ZHOU & WAI
[2020] FCCA 1061
•6 May 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZHOU & WAI | [2020] FCCA 1061 |
| Catchwords: FAMILY LAW – Property – short marriage – one child deceased shortly after birth – overwhelming financial contributions were funds provided by each party’s parents – each party alleges their parents made loans not gifts – each party alleges the other party’s parents made gifts – independent contemporaneous documentary evidence establishes each parties parents gave gifts and not loans – both parties unreliable witnesses on key issue of loans versus gifts – husband’s mother unreliable witness on this key issue – unable to rely upon either parties’ evidence – unable to rely on husband’s mother’s testimony – no other witnesses – other issues fall to be determined by reference to objective evidence in particular bank records – where no reliable independent evidence issues fall to be determined by reference to onus on proof – child bearing only matter established as greater non-financial contribution – no adjustment for s75(2) factors - property adjusted as to husband 75% and wife 25%. |
| Legislation: Family Law Act 1975 (Cth), ss.75(2), 79 Evidence Act 1995 (Cth), ss.128, 131(2)(g), 140 |
| Cases cited: Kennon & Kennon [1997] FamCA 27 Williams & Williams [2007] FamCA 313 |
| Applicant: | MR ZHOU |
| Respondent: | MS WAI |
| File Number: | SYC 4475 of 2017 |
| Judgment of: | Judge B Smith |
| Hearing dates: | 14 February 2019, 15 February 2019 & 3 May 2019 |
| Date of Last Submission: | 24 May 2019 |
| Delivered at: | Sydney |
| Delivered on: | 6 May 2020 |
REPRESENTATION
| Counsel for the Applicant: | Mr Moutasallem |
| Solicitors for the Applicant: | Wang Lawyers Pty Ltd |
| Counsel for the Respondent: | Mr Alexander |
| The Respondent was Self Represented and provided direct brief to Counsel |
ORDERS
The husband be disbursed and paid the monies held in the Accuro Legal Trust Account in the sum of $203,501.41.
The husband be disbursed and paid the monies held in the Frankham Family Lawyers Trust Account in the sum of $4,000.
The husband be disbursed and paid the sum of $76,665.17 of the monies held in the JC Legal Trust Account.
The wife be disbursed and paid the sum of $63,105.53 of the monies held in the JC Legal Trust Account.
Each party otherwise retain, to the exclusion of the other, all or any items of personalty in their possession as at the date hereof including but not limited to motor vehicles, monies, rings, jewellery, and clothing.
Each party be solely liable for and indemnify the other against all liability and or all debts in their sole name, or any liability encumbering any item of property to which such parties are entitled to, pursuant to these orders.
Each party be declared the sole beneficiary, to the exclusion of the other party, of any superannuation interest held in their own names.
IT IS NOTED that publication of this judgment under the pseudonym Zhou & Wai is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 4475 of 2017
| MR ZHOU |
Applicant
And
| MS WAI |
Respondent
REASONS FOR JUDGMENT
These are property proceedings between Mr Zhou born in 1988 (“the husband”), who is 31 years of age, and Ms Wai born in 1989 (“the wife”), who is 30 years of age.
They were both born in China and both came to Australia to study. The husband arrived in Australia in 2009 and the Wife in 2011. They met in Sydney in 2013 when they were both enrolled in the same course of study.
After a short period of dating they commenced cohabitation in rented accommodation in the latter part of 2013. They both became permanent residents of Australia in around 2014. They married in 2014 in a ceremony in China.
They purchased the former matrimonial home (“the home”) in 2015 for $770,000. The purchase settled in 2015.
The home was purchased primarily with funds provided by their respective parents. The amounts provided by each parties parents, and whether they were loans or gifts, was a significant issue in the case.
The parties became pregnant and had a child, X, who was born in 2016. Tragically, X passed away a week later in 2016. The parties had planned to travel to China to celebrate a festival in 2016. The husband went, despite X’s death. The wife stayed in Australia. She never forgave him for going. He never returned to the home. They were divorced 26 November 2018.
Between March and May 2017 the wife withdrew large sums of monies from the parties’ offset and joint savings accounts. By consent, that money was transferred to the controlled monies account of Accuro Legal Trust Account. That account holds $203,501.41. That money, having come from their joint account, is a joint asset of the parties. In about March 2018 the home was sold by Court Order. The sale proceeds of $139,770.70 are held in the trust account of JC Legal Trust Account. As the proceeds of the jointly owned former matrimonial home, these funds are also a joint asset of the parties. There is also a further $4,000 held in the Trust Account of Frankham Family Lawyers, which is a joint asset of the parties. The monies in these three accounts total $347,272.11. I will refer to them jointly as “the funds”.
The parties agree the husband has a Motor Vehicle 1 worth $13,000. It is agreed the husband should keep the Motor Vehicle 1.
These agreed assets of the parties total $360,272.11.
The major issues on which the parties focussed at the hearing and in final submissions were:
a)whether the monies received by each party from their parents were loans or gifts;
b)how much money did the wife receive from her parents;
c)the characterisation of $100,000 transferred by the husband’s parents to the wife; and
d)whether there is any other ascertainable property or liabilities for inclusion in the balance sheet, noting neither party provided information or made any submissions about superannuation.
There were also issues raised as to:
a)the date co-habitation commenced and finished;
b)the nature and extent of each parties financial contributions from work, and the nature and extent and relative degree of non-financial contributions; and
c)the parties financial resources.
The wife conducted a Kennon & Kennon [1997] FamCA 27 case, which was vigorously defended. The wife did not press the claim in final submissions. The husband led nominal medical evidence suggesting some physical impairment of earning capacity, but did not press this in final submissions.
There were also very substantial attacks upon the credibility of each party.
For reasons set out below I have concluded that both parties were unreliable witnesses. They were each willing to give sworn evidence about the major issue of whether money transferred to them had been as a gift, or a loan giving rise to a repayable liability, which was inconsistent with the contemporaneous documentary evidence they each created. They each did this to seek to obtain a financial advantage in the proceedings.
While that finding does not necessarily mean the Court cannot accept either witness on any other issues, considering the totality of the evidence I have formed the view that the testimony of these witnesses cannot be relied upon unless there is some independent corroboration or other persuasive factor. I note that the husband’s mother, who gave evidence in support of his case that monies transferred by her were a loan, suffered the same grave credibility problem on that key issue given a contemporaneous document she had created identifying the transfers as a gift. I therefore consider her equally unreliable on the other matters she gave evidence about.
That means that in respect of a number of matters where there is no objective evidence the issue falls to be determined by reference to the questions of legal and evidentiary onus. While that is a less than satisfactory basis on which to decide significant issues, it is the result of each party’s intentional conduct in the conduct of the case.
What monies were transferred by each party’s parents?
The parties agree on the sums of money transferred by the husband’s parents to the husband. They do not agree whether these were loans, as he says, or gifts as she says.
They agree that $100,000 was transferred from the husband’s parents to the wife.
The parties do not agree on the amounts of money transferred by the wife’s parents to her, which sums she says were loans and he says were gifts.
The husband received money from his mother, via transfers from a variety of differently named people and in a variety of different ways. This was generally in sums of just under or over $50,000, over the period from 2013 to 2015. These transfers totalled $426,270.
The wife received two cheques for $50,000, totalling $100,000, from the husband’s mother. These were banked in 2015, the same day as two cheques from the husband’s mother, drawn on the names of his grandparents and payable to him, worth $113,458 were also banked. These funds came just prior to the purchase of the home.
The husband’s evidence was that the $100,000 paid to the wife was a transfer for his benefit, made as part of the overall scheme in which Chinese capital controls were avoided by using the names and bank accounts of multiple people in China and transferring the money to both the husband and wife in Australia. I note that that argument is consistent with the array of named transferees in China who sent money to him on his parents’ behalf.
The husband’s case was that there was therefore a total of $526,270 transferred to him by his parents to purchase the property. His evidence, and that of his mother who was called as a witness, was that these were loans which he was and remains liable to repay.
The wife’s case was that the $100,000 paid to her by his parents was in consideration of the commercial sale from her parents to his parents of a form of precious mineral or gem known as a “A Stone”.
The husband’s mother transferred a further $99,970 by two transfers in 2016. On the husband’s case the total transfers were $626,240 and these were all loans. On the wife’s case the total transfers to the husband were $526,240 and these were all gifts, and the transfer of $100,000 to her was effectively a loan from her parents.
The transfers and amounts from the husband’s parents, or their numerous agents, were evidenced by bank statements and were not contested by the wife.
The wife also received transfers from her parents, which she said were repayable loans and which the husband said were gifts.
The wife’s evidence based on her “recollections” were that her parents contributed $206,555 towards the purchase of the property, including the $100,000 referred to above, together with $76,725 for study and expenses. That was a total of $283,280.
The husband conceded that her parents had contributed $82,000. However, that concession in final submissions was based on the proposition that the only relevant financial contributions by the wife’s parents which the Court should take into account, were those that could be traced through the purchase and offset account to the remaining funds. That incorrect proposition is considered further below. Otherwise, the husband did not submit on this issue.
Given the credit findings I make, I consider it necessary to confirm the wife’s oral evidence from the bank accounts provided by her evidencing the transfers.
Those bank statements identify transfers of $57,325 between 2013 and 2014. She also said her parents loaned her $196,955 over the period 2014 to 2015, in the run up to the purchase of the home. These transfers were generally in sums of $50,000 or less. They also loaned her the $100,000 received from the husband’s mother. These sums are identified in her bank statements. She also gave evidence that her parents gave her $19,400 of which she deposited, but in respect of which she has documentary proof to establish only $9,000. That is a total of $263,280 for which bank statements are available, including the $100,000 from the husband’s parents, or $163,280 excluding the $100,000.
Were the husband’s parent’s monies loans or gifts?
The husband’s case, as opened in written submissions, was that
“The husband contends that the monies advanced by his parents were loans and not gifts. This fact is disputed by the wife. The husband's assertions are corroborated by his mother's evidence.”
That was consistent with his sworn evidence that in September 2013, whilst in a relationship with the wife, but on his case before co-habitation as noted further below, he had a conversation with his mother in which he said:
“Mother, I am really struggling to support my lifestyle in Australia, I am now with Ms Wai, and I cannot support us both with our position.” And she said, inter alia “How can I help you son?” and after some discussions she said “I will loan you the monies to support your living expenses for now, and when you get permanent residency, I will provide you with the money to purchase a property and start your life in Australia.”
The husband was cross examined on a statement signed by him in 2014 and provided by him to the Department of Immigration of the Commonwealth of Australia in support of his application for permanent residency in Australia. That statement said in part
“My parents will give us enough money to buy an apartment in Sydney.”
The husband was also directed to a letter headed “Parents Statement” which he agreed bore the signatures of his mother and father, and which he had also submitted to the Commonwealth as part of his application for permanent residency. That statement included the sentence
“We all have good jobs in China, and we decided to buy a new house for them in Sydney as the wedding gift.”
The wife sought to cross examine the husband on the inconsistency between his sworn evidence in these proceedings and the written statements proffered by him to the Commonwealth as evidence upon which he obtained permanent residency. On advice from counsel the husband declined to answer questions about the inconsistency in exercise of his rights pursuant to section 128 Evidence Act 1995 (Cth). In the circumstances he was not required to answer and no further evidence was given.
The husband called his mother, Ms B, in support, inter alia, of his case that the funds he received from his parents were all loans. Ms B was shown her statement above and adopted her signature and her husband’s signature. Despite that document, she maintained her position that the transfers were loans despite what was contained in the document.
In these circumstances, I prefer the husband’s and his parent’s contemporaneous statements, against interest in these proceedings, that these transfers were gifts or a wedding gift. I note that this is also consistent with the presumption of advancement, if one were to consider that there is otherwise no reliable evidence on the issue.
I am comfortably satisfied to the requisite standard in section 140 Evidence Act 1995 (Cth) and Briginshaw v Briginshaw (1938) 60 CLR 336, that the characterisation of these transfers as loans which were repayable in evidence in chief in these proceedings was a direct and intentional lie on an issue of major significance designed to mislead the Court and obtain an improper advantage.
In these circumstances I find that the husband was an unreliable witness. This was not a minor exaggeration or a statement made to cover a matter of embarrassment. This was a bold lie designed to support the submission made that the entirety of the funds were payable to his parents in repayment of the matrimonial liability. I will not, therefore, accept his evidence unless there is some independent supporting material or other reason to do so. I make a similar finding concerning his mother, Ms B.
I find that the transfers from the husband’s parents to the husband were gifts and not loans.
I will deal with the $100,000 transferred to the wife further below.
Were the wife’s parent’s monies loans or gifts?
The wife’s evidence in chief similarly described the transfers from her parents as repayable loans.
However, her bank statements, which she relied upon to establish the existence and quantum of the transfers as set out above, included at a number of points the notations “mother gift” and “father gift” when she transferred these monies from her bank account to the parties joint account.
When these notations in the bank statement annexed to her own affidavit were put to her in cross examination, she gave evidence that it was the husband who made those notations. When her statements that she had made these transfers were put to her, she then gave evidence that she had accessed the account, she then gave the husband control, he then typed the words “mother gift” or “father gift”, but that she then resumed control and she was the person who clicked the button or took the action required to actually process each transaction.
On that basis she said her evidence was consistent, as while he made the notation she actually made the transfer. She did not attempt to explain why he was making the notations, why he was noting the transfers as gifts if they were loans, or why she let him put incorrect notations in on repeated occasions.
I prefer the contemporaneous notes in the wife’s personal bank account records which I find, on the balance of probabilities, she made at the time and which record the monies received from her parents as gifts. There is no evidence from her parents. Again, I note that this is consistent with the presumption of advancement which her evidence in chief has not in my view displaced.
During the course of the Hearing the wife sought to avoid answering questions directed to inconsistencies or weaknesses in her case by, quite convincingly, pleading stress, distress and memory difficulties. However, those difficulties only arose when faced with clear evidence inconsistent with her evidence and case. At other times, sometimes only shortly thereafter, she had as good a knowledge of and ability to refer the Court to the contents of documents in evidence from the witness box as any diligent counsel.
I am again comfortably satisfied to the requisite standard in section 140 Evidence Act 1995 (Cth) and Briginshaw, that the characterisation of these transfers as loans in evidence in chief in these proceedings was a direct and intentional lie on an issue of major significance in the proceedings designed to obtain a false advantage.
I note that when considering the wife’s credit, I have in mind her evidence about “the ring” considered further below.
In these circumstances, for the same reasons as outlined above regarding the husband, I also find that the wife was an unreliable witness. I will not, therefore, accept her evidence unless there is some independent supporting material or other reason to do so.
I find that the transfers from the wife’s parents to the husband were gifts and not loans.
Was there a ‘A’ Stone?
The wife gave extensive and detailed evidence about the alleged transaction which resulted in her parents selling a gem called a ‘A’ Stone to the husband’s parents for $100,000. It is so named because of the mineral’s hue and is said to be highly prized in China. The wife’s evidence was that the husband’s parents then paid her the money in Australia in satisfaction of the debt, and by way of a loan from her parents.
There was no independent corroboration of this transaction which was denied by the husband’s mother and the husband. The husband also points to the fact that the sale, which was said to be an arm’s length valuation commercial transaction, was said to have occurred in December 2014, but the payment was not made until April 2015. The wife did not call either of her parents to give evidence. There is no documentary evidence. There is no photo of the gem. The only evidence is the wife’s word.
The husband submitted that the payments to the wife were consistent with the pattern of using different names in the transfers to avoid capital controls, so that no inference arises from the use of the wife as a recipient. I cannot say why the measure was adopted, the pattern is clear. I accept that submission as correct having reference to the bank accounts.
It is agreed that the money came from the husband’s mother and would be his contribution, regardless of which party it was paid to, unless it was, as the wife says, a payment of a debt owed by his parents to her parents. Only in that latter case would it be the wife’s parents’ contribution on behalf of the wife. I have already made findings about the wife’s reliability on the question of loans versus gifts.
The wife bears the evidentiary onus of showing that there was a commercial arrangement involving the sale of a ‘A’ Stone. The only evidence she has led was her oral testimony.
In the absence of any independent evidence at all, and noting my findings regarding the wife’s credibility, I cannot find on the balance of probabilities that there was such a transaction.
I find that the $100,000 was, on the balance of probabilities, a gift from the husband’s parents to the husband paid via the wife as a way of avoiding Chinese capital controls.
Gifts - Summary
The wife’s final written submissions were to the effect that the funds received by each party from their parents were gifts. This eminently sensible concession by her counsel sought to avoid the credit issue as far as possible. However, that late concession could not overcome the impact of her evidence on this topic on her credibility. I note that I dealt with her evidence on this issue above, despite that concession, because of its significance to the approach I have had to take to her credibility generally, and the consequences it had on my ability to rely upon her other evidence.
The husband formally did not concede the issue. His counsel also sensibly sought to avoid or minimise the negative impact of this issue on the husband’s credibility by submitting that 95 per cent of the husband’s case was directed to the finding that the husband’s parents’ transfers were also gifts. This attempt to avoid the issue after the evidence was given was also too late to ameliorate the impact the evidence had on the husband’s credibility and on that of Ms B.
Based on my findings above, I find that the husband’s parents transferred $626,240 to the parties and these were all gifts, and that the wife’s parents transferred $163,280, as established by the bank accounts, and that these were all gifts. That is a total of $789,520. That was 21% of the major financial contribution by the wife’s parents on her behalf and 79% by the husband on his behalf.
The home was purchased with a mortgage. The gifts provided by the parties were not used solely for the purpose of buying or paying off the property. The precise use of the excess funds is not clear from the evidence, however, it appears the parties used those funds to meet their general living and other expenses.
These were the principle financial contributions dealt with by the parties in the hearing and submissions.
The parties gave little useful evidence about their limited earnings, when employed for short periods over the short relationship, and the $789,520 in parental gifts represented the overwhelming financial contribution by the parties.
Is there other ascertainable property?
The wife submitted that the agreed $360,272.11 represented the total, ascertainable, asset pool.
The husband submitted that in addition there were other assets, all in the possession of the wife or held by her parents on her behalf.
These include:
a)Gold bars and three pendants worth $130,000. These were said to be a dowry gift from the wife’s parents. He says she or they still have them. She says they were given to his parents;
b)Jewellery worth a total of $116,640 including in particular a “C Jewellers ring” worth $31,500, which he says he gave her during the relationship; and
c)$6,172.51 in foreign currency which was in the possession of the wife at the end of the relationship. As there is no substantial evidence about the $6,172.51 in foreign currency, which the wife allegedly held some years ago, I find that it cannot be established to be existing property of the parties. It was not submitted that this small sum should be dealt with as notional property or added back. I will not deal with this further.
On the husband’s case these additional items total $252,812.51 and are in the wife’s possession. Added to the agreed sum of $360,272.11, that gives a total property pool on the husband’s case of $613,084.62. The husband therefore submitted, as I understand it, that as $252,812.51, or 41% of the pool, is already in the wife’s possession, she already has more than she contributed and he should receive all of the funds. That is in addition to his submission on tracing considered further below.
The wife’s submission is that the husband bears the onus of proof regarding the jewellery, gold bars and pendants which he has not met.
Should the gold bars and three pendants be included in the pool?
The husband’s evidence was that whilst in China in 2015 the wife’s father:
“advised us that he had purchased $50,000 worth of Gold Bars and three Pendants worth $80,000 as gifts for the marriage. At this moment, [the wife’s father] showed me the Gold Bars and Pendants, and returned them to his safe. I have not seen the Gold Bars or Pendants since, and I believe that the Gold Bars and Pendants are still in the possession of Ms Wai’s father. The Gold bars and Pendants were not used or contributed towards the marriage.”
The husband gave evidence that the wife agreed in a conversation, in about November 2016, that her parents had the gold bars and pendants in “safekeeping” for them.
The wife’s oral evidence when it was put to her that her father kept the gold bars and pendants was:
Q: Ma’am, I’m going to suggest to you that your father kept the gold bars and the pendants. Didn’t he?
A: How is it possible, when the father gave – he has daughter’s dowry, then kept it. How could it be? That was a tradition in China, so that when the daughter marries someone, family would give some gold items. It is Chinese tradition that when a daughter is born, the family will prepare some gold for her, as dowry. And my mother bought a golden lock, a golden lock for my deceased child. She didn’t know the child would pass away.
Q: Ma’am, let me ask you this. It’s the case, isn’t it, that your father showed the gold bars, the pendants to you both, and then he put them back in his safe?
A: Okay. So on this occasion, I went back to China. I didn’t see a safe, in my family.
Q: Ma’am, you know that neither [the husband] or his mother – you know they don’t have the gold bars or the pendants.
A: They do.
Q: And you agree with me, when I - - -
HIS HONOUR: Stop here. You used the word – I know translation may be difficult, but “dowry?”
A: Yes.
HIS HONOUR: Now, is the dowry paid, on what you’re saying, to the applicant? Or is a dowry paid to his parents?
A: So in normal circumstances, the dowry would be for me. Given to me. But because his mother is such a – like a domineering person, so that was given to her. And then, again, in normal circumstances, those jewelleries will be passed on to next generation.
The parties agree that there were gold bars and three pendants and the value does not appear to be in dispute. The husband says the wife’s parents made the gift but he never saw or knew of the transfer of the property and contends that her parents retain it for her. The wife says the husband’s parents received the dowry payment, and probably still have this property.
The wife’s submission is that the Court cannot be satisfied where the property is so that it should not be included as property of the parties.
The husband submitted that the wife’s submission is inconsistent with her evidence that his parents have the property. On her case, he submitted, these items should be valued as her contribution but found to be in his possession. He sought an inference from her submission that she has the property and does not want the Court to deal with it.
The wife’s final submission was, however, consistent with being made in anticipation of the credit findings made above. Those findings were foreshadowed at the conclusion for the hearing, when counsel for both parties were asked to address on credibility, and in particular on what approach I should take if I found that both parties and Ms B were entirely unreliable witnesses. In that context the wife’s submission is understandable.
I do not consider that the wife not making the submission that the property should be included and found to be in the husband’s possession is a basis from which I can draw a factual inference that it is in her possession.
The husband bears the evidentiary onus of establishing that this is existing property of the parties and that it is in the wife’s possession.
There is no independent evidence at all about these items, only the testimony of the parties and Ms B, all of whom I have found to be unreliable.
On that basis I cannot find that these items still exist, or are in the possession of either party, or which party may have held them or disposed of them so that they should otherwise be considered.
On that basis I consider the wife’s submission represents the appropriate course of action and is the necessary consequence of both parties approach to giving their evidence. I do not include these items in the property pool or consider them otherwise.
It was not suggested by the wife that I would deal with them as her contribution in these circumstances but not then include them in the pool.
The Jewellery
The husband’s evidence was that during the relationship he purchased jewellery for the wife to the value of $125,950. He said:
During our relationship, I purchased the following personal items:
On or about 2013, I purchased a designer Bag valued at $2,300.00.
On or about 2014, a Gold Necklace valued at $1,000.00.
On or about 2014, a Gold Necklace valued at $1,500.00.
On or about 2014, a Bracelet valued at $10,000.00.
On or about 2014, a Pendant valued at $5,000.00.
On or about 2014, a Gold Pendant (Small) valued at $1,200.00.
On or about 2014, a Gold Pendant (Large) valued at $1,500.00.
On or about 2014, a Diamond Pendant valued at $60,000.00.
On or about 2014, a White Gold Necklace valued at $1,000.00.
On or about 2014, a Big Gold Ring valued at $1,500.00.
On or about 2014, I purchased a D Jewellers Wedding Ring valued at $2,440.00.
On or about 2014, I purchased a D Jewellers Love Ring valued at $2,010.00.
On or about 2014, I purchased a C Jewellers Diamond Ring valued at $31,500.00.
On or about 2014, I purchased a Louis Vuitton bag valued at $2,500.00.
On or about 2017, l purchased a Louis Vuitton bag valued at $2,500.00.
In total, I purchased the above items in the value of $125,950.00.
Apart from his recollection the only evidence he was able to proffer was a copy of the replacement valuation for the ring which, however, notes that “The description of the item, was obtained from C Jeweller’s records of sale” noting a purchase date in 2014. This was just before they were married in 2014 in a ceremony in China. The ring has a value of $31,500. There is also the tax invoice for the D Jewellers rings valued at $2,440 and $2,010. He agreed that he could not produce tax receipts for the other jewellery.
The husband also relied on a photo, said to be of a Diamond Pendant and taken prior to it being given to the wife, and a picture of the wife wearing a pendant which she said her father gave her. I cannot determine from photographs that these are the same items. I also note that there are references to multiple pendants with different values in the husband’s evidence.
The wife says that the husband has not established either that he purchased or gave her jewellery, or of the value alleged in most cases, or in some instances that she retains it rather than him.
On the issue of the jewellery it is necessary to consider the objective evidence that exists about some of the items to determine whether or not it is possible to find, on the balance of probabilities, that some or all of the jewellery exists and if so in whose possession or control it now lays.
There was substantial evidence and argument about the engagement ring said to have been given to the wife by the husband.
The wife denied that she had the engagement ring, or that she had been given it or worn it. The wife relied upon the fact that the husband had obtained a GST refund for the ring when he returned to China. However, his concession on that issue was that the GST refund was obtained, as they were returning to China together to get married.
C Jewellers confirms from their records that the ring was purchased by the husband and provides a valuation. It seems strange that such a valuable ring would be purchased weeks before the wedding and never given to the wife.
More significantly, in an email dated 20 July 2017 from the wife to the husband, she offered to give back “the ring” as part of what could be construed as an informal settlement offer.
I note for completeness that the evidence of negotiations was admitted pursuant to the exception contained in section 131(2)(g) of the Evidence Act 1995 (Cth) to the usual prohibition on evidence of settlement negotiations, as the wife’s sworn evidence was otherwise
“likely to mislead the Court unless evidence of the communication or document is adduced to contradict or to qualify that evidence.”
There was photographic evidence of her wearing a ring. That evidence could not, in my view, be sufficiently linked to the ring in question.
While it is possible that the ring referred to in the wife’s offer was not the C Jewellers ring, given the C Jewellers ring’s relative value compared to the other (alleged) rings, and it’s clear importance to the parties, I do not consider that likely.
I find that the likelihood is that the husband falsely claimed a GST refund on the C Jewellers ring and the wife retained the ring which she offered to return as part of a settlement negotiation. In making this finding I refer to my credit findings regarding both parties above.
I find that there is a C Jewellers ring which was purchased for and given to the wife by the husband. Absent other evidence I find on the balance of probabilities that it remains in the wife’s possession. I accept the valuation of $31,500 based on the evidence of replacement value provided. I find that this should be included in the balance sheet as an asset of the wife. There is no evidence that additional extra funds over and above those accounted for were contributed by the husband or his parents to purchase this item, and so it will not be dealt with as a further contribution by the husband.
Given that the D Jewellers rings were purchased as evidenced by the receipts, I make similar findings that the two D Jewellers rings with a combined value of $4,450 are probably in the wife’s possession. I find that this should be included in the balance sheet as an asset of the wife. No separate accounting for this as a contribution is justified by the evidence.
In respect of the other items of jewellery, there is an argument that the wife having been shown to have lied in respect of a significant item of jewellery, it is open to the Court to prefer the evidence of the husband in respect of all of the alleged jewellery, including a pendant said to be worth $60,000. If the husband were otherwise a witness of truth there would be great merit in that argument.
However, that is not the position. The husband bears the onus on the remainder of the jewellery. There is no independent evidence corroborating his assertion. In circumstances where I have made adverse credit findings regarding the husband there is insufficient evidence to persuade me that the husband has established, on the balance of probabilities, that he purchased the other items of jewellery or of their values or that they were given to the wife. Accordingly, I make no allowance for them as contributions and do not include them in the balance sheet.
Other financial contributions
The parties focussed on the major financial contributions as set out above.
The husband said that during the time they were renting he paid the rent of approximately $48,880 and living expenses of approximately $51,000, and purchased a computer which the wife used for $5,000. However, the source of those funds was not shown to be other than the monies provided by his parents.
The wife says she gave him $9,720 for the bond on the property. He denies that. Again, no separate source of the funds is identified.
The husband says he had trouble finding work and did not obtain employment until 2015 and that the wife did not obtain stable employment until 2016, although she worked between several jobs prior to that date.
The wife’s case was that she was in paid employment from 2015 until late 2015 and from 2016 to date.
On neither parties’ case were there significant earnings between their obtaining employment and separation, nor substantial evidence to justify their positions. Neither party made submissions as to the quantum of financial contribution that would be found to have been made by them from their own earnings.
Based on the evidence I find that the parties’ contributions from their own earnings, separate from parental gifts, were broadly equal and nominal in comparison to the gifts dealt with above. Given that finding, and in the absence of specific submissions on the issue by either party, I find that it is not necessary to try to account for these financial contributions as they would not materially affect the percentage calculation based on the parental gifts.
Non-financial contributions
The wife’s case was that the husband was spoiled and did no housework. He denied that.
She bore a child and dealt with the aftermath of his death largely alone.
The husband’s case was that there were equal contributions.
I am not in a position to make any finding of greater contribution by either party on this issue, in respect of which the wife bore the onus, given the credit findings and the absence of any independent evidence.
The one objectively ascertainable fact is that the wife bore a child. No submission was made by the wife specifically directed to non-financial contributions, nor within that to the issue of the burdens of pregnancy and child-birth.
The starting point is that 21% of the major financial contributions were the wife’s and 79% the husbands. The other financial contributions were equal and nominal, and did not require a variation of those percentages.
What is the property pool?
The Court is required to identify the parties existing legal and equitable property interests, whenever acquired, pursuant to the ordinary principles of the common law and equity, as set out in Stanford v Stanford (2012) 247 CLR 108 at [37]. The parties did not agree on a balance sheet.
For the reasons set out above I find that the following represents the property pool.
Joint property in controlled money or trust accounts
Joint
$347,272.11
Motor Vehicle 1
Husband
$13,000
C Jewellers Ring
Wife
$31,500
Two D Jewellers Rings
Wife
$4,450
Total:
$396,222.11
No party made submissions seeking add-backs.
That is a total property pool of $396,222.11. Of which $13,000 is the husband’s property, $35,950 is the wife’s property and $347, 272.11 is joint property.
What was the period of cohabitation?
There was a dispute about the period of cohabitation.
The husband’s evidence was that the relationship commenced in September 2013, but that cohabitation did not commence until December 2013. The wife’s evidence was that they met at University in about early 2013, went out from about 2013 and commenced cohabitation in September 2013.
The husband in his statement to the Department of Immigration said that he was in a relationship with the wife, and that upon them beginning to date, he said they
“[rented] a unit from E Real Estate, and in September 2013, we lived together.”
Further, the husband’s evidence was that he first sought money from his parents in September 2013, the day after he says the relationship commenced, because
“I am really struggling to support my lifestyle in Australia. I am now with Ms Wai, and I cannot support us both with our position”
The wife’s evidence was that they were living together from September 2013.
I find that the parties commenced cohabitation by September 2013. Both because of the husband’s statement to that effect to the Department of Immigration and also because that was when the husband, on his own evidence, first sought money from his parents to support them both, making it inherently more probable.
The husband’s case was that they finally separated when, after X’s death, he left Australia for China in late 2016. It is common ground that he never returned to the former matrimonial home and they never again lived together and had only limited communication after that.
The wife’s case is that separation was not final until about May 2017.
The wife submitted that the husband’s evidence supported her view that the marriage was not over given his evidence that after X’s death “at this point in time, I still wanted to resolve our marital issues.” However, that evidence by the husband clearly related to his conduct in not reporting the wife to police for what he says were her assaults on him prior to his leaving for China in 2016 (noting the mutual allegations of family violence have not been dealt with).
Similarly, the wife’s unilateral withdrawal of large sums of money in 2017 is consistent with the parties being finally separated.
On balance I find that the parties finally separated on 29 December 2016.
On that basis I find that the period of cohabitation was approximately 3 years and 3 months from September 2013 to 29 December 2016.
Section 75(2) matters
Neither party submitted there was any impact on earning capacity of either party of any proposed order.
The husband’s submission was that:
“Both these parties are of similar age. They both have university qualifications and have both at various times been gainfully employed in this country. There are no children of this marriage. There is no medical or psychological evidence to suggest that there is anything hindering either of these parties from moving on and making a living. In the circumstances it is submitted that there would be no adjustment on account of s75(2).”
The wife’s submission was similar but that:
“The Husband has significant financial resources as a result of the ongoing financial support of his parents. If 2.5% is allowed for the Husband's greater financial resources.”
While the husband clearly had the financial support of his parents to the tune of hundreds of thousands of dollars, so too did the wife. While he received more, given their youth, health, professional qualifications, the short duration of the marriage and the absence of any other factor said to be relevant, I am not satisfied that an adjustment is required by reference to the factors in section 75(2) of the Family Law Act 1975 (Cth) to do justice and equity between these parties.
Submissions
Short marriage
Both parties agreed that there was a relatively short period of cohabitation and marriage.
The husband referred to the authorities concerning “short marriages with no children”. The wife accepted it was a “short period of cohabitation” but pointed to the fact that there was a child though now deceased and not dependent. The husband emphasised the short nature of the relationship and the absence of dependent children as requiring “a closer examination of the parties’ relevant financial contributions” than in longer marriages, and also on his greater financial contributions, as the critical factors in determining the appropriate assessment of contributions. Citing G &G [2006] FamCA 877 and Bushby and Bushby (1988) FLC 91-919.
The wife agreed that the Court could take into account the short duration of the marriage, but emphasised that the exercise does not become an arithmetical or accounting exercise merely by reason of that fact. Citing In the Marriage of Horsley (1991) 14 Fam LR 550, and, In the Marriage of Brandt (1997) 22 Fam LR 97). Further, she submitted that whilst there is no surviving child of the relationship, the fact of the pregnancy, birth and the death of the child are matters which distinguish this case from G & G, to the extent to which the submission is that the Court should look to that as a comparable case.
The wife’s submission was that the Court’s fundamental task pursuant to section 79 of the Family Law Act 1975 (Cth) remains the same regardless of the length of the marriage, which is to weigh the identified contributions in the balance, citing Pierce & Pierce (1999) FLC 92-644. I accept that submission and that the length of the marriage is merely one aspect of the factual matrix in which that process occurs.
However, while I accept the wife’s submission immediately above, and the need to consider the “myriad of other contributions made by both parties throughout the course of the relationship” (Williams & Williams [2007] FamCA 313 at [26]) in this case I have not been able to assess those myriad contributions because of the conduct of the parties. I have not been able to make findings of fact about the myriad other matters which a Court would usually weigh together with the parental gifts.
As the only findings of fact I have been able to make relate to identified financial transactions and the bearing of a child, my assessment may thereby more closely resemble, although is not, a financial accounting exercise.
The husband submitted that the money received from his parents as gifts should be considered his financial contributions, citing Gosper (1987) FLC 91-818. I do not take that to be contentious and find that the gifts by each set of parents are the respective parties’ contributions.
The husband’s submissions - do the principles of tracing apply?
The husband provided in final written submissions a table headed “The Tracing Table” which purports to show not only the extent of the funds transferred by the husband’s parents, which the wife ultimately conceded, but also that the remaining cash is traceable to monies provided by the husband parents, rather than to the funds provided by the wife’s parents or by either of the parties through employment. It was submitted that the Court was required to consider “each party’s contributions to the monies” and “particular regard to how the [home] was purchased and how the funds in the offset account were accumulated”.
The husband submitted that “the modest amount of money held in the two accounts are what is left of the hundreds of thousands of dollars his parents transferred to him” and that a careful analysis of the banking records disclose that “the origins of the funds is the husband’s parents”. On that basis the husband seeks 100% of the monies.
It was submitted that as the funds received from the wife’s parents were not shown by tracing to have been specifically directed to the purchase of the former matrimonial home or the mortgage offset account and, by inference, that they were not relevant to the determination of how the remaining cash should be distributed.
I do not accept the tracing argument. The relevant principles are those set out in section 79 of the Act, and were also referred to by the husband in his final submissions, noting AJO & GRO [2005] FamCA 195.
The husband did not make specific submissions on the relative financial contributions, other than from the transfers of money from the parties’ parents, or on the relative non-financial contributions. He submitted there were no factors justifying an adjustment pursuant to section 75(2).
The wife’s final submissions
The wife’s final submission was that, if the $100,000 was the husband’s contribution rather than the wife’s, then the parental contributions, which made up the overwhelming financial contributions, were 77% to the husband and 23% to the wife.
She then submitted that, in view of her contributions through greater employment income, her contribution to homemaking by bearing a child, and her contribution to domestic tasks which she said she did to a greater extent than the husband, there would be a 7% adjustment and contributions would be 70% to the husband and 30% to the wife.
The wife submitted there would also be a 2.5% adjustment for section 75(2) factors, in particular his greater financial resource being his parents with their demonstrated wealth and generosity. On that basis she submitted it would be just and equitable for the Court to allocate the remaining asset pool, with no liabilities, 67.5% to the husband and 32.5% to the wife.
I note that as I did not allow sums that were not established, and did not accept the $100,000 was her contribution, the contributions by way of gifts were 79% to the husband and 21% to the wife.
The wife did not break down her 7% submission. She did not establish either relevantly greater financial contributions through earnings or greater domestic tasks. I accept that her contribution in child bearing and birth and dealing largely alone with the aftermath of X’s passing was a contribution and would allow just over half of that 7% amount, or 4% adjustment for that additional contribution. It is not a matter which is capable of mathematical justification.
As noted above, I did not accept the wife’s argument that an adjustment for section 75(2) factors due solely to his parents being a financial resources as justified.
Findings and Decision
For the reasons set out above I find that the gifts were financial contributions favouring the husband 79% to 21%. I could not assess any sufficient difference in earnings to justify a different percentage assessment to that on financial contribution issues.
I could not assess non-financial contributions except in regards to child-bearing and I adjust contributions 4% in favour of the wife. I do not allow any adjustment for section 75(2) factors.
I find contributions were 75% by the husband and 25% by the wife.
On that basis I find that it is just and equitable to divide the identified property, and in particular the funds, to bring the parties financial entanglement to an end, and that the husband should receive 75% and the wife 25% of the total.
On that basis given a total pool of $396,222.11, the husband should receive 75% equating to $297,166.58 and the wife 25%, equating $99,055.53 of the assets. As the husband has the Motor Vehicle 1 worth $13,000 he is to receive $297,166.58 - $13,000 = $284,166.58 of the funds. As the wife has the jewellery worth $35,950 she is to receive $99,055.53 - $35,950 = $63,105.53 of the funds.
Each party is to otherwise be confirmed in their property.
To avoid any issues as to which funds should be paid from which account I will make orders specifying the distribution of the funds.
I certify that the preceding one-hundred and fifty-eight (158) paragraphs are a true copy of the reasons for judgment of Judge B Smith
Date: 6 May 2020
Key Legal Topics
Areas of Law
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Family Law
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Evidence
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Remedies
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