CAO & HONG - [2015] FamCA 884

FAMILY COURT OF AUSTRALIA

CAO & HONG

[2015] FamCA 884

FAMILY LAW – PROPERTY – Interim – Where the parties have significant business and property interests in Australia and Country D – Where the totality of their wealth is in excess of $200,000,000 – Where both parties seek competing interim orders – Where orders are sought in relation to variation of previous Orders, injunctions, the wife’s access to funds for living expenses, the parties’ access to funds for payment of legal fees and orders for disclosure.

Family Law Act 1975 (Cth)

Mullen and De Bry (2006) FLC 93 – 293

APPLICANT:

Ms Cao

RESPONDENT:

Mr Hong

FILE NUMBER:

BRC

5044

2015

DATE DELIVERED:

22 October 2015

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Forrest J

HEARING DATE:

15 October 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Hackett

SOLICITOR FOR THE APPLICANT:

AHL Legal

COUNSEL FOR THE RESPONDENT:

Mr Alexander

SOLICITOR FOR THE RESPONDENT:

Hillhouse Burrough McKeown

Orders

IT IS ORDERED UNTIL FURTHER ORDER

That for the purposes of these Orders, the term "the B Group" means all of the Australian corporate and/or trust entities which the Wife and the Husband have an interest in, including but not limited to the following entities:
(a)B Australia Pty Ltd ACN …;
(b)B Australia Holdings Pty Ltd ACN …;
(c)B Constructions Pty Ltd ACN …;
(d)B Property Pty Ltd ACN …;
(e)B Realty Pty Ltd ACN …;
(f)B International Holdings Pty Ltd ACN …;
(g)Hong Enterprises Pty Ltd ACN …;
(h)B Finance Pty Ltd ACN …; and
(i)C Australia Pty Ltd ACN ….
That for the purposes of these Orders, the term "their Country D interests" means all of the Country D corporate and/or trust entities which the Wife and the Husband have an interest in, including but not limited to the following entities:
(a)B City Development Incorporated;
(b)E Incorporated;
(c)C Industrial Incorporated;
(d)B Industrial Limited;
(e)B Industrial Incorporated;
(f)C Entertainment Incorporated;
(g)B Development Incorporated; and
(h)F Co. Ltd.
(i)G Pty Ltd;
(j)B Enterprises Pty Ltd;
(k)H Incorporated;
(l)I Co;
(m)J Pty Ltd.
That paragraphs 3 – 9 of the Order of Judge Coates of the Brisbane Registry of the Federal Circuit Court of Australia of 7 August 2015 are discharged.
That each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from removing themselves or the other party from any office held by him or her in any of the entities within the B Group or their Country D interests, without firstly obtaining the written consent of the other party or an order of the Court.
That each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from dealing with, disposing of, transferring or selling any shares held in his or her name in any entity within the B Group or their Country D interests, without firstly obtaining the written consent of the other party or an order of the Court.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading CAO & HONG

Details

AGLC: CAO & HONG [2015] FamCA 884
Case: [2015] FamCA 884
Decision Date: 22 October 2015

CaseChat Overview and Summary

The case of CAO & HONG involved an application before Forrest J in the Federal Circuit Court of Australia. The dispute concerned the financial affairs of the parties, specifically relating to a group of Australian corporate and trust entities referred to as "the B Group" and a separate group of corporate and trust entities in "Country D," collectively termed "their Country D interests." The court was asked to make orders concerning the management and disposition of assets within these entities.

The primary legal issues before the court were whether to discharge previous orders made by Judge Coates and, more significantly, to implement new injunctive orders. These proposed orders aimed to restrain both parties from taking certain actions concerning the B Group and their Country D interests. Specifically, the court had to consider restraining the parties from removing each other from offices held within these entities, dealing with or disposing of shares, withdrawing funds in excess of a specified amount, increasing liabilities, or increasing salaries, director's fees, or dividends paid to themselves or certain family members, without the other party's consent or a court order.

Forrest J reasoned that it was necessary to discharge paragraphs 3 to 9 of the previous order made by Judge Coates. The court then made extensive orders restraining both parties, and entities controlled by them, from taking actions that could dissipate or improperly deal with assets within the B Group and their Country D interests. These restraints included prohibitions on removing each other from offices, disposing of shares, withdrawing significant funds, increasing liabilities, and increasing payments of salaries, fees, or dividends, subject to certain exceptions. The exceptions allowed for the ordinary and proper course of business, discharging pre-existing contractual obligations with notice, and specific monthly drawing limits for personal expenses for the Wife, and a limited amount for legal fees for both parties. The court also made orders for ongoing monthly disclosure of legal fees and specific disclosure obligations regarding lines of credit and other documents within 21 days.

Orders

Orders of the court

IT IS ORDERED UNTIL FURTHER ORDER

That for the purposes of these Orders, the term "the B Group" means all of the Australian corporate and/or trust entities which the Wife and the Husband have an interest in, including but not limited to the following entities:

(a) B Australia Pty Ltd ACN …;

(b) B Australia Holdings Pty Ltd ACN …;

(d) B Property Pty Ltd ACN …;

(e) B Realty Pty Ltd ACN …;

(f) B International Holdings Pty Ltd ACN …;

(g) Hong Enterprises Pty Ltd ACN …;

(h) B Finance Pty Ltd ACN …; and

(i) C Australia Pty Ltd ACN ….

That for the purposes of these Orders, the term "their Country D interests" means all of the Country D corporate and/or trust entities which the Wife and the Husband have an interest in, including but not limited to the following entities:

(a) B City Development Incorporated;

(b) E Incorporated;

(d) B Industrial Limited;

(e) B Industrial Incorporated;

(f) C Entertainment Incorporated;

(g) B Development Incorporated; and

(h) F Co. Ltd.

(i) G Pty Ltd;

(j) B Enterprises Pty Ltd;

(k) H Incorporated;

(l) I Co;

(m) J Pty Ltd.

That paragraphs 3 – 9 of the Order of Judge Coates of the Brisbane Registry of the Federal Circuit Court of Australia of 7 August 2015 are discharged.

That each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from removing themselves or the other party from any office held by him or her in any of the entities within the B Group or their Country D interests, without firstly obtaining the written consent of the other party or an order of the Court.

That each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from dealing with, disposing of, transferring or selling any shares held in his or her name in any entity within the B Group or their Country D interests, without firstly obtaining the written consent of the other party or an order of the Court.

That save as otherwise provided for in paragraphs 10, 11 and 12 hereof, each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from withdrawing funds in excess of ten thousand dollars ($10,000.00) per transaction from any bank account held by him or her personally or by any entity of the B Group or their Country D interests, held in Australia, Country D or any other country, without firstly obtaining the written consent of the other party or an order of the Court.

That save as otherwise provided for in paragraphs 10, 11 and 12 hereof, each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from dealing with, disposing of, transferring or selling any assets, stock or shares held by each of them or by any entity within the B Group or their Country D interests, without the written consent of the other party or an order of the Court.

That each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from increasing any liability held by each of them or by any entity within the B Group or their Country D interests, beyond the current level, without firstly obtaining the written consent of the other party or an order of the Court.

That each party is restrained, whether by themselves or through their servants or agents or by corporate entities controlled by them, from increasing any salary, director’s fee or dividend received by him or her or any third person who is his or her son, daughter, former spouse, former de facto spouse, current partner, or the former spouse, de facto spouse or current partner of his or her son or daughter, from any entity within the B Group or their Country D interests, without firstly obtaining the written consent of the other party or an order of the Court.

Exceptions to the preceding injunctions

10.

This order does not prohibit either party from:

(a) dealing with or disposing of any of their assets or the assets of any of the entities of the B Group or their Country D interests in the ordinary and proper course of business, including paying business expenses bona fide and properly incurred; and

(b) in relation to matters not falling within (a), dealing with or disposing of any of their assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so each party gives the other party, if possible, at least two working days written notice of the particulars of the obligation.

11.

That notwithstanding the other provisions of this order, including paragraph 9, the Wife shall be entitled to draw from the accounts of any entity in the B Group in Australia or Country D, either by way of director’s fees or salary or director’s loan or dividend payment as she may be advised, a net amount that does not exceed $15,000 per calendar month for the payment of her personal and household expenses, with any amount in excess of such sum only to be drawn with the prior written consent of the Husband or an order of this Court.

12.

That notwithstanding the other provisions of this order, including paragraph 9, the Wife shall be entitled to draw from the accounts of any entity in the B Group in Australia or Country D, and the Husband shall be entitled to draw from the accounts of any entity in their Country D interests, either by way of director’s fees or salary or director’s loan or dividend payment as she or he may be advised, an additional net amount that does not exceed $200,000 to be utilised for the payment of his or her legal fees and costs incurred in the conduct of these proceedings, with any amount in excess of such sum only to be drawn by her or him for the payment of his or her legal fees and costs in these proceedings with the prior written consent of the other party or an order of this Court.

Disclosure

13.

Each of the parties shall provide to the other on a monthly basis, in writing, details of the legal fees incurred in the previous month in respect of these proceedings and in respect of any amount paid towards those legal fees in that previous month, the amount of such payment and the source of such payment (identifying the source).

14.

That within 21 days of the date hereof:

(a) The Husband file and serve an affidavit in which he deposes to all of the details surrounding the applications for the two lines of credit for C Industrial Incorporated in Country D, each in the sum of NT$100,000,000 one with the Bank H and the other with Bank I Co Ltd, to the extent that he has not already deposed to same, as well as full details of the use of any of the funds drawn down from those lines of credit in the last twelve months, and he shall exhibit to that affidavit any and all documents related to the matters he is required to depose to that he is obliged to disclose to the Wife that he has not already disclosed, and to the extent that he is unable to do so, he shall depose to the attempts he has made to obtain copies of any such documents; and

(b) The Wife provide such further disclosure or copies of documents requested to be disclosed by her in the letter that was made Exhibit 1 in the proceedings on Thursday, 15 October 2015 and to the extent the Wife is unable to do so, she file and serve an affidavit deposing to the attempts she has made to do so; and

(c) That each party otherwise provide to the other, copies of the documents contained in their respective Lists of Documents and any Supplementary Lists of Documents.

Costs

15.

Each party’s costs of and incidental to the applications heard by the Court on 15 October 2015 are reserved.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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