LO & GONG
[2017] FCCA 1397
•23 June 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LO & GONG | [2017] FCCA 1397 |
| Catchwords: FAMILY LAW – Property – contributions – portion of funds retained by wife added back into asset pool. |
| Legislation: Family Law Act 1975, ss.60B, 60CA, 60CC, 60CG, 61DA, 65D, 65DAA, 75(2), 79 |
| Cases cited: Goode & Goode (2006) FamCA 1346 McCall & Clark (2009) FLC 93-405 MRR & GRR [2010] HCA 4 Bass & Bass (2008) FLC 93-366 Stanford & Stanford [2012] HCA 52 Lee Steere & Lee Steere (1998) FLC 91-626 Bevan & Bevan [2013] FLC 94-545 |
| Applicant: | MR LO |
| Respondent: | MS GONG |
| File Number: | ADC 496 of 2016 |
| Judgment of: | Judge Kelly |
| Hearing dates: | 20, 21 and 22 February 2017 |
| Date of Last Submission: | Written submissions 21 March 2017 |
| Delivered at: | Adelaide |
| Delivered on: | 23 June 2017 |
REPRESENTATION
| Counsel for the Applicant: | Ms H Tinning |
| Solicitors for the Applicant: | Tindall Gask Bentley |
| Counsel for the Respondent: | Ms M Pyke QC |
| Solicitors for the Respondent: | Norman Waterhouse |
ORDERS
Parenting
By consent the parties share equally in parental responsibility for the child X born (omitted) 2012.
X live with the mother.
The mother is permitted to relocate with X to Perth, Western Australia on or after 27 December 2017.
Pending X moving to Perth, he shall spend time with the father as follows:
(a)from 3.30pm or the conclusion of kindergarten on Thursday 29 June until 5.30pm on Saturday 1 July 2017;
(b)thereafter each alternate week from 3.30pm or the conclusion of school/kindergarten on Thursday until 5.30pm Sunday, commencing Thursday 6 July 2017;
(c)each intervening week from 3.30pm or the conclusion of school/kindergarten on Thursday until 9.00am or the commencement of school Friday, commencing Thursday13 July 2017.
In the event X and the father are both living in Perth, then X shall spend time with the father as follows:
(a)each alternate week from the conclusion of school or 3.30pm on Thursday until 5.30pm on Sunday;
(b)each intervening week from the conclusion of school or 3.30pm on Thursday until the commencement of school or 9.00am on Friday;
(c)commencing in second term 2018 during school term times:
(i)each alternate week from the conclusion of school or 3.30pm Thursday until the commencement of school or 9.00am on Monday;
(ii)each intervening week from the conclusion of school or 3.30pm Thursday until the commencement of school or 9.00am on Friday.
(d)for one half of each short school holiday period at times to be agreed between the parties and in default of agreement from the conclusion of school on the last day of term until 5.30pm on the middle Saturday;
(e)for one half of each Christmas school holiday period as agreed between the parties or in default of agreement on a week about basis with handover to take place at 3.30pm each Friday;
X shall spend time with each parent on special occasions as may be agreed between them or in default of agreement as follows:
(a)with the father from 5.00pm on the Saturday prior until 5.00pm on Father’s Day each year;
(b)with the mother from 5.00pm on the Saturday prior until 5.00pm on Mother’s Day each year;
(c)on X’s birthday each year at times to be agreed between the parties;
(d)commencing 2017 and each alternate year thereafter with the mother from 3.00pm Christmas Eve until 3.00pm Christmas Day and with the father from 3.00pm Christmas Day until 3.00pm Boxing Day;
(e)commencing 2018 and each alternate year thereafter with the father from 3.00pm Christmas Eve until 3.00pm Christmas Day and with the mother from 3.00pm Christmas Day until 3.00pm Boxing Day;
(f)commencing in 2018 and each alternate year thereafter with the father from 3.00pm on Chinese New Year’s Eve until 3.00pm on Chinese New Year’s Day and with the mother from 3.00pm on Chinese New Year’s Day until 3.00pm on the day immediately following:
(g)commencing in 2019 and each alternate year thereafter with the mother from 3.00pm on Chinese New Year’s Eve until 3.00pm on Chinese New Year’s Day and with the father from 3.00pm on Chinese New Year’s Day until 3.00pm on the day immediately following.
The mother facilitate X communicating with the father by Facetime or video on two (2) occasions each week on a Monday and Tuesday evening at approximately 6.30pm or such other days as the father may advise the mother by SMS text message at least seven (7) days prior, subject to his work roster.
The father facilitate X communicating with the mother by text message or Facetime on Thursday evenings at approximately 6.30pm when X is in his care.
Where appropriate, handover shall take place at X’s day care, kindergarten or school.
All other handovers shall take place as agreed between the parties or in default of agreement the father will collect X from the mother’s home at the commencement of X’s time in his care and the mother will collect X from the father’s home at the conclusion of X’s time in his care.
Each party is at liberty to attend any school or extra-curricular activities that X is enrolled in.
Each party is at liberty attend at any school events to which parents are ordinarily invited and to obtain copies of all school reports, newsletters, notices, school photographs and other information that parents would ordinarily receive, at each party’s own expense.
Each party is at liberty to communicate freely with all teachers and school staff in relation to X’s progress and development.
Each party is at liberty to communicate with any doctor or other healthcare practitioner providing treatment for X and to obtain copies of any medical records or reports in relation to X.
Both parties shall keep the other informed of any medical appointments for X and the results and outcomes of any such appointments.
In the event X requires emergency medical treatment or hospitalisation, then the parent with care of X shall notify the other parent as soon as possible and both parties are at liberty to attend with X during any hospital stay.
Each party is restrained from:
(a)denigrating the other parent or permitting any other person to do so in X’s presence;
(b)using physical discipline upon X or allowing any other person to do so;
(c)removing or attempting to remove X from the Commonwealth of Australia save as may be agreed and confirmed in writing by the parties.
In the event X is living in Perth and the father remains living in Adelaide, then X shall spend time with and communicate with the father as follows:
(a)by Facetime or video on three (3) occasions each week with the father to advise the mother by SMS text message at least seven (7) days in advance of his preferred days each week, subject to his work roster;
(b)overnight on any weekend during school terms that the father is present in Perth, upon the father providing the mother with fourteen (14) days notice of his intention to travel to Perth;
(c)during each short school holiday period for a period of nine (9) nights to commence on the first weekend of each short school holiday period and conclude on the tenth (10th) day thereafter;
(d)for the 2017 Christmas school holidays for a period of seven nights in alternate weeks on dates to be agreed between the parties;
(e)thereafter for one half of each Christmas school holiday period as agreed between the parties or in default of agreement for a period of three (3) weeks:
(i)commencing on 20 December 2018 and each alternate year thereafter;
(ii)commencing on 27 December 2019 and each alternate year thereafter.
(f)the mother shall deliver X to and collect him from the father for each school holiday period, unless otherwise agreed between the parties;
(g)the mother shall meet the costs of X’s return airfares between Perth and Adelaide for each school holiday period.
The Australian Federal Police maintain X’s name on the Airport Watch List in force at all points of arrival into or departure from the Commonwealth of Australia until X attains the age of 16 years.
In the event the parties agree in writing that X is permitted to travel overseas then each party shall do all things necessary and sign all documents necessary to permit X to travel and to remove his name from the Airport Watch List for the duration of his travel overseas.
Upon X attaining ten (10) years of age, the parties shall engage in family dispute resolution through a community based organisation to discuss and reach agreement in relation to X’s future care arrangements including, but not limited to:
(i)any variation to the time that X spends with the father;
(ii)X’s secondary school education;
(iii)removing X’s name from the Airport Watch List to enable overseas travel with either parent;
(iv)any other issues that either party wishes to discuss in relation to X’s care, welfare and development.
Property
In full and final settlement of all claims for property between the parties
Within 30 days of the date of these Orders (“the Settlement Date”) the husband do pay to the wife the sum of TWO HUNDRED AND FIFTY THOUSAND SIX HUNDRED AND TWENTY FOUR DOLLARS ($250,624), such payment to be forwarded to the wife’s solicitors trust account.
Contemporaneously on the Settlement Date, the wife shall transfer to the husband all of her right, title and interest in the real estate located at Property A and Property B.
Contemporaneously on the Settlement Date the husband shall discharge the joint mortgage secured over the Property B property and shall indemnify the wife with respect to any liabilities that may have accrued in relation to either the Property A property or the Property B property.
Thereafter the husband retain for his sole use and enjoyment absolutely the following property:
(a)the Toyota (omitted) motor vehicle;
(b)the (omitted) motor cycle;
(c)any savings standing to his credit;
(d)his furnishings and effects;
(e)his interest in the apartment in China;
(f)his superannuation entitlements.
Thereafter the wife retain for her sole use and enjoyment absolutely the following property:
(a)her interest in the property situated at Property C ;
(b)her interest in the (omitted business) business;
(c)her Toyota (omitted) motor vehicle;
(d)any savings standing to her credit;
(e)her furnishings and effects;
(f)her superannuation entitlements.
The parties do all things necessary to close any bank accounts in their joint names and any funds remaining in the said bank accounts shall be divided equally between the parties.
The husband indemnify the wife and keep her forever indemnified with respect to any debts in his sole name and indemnify her in relation to any monies advanced by his family to the parties.
The wife indemnify the husband and keep him forever indemnified with respect to any debts in her sole name and indemnify him in relation to any monies advanced by her family to the parties.
All proceedings are dismissed as finalised.
Liberty to apply with respect to costs.
IT IS NOTED that publication of this judgment under the pseudonym Lo & Gong is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 496 of 2016
| MR LO |
Applicant
And
| MS GONG |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties, Mr Lo and Ms Gong, were in a relationship for approximately six years. They have one child, X, born (omitted) 2012. The parties separated on 6 March 2015 and have been unable to resolve issues arising from the breakdown of their marriage. Accordingly, it falls to the Court to determine the long term parenting arrangements for X and the parties competing applications for property settlement.
Background
The Applicant father was born in (omitted) in China on (omitted) 1985. The Respondent mother was born in (omitted) in China on (omitted) 1983. They met in 2007 and commenced living together in (omitted) 2008. At that same time the father’s parents purchased an apartment in his name in (omitted) in China, for the sum of approximately $220,000.
The parties married in China on (omitted) 2009. In (omitted) 2009 the mother was granted a Regional Skilled Visa entry into Australia. She sponsored the husband as her partner and the parties immigrated to Australia in (omitted) 2009. Shortly after their arrival the father commenced work as a (occupation omitted) at a (employer omitted) and the mother commenced work as a (occupation omitted).
Both parties brought savings with them to Australia and also received financial support from their family in China. In (omitted) 2009 the father’s brother gave approximately $15,000 to the father, which the parties used to buy a (omitted) motor vehicle, for the sum of $27,000. The balance of the purchase price was drawn from their savings.
Unfortunately the parties experienced difficulties within their relationship. The father acknowledges that he slapped the mother during an argument on 22 December 2010, but says it was in response to the mother’s physical violence towards him. The mother says the father was violent and aggressive on other occasions, but this is disputed. Despite these difficulties, the parties’ marriage continued.
In 2011 the father commenced employment as a (occupation omitted) at (employer omitted). In (omitted) 2011 the parties purchased a Toyota (omitted) motor vehicle for approximately $50,000, from their own funds. In that same month the parties also purchased a property at Property B (“the Property B property”) for approximately $470,000. They paid a deposit of $220,000, drawn from their joint savings and from funds provided by their parents, mostly the father’s parents. The balance of the purchase price was obtained by a mortgage in the sum of $250,000 from the (omitted) bank.
Subsequently the father’s parents provided a further $250,000 to the parties. Rather than discharge the mortgage, the parties placed those funds in a mortgage offset account.
The mother became pregnant in (omitted) 2012. She ceased employment during the pregnancy prior to X’s birth on (omitted) 2012. She and X travelled to China in (omitted) 2013 and stayed with family for seven months. The father was able to arrange leave from his employment and spent the first and last month of this period with the mother and X in China.
In (omitted) 2014 the parties purchased another property at Property A for the sum of $755,000 (“the Property A property”). This property was purchased freehold. The parties drew the sum of $175,000 from their mortgage offset account, the father’s parents contributed approximately $300,000 and the mother’s parents contributed approximately $290,000. The parties moved into the Property A property and rented out the Property B property.
In (omitted) 2014 the mother and X returned to visit family in China. Whilst there, she re-established contact with a friend, Mr S. The father travelled to join the mother and X in China in (omitted) 2015 and upon arriving, the mother informed the father that she wished to obtain a divorce.
The parties returned to Adelaide on (omitted) 2015 and began to live separately within the family home. They returned to China in (omitted) 2015 to initiate their divorce, which was granted in China on (omitted) 2015. In addition the parties entered into a Voluntary Divorce Agreement. The terms of that Agreement provided that X would remain in the custody and guardianship of the father and that the father would retain the two properties at Property B and Property A, upon paying to the wife the sum of $290,000. The father’s parents then advanced to him the sum of $165,000 to assist with meeting the settlement.
The wife married Mr S on (omitted) 2015 and the parties returned to Australia with X on (omitted) 2015. The father was unaware that the wife had remarried until the parties returned to Australia.
The mother obtained independent rental accommodation on (omitted) 2015. The parties disagree about X’s care arrangements over the next few days but the mother retained X in her care in late May 2015 and he has continued living in the mother’s primary care since then, notwithstanding the terms of the Voluntary Divorce Agreement.
X commenced spending day visits with the father in June 2015. Both parties acknowledge there were some initial difficulties with handovers and that X struggled to separate from the mother. Nonetheless they agreed to progress to overnight time in October 2015.
The mother’s new husband immigrated to Australia in (omitted) 2015. The mother undertook training to become a (occupation omitted) and completed that qualification in (omitted) 2015.
In (omitted) 2015 the mother and her husband purchased a property at Property C (“the Property C property”) for the sum of $860,000. Mr Lo contributed savings of $250,000 and the balance of the purchase price was raised through a mortgage in the sum of $644,245.
The father continues to work at the (employer omitted). He remains living in the Property A property and the Property B property is tenanted.
In February 2016 the mother instructed her solicitors to notify the father that she and her husband planned to move to Perth with X, as she considered they would have better employment prospects in Western Australia. The father was opposed to X moving away from Adelaide and immediately filed an Initiating Application seeking shared care of X and to restrain the mother from relocating with X to Perth.
These proceedings
The father filed his Initiating Application on 17 February 2016 with a first return date listed on 26 April 2016. The mother filed her Response and supporting documents on that date, including an application for property settlement. The Court made interim parenting orders by consent for the parties to have equal shared parental responsibility and for X to live with the mother and spend regular time in the father’s care overnight each Friday in addition to contact by Facetime at least once each week.
The parties also consented to a range of injunctive orders to the effect that they would not remove X’s principal place of residence from Adelaide, would not remove or attempt to remove him from the Commonwealth of Australia and would not denigrate the other parent or their family in X’s presence. The mother also consented to orders that she would not encourage or permit X to refer to any other person as “Dad” or “Daddy” and that she would not physically discipline the child, without making any admission that such orders were necessary.
The parties subsequently attended a Child Dispute Conference but were unable to reach agreement. They also attended a Financial Conciliation Conference with a Registrar but were unable to resolve financial matters.
The matter was listed for a further interim hearing on 1 August 2016. The previous parenting orders were continued but X’s time in the father’s care was extended to commence at 3.30pm Thursday and conclude at 5.30pm Saturday each week. As matters otherwise remained unresolved, the Court ordered that a family assessment report be undertaken and listed the matter for a three day trial to commence on 20 February 2017. The parties instructed Ms M to undertake the family assessment and her report was completed on 25 November 2016.
The trial
The trial commenced before me on 20 February 2017. The evidence was concluded within the allocated hearing time and Counsel subsequently presented written submissions in accordance with the Court’s directions.
The father relied upon the following documents:
a)his further Amended Initiating Application filed 19 January 2017;
b)his trial Affidavit filed 19 January 2017;
c)his updated Financial Statement filed 19 January 2017;
d)the Family assessment report dated 25 November 2016, annexed to the Affidavit of Mr B filed 2 December 2016.
The mother relied upon the following documents:
a)her Response filed 26 April 2016;
b)her trial Affidavit filed 24 January 2017;
c)her updated Financial Statement filed 24 January 2017;
d)the trial Affidavit of her husband filed 23 January 2017.
Both parties gave evidence and were cross examined. Mr Lo was also available for cross examination and gave evidence with the assistance of a Mandarin Interpreter. I am satisfied that both parties and Mr Lo gave their evidence honestly and to the best of their recollection.
Ms M was also cross examined. She gave her evidence in a calm and professional manner and her evidence was of great assistance to the Court.
The Court’s decision in relation to X’s parenting arrangements will be a relevant factor in determining the parties’ competing applications for a property settlement. Accordingly, I will rule on the competing parenting applications first before addressing the property proceedings.
Parenting issues
The parties’ proposals
Both parties consent to an order for equal shared parental responsibility. The father’s proposed parenting orders are expressed as X ‘living with’ the mother and ‘spending time’ with the father. He proposes that X spend an increasing regime of time in his care, progressing to week about care in January 2021, when X will be nine years old. He opposes the mother’s application to relocate to Perth with X.
The father seeks a range of orders in relation to special occasion time and other parenting issues including handovers, telephone/Facetime contact and co-parenting communication. He also seeks a range of injunctive orders, including an order that X’s name remain on the Airport Watch List.
The mother sought orders for X to live with her and that she be permitted to relocate with X to Perth. Pending their relocation she proposed that X continue to spend time with his father in accordance with the existing orders. She proposed that X spend school holiday time in his father’s care in the event the father remained living in Adelaide. In the event both parties remain living in the same city, whether Perth or Adelaide, the mother proposed that X continue to spend two nights per week with the father. Upon X commencing school in 2018, she proposes that he spend time with the father from Wednesday to Friday in week one and from Friday to Sunday in week two.
The mother also proposed orders in relation to school holiday time. She did not specify precise orders regarding special occasions, or specific injunctive orders. However, her Case Outline document sought an order that the parties engage in mediation once X had turned ten years of age, to discuss X’s future care, including the removal of his name from the Airport Watch List. This suggests that the mother concedes that this Order will continue in force at this time.
Legal principles – parenting
In accordance with s.65D, the Court is empowered to make such parenting order as it thinks proper. When making a parenting order, the best interests of the child are the paramount consideration (s.60CA). Section 60B of the Family Law Act 1975 sets out the objects and principles which govern the Court’s decision-making responsibilities. This section focuses on the importance of parents having a meaningful involvement in their child’s lives, upon the need to protect children from harm and upon parents fulfilling their parenting duties and obligations.
Section 60CC sets out the factors the Court must apply in determining the children’s best interests. In Goode & Goode (2006) FamCA 1346 the Full Court noted that s.60B provides the context in which the various factors in s.60CC are “examined, weighed and applied in the individual case”.[1] Although that case dealt with interim parenting issues, the Full Court’s reasons provide guidance about the legislative pathway the Court should follow in any parenting case and their comments apply equally to final hearings.
[1] Goode & Goode (2006) FamCA 1346 @ para.10
First, the Court should address the considerations set out in s.60CC. Section 60CC is divided into primary considerations and additional considerations. There are two primary considerations:
a)the benefit to the child of having a meaningful relationship with both of the child’s parents; and
b)the need to protect the child from the physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.
In the event these considerations are in conflict, issues regarding safety in s.60CC(2)(b) should prevail. Section 60CC(3) then sets out a range of additional considerations which must also be taken into account. The Court must also ensure that the Court orders do not place any person at risk of family violence, in accordance with s.60CG.[2]
[2] Family violence is defined in s.4AB
Section 61DA requires the Court to presume that it is in a child’s best interests for their parents to share parental responsibility equally, unless the presumption does not apply or is rebutted. An order for equal shared parental responsibility triggers the effect of s.65DAA, which requires the Court to consider whether it will be in the child’s best interests to spend equal time, or substantial and significant time with each parent.
As discussed by the High Court in MRR v GR[3], s.65DAA involves a two-step process. First, the Court must ask whether equal time (or substantial and significant time) is in the child’s best interests. If the answer to that question is “yes”, the Court must also ask whether such an outcome is “reasonably practicable”. It is only when both questions are answered in the affirmative that the Court must consider making an order for equal time or substantial and significant time.
[3] MRR v GR [2010] HCA 4 @ para.13
Relocation disputes are particularly difficult cases to determine. Whatever decision the Court makes about the child’s best interests, one parent will inevitably feel aggrieved and distressed by the outcome.
While the child’s best interests is the Court’s primary consideration, it is not the only consideration. Weighing up the child’s right to a meaningful relationship with both parents against other relevant factors, including a parent’s right to freedom of movement, is a process that requires careful analysis.[4] However, the Court’s responsibility in such cases is no different to any other parenting dispute, at the end of the day. If, after careful analysis, the child’s best interests conflict with a parent’s right to live where they choose, the Family Law Act requires that the child’s best interests should prevail.[5]
[4] B & B (1997) FLC 92-755
[5] AMS v AIF; AIF v AMS (1999) FLC 92-852, per Kirby J
The authorities have consistently stated that each party’s parenting proposal, including any proposed relocation, must be assessed against the relative legislative considerations.[6] In Morgan & Miles [2007] FamCA 1230, Boland J considered the principles applicable to determining relocation applications. Her Honour observed:
“That the child’s best interest remains the paramount, but not the sole consideration; that a parent wishing to move does not need to demonstrate compelling reasons; that a judicial officer must consider all proposals and may himself or herself be required to formulate proposals in the child’s best interests; that the child’s best interests must be weighed and balanced with the right of the proposed relocating parent’s freedom of movement”.
What the legislation now requires is a consideration of the competing proposals against the criteria in section 60CC, informed by section 60B, and if a parenting order is made or proposed to be made and the presumption of equal shared parental responsibility applies, the consequences of an order for equal shared parental responsibility must be considered”.[7]
[6] Morgan & Miles [2007] FamCA 1230; McCall & Clark (2009) FLC 93-405;
[7] Morgan & Miles supra @ paras.80-81
Two years later the Full Court said in McCall & Clark (2009) FLC 93‑405:
“… it appears to us that dealing with a parenting application involving a relocation where the presumption applies and an order is made for equal shared parental responsibility a court must consider:
(a)whether equal time (or substantial and significant time) with both parents would be in the child’s best interests;
(b) consider and weigh up an equal time (or substantial and significant time) regime against all the factors having advantages for the child in the relocation proposal, including considering the matters in s 65DAA(5); and then
(c) consider whether an order should be made for equal time (or substantial or significant time) in one location, or for the child to reside with one parent in a distant location, with such other orders as will maintain the benefit of a meaningful relationship for the child if appropriate to do so;[8]
[8] McCall & Clark, supra @ para.69
The Family Law Act 1975 emphasises the children’s right to maintain a meaningful relationship with each parent.[9] As Kay J noted in Godfrey and Saunders [2008] FLR 287: “what the legislation aspires to promote is a meaningful relationship, not an optimal relationship”. [10]
[9] See ss.60B(1)(a), 60CC(2)(a)
[10] Godfrey v Saunders 2008 FLR 287 at 298
The legislation does not define what is meant by a meaningful relationship but the concept has been discussed at length in various judgments. In McCall & Clark, the Full Court endorsed the comments of Brown J in Mazorski & Albright where Her Honour said:
“A meaningful relationship or meaningful involvement is one which is important, significant and valuable to a child.”
Her Honour went on to note that it is a qualitative adjective, not strictly a quantitative one. That is to say, a meaningful relationship should be measured by the quality of the parent/child relationship, not simply by the number of hours or nights spent together.
I will address the relevant considerations set out in s.60CC in order to identify those factors that are most significant in determining the best interests of X. The Court is not limited to either party’s proposal when determining this dispute. Rather, the Court’s obligation is to make parenting orders that will be in the child’s best interests. To that end I will discuss the evidence and set out my findings within the context of the relevant s.60CC considerations.
I remind the parties that the Court is not required to rule on every issue in dispute. In considering the parties’ evidence I will focus my findings on issues relevant to determining X’s long term best interests.
Section 60CC(2) – primary considerations
(a) the benefit to the child of having a meaningful relationship with both parents
Both parties acknowledge that X has a meaningful relationship with each of his parents. This was confirmed by Ms M who noted that X relates comfortably and happily with both parents and has a warm and loving relationship with each of his parents.[12]
(b) the need to protect the child from physical or psychological harm from being exposed to abuse, neglect or family violence
[12] Affidavit of Mr B, Annexure B2, Family Assessment Report dated 25 November 2016 at p.10
Both parties are competent, loving parents and I am satisfied that X is not at risk of exposure to abuse or neglect in either parent’s care. The mother alleges the father was violent during the parties’ relationship and that he assaulted her around the time of separation, leaving her with bruising. The father concedes that he was physically violent towards the mother on one occasion earlier in the relationship but denies the mother’s further allegations.
It is well understood that family violence includes verbal and emotional violence as well as physical violence. I will set out my findings in relation to the allegations of family violence elsewhere in this judgment, but I conclude that X is not at risk of further exposure to family violence in the care of either parent.
Section 60CC(3) additional considerations
(a) any views expressed by the child
X was not yet four years of age when the family assessment took place. He told Ms M that he was a happy boy, “I am happy all the time” and that he was happy at daddy’s,[13] but X was not sufficiently mature to express any view about his parenting arrangements.
[13] Ibid, Family Assessment Report, p.6
(b) the nature of the child’s relationship with parents and other significant people
The mother has been X’s primary caregiver and Ms M commented that he is probably more reliant upon his mother, at this young age. Equally, Ms M noted in her report that X transitioned easily between the parties and interacted warmly and comfortably with both of his parents. I am satisfied that X enjoys a strong and loving relationship with each of his parents.
X has a developing relationship with Mr S and appeared to interact comfortably with him during the assessment process. Neither parent has any other extended family living in Adelaide but the father has friends with young children and he considers these relationships are important for X.
Both parties’ parents and extended family remain living in China. Each party has travelled with X to China on numerous occasions and both the maternal and paternal grandparents have also travelled to Australia for extended periods.
I am satisfied both parents will support X’s ongoing relationship with his extended family.
(c) the extent to which each parent has taken the opportunity to participate in major parenting decisions and to spend time or communicate with X;
(f) each party’s parenting capacity; and
each party’s attitude towards X and the responsibilities of parenthood
I will discuss these considerations together as they are interrelated.
Both parents are loving and committed parents. In the past the mother has assumed more of the decision making responsibility regarding X’s care, but this reflects her role as his primary caregiver, rather than any lack of interest on behalf of the father. The father has maintained an active and meaningful presence in X’s life and has done everything possible to ensure that X spends regular time in his care.
Both parties are able to provide for X’s day to day care and support his emotional and intellectual needs as he grows older. It is clear from their evidence and their interviews with Ms M that X’s welfare is their highest priority. One example of their dedication to their son is that both parents will abide the Court order in relation to any relocation. From the mother’s perspective, she will remain living in Adelaide if X is not allowed to relocate to Perth. From the father’s perspective, he will move to live in Perth, in the event X is allowed to relocate.
The parties have been able to discuss issues in relation to X’s attendance at childcare and kindergarten. For example, both parents agreed that it was important for X to attend childcare as this will assist in his English language skills and his social development. They have also discussed potential school enrolments for X and both parties agree that they were able to discuss these matters sensibly, in a child focussed manner.
(ca) the extent to which each parent has maintained X
The father has not paid child support since the parties separated. It appears the mother has not made an application for child support, which is somewhat surprising. The end result is that the mother has met the greater share of responsibility for X’s financial support. The father gave evidence that he offered to pay child support to the mother in September 2016, but the offer was not taken up by her.
(d) the likely effect of any changes in the child’s circumstances
X has lived in Adelaide since his birth. The father says that he and X have an established social network here in Adelaide, which will be disrupted if X moves to Perth. Clearly if X moves to Perth and his father is unable to follow him, or chooses not to, there would be a significant impact upon X’s relationship with his father. I take this potential impact into account, although I note the father’s evidence was that he would relocate to Perth as well if X is permitted to move.
The father seeks to increase X’s time in his care, progressing to equal time over the next three to four years. This would be a significant change for X, who has lived in his mother’s primary care since the parties separated in 2015.
X has not yet commenced school. That minimises the disruption that he would experience if he moves to Perth. He would be able to commence school there and develop new friendship groups, just as he would do if he commences school in Adelaide.
(e) the practical difficulty and expense of the child spending time with and communicating with each parent
There are no practical difficulties in relation to handovers at the present time while both parents are living in Adelaide. I am confident the parties would be able to agree upon a sensible handover arrangement if they are both living in the same city.
Clearly, if the mother and X move to Perth and the father remains living in Adelaide, there will be significant costs and difficulties involved in travel arrangements. Either the father would need to fly regularly to Perth to spend time with X, or X would need to travel by plane to Adelaide to spend school holiday time with his father. Given X’s age, X may also need to be accompanied on any flights, until he is old enough to travel alone.
The mother is presently unemployed but anticipates that she and her husband will be earning an income through the (omitted business), purchased by them in Perth. The father earns a modest income as a (occupation omitted). Both parties gave evidence that they would be able to contribute to the cost of any interstate travel, but there was limited evidence on this topic.
(g) the maturity, sex, lifestyle, culture and traditions of the child and his parents
X is not yet five years old. Both parents have deep links to their Chinese heritage and I am confident they will ensure that X also develops a strong appreciation of his Chinese heritage and culture. Ms M noted that X speaks English well and he is growing up bi-lingual in both English and Mandarin, which will be a considerable advantage for X when he enters the workforce later in life.
(j) any family violence; (k) any family violence orders; and s.60CG risk of family violence
There are no family violence orders relevant to these proceedings, but the mother alleges that the father was verbally, emotionally and physically abusive to her during the relationship. The father agrees that the marriage was unhappy but denies that he frequently behaved aggressively towards the mother.
The father concedes there was one occasion when, in the course of an argument on 22 December 2010, he slapped the mother. He gave evidence that his actions were in response to the mother’s own physical aggression towards him, but made it clear that he felt ashamed of his actions and had apologised for his behaviour. The father denies any other incidents of physical violence.
The mother alleges that he was physically and emotionally violent on numerous occasions. She says the father physically assaulted her twice in the period leading up to the separation; once in February 2015 while the parties were in China, after she asked him for a divorce, and again prior to their final separation in May 2015.
The mother tendered photographs arising from the incident in May 2015.[14] The photographs show bruising on her arm and marks that appear to be at the back of the mother’s neck or shoulder, consistent with the mother’s allegation that the father grabbed her by the arm. Again, the father conceded that the parties had been arguing, but denied grabbing the mother by the arm, saying rather that he may have lightly touched the mother on her clothing or sleeve.
[14] Exhibit M1
I accept the father believes his recollection is accurate, but the photographs are more consistent with the mother’s allegations. Both parties would have been in a highly emotional state across the day. I accept that the father does not remember grabbing the mother’s arm but I conclude it is more likely that he did so and that the mother suffered bruising as a result.
Family violence is always a matter of significant concern for the Court and must be taken into account when determining any child’s future parenting arrangements. However, I note there are no allegations of ongoing violent or aggressive behaviour by the father after separation. In the circumstances, I do not consider that X or the mother are at risk of further violent behaviour from the father.
(l) whether it would be preferable to make orders least likely to lead to further proceedings
Clearly it is in every child’s best interests to bring the Court proceedings to a conclusion. I am relatively confident that both parties will respect the Court order and will ensure that they manage their future parenting relationship, and care responsibilities for X, within the terms of the orders as pronounced by the Court.
Both parents support X’s relationship with the other party and will continue to do so, which should minimise the risk of further Court proceedings.
(m) any other relevant fact or circumstance
The mother and her husband have purchased a (omitted business) business in the Perth suburb of (omitted). They first inspected the business in (omitted) 2016, after it had been recommended to Mr Lo by a friend. The mother signed a first Contract to Purchase on (omitted) 2016 and re‑signed the Contract in (omitted) 2016, apparently on advice from their accountant.
The mother and Mr Lo entered into this Contract knowing that the Court had not yet determined where X should live. They decided to go ahead with the purchase on the basis that the mother will remain in Adelaide with X, if he is not permitted to live in Perth. Her husband will continue to run the (omitted business) in Perth for a period of time, but they would eventually sell the business so that he can return to live with the mother and X in Adelaide.
The father argues that the mother was attempting to manipulate the Court process by entering into such a significant financial commitment before her relocation application was determined. I appreciate the father’s concern in that regard but I accept the mother’s evidence as set out in paragraphs 1.1.5 – 1.2.7 of her trial Affidavit. The mother and her husband have clearly considered their options in the event X is not permitted to live in Perth. I accept her evidence that she and her husband decided the opportunity was “too good to miss” and will have to manage running the (business omitted), their domestic arrangements and the eventual sale of the business, in the event X and the mother remain in Adelaide. This was clearly a risky decision for them to take, but a decision that was open to them nonetheless.
Conclusion
Parental responsibility
Both parties seek an order for equal shared parental responsibility and I agree that order is appropriate and in X’s best interests. Both parties are committed, dedicated parents and I am confident their co‑parenting relationship is sufficiently robust that they will be able to negotiate and reach agreement about major issues affecting X’s care, welfare and development.
An order for equal shared parental responsibility triggers the effect of s.65DAA. The Court must consider whether it is in X’s best interests that he live equally with each of his parents, provided that outcome is also reasonably practicable. Alternatively, the Court must consider whether it is in X’s best interests that he spend substantial and significant time in the care of each parent, provided that such an outcome is also reasonably practicable.
X’s future living arrangements
The father concedes that X should remain living in the mother’s primary care at present, given his young age. The father acknowledges that X needs to develop a greater level of emotional maturity and independence before progressing to a week about parenting regime. He proposes that X spend five nights per fortnight in his care until 2021 when the parties thereafter implement a week about care arrangement. Clearly, the father’s proposals will only be reasonable and practical if the parties are living in the same city.
The Court is faced with a particularly difficult dilemma in this matter. Whatever the Court’s decision, one parent will feel frustrated and unhappy, forced to live in a city that is not of their choosing.
The Applicant father has a settled life here in Adelaide, with stable employment and accommodation. He has developed a social network. He is well regarded by his employer and has been able to negotiate some flexibility in his working arrangements to take account of his parenting responsibilities for X.
The father’s commitment to X is such that he will likely follow X to Perth, if necessary. Should that occur, however, he will have to re‑establish himself in terms of employment and accommodation. The father is reasonably confident that he would be able to obtain a position at the (omitted) in Perth but he would not have the same established relationship with that (omitted) as he has with his current employer here in Adelaide.
The father will retain significant assets and I am confident he will be able to obtain accommodation for himself in Perth, but there will inevitably be significant disruption for him if he relocates. He will lose the support of those friendships he has established here in Adelaide and will have to establish a new social network.
The mother’s situation is the reverse. Neither she or her husband have been able to obtain stable employment in Adelaide. She feels isolated and ostracised by the local Chinese community and feels judged by them for seeking a divorce from the father. The father disputes this is the case but I accept that is the mother’s perception. She and her husband see life in Perth as a fresh start, with better financial opportunities. The mother argues that their ability to purchase the (omitted business) business in Perth is clear proof of the better financial opportunities available to them in Western Australia.
The relevant authorities are clear that parents are entitled to travel and establish themselves in whatever location they consider is most beneficial for them. Nonetheless the Court must make parenting orders that are in the best interests of X, not in the best interests of either of his parents. The impact of the Court’s decision will obviously affect each parent but the impact upon the parties assumes greater relevance insofar as it also affects my assessment of X’s best interests.
As discussed previously, X is not due to commence school until 2018. A move to Perth may affect X’s friendship group, but these social networks develop more strongly when children are of school age. I am confident that X will make new friends, whether at school in Adelaide, or in Perth.
Both parties have demonstrated their capacity to establish themselves in a new community, as occurred when they migrated to Australia. While the father will feel disappointed if X is allowed to relocate to Perth, I am confident he will be able to make the transition, as indicated in his evidence.
X’s relationship with significant extended family members will continue on the same basis, whether X lives in Adelaide or Perth. I am confident his paternal and maternal grandparents will continue to visit X and his parents wherever they are living.
Both parties have given evidence that they will reside in whichever city X is living in. Accordingly X will continue to have the ongoing and regular support and parenting involvement of both parties as he grows up. I have no doubt that the parties will ensure that he is enrolled in a suitable school, whether in Adelaide or Perth.
The mother will inevitably feel happier and settled if she is allowed to relocate to Perth. She feels more confident in being able to establish a social network in Perth compared to Adelaide, where she feels harshly judged by the local Chinese community. She also feels more confident in her capacity to provide a secure financial future for X and their family unit.
In the event X remains in Adelaide, the mother will do likewise, but she will inevitably feel trapped and frustrated and will blame the father for her situation. It is almost inevitable that this would undermine the co‑parenting relationship between the parties.
Counsel for the father argued that the move to Perth would impose upon the father the same conditions that the mother complains about in Adelaide, such as social isolation, lack of support networks and limited employment opportunities. The father’s frustration at having his life in Adelaide disrupted also has the potential to undermine the parties’ co-parenting relationship. However, should the father decide to move, he would be doing so to maintain his relationship with X, which will be a strong motivating factor.
On both parties’ proposals, the mother will continue to be X’s primary caregiver for the next few years. Accordingly, her emotional wellbeing will have a greater impact upon X, whether positive or negative. This is a significant factor in my determinations.
I also take into account the possibility that the father may not relocate. Ms M’s report was clear that it would not be in X’s best interest to have his parents living in different cities. Ms M ultimately recommended that if the parties could not agree on a joint relocation to Perth, then X should remain living in Adelaide, but she acknowledged that X would adapt to living in Perth if he had the ongoing support of both parents.
Ms M did not identify any other advantages for X in living in Adelaide compared with Perth, beyond the obvious advantage of maintaining his relationship with the father. Ms M further acknowledged that one parent or the other would be negatively affected, depending upon where X is permitted to live. She did not identify any strong argument why that location should be Adelaide in the event the parents could not agree and I disregard this conclusion in Ms M’s report.
This is a very finely balanced matter. Both parties are putting forward appropriate, child focussed parenting proposals, which demonstrates their commitment to X’s welfare. Taking into account all of the evidence I have heard in this matter, I conclude that X should be permitted to relocate with the mother to Perth.
The mother will benefit from the move as she will feel settled and content, which will have a positive impact upon her parenting and upon X’s emotional welfare in her care. The father is likely to follow X, which means that X will continue to enjoy substantial time in each parent’s care.
I conclude that X should remain living in Adelaide until late 2017 so that he can continue to spend substantial and significant time in his father’s care over the coming months. It is hoped that the father will be able to use this time to make his own arrangements in relation to employment and accommodation in Perth, so that both parents will be settled in Western Australia prior to X commencing school in 2018.
Obviously the parties should be permitted to negotiate an earlier timeframe, if they choose, but that would depend upon the father’s circumstances. The mother acknowledged that she and X would be able to remain in Adelaide this year, even though her husband will have moved to Perth to run the (omitted business).
I conclude that X should be allowed to relocate to Perth whether or not his father decides to follow. There is no doubt the mother’s emotional wellbeing will be enhanced if she and her husband are allowed to establish their new life together in Perth. This can only enhance her parenting capacity, which is to X’s ultimate benefit. It will be a matter for the father to decide the extent of his future parenting role in X’s life.
Equal time or substantial and significant time
X has spent progressively longer time in his father’s care as he has grown older and become more emotionally mature. The mother says that X is settled in the present care arrangement and considers four nights per fortnight is an appropriate care regime going forward, but proposes that X continue to spend two nights each week with his father, from Wednesday until Friday in one week and Friday to Sunday in the next week, so that X can enjoy an uninterrupted weekend in each parent’s care.
The mother opposes X spending longer blocks of time in the father’s care. While she acknowledges X enjoys a strong and loving relationship with his father, she reminds the Court that X had previously experienced difficulties in separating from her care, a situation that she says still continues to some extent.
Notwithstanding the mother’s evidence, I am confident that X has a secure relationship with his father and will adjust to spending three nights in his father’s care in alternate weeks.
Once X is settled and has made the adjustment to school in the new year, I see no reason why he should not spend one half of each school holiday period with each parent, commencing in the April 2018 school holidays. The father may have limited annual leave and this may affect his availability to care for X during school holiday periods, but I am confident that he would make appropriate arrangements in those circumstances and it is not necessary to place any restrictions upon him. The mother will be self-employed and have greater flexibility, but it is likely that she will retain some responsibility for operating the (omitted business) business even when X is in her care during school holidays. As with the father, I am confident the mother will make appropriate arrangements for X’s care.
The father seeks orders that X progress to a week about care arrangement by 2021, when X will be approaching ten years of age. Ms M agreed that X has a strong relationship with both of his parents and that they are presently able to communicate appropriately with each other. Nonetheless, Ms M remained cautious about recommending an increase to week about care, given X is still so young and his views about an equal care living arrangement in the future are unknown.
Ms M noted that X was probably still emotionally dependent upon his mother, given his young age and that any change to a week about parenting arrangement is a topic that the parties should discuss, once X is older. I place considerable weight upon Ms M’s evidence and her recommendations in that regard.
I conclude that it is in X’s best interests that he continue to spend four nights per fortnight with his father over the next few months, but will vary the regime so that he spends three consecutive nights from Thursday until Sunday in alternate weeks and overnight each intervening Thursday. This allows X to enjoy a full weekend in each parent’s care.
Once X has settled into school during first term in 2018, I conclude that he should spend an additional night in his father’s care in alternate weeks, from Thursday after school until Monday morning, commencing in second term 2018. This will set up a regular pattern for X where he will be spending each Thursday night in his father’s care during school term time and continue to enjoy a full weekend in each parent’s care. Both parties will be able to arrange any extracurricular activities during X’s time in their care.
The parties are generally in agreement in relation to other parenting issues, including contact with X’s school or health professionals. While the mother hopes to be able to travel overseas with X, she concedes that his name will remain on the Airport Watch List, on the basis that the parties will discuss that and other parenting issues at mediation in a few years’ time.
The father made his intention clear that he will relocate if X moves to Perth, but I will pronounce orders in relation to X’s time spent with his father in Adelaide, should that not eventuate. Given the distance, it would be impractical for X to travel to Adelaide during school terms, but he should be able to enjoy extended time in his father’s care during school holidays. Once X is a little older, I see no great difficulty with him spending half of the Christmas school holidays with his father in a three week block, commencing in December 2019.
The father may choose to travel to Perth and spend time with X and I will pronounce orders in that regard. I consider fourteen days notice should be sufficient and I am confident the parties will be able to negotiate the handover times on those occasions. Telephone or Facetime communication should also continue at least three times each week.
I now make orders as published at the commencement of these Reasons and I am satisfied that these orders are in X’s best interests.
Property settlement
Legal principles
The relevant legal principles governing any application for property settlement are set out in Part VIII of the Family Law Act 1975. Section 79(1) states the Court may make such orders between the parties as it considers appropriate. Section 79(2) specifies that the Court cannot make an order for property settlement unless it is just and equitable to do so. The High Court noted in Stanford & Stanford[15] that this condition is generally met where the parties have separated, because “the common use of property” by the parties is no longer viable.
[15] Stanford & Stanford [2012] HCA 52 at para.42
In considering the terms of any such order, s.79(4) requires the Court to take into account the parties’ contribution to the maintenance and acquisition of the asset pool during the marriage, including direct and indirect financial contributions, direct or indirect non-financial contributions and any contribution to the overall welfare of the family, including in the capacity of homemaker or parent.
Section 79(4)(d) directs the Court to consider the impact of any proposed order upon the earning capacity of either party. Section 79(4)(e) refers the Court to the matters set out in s.75(2), factors that generally relate to each party’s future needs.
The High Court in Stanford & Stanford went on to identify three “fundamental propositions” to guide trial Judges determining property settlement proceedings. These propositions were summarised by the Full Court in Bevan & Bevan[16] as follows:
“1.Determination of a just and equitable outcome in an application for property settlement begins with the identification of the existing legal and equitable 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.The 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.”[17]
[16] Bevan & Bevan [2013] FamCAFC 116
[17] ibid, at para.73
In determining any application for property settlement, the Court is not embarking upon an arithmetical exercise but rather an examination of all the relevant factors set out in s.79(4). Earlier Full Court authorities have identified a four step process that can assist the Court in reaching a just and equitable decision.[18]
[18] Lee Steere & Lee Steere (1998) FLC 91-626;
Assuming the Court is satisfied that it is just and equitable to make an order for property settlement, the Court must identify the parties’ legal and equitable interests in the assets arising from their relationship, together with their liabilities. The Court should then assess each party’s contributions during the relationship in accordance with s.79(4)(a)-(c).
The third step requires the Court to consider the range of factors set out in s.79(4)(d)-(g), including the future needs factors identified in s.75(2). The Court should then consider its findings and, if the Court is satisfied that it is just and equitable to do so, make orders adjusting the parties’ property interests.
The Full Court in Bevan reminded trial Judges that the “four step process” is not legislatively mandated. Rather, it provides a structured process towards the ultimate requirement, which is to ensure that a property settlement order is only made when the Court is satisfied that it is just and equitable to do so and that the terms of the order itself are also just and equitable.[19]
[19] Bevan & Bevan, supra, para.86
Asset pool
The parties agree upon the list of relevant matrimonial assets acquired during their marriage but the value of some items remain in dispute.
The husband’s apartment in China
The parties acknowledged that the husband’s parents purchased a property in his name in late 2008 for the sum of approximately A$200,000. The wife alleges the property must have increased in value and argues it should be included in the asset pool with an estimated value of $360,000 but she has not provided any valuation evidence in that regard. Neither party has seen fit to obtain a valuation in relation to this property. The husband argues the property should be included in the asset pool, but at its purchase price of $200,000.
In the circumstances, I see no option but to include the property in the asset pool in the sum of $200,000. I appreciate that the property may be worth more than this but I am unable to make any formal finding in that regard, given the absence of any evidence as to valuation.
Proceeds of sale of Mazda motor vehicle
The husband gave evidence that he sold this vehicle in December 2016 for the sum of $9,500. He notes that $9,000 of those funds was deposited into his (omitted) Bank account no (omitted) and is reflected in his current savings. He therefore argues the Mazda motor vehicle should not be included as a separate item in the asset pool.
The wife estimates the value of this vehicle at $15,000 but there is no evidence to justify this figure. In the circumstances I decline to value the vehicle at $15,000. The sum of $9,000 is already reflected in the husband’s savings and I decline to make any further adjustment of $500, given the size of the overall asset pool.
The wife’s Toyota (omitted) motor vehicle
The parties agree that the wife retained savings at separation in the sum of $179,000. She then spent $34,200 to purchase her Toyota (omitted) motor vehicle. In circumstances where the motor vehicle was purchased two years ago, I accept that it is likely to have dropped in value. I will include the (omitted) motor vehicle at the value of $29,000.
While the vehicle was purchased with savings retained by the wife, it is well understood that parties are not expected to go into a state of suspended financial animation until their property settlement is finalised. It is perfectly reasonable for a party to purchase a motor vehicle after separation. The funds used by the wife are still substantially represented in the asset pool, even though the vehicle is now worth less than the original purchase price.
Household contents in either party’s possession
The husband argues that the household furnishings and effects he retained at separation would be valued at approximately $4,500 whereas the wife estimates their value at approximately $10,000. Neither party obtained a valuation in relation to these items. Counsel for the husband argues that the wife did not make any positive claim as to value, but the contents of Property A are clearly listed in her trial Affidavit.[20]
[20] Wife’s trial affidavit, para 184
Neither party was cross examined on this topic and the Court has been given little assistance. I am unable to determine the value of the contents at Property A, nor can I make any finding as to the value of the wife’s furnishings and effects currently in her possession.
Wife’s savings in China
The husband claims the wife retained savings in a (omitted) Bank account in the sum of approximately $30,000. The wife disputed this, saying that she held minimal funds in that account at separation. The husband called for the production of the bank statements, but the wife was unable to produce them. Counsel for the husband argues that the Court should draw an adverse inference from the wife’s failure to produce these bank statements.
I am not prepared to draw an adverse conclusion in that regard. The wife’s answers in cross examination were quite candid. She agreed that she operated a (omitted) Bank account and would purchase goods in Australia and send them to family members in China who would then pay for those items by depositing funds into this account. She went on to say that the parties would then generally transfer the money into their own joint account.
The wife agreed there would have been funds in the (omitted) Bank account but recalled transferring the funds into the parties’ joint account prior to travelling to China in (omitted) 2014. She gave evidence that any funds remaining in the account in early 2015 would have been used to purchase Australian dollars which they would have brought back with them to Australia in (omitted) 2015.
Both parties gave evidence about the regular transfer of funds between accounts in China to Australia, whether by bank transfer or by cash. I find the wife’s evidence entirely plausible and I am satisfied that she did not hold any significant funds in China.
The wife’s apartment in China
The wife was cross examined at length in relation to the father’s allegation that she owned an apartment in China. The wife denied the allegation, saying that she lived in an apartment owned by her parents and that she had never owned the apartment. The husband did not pursue that issue in his closing submissions and I exclude this item from the asset pool.
Funds retained by wife at separation
The wife retained the sum of approximately $173,000 at separation. The husband says this reflected a part payment of the Divorce Agreement reached between the parties whilst in China. The wife acknowledges that the parties signed the Divorce Agreement in China which included a property settlement to the effect that she would receive a cash payment in the sum of $290,000. While the Divorce Agreement sets out the parties agreement at that time, it does not have any further status in these proceedings, in my view.
The wife further acknowledges that the husband’s parents paid a substantial sum into the parties’ savings account, to assist him in paying out the wife pursuant to the Divorce Agreement. The wife withdrew the sum of $179,000 from those funds in the parties’ joint account at separation. At that time she did not retain control of any other property from the parties’ marriage. She was working part time and had no other financial resources available to her. She further points to the fact that the father has not paid any child support for X since separation.
The wife concedes the amount of $56,853 was spent by her on legal fees and should properly be added back into the asset pool. In her trial Affidavit she sets out how she spent the balance of the funds. I have already dealt with the purchase of her Toyota (omitted) motor vehicle and will not treat that sum of $34,500 as a potential add back. When these two sums are deducted, the balance remaining in dispute is approximately $81,000.
The wife has spent the remaining monies but the Court needs to be satisfied that such expenditure was reasonable, rather than a premature distribution of assets. The wife was cross examined about her expenditure which was set out in her trial affidavit. [21] I am satisfied that she spent approximately $20,000 on furnishings and household effects after separation, to establish a new home for herself and X. That is a legitimate item of expenditure and I decline to add back that portion of the funds into the asset pool. Similarly, the wife’s decision to undertake a TAFE training course was appropriate, as she was endeavouring to improve her employment skills. I decline to add back the sum of $4,400 into the asset pool.
[21] Wife’s trial affidavit at para. 185
Given the wife’s relatively low income, it is reasonable that she subsidise some of her regular outgoings from the funds retained by her at separation. It was clarified, during cross examination, that X’s childcare fees were closer to $60 per week rather than $100 per week. This equates to childcare fees across the 90 week period of approximately $5,400, rather than $9,000, as initially claimed by the wife.
Most of the other claimed expenses such as rent, household supplies, utilities should be seen as the joint responsibility of the wife and her husband. I accept that the wife would have struggled to meet even her share of these household expenses, given her limited income, but I am not satisfied all of the expenses listed by her were paid solely from these monies. The expenses may have been paid for from the funds brought into the relationship by her husband, for example, or from her salary or parenting benefits.
Taking into account the wife’s limited income and making some allowance for Mr S’s financial contribution, I will allow 50% of the wife’s claimed expenditure, excluding the item described as “general living expenses”, which is too vague to be of any assistance to the Court.
I find the wife’s reasonable expenditure as follows:
Purchase of new furnishings and effects E$20,000
TAFE fees $4,400
50% of X’s childcare fees E2,700
50% of rent $4,290
50% of gas $640
50% of electricity bills $977
50% of internet and mobile bills $850
50% of water bills $660
50% of home and car insurance $1,000
50% of car registration $28050% of Council fees $750
TOTAL $36,547The balance of the funds retained by the wife is approximately $81,000. When the wife’s “reasonable expenditure” is deducted, the balance remaining is $445453. I conclude that these funds this sum should be added back into the pool as a premature distribution to the wife, together with the wife’s legal fees in the sum of $56,853, totalling $101,306.
Assets purchased by wife with her husband after separation
In October 2015, the wife and her husband purchased a property at Property C for the sum of $860,000 (“the Property C property”). They borrowed $645,000 by way of mortgage from (omitted) and the balance of the purchase price was paid from their joint account, which consisted largely of funds brought into the marriage by the wife’s husband. The wife holds a legal interest in the property, as she owns it jointly with her husband. However, the wife argues that she has made no direct financial contribution towards the Property C property and accordingly, her legal interest in the property should not be included as part of the matrimonial asset pool between the parties.
The husband argues that the wife and Mr S intermingled their funds within their joint account. Given that the wife deposited some of the funds retained by her at separation into the joint account, there is a direct financial link from the assets of this marriage through to the Property C property now owned by the wife and her husband. Therefore her interest in that property must be considered within the matrimonial asset pool.
I agree that there is a direct link between the funds retained by the wife at separation and the bank account from which the deposit for the Property C property was paid. However, the wife’s contribution to that deposit can only have come from the savings she retained at separation, given that her income has been very modest.
I have determined that the wife has legitimately and reasonably spent a portion of those funds and that the balance should be added back into the asset pool, as a premature distribution of matrimonial assets. The husband cannot have it both ways. He cannot seek to add back the funds withdrawn by the wife at separation and at the same time argue the wife has contributed substantially to the equity in the Property C property.
The Property C property is presently valued at $860,000. The mortgage outstanding prior to the purchase of the (omitted business) was approximately $400,000 leaving an equity of approximately $460,000. The wife had very limited capacity to make a direct financial contribution to this equity. There is no doubt that the wife has a legal entitlement to 50% of the equity as she owns the property jointly with her husband, but it would be unjust and inequitable to treat her interest in the Property C property in the same manner as the other assets that were jointly acquired by these parties during their relationship. The property was purchased in the joint names of the wife and Mr S, but I am satisfied that the deposit came from funds provided by her present husband.
The (omitted business)
The wife and her husband purchased this property for $380,000 in (omitted) 2016, consisting of $140,000 cash with the balance obtained by way of extending the home loan secured over the former matrimonial home by a further $240,000.
The business is registered in the wife’s sole name, as her husband is not an Australian citizen. While she is the sole legal owner, there is no doubt it is an asset that was jointly acquired by the wife and her husband for their mutual benefit.
Accordingly, I conclude that the wife’s legal interest in the business should be valued at the present equity of $140,000 but her equitable interest should be valued at $70,000 as she holds one half of that interest on trust for her husband.
As with the Property C property, the wife’s direct contribution to the equity in this business is nominal. While these two assets are owned by one of the parties to the marriage and must be considered by the Court, I conclude that they should be dealt with as a separate pool, with very different findings in relation to contribution and any s.75(2) adjustment.
Neither party seeks a superannuation splitting order. The value of the parties’ superannuation interests is relatively small and I conclude the superannuation should be added into the Main Asset Pool, rather than dealt with separately.
Accordingly the asset pool is as follows:
Pool One – Main Asset Pool
Ownership
Asset
Value
Joint Property A $760,000 Joint Property B $540,000 Husband Apartment in China $200,000 Joint Toyota (omitted) motor vehicle $30,000 Wife (omitted) motor vehicle $29,000 Husband (omitted) motorbike $1,500 Wife Household contents Unknown Husband Household contents Unknown Husband
Savings accounts (including proceeds of sale of Mazda motor vehicle)
$18,130
Wife
Funds added back into asset pool
$101,306
Total tangible assets
$1,679,936
Husband (omitted) Superannuation $24,876 Wife (omitted) Superannuation $3,733 $1,708,545
Less Liabilities
Joint (omitted) mortgage secured over Property B $169,895 NET ASSET POOL
$1,538,650
Pool Two - Wife’s assets acquired after separation
50% legal interest in equity held in the property at Property C
E$230,000
50% equitable interest in (omitted business) business
$70,000
$300,000
Contributions
Both parties have made significant direct financial contributions to the relationship, particularly through the financial support of their families. The husband was given an apartment in China and retains that property. The precise value of the property is not known, as no valuation has been obtained. Whatever the valuation, there is no doubt that his parents provided the funds for the purchase of this apartment.
The wife’s family gifted their daughter at least $290,000 and the wife claims a further $30,000 was provided by way of cash payments. Obviously it is difficult to prove such an amount was provided by cash and in the circumstances, I find the direct financial contributions from the wife’s family were at least $290,000.
The parties generally agree that the husband’s parents contributed approximately $770,000 during the parties’ relationship and a further $145,000 after the parties’ separation. In addition, the husband received the sum of $15,448 from his brother when the parties purchased their car in (omitted) 2009.
The wife concedes that the direct financial contributions on behalf of the husband were approximately three times greater than the financial assistance provided by her parents. Clearly the financial support from both families was significant but the husband’s direct contributions were substantially greater. This must be reflected in the assessment of the parties’ direct financial contributions.
Both parties worked during the marriage and used their income for the benefit of the family. The wife ceased employment once X was born. Both parents were actively involved in X’s care but the wife was X’s primary caregiver and made a greater contribution in the role of homemaker and parent. She has continued to provide primary care for X after separation. I conclude that the parties’ other non financial contributions should be assessed as equal, whether direct or indirect.
The husband has made a significantly greater direct financial contribution through the funds provided by his parents. These funds on behalf of the husband provided the basis for the parties’ strong financial position at the present time. Taking into account all of the above, I conclude that the husband’s contribution to the main asset pool should be assessed at 80% and the wife’s contributions at 20%.
In relation to the wife’s assets purchased after separation, I conclude that the husband has made no direct contribution to these assets. The savings retained by the wife at separation have been accounted for, in terms of an amount allowed as her reasonable expenditure and by way of monies added back into the asset pool. Accordingly it would be unjust and inequitable to conclude that the wife used these same funds as a contribution towards the Property C property or the (omitted business) business.
Section 75(2) factors
The husband argues there should be no adjustment on s.75(2) factors, whereas the wife seeks a 10% adjustment in her favour.
Both parties are in their early 30s and are in good health. They have both demonstrated their capacity to engage productively in the workforce. The husband is likely to continue in salaried employment whereas the wife will be running a small business with her new husband. Both parties will retain the assets and financial resources allocated to them as a result of this judgment and will hold a significant asset base. Both parties will be able to plan appropriately for their future.
The parties’ child X is only four years of age. He will be remaining in his mother’s primary care for the foreseeable future. She has been the parent meeting the bulk of X’s expenses and will continue to provide for his financial support in the coming years.
Neither party has a duty to support any other person. The husband has not paid child support in the past but that situation may change in the future. The wife is eligible to receive a parenting allowance from the Commonwealth Government but neither party is eligible for any other government support.
The parties’ marriage was relatively short and neither party could be seen to have made a significant contribution to the income or earning capacity of the other party in a way that should be taken into account in these reasons. The parties lived a modest lifestyle during their relationship and have continued to live modestly since that time. The wife has re-married and has the benefit of enjoying the emotional and financial support provided by her husband and his financial contribution to their domestic economy.
The wife wishes to continue in her role as X’s primary caregiver. Her parenting responsibilities may impact upon the extent to which she can be involved in the day to day running of the (omitted business) but that is uncertain. It may be that the wife will be able to supervise X after school whilst still assisting in the business.
The wife anticipates that she and her husband will earn a joint gross income of approximately $120,000 per year, based on the earlier Profit and Loss Statements they inspected. The husband presently earns approximately $50,000 through his employment as a (occupation omitted). Both parties will be leaving the marriage in a strong financial position although the wife’s investment in the (omitted business) business might be seen as a riskier investment than real estate investments.
The husband presently receives $1,820 per month in rent from the Property B property. As at January 2017, the mortgage repayments due on that property were approximately $1,700 per month with the balance of rental income directed to other expenses. It may be that the husband will sell this property and may incur Capital Gains Tax. No evidence was placed before me in that regard, but I take this into account as a potential liability.
In light of these findings, I conclude the mother’s primary parenting responsibility warrants an adjustment in her favour, but the extent of that adjustment is modest taking into account the parties are likely to earn similar incomes and the husband’s potential capital gains loss. I conclude that an adjustment of 5% in the wife’s favour is appropriate in relation to the main asset pool. No further adjustment is necessary in relation to the second asset pool.
Conclusion
The net value of the main asset pool is $1,538,650. As a result of the above findings, the husband will retain 75% of the main asset pool to the value of $1,153,987 and the wife will retain 25% to the value of $384,663. The wife will retain her legal and equitable interest in the Property C property and the (omitted business) business, free from any further claim by the husband.
In relation to the main asset pool the wife has received the sum of $101,306 retained by her at separation, her Toyota (omitted) motor vehicle valued at $29,000 and her superannuation valued at $3,733, to a total value of $134,039. Therefore she requires a further settlement payment of $250,624. The husband will retain the Property A and Property B properties in Australia, together with his apartment in China. It will be a matter for the husband as to whether he borrows the funds to pay the wife’s settlement, or sells real estate to raise the necessary funds.
Based on the above findings, each party will retain assets as follows:
Husband Property A property $760,000 Property B property $540,000 Apartment in China $200,000 Toyota (omitted) motor vehicle $30,000 (omitted) motor bike $1,500 Savings account $18,130 Superannuation $24,876 Total Assets $1,574,506 Less mortgage secured over Property B $169,895 Less Settlement payment due to wife $250,624 $420,519 Net Assets to be retained by husband $1,153,987 Wife
Toyota motor vehicle $29,000 Add back of funds retained by wife $101,306 Superannuation $3,733 $134,039 Plus Settlement payment from the husband
$250,624
Assets from main asset pool to be retained by the wife $384,663 Plus wife’s ½ interest in (omitted business) $70,000 Plus wife’s ½ interest in Property C property $230,000 $300,000 Total Assets to be retained by wife $684,663
The husband retains matrimonial assets of substantially greater value when compared to the wife, but that reflects the greater contribution made by or on behalf of the husband. It also takes into account that the wife has had the benefit of over $100,000 retained by her at separation, funds that would otherwise have been available for distribution between the parties.
Having reached this conclusion, the Court should step back and consider both parties’ overall financial circumstances. Both parties in these proceedings are retaining assets of significant value overall. Both parties are likely to continue in the paid workforce. The husband will be left with substantial debt, but he will nonetheless be retaining net assets valued at over $1.1 million and is well placed to further enhance his future financial security.
The wife will be retaining assets valued in excess of $680,000. She and her husband also retain significant debt but are committed to the success of their new business. I am satisfied this outcome also provides appropriately for the wife’s future financial security.
Taking into account all of the above, I am satisfied this outcome reflects a just and equitable settlement as between the parties. I now make orders as published at the commencement of these Reasons.
I certify that the preceding one hundred and seventy-seven (177) paragraphs are a true copy of the reasons for judgment of Judge Kelly
Date: 23 June 2017
[11] Mazorski & Albright (2007) 37 FamLR 518 @ para.26
Key Legal Topics
Areas of Law
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Family Law
Legal Concepts
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Consent
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Jurisdiction
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Remedies
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