Caldbeck and Ladrone and Ors

[2018] FamCA 528

FAMILY COURT OF AUSTRALIA

CALDBECK & LADRONE AND ORS [2018] FamCA 528

FAMILY LAW – PROPERTY – Interim Proceedings – Where the wife removed $1,000,000 from the husband’s bank account and transferred the funds to bank accounts in China in her name and in the name of her parents – Where an order was made previously restraining the wife from departing from the Commonwealth of Australia – Where proceedings are currently on foot in China between the wife and her parents in relation to the money transferred and purported debts owed to the wife’s parents – Where the wife seeks permission to travel to China to defend herself in Court proceedings – Where there is potential prejudice arising if the wife is permitted to travel to China in that the financial proceedings may be frustrated and injustice will be done to the husband – Where the wife’s failure to appear in the Chinese proceedings could also cause prejudice to her and ultimately the husband if the funds are not recovered – Where the competing prejudices favour the refusal of the wife’s application provided the husband gives an undertaking to intervene if a finding is made in the Chinese proceedings adverse to the wife and report to the wife the outcome of proceedings – Where the application is dismissed. 

Evidence Act 1995 (Cth) s 131
Family Law Act 1975 (Cth) ss 90C, 114

APPLICANT: Ms Caldbeck

FIRST RESPONDENT: Mr Ladrone

SECOND RESPONDENT: Ms Song

THIRD RESPONDENT: Mr Zao

FILE NUMBER: SYC 4130 of 2017

DATE DELIVERED: 20 June 2018

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 14 June 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lloyd SC

SOLICITOR FOR THE APPLICANT: Swaab Attorneys

COUNSEL FOR THE RESPONDENTS: Mr Stapleton

SOLICITOR FOR THE RESPONDENTS: Armstrong Legal

Orders

1. The Application in a Case filed by the wife on 5 June 2018 is dismissed.

2. That order is made on the condition that the husband provides to the Court and to the solicitors for the wife an undertaking to the Court in writing by the close of business on Thursday, 21 June 2018 in the following terms:

   (a)to do all reasonable and practicable things to intercede or to facilitate a later intercession, on behalf of the wife in the proceedings between the wife and her parents before the City B District Court on 28 June 2018 in the event that there are findings adverse to the wife beyond the dismissal of her appeal and any costs orders; and

   (b)as soon as practicable, to provide a report to the solicitors for the wife as to the outcome of the proceedings before the City B District Court on 28 June 2018 and as to any action taken by the husband pursuant to this undertaking.

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 Caldbeck & Ladrone 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:  SYC4130 of 2017

Ms Caldbeck

Applicant

And

Mr Ladrone

First Respondent

And

Ms Song
Second Respondent

And

Mr Zao
Third Respondent

REASONS FOR JUDGMENT

1. As I indicated on delivery of ex tempore reasons, this corrected judgment includes some footnotes, mainly references to the location of evidence referred to in the judgment as well as correcting any infelicity of expression.

2. These are interlocutory proceedings in the context of proceedings between the parties for settlement of property.[1]  On 5 June 2018, an Application in a Case was filed on behalf of the wife.  It was first returnable on 14 June 2018.  Not all of the application was pressed by the wife, but in summary, she sought permission to travel to China between 23 and 30 June 2018 to defend herself in Court proceedings there.  That application was refused for the reasons set out below.

   [1] An Initiating Application was filed by the husband on 30 June 2017 seeking the enforcement of a Financial Agreement. That application has been amended on a number of occasions to the effect that the husband seeks in the alternative, enforcement or declarations and orders in respect of property settlement.

3. She also sought an order that the husband pay to her $525 per week by way of spousal maintenance until further order, and an order that the husband pay to her the sum of $2,980 on 15 June 2018 said to be by way of interim costs towards the wife’s airfares, transport, food and accommodation for her travel to China.

4. An issue about the payment of the fees of a single expert document examiner raised in the application had been earlier resolved.  Other issues raised in the application about interim costs and exclusive occupation were not pressed.

short history

1. The parties separated for the last time on 26 November 2016. 

2. On 27 June 2017 the wife drew down $1,000,000 on a National Australia Bank line of credit in the husband’s sole name.  That put the line of credit into debit for that sum.

3. The wife immediately transferred most of the money to bank accounts in China in her name and in the names of her parents.  Although not disclosed to the Court or the husband for some months, it is the wife’s case that all of the moneys transferred into her parents’ accounts and most of the money transferred to her own Chinese accounts, were owed to her parents.

4. Commencing on the days after the drawing, a number of orders were made aimed at repatriating the great proportion of the drawn funds to the line of credit account to await proceedings for property settlement.  One of the orders restrained the wife from leaving Australia until further order.

5. At the wife’s request (made under Court order), her parents later paid into a Chinese account of the wife, the $510,000 that had been paid into their accounts.  In December 2017 the wife’s parents commenced proceedings in a City B Court for recovery of a debt said to be owing by the wife.  The wife was represented in those proceedings.  Judgment was entered for the wife’s parents.  Pursuant to orders made in this Court, the wife appealed against the judgment in terms drafted on behalf of the husband.  That appeal is listed on 28 June 2018 in the City B Court.  The husband has no standing in the appeal but will instruct lawyers to observe the proceedings on that day.  In order that she can attend before the City B Court on 28 June 2018, the wife seeks relief from injunctions which prevent her from leaving Australia.  The husband opposes that relief.

6. It is the wife’s evidence that she was permitted to draw $1,000,000 on the line of credit because of a written agreement between the parties dated 5 August 2013 and because of words spoken to her by the husband in early June 2017.  The husband disputes that there was any agreement, that he consented to the drawing or that the wife had authority to operate on the line of credit account.  Indeed he reported the wife’s conduct to the police.

7. The wife also seeks financial support from the husband in the form of weekly spousal maintenance and moneys to meet the costs of her fares and accommodation in China.

background facts

1. It is necessary to set out the background facts in some detail.  Although the proceedings have been running in this Court for more than 12 months, because most of the key orders have been made ex parte or by consent, there has been no call for a judgment setting out those facts.  Of course, not all of the relevant history is agreed.

2. The husband is a qualified professional and is 58 years of age.  The wife works for a business and is 46 years of age.  She was born in China but has lived in Australia since January 1997.  The wife is an Australian citizen and contends that she has no rights of residence in China.  Each of the parties were previously married and I understand that they each have adult children.

3. The parties started living together in March 2008 and were married in 2008.  It is the wife’s evidence that the first separation of the parties occurred on or about 19 November 2008 when the husband moved out of the former matrimonial home at C Street, Suburb P, (“the C Street unit”).  It is the wife’s evidence that the parties started seeing each other again in about April 2010 and that the husband moved back into the unit in June 2010.  It is the wife’s evidence that between June 2010 and July 2013, she and the husband continued to live as husband and wife.  Nevertheless, a divorce was granted with effect from 6 June 2011.

4. In that regard, it is the wife’s evidence that the husband completed a joint application for divorce, which he signed on 1 April 2010.  The wife signed that application on 23 June 2010, which she says was just prior to the husband moving back in to the C Street unit.  The husband re-signed the application on 27 July 2010.  It is the wife’s evidence that the parties agreed not to lodge the application and that she put the application in a drawer.  The husband denies that the wife agreed that the divorce application would not be lodged.  However, I understand that the husband concedes that without the permission or knowledge of the wife, he lodged that application with the Court on 21 April 2011.  The wife contends that on that same date, she travelled to China on a holiday arranged for her by the husband.  A divorce was granted with effect from 6 June 2011.

5. On 14 September 2011, the parties entered into a binding financial agreement pursuant to s 90C of the Family Law Act 1975 (Cth). That agreement makes no reference to the fact of the parties’ divorce. It is the evidence of the wife that she first became aware that she was divorced in July 2013. It is the wife’s contention that on 23 May 2013 the husband provided to her a copy of a will he made that day in which the wife was referred to as his spouse. In July 2013, the wife found a receipt for a Family Court of Australia filing fee in the pocket of one of the husband’s suits. The receipt was dated 21 April 2011. The wife says that she then searched his briefcase and found among other documents a copy of the Application for Divorce, a divorce order dated 5 May 2011, and a copy of the will of the husband dated 9 June 2011.

6. On 29 July 2013 solicitors engaged by the wife wrote to the husband referring to the filing of the application for divorce, indicating that the wife would move to have the divorce set aside, and requesting that in order to avoid the issues of his conduct being aired, the husband should join in that application.  It is the wife’s evidence that thereafter the husband telephoned her and threatened her.  She says that she was afraid and emailed her solicitor, asking that all correspondence and the proceedings to have the divorce set aside, be discontinued. 

7. The parties resumed cohabitation in August or September 2013.

8. It is the wife’s evidence that she and the husband had a conversation to the effect:

   [Mr Ladrone]:         If you are agreed not to proceed with having the Divorce Order overturned I will agree to remarry you again in three months’ time.  I also agree that if we separate in the future I will pay you $1,000,000 as a final property settlement.  This will only be if we eventually separate.

   [Wife]:Yes.  I agree to that.

9. It is the wife’s evidence that she drew up a letter in those terms and that both parties signed that letter.  A copy of the letter, which is dated 5 August 2013, is attachment F at page 83 to her affidavit of 29 September 2017 and attachment MC7 at page 87 to the annexures to her affidavit of 5 June 2018.  Omitting formal parts the document reads:

   Dear [Mr Ladrone],

   As per our discussion I would like to confirm the following details:

   1)I will not take any action or proceedings against you in relation to the Divorce Application you lodged on 21/04/2011.

   2)We will legally remarry in three months.

   3)Should the marriage breakdown in the future, $1,000,000 will be paid out to me by you as final settlement figure. 

   Please feel free to contact me if you need further clarification regarding the above.

   Regards,

10. The copy document purportedly bears the signatures of each of the parties.  The husband repudiates the document.  The single expert document examiner, Mr D reports[2] that he can make no conclusive deductions from the document because it is a copy.

    [2] Report attached to the affidavit of Mr D filed 13 June 2018.

11. It is the wife’s evidence that also in August 2013 the husband presented her with a section 90B Financial Agreement to sign and that she refused to do so. 

12. The parties were remarried in late 2013.  They separated for the last time on 26 November 2016.  Separation occurred when the husband left the C Street unit.

13. It is the wife’s evidence that, in early 2017, she had a telephone conversation with the husband to the following effect.  The wife said:

    [Mr Ladrone] I do not think our marriage is going to survive this.  As a result I’m going to transfer the $1,000,000 as we both agreed.

    And the husband responded:

    I suggest you don’t do that.  It would be a stupid thing for you to do but you can do whatever you want.

14. The husband denied that any such conversation took place. 

15. The wife remained in the C Street property from the date of separation to 26 June 2017.  The husband contends that, at that time, it was his practice to stay overnight at the property for part of each week, and otherwise he lived with his sister in suburban Sydney. 

16. On 27 June 2017, the wife drew down $1,000,000 on a National Australia Bank line of credit in the husband’s sole name.  That put the line of credit into debit for that sum.  The moneys were then transferred into an account in the name of the wife. 

17. Later that day, the wife transferred $984,950 from her account as follows:

    ·$255,000 evenly divided between accounts in three Chinese Banks in the name of her father

    ·$255,000 evenly divided between accounts in three Chinese Banks in the name of her mother

    ·$318,000 evenly divided between accounts in two Chinese Banks in her name

    ·$40,000 into an account in an Australian Bank in her name; and

    ·$116,950 into another account in an Australian Bank in her name.

18. It is the wife’s evidence that in 2011 or 2012 she and the husband signed forms which, among other things, permitted her to operate on the husband’s National Australia Bank accounts.  The husband disputes that the wife had any authority to operate on the account in June 2017. 

19. Just stopping there, this is one of many puzzling aspects of the case.  If the wife did not have authority to operate on the account, would not the bank be responsible for the funds removed?  Authority or not, the husband contends that the wife did not have his consent to make the drawing. 

20. As to the purported agreement of 5 August 2013, of course, even if there was such a written agreement, it has no formal status and does not purport to authorise the wife to take the action she did by, effectively, borrowing money on behalf of the husband and removing most of it from the reach of the husband or the Court.

21. The parties had discussions/arguments on 29 June 2017.  It is the husband’s evidence that the wife said to him that she had the million dollars and, “now we can negotiate the financial settlement.”  The husband called the police on that day, and, later, the husband was required by the police to leave the C Street unit.  On 30 June 2017 orders were made ex parte on the application of the husband in the following terms:

    1.The proceedings are adjourned to 10.00 am on Monday 10 July 2017.

    2.Until further order of the Court, orders are made in the terms of paragraphs 2 (as amended), 3 (as amended), 5, 7, 8, 12 and 13 of the Interim Orders Sought in the Initiating Application filed by the husband on 30 June 2017, as set out hereunder:

    2.Pending further Order, the Wife and her servants or agents be restrained by injunction from transferring, assigning, disposing and/or otherwise dealing in any way whatsoever with the funds and any portion thereof totalling One Million Dollars ($1,000,000) unilaterally withdrawn from the Husband’s National Australia Bank account number …90 (“the funds”) on 27 June 2017.

    3.Pending further Order, the Wife be restrained from withdrawing, expending, transferring, and/or transacting upon any or all of the funds standing to her credit in the following bank accounts held in her name, whether jointly or solely with any other person or entity:

    3.1National Australia Bank;

    3.2E Bank;

    3.3F Bank;

    3.4Commonwealth Bank of Australia;

    3.5Westpac Bank;

    3.6G Bank;

    3.7ANZ Bank; and

    3.8any other bank account.

    4…..

    5That the Wife shall forthwith disclose to the husband’s solicitors the location of the funds including but not limited to the name of the bank and/or financial institution, the name of the account holders, the bank account number and all other information necessary to locate the said funds.

    6…..

    7That the Applicant Husband be at liberty to provide a copy of these Orders to National Australia Bank and any other relevant bank and/or financial institution forthwith and request that each bank and/or financial institution assist in the implementation of these Orders.

    8.That pending further Order, the Wife [Ms Caldbeck] (aka …) D.O.B … 1972 be hereby restrained from leaving and/or attempting to depart from the Commonwealth of Australia on an Australian and/or any other passport AND IT IS REQUESTED that the Australian Federal Police give effect to this Order by placing the name of the said Wife on the Family Law Watch List in force at all points of arrival and departure in the Commonwealth of Australia and maintain the Wife’s name on the Watch List until the Court orders its removal.

    9…..

    10…..

    11…..

    12That a sealed copy of the Initiating Application, Financial Statement, Affidavit in support, and a sealed copy of any Orders of the Court, be served upon the Respondent Wife, initially by email communication via email address: …. within twenty four (24) hours of the date of the making of any Orders.

    13That a sealed copy of the Orders made today be served upon National Australia Bank and any other bank and/or financial institution as soon as practicable by email and/or facsimile communication within twenty four (24) hours of the date of the making of any Orders.

    3.The Court notes that these orders are made on the usual undertaking as to damages given by the husband through his counsel today.

    4.The husband shall cause a written version of that undertaking signed by him to be lodged with the Registry not later than the close of business on 3 July 2017.

    5.Leave is granted to either party and to any person or entity affected by these Orders to apply to restore the proceedings to the list before this Court on giving 48 hours’ notice to the Court and to each other party or effected person or entity.

    6.Leave is granted to the solicitor for the applicant husband to apply for the issue of such number of subpoenas as she may be advised.

    7.Costs of and incidental to the proceedings today are reserved.

22. It is order 2.8 from which the wife seeks relief in these proceedings. 

23. By a letter from the wife’s solicitors dated 7 July 2017, the wife purported to comply with one of the orders of 30 June 2017 by disclosing to the solicitors for the husband the fate of the withdrawn funds.  It was asserted that the funds were transferred by the wife into 10 bank accounts, two of which were in Australia and eight in China as follows: 

    Accounts in the name of the wife’s mother, Ms Song:

    (a)J Bank account number …20  $85,000

    (b)F Bank account number …59  $85,000

    (c)H Bank account number …89  $85,000

    Accounts in the name of the wife’s father, Mr Zao:

    (a)J Bank account number …74  $85,000

    (b)F Bank account number …42  $85,000

    (c)H Bank account number …85   $85,000

    Accounts in the name of the wife in China:

    (a)J Bank account number …50   $159,000

    (b)H Bank account number …95    $159,000

    Accounts in the name of the wife in Australia:

    (a)K Bank BSB … account number …38   $40,500

    (b)ANZ Bank  BSB … account number …408  $116,950

1. On 7 July 2017 the wife explained the reason for her conduct on 27 June 2017, in the following terms[3]:

   I did transfer the $1,000,000 on 27 June 2017 on the basis of our agreement set out in Annexure H.  I have transferred that money to China and it is being held by my parents.  I did this because I do not trust [Mr Ladrone] because of his dishonest actions over the years.  I was afraid that the money would be removed by [Mr Ladrone] and not available as part of the property settlement.

   [3] Affidavit of the wife sworn and filed 7 July 2017 at page 9.

2. In other words: ‘I thought I was entitled to the money and I took it to keep it safe because I was afraid that the husband would take it to prevent my claim’.

3. On 10 July 2017 the proceedings were adjourned to 14 July 2017.

4. On 14 July 2017 the following orders were made:

   1.Leave is granted to the parties to copy the documents produced to the Court by the National Australia Bank.

   2.The wife sign all documents and do all things to cause $950,000 of the $1,000,000 she withdrew from the National Australia Bank account:  BSB … Account Number …90 (“the NAB account”) to be returned to that account forthwith.

   3.Forthwith upon the payment by the wife into the NAB account of not less than $950,000, Order 2.8 made on 30 June 2017 is vacated.  Leave is granted to the parties to provide to the chambers of Justice Loughnan an agreed minute recording that this order has been activated to enable an advice of the vacation to be provided to the Australian Federal Police.

   4.Until further order each of the parties is restrained from operating on the NAB account save for the purposes of depositing funds into that account or permitting automatic drawings from that account in the normal course in accordance with the terms of the existing facility with the Bank.

   5.Until further order the husband shall have occupation of the property at [C Street, Suburb P] in the State of New South Wales, to the exclusion of the wife.

   6.The injunctions granted in Order 2.2 and 2.3 on 30 June 2017 are vacated.

   7.Until payment by the wife into the NAB account of not less than $950,000 and except for the purposes of making that payment, the wife is restrained from withdrawing, expending, transferring and/or transacting upon all or any of the funds standing to her credit in any bank account whether in her name, jointly or solely with any other person or entity save for the account in the wife’s sole name “[Ms Caldbeck]” with the Commonwealth Bank of Australia BSB … account number ...

   8.The Court notes that there remains outstanding an application by the husband for the return of the balance of $1,000,000 removed from the NAB account and in respect of interest incurred on that account.

   9.Leave is granted to both parties to restore the proceedings to the list on giving 48 hours notice to the Court and to each other.

   10.The Court notes that it is contemplated there are issues about the status and enforceability of alleged financial agreements made between the parties and those issues may be dealt with at a preliminary hearing.

   11.The proceedings are adjourned for mention in relation to further progress of the interim and final proceedings at 9.30 am on 10 August 2017.

   12.The question of costs of the parties of and incidental to the proceedings today is reserved.

5. On 1 August 2017, the wife caused $156,950 to be paid back into the NAB account.  No other funds have been returned to that account by the wife. 

6. On 7 August 2017, the husband’s solicitors wrote to the wife’s solicitors requesting that the wife cause the funds held in accounts in her parents’ names to be transferred into an account in the wife’s name.  The husband travelled to China, and, on 8 August 2017, he opened an account in his own name with the F Bank. 

7. On 10 August 2017, the husband asked that the wife cause all funds held by her and her parents in China to be transferred into his new account.  The wife refused, saying that she did not want to expose herself or her parents in China for being complicit with a breach of Chinese financial regulations.  It is the wife’s contention that, under those regulations, an individual is restricted from removing more than $50,000 from China each year.

8. The wife reported that her parents were unwilling to facilitate the husband’s plans to repatriate the funds to Australia. 

9. On 10 August 2017 the following orders were made. 

   1.The proceedings are adjourned to 10.00 am on 3 October 2017 for the hearing of an application by the husband to be filed as soon as practicable, seeking orders in respect of funds held in China.

   2.The parties are granted leave to seek the issue of such subpoenas as they may be advised.

   3.The Court Notes that there will be a process for identifying as a single expert, a handwriting expert in the proceedings, with the applicant to nominate to the solicitor for the respondent one of the three experts proposed by the respondent within seven days.

   4.The Court Notes that the injunctions granted on 14 July 2017 remain in force.

10. The wife reported that her parents were also unwilling to facilitate the husband’s plans to repatriate the funds to Australia.

11. The husband offered the wife an undertaking to the effect that if the funds were transferred into his Chinese account, he would comply with all Chinese rules and regulations as to the transfer of funds from that account to his Australian NAB account.

12. Further orders were made on 3 October 2017 as follows:

    1.An order is made in terms of the order sought at paragraph 7 of the husband’s Application in a Case filed 25 September 2017 as amended, as follows:

    7.Further to Order 2 made on 14 July 2017,pursuant to Section 114 of the Act the wife shall forthwith do all acts and things and sign all documents necessary, including without limitation by issuing powers of attorney, to transfer the funds received by her from the husband’s National Australia Bank account (BSB … account number …90) (“the husband’s NAB account”) to the husband’s F Bank account, in China, (“the husband’s F Bank account”) being account number …18.

    2.That order is made on the husband’s written undertaking to the Court filed on 25 September 2017.

    3.Until further order of the Court the husband is restrained from removing from China any funds transferred into his F Bank account pursuant to Order 1, without having provided to the solicitors for the wife at least 7 days prior written notice of the method of proposed removal and evidence of the permission of the relevant Chinese authority for that removal.

    4.In addition to the requirements of Order 3 the husband shall provide to the solicitors for the wife as soon as practicable, written notice of the method of proposed removal and evidence of the permission of the relevant Chinese authority for that removal

    5.Within seven days from the date of these Orders the wife do all things and sign all documents and make all applications (including applications for the issue of subpoenas) to provide full and frank disclosure of each and every transaction undertaken by and/or on her behalf in respect of the draw down and transfer of $1,000,000 from the husband’s NAB account from 27 June 2017 to date.

    6.Otherwise the Application in a Case and the wife’s Response filed 29 September 2017 are adjourned to 2.15 pm on 14 December 2017, for hearing if practicable.

    7.In the event that either party seeks the determination of any other Application or seeks any substantive order not identified in the Application or Response any such Application is to be filed and served, with supporting material by 17 November 2017.

    8.Within seven days the solicitor for the wife notify the solicitor for the husband in writing of her parents’ address in China or of an address at which they would accept service in China or a reason for not providing such an address.

13. On 15 December 2017 the Court ordered that:

    1.By consent, orders and notations are made in accordance with the document titled “Minute of Order” (Exhibit 1 dated 15 December 2017), as set out hereunder:

    1.That further to Order 2 made on 14 July 2017 and Order 1 made on 3 October 2017, pursuant to Section 114 of the Act, within seven (7) days of the date of these Orders, the wife shall sign a Power of Attorney, in the presence of a Notary Public and in favour of the husband for the limited purpose of procuring the transfer of the funds held in the name of the wife with [H Bank] and [J Bank] in China to the husband’s [F Bank] account number …18 in China.

    1(a)That the Power of Attorney pursuant to Order 1 above shall give power and authority to the husband to require [H Bank] and [J Bank] in China to cancel bank cards in the name of the wife and to re-issue new bank cards in the name of the wife to be provided to the husband in China together with the new PIN numbers for the re-issued bank cards in China for the purpose of enabling the husband to effect to Order 1 of the Orders made on 3 October 2017.

    1(b)That on or before 5:00pm on Friday 22 December 2017, the wife shall do all acts and things and sign all documents necessary to cause the cancellation of her current Australian passport and to immediately thereafter apply for a new Australian passport on an urgent basis.

    1(c) That upon the wife’s receipt of a new Australian passport the wife shall immediately provide her original Australian passport to her solicitors who shall forthwith provide it to the solicitors for the husband and make the said Australian passport available to the husband for the purpose of giving effect to Order 1 of the Orders made on 3 October 2017 and further to Order 1 above.

    2.That within forty-eight (48) hours of receipt of any requests from the solicitors for the husband, the wife shall provide all such information and/or documents and do all acts and things and sign all documents required of her to cause the husband to give effect to the Power of Attorney pursuant to Order 1 above and for the sole purpose of effecting the transfer of all funds held by the wife in China with [H Bank] and [J Bank] to the husband’s [F Bank] account number …18 in China pursuant to Order 1 of the Orders made on 3 October 2017.

    3.That the wife be restrained by injunction from changing the passwords, pin numbers, and any other bank details prior to and after the provision of such information and documentation in compliance with Order 1 (a) to (c) and Order 2 inclusive and until the solicitor for the husband notifies the solicitor for the wife in writing that the transfer of funds has been procured in compliance with Order 1.

    4.That the husband’s costs of and incidental to these proceedings be reserved.

    5.That Order 5 of the husband’s Application in a Case filed on 17 November 2017 be adjourned.

    NOTATION

    A.The Court notes that the wife has represented to the Court and to the legal representatives for the husband on 14 December 2017 that the funds held in her bank accounts in China as notified to be held by her in the letter of 7 July 2017 from Swaab Attorneys to Armstrong Legal remains in those accounts, as far as she is aware and she has not caused or given authority to remove the funds, and the said funds will continue to be held in the said accounts until such time as all the funds held by the wife in bank accounts in China are transferred to the husband’s [F Bank] account in China to give effect to these Orders.

    B.It is further noted that in accordance with the Orders of 3 October 2017, the husband continues to press for the repatriation of his funds held by the wife’s parents in China.

    2.The listing before Registrar Aitken on 10 January 2018 is vacated.

14. On 20 February 2018 the following orders were made:

    1.The proceedings are adjourned to not before 12 noon on 23 February 2018 in relation to the wife’s interim financial application filed today and an Application in a Case or Response to that Application to be filed on behalf of the husband as soon as practicable.

15. On 23 February 2018 the following orders were made:

    1.By consent, orders are made in accordance with paragraphs 1, 2, 3, 4 and 6 of the document marked Exhibit 1 (dated 23 February 2018), as set out hereunder:

    1.That the Wife shall do all acts and things and sign all documents necessary to instruct her lawyer in China to apply to set aside and/or discharge the Judgment, and/or a stay of execution of the Judgment and/or lodge an Appeal in respect of the Orders and/or Judgment issued in the proceedings in China on or before Tuesday 27 February 2018.

    2.That the Husband be hereby granted leave to forthwith provide to [Mr L], Solicitor in China, any other legal representatives retained by the Husband in China and any legal representatives retained by the wife and/or her parents in China, any relevant bank(s) and/or financial institution(s), the [City B] District Court and any other Court in China, a copy of all and any Affidavits and Applications filed by the Husband and the Wife in these proceedings and all Orders made in the Sydney Registry of the Family Court of Australia.

    3.That the Wife shall do all acts and things and sign all documents necessary to cooperate with, respond and provide all information and documentation as requested by the Husband, [Mr L], Solicitor, any Court in China within twenty-four (24) hours of any such request being made orally and/or in writing to facilitate and effect the dismissal and/or setting aside of any civil claims judgement(s) issued against her in the [City B] District and any other Court in China in favour of her parents, [Mr Zao] and [Ms Song] and to prevent by injunction or otherwise the transfer, disposal, dissipation and/or any dealings whatsoever in respect of all the funds or any part thereof derived from the Husband’s Line of Credit Account with National Australia Bank (BSB … account number …90) and held in any bank accounts in China, save and except for the recovery of all the said funds or any part thereof by way of a transfer of all and any such funds to the Husband’s [F Bank] Account (account number …18) in China.

    4.That the Wife shall do all acts and things and sign all documents necessary to cooperate with, respond and provide all authorities, information and documentation as requested by the Husband, [Mr L], Solicitor, [H Bank] and [J Bank] as soon as practicable and no less than twenty-four (24) hours of any such request being made orally and/or in writing to obtain all bank statements and bank account balances in respect of the Wife’s [H Bank] account(s) and [J Bank] account(s) in China and to facilitate and effect the transfer of all funds held in her name with [H Bank] and [J Bank] in China to the Husband’s [F Bank] account in China.

    5.deleted

    6.That each party be granted liberty to restore the matter to the list with seven (7) days advance written notice.

    7.deleted

    2.Leave is granted to the husband in relation to the orders sought by him at paragraph 15 of his Application filed 23 February 2018 to restore those proceedings to the list on seven days’ notice to the Court and to each other.

    3.The question of the costs of the parties of an incidental to application before the Court today is reserved.

16. In April 2018 the husband initiated proceedings in China by way of a Bill of Complaint and a request for a Preservation Order.  The husband has been informed that the Bill of Complaint was accepted by the City B District Court on or about 19 April 2018 but he has not received written confirmation that the wife has been served.  He is also not aware whether the relevant banks have been served with his request for a Preservation Order. 

17. On 16 April 2018 the following orders were made:

    1.Any application filed on behalf of the husband by 5.00 pm on 18 April 2018 be made returnable before Justice Loughnan at 10.00 am on 24 April 2018.

    2.Any material in response is to be filed as soon as practicable.

18. On 24 April 2018 the proceedings were adjourned to 1 May 2018.

19. On 1 May 2018 the following orders were made:

    1.No order is made in relation to Orders 2 and 3 of the Amended Response to an Application in a Case filed by the wife on 30 April 2018.

    2.The question of the costs of the parties of an incidental to the proceedings before the Court today are reserved.

20. On 11 May 2018, the judge at City B District People’s Court, made an order in civil proceedings between the husband and the defendants, who are the wife and each of her parents, purporting to freeze the assets of the defendants to the value of RMB 4,519,787.  On 28 May 2018, the husband says he was advised that his application to intervene in the appeal proceedings between and the wife and her parents in China was rejected by the City B District Court.  The wife is the appellant in those proceedings which have been listed for hearing on 28 June 2018.

21. The husband understands that the wife is not required to attend at that hearing in person.  It is the husband’s case that the Preservation Order granted on 11 May 2018 will apply to the funds that are the subject of the appeal proceedings in an amount equivalent to approximately AUD 546,706. 

22. It is the husband’s evidence that as at 31 May this year, he had incurred interest charges on the line of credit in the sum of $45,656.31. 

23. On 5 June 2018, the wife’s application in a case was filed, and, as I have indicated, it was first returnable on 14 June 2018. 

24. In summary, the wife sought:

    ·permission to travel to China to defend herself in court proceedings there;

    ·that the husband pay the wife $525 per week by way of spousal maintenance or that he vacate the property at C Street, Suburb P and permit the wife sole occupation of that property;

    ·that the husband pay the wife by way of interim costs the sum of $2,980 on 15 June 2018 towards the wife’s airfares, transport, food and accommodation for the travel to China;

    ·that the husband pay to the wife the sum of $120,000 by way of interim costs on or before 21 June 2018;

    ·that within 24 hours the husband pay to Mr D the sum of $1355.30 in respect of his costs of preparing a single expert report or that he pay that same sum of the wife in the event that she has already paid those costs.

25. The husband filed a response on 13 June 2018 seeking the application be dismissed. 

26. As to the elements of the wife’s application:

Permission to travel to China to defend proceedings there

1. The wife seeks relief from order 2(8) made on 30 June 2017 and related orders to permit her to travel to China between 23 and 30 June 2018 to attend the City B District Court on 28 June 2018 in respect of her appeal against the orders secured at first instance against her by her parents.

2. It is submitted on behalf of the wife that, as the appellant in those proceedings, she is obliged to attend on the 28 June.  She is concerned because she rather unwisely signed and filed documents in those proceedings that were drafted on the instructions of the husband and which make allegations which she believes to be false.  As I understand her case, the wife is concerned that unless she attends at Court in person, adverse findings or rulings may be made against her, by the Court.  In that regard, the wife contends that she is estranged from her parents.

3. As to the original injunction, the wife contends that she is not a flight risk because, although she was born in China, she is an Australian citizen and has no right of residence in China.  The wife has employment and friends in Australia and has lived here since 1997.

4. It is submitted for the husband that the wife’s application is premature.  It is the husband position, as he indicated in a letter from his solicitors dated 14 May 2018, that he does not consent to the wife leaving the Commonwealth but that upon receipt of written verification that she has been served with process from proceedings initiated by him by the relevant courts in China he may reconsider that issue.

1. In considering the wife’s application, it is necessary to identify the balance of prejudice in granting or refusing relief from the injunction.

2. As to the injunction, firstly, as far as I can recall, the injunction was never opposed.  Not only did the wife not challenge the injunction, I do not believe that she ever exercised her right to a hearing on the merits of the husband’s original application for the injunction.

3. The effect of s 114 of the Family Law Act1975 (Cth) is that in proceedings between parties to a marriage the Court may grant such order or injunction as it considers proper with respect to the matter to which the proceedings relate, including relevantly, an injunction in relation to the property of a party to the marriage.

4. The presenting bare facts were that the wife acted unilaterally to obtain a million dollars by borrowing it in the husband’s name.  She immediately transferred most of those funds out of Australia and beyond the reach of the husband and the Court.  Her explanation for the international transfer was that she wanted to prevent the husband from recovering the removed funds.  On 7 July 2017 she deposed[4]:

   [4] From page 9 of the Affidavit of the wife sworn and filed 7 July 2017.

   I did transfer the $1,000,000 on 27 June 2017 on the basis of our agreement set out in Annexure H.  I have transferred that money to China and it is being held by my parents.  I did this because I do not trust [Mr Ladrone] because of his dishonest actions over the years.  I was afraid that the money would be removed by [Mr Ladrone] and not available as part of the property settlement.

5. The wife has subsequently asserted that she owed all of the transferred money to her parents.  She has put into evidence a series of loan receipts, the translations[5] of which are exhibit 4.  They purport to evidence various loans made by each of the wife’s parents to her.  According to those documents, from the wife’s father came the following advances (all in Australian dollars):

   [5] The translations are dated 22 February 2018.

   ·$13,283 and $49,992 advanced on 14 June 2016 and said to be repayable on 31 December 2016;

   ·$437,070.12 advanced between 21 September 2016 and 4 October 2016; and

   ·$93,000 advanced between 19 January 2017 and 7 February 2017.

   And from the wife’s mother came the following advances:

   ·$52,683 advanced on 14 June 2016 and $40,000 advanced on 25 September 2016 said to be repayable on 31 December 2016; and

   ·$144,406 said to be advanced between 20 January 2017 and 9 February 2017 and to be repayable on 30 June 2017.

6. I calculate that a total of $237,089 was advanced from the wife’s mother, some in cash and some from the wife’s mother’s Australian Commonwealth Bank account.  Similarly, a total of $593,345.12 was said to be advanced from the wife’s father, some in cash and some from the wife’s father’s Australian Commonwealth Bank account.  Thus, I calculate from those documents that by 9 February 2017 a total of $830,434.12 was advanced.

7. The wife now contends that, rather than for the purpose of her parents holding the funds to abide a property settlement with her husband, as she herself initially represented, the transfer of funds to China on 27 June 2017 was by way of repayment of a debt she owed her parents.  The husband doubts the evidence about the loans.  It is the husband’s case that the wife did not disclose to him or to the Court any alleged loans to her parents until February 2018, despite the fact that by at least December 2017 she was on notice of proceedings initiated against her by her parents in China and of judgments issued by the City B District Court on 29 January 2018.

8. In the wife’s affidavit filed 20 February 2018 there is the following passage:

   Background of Chinese Court Case

   10.Between 2016 and 2017, I borrowed money from [sic] parents to invest in various Chinese companies.  The investments have not been successful and I was not able to repay my parents as I had planned…

   11.In June 2017, I paid the sum of $500,000 to my parents, using funds that I transferred from [Mr Ladrone]’s NAB account (“the NAB account”), pursuant to our agreement dated 5 August 2013.

9. I asked the wife’s senior counsel about the wife’s first disclosure of the asserted debts and I was not referred to any correspondence or deposition about such debts, prior to that affidavit.  I was, however, referred to the endorsements on the bank transfer records of 27 June 2017 which are part of annexure MC3 to the wife’s affidavit sworn 13 December 2017.  There, on each of pages numbered 19, 20, 21, 22, 23 & 24 of the annexure bundle there is an endorsement “LOAN REPAYMENT AND GIFT” on the bank records of the transfers to the wife’s parents’ accounts.

10. The wife says[6] that there was no reference to any loans owing to her parents in her Financial Statement sworn 7 July 2017 because she had repaid the loans by that date (by the transfers of 27 June 2017).  That explanation is not supported by the rest of the Financial Statement.  Consistent with the wife’s evidence at paragraph 22 on page 9 of her affidavit of 7 July 2017, by Part I of the Financial Statement the wife deposes that she had property to the value of $1,361,204, which included funds in Chinese accounts in her name and in the names of her father and mother “in trust for” her.  Indeed, had the wife applied most of the funds from the National Australia Bank line of credit to repay a debt to her parents, she would have been obliged to complete Part M of the Financial Statement which deals with property disposed of in the period 12 months before separation and since.  The wife did not complete that part.

    [6] Paragraph 2 of the Affidavit of the wife sworn and filed 23 April 2018.

11. In March and April 2017 there was email communication[7] between the parties, apparently in aid of a financial agreement that was under consideration at that time. The emails were admitted pursuant to s 131(2)(g) of the Evidence Act 1995 (Cth) which permits evidence that would be otherwise excluded because it was prepared in connection with an attempt to negotiate a settlement of the dispute, to be admitted where the Court would otherwise be misled by other evidence given in the proceedings.

    [7] Exhibit 3.

12. The course of email communication starts with an email from the wife to the husband on 29 March 2017 in which she makes a proposition, apparently following on from “serious discussion” between them on the previous Saturday.  Among other things the wife proposed that the C Street unit be transferred into her name, free of encumbrance or duty upon her transferring $750,000 to the husband.

13. Later in the course of that email communication the wife was asked about her assets and liabilities.  In an email dated 6 April 2017, the husband wrote to the wife:

    [Ms Caldbeck],

    Can you please provide a list of your assets and liabilities.  My lawyer has asked for this when preparing the financial agreement.

    Regards

    [Mr Ladrone]

14. The wife responded later that day with:

    [M Street. Suburb N]   Mortgage $140,000

    Car $60,000 (no debts)

15. In an email early on 7 April 2017 the husband wrote to the wife:

    [Ms Caldbeck], thank you.  A couple of points.

    1.What do you say [Suburb N] is worth?

    2.Shall I also include $750,000 cash in a bank account (which bank)?

    Regards [Mr Ladrone]

16. The wife responded later that morning with:

    1)I think [Suburb N] worth about $520,000+

    2)My parents will give me $750,000 (no need to be included)

17. Thus the wife gave details of assets and liabilities but she made no reference to an outstanding debt to her parents.  The most likely reason for the wife not mentioning a pre-existing debt to her parents of the order of $830,000, is that there was no such debt.  That is inconsistent with the wife’s evidence, that as at June 2017 she owed her parents more than $830,000.[8]  As far as I am aware, the entirety of the wife’s evidence[9] about the fate of those loaned funds is that she borrowed the money: “to invest in various Chinese companies” and “The investments have not been successful”.

    [8] Exhibit 4.

    [9] Paragraphs 10 & 11 of the wife’s affidavit of 20 February 2018.

18. Presumably, the wife would say that the effect of the email communication in March/April 2017 was that she was proposing that her parents would advance her a further $750,000.

19. Adding to the confusion, it was submitted on behalf of the husband, without complaint on behalf of the wife, that although he was not aware of it at the time, the wife sold the Suburb N property several years before the 2017 course of emails.

20. The only practical enforcement of an order for the return of the transferred funds required the presence of the wife within the jurisdiction.  That was the basis for the injunction of 30 June 2017 and it remains the position today.

21. Much of the wife’s case is highly improbable and inconsistent.  For example, why did the wife transfer only $510,000 to her parents’ accounts on 27 June 2017 if she owed them over $830,000?  Importantly, on the wife’s own case, she has misled the Court on oath.  For example, there is her Financial Statement of 7 July 2017.  Perhaps even more importantly, the wife’s explanation for all this is that she set out to pre-empt any claim by the husband.

22. On the face of it, the wife was justifiably aggrieved about the husband’s conduct in prosecuting their divorce application in 2011, without her agreement.  The wife properly complains about purported financial agreements promoted by the husband when he knew that some of the contents were materially incorrect.  The wife may even have been justified in thinking that the husband would seek to defeat her property settlement claims.  However, none of that could justify the wife acting to borrow $1 million in the name of the husband or to remove the proceeds from the jurisdiction.  The wife has done the very thing that she accuses the husband of planning.

23. The husband is concerned that notwithstanding that the wife is not a Chinese citizen and is a citizen of Australia, particularly because of her conduct on 27 June 2017, she has relatively little connection with Australia.

24. The potential prejudice arising if the injunction is lifted is that the financial proceedings will be frustrated and an injustice will be done to the husband.

25. The competing prejudice arises from what could occur as a result of the wife’s failure to appear in person in the City B Court on 28 June 2018.  As I understand the wife’s case, although her lawyers attended the hearing in the City B Court at first instance, she was at a disadvantage because she was not able to give immediate instructions to those lawyers.  I apprehend that her case now is that either she is not permitted to appear only by a lawyer, and/or she would be at a similar disadvantage if she did not attend in person on the appeal hearing.

26. There is no probative evidence about what would be permitted or required by the City B Court or what could occur on 28 June 2018.  That is important because, in the Australian context, the only significant prejudice for not attending to prosecute an appeal would be that the appeal would be dismissed and potentially a costs order would be made.  Without the appellant there would be no party to rely on the documents filed in support of the appeal, for example.

27. As to the merits of the wife’s appeal, as I understand her position, if she is allowed to travel she intends to repudiate the substance of the appeal because unlike the husband, she concedes the debt save for an issue about the quantum of the debt found by the Court at first instance.  I understood her case to be that she disputes about $50,000 of the debt.  If, at the end of the day, the wife loses that allegedly disputed amount, that will have been a product of her own conduct.

28. Therefore, in my view, the most significant potential prejudice of the wife not appearing, would be to the husband.  He believes that a freezing order will preserve the subject matter of the appeal proceedings and that is a risk he is prepared to take.  That is a matter for him and no more need be said.

29. In the course of submissions I canvassed with the parties the idea of requiring the husband to undertake that he would take all reasonable steps to prevent or ameliorate any serious prejudice to the wife arising from her non-appearance.  Suffice it to say, that suggestion was better received on behalf of the husband than the wife.  In my view there is scope for such an undertaking being of assistance because, as I referred to earlier, I was told that the husband’s lawyers would attend at the appeal hearing on 28 June, albeit with only a watching brief.

30. In my view, the competing prejudices favour the refusal of the wife’s application but I will require the husband to give an undertaking whereby some of the potential risks identified by the wife may be ameliorated.

31. The undertaking shall be in the terms:

    To do all reasonable and practicable things to intercede or to facilitate a later intercession, on behalf of the wife in the proceedings between the wife and her parents before the [City B] District Court on 28 June 2018 in the event that there are findings adverse to the wife beyond the dismissal of her appeal and any costs orders; and

    As soon as practicable, to provide a report to the solicitors for the wife as to the outcome of the proceedings before the [City B] District Court on 28 June 2018.

32. On condition that the undertaking is provided in writing to the Court and to the solicitors for the wife by the close of business on Thursday, 21 June 2018, the wife’s application for orders 1, 2 3 & 4 in her Application in a Case filed 5 June 2018 stand dismissed.

33. I am not sure that the claim for travel costs etc. is properly a matter of interim costs but in light of the refusal of relief from the injunction of 30 June 2017, the issue of those costs do not arise.

34. As to the wife’s application for spousal maintenance.  The wife’s conduct and lack of financial disclosure means that she cannot satisfy the Court about her financial circumstances now.  Therefore she cannot establish a need for maintenance.  On the face of his disclosure, and largely because of the wife’s conduct, the husband has a deficit of outgoings over income.  That would be relevant to his capacity to pay.  The matter may become clearer later but at this stage it would not be proper to make an order.

35. The issues raised in the wife’s Application in a Case may arise again.  The husband has initiated proceedings in China by way of a Bill of Complaint and a request for a Preservation Order.  The Preservation Order was granted and I understand that the wife has been served with some process in those proceedings.  It is prima facie vexatious to litigate the same issues in two different jurisdictions.  If the husband wishes to prosecute proceedings in China that could have an adverse impact on the wife, there is a legitimate argument that she must be allowed to appear in those proceedings and to defend herself. 

36. I hope not but those may be matters for another day.

I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 20 June 2018.

Associate: 

Date:  19 July 2018