Xuen and Chao
[2013] FamCA 767
•10 October 2013
FAMILY COURT OF AUSTRALIA
| XUEN & CHAO | [2013] FamCA 767 |
FAMILY LAW – CHILDREN – Final orders – Undefended hearing - With whom a child lives with – Child’s best interests - Where mother relocated overseas and abandoned children – Where children expressed wishes to live with father – Where mother’s conduct questions her capacity to provide for the children’s emotional needs – Where mother demonstrates poor attitude towards parenting – Where mother has engaged in low level family violence – Order that the father have sole parental responsibility - Order made for precondition that the mother spend time with children as agreed by the father.
FAMILY LAW – CHILDREN – Parental Responsibility –Where presumption of equal shared parental responsibility rebutted on the basis of family violence.
FAMILY LAW – PROPERTY – Application for property settlement orders undefended hearing – Complex property proceedings regarding significant overseas and Australian assets in one or both parties names – Husband seeking orders that all Australian property together the all superannuation interests be transferred to him and to keep his interest in a jointly owned property overseas – Where difficulty ascertaining value of overseas property – Where wife not cooperating in proceedings – Where deliberate non disclosure by wife – Where husband’s values of overseas property accepted – Where proceedings undefended - Whether property owned by non parties or where gifted to non parties was part of the property pool – Where husband made greater financial contributions – Where significant weight given to father being sole contributor to the welfare of family since 2009 – where husband has care and control of children - Whether money taken by wife from superannuation and education fund considered as add backs or property of the wife - Difficulty of enforcement in overseas jurisdiction of an order for payment by the wife to the husband of the equivalent amount withdrawn as part of property order – Where unlikely mother would repay the amounts – Whether just and equitable to make an order in circumstances where the property division sought in father’s favour is less than would be his likely entitlement – Whether just and equitable to take all remaining superannuation in the unique circumstances – Where just and equitable to leave open husband’s prospect of salvaging the value of his joint interest in overseas property – Where it was not practicable to completely end the financial interrelationship between the parties in the circumstances in order to ensure a just and equitable division of property.
FAMILY LAW – COSTS – Application for property settlement orders – Where wife commenced but failed to cooperate in proceedings – Where wife wholly unsuccessful in proceedings – Costs on indemnity basis not warranted - Order made that wife pay the husband’s taxed costs of and incidental to proceedings.
Family Law Act 1975 (Cth) ss.4AB, 60CA, 60CC, 61DA, 65DAA, 65DAC, 75, 79, 81, 90MT, 117
Family Law (Superannuation) Regulations 2001
Domestic and Family Violence Protection Act (Old)
In the Marriage of Biltoff & Biltoff (1995) FLC 92-614
Townsend & Townsend (1995) FLC 92-569
Cerini & Cerini [1998] FacCA 143
| Smith & Smith (1991) FLC 92-261 |
Strahan & Strahan (2011) FLC 93-466
Commonwealth v Milledge (1952-3) 90 CLR 157
McGregor v McGregor (1996) FLC 92-710
Chang v Su (2002) FLC 93-117
Stanford & Stanford (2012) 87 ALJR 74
Archer & Archer (No.2) [2012] FamCA 357
| APPLICANT: | Mr Xuen |
| RESPONDENT: | Ms Cho |
| FILE NUMBER: | BRC | 3743 | of | 2010 |
| DATE DELIVERED: | 10 October 2013 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Tree J |
| HEARING DATE: | 30 April 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr. s Middleton |
| SOLICITORS FOR THE APPLICANT: | Carroll Fairon Solicitors |
| THE RESPONDENT: | No Appearance |
Orders
Parenting Orders
That the father have sole parental responsibility for the children J born … 1996 and F born … 2000.
That the children live with the father.
That the children spend time and communicate with the mother at all times as agreed in writing between them.
Property Settlement
Real Property
That within 7 days the wife repay to the N Super the amount of $68,296.23.
That within 30 days the wife pay to the Husband the amount of $81,368.64.
That within 90 days (the settlement date) the husband and the wife do all acts and sign all documents as are necessary to transfer to the husband, at the expense of the husband, all of the wife’s right, title and interest in the following properties:
(a)O Street, Suburb P in the State of Queensland more particularly described as Lot … on Registered Plan …, County of Q Parish of R, bearing Title Reference …; and
(b)S Street, Suburb T in the State of Queensland more particularly describes as Lot … on Registered Plan …, County of Q Parish of U, bearing Title Reference ...
That to complete the transfer by the wife to the husband, the following shall apply:
(a)settlement will take on the settlement date;
(b)the transfer documentation will be prepared by the husband’s solicitor and delivered to the wife by ordinary post for signature within 21 days;
(c)where the husband’s solicitor requires the return of the transfer documents for stamping purposes then:
(i)the husband’s solicitor will advise the wife at the time the transfer documentation is delivered;
(ii)the wife will then sign and deliver the transfers to the husband’s solicitors within 7 days;
(iii)where the wife fails to return the transfer documents within 7 days after the documents have been posted to the wife, then the husband may apply to a Registrar of the Family Court of Australia for such documents to be executed on behalf of the wife in accordance with these orders;
(iv)the husband’s solicitor will hold the transfer documents in escrow and use the transfers for stamping purposes only pending settlement.
That where the property is encumbered by a mortgage:
(a)the husband and wife shall sign an authority and any other documentation required by the mortgagee to release the mortgage and for that purpose the husband will obtain the relevant documents required by the bank;
(b)the husband’s solicitor will send the relevant release of mortgage documents to the wife for her signature;
(c)where the wife fails to sign and return the release of mortgage documents within 7 days of the date the documents were posted, then the husband may apply to a Registrar of the Family Court of Australia for such documents to be executed on behalf of the wife in accordance with these orders.
That pending the transfer:
(a)the husband shall have the sole right to occupy the Suburb T property and shall be solely responsible of the Suburb P property and during such right of occupation the husband shall be responsible for mortgage payments, rates and outgoing on the properties as they fall due up to and including the settlement date;
(b)the parties hold their respective interests in the properties upon trust pursuant to these orders;
(c)neither party shall encumber the properties without the consent of the other party or the mortgagee;
(d)any party who causes damage to the properties will repair such damage caused by them at their own expense.
The husband shall, from the settlement date, indemnify the wife against all claims, demands, proceedings and judgments in respect of any liability pursuant to the mortgages to V Home Loans, that is, W Pty Ltd ACN … with respect to registered Mortgage Number …, and all rates, taxes and other outgoings of the properties of whatsoever nature and kind.
That in the event that the husband is unable to raise sufficient finance to complete the transfers referred to herein, then the husband shall solely be responsible for the sale of one or both properties and in order for the sale of one or both properties to occur the following shall apply:
(a)the property shall be listed for sale by private treaty by such real estate agent chosen by the husband;
(b)the list price for the property shall be nominated by the husband;
(c)the sale price of the property shall be nominated by the husband;
(d)that upon agreement being reached for the sale of the property the parties shall execute the contract of sale and all other documents necessary to complete the sale of the property including all transfer documentation forthwith upon its submission to them by the agent or their solicitor;
(e)where the wife fails to sign and return such documents within 7 days of the date the documents were posted, then the husband may apply to a Registrar of the Family Court of Australia for such documents to be executed on behalf of the wife in accordance with these orders;
(f)the contract of sale shall provide for completion within 30 days after the date of the contract;
(g)the proceeds of sale of the property shall be paid in the following manner and priority:
(i)discharge the mortgage to V Home Loans;
(ii)payment of the agent’s commission, advertising and other expenses of sale;
(iii)payment of legal costs and outlays relating to the conveyancing for the sale;
(iv)the balance to be paid entirely to the husband.
Shares
That the husband and wife shall do all acts and sign all documents as are necessary to transfer to the husband, at the expense of the husband, all of the wife’s right, title and interest in and to the following shares:
(a)the wife’s shareholding in Telstra shares under Holder Reference Number … being the entire balance of Telstra shares held by her;
(b)the full balance of the jointly owned shares held with News Limited;
(c)the full balance of the jointly owned shares held in the Bank of Queensland;
(d)the full balance of the jointly owned shares held with Telstra;
(e)the full balance of the jointly owned shares held with X Pty ltd.
Superannuation
That the court allocates as required by Section 90MT(4) of the Family Law Act 1975, a base amount of 100 per cent to the husband out of the wife’s interest in Australian Super superannuation fund.
That in accordance with Section 90MT(1)(a) of the Family Law Act 1975;
(a)the husband is entitled to be paid using the base amount allocated in the immediately preceding order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)the entitlement of the wife in the Australian Super superannuation fund is correspondingly reduced by force of this order.
That the trustee of the Australian Super superannuation fund (“the trustee”) shall do all acts and things and sign all documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Family Law Act 1975, the entitlement awarded to the husband in the immediately preceding clause of this order;
(b)pay the entitlement whenever the trustee makes the suitable payment from the wife’s interest in the Australian Super superannuation fund.
That this order has effect from the operative time and the operative time is the fourth business day after the date of service of this order upon the trustee.
That the wife shall relinquish her entitlement in the N Super fund being the self-managed super fund of the parties and the husband shall retain, in its entirety, the whole benefit of the superannuation fund.
For the purpose of the preceding order that the husband and wife do all acts as are necessary to transfer to the husband all right, title and interest at the expense of the husband all of the wife’s right, title and interest in the only asset of the N Super Fund being the property at O Street, Suburb P in the State of Queensland more particularly described as Lot … on Registered Plan …, County of Q, Parish of R, bearing Title Reference ...
That to complete the transfer by the wife to the husband, the following shall apply:
(a)settlement will take on the settlement date;
(b)the transfer documentation will be prepared by the husband’s solicitor and delivered to the wife by ordinary post for signature within 21 days;
(c)where the husband’s solicitor requires the return of the transfer documents for stamping purposes then:
(i)the husband’s solicitor will advise the wife at the time the transfer documentation is delivered;
(ii)the wife will then sign and deliver the transfers to the husband’s solicitor within 7 days;
(iii)where the wife fails to return the transfer documents within 7 days after the documents have been posted to the wife, then the husband may apply to a Registrar of the Family Court of Australia for such documents to be executed on behalf of the wife in accordance with these orders;
(iv)the husband’s solicitor will hold the transfer documents in escrow and use the transfers for stamping purposes only pending settlement.
That pending the transfer:
(a)the husband shall be solely responsible for the Suburb P property and during such right of occupation the husband shall be responsible for mortgage payments, rates and outgoings on the properties as they fall due to and including the settlement date;
(b)the parties hold their respective interests in the properties upon trust pursuant to these orders;
(c)neither party shall encumber the properties without the consent of the other party of the mortgagee;
(d)any party who causes damage to the properties will repair such damage caused by them at their own expense.
That the wife will otherwise resign as a Trustee of the N Super and shall sign all documents required to be signed, and for that purpose where the wife fails to return the relevant documents within 7 days after the documents have been posted to the wife, then the husband may apply to a Registrar of the Family Court of Australia for such documents to be executed on behalf of the wife in accordance with these orders.
That otherwise the husband shall retain the entire benefit of his interest in the Australian Super Superannuation Fund and his interest in the self-managed superannuation fund N Super Fund.
The Husband’s Business
The husband will retain free claim by the wife his interest in the business Xuen Pty Ltd ABN … and the husband will indemnify the wife with respect to any liability owing by the business.
Other Orders
That the husband retain the following assets free from any claim by the wife:
(a)the cash payment of $81,368.64 from the wife;
(b)the property at S Street, Suburb T;
(c)the property at O Street, Suburb P;
(d)the News Limited Shares;
(e)all Telstra Shares;
(f)the Bank of Queensland Shares;
(g)the X Pty ltd Shares;
(h)the education fund for J;
(i)the business Xuen Pty Ltd;
(j)all benefits payable by Australian Super;
(k)the entire benefit of the self-managed superannuation fund, N Super Fund and in particular the property which forms part of that fund at O Street, Suburb P as well as the payment from the wife in the amount of $68,296.23;
(l)any other assets in the husband’s own name including contents of any properties, vehicles and bank accounts.
That the wife retain the following assets free from any claim by the husband:
(a)all remaining assets and interests not specifically referred to in these orders held by the wife in Australia.
That from the settlement date and unless otherwise specified in this order except for the purposes of enforcing payment due under these or any subsequent orders:
(a)each party shall be solely entitled to the exclusion of the other to all property in the possession of such party as at this date including any jewellery, furniture, furnishings, shares and motor vehicles;
(b)monies outstanding to the credit of the parties in their bank accounts to be the property of the party in whose name such bank account is held;
(c)each party forgoes any claim they may have to any superannuation benefit to or owned by the other. The parties in whose name such policy of superannuation or insurance stands shall be deemed to be the owner and beneficiary of such policy to the exclusion of the other;
(d)each party shall be solely liable for and indemnify the other against any other liability encumbering any item of property to which that party is entitled pursuant to this order.
That:
(a)each party shall do all acts and things reasonably required by the other including the signing and execution of all necessary documents to give effect to the provisions of this order within 7 days of being requested to do so;
(b)if either party refuses to neglects to sign or execute or return a document within 7 days of the request to do so then a Registrar of the Brisbane Registry of the Family Court of Australia is hereby appointed under Section 106A of the Family Law Act 1975 to sign or execute such document on behalf of that party upon lodgement of such document and filing of an affidavit of a solicitor on behalf of the requesting party as to the said neglect or refusal;
(c)a defaulting party shall pay the other party’s tax costs of and incidental to such requests and production of any documents to the Registrar.
That either party have liberty to apply to the implementation or enforcement of these orders within giving 7 days notice in writing to the other party.
That the wife pay the husband’s cost of and incidental to these proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Xaio v Chao 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 BRISBANE |
FILE NUMBER: BRC3743/2010
Applicant: Mr Xuen
And
Respondent: Ms Choa
REASONS FOR JUDGMENT
introduction
By the wife’s Initiating Application filed 15 June 2011, and the husband’s Amended Response filed 22 November 2012, each of the parties sought final parenting and property orders. On 8 December 2011 interim consent orders were made pursuant to which the parties’ three children were to live with the father, and spend time with and communicate with the mother. Those interim orders also updated procedural orders designed to ready the matter for hearing. Since 8 December 2011, the applicant has not involved herself in any way in either aspect of these proceedings. In those circumstances, on 24 January 2013 Registrar Coutts ordered that the respondent have leave to proceed to seek final orders on an undefended basis. I heard the matter on 30 April 2013, however in view of the issues raised in the property proceedings, reserved my decision.
This is my judgment and reasons relating to that hearing.
PARENTING ORDERS
The Children
There are three children of the parties’ marriage; Y born in 1995, J born in 1996, and F born in 2000. Y is now 18 years of age, and hence this court has no jurisdiction to make orders in relation to her. I will therefore refer to only J and F collectively as “the children”.
Orders Sought
In substance, the mother sought orders that the parties have equal shared responsibility for the children, that they live with her, and that they spend time regularly with the father. On the other hand, the father sought orders that he have sole parental responsibility for the children, that they live with him, and that they spend time and communicate with the mother at all times as agreed in writing between the parties.
Factual Background
The parties commenced their relationship in 1987 and finally separated on 23 August 2009. When they first met, both were Chinese residents, however the husband relocated to Australia in 1990. The parties married in Hong Kong in 1994, and the wife moved to Australia in July of that year, at which time cohabitation commenced.
After separation, the children continued to live with their father in the former matrimonial home. According to the Family Report dated 2 November 2011, after separation there was no structured time between the children and the wife. Rather it appears as though the wife was occupied in operating a business within China, and would periodically travel back to Australia. It is clear that there were long periods of time during which the children did not see their mother. For instance, as at the date of the Family Report, the children had not seen their mother since 24 March 2011. Prior to March 2011, they had not seen their mother for five months.
The material before me does not permit me to make any findings as to why it is that the wife has so absented herself from the children’s lives. It is plain from the Family Report that neither of the children particularly desire to spend time with their mother, however in part that unfortunately appears to be the product of the husband involving them in the dispute between himself and the wife, and particularly seeking to persuade them, even by reference to the wife’s affidavit material, that she is a liar.
It seems plain that the wife does not intend in the future to expend any real effort in either re-establishing a relationship with either of the children, or fulfilling her obligations as parent. Rather she appears to be intent on pursuing her business activities, and only when it is convenient to her, to spend some limited time with the children. For instance, in his affidavit filed 22 November 2012, the husband gave an illustration of the wife’s behaviour. He said “[m]y former wife arrived back in Australia on 1 November 2012 and turned up at the two Saturday morning Chinese language classes attended by my children at Sunnybank, early this month without any notice or consultation with me. She saw the children there and did not tell them how long she was staying in Australia, according to what they have told me.”
Statutory Framework
A convenient starting point is section 61DA of the Family Law Act, since by sub-section (1), it provides that the court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child. In the event that, either because that presumption applies, or because it is otherwise in the child’s best interests that there be an order providing for equal shared parental responsibility, then the court is obliged pursuant to section 65DAA to consider certain matters, including whether the child should spend equal time with each of the parents, or substantial and significant time.
However s61DA(2) provides that the presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in either abuse of the child or another child who, at the time, was a member of the parent’s family (or that other person’s family) or family violence. Further, subsection 61DA(4) provides that the presumption may be rebutted by evidence that satisfies the court that it would not be in the best interests of the child for the child’s parents to have equal shared parental responsibility.
In this context is convenient to also advert to section 65DAC, which provides for the effect of a parenting order that provides for shared parental responsibility. By subsection (3) such an order is taken to require each of the persons subject to it to consult with the other person/s in relation to the decision to be made about any major long-term issue in relation to the child, and make a genuine effort to come to a joint decision about that issue. It can therefore be seen that the obligations which an order effecting equal shared parental responsibility imposes are potentially onerous.
Finally, I should advert to s60CA, which provides that in deciding whether to make a particular parenting order, the court must regard the best interests of the child as the paramount consideration. The matters which a court must have regard to in determining the best interests of a child are set out in s60CC.
Does the s60DA(1) presumption apply, or is it rebutted?
Whilst the mother appears to make allegations of extensive disputes and some violence within the marriage, these remain untested by cross examination, and are disputed by the husband. However the father also makes allegations of family violence against the mother. These are detailed in the findings of Magistrate Cornack of 12 September 2011 which his Honour made during the course of making an order restraining the mother from approaching the father pursuant to the Domestic and Family Violence Protection Act (Qld). In those proceedings the learned Magistrate found that on several occasions the mother had acted in way intended to intimidate, harass and distress the father, including by upturning a table, throwing food on the ground on several occasions, and kicking the father’s car. That was behaviour which was intended to, and to an extent did, coerce and control the father. There are therefore reasonable grounds to believe that the mother has engaged in family violence, as that term is defined in s 4AB(1) and that therefore, pursuant to s61DA (2), the presumption of equal shared parental responsibility does not apply.
Accordingly it is unnecessary for me to consider whether the presumption is rebutted by evidence that persuades me that it is not in the best interests of the children to be the subject of an order providing for equal shared parental responsibility. I will therefore turn to determining what parenting orders are in the best interests of the children.
Consideration of s 60CC factors
s60CC(1)(a): The benefit to the child of having a meaningful relationship with both of the child's parents
There seems little doubt that it would be in the children’s best interests if they were able to have a meaningful relationship with both of their parents. However, albeit perhaps initially as a result of an interim restraining order, the mother has, by moving to live in China, chosen to, in a very real sense, abandon the children, and hence it seems inevitable that they are unlikely to ever during their minority, re-establish a meaningful relationship with her.
s60CC(1)(b): The need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence
Whilst the evidence does suggest that there was, during the latter part of the parties’ marriage, much argument between them, there is nothing to suggest that that remains a feature of the father’s home.
s60CC(3)(a): Any views expressed by the child and any factors (such as the child's maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child's views
Both of the children have expressed a desire to live with their father and to have little, if anything, to do with their mother.
s60CC(3)(b): The nature of the relationship of the child with:
(i) each of the child's parents; and
(ii) other persons (including any grandparent or other relative of the child)
Both of the children appear to have a good relationship with their father and a poor relationship with their mother. There is no evidence as to their relationships with other members of the maternal family.
s60CC(3)(c): The extent to which each of the child's parents has taken, or failed to take, the opportunity:
(i) to participate in making decisions about major long-term issues in relation to the child; and
(ii) to spend time with the child; and
(iii) to communicate with the child
A sad feature of this case is the failure of the mother, in recent years, to have any real involvement in the children’s lives. There is no suggestion that the father has in any way failed the children.
s60CC(3)(ca): The extent to which each of the child's parents has fulfilled, or failed to fulfil, the parent's obligations to maintain the child
It appears that the mother wholly fails to maintain the children. Since she has left Australia, that task has been shouldered exclusively by the father.
s60CC(3)(d): The likely effect of any changes in the child's circumstances, including the likely effect on the child of any separation from:
(i) either of his or her parents; or
(ii) any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living
There is no suggestion that the father’s proposed orders will effect any change in the childrens’ circumstances.
s60CC(3)(e): The practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child's right to maintain personal relations and direct contact with both parents on a regular basis
The mother resides in China. Whilst that may present difficulties in the children spending time with her, it is unlikely to present any difficulty with communication. Unfortunately the mother, on the material before me, is unwilling to communicate with the children, other than when it suits her convenience.
s60CC(3)(f): The capacity of:
(i) each of the child's parents; and
(ii) any other person (including any grandparent or other relative of the child);
to provide for the needs of the child, including emotional and intellectual needs
Plainly the father has the capacity to provide for the needs of the children including their emotional and intellectual needs. Whilst the mother may have that capacity, I have no direct evidence about that, other than that if she indeed does, she chooses not to. That in itself raises serious questions of her capacity to provide for their emotional needs.
s60CC(3)(g): The maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child's parents, and any other characteristics of the child that the court thinks are relevant
Both children are ethnically Chinese. It appears as though the father is cultivating their capacity to speak Mandarin, and that they associate with other family members in Australia who are also of Chinese ethnicity.
s60CC(3)(h): If the child is an Aboriginal child or a Torres Strait Islander child:
(i) the child's right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and
(ii) the likely impact any proposed parenting order under this Part will have on that right
This consideration is not relevant in this case.
s60CC(3)(i): The attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child's parents
On the material before me, it is plain that the father has demonstrated a good attitude towards the responsibilities of parenthood, and the mother has demonstrated a poor attitude.
s60CC(3)(j): Any family violence involving the child or a member of the child's family
As discussed above, the mother has perpetrated acts of family violence towards the father, and on occasion in the presence of the children. That said, that violence was very much at the lower end of the scale of such conduct.
s60CC(3)(k): If a family violence order applies, or has applied, to the child or a member of the child's family - any relevant inferences that can be drawn from the order, taking into account the following:
(i) the nature of the order;
(ii) the circumstances in which the order was made;
(iii) any evidence admitted in proceedings for the order;
(iv) any findings made by the court in, or in proceedings for, the order;
(v) any other relevant matter
This consideration is invoked here, given the orders of Magistrate Cornack made 12 September 2011. However as I have noted, whilst the mother was found to have perpetrated family violence, it was at a low level.
s60CC(3)(l): Whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child
There is no reason to think that the orders proposed by the father would likely lead to the institution of further proceedings in relation to either child. The mother appears to have no present interest in adopting any parenting role in relation to either of the children.
s60CC(3)(m): Any other fact or circumstance that the court thinks is relevant
I can identify no other relevant circumstances in this case.
Weighing the s60CC factors – What orders are in the children’s best interests?
Who should have parental responsibility?
The mother’s abandonment of the children is the most significant factor in this case. Notwithstanding my suspicion that she probably does have much that she could offer to these children, she appears to have, in effect, washed her hands of any responsibility for them. Such conduct makes it clear to me that it cannot be in the children’s best interests for her to be given any role or responsibility for long-term decision-making in relation to them. There will therefore be an order that the father has sole parental responsibility.
With whom should the children live?
The mother’s attitude precludes, on a practical level, there being any order other than that the children live with the father. In any event, the fact that she has moved to China, thereby in effect abandoning the children, would not give me any confidence that even if she were continuing to press that the children live with her, that such an order would be in their best interests. Her attitude to the parenting of them in the past is a factor which simply cannot be ignored.
When should the children spend time and communicate with the non-residence parent?
As unsatisfactory as it is to make orders, the practical content of which depend upon subsequent agreement - if any - of the parties, on one view it is perhaps better, in the event that such agreement can be reached, to give such agreement some binding effect. For instance, it is possible that the mother may incur considerable expense in travelling to Australia pursuant to some agreement reached with the father. It is in the best interests of the children to at least leave the door open for the mother to maintain contact with the children, save that it ought not to be in a disruptive or dislocating way. To achieve that, it seems sensible that, as a precondition to the mother spending time with the children, it be pursuant to agreement with the father.
Conclusion
I am therefore satisfied that the orders proposed by the father are in the children’s best interests, and will make the orders as sought.
PROPERTY ORDERS
The orders sought
By paragraph 5 of his amended response to initiating application filed 22 November 2012, the husband simply sought an order in the following terms: –
“Pursuant to section 79 of the family law act 1975 (Cth), all of the property of the Applicant Wife in Australia be assigned the Respondent Husband by way of final property settlement.”
A more fulsome set of proposed orders was annexed to the husband’s affidavit filed 12 March 2013. In substance in those orders:-
·he continued to seek that all Australian property of the parties either solely vesting or be transferred to, him together with all of the parties’ superannuation interests;
·he proposed to indemnify the wife in relation to the mortgages over the Australian properties;
·he sought that the wife be required to pay him the sum of $81,368.64, and the sum of $68,296.23 to the parties self-managed superannuation fund.
As disclosed in the parties’ affidavits, it appears as though in addition to assets within Australia, substantial assets are also owned either by the wife or by the husband and wife jointly, in China. During the course of argument, it became clear that the intention behind the drafting of the relief which the husband sought, was to keep alive the prospect that he may be able to obtain some future benefit from a property in China that was held in joint names. The difficulties associated with that will be addressed later.
What are the parties’ property interests?
The husband’s contentions
Counsel for the husband handed up during the course of his submissions, a volume of material which helpfully identified the property and liabilities of the parties, both in Australia and China, together with such supporting material as might assist the Court to ascertain the values attributable to them. The property and liabilities were said to be as follows:-
Assets
S Street St, Suburb T, Qld 4113 Mr Xuen & Ms Chao $500,000.00
O Street St, Suburb P, Qld 4109 Mr Xuen & Ms Chao $420,000.00
1,500 NSW News Ltd share Mr Xuen & Ms Chao $44,100.00
2,403 TLS Telstra Share Ms Chao $10,898.00
23 BOQ Bank of Queensland Shares Mr Xuen & Ms Chao $219.00
416 TLS Telstra Shares Mr Xuen & Ms Chao $1,886.00
194049 X Pty Ltd shares Mr Xuen & Ms Chao $776.00
Education Fund for Daughter J Mr Xuen $18,456.00
Mr Xuen & Associates Pty Ltd Mr Xuen Nominal
$996,335.00
Superannuation
Australian Super Mr Xuen $112,523.00
Australian Super Ms Chao $95,207.00
N Super – Self Managed Fund Mr Xuen & Ms Chao $425,000.00
$632,730.00
Liabilities
V Australia Home Loan Mr Xuen & Ms Chao $664,137.00
Citibank Australia Credit Card Mr Xuen $25,156.00
Mr Xuen & Associates Pty Ltd personal loan Mr Xuen & Ms Chao $150,000.00
XUEN personal loan Mr Xuen & Ms Chao $270,000.00
$1,109,293.00
Addbacks – Benefits taken by Wife
Withdrawal from joint mortgage $30,000.00
Withdrawal of AIA Policy for the child F $51,368.64
Funds withdrawn from N Superfund $68,296.23
$149,664.87
TOTAL AUSTRALIAN ASSETS $519,772.00
Assets in China
Z Street, Region AA B – Ms Chao’s brother $150,000.00
BB Street Region CC Ms Chao $150,000.00
EE Street, Region FF Mr Xuen & Ms Chao $390,000.00
GG Street, Region HH Ms Chao $500,000.00
II Pty LtdMs Chao $150,000.00
Watch 1;
Watch 2;
Watch 3;
Watch 4;
Various brand handbags such as LV & Jewelleries Ms Chao $40,000.00
C Street, Suburb T QLD Ms Chao $100,000.00
$1,480,000.00
Liabilities
Mortgage Loan Ms Chao $150,000.00
$150,000.00
Total Chinese Assets $1,330,000.00
Net Assets Australia $519,772.00
Net Assets China $1,330,000.00
Total Assets $1,849,772.00
Many of those entries seem uncontroversial in the sense that they are clearly established – both as to their existence and value – in the material in evidence before me. However whether some other items are in fact property of the parties, and whether the court should be satisfied of the values attributed to them, is dubious. I will deal with these instances under individual headings.
Mr Xaio & Associates Pty Ltd
It is uncontroversial that the husband conducts a business selling insurance on commission via the company Mr Xaio & Associates Pty Ltd. He attributes a nominal value to the business. However elsewhere in the list of assets and liabilities, it appears as though he relies upon a loan owed to the company by the wife in the sum of $150,000. Moreover elsewhere he attributes a further liability in the sum of $270,000 said to be owing to his three sisters.
In paragraph 12 of his affidavit filed 12 March 2013, the husband deposed to the fact that he owns 55 per cent of the shares in the company, with each of his 3 sisters holding 15 per cent of the shares. To that affidavit he annexed a copy of the balance sheet of the company as at 30 June 2012. Whilst that does disclose the loan of $150,000 owed to the company by the wife, and otherwise does not show any substantial assets, the husband cannot have it both ways: he cannot on the one hand assert a liability of $150,000 on the part of the wife, but on the other hand attribute no value to that asset on the part of the company.
As to the alleged loan from his sisters, the husband says nothing about it in his affidavit, and does not otherwise explain either in his affidavits or in the list of assets and liabilities handed up to me, how it is the sisters came to own a total of 45 per cent of the company or how he came to owe them $270,000.00. The latter is simply a bald assertion, and I am not persuaded, on the balance of probabilities, of the existence of present indebtedness in that sum or, if it be a present indebtedness, that it is likely to ever be enforced.[1]
[1]See In the Marriage of Biltoff & Biltoff (1995) FLC 92-614 at 82,125
Given all those matters, I will accept the husband’s assertion that the company has a nominal value, however to not take into account the asserted liability of the wife in the sum of $150,000, and the further asserted liability to the husband’s three sisters in the sum of $270,000.00.
Add Backs
The husband seeks to add back as notional assets in the property pool monies which were re-drawn by the wife from the mortgage, and withdrawn by her from an education policy for one of the children, together with funds which were also withdrawn by her from superannuation fund investment accounts.
Dealing firstly with the withdrawal of $30,000.00 from the mortgage re-draw facility, this has already in fact been factored into the liabilities of the parties. Amongst the liabilities which are clearly evidenced are the V mortgages, including for account No. …, with a balance of $131,214.00. This is the same account from which the wife withdrew the $30,000.00, such that but for that re-draw, the liability would be less. Moreover, there is no evidence that the wife has dissipated the $30,000.00.
Turning then to the withdrawal of the education policy, it appears as though this was done by surrendering the relevant policy and withdrawing the entirety of the funds within it. There is evidence that the wife then deposited that fund into her bank account in Australia, and proceeded to withdraw it in even $1,000.00 withdrawals between 9 March 2012 and 7 May 2012, with the last withdrawal on 8 May being of $720.00.
As to the superannuation term deposits, these appear to have been withdrawn by, in effect, closing the relevant accounts. What the wife has done with any of this money is unexplained.
The cases draw a distinction between a premature distribution of a proportion of the matrimonial assets on the one hand[2] and the reasonable conduct of post-separation of affairs in a manner consistent with parties getting on with their lives on the other.[3] However both are predicated upon the monies no longer forming part of the property available for division. That is not the case here – they were withdrawn, and remain unaccounted for, in circumstances where the wife has a duty of disclosure. In those circumstances it is not appropriate to add back the withdrawals: they should be regarded as property in the wife’s hands.
Z Street, Region AA, China.
[2]See for instance Townsend & Townsend (1995) FLC 92-569.
[3]See for instance Cerini & Cerini [1998] FamCA 143 at 346.
It will be noted that in the list of assets and liabilities, this item of property is said to be owned by the wife’s brother. Leaving aside the fact that the brother has not been joined as a party to these proceedings, and otherwise ignoring for the time being the lack of natural justice to him by any notice being given to him of the intention to deal with assets apparently registered solely in his name, it appears from paragraph 23 a. of the husband’s affidavit of 22 November 2012, that in fact the property was purchased for the brother so that he had a house for he and his then girlfriend to live in, so that she would marry him. How that asset, which appears to have been purchased as a gift for the brother, forms part of the property of either the husband or the wife, remains unclear to me.
I am not persuaded that it is either legal or equitable property of either of the parties available for division under section 79, nor am I persuaded that I should regard it as a financial resource of either of them.
All other Chinese real estate
There are three other units or penthouses which the husband says form part of the property of the parties available for division under section 79. None of them have been professionally valued. On several occasions, the husband has given his estimate of their values. On occasion those estimates increased; for instance, in his financial statement filed 22 November 2012, the husband estimated that his 50 per cent interest in the penthouse unit was worth $160,000, thereby giving it a total value of $320,000, however in the schedule of assets and liabilities handed up in argument, he attributed a total value of $390,000 to it. Whilst it could perhaps be conjectured that part of that increase was the result of inflation or increasing values generally, the value he attributed to the other Chinese properties remained unchanged.
The husband’s estimated values of the Chinese properties do not coincide with those sworn to by the wife. For instance, in her financial statement sworn 13 June 2011, she said that the Suite 206 unit was only worth $110,000 in total, and she said that her 50 per cent interest in the penthouse was only worth $90,000, which would have seen a total value attributed to it of $180,000, as distinct from the $390,000 presently contended for by the husband.
Resolving this matter is fraught with difficulty. The wife has ceased to cooperate in these proceedings, or indeed to have anything further to do with them. The process of obtaining valuations of the properties by a sufficiently credentialed Chinese expert, whose opinion could be given weight by this court, would no doubt be time-consuming and expensive, assuming it is achievable at all. I say it may not be achievable because, at least in relation to the two properties solely owned by the wife, how a proper valuation could be undertaken unless she were prepared to allow the valuer to inspect them is difficult to conceive. Whilst in such circumstances, an appropriate response, consistent with Smith and Smith (1991) FLC 92-261, may be to order the sale of the properties, the enforcement in China of any such order is likely to prove problematic.
There really is no easy solution to this problem. It is not satisfactory to accept the wife’s asserted values, given that they are now more than two years out of date, and she has, so far as I am aware, no expertise in valuing such assets. Although the husband in respect of some of the properties did give me a history of their purchase price and renovation costs, that may not continue to be reflective of current value. It is equally unsatisfactory to ascribe no value to them, or to only proceed to make an interim division of property, both in light of s 81, and the need to act within a conservative range of likely entitlement when making interim property orders, as adverted to in Strahan & Strahan (2011) FLC 93-466.
The authorities make it clear that in undertaking the task of affixing a value, a court is engaged upon a common sense endeavour, after consideration of all of the material before the court, to fix a sum satisfactory to the mind of the court: Commonwealth v Milledge (1952-3) 90 CLR 157 at 162, cited in McGregor v McGregor (1996) FLC 92-710 at 83,531. However the authorities also make it clear that in difficult cases, for instance in Chang v Su (2002) FLC 93-117 where there was deliberate non-disclosure, the only imperative that the Court can fall back upon is that the order must be just and equitable. In that case, the Full Court declined to interfere with the trial judge’s conclusion that, in the particular circumstances of that case, it would be just and equitable for the wife have the visible assets in Australia unencumbered, leaving the husband with all of the overseas assets.
Upon balance, I am prepared to accept and act upon the husband’s asserted value of the three Chinese properties in his financial statement filed 22 November 2012. There are three reasons for that. Firstly, so far as I am aware, that document was served upon the wife, and given the order of 24 January 2013 that permitted the husband to proceed on undefended basis, the wife must be taken to be at least on notice of the husband’s intention to rely upon those values in this hearing, and has chosen not to actively put that material in contest or to otherwise facilitate the resolution of the dispute between the parties as to the value of the properties. Secondly, the husband does have a history of property investment, and no doubt maintains an interest in the property market, albeit this observation might pertain more to Australia than China. Thirdly, his estimated values are to some extent buttressed by the costs of acquisition of the properties, together with, in one instance, the costs of renovation. Further, in considering whether the orders sought are just and equitable, I will take into account the possibility that the value attributed to those assets may be flawed.
The wife’s seafood business
The husband attributes a value of $150,000 to a seafood business which he says the wife operates. I know little about that business, and there is no supporting material for the attribution of any value to it, and certainly not a figure of $150,000. It may or may not be a current asset of the wife’s. To the extent that it is, I decline to attribute any value to it, as there is simply no basis upon which I could do so.
Valuables
The husband asserts that the wife has in her possession in China $40,000 worth of valuables, principally comprising watches. I have no real evidence as to the identity of those assets, nor their value. I decline to ascribe any value to them in these proceedings.
C Street, Suburb T
For reasons which are not clear on the material, this property is said to form part of the parties’ assets in China, although it is plainly situate in Queensland. It appears from the husband’s financial statement filed 22 November 2012, that the property is legally owned by the wife’s brother, Mr B. The husband asserts that $100,000 was contributed to its purchase by the wife. I have no idea as to the basis upon which that contribution was made. It could have been a gift. There is simply not sufficient information available to allow me to reach any conclusion as to existence of any equitable interest which, on the balance of probabilities, either party may have in the property. Again, for the purposes of this aspect of my decision, I note that Mr B is not a party to these proceedings, and appears not to have been given any notice of any claim against his property.
Summary of Assets and Liabilities
In accordance with the above findings, the property and liabilities of the parties is as follows:
Assets
S Street St, Suburb T, Qld 4113 Mr Xuen & Ms Chao $500,000.00
O Street St, Suburb P, Qld 4109 Mr Xuen & Ms Chao $420,000.00
1,500 NSW News Ltd share Mr Xuen & Ms Chao $44,100.00
2,403 TLS Telstra Share Ms Chao $10,898.00
23 BOQ Bank of Queensland Shares Mr Xuen & Ms Chao $219.00
416 TLS Telstra Shares Mr Xuen & Ms Chao $1,886.00
X Pty Ltd shares Mr Xuen & Ms Chao $776.00
Education Fund for Daughter J Mr Xuen $18,456.00
Mr Xuen & Associates Pty Ltd Mr Xuen Nominal
$996,335.00
Liabilities
V Home Loan Mr Xuen & Ms Chao $664,137.00
Citibank Australia Credit Card Mr Xuen $25,156.00
$689,293.00
NET TOTAL AUSTRALIAN ASSETS $307,042.00
Assets in China
BB Street, Region CC Ms Chao $150,000.00
EE Street, Region FF Mr Xuen & Ms Chao $320,000.00
GG Street, Region HH Ms Chao $500,000.00
Total monies withdrawn by wife Ms Chao $149,664.87
Total Chinese Assets $1,119,664.87
Total Net Assets $1,426,706.87
Superannuation
Australian Super Mr Xuen $112,523.00
Australian Super Ms Chao $95,207.00
N Super – Self Managed Fund Mr Xuen & Ms Chao $425,000.00
$632,730.00
Should an order under s79 be made?
Most of the parties Australian assets, including the former matrimonial home where the husband and children continue to reside, are jointly owned. One of the parties Chinese assets is jointly owned. They jointly conduct, or at least in the past have jointly conducted, a self-managed superannuation fund. This case is therefore a good instance of the example given in paragraph [42] of the High Court’s decision in Stanford and Stanford (2012) 87 ALJR 74, where “[i]t will 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 property by the husband and wife.”
What order under s79 should be made?
s79(4)(a): Financial contributions
In his affidavit filed 12 March 2013, the husband details how he arrived in Australia was with $7000 given to him by his family, and thereafter worked hard to build up the parties’ wealth in Australia. In July 1998 he started the insurance business. His affidavit says that he carefully stewarded the family’s limited financial resources by not only prudent investment, but also by hard work. The husband says in paragraph 35 of his trial affidavit that the wife did not work in Australia, and spent much of her time enjoying socialising, the gym and travelling.
Based on this limited, and admittedly one-sided, version of events, I conclude that during the course of the relationship, the husband made greater financial contributions than did the wife.
Whilst in his trial affidavit the husband says that he has “made all financial contributions since separation in August 2009 with no assistance whatsoever from the wife” I assume that he is restricting those comments solely to the Australian assets. In that regard, it appears clear that he and he alone has continued to service the parties’ mortgages in this country. As to the Chinese assets, I simply have no information as to who has been responsible for their maintenance and upkeep. Nonetheless on the information available to me, it appears as though the husband has, post-separation, continued to be the principal financial contributor.
s79(4)(b): Non-financial contributions
At paragraph 36 of his trial affidavit, the husband deposed to having attended to maintaining the several properties which the parties owned, including gardening, mowing and other maintenance. Whilst I have no evidence as to the wife’s contributions, it is highly likely that they existed, but that they were at a lesser level than the husband’s.
s79(4)(c): Contribution to the welfare of the family
At paragraph 37 of the husband’s trial affidavit he says that he shared the parenting and household duties concerning feeding, bathing, and clothing the parties children. He further says that the wife’s mother lived with them in the home for 10 years and did a lot of the housework, however he does concede that the wife did some cooking and he did some cleaning.
At paragraph 38 he says that he and the wife shared the education arrangements for the children, running them around to school and extracurricular activities, although he does say that in the last 5 years the wife did not once ever assist in doing so. Further, he says that since separation in August 2009, she has not been involved in the girls’ lives at all.
It is plain that the husband’s contribution to the welfare of the family has been considerable. Moreover, since August 2009, he has been the sole contributor to the welfare of the family, at least in so far as it is comprised of himself and the children. He is entitled to have that given significant weight.
s79(4)(d): Effect of proposed order on earning capacity
The orders proposed by the husband do not appear to impact on either parties earning capacity.
s79(4)(e): s75(2) factors
(a) the age and state of health of each of the parties
The husband is 47 years of age, the wife is 44 years of age. I have no information as to their state of health and infer that it is good.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
As at the date of the latest financial statement filed by the husband, he deposed to having a total average weekly income of $1013. On the other hand, in the wife’s financial statement sworn 13 June 2011, she asserted that she had a total average weekly income of $1.77. She said that she had expenses to the extent of $5000 per week, which were paid by her brother. Since then it appears as though that she has commenced some business in China.
It appears as though each of the parties has physical and mental capacity for appropriate gainful employment, and is deploying that capacity.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
The husband has the care and control of two children of the marriage who are under the age of 18 years, and presently educated in private schools in Brisbane.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain
The husband says that his total weekly expenditure is $2912, covering both himself and the two girls. As at June 2011, the mother asserted her weekly personal expenditure was $622.
(e) the responsibilities of either party to support any other person
This does not appear to be relevant in this case.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party
This does not appear to be relevant in this case.
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The parties appear to have had a frugal but enjoyable lifestyle. They appear to have ascribed particular importance to the education of their daughters, and invested heavily in it.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income
This does not appear to be relevant in this case.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant
This does not appear to be relevant in this case.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party
This does not appear to be relevant in this case.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
The parties marriage endured for 15 years, albeit the underpinning relationship appears to have lasted for 22 years. There is no evidence as to the extent to which the marriage has affected the earning capacity of either party.
(l) the need to protect a party who wishes to continue that party's role as a parent
Not only does the husband wish to continue his role as a parent, the wife appears not to wish to have any role in the children’s lives other than a superficial one.
(m) if either party is cohabiting with another person - the financial circumstances relating to the cohabitation
On the evidence before me, this does not appear to be relevant in this case.
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party
The orders proposed by the father would see each party retain sufficient assets to house themselves, and in the case of the husband, the children.
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii)
This does not appear to be relevant in this case.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
This does not appear to be relevant in this case.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
I do not identify any additional fact or circumstance relevant here.
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
This does not appear to be relevant in this case.
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
This does not appear to be relevant in this case.
s79(4)(f): Any other orders made
This does not appear to be relevant in this case.
s79(4)(g): Child Support
This does not appear to be relevant in this case, at least at this point in time.
s79(2): just and equitable
In accordance with these reasons, I find that the net value of the property of the parties is $1,426,706.87. The value of the parties’ superannuation is $632,730.00.
Given that he seeks to retain his joint interest in one Chinese property, the orders proposed by the father would see him retain assets with a net value of $467,042.00, save that he also seeks an order that the wife pay him the sum of $81,368.64. Given that, on his proposal, the wife will not retain any assets within the jurisdiction of Australia from which such a liability could be met, the chances of that sum being paid must be viewed as small. Nonetheless if she were to do so, then the husband would receive $548,410.64, or 38.4 per cent of the net assets. On any view, that is well below what would normally be his entitlement.
The proposed orders would also see him retain superannuation assets with a value of $632,730.00, save that he seeks that those funds be increased by the repayment by the wife to the self-managed fund of $68,296.23. He seeks that order because the wife plainly withdrew $68,296.23 from bank accounts of that superannuation fund and took those monies overseas. Again, the prospects of that sum being repaid to the superannuation fund seem remote. On any view, he is seeking at least 100 per cent of the extant superannuation assets, which is well above what would normally be regarded as his entitlement.
Assuming that the wife were indeed to repay both sums, then I calculate that the total entitlement of the husband would be a mix of property and superannuation with a present value of $1,249,436.87. The combined pool of superannuation and property as I find it has a present value of $2,059,436.87. That would see the husband’s net entitlement at 60.66 per cent.
On the other hand, the wife will retain Chinese assets which I find to have a value in the order of $959,664.87. From those she will have, on the husband’s proposed orders, a liability to pay the husband and the superannuation fund $149,664.87. If she did so, then her net entitlement would be $810,000.00, or 39.33 per cent of the total present net worth of the parties. Expressed as a percentage division, a 61/39 split of the parties’ property in the husband’s favour is within – but at the bottom of – an appropriate range, and satisfies me that any inaccuracy in the values attributed to the Chinese properties can, to a sufficient extent, be accommodated within the fact that the husband’s entitlement could justifiably be considerably more than he is asking. I also have regard to the unlikelihood that the wife will in fact repay the $149,664.87.
There are however 3 unusual aspects to the orders which the husband seeks: firstly that he wants all the Australian property, secondly that he wants all the superannuation, and thirdly, that he wants to keep his joint interest with the wife in one of the Chinese properties. I will discuss those issues in that order.
Turning firstly to the husband’s desire to retain all the property that is situate in Australia, I observe that the husband and the children reside in Australia, and the wife resides in China. Whilst the wife appears to retain some family living in Australia, it is clear that most of her time is spent in China, where she apparently conducts a business. At the time that she left Australia, she arranged to withdraw such cash as she was able to access, and either took it with her or deposited it into accounts under her exclusive control. She appears to have had nothing to do with the Australian assets since 2009. In those circumstances, to divide the assets largely along geographical lines, seems sensible.
Turning them to the question of the division of superannuation, it must firstly be observed that the mother withdrew from the self-managed superannuation fund investment accounts $68,296.23 upon her leaving the country. To that extent she has taken the benefit of some of the parties’ superannuation, and whilst the husband seeks an order requiring her to repay that amount, as I have observed, the chances of her doing so seem slim. The real question is whether the fact that the husband is seeking all of the remaining superannuation, can be seen as just and equitable in the unique circumstances of this case. As I have already observed, the property division which he seeks in his favour is less than would be his likely entitlement. As explained in submissions by his counsel, his reasons for doing so are entirely pragmatic, and relate to the difficulties of enforcement of any order in relation to Chinese property in that country. He is therefore suggesting that he take less than he might otherwise be entitled to property, but more than he might otherwise be entitled to in superannuation.
As I have illustrated above, if one were to notionally combine both the property and superannuation into one pool, the overall division, including in the equation the husband’s 50 per cent interest in one of the Chinese properties, is just within range. Moreover, by having a disproportionate entitlement to superannuation, and bearing in mind that the husband is only 44 years of age (which means that it will be many years before he gets personal enjoyment of any superannuation), the orders which he seeks work to his disadvantage. They are nonetheless pragmatically defensible, and I am of the view that the disproportionate skew of property and superannuation does not make the outcome unjust or inequitable.
Finally as to the question of the continued co-ownership of one of the Chinese properties, I am troubled that pursuant to section 81, it is the duty of this court to end the financial inter-relationship of the parties as far as practicable. Plainly, continuing co-ownership of the Chinese property would not fulfil that obligation, as was adverted to (albeit in a slightly different context) by Young J in Archer & Archer (No.2) [2012] FamCA 357 at [7]. However, if one were to factor into the percentage division of assets, a further $160,000.00 reduction in the husband’s entitlement, then the division of assets on the values which I have determined, would see his entitlement to property at $388,410.64 or 27.22 per cent of the pool, or of a combination of property and superannuation at $1,089,436.87 or 52.89 per cent of the total pool. In my view, both of those are well outside the range of a just and equitable division of the parties’ property.
I am of the view therefore, that if the husband wishes to continue to leave open the prospect of being able to salvage some value from his joint interest in the penthouse property, then in the unusual circumstances of this case, it is not practicable to make orders which will finally determine the financial relationships between the parties, because the only way in which that could be done would be by failing to make a just and equitable division of property between the parties. I say that a just and equitable division of the parties’ property could not otherwise be had, because viewed from a practical perspective, whilst there could be a larger cash sum required to be paid by the wife to the husband, as I have already observed, the chances of her in fact paying that sum seems slight, given the absence of any assets which she holds in Australia. On the other hand the fact that the husband remains (apparently pursuant to Court Order) a joint proprietor of the penthouse unit in China, may give him some slightly better prospects of being able to realise some value from that interest.
Conclusion
For these reasons there will be Orders in terms of para.4 to 28 of the Orders exhibited as JX-1A to the husband’s affidavit filed 12 March 2013.
COSTS
The husband seeks an order that the wife pay his costs of and incidental to these proceedings on an indemnity basis. The starting point for a consideration of that submission is s117 of the Family Law Act, which by sub-section (1), provides that subject to sub-section (2) of that provision, each party to proceedings under the Act shall bear his or her own costs. Sub-section (2) provides that, if the Court is of the opinion that there are circumstances that justify it in doing so, it may make an order as to costs as it considers just.
s117(2A) lists the matters which the Court is obliged to have regard to in considering whether there should be an order for costs. Two of those matters appear to be relevant here. The first is sub-paragraph (c), which is relevant given that the wife commenced these proceedings, but has not, since 8 December 2011, played any part in their resolution. The second matter is sub-paragraph (e) which is relevant here because the wife has been wholly unsuccessful in the proceedings.
In my view those two factors are sufficient to justify a departure from the ordinary position as to costs, and that there should be an order that the wife pay the husband’s costs. However I am not convinced that this is a case in which an order for indemnity costs is warranted, and decline to make an order on that basis.
Accordingly there will be an Order that the wife pay the husband’s taxed costs of and incidental to these proceedings.
CONCLUSION
For the reasons previously identified, there will be Orders in terms of paras.1 to 28 of the Orders at annexure JX-1A to the affidavit of the husband filed 12 March 2013, together with an order that the wife pay the husband’s taxed costs of these proceedings.
I certify that the preceding one hundred and eight (108) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 10 October 2013.
Associate:
Date: 10 October 2013
Key Legal Topics
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Family Law
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Property Law
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Equity & Trusts
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