Zhu and Han & Anor

[2016] FamCA 1061

FAMILY COURT OF AUSTRALIA

ZHU & HAN AND ANOR [2016] FamCA 1061

FAMILY LAW – PROPERTY SETTLEMENT – Contributions – Where the issue for determination was the division of trust funds comprising the net proceeds of sale of a parcel of real property – Where the parties made many financial and non-financial contributions that they contended should reflect in the division of those trust funds between them –  Ordered that the trust funds be equally divided

FAMILY LAW – PROPERTY SETTLEMENT – Intervener – Where the husband’s father was an intervener – Where the intervener only ultimately sought relief against a third party in relation to one specific parcel of real property – Where the spouses’ claims in relation to that property were abandoned – No accrued jurisdiction to entertain the intervener’s claim – The intervener’s claim was discontinued and he was discharged as party to proceedings

Family Law Act 1975 (Cth) ss, 75, 79

ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559
Calverley v Green (1984) 155 CLR 242
Davey v Lee (1990) 13 Fam LR 688
Garrett v Garrett (1984) FLC 91-539
Quinn v Quinn (1979) FLC 90-677
Re Wakim; Ex parte McNally (1999) 198 CLR 511
Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Mr Zhu

RESPONDENT: Ms Han

INTERVENOR: Mr A Zhu

FILE NUMBER: SYC 1957 of 2014

DATE DELIVERED: 9 December 2016

PLACE DELIVERED: Newcastle

PLACE HEARD: Sydney

JUDGMENT OF: Austin J

HEARING DATE: 28, 29 November & 1 December 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Ladopoulos

SOLICITOR FOR THE APPLICANT: Juris Cor Legal

COUNSEL FOR THE RESPONDENT: Mr Lethbridge SC & Ms Barnett

SOLICITOR FOR THE RESPONDENT: Sun Lawyers

COUNSEL FOR THE INTERVENER: Mr Carney

SOLICITOR FOR THE INTERVENER: Wang Fang & Co Legal Pty Ltd

Orders

1. The parties shall forthwith do all such acts and things and sign all such documents as may be necessary to cause the balance of funds held in trust by Sun Lawyers to be disbursed to the applicant and respondent in equal shares.

2. The wife is declared the sole legal and beneficial owner (as between the parties) of the following chattels, which the applicant shall forthwith deliver up to the respondent for her collection:

   (a)The following items of furniture, which are B brand:

   (i)One bed;

   (ii)Two bedside tables;

   (iii)One dressing table;

   (iv)One dress stool;

   (v)One coffee table;

   (vi)One two-seat sofa;

   (vii)One single-seat sofa;

   (viii)One three-seat sofa;

   (ix)One sofa end table;

   (x)One TV cabinet;

   (xi)One TV cabinet (low);

   (xii)One Hexagon Curio Cabinet;

   (xiii)One dining table;

   (xiv)Six dining chairs;

   (xv)One bookcase;

   (xvi)One desk;

   (xvii)One desk chair;

   (xviii)One arm chair; and

   (xix)One mattress.

   (b)The following other home contents and goods:

   (i)One receiver;

   (ii)One camera;

   (iii)Two sets of tableware;

   (iv)One Crystal Bottle set; and

   (v)One set of crystal wine cup and bowl.

3. Unless otherwise provided:

   (a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose real estate is deemed to be in the possession of the registered proprietor, bank accounts are deemed to be in the possession of the account holder, and superannuation entitlements are deemed in the possession of the superannuant; and

   (b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession and any debts in their respective sole names.

4. In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Sydney is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act.

5. Costs as between the applicant and respondent are reserved for 28 days.

6. Any and all other outstanding applications are dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1957 of 2014

Mr Zhu

Applicant

And

Ms Han

Respondent

And

Mr A Zhu

Intervener

REASONS FOR JUDGMENT

Introduction

1. The applicant husband and respondent wife were married for about two years, but they only lived together for about 16 months. They have no children.

2. Both parties are educated and hail from reasonably prosperous backgrounds. They each had property of significant value before their marriage and they each have property of significant value now.

3. When these proceedings were commenced by the husband, the parties sought relief in the nature of property settlement orders against one another under Part VIII of the Family Law Act 1975 (Cth) (“the Act”) taking into account all of their property interests but, once the trial began, they limited their quarrel to one solitary asset: the net proceeds of sale of a parcel of real property at Suburb C, NSW (“the Suburb C property”), in which they had lived together. It was bought after they were engaged to marry and was sold during this litigation.

4. During the course of the proceedings, the husband’s father was granted leave to intervene in the proceedings so he could pursue equitable relief in relation to the Suburb C property and, additionally, some undefined form of relief in respect of another real property at Suburb D, NSW (“the Suburb D property”). However, once the spouses limited their respective matrimonial claims to the Suburb C property and the intervener relinquished his equitable claim in respect of the Suburb C property, it became clear the intervener’s only remaining cause of action was a common law claim in debt against the wife’s mother over their dealings concerning the Suburb D property. The intervener was, therefore, bound to accept that his claim could not be determined by this Court because jurisdiction to entertain it did not properly accrue to the Court’s federal statutory jurisdiction. Determination of the intervener’s claim against the wife’s mother over a property which was of no further interest to the spouses was not integral to the determination of their matrimonial dispute (see ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at 586; Re Wakim; Ex parte McNally; Re Wakim; Ex parte Darvall; Re Brown; Ex parte Amann (1999) 198 CLR 511 at 562-564, 583-588). For those reasons, the intervener’s claim was discontinued and he was discharged as a party to the proceedings.

Relevant history

1. The parties engaged to marry in June 2012.

2. In July 2012, the wife purchased the Suburb C property for $1.6 million. The purchase was completed in September 2012, following which the parties began cohabitation in the property. Although it was common ground the husband and members of his family made financial contributions to the purchase of the property amounting to approximately $402,000, there was tremendous dispute about the following issues:

   (a)The quantification and characterisation of their financial contributions to a mortgage offset account, the credit balance of which account was used to meet the mortgage repayments and to reduce the interest component of such repayments, thereby reducing the debt secured by mortgage over the property;

   (b)The monies paid out of the mortgage offset account for reasons other than to meet mortgage repayments, for their respective benefit; and

   (c)The parties’ other financial and non-financial contributions made to or for their mutual or individual benefit that should otherwise reflect in their proportional entitlements to the property.

3. The parties married in China in 2013 and returned to Australia not long afterwards to resume cohabitation in the Suburb C property. The husband’s parents moved in to live with them in December 2013 and only weeks later, in January 2014, the parties separated, though there was no suggestion of any causal connection between those two events.

4. The proceedings were commenced in April 2014 and then, in May 2014, an interim order was made permitting the wife to sell the Suburb C property. It was sold in July 2014 for $2.08 million and the net proceeds of sale were paid into a trust account. The account now contains about $822,000.

5. In confining their attention to only their entitlements to the net proceeds of sale of the Suburb C property, the spouses expressly agreed:[1]

   (a)All financial contributions made by the intervener to the purchase of the Suburb C property should be regarded as contributions made on behalf of the husband;

   (b)The alteration of their property interests in the Suburb C property would accord with their respective contributions under s 79(4) of the Act and there should be no further adjustment of their interests pursuant to factors prescribed by s 75(2) of the Act; and

   (c)All of their many matrimonial contributions should be weighed and reflected in the apportionment of their proprietary interest in the net proceeds of sale of the Suburb C property held in the trust account. Save for their ancillary agreement about the distribution of some chattels between them, neither spouses made any claim against the other in respect of property they each owned as at the date of marriage and neither spouses made any claim against the other in respect of property they each acquired during or after the marriage.

   [1] Exhibit B, paras 1, 5, 6

Evidence

1. The husband relied upon:

   (a)His affidavit filed on 23 December 2015, as amended by a list of minor corrections;[2] and

   (b)His financial statement filed on 23 November 2016.

   [2] Exhibit H2

2. The wife relied upon:

   (a)Her affidavit filed on 10 December 2015;

   (b)Her financial statement filed on 10 December 2015;

   (c)The affidavit of her mother, Ms E, filed on 10 December 2015; and

   (d)The affidavit of her father, Mr F, filed on 10 December 2015.

Section 79(2)

1. The wife was the sole legal proprietor of the Suburb C property, so she was and remains the sole legal proprietor of the net proceeds derived from the sale of the property.

2. Orders under s 79 of the Act altering the spouses’ property interests in that asset may only be made if the Court is first satisfied, pursuant to s 79(2), it is just and equitable to make such adjustment orders (see Stanford v Stanford (2012) 247 CLR 108). The spouses sensibly agreed it would be just and equitable to adjust the wife’s sole proprietorship in the sale proceeds by apportioning to the husband an interest in those funds. Their argument devolved to the proportions in which the funds held in the trust account should be split between them.

Section 79(4)

Payments towards acquisition of the Suburb C property

1. The Suburb C property was purchased for $1,600,000 by the wife.[3]

   [3] Husband’s affidavit, paras 105-106; Wife’s affidavit, para 32

2. The payments made by or on behalf of the husband towards the purchase of the Suburb C property were: $80,000 for the deposit,[4] $73,510 for the stamp duty,[5] $246,465 towards the final payment on settlement,[6] and $2,000 towards the conveyancing costs.[7] The total amount contributed by the husband was therefore $401,975.[8] Accordingly, the husband’s financial contribution towards acquisition of the Suburb C property was equivalent to 25 per cent.

   [4] Husband’s affidavit, paras 111-113; Wife’s affidavit, para 33

   [5] Husband’s affidavit, paras 114-115; Wife’s affidavit, para 35

   [6] Husband’s affidavit, paras 116-121; Wife’s affidavit, para 36

   [7] Husband’s affidavit, para 122

   [8] Husband’s affidavit, para 126; Wife’s affidavit, para 38

3. The wife made no direct financial contribution towards the purchase of the Suburb C property,[9] apart from the money she borrowed from the bank to supplement the financial contributions made directly and indirectly by the husband. The loan was for an amount of $1,280,000.[10] Her commitment to exclusive liability under the secured loan was a contribution in itself (see Calverley v Green (1984) 155 CLR 242 at 267-268).

   [9] Husband’s affidavit, para 123

   [10] Husband’s affidavit, paras 124, 126; Wife’s affidavit, para 37

Payments into the mortgage offset account

1. When the wife borrowed the money from the bank to buy the Suburb C property two accounts were opened for her by the bank, both of which were held in her sole name: the loan account and a mortgage offset account.[11]

   [11] Husband’s affidavit, para 128

2. Large sums of money were thereafter deposited to the mortgage offset account, but there was significant debate about ownership of the funds claimed to have been contributed by the husband. The mother deposed she was given some $1,150,000 by her parents to deposit to the offset account,[12] but she conceded in cross-examination that calculation included an amount of $200,000 claimed to have been contributed by the husband.

   [12] Wife’s affidavit, paras 39-40, 46; Affidavit of Ms E, para 19

3. The credit balance in the offset account had the effect of reducing the interest incurred on the loan. The parties agreed it resulted in a saving of about $50,949 and they also agreed the credit accorded to each of them for that saving should reflect in the same proportions in which they were each responsible for the deposit of funds to the account, over which there was considerable debate.[13] The wife claimed all of the credit for the interest saving, which would be correct if she was entirely responsible for all of the deposits. She was responsible for almost all, but not the totality of the deposits. It was impossible to compute an exact amount of credit for the small proportion of interest savings attributable to the husband so, in the absence of proper evidentiary foundation, his calculation is not accepted.[14]

   [13] Exhibit C, item 1

   [14] Exhibit C, item 1

4. The credit balance in the offset account provided the source of funds for meeting the loan repayments, which amounted to about $7,550 per month. The repayments therefore totalled about $180,000 over the two years that the wife owned the property between July 2012 and July 2014. Just as in respect of the loan interest saved, credit for the repayments correlates with the contributions respectively made by the parties to the offset account. The wife continued to meet those loan repayments between the time of separation in January 2014 and sale of the property in July 2014, during which period the husband and/or his parents occupied the property rent-free.

5. All rent collected from other licensees who occupied parts of the Suburb C property was paid into the offset account,[15] but the wife was entitled to such money because she was the legal proprietor of the property. The husband’s contribution to that income is already reflected in the financial contribution he made to facilitate the wife’s acquisition of the Suburb C property as an asset, which the husband ultimately accepted and so he therefore abandoned his claim to credit for part of it.[16] The rent fluctuated between $5,500 and $6,500 per month.[17] The rental income exceeded $50,000 up to the time of the parties’ separation[18] and approximated $24,000 from the time of separation until sale of the property.[19] The wife declared the rent as income in her taxation returns for the 2013 and 2014 financial years, but also claimed expenses as deductions. It is impossible to be mathematically precise, as the wife attempted to be, about the net contributions.[20] Since the property was an income-producing asset in the wife’s hands, she was assessed for capital gains tax of $47,406 on its sale, which the parties agreed should be taken into account.[21]

   [15] Husband’s affidavit, para 132; Wife’s affidavit, para 48

   [16] Exhibit C, item 14

   [17] Husband’s affidavit, para 135

   [18] Wife’s affidavit, para 49

   [19] Wife’s affidavit, para 50

   [20] Exhibit C, item 14

   [21] Wife’s affidavit, para 84; Exhibit C, item 4

6. The husband caused the sum of $246,465 to be deposited to the offset account just prior to settlement of the purchase of the Suburb C property,[22] but he is already credited with that contribution as part of the property’s acquisition costs so it should not be double-counted.

   [22] Wife’s affidavit, paras 36-37

7. It was uncontroversial the husband made other financial contributions to the offset account, which included the payment of $8,000 to cover the first month’s repayment on the mortgaged loan,[23] other miscellaneous amounts totalling about $17,000 over the next six months or so,[24] the sum of $5,000 as part of money due to the husband for his share of a GST refund in respect of the Suburb D property,[25] and the sum of $12,681 being rent derived by the husband from his part ownership of the Suburb D property.[26] Those payments total about $42,700. Although he did make those contributions, probably much more was exhausted on the parties’ private expenditure because the funds in the offset account were also used to meet the parties’ living expenses, the parties’ credit card expenditure, and other personal miscellaneous expenditure.[27]

   [23] Husband’s affidavit, paras 130-131; Wife’s affidavit, para 68(a)

   [24] Wife’s affidavit, paras 68(b)-68(f)

   [25] Husband’s affidavit, paras 97-101

   [26] Husband’s affidavit, paras 90-94

   [27] Husband’s affidavit, para 214; Wife’s affidavit, para 67

8. The net proceeds of sale of the Suburb D property, amounting to $1,141,563, were deposited to the offset account in January 2014,[28] but that money was contributed by the wife. She bought the Suburb D property from her mother some months earlier and was the sole legal proprietor of it at the time of its sale.[29]

   [28] Husband’s affidavit, paras 89, 198-199

   [29] Husband’s affidavit, paras 53, 81, 83-86

9. There was heated controversy over sums of money paid into the offset account by the husband in the period between April 2013 and December 2013. The money was certainly deposited by the husband, but there was debate over whether he was the source of the funds or merely the conduit by which the funds were deposited to the account. The husband deposited $267,783 to the offset account in that period,[30] but he admitted $67,783 of it was given to him by the wife’s parents for no purpose other than deposit into the offset account.[31] As for the residual $200,000,[32] although he admitted he received it from the wife’s parents, he contended they gave it to him for services he rendered to them and it was therefore his money and not theirs. On balance, I do not accept the husband’s contention.

   [30] Husband’s affidavit, para 173

   [31] Husband’s affidavit, paras 162, 173(m), 173(n), 173(o), 173(q)

   [32] Husband’s affidavit, para 177

10. First, that evidence does not correlate with his other evidence about the sums he received from the wife’s parents. He elsewhere deposed that he received $231,570 from the wife’s parents,[33] of which he alleged $20,000 was for some other service he performed for them,[34] but the wife’s father denied it.[35] Even allowing for the truth of the husband’s assertion, he actually received $211,570, not $200,000, from the wife’s parents.

    [33] Husband’s affidavit, paras 225(a)-225(e), 225(m)

    [34] Husband’s affidavit, para 222

    [35] Exhibit W4

11. Secondly, the allegation he would be paid $200,000 (or its equivalent in Chinese currency) by the wife’s parents as a personal fee for setting up a Chinese corporation named G Ltd (“the G corporation”) seemed improbably extravagant when the wife’s mother had already paid about $200,000 to the husband’s cousin (at the husband’s direction) as the start-up capital for the G corporation.[36]

    [36] Husband’s affidavit, para 220

1. Thirdly, the solitary premise for his asserted entitlement to the $200,000 for such personal service was the conversation the husband alleged he had with the wife’s father in April 2013,[37] which the wife’s father denied.[38] The evidence of the wife’s father was no less credible than the husband’s.

   [37] Husband’s affidavit, para 221

   [38] Exhibit W4

2. Fourthly, the husband omitted making any claim about the $200,000 being his contribution when, earlier in these proceedings, he filed an affidavit in April 2014[39] and a Financial Questionnaire in May 2015[40] particularising his relevant contributions in summarised form. Those two documents were both filed after the alleged conversation between him and the wife’s father in April 2013 and were obvious opportunities for him to make the claim if it was genuine.

   [39] Exhibit W3

   [40] Exhibit W1

3. Fifthly, nor did the husband mention the alleged agreement about the large fee for his service during litigation conducted in China in March 2014 between him and the wife’s mother over their entitlement to the G corporation. The husband implied, if not expressed, to the Chinese court that his only financial return from the G corporation would be any profit he was able to derive from its operation when, for consistency, the totality of his version would have warranted his disclosure that, in addition to the $200,000 paid as start-up capital, he was personally paid another $200,000 for his personal service to establish the corporation.[41] The Chinese court found the $200,000 used to establish the G corporation was given by the wife’s parents to the husband (or at his direction) for that specific purpose and the court remained ignorant of the other alleged payment for service of $200,000.[42]

   [41] Affidavit of Ms E, para 68, annexure page 33

   [42] Affidavit of Ms E, para 69, annexure page 39

4. Most probably, the wife’s parents provided the extra $200,000 to the husband, not as fee for his service, but merely for him to deposit into the mortgage offset account in the period between April and December 2013. The wife, not the husband, should be credited with those deposits.

5. In fact, the wife’s parents paid an extra $27,985 to the husband in December 2013, which he kept. They paid him $47,985, but he only paid $20,000 into the offset account and held back the residue.[43] At or about separation the wife asked him to give her the residue money, but he refused.[44] The parties agreed the wife should be credited with that amount as her contribution.[45]

   [43] Husband’s affidavit, para 225(m)

   [44] Wife’s affidavit, para 45

   [45] Exhibit C, item 3

Money withdrawn from the mortgage offset account

1. As already mentioned, the funds in the offset account were used to meet the parties’ personal expenditure and not just expenditure associated with maintenance of the Suburb C property. They both possessed the passcode to operate the account up until the time of their separation and both should be taken to accept the efficacy of expenditure from the account to that point in time.

2. At the time of separation in January 2014, the balance of the offset account was $782,677.[46] Immediately following separation, the wife withdrew $600,000 and changed the passcode for the account, thereby preventing the husband’s access.[47] The wife thereafter used the funds in the offset account as her own, making substantial deposits to and withdrawals from the account until its eventual closure in July 2014, spending the funds as she saw fit mainly for her own benefit.[48]

   [46] Husband’s affidavit, paras 188-189

   [47] Husband’s affidavit, paras 190-195

   [48] Husband’s affidavit, paras 200-213

3. Despite the argument between them in this litigation, she was free to do so because, aside from the amount of about $42,700 deposited by the husband, she directly or indirectly contributed all other money to the offset account. Her deposits well exceeded $2 million.

Non-financial contributions to the property

1. Both parties had a hand in arranging licensees for the Suburb C property and the collection of their rent.[49]

   [49] Husband’s affidavit, paras 136, 152,153; Wife’s affidavit, para 69

2. The husband also devoted time, effort, and money to the renovation of the Suburb C property.[50] The evidence does not fairly permit an inference that such renovations increased the value of the property, but the husband did contribute $5,000 towards the cost of the renovation.[51] He should have credit for those contributions.

   [50] Husband’s affidavit, paras 137-151

   [51] Husband’s affidavit, para 139

Extraneous contributions

1. The parties agreed they both performed household tasks and their contributions in that regard should be regarded as broadly equivalent.[52]

   [52] Husband’s affidavit, para 245; Wife’s affidavit, para 70

2. The husband adduced evidence of his expenditure on shopping trips and holidays,[53] but no submission was ultimately made for such evidence to attract any weight in the adjustment process.

   [53] Husband’s affidavit, paras 234-239

3. The parties agreed the expenditure by their respective families upon their two wedding pageants should be regarded as equivalent.

4. The husband’s evidence about his expenditure on furniture was not the subject of any submission,[54] in which event I presume he kept the furniture he wants. The parties agreed about the husband’s surrender of some other furniture to the wife, which she regarded as important.[55]

   [54] Husband’s affidavit, para 244

   [55] Wife’s affidavit, paras 52-53

5. The only other significant issue over which the parties argued was the provision by the wife’s parents of $200,000 (or more accurately, its equivalent in Chinese currency) for establishment of the G corporation. In essence, the dispute was whether the money was intended as a gift to the parties (for which the wife contended) or whether it was really just a payment to advance the wife’s parents’ commercial interests (as the husband contended). On the balance, I accept the husband’s submission to be correct.

6. The husband deposed the wife’s father told him in July 2012 he would give him $200,000 to establish the G corporation, so his other corporations could trade with it. Arrangements were then made for the husband’s cousin to be the figure-head of the G corporation.[56] The shares in the corporation were later transferred by the cousin to the husband in January 2015, though the shares are now worth little or nothing.[57] Although the wife’s father denied such conversations with the husband,[58] the husband’s version of the conversations corresponds with known facts. The corporation was set up by the husband’s cousin in November 2012 with money provided by the wife’s parents.[59]

   [56] Husband’s affidavit, paras 215-218

   [57] Husband’s affidavit, paras 227-229, 233

   [58] Exhibit W4

   [59] Husband’s affidavit, paras 219-220; Affidavit of Ms E, paras 64-66

7. The husband correctly contended that the donor’s intention is critical to resolution of the issue. The wife’s mother confirmed she wanted to set up a corporation in China for the purpose of international trade,[60] which evidence implied it was for her benefit. She commenced the litigation in China to try and recover ownership of the G corporation’s shares.[61] In that litigation she told the Chinese court she needed to establish the corporation “for her … business”.[62] In cross-examination, the wife’s father conceded that three other Australian corporations, in which he, his wife, and/or the wife have proprietary interests, have all traded with the G corporation. Most probably, the wife’s parents’ decision to fund the establishment of the G corporation was motivated by their desire to further their own commercial interests. Any potential financial benefit to the husband or the wife was merely ancillary.

   [60] Affidavit of Ms E, para 64

   [61] Affidavit of Ms E, para 67

   [62] Affidavit of Ms E, para 69, annexure page 38

8. The wife contended that, since the husband asserted to the Chinese court the money was paid to him by her parents as a wedding gift,[63] he should be bound by that confession in these proceedings. In fact, that was not the assertion made in the Chinese proceedings by the husband – it was the separate contention of the G corporation. The husband actually asserted, as he consistently did in these proceedings, that the wife’s parents gave him the money for the express purpose of establishing the G corporation.[64]

   [63] Affidavit of Ms E, para 69, annexure page 39

   [64] Affidavit of Ms E, para 69, annexure page 39

9. I reject the wife’s submission that her parents’ contribution of the funds to the establishment of the G corporation should be regarded as a matrimonial contribution for which she derives credit.

Conclusions and orders

1. The parties prepared and presented their cases in apparent expectation the Court would conduct a comprehensive audit of their financial affairs over the course of their relationship. It was an unrealistic expectation and one wholly divorced from both reality and the law. In adjusting parties’ proprietary interests upon termination of their marriage or domestic relationship it is not necessary to undertake a reductionist process analogous to the taking of accounts for a commercial partnership. The process calls for a discretionary and holistic value judgment (see Quinn v Quinn (1979) FLC 90-677 at 78,615; Garrett v Garrett (1984) FLC 91-539 at 79,359, 79,372; Davey v Lee (1990) 13 Fam LR 688 at 689).

2. In final submissions, the wife contended for her entitlement to both a fixed sum and a remainder percentage of the trust funds which, in aggregate, amounted to about 54 per cent of the available funds.[65] The husband contended for equal distribution of the trust funds in the event his argument about his $200,000 contribution to the mortgage offset account found no favour, but 75 per cent if his argument was sustained.[66]

   [65] Exhibit W5, Order 1

   [66] Exhibit H3, page 2

3. Overall, the parties’ contributions should be regarded as equivalent because:

   (a)The husband provided one-quarter of the funds to acquire the Suburb C property, which amounted to about $402,000 and he spent another $5,000 and laboured on renovations to the property;

   (b)The wife was the exclusive mortgagee of the Suburb C property, pursuant to which she made mortgage repayments of about $180,000 over about two years and, for part of that time (January to July 2014), the husband and his parents lived rent-free in the property;

   (c)The funds paid into the mortgage offset account by the wife’s parents saved over $50,000 in loan interest;

   (d)The wife sustained an individual tax debt of over $47,000 because she acquired the Suburb C property as an income-producing asset for the parties’ financial benefit;

   (e)The sum of about $42,700 contributed by the husband to the mortgage offset account would likely not have been sufficient to cover the parties’ personal expenses over the period of their cohabitation, so any and all other expenses must have been met by the wife;

   (f)The husband kept $27,985 given to him by the wife’s parents, which sum was destined for the mortgage offset account;

   (g)The parties contributed equally to household chores;

   (h)The wife contended for a combined sum amounting to about 54 per cent of the trust funds, which assumed her submission about being given credit for the payment of $200,000 by her parents to the husband in respect of the G corporation would be accepted, but it was not; and

   (i)The husband ultimately conceded the parties’ contributions should be regarded as equal if he lost the argument about the characterisation of the other sum of $200,000 he contributed to the mortgage offset account, which argument he did lose.

4. An order is therefore made dividing the net sale proceeds of the Suburb C property equally between the parties. Those funds are held on trust by Sun Lawyers.[67]

   [67] Exhibit C

5. The order about the husband’s surrender to the wife of enumerated items of furniture and household contents is made with the parties’ consent.[68]

   [68] Exhibit W5, Order 2

6. Such orders represent a just and equitable adjustment of the parties’ property interests.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 9 December 2016.

Associate: 

Date:  9 December 2016