JI & JI

[2008] FamCA 1074

FAMILY COURT OF AUSTRALIA

JI & JI [2008] FamCA 1074

FAMILY LAW – CHILDREN – With whom children live
FAMILY LAW – PROPERTY SETTLEMENT

APPLICANT: Ms Ji

RESPONDENT: Mr Ji

FILE NUMBER: TVC 687 of 2007

DATE DELIVERED: 19 December 2008

PLACE DELIVERED: Townsville

PLACE HEARD: Townsville

JUDGMENT OF: Monteith J

HEARING DATE: 18, 19 & 20 Nov 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Self Represented

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: Mr Fellows of Counsel

SOLICITOR FOR THE RESPONDENT: Roberts Nehmer McKee

IT IS NOTED that publication of this judgment under the pseudonym Ji & Ji is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT TOWNSVILLE

FILE NUMBER: TVC 687  of 2007

MS JI

Applicant

And

MR JI

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

1. The proceedings before the Court involve questions of parenting orders, property orders, spousal maintenance orders and variation of child support orders.

2. Mr Fellows of Counsel appeared on behalf of the applicant wife and Mr Ji appeared on his own behalf.

3. I propose to deal with parenting orders first.

PARENTING ORDERS

1. The orders sought by the wife were contained in an amended Application filed on 11 November 2008.  The husband’s proposed parenting orders were contained in an amended Response filed by him on 18 November 2008, being the morning of the trial.

2. Interim parenting orders had been made by Federal Magistrate Coker on 31 January 2007 and they, in substance, provided for equal shared parental responsibility and that the children live with the father each week from 9.00 am Sunday until the commencement of school or day care each Tuesday and from the conclusion of school or day care each Thursday until the commencement of school or day care each Friday and that otherwise, the children live with the mother.

3. The orders with respect to parenting were never varied by the Court and they made no provision for special days or for school holidays.

4. The parties by agreement between themselves varied the orders so that the husband had the care of the children from Tuesday after school/day care until Wednesday morning when he returned them to school/day care and from Friday after school/day care until Sunday morning.  The wife had the children for the remainder of the time, namely from Sunday morning until Tuesday morning and from Wednesday afternoon until Friday morning.

5. These were the arrangements prevailing at the date of trial.  The mother did not seek to change those arrangements save that she wanted some amendments that reflected the fact that the youngest child was to start school next year and made some provision for special days and school holidays.

6. The husband, in his amended Response, sought that the children spend time with him each week from 9.00 am Sunday until the commencement of school or day care each Friday during normal school days, and during school holidays from 9.00 am Sunday until 9.00 am Friday.  He also sought orders with respect to special days.

7. The basic difference between the proposals was that the mother wanted to retain a four/three split whereas the husband wanted to impose a five/two split. 

8. Both parties proposed that there should be equal shared parental responsibility and Mr Fellows submitted that I should apply the presumption that equal shared parental responsibility was in the best interests of the children.  Consequently, I propose to do so.

9. Hence, I am required under the Act to consider making an order that the children spend equal time with the parents or if that is found not to be in the children’s best interests or impracticable, then consider making an order that the children spend substantial and significant time with each parent and if neither equal nor substantial and significant time is considered to be in the best interests of the children, then make such order in my discretion as is in the best interests of the children as a result of the considerations of one or more of the matters in section 60CC.

10. I had the benefit of two Family Reports, the first dated 4 October 2007 which became Exhibit T in these proceedings, and the second dated 17 October 2008 which became Exhibit U in these proceedings.  The author of both reports, Ms P, B.Psych (Hons) BSocSc, Family Consultant, gave evidence before me.

11. The husband was born in China in February 1960 and is currently 48 years of age.  The wife was born in China in October 1970 and is currently 38 years of age.  The parties married in September 1995 in China, although the husband had already migrated to Australia in April 1990.  He was a permanent resident in Australia at the time of the marriage.  In October 1996 the wife migrated to Australia to join the husband and they lived in southern Queensland.  The first child of the marriage, Z, was born in November 1997 and is currently 11 years of age.  The second child of the marriage, C, was born in September 2004 and is currently four years of age.  The parties had previously relocated from south Queensland to Townsville in February 2000 and separated under the one roof on 23 August 2006.  Interim orders were made on 31 January 2007 by Federal Magistrate Coker, to which I have already referred, and those orders amongst other things provided for the wife to have exclusive occupation of the former matrimonial home.  The husband failed to move out pursuant to the terms of that order and on 29 June 2007, I ordered that the husband vacate the property by 4.00 pm on 6 July 2007.  The husband complied with that order and ever since has lived separate and apart.  However, he rented premises within easy walking distance of the wife which made for easy changeover for the parties with respect to the children.  It was this proximity that made the current orders of a four/three split work so well.  It is a five minute walk between the two homes.

12. In the first Family Report, the report writer gave consideration to changing the arrangements because the husband sought that the children spend three nights per week with him, namely Monday afternoon to Thursday morning in the first week, alternating with Thursday afternoon to 6.00 pm Sunday in the second week.

13. During the conduct of the first report, both parents acknowledged to the Family Consultant that the current arrangements were viable.

14. At paragraph 20 of the first Family Report, the report writer says:-

    “As to the children’s living arrangements, [the wife] claimed the current arrangement works.  [The husband’s] close location was seen as advantageous, enabling [Z] to move between the two homes.  [The wife] maintained she would be upset if the children spent less time with her.”

15. At paragraph 29 of the first Family Report, the report writer wrote:-

    “[The husband] acknowledged the present living arrangements were appropriate for a child of [C’s] age.  On this basis, he advocated the present pattern should continue until [C] is of sufficient age to cope with longer periods of separation from either parent.  He later suggested continuing the present pattern for the next two to three years.  Whilst proposing that the children’s living arrangements be alternated annually, [the husband] also advocated that in future, the parents be guided by [Z’s] wishes.  [The husband] disclosed ‘I talked with [Z].  She would prefer to live out of a suitcase’ rather than longer periods at each home.  [The husband] indicated ‘[Z] is happy with the current arrangements.  We can all count sleeps; maximum is two nights apart’. 

16. The report writer found that it was evident that the children had a very close and affectionate relationship with the wife and that this was reciprocated and that the husband had a very close and affectionate relationship with the children and the girls reciprocated his affection.

17. The report writer opined in paragraph 53:-

    ‘Given the proximity of the two homes, combined with both parents’ commitment to fostering a positive relationship between the children and the other parent, in regards to living arrangements, the writer recommends the status quo.’

18. In the second Family Report dated 17 October 2008, the report writer indicates that the children continue to live with the father three nights each week, two consecutive nights plus one night, and the remainder of the week, the children live with the mother.  Z attends T School and C presently attends Childcare but she starts prep in 2010.  The parents completed the necessary enrolment forms for C’s attendance at T School pre-prep in 2009.

19. The report writer at paragraph 28 of her report says:

    “[The wife] maintained the current living arrangements are ‘very good; the kids need this [current pattern].  I like to see them often; I think [the husband] wants them often.  Week about is too long’.  [The wife] emphasised ‘the kids need to see [the husband]’;  she recalled ‘during our [earlier] separation in 2000, [Z] had missed her daddy’.  When asked for her views regarding [the husband’s] proposal of five nights, [the wife] claimed ‘[the children] would be hurt [upset]’ it would be terrible’.  [The wife] reasoned ‘I’m good at taking care of everyday life.  I’m responsible for homework, I teach [C] numbers and the alphabet.  I write, she copies’.  Whilst highlighting that [Z] is ‘doing good at school’ [the wife] pointed out other students are achieving better marks.  [The wife] noted that she is presently assisting [Z] with her math.”

20. The report writer goes on in paragraph 31 to state:

    “When reflecting on [the husband’s] proposed living arrangements, [the wife] stated an equal shared care arrangement of four/three split followed by three/four split would confuse not only [the children] but also disrupt their routine.  She explained ‘[Z] is very forgetful; she forgets essentials such as her text books and reading classes.  She is not into [ensuring] details [are attend to] (sic).  According to [the wife], [Z’s] lack of detail leads to errors in her school work; ‘even copying she makes mistakes’.

21. The husband spoke optimistically about his future to the report writer.  In particular, he hopes his plans for a business will soon be realised.  At paragraph 39, the report writer records:-

    “According to [the husband], ‘I can’t save the marriage; but I could be far better [as a parent than [the wife]] for the children’.  On that basis he declared ‘I want five days’.  He reasoned ‘when together every time [Z] had a nightmare, cold or wanted to go to the toilet she called me, she knew [her] mum would not respond.  [Z] is scared of the dark, even now.  [C] is also affected, she has learnt from [Z] to be scared’.  [The husband] claimed ‘involvement and participation in the children’s life is very important’.  He maintained his quality and attitude towards parenting exceeds that of [the wife].  To reinforce his point, [the husband] spoke of how he assists [Z] with her homework and sits with her when she practices on the piano.  He also spoke of the various school activities that he attended despite the activity occurring during time the child spent with the mother.  [The husband] spoke of how he turns simple activities such as watching a DVD into a fun event.  He explained ‘I brought a tent;  we, along with our pop corn, marshmallows or chocolate, crawl into the tent [erected inside the house] and watch a DVD on my lap-top.  We do this on a regular basis’.  [The husband] also mentioned how he often provides sporting activities (golf, T-Ball, swimming) for the daughters.  Often such activities including [Z’s] T-Ball training occur on a Sunday afternoon.  He questioned if [the wife] is as active;  if she too spends quality time with [the children].’

22. At paragraph 45, she records:-

    ‘As to his proposal of [the children] living with him for five of the seven days each week, [the husband] declared ‘I would cut my hours.  I’m not superman;  I’m doing better than before’.  He envisaged once the [business] is operational, he would cut his hours further.  Being optimistic about the success of [the business], [the husband] spoke of the possibility that he could manage the [business] without being on-site.  When questioned if he could sustain his commitment to his daughters, his practice and management of the [business] [the husband] stressed I’m happy, this is not a burden’.

23. The report writer records her conversations with Z at paragraphs 53 and 54 and I set those out hereunder:

    “53.[Z] spoke at length about her dislike of vacation care.  She expressed a desire to participate in the weekly Science Club that her friend […] attends.  According to [Z] she would prefer to spend school holidays with her mother rather than attend vacation care.  Whilst articulating benefits from spending time at [the husband’s] office, [Z] stated this arrangement was better than vacation care however her preference was to be with her mother.

    54.[Z] acknowledged she was forgetful; consequently she and her parents are constantly chasing up forgotten items.  Given such forgetfulness, [Z] stressed that she requires consistency.  For instance, she wished to continue with the current pattern rather than a week about arrangement. According to [Z], she is comfortable with the current arrangements as she only has to remember the day to know which parent will be collecting her.  Later in the assessment, [Z] acknowledged that if her father was seeking additional time she would be willing to spend another night once a fortnight with him.  Despite this offer [Z] struggled to identify a suitable night.”

24. In her assessment, the report writer wrote at paragraphs 63 and 67 as follows and I set them out hereunder:

    “63.The writer gained the impression that [the husband] and [the wife] are excellent parents, both striving to provide optimal environments for [the children].  Whilst the parents find fault in each other’s parenting styles, these minor short-comings tend to be magnified.  Indeed, both [the husband] and [the wife] acknowledge the other is a good parent and plays a very important role in the children’s lives.

    …

    67.While the writer sees merit for the children to live with the parents on an equal basis, the writer is also cognisant of [Z’s] plea for consistency.  The current pattern of a minimum of two nights away from a parent appears to be viable for [the children].  To move to a more equitable arrangement a possible solution is that the children spend alternate Wednesdays with the father.”

25. Under the heading “Recommendations”, the report writer says:-

    “68.    The writer recommends shared parental responsibility.

    69.Whilst there is merit for a more equitable living arrangement, the writer acknowledges the parents are best position to evaluate the child’s, in particular [Z’s] capacity to adjust to an arrangement that slightly varies on a weekly basis.

    70.The writer recommends specific arrangements for significant dates in [the children’s] life, for example each child’s birthday and Christmas, Mother’s/Father’s Day. The writer provided a suggested format in October 2007 report (para 55 refers).

    71.The writer recommends formalising school holiday arrangements.”

26. Ms P in her evidence swore that both parents are excellent parents and that it was difficult to distinguish between them.  She thought that the two parents complemented each other and that they both have a lot to offer.  She supported a continuation of the status quo on the basis that it has worked in the past, it is presently working, it is what the children want and it is what she believes is in the best interests of the children.

27. Consequently, I am satisfied that it is in the children’s best interests that I make the parenting orders as set out in Annexure A to the amended Application for Final Orders filed on 11 November 2008, save that I propose to delete Clause 6, slightly amend Clause 5 to account for the fact that C is starting school next year, then make some orders with respect to special days and school holidays.

CHILD SUPPORT

1. The husband brought an Application in a Case dated 2 July 2008 in which he sought orders varying the orders of Federal Magistrate Coker made on 31 January 2007.  He sought an order that there be no departure from the Child Support Assessment issued by the Child Support Agency on 17 April 2008 and some ancillary orders.  I ordered on 25 August 2008 that that application be heard together with the trial proceedings and in his amended Response filed on the morning of the trial, being 18 November 2008, he sought an order that the child support be in accordance with the current CSA scheme.

2. In his order of 31 January 2007, Federal Magistrate Coker ordered at paragraph 6:-

   “6.Pursuant to Division 4 of the Child Support (Assessment) Act 1989 there be a departure from the child support assessment such that the Father pay to the Mother each week for the support of the children the sum of $300 per week, and additionally:

   (a)The Father pay directly to the school, as and when such fees might fall due, the school fees and levies associated with the child [Z’s] attendance at [T] School.

   (b)The father pay directly to the day-care centre attended by the child [C], the fees associated with her attendance at [… DayCare] or as may otherwise be agreed between the parties jointly.

   (c)The Father be responsible for the payment of uniform expenses and stationery and texts associated with each of the children’s attendance at school or day-care.

   (d)The Father continue private health insurance at the current level in relation to maintaining and ensuring the children’s coverage.”

3. The evidence establishes that the father has a high income.  It was $250,000 per annum in January 2007 (see his Form 13 filed on 19 January 2007) and more recently assessed by the Child Support Agency at $175,000 per annum as at October 2008, being annexure “E” to the wife’s trial affidavit, and estimated to be about $225,000 per annum in his Form 13 filed on 13 November 2008.

4. Exhibit M in these proceedings is a schedule based on the husband’s Form 13 and showing his income at $4,393 per week less expenses there set out with a surplus of $993 per week.  The expenses include the $300 per week ordered by Federal Magistrate Coker to be paid by the husband.

5. From the husband’s evidence, he desired the children to have the best, including a private education and has gone to the expense of buying one of the children a piano worth in excess of $11,000.  It is also clear that the mother’s income will never be as significant as that of the father and she is presently reliant upon pension support.

6. The decision of the Federal Magistrate imposing an obligation upon the husband of $300 a week plus payment of day care for C and school fees for Z together with incidental educational costs and the provision of medical insurance was entirely appropriate for him to make at that time.  Though an Application to Vary a previous Child Support Order does not require the establishment of a change of circumstances (see Gilmour (1994) 18 FamLR 646), it is necessary to establish special circumstances or one or more grounds that the proposed change is “just and equitable” (see section 117 Child Support (Assessment) Act).

7. The mother seeks a small variation of the prior order to reflect the fact that the younger child, C, now attends private school. This is a matter that has been agreed upon between the parents and is referred to in the most recent Family Report. Therefore the children are being educated in the manner expected by the parents, which is recognised by section 117(2)(b)(ii). It is clearly appropriate that these school fees should be paid by the husband.

8. Further, the husband promises to provide private medical insurance (see paragraph 153 of his trial affidavit).

9. Looking at Exhibit M, it is clear that the husband has an excess of income over expenditure so there is no question of affordability. 

1. The father’s application is simply for reversion to the Administrative Assessment, presently an amount of $250 per week (See Annexure E to the mother’s trial affidavit).

2. Implicit in the husband’s application for me to vary the orders made by the Federal Magistrate is an assumption that I will make an order under the property orders, setting up a Trust Fund of $300,000 for the education of the children.  I do not propose to make such an order.

3. I find that the order made by Federal Magistrate Coker was entirely appropriate, that the situation remains the same and that the husband has not demonstrated any special circumstance or ground justifying a change of the existing orders, save for the minor amendment sought by the wife relating to C’s attendance at T School and the cost associated with the children’s extra-curricular activities.

SPOUSAL MAINTENANCE

1. Because of the unusual factual matrix of this case, any order for spousal maintenance, which if I make it relates to the payment of the mortgage payments on the house, is really so intimately connected with orders for the adjustment of property that I propose to deal with it more generally under the property orders.

PROPERTY ORDERS

1. So as to better understand what is between the parties, I set out in précis form the orders sought by the wife and those sought by the husband.

2. The wife seeks the following orders:

   “8.That in conjunction with the wife refinancing the mortgage into her sole name on or before 1 January 2001, the husband transfer to the wife his right, title and interest in the property known as [the former matrimonial home].

   9.That on or before 30 June 2011, the wife arrange to finance the remaining mortgage secured over the [former matrimonial home] into her sole name and discharge the husband for all liability thereunder.

   10.That in the event that the wife is unable to secure appropriate financing to refinance the mortgage on or before 30 June 2011, unless otherwise agreed, the property be sold and pending sale, the wife assume liability for the minimum mortgage repayments and indemnify and keep indemnified the husband in relation to same.

   11.That by way of property settlement and/or spouse maintenance, until 1 January 2011, the husband pay the minimum mortgage repayments of principal and interest and indemnify and keep indemnified the wife in relation to those payments.

   12.That an amount of $300,000 is allocated as required by section 90MT(4) of the Family Law Act 1975 to the wife out of the husband’s interest in the [M] Superannuation Fund.

   …

   16.That the assets and superannuation of the parties be distributed so that the wife and husband retain 80 percent and 20 percent respectively.”

3. It is not clear to me whether it is intended that there should be a difference in paragraph 8, 9, 10 and 11 as to the date.  I can understand how paragraph 11 can fit with paragraph 9 and 10, but I am puzzled how paragraph 8 can fit with paragraphs 9 and 10.  It seems to me that paragraph 8 should contain the date “30 June 2011” rather than “1 January 2011”.  Alternatively, paragraphs 9 and 10 should contain the date “1 January 2011”, not “30 June 2011”.  Whether it is intended that the husband only be responsible for the mortgage repayments up to 1 January 2011 or if it is intended he should be responsible for them until 30 June 2011 is unclear to me and these issues were never raised in argument. 

4. Further, paragraph 10 does not deal with who is to have the power of sale, the terms of sale, the costs of sale or how the proceeds of sale are to be applied.

5. I think it was intended that the wife would have the power of sale and that on sale, she would receive the net proceeds but that is a matter that was not dealt with in argument.

6. In relation to the submission that the orders proposed were just and equitable, Mr Fellows did submit to me that the wife was getting in substance $300,000 equity in the home and $300,000 under the splitting order, so I assume it was intended that she would get the proceeds of sale but I will hear further argument as to the form of orders proposed.

7. The husband proposes very different property orders.

8. He proposes that the wife transfer to him her right, title and interest in the former matrimonial home.

9. He proposes that an education trust be set up for the children and that an amount of $300,000 be set aside from the matrimonial asset pool and be put into a Trust Account used for the children’s primary and secondary educations at T School.  He further proposes that the asset in the trust be transferred to the names of the children when they attain 18 years, so they can draw upon it for their tertiary education expenses or other purposes in life.  He proposes that he take over the mortgage loan on the matrimonial home, that he reside in the matrimonial home and pay rent at market value to the Education Trust Account, that he borrow $100,000 for the wife subject to financial institution’s approval to enable her to use it as a home loan deposit, and in exchange for the $100,000 cash, he receive a just and equitable amount of not less than $100,000 from the matrimonial super fund. 

10. He proposes a number of other specific orders in relation to the Australian Tax Office debt, other matrimonial assets post-separation and the like, but the substance of what he proposes is as I have set out.

11. In the context of the orders sought by the wife in relation to the husband paying the mortgage repayments on the former matrimonial home, it is to be noted that the Federal Magistrate in his order of 31 January 2007 ordered pursuant to paragraph 5 “the father be responsible for payment of outgoings in relation to the [former matrimonial home], including particularly mortgage repayments, insurance and rates associated with the said property”.

PRINCIPLES APPLICABLE TO THE MATTERS BEFORE THE COURT

1. The provisions of s 79 of the Family Law Act define the Court’s power and obligations in determining applications for property settlement.  The Court has a discretion t6o make orders altering the interests of parties in property, provided the Court is satisfied that such orders are appropriate, just and equitable.

2. The Court is obliged by the provisions of s 79(4) to take into account the following matters:

   (a)the financial and non-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 (sub-paragraphs (a) and (b));

   (b)the contribution made by a party to the marriage to the welfare of the family, including any contribution made in the capacity of homemaker or parent (sub-paragraph (c));

   (c)the matters referred to in s 75(2) so far as they are relevant (sub-paragraph (e));

   (d)any other order made under the Act affecting a party to a marriage or a child of the marriage (sub-paragraph (f));

   (e)any child support payable (sub-paragraph (g)).

3. Accordingly, in assessing the entitlement of each of the parties to property settlement, there is both a retrospective element relating to the contributions of each of the parties and a prospective element relating to matters referred to in s 75(2).

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

   ·Firstly, the Court must determine the assets, liabilities and financial resources of the parties to the marriage.

   ·Secondly, the Court must consider all relevant contributions of each of the parties and, where possible, the Court should assign an entitlement of each of the parties arising as a result of those contributions.

   ·Thirdly, the Court should then consider the prospective components of the claims of each of the parties arising as a result of the provisions of s 75(2).  The Court should then identify what alteration, if any, should be made to the entitlement of each of the parties earlier assessed on account of contributions as is deemed necessary having regard to the s 75(2) factors.

   ·Fourthly, having determine and considered the entitlement of each of the parties to property settlement, the Court should consider whether there is, in addition, any entitlement to spousal maintenance, either periodic or lump sum, in accordance with the provisions of ss 72 and 74 of the Family Law Act.

THE ASSET POOL

1. The parties have largely agreed about the asset pool and it became Exhibit B in these proceedings.  I set it out hereunder:

Asset/Liability	Value
Former matrimonial home	$495,000	Agreed
Toyota Corolla	$10,700	Agreed
Subaru	$19,600	Agreed
NAB account (wife)	$1,564	Agreed
Westpac bank account (joint names)	$559	Agreed
Westpac Basic account (Bonus Saver account was closed on 15/10/08) – (wife)	Minimal	Agreed – exclude as minimal
Westpac eSaver (maxi direct) bank account (wife)	$32,596	Includes funds borrowing from family members of $30,500 telegraphic transfer from overseas, the balance of $2,106.21 all post separation earnings. Agreed
Commonwealth Bank Everyday account (wife)	Minimal	Agreed Exclude – nominal balance
Comsec Cash account (wife)	$Minimal	Agreed Exclude – nominal balance
Commsec investment account (wife	$406	Agreed
R Investments Trust	$1,737	Agreed (value proposed as per June 2008 balance sheet)
U Pty Ltd (Husband contends – less than $1,000)	$85,682 $42,282	Disputed (value proposed as per June 2008 balance sheet) No independent valuation
K Pty Ltd (K Trust / K Business)	$3,595	Agreed. (value as per June 2008 balance sheet)
Westpac One bank account (husband)	$1,395	Agreed
Babcock & Brown shares (wife)	$7,710	Agreed
Telstra shares – wife	Nil/sold	Agreed
Jewellery (wife	$1,000	Agreed.  (Agreed that when new, diamond earrings purchased for approx. $6,000 – disputed as to who has earrings, husband or wife)
Furniture	$10,000 (wife)	Disagreed. $20,000 (husband)
Mortgage	($192,869)	Agreed
Money borrowed from LZ (wife)	($8,500)	Agreed. After separation.
Money borrowed from overseas – wife (Westpac Account)	($30,500)	Agreed.
Add back funds transferred to China by Husband – not added back.	Agreed – post separation transfers only
ATO Debt – Husband	E($17,425)	Agreed.  Husband contends joint debt.
NAB credit card (wife0	($765.77)	Agreed.
Total as per agreed/wife’s value where no agreement	$428,206
Superannuation
M superannuation (wife)	$42,094	Agreed – as per Fm 6 valuation of wife
M superannuation (husband)	$458,896	Agreed – as per Husband’s Financial Statement
R Superannuation	$17,421	Agreed – as per Husband’s Financial Statement
$517,368
Total including superannuation	$945,574

1. As can be seen, the former matrimonial home in which the wife and children presently live has an agreed value of $495,000.  The Toyota Corolla has an agreed value of $10,700 and that is in the husband’s possession.  The Suburu has an agreed valuation of $19,600 and is in the possession of the wife.  The wife’s NAB account is agreed at $1,564 and there is a joint bank account with Westpac agreed, for present purposes, at $600, namely $300 each.  The Westpac E-saver bank account in the wife’s name is agreed at $32,596 but $30,500 of that includes borrowings from her family members and $2,106.21 of post-separation earnings.  Those matters are agreed.  The ComSec Investment Account of the wife is agreed at $406.  The R Investments Trust which is part of the husband’s business is agreed at $1,737, but the value of U Pty Ltd at $85,692 is disputed.  There is no independent valuation of this company.  The husband contended before me that it had a value of less than $1,000.  There is no independent evidence or for that matter any evidence that its value is $1,000 other than the husband’s assertion.

2. The value of $85,692 is drawn from the 2008 Balance Sheet.  There is no reason why I should not accept that valuation.  However, there is one complicating factor.  From the most recent Balance Sheet tendered on the trial, the Suburu which has an agreed value in this schedule on $19,600 appears on the Balance Sheet as an asset in the sum of $43,400.  It appears that the Suburu was registered in the name of U Pty Ltd. 

3. As Mr Fellows suggested, the simple course to follow is to allow its value at $19,600 as agreed in the schedule being Exhibit B but to reduce the value of the business from $85,682 by $43,400 giving a value of $42,282. 

4. K Pty Ltd which is the trading trust for the husband has an agreed value of $3,595 and the husband’s Westpac One Bank Account has an agreed value of $1,395.  Although the Babcock and Brown shares were agreed to be worth $7,710, as Mr Fellows pointed out on the last day of the trial, their value is somewhat fragile having regard to what has been happening to that company on the Stock Exchange.  Those shares are with the wife but they are probably not worth the $7,710 at which they were valued.

5. The wife’s jewellery is agreed at $1,000 but there is an interesting side dispute in relation to the jewellery.  There are a pair of diamond earrings purchased for approximately $6,000 and the dispute is as to whether the husband has them or the wife has them.  An insurance claim was made by the wife and the husband intervened in that dispute, the net result being that the insurer failed to pay under the policy.  Each of the husband and wife deny having the earrings.  I find myself unable, on the evidence, to make a finding as to whether either the husband or the wife has the earrings or whether they have, in fact, been lost.  I propose to ignore jewellery other than the agreed sum of $1,000 in the hands of the wife.

6. The next item is furniture $10,000.  This represented furniture said to be in the possession of the wife.  The husband disagrees and asserts that the value of the furniture in the hands of the wife is $20,000.  There is no other evidence other than the estimates of the husband and the wife.  Further, furniture in the hands of the husband is not included in this schedule.

7. From the evidence called before me, I now know that the wife has, in addition to the furniture valued at $10,000 purchased a piano for the children in the sum of approximately $6,000.  Consequently, I can value her furniture at about $16,000.

8. As I have said, the husband’s furniture has not been included in the schedule.  Again, I know from the evidence called before me that he has purchased a piano for the sum of $11,400 and a washing machine for $1,800, a total of $13,200.  In addition, he has other furniture such as a refrigerator, beds etc and it is in my view a small leap to get to the sum of $16,000.  Consequently, I find that each of them has furniture to the value of approximately $16,000 and they cancel one another out.

9. It is agreed that the mortgage on the former matrimonial home is currently $192,869.

10. Further, it is agreed that the wife borrowed from LZ $8,500 and $30,500 from overseas which is the sum represented as part of the $32,562 standing to her credit at the Westpac e-saver.

11. In relation to the $6,721 funds transferred to China by the husband, Mr Fellows agreed that that should not be added back and I can ignore it for present purposes. 

12. With respect to the debt owed to the Australian Tax Office of $17,425, it is agreed that that debt is owing but the husband contends that it is a joint debt.  In my view, the debt to the Australian Tax Office should be solely the husband’s responsibility.  He has had plenty of time to pay it off and has chosen not to and has, amongst other things, bought an extravagantly expensive piano for the children, when in fact, they already had a piano at the wife’s home.  I see no reason why the wife should be liable for half of this debt.

13. With respect to the superannuation, it is agreed that the wife’s M Fund superannuation is $42,094 and the husband’s was agreed at trial at $458,896.  There is an additional superannuation in the name of the R Superannuation Fund at $17,421 which is also agreed. 

14. It is very likely that the superannuation valuations have not changed since separation. 

15. Consequently, I find that the assets in the hands of the wife are as follows:

    Assets in Hands of Wife

    Former matrimonial home  $495,000

    Subaru  $19,600

    NAB Account  $1,564

    Westpac Joint Account $559  $300

    Westpac e-saver  $32,596

    CommSec Investment Account  $406

    Babcock & Brown shares  $7,710

    Jewellery  $1,000

    Furniture  $16,000

    $574,176

    Less Liabilities

    Mortgage  $192,869

    Debt to LZ  $8,500

    Debt Overseas  $30,500

    NAB Credit Card  $766  

    $232,635

    $341,541

    M Fund Superannuation  $42,094

    $383,635

    =======

16. I find that the assets in the hands of the husband are as follows:

    Assets in Hands of Husband

    Toyota Corolla  $10,700

    R Investment Trust  $1,737

    U Pty Ltd  $42,282

    K Pty Ltd  $3,595

    Westpac One Account  $1,395

    Westpac Joint Account  $300

    Furniture  $16,000

    $76,009

    Less Liabilities  

    ATO Debt  $17,425  $17,425                  

    $58,584

    Superannuation

    M Fund  $458,896

    R Fund  $17,421  $476,317       

    $534,901

    =======

17. Consequently, the total net assets of the parties including superannuation are$918,534.

CONTRIBUTIONS

1. As I have previously said, both the husband and the wife were born in China.  He is currently 48 years of age and she is 38 years of age. 

2. When they met, the wife was still living in China and the husband was a permanent resident in Australia.  They married in China in September 1995 and moved to Brisbane in 1996.  They lived in Brisbane until about February 2000 when they moved to Townsville.

3. Both the husband’s and the wife’s primary language is Mandarin and they have learned English as their second language.

4. They have two children aged 11 and 4 years.

5. They separated on 23 August 2006, initially remaining in the family home but living separately and apart.  The husband moved out pursuant to my order on 6 July 2007.  They had been previously separated for a period of approximately 12 months in 2001.

6. Although the husband had professional qualifications from China, he was originally working in a factory in Brisbane as his overseas qualifications were not recognised.  I accept that the wife encouraged him to undertake the process to have his qualifications recognised which took two years from about 1997 to 1998.  He then worked in locations in Brisbane.  In early 2000 they moved to Townsville so he could work in a business in Townsville. 

7. At the time of separation, the husband ran his business through U Pty Ltd of which he was the Director and the wife was the Company Secretary.  After separation, the husband rearranged his financial structure and now operates his business through K Pty Ltd and R Investments Pty Ltd as trustee for the R Investments Trust.

8. At the time of separation, the husband was hopeful of setting up his own business and in evidence before me, plans have been lodged with the appropriate planning authority with respect to him setting up his own business.  He has obtained legal advice and is in the process of entering into a lease of the premises. 

9. As I have already found with respect to the child support issue, the husband has a high income and according to his Form 13 filed on 13 November 2008, he has an income of approximately $225,000 per annum.  Looking at Exhibit M, he appears he has a net surplus after all expenses of approximately $1,000 per week.

10. I accept the wife’s evidence that as a qualified professional the husband is able to earn a very high income.  She asserts that he is able to earn around $200,00 - $300,000 per annum working as a contracting professional and that this income will increase when he commences operating his business when he will have access to additional income, namely a percentage of contracting professionals’ billings.

1. After the marriage, the wife continued work in China in a clerical role until 1996 when she was able to join the husband in Australia.

2. I accept that during the relationship, she undertook the primary homemaking role and supported the husband in his work endeavours.  I further accept that after the birth of the children, she was the primary caregiver for them and attended to all their and the husband’s needs.

3. When she came to Australia, she commenced studying English at TAFE in Brisbane, stopping for a period of time when Z was born.  She completed a number of courses in English, including a Level 3 English Certificate.  When she moved to Townsville, she obtained a driver’s licence and then enrolled at the TAFE, studying part time for a Diploma in Business Accounting.  During this period, she was also caring for Z.

4. During the period of separation in 2001, whilst living in Brisbane, she enrolled for and completed an Advanced Diploma in Business Accounting at TAFE in Brisbane.

5. In approximately 2002, she enrolled at University to undertake a Bachelor Degree. She completed this degree in 2004 and she is presently undertaking a postgraduate course.  She has only completed two segments of this and still needs to complete another four segments within five years which is required to be completed with three years practical experience under a mentor or supervision.

6. In November 2006, she accepted a position with L Company, working five days a week from 9.15 am to 2.45 p.m.  She earned $412 per week gross, $360 per week net.

7. At April 2008, L Company was taken over by S Company and she then commenced working for that company under the supervision of Ms L. 

8. I accept that she struggled with the work and found that she was under considerable pressure.  I accept she has some limitation in her language skills with English, and as a result, often struggles to comprehend some business concepts and communications.  As a result of this, she was on a number of occasions counselling at work and her performance reviews were negative.  In May 2008, a number of errors in her performance were highlighted along with the fact that she had consistently been unable to make budget.  It was made clear to her that she did not have a future with that firm and as a result, the following week, she formally resigned.

9. An affidavit confirming this was sworn by Ms L and filed in these proceedings but the husband chose not to cross-examine her.

10. Since resigning her employment, she has sought other employment but has found it difficult to find such employment having regard that she is only able to work part-time and because of her limitations in her abilities, both language skills and technical.

11. I accept that it is difficult for her to work and balance her caring commitments to the children.  I accept that she will be limited in the amount or type of work she can undertake for at least until both the children are at school.  She has recently secured some alternative employment but she is on a 3-months casual employment probationary period and she is unsure how this job will go.  Her net after tax wage is estimated to be $580 per week.

12. This is a relationship of some 11 years with two children, where both parties have worked hard according to their different capacities to contribute to family welfare.  Each worked very hard to learn English and to obtain qualifications.  They each had to fill in for the other during their studies but I find that the wife has had to shoulder the principal domestic duties during the marriage.

13. As Mr Fellows submitted this is a case where, more than ever, the passage in Figgins (2002) FLC 93-122 at 134 that “marriage is and should be regarded as a genuine partnership to which each brings gifts” applies.

14. I find that contributions of all kinds should be assessed as being equal namely, 50/50 percent.

SECTION 75(2) FACTORS

1. As I have found, this is a case where for many years both parties worked hard, with the support of the other, to establish themselves in Australia and gain the necessary qualifications to be gainfully employed in this country.  However, the husband has a vastly superior earning capacity to that of the wife.  The wife’s contribution to the husband’s present earning capacity must be given realistic effect (see Marriage of Mitchell (1995) 19 FamLR 444). As was said in Clauson (1995) 15 FamLR 693, “section 75(2) factors are not to be analysed in percentage terms without consideration of the real impact in financial terms”.

2. There is approximately $300,000 equity in the home but $458,896 standing to the husband’s credit in the M Superannuation Fund.

3. In part, this is explained because the husband drew down approximately $120,000 just before separation on the mortgage and paid it into the superannuation fund.  There may have been good taxation reasons for doing so, but the net effect has been to reduce the equity in the matrimonial home by $120,000 and lock up an additional $120,000 in the superannuation fund.

4. Because of their ages, neither can access the superannuation funds for many years.

5. Mr Fellows argues that I should effectively give the equity in the house to the wife and in addition, make a splitting order in an amount of $300,000 in the wife’s favour from the husband’s M Superannuation Fund.

6. He further argues that the wife does not have the financial capacity to take over the mortgage at the present time but that the husband does have the financial capacity to meet those payments and that it would be just and equitable to make an order requiring him to continue to make those payments, which he was ordered to do by the Federal Magistrate, until either 1 January 2011 or 30 June 2011.

7. I say that because, as I have previously indicated, I am not sure precisely what orders the applicant wife is seeking in her amended Application.  As I have already identified, paragraphs 8, 9, 10 and 11, do not sit comfortably together and I will need to hear some argument as to the form that those orders should take.  However, whether it be to 1 January 2011 or 30 June 2011, it is my view that in the present circumstances, it is appropriate to make an order that the husband continue to pay the mortgage payments on the former matrimonial home so that the wife can get herself into a financial position to be able to take over the mortgage payments.  A $300,000 splitting order will not assist her in that regard because she is unable to access the superannuation for many years.

8. If I make a splitting order in the wife’s favour in an amount of $300,000, the effect of that is to give her an amount of $683,635 out of the total asset pool of $918,534.

9. The net assets in the husband’s hands at present amount to $534,901 of which $458,896 is the value of his superannuation fund under the M fund.  A $300,000 splitting order in the wife’s favour would reduce his net assets from $534,901 to $234,901.  However, all of it would be from his superannuation fund to which he will be able to add substantially in the future.

10. On my calculations, the percentage distribution, were I to make the orders as sought, would be 74.4 percent to the wife and 25.6 percent to the husband.

11. Therefore, in percentage terms it would be an uplift of 24.4 percent to the wife for s 75(2) factors.  In all the circumstances, I am satisfied that that is an appropriate adjustment to make even though pursuant to Order 16 in the amended Application, the wife seeks an 80/20 percentage split.

12. The orders sought by the husband are, in the present circumstances of this case, totally inappropriate and there is, in my opinion, no basis for making them.

13. Consequently, I am satisfied that orders that reflect my findings in these Reasons for Judgment are orders which would be appropriate, just and equitable in the circumstances.

14. However, because there is some uncertainty with respect to the precise wording of the orders, I propose to give the parties an opportunity to make further submissions to me as to the form the orders should take.

I certify that the preceding one hundred and fourteen (114) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Monteith.

Associate: 

Date: