FAMILY LAW – PROPERTY – Where the marriage was relatively short – Where the parties’ liabilities exceeded their assets – Both parties acquired several properties prior to and during their relationship – Where the properties in the husband’s sole name were sold prior to the final hearing with the proceeds applied to discharging the debt – The three remaining properties held in the wife’s sole name – Where the husband made a significant cash contribution to purchase of the former matrimonial home – Where wife entered into substantial mortgage – Where the husband sought a declaration that the wife holds 87.5 per cent of the former matrimonial home on resulting trust in his favour – Presumption of advancement – Where add backs sought were largely unsubstantiated and misconceived – Where parties’ contributions were largely equal – Where wife sought a Kennon adjustment – Where no secure finding that the alleged family violence perpetrated by the husband made the wife’s contributions more arduous – Evidence fails to establish any basis for just and equitable orders – No order for property adjustment made – No order for superannuation split made – No order as to costs.
Legislation:
Family Law Act 1975 (Cth) Pt VIII, ss 44(3), 72(1), 79, 79(2), 79(4), 80, 81
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Chiu & Shun (No 2) [2024] FedCFamC1F 167
Case
[2024] FedCFamC1F 167
Decision Date
CaseChat Overview and Summary
The case of Chiu & Shun (No 2) involved a property settlement dispute between Ms Chiu and Mr Shun following their divorce. The central issue was the distribution of the parties' assets and liabilities, which included several properties and significant debts. The parties' marriage was relatively short, and their financial relationship during the marriage was complex, with both parties contributing to the acquisition of properties and incurring substantial debts. The court had to decide whether to make property adjustment orders and how to allocate the parties' contributions to the marriage.
The court examined the nature and extent of the contributions made by each party, both financial and non-financial, to the acquisition, conservation, and improvement of their assets. It was noted that both parties made significant contributions to the purchase of their properties, and their liabilities exceeded their assets. The court found that there was no basis to distinguish the contributions of one party over the other, and therefore, no property adjustment was warranted. Additionally, the court rejected the husband's claim for a resulting trust over the former matrimonial home and the wife's claim for a Kennon adjustment. The court concluded that there was insufficient evidence to support just and equitable orders.
The final orders of the court dismissed both the applicant's and the respondent's applications, as well as the respondent's application for spouse maintenance. The court's decision reflected the complexity of the financial relationship between the parties and the need for a balanced approach to property settlement, taking into account all relevant factors and contributions made during the marriage.
Orders
Orders of the court
SYC 8033 of 2015
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:
MS CHIU
Applicant
AND:
MR SHUN
Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
18 MARCH 2023
THE COURT ORDERS THAT:
1. The Applicant’s Amended Initiating Application be dismissed.
2. The Respondent’s Response be dismissed.
3. The Respondent’s application for spouse maintenance be dismissed.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
Background
Background to the litigation
Neither party presented as a reliable witness, and this fact coupled with the way they organised their material led me to hold reservations about each of their cases. I have not preferred either the wife or husband as a witness generally. Rather I have been compelled to chart a specific course, to the extent necessary, through each factual dispute, often unaided by much of their evidence, which was voluminous, despite giving it all careful attention. BRIEF BACKGROUND The husband was born in 1973 and is currently 50 years of age. The husband moved to Australia in 2001 and was granted permanent residency in 2003. The wife was born in Country E in 1983 and is currently 40 years of age. The wife immigrated to Australia in or around 2003 and became an Australian citizen in early 2009. The parties dispute the date that the relationship commenced. I will return to this below because the resolution of the dispute is assisted by a consideration of the evidence concerning property purchases by each of the parties. The parties were married in 2012 in Country E. Nothing turns on the difference. The husband contended the parties separated on a final basis on 17 July 2015, while the wife’s case was that they separated on 11 May 2015. The difference is not material. A divorce order took effect in early 2018. The husband worked as an IT professional from late 2008 until 2017 when he became unemployed. At the time of the final hearing the husband’s evidence was that he is unemployed and homeless. The wife worked as a financial professional on a full-time basis from 2009 until early 2014, at which time she was made redundant. The wife did not return to paid employment until late 2021 however during this time she received rental income from the properties held in her sole name, as set out below. According to the wife’s Financial Statement filed 5 May 2023, she has been employed as a manager from at least late 2022 and presently earns $2,800 per week before tax, being approximately $140,000 per annum, and receives an additional $1,010 per week by way of rental income. Property Purchases It was the wife’s case that sometime prior to the commencement of the relationship, the husband acquired a property at F Street, Region G, City H, Country E (“the City H property”). In late 2008, the husband entered into a contract to purchase an off-the-plan property at J Street, Suburb K (“Suburb K”) for $395,000 and paid $39,500 for the deposit. He paid $13,269 for stamp duty in early 2010. This purchase did not settle until mid-2013. The husband financed the settlement of the purchase by borrowing $315,000 secured by a mortgage. In early 2009 the wife purchased an off-the-plan property at L Street, Suburb M (“Suburb M”) for $460,000. She paid about $90,000 towards the purchase. This purchase did not settle until early 2011 and was funded by way of a $370,000 mortgage. The husband purchased a property at N Street, Suburb O (“Suburb O”) for $486,000 in early 2009. The Suburb O purchase settled in early 2009 and the husband financed it in part by way of a $368,000 mortgage. The parties resided in Suburb O from mid-2009 until the first half of 2010, after which time the property was tenanted. The circumstances of this cohabitation will be discussed below.
Evidence
Evidence Before The Court
The documents tendered by the parties and read into evidence are set out in Schedule 1 to this judgment. Expert Evidence On the second day of the hearing the husband sought leave to rely upon the evidence of an adversarial expert witness with respect of the rent likely to have been received by the wife. Leave was refused (Chiu & Shun [2023] FedCFamC1F 533).COMPETING PROPOSALS I summarised the parties’ competing proposals at the start of these reasons. The wife’s proposed orders, as contained in Exhibit 19, are detailed in Annexure “A” set out at the conclusion of this judgment. The husband’s proposed orders, as contained in his proposed Minutes of Orders filed 20 November 2023, are set out in Annexure “B”.THE LAW Part VIII of the Act sets out the legislative provisions relating to property orders that may be sought when parties are or were married. The central provision is s 79 of the Act, which gives the Court power to make such orders for alteration of property interests as it considers appropriate. Section 79(2) of the Act provides that:The court must 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) of the Act set outs the factors to be taken into account in considering what order, if any, should be made. These will be discussed in detail below. Section 80 grants specific powers to make a range of different orders to adjust property interests. Section 81 reflects a policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings.DETERMINATION OF AN APPLICATION FOR ALTERING PROPERTY INTERESTS In determining of an application under s 79 of the Act, it is settled that the Court must identify and value, the parties' property, liabilities and financial resources at the date of the hearing. Then identify and assess the contributions of the parties as referred to in s 79 of the Act and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties, whether examined on a global approach or an asset by asset approach. Thereafter, the Court must identify and assess the other relevant factors including, the matters referred to in s 75 of the Act and determine the adjustment (if any) to be made to the contribution entitlements at step two. Finally, the Court must consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case (see Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) at [37]). The Full Court in Bevan & Bevan (2013) FLC 93-545 at [72]–[73] (“Bevan”) has held that the decision in Stanford has not overruled the four step approach. Stanford also made clear that the requirement pursuant to s 79(2) that it would be just and equitable to make orders altering property should not be conflated with the requirements of s 79(4). The High Court also confirmed at [39] that the question of whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different from those that then exist”, in other words, at the time when the discretion may be exercised.
Decision
Reasons for decision
Item 45 was claimed as a liability for overdue electricity costs of $2,799. The husband did not agree with this amount but claimed he did not know. I will include it on the balance sheet.CONCLUSIONS AND ASSET POOL Based on these conclusions, the asset pool is as follows: Consequently, if there was no property adjustment, the wife would hold all the material non‑superannuation assets, but her liabilities would exceed her assets, including superannuation, taking account of the loans owing to family and friends, by some $498,844. The husband has no non-superannuation assets, $4,500 in add backs and $90,464 in superannuation. It cannot go unremarked that the parties provided thousands of pages of documents and five days of oral evidence ultimately only to demonstrate this melancholy reality. I turn now to consider the application of Pt VIII of the Act and the factors set forth in s 79 and s 75(2).CONTRIBUTIONS I will deal first with s 79 of the Act. Section 79(4) sets out the considerations to be taken into account by the Court in determining what order (if any) should be made under s 79 in property settlement proceedings. In closing submissions, the husband argued that an asset by asset approach should be taken when considering the contributions of the parties. The Court has a discretion as to which approach to take (Norbis v Norbis (1986) 161 CLR 513 (“Norbis”)). A global approach is often preferrable, however an asset by asset approach may be appropriate where the marriage of the parties is of short duration and in circumstances where the financial relationship of the parties was such that they treated some property as exclusively the property of one party and to which the other party made no contribution (Zyk and Zyk (1995) FLC 92-644 at 82,509-10; Elliott & Elliott [2007] FamCA 1232; Ashforth & Ashforth [2012] FamCA 621; Keirn & Moxey [2017] FamCA 487). However, a short marriage is but one factor which may weigh in favour of an asset by asset approach, it is not determinative in and of itself (Zagari & Habib [2010] FamCAFC 159 at [83]; Greer & Mackintosh [2013] FamCAFC 16 at [101]). In accordance with s 79(4) of the Act, it has been settled for many years that the court must consider all the contributions, both financial and non-financial, to the acquisition, conservation, and improvement of the parties’ assets, as well as to the welfare of the family during cohabitation and after separation. The Court must consider the contributions in an overall sense (Norman & Norman [2010] FamCAFC 66; Kowalski and Kowalski (1993) FLC 92-342; G and G (2000) FLC 93-043). A broad approach is preferred, rather than reference to precise mathematical calculations (Burke and Burke (1981) FLC 91-055), although an evaluation of each party’s respective contributions is necessary (JEL and DDF (2001) FLC 93-075). Assumptions about equality of contributions should not be made. In Dickons v Dickons (2012) 50 Fam LR 244, the Full Court said:21. [The] principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79. That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage. Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “...where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property...” or is it, for example, a union where parties lived very separate domestic and financial lives?
Ratio Decidendi
Legal Principle Established
The initial contributions of both parties provided a basis for the acquisition of further wealth. I find there is no basis to distinguish the contributions of one party in favour of the other.Financial contributions post-separation I have already described how various properties were sold or utilised after separation. I will not repeat what I have already said, other than to add the following. The wife contended that she was responsible for the mortgage repayments and all outgoings associated with the Suburb D, Suburb M, Victorian properties from separation in July 2015 to present. The evidence before the Court was that the wife paid $546,136 towards the mortgages against the three properties from July 2015 to the date of trial, but the amount outstanding increased by about $178,000 between 2016 and 2023. The wife was responsible for the mortgage and outgoings associated with the Queensland property from July 2015 until early 2023 when the property was sold by mortgagee sale. The mortgage on the Queensland property was $291,655 at July 2015 and the bank records exhibited to the wife’s affidavit showed that the wife made the minimum interest payments until December 2018 (Exhibit 5, p.1523–1562). The wife made additional repayments in 2019 such that by December 2019 the home loan was at $294,592 (Exhibit 5, p.1574–1583). Repayments ceased from early 2020 until the mortgage had increased to $362,949 by early 2023 prior to mortgagee sale (Exhibit 5, p.1588–1647). (b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage Both parties contended they significantly assisted the other party with the management and logistics involved in leasing the other’s properties. Both parties argued that they were primarily responsible for the domestic chores.(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 Between mid-2014 and early 2015 the wife underwent difficult and expensive assisted medical treatments. From about October 2013, the parties had desired that the wife fall pregnant but this did not occur, leading to the joint decision to engage treatment. The wife bore the physical burden of this treatment, and tendered evidence that showed she paid $3,605 for the cost of the treatment. The treatment was ultimately unsuccessful and the wife did not fall pregnant. The husband claimed that he took some medicine and attended some doctors’ appointments and thus “had not done less than [the wife]” (Husband’s affidavit filed 3 May 2023, paragraph 33). I reject this contention of the husband. I conclude that while the husband participated in the process the contribution was substantially made by the wife. (d) the effect of any proposed order upon the earning capacity of either party to the marriage; and Not applicable.ASSESSMENT OF CONTRIBUTIONS