China’s family law reform has had marked socio-economic reverberations for the Chinese and is playing out in the family law courts of Australia.
Before the 2003 mainland China reforms, spouses seeking a divorce were required to produce written support for the dissolution of marriage from their employer or a sufficiently ranked community official.
Now it is no longer necessary for couples to provide evidence of an “irretrievable” breakdown of marriage.
Divorce proceedings are categorised as either uncontested or contested, depending on whether either party nominates matters in dispute as a consequence of the marriage breakdown.
Generally the contested cases will proceed through the Chinese civil court but in instances where there is a cross-border connection, the divorce becomes more complicated because, although it is possible, the Chinese civil court does not deal with any foreign-owned assets of the parties as a matter of course.
This can lead to competing divorce proceedings in two different jurisdictions. In this respect it is not an uncommon Chinese-Australian footprint to have one spouse holding Chinese residency status and working in China as the breadwinner, and the other spouse holding Australian citizenship. There may be further cross-border ties with the children being educated in Australia and the family owning multiple properties throughout China and Australia.
In these cases the spouses may be motivated to pursue competing China-Australia divorce proceedings for the financial advantage they may have in one court over the other.
And while the Chinese generally liken the process of the contested divorce to that of a corporate demerger, the high-stakes cases making their way into the Australian family courts are being propelled more so from the sentiment expressed in the Chinese proverb: “If you don’t go into the tiger’s den, you won’t get its cubs.”
While the contested Chinese-Australian divorce scenario is being felt by the courts, uncontested Chinese divorce is having ramifications on the Australian property market.
The uncontested divorce permits spouses to obtain a same-day divorce, simply by attending the divorce registry, producing the original marriage certificate, completing the prescribed form, producing photo ID and paying 10 yuan ($2).
This is often referred to as the lightning divorce — reflecting the trend for children born in the 1980s under the one-child policy to divorce as fast as they married.
There is debate among the Chinese that the $2 divorce is too accessible. It is referred to as the fake divorce, in circumstances where it may be initiated not because spouses fall out of love but because once divorced the former spouses are entitled to claim property tax concessions.
Such concessions allow a first-home owner discount on the down-payment when purchasing a second property if one of the spouses has not previously owned property, and avoidance of a 20 per cent profits tax on the sale of a second property if parties are divorced and own one property each.
The fake divorce has spurred claims among the Chinese that this was a factor pushing property prices beyond the reach of ordinary Chinese, particularly in the top-tier cities, leaving many to buy cheaper property in lesser cities or offshore in places such as Australia. In response, China implemented policy amendments this year stipulating that parties must be divorced for 12 months or more before claiming the concessions.
The interest in Sino-Australia divorce matters will continue as Chinese policy addresses the socio-economic anomalies arising from the uncontested divorce, together with developing judicial co-operation between courts case-managing contested divorces.
By Angie Todd