Chang v Su

[2002] HCATrans 446

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S104 of 2002

B e t w e e n -

JAMES CHANG

Applicant

and

SUSIE SU

Respondent

Application for special leave to appeal

GLEESON CJ
CALLINAN J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON TUESDAY, 5 NOVEMBER 2002, AT 12.13 PM

Copyright in the High Court of Australia

MR B. LEVET:   May it please the Court, I appear for the applicant.  (instructed by Leslie Young)

MR R.S. BELL:   May it please the Court, I appear for the respondent.  (instructed by James Lee)

GLEESON CJ:   Yes, Mr Levet.

MR LEVET: Your Honour, the point is a fairly simple one, that is, whether a court can order under section 79 of the Family Law Act a payment of a sum of money which, in effect, exceeds the extent of the ascertained assets.

GLEESON CJ:   It may depend on what you mean by “ascertained”.

CALLINAN J:    Mr Levet, at page 22 of the book there is a reference to your client disclosure in connection with his application for immigration, or for a visa or some kind, of assets in excess of $4.55 million.

MR LEVET:   Yes, your Honour.

CALLINAN J:   Now, that is a clear admission and it is an admission against interest and in the absence of evidence – convincing evidence – as to the dissipation or loss of that sum of money, the court is fully entitled to accept it as a good indication of how much he was worth.

MR LEVET:   Yes, your Honour, it is an indication of what he was worth at a particular point in time.

CALLINAN J:   Yes, and is there any convincing evidence in the case as to the dissipation or loss of that sum of money?

MR LEVET:   No, your Honour, I am not able to point you to any clear explanation as to that dissipation.

CALLINAN J:   How much was the settlement that was ordered?  How much did your client have to pay in money and assets?

MR LEVET:   He had to discharge the mortgages ‑ ‑ ‑

CALLINAN J:   What was all of that worth?  How much was it in moneys worth?

MR LEVET:   It was in excess of $1 million, your Honour.

CALLINAN J:   In excess of $1 million but well below $4.55 million?

MR LEVET:   Yes, your Honour.

CALLINAN J:   That is the end of the matter, is it not?

MR LEVET:   With respect, no, your Honour.  The finding of her Honour was that she was not able to ascertain the extent of the assets outside of Australia.

CALLINAN J:   Your client chose to rely, I think, upon, or sought to tender three affidavits but not to produce the deponents, is that not right?

MR LEVET:   Yes, your Honour, that is correct, save and accept they were witnesses from overseas and he sought to – he made application that he be allowed to rely on their evidence, they being not in the country.

CALLINAN J:   Yes.  That was refused, in the exercise of her Honour’s discretion.

MR LEVET:   Yes, your Honour.

CALLINAN J:   And in respect of a very important matter that discretion was, I suggest to you, properly exercised?

MR LEVET:   Your Honour, it is not the exercise of her Honour’s discretion in that respect that is before you.

CALLINAN J:   I know that but that might explain why there is no satisfactory evidence, assuming that it could be forthcoming, of what happened to the $4.55 million that your client had – how long before the case?  That was a conservative estimate, too.

MR LEVET:   It was, your Honour.  It was a few years, your Honour, not a lengthy period.  Your Honour, 1991, and the case commenced its first matter in 1995.

CALLINAN J:   You would have to be pretty good to lose $4 million in four years, if he was a man of any prudence at all.

MR LEVET:   Indeed, yes, your Honour, but in its abstract form the question is simply this:  accepting that the cases impose – both the cases – the Act and the rules impose a duty on a party of full disclosure.

CALLINAN J:   Yes.

MR LEVET:   And accepting that her Honour found that the husband had been less than frank in his discharge of that duty and accepting that the cases indicate that a court can be, as it were, bold where there has been a failure to fully discharge such duty and accepting the Mezzacappa proposition that one can indicate that in the absence of an adequate explanation one can assume that a party still has assets.  The difference between this case and Mezzacappa is simply this:  in Mezzacappa the husband was left, as it were, with the unascertained assets and the wife was left with the ascertained assets.

Your Honour, that is the situation in relation to a number of the cases.  It is certainly the case in Mezzacappa.  It is also the case in Weir where there is not an order from payment from an unascertained pool.  Here, I suppose, what one has is the Monte‑type situation of a limit being placed on the amount which can be the subject, properly, of a section 79 order and that is to say the limit of the ascertained asset.

The assets that were ascertained in this case were the two pieces of real property in Australia, they being the house and the unit.  Both were subject to a mortgage and what the effect of her Honour’s order was, was quite simply to require the husband from an unascertained pool which her Honour freely admitted was unascertained and which her Honour said was unascertained due to the failure of the husband to fully discharge his duty of disclosure but from that unascertained pool to make an order that he pay a sum certain.

GLEESON CJ:   Has that word “ascertained” or “unascertained” some statutory basis?

MR LEVET:   No, your Honour.  From memory, it is the language that was used in Monte by the ‑ ‑ ‑

GLEESON CJ:   It does not come out of the Act?

MR LEVET:   No, your Honour.

GLEESON CJ:   What is the relevant difference between the meaning of “ascertained” and the meaning of “inferred”?

MR LEVET:   Your Honour, for the purpose of the rule in Mezzacappa one can, in my respectful submission, infer that a person has a pool of assets which is unascertained and which is available to him and the rule in Mezzacappa indicates ‑ ‑ ‑

CALLINAN J:   You say “the rule” but these are only cases which deal with factual situations by the Family Court.

MR LEVET:   Yes, your Honour.

CALLINAN J:   I do not know whether they set down rules – certainly not intellectual rules.

MR LEVET:   The principle espoused in Mezzacappa, your Honour, I am sorry.

CALLINAN J:   It does not matter what the principle might be said to be, a court has to do the best it can.  It does the best it can, having regard to the evidence that is adduced and if the parties are not frank then naturally there is going to be a measure of imprecision about any findings that the court can make.

MR LEVET:   Yes, your Honour, but if, as is the case here, you have, as it were, two pools of assets, one being a certain pool of assets in Australia that one can identify with a degree of precision, one has outside Australia a pool of assets which for various reasons her Honour cannot ‑ ‑ ‑

CALLINAN J:   Not for various reasons.

GLEESON CJ:   Because your client is not being frank about them.

CALLINAN J:   Your client will not tell her Honour about them.

MR LEVET:   I cannot escape from that as a proposition, your Honour.  But, your Honour, her Honour was not able to say what assets existed outside Australia.  She was not able to ascertain them.  She was able to infer from the evidence that he had substantial assets outside Australia but was not able to say what those assets were or what constituted them.  In my respectful submission, it is not open to her Honour to make an order for payment of a sum certain from a pool that she is unable to ascertain the limits of.

Your Honours, in Monte which is referred to at length in the case of Stein, which is in my friend’s list, it was argued in that case by the counsel for the husband that the upper limit of what could be ordered by reason of the financial resources of one party is an award to the other party of the whole of the ascertained property of the parties.

GLEESON CJ:   But does that mean that if a man is entitled to a property settlement to be made on him by his wife then she can place an upper limit on the amount to which he is entitled by simply deciding that she is not going to reveal any more than X dollars?

CALLINAN J:   Just hide it, that is the way to do it.  Just go around hiding your assets and then you limit the amount of the settlement.  That cannot be right, Mr Levet.  That is, with respect, nonsense.

MR LEVET:   Well, your Honour, that was the approach that was adopted by a Full Bench of the Family Court in Monte.

GLEESON CJ:   I would have thought it would come down to a question of what is a reasonable inference in the circumstances of the particular case.

MR LEVET:   Your Honour, in my respectful submission, one may infer that a party has been less than frank, or one may find that a party has been less than frank and infer the existence of an asset pool.  One can use that inference to say that they will give to the other party the entirety of the ascertained assets but what one cannot, in my respectful submission do, is to use that inference to say that there is sufficient funds in an unascertained unidentified pool of assets from which a party can be ordered to make a payment.

CALLINAN J:   Mr Levet, did your client make any attempt, personally, to explain what happened to the $4.55 million over the four years?

MR LEVET:   Your Honour, it was a case ‑ ‑ ‑

CALLINAN J:   No, did he or did he not make any attempt in his evidence – his own evidence – to explain where the money had gone?  Did he even contend that the sum had been in some way reduced or the ‑ ‑ ‑

MR LEVET:   He contended, your Honour, that he no longer had it.  There was some contention as to the sale and disposition of certain assets.  He indicated that moneys had been expended on living costs, that moneys had been expended on business ventures but I could not put to you that there was a comprehensive explanation of that amount of money, no.

GLEESON CJ:   Mr Levet, I am not sure what the special point at stake here is.  This must be bread‑and‑butter work for a Family Court judge.  I would have thought this situation in which one party to a matrimonial proceeding who is potentially liable to make a property settlement in favour of another party, or be subject to an order of an appropriate kind, is found to be disguising his or her means.  It must go on all the time.  What is special about this?

MR LEVET:   Your Honour, what is special is that this is a case involving an order for a payment of a sum certain from an unascertained pool.  Your Honour, there are not a lot of cases relating to it.  The closest one gets to the point having been directly raised is the Full Court of the Family Court decision in Monte which tends to be distinguished, as indeed it was in Stein.  There has not been a ruling by any court that I am able to point your Honours to that the ruling in Monte is incorrect and that, in effect, is the proposition I now advance, the proposition in Monte.

It is frequently distinguished on the facts.  It is almost invariably distinguished on the facts.  In my respectful submission, as an abstract principle, the finding in Monte’s Case is an important one because it prevents an order being made against a party for payment of an amount from moneys that they may not have.

GLEESON CJ:   And you do not know whether or not they have them because they are not telling you?

MR LEVET:   Yes, your Honour.

CALLINAN J:   And in this case, even though not long before he certainly did have the money.

MR LEVET:   Your Honour, in 1991 the evidence is that he had assets of a particular nature.  The case first came before his Honour Justice Rowlands in 1995.

CALLINAN J:   You have to be pretty careless to lose half of $4.5 million in four years and even if he had half of $4.5 million, conservatively estimated, then the settlement – there were funds available for the settlement.  Plenty of money.  You said the settlement was worth about $1 million or so, a bit over $1 million.

MR LEVET:   It was in excess of, your Honour, yes.

CALLINAN J:   If he had been so imprudent as to lose half of $4.55 million, there was still plenty of money there to satisfy the order.

MR LEVET:   Your Honour, there was, as I indicated, evidence of the loss or sale of significant parts of the moneys that he originally had.  What I conceded to your Honour was that there was certainly not a comprehensive explanation of $4.5 million on the basis of the evidence that was before the court.  Your Honours, I cannot, as it were, make the same point more than once.  If you are not with me, you are not with me, and that is the point.

GLEESON CJ:   Thank you.

MR LEVET:   Thank you, your Honour.

GLEESON CJ:   We do not need to hear you, Mr Bell.

This is an application for special leave to appeal from a decision of the Full Court of the Family Court affirming a judgment in which the primary judge made the best assessment that she could of the means of the respective parties and ordered that the applicant make a substantial disposition of property in favour of the respondent.

The primary judge was unable precisely to ascertain the means and assets of the applicant.  The reason for this was his inconsistency and want of frankness in his assertions and disclosures about his means.  Accordingly, her Honour was thrown back principally on statements made by the applicant in his application for permanent residence in Australia in 1991 in which, among other things, he said that his net assets conservatively estimated at a volume in excess of $4.5 million.

The primary judge was entitled to rely on the information contained in the application for permanent residence and the applicant’s failure to explain the difference between his financial status at that time and his claim in the proceedings to a very much reduced position at the time of the trial.  The Full Court of the Family Court reviewed the evidence for itself and was unable to discern any error of law or fact on the part of the primary judge.

The questions the applicant would seek to raise in this Court are essentially questions of fact.  The application has insufficient prospects of success to warrant a grant of special leave and the application is refused with costs.

We will adjourn for a short time to reconstitute.

AT 12.32 PM THE MATTER WAS CONCLUDED