Chiu & Wei and Anor

[2006] FamCA 788

[2006] FamCA 788

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA

AT   No. (P)SYF.2139 of 2004

IN THE MATTER OF:	MRS CHIU	Wife
AND	MR WEI	Husband
AND	MR CHIU	Intervenor

REASONS FOR JUDGMENT

CORAM:	The Hon. Justice J. Ryan
DATE OF HEARING:	18 August 2006
DATE OF JUDGMENT:	25 August 2006

Legislation considered

Family Law Act 1975 (Cth) s75, s79

Cases considered

In the Marriage of Lee Steere (1985) FLC 91-626
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Clauson (1995) FLC 92-593
Biltoftv Biltoft (1995) FLC 92-614

Baumgartner (1987) 164 CLR 137
Green v Green (1989) 17 NSWLR 343
Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41
Muschinski v Dodds (1985) 160 CLR 583
Parshen v Parshen (1996) FLC 92-720
The State of Queensland and another v. J.L. Holdings (1997) 189 CLR 146
Tomasetti (2002) FLC 93-032

APPEARANCES:

Mr Taylor	Of Counsel - instructed by Luk & Associates
The Respondent Husband	In person
Mr Dura	Of Counsel - instructed by Cam Ly & Co appeared on behalf of the Intervenor.

FAMILY LAW -  Property - Accrued jurisdiction  - Where Intervenor claims interest in former matrimonial home pursuant to constructive trust – In order to quantify asset pool trust issue determined first – Constructive trust declared – Property – General principles

Introduction

1. These are proceedings for the adjustment of property pursuant to section 79 of the Family Law Act 1975 (as amended) commenced by the Wife on 27 January 2004.  When the proceedings commenced, the Wife sought both parenting and property orders.  At the commencement of the hearing, the parties resolved all outstanding parenting issues.  Simply put, the parties four children will continue to live with the Wife and enjoy regular time, mainly during weekends and school holidays, with the Husband.  The parties’ most valuable asset is a home at B [the former matrimonial home].  Although registered in the Husband and Wife’s names as joint tenants, the Wife agrees with her brother’s assertion that, as to 90 per cent, they hold the property on trust for him.  Of the remaining asset pool, the Wife claims the balance.

1. The Husband filed his Response on 23 March 2004.  Concerning the property proceedings, the Husband proposes the sale of the former matrimonial home.  After payment of realisation costs and discharge of the mortgage he proposes that the sale proceeds are distributed 60 percent to the Wife and the balance to him.  The Husband refutes any notion that the Wife’s brother has an interest in this property.

1. On 14 April 2005, the Wife’s brother (“the Intervenor”) filed an application seeking leave to intervene in the proceedings.  On 29 April 2005, leave was granted on the basis the Intervenor claimed a beneficial interest in the former matrimonial home.  This interest was said to arise by virtue of a constructive trust.  Reliant upon the Court’s accrued jurisdiction, the Intervenor applied for orders:-

   ·    That the Husband and Wife be declared to hold on trust for the Intervenor a 90 percent interest in the property known as and situate at B.

   ·    That the Husband and Wife be declared to be indebted to the Second Respondent in the sum of $810,000.

   ·    In order to satisfy the above orders, the parties, including the Intervenor, do all acts and things necessary to:-

   (a)transfer the Husband and Wife’s interest in the property to the Intervenor

   (b)the Intervenor discharge any mortgage secured against the property.

   ·    The Intervenor pay to the Husband and Wife $60,000.

   ·    The Husband and Wife pay the Intervenor’s costs of the proceedings.

   These orders are more fully set out in the Intervenor’s Response filed 20 June 2005.

1. The hearing proceeded on the basis there is a community of interest between the Wife and Intervenor.  During closing addresses, the Wife’s Counsel supported the Intervenor’s approach.

The hearing

1. It is necessary to comment upon the conduct of the hearing.  All parties appeared with the assistance of Cantonese speaking interpreters.  The Wife and Intervenor were each represented by Counsel and relied on the documents set out in their respective case outline documents.  The Husband appeared unrepresented. Although subject to repeated procedural orders including orders that he file and serve affidavits, the Husband failed to comply.  His non-compliance was prolonged and as a review of the Court file reveals, could not be said to result from ignorance on his part concerning his obligations.  In the event he was afforded an opportunity to test the Wife’s and Intervenor’s evidence and to present documents.  In the face of the Wife’s and Intervenor’s objection I refused to allow him to give evidence.  In order to put these rulings in context I set out below a summary of the relevant procedural directions which were intended to ensure that the Husband presented his case in a manner which afforded all parties procedural fairness.

1. It is important to observe that when the proceedings commenced the Husband had legal representation. 

1. On 6 July 2004, the parties and their lawyers attended a conciliation conference.  When the conference failed to produce an agreed outcome, the Court directed that the parties file and serve their affidavits by 10 March 2005.  When both parties failed to comply, the matter was directed to a Defaulter’s List. 

1. On 29 April 2005, the parties were directed to file and serve their affidavits by 18 August 2005.  The Court record shows that on this occasion the Husband appeared personally and I am satisfied he was aware of the directions.  The Wife complied with these directions, however the Husband did not.  Once again, the matter was placed in the Defaulter’s List. 

1. On 14 October 2005, with the Husband present, the Court directed that he file and serve his affidavits by 25 November 2005.  The matter was listed for possible undefended hearing on 19 December 2005. 

1. When the matter came before the Court on 19 December 2005 all parties appeared.  The matter was adjourned for final hearing on 17 March 2006. The Judicial Registrar explained to the Husband that unless he filed and served his affidavit evidence, the matter may proceed on the next occasion without affording him a right to be heard.

1. On 17 March 2006, before marking the hearing not reached, the trial judge arranged for the Husband to confer with a Registrar.  The rationale for doing so appears to have been to reinforce with the Husband the importance of his complying with the trial directions (albeit late) and ensuring that he understood what was required of him. 

1. On 5 July 2006 the matter was listed for hearing to commence at 10 am on 16 August 2006.  Each of the parties appeared on 16 August 2006.  Unfortunately the matter was not reached and adjourned to 18 August 2006 for hearing.

1. As the above chronology reveals, the Husband has been subject to directions for in excess of two years to file and serve his affidavits.  Asked to explain his failure to do so, the Husband initially said he was unconcerned about the property proceedings and his focus had been upon the parenting proceedings.  Perhaps the Husband anticipated the parties would ultimately agree on parenting matters as this response does not address his failure to file affidavits which addressed parenting issues.  The Husband then claimed he was unaware of what the Court’s directions expected from him.  I reject this assertion. Throughout the life of this matter, the Husband has been served with affidavits setting out the evidence relied upon by the Wife and Intervenor.  Early in the proceedings, he was legally represented.  The Court, through its Registrars and judicial officers, has gone to considerable lengths to ensure the Husband understood what was required of him.  In addition, on a number of occasions, including on the day the matter was listed before me, the Husband was directed to the Duty Solicitor.  The net effect is I am comfortably satisfied the Husband was well aware of the procedural directions that he produce documents as well as file and serve affidavits.  Relevantly, also the potential and likely consequences of failing to do so.

1. In light of his serious non compliance deciding the appropriate course required careful balancing of the matters described by Kirby J in The State of Queensland and another v. J.L. Holdings (1997) 189 CLR 146. At par. 7 His Honour said, “while taking all of the considerations relevant to the circumstances of the case into account, the judge must always be careful to retain that flexibility which is the hallmark of justice.  New considerations for the exercise of judicial discretion in such cases have been identified in recent years.  But the abiding judicial duty remains the same.  A judge who ignores the modern imperatives of the efficient conduct of litigation may unconsciously work an injustice on one of the parties or litigants generally, and on the public.  But a judge who applies case management rules too rigidly may ignore the fallible world in which legal disputes arise and in which they must be resolved.”

1. I contemplated adjourning the hearing and affording the Husband yet another opportunity to file and serve his affidavits.  Because the Wife and Intervenor were ready to proceed, such an approach justified costs orders in their favour.  Added together, their costs are likely to have run, at least, to a few thousand dollars.  The Husband’s Financial Statement reveals he is a man of modest means.  Combined with his repeated failure to comply with procedural directions, I was far from satisfied that the Husband would comply with any costs orders.  More relevantly, I formed the view that an adjournment would be an exercise in futility.  I had no confidence the Husband would take advantage of the opportunity afforded him and file his affidavits.  Thus it was highly probable that on the next occasion the Court would be presented with determining the applications with the evidence no further advanced than it was before me.  Of course adjourning the proceedings necessitated displacing another hearing or imposing substantial delay before these proceedings could be finalised. 

1. I was not asked to strike out the Husband’s Response.  This course could have been taken earlier and the matter listed for hearing undefended vis the Husband. The Husband sought leave to adduce oral evidence.  The Wife and Intervenor objected and I agreed with them that this course was tantamount to a trial by ambush.  With a Response still on foot, procedural fairness to all parties was best served by affording the Husband the opportunity to test the evidence brought against him.

1. Neither party sought to cross examine the Husband on his Financial Statement. I accept the evidence therein contained.

Short History

1. The Husband was born in China in February 1954.

1. The Intervenor was born in China in June 1962.

1. The Wife was born in China in June 1965.

1. The Husband and Wife married in Australia in March 1989.

1. The Husband and Wife’s first child, the elder daughter, was born in October 1989.

1. Their second child, the younger daughter, was born in December 1992.

1. On 25 August 1994 the Husband and Wife settled the purchase of the former matrimonial home.  This property was purchased from the Husband’s brothers for $500,000.

1. In April 1996 the Husband and Wife’s sons, twins, were born.

1. In January 2003 the Husband and Wife separated. Since then, the Wife and children have lived in the former matrimonial home.

1. On 6 May 2004 the parties divorced.  At about the same time the Intervenor migrated to Australia.  He lives in the former matrimonial home.

The Intervenor’s claim to an interest in the former matrimonial home

1. In my view, the Intervenor’s claim to an interest in the former matrimonial home must be determined first.  This is because resolution of this issue is fundamental to the asset pool.

1. Pursuant to the Court’s directions, the President of the Real Estate Institute nominated Mr T, registered valuer, to prepare a single expert’s report concerning the market value of the former matrimonial home.  In a report dated 9 August 2005, Mr T opined that the property is worth $1 million. Other than evidence of belief, this is the only expert evidence the Court received concerning the property’s value.  I have no difficulty accepting Mr T’s opinion.

Applicable law on constructive trusts

1. Before dealing with the evidence I should refer briefly to the well established principles concerning constructive trusts. In Muschinski v Dodds (1985) 160 CLR 583 Justice Dean said: “Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it.  The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf Atwood v Maude 107 (1868) L.R. Ch. App., at pp. 374-375., and per Jessel M.R., Lyon v Tweddell 108 (1881) 17 Ch. D. 529, at p.531.”

2. The majority of the High Court in Baumgartner (1987) 164 CLR 137 adopted his Honour’s conclusion.

3. It is important not to overlook Justice Deane’s comments in Muschinski v Dodds at page 615: “..The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for indulgence of idiosyncratic notions of fairness and justice.  As an equitable remedy, it is available only when warranted by established legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles.”

4. Although the principal operation of the constructive trust has been in the area of fiduciary duty, its flexibility has been recognised in a number of cases.  In Green v Green (1989) 17 NSWLR 343 Chief Justice Gleeson, as he then was, referred to the area as being one where equity is at its most flexible. For example in Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 108 Justice Mason, as he then was, quoted with approval Cadozzo J in Beatty v Guggenheim Exploration Co (1919) 22 NY at 389 who said: “ A court of equity in decreeing a constructive trust is bound by no unyielding formula.  The equity of the transaction must shape the measure of relief.”

5. A constructive trust is imposed to prevent an unconscionable assertion of legal title, in circumstances where the parties had no explicit intention about how the legal title would be held in the circumstances that have arisen.  This does not mean that intention has no role to play in constructive trusts.  Part of the justification for a constructive trust is that the parties have jointly been building up assets for the joint venture of the future.  One reason why it can be unconscionable to let the legal title lie where it falls is that the parties knew that the other was contributing to the assets for their joint benefit.  Another way intention is relevant is where the parties had formed an express intention about what would happen in the very circumstances which have arisen.  If the parties contemplated the very circumstances and agreed how the asset would be distributed, it would often be the case that there is nothing unconscionable in holding the parties to their agreement. This list is illustrative and not exhaustive.

Applying the law on trusts to the facts

1. As earlier explained, the Husband and Wife purchased the former matrimonial home from the Husband’s brothers, K and C in August 1994.  I do not know when the vendors first acquired the property or its original purchase price.  When purchased, erected on the land was an old home which the vendors subsequently demolished.  Thereafter, and before its sale to the Husband and Wife, the vendors built a modern two storey brick home.  Prior to its purchase in 1994, the Wife and her brother loaned the vendors $27,505.  These amounts were advanced by a series of transactions commencing 7 November 1994 and ending 3 March 1994.  Apparently the vendors fell into financial difficulty and decided to sell the former matrimonial home.  The vendors offered to sell the former matrimonial home to the Wife and her brother at market value.  Their solicitor arranged for a valuation and on 17 July 1994 Mr S valued the property at $500,000.  I accept that as at that date this was the property’s fair market value. The Wife and her brother agreed to purchase the property for $500,000.  As part of the purchase price, the vendors repaid the funds previously loaned by the Wife and her brother, effectively by way of off-set. 

1. Before the purchase was finalised, the parties discovered that because the Intervenor was not an Australian resident, he needed approval from the Foreign Investment Review Board before he could purchase real estate.  Without a visa which enabled him to remain in Australia for more than 12 months, the Intervenor could not obtain approval.  Without the Intervenors participation the Wife was unable to proceed with the purchase.  After a series of discussions between the parties, the Husband said to the Wife, “How about we purchase the property in our names first, then find ways to transfer to your brother in future?  You know that my brothers are in financial difficulties.  They need to sell the property as soon as possible otherwise they cannot afford the repayment of mortgage.”  At that time the Husband and Wife were living in the former matrimonial home.  The Wife expressed sentiments to the effect that the Husband’s brothers’ problems had nothing to do with her or her brother and if the property was forcibly sold then so be it.

1. The Husband continued to try and persuade the Wife and her brother to proceed with the purchase, albeit in the Husband and Wife’s name.  Following a series of conversations, the Intervenor telephoned the Wife and said, “You and [the Husband] agree to transfer the property back to me if I grant the resident visa in Australia but what about the finance with bank for the balance of purchase money?”  The Wife responded, “[The Husband] and I have talked about this as we need to rent the house to live so we think we will better pay the mortgage as the rental we will arrange the mortgage with bank on your behalf.  The house appears to be ours, but actually is your house you can get back the house or get the market value of property in future.”  Because the Intervenor trusted his sister and brother in law, he did not require written confirmation of their agreement.  I am satisfied the Husband knew of these conversations and agreed with the Intervenors terms.

1. Between 2 June 1993 and 6 June 1994 the Intervenor transmitted, directly or through third parties, $116,889.49 to the Wife. Of this, $27,505 was loaned to the vendors.  The Wife used $75,000 from the balance remaining towards the property’s purchase.  In addition to the purchase price, the Wife used the funds her brother advanced to pay legal costs and stamp duty associated with the purchase totalling $21, 234.22.  In order to complete the purchase, the Husband and Wife borrowed $400,000 from the Colonial Bank.  It was agreed between the Husband, Wife and Intervenor that in lieu of rent, the Husband and Wife would repay the periodic instalments whilst they remained in occupation.  At settlement, the purchasers paid out the mortgage previously raised by the vendors and on 26 August 1994 the vendors provided a written acknowledgement that they had received “the balance of the sale money directly from the purchasers”. 

1. Almost immediately the Husband and Wife were unable to pay the mortgage. On 8 September 1994 the Intervenor transferred $11,000 to Australia which was used towards the mortgage repayments.  This pattern continued and from late 1994 until August 1996 the Intervenor transmitted $53,025.45 which was used to pay the mortgage.

1. Once again the mortgage fell into arrears and on 7 May 1997 Colonial State Bank issued a Notice of Default alleging that the mortgage was $14,462.01 in arrears.  Using an aunt, the Intervenor sent $5,000 from China which was paid to the mortgagee.  When the mortgagee again threatened to take possession of the property the Intervenor transferred an additional $14,988 to the Wife which was paid onto the mortgage.

1. In July 1997 the Husband closed his restaurant business which at that time owed various creditors over $100,000.  From that time onwards, the Intervenor has been primarily responsible for all mortgage repayments.  During their years of cohabitation in total the Husband Wife paid $45,546.43 towards the mortgage.  By comparison, including the purchase price, costs of purchase and loan repayments, as at 23 May 2004 the Intervenor paid $400,281.17.  Since then, the Intervenor alone has made mortgage repayments as and when they fell due.  In total, the Intervenor has paid approximately $420,000.

1. I am strongly persuaded that the Husband and Wife purchased the property on the Intervenor’s behalf and agreed to repay the mortgage in lieu of rental.  It would be unconscionable to allow the Husband and Wife to resile from their agreement by denying the Intervenor the relief claimed. True it is, that the Husband and Wife maintained the property and paid approximately $45,000 towards the mortgage.  The evidence does not suggest they made significant improvements to the property and they appear to have done nothing more than maintain it in good repair without significant cost to them.  I do not have evidence of the property’s rental value during the years the Husband and Wife have been in occupation, however given the size of the property, the nature of its improvement and the years during which the Husband and Wife have been in occupation, it seems likely the mortgage repayments they have paid are less than its fair market rental.  On this basis, the Husband and Wife have received more than they contributed. 

1. Unless the trust is declared as sought, the Husband’s assertion of legal title is unconscionable.  All along he knew, indeed encouraged, the Intervenors involvement in the purchase of the former matrimonial home.  From the outset he agreed although legally registered as the properties owner, the parties held the property on trust for the Wife’s brother.  The facts outlined above make this a clear case for equities intervention in the situation as it now stands.

1. I am satisfied that the Intervenor has an interest by way of constructive trust.  In my view he made out a reasonable case to have the entire property transferred to his name.  However he seeks only 90 percent and ordering an adjustment in his favour greater than he sought would be unfair to the Husband and Wife.  Presently the amount outstanding on the mortgage is $319,129.  Ten percent of the properties net value is thus $68,000.  This is the amount the Intervenor must pay the Husband and Wife in order to secure exclusive title to the property.  Subject only to the order declaring the Husband and Wife’s indebtedness to the Intervenor the orders proposed by the Intervenor are appropriate in order to give effect to this declaration.

The relevant law in section 79 property proceedings

1. I turn now to consider the section 79 proceedings. The approach to the determination of an application under section 79 is well established by authority: See In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-593. The process involves a four part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Biltoft and Biltoft (1995) FLC 92-614. Secondly, evaluating the contributions made by the parties as defined in s 79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s.75(2) insofar as they are relevant; any other order made under the Act affecting a party or child; and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide or might be liable to provide in the future for a child to the marriage.

2. Finally in determining what order should be made under s.79, the court must be satisfied in all the circumstances that it is just and equitable to so order: s.79(2). It is the justice and equity of the actual orders that the court must consider: See Russell v Russell (1999) FLC 92-877.

Assets and Liabilities as at the date of hearing

1. The Husband and Wife have few assets.  Excluding the mortgage which the Wife’s brother will pay out, I find that their assets and liabilities are as follows:-

Assets	$
Husband’s motor vehicle	15,000
Interest in former matrimonial home (Joint)	68,000
Household furniture (Wife)	2,000
Wife’s savings	10
Husband’s savings	600
TOTAL non superannuation assets	85,700

Superannuation assets	$
The Employee Retirement Plan (Husband)	2,889
TOTAL superannuation assets	2,889

Financial Resources	$
Nil	NIL
TOTAL financial resources	NIL

1. All of these figures are taken from the parties’ Financial Statements. 

1. The Wife has a car worth about $24,000.  The car was purchased after separation from funds the Wife borrowed from her brother.  There is no suggestion the Husband made any contribution towards its acquisition.  In her Financial Statement the Wife says she owes her brother $424,771.  This relates to the car loan and mortgage repayments.  The mortgage advances have already been taken into account in the trusts claim.  This suggests that of the $424,771 the Wife claims she owes her brother, only a small amount relates to the car.  As I cannot determine how much, the car and entire debt is excluded.  The effect of this is that other than the mortgage, neither party has any liabilities.  Although legally liable to repay the mortgage by virtue of the outcome of the Intervenors claim this loan will be fully repaid without further contribution by the Husband or Wife.

1. The Husband has a life assurance policy which appears to be in the nature of a death and disability cover or income protection facility.  I infer the $200,000 he attributes to its value is the maximum amount payable if there is a trigger event establishing entitlement.  Neither party suggests this policy is in the nature of superannuation and I infer it is not.  Including the policy as either an asset or financial resource in the asset pool is fraught with the risk of injustice to the Husband and it is accordingly excluded.

Section 79(4) contributions and other factors

1. Section 79(4) requires that the Court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family as well as to the acquisition, conservation and improvement of assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense.

1. One of the difficulties in this case is that the Court has relatively little evidence concerning contributions.  Understandably, the evidence tended to focus on the trust issue.  With that issue resolved, relatively little remains for distribution between the Husband and the Wife.  In Parshen v. Parshen (1996) FLC 92-720 the Full Court of the Family Court said, “in our view, in the absence of evidence to the contrary, it should be inferred in proceedings pursuant to the provisions of section 79 that monies how so ever received by a party during the course of the party’s cohabitation are used by that party for the benefit of the family unit.  Such monies in those circumstances thus constitute a financial contribution by the party who received the money.”  Although the Wife refers to the Husband’s gambling, she gives no evidence which would enable the Court to conclude that his gambling was excessive or wasteful.  There is simply insufficient evidence on this issue to persuade me that the Court should depart from the presumption referred to in Parshen.

1. At the commencement of cohabitation, the Wife had approximately $15,000, furniture worth approximately $2,000 and $200 cash.  It appears the Husband was running a small restaurant the value of which is not in evidence.  There is no evidence that either party had any liabilities or financial resources.  It appears likely that the Wife made a greater initial contribution than the Husband.  This follows from the Wife’s evidence “I was working casual at the Respondent Father’s restaurant without pay as from 1989 to 1991 as their business was not profitable and they could not afford to pay me.”  The Wife continued to work for him on a casual basis until shortly before the twins’ birth in April 1996.  From 1998 until separation the Wife received family tax payment and for a period a parenting payment paid by Centrelink.

1. I infer the Husband worked full time in his restaurant from the commencement of cohabitation until its sale in 1997.  It appears the Husband’s restaurant struggled to make a profit.  This does not appear for want of trying on his part.  The Husband left the house daily at about 6.30 am and finished work at about 5.00 pm.  Until the business failed in 1997, it appears the Husband worked full time and although his efforts produced little financial result, I infer he tried hard to ensure the businesses success.  When the business failed it had debts in excess of $100,000, repayment of which is not entirely clear.  The Wife’s evidence suggests that the Husband was in business with other family members, possibly his brothers.  In these circumstances I am not persuaded the Husband was exclusively liable for the entire $100,000. 

1. I am satisfied that the Husband’s business produced insufficient income to meet the family’s day to day living expenses and without the Wife’s family’s (particularly her brother’s) financial support there was insufficient funds produced to meet the family’s essential living expenses.  After the business failed, it appears the Husband worked occasionally as a chef and also endured periods where he was unemployed.

1. Since separation the Wife has supported the children primarily reliant upon the social security benefits.  She and the children have been able to remain in the former matrimonial home because her brother has paid its outgoings.  Post separation the Husband has paid the Wife approximately $10,000 during 2004 and recently $120 per week child support. 

1. Although the Wife’s brother will now receive the benefits of his payments made towards the former matrimonial home, the fact of these payments enabled the Husband, Wife and their four children to have a roof over their heads from 1994 at very little cost to them.  Without the Intervenor’s support, it appears likely the Husband, Wife and children would have lived in penury and been effectively homeless.  This is a contribution made indirectly on the Wife’s behalf.  Because the Intervenor’s application has been successful, this contribution is not as significant as would have been the case had he failed. Overall, I am satisfied the Wife made a greater financial contribution than the Husband.

1. Neither the Husband or Wife suggests either of them made any improvements to the property which should now receive consideration.

1. It is the Wife’s evidence that she was primarily responsible for the children’s care and for maintaining the home.  During periods when the Husband was not at work the Wife’s unchallenged evidence is that the Husband was largely absent from the home and that he had little role in the children’s care or as a homemaker.  I am satisfied that as at the date of separation the Wife’s contribution as a homemaker and a parent greatly exceeded the Husband’s.  This pattern continued after separation, since when the Wife has been effectively exclusively responsible for the children’s care.  Comparatively, the Wife’s contribution as a homemaker and parent greatly exceeds the Husband’s.

1. The orders I propose will not affect the earning capacity of either party.

1. I have already made findings regarding the payment of child support.

1. I find therefore that the parties’ total contributions and other factors should be assessed as being 60 percent by the Wife and 40 percent by the Husband.

Section 75(2) factors

1. Subsection (a). The Husband is 51 years old.  The fact that he works two jobs as a chef suggests that he is in reasonable health. During the hearing he appeared physically well and on balance I am satisfied the Husband is reasonably healthy. The Wife is 41 years old and the evidence suggests she is also in good health.  I make no adjustment pursuant to the subsection.

1. Subsection (b).  I have already made findings about the parties’ assets, financial resources and liabilities.  The parties each has the income and expenses identified in their respective Financial Statements.  The Husband earns $800 per week as a chef.  The Husband has extensive experience as a chef and has the physical and mental capacity to continue paid employment in this field probably until reaching retirement age.  The evidence suggests the Husband is presently at the peak of his earning income producing capacity.  Presently his income is protected by death and disability type insurance.  The Wife receives $115.20 wages, $554 Centrelink benefits and $120 child support each week.  The Wife is without formal qualifications and her experience in the paid workforce is limited to waiting in the husband’s restaurant and as a clerk in her solicitors office.  Although fluent in Cantonese, the Wife has basic oral and written English language skills.  The type of employment the Wife is likely to succeed in obtaining is relatively poorly paid and without job security.  Should she choose to do so, it seems the Wife is able to work longer hours and thus increase her income.  However, on present indications it appears that the Wife is unlikely to earn an income as high as that which the Husband is capable of producing.  Because of her age, the Wife has approximately ten years more available to her in the paid workforce. To a considerable extent, this counterbalances the Husband’s greater income earning capacity whilst he remains in the paid workforce.  On balance, I make no adjustment pursuant to the subsection.

1. Subsection (c). The parties’ four children reside with the Wife and will continue to do so.  Although the elder children will shortly reach their majority, the twins are eleven years old and still have a number of years on which they will be relying on the Wife for their care. In Clauson the Full Court of the Family Court held that, “in addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility and the restriction on an independent lifestyle which the obligation to care for children usually entails”.  There is no doubt that primary responsibility for these children does, and will continue to, sit squarely upon the Wife.  At their ages, whist their care does not significantly affect her capacity for paid employment, for the reasons outlined in Clauson, I am satisfied there should be an adjustment in the Wife’s favour pursuant to the subsection.

1. Subsection (d).  The Husband’s Financial Statement details total expenditure of $573.76 per week. The Husband pays $100 per week tax, $100 per week rent and $120 per week child support.  Although his financial situation is tight, for so long as he is working two jobs, the Husband is able to meet his necessary day to day living expenses. The Wife’s total personal expenditure is $1,958.25 each week.  This includes mortgage, rates and car payments all of which are paid by the Intervenor.  In total, the Intervenor contributes approximately $1,258.83 weekly to the Wife’s expenses.  Without the Intervenor’s support, the Wife is unable to meet her and the children’s necessary day to day living expenses.  In her own right, the Wife’s position is parlous.  I make an adjustment in the Wife’s favour pursuant to the subsection.

1. Subsection (e). Other than the children, neither party has an obligation to support any other person.  I make no adjustment pursuant to the subsection.

1. Subsection (f). The Wife receives $554 per week from social security benefits. Until the twins turn 18 or are living independently, the Wife is likely to continue to receive social security payments in one form or another. The Husband does not receive social security payments.  I have already taken the Husband’s superannuation benefits into account.  I make an adjustment in the Husband’s favour pursuant to the subsection.

1. Subsection (g).  Both parties are living from pay to pay and there is no evidence either has ever enjoyed more than a modest lifestyle. Comparatively, the Husband’s standard of living has deteriorated in a manner which the Wife’s has not.  In the circumstances, I make an adjustment in the Husband’s favour pursuant to the subsection.

1. Subsections (h) – (k).  These subsections do not arise.

1. Subsection (l).  I have already made an adjustment in the Wife’s favour pursuant to subsection (c).  The Wife does not submit that the children’s care requires and additional adjustment pursuant to subsection (l) and I make no adjustment pursuant to the subsection.

1. Subsection (m).  The Husband lives in rented accommodation.  Other than the payment of rent, there is no evidence which suggests that this arrangement is financially advantageous to him.  The Wife lives with her brother and has done so since his arrival in Australia in 2004.  The tenor of the Wife’s and Intervenor’s evidence is that this living arrangement is likely to continue indefinitely.  As well as assets in Australia, the Intervenor has business interests in China and personal assets there worth in excess of $1 million. The Intervenor is financially secure and appears committed to ensuring the Wife’s and the parties’ children are housed and supported for the foreseeable future. I make an adjustment in the Husband’s favour pursuant to the subsection.

1. Subsection (n). Section 75(2)(n) achieves a cross referencing between section 75(2) and section 79(4). As a result of my earlier contributions phase findings the Wife established an entitlement to receive 65 percent of the net assets. In dollar terms, both parties will have few assets and their financial future is bleak. Given the size of the asset pool, I am not persuaded there should be an adjustment in either party’s favour pursuant to the subsection.

1. Subsection (na).  As previously discussed, the Husband pays $120 per week child support.  The evidence suggests that the Husband’s child support contribution has been unreliable and for her part, the Wife considers it is presently inadequate.  Given the Husband’s financial circumstances, it is unlikely his child support will increase and the children’s ages suggest it is likely to shortly decrease.  In the circumstances, I make no adjustment pursuant to the subsection.

1. Subsections (o) – (p).  These issues do not arise.

1. Having regard to all of the section 75(2) factors, I find that it is appropriate that there should be an adjustment in the Wife’s favour of 5 percent. This outcome reflects the cumulative outcome of the findings that I have made pursuant to section 75(2). See Tomasetti (2002) FLC 93-032.

Section 79(2) – Is this outcome just and equitable?

1. Because the Court must consider the actual orders and not just the percentage distribution under section 79(2), justice and equity in cases like this requires the Court stands back and looks carefully at the outcome of the section 79(4) and section 75(2) process. It is at this stage that the Court considers the actual structure of the orders.

1. I will not repeat the findings made thus far.  There are key findings that lead to my comfortable satisfaction that an outcome favourable to the Wife of 65 percent compared to the Husband’s entitlement of 35 percent is just and equitable.  These include the Wife’s greater initial contribution and the support afforded by her family in providing the parties and children with accommodation over many years. The Wife’s contribution as a homemaker and parent greatly exceeds the Husband’s contribution as a homemaker and parent.  Since separation the children have resided with the Wife and her post separation homemaker and parent contribution greatly exceeds the Husband’s.  I do not accept the Wife’s contention that because the Husband’s restaurant failed the Court should ignore his efforts in attempting to turn this venture into a financial success.  Although the Husband earns more than the Wife, he is older than she is and in the long term, their respective capacities to earn an income are probably closely aligned.  One cannot ignore the continuing financial support the Wife has available to her from her family compared to the Husband’s self reliance.  Because the Wife has continuing financial support from her family, her financial future is not as bleak as the Husband’s.  For these reasons, I am satisfied the orders are just and equitable.

1. Excluding superannuation the asset pool is worth $85,700.  Of this the Husband has assets worth $29,995 which means that from the monies payable by the Intervenor there must be a cash adjustment in his favour of $14,395.  In calculating this figure I have disregarded the Husband’s superannuation policy.  It is of miniscule value and in my opinion there is every possibility administration fees and the like could result in the Husband being paid almost nothing.  The Intervenor will have eight weeks within which to pay out the Husband and Wife.  This gives him an appropriate amount of time to rearrange his finances without requiring the Husband and Wife to wait an inordinate period for their payout.

1. For these reasons I make the following orders:-

1.The Court declares that the Husband, Mr Wei, and the Wife, Ms Chiu, hold on trust for the Intervenor, the wife’s brother a ninety percent interest in the property known as and situate at the former matrimonial home.

2.That the Intervenor indemnify the Husband and the Wife in relation to any mortgage secured against the property at the former matrimonial home.

3.Within eight (8) weeks of the date of these orders, the Husband and Wife shall do all acts and execute all documents as are necessary to transfer to the Intervenor the whole of their right, title and interest in the property situate at and known as the former matrimonial home.

4.Simultaneously upon compliance by the Husband and Wife with order 3 the Intervenor shall pay the Husband and Wife $68,000.  Of this amount, the Intervenor shall pay the Husband $14,395 and the balance to the Wife.

5.Simultaneously upon compliance with order 3 the Intervenor shall give the Husband and Wife a discharge of mortgage in registrable form for any mortgage secured against he former matrimonial home.

6.Within fourteen (14) days of compliance with the above order, the Intervenor and/or the Wife shall lodge all documents and pay any monies required to the Land Titles Office in order to register the discharge of mortgage referred to in the above order.

7.In the event that any party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, then pursuant to s.106A, a Registrar of the Family Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to such deeds, documents and instruments.

8.All exhibits tendered in these proceedings shall be returned at the expiration of one (1) calendar month unless an appeal is lodged.

9.The solicitor who issued any subpoena shall collect the subpoenaed material and return it to the owner within seven (7) days.

10.Other than any costs applications, all outstanding applications are dismissed.

11.In the event either party seeks to make an application for costs, they must notify my Associate no later than 4.00pm on Tuesday 29 August 2006.

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as CHIU & WEI AND ANOR