LIU & BAI

FAMILY COURT OF AUSTRALIA

LIU & BAI

[2017] FamCA 725

FAMILY LAW – PROPERTY – short marriage – relationship of 19 months – where the wife made greater initial financial contributions – where neither party sought an adjustment for s 75(2) factors – where the husband seeks 7.2 per cent of the asset pool – husband to receive four per cent of the asset pool.

Family Law Act 1975 (Cth) ss 79, 75(2)
Evidence Act 1995 (Cth) s 140

Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545
Brown v Green (1999) FLC 92-873
Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592
Kowaliw and Kowaliw (1981) FLC 91-092
Norbis & Norbis (1986) 161 CLR 513
Stanford v Stanford (2012) 247 CLR 108
Watson & Ling (2013) FLC 93-527

APPLICANT:

Ms Liu

RESPONDENT:

Mr Bai

FILE NUMBER:

MLC

4953

2015

DATE DELIVERED:

20 September 2017

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Johns J

HEARING DATE:

31 May 2017 & 1 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Hoult

SOLICITOR FOR THE APPLICANT:

Canaan Lawyers

COUNSEL FOR THE RESPONDENT:

Ms Ambrose

SOLICITOR FOR THE RESPONDENT:

Le Brun Glezakos Lawyers

Orders

That the wife retain to the exclusion of the husband all her right, title and interest in the real property situate at and known as B Street, Suburb C and indemnify the husband and keep him indemnified in respect of any liability or encumbrance affecting the said property.
That the wife retain to the exclusion of the husband, her interest in:-
(a)The proceeds of sale of the business trading as D Pty Ltd;
(b)The E Pty Ltd (ACN …).
That the wife indemnify the husband and keep him indemnified in respect of any and all liability arising from his interest in:-
(a)The D Pty Ltd business;
(b)The E Pty Ltd.
That the proceeds of sale of the German motor vehicle be applied as follows:-
(a)First in payment to the husband the sum of $42,480;
(b)Second, the balance then remaining to the wife.
That unless otherwise specified, and save for the purposes of enforcing any monies due under these or any subsequent orders:-
(a)Each party be solely entitled, to the exclusion of the other, to all other property (including choses-in-action, chattels and motor vehicles) in the possession of such party as at the date of these orders;
(b)Each party forego any claims they may have to any superannuation benefit belonging to or earned by the other;
(c)Any insurance policies remain in the sole property of the owner named therein;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(e)Any joint tenancy is hereby expressly severed.
That all extant applications be otherwise dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Liu & Bai has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4953 of 2015

Ms Liu

Applicant

And

Mr Bai

Respondent

REASONS FOR JUDGMENT

Introduction

The applicant wife and the respondent husband seek orders for the adjustment of their property interests pursuant to Part VIII of the Family Law Act 1975 (Cth) (“the Act”). The litigation with respect to these issues was conducted over a period of 26 months. Ironically, their relationship, the subject of the dispute, endured for only 19 months.
By the conclusion of the trial the parties had spent in excess of $200,000 on legal costs. The assets the subject of the dispute are largely controlled by the wife. The issue for determination was whether the husband or the wife should receive the sum of $77,000, being the proceeds of sale of the car registered in the husband’s name. On any view, both parties gained nothing from the pursuit of this litigation. In the aftermath, the parties have expended amounts on their lawyers greater than the sum in dispute and each has suffered the indignity of a two day hearing.
On the first day of the hearing, in accordance with my trial directions, each party tendered a statement as to the legal costs incurred by them and expected to be incurred to the completion of the final hearing. For the wife’s part, her costs statement (Exhibit W1) disclosed that to the commencement of the trial she had paid to her lawyers a total of $136,338.34 and further by conclusion of the two-day hearing it was anticipated that she would incur a further $23,700 in costs. Hence, it was anticipated that by conclusion of the hearing she will have expended approximately $160,000.
The husband has been self-represented for much of the proceedings. Nonetheless, he too has expended significant amounts on lawyers in the preparation for hearing. His costs disclosure statement (Exhibit H4) states that up to the first day of the final hearing he had paid to his lawyers a total of $44,706.75. By conclusion of the trial his total costs are estimated to be $66,000.
Such is the animus between these parties that each preferred to expend significant sums on their lawyers, in the wife’s case more than double the amount actually sought by the husband, and devote more than two years of their lives to the pursuit of this litigation rather than resolve their dispute prior to trial. That this is so reflects poorly on both parties; their desire to save face has overridden commercial realities and common sense.
These are my Reasons for Judgment with respect to the matters in dispute.

The parties

The wife, who is the applicant in the proceedings, was born in China in 1990. She is aged 27 years. She is a student, having travelled to Australia on a student visa in 2008. The wife is studying for a Masters degree and it is anticipated that she will complete her studies this year and will then return to China.
The husband, who is the respondent in the proceedings, was born in 1988 and is aged 28 years. He attained Australian citizenship in 2014. During his oral evidence, the husband stated that he is a student. He is undertaking business studies. In addition, he is working as a trainee.
The parties commenced cohabitation in August 2013. They married in 2014 and separation occurred in March 2015. Hence, their relationship spanned a period of approximately 19 months.

Material relied upon

The wife relies upon the following material:-
·Outline of Case document dated 24 May 2017;
·Amended Initiating Application filed 20 December 2016;
·Affidavit of the wife filed 17 March 2017;
·Financial statement of the wife filed 28 April 2017;and
·Affidavit of Ms F filed 19 May 2017.
The wife’s Outline of Case document referred to an affidavit of Mr G filed 4 April 2017. Mr G was engaged by the parties to prepare a valuation in relation to a business operated by them during the course of the marriage. That valuation was dated 15 July 2016. Subsequent to the preparation of that valuation report, the wife sold the business. Accordingly, although referred to in the wife’s case outline, no reliance was placed on that report during the course of the hearing.
The husband relied upon the following material:-
·Outline of Case document filed 24 May 2017;
·Amended Response to Initiating Application filed 18 January 2017;
·Affidavit of the husband filed 26 April 2017; and
·Financial statement of the husband filed 1 May 2017.

Orders sought

The orders sought by the wife prior to the commencement of the hearing are those set out at Part G of her Case Outline document filed 26 May 2017. The orders sought included that:-
·The wife retain the property at B Street, Suburb C;
·After repayment of loans advanced by her mother towards the acquisition of the D Pty Ltd business, the proceeds of sale of D Pty Ltd, if any then remaining, be divided equally between the parties;
·That the loan advanced by the wife’s parents towards the acquisition of the German motor vehicle be repaid and the husband be responsible for any shortfall.
In opening counsel for the wife confirmed that his client’s position had altered since filing of her Case Outline and that the wife sought orders that she retain the property at B Street, Suburb C and the proceeds of sale of the D Pty Ltd (“DPL”) business and the German motor vehicle. The effect of the orders sought was that the wife would retain 100 per cent of the parties’ interests, save that the husband retain his nominal superannuation entitlements. That position was maintained by the wife throughout the proceedings.
The orders sought by the husband are those contained at Part E of his Case Outline document filed 24 May 2017 save that he did not seek orders in the terms of paragraph 4. The orders sought by the husband include that:-
·The wife retain the property at B Street, Suburb C;
·The wife retain The E Pty Ltd entity;
·That the husband be entitled to retain to the exclusion of the wife the proceeds of sale of the German motor vehicle;
·That each party otherwise retain to the exclusion of the other their accrued superannuation entitlements.
The adjustment sought by the husband represents approximately 7.2 per cent of the parties’ agreed asset pool.

The hearing

The hearing commenced before me on 31 May 2017 and proceeded over two days. Both parties were represented by counsel throughout the hearing. The parties’ pool of assets available for division had an agreed value. An agreed summary of their interests was tendered on 1 June 2017 (Exhibit H3).
The wife, her mother and the husband were cross-examined. Each of those witnesses was assisted by an interpreter.

The evidence

In determining the matter, the relevant standard of proof is the balance of probabilities. Section 140 of the Evidence Act 1995 (Cth) provides that without limiting the matters the Court may take into account in applying that standard of proof the Court must take into account:-
(a) The nature of the cause of action or defence;
(b) The nature of the subject matter of the proceedings; and
(c) The gravity of the matters alleged.
I have read all documents upon which the parties have relied and the exhibits tendered during the course of the hearing. I have also had the advantage of observing the appearance and demeanour of the witnesses when giving their evidence in Court.
In making my findings, I have given careful consideration to all of the evidence, the nature of the proceedings, the seriousness of the allegations made and the consequences that flow from those findings.
In final submissions, counsel for each of the parties submitted that the other was not a witness of truth.
It became clear during the course of the evidence that at times both the wife and the husband had sought to mislead the Court.
The wife in her trial affidavit filed 17 March 2017 deposed as to loan agreements she had entered into with her mother in respect of advances made by her mother prior to and during the relationship. For the reasons set out below I am satisfied that that evidence was misleading and an attempt by the wife to shore-up her case with respect to the advances made by her mother, and to have them characterised as loans rather than contributions made on her behalf.
I am satisfied that the husband also sought to mislead the Court as to his employment and income. Again I will refer to those matters in more detail later in this judgment.
Notwithstanding the submissions made by the parties’ counsel, in my view little turns on those credit issues. At the end of the day the central issue in the case was the determination of the weight to be attached to the contributions made by or on behalf of the wife during the course of the marriage. Although there was elaborate detail in her trial affidavit material as to the loan agreements, by the time of the trial the wife had abandoned the allegation that there were loans re-payable to the her parents in accordance with the terms of those agreements.
The trial proceeded on the basis that the monies advanced by the wife or her family were contributions to be assessed in the course of the parties’ very short relationship. Whilst the manner in which the wife elected to conduct her case may have lengthened the proceedings and caused an increase in legal costs, given the position adopted by her during the trial those matters do not impact on my assessment of the weight to be attributed to those contributions.

The law

The parties’ competing property applications are to be determined in accordance with the provisions of Part VIII of the Act. The High Court considered the approach to be adopted in the determination of proceedings pursuant to s 79 of the Act in the decision of Stanford v Stanford (2012) 247 CLR 108. At page 121 the High Court said that “[t]he power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down””. Section 79(2) of the Act provides that a Court should not make an order for property settlement unless it is satisfied that it is just and equitable to do so.
That decision has been considered in detail by the Full Court in Bevan & Bevan [2013] FamCAFC 116; (2013) FLC 93-545 (“Bevan”) and Chapman & Chapman [2014] FamCAFC 91; (2014) FLC 93-592.
In Bevan at [73] the Full Court referred to the three “fundamental propositions” laid down by the High Court which should guide trial judges in approaching the task under s 79. They were summarised as follows:-
1.   Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);
2.   The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;
3.   A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.
(emphasis in original)
Accordingly, in determining competing applications pursuant to s 79 of the Act, the Court is required to:-
·Identify the parties’ respective legal and equitable interests in property;
·Determine whether, in accordance with s 79(2), it is just and equitable to make a property settlement order having regard to the parties’ existing interests;
·Determine all relevant contributions of each of the parties;
·Identify and weigh against each other the matters set out in s 79(4)(a) to (c) inclusive; and
·Consider the matters contained in s 79(4)(d) to (g) inclusive and make a determination as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of their contributions, particularly having regard to the provisions of s 75(2).
The Act does not prescribe the order in which the matters in s 79(4) of the Act are to be considered. The circumstances of individual marriages as to their nature and form differ; how parties have organised and lived within the marriage are factors which may be relevant in the exercise of the discretion pursuant to s 79(2) of the Act.
The Court’s approach may be less compartmentalised than was previously the case and a more “holistic” approach, as described by Murphy J in Watson & Ling (2013) FLC 93-527 at [13], is adopted.
It was common ground between counsel representing the wife and the husband that it was necessary to make property orders in this matter. Both parties asked the Court to make orders adjusting their respective property interests. There was no challenge to the proposition that it is just and equitable to make orders for property settlement. Accordingly, in circumstances where it is agreed between the parties that they will no longer have joint use and enjoyment of their interests, I am satisfied that it is just and equitable to make orders for adjustment of their interests.

THE ISSUES

The principal issues in dispute related to:-
·The weight to be attributed to the contributions made by or on behalf of the wife, being:-
(a)The property at B Street, Suburb C which was purchased by her in 2011 and which purchase was funded by an advance of $800,000 from the wife’s mother;
(b)The advance of $300,000 from the wife’s family to facilitate the purchase of the DPL business operated by the parties;
(c)The advance by the wife’s mother of $122,000 which sum was applied to the purchase of a German motor vehicle registered in the husband’s name.
·The weight to be attributed to the contributions made by or on behalf of the husband during the relationship, including alleged advances of $50,000 from his step-father and $10,000 from his uncle.

Purchase of the B Street property

In 2011, approximately two years prior to the commencement of cohabitation, the wife purchased the property at B Street, Suburb C (“B Street”). The wife’s mother, Ms F advanced the sum of approximately $800,000 in order to facilitate the purchase of B Street. B Street is registered in the wife’s sole name.
Throughout the proceedings until the commencement of the trial, the wife maintained that the funds advanced by her mother towards the purchase of B Street were a loan. In support of that contention, the wife annexed to her trial affidavit filed 17 March 2017 a deed of agreement dated 10 June 2011 (“the first loan agreement”) (Annexure MXL-2).
Both the wife and her mother were cross-examined with respect to the first loan agreement.
The first loan agreement records that B Street was purchased for $780,000 with settlement to occur on 19 July 2011. The terms of the loan agreement include that:-
·The wife’s mother is entitled to register a caveat over the title to B Street to protect her equitable interest;
·When the property is sold the wife’s mother will be paid $800,000 from the proceeds of sale in satisfaction of the loan.
During her oral evidence the wife stated that she had agreed to pay interest to her mother in respect of the loan, that interest being payable at a rate of five per cent per annum. She stated that interest had been accruing since 2011. The first loan agreement annexed to her trial affidavit is silent in respect of interest payable under the alleged loan.
Further, the wife admitted during cross-examination that although dated 10 June 2011, the first loan agreement was not in fact signed until June 2014, approximately one month prior to the parties’ marriage.
It was also conceded by the wife during cross-examination that she had misled the Court at paragraph 5 of her affidavit filed 2 June 2015 where she deposed that she had “signed a Deed of Agreement evidencing this loan on 10 June 2011”.
Notwithstanding the wife’s evidence in her trial affidavit regarding the advance of monies being a loan, at the commencement of the final hearing it was conceded by her counsel that the advances by her mother applied to the acquisition of B Street should be treated as contributions made by or on her behalf rather than loans repayable to her mother. Having regard to the evidence of both the wife and her mother as to the circumstances in which the first loan agreement was created and executed, this was a sensible concession.

Purchase of DPL

In August 2013 the parties established an entity, The E Pty Ltd. Both the husband and the wife were directors of The E Pty Ltd and each held half of the shares in that entity.
In August 2013 The E Pty Ltd purchased a franchise business, DPL for the sum of $300,000.
Between July and September 2013 a total of $348,657 was transferred to the wife in 14 separate transactions from friends and family in China. Those funds were applied to the purchase of DPL. In addition, the wife’s evidence is that some of those funds were applied towards the parties’ day-to-day living expenses.
The wife alleged in her trial affidavit that the monies advanced to purchase DPL were a loan from her mother. Annexure MXL-4 of the wife’s trial affidavit is a loan agreement between the wife’s mother and The E Pty Ltd dated 8 August 2013 (“the second loan agreement”). The terms of the second loan agreement included that:-
·The wife’s mother has advanced to the company the sum of $300,000 effective from 8 August 2013 for a term of five years;
·Interest is payable on the loan at the rate of five per cent per annum in monthly instalments of $1,250 per calendar month for 60 months;
·The E Pty Ltd will provide to the wife’s mother by way of security an equitable charge on the company assets.
During cross-examination the wife conceded that she did not sign the second loan agreement on 8 August 2013 and that that document was not signed until after the parties’ separation in 2015. In addition, the wife acknowledged that the second loan agreement is between her mother and the entity in which both she and the husband are directors and shareholders, that the husband did not consent to the second loan agreement and he was not aware of its existence at the time of the alleged loan.
The wife’s evidence was that the purpose of drafting the second loan agreement was to establish that the funds advanced were a loan. The wife also conceded that there had been no interest paid to her mother in respect of the second loan agreement. The wife confirmed during cross-examination that the instructions with respect to the preparation of the second loan agreement were provided to the solicitors after the parties’ separation and that the agreement was back-dated two years.
Again during the hearing, it was conceded on behalf of the wife that the monies advanced by her mother to the parties to assist with the acquisition of the DPL business should be treated as contributions on her behalf and not as a loan. In light of the evidence of the wife and her mother this was an appropriate concession.
Following its acquisition, the parties operated the DPL business. The wife in her trial affidavit alleges that she was solely responsible for the day-to-day operation of the business, the supervision of employees and the financial affairs of the business. That allegation is disputed by the husband who maintains that he ceased working part time in order to devote time to the business. It is his contention that he also made a direct financial contribution to the business, having been advanced $10,000 from his uncle which was applied towards the acquisition costs of the business. The husband also contends that he worked in the business attending to minor clothing repairs, minor repairs to machinery, attending to customers, supervising employees, purchasing supplies and attending to staff payments.
The husband maintains that he worked full time at DPL until December 2014 and thereafter attended at the business two to three days per week.
The wife was cross-examined in relation to the husband’s contributions to the DPL business. The wife confirmed that the husband’s uncle did advance $8,000 (and not $10,000 as alleged by the husband) towards the bond for the lease of premises in respect of the DPL business. The wife conceded that the husband paid the staff wages but maintained that he was not present at the business on a full-time basis. She also conceded that the husband supervised the employees of the business during the initial period of its operation and that he assisted with purchases of supplies for the business during that period. She also confirmed that the husband was responsible for the calculation of employee pay and entitlements. The wife’s evidence was that her role was primarily to deal with customer service.
Throughout her oral evidence the wife sought to minimize contributions made by the husband. Concessions made by her as to the financial contributions from the husband’s uncle and as to the work undertaken by the husband were made reluctantly and only when pressed by the husband’s counsel. In circumstances where the wife has sought, up until the commencement of the hearing, to contend that advances from her family were loans, and has created and executed documents, backdating them, so as to bolster those claims, I place little weight on her evidence as to the husband’s contributions to the business. I prefer the evidence of the husband as to the contributions made by him towards the operation of the DPL business during the course of the marriage.
The wife continued to operate the DPL business following the parties’ separation. The DPL business was sold in May 2017. The net proceeds of sale after payment of liabilities to the Australian Taxation Office is $45,000.

The German motor vehicle

In anticipation of the parties’ wedding the wife’s parents travelled to Australia to meet the husband and his parents. The wife deposes at paragraph 32 of her Trial Affidavit that:-
…My parents wanted to provide financial support to me and the respondent in the initial and beginning stages of our married life. At all times, it was intended that their support would be by way of loan until we established financial independence upon which we would then re-pay my parents.
During the visit by the wife’s parents, the parties’ and the wife’s parents attended a car dealership and purchased a German vehicle for the sum of $122,000. That vehicle was registered in the husband’s name.
The wife alleges that her parents advanced the sum of $122,000 towards the purchase of the German motor vehicle. That vehicle was sold after separation in August 2015 for the sum of approximately $77,000. The proceeds of sale from the motor vehicle are held upon trust for the parties pending a finalisation of the proceedings.
The wife was cross-examined in relation to the circumstances of the acquisition of the German motor vehicle and the advance of monies from her parents. During her oral evidence she conceded that the monies were advanced to both the husband and the wife on the basis that both would be driving the vehicle. As to whether the monies advanced constituted a loan, the wife’s evidence was that the monies were to be re-paid to her parents once the parties were financially independent. It was her evidence that no interest was payable in respect of the alleged loan and she conceded that the loan was not documented.
During her oral evidence the wife’s mother also conceded that there was no loan agreement with respect to the purchase of the German motor vehicle. The wife’s mother denied the allegation that that car was selected in order to enhance the husband’s standing as a businessman. It was her evidence that the vehicle was registered in the husband’s name as he was the “main” driver. Further, she stated that at the time of its acquisition the wife was under 25 years of age and as a consequence the insurance premiums on the vehicle were it registered in her name would be prohibitive. The wife’s mother denied the proposition that the vehicle was purchased as a gift to induce the husband to marry the wife.
Notwithstanding the evidence of the wife and her mother in their trial affidavits, it was conceded by the wife's counsel that the advance of funds by the wife’s parents towards the acquisition of the German motor vehicle was not a loan to the parties. Rather it was submitted that those advances should be treated as contributions made on behalf of the wife. This too was a sensible concession in light of the oral evidence of the wife and her mother.

The asset pool

The balance sheet tendered by the husband (Exhibit H-3), which was accepted by the wife as accurately representing the parties’ interests, identifies the agreed pool as follows:-
B Street, Suburb C  $940,000
Sale proceeds DPL (93-48K (ATO)  $ 45,000
Sale proceeds car  $ 77,000
$1,062,000

Section 79(4) contributions

At the commencement of the marriage the wife was the sole registered proprietor of the property at B Street, which was unencumbered. There is no evidence before me as to the value of B Street at the commencement of the parties’ cohabitation in 2013. B Street was purchased by the wife for the sum of $780,000 in 2011.
In addition to that contribution, during the marriage advances were made by the wife’s parents towards the acquisition of the DPL business ($300,000) and to the purchase of the German motor vehicle ($122,000). In total the wife has received advances from her parents of $422,000 during the relationship. Accordingly I am satisfied that the direct financial contributions made by or on behalf of the wife by way of B Street (no less than $780,000) and the amounts advanced by her parents are valued at in excess of $1.2 million.
It is common ground between the parties that the husband had no assets of significance at the commencement of their cohabitation.
The husband alleges that direct financial contributions were made on his behalf during the marriage by his uncle and stepfather. The wife concedes that $8,000 was received from the husband’s uncle and applied towards the lease of premises for the DPL business.
In addition to that amount, the husband contends that his step-father advanced the sum of $50,000 to him by way of 10 transfers of $5,000 to the husband’s Commonwealth Bank account, those transfers occurring in 2014. Those amounts were expended for the parties’ mutual benefit. The wife was cross-examined in relation to those advances and during her oral evidence she stated that she had no idea whether such funds were received. When asked whether she disputes the husband’s contention that $50,000 was advanced by his step-father she responded that she simply could not remember.
The husband relied upon Exhibit H-2, being his Commonwealth Bank Complete Access Account Statement for the period 1 April 2014 to 30 September 2014. That statement discloses 10 direct deposits of $5,000 into the account from Mr H. It also discloses expenditure at service stations, supermarkets, restaurants and entertainment venues. Having regard to that document, I accept the husband’s evidence as to the contributions made on his behalf by his step-father and further that those funds were likely expended for the parties’ mutual benefit.
The husband also contends that his step-father transferred to him a Japanese motor vehicle. That vehicle was sold after the purchase of the German motor vehicle and the husband alleges that he received $11,000 from the sale of that vehicle and that the proceeds of sale were applied for the parties’ mutual benefit. The wife was also cross-examined with respect to those matters. She conceded that the husband’s step-father transferred the Japanese motor vehicle and that it was sold. She could not recall the amount received from the sale or whether the proceeds of sale were applied towards the parties’ expenses.
The wife’s inability to recall matters adverse to her own case or supportive of the husband’s was a feature of her evidence and does her no credit. In the circumstances, I accept the husband’s evidence as to the amounts received from the sale of the Japanese motor vehicle and the manner in which those sale proceeds were applied.
It is common ground between the parties that the DPL business was acquired shortly after they commenced cohabitation. The wife’s evidence was that she worked on a full-time basis in that business. Further, she alleged that whilst the husband worked in the business initially following its acquisition his involvement in its day-to-day operation diminished over the passage of time. The husband’s evidence is that not only did he work in the DPL business, in the latter part of the marriage he also undertook a morning delivery service rising at 4.00am. During the period he operated the delivery service he continued to attend to the business two to three days each week. He also worked part time in another occupation during that period.
As discussed previously, during cross-examination the wife made some concessions, albeit reluctantly as to the husband’s contributions toward the business, particularly in respect of the calculation and payment of employee entitlements and payments to employees. She also conceded that the husband was involved in the purchase of supplies and the delivery of machinery to service men for repair. The wife also acknowledged that the husband worked the delivery service. She did not challenge the husband’s contention that his income earned was applied for the parties’ mutual benefit.
No submissions were made on behalf of the parties as to whether the parties’ contributions should be assessed globally or on an asset-by-asset basis. It is common practice, though not obligatory, to assess parties’ contributions globally (see Norbis & Norbis (1986) 161 CLR 513). Although the wife made direct financial contributions at the commencement of the cohabitation and direct advances were made on her behalf during the marriage, those contributions were made in the case of the business, to an entity owned and controlled by both parties, and in respect of the motor vehicle, to an asset registered in the name of the husband. Given those circumstances and in the absence of any submission seeking an asset by asset approach, I am satisfied that it is appropriate that I adopt a global approach in assessing the parties’ contributions.
In so assessing those contributions I must have regard to the disparity in the parties’ initial contributions. The wife brought into the marriage the unencumbered B Street property which is now valued at $940,000 and represents approximately 88.5 per cent of the parties’ available assets. The husband brought no assets of significance into the relationship.
Having regard to all of the evidence, I am satisfied that each party contributed to the best of their ability towards the operation of the DPL business during the period of the cohabitation. In addition to his contributions to the business, the husband also undertook additional employment with his delivery service and part time work. I am also satisfied that each party undertook responsibilities as directors of The E Pty Ltd, the entity which conducted the DPL business.
As to the parties’ contributions to the home, the wife at paragraph 59 of her trial affidavit deposes that the husband’s contributions were limited to:-
·Changing the light bulbs twice;
·Fixing the toilet seat once;
·Cleaning up the dog faeces occasionally;
·Cleaning the houses three times upon her request.
The husband’s evidence during cross-examination was that the parties cleaned and cooked together, that the wife washed the clothes, attended to cooking and cleaned the floor.
My impression of the wife was that she sought to minimise the husband’s contributions at every opportunity. Her evidence in her trial affidavit as to his contributions to the parties’ household is yet another example of her attitude towards the husband’s contributions and is one that reflects poorly upon her.
I am satisfied on the balance of probabilities that each party contributed to the best of their ability in their respective roles during the short period of the marriage.
The difficulty faced by both parties is that notwithstanding their efforts in the DPL business, those contributions are not reflected in the proceeds of sale that remain. That then raises the question as to whether one or both parties should bear the financial loss resulting from the failure of the business. In Kowaliw and Kowaliw (1981) FLC 91-092 (“Kowaliw”) the Court recognised that marriage for most parties is an economic partnership where they live and work together with the goal of purchasing a home and other assets in order to attain a higher standard of living. I am satisfied that that was the intention of the husband and the wife in this case. Baker J noted in Kowaliw, at 76,643-4, that just as the economic fruits of marriage should be shared, having regard to the provisions of ss 79(4) and 75(2) of the Act, so too should losses so sustained, except where it is established that such losses arise as a result of a course of conduct designed to reduce or minimise the value of the pool or reckless, negligent or wanton conduct in respect of the assets which has reduced their value. No submission was made on behalf of either party that such conduct is a feature in this case.
It was acknowledged by the Full Court in Brown v Green (1999) FLC 92-873 that parties to a marriage should share, although not necessarily equally, both the financial gains and losses during a marriage, even a marriage of short duration.
It was submitted on behalf of the wife, and I accept the submission, that the direct financial contributions made by and on her behalf at the commencement of and during the course of the parties’ short marriage overwhelmingly favour her. The reality is that those contributions exceed a value of $1.2 million in a case where the pool of assets available for division has reduced and is now approximately $1,062,000. The wife maintains that she should retain 100 per cent of the parties’ agreed pool of assets, having regard to those contributions.
The husband seeks an order that he retain the proceeds of sale of the German motor vehicle. A payment in those terms represents an adjustment to him of approximately 7.2 per cent of the available pool. It was submitted that an adjustment in those terms recognises the contributions made by him during the course of the parties’ marriage. It was also submitted that such an outcome was appropriate having regard to the evidence of the wife’s mother as to the intention that the German motor vehicle be purchased for the benefit of the husband and the wife, as well as the fact that the vehicle was registered in the husband’s name. As highlighted previously the evidence of the wife’s mother was that when the car was purchased it was understood that the husband would be the “main driver” of the vehicle.
Notwithstanding that evidence, I am satisfied that the monies provided by the wife’s parents for the purchase of the motor vehicle were advanced as a result of the relationship then existing between the wife and the husband. In my view the advance of funds to facilitate the purchase of the German motor vehicle was a contribution made on behalf of the wife.
Having regard to the parties’ financial and non-financial contributions, I propose to make an adjustment between the parties to reflect a 96/4 per cent split in favour of the wife. I am satisfied that an adjustment in those terms recognises the contributions made by each but particularly the overwhelming direct financial contributions made by or on behalf of the wife during the course of the relationship.

Section 75(2) factors

Neither party sought an adjustment pursuant to s 75(2) of the Act.
The reality is that both parties are young; the husband aged 28 years and the wife 27 years.
The wife is nearing completion of her accounting degree and indicated that she will likely return to China upon its completion. She has significant assets and resources at her disposal and will soon be armed with qualifications that will assist her in any future employment or business endeavours.
The husband is engaged in employment as a trainee and has commenced earning an income from that source. The husband’s evidence as to his income was unimpressive. In his Financial Statement filed 1 May 2017 he deposed that he had no income. He was evasive when questioned as to commissions received to date and anticipated to be received. During cross-examination he conceded in his oral evidence that he had earned between $5,000 and $6,000 in commissions since he commenced his employment in late March 2017.

All of the evidence supports a finding that the husband is hard working and resourceful. When necessary he has undertaken work at the delivery service and his additional part time work to supplement his income.
The wife has no superannuation interests and the husband discloses in his Financial Statement accumulated superannuation entitlements of nominal value.
I am satisfied having regard to all of those matters that there should be no adjustment pursuant to s 75(2) of the Act.

Conclusion

Taking into account all of the above matters I am satisfied that there should be a division of assets on the basis that the wife receives 96 per cent and the husband receives four per cent of the available pool.
The effect of an adjustment in those terms is that the husband will be paid the sum of $42,480 from the proceeds of sale of the German motor vehicle. The balance of the sale proceeds should be paid to the wife. Accordingly, the wife will retain assets valued at $1,019,520.
It is likely that neither the husband nor the wife will be satisfied with the result. The reality is that both parties have made greater direct financial contribution during the course of the marriage than they will receive at the conclusion of these proceedings. That this is so is as a result of the losses sustained by them following the sale of the DPL business and the German motor vehicle.
Nonetheless, having regard to all of the matters set out above, I consider the orders I make will be a just and equitable result as between the husband and the wife.

THE ORDERS

The orders I make are as follows:-
1.That the wife retain to the exclusion of the husband all her right, title and interest in the real property situate at and known as B Street, Suburb C and indemnify the husband and keep him indemnified in respect of any liability or encumbrance affecting the said property.
2.That the wife retain to the exclusion of the husband, her interest in:-
(a)The proceeds of sale of the business trading as D Pty Ltd;
(b)The E Pty Ltd (ACN …).
3.That the wife indemnify the husband and keep him indemnified in respect of any and all liability arising as a result of his interest in:-
(a)The D Pty Ltd business;
(b)The E Pty Ltd.
4.That the proceeds of sale of the German motor vehicle be applied as follows:-
(a)First in payment to the husband the sum of $42,480;
(b)Second, the balance then remaining to the wife.
5.That unless otherwise specified, and save for the purposes of enforcing any monies due under these or any subsequent orders:-
(a)Each party be solely entitled, to the exclusion of the other, to all other property (including choses-in-action, chattels and motor vehicles) in the possession of such party as at the date of these orders;
(b)Each party forego any claims they may have to any superannuation benefit belonging to or earned by the other;
(c)Any insurance policies remain in the sole property of the owner named therein;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(e)Any joint tenancy is hereby expressly severed.
6.That all extant applications be otherwise dismissed.

I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 20 September 2017.

Associate:

Date: 20 September 2017

[2017] FamCA 725

20 September 2017

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Family Law

Equity & Trusts

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Injunction