Jue and Deng - [2009] FMCAfam 565

FEDERAL MAGISTRATES COURT OF AUSTRALIA

JUE & DENG

[2009] FMCAfam 565

FAMILY LAW – Property – date of separation – non-disclosure – contribution – just and equitable order.

Family Law Act 1975, ss.75(2), 79

Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143

Applicant:

MS JUE

Respondent:

MR DENG

File Number:

SYC 2104 of 2007

Judgment of:

Altobelli FM

Hearing date:

22 December 2008

Date of Last Submission:

22 December 2008

Delivered at:

Sydney

Delivered on:

6 February 2009

REPRESENTATION

Counsel for the Applicant:

Mr Gould

Solicitors for the Applicant:

Briggs & Associates

Counsel for the Respondent:

Mr Johnston

Solicitors for the Respondent:

Lawside Lawyers

ORDERS

No later than 3 months from the date of this order the wife pay to the husband the sum of $178,817.00.
Simultaneously upon compliance by the wife with order 1 the husband shall do all acts and execute all documents as are necessary to transfer to the wife the whole of his right, title and interest in the property situate at and known as Property M, Parramatta in the State of New South Wales.
Simultaneously upon compliance by the husband with Order 2 the wife do all things and pay all monies to discharge first registered mortgage to Westpac Banking Corporation over property at Property M, Parramatta in New South Wales.
In the event the wife or the husband fails to comply with Orders 1 to 3 the parties do all such acts and execute all such documents as may be required to effect a sale of the former matrimonial home situate and known as Property M, Parramatta in the State of New South Wales to be sold by private treaty at a price agreed upon between the parties and failing such agreement to be determined by the President of the Australian Property Institute of New South Wales or his nominee.
Upon the completion of the sale in accordance with order 4 proceeds of the sale be applied as follows:
(a)To pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the matrimonial home;
(b)$178,817.00 to the husband together with interest calculated from the date 3 months from the date of this order, in accordance with the Family Law Rules;
(c)Balance then remaining to the wife.
The wife to pay the orthodontist fees in relation to her son.
Unless the parties are otherwise able to agree about an equal division of the furniture and contents contained in the former matrimonial home within fourteen (14) days from the date of these orders the wife will prepare two separate lists of furniture and contents with the husband to decide which of those two lists of furniture and contents he wishes to retain. The wife will retain the furniture and contents referred to in the other list.
Subject to these orders, the husband and the wife be otherwise declared to have the sole right title and interest in:
(a)Any chattels, goods, furnishings and other property currently in their respective possession;
(b)Any moneys, shares, debentures which currently stand in their sole name respectively;
(c)Any superannuation entitlements currently held in their sole name respectively.
Leave to re-list before Federal Magistrate Altobelli on 14 days notice as regards interpretation, implementation and enforcement of these orders.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYC 2104 of 2007

MS JUE

Applicant

And

MR DENG

Respondent

REASONS FOR JUDGMENT

(Ex tempore)

Introduction

In the matter of Jue and Deng I provide the following oral reasons in support of the orders I am about to make. I note that these oral reasons are being made in the absence of the solicitor for the respondent husband. This is an application for property settlement under s.79 of the Family Law Act 1975. The parties have reached agreement about a number of important facts to which I will shortly refer. As it turns out by the time of the hearing the main issue is when, precisely, the parties separated.
The applicant wife says this was in 2002, the respondent husband says this was in 2006. The significance of the date of separation is that it will assist in the characterisation and treatment for s.79 purposes of assets acquired by the wife after, what she says, was the date of separation but before what the husband says was the date of separation. The parties in this case need to understand that it is not the task in the Family Law Courts to do that which all of the king's horses and all the king's men could not do, that is: put all the pieces back together again.
The Court is bound by and limited to the evidence that the parties themselves lead at the hearing. If there are any gaps, that is any missing pieces, it is not the Court's task to find them and put them in place. All the Court can do is to make a just and equitable order based on the evidence available before it.

Background

By way of background apart from the date of separation which is highly contentious, the other background facts are largely agreed to. The applicant wife is 44 years old and was born in Shanghai China, came to Australia in 1989 and has been a permanent resident since 1991. The respondent husband is 48 years old, was also born in Shanghai China and first came to Australia in 1988. They commenced cohabitation in 1990 and married that year. They have one child, [X], who is 14 years old in respect of whom the parties entered into consent orders in March 2007.
Despite the terms of the consent order I find from all the evidence available to me that the current actual parenting arrangements differ from the consent order. As the husband and wife and [X] all continue to reside in the former matrimonial home at Parramatta, what is in place is in reality a shared care arrangement with both husband and wife actively involved in [X]'s life on a daily basis, albeit in different ways.
No orders for parenting were sought at the hearing and indeed I would not make such orders in the absence of evidence about [X]’s views. Both the husband and the wife are in full-time employment in various capacities that are not relevant for present purposes. The asset pool of the parties was agreed and I incorporate into these my ex tempore reasons, the schedule provided to me at the hearing with the following important observations.

ASSETS
No.	Ownership	Asset	Agreed Value
1	Joint	Property M Parramatta	$430,000
2	Wife	Property R Shanghai – 1,086,700 RMB (CYN) (Whole) – Wife owns 50%	$124,447
3	Wife	Westpac Bank account	$13,184
4	Wife	Commonwealth Bank account	$11,997
5	Wife	2,000 Telstra shares @ $3.72	$7,440
6	Wife	736 AMP shares @ $5.45	$4,011
7	Wife	2002 Toyota Rav 4	$14,650
8	Wife	1 E class share in [A] Pty Limited	NIL
10	Wife	Paid legal costs	NIL
11	Wife	Summit Review superannuation	$59,476
12	Wife	AMP superannuation	$41,704
13	Husband	NAB savings	$3,158
14	Husband	2,000 Telstra shares @ $3.72	$7,440
15	Husband	[H] Pty Ltd-husband’s interest	Nil
16	Husband	1,173 AMP shares @ $5.45	$10,051
17	Husband	Household contents	Pick a pile
18	Husband	AMP superannuation	$98,866
19	Husband	LUCRF superannuation	$28,913
20	Husband	Paid legal costs	NIL
GROSS ASSETS		$855,337

LIABILTIES
1	Joint	Mortgage over Parramatta home unit	$191,246	$191,246
2	Wife	Citibank Visa card	$3,700	$3,700
3	Wife	Orthodontist expenses for child [X]	$6,900	$6,900
4	Husband	Citibank Visa card	$1,000	$1000
GROSS LIABILITIES				$202,846

Firstly, item 1 is "The Former Matrimonial Home Value Agreed". The wife wants an opportunity to buy out the husband's interests and in his evidence the husband indicated that he had no issue with this. Accordingly, I propose to give her the opportunity to buy out the husband's interest in the home.
Nextly, item 2 is a property in Shanghai in respect of which the wife has an interest. By the conclusion of the evidence and during submissions it became apparent to me that the wife was conceding that she had a 50 per cent interest in the property and the husband was abandoning any claim that she had a greater than 50 per cent interest. Accordingly I find she has a 50 per cent interest, the agreed value of which is $1,086,700 Chinese yuan and it was agreed that I would use an exchange rate approximate to the date of judgment for the purposes of establishing the Australian value.
I use the exchange rate according to the Reserve Bank of Australia on

3 February 2009
, and hence arrived at the figure of $124,447.
Thirdly, neither party sought to adduce evidence about the value of the assets and liabilities referred to in items 3 to 6, 11 to 12 and 13 to 19 as at the various dates of separation as alleged by either of them. I record the fact that I am surprised by this. If the wife was seriously asserting a 2002 date of separation I would have expected some evidence about the value of her assets at that time. It is perhaps not so significant if the date of separation is 2006. In any event I am left in a situation where I have no choice but to simply include all of the agreed assets and liabilities in the final balance sheet and apply findings as to contribution on a global basis.
Nextly, the parties agree that the furniture and contents in the former matrimonial home is to be divided in specie and I will make the usual form of order for a pick a pile method if they are unable to agree. And lastly, the wife has an interest in her employer, [A] Pty Limited and the husband has an interest in [H] Pty Limited and they have agreed that for the purposes of these proceedings the value of the same is nil.
The applicant wife seeks orders to the effect that she take over the mortgage secured over the home at Parramatta, that the husband transfer his interests in the home to her and that she pay him $58,000 and otherwise retain all that she has in her possession and control. However, in closing submissions her Counsel submitted that, assuming I find a 2002 date of separation as asserted by the wife, I should adopt a global approach to Australian assets and find that contribution be assessed at 50/50 with no 75(2) adjustments either way.
In relation to the wife's interests in the Shanghai property Counsel's submissions were less clear. He emphasised that her investment in this unit was as little as $32,000 on one view or as high at $47,000 on another view of the evidence and that this had, in any case, rapidly increased in value to its current level. By inference the submission is that the husband made no contribution to the acquisition or otherwise of this asset and that it should either be ignored or have minimal impact in the proceedings.
The respondent husband seeks orders to the effect that he receive a 50 per cent interest in the net sale proceeds or value of the family home, plus a further sum of $90,000 and half the value of the wife's car. Moreover, he sought an order that the wife return to him the diamond gold necklace given to her by his parents, but in this regard no evidence was placed before me so I cannot make the order.
In submissions Counsel for the husband submitted that the husband should receive 50 per cent across the board of all net assets and no s.75(2) adjustments were suggested. I wish to record my concerns about the conduct of these proceedings. They were commenced over two years ago and were listed for hearing before me on 4 and 5 February 2008, a year ago. The parties were not ready to proceed on that date.
By the time of this hearing it was apparent that the issues really were not complex. The pool of assets is not a large one. The husband deposes in his financial statement filed 2 December 2008 to owing legal fees of $40,000. The wife provides no evidence about his but I assume it is comparable, if not more. I am left with the lingering impression that these proceedings could have been conducted with greater diligence by the parties, though I do commend the parties and their legal representatives to their focus when the matter finally got before me.
Now having regard to that introduction and background the issues appear to me as follows. They are quite discrete. Firstly, what is the date of separation, is it 2002 or 2006? Nextly, if it is 2002 what contribution did the parties make to the Shanghai property and if it is 2006 what contribution did the parties make and lastly what is the just and equitable order to make in the circumstances of this case.

The applicable law

This case is covered by s.79 of the Family Law Act and the Full Court's decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 outlines the four step approach to be adopted but given the discrete issues that arise in this case, largely this case was determined by reference to factual issues. So the first issue is separation.

Date of separation

In her affidavit filed 20 December 2007 the wife gives evidence about the date of separation at paragraph 7, 25 to 36, and she asserts the date of separation at 4 March 2002, but concedes that as at the date of the affidavit the husband and wife and child continued to live under the same roof. She gives evidence that she filed an application for dissolution on the same day as filing her affidavit.
The documents relating to the divorce application are not in evidence. Clearly in order to grant a divorce a Registrar would have had to make a finding about a date of separation. Whether or not I am bound by that finding I still have no evidence of it. I do not know for example whether either the husband or the wife asserted a different date of separation whether the divorce was opposed by the husband or anything else.
I must say I found it curious that neither party sought to tender the divorce application or any other relevant documentation in relation to the divorce. Maybe it would not have helped them, I do not know, but in a case like this where, from the wife's perspective, so much hinges on a finding of the date of separation in 2002, the onus of proof was on her. In other words, it was for her to prove on the balance of probabilities that the date of separation was 2002.
The wife's evidence does paint a picture of matrimonial disharmony, indeed quite possibly serious matrimonial disharmony, from 2000 to 2001. There is correspondence from the husband corroborating this. It may be that prior to 4 March 2002 the husband might have suggested divorce to the wife but it is equally clear from paragraphs 25 and 26 of the wife's affidavit that she did not accept this. The wife relies on her discovery on 4 March 2002 of romantic emails between the husband and another woman, of her confrontation of the husband in relation to this and her subsequent actions outlined in paragraph 29 onwards.
She asserts that in effect there has been a separation under the same roof since then. She agrees that she sought legal advice in March and April 2002 at paragraph 32 of her affidavit and states that she was unable to afford to proceed with divorce and property settlement at the time. She gives evidence later in her affidavit about separating accounts from the husband so she could pay half the mortgage and other household expenses relating to the family home and to the care of the child.
In the wife's affidavit, 31 March 2008, she sets out further evidence on this issue at paragraphs 2 and 3. Now this affidavit is also significant because of the evidence she gives about disclosure, of financial matters and her failure to disclose relevant financial evidence in her first affidavit. The husband's evidence about the date of separation is contained in his affidavit filed 21 February 2008 at paragraph 25 where he says separation took place in April 2006, after the wife called him from China saying she wanted to get a divorce.
He asserts at paragraph 26 that there has been a separation under the same roof since then. It should be noted that it is in this affidavit that the husband discloses his knowledge of the wife's ownership of the Shanghai property. He gives further evidence about this in his affidavit of 2 December 2008 at paragraph 3. In cross-examination both the husband and the wife maintain their evidence about the date of separation.
Now I make the following observations about this issue, that is, the issue of the date of separation. Firstly the husband and the wife are still not physically separated because even now they continue to remain in occupation of the home, except for those periods when the wife's employment takes her either interstate or overseas. There was no challenge to the husband's evidence about the frequency and duration of the wife's absences from the home since 2003 as set out in the husband's affidavit at paragraph 32.
For example in 2003 the wife was absent 57 days; 2004, 68 days; 2005, 104 days; 2006, 81 days; 2007, 97 days; 2008, 68 days. Now these frequent absences are significant. The wife does not assert they are attributable to the separation. She says they are attributable to her employment and I accept that, but her absences create what I will describe in general terms as the dependence on the husband that is inconsistent on the facts of this case to the separation since 2002 as she asserts. In her absence the husband shoulders the total burden of care for the child and of the household that they both occupy.
Secondly there is a financial interdependence between the husband and the wife that is, on the facts of this case, inconsistent with the date of separation in 2002. This is evident at parts F and H of the wife's financial statement sworn 18 November 2008. The fact is they depend on each other for payment of the mortgage, electricity, telephone, water, gas, rates and strata levies.
The husband gave evidence unchallenged by the wife that when she did not pay these things he did pay. Their interdependence on each other is also apparent from their evidence about the shared care arrangements for their son.
Thirdly, the wife says she had legal advice in 2002 but could not afford to divorce or seek a property settlement and yet she deposes in her affidavit to receiving bonuses from her employer in the financial years of 2003 and 2004 that were part of the moneys she paid towards the acquisition of the Shanghai property. Indeed she also gives evidence of the willingness of her parents to lend her the money, including once $10,000 USD in cash in an envelope. I therefore doubt her evidence that she could not afford to do something about a property settlement in the period, after what she alleges, was the date of separation.
Fourthly, the wife annexes to her affidavit of 20 December 2007, what appears to be her solicitor's first letter to the husband dated 26 May 2006. What is surprising from this letter is the absence of a clear assertion that the date of separation was in 2002. All it asserts is that the husband and wife had been residing separately and apart under the same roof since April 2002. There is a bland statement that the wife's opinion was that the marriage had broken down irretrievably but it is not asserted that this opinion was formed in 2002, indeed the context of the letter on a plain reading of it is that in it announces that in the wife's opinion there had been an irretrievable break down of the marriage.
Fifthly, the wife's assertion that the 2002 date of separation is inconsistent with the transaction on 15 June 2003 when the wife purchased her current RAV4 Toyota motor vehicle using as a trade in the husband's Pajero motor vehicle. The evidence at paragraph 30 of the husband's affidavit was unchallenged. If there had been a separation and a separation of finances as asserted by the wife, why would the husband trade in his own motor vehicle so that the wife could purchase hers?

Sixthly, even thought there is documentation of the husband that indicates the extent of the matrimonial disharmony in 2001 the wife does not accept that this constituted separation. She relies on the 2002 date. I cannot explain what happened. Perhaps they reconciled. I do not know, all I can do is to go off the evidence.
Lastly, on the issue of separation, and in a case like this, even if I had no other evidence I would make a finding as to date of separation based on the credibility of the witnesses. In other words, who I would believe. In this regard I found the wife's evidence to be less credible than that of the husband. She clearly failed to disclose the existence of assets that ought to have been disclosed. She clearly changed her evidence about the Shanghai property.
All of this is apparent from her own affidavit of 1 April 2008. Whilst I note her "apology" for these omissions that apology does not eradicate the impact of her non disclosure on her credibility. In any event the wife's cross-examination left me with a strong impression of her as having a selective memory and who was prepared to change her testimony almost instantaneously when confronted with the reality that there was no way out. Quite frankly she was not an impressive witness.
Even the husband had his shortcomings in cross-examination and I am quite sure that he has not been one hundred per cent forthright about his earnings from his own company but at the end of the day I still prefer the husband's evidence to that of the wife in relation to the date of separation. Having regard to the seven matters to which I have referred I find that the parties separated in about April 2006.

Contribution

I turn now to contribution. My finding of a separation in April 2006 facilitates the assessment of contribution in this case. Both Counsel concede it should be 50/50 in relation to the Australian assets and that there are no s.75(2) factors. The husband's Counsel says it should be 50/50 in relation to the Shanghai property; I agree. It was purchased with earnings of the wife prior to the date of separation and yes, it has probably increased in value but there is no reason to attribute the increase solely to the wife. I therefore find contribution to be equal.
There is a net property pool of $652,491, meaning each of the husband and wife should receive assets to the value of $326,245. I will give to the wife the opportunity to buy out the husband's interests in the Parramatta unit. From the wife's perspective her entitlement will be, Parramatta unit $430,000; Shanghai unit, $124,447; Westpac account $13,184; Commonwealth Bank account $11,997; Telstra shares $7440; AMP shares $4011; Toyota RAV4 $14,650; superannuation $101,180, making it a total of $706,909.
Of course she will take the mortgage, $191,246; the Citibank Visa $3,700 and she will bear the orthodontist fees, $6900, thus liabilities of $201,846 and on this pool she would receive $505,063. In order to get to her entitlement of $326, 245 the payment to the husband would be $178,818. As I have mentioned before, on this scenario the wife would be solely responsible for the payment of the orthodontist fees for her son.
Now, from the husband's perspective his entitlement would be the NAB savings account $3158; Telstra shares $7440; AMP shares, $10,051; superannuation $127,779; less his Visa card debt of $1000 and then add the payment to him of $178,817 from the wife takes his entitlement to $326,245.

Just and equitable order

Lastly, I ask, is this a just and equitable order. The wife needs to pay to the husband $178,817 on this scenario in return for a transfer of the former matrimonial home to himself. The equity in this home is $238,754. For her to borrow the $178,000 on top of the existing mortgage takes the borrowings to 85 per cent of equity, which makes it a possible scenario having regard to her income. In any event she has liquid assets of about $35,000; in these circumstances it is just and equitable under the circumstances. I note that the solicitor for the husband has now arrived.
I am not asked to make a super split nor would I regard it as appropriate in any event as the husband needs to reaccommodate himself as well. Accordingly I make orders in terms of the document that I now make available to Ms Briggs and to Mr Raine.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Associate:

Date: