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Property – adjustment under s75(2) set aside where children were 16 and 13 and husband was paying child support

In Chan & Chih [2020] FamCAFC 31 (14 February 2020) the Full Court (Strickland, Ryan and Tree JJ) allowed the husband’s appeal of property orders. The husband was 50 and the wife 45. The parties married in 1999, moved from South Korea to Australia in 2000 and separated in 2013 with assets totalling $4 million. Their children (16 and 13) lived with the wife.

At first instance Watts J held that there should be two pools, being the wife’s Korean assets and all other assets (including the husband’s Korean property). The wife’s Korean assets comprised a 5/14th share in her late father’s commercial property, her interest being worth $2.2 million which also provided the wife with an income stream. The wife had also received financial support from her mother. Watts J made a 5% adjustment under s75(2)(d)-(g) for the wife calculated on the value of both pools.

The husband appealed, arguing that no adjustment should have been made. The Full Court agreed. The court ([42]) said that his Honour gave insufficient reasons for that adjustment, continuing (at [43]-[44]):

“It is also argued that the particular factors identified…cannot justify a 5 per cent adjustment. Certainly, the financial responsibilities for the children are a highly relevant factor, but the children were aged 16 and 13 years…and the husband was paying child support as well as providing additional funds. In relation to the ‘real nature’ of the wife’s interest in the J property… his Honour made no findings as to the restrictions on the wife’s enjoyment of her interest in that property being significant enough to justify an adjustment of 5 per cent.

Further, it is significant that his Honour only referred in percentage terms to the extent of the adjustment. There is no dollar figure discussed, and no analysis by his Honour of the real effect in money terms of the adjustment. The adjustment of 5 per cent represented $203,568, and created a differential of approximately $407,000. To not take that into account flies in the face of authorities such as…Clauson [1995] FamCA 10.”

Robert Glade-Wright is the founder and senior editor of The Family Law Book, a one-volume loose-leaf and online family law service . He is assisted by Queensland lawyer Craig Nicol, who is a QLS Accredited Specialist (family law).

This story was originally published in Proctor May 2020.

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