CHAU & CAO - [2019] FamCA 97

FAMILY COURT OF AUSTRALIA

CHAU & CAO

[2019] FamCA 97

FAMILY LAW – PROPERTY – Where the parties have lived separately for the majority of the marriage – Where the wife has lived in Country C and Country B, while the husband has lived in Australia – Where the parties had one child, who is now independent - Where the husband made an initial contribution of equity – Where the wife made no relevant initial contributions – Where the wife did not contribute her earned income to the enterprise of the family – Where the wife made no contributions to the acquisition, conservation or improvement of the husband’s assets -Where the wife provided money to the husband which was placed in Australian bank accounts – Where the money accumulated interest – Where the money was returned to the wife at her request – Where the wife alleges that significant funds were placed in Australian bank accounts on behalf of her family that have not been returned – Where this is disputed by the husband – Where the wife failed to make full and frank disclosure of income and assets – Where it was found that the failure to provide requested documents was deliberate – Where the wife’s failure to make full and proper disclosure meant it inappropriate to make any adjustment in her favour.

Family Law Act 1975 (Cth) ss 75, 79

Bevan & Bevan (2013) 279 FLR 1
Guinti & Guinti (1986) 11 Fam LR 160
Weir & Weir (1992) 110 FLR 403

APPLICANT:

Ms Chau

RESPONDENT:

Mr Cao

FILE NUMBER:

SYC

2741

2014

DATE DELIVERED:

27 February 2019

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Rees J

HEARING DATE:

11, 12 and 13 February 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Winfield

SOLICITOR FOR THE APPLICANT:

Access Legal Solicitors

COUNSEL FOR THE RESPONDENT:

Ms Christie SC

SOLICITOR FOR THE RESPONDENT:

Linden Legal

Orders amended pursuant to Rule 17.02 on 20 March 2019

Orders

IT IS ORDERED

That the application of the wife filed 8 May 2014 be dismissed.
That Order 5 made 8 August 2014 ~~2015~~ be discharged.

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 Chau & Cao 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: SYC 2741 of 2014

Ms Chau

Applicant

And

Mr Cao

Respondent

REASONS FOR JUDGMENT

Ms Chau (“the wife”) and Mr Cao (“the husband”) were both born in Country B. The husband migrated to Australia in 1973 and has become an Australian citizen. He lived and worked in Australia after 1973 and has now retired.
The wife met the husband in Country B and they married there in 1989. They had one child, Mr D who is now aged 27 years.
The circumstances of this marriage are unusual.
It is not disputed that, in 25 years of marriage, the parties have lived under the same roof in Australia for less than 400 days in total. For the remainder of that period, they have lived apart and in different countries, with the exception of a period of some four months after their son was born when they lived together in Country C and at least one other period when the husband visited the wife in Country B.
From the time of the marriage, until 1998, the wife lived and worked in Country C for a company belonging to members of her family.
Mr D was born in 1991 in Country C where both parents travelled for the birth. The husband returned to Australia for a period and returned to Country C in 1993. On 28 September 1993, when Mr D was 21 months old, the husband brought Mr D to Australia. After that time, Mr D lived in Australia and was cared for by the husband with the assistance of the paternal grandmother, who lived with them in an apartment owned by the husband in Suburb H, where they still live.
From 1999 the wife lived and worked in Country B and the husband and Mr D have lived in Australia.

BACKGROUND

At the time of the marriage, the wife asserts that she was the owner of an unencumbered property at Suburb E (“Suburb E property”) in Country B and a second property at Suburb F in City G (“Suburb F property”) which shortly after the marriage was mortgaged for $200,000. The wife asserts that the Suburb F property was sold by the mortgagee. The husband asserts that he was not aware that the wife owned the Suburb F property and does not know what became of it or whether the wife received anything from its sale.
The husband was the owner of an apartment in Suburb H in Sydney. He deposed that the mortgage had almost been paid off. I accept that in 1992 the balance of the mortgage was $8,000.
The parties did not acquire any assets together.
The wife asserts that between 1990 and 1993 she borrowed some $400,000 from her siblings and her niece. In addition, she borrowed either $100,000 or $200,000 secured against the Suburb F property. All of those sums, together with savings of $100,000, were transferred to Australia by her and invested by the husband in banks on behalf of her family. The wife asserts that a total of $360,000 of her own funds was transferred to Australia.
The husband admits that the wife sent $360,000 to Australia but said he had no knowledge of any sums borrowed by the wife from her family in Country B, or invested on their behalf. The circumstances of these transactions are disputed.
It was the wife’s case that she owes her siblings $1,010,000 (or some other amount. The amount owed to her siblings differed according to various sworn evidence relied upon by the wife).
It was the husband’s case that he returned to the wife her principal sum of $360,000 and all accrued interest.
In 2009 the wife changed her name to Ms Chau.
The wife asserts that in 2012 or 2013 she purchased an apartment at Suburb J (“Suburb J property”) in Country B from her brother. The title was registered in the name of the parties’ son. She asserts that she then transferred the title of the Suburb J property to her brother and that she still lives in the apartment with a lease which expires in 2038. The beneficial ownership of that apartment is in dispute.
The marriage ended in 2014.
The wife sought an order for the equal division of the property of the parties.
The husband sought an order that the wife’s application be dismissed.

ISSUES

In opening, and in submissions, counsel identified the factual issues to be resolved:
·    What was the wife’s initial contribution?
·    What funds, if any, were borrowed by the wife from her family members?
·    Does the wife owe any debt to her family and, if so, in what amount?
·    What funds from the wife’s income were contributed to the family of the husband, the wife and their child?
·    Did the wife work in Country B after separation?
·    Does the wife have assets in Country B?
·    Has the wife made full and proper disclosure of her assets and income?
All of these issues fall to be determined having regard to the onus of proof and the directions of the Court and requests made by the husband’s solicitors for disclosure by the wife.
Extensive efforts had been made by the husband’s lawyers to obtain information about the wife’s assets.
On 31 October 2014 orders were made in the Federal Circuit Court that, inter alia, the wife’s solicitor provide copies of the wife’s bank statements for all accounts held by her from 1 January 2013 to date.
On 2 November 2015, further orders were made in relation to the provision of documents by the wife. She was directed to provide documents relating to:
1.        The sale of the Suburb E property and disbursal of the proceeds.
2.        The sale of the Suburb F property and the amounts received.
3.        Her employment in Country C.
4.        Alleged loans from family.
5.        Alleged payment of interest from her salary.
6.        Alleged repayments to her family.
7.        Documents supporting her calculation of the sum owed to her family.
8.        Documents in relation to her current employment.
9.        Documents relating to the purchase of the unit in Suburb J.
On 12 July 2018 the husband’s solicitors wrote to the wife’s solicitors requesting the provision of documents (together with English translations of the documents where applicable). The letter repeated the terms of the orders made on 2 November 2015 and in addition sought the following documents:
1.Evidence of the wife’s current income from 1 January 2014 to date.
2.A copy of the wife’s passport.
3.Copies of bank statements for bank accounts in the wife’s name jointly or with any other person or in which she had an interest from 1 January 2014 to date, including but not limited to the following accounts:
(a)K Bank account;
(b)Country B Bank account;
(c)Westpac Bank account;
(d)ANZ Bank account.
4.Copies of dividend statements or share-holder statements from shares held by the wife from 1 January 2014 to date including but not limited to:
(a)Company L;
(b)Company M;
(c)Company N.
On 26 October 2018 a further letter was written by the husband’s solicitors to the wife’s solicitors seeking disclosure in accordance with the orders made on 2 November 2015 and, in particular, production of documents relating to bank accounts.
On 30 November 2018 specific questions were administrated to the wife pursuant to rule 13.26. Those questions included, inter alia:
1.What funds do you receive to meet your weekly expenses? From what source?
2.Do you operate one or more account [sic] with a bank/financial institution in Australia and/or overseas? If your answer is yes, please provide the details of the bank/financial institution where the account is held and the account numbers for the said account(s) and provide copies of statements for all such banks/financial institution accounts that you operate for the 18 months immediately preceding this notice.
Thus it was clear to those representing the wife that, from the commencement of these proceedings, her assertions as to her financial position, both as to income and assets, were disputed. It was also clear that her assertions of loans from her family, or monies invested by her on behalf of her family, were disputed.
Once the wife’s assertions were disputed, she bore the onus of proving, on the balance of probabilities, that which she asserted.

What was the wife’s initial contribution?

The wife deposed that she was the owner of an apartment in Suburb E and a plot of land in Suburb F at the time of the marriage. Both were initially unencumbered. The husband deposed that he was not aware of the wife’s Suburb F property until it was revealed in these proceedings.
In relation to the Suburb E apartment, the wife deposed:
I later sold this property for approximately $500,000.00 on 15 December 1996 in order to pay back the debt that the husband and I borrowed from my siblings during the marriage...
In re-examination, the wife said that she had the original documents relating to the sale of Suburb E in Country B. She could provide no explanation why, despite having been directed to do so, she had not produced those documents.
There is no dispute that the whole of the proceeds of sale of the Suburb E property was paid to the wife’s family.
If it is the case that the proceeds were used to repay a joint debt of the parties, then I accept that the wife’s ownership of the Suburb E apartment would be counted as an initial contribution by her.
However if, as I have found later in these reasons, the wife has not established that any money was owed, either by her or by the parties jointly, to her family, then the Suburb E property was never contributed to the purposes of the marriage and cannot be taken into account as an initial contribution.
In relation to the Suburb F property, the wife deposed (as per the original):
I used this land as security of the loan I borrowed from the bank in [Country B] for about $200,000 shortly after I married to the husband in 1990. I then transferred the loan to the husband. I lost the record of the bank statement regarding the loan when I moved houses. As I could not pay back the loan, the bank sold the land on 26 February 2013 for around NT$6,818,800 [Country B] currency to cover the debt...
The wife produced a letter from the Country B City G Local Court dated 26 February 2013 giving notice of the order for sale by the mortgagee. The letter nominates NT$6,816,800 as the estimated value of the property. The mortgagee was the Country B Bank Co. Ltd. There is no evidence of the amount borrowed.
No other documents were produced.
The husband’s evidence that he was not aware of the existence of the Suburb F property was not challenged.
What the wife did with the sum of $200,000 that she asserts she borrowed has not been explained. It is unlikely that the loan was “transferred to the husband” as the wife asserts, without his knowledge. In any event, there is no evidence to support the wife’s assertion that the loan was transferred.
It was not alleged, in the wife’s case, that the asserted borrowing of $200,000 formed part of the $360,000 which was transferred by her to bank accounts in Australia.
I am unable to find that the wife borrowed $200,000 and contributed those funds to the marriage.
How much she borrowed and what she did with the money has not been demonstrated. Thus, for the reasons explained in relation to the Suburb E property, the Suburb F property was not contributed to the enterprise of the marriage.
Nor can I conclude, absent documentary evidence, that the wife received nothing from the sale of that property. She is, in her trial affidavit, silent on that issue.
I am unable to conclude that the Suburb F property forms part of the wife’s initial contribution.
There is no dispute that the wife had about $360,000 in cash which she transferred to Australia and which was placed in bank accounts in her name in Australia.
The wife in her affidavit sworn 8 May 2014, deposed that she transferred money from Country B as follows:
·    $160,000 on 31 January 1996
·    $74,372 of 31 January 1998
·    $26,000 on 7 January 1998
·    $100,000 from Westpac account ending #60 in February 1996. (The ownership of that account will be discussed later in these reasons.)
The total of those amounts was a little more than $360,000.
Also in her affidavit sworn 8 May 2014, the wife deposed that the husband transferred funds to Country B between 1997 and 2011 totalling $274,500. It is not clear whether that included the total sum of $160,000 transferred to the wife’s sister for the purchase of the Suburb J apartment but I have assumed that it does not because the wife, in her affidavit, refers to the payment of $274,500 as “interest”.
The husband’s evidence that he transferred a total of $274,690 by cheque, telegraphic transfer and bank transfer, between 1997 and 2011 is not challenged. The husband’s evidence that, in addition, he paid by cheque a further sum of $161,000 between 14 June 2011 and 11 October 2013 is also unchallenged.
The total amount returned by the husband to the wife is $435,680.
Thus I am satisfied that the wife commenced to bring her own funds to Australia in 1996 and the husband began returning her funds to her in 1997. By 2013, all of the wife’s funds had been returned plus an additional amount of $75,680.
Can the wife’s funds of $360,000 be counted as an initial contribution or as a contribution at all?
Counsel for the wife submitted that there had been an intermingling of the wife’s and the husband’s funds and pointed to a number of transactions where the husband had drawn funds from an account in the wife’s name, paid those funds into an account in his own name and then drawn a cheque to the wife. On about three occasions, the amount remitted to the wife was a little less than the amount paid into the husband’s account. On one occasion, the husband paid to the wife an amount significantly greater than the sum he transferred from her account.
Other than for the purpose of forwarding money to wife at her request, there is no evidence that the husband used the funds in the accounts in the wife’s name.
The wife’s $360,000 was kept in bank accounts in her name and paid to her by the husband as she requested him to do so.
If it is the case that, on the few occasions identified by counsel for the wife, the husband transferred more money to his account than he received from the wife’s account, it is also the case that he forwarded to her $75,680 more than she deposited in Australia.
I do not accept that the wife has established that her funds and the husband’s funds were sufficiently intermingled that her contribution of $360,000 is a contribution to the marriage.
Thus I am unable to find that the wife made any initial contribution to the marriage.
I have accepted that the sum of $360,000 was, as the wife asserted, her money. It was not submitted before me that the amount was raised by borrowing either from the wife’s sister or from a mortgage over the Suburb F property. If I am in error as to the source of the wife’s $360,000, then that error favours her as I have considered the sum as being available to her from savings and not subject to any obligation for repayment of any portion of the fund.

What funds, if any were borrowed by the wife from her family members?

The wife’s evidence in relation to funds asserted to have been advanced by her family and the terms of any advance is both confusing and contradictory.
In circumstances where the husband denies knowledge of any such advances, the onus is upon the wife to establish the fact of the advances on the balance of probabilities.
The wife has been directed and requested, as is set out earlier in these reasons, to provide the documents that support her assertions in relation to these loans. The only document that she has provided is a remittance advice in relation to a transfer to her from the Westpac account ending #60 in February 1996.
On behalf of the wife, it was submitted that the #60 account was a joint account of the wife with her sister. There is no dispute that $100,000 was transferred to the wife’s account from the #60 account in February 1996 and forms part of the $360,000 which is accepted to have been transferred by the wife from Country B to Australia. Why the wife persisted with her insistence that the account was a joint account is not obvious. The significance of that transaction is not that it happened but the manner in which the documents relating to both the #60 account and the remittance in February 1996 came into evidence and what those documents reveal about the wife’s credit.
The wife deposed in her trial affidavit that the #60 account was opened by the husband, in her presence and in her name, at a Westpac branch in Sydney. Throughout cross-examination she continued to insist that the account was a joint account with her sister Ms O Chau.
She also deposed:
I was in [Country B] from about July 1990 to February 1991. There was a [Country B] branch of Westpac at that time. My youngest sister and I opened a joint account (ending in #60) at this [Country B] branch I said ‘Let’s open this account to pay the outstanding interest to you and the others. You can send it to them from this account.’ My younger sister put into it $10,000.
(As per the original)
A statement dated November 1993 for the #60 account is addressed to Ms O Chau at an address in City G. The wife is not included as an account holder. In cross-examination, the wife said that she took her sister to the Westpac bank in City G to open the account. That evidence in not consistent with at least part of her affidavit.
It is not disputed that $97,678.55 was deposited in the #60 account and that, subsequently from the same account, an amount of $100,000 was transferred to the wife’s account in Australia.

The wife produced a copy of the remittance advice in relation to the deposit of $97,678.55. She was asked on a number of occasions to produce the original document but has never done so. In cross-examination, she said the original is in Country B. The wife did, however, produce two colour photocopies purporting to be of the original. The colour copies are remarkably different from the black and white photocopy annexed to the wife’s affidavit. In the affidavit copy, the wife’s name is clearly written as an account holder. However, while the name of the wife’s sister is written in capital letters, the wife’s name is written in both upper and lower case letters. On the colour copies the wife’s name is not visible on one copy and only faintly visible on the other. Where the wife’s name is visible, the handwriting of the wife’s name is different from that of her sister’s name. Further, on the colour copy the wife’s name is written as “Chau LI” and on the affidavit copy the wife’s name is written “Chau Li”. The wife, in cross-examination, said that because the copies were not legible, her sister-in-law wrote the names on the copy.
The copy of the document annexed to the affidavit has been altered and is not the same as the colour copies tendered. Whether it was the wife or her sister-in-law who altered the document, it is clear that the wife relied on a document she knew to have been altered to make a representation which she thought would assist her case.
The wife deposed to a conversation with the husband in January or February 1990 in Australia. She deposed:
... my husband said to me with words to the following effect:
“The interest rate here (in Australia) is very high! It’s more than 20%! Why don’t you transfer your money here so that we can live off the income we get from the banks?”
Me: “Yes that sounds like a good idea. However, I don’t have that much money myself.”
The husband:
“In fact, why don’t you get your relatives to do the same? Perhaps you can get them to fork out the money first? That way we can earn even more and support ourselves. The current interest rate in Australia is 23% and that in Country B is 13%. If they agree we could keep 20% of the interest earned in the bank accounts in Australia, as an agency fee for managing their accounts. 10% of the money would be paid to taxes and the rest of the money (ie. The remaining 70%) will be transferred back to them. We can probably also borrow some money from the bank. Based on my current income, I won’t have enough money to deposit in the bank. To be honest with you, I don’t have much money with me at all. If we don’t do as I suggest, when we have kids in the future, we won’t be able to provide them with a good education. To be honest it was because of this fact that my ex-wife thought that I did not earn enough income that she chose to divorce me.”
Me: “I like this idea, why don’t I ask my siblings first and see what they think?”
(As per the original)
The husband denies that this conversation took place as alleged or at all.
The wife deposed:
Following the above conversation, I then called my brother [Mr P Chau] and my sister [Ms O Chau], conveying to them our plan.
On several occasions, both over the phone and in person I told my sister over the phone and I also face to face met with her and repeated what I told her over the phone with the details as follows. I told her that my husband told me that the interest rate is twice the rate here in Country B, even after tax. Taking away the commission of 30%, we can pay them back 70% of the principal and the interest. We will send you back the 70% of the principal and interest, repaying them.
When I made the phone call from Australia to my brother and sister, my husband was present. I also [sic] my brother on several occasions, on the phone, to repeat what I said to my sister separately.
My brother thought it was a good idea and my sister also said the same. They told me that if they needed funds, they would notify me 15 days prior. It was an oral agreement and subsequently the written agreement was drawn up in January 1993.
[Ms O Chau] said to me: “We trust you with the money because we are family” and “Your husband is a decent and honest man and we trust him with our money’. [Mr P Chau] agreed with my sister. Upon them agreeing to have their money transferred to Australia to be deposited for the purpose of accruing interest, I informed my husband “They both agree”.
(As per the original)
The wife annexed a number of loan agreements which she deposed had been drawn up and signed “with them”. These documents will be discussed later.
The wife deposed that she then, with the assistance of the husband, opened the #60 account “solely under my name”.
The wife deposed:
Following the opening of the Westpac Accounts, I made a few international calls to [Country B] to my brother and sister, after which loans were made from them. My husband told me and I told my sister and brother face to face that the original plan was that they could use the cheque account to draw the money. My husband told me about this new arrangement and they agreed not to use the cheque account to get the interest payments. Instead the interest payments were to be paid from my salary in [Country C] with the intention that the interest they have got will be re-invested by my husband, who operates the account on our behalf. My brother and sister said that there will be higher interest payments earned that way, a far better earning. My husband told me in the mean time that I can use my own salary to pay them interest repayments owed to the bank. This was only an oral agreement among myself, my brother, my sister and my husband. Subsequently, in January 1993 they wanted me to put it in a written agreement and signed with myself and them ...
a)AUD$250,000.00 had been sent to me from my younger brother (“my Younger Brother”) [Mr Q Chau] and his wife (“my Younger Sister-In-Law”), [Ms R] from 1990 to 1993. He said that ‘I sent you the amount and I gave you already the remittance notice, here you go’ and I then asked my husband whether he received the 250,000.00 and he said yes. The money arrived within 1-2 days.,
b)AUD$100,000.00 had then been leant to me from my younger sister (“My Younger Sister”) [Ms O Chau]. She said ‘I sent the money to your joint account with me and you from [Ms R’s] account, I need you to guarantee that I am the lender because I’m holding the joint account with you. I understand that your husband is operating this account’. I told them that my husband told me we could repay them when the term deposit is due in 2013.
c)AUD$50,000.00 had been leant to me from my niece Ms S. She told me ‘I have sent you the money and I gave you the remittance notice’. The money arrived within 1-2 days.
(As per the original)
The wife deposed:
I left Australia in 16 February 1990. During the period between 16 February 1990 and 21 June 1990, when I was in [Country B], I borrowed a loan from a bank in [Country B] for about $100,000.00 in 1990. I used the land of [Suburb F] as a security of the loan as above mentioned in paragraph 7. I then transferred the loan to the husband. I lost the record of the bank statement regarding the loan when I moved houses. I also sent my savings of AUD$100,000 to the account plus loan 100,000 in 1990 (total $200,000).
Therefore it could be calculated that there was approximately a total of $650,000 in the account from my siblings and me in 1990.
(As per the original)
It is not clear on what basis the wife asserts that the amount in the accounts would have been $650,000 as the total of the remittances to which she refers appears to be $600,000, of which only $400,000 is alleged to have been remitted by her family members. No bank statements which might have corroborated her assertions were made available.
At paragraph 158 of her trial affidavit, the wife deposed:
By 1998 my family had sent my husband more money for the sake of collecting interest. They had believed him to be reliable as the debts had been paid off previously.
(As per the original)
At paragraph 159 the wife deposed:
In my calculation the total amount in the account should be approximately $1,010,000 ($650,000 between 1990 - 1993 + $360,000 between 1996 – 1998) from 1990 to 1998 sent my me and my family.
(As per the original)
With the exception of the remittance advice in relation to the sum of $100,000 which has been referred to earlier in these reasons, the wife provided no document to substantiate her claims of monies advanced by her family.
In her Financial Statement sworn 6 May 2014, the wife deposed that the amount owed to her family was $434,371.
In her Financial Statement sworn 1 August 2018, the wife deposed that the amount owed to her family was $1,050,000.
In a document tendered in her case, purporting to be a document prepared by her, the wife calculated the amount owing to her family as at 2015, at $2,279,357.73. That document makes no mention of the asserted repayments of interest to the wife’s family of $274,500 or of the repayment of principal of $500,000 that the wife asserts was made from the sale of Suburb E.
In cross-examination the wife said that her brother, in Country B, had kept records of all of the funds which had been advanced and all of the repayments.
As already has been stated in these reasons, the wife’s brother did not give evidence and the records kept by him have not been produced.
In her affidavit sworn 8 May 2014, the wife deposed “There is total more that $800,000 sent from me and borrowing my family to my accounts in Australia was for the purpose of receiving interest.”
If it were the case that the wife’s sister and brother and niece are owed significant amounts of money, it would have been expected that they would give evidence to that effect in the proceedings or provide documents to substantiate that assertion. Neither occurred.
The wife deposed that in 1996, she sold her property at Suburb E and paid $500,000 to her family in payment of the amounts allegedly owed to them.
She deposed in her affidavit to a conversation, after the sale of Suburb E, where the husband said:
“Please get me the receipts and documents relating to the transfers of money and debt owed from your siblings and nephew. I shall pay the outstanding when the fixed deposit is due. I need these documents to show the government where our money came from.”
I did as asked and collected the documents from my siblings because the debts had been paid off. I gave these documents to him when I came to Australia. (Emphasis added)
He said to me with words to the following effect:
“These documents are in regards to Australian banks, there is no point in you keeping them. They are in English too and are useless to you now since the debts have been paid off. I can help you keep the receipt in Australia in case you lost them.”
(As per the original)
The wife referred to a number of “loan agreements” which she claimed to have prepared and executed. She was cross-examined about the veracity of those documents and it was put to her, and she denied, that she had created the documents to bolster her case about the alleged loans from her family.
There are four such documents.
A document dated January 1993 refers to loans of $250,000 from the wife’s brother Mr Q Chau; a loan of $150,000 from the wife’s sister Ms O Chau and a loan of $50,000 from the wife’s niece. The document was prepared by the wife in her handwriting and signed but not witnessed. It contradicts the wife’s sworn evidence that the loan from her sister was in the sum of $100,000.
The wife relied on a document dated 31 January 1996, again in the wife’s handwriting and signed but not witnessed. In that document the wife purports to record that, upon the sale of Suburb E, the wife paid her brother and sister-in-law:
Australian Dollars A$160,000 as the interests for the loan borrowed in 1990-1996 and I also paid back the money amount A$70,709 for the interest payment using the money deducted from the salaries for me (the total amount owed so far being A$90,000). The total interest to be paid back is 320,709.32 and the interest rate is 23%.
The money amount the first time borrowed: 250,000
The money amount the second time borrowed: 160,000
The interest still owed so far: 90,000
Note: The money amount the second time borrowed 160,000 was actually the payment remitted for the interest and therefore by 31 January 1996 the total loan amount has been A$500,000
(As per the original)
The assertions in that document contradict the wife’s sworn evidence that she paid her family $500,000 from the sale of Suburb E. It is also inconsistent with her sworn evidence at paragraph 6 of her trial affidavit that she sold Suburb E on 15 December 1996. It is also inconsistent with the wife’s evidence about the conversation with the husband about the loan being repaid from the sale of Suburb E.
There is an addendum to that document signed by the wife and dated 5 May 2012 which states:
The loan borrowed was term-deposited in the bank account and the term deposit is to be matured in 2013 and [Mr Cao] shall post back all the loan amount included both principal and interests to pay it off.
(As per the original)
It is not clear to what transaction the addendum refers but it appears, on its face, to suggest that the wife’s sister had deposited money for the wife in a term deposit and would return the funds to the wife when the deposit matured.
A document dated 11 January 1996 states:
I sold the property located at [Suburb E] in 1996 and then I paid [Ms S] the money so as the interests for the loan borrowed in 1990-1996, but I did not pay A$75,390, instead I paid only A$50,000 first, leaving A$25,390 unpaid. The interest rate was 23%.
(As per the original)
There is an addendum to that document, also dated 5 May 2012, in the same terms as the addendum to the document dated 31 January 1996. That document contradicts the wife’s sworn evidence in the same manner as the earlier document.
A further document dated 11 January 1996, written and signed by the wife but not witnessed states:
...I sold the property located at [Suburb E] in 1996 and then I paid [Ms O Chau] Australian Dollars A$125,000 as the interests for the loan borrowed in 1990 - 1996 (the current interest amount I owe being A$150,000) while the total interest amount that should be paid is A$275,852.99 with the interest being 23%.
The money amount first time borrowed: 150,000
The money amount the second time borrowed: 100,000
The interest owed so far: 150,000
Note: The money amount the second time borrowed 100,000 was actually the payment remitted for the interest and therefore by 11 January 1996 the total loan amount has been A$400,000.
(As per the original)
There is an addendum to the document dated 5 May 2012 in the same terms as the addenda to the previous documents.
This document also contradicts the wife’s sworn evidence.
None of the documents acknowledge that, on the wife’s evidence, there was no agreement that the asserted loans would bear interest at the rate of 23 per cent. Rather, according to the wife’s evidence, the asserted agreement was that, from the interest earned when the principal sums were invested, the husband and wife would receive a management fee equivalent to 20 per cent of the interest and 10 per cent of the interest would be withheld for tax.
Although the wife tendered documents from the Reserve Bank, she was unable to demonstrate that interest rates in Australia on deposits had ever approached 23 per cent.
In the face of the challenge to the authenticity of the documents, the onus lies with the wife to establish that they are contemporaneous acknowledgements of debt.
The documents are not witnessed. They contain matters contrary to the wife’s sworn evidence. They make assertions contrary to the wife’s case as it was conducted before me. Further, the wife has demonstrated that she will put into evidence documents that have been altered to change their meaning and support her case.
I am not satisfied that the documents are an accurate reflexion of the position on the date they purport to have been signed.
Having regard to all of those matters, I do not accept that the documents are genuine acknowledgements of debt.
None of the wife’s relatives named have given evidence in the proceedings of the existence of any debt.
Documents said to be in the possession of the wife’s brother have not been provided.
The wife has not demonstrated, on the balance of probabilities, that any funds were lent to her by her brother, sister or niece.

Does the wife owe any debt to her family and, if so, in what amount?

It follows, from the preceding discussion that I am unable to find that the wife owes any amount to her family.

What funds from the wife’s income were contributed to the family of the husband, the wife and their child?

The wife asserts that she earned a salary in Country C of some $5,000 per month from the time of the marriage until she returned to live in Country B in 1998. In Country B, the wife worked and earned money but there is no evidence of how much she earned.
She does not assert that she contributed any of those funds to the welfare of the family in Australia.
The husband’s evidence that the wife had never paid child support or contributed to living expenses in Australia was not challenged.

Did the wife work in Country B after separation?

The wife’s evidence about this issue was contradictory.
In her two Financial Statements filed in May 2014 and August 2018, she deposed that she had no income.
In an affidavit sworn in 2015 the wife deposed that she was employed in Country B “in an increasingly limited capacity”.
In cross-examination she said that she worked for a company owned by her brother receiving commission, a basic wage and travel expenses. She also said that although she remained in that employment from 2014, she received no income from commission in 2014 or 2015.
Despite being directed by the Court to produce documents relating to her earnings, and requested to do so by the husband’s solicitors, the wife produced no documents. The wife’s brother, for whose company she worked, did not give evidence.
Once the wife’s evidence that she had no income from exertion was challenged, the onus of proof was on her to establish that which she asserted. She has not done so.
I am not satisfied that the wife has not earned income from working for her brother’s company but I am not in a position to make a finding about her income.

Does the wife have assets in Country B? Has the wife made full and proper disclosure of her assets and income?

It is convenient to consider these two issue together.
The wife has sworn two Financial Statements in the proceedings, the first in May 2014 and the second in August 2018. In both those statements, she swore that she had no income, no bank accounts and no other assets.
That evidence was not accurate in a number of aspects.
Despite the various requests and the directions relating to production of documents pertaining to the purchase of the Suburb J apartment, no document has been produced except for the land ownership certificate from Country B showing that the title was registered in the name of the parties’ son on 21 June 2013 and in the name of the wife’s brother on 31 August 2015.
The wife deposed that between 15 May 2003 and 11 April 2005 the husband sent $160,000 to the wife’s sister in Country B from Australia. She deposed “he used the money to buy the property for our son from my younger brother... My son then leased this property to me”. Setting aside the fact that there is no admissible evidence that the husband instigated the transaction, where the seller was the wife’s brother, and the intermediary is the wife’s sister, it is likely that the negotiations, whatever they were, were conducted by the wife or on her instructions.
There is no evidence of the actual purchase price paid or whether any funds were raised by way of mortgage.
In order to effect these transactions, the wife arranged for their son to sign a Power of Attorney in her favour.

The wife’s evidence raised more questions than it answered. If it is the case, as the wife asserts, that she owed significant amounts of money to her family in Country B in 2003 and 2005, why was the money sent to Country B not applied against the debt? Why would the wife’s sister simply hold $160,000 from at least 2005 until 2013 when the apartment was purchased? Why would the wife’s brother sell her the apartment when she already owed him a substantial amount of money?
In cross-examination, the wife said that her brother had the documents relating to the apartment transactions. The wife’s sister and brother, who could have answered all these questions, did not give evidence. There was no explanation for the documents held by the wife’s brother not being made available. It is reasonable to conclude that the documents, had they been produced, would not have assisted the wife’s case.
In relation to the transfer of the apartment to the wife’s brother, she deposed:
Instead of repaying the debts owed to my siblings, the amount transferred by husband were effectively eventually used to purchase the property. When I came to the conclusion my sister and brother were unlikely to be repaid their loans... I transferred the title to my brother using the power of attorney.
(As per the original)
It is the husband’s case that the wife used funds (part of the $360,000 that he acknowledged she sent to Australia), to purchase the Suburb J apartment.
By 31 August 2015, when the title was transferred to the wife’s brother the proceedings had been on foot for over a year and had been transferred to the Family Court.
Whether the purpose of the transfer was to remove the asset from the pool of property is unknown and speculation is unhelpful. In cross-examination, the wife said that she transferred the apartment after she came to the view that her husband “had another woman”. The wife could not satisfactorily explain why, when she was living in the apartment from 2013, she did not use that address as her registered address but used her sister’s address. She said there was “no particular reason”.
However, once the beneficial ownership of the apartment was put in issue, the onus of proof lay with the wife to establish that she is not the beneficial owner of the property, in circumstances where the transactions are between family members and the wife was granted a lease in 2015 until 2038 and where, according to her two Financial Statements, she is not required to pay either rent or outgoings, such as rates, levies or insurance.
I am not satisfied that the wife is not the beneficial owner of the apartment.
In the Joint Balance Sheet tendered at the commencement of the trial, reference was made to bank accounts in the name of the wife with K Bank, Country B Bank, T Bank (Country B) and U Bank (Country B). Further the wife disclosed three accounts with V Bank, two separate Westpac Bank accounts and two separate ANZ Bank accounts.
In cross-examination, the wife said that, in August 2018, she had accounts with the Commonwealth Bank, Westpac Bank, U Bank, K Bank, ANZ Bank, T Bank (Country B) and Country B Bank. She said, however, that those accounts were not current.
In cross-examination about her employment in Country B the wife said that any money which she earnt from employment was deposited into a bank account with the U Bank. Asked where the statements for that account were, she said that she did not have them with her. The wife acknowledged that she had received copies of correspondence asking for the provision of statements of all accounts in her name. Asked why she had not included that account in her financial statements her response was that she was not asked.
In relation to the U Bank account, the wife acknowledged that no statements had ever been provided in relation to that account. In relation to the T Bank account, the wife said that she did not have the bank book with her. She said that she had never been told that she was required to produce statements for the K Bank account in relation to the statements. In relation to the Country B Bank account, the wife said she would “need to check it out”.
No statements were produced in relation to a call for statements relating to the V Bank where the wife had two accounts. No statements were produced in relation to the credit cards which the wife said she held as at August 2018, being two cards with the K Bank, two cards with “V Trust” and one card with another institution. There is no mention of any credit card debts in either of the wife’s credit card statements.
In relation to those banks located in Country B and in China, the wife conceded that she had provided no statements for the accounts.
The existence of those accounts came to the notice of the husband’s lawyers only as a result of a subpoena issued to the relevant government department seeking information about the wife’s various entrances and exits from Australia.
Documents provided by the wife in support of her various applications for a visa to enter Australia were tendered. In relation to a visa application in 2014, the wife provided a document stating that she had $14,000 in the V Bank. In cross-examination, she said that, at the time, she also had $3,000 in cash. In relation to a visa application made in February 2015, the wife stated that she had a “cash deposit in Westpac Bank of Australia” and annexed a page from an affidavit where she deposed that she worked in Country B. In a September 2016 visa application she said that she had an account with W Bank and an account with V Bank. Attached to a Visa application in February 2017 was a copy of a “Certificate of Account Balance” from U Bank showing a balance of $US6,801.
I am not satisfied that the wife has no money in bank accounts in China or Country B.
In relation to the shares owned by the wife in Country B, other than the reference in the Joint Balance Sheet to shares in Company L, Company M and Company N, the wife gave no evidence. Thus there is no evidence about the number of shares she holds, the market value of the shares or the dividend stream that flows from the shares. No documents were provided by the wife in relation to her shareholdings, despite her having been both asked and directed to do so.
I am not satisfied that the wife has made proper disclosure and I am unable to make a finding about what assets she may have in Country B.
It was not submitted in the wife’s case that any lack of disclosure was inadvertent. The wife’s failure to make proper disclosure was deliberate, as was amply demonstrated in her cross-examination where she repeatedly said that relevant documents were in her possession in Country B or in the possession of her brother. It was peculiarly within the wife’s power to make disclosure of her bank accounts in China and Country B and only she could have ensure that the statements and other relevant documents relating those accounts were before the Court. Similarly, it was only the wife who could have put before the Court the documents relevant to the various transfers of the Suburb J apartment which she said were in the possession of her brother. Absent any evidence on the part of the wife that she had asked for the documents and that her brother had refused to give them to her, the conclusion that her failure to provide those documents was deliberate is inevitable.

THE CONSEQUENCES OF FAILURE TO MAKE PROPER DISCLOSURE

The obligation, in proceedings between spouses, to make a full and frank disclosure of income and assets is of long standing and well understood and is fundamental to the exercise of jurisdiction in financial matters.
In Guinti & Guinti (1986) 11 Fam LR 160 the Full Court said:
It is obviously desirable as a general principle that the court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs: see In the Marriage of Briese (1985) 10 Fam LR 642; [1986] FLC 91-713, affirmed by the Full Court in Oriolo v Oriolo (1985) 10 Fam LR 665; [1985] FLC 91-653, there is no problem, although there may be disputes as to valuation. "However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.
The consequence of failure to make such full and frank disclosure was stated by the Full Court in Weir & Weir (1992) 110 FLR 403 in the following terms:
It seems that once it has been established that there has been a deliberate non-disclosure...then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.

THE BALANCE SHEET

At the commencement of the hearing, the parties tendered a Joint Balance Sheet which is reproduced below:

ASSETS
Ownership		Description		Wife's value	Husband's value
1	H	X Street, Suburb H		790,000	790,000
Bank accounts:
2	H	(a) Y Bank #14		216,879	216,879
3	H	(b) W Bank #87		3,450	3,450
4	H	(c) W Bank #12		2,106	2,106
5	H	(d) Z Bank #09		1,485	1,485
6	H	(e) Z Bank Term Deposit #41		13,194	13,194
7	H	(f) ANZ #31		777	777
8	H	(g) AA Bank #18		10,198	10,198
9	H	(h) AA Bank #45		2,878	2,878
Shares/Investments:
10	H	(a) Company BB		0
11	H	(b) Company CC		0
12	H	(c) Company DD		40,393	40,393
13	H	(d) Company EE		26,450	26,450
14	H	(e) Company FF		43,469	43,469
15	H	(f) Company GG		10,891	10,891
16	H	(g) Company HH		129,905	129,905
17	H	(h) Company II		3,309	3,309
18	H	(i) Company JJ		23,536	23,536
19	H	(j) Company KK		22,969	22,969
20	H	(k) Company LL		11,992	11,992
21	H	(l) Company MM		14,576	14,576
22	H	Contents		5,000	5,000
23	W	K Bank Account #1-0 (Country B)		0	NK
24	W	Country B Bank Account #0-7		0	NK
25	W	Company L shares		0	NK
26	W	Company M shares		0	NK
27	W	Company N shares		500	NK
28	W	Household items		2,000	2,000
29	W	Westpac bank account #73		103	NK
30	W	ANZ account #91		527	NK
31 W	W	V Bank account		1,000	NK
32	W	ANZ account #77		NK
33	W	Westpac account #91		NK
34	W	T Bank (Country B) Account #10		NK
35	W	U Bank (Country B) Account #23		NK
36	W	W Bank Account #18		NK
37	W	V Bank Account #77		NK
38	W	V Bank Account #90		NK
39	W	ANZ Account #39		NK
Total		$ 1,395,222	$ 1,375,457

LIABILITIES
Ownership		Description		Wife's value	Husband's value
40	W	Personal Loan from Ms O Chau, Ms R and Ms S		1,050,000	Nil
Total		$ 1,050,000	$ 0

SUPERANNUATION
Member		Name of Fund		Type of Interest	Wife's value	Husband's value
41	H	Super 1 30.06.18		Accumulation	526,778	526,778
42	H	Super 2 30.06.18		Accumulation	222,310	222,310
43	H	Super 3 30.06.18		Accumulation	46,491	46,491
44	H	Super 4 30.06.18		Accumulation	42,726	42,726
Total		$ 838,305	$ 838,305

FINANCIAL RESOURCES
Ownership		Description		Wife's value	Husband's value
45	H	Pension		NK
Total		$ 0	$ 0
NETT TOTAL ASSETS (including Superannuation)				$ 1,183,527	$ 2,213,762

I accept that the husband has assets as set out in the Joint Balance Sheet of $1,421,762.
As I have already explained, I can make no findings as to the assets the wife may have in Country B.

SECTION 79(2)

As the Full Court stated in Bevan & Bevan (2013) 279 FLR 1 “the power to make any order adjusting property interests is conditioned upon the court finding that it is just and equitable to make an order.”
Such is the factual controversy in these proceedings that it is necessary to apply the facts as I have found them to be, to the law, in order to determine whether it is just and equitable to make any order adjusting existing rights.

CONTRIBUTIONS

The husband made an initial contribution to the equity in the Suburb H unit in which he still lives and which is now valued at $790,000.
The wife made no relevant initial contribution.
After the birth of their child, the parents jointly cared for him, in Australia and in Country C, until June 1993 when the husband returned to Australia. Thereafter, the wife cared for the child until September 1993 when the husband and the child returned to Australia. From September 1993 the husband was the primary carer of the child and the wife spent very little time with him. She did not come to Australia in 1993 or 1994. In 1995 she spent one period of seven days and one of ten days in Australia. She did not come in 1996. In 1997 she spent six days in Australia. She did not then come again to Australia until 2011 when their child was nine or ten years old. On that visit she was in Australia for 12 days. She did not visit in 2012. In 2013 she was in Australia for 42 days. She arrived in Australia on 5 February 2014 and the parties separated although the wife remained living at the Suburb H apartment until 2 April 2014. When the parties separated, their child was 16 years old. The wife does not claim to have made any parenting contributions after separation.
Thus the husband made almost all of the relevant parenting contributions.
The wife did not contribute her earned income to the enterprise of the family. She did not pay child support or contribute to the support of the child after he was 21 months old.
There was a period of about four months in 1992 when the husband took unpaid paternity leave and the parties and their son lived together in Country C. The wife does not assert that she supported the husband during that time. She deposed that she arranged for him to work in the family company. In cross-examination, she said that was paid work.
The husband denied that he had worked in Country C and said he was on paternity leave. There was no evidence about how he supported himself.
The wife’s savings of $360,000 were not contributed to the family. In so far as the wife earned income, and used her property, those contributions were made to her birth family, not the family comprised of herself and the husband and their child.
I am unable to conclude, having regard to the wife’s evidence, that she supported the husband during that period.
Having regard to my finding that the wife did not make a direct financial contribution and neither did she make a home making and parenting contribution which justifies recognition, I am unable to find that she made any indirect contribution to the acquisition, conservation or improvement of the assets, particularly, to the accumulation of the husband’s superannuation entitlements.
Therefore I find that the wife made no contributions to the acquisition, conservation or improvement of the husband’s assets.

SECTION 75(2)

The wife is aged 66 years and the husband is aged 76 years. The husband has been retired for some years. Whether the wife is currently engaged in paid employment is not known but I accept that her capacity for gainful employment is limited by her age.
Whilst I am able to determine the property of the husband, I have not been able to make any finding as to the property of the wife.
I am unable to make any findings about the wife’s current living circumstances. She lives, rent free, in an apartment in Country B in relation to which she has a lease for the next 19 years. She is not required to pay rates, levies or repairs. She deposed in her Financial Statement to discretionary expenses of $358 per week but gives no indication of how she meets those expenses. She is able to travel to and from Australia for extended periods. In cross-examination she said that in 2018 she had lived mostly in Australia where she supported herself either by borrowing money from a friend, or using her credit cards or using money sent to Australia from Country B. In her Financial Statement she swore that she had no money. She said, in cross-examination, that she was in receipt of a multiple entry visitor visa which entitles her to stay in Australia for a maximum of three months at a time, so I infer that, in 2018, she must have travelled between Country B and Australia at least four times. There is no evidence about how her airfares are paid.
The consequence of the wife’s failure to make full and proper disclosure is that I am unable to conclude that it is appropriate to make any adjustment in her favour.

CONCLUSION

The wife’s application will be dismissed.
By Order 5 made 8 August 2015, the husband was restrained from dealing with certain assets, pending determination of these proceedings.
That Order should now be discharged.

I certify that the preceding one hundred and seventy-five (175) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 27 February 2019.

Associate:

Date: 27/02/2019