XOA & DIUNG

FAMILY COURT OF AUSTRALIA

XOA & DIUNG

[2015] FamCA 959

FAMILY LAW – PROPERTY – where the wife seeks to retain her interest in the matrimonial property – where the husband seeks effective discharge of his liability in terms of the underlying mortgages and an indemnity by the wife that he will not be pursued in respect of any alleged loan that remains outstanding – where significant financial contributions have been made to the marriage by the wife’s parents – where significant weight is given to the wife’s contribution arising from monies provided by her family – where the parties borrowed and subsequently loaned the husband’s brother $100,000 –where the husband has interest in a term deposit – where the husband alleges this money is to assist his parent’s Australian visa applications – where the wife seeks that the this be brought into account as property available for the Court’s consideration –where it is found that the term deposit represents property of the parties – where a global approach is applied – where consideration is given to assignment of right to sue – where an adjustment to the contributions as between the parties is made to reflect a 96 per cent/4 per cent adjustment in favour of the wife – where it is ordered that the husband’s interest in the property be transferred to the wife – where it is ordered that the husband pay the wife a settlement sum – where it is ordered that the husband assign to the wife all right and entitlement to sue his brother.

Family Law Act 1975 (Cth) – s 75(2), s 79

Carvill & Carvill (1984) FLC 91-586
Gosper & Gosper (1987) FLC 91-818
In the Marriage of Goodwin (1999) FLC 92-1992
Pierce & Pierce (1998) FLC 92-844
Quinn & Quinn (1979) FLC 60-677
Stanford & Stanford (2012) 247 CLR 108

White & White (1982) FLC 91-246

APPLICANT:

Ms Xoa

RESPONDENT:

Mr Diung

FILE NUMBER:

ADC

4710

2014

DATE DELIVERED:

6 November 2015

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Berman J

HEARING DATE:

26, 27 and 28 October 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Smith

SOLICITOR FOR THE APPLICANT:

Winters Solicitors

COUNSEL FOR THE RESPONDENT:

Mr Gallasch

SOLICITOR FOR THE RESPONDENT:

Dixon Gallasch Pty Ltd

Orders

In full and final settlement of any claim that either party may have against the other by way of settlement of property or variation of settlement of property:
(a)within ninety (90) days of this order the husband do pay or cause to be paid to the trust account of Winters Solicitors for and on behalf of the wife the sum of SIX THOUSAND TWO HUNDRED AND FIFTY FOUR DOLLARS ($6,254) (“the settlement sum”);
(b)that until payment of the settlement sum as provided for herein the husband shall be restrained from withdrawing or dealing with money held in the CBA term deposit number …;
(c)the parties do all things necessary to transfer to the wife the husband’s interest in the property situate at B Street, Suburb C in the State of South Australia being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“the Suburb C property”);
(d)that the husband will sign and return to the wife’s solicitors all documents necessary to give effect to the transfer of the Suburb C property to the wife including but not limited to a Memorandum of Transfer within seven (7) days of the same having been presented to him;
(e)that within forty five (45) days of the date of this order the wife will either discharge or refinance the current mortgage liabilities secured over the said Suburb C property to the complete exoneration of the husband and the wife shall indemnify and keep the husband indemnified against all and any liability in respect of the said property PROVIDED that in default the parties shall do all things necessary to place the said Suburb C property on the market for sale upon such price and upon such terms and conditions as the parties may agree or as may be ordered and following the discharge of all liabilities and the cost of sale, the net proceeds (if any) be paid to the wife;
(f)that within fourteen (14) days of the date of this order the husband transfer his interest in the Japanese motor vehicle registration number … to the wife by first obtaining the necessary transfer documents and then signing same and forwarding them to her;
(g) the husband shall retain to the exclusion of the wife the following:
(i)funds standing to his credit in bank accounts;
(ii)any motor vehicle in his possession;
(iii)his superannuation entitlements;
(iv)any personalty, furniture and effects currently in his possession;
(h) the wife shall retain to the exclusion of the husband the following:
(i)funds standing to her credit in bank accounts;
(ii)her motor vehicle;
(iii)her superannuation entitlements;
(iv)any personalty, furniture and effects currently in her possession;
(i)the wife indemnify the husband with respect to any debt that may be claimed against him by the wife’s parents;
(j)that the husband do forthwith assign to the wife all of his right and entitlement to sue Mr D Diung in respect of a loan outstanding to the parties in the sum of NINETY FIVE THOUSAND THREE HUNDRED AND SEVENTY DOLLARS ($95,370) or for such other relief in relation thereto, with the wife to be entitled to retain free from claim by the husband any proceeds arising from the anticipated litigation PROVIDED that the wife indemnify the husband against all liability arising as a result of the acts of the wife in the pursuit of any such action;
(k)that within fourteen (14) days of this order the wife make the following personal effects of the husband available for collection by the husband’s agent at his expense:
·clothes and shoes
·printer
·speakers
·cameras
·Ikea chairs and table
·bedding
·Internet modem
·metal shelving
·other personal items.
(l)that each party shall be liable for their own separate debts and obligations to the exclusion and exoneration of the other party;
(m)that should either party refuse or neglect to sign any document necessary to give effect to the terms and conditions of these orders within seven (7) days of the same having been presented to him or her THEN and in such event a Registrar or Deputy Registrar of the Family Court of Australia is able to sign on behalf of the party in default within seven (7) days of an affidavit having been presented setting out the said default and annexing a copy of the relevant document or documents.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 4710 of 2014

Ms Xoa

Applicant

And

Mr Diung

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

The proceedings are for settlement of matrimonial property following the irretrievable breakdown of a relationship comprising a period of cohabitation less than three years.
The wife, Ms Xoa commenced the proceedings by filing an Initiating Application on 22 December 2014. The Application did not specify the final orders being sought but rather, reserved to the wife the right to set out the orders upon receiving full and frank disclosure. The Initiating Application provides little assistance in the determination of the issues in contention between the parties.
By Response filed 6 May 2015, Mr Diung, the husband, sought a general order for property settlement as the Court “deems just and equitable in all the circumstances”. The Response is an unhelpful document.
At trial, the wife sought the following orders as set out in a Case Outline document prepared by counsel:
(1)that the husband transfer his interest in the Suburb C property and the Japanese motor vehicle to the wife.
(2)that the husband discharge at his sole expense the ANZ home loan ...
(3)that the husband repay to the wife’s parents the amount of $160,000 being his one half share of monies loaned by her parents to the husband and the wife to purchase the Suburb C property.
(4)the husband do repay the monies that he has transferred from their joint accounts or redrawn from their joint accounts.
(5)the husband be restrained from contacting, assaulting, molesting, harassing or in any way interfering with the wife or her parents.
(6)that contemporaneously with the husband transferring his interest in the Suburb C property to the wife, the wife will refinance into her name alone the ANZ variable home loan … and ANZ fixed home loan ...
(7)that there be no adjustment of the parties respective superannuation interests.
(8)the parties otherwise retain all property in their respective names and/or possession.
(9)that each otherwise remain liable for all debts in their individual names.
At the commencement of trial, the wife’s position was further amended to reflect that she no longer sought that the husband repay her parents the amount of $160,000 but was content to pursue the order requiring the husband to either discharge at his sole expense the ANZ home loan … (“mortgage ...”) or that the husband pay her a settlement sum of $95,370.
There was no opposition to the wife’s application for leave to amend the orders sought and accordingly the trial proceeded on that basis.
The wife’s position was further complicated by a late amendment to the orders that she sought at the commencement of her final submissions summarised by her agreeing to take over the responsibility for the three mortgages currently registered over the property at B Street, Suburb C (“the Suburb C property”), the payment by the husband of a settlement sum totalling $6,600 and a transfer of the husband’s choses in action in respect of a loan made by the parties to Mr D Diung (“the husband’s brother”).
The orders sought by the husband were also the subject of amendment.
In the Outline of Case document of the husband, orders were sought that if the wife proposed to sell the Suburb C property then each party would retain their chattels, bank accounts, superannuation and motor vehicles in their respective possession free from any claim by the other, the wife to retain the net proceeds of sale, if any, following the payment out of all of the mortgage obligations and the costs of the sale and an agreement that he would transfer his interest in the Japanese motor vehicle to the wife. Importantly, the husband sought an order that “the wife waive any claim for repayment of any amount that may be repayable to her by the husband’s brother”. This reference is in relation to a loan of $100,000 made by the parties to the husband’s brother by bank borrowing and a resultant mortgage placed over the Suburb C property. It is conceded that as at the date of trial there is an amount outstanding by the brother to the parties of $95,370.
In a similar manner to the wife, during his final submissions counsel for the husband abandoned the specific order in relation to the wife waiving any claim for repayment by his brother, but suggested with little observed energy that the Court should consider placing a limit on the ability of each party to recover a proportion of money owed by the husband’s brother.
It is demonstrable that the parties had given scant regard to the importance of this issue and for reasons that were never explained, no effort was made to call evidence from the husband’s brother notwithstanding the clear importance of the issue.
I indicate to the parties and their legal representatives that the level of preparation and attention to the seminal issues was inadequate.
The wife seeks to retain the Suburb C property. That is not opposed by the husband providing that she is able to either discharge the three mortgages or refinance to his complete exoneration, but in those circumstances he seeks an order that the wife pay him a settlement sum of $20,000 together with default interest. He continues to seek an order that the wife waive any claim for repayment by his brother.
It was not made clear why the sale of the property would justify the payment of a settlement sum in circumstances where the retention of the property would not.
Notwithstanding the clear conflict between them, the parties were able to agree the following summarised orders:
(1)that within 14 days the husband would obtain the necessary transfer of registration papers for the Japanese motor vehicle, sign same and provide them to the wife’s solicitors;
(2)that the wife indemnify the husband with respect to any debt that may be claimed against the husband by her parents;
(3)that each party be solely responsible for any debt recorded in their sole name;
(4)that each party would retain chattels, bank accounts, superannuation and motor vehicles in their respective possession free from any claim by the other.
It is an agreed position that the modest superannuation held by the parties should be excluded from both the pool of assets available for division and given the short duration of the relationship and the similar level of superannuation accumulated by each of the parties.
There is a dispute between the parties as to the retention by the wife of the husband’s personal items and his refusal to return certain items that would normally have been left in the home, in particular various remote control devices. The husband denies that he holds these devices and the wife has been resistant to delivering up the husband’s personal effects in the hope that he will exchange the remote controls for his personal effects.
Ultimately the wife conceded that she would deliver up the husband’s personal effects and I propose to order accordingly. If the husband has the remote control devices then he will be ordered to return those to the wife.

DOCUMENTS RELIED UPON

The wife relies upon the following documents:
(1)Initiating Application filed 22 December 2014
(2)Trial Affidavit of wife filed 7 October 2015
(3)Financial Statement of wife filed 21 October 2015
(4)Case Outline document prepared by counsel
The wife also seeks to rely upon an Affidavit filed 21 October 2015 which corrects and error in paragraph 76 of her Trial Affidavit which excluded or ignored an ANZ mortgage liability of $139,599.63. There is no opposition to the inclusion of the omitted liability.
The husband relies upon the following documents:
(1)Response filed 6 May 2015
(2)Trial Affidavit of husband filed 19 October 2015
(3)Financial Statement of husband filed 14 October 2015
(4)Case Outline document prepared for trial

PROCEEDINGS

The proceedings were first filed in the Federal Circuit Court and were listed for trial by Judge Kelly on 26 and 27 October 2015. The matter was transferred for hearing to the Family Court of Australia upon my invitation.
It is noted that orders made on 28 May 2015 required the parties to prepare a draft joint statement of assets and liabilities on or before 19 June 2015. On 21 July 2015 further orders were made bearing the following notation:
…the parties are in agreement as to the value of the matrimonial assets and will prepare a Joint Balance Sheet identifying any issue still in contention in relation to add backs, such document to be prepared by the Applicant’s solicitors and completed by the respondent’s solicitors no later than 28 August 2015.
A further order required the parties to file a Case Outline document identifying the assets, liabilities and financial resources of the parties and the main contentions in dispute as to:
·inclusion in the asset pool; and
·value of assets;
·list of contributions claimed or contended;
·list of other factors relied upon (s 75(2) factors) and percentage adjustment contended for.
There would not appear to have been any attempt by counsel to consider a joint balance sheet, the separate legal and equitable interests of the parties in property and the matters that were in clear contention.

CHRONOLOGY

1983Date of birth of husband

1989 Date of birth of wife
2009Parties commence their relationship
January 2011 Parties commence cohabitation
2012Date of marriage
March 2012Temporary visa granted to wife
October 2012 Parties purchase Suburb C property for $730,000 plus stamp duty and costs of acquisition
May 2013Parties obtain $100,000 by way of mortgage secured over the Suburb C property and the money is then lent to the husband’s brother
August 2013 Parties enter into a loan agreement with the wife’s parents in respect of monies provided enabling the purchase of the Suburb C property
Early 2014The wife obtains fulltime employment
12.6.2014Wife obtains permanent visa
4.7.2014Date of separation
December 2014 Proceeding are commenced in the Federal Circuit Court

BACKGROUND

The parties were both born in the People’s Republic of China. At the date of hearing the wife is aged 25 years and the husband 32 years. They are both of good health. The husband is employed as an accountant and the wife has employment as a dental and pharmacy assistant. They are both in fulltime employment and whilst in receipt of a modest income, the husband’s income is significantly in excess of that of the wife, her income is bolstered by the inclusion of rental from two boarders and a home stay student.
The wife met the husband at a time when she was a “home stay” student. The parties commenced their relationship in 2009 but it is not controversial that the parties frequently argued and separated for varying periods of time. At the commencement of their relationship the parties each held minimal property. So tumultuous was their relationship that the parties separated in December 2011 but reconciled in January 2012. They returned from China to Australia with the financial assistance of the wife’s parents.
Each of the parties has a close attachment to their parents and immediate family. To a substantial degree, the actions and conduct of the parties were largely dictated by their desire to fulfil familial and cultural obligations.
As is obvious, the period of marriage was only two and a half years duration.
Taking into account periods of separation, the finding is that the parties relationship was of short duration and compass.
At the date of marriage the wife asserts that she had in excess of $20,000 in her various bank account emanating from her parents.
A significant issue in the proceedings is the extent to which the parties received monies from their respective families but in particular the wife from her parents. It was also a feature of the financial arrangements between the parties that they were each possessed of numerous joint and separate accounts. The contention seems to be not whether the wife received substantial sums of money from her parents, but the use to which those monies were used either at the direction of the parties or each of them, or their extended families.
At about the time of the parties marriage the wife agreed to assist the husband in obtaining a visa for his parents to enter and remain in Australia. The costs of that visa process are reputed to be about $80,000 to $100,000 and the duration of the process was up to two years.
It was the wife’s case that the husband and his brother would each pay the total visa costs and that initially the husband needed about $23,000. It is conceded by the husband that the wife’s parents provided that money and that it was subsequently used as part of his parents’ visa application. The wife alleges that her parents were never repaid the money that they had loaned to the husband. The husband strongly asserts that the money was repaid.

By reference to various bank statements, the husband was able to demonstrate that monies came into the mortgage loan account number … on 10 June 2013 and on 3 July 2013 the sum of $10,500 was transferred to account number … and on 15 August 2013 a further sum of $10,000 was withdrawn. Those monies can be traced to the husband’s accounts and then by subsequent withdrawals to accounts not associated with the parties. I accept that the wife may not know where the money went, but in the absence of any other explanation on this topic, I am prepared to accept the husband’s evidence that the wife’s parents were repaid.
This was a matter of ongoing contention between the parties. It is the wife’s position that her parents did not receive repayment for the monies provided to assist the husband’s parents in their visa application, whereas the husband says that they did. For reasons best known to the wife, she did not call evidence from her parents. There does not appear to be any subpoena or other process issued which would establish whether the transfer details of money from the husband’s accounts to the wife’s parents is correct. I find that there are no monies outstanding.
Even if the wife’s parents had not been repaid, it is clear that all parties understood that the recipient of the wife’s parents’ funds was the husband’s parents. It is also apparent that the wife’s parents knew the purpose for which the money was being provided. I do not consider that it is a matter for this Court in any event.
In July 2012 the wife purchased a Japanese motor vehicle for $22,490. She alleges that the funds had been provided to her by her parents. There are accounts which demonstrate money coming into the wife’s account. The transaction was completed by a cash withdrawal of funds sufficient to conclude the sale and purchase.
The parties agreed that the Japanese would be registered in the husband’s name. It remains so. The husband however concedes that the car was purchased with monies provided by the wife’s parents and that he would transfer the registration of the vehicle to her. For reasons that are difficult to ascertain, notwithstanding the agreed position, the transfer has not been affected. Counsel for the husband confirmed that his client will now do all things necessary to secure the registration papers and cause the motor vehicle to be transferred as soon as possible. I have been invited to make an order that the vehicle be transferred to the wife and that the husband do all things necessary to obtain the registration and/or transfer documents to give effect to the parties intention.
Whilst there has been some issue in respect of the mechanics of the transfer, the important concession by the husband is that the motor vehicle was purchased with the wife’s parents’ funds.
The parties agreed to purchase the Suburb C property in October 2012. The settlement statement being Annexure “VX5’ to the wife’s Trial Affidavit provides the detail as to the purchase and settlement of the property. The purchase price was in the sum of $730,000, a deposit was paid of $36,500 leaving an advance by the ANZ Bank of $449,831 and a further sum of $284,489.51 to be provided by the parties at settlement. The total price including utilities adjustments, stamp duty and other conveyancing and transfer charges was $770,780.51.
It was the wife’s initial position that her parents had provided $330,000 as a loan in order to assist in the purchase and whilst the husband does not dispute the provision of funds, he does not concede that they should be categorised as a loan, but rather as a gift. The husband properly acknowledges that “without the generosity of this gift we would have looked for cheaper accommodation”.
Ultimately the wife conceded that the monies were provided not by way of a loan but rather, a gift and should be brought to account as a contribution for and on her behalf. It was not seriously contended by the husband that the generosity of the wife’s parents was extended to him independently of their relationship with their daughter. But for that connection, the husband concedes that the money would not have been provided.
In early 2013 the husband said that he was approached by his brother seeking $100,000 by way of a loan to assist him to purchase a property in Sydney. The wife alleges that the husband told her his brother wanted $50,000 and that the balance would be dispersed by way of $25,000 towards the husband’s parents’ visa application and $25,000 to repay the wife’s parents in respect of the monies originally loaned for the husband’s parents’ visa application.
What is certain is that in May 2013 the parties borrowed a further $100,000 from the ANZ Bank secured by way of a mortgage over the Suburb C property being account number …25294. It is the wife’s contention that it was only in June 2013 that she learned that the entire $100,000 had been credited to the bank account of the husband’s brother and not divided in the way that she understood.
The husband disputed the wife’s understanding and alleges that it was always understood that the entire $100,000 would be provided to his brother. The husband further alleged that he gave the wife an opportunity to refuse the provision of funds on the basis that his brother was in a demonstrably poor financial position.
At paragraph 24 of the husband’s trial affidavit, he says:
My brother is in a poor financial position and we helped him financially as he is family. Whilst he has paid the interest on the finance there is still $95,000 owing and I have concerns that he may not keep up the repayments. My wife was aware of my brother’s financial problems at the time but she agreed to lend the money. It was a risk that we both took.
Neither party saw the need to call evidence from the husband’s brother and in the circumstances of this case I am satisfied that the parties borrowed $100,000 which monies were provided by way of a loan to the husband’s brother. Whatever the understanding was of the wife as to where the money was ultimately be dispersed, the reality is that monies were borrowed by them and then on-lent. The monies loaned to the husband’s brother remain outstanding in the sum of $95,370.
On 4 July 2014 the parties separated but remained living under the same roof. There then followed a distressing two to three months where each of the parties at various times returned to take up residence in the Suburb C property, each allege intolerable and aggressive conduct by the other. Ultimately an intervention order was made by consent in July 2015 which brought some semblance of calm to the parties conduct and it is conceded that the husband did not return to the property after September 2014.
The husband has now re-partnered with Ms E and resides with her in her property at Suburb F.

LEGAL PRINCIPLES TO BE APPLIED

Section 79 of the Family Law Act 1975 (Cth) (“the Act”) provides:
(1)In property settlement proceedings the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them – altering the interests of the parties to the marriage in the property; or
(b)…including;
(c)an order for settlement of property in substitution for any interests in the property; and
(d)an order requiring:
(i)either or both of the parties to the marriage; or
(ii)the relevant bankruptcy trustee (if any); to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
Section 79(2) provides:
(1)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
“Property” is defined in s 4(1) of the Act as meaning:
…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion…
In Stanford v Stanford (2012) 247 CLR 108 the majority held:
[35]It will be recalled that section 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the Court that, in all the circumstances, it is just and equitable to make the order.
[36]The expression “just and equitable” is a qualitative prescription of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds…
It is therefore not to be assumed that a party to a marriage has right to an interest in property by reference to matters arising under s 79(4). In effect, a party cannot pull themselves up by their own bootstraps by asserting contribution under s 79(4) and then using that position to then satisfy the obligation created by s 79(2). To do so would be to “conflate” the relevant sections.
The High Court in Stanford sought to define its likely application to cases in the following manner:
[42]In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as a result of the choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It would be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of the property by the husband and the wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the Court may make a property order. What order, if any, should then be made is determined by applying section 79(4).
The parties cohabited for a period slightly less than three years having married in 2012 with a final separation on 4 July 2014.
Both parties seek that there should be an alteration of their respective property interests. That is so notwithstanding that the husband effectively argues that he should be permitted to walk away retaining his superannuation, personalty in his possession and control and a sum of $14,000 that currently sits in a term deposit.
The parties are no longer living in a marital relationship and they do not have the advantage of “common use of property”.
The wife seeks that the husband transfer his interest in the Suburb C property to her and he has agreed with that proposition subject to the effective discharge of his liability in terms of the underlying mortgages and an indemnity by the wife that he will not be pursued by her parents in respect of any alleged loan that remains outstanding.
In the circumstances of this case I am satisfied that it is just and equitable to embark upon a consideration of an adjustment to the property interests of each of the parties.

ASSETS AND LIABILITIES OF THE PARTIES

There is agreement that the parties are to retain their separate bank account balances without them being brought to account or any adjustment in favour of the other.
The husband’s Super SA entitlement is in the sum of $37,000. The wife has an interest in Hesta Superannuation of $6,350. The parties agree that the Court should exclude their separate superannuation entitlements without adjustment. As discussed, the amount accumulated by the husband during the course of the marriage is not dissimilar to the entitlement of the wife. The amounts are not such that they are likely to represent a substantial factor pursuant to s 75(2) and in any event the parties have many years before they will satisfy a condition of release.
Initially the husband sought to bring to account furniture remaining in the wife’s possession that he asserts has a value of $8,000. The short summary is that upon separation the husband took nothing with him from the Suburb C property and indeed left most of his personal effects and belongings in the home. The wife has been resistive to the delivery up of his personal effects notwithstanding that she acknowledges that they remain in the home.
It appears that her reluctance to return the husband’s personalty is linked to his refusal to return two remote air conditioning controls. The husband denies that he has them. Ultimately, the husband is prepared to resile from the inclusion of a valuation in respect of furniture at the Suburb C property if the wife returns to him the items as set out in paragraph 61 of his Trial Affidavit namely:
·clothes and shoes
·printer
·speakers
·cameras
·Ikea chairs and table
·bedding
·other miscellaneous personal items
·internet modem
·metal shelving
The wife in evidence has agreed to return the husband’s personal effects.

Suburb C Property

The parties purchased the Suburb C property for $730,000 plus costs. In preparation for trial, they jointly instructed Mr G of G Property to conduct a valuation of the property. His assessment of value is set out in a report dated 14 July 2015 being Annexure “VX16” to the wife’s Trial Affidavit.
Whilst the parties are agreed as to the current value at $685,000, the husband relies upon the report to assert that the property should be valued at either $720,000 or at the figure that the parties paid for it in October 2012.
It is not suggested that the parties paid too much for the property. I am not able to find necessarily that the purchase price paid by the parties represents a correct assessment of value.
During the course of the marriage and soon after the purchase of the property, the parties effectively decimated the front and rear garden.
By way of general comments, the report states as follows:
11.1The subject property is located in a highly sought after location, being in close proximity to the Adelaide CBD and also within the zoning for [H School]. The dwelling itself presents in a relatively good condition, commensurate with its age and use. The extension to the rear appears to have been well constructed and provides modern, open plan accommodation which is appealing to a range of buyers. The perimeter landscaping, or lack thereof, is considered to be a significantly limiting factor which adversely affects the presentation of the property and is likely to have a negative impact on the achievable sale price should the property be offered to the market in its current state. In addition, there are a number of relatively minor maintenance issues that, if repaired, would increase the overall appeal of the property.
Put simply, the husband says that the wife and her parents decided to remove the front and rear gardens and to date it has not been reinstated.
The wife agrees that the garden has been removed but says that the parties agreed that this would happen because they suffered from hay fever and the garden had been planted with a variety of flora that was an ongoing cause of irritation.
It would appear that at all relevant times the husband was present. His affidavit suggests that so dysfunctional was the relationship between he and the wife and her parents and so aggressive were they towards him that he felt powerless to attempt to stop their destruction of the garden.
He does not assert that he put up any objection and whilst obviously the removal of the garden has potentially had a detrimental effect on value, it is difficult to find that it was done with any deliberate or malicious intent to cause the property to be devalued or it being wasted. There would be no good sense in that proposition.
A further difficulty arises in that there is a lack of directly comparable sales given the “uniqueness of the subject property particularly having regard to its large dwelling size and allotment”.
It is also noted that the parties may well have purchased the property at the high end of the property valuation cycle.
I am not able to find that the wife has deliberately set out to devalue the property by the removal of the garden. In any event the property is desirable and is placed within a suburb near to the Adelaide CBD. The valuer asserts that it is a property likely to be sought after if placed on the market for sale.
No efforts were made to call the valuer and I am left to do the best that I can in respect of his report which is before me by consent.
No evidence was presented as to the cost of reinstating the property by way of planting a front and rear garden, but I suspect that the costs of remediation are likely to be substantial and the residual difference between the property valued at $685,000 together with the costs of the installation of a new garden is unlikely to be much less than the optimistic value being represented by that which the parties paid at $730,000.
To some extent the issue is moot because ultimately the property of the parties is modest and the overwhelming consideration is the weight to be given to the wife’s contribution arising from monies provided by her family.

Japanese Motor Vehicle

The parties are agreed to bring to account the Japanese motor vehicle at $14,550.

CBA Term Deposit

The husband acknowledges that he has $14,000 by way of investment in a CBA term deposit account number …27207. The investment commenced on 21 August 2014 and by reference to Exhibit “6” being a Term Deposit End of Financial Year Notice, the investment matures on 21 August 2018. The wife’s position is that the money on investment should be brought to account as property available for the Court’s consideration.
The husband’s initial position was that the money did not belong to him and was placed in that account by him but from money received from his family.
At the conclusion of the proceedings, I am uncertain as to the husband’s current position. It may well be the case that the husband’s counsel conceded that the money could be brought to account but with an acknowledgement that it was contributed entirely by his family.
This matter was again an unnecessary complexity that could have been resolved by the proper presentation of evidence.
The assertion by the husband is contained at paragraph 23 of his Trial Affidavit. To some extent it is linked to the loan of $100,000 to his brother. The mortgage account which supports the husband’s brother’s loan is account number 25294. The husband points to the various transactions in respect of that and other accounts and his position is summarised as follows:
[23]…From time to time there has been a draw down and there is now $95,000 owing. If my parents have surplus funds they will bank it into this account to save on interest. Then if they need the money back they will draw down on the account. This is usually done by me transferring the funds into my account and then paying my parents or brother. The account has not fallen into arrears. At one point I drew down $13,200 and used these funds plus $800 of my own money to establish a 10 year term deposit of $14,000 to assist my parent’s application to live in Australia.

In evidence, the husband contended that it was apparent from the account significant additional sums appeared in the joint home loan and given the relatively modest income of the husband and the wife, the only other explanation is that the money came from outside of the marital relationship and therefore most likely from his parents and brother. The husband then drew money out of the account and set up the term deposit.
Whilst there was no explanation in paragraph 23 of the purpose of the term deposit, counsel in final submissions and by reliance upon Exhibit “6” highlighted the notation to the term deposit notice in the following terms:
Important Information; This deposit is to be held as a mandatory condition of an Assurance of Support bank guarantee under the sponsorship of an immigration visa. Alterations and release of funds are only permitted under instructions from Centrelink.
The husband was asserting that he has no effective control over the money and that it is quarantined as part of his parent’s visa application process.
No evidence was presented and whilst it is likely that the amount is held in order to reimburse Centrelink for the social security payments that the husband’s parents receive whilst their application for visa is pending, in the event that it is unsuccessful, that is at best my speculation.
The husband chose not to call his parents nor indeed provide any better information as to whether there was truly an encumbrance on his ability to access the term deposit.
The husband’s position that the money is on investment for 10 years is demonstrably incorrect by reference to the maturity date of 21 August 2018.
There is no evidence as to the timetable for his parent’s visa application and it may well be the case that by August 2018 the fate of his parents in terms of their ability to remain in Australia will be known.
I do not accept the husband’s position that the evidence demonstrates clearly that monies have come into the account from sources outside of the marriage and that by necessity that must be for his parents.
Again, the husband presented no evidence nor did he seek to provide any schedule or accounting exercise to demonstrate his first contention namely, that the money that he alleges was surplus and could not have come from either of the parties either directly or via transfer from their multitudinous accounts.
It is not for me to undertake some form of audit of the bank statements in circumstances where prudent preparation would have likely provided a ready answer.
Doing the best that I can, I find that the sum invested by the husband, namely $14,000, is property of the parties. I am however prepared to accept the husband’s evidence that at least until 21 August 2018 he is not able to access and/or withdraw those funds.

The Husband’s Brother’s Loan

The parties acknowledge that the sum of $100,000 initially borrowed from the ANZ Bank was ultimately paid to the husband’s brother. There is some uncertainty as to how he used the money but it seems that the best answer is that it was used to enable him to purchase a property in Sydney. For a period of time he made the instalment payments and whilst there was no effective accounting undertaken (in particular given that the account had been used by the parties in respect of unrelated transactions), there is a concession that the amount owed by the brother is $95,370.
The difficulty is that at first the husband’s position was that his brother was unlikely to repay the money and therefore consideration should be given as to whether it is brought to account as an asset to correspondingly offset the home loan liability in the same amount.
The husband gave evidence about his brother’s conduct.
The bank statements demonstrate that up until the date of separation, the husband’s brother made a regular payment of $256.17 a fortnight which I assume equates to the liability pertaining to the particular loan. Upon the separation of the parties in July 2014, the brother stopped paying. He has not resumed payment.
The husband was challenged in cross examination as to whether the cessation of payments by his brother was a coincidence in respect of the date of separation or was indicative of some other issue or impediment.
The husband was entirely unconvincing in his response. He did not consider that it was a coincidence, but he could not indicate what reason, if any, existed for the cessation of payments. Moreover, the husband alleged that he was personally disappointed with his brother’s conduct, in particular because his brother refused to communicate with him and/or respond to his various telephone calls.
When asked when he had last seen his brother, he indicated it was in February 2014 to coincide with the Chinese New Year. The husband was asked to consider his response carefully and he repeated his answer. Upon further enquiry, the husband admitted that of recent date in order to celebrate a relationship milestone with his current partner, his brother had recently attended the occasion.
Notwithstanding that opportunity to discuss his poor conduct, the husband said he did not challenge his brother and he has had no contact and/or response to his entreaties since their last meeting.
The husband’s evidence on this topic was unimpressive. I am left in no doubt that the nature of the dispute between the parties was sufficient for the brother with the possible support of the husband to decide that he should cease making payments as at the date of separation. The husband’s position is clear from his documents namely, the wife chose to remain in the property and therefore she should be responsible for the outgoings including the mortgage taken out to secure the borrowings to his brother.
I do not accept that the husband does not know where the brother lives, nor that he has had no effective communication with him.
It is also the case however that the wife has not taken any steps to subpoena the brother or indeed to attempt to seek information as to his current financial position.
Doing the best that I can and on the basis that it appears that the monies were used to enable the brother to purchase a property at Suburb I, I propose to bring the balance of monies outstanding by the husband’s brother in the sum of $95,370 to account.
During final submissions the wife’s counsel conceded the wife’s new position which is that she would retain all of the liabilities together with the Japanese motor vehicle and the house and sought only the sum of $6,600 from the husband. For his part, the husband was prepared to walk away from the proceedings paying nothing to the wife but retaining the $14,000 term deposit. The connection between the settlement sum and the term deposit is that the wife seeks one half of $13,200 which the husband says he utilised for the term deposit and to which he added a further $800. Whilst the outcome is not necessarily a matter of arithmetic, it is difficult to understand from the wife’s case as to why it would not be one half of $14,000 namely, $7,000.
Accordingly, the following list of assets and liabilities is set out:

Assets

Suburb C house property

685,000

Commonwealth Term Deposit (husband)

14,000

Japanese motor vehicle (wife)

14,550

Loan owing by Mr D Diung

95,370

Total

$808,920

Liabilities

Home Loan … (loan for husband’s brother)

95,370

Home Loan …

288,969

Home Loan …

139,777

Total

$524,116

Accordingly, the net asset pool is $284,804.

METHODOLOGY

There is no significant dispute in respect of the approach to be adopted notwithstanding that the period of cohabitation is less than three years.
The significant issue is the weight to be given to the contribution made by the wife’s family which the husband concedes exceeds the net value of the Suburb C property and the extent to which there can be confidence in the likelihood of the husband’s brother repaying the loan made to him.
Notwithstanding the wife’s apprehension, it is now her position that the asset pool should include the brother’s loan at $95,370 being an amount equal to the current outstanding balance on the corresponding home loan.
There is no contention in respect of the balance of the home loans and whilst it is a reasonable argument that the wife has chosen to remain in the home and therefore should be responsible for the underlying loans, that argument could not apply to the home loan secured against the property in order to borrow monies for the brother.
The husband has made no contribution to that liability since separation.
A global approach should be applied to the property interests of the parties rather than an asset by asset approach. It is unlikely to make much difference in any event given the overwhelming nature of the wife’s contribution.
In Quinn & Quinn (1979) FLC 90-677 the Full Court said:
[11]The fact that the marriage was of short duration, in the circumstances of this case…does give added weight to the capital contribution which the wife made to the acquisition of this home, as against the contribution which the husband made from his income and earnings during the marriage. That is, because the marriage was of such short duration, the assets in question to a large extent could be seen not as an asset accumulated from the efforts of the parties during the marriage but still largely an asset brought into the marriage by the wife.
In the Marriage of Goodwin (1999) FLC 92-192 the Court was faced with a four year marriage with no children of the relationship. Whilst the decision of the trial judge to award only a modest adjustment to the wife totalling 10 per cent was the subject of an appeal and whilst the methodology of the trial judge was found to be in error, the outcome was upheld.
I do not necessarily consider that there is a category of cases that can be described as “short marriages” in the sense that such a delineation would require a different approach to be adopted.

CONTRIBUTIONS

The husband agreed that at the commencement of this relationship he was possessed of modest property. The wife submits that she had at least $20,000 in a bank account and a motor vehicle.
Thereafter, the wife says that from time to time her parents provided her with significant sums of money and although it is not able to be easily quantified or perhaps identified in terms of its use and ultimate purpose, nonetheless it enabled the parties a greater level of financial freedom than would have been the case in circumstances where the husband was in receipt of modest income and until 2014 the wife was effectively a student.
Clearly, the overwhelming focus is upon the treatment of monies provided by the wife’s family which ultimately enabled the purchase of the Suburb C property.
In White & White (1982) FLC 91-246 the Full Court observed at page 77,365:
His Honour went on to discuss the question of whether the financial contribution by the husband’s father should be regarded as a contribution by the husband under section 79(4) or “as a fact or circumstance relevant under section 75(2)(o)”. His Honour preferred the latter view as expressed in Antmann & Antmann (1980) FLC 90-908 at page 75,745, but in the circumstances of this case we are of the opinion that the financial contributions by the husband’s father should be regarded as indirect financial contributions by the husband.
In Gosper & Gosper (1987) FLC 91-818 Fogarty J held at 76,169:
In many such cases that gift was made only because of that relationship and in reality as a means of benefiting that relative in that marriage. It was made “because she was a daughter of that family” as was said in W’s Case at page 75,527.
It is clearly a “financial contribution” and one “made directly” to the acquisition, conservation and improvement of property. In such cases it is open to the court to conclude, if the facts justify it, that it was made “on behalf of one spouse”.
The position adopted by Fogarty J received support by the Full Court in the Marriage of Kessey (1994) FLC 92-495 at page 81,151:
In other words, a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent “unless” there is evidence which establishes it was “not” the intention of the parent to benefit only his or her child.
I propose to treat the money able to be identified as emanating from the wife’s parents and family as a contribution of the wife.
In Pierce & Pierce (1998) FLC 92-844 at page 85,811 the Full Court said:
In our opinion it is not so much a matter of erosion of contribution but a question of what weight should be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contribution by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contributions, in this case of the husband, regard must be had to the use made by the parties of that contribution.
It is obviously a matter of assessing the weight to be given to the respective contributions of each of the parties. The obligation is to achieve a result that is appropriate, just and equitable. It is a matter of balance and a consideration of weight. It is not an arithmetical exercise. I do not propose to look at each of the separate contributions of the parties and attempt to undertake the apportionment of a specific percentage adjustment in favour of the husband and in favour of the wife.
It is however necessary to identify the contributions of the parties.
I have indicated that at the commencement of the marriage the wife had substantial savings which were used generally to assist the parties in their day to day lives and general household expenses.
The wife’s parents were overwhelmingly generous. The monies provided by them in respect of the Suburb C property and the Japanese motor vehicle are able to be directly identified and therefore have a clear presence in the interests of each of the parties that now form the pool of property available for division. The husband argues that if there had not been such a contribution they may have purchased a property, just not the Suburb C property. The reality is that they did purchase the Suburb C property and that is what now forms the pool. The parties added little or none of their own separate and private resources to the purchase and the monies provided by the wife’s parents assisted not just in terms of deposit balance required at settlement but also stamp duty and other acquisition costs.
During the course of the marriage the husband was in employment, whereas the wife’s income was modest until she gained her qualifications.
I also bring to account that following separation the husband’s brother ceased to make any payments in respect of the outstanding loan monies and the amount paid out by the wife in respect of the relevant mortgage was $7,292.10. I propose to deal with that by requiring the husband to pay one half of that sum to the wife. It could be considered a contribution issue or a factor pursuant to s 75(2)(o). I therefore do not bring it to account as a further contribution factor.
I have found that the $14,000 currently held in the CBA term deposit represents property of the parties. I do not accept the evidence of the husband that in some way I can track that money back to his family. Whilst there is an potential impediment in making an order directly against those funds, nonetheless I propose to bring to account the unilateral action by the husband in utilising those monies without reference and/or consent of the wife. To the extent that there is uncertainty surrounding the purpose of those monies, the period for which those monies are invested and therefore not able to be distributed and any subsequent caveat arising from the visa requirements for his parents, they are matters created by the husband and made more complex by the lack of disclosure and evidence from his parents, brother and their visa application.
There is no uncertainty in respect of the liability attached to the mortgage undertaken to provide the loan to the husband’s brother but there remains substantial uncertainty as to whether and if so to what extent the husband’s brother will repay the loan.
I did not accept the husband’s evidence in terms of his assertion that he has not been able to ascertain his brother’s intention. I find that the behaviour of the brother in ceasing to make any contribution or repayments towards the loan monies as and from the date of settlement was not a coincidence but rather a device.
Notionally the asset has been included and is therefore to be retained by the wife. Practically, I suspect there will be significant difficulty and litigation will be likely with all the attendant costs if any of the loan monies are to be recovered. On the husband’s own evidence, he considers his brother’s behaviour to be unsatisfactory and provides no real confidence that the loan will be easily recoverable.
The wife is likely to expend significant money and effort in order to recover a liability that has been made more complicated by the husband’s actions and lack of willingness to assist. I consider that this issue is best treated as a s75(2)(o) consideration.
I propose to adjust the contributions as between the parties to reflect a 96 per cent/ 4 per cent adjustment in favour of the wife.

SECTION 75(2) FACTORS

I am uncertain as to the position of the husband in respect of s 75(2) adjustment. There was nothing in the Case Outline document but I assume that the husband may well have focussed on the likelihood of the wife being able to receive further monies from her parents which will enable her to retain the home and place her in a significantly superior financial position to that of the husband.
For his part he continues to be employed and it is conceded that his income is slightly greater than that of the wife.
The husband has also re-partnered and he appears to live in the home albeit with a rental obligation, with his partner Ms E.
The pool of property available for division is modest and depending upon the success or otherwise of the wife in respect of her endeavours to collect loan monies from the husband’s brother, it must be said that the exercise of property settlement in this case has been potentially pyrrhic given the costs incurred by each of the parties.
I do not consider that there should be any adjustment in respect of factors relevant to s 75(2) of the Act save as to the wife’s obligation to continue to pay the mortgage pertaining to the brother’s loan and the real possibility that the loan may not be recoverable either in whole or in part.
In any event it is the wife’s case that she seeks a settlement sum of $6,600 and on the husband’s case he was prepared to walk away from the proceedings retaining his own personalty and the monies invested.

ASSIGNMENT OR RIGHT TO SUE

The husband concedes that his brother Mr D Diung is liable to repay the parties the outstanding balance of his loan namely the sum of $95,370.
As discussed, the loan funds were obtained by the parties borrowing money secured by a mortgage over the Suburb C property. The particular home loan is account number …25294.
The parties are also agreed that the wife will take on the obligation in respect of the loan. The orders will reflect that whilst the husband is to transfer his interest in the Suburb C property to her, the wife is required to either discharge all of the liabilities or refinance to the exoneration of the husband.
The wife has accepted that the outstanding balance of the husband’s brother’s loan should be brought to account as an asset. It may or may not be recoverable. The husband remains disappointed in the poor conduct of his brother.
It will only be recoverable if the parties bring proceedings against the husband’s brother. The husband does not wish to be involved in that potential litigation nor is it likely that the relationship between the parties is such that they would adopt a unified approach.

The husband however does not object to the wife pursuing his brother providing he is indemnified in respect of any liability, obligation, cost or disbursement that might arise from any anticipated action.
The wife seeks an order that the husband assign his right to take action against his brother to the wife. A right to take action is a chose in action.
In Carvill & Carvill (1984) FLC 91-586 Barblett SJ considered whether the right of action is property within the meaning of s 79 of the Act. His Honour referred to the following extract from the 4^th edition of Halsbury’s Laws of England, Vol 6, para 1:
The expression “chose in action” or “things in action” in the literal sense means a thing recoverable by action, as contrasted with a chose in possession which is a thing of which a person may have not only ownership but also the actual physical possession. The meaning of the expression “chose in action” has varied from time to time, but it is now used to describe all personal rights of property which can only be claimed or enforced by action, and not by taking physical possession.
His Honour then said:
Is then, a chose in action, which is assignable (and that is yet to be determined, of course), property within the meaning of s 79. This matter was considered by the Full Court in Duff & Duff (1977) FLC 90-217. The three Judges who made up that court gave a joint judgment and they determined a very wide definition of property. The definition within the Family Law Act itself really does not take this question any further, but there can be no doubt that a chose in action, which is property within the normal meaning of the word, is also property within the meaning of that term within the Family Law Act.
Accordingly, I propose to order that the husband’s right of action against his brother should be assigned to the wife.

CONCLUSION

On the basis of a net asset pool of $284,804, the husband is entitled to retain 4 per cent which amounts to $11,392. He retains the term deposit standing in the sum of $14,000 and accordingly, the settlement sum payable to the wife is $2,608. To that sum must be added one half of the amount paid out by the wife in respect of the brother’s loan of $7,292 being $3,646, resulting in a total settlement sum payable by the husband to the wife of $6,254.
I consider it reasonable that the settlement sum should be payable within ninety days of the date of this order and I propose to make orders accordingly.
Should there be a default by the husband in respect of the payment of the settlement sum, I propose to put in place an injunction restraining the husband from accessing or dealing with the monies currently retained on term deposit until the settlement sum has been paid.
I make orders as appear at the commencement of these reasons.

I certify that the preceding one hundred and sixty two (162) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Berman delivered on 6 November 2015.

Associate:

Date: 6 November 2015

[2015] FamCA 959

6 November 2015

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Remedies

Injunction

Costs

Procedural Fairness

Assets
Suburb C house property	685,000
Commonwealth Term Deposit (husband)	14,000
Japanese motor vehicle (wife)	14,550
Loan owing by Mr D Diung	95,370
Total	$808,920

Liabilities
Home Loan … (loan for husband’s brother)	95,370
Home Loan …	288,969
Home Loan …	139,777
Total	$524,116