HOU & YING
[2018] FamCA 311
•11 May 2018
FAMILY COURT OF AUSTRALIA
| HOU & YING | [2018] FamCA 311 |
| FAMILY LAW – PROPERTY – Where the parties were married for eight years – Where there is one child of the marriage – Where each party seeks orders for the division of property – Where the former matrimonial home was acquired by the husband prior to the marriage – Where the husband made greater financial contributions during the marriage – Where the wife made greater contributions as homemaker and parent during the marriage – Where there is a two pool approach adopted for superannuation and non-superannuation assets – Where contributions for superannuation and non‑superannuation assets are assessed to be 80 per cent in favour of the husband and 75 per cent in favour of the husband respectively – Where the wife has the primary care of the child and the husband has a higher earning capacity – Where an adjustment of 10 per cent in favour of the wife is just and equitable. FAMILY LAW – PRACTICE AND PROCEDURE – Where the husband sought leave to re-open the matter to provide additional evidence – Consideration of Summitt & Summitt and Ors(Re-opening) [2009] FamCA 365 – Where the husband argues it would be in the interests of justice for the additional evidence to be admitted – Where the husband has not established that, if admitted, the evidence would be likely to alter the outcome of the proceedings, nor that it was so material that the interests of justice required that it be admitted – Where the application to re-open is dismissed. |
| Family Law Act 1975 (Cth) ss 75(2), 79, 81 |
| Browne v Green (1999) FLC 92-873 Coghlan & Coghlan (2005) FLC 93-220 Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 In the Marriage of Lenehan (1987) FLC 91-814 In the Marriage of Shewring (1988) FLC 91-926 In the Marriage of Zyk (1995) FLC 92-644 Norbis v Norbis (1986) FLC 91-712 Omacini & Omacini (2005) FLC 93-218 Pierce v Pierce (1999) FLC 92-844 Stanford v Stanford (2012) 247 CLR 108 Summitt & Summitt and Ors (Re-opening) [2009] FamCA 365 Vass & Vass (2015) 53 Fam LR 373 |
| APPLICANT: | Mr Hou |
| RESPONDENT: | Ms Ying |
| INDEPENDENT CHILDREN’S LAWYER: | Mark Whelan Lawyer |
| FILE NUMBER: | SYC | 2205 | of | 2015 |
| DATE DELIVERED: | 11 May 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 22, 23 & 24 January 2018 and 17 April 2018 |
REPRESENTATION
| APPLICANT: | Self-represented |
| COUNSEL FOR THE RESPONDENT: | Mr Lee on 22, 23 and 24 January 2018 |
| SOLICITOR FOR THE RESPONDENT: | SHL & Associates Lawyers |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Ms Falloon |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mark Whelan Lawyer |
Orders
That within three months from the date of these orders the husband pay to the wife, or as she may direct, the sum of $381,498.
That in the event that the husband does not comply with order 1, forthwith on that default, he shall do all things and sign all documents necessary to sell the property located at D Street, Suburb F in the State of New South Wales (“the Suburb F property”).
That for the purposes of order 2 the husband shall cause the Suburb F property to be presented for sale by auction within two months of his default under order 1 and to be sold for the best price reasonably attainable.
That upon the sale of the Suburb F property the net proceeds of sale after payment of the costs of sale including agent’s commission, auction expenses and legal costs shall be disbursed:
(i) as to 32.9 per cent of the remaining proceeds to the wife;
(ii) to discharge any amounts secured on the Suburb F property; and
(iii) as to the balance, to the husband.
That the parties forthwith do all acts and things and sign all necessary documents so as to close the joint G Bank account #...29 and in doing so, disburse any remaining balance therein to the husband.
That within seven days the solicitor for the wife shall send a copy of the following proposed splitting order to the Trustee of H Super who is requested to advise that solicitor of any objection to the order within 28 days of receipt:
(a)that pursuant to s 90MT(1)(b) of the Family Law Act 1975 (Cth) whenever a splittable payment becomes payable in respect of the superannuation interest of Mr Hou in H Super:
(i)Ms Ying shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using the base amount of $137,549; and
(ii)there be a corresponding reduction in the superannuation interest of Mr Hou to whom the splittable payment would have been made but for the order.
(b)that the operative time for order 6(a) is seven business days after service of this order on the Trustee of H Super.
That leave is granted to the wife to restore the proceedings after giving effect to order 6 and on seven days written notice to the husband, for the purpose of a splitting order being made in respect of the husband’s superannuation interests.
That except as otherwise provided in these orders the parties shall otherwise retain all assets, furniture and moneys held in banking institutions and shall retain responsibility for all liabilities, in their respective names, to the exclusion of the other.
That in the event that the husband refuses or fails to execute any document, instrument or transfer in relation to the sale of the Suburb F property, the registrar of this Court is empowered to execute all necessary documents pursuant to s 106A of the Family Law Act1975 (Cth).
Leave is granted to the parties to apply within 28 days, on giving at least seven days’ notice to the Court and each other in relation to the wording of these Orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hou & Ying has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC2205 of 2015
| Mr Hou |
Applicant
And
| Ms Ying |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property settlement proceedings between Mr Hou and Ms Ying. The parties are divorced but for convenience I will refer to them as the “husband” and the “wife” respectively.
Applications
On the first morning of the trial the husband said that as to property settlement he sought the orders set out in his Case Outline document (exhibit 2) as follows:
Final Orders for Property Settlement sought by the Father (the Applicant):
Order 1:That the Property Settlement part of the court matter [SYC2205/2015] raised in the Amended Response filed by the Respondent on 22 July 2015 be dismissed, or alternatively, that within three (3) calendar months of the date of these Orders, the Respondent pays the Applicant by way of the final settlement of property the sum of $947,919.
Order 2:That within 14 days of the date of these Orders, the Respondent refunds the sum of $77,000 to the Applicant that was paid by the Applicant in complying with the Court Order made on 3 February 2016.
Order 3:That within 14 days of the date of these Orders, the Respondent refunds the sum of $50,000 of the Spouse Maintenance fee to the Applicant. This sum is equivalent to 100 weeks’ Spouse Maintenance fee that had been paid by the Applicant in complying with the Court Order made on 3 February 2016, for the period between February 12, 2016 and January 18, 2018.
Order 4:That after Court Orders are made the interim Spousal Maintenance fee of $500 per/week be terminated immediately.
Order 5:That within 14 days of the date of these Orders, J Pty Ltd pay to the Applicant the sum of $100,000 by the way of compensating the Applicant for loss and emotional harm suffered from the black-white-reversal false accusations made by its solicitors and actions that knowingly provided the Court with their inaccurate and misleading information.
Order 6:That the Applicant reserves the right to claim further compensation from J Pty Ltd if it is necessary. For example, in the circumstances of that the Applicant’s future legal expenses exceed a certain amount of money.
Order 7:That the Respondent pays the Applicant $10,000 as a symbolical compensation for emotional and reputation damages caused by the Respondent’s false accusations of “family violence” and “child abuse”.
Order 8:That the parties forthwith do all acts and things and sign all necessary documents so as to close the joint G Bank Express Freedom bank account #465930929 and in doing so pay any remaining balance therein equally between the parties.
Order 9:That the Respondent shall retain, to the exclusion of the Applicant:
9.1All furniture, jewellery and other chattels currently in her possession, custody or control;
9.2All motor vehicles registration registered in her name;
9.3Any funds standing to her credit in any Bank, Credit Union or Building Society account;
9.4Her interest in the business [Business B] and [Business K];
9.5Her interest in the business [Business C];
9.6Any shares in any public or private company;
9.7Any superannuation fund in which she has an entitlement;
9.8Any other employment benefits or entitlements.
Order 10:That the Applicant shall retain, to the exclusion of the Respondent:
10.1All furniture, jewellery and other chattels currently in his possession, custody or control;
10.2All motor vehicles registration registered in his name;
10.3Any funds standing to his credit in any Bank, Credit Union or Building Society account;
10.4Any shares in any public or private company;
10.5Any superannuation fund in which he has an entitlement;
10.6Any other employment benefits or entitlements;
10.7All of his rights, title and interest in the property situated at and known as [D Street, Suburb F] … in the state of New South Wales.
Order 11:The Respondent pays the Applicant’s costs of these proceedings.
Order 12:Such further orders as the Court sees fit.
The wife sought the following orders as set out in her outline of submissions filed 12 January 2018:
(a)the property located at [D Street, Suburb F] (the [Suburb F] Property) be sold and the net proceeds, after payment of agents and conveyancing fees, be divided:
(i)55% to [Ying]; and
(ii)45% to [Hou].
(b)The amount of $150,000 paid to [Ms N] on 21 July 2015 be added back into the asset pool of the parties., insofar, and as is addressed below, the concept of add backs is still good law following Stanford.
(c)[Hou] pay to [Ying] 50% of the $150,000 sent to [Ms N], being the sum of $75,000 and 50% of the current balance of the husband’s bank account.
(d)[Hou’s] superannuation with [H] Super be split 50% to [Hou] and 50% to [Ying].
(d)The parties otherwise retain all assets, furniture and credit standing in banking institutions to the exclusion of the other and retain all liabilities they have.
(e)If [Hou] fails to execute any document, instrument or transfer in relation to the sale of the [Suburb F] property, the registrar of this Court be empowered to execute all necessary documents.
Written Evidence
In respect of property settlement, the husband ultimately relied on:
·the husband’s affidavit filed 12 December 2017;
·the affidavit of Ms N filed 20 October 2015; and
·the affidavit of Mr Hou Snr (the husband’s father) filed 12 December 2017.
The wife relied on:
·Amended Response filed 22 July 2015;
·the wife’s Financial Statement filed 22 July 2015; and
·the wife’s affidavit filed 9 January 2018.
The Hearing
The hearing commenced on 22 January 2018. The husband elected to have no legal representation. I gather that the husband received some legal advice at an earlier stage of the proceedings. Suffice it to say, the husband was at a considerable disadvantage as a result of not being legally represented at trial. A Mandarin interpreter was provided and the husband made intermittent use of that service.
The matter was listed for hearing over four days in respect of both parenting and property settlement issues. The parties took some time on the first day to attempt to resolve some or all of the parenting issues. At about 11.40 am I was told that there was no settlement but that discussions might continue out of Court hours. The trial then commenced.
Despite an order made on 27 July 2017, that there be only one affidavit from each deponent, in his Case Outline the husband purported to rely on multiple affidavits. Ultimately he nominated the affidavit evidence referred to above as the written deposition relied on by him for the hearing in relation to the property matter. Learned counsel for the wife did not press objections to the husband’s own affidavits. Objections were taken to Ms N’s affidavit. Presumably as a result of the rulings on those objections, she was not required for cross-examination. Objections were also taken to Mr Hou Snr’s affidavit. I ruled on the husband’s objections to the wife’s affidavit, most of which were rejected. On the second day of the trial the parties sought leave to resume settlement discussion and at about 2.35 pm I was told that all of the parenting issues were agreed. I read the terms to the husband and he confirmed that he understood them and agreed to have orders made accordingly. The wife then passed a note to the Independent Children’s Lawyer (“ICL”). The ICL’s counsel said that there was an issue about the wife’s consent and asked that the matter be stood down in order for her counsel to obtain instructions. At about 4.30 pm I was asked to adjourn for the day to allow the wife’s counsel to confirm his instructions. At my request the husband’s father was called for cross-examination. He is in his 80s and had waited at Court all day to be cross-examined. That was done and the Court adjourned for the night at about 5.00 pm.
When the hearing resumed on 24 January 2018 I was told that the parenting proceedings were resolved save for an issue about where the passport of the parties’ son, X, would be held when he was not travelling overseas. Ultimately that issue too was resolved and I made orders in terms of the parties’ agreement. Learned counsel for the ICL and her instructing attorney were excused and the trial resumed in respect of property settlement. The wife was cross-examined and re-examined and submissions were made. At the end of 24 January 2018 an order was made that the costs advice document of the wife be lodged and served within seven days and otherwise judgment was reserved.
Application to re-open
After the trial concluded and prior to the delivery of judgment the husband sought to re-open his case. On 19 March 2018 the husband filed an Application in a Case seeking leave to introduce certain evidence. The application was supported by an affidavit of the husband affirmed 5 March 2018. The application was listed for determination on 17 April 2018. On that date the husband appeared in person and, as was the case during the trial, without legal representation. The wife was not present but was represented by a solicitor, Ms P. Ms P said that her client opposed the husband’s application, that she wished to make submissions but did not seek to introduce any evidence on behalf of her client or to cross-examine the husband.
The husband also sought to rely on an affidavit filed on 16 April 2018, the day before the hearing. Ms P said that she could not meet that evidence and I refused to allow the husband to rely on it.
The husband identified several categories of information that arose from his affidavit:
·an advertisement in a Chinese language newspaper published on 17 February 2018 advertised Business B and included a photograph of the wife, a reference to a website … and the wife’s mobile phone number.
·a search of the web site identified in that advertisement revealed that the wife’s photograph and phone number appeared on the site together with a list of specialist consultancy services. The site referred a number of services delivered by the wife and a list service charges.
·in the abovementioned Chinese language newspaper there was a further advertisement of Business B published on 24 February 2018;
·in the abovementioned Chinese language newspaper there was a further advertisement of Business B published on 3 March 2018;
·a Google search for Business B found a new website at … which displays the wife’s phone number and the business address which is the same address as for the Business C.
·the address of the Business B company was no longer the M Street premises from which the wife had operated her business, but the same address as the Business C in which, the husband alleges, the wife has an interest;
·the wife is the president of an academic interest group and on the website for that organisation the wife is shown as being the manager of Business C.
Ms P referred to a decision in Summitt & Summitt and Ors (Re-opening) [2009] FamCA 365 (“Summitt”) in which Murphy J discussed the applicable principles for re-opening a matter. Ms P drew the Court’s attention to [14] ‑[24] where it was discussed as follows:
14.In a case involving an application for settlement of property, it can broadly be said that common law principles govern applications to re-open in this Court. (see eg Gelley & Gelley (1992) FLC 92-290 and the cases there discussed).
15.Those principles make it clear that the granting of leave to re-open is discretionary. That discretion is guided by the interests of justice. The essential question is, is the court more able to do justice in the facts and circumstances of the particular case if the application is granted. (see eg Smith v NSW Bar Association [1992] HCA 36; (1992) 176 CLR 256; Urban Transport Authority v NSEISER (1992) 28 NSWLR 471 at 478 and EBv CT (No. 2)[2008] QSC 306)
16.In cases where reasons for judgment have not been delivered, the High Court has held that the primary consideration should be embarrassment or prejudice to the other side. (see Smith above, at 266-267)
17.A recent decision of the Supreme Court of Queensland, EBv CT (No. 2) [2008] QSC 306 was referred to by both counsel for the husband and wife. That case involved an application for property settlement under (then applicable) State law with respect to a de facto relationship. In that case, Applegarth J summarised, by reference to earlier authorities, the (common law) principles applicable to a re-opening:
[2] The guiding principle in deciding whether to grant leave to re-open is whether or not the interests of justice are better served by allowing or rejecting the application. Reference is made in Finbrough Investments Pty Ltd v Airlie Beach Pty Ltd and in the cases referred to in it to the need for finality and litigation.
[3] In Smith v New South Wales Bar Association the High Court stated that different considerations may apply depending on whether the case is simply one in which the hearing is complete, or one in which reasons for judgment had been delivered. As to the former situation, the Court said it was difficult to see why the primary consideration should not be that of embarrassment or prejudice to the other side.
[4] In Reid v Brett the criteria governing the exercise of the discretionary power to re-open a case to admit further evidence where the hearing has concluded but judgment has not been delivered, was said to be as follows:
The further evidence is so material that the interests of justice require its admission;
(b) the further evidence, if accepted, would most probably effect the result of the case;
(c) the further evidence could not by reasonable diligence have been discovered earlier;
(d) no prejudice would ensue to the other party by reason of the late admission of the further evidence.
[footnotes and references omitted]
18. In addition, his Honour held that:
[5] Reference by the High Court to prejudice to the other party, and the guiding principle of the interests of justice, require account to be taken of the strain that litigation imposes on personal litigant. The prejudice caused by delay in the delivery of an expected judgment at the end of stressful litigation can not always be measured in terms of money or cured by an order for costs. The interests of justice is served by finality in litigation, particularly where prolonged litigation imposes a strain on personal litigants.
19.I consider that that is particularly true of litigation in this court generally, and in this case specifically. I will return to this issue below.
20.The decision just referred to involved a claim, under the Queensland legislation then applicable, for property adjustment in the context of a de facto relationship.
21.His Honour considered that, in determining that application, the property of the parties and its value should be determined as at the date of the hearing. That principle is applicable, generally speaking, to applications for settlement of property pursuant to s 79 of the Family Law Act 1975. In the context just described, his Honour went on to say:
[6] The application to re-open is not to overcome a technical defect in the evidence or to tender evidence that is omitted by inadvertence. The application seeks to raise a new issue, namely the current value of certain assets of one of the parties, whereas the issue litigated at the hearing of the assets, financial resources and liabilities of the parties as at the date of hearing. It is impossible to see how the respondent could be permitted to call evidence of the current value of some of his assets without, in fairness, opening up the general issue of the current value of the parties’ assets. To do otherwise would be to fall into error. It would be wrong to determine the matter on the basis of the current value of some assets and the value as at the date of hearing of the balance of the assets.
22.However there are, here, significant points of distinction. This is not a case (as was the case before his Honour) where the application is to allow the re-valuing of the property of one party only. However, his Honour goes on to say (at [7]) that:
“... the relevant issue is the value of the parties’ property at the date of the hearing. The interests of justice do not require the admission of the evidence to determine that issue. It is contrary to the interests of justice to re-open the evidence to enable the value of the assets to be re-assessed at dates after the respondent’s case has closed and after the hearing was concluded.”
23.Without expressing any view of what the position might have been in respect of the then relevant Queensland legislation, it is necessary, I think, to be a little more circumspect about the position in respect of s 79 applications under the Family Law Act. It has been said for example (albeit in a different context) that: “... in addition to the date of the hearing, the value of property at other dates may be important.” (Australian Family Law, Lexis Nexis, Vol 1, [79.113]). That is because, primarily, the nature of contributions can change. Thus, the issue at a trial may be broader than simply the value of property at the date of the hearing.
24.That said, it is equally true to say that the date of hearing is almost inevitably an important date for the ascertainment of the value of s 79 property and very frequently – as was the case here – used as the relevant date for the purpose of ascertaining the value of “the property of the parties or either of them” within the meaning of s 79.
It is submitted by the husband that during the trial the wife gave evidence that she was not working as a counsellor and that she had given away her Business B. The wife amended her financial statement to reduce her disclosed income from $384 a week to $0. It was the wife’s evidence that she was not the manager of the Business C and that she had referred to herself as being the manager but only on a private website. I take the husband’s case to be that it would be in the interests of justice for the evidence in his affidavit to be admitted as evidence in the trial to contradict or correct the wife’s testimony in relation to the cessation of her business, that she had no income from paid employment and her assertion that she was not the manager of the Business C.
It was submitted on behalf of the wife that it would be in the interests of justice to bring these proceedings to an end and that the wife has incurred significant legal fees. It was submitted to the effect that the evidence, if admitted, does not establish that the wife lied in her evidence at trial. Advertising put in place after the trial is consistent with the wife seeking to earn an income by recommencing the business that she had attempted to make viable for many years. It was submitted that the husband offers no evidence that any income was received by the wife at the time of trial and therefore the evidence could have only a minimal impact on the outcome of the trial.
Dealing with the criteria referred to in Summitt the evidence presented by the husband is not evidence that would have been available to him at the time of the trial and no significant prejudice would be occasioned to the wife if it were admitted. However the husband has not established that if admitted, the evidence would be likely to alter the outcome of the proceedings, nor that it was so material that the interests of justice required that it be admitted.
No evidence is offered that the wife was in receipt of income from any business or any other source at the time she gave evidence at trial. It was her case that at about that time she had removed herself from the businesses as part of the process of seeking to be appointed to a local government position. There is no evidence that the wife is the manager of Business C. This issue will be dealt with again later in these reasons. The wife conceded that she had represented that she was the manager of that business and, in my view, it makes no material difference that she made a similar representation on the website of the professional association.
For those reasons the application of the husband to re-open the evidence in his case is dismissed.
Short History
The husband was born in 1957. As at the date of the hearing he was 60 years of age. The wife was born in 1979. As at the date of the hearing she was 38 years of age. The parties began living together on 27 May 2008, were married in China in 2008, separated on a final basis on 12 March 2015 and were divorced on 2 October 2016.
The only child of the marriage is X who was born in 2009 (“X”) and as at the time of the hearing, he was eight years of age.
Credibility
The credit of the parties has some relevance to the determination of these proceedings. Much of the financial history occurred without formal documentation and therefore some disputed issues fall to be determined on the uncorroborated testimony of lay witnesses. One area of direct conflict related to the wife’s evidence that when she first arrived in Australia she gave the husband much of the wage she received for factory work. It is the husband’s case that the wife never accounted to him for any part of her wage. The wife was not challenged about her evidence in cross-examination by the husband. It was put to the husband that he received payments from the wife’s income and he denied that he did. There is no basis for preferring the evidence of one witness over that of the other on this issue.
During his cross-examination, the husband was often unresponsive. He generally answered in a raised voice and proved difficult to control. Although ultimately cooperative, during cross-examination the husband often sought to include submissions in his answers.
Although she occasionally responded with ‘yes’ or ‘no’ in English, the wife made full use of the interpreters who assisted her. Her answers were direct and to the point. On her Facebook page the wife described herself as the manager of Business C. The wife was asked about that and said that she did not know another word she could use to describe her work. She then said something to the effect that by that description and others on that Facebook page she sought to represent to the readers of the page that she had important roles. Those are entirely inconsistent answers and the second is far more credible than the first.
On balance it is not possible to prefer one witness over the other in all instances. Findings fall to be made issue by issue.
Background Facts
In 1988 the husband migrated to Australia.
In 1999 the husband began working as an academic at University Q (“UQ”).
In November 2007 the husband and his father purchased a home at D Street, Suburb F (“the Suburb F property”) in the husband’s name for $702,000.
In 2007 the parties met online.
In 2008 the parties were married in China.
On 27 May 2008 the wife immigrated to Australia. The husband sponsored the wife to obtain Australian permanent residency.
On 24 August 2008 the wife became employed in factory work in Suburb F. She worked full-time and was paid about $180 per week. At this stage the wife spoke little English.
In May 2009 the wife ceased employment on finding out that she was pregnant. She did not thereafter work as an employee.
The child X was born in 2009.
Following X’s birth the wife’s mother came to Sydney to look after X. The wife’s mother practiced traditional counselling as an occupation in China and she taught this practice to the wife.
In February 2010 the parties opened a joint bank account with G Bank (“the joint bank account”). The wife’s payments from Centrelink were deposited into this account.
In 2011 the wife registered the business name, Business B, under which she could provide her services. In September 2011 the wife rented an office at L Street Sydney NSW which she used to provide her services. The wife says that her mother gave her $5,000 as a gift to be used to cover the rent of the office.
In March 2013 the wife and X travelled to City R in China to attend an international coherence on traditional counselling. The wife says that her mother financed the trip, including flights, accommodation and food.
In June 2013 the wife registered the company K Pty Ltd.
In around August 2013 the husband paid off the home mortgage on the Suburb F property.
In 2014 the total annual turnover of K Pty Ltd, a business owned by the wife, was $10,260. Annual rent for the premises from which the business was conducted was approximately $9,360. Additional business expenses were $845.
The parties separated on 12 March 2015.
The wife says that on 15 March 2015 she borrowed $10,000 from her mother and sister.
From separation in March 2015 until September 2015 the wife was not receiving Centrelink payments. It is the wife’s case that the Centrelink payments ceased when she reported to Centrelink that she had left the husband. I do not understand that evidence but there it is. The payments commenced again in around September 2015.
From 17 March 2015 to the end of July 2015 the husband withdrew cash from his G Bank account totalling $150,000. He states he was worried that his bank accounts might be closed soon due to the separation. The husband subsequently transferred $150,000 to his cousin, Ms N, on 21 July 2015. It is the husband’s case that his cousin had loaned him $150,000 over time.
On 7 April 2015 the husband transferred $500 into the joint bank account with the description “[X’s] school fees”.
These proceedings were commenced when the husband filed an Initiating Application in the Federal Circuit Court on 10 April 2015.
The wife says that on 18 April 2015 she borrowed $5,000 from her mother and sister.
On 5 August 2015 interim consent orders were made by Judge Sexton that:
(a)the husband be restrained from withdrawing or transferring from his bank accounts a total sum in excess of $5,000 in any fortnight without seven days’ prior notice to the wife’s solicitor;
(b)that pending further order the husband shall not sell, transfer or encumber the former matrimonial home; and
(c)disclosure was to be provided.
In September 2015 the husband paid $5,600 for urgent dental treatment for X.
From September 2015 until 16 October 2016 the wife received approximately $297 per week in maintenance from the husband.
On 3 February 2016 orders were made by Judge Sexton that the husband pay the wife $77,000 in interim costs (with this sum to be retained in trust by the wife’s solicitors for payment of legal expenses) and $500 per week by way of interim spouse maintenance.
On 10 June 2016 it was ordered that the proceedings be transferred to this Court.
On 30 September 2016 the wife signed a lease for S Street, Suburb T NSW under the joint names of her mother, Ms U, and herself. The wife currently occupies this property with X, her brother and, when her mother is in Australia, her mother.
On 26 May 2017 the husband’s child support liability was changed on review to $10,961 per annum.
In June 2017 the wife resigned as director of K Pty Ltd and Business B. She says that she did that as she was campaigning for a place on the V City Council. The wife was not elected to the council.
On 27 July 2017 trial directions were made, including an order that the proceedings be listed for a four day hearing commencing on 22 January 2018.
On 24 January 2018 final parenting orders were made by consent which included orders providing that the parties have equal shared parental responsibility for X, that X live mainly with the wife and that he live with the husband during school term for two nights a week for six months and thereafter, provided the father can provide X with his own bedroom, for three nights each week and for one half of the school holidays.
The approach to proceedings under section 79
In the context of these proceedings s 79 of the Family Law Act1975 (Cth) (“the Act”) relevantly provides:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a) in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property; or
….
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i)either or both of the parties to the marriage; …
….
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
….
(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.
(4) 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.
The application of s 79 has been the subject of extensive judicial interpretation and comment. In Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 (“Hickey”) the Full Court said at 78,386:
39.The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEL and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
In Hickey the Court was not asked to address the preliminary aspect of the requirement created by s 79(2) as to whether any order should be made. Similarly, the proceedings before me do not involve any controversy about that issue. As was observed in Stanford v Stanford (2012) 247 CLR 108 that preliminary, just and equitable requirement is often readily satisfied. Here, the husband sought, at least in the alternative, that the wife’s application be dismissed. However, the parties lived together for nearly seven years and contributions have continued since their separation. The parties’ relationship has broken down and they live apart. Virtually all of the assets are held by the husband. Section 81 of the Act requires the Court, as far as practicable, to “make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”. It is just and equitable that the parties have relief under s 79 of the Act.
I turn to the task of identifying just and equitable orders that will alter the interests of the parties in property. There is no mention of steps or stages in s 79, let alone of the sequence set out in (a) – (d) below. Nevertheless I will address the following matters:
(a)make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing;
(b)identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;
(c)identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s 79(4)(e), the matters referred to in s 75(2) of the Act insofar as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties; and
(d)consider the effect of those findings and determinations and resolve what order is just and equitable in all the circumstances of the case.
The Orders Sought by the Parties
Before addressing the matters referred to above I should say something about the orders sought by the parties.
As to the orders sought by the husband, some of the orders are not orders for property settlement. In relation to those orders:
Order 2:That within 14 days of the date of these Orders, the Respondent refunds the sum of $77,000 to the Applicant that was paid by the Applicant in complying with the Court Order made on 3 February 2016.
The order in question was by way of interim costs. The husband sought leave to appeal against the order but as I understood from the husband, leave to appeal was refused, in part because of the proximity of these final proceedings. The $77,000 was applied to the wife’s legal costs. As I will explain later, that amount will be added back to the balance sheet for that reason. In that way the husband’s concern is at least partially addressed.
Order 3: That within 14 days of the date of these Orders, the Respondent refunds the sum of $50,000 of the Spouse Maintenance fee to the Applicant. This sum is equivalent to 100 weeks' Spouse Maintenance fee that had been paid by the Applicant in complying with the Court Order made on 3 February 2016, for the period between February 12, 2016 and January 18, 2018.
The husband seeks a retrospective variation of an order for interim spousal maintenance. I gather that this prayer is caught up with the husband’s calculations about the wife’s income. I will address this application later in these reasons.
Order 4: That after Court Orders are made the interim Spousal Maintenance fee of $500 per/week be terminated immediately.
By this order the husband seeks that the interim order for maintenance be discharged and there be no ongoing maintenance. The wife agrees to this order.
Order 5: That within 14 days of the date of these Orders, [J Pty Ltd] pay to the Applicant the sum of $100,000 by the way of compensating the Applicant for loss and emotional harm suffered from the black-white-reversal false accusations made by its solicitors and actions that knowingly provided the Court with their inaccurate and misleading information.
No head of jurisdiction is identified for this application. In any event, the husband conceded that he has not served J Pty Ltd. During oral submissions the husband said that he did not press the claim. This claim will be dismissed.
Order 6:That the Applicant reserves the right to claim further compensation from [J Pty Ltd] if it is necessary. For example, in the circumstances of that the Applicant's future legal expenses exceed a certain amount of money.
No head of jurisdiction is identified for this application. The husband did not serve J Pty Ltd. The husband said that he did not press the claim. This claim will be dismissed.
Order 7:That the Respondent pays the Applicant $10,000 as a symbolical compensation for emotional and reputation damages caused by the Respondent's false accusations of "family violence" and "child abuse".
No head of jurisdiction is identified for this application. I understood the husband to say that the claim was originally made to bring home a point to the wife. In any event, the husband said that with the resolution of the parenting proceedings he did not press the claim. This claim will be dismissed.
As to the orders sought by the wife, some of them are not enforceable orders for property settlement. In relation to those orders:
(a)the property located at [D Street Suburb F] (the [Suburb F] Property) be sold and the net proceeds, after payment of agents and conveyancing fees, be divided:
(i)55% to [Ying]; and
(ii)45% to [Hou].
The proposed order is understandable but it provides no machinery terms and being expressed in rem, does not require either of the parties to do anything. An order expressed in the terms sought would be unenforceable.
(b)The amount of $150,000 paid to [Ms N] ([Ms N]) on 21 July 2015 be added back into the asset pool of the parties., insofar, and as is addressed below, the concept of add backs is still good law following Stanford.
(c)[Hou] pay to [Ying] 50% of the $150,000 sent to [Ms N], being the sum of $75,000 and 50% of the current balance of the husband’s bank account.
The proposed orders (b) and (c) are part submission and part proposed order. Paragraph (c) makes no sense because the funds that would be added back to the balance sheet do not exist. An order can be made for the equivalent of half of the amount to be paid to the wife but there will be no balance to pay to the husband’s account.
(d)[Hou’s] superannuation with [H Super] be split 50% to [Hou] and 50% to [Ying].
The proposed order (d) is expressed in rem and would be unenforceable. In this case the machinery orders are important if the order is to be binding on the trustee of the husband’s superannuation fund.
The property of the parties
In determining what order is appropriate, it is necessary to make findings as to the property of the parties. That involves identifying their assets, liabilities and financial resources and their values.
The parties were not able to prepare a joint balance sheet prior to final submissions. The following joint balance sheet is my characterisation of the position at the commencement of the trial:
Assets
Owner Description Wife’s value Husband’s value 1 H D Street, Suburb F $1,160,000 $1,160,000 2 H Husband’s bank accounts at W Bank and Y Bank in China $35,700 $35,700 3 H Husband’s Westpac Bank account $100 $100 4 W Wife’s G Bank account $1,624 $1,624 5 J Joint G Bank account $67 $67 6 H Husband’s Japanese motor vehicle $3,000 $3,000 7 W Wife’s German motor vehicle NA $85,000 8 W Business C NA NK 9 W K Pty Ltd NA NK 10 W Business B NA NK 11 W Proceeds of interim costs order applied to wife’s legal costs of these proceedings NIL $77,000 Total $1,200,491 $1,362,491
Liabilities
Owner Description Wife’s value Husband’s value 12 H Husband’s debt to University Z NIL Estimated RMB1,250,000
or AUD240,584
13 H 14.2 per cent of the value of the Suburb F property owned by Mr Hou Snr (Husband’s father) NIL NK 14 W Wife’s debt to Ms U (wife’s mother) $15,000 NIL 15 W Wife’s debt to Ms AA $5,000 $5,000 Total $20,000 $245,584
Superannuation
Owner Description Wife’s value Husband’s value 16 H Husband’s H Super $458,497 $353,667 Total $458,497 $353,667
As to the issues about the balance sheet:
Assets
Item 7: German motor vehicle
The wife drives a four year old German motor vehicle. She contends that it was bought and paid for by her mother and that her mother meets the costs of registration and insurance. The husband contends that the vehicle is the vehicle of the wife.
There is no evidence to suggest that the wife bought the vehicle or that she owns it. This item will not be included in the balance sheet.
Even if the vehicle was included in the balance sheet there is no valuation evidence about it.
Item 8: Business C
It is the husband’s case that the wife has an interest in the Business C. As I understand the argument, the wife is either the manager of the business or another paid employee and/or she has a beneficial interest in the business. In support of his case, the husband relies on the following arguments:
·the wife’s mother has a visa which allows her to live in Australia for no more than three months at a time and therefore the wife is likely to undertake her mother’s role as owner or director of the business;
·the wife regularly attends at the business premises;
·the wife apparently has unfettered use of a German motor vehicle that is registered in the name of her mother and the vehicle is insured and registered at the cost of her mother;
·advances totalling $15,000 from the wife’s mother to the wife which the wife says were loans are really disguised remuneration for the wife for her work at the business;
·the wife had referred to herself as the manager of the business on her Facebook page; and
·one of the contact telephone numbers on a business notice is the phone number of the wife.
The wife’s responses are to the following effect:
·the wife does not stand in for her mother as owner or director of the business when the wife’s mother is outside Australia;
·the wife often attends at the business premises because she enjoys doing so.;
·the German motor vehicle is owned by and registered in the name of the wife’s mother and the wife has no beneficial interest in it;
·the advances were by way of loans totalling $15,000 and are not disguised remuneration. It is the wife’s case that her mother requires the loan to be repaid at the conclusion of these proceedings;
·the wife conceded that she referred to herself as the manager of the business on her Facebook page. When asked about that in cross‑examination she initially said that she did not know the correct word to use to describe her role at the business. With respect, that is not believable. The Facebook page is in Chinese and the wife was able to give evidence in her primary language in these proceedings that she worked as a volunteer at the business. I asked her why she did not describe herself on the Facebook page as a volunteer and she could not provide a satisfactory answer. She then said something to the effect that she used the description “manager” and “president” in another context to show that she had important roles. The wife ran for local council last year and it may be that she wanted her Facebook page to promote her credentials for that office to the voters; and
·the wife conceded that one of the contact telephone numbers on the business notice is her phone number but it was her contention that the number was provided only for contact in respect of an external activity and not for general communication with the business.
A search of the official records of the Business C or a subpoena to the business would have identified the name of the manager of the business. The husband acted without legal representation and this was one of the many areas in which he could not support his case with relevant evidence. However, the fact that he did not have legal representation is not a reason to make findings unsupported by evidence.
There is no basis for including the business on the balance sheet for the parties’ property settlement proceedings. Even if there was, there is no evidence as to the value of the business, let alone a basis for attributing some value to the wife.
Item 9: K Pty Ltd
The wife was the sole director and shareholder of K Pty Ltd which was first registered on 13 June 2013. As from 26 June 2017 the wife was no longer a director or shareholder of the company, having resigned as a director and transferred her shareholding to Ms P.[1] The wife says that she terminated her roles with the company because she was running for election as a councillor on V City Council. There is no evidence that the wife received any payment on the transfer. The income tax returns for the company show that it had little or no net income.
[1] See ASIC Current Organisation Extract at Annexure D to the wife’s affidavit (commencing page 76).
In any event, there is no valuation evidence in respect of the company. I will not include the company in the balance sheet.
Item 10: Business B
Business B was a business name registered by the wife on 21 November 2011 as the vehicle for her counselling services. There is also reference to that or a similarly named enterprise providing different services. The registration was cancelled on 25 March 2017.[2] The wife says that she terminated her roles with the business because she was running for election as a councillor on V City Council. There is no evidence that the wife received any payment on terminating the business. The wife estimates that her combined income from this business and from K Pty Ltd prior to her terminating her roles in those businesses amounted to about $380 per week.
[2] See ASIC Business Current Business Name Extract at Annexure E to the wife’s affidavit (page 84).
There was no challenge to the wife’s evidence about cancelling the registration of the business name. In any event, there is no valuation evidence in respect of the business. I will not include the business in the balance sheet.
Add-backs
There are two issues about add-backs.
Firstly, on 21 July 2015 the husband paid his cousin, Ms N, the amount of $150,000. The husband contends that the payment was by way of repayment of several debts owed to Ms N and her mother. It was initially submitted for the wife that there were no such debts and that the $150,000 should be notionally added back to the balance sheet as if it had not been paid. Ultimately the claimed add-back was not pressed. Had the claim been pressed there was some support for it. No reason was advanced for the husband paying Ms N for advances made many years earlier. Neither Ms N nor the husband have provided probative evidence of a debt. However, in my view there is not a significant difference between adding back the payment and not. There is no dispute that the advances were made. It is not contended that the wife made any contribution to any of the advances. In other words, had $150,000 been added back to the balance sheet, the only contribution to it was made on behalf of the husband.
The husband made the payment because of these proceedings and he was wrong to do so. He should have given the wife advance notice of his intention to do so. That said, the wife too has acted in a unilateral way and without notice to the husband. For example, there is no evidence to suggest that the wife gave the husband advance notice of her intention to give away K Pty Ltd. There will be no add-back for the payment to Ms N.
The second add-back issue arises from the $77,000 paid to the wife pursuant to an order for interim costs. Those funds were applied to her legal costs. The husband seeks an order whereby that amount is refunded to him. That would not be a satisfactory solution because that would result in the wife having no interest in that sum. In my view, the better approach would be to add back the $77,000 to the balance sheet in the hands of wife. In that way the $77,000 will be included in the pool of assets to be divided and it will be divided in the same proportion as all of the other non-superannuation assets which are included in the balance sheet.
There have been circumstances in other cases whereby assets are included in the list prepared for property settlement proceedings, even though they no longer exist. The same logic has been applied to the exclusion from the relevant list of liabilities of debts that do exist at the date of the hearing. The current state of the authorities has the use of add-backs in the first step in the process of identifying what, if any, orders for settlement of property are just and equitable, as the exception rather than the rule. The practise has neither been mandated in any particular situation, nor has it been conclusively proscribed.
In Vass & Vass(2015) 53 Fam LR 373, the Full Court said at page 394:
[137] At [50] to [65] of the First Reasons under the heading “Add-backs,” the trial judge held that $25,000 withdrawn by the husband from the parties’ bank accounts post-separation should be added back into the pool of assets, and further concluded that $50,000 which the husband had, post-separation, paid to his parents, purportedly in repayment of a loan from them, should also be added back.
[138] There is no error committed per se in adjusting the parties’ actual property interests by a calculation involving notionally adding back into the pool sums which have been dissipated by the parties. We reject any suggestion that the decision of Bevan v Bevan(2013) 49 Fam LR 387; [2013] FamCAFC 116 – or, more particularly, the decision of the High Court in Stanford v Stanford(2012) 247 CLR 108; 293 ALR 70; 47 Fam LR 481; [2012] HCA 52 - is authority for any necessary contrary solution. Some statements made by the High Court may lead to the conclusion that references to “notional property” as have been referred to in decisions of this court and at first instance may need to be reconsidered.
[139] The decisions referred to seek to remind the Court that, however the exercise of discretion might seek to deal with property that is said to be the subject of “add back”, proper consideration must be given to existing interests in property, and the question posed by s 79(2) as a separate inquiry from any adjustment to property interests by reference to s 79(4) if a consideration of s 79(2) reveals that it is just and equitable to alter existing interests in property.
An earlier Full Court canvassed situations that had led to add-backs. In Omacini & Omacini (2005) FLC 93-218; [2005] FamCA 195 (“Omacini”) the Full Court noted at 79,617:
30.To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b) Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.”
As the Full Court said in Browne v Green(1999) FLC 92-873 at 86,360:
44.We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.”
The approach I propose in relation to the $77,000 interim costs payment is that which is referred to in the first of the categories identified in the quoted passage from Omacini (above).
Liabilities
In the course of the proceedings the husband asserted that he owed his father $20,000. Despite me pressing him on a number of occasions, the husband made no such claim in the course of final submissions.
Item 12: Husband’s debt to University Z
The husband asserts that he has a debt to University Z of the order of RMB 1,250,000. It is referred to in earlier balance sheets as being AUD 240,584. During final submissions the husband did not support the latter figure but referred to the RMB estimate. The debt is said to arise out of a contract entered into by him to provide services to that university over a number of years.
It is the husband’s case that he breached the agreement with the university and it is seeking the reimbursement of a settlement payment together with some amount for his tuition fees. In cross-examination the husband conceded that the contract between him and the university was for the period 1 June 2013 to 31 May 2016. He could not explain why a termination notice dated 31 August 2016 (i.e. outside the period of the contract) could give rise to the debt he claims. He conceded that he has not had notice of any court or arbitration proceeding instituted against him by the university. During final submissions he said that the last email he had received from the university about the claim was at the end of 2016.
I put to the husband that it would be submitted on behalf of the wife that he will never be required to pay the university. The husband responded to the effect: “I hope so”.
Suffice it to say there are a number of problems with the husband’s case on this debt. The husband has not established that he has an obligation to pay the university. There is no evidence of the precise amount of the alleged debt. There is no evidence that the debt is being pursued. The husband concedes that he might never have to pay the debt. Importantly, at various times since the end of 2016, the husband has had some funds and could have paid, or made an arrangement to pay, some or all of the asserted debt and he has not done so. The concern is that he might see the ‘debt’ as something to argue in the property settlement proceedings with his wife but not as a real liability.
For those reasons, the debt will not be included in the balance sheet.
Item 13: 14.2 per cent of the value of the Suburb F property owned by Mr Hou Snr (the husband’s father)
The husband asserts that his father has an interest in the Suburb F property. I am not entirely sure that the husband argues for a liability to be included in the balance sheet for this alleged interest.
Pursuant to orders made when the proceedings were before the Federal Circuit Court, the husband and the wife were ordered to serve their documents relating to property settlement on the husband’s father. There is no evidence that such service was effected but it is my understanding that at that time, as has largely occurred since, the husband’s father was living with the husband. No application has ever been made by the husband’s father and he has not sought to take part in these proceedings either as a party or as a person affected. There is no evidence that the husband’s father has pressed the husband for a payment or has sought to formalise any interest he has in the Suburb F property. The husband said that it is his expectation that subject to his father’s health, his father will continue to live with him. As is submitted on behalf of the wife, there is also the issue of the presumption of advancement in relation to certain dispositions within a family, including those between father and son.
I will not include a debt to the husband’s father in the balance sheet. That said, as with some other issues about loans, there is no suggestion that the wife contributed 14.2 per cent of the purchase price of the Suburb F property. Whether it was provided by the husband’s father or not, the husband brought to the marriage the equity in the Suburb F property, including the 14.2 per cent interest said to be contributed by his father. Therefore the substance of the issue can be dealt with when considering the contributions made by or on behalf of the parties’.
Item 14: The wife’s debt to Ms U (the wife’s mother)
The wife claims and the husband disputes that she owes her mother $15,000.
The wife has put into evidence an IOU that is said to support her claim as to $10,000 of the borrowing. Annexure L to the wife’s affidavit is a document in Chinese. The unchallenged translation records:
IOU
Due to inability to pay rent and daily living expenses, I now borrow 10,000 Australian Dollars ($10,000) from my parents.
Borrower: [Ms Ying]
Date 15/3/2015
The wife says that in around October 2017 she had a conversation with her mother to the effect:
[Ying]:Mum, I am short of money and the court case will not conclude for several months. Could I borrow several thousand dollars?
Mum:Yes, I will transfer $5,000 to your account. Pay me back whenever the Court case is finalised
As I understand the husband’s case, he does not challenge the fact of the advances. It is his case that rather than a loan, the $15,000 represents remuneration to the wife from her mother for the wife’s role with the Business C. There is no evidence from the wife’s mother and no explanation was offered as to why she did not give evidence. The wife says that the debt is owed to her mother and yet the IOU says that the money was borrowed from both her parents.
The wife’s debt to her sister is said to have arisen in a similar way to the asserted 2015 advance from her mother and is evidenced with a similar “IOU” and yet it is not disputed by the husband.
The husband is not able to support his alternate theory, that the advances were by way of remuneration for work associated with the Business C. The wife was not successfully challenged about the loans. I will include the loan from the wife’s mother in the balance sheet.
Item 16: The value of the husband’s superannuation
The husband contends that his superannuation should be included in the balance sheet at its value at the time of separation. He argued that the increase in its value since then can have nothing to do with the wife.
The approach to property settlement determinations is to identify assets and their values at the time of the hearing. It is obvious why that approach is taken. The operative orders can only apply to the actual value of assets.
I will include in the balance sheet the current value for the husband’s superannuation, being $458,497.
I find that the balance sheet is as follows:
Assets
Owner Description Value H D Street, Suburb F $1,160,000 H Husband’s bank accounts at W Bank and Y Bank in China $35,700 H Husband’s Westpac Bank account $100 W Wife’s G Bank account $1,624 J Joint G Bank account $67 H Husband’s Japanese motor vehicle $3,000 W Proceeds of interim costs order applied to wife’s legal costs of these proceedings $77,000 Total $1,277,491
Liabilities
Owner Description Value W Wife’s debt to Ms U (wife’s mother) $15,000 W Wife’s debt to Ms AA $5,000 Total $20,000
Superannuation
Owner Description Value H Husband’s H Super $458,497 Total $458,497
Net Assets
The net assets are $1,715,988 [$1,277,491 - $20,000 + $458,497]. Of that net sum, $458,497 is in the form of superannuation interests and $1,257,491 is in non-superannuation assets.
Contributions
The obligations placed on the Court by s 79 of the Act call for an assessment of the respective contributions by and on behalf of the husband and wife. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed not in any merely token way, but in terms of their true worth to the building up of the assets.[3] There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the husband and wife in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of husband and wife.
[3] In the Marriage of Shewring (1988) FLC 91-926
As to whether the Court should apply the considerations in s 79(4) of the Act to the assets globally or asset by asset, the authorities have it the former approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) FLC 91-814; Norbis v Norbis (1986) FLC 91-712; In the Marriage of Zyk (1995) FLC 92-644.
In Coghlan & Coghlan (2005) FLC 93-220 the Full Court held that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79 of the Act, whether or not a splitting order is sought in those proceedings. The Full Court suggests at 79,645:
61… This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.
Both parties seek that s 79 of the Act be applied to the husband’s superannuation differently compared to the other assets. The wife seeks a splitting order based on 50 per cent of the husband’s superannuation interest, while seeking 55 per cent of the net value of the Suburb F property. I assume from their submissions that the parties argue for different findings about contributions to the superannuation and non-superannuation assets and for their division in different proportions.
Beyond that, the wife seeks a different division for the Suburb F property (55 per cent to her) and yet she seeks that the husband’s bank balance and the added back $150,000 paid to Ms N, like the husband’s superannuation, be divided equally. Those different approaches were not explained in the course of the written or oral submissions made on behalf of the wife.
The orders sought by the husband are not explained in terms that make sense of the accepted approaches to family law property settlement in this jurisdiction.
Doing the best I can with that, I will approach the s 79(4) task separately for the superannuation and non-superannuation assets. At least in regard to the assessment of contributions and the format of final orders to be made.
Superannuation Interests
SECTION 79(4)(a) CONTRIBUTIONS
The only direct financial contributions to the husband’s superannuation were made by him.
The husband brought a superannuation interest into the marriage. He commenced work as an academic in 1999. I am not aware of the value of his superannuation interest at the commencement of the marriage.
During the marriage, the husband continued to make superannuation contributions.
There were no significant indirect financial contributions to the husband’s superannuation.
Since separation, the only contributions made to the husband’s superannuation were made by him. It has been asserted, without complaint, that the value of his interest has increased from $353,667 to $458,497 in that period.
The only financial contribution to the husband’s superannuation was made by him. The parties’ cohabitation was for less than seven years. The husband’s superannuation interests are apparently based on something like 18 years of contributory service.
SECTION 79(4)(b) CONTRIBUTIONS
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
There is no evidence of significant contributions falling under this heading.
SECTION 79(4)(c) CONTRIBUTIONS
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage. These contributions are not made to assets and therefore will apply equally to superannuation and non-superannuation assets.
The wife variously deposed that she undertook all of those roles and most of those roles. However, her case was put on the basis that she undertook most of the parenting and homemaker duties. Both positions were put to the husband. He disagreed. The wife ceased paid employment before X was born and she did not register the name of her business until 2011. It follows that the wife was probably more available than the husband for parent and homemaker tasks for the early years of X’s life.
The husband contends that he equally shared the parenting and homemaker duties with the wife. It is his case that his work only requires him to attend at the university on two days a week and then generally, only from 7.30 am to 3.00 pm. Otherwise he works from home and was and is available to make contributions to the family during the working week. However, he conceded that he has undertaken overseas travel with his work. Presumably, the wife performed the main parenting and homemaker role during those trips.
The wife’s contribution to the family, including as parent and homemaker was greater than that of the husband. The division of labour in the household had the husband as the breadwinner and from the time of her confinement with X, the wife as the primary homemaker. The husband had some overseas travel without the wife and X and during those periods, the load fell to the wife. Since separation, the parenting load has mainly fallen to the wife.
The wife made the greater contribution as parent and homemaker.
CONCLUSION ON CONTRIBUTION
The husband’s contributions to superannuation greatly exceeded those of the wife.
In my view the balance of contributions to the husband’s superannuation interests was 80 per cent by him and 20 per cent by the wife.
Non-Superannuation Interests
SECTION 79(4)(a) CONTRIBUTIONS
Financial contributions to property, both direct and indirect were made by each of the husband and wife.
The husband brought the Suburb F property into the marriage. I do not recall seeing evidence that might assist with the value of the husband’s interest in the property when the parties married. This was an initial contribution of importance because it represented the parties’ home for the duration of the marriage.[4]
[4] Pierce v Pierce (1999) FLC 92-844 at 85,881.
The husband received USD50,000 from Ms N’s mother before his departure to Australia in 1988.
In April 2008 the husband received USD50,000 from Ms N in cash. The husband says that he used part of this money to travel to the US and to pay expenses and his home loan.
At the commencement of the marriage the wife had no assets of significance.
There were injections of funds during the marriage. In 2011, during the husband’s visit to China, his cousin, Ms N, advanced a further sum in RMB to the value of the order of AUD50,000 which the husband applied to his living expenses in China, to the mortgage on the Suburb F property and he left some funds in China for use during later trips.
Each of the parties had paid employment during the marriage. The husband’s income was invariably received at a greater rate than that of the wife and unlike her, he was employed throughout the marriage. The wife had paid employment at a very modest rate for less than a year early in the marriage and from about 2011 she commenced to seek income through her own businesses. At first she set up a counselling service and later another business. On her own evidence, those businesses made modest returns and often did not achieve much more than covering her expenses. Of course financial contributions in the form of income are not necessarily measured only by monetary value. Their import relates also to effort.
The parties dispute the extent to which each of them applied their funds to family purposes. The husband deposes that he did not receive any financial support from the wife. It is the wife’s evidence that the husband only deposited money into the joint account on one occasion and that he did not adequately support the family. There was little, if any, testing of those assertions during the trial and it is not possible to make a useful finding about those allegations.
There is no suggestion that the wife has funds secreted in undisclosed bank accounts. While the husband makes assertions about the wife’s finances, judicial assessments have been made on an interlocutory basis in these proceedings, based on the wife’s need for funds for her weekly support and to fund this litigation. Similarly, the child support position involves a payment by the husband to the wife. I have no reason to think that the wife’s income from her employment and her businesses was not generally applied to family purposes.
With two or three trips overseas each year, and the very limited access of the wife to funds, it follows that the costs associated with those trips as well as the means of financing the household day to day, must have largely come from the husband.
The husband made the overwhelming financial contribution.
SECTION 79(4)(b) CONTRIBUTIONS
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
There is no evidence of significant contributions falling under this heading.
SECTION 79(4)(c) CONTRIBUTIONS
This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.
I refer to, without repeating, the observations about this category of contributions in the context of superannuation that I have referred to above. Those observations apply equally here.
CONCLUSION ON CONTRIBUTION
In a short marriage, the husband made a significantly greater financial contribution than the wife. She made the greater contribution as homemaker and parent.
In my view the husband made the greater overall contribution and by a considerable margin as he brought the Suburb F property into a marriage of seven years duration and he was engaged in well remunerated, full-time employment throughout the marriage.
The submission for the wife is that her contributions were made in the proportion 35 to 40 per cent. In my view that is an overly generous assessment. I will fix the proportions of contribution in respect of the non-superannuation assets at 25 per cent by the wife and 75 per cent by the husband.
The other matters in Section 79
Once contributions have been assessed, the other factors in s 79(4) need to be considered. It is not easy to identify a principled basis for the parties’ proposed approaches to adjustments in respect of superannuation and non‑superannuation issues. I will apply the non-contribution considerations of s 79 to both types of assets, equally.
Those considerations are:
Section 79(4)(d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife.
Save in respect of superannuation, the main call on the husband’s proportion of the settlement is likely to be for his accommodation. With the final property settlement orders the wife’s receipt of spousal maintenance will cease. She too will have a need for accommodation but it may be that some part of her settlement will be required to assist with her living expenses.
Section 79(4)(e) - Section 75(2) factors
The relevant matters in s 75(2) of the Act would seem to be paragraphs (a), (b), and (c).
(a) the age and state of health of each of the husband and wife;
The husband is 60 years of age and the wife is 38 years of age. They are both in good health.
(b) 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;
The wife made a very poor attempt at assisting the Court in respect of her financial circumstances. According to her Financial Statement, as at the time of the hearing the wife’s income was $710 per week, made up of $210 in child support and $500 in spousal maintenance payments. Although she does not include any Centrelink benefits in that Statement, at paragraph 45 of her affidavit she refers to receiving Centrelink benefits.
According to the wife’s evidence, her expenditure is $800 per week, made up of $500 in rent, $14 in health insurance and $284 in living expenses. That does not amount to $800 but there it is. The wife estimates that $350 per week of her expenses is applied for the benefit of X.
The wife’s expenses are subsidised by others. The wife lives with her brother and her mother and they share the rent and expenses. One would think that the wife and X get the better of that arrangement. There being no evidence to the contrary, her mother’s contribution apparently continues even though, under the terms of her visa, she is only permitted in Australia for three months at a time. The wife has the shared use of her mother’s motor vehicle and the fixed costs in relation to the vehicle are also paid by her mother. The rental bond on the apartment occupied by the wife was paid by her mother.
The evidence about the wife’s assets and liabilities is set out earlier in these reasons.
There is no doubt that the wife is not fully exercising her earning capacity. Soon after arriving in Australia in 2008, presumably with a less adequate command of English than she now has, the wife had paid employment. She closed her businesses in July 2017 and after failing in a bid for a position as a local government councillor, she has not applied for any paid positions. It is suggestive that the closure of the businesses came two months after the Child Support Registrar referred, as part of the reasons for decision, that there are advantages to the owner of a business in relation to the treatment of income and expenses. As the material annexed to the husband’s affidavit suggests, the wife is capable of presenting herself to the electorate for a local government position; she is the president of a cultural organisation and has run two diverse businesses. The wife does not contend that she is required to volunteer at either of X’s schools or to assist with chess or drawing activities. She enjoys those pursuits. Although the findings made in the administrative part of the child support scheme are not findings for the purposes of these proceedings, an assessment has issued that relies on a notional annual child support income for the wife in the order of $55,640. The wife has not challenged that assessment.
There is evidence that various factors have limited the ability of the wife to exercise her earning capacity. We do not live in times of full employment and not having a ready facility in English will no doubt limit the range of work available to the wife. Similarly, engagement in these proceedings is no doubt a distraction to seeking paid employment. It was her evidence at trial that she studied English at TAFE in 2017 but that she did not successfully complete that course. She will renew or repeat those studies this year. The wife told the Child Support Registrar in early 2017 that she was also studying at the CC College. The fact remains however that the wife is young, she has a range of interests and skills, including a capacity and interest in public presentations and civic leadership. She has unexercised earning capacity.
Of course, it is entirely a matter for the wife as to whether she seeks paid employment or not. The issue here is to identify, for the purpose of adjustments to the contribution based entitlements of the parties, whether the wife’s earning capacity is fully exercised.
The husband’s income is $2,988 per week from his salary as an academic at the University Q. According to his Financial Statement there are no other income earners living in his household. That is inconsistent with the husband’s evidence about his father living with him for much of each week. The husband spends $4,062 per week, including $928 in tax, $850 in rent, $26 in water rates, $29 in council rates, $10 in compulsory third party insurance, $10 on motor vehicle insurance, $3 on roadside assistance, $10 on registration for a Japanese motor vehicle, $210 in child support, $500 in interim spousal maintenance and $1,486 in living expenses of which $782 is applied to the expenses of X and $704 for the husband’s own expenses.
The husband’s father lives for part of each week with the husband and X at Suburb T and spends the balance of the week at the Suburb F property. The husband’s father pays some of the expenses for the Suburb F property.
The evidence about the husband’s assets and liabilities is addressed above.
It is not submitted in the wife’s case that the husband has unexercised earning capacity. He is 60 years ago. He has earlier deposed to a plan to retire at 67 years of age. In cross-examination he said something to the effect that he might retire earlier.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
Under the orders made on 24 January 2017 X will live mainly with the wife although, subject to the husband having a bedroom for him in six months, his time with the husband will increase to three nights each week.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
I have set out above what there is of the evidence in relation to the parties’ expenses.
(f) subject to subsection (3), 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;
I have referred to the conflicting evidence about the wife’s receipt of Centrelink benefits.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
It was the unchallenged evidence of the husband that the parties had two to three overseas trips every year during the marriage. I gather that the Suburb F property is a substantial home. The parties each currently live in rental properties in the Suburb T area at significant rental cost. X enjoys many extracurricular activities. This was apparently a matter of some contention between the parties. The husband expressed a concern that the boy was committed to too many activities but even he thought that the boy should have four such activities each week.
The parties are both entitled to a comfortable standard of living.
(h) 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;
There is no application for maintenance. The wife studied English at TAFE in 2017 and she plans to repeat or continue those studies this year. There is no evidence that either of the parties intends to set up a business. The wife has given evidence that, with improved English skills, she intends to seek administrative work.
(ha) 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;
No such issue was raised.
(j) 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;
This is a matter of some contention. The husband’s occupation does not make extensive demands on his time. He said that he has and will this year be obliged to attend at the university during university term, for two days each week. He can arrive as early at 7.30 am on those days and generally leaves at about 3.00 pm although that can sometimes be extended to 5.00 pm. The husband also attends at the university for some meetings and he does work at home. However, such is the comfort of his academic load and provision for leave, including sabbatical leave, that the husband was able to consider committing himself to the University Z for six months of each of three years.
In that context the advantage of having a partner who is able to carry the homemaker and parent role is reduced. Nevertheless, it must have been of assistance to the husband, whether in relation to the days he was obliged to attend at the university, his travels for work or while he worked at home, to have the wife managing X and the household.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The marriage has not had an identified detrimental effect on the husband’s earning capacity. Several years ago he achieved a position as an associate professor.
The wife worked in a professional role in China before she married the husband and she has not been able to achieve a significant level of remuneration since, whether as an employee or in her own business. The wife has not applied for positions as an employee and therefore it is difficult to assess the impact on her earning capacity of the marriage itself. However, on any view she has not consistently maintained any significant level of income, let alone had access to the benefits that come with secure employment, such as the opportunity for promotion or progression, leave entitlements and superannuation.
(l) the need to protect a party who wishes to continue that party's role as a parent;
The wife does wish to continue to help X during the school/working week as well as on the weekend. She takes him to school and leaves home each day at about 2.00 pm to collect him. She attends as a volunteer to help at his primary school as well as at the Business C and at classes and excursions associated with his activities such as dance and chess. As I understand her evidence, those things are not matters of practical necessity but they are activities that the wife enjoys. X is eight years of age and the wife will increasingly have choices to make about the balance between providing financial support for herself and X and the benefits of those activities.
Of course the wife will be free to take up remunerative employment on the days that X is living with the father.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
I have set out above what there is of that evidence.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(naa) 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 the property of a party to the marriage;
These considerations are not relevant to this case.
(na) 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;
There is a child support assessment. The husband attached his December 2017 Financial Statement to his affidavit filed 12 December 2017. In that document he deposes to paying $210 per week. The current assessment resulted from a decision of the Child Support Registrar on review, being a decision made on 19 May 2017 in respect of the period 1 May 2017 to 30 April 2020.[5] The decision resulted in the adjusted taxable income for the wife being increased to $55,640 which had the effect of reducing the husband’s liability from $13,112 per annum to $10,961 per annum. The wife did not complete a Financial Statement for the hearing. She relied on her Financial Statement from 2015 and she belatedly completed a document by hand which I understood was intended to bring that earlier document up to date. Neither document is very useful. For example, there is no reference to the wife receiving child support payments in either document. There may have been no child support assessed at the time of the earlier document but there is now.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
[5] Annexed to the wife’s affidavit at page 66 of the annexures and annexed to the husband’s affidavit at page 55 of the annexures.
Nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There is no such agreement.
Section 79(4)(f)
Beyond those referred to above, there are no relevant orders made under the Act.
Section 79(4)(g)
I have referred to the child support assessment.
Conclusion
The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
·the wife is 22 years younger than the husband and on the basis of probabilities, she has the potential for two decades in the workforce that is not available to the husband;
·the wife cannot immediately aspire to earning at a rate that is anything like the rate of income earned by the husband. Of course much may change in 20 years and the gap in their expected income rate could well narrow;
·the wife has been assisted practically and financially by members of her family;
·a property settlement based on contributions alone will greatly favour the husband;
·because of their respective ages, superannuation will be of more immediate benefit to the husband rather than the wife;
·more of the expense and parenting load for X will fall to the wife but the husband will continue to contribute through child support; and
·the marriage has had a harmful effect on the wife’s earning capacity whereas the husband’s career has flourished.
Those considerations involve countervailing effects but in my view an adjustment is required in favour of the wife of 10 per cent. In these proceedings 10 per cent represents $171,598.80 and an adjustment of that order will make a difference between the parties of twice that sum.
As an adjustment to the findings about contribution, that will mean a settlement of superannuation interests in the proportion 70 per cent to the husband and 30 per cent to the wife. The non-superannuation interests will be divided in the proportions 65 per cent to the husband and 35 per cent to the wife.
Just and Equitable
The net assets are $1,715,988 [$1,277,491 - $20,000 + $458,497]. Of that net sum, $458,497 is in the form of superannuation interests and $1,257,491 is in non-superannuation assets.
The net non-superannuation assets have a value of $1,257,491. If they are divided in the proportions 65 per cent to the husband and 35 per cent to the wife then the husband will have about $817,369 in net assets and the wife will have about $440,122. As to the form of the orders, the operative order will call for a payment to the wife and in default, the sale of the Suburb F property and a division of the net proceeds so as to achieve a settlement in the required proportions.
Of the pool of assets identified by me, the wife has the benefit of and would like to retain:
Wife’s Assets
Owner Description Value W Wife’s G Bank account $1,624 W Proceeds of interim costs order applied to wife’s legal costs of these proceedings $77,000 W Wife’s debt to Ms U (wife’s mother) -$15,000 W Wife’s debt to Ms AA -$5,000 Total $58,624
In order to bring her to 35 per cent of the net non-superannuation assets she would need to receive an additional $381,498 ($440,122 - $58,624).
That would leave the husband with:
Husband’s Assets
Owner Description Value H D Street, Suburb F $1,160,000 H Husband’s bank accounts at W Bank and Y Bank in China $35,700 H Husband’s Westpac Bank account $100 J Joint G Bank account $67 H Husband’s Japanese motor vehicle $3,000 Payment to the wife -$381,498 Total $817,369
I will provide for the husband to pay the wife $381,498 within three months. In the event that he is unable to do so, the orders will require that the husband sell the Suburb F property and make a payment to the wife from the net proceeds of sale. In order to deal with the likelihood that the net proceeds of such a sale will be different to the notional value attributed to the property, for the purposes of these proceedings, I will provide for a division of balance of the account in the proportions that reflect the ratio of $381,498 to that notional net value ($381,498 as a proportion of $1,160,000). I will round that ratio up to 32.9 per cent. If the property must be sold, the net proceeds of sale will be divided as to 32.9 per cent to the wife and the balance to the husband. The payment to the wife will have priority over all disbursements save for the costs of sale, in case the husband borrows against the property prior to paying out the wife. In that way, each of them will share in the profit or loss associated with the difference between the realised net value for the property and the notional value referred to above.
As to the superannuation interest, the orders will need to effect a settlement in the proportion 70 per cent to the husband and 30 per cent to the wife. The wife seeks a splitting order in respect of the husband’s superannuation. The husband does not seek such an order but when I suggested to him that I could make a greater adjustment from the non‑superannuation assets to account for the fact that he has more than $400,000 in superannuation and the wife has none, the husband strongly opposed that idea. Therefore it will be necessary to make a superannuation splitting order. Of course, the husband is much closer to retirement age than the wife and superannuation will be of more immediate value to him than to her.
All of that said, the wife has not proposed the terms of a splitting order and there is no evidence that the trustee of the husband’s superannuation has been given notice of an order in relation to the husband’s interest or has had the opportunity to indicate whether or not such an order could be complied with. It will be necessary then to require the wife’s solicitors to give the trustee of the husband’s fund the appropriate notice. The matter was not addressed in submissions but I assume that an enforceable order would involve a splitting order calculated on a base amount of $137,549 (representing 30 per cent of $458,497).
Conclusion
This was a marriage that spanned eight years and very significant contributions were made by each of the parties during that period and since. The parties shared the work of the marriage in different ways but overall the contributions of the husband were greater than those of the wife. An adjustment in favour of the wife of 10 per cent is justified by reference to the non-contribution provisions of s 79(4). In my view the orders proposed in these reasons will reflect a just and equitable division of the property.
I certify that the preceding two hundred and five (205) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 11 May 2018.
Associate:
Date: 11 May 2018
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