Xiao and He

[2009] FamCA 718

FAMILY COURT OF AUSTRALIA

XIAO & HE [2009] FamCA 718

FAMILY LAW – PROPERTY SETTLEMENT – Self represented litigants

Family Law Act 1975 (Cth)

APPLICANT: Mr Xiao

RESPONDENT: Ms He

FILE NUMBER: SYC 841 of 2007

DATE DELIVERED: 7 August 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE: 10 July 2009

REPRESENTATION

FOR THE APPLICANT: In Person

FOR THE RESPONDENT: In Person

Orders

1. Subject to the other orders made herein, the parties are to do all things and sign all documents necessary to transfer the husband’s interest in the property at H in the State of New South Wales (“the H property”) to the wife subject to the registered mortgage. The transfer is to be delayed until the husband receives all of the money payable to him pursuant to these orders.

2. The parties are to forthwith cause each of the properties at Shop …, L in the State of New South Wales (“the L property”) and N in the State of New South Wales (“the N property”) to be sold through an agreed real estate agent and at an agreed sale price.

3. Upon each property being sold, as provided for herein, the parties are to apply the sale proceeds in the following manner:

   (a)       pay the costs of sale;

   (b)       discharge of registered mortgage against the title of either property; and

   (c)       payment of land tax and capital gains tax assessed against each party. 

4. Once both the L property and the N property have been sold the parties are to calculate the amount to be paid to the parties from those sale proceeds as follows:

   (a)In order to calculate the husband’s entitlement to the proceeds of the sales of the two properties the following exercise is to be undertaken:

   (i)Add the following:

   1.   $275,000 being the equity in the H property,

   2.   Net sale proceeds (i.e. what remains after payment of the items set out in order 3 hereof) of the L property;

   3.   Net sale proceeds (i.e. what remains after payment of the items set out in order 3 hereof) of the N property;

   4.   $45,000 for the wife’s other assets on the balance sheet.

   5.   $89,000 being the husband’s interest in the China property.

   (ii)Deduct from that total the wife’s debt on the balance sheet of $18,500.

   (iii)In relation to the balance, then remaining, ascertain 47.5% of same. Deduct from that sum $89,000. What then remains from the 47.5% figure is the husband’s entitlement which is to be paid to him.

   (iv)After the husband has been paid his entitlement the balance then remaining is to be paid to the wife.

5. Until the sale of the two properties (being the L property and the N property) the wife is to continue to receive the income from those properties and she is to meet the outgoings on each. The husband may continue to occupy the H property pending receipt by him of his entitlement from the sale funds as provided for in order 4. During that time he is to meet the outgoings on the property except for the mortgage.

6. The husband is to have a period of three (3) months to vacate the H property after he receives his entitlement from the orders of the Court. From the time of receipt of those funds until the husband vacates the property he is to pay $414.65 per month on the mortgage as well as meeting the other outgoings on the property until he vacates same.

7. The sale of the L and N properties is to be through an agreed real estate agent and at an agreed sale price. The wife is to nominate real estate agents to the husband until they have an agreement as to which agent will sell each property.

8. The parties have liberty to apply for further orders relating to the implementation of any of the orders made herein.

9. Each party is otherwise to retain as his or her own property absolutely any superannuation, chattel or item of personalty in their respective possession.

10. All outstanding applications be dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 841 of 2007

MR XIAO

Applicant

And

MS HE

Respondent

REASONS FOR JUDGMENT

1. The parties were married in February 1998 and separated in December 2007.

2. The husband was born in 1959 and is 50 years of age.

3. The wife was born in 1962 and is 46 years of age.

4. The parties have two children, K born in October 1999 (now nine years of age) and Y born in August 2001 (now almost eight years of age).

5. At the time of the marriage, the wife was the owner of a property at N (“the N property”) which she had purchased in 1993 for about $102,000. In order to enable that purchase she had borrowed $78,000. The stamp duty and legal costs associated with the purchase she had met from her own savings.

6. At the date of the marriage the wife also owned a Toyota Corolla motor vehicle which she had purchased in 1996 for about $7,000. There was no money owing on that vehicle. The wife otherwise had minimal savings.

7. At the time of the marriage the husband owned a Toyota Corolla motor vehicle which he had purchased in 1996. There was no money owing on that vehicle. In addition, the husband had savings of about $40,000 and he had lent a friend $20,000.  He later called up that loan.

8. At the date of the marriage, both parties were in employment. The wife worked until May 1999 when she gave up work to give birth to the first of their children, K. She returned to work in about October 2002. The wife’s recollection is that until May 1999 her income was slightly more than the husband’s. The husband disagrees with that assertion and says that throughout the cohabitation he had two jobs which collectively earned more for him than the income of the wife. I do accept the husband’s evidence on that issue. The wife concedes that when she went back to work in October 2002 her income was less than that of the husband.

9. During the marriage, the wife contributed her income from employment and she also contributed the rental from the N property. The husband agrees that following the marriage and until about 1999 the income from the N property just met the outgoings. In about 1999 the rental produced a surplus which then increased over the course of the marriage. There were no other financial contributions.

10. During the marriage the husband contributed his income from his business and employment. The savings which he brought to the marriage provided the deposit for the purchase of the property at H which the parties purchased in 1998. During the twelve month period following the purchase and before the parties moved in to occupy that property it was rented out and the rental was used to meet the mortgage expenses and provide income.

11. Throughout the marriage each of the parties contributed as a homemaker and parent. There is a difference between the parties in terms of the amount of contribution that each made. The wife says that due to the husband’s long working hours and working, in fact, two jobs, he had little time available to spend with the children and/or care for them. The wife concedes that prior to the birth of the children the husband shared with her in the domestic tasks associated with the household, although she says she did the majority of the cooking. The husband says that he was very significantly involved in the care of the children and that this was particularly so at night when he returned from work. He says he often had to shower and dress the children for bed, although it was 10.00pm at night when he returned. He also spent some hours cleaning the premises. When the parties were living in the H property and following the birth of K the husband says she had the habit of waking every night at about 1.00am and he would then attend to care for her for an hour or so. He said the wife had the luxury of being a heavy sleeper and did not wake. The wife disagrees with that assertion. I accept the husband’s evidence in relation to that issue. I do so because I thought he was the most compelling witness on the issue.

12. Following the marriage the parties purchased a property at H (“the H property”) in their joint names. The purchase price was approximately $202,000 and the property was purchased in 1998. The husband contributed about $30,000 of his pre-marriage savings towards the purchase and there was refinancing against the N property to enable the purchase. The husband had contributed about $30,000 of his pre-marital savings towards reducing the mortgage on the N property following the marriage. In 2002 the parties purchased the property at L (“the L property”). The purchase price was $280,000 and all of the purchase price, including stamp duty and legal costs, was borrowed to purchase the property. The L property was not used as security for the loan; however, the parties refinanced both the N and H properties to raise the funds to buy the L property.

13. In relation to non-financial contributions, the husband says that following the purchase of the H property he painted the inside of the property and changed the carpet in the bedroom himself. He also did tiling in the kitchen and the lounge room. He replaced the light fittings and installed a sink and bathroom cupboard in the bathroom. The wife purchased material and made curtains for the unit. She also organised tradesmen to carry out work in the unit in the nature of installing a wardrobe and a shower screen. In relation to the properties at L and N, neither of the parties did any work on those properties, although the wife managed the N property throughout the course of the cohabitation and since. In relation to the L property, the wife was the principal manager of that property after its acquisition. However, the husband has been involved in various aspects of the management, as required, including instructing solicitors, signing documentation and assisting with the collection of arrears in rent in respect of one of the tenants.

14. The husband’s current financial position is that he is unemployed. However, he is hoping to be able to acquire a business with funds after the property settlement has been determined. He expects to spend about $10,000 on the business and he anticipates that should earn him an income of about $800 per week before tax. He owns no other real estate. The Toyota Corolla which he had last year became damaged and of no value. He has purchased another Corolla for himself, a 1989 model for $3,000. He has $5,000 in savings at the moment. He had negligible savings at the date of separation.

15. The wife now works full time. She earns an income of $40,000 per year before tax. She owns no other real estate. She sold her interest in T Pty Limited to her brother in August last year for $20,000 although she said she received no payment. She said the amount she was to receive was offset against borrowing from her brother. The last evidence was given for the first time at the hearing before me and was not corroborated by any evidence. I propose to include the wife’s sale proceeds of $20,000 in the balance sheet and allow only the debt of $10,000 as stated by the wife in her evidence to the Court at an earlier date. She still owns the Honda CR-V motor vehicle and her savings currently are $4,000. At the date of separation her savings were negligible.

16. No child support is being paid by either party at this stage. Between September and December 2008 the husband was paying $61 per week by way of child support. Recently, the husband paid $1,400 to the Child Support Agency in relation to arrears the Agency said were owed.

17. On 7 May 2009 Orders were made by me in relation to the children. Those Orders require that the parties have equal shared parental responsibility for the children. During school term the children are to live with the wife each alternate week from after school Thursday to school time the following Monday. In addition, the children were to live with the wife each alternate week from after school Thursday until 10.00am on Saturday. Otherwise the children were to live with the husband. School holiday times were to be shared equally between the parties.

18. Between December 2007 and February 2009 all of the income from the L property (approximately $2,500 a month) was paid to the H mortgage account. Documents in relation to that account show that a monthly payment of $2,351 was paid into the account and over the period of 12 months the mortgage balance was reduced from $82,472 to $64,673. As and from March 2009 the income from the property has been paid to the wife and she has deposited that money into her own account. No further payments have been made by either party in respect of the H property loan since that time. The parties understand that the mortgage balance on the property today is approximately $60,000. During the time that the rental was paid into the H property mortgage account the husband paid for all the outgoings in respect of the L property and the H property.

19. Between December 2007 and the current date the wife has received the rental from the N property. The rental is $230 per week, which she deposits into her personal account. She meets the mortgage payments of $275 per week and she pays the rates and outgoings on the property. In relation to the H property the husband has occupied the property since separation and he has paid the levies, rates and taxes on the property. He has not made any other payments in reduction of the H property mortgage.

20. Since the date of separation the husband has received rental from three boarders who occupy the H property with him and receives $214 per week collectively from those boarders. He provides no food, but he does provide electricity, internet and telephone services.

21. During 2008 and until 18 December 2008 the husband was in employment. During 2008 the husband received about $510 per week after tax from his employment and then from that sum he had to meet child support of $16 per week.

Assessment of Contribution to the Date of Separation

1. Having considered all of the contributions of the parties, I determine that the assessment of contribution to the date of separation is equal.

Contributions by the Parties from the Date of Separation in December 2007 to the Date of the Trial

1. During this period, the husband resided in the H property and made no financial contribution by way of rental for that property or for any reduction in the mortgage. However, he met the rates, taxes and levies in respect of the H property and also in respect of the L property until February 2009, when I made Orders for the wife to receive the rental from the L property. The husband says that contribution amounted to $215 per week. He points out that he personally did not receive any of the rental from L property. It was, in fact, deposited to the mortgage account on the H property which benefited both parties because it considerably reduced the mortgage liability on the property. During that same time the husband received $214 per week by way of income from the boarders. However, he has to meet additional electricity, internet and telephone fees as a condition of providing that accommodation. The rental received from L property is about $30,000 per year. The husband argues that since the separation he has made a greater contribution towards the care and financial support of the children than the wife. He claims that the children’s time with him represents nearly 90% of their time and, in particular, he is responsible for the payment of most of their expenses. For example, he provides them with dinner during most school nights.

2. The wife argued that her contributions overall should be seen as greater than that of the husband. She was unable to focus on the post-separation period to address her submissions in respect of the assessment of contribution during that time.

3. The wife seeks a greater distribution of assets based on contribution. The husband says that overall his contributions should be seen as greater than the wife’s, particularly post-separation, however he does not press for a determination other than equal.

4. Having regard to all of those matters I determine that as at the date of trial the parties’ contributions should be assessed as equal.

The Balance Sheet

1. I determine the balance sheet to be as follows:

   ASSETS

   H property (Jointly owned)   $335,000

   L property (Jointly owned)     $380,000

   N property (Wife’s property)  $180,000

   Husband’s equitable interest in property in the China property               $  89,000

   Wife’s Honda CR-V  $  25,000

   Wife’s interest in T Pty Ltd  $  20,000

   TOTAL ASSETS  $1,029,000

   LIABILITIES

   Mortgage on the H property  $  60,000

   Mortgage on the N property  $126,000

   GST debt (already paid by the wife)  $    3,500

   Wife’s debt to wife’s mother  $    5,000

   Wife’s debt to her brother   $  10,000

   TOTAL LIABILITIES  $204,500

   NET ASSETS  $824,500

2. There was some argument with the husband about the title to the property in China and whether it could be regarded as his property for the purpose of the balance sheet. The parties agreed on the value of the property. The property was acquired with money supplied to the husband’s parents by him. The husband holds a letter from his father to the effect that upon the death of the husband’s parents the property is to be transferred to the husband. The husband’s father is now deceased. The husband doubts that the letter from his father will be upheld in a Chinese Court. He says that Chinese law usually holds that the property of parents be divided equally between siblings. There is no expert evidence in relation to the law in China. On balance I consider the property should be included in the balance sheet. I will take into account under s 75(2) that the property will not become available to the husband until the demise of his parents and that may be some years away.

3. In 2003 the wife acquired an interest in T Pty Limited. In August 2008 the wife sold her interest in that company for $20,000. In relation to the balance sheet, the wife’s interest in T Pty Limited was agreed at $20,000 in February 2009. The wife in her evidence says that she sold her interest in that company to her brother for $22,500 and that she received none of the funds as it was all kept by the brother to contra loans which he had advanced to her. Such an assertion is made for the first time in the Court at the final stage of the property hearing. At all earlier times, including February 2009, the assertion of the wife was that a debt of $10,000 was owed to her brother. The wife has no documents to establish any liability and in the circumstances, it is not accepted by the husband that there was a debt of $22,500. I propose to take into account the value of the wife’s former interest in the business T Pty Limited of $20,000 and take into account a loan to her brother of $10,000 only.

Section 75(2)

1. The husband is 50 years of age and currently without employment although, as pointed out earlier in these reasons, he is proposing to acquire a business for himself once the orders of the Court have been made.

2. The wife is 46 years of age and once again in full time employment. She earns an income of about $40,000 per annum. There is no evidence to suggest that either party’s future income earning capacity is restricted in any particular manner other than by the requirement to care for their children.

3. Orders have been made by me in relation to the care of the parties’ children, K and Y. Those Orders impose on each of the parties an obligation to contribute their time to the care of the children. There is nothing about those orders which would, by itself, warrant an adjustment in favour of one party or the other.

4. The question of child support is a matter which will require determination from time to time and will very much depend upon whether or not each of the parties has current employment and the remuneration received from same.

5. The parties’ property and financial resource has been disclosed to the Court and has been referred to by me in these reasons. Each of the parties has an obligation to support him or herself and the children whilst the children are in their care.

1. The determination in relation to the contributions of each of the parties will see each of them sharing equally in their property.

2. Each of the parties has superannuation. The husband’s superannuation has a value of about $30,000 and the wife’s, $3,000. That superannuation was accumulated over a period where the husband worked for one employer from February 1990 until December 2008. The wife’s superannuation commenced to build up in 1993. However, she has not been in employment which has continuously provided her with superannuation benefits.

3. There is no evidence to establish exactly what the husband’s entitlement to superannuation was at the date of the marriage in February 1998. Clearly, he would have accumulated a benefit prior to that time. Additionally, during the period of cohabitation, the wife must be seen to have made indirect contributions to the husband’s superannuation, and likewise the husband to the wife’s superannuation. Neither party seeks a splitting order. However, a determination of contribution in respect of superannuation must see the husband’s contribution as being assessed as greater than that of the wife. Any adjustment in relation to that determination needs to be done within the confines of the other assets of the parties and is, therefore, a matter which needs to be taken into account at this point.

4. I will take into account under s 75(2) that the property in China will not become available to the husband until the demise of his parents and that may be some years away. The husband will eventually become the owner of a property in China upon the demise of his mother. There is no certainty as to when that might happen. In addition, the husband takes with him from the marriage his superannuation of $30,000. Those matters do warrant an adjustment and accordingly, I propose to make a small adjustment in favour of the wife. Such adjustment will see the wife receiving 52.5% of the assets and the husband 47.5% of the assets.

5. The division of the assets would see the wife entitled to $432,863 and the husband entitled to $391,637. That is a difference of $41,226 between the parties’ shares.

6. The husband wished to retain the H property. That property has a value of $335,000 and a mortgage of $64,000, leaving an equity of $271,000. The wife also wishes to retain that property. The husband kindly agreed that the wife could retain the property.

7. The Orders of the Court are to provide that the wife retains the H property. The properties at L and N are to be sold, and after payment of sale expenses, mortgage on the N property and after payment of capital gains tax by each of the parties, the husband is to receive his entitlement and the wife is to receive the balance.

8. Given that the amount of the net sale proceeds is unknown the orders should impose an arithmetic calculation to ensure, as much as possible, that the ultimate division of assets determined by the Court is achieved.

9. In order to calculate the husband’s entitlement to the proceeds of the sales of the two properties the following exercise is to be undertaken:

   Add the following:

   (a)$275,000 being the equity in the H property;

   (b)Net sale proceeds of the L property;

   (c)Net sale proceeds of the N property;

   (d)$45,000 for the wife’s other assets on the balance sheet; and

   (e)$89,000 (being the husband’s interest in the China property).

   Then, deduct from that total the wife’s debt on the balance sheet of $18,500.

   Then, in relation to the balance, ascertain 47.5% of same. Deduct from that sum $89,000. The balance of the sum is to be paid to the husband from the sale proceeds of the two properties. The wife is to retain the balance of any proceeds from the sale of the properties.

10. In calculating the net sale proceeds of the two properties the parties are to cause the total amount of capital gains tax which the parties will have to pay as a result of the sales, in fact to be paid, and each is to receive the amount of their personal liability before the balance of the proceeds are distributed.

11. The husband is currently in occupation of the H property. He sought the right to continue to reside in the property for a short period after he has received the funds from the sale of the two properties. He sought that time in order to be able to find suitable accommodation for he and the children.

12. Until the sale of the two properties (being the L property and the N property) the wife is to continue to receive the income from the two properties and she is to meet the outgoings on each. The husband may continue to occupy the H property pending receipt of the funds from the sales and he is to meet the outgoings on the property except for the mortgage. The mortgage is paid well in advance of the requirements of the mortgagee.

13. I propose to allow the husband three months to vacate the H property after he receives his entitlement from the orders of the Court. From the time of receipt of those funds until the husband vacates the property he is to pay $414.65 per month on the mortgage as well as meeting the other outgoings on the property.

14. The sale of the two properties is to be conducted by an agreed real estate agent and at an agreed sale price. The wife is to nominate real estate agents to the husband until they have an agreement about which agent will sell each property.

15. The parties have liberty to apply for further orders relating to the implementation of any of the orders to be made.

I certify that the preceding forty nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench.

Associate: 

Date:  7 August 2009