Lau and Hsu

In *Lau & Hsu* [2013] FamCA 294, the Family Court of Australia considered an application for property settlement orders following the breakdown of a de facto relationship between Mr Lau (the husband) and Ms Hsu (the wife). The parties had cohabited from 1991 until their separation in 2008. The proceedings involved complex issues concerning the ownership of various properties, including assets located in China, and the proper attribution of financial losses and contributions made during the relationship.

The court was required to determine several key legal issues. These included whether a property in China (Chinese Property C) was owned by the parties or the husband's parents, and whether losses incurred from the husband's unsuccessful business venture in China should be solely attributed to him. Additionally, the court had to consider whether the wife's failure to defend winding-up proceedings against G Pty Ltd and her subsequent failure to pay a debt constituted reckless conduct, warranting the losses from the company's winding up to be attributed to her. The court also needed to ascertain the nature of a significant sum received by the husband from his relatives in China, specifically whether it constituted gifts or loans, and how funds taken by the husband from G Pty Ltd and sent to China should be treated.

Applying the principles from *Stanford v Stanford* [2012] HCA 52, the court assessed the contributions of the parties to their various assets and liabilities. The court found that the parties' contributions to the property held by them were 52.5% to the wife and 47.5% to the husband. After considering the factors outlined in sections 90SM and 90SF of the *Family Law Act 1975* (Cth), including the specific issues raised regarding the disputed properties and financial losses, the court determined that an adjustment of 2.5% in the wife's favour was appropriate pursuant to s 90SF(3). This adjustment resulted in a final division of assets whereby the husband received 45% and the wife received 55%. The judgment detailed specific orders regarding the retention and sale of various properties, the division of sale proceeds, and the indemnification of the husband against certain claims related to G Pty Ltd.