Hsieh and Chow

[2007] FamCA 470

FAMILY COURT OF AUSTRALIA

HSIEH & CHOW [2007] FamCA 470

FAMILY LAW - PROPERTY SETTLEMENT - Value of overseas assets - Contributions - Just and equitable outcome

APPLICANT: Ms Hsieh

RESPONDENT: Mr Chow

FILE NUMBER: PAF 1483 of 2005

DATE DELIVERED: 24 May 2007

PLACE DELIVERED: Parramatta

JUDGMENT OF: Stevenson J

HEARING DATE: 26 & 27 March 2007,     11 & 12 April 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dura

SOLICITOR FOR THE APPLICANT: PSK Legal

COUNSEL FOR THE RESPONDENT: Mr Gersbach

SOLICITOR FOR THE RESPONDENT: Hughes & Taylor
Solicitors

Orders

1. That, within 3 (three) months of the date of these orders, the husband pay to the wife the sum of $181,000.

2. That, in the event that the husband fails to pay such sum of $181,000 to the wife within such period of 3 months, the parties shall do all things necessary to effect the sale of the former matrimonial home situate at and known as B in the State of New South Wales and to distribute the proceeds of such sale as follows:

   2.1in payment of agent’s commission and expenses

   2.2in payment to the wife of the sum of $181,000

   2.3in payment of the balance to the husband

3. That each of the parties be declared to be solely entitled to all other items of property, whether real or personal which are presently in his and her respective possession.

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAF 1483 of 2005

Ms Hsieh

Applicant

And

Mr Chow

Respondent

REASONS FOR JUDGMENT

the proceedings

1. Mr Chow and Ms Hsieh are in dispute as to settlement of their property.  There was no agreement as to the identity and value of their assets, nor as to the extent of the liabilities.  There was also an issue as to whether an asset by asset or global approach should be adopted.

BACKGROUND

1. The parties married in Korea in March 1997, when they were aged 57 and 60 years respectively.  Each of the parties has been married previously. The husband and his first wife had two daughters, while there were no children of the wife’s previous marriage.

2. It seems that the parties commenced their relationship in 1996, when they were introduced in Australia by a mutual friend.  The husband had lived in Australia since 1972 and the wife was on a holiday in this country.

3. At the date of the marriage the wife had significant assets in Korea.  She owned an apartment, the D property, and commercial premises known as the G property.  She also had substantial amounts of cash in Korean bank accounts.  There was no evidence as to the value of the husband’s Korean assets as at the date of the marriage.

4. At the commencement of cohabitation the husband had cash savings, a Volvo motor vehicle and various chattels.  There was an issue as to how much cash the husband possessed at the date of the marriage.  I will consider the relevant evidence below, in the context of the source of the purchase money for the parties’ former matrimonial home.

5. In March 1996 the husband and wife purchased their former matrimonial home, B for $155,000.  There was disagreement as to the amounts contributed respectively by Mr Chow and Ms Hsieh.  On any view of the evidence, however, the wife injected more money into the purchase than did Mr Chow.  No funds were borrowed to acquire this property.

6. After the purchase of the B property the wife spent considerable time in Korea.  The records of the Department of Immigration (exhibit 2) show that she spent the following periods in Australia between March 1996 and the separation in September 2002:

   ·    9 April 1996 to 18 April 1996

   ·    9 November 1996 to 19 November 1996

   ·    20 December 1996 to 11 January 1997

   ·    31 October 1997 to 17 November 1997

   ·    26 July 1998 to 8 September 1998

   ·    22 January 1999 to 28 February 1999

   ·    12 September 1999 to 10 October 1999

   ·    4 November 1999 to 14 November 1999

   ·    26 July 2000 to 17 March 2002

   ·    4 June 2002 to 17 September 2002

   Following the separation the wife was in Australia from 1 September 2003 until 11 September 2003 and again from 31 March 2004 until 9 April 2004. 

7. During their relationship the parties operated a number of bank accounts.  The wife maintained accounts at the Bendigo Bank (exhibit 3) and the Westpac Bank (exhibit 4).  The husband had a savings investment account at the Commonwealth Bank (exhibit 11).  The parties operated a joint account at the Westpac Bank (exhibits 6, 7 & 8) and also a joint IMB account (exhibit 10). 

8. There were disputes concerning the parties’ dealings with the funds in these various accounts and the evidence fell some way short of enabling me to make a proper determination of these issues.  To the extent which is possible on the material before me, I will attempt an analysis of the source and fate of the funds which passed through the various bank accounts.

9. The husband conceded that the wife spent $25,000 to $30,000 on furniture from her own funds.  He said also that she took these items of property with her when she returned to Korea after the separation.  This assertion was not challenged by the wife.

10. Since the wife departed for Korea on 17 September 2002, the husband has had sole occupation of the B property.  He claimed that he has carried out improvements and maintenance to the home since separation.  This allegation was disputed by the wife.

11. The husband and his first wife separated either in 1994 or 1995.  On 5 November 2003 they entered into a binding financial agreement, the effect of which was to constitute their two children the sole registered proprietors of their former matrimonial home at F.  The husband claimed that he received payment of approximately $80,000 from his first wife as an “informal” property settlement.  This contention was disputed by the wife.

APPROACH TO THESE PROCEEDINGS

1. According to guidelines established through a series of leading decisions, the Court is required to determine the following matters on the evidence:

   ·    firstly, the assets, liabilities and financial resources of the parties to the marriage are to be determined

   ·    secondly, all relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other

   ·    thirdly, the matters in paragraphs (d) to (g) of section 79(4), particularly paragraph (e) which takes up by reference the provisions of section 75(2) must be considered and a determination made as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of contribution

   ·    finally, an order under section 79 must not be made unless the Court is satisfied that, in all the circumstances, it is just and equitable to make the order.

THE ASSETS, LIABILITIES AND FINANCIAL RESOURCES

The Assets

1. It was agreed that the parties have assets and superannuation with the following values:

1.	B (J)	$312,500
2.	G (Korea) property (W)	$740,000
3.	Volvo car (H)	$1,500
4.	I shares (H)	$6,400
5.	CBA savings (H)	$6,973
6.	Westpac savings (H)	$845
7.	Bendigo Bank savings (W)	$2,387
8.	Westpac Bank savings (W)	$2,080
9.	Household contents (H)	$3,000
10.	Household contents (W)	$500
11.	Personal effects (H)	$1,000
12.	Jewellery (W)	$2,000
13.	Paid legal fees (H)	$9,485
14.	Paid legal fees (W)	$5,985
15.	S Superannuation Benefit (H)	$227

1. The following issues arose in relation to the list of assets:

   1.   What is the value of the wife’s D property?

   2.   Does the wife have undisclosed savings and/or cash in Korea?

   3.Should a sum of $58,035 withdrawn by the wife from the joint IMB account be added back to the list of assets?

   4.Should an amount of $50,000 withdrawn from the joint Westpac account by the husband in 1999 be added back to the list of assets?

2. The Value of the D property

3. The husband and wife attributed a value of $174,313 and $110,000 respectively to this property.  The husband’s figure was said to be an admission against interest made by the wife in her Financial Statement sworn on 31 January 2005.  The wife’s figure was said to be an admission against interest made by her in a later Financial Statement sworn on 13 March 2007.

4. On behalf of the husband it was submitted that the wife should be held to the admission against interest in her first Financial Statement.  It was said that she gave an unconvincing explanation for the alleged reduction in value during the subsequent period of two years.  Her evidence was, in essence, that her property has reduced in value because it is 17 years old and a large number of apartments have been built in the city of Pusan in recent times. 

5. On behalf of the wife, it was pointed out that she did not rely on the earlier Financial Statement as evidence in her case and the document was not tendered by counsel for the husband.  It was said that the only evidence in relation to the value of the property, therefore, was the wife’s admission against interest in her Financial Statement sworn on 13 March 2007.

6. In my view, the difficulty with this submission is that the wife acknowledged in cross-examination that she had attributed a value of $174,313 to the apartment in her 2005 Financial Statement.  There was evidence, therefore, of an admission against interest that the apartment property was valued at $174,313 as at 31 January 2005. 

7. In the absence of expert evidence, there is no real basis upon which I should prefer one of the wife’s admissions against interest as to the value of the apartment property over the other.  Neither party adduced expert evidence of the value of the Korean properties, although the husband signalled an intention to do so at the aborted hearing in November 2006.  It seems that the best evidence of the value of the wife’s Korean apartment is her most recent estimate. In these circumstances, I propose to adopt the wife’s admission against interest in her Financial Statement sworn on 13 March 2007.  I find the value of the D property to be $110,000.

8. Does The Wife Have Undisclosed Savings and/or Cash in Korea?

9. The wife made no reference to any bank accounts in Korea in her Financial Statement sworn on 13 March 2007.  In cross-examination she denied specifically that she presently has any Korean bank accounts.

10. I find this denial difficult to accept for a number of reasons.  Firstly, the wife’s evidence concerning payment of rental for her commercial property in Korea was unconvincing.  In her Financial Statement sworn on 13 March 2007 she included an item “rent E $220” as part of her weekly income.  She then suggested that the commercial premises have been untenanted for some years.  She claimed that this weekly payment represents arrears of rental accrued while she was absent from Korea.  She said that she receives this money in cash and that she pays all of the expenses in relation to the property in cash.  It seemed to me that this is a strange and unlikely arrangement for the leasing of a commercial property.

11. In addition, the wife has 4 loans from Korean financial institutions, the repayments for which total approximately $250 per week.  It would be most unusual, in my view, for these loans to be serviced entirely by way of cash payments.

12. Further, the wife conceded that she withdrew $58,035 from the joint IMB account on 4 September 2003.  She admitted that she deposited this money into her Westpac Bank account and then withdrew $58,035 some 5 days later.  She said that she then “took this to Korea”.  I consider it most unlikely that the wife departed Australia with approximately $58,000 in cash.

13. For these reasons it seems to me to be more probable than not that the wife has bank savings and/or cash in Korea which she has failed to disclose.  Obviously, it is impossible on the available evidence to quantify these cash reserves. 

14. Should $58,035 Withdrawn by the wife from her Westpac Band Account be Added Back?

15. Should $50,000 Withdrawn from the Joint Westpac Account by the husband in 1999 be Added Back?

16. These two issues are inter-related and will be considered together. 

17. As I have said, on 4 September 2003 the wife withdrew from the joint IMB account a sum of $59,966.93, which was the total credit balance.  She then deposited this money into her Westpac Bank account and withdrew $58,035 on 9 September 2003.  In her oral evidence, the wife said that she “took this money to Korea”, which means that there is no doubt that the wife has used all of this money for her own purposes.  It thus appears to be appropriate that this money be added back to the list of assets, subject to the qualification below.

18. It should be remembered that the wife’s unchallenged evidence was that she paid $5,985 on account of legal costs from the money which she withdrew from the joint IMB account.  It was agreed that these paid legal costs are to be included in the list of assets.  It is thus necessary to subtract that amount from $58,035 to avoid double counting.  I propose, therefore, to add back to the list of assets an amount of $52,050 rather than $58,035.

19. On behalf of the husband it was submitted that the $50,000 withdrawn by him from the joint account in 1999 should not be added back to the list of assets.  There was no dispute that, from these funds, he spent approximately $30,000 on a lengthy trip around Australia which he took by himself.  It was said, however, that this expenditure was offset by withdrawals of approximately $31,700 by the wife from her Westpac Bank account between July 2002 and September 2002.  It was said, further, that the husband spent $20,000 on renovations to the B property after separation.

20. It was submitted on behalf of the wife that these propositions must be rejected for a number of reasons.  Firstly, it was said that there was no cross-examination of the wife about the withdrawals from her Westpac account prior to the separation.  It follows, so it was said, that it cannot be inferred that she received the sole benefit of this money.  The consequence, according to counsel for the wife, was that this sum of $31,700 and the $30,000 spent by the husband on a holiday do not cancel each other out.

21. The history of the husband’s Westpac account (exhibit 4) is that the account was opened on 11 November 1996 and has been dormant since 1 October 2003.  The account held $31,852 on 1 July 2002 and $2,080 as at the date of the last transaction on 1 October 2003.  This amount of $2,080 was included, by agreement, in the list of assets.

22. I reject the submission on behalf of the wife that it cannot be assumed that she made all of the withdrawals totalling $31,700 from her Westpac Bank account and received the sole benefit of this money.  The account is in her sole name and there was no evidence that the husband had any withdrawal authority.  It was not put to him that he made any of these withdrawals, nor that he received any benefit from this money.  It is thus proper that an amount of $31,700 be added back to the list of assets.

23. The second submission put on behalf of the wife, as to the add-back of the $50,000, was that the evidence does not support the husband’s contention that he spent $20,000 on renovations to the B property.  It is true that objection was taken to his estimate of the amount of money spent by him on the property after separation.  I granted leave to adduce this evidence in proper form but no further material was forthcoming in the husband’s case. 

24. In his affidavit sworn on 27 April 2006, the husband deposed as follows: 

    “Since the date of separation I have undertaken and paid for the upkeep of [B property].  I have paid for the cost of erecting a dividing fence, repairs to the roof and the yard, erected a brick wall, installed an alarm systems, erected two awnings, replaced some windows and laid a concrete footpath.” 

    As I have said, the husband’s estimate that he spent $20,000 was objected to in his affidavit and the leave which I granted, to adduce evidence of his expenditure in proper form, was not taken up.

25. In his affidavit sworn on 30 March 2005 the husband said:

    “Since the date of separation I have undertaken and paid for the upkeep of [N property].  I have paid for the cost of erecting a dividing fence, repairs to the roof and the yard, erected a brick wall, installed an alarm system, erected two awnings, replaced some windows and laid a concrete footpath”. 

    Again, objection was taken to his estimate of expenditure of  “about $20,000” for these purposes.  Leave to adduce this evidence in proper form was granted but not taken up in the husband’s case.

26. In these circumstances, I propose to add back the sum of $50,000 withdrawn by the husband from the joint Westpac account in 1999.  I will consider the evidence of the husband’s post-separation expenditure on the B property in the context of the contributions of the parties.

27. I thus find the assets of the parties to be as follows:

1.	B property(J)	$312,500
2.	G property (W)	$740,000
3.	D property (W)	$110,000
4.	Volvo car (H)	$1,500
5.	I shares (H)	$6,400
6.	CBA savings (H)	$6,973
7.	Westpac savings (H)	$845
8.	Bendigo Bank savings (W)	$2,387
9.	Westpac Bank savings (W)	$2,080
10.	Household contents (H)	$3,000
11.	Household contents (W)	$500
12.	Personal effects (H)	$1,000
13.	Jewellery (W)	$2,000
14.	Paid legal fees (H)	$9,485
15.	Paid legal fees (W)	$5,985
16.	Money withdrawn from joint bank account  by husband	$50,000
17.	Money withdrawn from Westpac account by wife	$31,700
18.	Money withdrawn from joint IMB account by wife	$52,050
19.	S Superannuation (H)	$227
Total:	$1,338,632

Liabilities

1. The parties were agreed that they have the following liabilities:

1	Advance from daughters for legal costs (H)	$8,985
2.	Bank loan 80 million wan (W)	$103,896
3.	Bank loan 30 million wan (W)	$38,961
4.	Bank loan 5 million wan (W)	$6,493
5.	Bank loan 19,972,436 wan (W)	$25,938

1. The husband disputed that the wife has the following additional liabilities:

1.	Ms KH - 120 million wan	$164,000
2.	AS - 35 million wan	$48,000
3.	HL - 30 million wan	$41,000
4.	“various friends” - 15 million wan	$20,000

1. The only evidence as to these alleged liabilities was a bare reference thereto in the wife’s Financial Statement sworn on 13 March 2007.  There was no corroborating evidence whatsoever as to of the existence of these loans.  There was practically no evidence of the circumstances in which the debts allegedly arose;  the only exception being some limited evidence in relation to the loan from Ms KH.  He wife said that Ms KH, who is her niece, loaned money to her and took a collateral mortgage on the apartment property.  There was no evidence as to the purpose of this loan or any conditions for repayment.

2. In such circumstances, I do not propose to include these alleged debts of the wife in the list of liabilities.  In my view, there is simply insufficient evidence to enable me properly to do so.

3. I thus find the liabilities of the parties to be as follows:

1.	Husband’s debt to his daughters for paid legal costs	$8,985
2.	Wife’s Korean bank loan	$103,896
3.	Wife’s Korean bank loan	$38,961
4.	Wife’s Korean bank loan	$25,938
5.	Wife’s Korean bank loan	$6,493
Total:	$184,273

1. The husband sought to include as a liability an unquantified amount of legal costs owed to him by the wife.  On 21 November 2006 his costs were reserved when the hearing was aborted.  I will determine whether the husband should receive an order for costs independently of the exercise of identification and valuation of the net pool of property.

FINANCIAL RESOURCES

1. There was no evidence that either party possesses a financial resource and I so find.

ASSET BY ASSET OR GLOBAL APPROACH?

1. It is clear that either of these two approaches is permissible, according to the circumstances of the particular case Norbis & Norbis (1986) FLC 91-712 (High Court of Australia). I considered adopting an asset by asset approach in this matter, for the following reasons:

   ·the relationship between the parties subsisted for the relatively short period between early 1996 until September 2002

   ·The wife owned substantial assets in Korea well before the marriage

   ·nothing in the evidence suggests that the husband made any contribution to the wife’s Korean assets

   ·the intermingling of the parties’ funds was confined primarily or entirely to the B property and the various Australian bank accounts

   ·the period of the marriage did not bring about any substantial change to the relative financial positions of the parties

1. An asset-by-asset approach can readily be adopted with respect to some items of property, for example the wife’s Korean apartment and commercial premises, but it is much more difficult to do so with assets acquired during the course of the relationship.  This approach becomes problematic in circumstances where the husband and wife cohabited and mingled their funds for 6 years.  For example, it is practically impossible to apply an asset-by-asset approach to the amounts remaining in and withdrawn from the various bank accounts.  The Outline of Case Document filed on behalf of the wife urged the adoption of a “two pool” approach.  Essentially, the wife’s Korean assets and other property owned by her prior to the marriage would constitute one pool.  I will adopt a modified version of this suggested approach.

THE CONTRIBUTIONS OF THE PARTIES

1. The husband and wife each made a direct financial contribution to the acquisition of the B property.  The unsatisfactory way in which the evidence was presented makes it difficult to quantify precisely the amount of money contributed by each party to the purchase price. 

2. A settlement statement, annexed to the affidavit of the husband sworn on 27 April 2006, shows that the purchase price was $155,000.  On 10 April 1996, amounts of $39,200 and $105,516.58 were deposited into the trust account of the conveyancing solicitors.

3. The husband’s withdrawal of $39,200 from his Commonwealth Bank account on 10 April 1996 obviously matches the deposit of that amount into the solicitors’ trust account.  The husband’s account was opened on 19 March 1996 with a cash deposit of $10.  On 22 March 1996 a deposit of $41,270 followed as an entry titled ‘term deposit’.   The husband said that this money was part of the “informal property settlement” between himself and his first wife.  Following withdrawals of $2,000 on 28 March 1996 and $39,200 on 10 April 1996, this account has been dormant with a balance of approximately $10. 

4. A sum of $105,523 was withdrawn from the joint Westpac Bank account on 10 April 1996.  There is no doubt that this money came from funds transmitted by the wife from Korea in March and April 1996.  The relevant bank statement shows a series of telegraphic transfers amounting to a total of approximately $109,800, prior to the withdrawal.  The only additional deposit was of a sum of $1,000 when the account was opened.  It must follow, therefore, that the wife contributed this sum of $105,516 to the purchase of the B property.

5. The husband maintained that he paid the deposit of $15,500.  He said that this money came from a joint account which he had previously operated with his first wife, in connection with a business known as “[I Company]”.  He said that this money was another component of their informal property settlement.

6. Although there was no documentary evidence to support the husband’s contention that he paid the deposit from this business account, I am inclined to accept that he did so.  There was no withdrawal from the joint Westpac account to match the payment of the deposit.  The money for the deposit could not have come from the wife’s Westpac or Bendigo Bank accounts, which did not exist when the B property was purchased (exhibits 3 and 4). 

7. I thus find that the husband contributed approximately $54,700 to the purchase of the B property.  I find that the wife’s contribution to the purchase price was approximately $105,500.

8. The husband also claimed that he had $10,000 in cash at the commencement of the relationship.  He said that this money was also part of the “informal property settlement” with his first wife.  Again, there was no corroborating evidence that he had such money but I am inclined to accept that he was truthful in this regard.  He gave no evidence as to the use which he made of this money.    

9. Following the purchase of the former matrimonial home, substantial additional funds were transmitted from Korea to the joint Westpac bank account.  A rough total of such deposits, identified as “Telegraphic Transfer” or “Overseas T/T” amounts to approximately $159,000.  There were additional deposits into this account, amounting to around $88,000, which were not identified in this way.  There was little evidence as to the source of the deposits which did not originate overseas.  It did seem to be common ground that the wife brought cash with her when she returned from her frequent trips to Korea.

10. The husband alleged that some of the telegraphic transfers into the joint Westpac account were part of a scheme conducted by the wife and other people, to avoid restrictions on currently transfer imposed by Korean law. The only admissible evidence in this regard was to be found in the affidavit of Ms P sworn 27 April 2006.

11. Ms P deposed that she and her husband required money from a Korean bank account to assist their daughter with her education.  They had already transferred to Australia the annual maximum of US$10,000 permitted by Korean law.  Ms P said that she arranged for two withdrawals from their Korean bank account on 2 June 1997 and 5 June 1997, which dates she noted in her diary.  Arrangements were then made for these two amounts, each of US$5,000, to be transferred into an account in the name of the wife and/or the husband. She said that the husband attended the home of herself and her husband and handed to them approximately A$13,000 in cash.  Ms P’s evidence was not tested by cross-examination.

12. Telegraphic transfers on 3 June 1997 of $6,563 and $6,460 on 6 June 1997 in the statements relating to the joint Westpac Bank account (exhibit 8), which accord with Ms P’s evidence.  I might say that the pattern of the proximity of telegraphic transfers and withdrawals certainly appears to suggest that the wife operated a currency transfer scheme.  The evidence falls far short of enabling me to find that she did so.  In any event, this argument was floated in the case for the husband but never developed.  No submission was put as to how I should treat the evidence of Ms P. 

13. Otherwise, the deposits into the joint Westpac Bank account consisted of the husband’s pension, which ranged between $316 and $345 per fortnight.  The credits attributable to his pension would thus total around $43,000.

14. The husband and wife operated a joint IMB account between September 1999 and September 2003.  The opening deposits on 13 September 1999 consisted of cash of $15,000 and “multiple cheques” of $41,000.  The statements (exhibit 10) show several “corrections” of entries after the initial deposits.  The only evidence as to the source of the money lodged in this account was contained in the wife’s affidavit, where she said:  “I have made the entire financial contribution for this account”.  This evidence was unchallenged.

15. The wife maintained that the husband made withdrawals from this account without her knowledge or consent.  The evidence does not enable me to find that he did so.  The relevant bank statement shows withdrawals of $1,000 and $5,000 on 30 May 2003 and 29 August 2003 but neither party was questioned as to who was responsible for these transactions. 

16. The wife operated a Westpac Bank account in her sole name from 11 November 1996.  There was no suggestion by the husband that he deposited any funds into this account.

17. The wife also operated a Bendigo Bank account in her own name, into which she deposited her pension payments.  She began to receive an Australian pension in about March 2002. 

18. The husband maintained that he was responsible for the maintenance of the B property prior to the separation, a proposition not seriously disputed by the wife.  The husband must have been solely responsible for the maintenance of the property since the separation.  The wife has lived in Korea since that time and he has had sole occupation of the home. 

19. There was a dispute as to whether one party carried out a greater proportion of the domestic duties in their household than did the other.  It is impossible for me to make any determination of this issue on the available evidence.

CONCLUSION AS TO CONTRIBUTION

1. The Outline of Case document on behalf of the wife stated:

   “The wife submits that on an asset-by-asset approach the court would find the wife’s contributions up to the date 80%”.

   After recording a concession of a 5% adjustment in favour of the husband on account of section 75(2) factors, the Case Outline on behalf of the wife continued:

   “Accordingly the wife asserts that the just and equitable division of the parties’ jointly acquired assets ought to be 75/25 in favour of the wife.”

2. As I have said, the Case Outline filed on the wife’s behalf seemed to suggest that the matter be considered on the basis of two pools of property.  The first pool would consist of the B property and addbacks for money withdrawn from the various bank accounts.  The remaining assets and the liabilities would constitute the second pool.  This approach seems to me to hold some advantages, in terms of achieving justice and equity between the parties.  I will adopt a modified version of the approach suggested by counsel for the wife. 

3. The Case Outline submitted on behalf of the husband stated:

   “The husband submits that his contributions up to the date of the hearing should be found to be 25%”.

   The husband’s counsel urged that a global approach be adopted. 

4. It seems to me that the husband could not claim that he made any contribution to the acquisition, conservation or improvement of the following assets of the wife:

1.	G Property	$740,000
2.	D Property	$110,000
3.	Household Contents	$500
4.	Jewellery	$2,000

1. Similarly, it seems to me that the wife could not claim to have made any contribution to acquisition of the husband’s paid legal fees of $8,985, which came from his daughters. Arguably, the wife made a contribution to the conservation of the following assets of the husband:

1.	I Shares	$6,400
2.	Volvo Car	$1,500
3.	Household Contents	$3,000
4.	Superannuation	$227

She provided substantial funds for the joint benefit of the parties during some of the period of the husband’s ownership of these items.

1. There has been a clear intermingling of the parties’ funds with respect to the following assets:

1.	B property (J)	$312,500
2.	CBA Savings (H)	$6,973
3.	Westpac Bank Savings (H)	$845
4.	Bendigo Bank Savings (H)	$2,387
5.	Westpac Bank Savings (W)	$2,080
6.	Husband’s Paid Legal Fees (ex advance from his daughters)	$500
7.	Wife’s Paid Legal Fees	$5,985
8.	Money Withdrawn From Joint Westpac Account by Husband	$50,000
9.	Money Withdrawn From Joint IMB Account by Wife	$52,050
10.	Money Withdrawn From Westpac Bank Account by Wife	$31,700
$465,020

1. The husband began to receive a social security pension in 1998.  In the 1996 financial year, his total income was $3,941.  There was no evidence of his income for the 1997 financial year.  It follows that he could not have made a significant contribution to the credit balances in the various bank accounts operated by the parties during their relationship.  In fact, from 1998 he was in a position to contribute only his aged pension to their available funds  It may be that he retained some amount of cash from the “informal property settlement” with his first wife.

2. I have referred above to the rough analysis of the credits into the joint Westpac Bank account.  A total in the vicinity of $290,000 was deposited into this account, of which about $43,000 came from the husband’s pension.  The balance must have come either from the wife or friends with whom she entered into arrangements to extract money from Korea.  The evidence does not enable me to determine which of these deposits consisted of the wife’s own funds. 

3. It can safely be concluded that the money deposited into the joint IMB account and the wife’s Westpac Bank account came only from her.  The husband simply could not have supplied these funds and he did not suggest that he did so.

4. The husband’s evidence was that his two daughters provided financial assistance to him until recently.  It seems to me to be more probable than not that a substantial component of his CBA savings came from this source.  It may also be the case that some of these savings consist of money remaining from the $50,000 which he withdrew from the joint Westpac Bank account in 1999.

5. It should be remembered there has been a relatively substantial increase in the value of the B property since 1996.  The purchase price was $155,000 and the agreed present value is $312,500, which means that the property has increased in value by $157,500.  This component of the net pool of property is simply a windfall.

6. It is obvious that the wife’s contributions outweigh those of the husband to a significant extent.  As I have said, it does not seem to me that the husband made any contribution to the conservation of the wife’s Korean assets.  It is arguable, however, that the wife made a contribution to the conservation of the husband’s pre-marriage assets.  Quite simply, she provided significant amounts of cash for the joint benefit of the parties at a time when the only funds which the husband had available were his aged pension and cash from the “informal property settlement” with his first wife.

7. I accept that the husband made a contribution to the conservation of the B property following the separation.  On the other hand, he has had sole occupation of the home and he has been relieved of any obligation to pay rent or mortgage instalments.

8. In relation to the assets acquired or generated during the relationship, as set out in paragraph 71 above, it is clear that the wife’s contributions significantly exceed those of the husband.  She contributed a greater sum to the purchase price of the B property and provided larger sums of money for the benefit of the parties during the relationship.  On the other hand, a reasonably significant component of this pool of property is comprised of the windfall being the increase in value of the B property.

9. I would assess the contributions of the husband and the wife to the net pool of property identified in paragraph 72 above as 35% and 65% respectively and I so find.  As a checking exercise, this finding would equate to 16% to the husband and 84% to the wife in relation to the overall net pool of property.  Without regard to any pre-marriage Korean savings, the wife contributed at least 60% of that pool by way of existing net assets.  I am here referring to her Korean real estate, less the liabilities to Korean financial institutions.  When consideration is given to the wife’s transfers of cash into the Australian bank accounts, it is readily apparent that her contributions would exceed 60% to a substantial extent. 

SECTION 75(2) FACTORS 

1. I will refer only to those factors set out in section 75(2) which appear to me to be relevant to the present proceedings.

   section 75(2)(a): the age and state of health of each of the parties

   section 75(2)(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

2. The husband and wife are aged 65 and 68 years respectively.  They are each retired and neither can be expected to engage in gainful employment in the future. 

3. The wife seems to have some health problems.  She has suffered a stroke and requires regular kidney dialysis.  There was no medical evidence adduced in her case as to her state of health.  This deficiency is not of much moment, in my view, as her age precludes her from gainful employment in any event.

4. The husband’s only income is his aged pension.  In terms of available income, his situation is highly unlikely to improve in the future.  The wife has her commercial property in Korea, from which she is in a position to derive an income.  As I have said, I have suspicions that the wife has undisclosed cash reserves and/or bank accounts in Korea. 

   section 75(2)(o): any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account

5. The husband’s unchallenged evidence was that the wife spent approximately $25,000 to $30,000 on furniture, all of which she took to Korea upon the separation.  The wife now attributes a value only of $500 to her “household contents”.  It seems to me to be highly likely that she has undervalued these assets.  On the other hand, there was no dispute that she purchased these items with money held by her prior to the marriage.  I have referred already to my suspicion that the wife has undisclosed assets in Korea.

6. It seems to me to be convenient for the husband, rather than a coincidence, that he entered into a binding financial agreement with his first wife following his separation from the wife.  The husband voluntarily divested himself of an interest in a valuable piece of real estate.

CONCLUSION AS TO SECTION 75(2) FACTORS

1. The wife conceded that there should be a 5% adjustment in favour of the husband on account of section 75(2) factors, with reference to “the parties’ jointly acquired assets”.  In my opinion, this concession is appropriate having regard to the disparity in their respective capital bases.

RESULT

1. The result is that I find that there should be a division as to 60% to the wife and 40% to the husband in respect of the following items of property:

1.	B property (J)	$312,500
2.	CBA Savings (H)	$6,973
3.	Westpac Bank Savings (H)	$845
4.	Bendigo Bank Savings (H)	$2,387
5.	Westpac Bank Savings (W)	$2,080
6.	Husband’s Paid Legal Fees (ex advance from his daughters)	$500
7.	Wife’s Paid Legal Fees	$5,985
8.	Money Withdrawn From Joint Westpac Account by Husband	$50,000
9.	Money Withdrawn From Joint IMB Account by Wife	$52,050
10.	Money Withdrawn From Westpac Bank Account by Wife	$31,700
$465,020

60% of that figure equals $279,012 and 40% equals $186,008.

1. The husband wishes to retain the B property, which has been his home for the last 10 or 11 years.  On the basis that the husband’s daughters have provided financial assistance to him in the past, I will structure my orders so as to provide an opportunity for him to buy out the wife’s interest in the property.  I will include a default provision for sale to cover a situation where the husband’s daughters or other person/s, elect not to provide such assistance.

2. Of the above pool of property the husband holds assets to the value of $370,818, which exceeds his entitlement by $184,810.  The wife holds assets to the value of $94,202 which falls $184,810 short of her entitlement of $279,012.  As a cross-checking exercise this outcome represents a division of the overall net pool of property as to 83% to the wife and 17% to the husband.

3. The overall result would be that the wife maintains her Korean assets, one of which provides her with an income.  She could discharge her debts, either from money paid to her by the husband or from her share of the sale proceeds of the B property.  The husband would have the continuing benefit of the B home or an amount of around $127,500 if the property is sold.  This result seems to me to be a just and equitable outcome.

THE HUSBAND’S APPLICATION FOR COSTS

1. The hearing fixed for 21 November 2006 could not proceed because the wife  failed to attend and provided late notice that she did not intend to be present.  It was argued on behalf of the wife that the husband’s application for costs is compromised by his failure to adduce evidence of her Korean properties, as he indicated that he would do so.  I do not regard this submission as persuasive, as the wife’s failure to attend court for the 3 day hearing meant that the entire process was aborted.

2. I propose to make an order for costs in favour of the husband.  His estimate of costs thrown away was as follows:

Counsel’s fees (inclusive of GST):
·	One day of reading and preparation*	$2,500
·	One day of hearing	$2,500
·	3 days reserved for hearing	No charge	$5,000
Solicitor’s costs
·	Conferring with counsel and client in preparation for commencement of hearing*
·	Communication with Wife’s solicitors, client and counsel in relation to advice Wife not to attend court (after 9:00am 20 November 2006)
·	Attending at Court on 21 November 2006
5 hours @ $290	$1,400
GST @ 10%	$140	$1,540
TOTAL		$6,540
*includes only time that will not be of continuing benefit and work that will need to be repeated

1. I will not allow $2,500 for counsel’s “reading and preparation”.  This earlier work must have reduced the amount of time necessary to prepare the matter for the hearing before me.  Similarly, I will not allow all of the time spent by the husband’s solicitor in conference.  I will allow 4 of the 5 hours claimed by the solicitor at $290 per hour and 1 day’s fees for counsel at $2,500, making a total of $3,732 including GST.

2. The husband will need to pay to the wife an amount of $184,810 in order to retain the B property.  The most convenient course would be to deduct the sum of $3,732 from that figure, which would mean that the husband pays to the wife $181,078.  In the exercise of my discretion, I will round off this amount to $181,000.

I certify that the preceding ninety five (95) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson

Associate: 

Date:  24 May 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as HSIEH & CHOW