Cun & Zhihui (No 2)
[2022] FedCFamC1F 598
Federal Circuit and Family Court of Australia
(DIVISION 1)
Cun & Zhihui (No 2) [2022] FedCFamC1F 598
File number(s): SYC 3261 of 2015 Judgment of: HARPER J Date of judgment: 19 August 2022 Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Summary dismissal – Where the First to Third Respondents are self-represented – Where final hearing dates had previously been vacated – Husband presses an application for summary dismissal of wife’s application for final orders – Allegations of malicious lawsuits and fraudulent conduct by the wife and her legal representatives – Allegations of obstruction of justice and manipulation – No evidence to support contentions – Application dismissed – Wife seeks orders for updated valuation of properties – Where husband has denied access to valuers – Orders made for updated valuation. Legislation: Criminal Code Act 1995 (Cth) s 137.1
Corporations Act 2001 (Cth) s 601AH(2)
Family Law Act 1975 (Cth) ss 78, 79, 106B
Cases cited: D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12
Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251; [1996] HCA 14
Reichel v Magrath (1889) 14 App Cas 665
Ridgeway v The Queen (1995) 184 CLR 19; [1995] HCA 66
Ritter & Ritter (2020) FLC 93-957;
Spencer v Commonwealth of Australia (2010) 241 CLR 118; [2010] HCA 28
Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28
UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45
Division: Division 1 First Instance Number of paragraphs: 31 Date of hearing: 15 August 2022 Place: Sydney Solicitor for the Applicant: Goh Lawyers The First Respondent: Self-represented litigant The Second Respondent: Self-represented litigant The Third Respondent: No appearance ORDERS
SYC 3261 of 2015 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS CUN
Applicant
AND: MR ZHIHUI
First Respondent
MR CHEN
Second Respondent
MS CHEN
Third Respondent
order made by:
HARPER J
DATE OF ORDER:
19 August 2022
THE COURT ORDERS THAT:
1.The Application in a Proceeding filed by the First Respondent Husband on 25 July 2021 and amended on 26 July 2022 be dismissed.
2.The parties jointly engage F Valuers (“F Valuers”) to provide an updated valuation report with respect to the properties situated at:
(a)G Street, Suburb D, NSW; and
(b)H Street, Suburb E, NSW.
3.The First, Second, and Third Respondents do all things necessary to cooperate with F Valuers for the purpose of the valuation referred to in Order 2, including permitting F Valuers access to the properties for the purpose of both an internal and external inspection as may be necessary and appropriate to complete an updated valuation.
4.The Applicant Wife and First Respondent Husband share equally in the cost of the valuation referred to in Order 2.
5.The Application in a Proceeding filed by the Applicant Wife on 26 July 2022 be otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cun & Zhihui has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
These proceedings have been in this court for a long time. They were listed for final hearing to commence on 15 August 2022, with an estimate of ten days. However, on 28 July 2022, I made orders vacating the final hearing dates: see Cun & Zhihui [2022] FedCFamC1F 597. The First Respondent Husband (“the husband”) claimed he was not ready to proceed, whilst counsel who had been long retained in the proceedings by the Applicant Wife (“the wife”) was compelled to undergo emergency surgery and could not be available for the final hearing.
The proceedings involve property issues. The wife seeks orders pursuant to s 78 and s 79 of the Family Law Act 1975 (Cth) (“the Act”) in the nature of declarations of interests in property, and orders for property adjustment on a just and equitable basis.
The husband resists her claims for relief. The Second and Third Respondents are the children of the husband from a previous marriage. Together, they hold properties at G Street, Suburb D, and H Street, Suburb E, as registered proprietors.
One contention of the wife is that those properties, of which the registered proprietor had formerly been a company known as J Pty Ltd (“J Pty Ltd”), were transferred by J Pty Ltd to the Second and Third Respondents and was then deregistered. On 1 November 2019, consent orders were made for the reinstatement of J Pty Ltd as a necessary party, on the basis that the wife sought orders pursuant to s 106B of the Act setting aside the transfer from the company to the Second and Third Respondents.
On 25 July 2021, the husband filed an Application in a Case seeking, amongst other orders, for the wife’s substantive application to be dismissed as a “malicious lawsuit, which is essentially a fraud lawsuit.” He amended this application on 26 July 2022, in anticipation of the final hearing due to commence on 15 August 2022, with the following orders:
1. That for the dismissal of the proceedings against me on the basis of the Applicant's failure to comply with the legislative provision and order.
2. That to dismiss all of the application on the basis of the Applicant did not respond to an application.
3. That the court dismiss all of the case […] on the basis of the Applicant's consequences of non-disclosure.
4. That the application for summary order on the basis that the Applicant's that it is frivolous, vexatious and abuse of process.
5. That the certificate of vexatious proceedings order to [Ms Cun, Mr K and Mr L].
6. That the case […] the proceedings be dismiss basis of the Applicant's in default.
7. That the lawyer to bear all the costs personally and indemnifies all respondents and their families.
On 25 July 2022, the wife filed an Application in a Proceeding seeking, in part, orders for the updated valuation of the Suburb D and Suburb E properties. The relevant orders sought are as follows:
3. That the parties jointly engage [F Valuers] to provide an updated valuation report with respect to the properties:
(i) [G Street, Suburb D] NSW; and
(ii) [H Street, Suburb E] NSW.
4. That the Respondents provide access to conduct the valuation.
5. That the Applicant and First Respondent to share the cost of the valuation equally.
Accordingly, the issues to be determined by this judgment are those raised by the husband in his Amended Application in a Proceeding, and whether orders should be made for an updated valuation of the Suburb D and Suburb E properties.
The husband, in his case outline, referred to s 45A and ss 123(a)–(o) of the Act. Section 45A grants a power to grant summary decree where a party has no reasonable prospects of success. Reliance on s 123 seems misconceived, since it deals with the rule making power of the Chief Justice. He also relied on a number of rules contained in the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) granting a power to dismiss proceedings for various reasons: rr 1.33(2)(a) (failure to comply with a legislative provision or order), 6.17(b)(failure to disclose a document), 10.09(c) (an application is frivolous, vexatious or an abuse of process), 10.27(1) (where an applicant is in default), and ss 68(5)–(6) of the Federal Circuit and Family Court of Australia Act 2021 (Cth), which empower the Court to make personal costs orders against lawyers. It is unnecessary to set out the terms of those rules and legislative provisions in detail.
He also relied on r 10.23(1), which deals with a person seeking the Chief Executive Officer to issue a certificate under s 102QB of the Act. However, no application has been made pursuant to s 102QB.
It is appropriate to determine first whether the husband has shown the wife’s application for property adjustment orders has no reasonable prospect of success, or is frivolous, vexatious, or an abuse of process. Thereafter, the husband’s other claims raised by his application can be considered.
The principles upon which the court may dismiss proceedings as having no reasonable prospect of success are well known. In Spencer v Commonwealth of Australia (2010) 241 CLR 118 (“Spencer”), at [22], French CJ and Gummow J said the criterion of a “reasonable prospect” of success has been understood “in analogous statutory settings to mean a “real” rather than “fanciful” prospect”, and the expression “no reasonable prospects of success” applies to a case in which the pleadings disclose “no reasonable cause of action and their deficiency is incurable.” This requires a practical judgment, which may be a judgment of law or of fact, or of mixed law and fact: at [25]. Hayne, Crennan, Kiefel, and Bell JJ pointed out at [52] that the enquiry required is whether there is a “reasonable” prospect of prosecuting the proceeding, not an enquiry directed to whether a certain and concluded determination could be made that the proceeding would necessarily fail.
In Ritter & Ritter (2020) FLC 93-957 at [27], the Full Court followed the statement of principle in Lindon v Commonwealth of Australia (No 2) (1996) 136 ALR 251 at 255–256, per Kirby J:
The approach to be taken by the Court to the Commonwealth's application for summary relief is not in doubt:
1. It is a serious matter to deprive a person of access to the courts of law for it is there that the rule of law is upheld, including against Government and other powerful interests. This is why relief, whether under O 26, r 18 or in the inherent jurisdiction of the Court, is rarely and sparingly provided;
2. To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious;
3. An opinion of the Court that a case appears weak and such that it is unlikely to succeed is not, alone, sufficient to warrant summary termination. Even a weak case is entitled to the time of a court. Experience teaches that the concentration of attention, elaborated evidence and argument and extended time for reflection will sometimes turn an apparently unpromising cause into a successful judgment;
4. Summary relief of the kind provided for by O 26, r 18, for absence of a reasonable cause of action, is not a substitute for proceeding by way of demurrer. If there is a serious legal question to be determined, it should ordinarily be determined at a trial for the proof of facts may sometimes assist the judicial mind to understand and apply the law that is invoked and to do so in circumstances more conducive to deciding a real case involving actual litigants rather than one determined on imagined or assumed facts;
5. If, notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a court will ordinarily allow that party to reframe its pleading. A question has arisen as to whether O 26, r 18 applies to part only of a pleading. However, it is unnecessary in this case to consider that question because the Commonwealth's attack was upon the entirety of Mr Lindon's statement of claim; and
6. The guiding principle is, as stated in O 26, r 18(2), doing what is just. If it is clear that proceedings within the concept of the pleading under scrutiny are doomed to fail, the Court should dismiss the action to protect the defendant from being further troubled, to save the plaintiff from further costs and disappointment and to relieve the Court of the burden of further wasted time which could be devoted to the determination of claims which have legal merit.
(Citations omitted)
The principles upon which a case may be dismissed as vexatious, frivolous or abuse of process are also well known. The concepts overlap. Abuse of process is a wide and flexible concept informed in part by considerations of finality and fairness which enlivens a power to dismiss proceedings where the use of the court's procedures occasions unjustifiable oppression to a party, or where their use is “scandal to the administration of justice”, serving to bring the administration of justice into disrepute: Reichel v Magrath (1889) 14 App Cas 665 at 668; Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507 at [24]–[25]; UBS AG v Tyne (2018) 265 CLR 77 at [1] and [45]. Vexatious proceedings are an abuse of process, and include proceedings that are “seriously and unfairly burdensome, prejudicial or damaging” or “productive of serious and unjustified trouble and harassment”: Ridgeway v The Queen (1995) 184 CLR 19 at 74–75 (per Gaudron J); D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [74]–[75] (per Gleeson CJ, Gummow, Hayne, and Heydon JJ).
The husband’s factual contentions are contained in two affidavits, one filed on 25 July 2021, and the other on 26 July 2022. I take the evidence of the husband at its highest. They may be summarised as follows.
Firstly, he contends that the solicitor for the wife made an arrangement to sell the wife’s property in China, which was “an offence” to s 106B(2) of the Act. On 22 May 2015, the same solicitor was said to have filed a malicious lawsuit in the Federal Circuit Court of Australia, as it was then known. The solicitor then concealed the truth, provided false statements of evidence in the wife’s affidavit, and made a false statement in court in 4 February 2016, giving misinformation which led her Honour Judge Henderson (as she then was) into error. This, he contends, was a breach of s 137.1 of the Criminal Code Act 1995 (Cth). He generally contends that the solicitor for the wife and her counsel used false documents and information, and made misleading statements to the court. The husband submits that he investigated these matters and exposed them in court.
He also contends that the valuer appointed to value the Suburb D and Suburb E properties made a false valuation report.
His accusations then move to his former lawyer, who he accuses of fraudulent conduct by tricking him into agreeing to a dishonest document on 1 November 2019. This appears to be a reference to an order made reinstating J Pty Ltd, pursuant to s 601AH(2) of the Corporations Act 2001 (Cth). The husband contends this order was made without any reasons being given, but of course, according to his own evidence, it was presented to the court as an order by consent. The husband then contends that the solicitor for the wife deceived ASIC into reinstating J Pty Ltd.
His assertions also broaden to include the claim that there is something described as a “mysterious interest group” which is operating in the case. This “interest group” is preventing important legal documents from being submitted to the court, including a balance sheet, a callover information document, and case outline. I note the husband makes these accusations despite failing to take the necessary steps to make himself ready for the final hearing which had been due to commence on 15 August 2022. He further contends that the “interest alliance” has colluded with ASIC to violate human rights and obstruct justice, and that they are attempting to insert false documents into his affidavit through his former lawyer, who he says then conceded that he was bowing to the interests of the “interest group”.
The husband asserted that in attempting to investigate the case, he was intimidated with obstruction of justice and manipulation. He has made a complaint to the Chief Justice of this court and has made accusations against the counsel retained by the wife for making exaggerated statements in court and acting in a biased manner.
As pointed out, the wife’s case is based upon s 78 and s 79 of the Act. The question is whether the husband has demonstrated that either the wife has no reasonable prospects of success, or her case is otherwise vexatious, frivolous or an abuse of process.
In determining whether an order for property settlement should be made on a just and equitable basis, it is necessary for the court to determine and evaluate the relevant assets forming the matrimonial pool between the spouse parties, and then to determine and evaluate their contributions during the relationship. It is only at that point that it is possible to determine what a just and equitable outcome may be. Settling the pool of assets will be contentious. On the wife’s case, the matrimonial pool includes at least the two valuable properties referred to above. The circumstances about their transfer to the Second and Third Respondents will have to be determined at trial after cross examination. These are matters which are inherently appropriate for determination at final hearing where factual findings can be made.
The recitation of the contentions of the husband above shows that his allegations relate to the legal representatives of the wife, his own former representatives, ASIC, and the mysterious “interest group”. They do not seem to relate directly to the wife’s claim for declarations or property adjustment in any discernible way. Making a practical judgment, none of the husband’s allegations demonstrate that the wife has no reasonable prospect of success.
The husband’s own evidence, in my view, shows that that his numerous allegations are unsupported and often fanciful. For example, his contentions about the reinstatement of J Pty Ltd, his lawyer, and ASIC are countered by the emails annexed to his affidavit of 26 July 2022. These show that his solicitor emailed to him a copy of proposed orders for 1 November 2022, which he explicitly approved. These included orders for the reinstatement of J Pty Ltd.
The material he relies upon in support of his other allegations goes no distance to demonstrating their veracity.
Even if abuse of process is a wide and flexible concept, the absence of any persuasive factual basis for the allegations made by the husband prevents me from concluding that there is any reason to think the wife’s substantive proceedings are vexatious, frivolous or an abuse of process. I accept the wife’s submission that the husband, who is representing himself through an interpreter, appears to misconceive the nature of the jurisdiction exercised by this court and the broad discretionary powers for property adjustment that it may exercise. His perception of some shadowy “interest group” operating in the proceedings against his interests is not sustainable.
The husband’s evidence does not make clear what non-disclosure or default of the wife should lead to the dismissal of her application for property adjustment. His evidence discloses no discernible case for costs orders against either his lawyers or those of the wife.
Accordingly, his application will be dismissed.
I move then to the wife’s application seeking updated valuation of the properties. On 21 October 2021, I made trial directions which included the following:
4. The parties take all necessary steps to engage the appropriate valuer for updated valuations of the properties:
a. [G Street, Suburb D], NSW
b. [H Street, Suburb E], NSW
On the wife’s evidence, the husband has failed to comply with this order. The husband filed no response, nor made any submissions suggesting he shouldn’t be compelled to engage with the valuer. Updated valuation clearly must take place prior to the final hearing, which is now due to commence on 1 May 2023.
Accordingly, I will make the orders as sought by the wife.
I will reserve all questions of costs.
I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 19 August 2022
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