Manetta & Casano
[2024] FedCFamC2F 1133
•19 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Manetta & Casano [2024] FedCFamC2F 1133
File number(s): MLC 7982 of 2022 Judgment of: JUDGE GLASS Date of judgment: 19 August 2024 Catchwords: FAMILY LAW – PROPERTY – where husband was in persistent default of his obligations to file documents – where husband failed to avail himself of two opportunities to cross-examine the wife – where matter proceeded on the wife’s evidence – where wife is solely responsible for the care of the parties’ children – where wife has been out of the workforce for 19 years – where husband has a very significant earning capacity.
FAMILY LAW – SPOUSAL MAINTENANCE – where wife is solely reliant upon investment income – where husband has very significant earning capacity.
FAMILY LAW – CHILD SUPPORT – where parties expected their children to be educated at private schools – how private school fees should be paid – whether further departure or lump sum orders are appropriate
Legislation: Child Support Assessment Act 1989 (Cth) ss 117, 123A, 124, 125
Family Law Act 1975 (Cth) ss 72, 75, 77A, 79, 90XT, 106A, 117
Superannuation Industry (Supervision) Act 1993 (Cth) sq 40
Family Law (Superannuation) Regulations 2001 pt 6
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 1.04, 8.04, 10.17, 10.27
Cases cited: Allesch v Maunz (2000) 203 CLR 172
Benson & Drury (2020) FLC 93-998
Bergmann & Bergmann (2022) FLC 94-078
Best & Best (1993) FLC 92-418
Bevan & Bevan (1995) FLC 92-600
Browne & Green (1999) FLC 92-873
NHC & RCH (2004) FLC 93-204
Clauson & Clauson (1995) FLC 92-595
Colgate-Palmolive Company v Cussons Pty Limited (1994) 46 FCR 225
Cooke & Morton (2018) FLC 93-820
Crick & Bennett (2018) FLC 93-832
Dickons & Dickons (2012) 50 Fam LR 244
DJM & JLM (1998) FLC 92-816
Dulton & Dulton (2020) FLC 93-984
Fewster & Drake (2016) FLC 93-745
Gadhavi & Gadhavi (2023) 67 Fam LR 174
International Finance trust Company Limited v New South Wales Crime Commission (2009) 240 CLR 319
Isles & Nelissen (2022) FLC 94-092
Kioa v West (1985) 159 CLR 550
Kohan & Kohan (1993) FLC 92-340
Kowaliw & Kowaliw (1981) FLC 91-092
LGM & CAM & Others [2008] FamCA 185
Masoud & Masoud (2016) FLC 93-689
Marchant & Marchant (2012) FLC 93-520
McCrossen & McCrossen (2006) FamCA 868
Mitchell & Mitchell (1995) FLC 92-601
Morgan & Valverde (2022) FLC 94-100
Munday & Bowman (1997) FLC 92-784
Naparus & Frankham (2020) FLC 93-943
AJO & GRO (2005) FLC 93-218
Prantage & Prantage (2013) FLC 93-544
Rankin & Rankin (2017) FLC 93-766
Re F: Litigants in Person Guidelines (2001) FLC 93-072
Rosati & Rosati (1998) FLC 92-804
Saso & Saso (2023) 66 Fam LR 571
Simmons & Simmons (2023) FLC 94-137
Spano & Spano (1979) FLC 90-707
Stanford v Stanford (2012) 247 CLR 108
Storstrand & Storstrand [2024] FedCFamC1A 128
Trask & Westlake (2015) FLC 93-662
Trevi & Trevi (2018) FLC 93-858
Vida & Vida (2023) FLC 94-164
Weir & Weir (1993) FLC 92-338
Yarrow & Yarrow(No 3) (2023) FLC 94-155
Division: Division 2 Family Law Number of paragraphs: 195 Date of hearing: 29-30 July 2024 Place: Melbourne Counsel for the Applicant: Ms McCreadie Solicitor for the Applicant: Velocity Legal Counsel for the Respondent: The Respondent appeared in person ORDERS
MLC 7982 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS MANETTA
Applicant
AND: MR CASANO
Respondent
ORDER MADE BY:
JUDGE GLASS
DATE OF ORDER:
19 AUGUST 2024
Amended pursuant to rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) on 11 September 2024.
THE COURT ORDERS THAT:
1.Within 30 days, the Husband pay to the Wife the sum of $100,000 by way of lump sum spousal maintenance, this being an Order to which section 77A of the Family Law Act 1975 (Cth) applies, with interest payable on any outstanding amount at the rate prescribed by rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
2.Within 30 days, the Husband pay to the Wife the sum of $123,362 for the school tuition fees and levies for X born in 2006 and Y born in 2008 at B School, such payment not to reduce the annual rate of child support payable by the Husband under any relevant administrative assessment, with interest payable on any outstanding amount at the rate prescribed by rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
Property
3.The Wife be appointed Trustee to have the conduct of the sale of the property at C Street, Town E (Town E property) being the whole of the land more particularly described in the Certificate of Title Volume … Folio … on behalf of the Husband including but not limited to:
(a)appointing D Real Estate, Town E as selling agent;
(b)appointing F Conveyancing as the conveyancer;
(c)determining the mode of sale;
(d)fixing a reserve price for the sale in consultation with the selling agent;
(e)accepting any offer or bid made by any prospective purchaser;
(f)completing and executing any Section 32 statement or other documents required to complete the sale;
(g)executing any Contract of Sale in the name of the Husband and to bind the Husband thereto;
(h)signing all documents and doing all acts and things on behalf of the Husband as may be required under the Contract of Sale and to complete the sale;
(i)effecting a transfer of the property to the purchaser; and
(j)distributing the proceeds as set out in these Orders
with the Wife to keep the Husband advised of all decisions made in relation to the sale of the property.
4.Upon settlement of the sale of the Town E property, the proceeds be applied as follows:
(a)firstly, to pay all costs, commissions and expenses of the sale including agent’s fees and commissions, and conveyancing costs;
(b)secondly, to pay any outstanding rates relating to the property;
(c)thirdly, the sum of $180,000 to remain held on trust in an interest-bearing trust account in the Wife’s name to meet any capital gains tax incurred as a result of the sale in accordance with paragraph 7;
(d)finally, the balance then remaining to the Wife.
5.Within 30 days of the settlement of the sale of the Town E property, the Husband pay to the Wife the sum of $X to be calculated in accordance with the following formula:
$X = [(A + $3,201,035) × 65%] - $1,283,749 - A
Where:
A is the balance remaining consequent upon compliance with the sale of the Town E property and payments required by paragraphs 4(a), (b) and (c) of these orders;
$3,201,035 is the total value of the non-superannuation property interests of the parties as found excluding the value of the Town E property, expected costs of its sale, and anticipated capital gains tax liability; and
$1,283,749 is the total value of the other property to be retained by the Wife as found;
with interest payable on any outstanding amount at the rate prescribed by rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021.
6.Pending the settlement of the sale of the Town E property:
(a)the Wife have the sole use and occupation of the property and be permitted to receive all rental income from the property;
(b)save as may be required to give effect to these Orders, neither party shall be authorised to increase the debt balance of loan or mortgage, encumber or further encumber the property without the express written consent of the other party; and
(c)the parties hold their interests in the Town E property on trust pursuant to these orders.
7.The $180,000 to be held on trust pursuant to paragraph 4(c) be applied in payment of any capital gains tax incurred as a result of the sale of the Town E property, and any balance remaining be distributed in the proportions of 65% to the Wife and 35% to the Husband SAVE THAT in the event the Husband has not complied with his obligations pursuant to paragraphs 1, 2 and 5, the Husband’s share of the monies held in trust be first applied to pay to the Wife such sum of the outstanding balance as is then outstanding and the remaining balance, if any, be paid to the Husband.
8.If no capital gains tax liability arising from the sale of the Town E property has been incurred within 24 months after settlement of the sale of the Town E property, the monies held in trust pursuant to paragraph 4(c) above be distributed 65% to the Wife and 35% to the Husband SAVE THAT in the event the Husband has not complied with his obligations pursuant to paragraphs 1, 2 and 5 the Husband’s share of the monies held in trust be first applied to pay to the Wife such sum of the outstanding balance as is then outstanding and the remaining balance, if any, be paid to the Husband.
9.Pending the Husband’s compliance with his obligations to make the payments to the Wife pursuant to paragraphs 1, 2 and 5, save to give effect to these payments with the express written consent of the Wife, the Husband be restrained from encumbering or further encumbering the property at 1 G Street, Suburb H, in the State of Victoria (1 G Street property) being the whole of the land more particularly described in the Certificate of Title Volume … Folio ….
10.Subject to these Orders the Husband retain the 1 G Street property.
11.Contemporaneously with the Husband’s compliance with his obligations to make the payments to the Wife pursuant to paragraphs 1, 2 and 5, the Wife will do all acts and things to remove caveat number … encumbering the 1 G Street property at her sole expense.
12.Within 7 days of the date of these Orders the Husband in his personal capacity and in his capacity as sole director and shareholder of J Pty Ltd do all acts and things and sign all documents necessary to authorise the transfer of 100% of the shares held in the K Group to the Wife, or at her direction (K Group shares Transfer).
13.The Wife forthwith authorise the monies in the Velocity Legal Trust Account to be distributed as follows:
(a)the sum of $57,150 to Ms L;
(b)the sum of $10,000 to Y;
(c)the sum of $10,000 to X;
(d)such sum as is required to discharge the Wife’s capital gains tax liability (of approximately $293,419);
(e)the sum of $100,000 to remain held on trust in an interest-bearing trust account in the Wife’s name to meet any potential liability relating to the O Company insurance claim in accordance with paragraph 14; and
(f)the balance then remaining to the Wife.
O Company Insurance Claim
14.The $100,000 to be held on trust pursuant to Order 13(e) be applied in payment of:
(a)any liability required to be paid as a result of the claim by O Company relating to the property at P Street, Suburb H, Victoria (P Street property);
(b)any legal costs and disbursements associated with the claim and/or defending any court proceedings commenced by the insurer; and
(c)any balance remaining be distributed 65% to the Wife and 35% to the Husband SAVE THAT in the event the Husband has not complied with his obligations pursuant to paragraphs 1, 2 and 5, the Husband’s share of the monies held in trust be first applied to pay to the Wife such sum of the outstanding balance as is then outstanding and the remaining balance, if any, be paid to the Husband.
15.If no court proceedings are commenced relating to the P Street property within 24 months of the date of final orders the monies held in trust be distributed 65% to the Wife and 35% to the Husband SAVE THAT in the event the Husband has not complied with his obligations pursuant to paragraphs 1, 2 and 5, the Husband’s share of the monies held in trust be first applied to pay to the Wife such sum of the outstanding balance as is then outstanding and the remaining balance, if any, be paid to the Husband.
16.In the event the monies held in trust are not sufficient to meet the liability and legal costs associated with this claim then the Husband and Wife be equally responsible for the shortfall.
Corporate Entities & Trust
17.Save as provided for in these Orders, the Husband:
(a)retain his interest in the income and assets of Q Pty Ltd, J Pty Ltd, R Pty Ltd and the J Investment Trust (Corporate Entities and Trusts);
(b)be restrained from distributing income to the Wife from the 2021 financial year onwards.
18.The Husband do all such necessary acts and things and sign all such documents as may be required to release (if required) and indemnify, and keep indemnified, or cause the Corporate Entities and Trusts to release and/or indemnify, and keep indemnified, the Wife in relation to all past, current and future debts, liabilities, interests, costs or outgoings of whatsoever nature and kind including but not limited to those in relation to:
(a)any and all creditors of the Corporate Entities and Trusts;
(b)any and all borrowings of the Corporate Entities and Trusts of whatsoever kind and nature;
(c)any and all liability to the Australian Taxation Office owing by the Husband personally and Corporate Entities and Trust including any interest, costs or penalties applicable thereto;
(d)any liability of whatsoever nature and kind, including taxation liabilities, arising from the operations of the Corporate Entities and Trusts; and
(e)any and all hire purchase and/or lease liabilities in respect of any assets owned by the Corporate Entities and Trusts.
Superannuation
19.That having been accorded procedural fairness paragraphs 20 to 23 (inclusive) of these Orders are binding upon the Husband and Wife personally and in in their capacity as the directors of the Trustee of Super Fund 1.
20.Within 28 days of the date of these Orders the Wife do all acts and things and sign all documents as may be required to establish her own complying self-managed superannuation fund or nominate a compliant fund and upon doing so, forthwith provide the Husband with the details of the name of the fund and the trustee, a notice pursuant to section 40 of the Superannuation Industry (Supervision) Act 1993 (Cth) that the fund is a complying superannuation fund and any other details of the fund required to give effect to these Orders.
21.Pursuant to subsection 90XT(1)(a) and (b) and of the Act the parties as Trustees of the Fund do all acts and sign all documents necessary:
(a)transfer and roll out to any superannuation fund or as directed by the Wife (acting in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001) a sum equivalent to 50% of the Fund to be calculated as 50% of the K Group Shares held by the Fund and 50% of the balance of the N Bank Account (Wife’s superannuation split);
(b)make any appropriate adjustment to the Husband’s interest in the Fund so that at the date of the Wife’s superannuation split, the Husband’s superannuation entitlement in the Fund is 50%; and
(c)upon the Wife’s superannuation split taking effect, the Wife do all acts and sign all documents necessary to:
(i)resign as a director of the Trustee and transfer her shareholding the Trustee to the Husband or at his direction; and
(ii)resign as a member of the Fund.
22.Pending the Wife’s superannuation split, the parties be and are hereby restrained from doing any act or thing or giving any direction which would have the effect of reducing or prejudicing the Wife’s superannuation split.
23.Contemporaneously with the Wife’s superannuation split, the Husband pay and continue to pay and indemnify the Wife in relation to the Fund, and any past, present or future liability of the Wife personally arising out of her involvement in the Fund and any corporate trustee of the Fund.
Liabilities
24.Save as provided for in these Orders, the Husband and the Wife be solely responsible for and indemnify the other against and in relation to all, mortgage repayments, taxation, credit cards and other debts and liabilities of whatsoever kind and nature in their respective sole names.
Other Assets
25.The Wife otherwise retain for her sole use and benefit free from any claim by the Husband:
(a)monies in any bank accounts in her sole name;
(b)Motor Vehicle 1;
(c)the household contents and personal effects in her possession and of the Town E property; and
(d)save as provided for in these Orders, her superannuation entitlements.
26.The Husband otherwise retain for his sole use and benefit and free from any claim by the Wife:
(a)monies in any bank accounts in his sole name;
(b)the proceeds of sale of the T Company shares;
(c)the funds advanced to Mr U and Mr V;
(d)Motor Vehicle 2;
(e)the household contents and personal effects in his possession; and
(f)save as provided for in these Orders, his superannuation entitlements.
27.Unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these Orders;
(b)each party forego any claims they may have to superannuation or other work related benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the policy holder named therein;
(d)each party 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; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
28.That the Husband and Wife do all acts and things and give all consents and execute all documents and writings necessary to give effect to the Orders made within 7 days of a request from the other party.
29.In the event the Husband refuses or neglects to sign any documents necessary to give effect to these Orders within 7 days of being requested to do so, then pursuant to Section 106A of the Family Law Act 1975 (Cth) the Wife is hereby appointed to execute any document necessary to give validity and operation to these Orders without the requirement of any further Affidavit material being filed by the Wife.
Costs
30.The Husband pay the Wife’s costs of and associated with:
(a)the Husband’s failure to provide full and frank financial disclosure in accordance with Part 6.1 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) including relating to the issuing of numerous subpoenas in the sum of $15,627.95;
(b)the Wife’s Contravention Application filed 21 December 2022 in the sum of $5,833.26; and
(c)the Wife’s Counsel’s fees for attendance at hearing on 12 February 2024 in the sum of $5,500.
31.All extant applications be dismissed.
BY CONSENT, THE COURT ORDERS THAT:
32.Any application for costs be filed by way of written submissions within 14 days.
33.Any reply to any such application for costs be filed by way of written submissions 14 days thereafter.
34.Any such application for costs be determined in chambers without the need for appearances by or on behalf of the parties.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE GLASS:
Ms Manetta and Mr Casano commenced cohabitation in 2002, married in 2004, separated in September 2019 and were divorced in 2023. They have three children, Ms M, now 19 years old, X, now 17 years old, and Y, now 15 years old. The children live with Ms Manetta and spend no time with Mr Casano.
Arising for determination are Ms Manetta’s applications for orders altering the parties’ interests in property, child support and spousal maintenance. It is convenient to address them in that order.[1]
[1] Clauson & Clauson (1995) FLC 92-595 (“Clauson”) at 81,907; Masoud & Masoud (2016) FLC 93-689 at [165] & [167].
Procedural Matters
Mr Casano defaulted in his obligations to file material in advance of the final hearing. He made a number of submissions critical of the procedure adopted to determine Ms Manetta’s application. It is convenient to first address those procedural matters, and give reasons for my determination that Mr Casano not be afforded a third opportunity to cross-examine Ms Manetta.
Procedural fairness relevantly requires each party to be provided with “an opportunity to be heard, to advance its own case and to answer, by evidence and argument, the case put against it”.[2] Fundamentally, “each party needs to know the case the opposing party seeks to make, how that party seeks to make it, and be given the opportunity to meet it”.[3] Parties are to be given an adequate opportunity to advance their case, present material information and make submissions.[4]
[2] International Finance trust Company Limited v New South Wales Crime Commission (2009) 240 CLR 319 at [54] per French CJ.
[3] Bergmann & Bergmann (2022) FLC 94-078 at [25] and the cases there cited.
[4] Allesch v Maunz (2000) 203 CLR 172 at [35] per Kirby J; Yarrow & Yarrow (No 3) (2023) FLC 94-155 at [31] citing Kioa v West (1985) 159 CLR 550 at 582 per Mason J.
The Full Court in Cooke & Morton held as follows:
As the authorities show, it is a fundamental general principle of natural justice that a party to litigation has a prima facie entitlement to have the proceedings heard in the party’s presence and to be given an opportunity to be heard before an order affecting some right, interest, entitlement or privilege of the party is made. The opportunity to be heard usually includes the right to know the case advanced against the party; the opportunity to answer that case; the opportunity to dispute an opponent’s case by cross-examination of the opponent’s witnesses; and the right to adduce evidence in support of the party’s own case and to make submissions, before an order is made.
…
However, those same authorities show that both the content, and application of the, the rules of natural justice are flexible requiring fairness to all parties in the circumstances of the particular case.[5] (emphasis in original)
[5] Cooke & Morton (2018) FLC 93-820 at [33]-[34] and the cases there cited.
In managing the conduct of the proceedings, I have a responsibility to take “such steps as are necessary to ensure the effective and efficient management of the hearing”.[6] Modern courts “have a responsibility to efficiently and effectively case manage matters”, though case management principles “should not supplant the objective of doing justice between the parties according to law”.[7]
[6] Simmons & Simmons (2023) FLC 94-137 at [44].
[7] Simmons at [45] citing Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175 at [30].
Importantly, Mr Casano does not have a right to cross examine, but rather a right to a fair trial.[8] Although cross examination would ordinarily be permitted at a hearing where one party is in default,[9] it is permissible to deny the defaulting party that opportunity.[10]
[8] LGM & CAM & Others [2008] FamCA 185 at [199], [208]; Naparus & Frankham (2020) FLC 93-943 at [19]-[20] and the cases there cited.
[9] Saso & Saso (2023) 66 Fam LR 571 at [19]; Morgan & Valverde (2022) FLC 94-100 at [35].
[10] Storstrand & Storstrand [2024] FedCFamC1A 128 at [27] and the cases there cited.
These proceedings were initiated by Ms Manetta in July 2022. On 8 September 2023, directions were made listing the matter for final hearing to commence on 12 February 2024. Mr Casano was directed to file and serve any Amended Response setting out with particularity the final orders sought, an updated single consolidated trial Affidavit, any witness affidavits, and an updated Financial Statement no later than 14 days prior to that hearing. Mr Casano did not file any of the required documents in advance of that hearing.
On 12 February 2024, the proceedings were adjourned. Agreement was reached for Mr Casano to sell some shares and retain their proceeds. Ms Manetta submits that it was agreed Ms Manetta would use those funds to obtain legal representation. Mr Casano advised that he spent those funds on living costs. He did not obtain legal representation.
On 12 February 2024, Mr Casano was again directed to file relevant material for the adjourned trial 28 days prior to its commencement. He again failed to file any of the prescribed documents at any time.
The consequence of Mr Casano’s failure to file any of the directed material is that Ms Manetta had no prior notice of any orders sought by Mr Casano. She also had no prior awareness of any evidence upon which Mr Casano would seek to rely.
Mr Casano was not present at Court when the matter was called shortly after 10:00am on the first day of the adjourned final hearing on 29 July 2024. Shortly after 10:00am, Mr Casano sent an email to the Court and Ms Manetta’s representatives advising that he was delayed and expected to be present in court by 10:30am. With the consent of Ms Manetta, the matter did not commence until 10:37am. By that time, there was still no appearance by Mr Casano.
I raised with Ms Manetta’s Counsel a number of preliminary matters with respect to the substantive application which necessitated the matter being stood down while instructions were taken from Ms Manetta. Mr Casano attended Court at approximately 11:10am.
Court reconvened at 12:52pm, by which time Mr Casano had been given an amended Minute of Proposed Final Orders which was more favourable to him than the orders sought in Ms Manetta’s Second Further Amended Initiating Application filed on 1 July 2024. He did not object to the Court receiving that amended proposal. The orders finally sought by Ms Manetta are contained in Exhibit A1.
Mr Casano applied for a further adjournment of the proceedings, relying on a letter from his psychologist dated 21 July 2024. For reasons given after the luncheon adjournment, that application was refused.
Pursuant to paragraph 10.27(1)(g) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, I have a discretion to proceed on Ms Manetta’s evidence. I am satisfied that the interests of justice, including the purpose of facilitating a just resolution of the dispute according to law as quickly, inexpensively and efficiently as possible,[11] are served by a finalisation of the proceedings. Consistent with that rule, Mr Casano was afforded the opportunity to tender or rely on documents, to cross-examine each of Ms Manetta’s witnesses, and to make submissions.
[11] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 1.04.
In accordance with my obligations pursuant to Re F: Litigants in Person Guidelines,[12] I explained to Mr Casano the procedure that would be followed for the hearing. I explained that he could seek leave to rely on material or documents notwithstanding his non-compliance with the Court’s directions to file material. He sought to rely on no material previously filed in the proceedings, nor did he seek to tender any documents other than his psychologist’s letter dated 21 July 2024.
[12] (2001) FLC 93-072 at [253].
Mr Casano was afforded an opportunity to object to evidence adduced on behalf of Ms Manetta. He made no such objections.
Ms Manetta relies on the documents particularised in her Outline of Case filed 25 July 2024. When that reliance was confirmed with Mr Casano, he was granted a brief adjournment to consider whether he sought to cross-examine any of the deponents to the relevant affidavits. After that adjournment, he advised that the only witness he sought to cross-examine was Ms Manetta. The other affidavits relied on by her were accordingly read into evidence without objection.
Ms Manetta duly commenced giving oral evidence at 2:51pm. She confirmed the accuracy of the contents of her Trial Affidavit and Financial Statement of 1 July 2024. Mr Casano then indicated to the Court that he was unprepared for cross-examination of Ms Manetta. He sought some time to prepare, eventually seeking an adjournment of one hour to do so. I ultimately granted that request, adjourning the proceedings until 10:00am the following morning to allow him time to prepare his cross-examination.
Mr Casano was again absent from Court at 10:00am on the second day of hearing. In the event he was unexpectedly delayed, Court did not commence sitting until 10:09am. Mr Casano continued not to be in attendance. Unlike the previous day, no correspondence was received from him suggesting that he was delayed. Ms Manetta’s Counsel accordingly proceeded to make final submissions.
Mr Casano entered the courtroom at 10:43am. Ms Manetta concluded her submissions shortly thereafter. Mr Casano then proceeded to respond to some of those submissions.
Mr Casano then made an application to re-open the evidence in order to cross-examine Ms Manetta. That application was refused for reasons which I now give.
As the authorities to which I have referred make clear, Mr Casano is to be afforded an opportunity to cross-examine witnesses. He was afforded that opportunity just before 3:00pm on the first day of hearing. He was granted an indulgence of adjournment of that cross‑examination until 10:00am the following day. He did not take up either opportunity.
When asked where he was at 10:00am on the second day of hearing, Mr Casano advised that he had been trying to print Ms Manetta’s Trial Affidavit. That is a document that had been filed on 1 July 2024. It had been referred to, and clearly identified to him as a document relied on by Ms Manetta’s Outline of Case filed 25 July 2024, and during the proceedings the previous day. Mr Casano offered no explanation as to why he was still trying to print it at, or shortly before, 10:00am on 30 July 2024. He submitted that he didn’t have an excuse for being late, but that he was just “panicking”.
Despite Mr Casano’s protestations, he was not deprived of the opportunity to cross-examine Ms Manetta or her witnesses. He had that opportunity at 2:54pm on 29 July 2024, and at 10:00am on 30 July 2024. He took advantage of neither opportunity.
Mr Casano submitted that “without the opportunity for cross-examination… then a large part of the evidence would not be available”. The submission belies the fact that Mr Casano has had since September 2023 to prepare and adduce evidence for the purpose of the final hearing. It is that failure that has resulted in evidence that he would otherwise seek to adduce being unavailable to the Court. For the reasons already given, I also reject the submission that he was denied the opportunity for cross-examination.
Mr Casano submitted that “I wasn’t at all aware that… if I wasn’t standing here at 10:00am, that there would be no opportunity for cross-examination”. Again, I reject the assertion that Mr Casano was not afforded the opportunity to cross-examine. I am also not satisfied that I was under any obligation to advise Mr Casano that in the event he did not attend Court at the allocated time, he would lose the opportunity to undertake the task for which the adjournment had been granted. Mr Casano is a professional.
Mr Casano submitted that without the opportunity to cross-examine he had “no opportunity to put my case in any way to you”. I reject the submission. He has had since September 2023 to prepare and adduce evidence in any case he sought to put to the Court.
Mr Casano sought to re-open the evidence to cross examine Ms Manetta for the following purposes:
·“to draw out any of the matters from the trial affidavit which would give your Honour the wrong impression”;
·“to draw out some additional material”;
·“to draw out some issues that, as they currently stand in the documentation would give your Honour a certain impression of how things have been, of what occurred, and I’m hoping to draw out some of those things are not as they’ve been described”;
·“hoping to draw attention to some inconsistencies”;
·“to draw out additional information”; and
·“drawing out some additional information which would show that the overall impression that’s given via this affidavit on virtually every topic is potentially misleading”.
Mr Casano submitted that he was not seeking to challenge the contents of the affidavit as such, but rather he was seeking to adduce further evidence through cross-examination in order to correct misleading impressions. The difficulty with the submission is that Mr Casano’s opportunity to adduce evidence was afforded to him through the direction to file material in advance of the trial in February 2024 and then before the adjourned trial in July 2024. It was not an opportunity he was deprived of by virtue of his failure to exercise his opportunities to cross-examine.
Evidence in this Court is by way of affidavit.[13] If there was evidence Mr Casano wished to adduce, he had ample opportunity to do so by filing affidavits. Ms Manetta was entitled to know what evidence Mr Casano sought to rely on in advance of the final hearing. To grant Mr Casano leave to re-open the proceedings after the conclusion of the evidence, enabling him to adduce further evidence not in the form of an affidavit, would deprive Ms Manetta of knowing the evidence upon which Mr Casano sought to rely prior to the final hearing. As the authorities make clear, procedural fairness must be afforded to both parties.
[13] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 8.04.
Given Mr Casano was afforded two opportunities to cross-examine Ms Manetta, the purposes for which he sought re-open the evidence, and the lack of excuse for his absence at 10:00am on the second day of hearing, I was not satisfied that I should re-open the evidence to afford Mr Casano a third opportunity to cross-examine Ms Manetta.
Mr Casano made clear on multiple occasions thereafter his dissatisfaction with that determination.
Mr Casano was given ample opportunity to make submissions from 11:06am on the second day of hearing until 4:26pm. During those submissions, I directed Mr Casano’s attention to a number of the submissions that had been made in his absence, and explained a number of significant integers of the case against him. However, he required repeated reminding that his submissions were to be “limited to the matters that are the subject of evidence”.[14] As I repeatedly explained to Mr Casano, I am unable to take into account factual assertions made by him which were not the subject of evidence.
[14] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r. 10.27(1)(g)(iii).
PROPERTY
Ms Manetta proposes that Mr Casano pay her the sum of $377,000 in order to give effect to a distribution of the value of the parties’ non-superannuation assets such that she retain 65% of their value and Mr Casano retain 35% of their value. She seeks the sale of a property in Town E, and that she retain the proceeds of that sale. She proposes that Mr Casano transfer shares to her. She also proposes that funds currently held on trust for the parties be applied to various debts, an amount of $100,000 be retained on trust to satisfy any future insurance claim in relation to a property in Suburb H, and she retain the balance then remaining. She otherwise proposes that she retain 50% of the value of the parties’ self-managed superannuation fund.
Pursuant to section 79 of the Family Law Act 1975 (Cth), I have a discretion to make such order altering the parties’ interests in property as I consider appropriate. I am prohibited from making an order unless I am satisfied, in all the circumstances, it is just and equitable to do so.[15] If I am so satisfied, I am required to consider the matters prescribed by subsection 79(4) of the Act and by the device of paragraph 79(4)(e), relevant matters referred to in subsection 75(2) of the Act.
[15] Family Law Act 1975 (Cth) s 79(2).
Other than to make an assertion that the 65/35 split proposed by Ms Manetta was unfair, Mr Casano essentially did not make any submissions with respect to those statutory considerations.
Property interests
It is necessary to begin by identifying, according to common law and equitable principles, the existing legal and equitable interests of the parties in property.[16] For reasons that follow, I find those interests to comprise the following, treating assets owned by entities controlled by Mr Casano as assets owned by him:
[16] Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) at [37].
Asset O'ship Value Monies owed to X and Y Jt ($20,000) O Company insurance claim intended but not yet made Jt ($100,000) Legal fees owing in relation to P Street Insurance Claim W ($3,096) ANZ Bank Accounts W $931,409 Funds held by Velocity Legal on trust W $593,390 Motor Vehicle 1 W $45,125 Capital Gains Tax referrable to P Street W ($293,419) G Street, Suburb H H $1,780,000 C Street, Town E H $1,650,000 Anticipated sale costs of Town E H ($50,000) Anticipated Capital Gains Tax payable upon sale of Town E H ($180,000) K Group Shares H $187,500 NAB accounts H $15,899 S Company Investment H unknown Motor Vehicle 2 subject to finance H unknown Addback lump sum spousal maintenance, school fees and arrears of child support H $231,459 Addback funds transferred to Mr U H $104,689 GST Liability H ($214,761) Liability to Ms L H ($57,160) Total non-superannuation interests $4,621,035 Super Fund 1 Jt $2,044,993 Super Fund 2 W $39,393 Total superannuation interests $2,084,386 Total property interests $6,705,421
The assertions made by Ms Manetta with respect to the parties’ interests in property are contained in her Outline of Case filed 25 July 2024.
Ms Manetta asserts, and Mr Casano accepts, that X and Y are owed $20,000 from an inheritance. Mr Casano said that he did not understand why it was being brought into account in the proceedings. The failure to include the sum as a debt of the parties would be to ignore the children’s interest in the funds which are currently held on their behalf by their parents.
In early 2023, Ms Manetta received notification from O Company of its intention to sue the parties for water damage to a property adjacent to the property formerly owned by the parties at P Street, Suburb H. The sum sought to be claimed was $74,864.33. Ms Manetta proposes, and Mr Casano does not oppose, $100,000 being held on trust to satisfy any such claim in the event it is made. Distribution of any unused funds is proposed in the same proportions as the distribution of the value of the parties’ non-superannuation assets. In those circumstances, I will deduct the $100,000 from the value of the parties’ assets and liabilities, noting it represents approximately 2% of the value of the parties’ interests in non-superannuation property. It is agreed in the event those funds are insufficient, the parties will contribute equally to the shortfall.
Ms Manetta contends for the inclusion of an outstanding liability for legal fees incurred by her in relation to the P Street insurance claim. Mr Casano made no submissions with respect to the assertion. Given his concession that the parties should be jointly responsible for meeting the costs of any claim from O Company, I am satisfied that the legal fee liability ought be treated as a liability of the parties.
Ms Manetta asserted values for bank accounts in her name. Mr Casano made no submissions with respect to those values. I accept Ms Manetta’s assertions as to the value of the bank accounts in her name in the absence of any contrary assertion.
I also accept Ms Manetta’s assertion as to the value of her motor vehicle absent any contrary assertion.
Ms Manetta asserts that her capital gains tax liability ought to include both the substantive taxation liability of $293,418.75 and a general interest charge of $25,621.96, less a subsequent tax return credit of $359. Inconsistently, she asserts that a goods and services tax liability associated with an entity controlled by Mr Casano should be included at its value of $214,761, ignoring what she deposes to being “substantial interest and penalties” of “approximately $100,000”.[17] Mr Casano accepts Ms Manetta’s evidence that the penalties and interest on his GST liability would likely be waived. I accept his submission that a consistent approach ought be taken with respect to both parties’ taxation liabilities. I will disregard the general interest charge and tax return components of Ms Manetta’s claimed liability in order to ensure consistency of approach.
[17] Affidavit of Ms Manetta filed 1 July 2024, paragraph 162.
Ms Manetta contends for the inclusion of the Suburb H property at a value of $1,780,000. The property is registered in Mr Casano’s name, and occupied by his mother. Mr Casano variously asserted that “the asset doesn’t really exist right now… in practical terms”, it is a “bare interest that can’t be … monetised”, it “cannot be treated like just another monetisable property”, and “no value can be realised from this property for perhaps 10 years”. The Court noted on 12 February 2024 that the parties agreed that Mr Casano’s interest in the property was subject to a life interest in favour of Mr Casano’s mother.
Mr Casano ultimately contended that the value of the Suburb H property should be reduced by $240,000, being the value ascribed to the life interest by the Single Expert valuer, Mr W.
There is no evidence of any agreement between Mr Casano and his mother in relation to the property. Ms Manetta gives evidence of the parties agreeing “it would be nice” for them to provide their parents with a property in which they could reside until they moved into retirement living.[18] She deposes to Mr Casano’s mother selling her apartment in 2015 and gifting the proceeds to the parties, which were used to renovate the Suburb H property. Ms Manetta deposes to the arrangement of Mr Casano’s mother transferring the parties $300,000 being a “gesture of goodwill” to allow her to live in a larger property while continuing to receive her pension.[19] She deposes to Mr Casano’s mother living in the property rent free, and paying rates and outgoings for the property. That evidence is uncontradicted and unchallenged, I accept it.
[18] Affidavit of Ms Manetta filed 1 July 2024, paragraph 84.
[19] Affidavit of Ms Manetta filed 1 July 2024, paragraph 92.
Inconsistent with Mr Casano’s assertions to the Court that he cannot realise the value of the Suburb H Property, Ms Manetta deposes to Mr Casano’s mother telling her that Mr Casano had “on a number of occasions” “threatened to sell” the Suburb H property after the completion of the parties’ property settlement.[20] In the absence of objection to that evidence, I am entitled to take it into account despite its form.[21] Absent any articulation of a basis upon which to reject the evidence, I accept it.
[20] Affidavit of Ms Manetta filed 1 July 2024, paragraph 94.
[21] Crick & Bennett (2018) FLC 93-832 at [57]; Isles & Nelissen (2022) FLC 94-092 at [98] and the cases there cited.
That the parties have previously agreed Mr Casano’s mother has a life interest in the property does not establish the assertion. Mr Casano was unable to articulate how that life interest is established pursuant to legal or equitable principle. His actions of threatening to sell the property are inconsistent with his assertions to this Court. In those circumstances, I decline to discount the value of the Suburb H property because of his assertion of his mother having a life interest in it.
I will accordingly ascribe the Suburb H property its unencumbered value of $1,780,000, as opined without challenge by Mr W.
Mr Casano did not challenge the asserted value of the Town E property. The value is consistent with the expert evidence before the Court which I accept.
Ms Manetta seeks the sale of the Town E property. It is registered in Mr Casano’s name. Mr Casano submits that capital gains tax will be incurred in the event of the property’s sale. He adduces no evidence of the likely tax. He submits it would be “difficult to know what the number would be” but, assuming the top marginal tax rate applies, a sale price around the valuation amount, and a cost base of approximately $950,000, it could be in the order of $175,000 or $180,000.
Ms Manetta opposes allowance being directly made for the anticipated capital gains tax liability. She contends that it cannot be taken into account as a dollar figure. She opposes its inclusion as a liability to be paid on the basis that it may increase the amount Mr Casano would be required to pay Ms Manetta. She contends that Mr Casano’s history of non-filing of his taxation returns should also be taken into account, although I am unable to locate any evidence in support of the submission.
Even though Ms Manetta agrees that allowance could be made for the capital gains tax liability pursuant to paragraph 75(2)(o) of the Act, the general position in the event a sale is ordered is that allowance should be made for capital gains tax payable as a result.[22] To fail to make such an allowance has the effect of Mr Casano not retaining the value of property otherwise considered to be just and equitable.[23]
[22] Rosati & Rosati (1998) FLC 92-804 at [6.36].
[23] Vida & Vida (2023) FLC 94-164 at [41] and [53].
Despite the lack of evidence in relation to the issue, I am satisfied that allowance should be made for capital gains tax from the sale of the Town E property. Such an approach is consistent with Ms Manetta’s submission, also made without evidence, that an allowance of $50,000 should be made for selling costs. Mr Casano did not cavil with such an allowance being made. I will accordingly allow an anticipated amount of $50,000 for the sale costs of the Town E property.
In relation to the potential capital gains tax liability for the Town E property, I propose to adopt a similar approach to that proposed by Ms Manetta in relation to the potential O Company claim relating to the P Street property. I will provide for an amount of $180,000 to be held in trust pending the capital gains tax liability being incurred, and the distribution of any balance then remaining between the parties in the relevant proportions. Again, I will include that potential liability in the balance sheet, noting it represents approximately 3.5% of the value of the parties’ non-superannuation assets.
I accept Ms Manetta’s unchallenged assertion of the value of shares in K Group. I also accept her unchallenged assertion as to the current balances in Mr Casano’s bank accounts. He adduced no evidence to the contrary.
Ms Manetta asserts that Mr Casano has an interest in S Pty Ltd. She does not adduce evidence of its value. I will give further consideration to that asset in my consideration of the paragraph 79(4)(e) matters.
Ms Manetta asserts that Mr Casano has an interest in Motor Vehicle 2 subject to finance. Despite Mr Casano’s failure to provide any disclosure with respect to the vehicle, Ms Manetta does not assert a value for his interest in it. In those circumstances, I am unable to ascribe it a value.
Ms Manetta contends that a number of items should be treated as addbacks in the balance sheet. Add-backs are both discretionary and exceptional.[24] Ordinarily, I am to take the property of parties as I find it.[25] Mr Casano is not required to go into a state of suspended economic animation after separation and is entitled to conduct his affairs in a manner consistent with getting on with his life.[26]
[24] Dulton & Dulton (2020) FLC 93-984 at [32] citing Trevi & Trevi (2018) FLC 93-858 at [30] (‘Trevi’) and AJO & GRO (2005) FLC 93-218 (‘AJO & GRO).
[25] Trevi at [29] and the cases there cited.
[26] Trevi at [29] and [73] and the cases there cited.
Ms Manetta submits that funds paid pursuant to interim Orders made 21 February 2023 for spousal maintenance, school fees and child support arrears totalling $231,459 ought be added‑back as a notional asset of Mr Casano. The prior characterisation of those payments cannot now limit my discretion.[27] However, to fail to add those funds back would have the effect of Ms Manetta contributing proportionally to payments made to her for that purpose. For reasons upon which I will expand, I am satisfied that Mr Casano had an income earning capacity to meet those payments from income. I am accordingly satisfied that their characterisation was appropriate in the circumstances, despite Mr Casano’s submission that capital funds previously made available to Ms Manetta were intended by him to be applied to living expenses. I am satisfied that the addback contended for is appropriate in the circumstances.
[27] Marchant & Marchant (2012) FLC 93-520 at [44].
Ms Manetta contends that a sum of $104,689 ought be added back for funds transferred by Mr Casano to his partner, Mr U. Mr Casano conceded the add back. I am satisfied it is appropriate in those circumstances.
Ms Manetta otherwise contends for the addback of assets or funds, the benefit of which has been retained by Mr Casano. The relevant bases for the assertions appear to be that there has been a premature distribution of matrimonial assets or waste or wanton, negligent or reckless dissipation of assets.[28]
[28] Trevi at [27] citing AJO & GRO.
The first such addback contended for by Ms Manetta relates to the proceeds of sale of T Company shares in the amount of $105,495. The second such addback in the amount of $22,850 is described as “addback of unknown transactions and transactions to [Mr V]”.[29] The third such addback in the amount of $36,500 is described as “unexplained lump sum withdrawal” [30] by Mr Casano. The fourth, in the amount of $35,744, is described as “monies paid in payment of unpaid Land Tax at settlement of [Z Street]”.[31] Those amounts total $200,589, representing nearly 4% of the value of the parties’ non-superannuation assets.
[29] Ms Manetta’s Outline of Case filed 25 July 2024, page 3.
[30] Ms Manetta’s Outline of Case filed 25 July 2024, page 3.
[31] Ms Manetta’s Outline of Case filed 25 July 2024, page 3.
Mr Casano commenced employment with T Company after separation. He acquired shares in the entity in early 2022, some 2 months after the parties’ separation. The transactions underlying the assertions of add-backs all relate to the period after separation. It is not suggested that Mr Casano applied funds in existence at the time of separation to the various uses contended for. To add-back the sums sought would have the effect of requiring Mr Casano to go into suspended economic animation after separation. The evidence does not establish that he has depleted matrimonial assets. Essentially what is alleged is that he applied post separation income to his own purposes. I am not satisfied the circumstances are exceptional warranting the add-backs contended for.
I am also not satisfied that the unpaid land tax amount of $35,744 should be added back. Ms Manetta deposes that Mr Casano “ought to have been meeting those land tax payments from his income”.[32] The basis of that obligation is not articulated. The circumstances are not of an exceptional kind warranting the add-back sought.
[32] Ms Manetta’s Trial Affidavit filed 1 July 2024, paragraph 157.
Mr Casano submits that Ms Manetta’s paid legal fees ought be added-back. That course would ordinarily be followed to avoid making a pre-emptive decision about one party paying the other’s legal costs contrary to the statutory position prescribed by subsection 117(1) of the Act.[33]
[33] NHC & RCH (2004) FLC 93-204 at [39].
The difficulty with the submission is that Mr Casano did not tender into evidence, nor did Ms Manetta seek to rely on her Costs Notice filed in anticipation of the hearing. Further, Mr Casano has incurred his own legal costs about which I have no evidence. In particular, I have no evidence of the source of funds applied by either party towards their legal fees. Mr Casano’s submission was made for the first time in his closing address, without prior notice to Ms Manetta, after the evidence had been concluded. He has failed to establish the assertion by evidence admitted in the proceedings. As I repeatedly explained to him, I am unable to have regard to factual assertions made by him without evidentiary foundation.
Mr Casano took no issue with the amount asserted by Ms Manetta to be owed to Ms L of $57,160.
Ms Manetta contends that the parties’ self-managed superannuation fund is worth $2,044,933, and that she has superannuation interests worth $39,393. Mr Casano took no issue with the latter contention but submitted that the self-managed superannuation fund has no value approaching the amount contended for by Ms Manetta. He pointed to no evidence before the Court to establish the submission. Ms Manetta deposes to the basis for her valuation of the superannuation fund by reference to documents relating to the fund’s principal asset, being a shareholding in K Group. I accept her unchallenged evidence of value absent any objection to that evidence.
Justice and equity
Ms Manetta seeks an alteration of the parties’ property interests in order to finally determine the financial relationships between them.[34] Mr Casano did not contend that it is not just and equitable to make an order altering the parties’ interests in property.
[34] Family Law Act 1975 (Cth), s 81.
Mr Casano is the owner of the two assets of most significant value, being the parties’ real estate interests. Pursuant to interim Orders of the Court, Ms Manetta has the sole use and occupation of one of those real properties.
As a result of the parties’ separation, they no longer have common use of their property. The “express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship”.[35]
[35] Stanford at [42].
I am satisfied it is just and equitable to make orders altering the parties’ interests in property.
Contributions
I am required to take into account the parties’ financial and non-financial, direct and indirect, contributions to the acquisition, conservation or improvement of property.[36] I am also required to take into account the parties’ contributions to the welfare of the family.[37]
[36] Family Law Act 1975 (Cth), s 79(4)(a-b).
[37] Family Law Act 1975 (Cth), s 79(4)(c).
At the commencement of the parties’ relationship, the parties had assets of nominal value. Mr Casano owned an apartment in Suburb AA, although it had limited equity in circumstances where he had paid the deposit on a credit card.
At the commencement of the parties’ relationship, Ms Manetta was employed in as a sales representative. In 2005, the parties’ first child, Ms M, was born. Since that time, Ms Manetta has been engaged in full time home duties. She has also project managed the parties’ various property development projects. She was primarily responsible for home and parenting duties for the parties’ three children.
Mr Casano is a professional and has been employed throughout the parties’ relationship. He worked long hours and frequently travelled interstate and overseas. Between 2009 and 2017, he was earning between $1,175,000 to $1,300,000 per annum. Between 2017 and late 2019, he was promoted to another large company, earning approximately $2,000,000 per annum.
In 2009, the parties purchased a property at BB Street, Suburb CC for $2,725,000. It became the family home. It was renovated in 2013. It was sold in early 2021 for $4,800,000. It was then encumbered by a debt of $3,969,150. The proceeds of sale were applied to outstanding bills and liabilities. Ms Manetta continued to lease the property thereafter until recently relocating to another rental property with the children.
In 2013, the parties purchased a property at 1 G Street, Suburb H for $1,200,000. The purchase was funded by joint savings and a mortgage. The property was initially rented. In 2015, the property was subdivided. The parties built and sold 2 G Street which was sold for $1,250,000. Mr Casano’s parents occupied 1 G Street from approximately 2015. 1 G Street was substantially renovated, including through the application of $300,000 from Mr Casano’s mother. Both of Mr Casano’s parents lived in the property rent free until the passing of his father in 2018. Since that time, Mr Casano’s mother has resided in the property rent-free. I do not place significant weight on the injection of funds from Mr Casano’s mother nearly 9 years ago in circumstances where both her and her late husband have received the benefit of rent‑free accommodation since that time.
In 2015, the parties purchased a property at DD Street, Suburb CC with the intention of developing the property into 6 apartments. Council approval to do so was not obtained, and the property was sold in 2018. This resulted in the GST liability of $214,761 being incurred.
In late 2015, the parties acquired the Town E property for $450,000 funded by way of mortgage. They bulldozed the existing home and relocated to the site a home from Suburb EE which had been acquired for $200,000. Substantial renovations were also undertaken.
In mid-2017, the parties acquired a 50% interest in a property at Z Street. It was sold for a loss in early 2024, generating proceeds of sale of approximately $118,000. Those funds were deposited into Ms Manetta’s solicitor’s trust account.
In late 2017, the parties invested $250,000 in a start-up company, FF Company. The company was sold to GG Company in mid-2021. The parties received a return of approximately $5,885,000 in separate tranches. From those funds, $2,000,000 was transferred to Ms Manetta and $2,100,000 was transferred to Mr Casano. Contrary to Mr Casano’s oral submissions to the Court, Ms Manetta deposes that $100,000 was retained by each of the parties to meet their living costs. I accept that unchallenged evidence. Remaining funds from the FF Company investment were applied to the repayment of debts and liabilities. In late 2022, Ms Manetta applied $1,296,117 of the funds then held by the parties to taxation liabilities in Mr Casano’s sole name.
Also in 2017, Mr Casano invested $1,000,000 in S Company. The funds were borrowed from the National Australia Bank. Ms Manetta does not now assert a value for that investment. I will return to it in consideration of the subsection 79(4)(e) factors.
In late 2018, the parties purchased a property at P Street, Suburb H for $4,350,000 using equity in the former matrimonial home, the Suburb H property and the Town E property. It was sold in late 2022. Proceeds of $6,036,496 were applied to discharge the loan facilities secured against the property, including the loan for the Town E property and the Suburb H property, an investment loan account in Mr Casano’s name of $758,862, and the S Company investment loan in the amount of $1,101,880. Remaining proceeds of $69,484 were deposited into Ms Manetta’s solicitor’s trust account.
Since the parties’ separation in September 2019, the children, who were then aged 14, 12 and 10 years old, have lived with Ms Manetta. They have not spent any frequent or regular time with Mr Casano. Ms Manetta has accordingly been overwhelmingly responsible for the parenting contributions for three teenage children for a period of nearly five years.
Although Mr Casano initially made capital available to Ms Manetta to apply to her support, he has failed to pay child support as administratively assessed, with the result that he is now in arrears in the sum of $59,619. Pursuant to interim Orders made in February 2023, a lump sum was distributed from the parties’ then capital to pay Mr Casano’s then outstanding child support in the amount of $31,459.18.
Mr Casano contends that the child support assessment is inappropriate due to the disclosures made by Ms Manetta to the relevant government department. There is no evidence to support the submission. Mr Casano also suggests that if the assessment had been accurate, he would not have had to pay child support. There is no evidence of Mr Casano seeking any departure from the administrative assessment of child support. I decline to find, on the basis of Mr Casano’s submission without evidence, that there is any inappropriateness in the administrative assessment of child support.
Mr Casano undertook various roles for T Company from late 2019. Ms Manetta’s unchallenged evidence is that from May 2020, Mr Casano was receiving between $7,500 and $70,700 per month from T Company for advisory services and board fees. In an application for finance from HH Company in late 2021, he declared his then income to be $62,000 per month, or $744,000 per annum. He continued to invoice T Company for work done until late 2023. Despite his legal obligation to do so, he has not provided for the support of his children from that income.
Mr Casano acquired the shares in K Group in early 2022.
All of the parties’ contributions must be weighed collectively,[38] and assessed holistically.[39] I am satisfied that those contributions favour Ms Manetta particularly given the circumstances arising after the parties’ separation.
[38] Benson & Drury (2020) FLC 93-998 at [35] and the cases there cited.
[39] Dickons & Dickons (2012) 50 Fam LR 244 at [21]; Gadhavi & Gadhavi (2023) 67 Fam LR 174 at [42].
I accept her contention that her contributions to the non-superannuation assets ought be assessed as favouring her by a differential of 5%, equating to a dollar amount of $231,052. I accordingly find Ms Manetta’s contributions to the parties’ non-superannuation assets to be 52.5% and Mr Casano’s contributions to be 47.5%.
No submissions were specifically directed to the contributions to the parties’ superannuation interests. I am satisfied that after a relationship of 17 years and a post separation period of nearly 5 years, those contributions should be assessed equally.
Paragraphs 79(4)(d, e, f and g) and subsection 75(2) factors
Ms Manetta is now 55 years old.
In early 2017, Ms Manetta was bedridden for 5 months. She had a medical condition. She was reliant upon support from her sister and Mr Casano’s mother for assistance in the care of the children. She was hospitalised for a brief time. Despite extensive testing, numerous doctors were unable to determine a cause of her illness. Ms Manetta researched her symptoms and requested to be tested for a specific disease. The test was positive. The source of the infection was Mr Casano. When confronted with the diagnosis, Mr Casano lied to Ms Manetta, asserting that he had shared a needle to use illicit drugs. This disease cannot be transmitted in that fashion. In approximately late 2019, Mr Casano told Ms Manetta that he had been having affairs with men.
Ms Manetta’s disease triggered a medical condition. The medication prescribed to treat her symptoms caused serious illnesses. She continues to be treated for the medical condition triggered by her disease.
After separation, Ms Manetta developed an illness which causes her ongoing pain. The medical condition was brought on by chronic stress, which Ms Manetta attributes to Mr Casano’s conduct in these proceedings and the bullying, harassment and veiled threats of self-harm made by Mr Casano in correspondence with her since mid-2022. She has been bedridden for some weeks with chronic pain as a result of her medical condition. She requires regular tests to monitor it. She is prescribed anti-anxiety medication.
Ms Manetta’s current income derives solely from interest earned on savings held in bank accounts in her name and the rental income from the Town E property.
Ms Manetta is solely responsible for the care and support of the parties’ two minor children, now aged 17 and 15 years. X is completing his final year of schooling. Y is in Year 10. Both attend upon psychologists to manage their mental health. They feel abandoned by their father. Mr Casano has not spent time with X since December 2022. He has not spent time with Y since mid-May 2023.
The parties’ eldest child, Ms M, continues to live with Ms Manetta. She is studying at university.
Mr Casano is 52 years old. Ms Manetta deposes that he is in good health.
Mr Casano relies on a report from his psychologist, Mr JJ, who assesses him to suffer from a “treatment-resistant [mental health condition]”.[40] He opines that Mr Casano “is experiencing a mental health condition that might limit his capacity to function currently, namely in his current legal proceedings.” [41] He goes on to opine that:
… if [Mr Casano’s] circumstances were to positively shift. Namely, the court proceedings were behind him, he gained meaningful work, and re-engaged with the close relationships in his life, many of his symptoms would significantly reduce.[42]
[40] Exhibit R1.
[41] Exhibit R1.
[42] Exhibit R1.
As Mr Casano concedes, that evidence does not demonstrate he is currently unable to work. Indeed, Mr JJ predicts a significant improvement in his symptomatology upon the conclusion of these proceedings, obtaining meaningful work, and re-engaging with close relationships.
I am not satisfied that Mr Casano’s health is such that he is prevented from engaging in full‑time employment.
In late 2019, Mr Casano resigned from his employment as a professional. Ms Manetta deposes that since that time Mr Casano “has elected not to work in any regular capacity”.[43] She also deposes that Mr Casano “has no impediment to exercising his earning capacity to its full extent”, which she avers to exceeding “$500,000 and could be as much as $2M.”[44] That evidence is unchallenged and uncontradicted. Mr Casano has had ample opportunity to depose to the circumstances of him resigning from his equity partnership and his choice not to work in a regular capacity. His submissions to the Court that he is unable to work in his previous capacity are unsupported by evidence.
[43] Affidavit of Ms Manetta filed 1 July 2024, paragraph 41.
[44] Affidavit of Ms Manetta filed 1 July 2024, paragraph 225.
Mr Casano commenced a de facto relationship with Mr U in late 2019. Mr Casano has not disclosed the financial circumstances relating to their cohabitation. He directed his own dividend income from T Company to Mr U.
Mr Casano has failed to provide any disclosure with respect to the $1,000,000 investment in S Company. The funds borrowed for the purpose of that investment were repaid upon the sale of the P Street property. In late 2021, Mr Casano told Ms Manetta the investment was valued at $2,000,000. I can place no weight on Ms Manetta’s evidence that Mr Casano asserts in his unsworn affidavit filed 13 February 2023 that he “was liaising with accountants regarding a write off of that investment”. I can also place no weight on Mr Casano’s representations to the court that the relevant entity is in liquidation, absent any evidence of that fact. His proposal that the asset be transferred to Ms Manetta was raised for the first time in oral submissions after the close of the evidence. It was not accepted by Ms Manetta and I decline to give it any further consideration absent Ms Manetta having an opportunity to formally respond to the proposal.
It is certainly the case the financial losses incurred by parties ought ordinarily be shared by them.[45] However, here I have no evidence that a loss has in fact occurred. Mr Casano has deliberately failed to disclose his financial circumstances to the Court for the purpose of this final hearing. I should not be unduly cautious about making findings in favour of Ms Manetta.[46]
[45] Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644 - 76,645; Browne & Green (1999) FLC 92-873 at [53].
[46] Weir & Weir (1993) FLC 92-338 at 79,593.
I consider the possibility that Mr Casano may receive a return on the $1,000,000 investment to be a financial resource available to him.
Mr Casano is in default of his obligations to pay child support as assessed for the children at the rate of $43,816 per annum.
Ms Manetta has the exclusive care of the parties’ children and has been out of the paid workforce since 2005. She has no professional qualifications. Mr Casano is a professional. He has a very significant earning capacity given his earnings of between $1,1750,000 and $2,000,000 from 2009 until 2019. The evidence does not establish that he no longer has that very significant earning capacity.
Although my findings on contributions will result in Ms Manetta retaining non-superannuation assets with a value of $2,426,042 and Mr Casano retaining assets worth $2,194,992, I consider a significant adjustment in favour of Ms Manetta is warranted given the matters to which I have referred.
Ms Manetta contends that the adjustment should create a differential between the parties of a further 25% of the value of their non-superannuation interests, or $1,115,259. Given that amount is substantially less than Mr Casano’s annual income in the final two years of the parties’ relationship, I am satisfied that an adjustment of that magnitude is appropriate in the circumstances. It has long been recognised that in most cases the most significant “asset” which a party can take out of a marriage is a substantial and reliable income earning capacity.[47]
[47] Clauson at 81,911; citing Best & Best (1993) FLC 92-418 at 80,295.
Ms Manetta proposes that the parties’ self-managed superannuation interests worth $2,044,993 be distributed equally and she retain her superannuation interest worth $39,393. She accordingly proposes to retain 51% of the value of the parties’ superannuation. I am satisfied that modest adjustment in her favour is warranted in light of the matters to which I have referred.
Property Conclusions
Ms Manetta proposes to be appointed trustee for the sale of the Town E property. Mr Casano opposes the proposal. He sought an opportunity to retain the property. There was no evidence he could point to establishing he has any capacity to do so. In order for him to do so, he would need to raise further funds equating to the value of the property. He was unable to articulate how he would do so, other than to say it could be done in a matter of days. As Ms Manetta submits, ordering the sale of the property does not preclude Mr Casano from acquiring it at market if he is able to do so. Absent any evidence of his capacity to retain the Town E property, I decline to afford him a further opportunity to seek to retain the property. He has been on notice of Ms Manetta’s application to sell the property since at least 1 July 2024. He has not advanced any formal proposal to retain the property since trial directions were first made in September 2023.
I am satisfied that Ms Manetta ought be appointed trustee for the sale of the Town E property. For reasons I have already canvassed, Mr Casano has been non-compliant with the Court’s directions. He has failed to make disclosure of his financial circumstances. He failed to comply with an interim Order made on 17 November 2022 to direct a payment of funds into Ms Manetta’s solicitor’s trust account until 8 February 2023. He failed to comply with interim Orders made 21 February 2023 to provide Ms Manetta with the keys to the Town E property upon her sole occupation of it from early 2023. Mr Casano made some suggestion that Ms Manetta retains personal property of his, including in the Town E property. I note that pursuant to interim Orders made 21 February 2023, he was at liberty to remove his personal belongings from the property prior to 10 March 2023.
In light of Mr Casano’s repeated defaults on his obligations, I am not satisfied that he will cooperate in a timely fashion with the sale of the Town E property. I am accordingly satisfied of the appropriateness of Ms Manetta being appointed trustee for its sale upon the terms proposed by her.
Ms Manetta proposes that funds of $100,000 be held on trust for the parties to satisfy the intended, but not yet made, claim by O Company against the parties in relation to the P Street property. The possible claim relates to water damage to a neighbouring property. In the event no claim is made within 24 months, she proposes the distribution of those funds to the parties in the same proportions as the distribution of the parties’ non-superannuation assets. Mr Casano took no issue with the quarantining of funds for that purpose. He made no submissions with respect to the other order sought that the parties meet any insufficiency between the quarantined funds and the claim equally. I am satisfied that proposal is appropriate.
Ms Manetta’s proposed orders do not specify what is to happen with any proceeds held in trust in the event only some of the funds held on trust are needed to meet the claim. It is appropriate that any such remaining funds be distributed to the parties in the same proportions as distribution of their non-superannuation assets.
I am also satisfied that a similar approach ought be adopted to quarantine funds for the payment of capital gains tax on the Town E property. I consider those funds should be quarantined from the proceeds of sale. I will afford Mr Casano the same period of 24 months for the funds to be applied to that purpose, failing which they ought be distributed to the parties in the proportions of the distribution of their non-superannuation assets. I will adopt the same approach with respect to any residual remaining after the payment of the capital gains tax liability.
As a result of the orders sought by Ms Manetta, aside from the proceeds of sale of the Town E property and the payment sought from Mr Casano, she would retain the following non‑superannuation assets worth a total of $1,283,749:
·ANZ bank funds $931,409
·Balance of Trust Funds after payment to Ms L, Y and X, and quarantining of $100,000 for the O Company claim $416,230
·Motor Vehicle 1 $45,125
·K Group Shares $187,500
·Capital Gains Tax liability ($293,419)
·Legal fees regarding P Street Insurance Claim ($3,096)
As a result of the orders sought by Ms Manetta, aside from the payment sought from Mr Casano, he would retain the following non-superannuation assets worth a total of $1,917,286:
·1 G Street, Suburb H $1,780,000
·S Company Investment Unknown
·Motor Vehicle 2 subject to finance Unknown
·Bank accounts $15,899
·Addback for lump sum spousal maintenance, school fees and paid arrears of child support $231,459
·Addback for funds transferred to Mr U $104,689
·GST liability ($214,761)
Ms Manetta proposes that the payment sought from Mr Casano be calculated by reference to the valuation of the Town E property less its sale costs. The difficulty with the proposal is that her case was argued on the basis that she should retain 65% of the value of the parties’ non‑superannuation assets, which outcome I have found to be just and equitable. In order to achieve that result, orders must be crafted by reference to as yet unknown sale proceeds, and acknowledge that the property may sell for a different price.[48] Being satisfied that the percentage distribution sought is just and equitable, I will craft orders that ensure that percentage outcome. In order for that result to be achieved, it will be necessary for the further payment from Mr Casano to be calculated following settlement of the sale of the Town E property.
[48] Trask & Westlake (2015) FLC 93-662 at [34] and [37].
Mr Casano made no submissions with respect to the relief proposed by Ms Manetta that she continue to have sole use and occupation of the Town E property and receive any rental income from it, that the parties are prohibited from encumbering the property and hold their interests in the property upon trust pending its sale. I am satisfied the proposed order is just and equitable.
I am not satisfied that the relief sought by Ms Manetta for Mr Casano to reimburse any outstanding council or water rates with respect to the Town E property is just and equitable. Although Orders made 17 November 2022 required Mr Casano to meet those outgoings, Ms Manetta has had sole occupancy of the property since early 2023 pursuant to subsequent interim Orders made 21 February 2023. I am satisfied that any outstanding rates ought be paid from the proceeds of sale such that the parties proportionally meet those liabilities.
I am satisfied that interest should accrue pursuant to the default rate prescribed by the Court’s rules. No submission was advanced in support of the calculation of that interest “compounding daily”.[49] I determine interest should accrue on the basis prescribed by the Rules.
[49] Exhibit A1, paragraph 4.
Ms Manetta proposes that Mr Casano be restrained from dealing with, or encumbering, the Suburb H property until such time as he has made payments prescribed by Orders of this Court. Mr Casano made no submissions with respect to the restraint sought. I am satisfied the order sought is proper in circumstances where Mr Casano has previously been in default of his legal obligations.
Mr Casano had no objection to the K Group Shares being transferred to Ms Manetta. He also had no objection to payments being made from funds held in trust to Ms L, Y and X. I am satisfied the orders sought in that respect are appropriate.
Mr Casano objects to the amount sought to be paid for Ms Manetta’s capital gains tax liability, asserting that it should be the amount without interest. I have accepted that submission, although the penalty is not $100,000 as asserted orally by Mr Casano but approximately $25,000. I also accept Mr Casano’s submission that the order should refer to the capital gains tax liability rather than Ms Manetta’s income taxation liability.
Ms Manetta proposes that Mr Casano retain his interest in various entities and be liable for any liabilities of those entities. Mr Casano took issue with the proposal because of the GST liability associated with one of the entities. Allowance has been made for that liability in the balance sheet, with the result that both parties are proportionally liable for it. I am satisfied the orders proposed by Ms Manetta are accordingly appropriate.
Ms Manetta proposes an equal distribution of the assets of the parties’ self-managed superannuation fund. Mr Casano’s only submissions with respect to the self-managed superannuation fund is that he challenged the value ascribed to it by Ms Manetta. He did so without adducing any evidence. If it transpires the value ascribed to the fund’s assets in these proceedings proves to be inaccurate, the orders provide for an equal distribution of the value of the fund’s assets which will ensure that justice and equity is done. I am satisfied the orders sought by Ms Manetta are appropriate.
Ms Manetta proposes that the parties indemnify each other with respect to their various liabilities. Mr Casano made no submissions with respect to the relief sought. I am satisfied it is appropriate, although there is no need for two orders to be made as proposed by paragraphs 19 and 27 of Exhibit A1. I will make only the more prescriptive former proposal.
Ms Manetta otherwise proposes that the parties retain the various assets currently in their possession or ownership. Mr Casano suggested in submissions that he sought the return of various personal items in Ms Manetta’s possession. Other than to refer to a piece of furniture, he did not identify those items. In the absence of any articulated proposal or evidence, I am unable to be satisfied of the appropriateness of granting any relief suggested by Mr Casano’s submissions. I am satisfied that the relief sought by Ms Manetta is appropriate.
I am also satisfied that it is appropriate for Ms Manetta to be appointed pursuant to section 106A of the Act to sign any necessary documents in the event Mr Casano refuses or neglects to do so. Mr Casano made no submissions with respect to that aspect of the relief sought.
CHILD SUPPORT
Mr Casano is currently administratively assessed to pay child support at the rate of $43,816 per annum. He is currently in arrears of child support in the amount of $59,618.81.
Interim Orders made on 21 February 2023 provided for the payment of Mr Casano’s then child support arrears in the amount of $31,459.18 and a payment of $100,000 towards the children’s private school fees. The source of those amounts were funds then held on trust for the parties.
Ms Manetta now seeks the following Order:
The Husband pay, or cause to be paid, to the Wife within 30 days of the date of these Orders (child support payment date) child support for the children [X] born [in] 2006 and [Y] born [in] 2008 (the children) as follows:
a) pursuant to sections 117, 123A, 124 the Child Support Assessment Act 1989 (Child Support Act) there be departure from the administrative assessment of Child Support in relation to the children and the husband pay capitalised child support to the Wife in the amount of $200,000, such amount to be credited as 100% of the Father’s periodic child support liability pursuant to the assessment from the date of these Orders; and
b) pursuant to sections 117 and 124 the Child Support Assessment Act 1989 the husband pay to the Wife the children’s school tuition fees and levies at [B School] in the amount of $123,362.
(child support payments)
and in the event the Husband fails to make the child support payments by the child support payment date interest shall accrue on any amount outstanding in accordance with the Federal Circuit and FamilyCourt of Australia (Family Law) Rules 2021 compounding daily from the child support payment date until the date of payment.[50]
[50] Exhibit A1, paragraph 3.
It is convenient to address the school fees before the capitalised claim.
School fees
X is in Year 12 at B School. Y is in Year 10 at the same school. The balance of the children’s school fees, if paid in a lump sum, is $123,362.
Pursuant to section 117 of the Child Support (Assessment) Act 1989, Ms Manetta may relevantly apply for a departure from the administrative assessment of child support on the ground that, in the special circumstances of the case, the costs of maintaining the children are significantly affected because they are being educated in the manner that was expected by their parents. I must also be satisfied that it is just and equitable as regards the children and the parties to make the order and otherwise proper to do so.
Ms Manetta may apply to the Court for the relief sought by virtue of applications being pending in this Court, and upon my satisfaction that it would be in the interests of the parties to consider whether to grant the relief sought.[51] Mr Casano made no submissions about whether it would be in the interest of the parties to consider whether to grant the relief sought. He made substantive submissions with respect to the application. The Court has previously made interim Orders in relation to child support. I am determining both property and spousal maintenance applications. In those circumstances, I am satisfied it is in the interests of the parties to consider granting the relief sought.
[51] Child Support (Assessment) Act 1989 s 116(1) (‘Assessment Act’).
Ms Manetta may also apply for child support to be paid otherwise than in the form of periodic payments.[52] I am required to be satisfied that it would be just and equitable as regards the children and the parties and otherwise proper to make such an order, having regard to mandatory considerations prescribed by subsections 124(2), (3), (3A), and (4) of the Assessment Act.[53]
[52] Child Support (Assessment) Act 1989 s 123.
[53] Child Support (Assessment) Act 1989 s 124.
The parties’ three children have attended B School. Mr Casano does not assert that they did so contrary to the manner that was expected by their parents. The associated fees are significant. I am satisfied that the relevant ground for departure is established.
In determining whether it would be just and equitable in the relevant sense to make the order sought, I take into account the matters prescribed by subsection 117(4) of the Act.
Ms Manetta receives income by way of interest of $1,035 per week. It is not asserted, and I do not find, she presently has any greater earning capacity.
Mr Casano submits that capital was previously made available for the purposes of meeting the parties’ living expenses. Ms Manetta deposes, without contradiction, that $100,000 each was retained for the parties “to meet living costs of both households” in November 2021.[54] I reject any suggestion there was an agreement between the parties for the children’s private school fees to the conclusion of their schooling to be paid from those, or other funds, retained by the parties.
[54] Affidavit of Ms Manetta filed 1 July 2024, paragraph 138(a)(vi).
Mr Casano’s income is undisclosed. He has previously earned between $1,175,000 and $2,000,000 per annum over a period of 10 years. The only evidence I have is that it is his election not to work in a regular capacity and there is no impediment to him exercising his earning capacity to its full extent. I find no reason to reject that evidence. Mr Casano has not demonstrated that it was not a major purpose of his election not to work in a regular capacity to affect the administrative assessment of child support. Subsection 117(7B) of the Assessment Act is accordingly satisfied.
To refuse to make the order would have the effect of Ms Manetta either electing to apply the capital assets she will retain pursuant to the property Orders to the children’s school fees, or change their school enrolment. Given the advanced stages of the children’s education and Mr Casano’s very substantial earning capacity, I am not satisfied either result is just and equitable.
Mr Casano has a duty to maintain the children that has priority over his other commitments other than those necessary to support himself.[55] I have no evidence that either party or child is currently in receipt of an income tested pension, allowance or benefit. The result is that it appears there would be no change to the rate of any such payment if I grant the relief sought.
[55] Child Support (Assessment) Act 1989 s 3.
I am satisfied that it is just and equitable in the relevant sense and otherwise proper for Mr Casano to be responsible for payment of the children’s school fees.
Mr Casano proposes that the school fees be met from the parties’ joint funds. The effect of paying the liability from the parties’ joint assets would be that Ms Manetta contributes 65% of the school fees and Mr Casano contributes 35% of them. Ms Manetta also proposes that the payment of the school fees be made from capital, but that he pay 100% of the fees. Given Mr Casano’s very significant earning capacity, I am satisfied Ms Manetta’s proposal is proper in all the circumstances.
Pursuant to section 125 of the Assessment Act, I am required to specify whether the non‑periodic payment is to reduce the annual rate of child support payable pursuant to the administrative assessment of child support. In effect, Ms Manetta seeks that there be no such reduction. In order to do so, I must be satisfied that it would be just and equitable as regards the children and the parties and otherwise proper, having regard to the mandatory considerations prescribed by subsections 125(5), (5A) and (6) of the Assessment Act.
To reduce the child support payable by Mr Casano by reference to his payment of the children’s school fees would reduce the funds otherwise available for the children’s support. Given the parties’ expectation that the children would be privately educated, I am satisfied that no reduction in the annual rate of child support otherwise payable is just and equitable and otherwise proper in the relevant senses.
Absent any submissions on the subject, I am satisfied that interest should be payable on that sum, should Mr Casano default on his obligations, at the rate prescribed by the Court’s rules.
Capitalised Child Support
Ms Manetta submits that her claim for a payment of capitalised child support in the amount of $200,000 is comprised of the following components totalling $197,342:
·administratively assessed child support for both children for six months of $21,840 (at the current weekly rate of $840);
·administratively assessed child support for Y for a further 24 months of $43,680 (assuming an administrative assessment of $420 per week);
·both children’s expenses as deposed to in Part N of Ms Manetta’s Financial Statement excluding school fees for six months of $43,934 (at a rate of $1,690 per week); and
·one-half of the children’s expenses as deposed to in Part N of Ms Manetta’s Financial Statement excluding school fees for a period of 24 months of $87,888 (at a rate of $845 per week).
With respect, the calculation is misguided. It treats income to be received by Ms Manetta by way of child support as expenditure incurred on her behalf for the children. In other words, it inflates the total expenditure incurred by her by the first two figures totalling $65,520.
When that correction is made, the effect of the relief sought by Ms Manetta must be that she proposes Mr Casano pay all of the expenses she incurs for the children until their age of majority, being a sum, on her submission of $131,822.
The effect of the application is a departure from the administrative assessment of child support such that Mr Casano pay the totality of the expenses incurred by Ms Manetta for the children, and a capitalisation of that sum.
Regrettably, little forensic attention addressed the initial aspect of the claim. No attempt was made to articulate which ground for departure prescribed by subsection 117(2) of the Assessment Act was relied on.
If it be the case that the ground relied on is Mr Casano’s earning capacity, I have insufficient evidence to determine the application. I have no evidence of the income that has been used in the administrative assessment of child support, apparently because the only assessment in evidence has been printed from a mobile phone application.[56] I simply do not know to what extent the current assessment reflects Mr Casano’s income.
[56] Exhibit A2, Annexure 19B.
If it be the case that the ground relied on relates to the children’s special needs, the claimed expenditure does not support the claim. Only $150 per week is claimed to be spent on two children’s medical, dental, psychological and optical needs. Ms Manetta deposes to incurring out of pocket expenses for the children’s psychologists of approximately $127 for each of X and Y’s fortnightly or three-weekly appointments. I am not satisfied that expenditure significantly affects the costs of maintaining the children.
I am accordingly not satisfied that any ground for departure from the administrative assessment of child support has been established.
Ms Manetta submits that I ought to capitalise future child support payable for the children and require Mr Casano to now make such a payment. I accept Ms Manetta’s submission that I can have no confidence that Mr Casano will pay his child support obligations on time.
However, I am not satisfied it is just and equitable to capitalise future child support payable and require its payment to be offset against future administrative assessments. Those assessments will inevitably change upon X turning 18 and completing school. They may change due to future departure applications either party may elect to make. Mr Casano complained that the current assessment was unfair, although he has taken no action to seek its rectification. The children’s circumstances might change for any number of reasons.
Ms Manetta did not pursue her claim for recovery of child support arrears from Mr Casano in the final hearing. To now order a lump sum payment for future child support obligations will leave the enforcement of current arrears to administrative action and enforcement of any lump sum order for prospective child support to this Court.
I am ultimately not satisfied it would be just and equitable as regards the children and the parties for a capitalised sum of child support to now be paid by Mr Casano. I decline that aspect of the relief sought by Ms Manetta.
SPOUSAL MAINTENANCE
Ms Manetta proposes that Mr Casano pay her capitalised spousal maintenance of $150,000.
Pursuant to section 72 of the Act, Mr Casano is liable to maintain Ms Manetta to the extent he is reasonably able to do so, if and only if, she is unable to support herself, having regard to any relevant matter prescribed by subsection 75(2) of the Act. I have a discretion to make such order as I consider proper for the provision of maintenance.[57]
[57] Family Law Act 1975 (Cth) s 74.
I am required to first determine the claim for periodic maintenance, because the lump sum sought is a capitalisation of that conclusion.[58]
[58] Clauson at 81,907.
Mr Casano submits that Ms Manetta has no need for spousal maintenance because she will have “assets, capital of several million dollars”. He submits that where there is sufficient capital allocated, the Court has “accepted that there is no need for further spousal maintenance”. He cited no authority for the submissions.
The authorities hold that Ms Manetta is not required to deplete her assets and capital to support herself.[59] She need not deplete her capital resources before seeking an order for spousal maintenance.[60] However, that is not to say that her capital is to be disregarded. Rather, the possible need to retain capital and not use it for day to day support is a relevant consideration.[61] It may be that Ms Manetta can no longer be described as being unable to support herself adequately because she may have sufficient assets which, with or without income arising from the investment or use of those assets, will provide an adequate level of support.[62]
[59] Mitchell & Mitchell (1995) FLC 92-601 at 81,995-996; Bevan & Bevan (1995) FLC 92-600 at 81,980.
[60] Fewster & Drake (2016) FLC 93-745 (“Fewster & Drake”) at [103].
[61] Fewster & Drake at [106].
[62] Clauson at 81,907.
Ms Manetta is currently receiving income by way of interest at the rate of $1,035 per week. She will not have access to further capital until the sale of the Town E property. She currently incurs expenditure for rent, insurance and motor vehicle registration of $1,577 per week. She incurs other expenditure for herself totalling $1,525 per week. Mr Casano did not submit that expenditure was in any way unreasonable. I am satisfied it represents a standard of living that is reasonable in the circumstances.[63]
[63] McCrossen & McCrossen (2006) FamCA 868 at [32] and the cases there cited.
Ms Manetta’s application is premised on a submission that her reasonable needs amount to $3,102 per week. I am not so satisfied. She currently has a deficit of $2,067 per week between her investment income and expenditure. Although that investment income will reduce as a result of some debts being repaid pursuant to the property Orders, she will in due course receive the proceeds of sale of the Town E property from which increased income could be derived.
I determine that Ms Manetta has a reasonable need for maintenance at the rate of $2,067 per week. Her assets will not be able to generate sufficient income in the short term to meet that need.
Mr Casano submits that he is “not earning income at the moment”. He adduces no evidence in support of the submission, having relied on no filed material for the final hearing. His submissions did not explain how he continues to make lease payments on the Motor Vehicle 2 he purchased for $203,000 in late 2021. The monthly repayments amount to $2,387 per month, or $28,644 per annum.
I have referred already to Ms Manetta’s unchallenged and uncontradicted evidence that Mr Casano has elected not to work in a regular capacity and there being no impediment to him exercising his earning capacity to its full extent. That evidence satisfies me that Mr Casano has both an ability to work and an opportunity to work, being the two conditions necessary for me to be satisfied of his earning capacity.[64] He has a long history of earning in excess of $1,000,000 per annum. Earnings at such a rate significantly exceed Ms Manetta’s established weekly need. I am satisfied that Mr Casano is reasonably able to support her to that extent.
[64] DJM & JLM (1998) FLC 92-816 at [17.36] to [17.37].
Ms Manetta effectively seeks a capitalised amount of spousal maintenance for a period of 12 months. Mr Casano complains that the application is effectively a double-dipping into his assets. It is certainly true that the power to order lump sum maintenance is one to be exercised cautiously.[65] Nevertheless, given Mr Casano’s failure to pay any periodic child support in accordance with his legal obligations, I have genuine concerns about his capacity and preparedness to pay periodic maintenance.[66]
[65] Clauson at 81,908.
[66] Clauson at 81,908.
Lump sum maintenance ought only be awarded if there are sufficient funds available to meet such an order.[67] Pursuant to the property Orders, Mr Casano will retain assets (excluding notional assets) worth approximately $1,280,000. Whilst he complains about the liquidity of those assets he will primarily retain the Suburb H property currently occupied by his mother, he also repeatedly sought a brief opportunity to raise a further $1,650,000 to purchase the Town E property. Given that adopted position, his ongoing repayments of his motor vehicle loan, and the total value of the assets he will retain, I am satisfied Mr Casano has funds that can be made available, even if only through borrowings against his assets, to meet his obligation to support Ms Manetta.
[67] Rankin & Rankin (2017) FLC 93-766 at [77] quoting Spano & Spano (1979) FLC 90-707 at 78,766.
In the circumstances, I am satisfied that it is proper for Mr Casano to pay twelve months of spousal maintenance to Ms Manetta by way of lump sum payment. The capitalised amount would be $107,484. I will discount that amount to $100,000 because of its immediate payment.[68]
[68] Clauson at 81,908.
For the same reasons referred to in my conclusions in relation to the property relief sought, I will order interest to be payable to the rate prescribed by the Court’s rules.
Because of the terms of section 77A of the Act, it is necessary to express the order to be an order to which that section applies.
COSTS
Ms Manetta seeks her costs on an indemnity basis for subpoenas she has issued in the proceedings, a Contravention Application filed by her on 21 December 2022, and her Counsel’s fees for attending on 12 February 2024.
Pursuant to subsection 117(1) of the Act, each party is to bear their own costs of proceedings under the Act. Nevertheless, I have a discretion to make such order as to costs as I consider just, if the circumstances justify doing so, having regard to the matters prescribed by subsection 117(2A) of the Act.[69]
[69] Family Law Act 1975 (Cth) s 117(2).
I have referred at length already to the parties’ financial circumstances, including those that will prevail following the determination of these proceedings.
It is not suggested either party is in receipt of legal aid.
Ms Manetta’s costs incurred for the issuance of subpoenas were directly consequential upon the substantial deficiencies in Mr Casano’s disclosure. Put another way, had Mr Casano complied with his obligations to file documents and provide complete discovery, the subpoenas would have been unnecessary. I am satisfied his conduct in that respect justifies an order for costs in favour of Ms Manetta in relation to the subpoenas.
Mr Casano failed to comply with an interim Order made by consent on 17 November 2022 to direct payments from the FF Company investment directly to Ms Manetta’s solicitor’s trust account. It was that non-compliance that led Ms Manetta to file the Contravention Application on 21 December 2022. Those proceedings were necessitated by Mr Casano’s non-compliance. That he considers he had good reason for doing so does not impugn that conclusion. I am satisfied the circumstances justify an order for costs in favour of Ms Manetta.
Mr Casano sought, and was granted, an adjournment of the final hearing on 12 February 2024. Ms Manetta contends that agreement was reached for him to liquidate shares and apply funds to obtaining legal representation. As has already been referred to, he obtained no such representation. He also failed to file required documents in anticipation of the adjourned trial date. His conduct in that respect has put Ms Manetta to entirely unnecessary expense in having to pay for Counsel to appear for the first day of trial on two occasions. I am also satisfied Mr Casano’s conduct in that respect justifies an order for costs in favour of Ms Manetta.
Indemnity costs are a very great departure from the normal standard.[70] They should only occur in exceedingly rare situations.[71] One of the circumstances that may justify such a departure is particular misconduct resulting in loss of time to the Court and other parties.[72] Mr Casano has repeatedly been in default of his obligations to file material in this Court and to discover documents relevant to the dispute. The adjournment he was granted in February proved completely inutile in enabling him to rectify those defaults. He was otherwise non-compliant with interim Orders. I am satisfied that his misconduct is of an exceptional nature justifying an order for indemnity costs.
[70] Kohan & Kohan (1993) FLC 92-340 at 79,611.
[71] Prantage & Prantage (2013) FLC 93-544 at [42], [152].
[72] Munday & Bowman (1997) FLC 92-784 at 84,660, citing Colgate-Palmolive Company v Cussons Pty Limited (1994) 46 FCR 225 at 233-4.
I will grant the costs relief sought by Ms Manetta in Exhibit A1.
Ms Manetta also made an oral application for costs arising from the time wasted during the course of the final hearing. I am not satisfied Mr Casano’s conduct during the proceeding was such as to warrant the making of such a costs order. The matter was stood down for most of the morning of the first day for the Applicant to instruct her Counsel in relation to issues raised with her by the Court. Only approximately 1 hour of hearing time was lost by virtue of Mr Casano seeking time to prepare his cross-examination.
At the conclusion of the hearing, the parties consented to any further costs applications being determined by way of written submissions.
I certify that the preceding one hundred and ninety-five (195) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Glass. Associate:
Dated: 19 August 2024
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