Castelli & Castelli [2023] FedCFamC2F 1172

Castelli & Castelli [2023] FedCFamC2F 1172

Relationship Details

• Type: Marriage
• Court: Federal Circuit and Family Court of Australia (Division 2), Judge Street. Orders were made on 10 May 2023 and the reasons were published on 7 September 2023.
• Duration: Married in 1977 and divorced in 1991, but the parties kept living under one roof until they separated in about 2005. The court treated the marriage as lasting 14 years and the relationship 28 years.
• Ages at Judgment: Husband 69, Wife 66

Children

• The couple had three children, now adults aged about 40, 38 and 33. They gave evidence that corroborated the wife's account of family violence.
• The husband now has the care of two younger dependent children, aged 12 and 10.

Initial Financial Positions

• Wife:
  • Said she used $3,000 from a trust account to help with the legal costs and expenses of buying the home in 1977. The court accepted she made a real but modest monetary contribution, equal to about half the deposit.
• Husband:
  • Said he paid the $6,000 deposit on the home (bought in his sole name for about $30,000) and serviced the mortgage of about $23,000 to $25,000. The court accepted that the home was otherwise bought with his funds and that only about $10,000 was owing on it at the time of the divorce.
  • The court assessed the parties' initial financial and non-financial contributions as almost equal.

Contributions During the Relationship

• Financial Contributions:
  • The husband paid the mortgage and most of the council rates throughout, and worked until he retired in about 2010.
  • After the divorce he used the home as security in his other property dealings.
• Non-financial Contributions:
  • The wife was the primary homemaker and primary carer of the three children, with very little help from the husband. Her care also enabled the husband to earn his income.
• Family Violence: The court found a prolonged course of family violence by the husband, including financially controlling behaviour, corroborated by the adult children. It caused the wife lasting depression and anxiety, for which she still takes medication, and made her contributions as homemaker more arduous.

Post-Separation Contributions and Actions

• Financial Contributions:
  • The husband kept paying the mortgage on the home, including loans he had refinanced against it.
  • The wife paid some council rates and utilities and has lived in the home throughout.
• Promises about the home: In letters he signed in 2015, the husband promised the wife that the home was hers. The court accepted her evidence on this point.

Current Financial Position & Property Pool

• Current Assets:
  • The two properties, both in the husband's name: the former home, valued at $760,000, and the husband's home, valued at $730,000.
  • Mortgages to the same bank: $327,432 on the former home and $418,354 on the husband's home, cross-secured for his other debts.
  • The net value of the two properties after the mortgages was $744,214.
• Liabilities: The husband also had credit card and other debts, and the wife a Centrelink debt.
• Superannuation: The wife's superannuation of about $36,680 was earned from her work after the divorce without any contribution by the husband. It was treated as a separate pool and not altered. The husband had no superannuation.
• Income:
  • The wife works 10 hours a week in retail, earning about $650 a week before tax, and receives $62.50 a week from the government. Her earning capacity is limited by her age and health.
  • The husband is retired, receives a pension and family payments, and supports his two young children.

Assessment of Contributions and Future Needs

• Contributions:
  • 55% to the wife and 45% to the husband, because her contributions as homemaker and parent were greater, plus a further 5% for the effect of the family violence on her contributions (applying Kennon & Kennon). The result was 60% to the wife and 40% to the husband.
• Future Needs Adjustments:
  • The court weighed the wife's age, health and limited earning capacity against the husband's retirement and his care of two young children, and the husband's written promises that the home was hers. It found no further adjustment was needed and declined a further adjustment in the husband's favour for his dependent children.
• Final Division:
  • The former home was transferred to the wife subject only to its own mortgage of $327,432, free of the cross-security for the husband's other debts. The husband kept his own home and its larger mortgage. The court found this gave the wife slightly more than 60% of the net value of the two properties, and rejected the husband's proposal that the bank debts be shared equally.
  • If the bank would not release the cross-security, the wife could apply for an order severing it. If she could not refinance, both properties were to be sold.

Unique Aspects

• The parties lived under one roof for about 14 years after their divorce, and the court looked at the whole 28-year relationship.
• The court found that the family violence, including financial control, had a lasting effect on the wife's health and made her contributions more arduous, which increased her share.
• The orders were designed to let the wife stay in the home she had lived in since 1977, while leaving the husband responsible for the larger debt.

Related decision

In Castelli & Castelli (No 2) [2023] FedCFamC2F 1708 (6 December 2023), the same judge joined the bank to the proceedings and ordered it to discharge the mortgage over the former home on payment of the loan balance and to sever the cross-security over the husband's other debts.

Conclusion

The court gave the wife the former home, carrying only its own mortgage, reflecting her greater contributions as homemaker and parent and the effect of the husband's family violence on those contributions.

The law since this decision

This case was decided before 10 June 2025. From that date the Family Law Act 1975 (Cth) sets out the steps for a property settlement in s 79(3) to (5), and the court must consider the effect of family violence on each party's contributions (s 79(4)(ca)) and on their current and future circumstances (s 79(5)(a)), and any material wastage of property (s 79(5)(d)). In Western Australia, a property case between married couples is decided under that Act in the Family Court of Western Australia. A case between de facto partners in Western Australia is decided under the Family Court Act 1997 (WA), which has not adopted those 2025 changes.