money which was spent and not noted in the books. Business B was subsequently sold in 1995 for $46,000.

188The husband owned a Peugeot motor vehicle. It was in dispute as to whether the husband had a personal loan for 90% of the value of this vehicle.

189The husband said at the time he met the wife he had savings of $48,000. No evidence of these savings was produced. In the absence of documentary evidence in this respect, the husband's evidence about his savings was not established.

190At the commencement of cohabitation, the wife was working. She owned commercial premises at Unit E3. She also owned Italian government shares purchased in mid-1988 for equivalent to $10,500. She owned an unencumbered block of land in Australia, being Property A, and she had funds in a term deposit of $71,000 [with Bank D].

191The wife built a home on Property A with funds provided to her by Ms A. I have found that this is not a loan to be repaid by the wife. It is a contribution on behalf of the wife by Ms A.

192Both parties worked in Business B. I am not persuaded that the wife bought into this business, but I accept the parties discussed that they would share the profit received upon its sale.

193The husband continued in employment. The wife cared for the children after their birth. The husband worked in Business A after it was purchased in 2001 and he continued to work in the business until its sale in late 2007. The wife also worked in Business A. The funds drawn from the business were applied to the parties' joint purposes.

194The parties derived an income from home stay students who occupied rooms in Property A from about 1999 to 2003. The husband said he did not know where the rent paid by the students went, but the wife said those funds were applied to improvements of Property A.

195The husband inherited the Region A property, Italy in about January 1996.

196The parties purchased the Suburb B Properties which they subsequently sold.

197The share in Business A was purchased with proceeds from the sale of the Suburb B Properties.

198The parties applied funds to the building of the Italian townhouses and I refer to my findings above in this respect. I have found it more probable than not that ultimately this venture resulted in a loss.

199The parties disagree as to the extent of work carried out by the husband to Property A. The wife deposed that between 2000 and 2003 she funded and organised improvements to Property A. She said the renovations were funded by the rent she received from students, but the husband said they were funded by income from Business A.

200The husband deposed to extensive work carried out by him at Property A which the wife disputed. For example, the husband deposed he carried out major renovations to the outdoor areas, including the addition of a pool, an outdoor shower, new walls, a water feature, a barbecue area, a pergola, and paving. The wife said the parties employed tradesmen to do that work. The husband deposed $91,618 was spent by him on improvements to Property A. The wife submitted the true expenditure was $49,325.

201The husband relied on invoices dated between 2006 and 2007, although the wife said the invoices had been changed and were actually incurred five or six years earlier. Invoices referred to by the parties appeared to have been altered and in many instances were unreliable.

202The parties disagreed as to the source of the funds used to pay for the improvements, with the wife saying they were funded from student rent, and savings. The husband said the improvements were funded from the joint account of Business A and possibly some of the student rent. The parties disagreed as to the condition of Property A when they moved in. In cross-examination, the wife put to the husband it was finished and in good condition. He agreed it was in good condition but said the outside needed attention.

203I am satisfied that both parties used their best endeavours and their joint funds improving Property A. The wife organised and managed improvements. The husband did too and carried out manual work. The improvements were funded by monies available to the parties from various sources including their earnings and the student rent.

204I am unable to make any detailed finding as to who did what and who paid for what. I am satisfied the parties carried out repairs to Property A. Both contributed their efforts to the improvement of Property A. They applied what funds were available to them which included the income from Business A, the rent and perhaps funds held by the wife in Italy. Doing the best I can, I am not able to distinguish between the efforts of the parties and cannot make a finding as to who made the greater effort.

205When Property A was first leased, the rent was received by the wife's father to repay a loan. Thereafter, between August 1997 and July 1998 the rent was used to pay the mortgage over the Suburb B Properties. Property A was again leased from about May 2007. The husband received the rent until the wife changed the leasing arrangements, and the rent was diverted to her account. From March 2010 the wife excluded the husband from the property, and she continued to receive the rent.

206The wife has received the rent from Property A from about March 2008 to date. As at the date of trial, she had not disclosed the total amount received. She deposed she receives $699 per week by way of rent in her financial statement filed 12 July 2021. The husband asserted the wife has received income from Property A from May 2007 to November 2015 in the sum of $144,928. This may not be entirely accurate as the wife began receiving rent from about March 2008. The husband estimated she received a further $208,302 in rent from November 2015 to date of trial.

207The construction of the Italian townhouses was partly funded by proceeds of sale of the Suburb B Properties, Business A, and two motor vehicles, the Property A rent, and joint funds of the parties. The husband also borrowed funds from the wife's father and friends for the construction.

208After the parties separated, the wife remained living in Italy with the children and the husband later returned to live in Australia. The wife has continued to receive the rent from Property A. She has applied that to her own purposes including support of the children. The husband received the sale proceeds from Villa Number 3, and he applied those proceeds to his own purposes which he said included paying child maintenance. Prior to the sale of Villa Number 3, the property was leased, and the husband received the rent which was paid to his sister's bank account.

209The husband asserted the wife rents out a room in the home she owns. The husband has paid for private rental accommodation. The husband has paid child maintenance since 23 October 2012 when an order for payment of 800 euros per month was made for both children. He has also paid university expenses and doctor's fees. As at 14 July 2021, he estimated he had paid $300,000 since 2009, although the wife disputed this amount and submitted that the amount was considerably less. The children have lived with the wife and she has paid other expenses for them.

210The husband has accumulated superannuation since separation.

Assessment of contributions to Pool A

211The wife made the greater initial contribution, in particular the unencumbered land upon which Property A was built, her savings, and funds received from Ms A to build the home. This is a contribution by the wife which must be recognised, but I am mindful it is one of the myriad of contributions that each of the parties has made during the course of the relationship. (Jabour and Jabour (2019) 59 Fam LR 475).

212The husband contributed Business B. The parties' relationship endured for over 17 years. The husband worked, and the wife cared for the children and also worked. The parties bought and sold properties and invested in a business from which they derived an income. The parties occupied Property A as their family home for many years. They improved it and derived an income from it. The parties' funds were applied to the construction of the Italian townhouses which ultimately resulted in a loss.

213After separation the wife had full-time care of the children. The husband paid child maintenance. Both parties received funds after separation which they applied to their own purposes.

214Much of the evidence at trial concerned the parties' contributions to Property A and in particular their non-financial contributions by way of improvements and work carried out to the property. The wife minimised the husband's contributions. While many aspects of his evidence in relation to financial matters are unsatisfactory, that does not negate the contributions he made. I have not overlooked that each party made important contributions including those which do not have a nexus with Property A.

215In Horrigan & Horrigan [2020] FamCAFC 25 the Full Court said at [35]:

It is well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties' respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment.

216When I weigh the parties' respective contributions from the commencement of cohabitation to the date of trial, I conclude that the wife's contributions overall were greater than those of the husband.

217In my assessment by reason of contribution the percentage division should be 60% to the wife and 40% to the husband. The total of Pool A is $1,380,827. The effect of this finding as to contribution is that the wife is entitled to receive $828,496 and the husband is entitled to receive $552,331.

Contributions to Pool B

218Pool B comprises the following:

HUSBAND'S ASSETS	Value $
3	Property F	11,130
TOTAL HUSBAND'S ASSETS	11,130

WIFE'S ASSETS	Value $
23	Property D	376,830
25	Property C	218,943
29	Bank F Account	398
38	Unit E3 (Commercial premises)	80,772
TOTAL WIFE'S ASSETS	676,943
WIFE'S LIABILITIES
46	Bank F Mortgage	183,244
TOTAL WIFE'S NET ASSETS	493,699
TOTAL POOL B NET ASSETS	504,829

219At the commencement of cohabitation, the wife owned commercial premises at Unit E3.

220The circumstances of the wife's acquisition of this property are set out at [158] above. The wife receives rent from Property C. The husband has made no contribution to this property.

221In 2003 the husband's mother died, and he inherited a one‑eleventh share in Property F. The wife has made no contribution to this property.

222After separation the wife received an inheritance from her father set out at [67] above.

223The wife has a loan with Bank F in respect of Property D. She also had loans from Ms A and Mr C in respect of this property, which were subsequently repaid when she and Child A sold Unit E1.

224The wife inherited a 50% share in Unit E1 from her late father in January 2012. The wife received rent for that property. It was sold in 2019. The proceeds of $224,510 were spent as set out above at [76], although not all has been accounted for.

Assessment of contributions to Pool B

225Upon the evidence the husband made no contribution to the acquisition, conservation or improvement of the wife's property in Italy. There were no other relevant contributions to these properties. The wife will retain 100% of her properties in Italy.

226Upon the evidence the wife made no contribution to the acquisition, conservation or improvement of the husband's property in Italy. There were no other relevant contributions to this property. The husband will retain 100% of his property in Italy.

RELEVANT S 75(2) MATTERS

227The relevant matters to be taken into account are as set out below.

(a) the age and state of health of each of the parties

228The husband is 60 years of age. He is in good health apart from situational stress caused by the length and cost of these proceedings. There was no medical evidence in relation to the effects of the stress upon the husband.

229The wife is 62 years of age. She has osteoporosis on her spinal vertebrates and hip areas, suffers from arthritis and rheumatism, cartilage problems on the knees causing soreness and stiffness affecting her part-time [carer] work. The wife provided medical reports which state that she showed signs of [an] osteopenia condition and [vertebral] osteoporosis with increased risk of fracture.

(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

230The parties have the property as set out above.

231The husband is [self-employed]. He receives income from his business of $384 per week, and income of $106 per week from an administrator relating to a lost investment, a total of $490 per week.

232The wife deposed to being unemployed as at the date of trial. She receives dividends from shares of $26 per week, rent from Property C of $244 per week and rent from Property A of $699 per week. She has a total weekly income of $958.

(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years

233The two children of the marriage are over 18 years of age. The wife has the care of the children and they are financially supported by both parties.

(d) commitments of each of the parties that are necessary to enable the party to support:

(i)himself or herself; and

(ii)a child or another person that the party has a duty to maintain

234The parties' commitments are as set out in their financial statements. The husband pays rent for his accommodation. The wife's position is that she has a legal duty in accordance with Italian law to maintain the children of the marriage until they are economically independent. Both are currently studying. The husband pays child maintenance in the sum of approximately 800 euros per month, or $294 per week, pursuant to an order of the Italian Court.

(f) subject to sub section (3), the eligibility of either party for a pension, allowance or benefit under:

(i)any law of the Commonwealth or of a State or Territory or of another country; or

(ii)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

235The husband has the superannuation interest as set out in the balance sheet.

(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable

236Both parties seek to enjoy a comfortable standard of living in the future.

(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration

237The parties were in a relationship for over 17 years.

(m) if either party is cohabiting with another person – the financial circumstances relating to the cohabitation

238The husband is in a relationship, but it is not a de facto relationship and he and his partner do not share finances.

(n) the terms of any order made or proposed to be made under section 79 in relation to

(i)the property of the parties;

(ii)vested bankruptcy property in relation to a bankrupt party;

239An order will be made for payment of a sum of money by the wife to the husband.

(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account

240The wife was highly critical of the husband's disclosure and his failure to provide documents in relation to the costs of the construction of the Italian townhouses and his receipt of payments. There is merit to the wife's complaint in that the husband was unable to produce documents in support of his assertions as to various financial transactions.

241The wife's disclosure was also lacking. She did not disclose documents relating to the sale of Unit E1, nor did she disclose information concerning the rental income of Property A until trial.

ASSESSMENT OF S 75(2) FACTORS

242The wife has a greater income than the husband, although her income will be impacted by the orders to be made in that she expects she will need to sell Property A to pay a sum ordered to the husband. The disclosure of both parties was lacking and, in various aspects, the evidence of each of them was unreliable.

243I am of the view that the matters discussed under s 75(2) taken as a whole do not warrant any further adjustment in favour of a party.

JUST AND EQUITABLE

244The division of property in Pool A will be 60% to the wife and 40% to the husband. The total of the property in Pool A is $1,380,827. The wife's entitlement is $828,496. The husband's entitlement is $552,331.

245The husband will retain 100% of his property in Pool B. The total value of his property is $11,130. The wife will retain 100% of her property in Pool B. The total net value of her property is $493,699.

246The total of the property to be retained by the wife of Pools A and B is $1,322,195. The total of the property to be retained by the husband of Pools A and B is $563,461. The total of Pools A and B is $1,885,656. The wife will receive 70.1% of the parties' property overall and the husband will receive 29.9% overall. The differential is $758,734 or 40.2% of the parties' property.

247The husband retains the following:

POOL A	Value $
4	Bank E account (Child B)	1,374
6	Bank E account (business) Bank E account (life) Bank E business account	349 100 1758
7	Toyota vehicle	E9,500
8	Motorcycle	E5,500
9	Furniture and household effects	E2,000
Paid legal costs – added back	208,263
85	Superannuation Fund A	62,418
POOL B
3	Property F, Italy	11,130
TOTAL HUSBAND'S ASSETS & SUPERANNUATION	302,392

248The wife retains the following:

POOL A	Value $
24	Property A	925,000
26	Bank D Saver Account 1	256
27	Bank D Saver Account 2	1,050
28	Bank D Saver Account 3	966
34	Furniture and household effects	2,500
36	Shares	43,885
Paid legal costs – added back	146,277
POOL B
23	Property D	376,830
25	Property C	218,943
29	Bank F Account	398
38	Unit E3 (Commercial premises)	80,772
TOTAL WIFE'S ASSETS	1,796,877

WIFE'S LIABILITIES
POOL A	Value $
55	Mr C (personal loan)	23,214
56	Mr C (personal loan)	7,155
POOL B
46	Bank F Mortgage	183,244
TOTAL WIFE'S LIABILITIES	213,613
TOTAL WIFE'S NET ASSETS	1,583,264

249The husband's entitlement overall is $552,331. In terms of the table at [247] above the husband retains assets and superannuation to a value of $302,392.

250The wife's entitlement overall is $1,322,195. In terms of the table at [248] above the wife retains net assets to a value of $1,583,264. This table includes Property A.

251To give effect to the percentage division which I have determined to be just and equitable the wife will have to pay the husband the sum of $261,069.

252The justice and equity of the orders to be made to give effect to the above division must include a careful consideration of the consequences of those orders, particularly with respect to Property A.

253The source of funds to be paid to the husband is not readily identifiable. The wife's position was that Property A would need to be sold. Capital gains tax is likely to become due upon the sale. Exhibit 72 as referred to above at [152] provided an approximation of capital gains tax of $198,000 upon an estimated sale at a price of $1,000,000. If the liability is only estimated, it is open to me to make orders which provide for the parties to share in the liability in proportion to their beneficial entitlements as determined. (Jarrott & Jarrott [2012] FamCAFC 29).

254The husband will receive funds by way of a lump sum, but otherwise his circumstances remain modest.

255In the event of a sale of Property A, the wife will lose an income stream, but she will receive a significant capital sum which she may choose to invest appropriately. The wife should have an opportunity to consider her financial position. I intend to give the parties an opportunity to consider my findings and the proposed orders.

256Subject to hearing from the husband's counsel and the wife, and in the absence of agreement otherwise, the orders I propose to make are those set out below.

THE PROPOSED ORDERS

1Within 60 days of orders the Respondent, [MS FREDA] pay to the Applicant, [MR LUCCI] the sum of $261,069.

2Contemporaneously with the payment referred to in order 1 above, the Applicant transfer any right title or interest he may have in [Property A] to the Respondent.

3In the event the Respondent fails to pay the sum of $261,069 to the Applicant, pursuant to order 1 above, the parties do all things and sign all such documents as are necessary to place [Property A] on the market for sale as joint trustees, with a selling agent and at a selling price to be agreed and if not agreed at a selling price as recommended by the selling agent from time to time.

4Upon the sale of [Property A], the proceeds of sale be disbursed as follows:

(a)in payment of all sale costs including selling and conveyancing fees;

(b)in payment of outstanding rates and taxes;

(c)in payment of capital gains tax; and

(d)the balance be paid to the parties to effect an overall division of property 70.1% to the Respondent and 29.9% to the Applicant, with reference to the balance sheet, a copy of which is attached to these orders and in respect of which all values are fixed save and except for the value of [Property A] which shall be the actual sale price, less the actual selling costs and adjustments for rates and taxes and less the amount assessed as payable for capital gains tax.

5The parties do all such things and acts and sign all documents as necessary to minimise the capital gains tax assessed to be paid as a result of the sale of [Property A].

Other

6Unless otherwise specified in the orders, any right title and interest the Respondent may have in the following vest in the Applicant absolutely:

(a)furnishings and chattels in the possession of the Applicant;

(b)personal effects in the possession of the Applicant;

(c)[Toyota vehicle];

(d)the Applicant's [motorcycle];

(e)any money standing to the credit of the Applicant in any financial institution; and

(f)the entitlements of the Applicant in [Superannuation Fund A] and

(g) the Applicant's property at [Property F], Italy.

7Unless otherwise specified in the orders, any right, title and interest the Applicant may have in the following vest in the Respondent absolutely:

(a)furnishings and chattels in the possession of the Respondent;

(b)personal effects in the possession of the Respondent;

(c)any money standing to the credit of the Respondent in any financial institution.

(d) the [shares]; and

(e)the Italian properties including [Property D] [Property C] and [Unit E3].

8Other than as provided in these orders, the Applicant indemnify the Respondent and keep the Respondent indemnified against any debt, encumbrance or any other liability associated with any property retained by him, transferred to him, and/or in his control as at the date of these orders.

9Other than as provided in these orders, the Respondent indemnify the Applicant and keep the Applicant indemnified against any debt, encumbrance or any other liability associated with any property retained by her, transferred to him, and/or in her control as at the date of these orders.

10Except as otherwise provided in these orders, the parties shall each be solely responsible for any and all liabilities presently in the name of each of them respectively and indemnify the other party and keep that party indemnified in relation to such liabilities.

11Upon being reasonably requested in writing by the other party, the parties or cause any third party or agent acting on their behalf, to do all acts and things and sign all documents necessary, necessary to give effect to these orders.

12Both parties have liberty to apply with respect to the implementation of these orders.

13All documents produced by named persons pursuant to subpoena be returned or destroyed in accordance with the request from the named person on the expiration of 42 days from this order.

14In relation to material tendered as an exhibit into evidence in these proceedings:

(a)all parties must collect the exhibits tendered by them ("their exhibits"), from the chambers of Justice Duncanson, at least 28 days, and no later than 42 days, from today's date;

(b)all parties must contact the chambers of Justice Duncanson to arrange the collection of their exhibits;

(c)in default of compliance with subparagraph (a), all material tendered as an exhibit, save and except for material produced pursuant to subpoena, will be destroyed by the court without notice to the parties.

15In the event of an appeal being lodged prior to the expiration period of 42 days, orders 12 and 13 above do not apply.

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

RM

Associate

17 MAY 2022