Rocca & Rocca
[2024] FedCFamC2F 1118
•16 August 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Rocca & Rocca [2024] FedCFamC2F 1118
File number(s): PAC 6377 of 2020 Judgment of: JUDGE MYERS Date of judgment: 16 August 2024 Catchwords: FAMILY LAW – property proceedings – long marriage – value of property – conflicting expert evidence – assessment of wife’s “wastage” argument – arguments regarding wastage related to transactions during the relationship – assessment of wife’s ‘Kennon claim’ – where Court dismisses the wife’s “wastage” argument – where Court dismisses the wife’s ‘Kennon claim’ - where Court finds it just and equitable for Wife to receive 60% of the property pool and Husband 40% . Legislation: Child Support (Assessment) Act 1989 (Cth)
Evidence Act 1995 (Cth) ss 76, 79
Family Law Act 1975 (Cth) ss 4B, 75(2), 79, 81
Gaming Machines Act 2001 (NSW)
Cases cited: Kennon & Kennon [1997] FamCA 905
Kessey & Kessey (1994) FLC 92–495
Kowaliw & Kowaliw (1981) FLC 91-092
Stanford v Stanford (2012) 247 CLR 108
Division: Division 2 Family Law Number of paragraphs: 149 Date of last submission/s: 15 December 2023 Date of hearing: 12, 21, 22 September 2023 & 5, 7 & 15 December 2023 Counsel for the Applicant: Mr Givney Solicitor for the Applicant: Mark Brown & Associates Respondent: Self-Represented Litigant ORDERS
PAC 6377 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR ROCCA
Applicant
AND: MS ROCCA
Respondent
ORDER MADE BY:
JUDGE MYERS
DATE OF ORDER:
16 AUGUST 2024
THE COURT ORDERS THAT:
1.The Husband shall within 60 days of the date of these Orders:-
(a)Cause to discharge or refinance the following liabilities so as to remove the Wife as borrower or guarantor:
(i)NAB Home Loan […71];
(ii)NAB C Business Cheque Account overdraft […33];
(iii)NAB Visa Card […55];
(iv)CBA Credit Card […69];
(b)Pay to the Wife the sum of $392,758.62.
(c)Reimburse the Wife for all monies she has paid for insurance over B Street, Suburb D since the making of orders by the Court on 15 December 2023.
(d)For the purposes of clarification of these orders, where the credit cards referred to at order 1(a)(iii) & (iv) above are not in the Wife’s name or guaranteed by the Wife then the Husband shall not be required to discharge or refinance the said credit cards.
2.Immediately and contemporaneously with the compliance by the Husband with Order 1 above, the Wife shall transfer to the Husband her right title and interest in the property situate at and known as B Street, Suburb D (‘the property’), and the Husband shall be solely responsible for all council rates and council water rates and utilities such as power and gas in respect of the property.
3.The Husband and Wife be declared to be liable for one half each of the monies owed to the Australian Taxation Office currently in the sum of $71,177.83 such that they will each be liable to the Australian Taxation Office for $35,588.92.
4.That for the purposes of giving effect to Order 3 above, the parties shall forthwith upon the request of the Australian Taxation Office, enter into any deed or other agreement with the Australian Taxation Office to give effect to the declaration set out at Order 3 above within such timeframe as requested by the Australian Taxation Office.
5.That the parties shall within 7 days of the making of these Orders cause a copy of these Orders to be provided to the Australian Taxation Office.
6.Within 21 days of the date of these Orders, the parties shall do all acts and things and sign all documents necessary so as to close the parties’ joint NAB account […67] and divide the proceeds of the account 60% to the Wife and 40% to the Husband.
7.In the event the Husband fails or neglects to comply with Order 1, then the parties shall do all acts and things necessary to sell the property and in respect of such sale the following shall apply:
(a)The parties shall instruct a solicitor nominated by the Wife to prepare a contract for sale of the property and thereafter act on the conveyance of the sale of the property. The parties shall be equally liable for the costs of the conveyance.
(b)The parties shall do all acts and things and sign all documents to instruct and engage a licenced real estate agent as nominated by the Wife to sell the property by way of a public auction within 28 days of the Husband’s default of Order 1.
(c)In the event the parties cannot agree as to the reserve price at auction, then the parties or either of them shall appoint the President for the time being of the Real Estate Institute (New South Wales Division) or his or her nominee to assess the reserve price at auction and the parties shall be bound by such assessment and equally bear the cost of having engaged the said President.
8.Where the property fails to sell at the auction contemplated at Order 7 above then the property shall be auctioned every forth Saturday thereafter until such time as the property is sold. The Reserve price shall be 3% less than the reserve price set at the previous auction.
9.Upon sale of the property, the proceeds of sale shall be paid as follows:
(a)In payment of agent’s commission and legal fees/ conveyancing costs occasioned by the sale.
(b)Pay all council rates and water rates adjustments.
(c)In discharge of the NAB Home Loan […71] and NAB C Business Cheque Account overdraft […33].
(d)In payment to the Wife the sum of $392,758.62.
(e)Subject to order 10 below, make payment to the Husband the sum of $202,441.39.
(f)Pay the then remaining balance if any 60% to the Wife and 40% to the Husband.
10.The solicitor acting on the conveyance of the property shall undertake a calculation and make an adjustment of monies the Husband will receive pursuant to these Orders whereby the Husband shall be responsible for and pay from his share of the monies from the sale of the property, all arrears and charges in respect of the NAB mortgage, all adjustments in respect of council rates and council water rates, reimburse to the Wife monies she had paid for insurances over the property since 15 December 2023 and pay such sums as are necessary to discharge the NAB Visa Card […55] and CBA credit card […69], only in circumstances where the Wife is a borrower or guarantor in respect of the said credit cards or the credit cards are in her name either jointly or solely.
11.That where there are insufficient funds necessary to pay the sums as set out at Order 9 above and where the parties are unable to reach agreement as to calculations that will see the Wife receive 60% and the Husband 40% of the net matrimonial assets, then the parties have liberty to restore the matter on 14 days’ notice for the purposes of the court making ancillary orders to settle the calculation of monies the parties shall receive on the sale of the property.
12.That pending the Husband’s compliance with order 1 above or upon completion of the sale of the property the Husband shall make all payments due to the National Australia Bank with respect to the mortgage over the former matrimonial home and pay the insurances and other outgoings including rates as and when they fall due in respect of the property.
13.That except otherwise as provided for in these orders, the Husband be declared sole and beneficial owner of:-
(a)Motor Vehicle 1;
(b)Motor Vehicle 2;
(c)Motor Vehicle 3;
(d)Motor Vehicle 4;
(e)Motor Vehicle 5;
(f)CBA account […11];
(g)Tools and equipment in his possession and control;
(h)CBA Business Transaction account […30];
(i)CBA Business account […49];
(j)The Husband’s superannuation;
(k)Any other property including but not limited to monies in bank accounts, shares in public or private companies, motor vehicles, furniture furnishings and all other items of personalty that stand in his name or that are in his possession or control at the date of these Orders.
14.That except otherwise as provided for in these orders, the Wife be declared sole and beneficial owner of:
(a)CBA Account […23];
(b)Motor Vehicle 6;
(c)The Wife’s Superannuation;
(d)Any other property including but not limited to monies in bank accounts, shares in public or private companies, motor vehicles, furniture furnishings and all other items of personalty that stand in her name or that are in her possession or control at the date of these Orders.
15.All outstanding Applications are dismissed, and the proceedings are removed from the List of Matters awaiting finalisation.
AND THE COURT NOTES THAT:
A.The Court relies upon the Wife’s evidence that the Australian Taxation Office has agreed to reduce the debt owed by the parties to the Australian Taxation Office such that the debt now stands at $71,177.83.
B.Having heard from the Wife regarding her negotiations with the Australian Taxation Office the Court notes the Australian Taxation Office’s consent to the Court making orders and declarations that the Husband and the Wife shall each be liable for one half of the debt owed to the ATO that currently totals the sum of $71,177.83.
C.The Wife has advised the Court that there are personal items owned by her in the possession or control of the Husband’s parents at their property. The Court has advised the Wife that she should speak to them or the police if they are not returned.
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 MYERS:
This is a final property decision in the matter of Rocca & Rocca.
These proceedings were originally commenced by Mr Rocca, (Husband) against Ms Rocca, (Wife) as parenting and property proceedings.
On 24 August 2023 the Applicant Husband filed a Notice of Discontinuance with respect to the parenting proceedings. Subsequently, on 12 September 2023 the Respondent Wife and the Independent Children’s Lawyer (‘ICL’) resolved the parenting aspect of the proceedings which in summary provided (in regard to the one child under the age of 18 years):
(1)That X (born in 2009, currently 14 years of age, hereafter “X”) live with the Wife and spend time with the Husband:
(a)Until X attains the age of 15, on an unsupervised basis each alternate Saturday for a period of up to six hours;
(b)Once X attains the age of 15, on an unsupervised basis in accordance with his wishes.
Before discharging the ICL the Court considered and determined the ICL’s application for costs made against the parties, and in doing so took into account the legislative provisions of section 117(4) of the Act that provides:
(4) However, in proceedings in which an independent children's lawyer for a child has been appointed, if:
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
(b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
Given the financial circumstances of the parties, as will become evident in this decision, the Court made a finding that it considered that the parties to these proceedings would suffer financial hardship if either party had to bear a proportion of the costs of the ICL, and in doing so refused the ICL’s application for costs.
Two of the parties’ adult children, Mr E (born in 1998, currently aged 25 years of age, hereafter “Mr E”) and Mr F (born in 1999, currently aged 24 years of age, hereafter “Mr F”) live with the Paternal Grandparents. The Paternal Grandparents own and live in a home that is nearby to what is the former matrimonial home at B Street, Suburb D in which the Husband resides.
Sadly, the parties’ child G, born in 2005, passed away in 2007.
At the final property hearing the Applicant Husband was represented by Mr Givney of Counsel briefed by Mark Brown & Associates. The Applicant Mother was initially represented by Mr Q of Counsel briefed by R Lawyers, however, became self-represented mid-way through the Husbands cross-examination.
The level of expenditure on legal fees is extraordinary in this matter where it would appear that the Husband has expended the sum of approximately $261,080.00 in accordance with the Costs Notice filed 7 August 2024 and the Wife the sum of approximately $299,212.92 in accordance with the Costs Notice forming Exhibit ‘G’ in the proceedings. The expenditure is in no way relative to the size of the property pool available for division.
PROPOSED ORDERS
The Applicant Husband sought the following Final Property Orders as contained in his case summary document filed 12 September 2023:
1.The Husband shall within 90 days of the date of these Orders:-
1.1 Cause the discharge of the following liabilities:-
1.1.1NAB Home Loan […71]
1.1.2NAB [C Business] Cheque Account […33]
1.1.3NAB Visa Card
1.1.4CBA Credi Card
1.2 Pay to the Wife the sum of $332.789.00
2. Immediately upon the compliance of the Husband with Order 1, the Wife shall transfer to the Husband her right title and interest in the property situate at and known as [B Street, Suburb D] [the property].
3. The Wife shall immediately upon receipt of the payment from the Husband pay such monies as are then outstanding by the parties to the Australian Taxation Office.
4. The Husband be declared sole and beneficial owner of:-
4.1 [Motor Vehicle 1]
4.2 [Motor Vehicle 2]
4.3 [Motor Vehicle 3]
4.4 [Motor Vehicle 4]
4.5 [Motor Vehicle 5]
4.6 CBA […] account […11]
4.7 Tools and equipment in his possession and control
4.8 CBA Business Transaction account […30]
4.9 CBA Business [account] […49]
4.10Any other item of personalty in his possessor or control
5. The Wife be declared sole and beneficial owner of:
5.1 CBA Account […23]
5.2 [Motor Vehicle 6]
5.3 Any other item of personalty in her possessor or control
5.4 In the event the husband fails or neglects to comply with Order 1, then the parties shall do all acts and things necessary to sell the property and in respect of such sale the following shall apply:-
5.4.1 The parties shall place the property in the hands of a licensed auctioneer to sell the property by way of a public auction within 60 days of the husband’s default of Order 1.
5.4.2 In the event the parties cannot agree as to the reserve price at auction, then the parties or either of them shall appoint the president for the time being of the Real Estate Institute (New South Wales Division) or his or her nominee to assess the reserve price at auction and the parties shall be bound by such assessment and equally bear the cost.
5.4.3Upon sale the proceeds of sale shall be paid as follows:-
5.4.3.1In payment of agent’s commission and legal fees/ conveyancing costs occasioned by the sale
5.4.3.2In discharge of the liabilities at or below the balance contained in Order 1
5.4.3.3In payment to the Wife of 66.8 percent of the balance
5.4.3.4In payment of the balance to the Husband
6. The Wife shall immediately upon receipt of the payment from the Husband pay such monies as are then outstanding by the parties to the Australian Taxation Office.
7. In the event prior to exchange of contacts and after the expiration of the period determined in Order 1 hereof, the Husband tenders to the Wife the sum of $332,789.00 plus interest from the payment date then the Wife shall otherwise comply with Order 2 and the Husband shall pay any costs thrown away by the parties in instructing solicitors or conveyancers and/or real estate agents for the sale of the property.
8. Pending the Husband’s compliance and/ or sale of the property the Husband shall pay all instalments as and when they fall due in respect of the liabilities provided for in Order 1 hereof.
The Respondent Wife sought, in summary, by way of her oral submissions on 15 December 2023 that the former matrimonial home be sold by way of public auction and that there should be a division of property between the parties of 30% to the Husband and 70% to the Wife:
I contend that it is appropriate and just and equitable to order that the property is to be sold at a public auction.
(Transcript dated 15 December 2023, page 416, lines 1-2).
The Wife went on to make the following statement during submissions:
… It is my contention the pool division should be 30/70 for many factors I have described and am yet to describe. It has been established in my submission that the applicant former husband has abused the matrimonial funds for the purpose of gambling and wastage, by purchasing ..... for self-gratification. Also I ask the court to divide the remaining part of the funds, 30 per cent to the applicant and former husband, and the remaining 70 per cent to myself.
(Transcript dated 15 December 2023, page 420, lines 40-46).
BACKGROUND
By way of background the Husband was born in 1973 and is currently aged 50 years, and the Wife was born in 1968 and is currently aged 55 years.
The parties met in 1991.
The Wife deposed at paragraph 18 of her trial Affidavit that in 1993 she received compensation of $50,000 for sexual child abuse. The Wife suggested that in 1994 she used some of those funds in the amount of $12,000 to assist the Husband to establish a business after completing his apprenticeship, purchasing equipment at a cost of approximately $1,000; and other tools at a cost of approximately $5,000. The Wife suggests that she also paid $5,000 towards the cost of the purchase of a motor vehicle.
It is the Wife’s position that the parties commenced cohabitation in early 1997 while it is the Husband’s position that they commenced living together on the date the parties married in 1998.
In late 1997 the parties purchased a home at B Street, Suburb D NSW for $140,000. The Husband deposed at paragraph 34 of his trial Affidavit that he used $20,000 in savings that he had at the time of the purchase that was used towards the purchase price. Otherwise, it is his position the parties borrowed almost the balance of the purchase price being $120,000 from H Bank. It is uncontroversial that following the purchase the Husband’s parents gave the parties the sum of approximately $20,000 that was then used by the parties to renovate the property. At paragraph 34 of the Husband’s trial Affidavit, he deposed to personally doing what he described as “extensive” renovations where he suggested:
I gutted the inside of the house and I arranged for the installation of new plumbing and new electrical wiring throughout the house. I installed a new bathroom and put in new […] walls [and installed new fixtures] throughout the house, and I repainted the whole of the inside of the house.
It is uncontroversial that when the parties met, the Husband was self-employed on a full-time basis as a tradesperson, and that continues to be the Husband’s occupation, while the Wife was employed on a full-time basis as a carer. The Husband contends the Wife ceased work prior to the birth of the parties’ first son and did not return to paid work during the course of the parties’ relationship. The Wife contends that she was employed on a permanent part-time basis as a carer until mid-2005. It is accepted by both parties that the Wife undertook the bookkeeping work for their family business, C Business.
In 1998 the parties first child Mr E was born.
In 1999 the parties second child Mr F was born.
From 2004 to 2005, the parties lived with the Husband’s parents. The parties rented their property at B Street out during this time for $240 per week, with the rental monies applied to their NAB mortgage. (Wife’s Trial Affidavit, paragraph 24)
In 2004, the parties commenced a business partnership trading as C Business.
In 2005 the parties third child G was born. Unfortunately, G passed away in 2007.
The Husband deposes to the following at paragraph 29 of his trial Affidavit:
Prior to and following the death of our son [G], I was not able to work on a full-time basis and over that period I estimate that my parents gave me a sum of about $30,000 which was utilised to pay everyday living expenses and maintain our debts.
In 2009 the parties fourth child X was born.
In 2010 the parties received a compensation payment from damages in the amount of over $90,000 for medical negligence. The Husband contended at paragraph 29 of his trial Affidavit that this payment was used for family purposes.
On 9 January 2019 the parties separated. At the time of separation, the Husband remained residing in the former matrimonial home at B Street and the Wife and X moved to reside with her parents at their residence for six months.
At the time of separation, the parties had the following debts:
·Debt owing to the Australian Taxation Office - $93,200
·Mortgage of the FMH - $244,549
·Finance loan on Motor Vehicle 1 - $43,968
·CBA credit card debt - $35,092
·Visa card debt #...55 - $4,734
From about mid-2019-early 2021 the Wife and X lived in the former matrimonial home and the Husband resided at his parent’s residence. It is agreed that during this period the parties jointly contributed to the NAB home loan.
The Husband commenced proceedings in the Federal Circuit Court of Australia (as it then was) on 27 November 2020.
In early 2021, the Wife and X commenced residing in transitional housing organised by J Services at a subsidised rent until mid-2022. Following this, the father returned to living in the former matrimonial home and it remains to be his current place of residence.
In mid-2022 X and the Wife commenced residing in a private rental property.
The Wife is currently employed as an administrative officer.
On the topic of the parties’ earnings and their earning capacity, the Husband set out in his Financial Statement filed on 22 August 2023 that he receives approximately the sum of $1,538 per week from C Business and use of a “company vehicle and phone” worth the sum of $100 per week. While the Wife sets out in her Financial Statement filed 21 August 2023 that she receives the sum of approximately the $1,513 for her work as an administrative officer with K Pty Ltd and a further sum of $128 per week being Family Tax Benefits parts A & B.
There was no suggestion by the Wife during the proceedings that she would be able to retain the former matrimonial home noting she told the Court that she did not have the financial capacity to do so. The Husband however sought in his final orders that he retain the former matrimonial home and pay the Wife out. The Husband made clear the reasons for his desire to retain the former matrimonial home in his application that included that the former matrimonial home is located close to his parents’ home, and it was originally his grandparents’ home. (Husband’s Trial Affidavit, paragraph 53)
In cross-examination, set out below, it was suggested to the Husband that he did not have the financial capacity to retain the former matrimonial home however he disagreed.
[Mr Q]: Now, sir, your proposal to retain [Suburb D] - - -?
Husband: ---Yes.
[Mr Q]:- - - pay the required amounts you’ve indicated, including the mortgage and the overdraft - - -?
Husband: ---Yes.
[Mr Q]: - - - to pay your legal fees - - -?
Husband: ---Yes.
[Mr Q]: - - - and to pay out the wife, that’s looking like an impossibility at this point, isn’t it?---
Husband: No. Maybe to you.
(Transcript dated 22 September 2023, page 128, lines 8-16)
The Court considers it unlikely that the Husband and or the Wife, based upon the material before the Court, have the financial capacity to purchase the former matrimonial home situated at B Street, Suburb D. However simply finding that the Husband cannot afford to retain the B Street property based on his financial circumstances and then make orders for a sale ignores the possibility that his parents or even others might help him to retain the property.
Noting the Husband’s evidence where he contends that he does have the capacity to retain the former matrimonial property, the Court finds that it is just and equitable to at least afford the Husband the opportunity to attempt to retain the said property. It may be the case, given the property is located close to the Husband’s parents’ house, that the Husband’s parents will assist the Husband with the refinancing of the property. It is the view of the Court that the Husband should be afforded the opportunity to retain the home. The Court has little doubt that there is a financial benefit in the Husband retaining the former matrimonial property and receiving the transfer of the Wife’s share. That benefit includes receiving a transfer that is not liable for stamp duty. A further benefit is afforded to both parties where there will be no payment by the parties for real estate agent’s commission on the sale. The other benefit that cannot be financially quantified is the benefit of the Husband retaining and living in a home next door to his parents.
However, to ensure the Wife is not disadvantaged, the Court will make orders for the Husband to pay the Wife her adjustment of the property and refinance the mortgage so as to remove the Wife as a borrower or guarantor in respect of the loan secured by way of mortgage over B Street within 60 days of the making of these Orders. This period should allow the Husband sufficient time to payout the Wife her entitlements and refinance the mortgage. However, should the Husband fail to refinance the mortgage and payout the Wife in accordance with the timeframe set out in the Orders, the Court will make Orders for the sale of the property by way of public auction.
BALANCE SHEET
The Court notes the contents of the amended joint balance sheet jointly tendered that forms Exhibit “J” in the proceedings.
Ownership
Description
Applicant Husband’s Value
Respondent Wife’s Value
ASSETS
1
J
B Street, Suburb D
$850,000
$960,000
2
H J
Motor Vehicle 1
$36,600
$36,600
3
H J
Motor Vehicle 2
$5,700
$5,700
4
H J
Motor Vehicle 3
$11,600
$29,990
5
H J
Motor Vehicle 4
$18,800
$30,400
6
H J
Motor Vehicle 5
$NIL
$NIL
7
H
CBA bank account #...11 as at 08.09.2023
$130
$130
8
H J
Tools and equipment
$15,000
$60,000
9
B H
CBA business transaction account #...30 as at 08.09.2023
$5,650
$5,650
10
B H
CBA business account #...49 as at 08.09.2023
$40
$40
11
W
CBA #...23 as at 20.08.2023
$800
$800
12
W
Motor Vehicle 6
$100
$100
13
J
Memorabilia/Collectables (owned by the children)
$NIL
$NIL
14
J
Mower (owned by paternal grandfather)
$NIL
$NIL
15
J
NAB #...36 as at 08.09.2023 ($0.14)
$NOMINAL
$MINIMAL
16
J
NAB #...67 as at 08.09.2023
$60
$60
Total
$944,480
$1,129,470
LIABILITIES
19
J
NAB Home loan account #...17 as at 08.09.2023
$188,800
$189,400
20
J
NAB C Business cheque account #...33 as at 08.09.2023
$124,000
$120,400
21
H
NAB Visa credit card #...55 as at 08.09.2023
$7,550
$NIL
22
J H
CBA credit card #...69 as at 08.09.2023
$35,050
$NIL
23
H J
ATO Debt as at 04.08.2023
$113,550
$113,587
Total
$468,950
$423,387
SUPERANNUATION
Member
Name of Fund
Applicant’s value
Respondent’s value
24
W
Super Fund 1 as at 04.08.2023
$17,750
$17,750
25
H
Super Fund 2 as at 09.08.2023
$30,650
$30,650
Total
$48,400
48,400
The first item the parties disagree upon in the balance sheet is item 1 being the value of the former matrimonial home at B Street, Suburb D.
The Husband contends in the balance sheet that the former matrimonial home is worth $850,000 and the Wife contends in the balance sheet that the former matrimonial home is worth $960,000. Despite contending for this value in the balance sheet the Wife changed her position on the value during cross-examination that will be explored below.
Initially and at a time when the Wife was represented, the parties jointly instructed Mr L (a Certified Practising Real Property Valuer) to value the former matrimonial property. Mr L carried out a valuation on the property and subsequently prepared a valuation report dated 30 August 2023, valuing the former matrimonial home at $850,000.00 (Valuation Report Annexed to Affidavit filed 11 September 2023).
The Wife did not accept the valuation of the former matrimonial home was correct due to what she described as the “variables” considered by Mr L and expressed to the Court her belief that Mr L was “biased in the proceedings towards the applicant former husband” (Transcript dated 15 December 2023, page 365, lines 45-46).
Consequently, the Wife instructed her solicitors to obtain a further valuation of the former matrimonial home. Mr M (a Certified Practising Real Property Valuer) was instructed by the Wife, and he subsequently prepared a valuation report dated 8 September 2023, valuing the property at $960,000.00. The following exchange took place between Counsel for the Husband and the Wife regarding Mr M’s valuation:
MR GIVNEY: So were you happy with [Mr M]’s valuation?---
[MS ROCCA]: It was closer to what I believe that the property is valued at.
MR GIVNEY: But you don’t accept it, do you, because you’re of the view it’s worth more?---
[MS ROCCA]: I believe that the market will determine the true value of the property - - -
HIS HONOUR: No, no?--- - - -
[MS ROCCA]: if it was put to auction.
HIS HONOUR: What do you say? Do you say the – the question that’s asked is do you say that 960 is correct or do you say it’s worth more?---
[MS ROCCA]: I believe it’s worth more.
HIS HONOUR: So you don’t accept what [Mr M] says?---
[MS ROCCA]: I believe that on the day that he did the valuation that the – the market may have been at that price. The valuation can only be sustainable on the day of the – the – the market valuation was done.
MR GIVNEY: You heard [Mr M] come along and give evidence on the first day of the hearing?
[MS ROCCA]: Did I?
MR GIVNEY: Did you – you were here, and you heard that?
[MS ROCCA]: Yes.
MR GIVNEY: And he still suggested it was worth 960, didn’t he?
[MS ROCCA]: He said that on – on – when he did the valuation
MR GIVNEY: No?
[MS ROCCA]: that that’s what it was worth.
MR GIVNEY: When he was in court, and he contended in this court that it was worth 960?
[MS ROCCA]: On – on the day of the valuation.
HIS HONOUR: No. On the day of the hearing?
[MS ROCCA]: Sorry?
HIS HONOUR: He considered that the house is worth 960?
[MS ROCCA]: On the day of the – the hearing, is that what you’re suggesting, your Honour?
HIS HONOUR: Yes, that’s what I’m suggesting is that
MR GIVNEY: Did you hear your barrister put to [Mr M] that it was worth more than what he said it was in his valuation?
[MS ROCCA]: I don’t recall that.
MR GIVNEY: Didn’t happen, did it? You know that. You know for a fact, don’t you, your barrister didn’t say to [Mr M]?
[MS ROCCA]: No, I don’t believe he did. No.
MR GIVNEY: “It’s worth more”?
[MS ROCCA]: No.
MR GIVNEY: Why would that be?
[MS ROCCA]: I don’t know.
MR GIVNEY: You don’t know?
[MS ROCCA]: I can’t speak for the – the barrister.
MR GIVNEY: Can’t you?
[MS ROCCA]: No.
MR GIVNEY: I see.
(Transcript dated 15 December 2023, page 366, lines 23-46, page 367, lines 1-25)
Despite what the Wife suggested about the valuation only being correct on the day the valuation was undertaken both Mr L and Mr M both came to Court and were cross examined as to their contentions that the value was $850,000 and $960,000 respectively.
The Wife made clear her contention that the property should be sold. This, in the view of the Court, fell from the Wife’s position that the Husband should not be able to keep the former matrimonial home regardless of its value where the Wife was of the view the property had redevelopment potential if combined with the Husband’s parents adjoining property. This position was made clear during the Wife’s submissions where she suggested:
[MS ROCCA]: The former applicant – sorry, the applicant former husband wishes to acquire the sole ownership of the [B Street] property by way of payout of share so that he can redevelop the property as he has always wished to. The [B Street] property has potential development prospects, subject to council approval, on its own merit, but not limited to, subdivision into two lots; development of [houses]; selling the property to private auction – at private auction to developers or private buyers.
Combining the [B 2 Street] property in a single parcel of land would provide the husband with potential development prospects, subject to council approval, including, but not limited to, [houses] or the sale to developers.
(Transcript dated 15 December 2023, page 433, lines 36-47)
The Court listened to Mr L and Mr M’s cross-examination on the value of the former matrimonial home and considered their evidence. The Court was not persuaded that either valuer had poorly prepared their valuations or had taken into account irrelevant information or irrelevant comparable sales. The Court does not find that the valuers’ methodologies were lacking or erroneous. The Court considered the valuers’ difference in opinion was simply that, a difference in opinion. Where neither were obviously right or obviously wrong, as compared to the other, the Court finds that it is just and equitable to value the formal matrimonial home adopting a middle point between that contended for by Mr L and that contended for by Mr M where they are $110,000 apart.
The mid-point between the valuation is $905,000.
The next items of contention as to value are those numbered 4 and 5 in the Balance Sheet being the Husband’s Motor Vehicle 3 and Motor Vehicle 4 . The Husband suggests that Motor Vehicle 3 is worth $11,600 and the Wife suggests it is worth $29,990. The Husband contended that the value of the Motor Vehicle 4 was $18,800 and the Wife contended that it was worth $30,400. The Wife sought to try and rely on an online “Redbook” type valuation during the hearing. The Court heard the Wife’s cross-examination of the Husband on the subject including disagreements around the actual model of Motor Vehicle 4. Having listened to the cross-examination by the Wife the Court formed the view that the Wife was aggrieved about the value of Motor Vehicle 4 where it appeared based upon her questioning the Husband had persuaded and convinced the Wife during their relationship that Motor Vehicle 4 would be a worthwhile purchase as it would go up in value rather than depreciate.
Both parties gave opinion evidence in their respective trial Affidavits as to the value of various items of property. That evidence was the subject of successful objections by both parties. ‘Redbook’ online type valuations hold no weight. They are at best an indication of the price that parties might use for the purpose of negotiation. To be clear, where there is a dispute as to value then a valuation prepared by a properly qualified valuer who has concerned themselves with the Court rules should be obtained. Section 76 of the Evidence Act 1995 (Cth) (‘Evidence Act’) is clear where it provides (subject to certain exceptions) that “evidence of an opinion is not admissible to prove the existence of a fact about the existence of which the opinion was expressed”.
Section 79 of the Evidence Act provides an exception that provides that “if a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge”. It is not disputed that neither the Husband or the Wife possess specialised knowledge based on their training, study, or experience such that they could give evidence as to values of real property or chattels. It is for this reason that the Court cannot and does not accept the Wife’s opinion as to the value of the former matrimonial home. In respect of Motor Vehicle 3 or Motor Vehicle 4, the Court cannot accept the Wife’s value based on her own opinion or that of a ‘Redbook’ type valuation. The Husband has suggested Motor Vehicle 3 is worth $11,600 and Motor Vehicle 4 is worth $18,800. On the basis of the Husband’s admission against interest that Motor Vehicle 3 is worth $11,600 and Motor Vehicle 4 is worth $18,800, the Court finds the Motor Vehicle 3 is worth $11,600 and Motor Vehicle 4 is worth $18,800.
In respect of item numbered 6 in the balance sheet being Motor Vehicle 5 the Court notes Paragraph 50 of the Husband’s trial Affidavit:
In about early 2021 I gave [Motor Vehicle 5] to our son [Mr F] and I did not receive any money for that [vehicle].
In any case the Court notes that neither party contends Motor Vehicle 5 has any value.
There is a dispute as to the value of item numbered 8 in the balance sheet being the Husband’s tools. The Husband had no valuation evidence and makes an admission against interest that the tools are worth $15,000. The Wife contends that the tools are worth $60,000. As set out above the Court cannot accept the Wife’s opinion as to value. The Wife did not seek to file and rely on any evidence from an appropriately qualified valuer. In the absence of admissible valuation evidence from an appropriately qualified valuer the best the Court can do is accept the Husband’s value based on his admission against interest. The Court finds the Husband’s tools numbered item 8 in the balance sheet are worth $15,000.
There are disputes as to the value of the liabilities of the parties. The court notes the dispute as to the liability found at item numbered 19 in the balance sheet being NAB Home loan account #...17 as at 8 September 2023. The Wife suggested the liability to NAB is $188,800 and the Husband suggested the liability was $189,400. To be clear, this dispute was pointless. The liability owed to NAB secured by way of the mortgage was $189,400 as was pointed out by Mr Q (being counsel for the Wife) during his cross-examination of the Husband set out below:
[MR Q]:Thank you. Now, you – the orders that you seek are that you will pay – you will cause the discharge of the NAB home loan?
[MR ROCCA]: Yes.
[MR Q]: The overdraft account?
[MR ROCCA]: Yes.
[MR Q]:The two Visa cards – the Visa and the credit card that are in your name?
[MR ROCCA]: Yes.
[MR Q]:You will pay to the wife the sum of $332,789?
[MR ROCCA]: Yes.
[MR Q]:Now, the mortgage over the property is – has a balance of about 189,400 at the moment?
[MR ROCCA]: Yes.
(Transcript 22 September 2023, page 92, lines 24-31)
The Court notes the dispute as to the overdraft facility liability found at item numbered 20 in the balance sheet being that described as the NAB C Business cheque account #...33 with a debit balance as at 8 September 2023. The Husband contended that the debit balance was $124,000 while the Wife contended the debit balance was $120,400. The debit balance was the subject of cross-examination of the Husband by Mr Q during which the Husband made the following concession:
[MR Q]:Right. The overdraft account has a balance of about $120,400 at the moment, to your awareness?
[MR ROCCA]: Yes.
(Transcript 22 September 2023, page 92, lines 36-37)
The Court finds that the liability in respect of the overdraft numbered 20 is that of $120,400.
The Court notes the dispute regarding the credit cards found at items numbered 21 and 22 in the balance sheet. The Husband suggests that the NAB Visa credit card #...55 with an outstanding liability as at 8 September 2023 of $7,550 should be considered a joint liability of the parties and also suggests that the CBA credit card #...69 with an outstanding liability as at 8 September 2023 of $35,050 should be considered as a joint liability of the parties. The Wife suggests that the Court should not take either of the credit card liabilities into account. The Husband deposed at paragraph 40 of his trial Affidavit that at the date of separation the NAB credit card had an outstanding liability of $4,734 and the CBA credit card an outstanding liability of $35,092. The Wife was cross examined on the topic of the credit cards and provided her evidence as follows:
MR GIVNEY: Now, do you remember that there was a CBA credit card debt at the time you separated?
[MS ROCCA]: Correct.
MR GIVNEY: Of $35,092?
[MS ROCCA]: Not sure on what the actual figure was, but ---
MR GIVNEY: Does that figure surprise you?
[MS ROCCA]: ---No.
MR GIVNEY: Did you check what it was when you read his affidavit?
[MS ROCCA]: ---Did I check?
MR GIVNEY: Yes. Did you say---?
[MS ROCCA]: I don’t have access to that account at all.
MR GIVNEY: Right. Did you have his – his solicitors asked where the information came from?
[MS ROCCA]: I – I haven’t. No.
MR GIVNEY: Right. And there was a Visa card debt of $4734; do you remember that?
[MS ROCCA]: ---For – for which Visa are you referring?
MR GIVNEY: […]55?
[MS ROCCA]: Is that [Mr Rocca]’s personal one? I believe it is [Mr Rocca]’s personal one.
MR GIVNEY: Yes. Yes, personal one. So when you saw his affidavit, did you read the annexures?
[MS ROCCA]: As I said, I browsed over it.
MR GIVNEY: Right. So [Mr Rocca] attaches to his affidavit the various statements verifying what’s in his schedule in paragraph 40; did you see those documents?
[MS ROCCA]: If you would like to show me then now, I will verify.
(Transcript 15 December 2023, page 395, lines 7-31)
The Court finds that the outstanding balances on the credit cards at the time of separation were correctly recorded at paragraph 40 of the Husband’s trial Affidavit. The Court further finds that the NAB Visa credit card #...55 with an outstanding liability as at 8 September 2023 of $7,550 should be considered a joint liability of the parties but only in the amount of $4,734 being the balance at the time of separation. The Court finds the CBA credit card #...69 with an outstanding liability as at 8 September 2023 of $35,092 should be considered and included as a matrimonial liability.
The Court now considers the outstanding debt owing to the Australian Taxation Office (‘ATO’) numbered 23 in the balance sheet.
The Court received into evidence a letter from the ATO dated 11 November 2022 directed to the parties regarding the parties outstanding debt in the amount of $107,483.79 forming Exhibit “E” in the proceedings:
Your debt hasn’t gone away, but we have put collection action on hold for now.
We can use any future tax refunds or credits you receive from other government agencies to pay off your debt. We can also take action in the future to collect your debt.
It is the Husbands position that as at December 2022 this debt was essentially “written off” and the Wife reactivated the debt after making a unilateral decision to call the ATO in mid-2023. Following this call, the ATO sent a letter to the parties dated 4 September 2023 stating:
Your debt that was on hold has been reactivated.
The Court does not accept that at any point the debt was “written off”. The Court finds that the debt was, for a period of time, not being pursued by the ATO, but the ATO could have at any point in the future chosen to pursue the debt. In the view of the Court, the Wife contacted the ATO to have the debt included as a liability in the proceedings so as to ensure that any order made by the Court would ensure for a clean break between the parties. The Court considers s 81 of the Act and finds that it was the intention of the Wife to be able to move forward in her life and put to an end any potential further litigation between the parties. In accordance with s 81 of the Act the Court is obliged to consider the debt noting that the parties are jointly and severally liable for the said debt.
At the conclusion of the Final Hearing the Court made orders for the Applicant Husband, either personally or through his accountant and/or solicitor, to contact the ATO for the purposes of negotiating an agreement for a reduction or extinguishment of the tax debt of the party’s partnership. The Husband was however unsuccessful in his negotiations. The Court thereafter made orders on 26 February 2024 authorising the Wife to contact the ATO for the purposes of attempting to negotiate the said debt. The Wife advised the Court on 13 March 2024 that she had been successful in her negotiations and the ATO had agreed to remit the general interest charges totalling $44,600.72. On this date the Court made the following Orders:
1.The Court receives into evidence an activity statement evidencing the current debt owing to the Australian Taxation Office in the amount of $71,177.83. This will form Exhibit “K” in the proceedings.
2.The matter is formally adjourned to a date to be advised for delivery of reserved Judgment.
AND THE COURT NOTES THAT:
A. It is an agreed fact between the parties the Australian Taxation Office is prepared to apportion the debt of $71,177.83 between the parties based upon the orders of the court making a division of the said debt.
It was accepted on behalf of the Husband that the parties would each need to pay their respective halves of the debt.
The Court will make orders that will see each party bear responsibility for 50% of the debt, which, in accordance with Exhibit ‘K’, is outstanding in the sum of $71,177.83.
ORDERS 15 DECEMBER 2023
Prior to the conclusion of the hearing on 15 December 2023 the Court made orders that required the Husband to make certain payments in respect of B Street given the Husband’s occupation of the home. That order provided:
10. Pending delivery of the final decision the Applicant husband is to ensure the payments due to the National Australia Bank with respect to the mortgage over the former matrimonial home are paid and the insurances and other outgoings including rates are paid.
Prior to the delivery of this decision the Wife filed an Application in a Proceeding on 24 July 2024 seeking to reopen the case for the purposes of the Court receiving evidence as to the Husband’s non-compliance with the orders of the Court where the Husband had not made the mortgage repayments to the NAB or payments to council for rates and water or paid the insurance over the home. The matter was listed before the Court on 25 July 2024. On this date the Court made the following orders:
1. Leave is granted to [Ms Rocca] to reopen the case for the purposes of providing evidence with respect to any arrears owed on the mortgage or other payments that are outstanding that the Court had ordered the husband be liable for the purposes of his occupation of the former matrimonial home.
It is an agreed fact in the proceedings that the Husband did not comply with the orders of the court made on 15 December 2023 and that the Wife had made payments towards the insurance over B Street rather than having the insurance policy lapse.
When the matter come before the Court on 8 August the Court made the following notation:
AND THE COURT NOTES:
A. The concession made by the husband that he be liable to pay the arrears owed on the NAB Mortgage #[…]17, the council rates on the Former Matrimonial Home and the water rates on the Former Matrimonial Home, with such payment to be made at the time of refinance/sale.
It is apparent to the Court, and an agreed position between the parties, that the Court will need to make specific final orders adjusting the monies the Husband is to receive so that the Wife’s entitlement is not eroded. Where the Husband retains B Street he will be required to payout all mortgage arrears, all council rates including water rates and repay the wife for monies she has paid in order to keep B Street insured. Where the Husband does not refinance the mortgage and retain B Street (paying to the Wife her entitlement), it will be necessary to make an adjustment at the time of sale such that the mortgage arrears, council rates and water rates are paid from the Husband’s share of the proceeds of sale and further that the Wife be reimbursed by the Husband from the monies the Husband receives on the sale those monies the Wife has paid to keep B Street insured.
SHOULD THE COURT MAKE ORDERS
The Court having identified, according to ordinary common law and equitable principles the existing legal and equitable interests of the parties, now considers whether it should make an order pursuant to section 79 of the Family Law Act 1975 (Cth) (‘the Act’). Section 79(2) of the Act provides:
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In Stanford v Stanford (2012) 247 CLR 108 the High Court set out how the intersection of sections 79(2) and 79(4) operate. At [35] the Court held:
35. It will be recalled that s 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
Helpfully, and particularly relevant to this case, the High Court stated at [42]:
42. In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
In this case the Court considers whether it is satisfied that it is just and equitable to make an order adjusting the parties’ property by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property identified by the Court.
While the Court notes the sole ownership of some items and the joint ownership in property such as the former matrimonial home, the Court importantly notes the Husband’s continued operation of the business, C Business, that is assigned no value in the parties’ balance sheet. As set out above the Husband receives approximately the sum of $1,538 per week from C Business and use of a “company vehicle and phone” worth the sum of $100 per week. The Court recognises that C Business had afforded the parties significant financial benefit during their relationship. The Court accepts that the Wife worked in and contributed to C Business that operated as a partnership, and while the parties are liable to the ATO for residual tax debts arising from the partnership the arrangement where C Business benefited both parties and the family lasted while the parties’ marital relationship remained intact. Now that the marital relationship is over any benefits from C Business fall to the Husband alone. In other words, while the parties express or implicit assumption that the parties made to the effect that existing arrangements of C Business being operated as a partnership between the parties was sufficient and appropriate during the continuance of their marital relationship, that sufficiency and appropriateness ended with the ending of the marital relationship. Given this outcome the Court initially finds that it is satisfied that, in all the circumstances, it is just and equitable to make orders pursuant to section 79 of the Act.
The Court is required to consider the legislative pathway set out at section 79(4) of the Act. Section 79(4) provides that in considering what order (if any) should be made under this section in property settlement proceedings, the Court shall take into account:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last - mentioned property, whether or not that last - mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last - mentioned property, whether or not that last - mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
CONTRIBUTIONS
Section 79(4)(a) - Financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage.
The Wife deposes that at the commencement of the parties’ relationship that although she had no superannuation entitlements or liabilities, in 1994, she owned household items and furniture; Motor Vehicle 7; and $48,000 in savings with Commonwealth Bank in her Commonwealth Savings account No. #...23.
The Wife further suggests that the Husband owned a few tools, Motor Vehicle 8 and a nominal amount of superannuation with Super Fund 2.
The Husband deposes at paragraph 35 of his trial Affidavit that he owned Motor Vehicle 8, Motor Vehicle 2, had tools of trade and $20,000 in savings.
Both parties deposed as to the circumstances in which they purchased B Street. At Paragraph 20 of the Wife’s trial Affidavit, she deposed:
20. [In] or about [late] 1997, [Mr Rocca] and I each contributed $10,000 which we received as gifts from our respective parents towards:
a. a deposit of $10,000, and around $10,000 in stamp duty and legal costs, associated with the purchase of [B Street, Suburb D] (“[B Street]”) at the price of $140,000 from [Mr Rocca]’s father, [Mr N], and [Mr Rocca]’s uncle [Mr O], and;
we borrowed $120,000 from [H Bank] to enable us to settle the purchase of [B Street in] or about [late] 1997.
In respect of the purchase the Husband deposed at paragraph 34 of his trial Affidavit that:
34. [Ms Rocca] and I completed the purchase of the former matrimonial home in [late] 1997. I had $20,000.00 in savings at that time which I contributed to the purchase price and we borrowed a sum of $120,000.00 to complete the purchase of the property.
The parties are not in agreement with respect to the property each had at the commencement of their relationship. Similarly, the parties are not in agreement with respect to the exact sum they each contributed towards the purchase of B Street. In this case the difference between them is largely insignificant where each parties’ contributions subsequent to the purchase have risen up to well meet and exceed the initial contribution of property that the parties owned at the commencement of their relationship and contributions towards the purchase of B Street.
Both parties agree that following the purchase of B Street that the Husband’s parents gifted them monies to use for the purposes of renovating the said property. At paragraph 21 the Wife’s trial Affidavit she deposed:
21. [In] or about [late] 1997, following the sale of [B Street] to [Mr Rocca] and I, [Ms P] and [Mr N], gave us money, the amount of which is unknown to me, towards the cost of renovations to [B Street] comprising:
a. gutting of [walls];
b. removal of [old fittings and fixtures];
c. [installation of new fixtures and fittings];
d. paying for tradesmen [for painting and tiling]
At paragraph 34 of the Husband’s trial Affidavit, he deposed that:
34. Immediately after settlement my parents gave me a sum of approximately $20,000.00 to assist with the cost of extensive renovations to the house which I carried out. I gutted the inside of the house and I arranged for the installation of new plumbing and new electrical wiring throughout the house. I installed a new bathroom and put up new walls, [installed new fittings and fixtures to the house]
The Court notes the decision in the matter of Kessey & Kessey (1994) FLC 92–495, where in that case the Wife’s mother gave the parties $75,000 for the purpose of improving the matrimonial home, which was held in the Wife’s sole name. The Court found that “a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child.” The Court accepts that the Husband’s parent’s gift should be treated as a contribution made on behalf of the Husband of limited weight.
The Court accepts that the Wife worked as an unpaid bookkeeper in the parties’ business. Having heard the parties’ evidence in cross-examination the Court finds that both parties worked hard and worked to the best of their ability in a marriage that was, until separation, a joint endeavour.
Section 79(4)(b) - Contributions (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them.
The Court considers the contributions made by the parties to the renovations of B Street.
At paragraph 34 of the Husband’s trial Affidavit referred to above, the Husband deposed to having carried out significant renovation works to the B Street property.
While at paragraphs 53 and 54 of the Wife’s trial Affidavit she deposed that:
53. Also in 1997, [Mr Rocca] and I jointly undertook renovations to the [B Street] home including:
a. gutting of [the walls];
b. removal [old fittings and fixtures];
c. [installation of new fittings and fixtures];
d. organising and paying for tradesmen to do painting and tiling.
54. I assisted with the necessary demolition work and cleaning following completion of the renovations ready for [Mr Rocca] and I to move into the home.
Further at paragraph 57 of the Wife’s trial Affidavit she deposed:
57. Between 2003 and 2004, [Mr Rocca] erected a Pergola in the back garden of [B Street] with the assistance of some of his employees.
While the Court accepts that the Wife would have been of assistance in carrying out the renovation works to B Street, the Court finds that the significant majority of the renovation works were carried out by the Husband and the Court gives weight to those contributions.
Section 79(4)(c) - Contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent.
The Court gives weight to the contributions made by the Wife to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent. It is not contested that the Wife was practically wholly responsible for the domestic care and work within the parties’ home.
As set out above, in 2005 the parties third child G was born. Tragically, as set out above, G passed away in 2007. The Court accepts that the Wife provided substantial and significant care for G well beyond that any parent of a healthy child would ordinarily undertake. The circumstances of that care are set out at paragraphs 62-64 of the Wife’s trial Affidavit that provides:
62. During his short life, [G] was severely disabled and required full-time care which was provided solely (sic) by me other than on occasions when I helped [Mr Rocca] to shower [G].
63. My care of [G] included:
(a) feeding him, including tube feeding;
(b) providing him with medication;
(c) changing his nappies;
(d) bathing him;
(e) dressing him;
(f) taking him to and from his many doctors', physiotherapy and hospital appointments;
(g) suctioning and monitoring;
(h) liaising with his medical team; and
(i) accompanying [G] during his overnight hospital stays.
64. During the periods that I was not present at home when I was giving birth and or accompanying [G] to hospital for treatment and examinations, [Ms P] and [Mr N] cared for the children providing them with meals, bathing them, washing their clothes, taking them to, and collecting them from, primary school particularly when [G] was born.
The Court accepts that the Wife was at all times the primary carer of the parties other 3 children and continues to be the primary carer for the parties’ son X.
Impact of Family Violence on the Wife’s Contributions
The Wife gave extensive evidence within her trial Affidavit as to the Husband perpetrating family violence upon her during their relationship. The Husband denies those allegations, noting specifically paragraph 19 of the Husband’s Trial Affidavit where he stated “…I have never assaulted [Ms Rocca] in any way whatsoever”. The Wife also put to the Husband during cross-examination various allegations of family violence that the Husband denied. Ordinarily it is difficult for the Court to make a finding that a husband engaged in a course of conduct towards a Wife (or vice versa) that falls within the definition of family violence contained at section 4B of the Act in circumstances where the allegations put a Wife’s word against that of a Husband. In this case however, the Court was able to observe the extreme distress of the Wife when cross-examining the Husband on issues of family violence.
The Wife’s level of distress during her cross-examination of the Husband caused the Court real concern about her wellbeing such that the following exchange between the Court and the Wife took place:
HIS HONOUR: [Ms Rocca], I am worried about you. It’s not therapeutic for you to do this. I know you want to. It’s really not.
[MS ROCCA]: Well, I believe it is, your Honour.
HIS HONOUR: But that’s not – that’s
[MS ROCCA]: Because he needs to hear this from my voice…
(Transcript 7 December 2023, page 329, lines 1-4)
The Wife’s questioning of the Husband during cross-examination and her physical demeanour and distress undertaking this task was such that it left the Court in a position that it believed, on the balance of probabilities, that the Wife was a victim of family violence that had been perpetrated on her by the Husband.
Despite the Court accepting the Husband had perpetrated family violence on the Wife, the Kennon argument made by the Wife cannot be advanced noting that at no point in her evidence does the wife directly or even indirectly suggest that the Husband’s conduct made the Wife’s contributions to the relationship with respect to her ability to work making direct financial contributions or contributions as a homemaker and parent significantly more arduous.
The Court notes, what the Court regards as a concession made by Counsel for the Wife on the first day of the Final Hearing regarding the Wife’s Kennon argument:
Judge Myers: The second issue in this matter is the Kennon argument. If I read your client’s affidavit, which I do, the evidence about family violence is – it’s – if you thought to give it weight, because it’s not very specific, and correct me if I’m wrong, but I don’t see any evidence about contributions being made more arduous – there’s evidence about family violence.
[Mr Q]: There’s evidence---
Judge Myers: But the next – the flow on effect if one looks at Kennon is not just family violence. The contribution has been made more arduous.
[Mr Q]: I accept that those are the two elements to the satisfaction of the Kennon claim. And I observe what your Honour says ---
(Transcript, 12 September 2023, pages 10-11)
Following the Full Court of the Family Court’s decision in Kennon & Kennon [1997] FamCA 905, family violence may be taken into account in family law property proceedings.
In Kennon (at 84, 294) the Court held that:
where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties' respective contributions within s.79.
The test in Kennon (at 84, 294 - 84, 295) is a relatively strict test: the party arguing for an adjustment must demonstrate (a) a course of violent conduct, (b) a discernible impact upon the party’s contributions. The Court emphasised that it would only apply in “exceptional” circumstances and to a “relatively narrow band of cases”.
The Court notes the decision of the Full Court of the Family Court in Keating & Keating [2019] FamCAFC 46 where Ainslie-Wallace, Ryan and Austin JJ reviewed the decision in Spagnardi as it related to the Court’s consideration of Kennon and held (at 35-39):
35. Turning then to Kennon, the rationale for a contributions adjustment as a consequence of family violence was explained by Fogarty and Lindenmayer JJ at 84,294:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties’ respective contributions within s.79. We prefer this approach to the concept of “negative contributions” which is sometimes referred to in this discussion.
36. And at 84,294 – 84,295:
It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass (as in Ferguson) conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).
(Emphasis added)
37. In Spagnardi the Full Court referred to Kennon and the necessity to show that the conduct had a “discernible impact” on the party’s contributions but noted that, there was an “insufficiency of evidence” [47]. Their Honours then continued:
As Kennon has established, it is necessary to provide evidence to establish:
The incidence of domestic violence;
The effect of domestic violence; and
Evidence to enable the court to quantify the effect of that violence upon the parties [sic] capacity to "contribute" as defined by section 79(4).
(Emphasis added)38. Their Honours further noted at [48] that there was a “complete absence of evidence as to how the husband’s conduct affected her ability to contribute”. At first blush the reference in Spagnardi to “quantification” seems to elevate the need for an evidentiary nexus or “discernible impact” between the conduct complained of and its effect on the party’s ability to make relevant contributions, requiring expert or actuarial evidence of the effect of the violence. That impression is reinforced by their Honour’s reference to and comparison with the husband’s failure to adduce evidence to demonstrate the impact on the value of the house by his renovations and improvements at [50] where their Honours said:
An absence of quantification was also apparent in the appellant’s case. While the husband went to great lengths to identify each of the tasks undertaken by him in connection with renovations and improvements to the matrimonial property, he failed to provide evidence of the direct effect of his endeavours upon the value of that property.
39. This uncomfortable analogy does not illuminate what “quantification” of the effect of violence on contributions might look like. It suggests something more than the evidence by the victim spouse. We struggle to understand what that “quantification” evidence might be beyond that given by the victim spouse as to the incidence and effect of the violence as identified in Spagnardi in the first two dot points at [47]. Furthermore, we fail to see how this third step accords with the decision in Kennon which the Full Court in Spagnardi said governed the situation. Perhaps the use of the word “quantification” is infelicitous and has unintentionally added a gloss to the ratio in Kennon when, in truth, the Court in Spagnardi was merely reinforcing the need for there to be an evidentiary nexus between the conduct complained of and the capacity (and or effort expended) to make relevant contributions. And, depending upon the nature of the violence established, in the absence of express evidence about the effect that violence had on the victim spouse’s contributions, how difficult it might be for the Court to draw inferences which would establish the evidentiary nexus (see Spagnardi at [42]).
For these reasons set out above where the Wife provided no evidence about the effect that the Huband’s violence had on her contributions the Court cannot just draw an inference that there was some effect. In the absence of such evidence the Wife’s Kennon argument fails.
Section 79(4)(e) - Matters referred to in subsection 75(2) so far as they are relevant
The Court considers those matters referred to in s 75(2) of the Act so far as they are relevant.
The age and state of health of each of the parties: s 75(2)(a)
The Husband is 50 and the Wife is 55 years old. The Husband is some 5 years younger than the Wife. The Husband’s working career will as a factor of the parties’ respective ages be greater than that of the Wife’s. There was no admissible evidence that would allow the Court to make any finding other than the parties being in reasonable health.
The income, property, and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment: s 75(2)(b)
The husband set out in his Financial Statement filed on 22 August 2023 that he receives the sum of approximately $1,538 per week from C Business and use of a “company vehicle and phone” worth the sum of $100 per week. While the Wife sets out in her Financial Statement filed 21 August 2023 that she receives the sum of approximately the $1,513 for her work as an administrative officer with K Pty Ltd and a further sum of $128 per week being Family Tax Benefits parts A & B.
The parties possess no financial resources beyond those set out in the balance sheet that the Court has found above. While the Husband operates C Business as a sole trader that is assigned no value in the parties’ balance sheet the Court finds that the business is really a personal exertion type business that has no real value beyond the Husband undertaking work and as such is not a financial resource.
The parties have the physical and mental capacity for appropriate gainful employment evidenced by the earnings disclosed in their respective financial statements.
Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years: s 75(2)(c)
The parties’ son X is aged 15 years. Pursuant to Orders dated 12 September 2023, X lives with the Wife and spends time with the Husband in accordance with his wishes.
Commitments of each of the parties that are necessary to enable the party to support; himself or herself; and a child or another person that the party has a duty to maintain: s 75(2)(d)
The Court is aware of the usual commitments of each of the parties that are necessary to enable them to support themselves. The Court however is not aware of how much time X is actually spending with either parent. Beyond the parties’ commitments to support themselves and their son X, to the varying extent that may be, neither party has other commitments to support a child of another person.
The responsibilities of either party to support any other person: s 75(2)(e)
The Court is not aware either party has a duty to maintain any other person.
The eligibility of either party for a pension, allowance or benefit under: (i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party: s 75(2)(f)
The Husband, on the face of his financial statements and evidence is not eligible for a pension, allowance, or benefit under any law of the Commonwealth, of a State or Territory or of another country, nor is he currently eligible to a pension allowance or benefit under any superannuation fund or scheme operating within or outside Australia.
The Wife however, as per her financial statement filed 21 August 2023 receives a Family Tax Benefit totalling approximately $128 per week.
A standard of living that in all the circumstances is reasonable: s 75(2)(g)
Although the division of property in these proceedings will see the parties’ assets divided between them such that they will each experience a significant reduction in their financial wealth the parties will by virtue of their income and remaining assets be afforded a standard of living that in all the circumstances is reasonable.
The extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income: s 75(2)(h)
This consideration is not relevant to the parties in these proceedings.
The effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant: s 75(2)(ha)
This consideration is not relevant to the parties in these proceedings.
The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party: s 75(2)(j)
This consideration is not relevant to the parties in these proceedings.
The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration: s 75(2)(k)
The Court finds based on the evidence, that the duration of the marriage has not adversely affected the earning capacity of either party.
The need to protect a party who wishes to continue that party's role as a parent: s75(2)(l)
The Court notes the Wife’s desire to continue her role as primary carer/ parent for the parties’ son X.
If either party is cohabiting with another person--the financial circumstances relating to the cohabitation: s 75(2)(m)
The Court is not aware of either party cohabiting with another person.
The terms of any order made or proposed to be made under s 79 in relation to the property of the parties; or vested bankruptcy property in relation to a bankrupt party; the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to a party to the marriage; or a person who is a party to a de facto relationship with a party to the marriage; or the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii): s 75(2)(n) and s 75(2)(naa)
The Court takes into account the orders proposed to be made by both parties under section 79 of the Act in relation to the property of the parties.
The Court notes that neither party is bankrupt.
Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provide, is to provide, or might be liable to provide in the future, for a child of the marriage: s 75(2)(na)
The Court notes the modest child support assessment to be paid by the Husband for X under the Child Support (Assessment) Act 1989 (Cth). The Court also notes the Husband has been well less than diligent in his payment of Child Support to the Wife in respect of X. It is not disputed that the Husband has several thousands of dollars owing in arrears of child support to the Wife.
Any other matters: s 75(2)(o)
During the course of the proceedings the Wife advanced a wastage argument with respect to matrimonial funds, that she contended were wasted by the Husband as a result of gambling on poker machines. The Wife initially sought the wastage argument to be advanced as an “add-back”, however abandoned the “add-back” argument and chose to pursue a wastage argument in respect of the Court’s consideration of section 75(2) of the Act. (Transcript dated 22 September 2023, p 34, lines 35-43).
As set out by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at paragraphs [18]-[19]:
[18]. If a party has acted in the manner to which I have referred earlier either by:
(a) embarking upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) acting recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value,
[19]. then such conduct in my view and the economic consequences which flow therefrom are clearly matters to which the Court may have regard pursuant to the provisions of sec. 75(2)(o).
The Wife cross-examined the Husband at length with respect to certain cash withdrawals made at automatic teller machines at pubs, clubs and petrol stations for the period of 2006 to 2019. It was put to the Husband propositions that he withdrew cash for the purposes of gambling to which the Husband denied. The Wife conceded in cross-examination that on occasion she was responsible for withdrawing money and that she would play poker machines alongside the Husband. The Wife however was not able to identify by looking at the bank statements on what occasions she may have withdrawn money. Based on the evidence before the Court, it is difficult for the Court to discern who made the cash withdrawals and what the cash withdrawals were spent on where scenarios put to the Court included that; the Husband gambled on poker machines, the parties joint gambled on poker machines, monies were spent in cash grocery shopping and paying for dinners.
The Court listened to the Wife’s cross-examination on the topic of the parties’ borrowing money from their bank in consecutive years, putting money into the partnership, purchasing vehicles and otherwise paying out debts.
The Court accepts that over a period of years the parties borrowed monies increasing the liability owed on their mortgage. The Court cannot however find that the expenditure by the Husband and or the parties jointly gambling on poker machines contributed to or played any discernible role in the parties’ increased borrowings. The wife suggested to the Husband in cross-examination on the topic of the increase of borrowings that they had been living beyond their means and beyond the means of the business. (Transcript 7 December 2023, page 261, lines 31-34. Page 265, lines 37-38. Page 267, lines 41-44. Page 273, lines 10-11).
Indeed, the parties borrowing monies against their home on a number of occasions suggested that they did perhaps live beyond their means to the extent that they borrowed funds to make purchases or pay debts rather than paying debts as they accrued or saving up for things such as the purchase of motor vehicles. It must be remembered that the parties borrowed against the equity in their home where that equity had increased. The expenditure of monies on what are legally termed ‘gaming machines’ (also known as poker machines) is for many people an entertainment choice and one that they can afford. While the Court has on occasion observed litigants before the Court emptying their bank accounts and gambling all their money to the point where they cannot even afford groceries, that it not the case in these proceedings.
The gambling by people within NSW on what are termed in the legislation as “gaming machines” is administered by NSW Government Department of Liquor and Gaming and the NSW Independent Liquor and Gaming Authority and is regulated pursuant to the Gaming Machines Act 2001 (NSW). The expenditure of monies on gaming machines within NSW is legal and the Court should not and cannot simply just find that any and all monies expended by parties on gaming machines should fall within the sort of conduct set out in Kowaliw & Kowaliw or should be somehow treated as an add-back. What must be demonstrated is that a party to a marriage had embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or had acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
The easiest example of where the Court would consider gambling in the context of the type of conduct set out in Kowaliw & Kowaliw is where a party to a marriage has for instance a gambling addiction and has gambled away a significant portion of their savings. In those circumstances the Court could find that such conduct falls within the ambit of having acted recklessly or wantonly with matrimonial assets such that the Court would have regard to that conduct pursuant to section 75(2)(o) of the Act. In this case however the Court does not find that when the Husband had expended monies on gaming machines that the Husband had embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or had acted recklessly, negligently or wantonly with matrimonial assets the overall effect of which has reduced or minimised their value. The Court does not accept the Wife’s argument made pursuant to section 75(2)(o) of the Act.
The terms of any binding financial agreement binding on the parties to the marriage and the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage: s 75(2)(p) and s 75(2)(q)
The Court is not aware of there being any Financial Agreement that is binding on the parties nor of there being any Part VIIIAB Financial Agreement that is binding on a party to the marriage.
Any other order made under this Act affecting a party to the marriage or a child of the marriage: s 79(4)(f)
Other than the final parenting orders made for X, the Court is not aware of any other Order made under the Act affecting the parties or their son.
The Court considers the provision of s 79(4)(g) of the Act and notes the Husband remains liable to pay child support to Wife.
JUST AND EQUITABLE
When considering the parties’ contributions being financial contributions, non-financial contributions and contributions as a homemaker and parent the Court finds that it is just and equitable to make an adjustment in the Wife’s favour of 5%. When considering the matters set out at section 75(2) of the Act the Court finds that it is just and equitable to make an adjustment in the Wife’s favour of 5%. The Court thus finds that when considering the parties’ contributions and matters at s 75(2) of the Act there should be an overall division of property between the parties of 40% to the Husband and 60% to the Wife.
Final orders will be made in accordance with the findings and reasons set out above and are contained at the beginning of this judgment based on the following calculations.
Following the Court having made findings as to values of assets and liabilities the overall pool of assets and liabilities consists of the following:
Assets
[B Street] $905,000
[Motor Vehicle 1] $36,000
[Motor Vehicle 2] $5,700
[Motor Vehicle 3] $11,600
[Motor Vehicle 4] $18,800
CBA Acc #[…]11 $130
Tools & Equipment $15,000
CBA Acc#[…]30 $5,600
CBA Acc#[…]49 $40
[Super Fund 2] $30,650
[Super Fund 1] $17,750
[Motor Vehicle 6] $100
CBA #[…]23 $800
NAB #[…]67 $60
Total Assets: $1,047,230
Liabilities:
NAB Mortgage $189,400
NAB Overdraft facility $120,400
ATO Liability $71,177.83
NAB Visa $4,734
CBA Credit Card $35,092
Total Liabilities: $420,803.83
Net Total available for Distribution: $1,047,230 less
$420,803.83
$626,426.17
For the purpose of this calculation the Court will disregard the sum of $60 in the joint NAB account that will need to be closed by the parties and the proceeds divided 60% to the Wife and 40% to the Husband.
The Wife is to receive 60% of $626,366.17 = $375,819.70.
The Husband is to receive 40% of $626,366.17 = $250,546.47.
The Husband will retain the following assets, with the following values as found by the Court:
[Motor Vehicle 1] $36,000
[Motor Vehicle 2] $5,700
[Motor Vehicle 3] $11,600
[Motor Vehicle 4] $18,800
CBA Acc #[…]11 $130
Tools & Equipment $15,000
CBA Acc #[…]30 $5,600
CBA Acc #[…]49 $40
[Super Fund 2] $30,650
Total: $123,520
The Husband will remain liable for the following:
50% ATO debt $35,588.92
NAB Visa $4,734
CBA Credit Card $35,092
Total $75,414.92
Total Net $48,105.08
In order that the Husband receive his entitlement of $250,546.47 he will need to receive the sum of $202,441.39.
The Wife will retain:
[Super Fund 1] $17,750
[Motor Vehicle 6] $100
CBA #[…]23 $800
Total: $18,650
The Wife will remain liable for the following:
50% ATO Debt $35,588.92
Total: $35,588.92
Total Net: -$16,938.92
In order that the Wife receive her entitlement of $375,819.70 she will need to receive the sum of $392,758.62.
In accordance with the reasoning set out in this decision and the calculations above the Court makes the Orders and Notations found at the beginning of this judgment.
I certify that the preceding one hundred and forty-nine (149) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Myers. Associate:
Dated: 16 August 2024
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