Gao and Wutung and Ors

[2017] FamCA 72

FAMILY COURT OF AUSTRALIA

GAO & WUTUNG AND ORS [2017] FamCA 72

FAMILY LAW – PROPERTY – Application by wife seeking injunctive orders – Injunctive orders granted subject to the wife giving an undertaking as to damages

FAMILY LAW – PROCEDURAL – Matter listed for trial on a fixed date – Orders and directions made for the filing of trial documents – Orders and directions made in relation to the appointment of a single expert – Leave given for parties to re-list the matter on notice

Family Law Act 1975 (Cth)

APPLICANT: Ms Gao

FIRST RESPONDENT: Mr Wutung

SECOND RESPONDENT Mr A Wutung

THIRD RESPONDENT: Ms Yang

FILE NUMBER: SYC 8136 of 2016

DATE DELIVERED: 10 February 2017

PLACE DELIVERED: Hobart

PLACE HEARD: Hobart

JUDGMENT OF: Benjamin J

HEARING DATE: 2 February 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Blank

SOLICITOR FOR THE APPLICANT: Juris Cor Legal

COUNSEL FOR THE 1^ST RESPONDENT: Mr Bell

SOLICITOR FOR THE 1^ST RESPONDENT: Zhang Shijing Lawyers

COUNSEL FOR THE 2^ND RESPONDENT: Mr Bell

SOLICITOR FOR THE 2^ND RESPONDENT:

COUNSEL FOR THE 3^rd RESPONDENT:

Zhang Shijing Lawyers

Mr Bell

SOLICITOR FOR THE 2^nd RESPONDENT:

Zhang Shijing Lawyers

Orders

1. PENDING FURTHER ORDER;

   (a)Within seven (7) days of the date of this order the second and third respondents provide to the applicant an «FCA_LD221»irrevocable authority to the guarantor of the deed of “Put and Call Option” annexed as Annexure C to the affidavit of Mr A Wutung sworn 10 Janaury 2017, such authority to transfer any and all future proceeds from the guarantor’s exercise of the Call Option or the second and third respondents’ exercising the Put Option pursuant to the Option Deed into a controlled money account in the name of the four parties to these proceedings and to be jointly controlled and managed by the solicitors for each of the parties;

   (b)Subject to the applicant giving an undertaking as to damages which she may be ordered to pay, the second and third respondent themselves or their agents be restrained from otherwise selling, disposing or transferring or encumbering property B Street, Suburb C New South Wales without the leave of the Court or written consent of both the applicant and first respondent; and

   (c)such undertaking to be provided by the applicant in affidavit form filed and served within seven (7) days of the date of this order.

2. The Orders made 11 January 2017 be discharged.

3. These proceedings be listed for hearing before Benjamin J at Sydney on 29, 30 and 31 May 2017.

4. The applicant shall pay the hearing fee on or before 1 May 2017 or seek remission of such hearing fee.

5. The applicant shall file and serve all affidavit material (including an updated financial statement) upon which she seeks to rely on or before 4.00pm Thursday 6 April 2017.

6. The respondents shall file and serve all affidavit material (including an updated financial statement in respect of the first respondent) upon which they seek to rely on or before Thursday 4 May 2017.

7. The applicant shall file and serve any material in response to the affidavit of the respondents on or before Thursday 11 May 2017.

8. The applicant and first respondent shall do all acts and things to cause the appointment of a single expert for the purpose of valuing property at B Street, Suburb C New South Wales to determine its market value (in the absence of a Put and Call Option) and in the event that the parties are unable to agree on a valuer leave be given for the parties to have the matter relisted before Benjamin J for that purpose, such directions to the single expert to be submitted within thirty five (35) days from the date of this order.

9. The parties file in electronic form, in word format, a case outline three (3) business days prior to the commencement of the hearing, such case outline to provide:-

   (a)precisely what orders that or those the parties seek;

   (b)the filed documents upon which the party relies;

   (c)a chronology; and

   (d)an outline of that parties’ case in dot point form.

10. The parties are otherwise restrained from filing material without the leave of the court.

11. Leave be given for the matter to be listed before me on the giving of seven (7) days notice to the Court and to the other parties.

12. As to the examination of the alleged written loan agreements between the husband and his father for each of the equipment loan and the stamp duty loan and other original documents relevant to those alleged agreements (‘the documents’):-

    (a)Within seven (7) days the respondents shall deliver or cause to be delivered to the solicitor for the applicant the documents, which are to be held by that solicitor and only released to the single expert document examiner or back to the solicitor for the respondents. Such documents are not to be otherwise released without the leave of the Court or written agreement between all of the parties.

    (b)Within seven (7) days of the date of this order the applicant shall nominate a document examiner (with his/her curriculum vitae) to the respondents and within a further seven (7) days the respondents shall either accept that nominated examiner as single expert or reject that examiner with written reasons and nominate another document examiner (with his/her curriculum vitae). 

    (c)If the parties are unable to agree to which person shall be the single expert document examiner the proceeding shall be listed before me for determination.

    (d)Once the single expert document examiner is agreed; the parties shall electronically forward to my associate a form of order and terms of reference for such single expert and consent order sent for consideration of a Chambers Order to that effect; in the event that the parties are not able to agree to such matters the issue shall be listed before me for determination.

    (e)The Family Law Rules2004 (Cth) are varied to the extent that the applicant shall meet the costs of the single expert document examiner subject to any further orders as to those fees as may be made before, during or at the conclusion of the hearing or as is otherwise agreed in writing between the parties.

    (f)The documents shall be returned to the solicitor for the respondents within fourteen (14) days of the completion of the document examination and held by them and not otherwise released until these proceedings are concluded or as is otherwise ordered or as is agreed in writing between the parties.

13. Should one or other of the parties wish to tender documents during the hearing such party/ies shall have available a tender bundle with such documents contained in them; such bundle shall be:-

    (a)paginated and indexed;

    (b)available as an original and four (4) copies; and

    (c)served on the other party/ies two (2) working days prior to the commencement of the hearing.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) this matter reasonably required the attendance of counsel.

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 Gao & Wutung and Ors 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 HOBART

FILE NUMBER: SYC 8136 of 2016

Ms Gao

Applicant

And

Mr Wutung

First Respondent

And

Mr A Wutung
Second Respondent

And

Ms Yang
Third Respondent

REASONS FOR JUDGMENT

Introduction

1. Ms Gao (‘the wife’) is engaged in property and spousal maintenance proceedings with her estranged husband, Mr Wutung (‘the husband’).  She has joined the husband’s parents, Mr A Wutung and Ms Yang, as parties to these proceedings (the ‘grandfather’ and ‘grandmother’ respectively; the ‘grandparents’ collectively).  In her originating application, the wife sought final orders claiming an equitable interest in a home unit at B Street, Suburb C (‘the home unit’) which is registered in the joint names of the grandfather and the grandmother, who in turn contend that they have the whole of the legal and equitable interest in the home unit. Additionally, the wife seeks interlocutory orders in relation to the possible sale, mortgage or alienation of that home unit by the grandfather and the grandmother, other than in accordance with a “put and call option” entered into between a developer and the grandfather and the grandmother. 

2. The home unit was purchased relatively recently for $800,000 and the “put and call agreement” could mean a sale of that property at some $2,400,000.  The “put and call option” was entered into on 22 December 2015 between the grandmother and grandfather, of the one part and a developer of another part.  Under the “put and call agreement”, the call option provides that a fee of three per cent of the purchase price, namely $72,000, was to be paid on the date of the deed, a further $48,000 10 months after the date of the deed and a further $48,000 within 18 months of the date of the deed. 

3. It is not entirely clear to me as to precisely how much has been paid at this time, although it seems clear that some monies have been paid.  The wife, in her amended application, filed 25 January 2017, sets out points of claim and asserts trust claims, including a resulting trust claim, a constructive trust claim, an estoppel claim and money having been received.  There is significant issue as to the facts asserted by the wife and each of the parties has filed evidence in that respect.  The material before me for the purpose of this interlocutory application were the following exhibits:-

   a)Exhibit E1:  The annexures to the affidavit of the husband, filed 31 January 2017;

   b)Exhibit E2:  The submissions prepared as an addendum to the submissions made by counsel for the husband and grandparents;

   c)Exhibit E3:  A chronology prepared by counsel for the respondents;

   d)Exhibit E4:  The wife’s case outline, prepared by her counsel; and

   e)Exhibit E5:  A draft order sought by the wife on an interlocutory basis.

4. The wife relied upon the following documents:-

   a)Her application commencing these proceedings, filed 8 December 2016;

   b)Her amended application, filed 25 January 2017;

   c)Her financial statement, filed 8 December 2016;

   d)Her affidavit, filed 8 December 2016;

   e)Her first affidavit, filed 1 February 2017; and

   f)Her second affidavit, filed 2 February 2017.

5. The respondents relied upon:-

   a)The response, filed 10 January 2017;

   b)The amended response, filed 1 February 2017;

   c)The affidavit of the respondent’s solicitor, filed 25 January 2017;

   d)The affidavit of the husband, filed 1 February 2017 (to which annexures I have already referred);

   e)The affidavit of the grandfather, 1 February 2017; and

   f)The affidavit of the grandmother, 1 February 2017

Background

1. The grandmother and grandfather are both aged 58.  They live at the home unit with the husband, who is aged 32.  The husband works in transport.  The wife is aged 31 and is presently not in paid employment, having the care of the child of the relationship with the husband. The child is aged about seven months.  The parties married in 2012 and separated in October 2016. 

2. The grandfather and grandmother exchanged contracts to purchase the home unit in May 2014 and that purchase was settled in July 2014. The purchase price was about $800,000.

3. There is evidence that the wife has worked during the course of the marriage and more particularly, there is evidence given by her, albeit disputed, that there was a conversation giving rise to an agreement that the home unit would be purchased in the names of the grandmother and grandfather and that, provided the husband and wife paid the mortgage, the property would be held in trust for them.

4. The wife says that there was a deposit of $27,000 from her funds into a joint account with the husband, further and consequently, of that deposit sum $25,000 was transferred to the account of the grandfather and grandmother for the purchase. In addition the husband and wife transferred another sum of $15,000 to the joint account of the grandfather and grandmother, which was used for payment of stamp duty.  The husband and grandparents deny any such conversation and any such agreement.  They say that the $15,000 used for stamp duty was a loan from the husband to the grandfather and produced a document in that respect.  The wife doubts the veracity of that document.

5. The wife asserts that she and the husband paid about $64,900 towards the mortgage and home unit, plus capital.  Firstly, the capital of $25,000 and $15,000 towards the purchase.  Secondly, the payment of mortgage instalments.  The purchase price of $800,000 was funded by loans totalling $640,000 (two loans, one of $240,000 and the other of $400,000).  The balance was paid by the grandfather and the grandmother on their case and by all parties on the wife’s case.  The loans advance of $240,000 has no interest accruing as over that sum has been put into an offset account. 

6. In the context of this dispute, there is an issue about the work equipment that was purchased by the husband in June 2013, where he says that he and the wife borrowed $30,000 from the grandparents for its purchase.  The husband and grandfather have produced a document to that effect; however, the wife doubts the veracity of that document.

7. The husband says that the $25,000 transferred in May 2014, which the wife asserts were funds towards the purchase of the home unit, was re-repayment of the loan for equipment.  The husband and grandparents say that the $80,000 deposit was paid by the grandparents and that the $15,000 was lent for the shortfall of stamp duty.  The husband and the grandparents say that any moneys paid by the husband and wife were by way of payment of rent, as the wife, the husband and the grandparents lived in the home unit. 

8. The husband says that he and the wife applied for a Centrelink benefit and detailed in that document that the money paid by the husband and wife was rent.  This document was completed by the husband and there is some issue as to whether the wife did or did not adopt all or part of this document.

9. At separation, the wife withdrew savings of the parties totalling about $39,500 from the parties’ savings. 

10. On 13 October 2016, the wife instructed her solicitors to lodge a caveat over the home unit title and this apparently occurred.  On 2 November 2016, the grandparents assert that they repaid the $15,000 to the husband and the lapsing notice was posted in relation to the caveat.  On 8 December 2016, the wife filed an initiating application, affidavit and financial statement seeking interim orders, to which documents I have earlier alluded.  On 10 December, the wife’s solicitors sent a letter to the Developer and 20 companies associated with the Developer, without disclosure to the Court or respondents, suggesting that she had an interest in the property and making demands of the Developer and associated companies.  Counsel for the father and grandparent’s contend that this has or has the potential of undermining commercial transaction that is reflected in the put and call option.

11. There is no objective evidence of any adverse response from the Developers and the wife, through her counsel today, gave an open assurance that she would be bound by that “put and call option”, although she says she did not understand the nature of the transaction prior to the document being made available.  Accordingly, it is the view of all of the parties that whichever way this proceeding moves, if at all, that the put and call agreement should remain on foot.  There was an effectively unexplained delay in the service of the documents and the first person to be served was the grandfather, on New Year’s Eve, the grandmother having travelled to China from Sydney on the preceding day.  The husband was served on 3 January 2017 and the grandmother returned from China on 12 January 2017, the matter having come before me the preceding day. 

Discussion

1. The first question is that of jurisdiction and power in relation to the claim against the grandparents.  It is clear that the Court may exercise an accrued jurisdiction in a proper case and I was taken to Warby v Warby (2002) FLC 93-091 and I have considered the factors set out in Warby, namely:-

   a)What the parties have done: in this case, the grandparents purchased a home unit in which the grandparents and the husband and wife had lived, at least for a period of time.  On the wife’s evidence, she and the husband contributed some $40,000 towards the acquisition of the property or the costs associated with the acquisition of that property (this factor is disputed) and they have contributed some $64,000 or so since that time (this factor is disputed).  She says that there was a discussion that the unit would be purchased and held in trust for them.

   b)The relationship between or among the parties:  the husband and wife were married and were planning to buy a house.  The grandparents are the husband’s parents and were engaged in the transaction for the purchase of the home unit.  I also refer to the matters I have outlined earlier and as outlined in the various affidavits.

   c)The laws which attach rights or liabilities to their conduct and relationships:  the wife sets out, albeit in fairly brief form, the basis of her equitable claims referred to in the points of claim and as is set out in her affidavits, to which I have earlier alluded.

   d)These accrued claims by the wife are part of a single justiciable controversy:  if the parties have an equitable interest in the home unit it would make up the largest part of the parties’ property.  That claim must be determined, and the wife has established a prima facie case in that respect. Her claims in equity are attached and not severable.  If the wife is successful and the “put and call option” is exercised, then she would be entitled to an interest in a property which may be acquired for $2.4 million.  There are mortgages over the property to the extent of some $640,000, although there is some $243,000, at least in recent times, in a set-off account against one of the mortgages.  Therefore, the mortgage could be as low as $400,000 and as high as $640,000, leaving equity in the home unit of about upwards of $1,760,000.  This is an integral part of the wife’s claim, if able to be substantiated and if she is successful. 

   e)Whether the Court has the power to grant appropriate remedies to the attached claims:  in this respect, if the Court finds there is an equity in the property or in the proceeds of sale of the property or otherwise, then there is a power to grant remedies out of the proceeds of sale of the property or a declaration as to the husband or wife’s interests, if any, in the property.

2. Counsel for the respondents said that there was no supporting material to the agreement.  With respect, I disagree.  There is material, albeit material which may or may not be accepted on a final trial, but which is sufficient to provide evidence as to a prima facie level.  I have considered the careful submissions of counsel for the respondents and I am satisfied that there is some evidence of the trusts and the other equitable matters to which the wife asserts in her points of claim, which are supported by her evidence, whether being by way of the resulting trust and constructive trust or otherwise.  If the wife is successful, then she and the husband may have a significant interest in the unit or the proceeds of sale of the home unit.

1. There was a submission in relation to the costs of the second and third parties.  Fortunately, there is one counsel acting for the respondents and I can infer that there are no issues as to that circumstance and as such, the costs are likely to be less than would occur if there was separate counsel appearing for them.  In terms of undertakings as to damage, if there has been damage done, it may well have been done by the letter sent by the wife’s solicitor to the Developer in December, although there was no evidence of any such damage. 

2. I am satisfied, given the matters referred to by counsel for the wife, in his submissions, there is a risk that the property could be disposed of or that the rights of the grandparents could be transferred to another.  I note that the second and third respondents are Chinese nationals and there is evidence that they travel to and from China from occasions.  I accept the submission on behalf of counsel for the wife that the impact of an injunction will be of very modest consequence, particularly having regard to the wife’s assurance, provided in open court, as to being bound by the “put and call option”.

3. Given all of those circumstances, I am prepared to make an order, although not wholly in terms of that sought by counsel for the wife.  I am somewhat mollified in terms of this, as some dates have become available to me to hear the substantive property proceedings on 29, 30 and 31 May of this year.  I raised this with each counsel for the parties and they indicate that the matter could be contained within those days and the parties could be ready in that time.

I certify that the preceding twenty one (21) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on

10 February 2017.

Associate:     

Date:              10 February 2017