Go and Sun and Anor

[2021] FCCA 351

FEDERAL CIRCUIT COURT OF AUSTRALIA

GO & SUN & ANOR [2021] FCCA 351

Catchwords:
FAMILY LAW – Interim ruling on various discrete disputes – second respondent joined despite objection – consideration of anti-suit injunction to retrain proceedings in China – possible release from Harman undertaking premature – matter adjourned to 5 day trial as soon as practicable  

Cases cited:

Australian Broadcasting Corporation v O’Neill [2006] HCA 46

Applicant: MR GO

First Respondent: MS SUN

Second Respondent: MS CHEN

File Number: DGC 3622 of 2017

Judgment of: Judge Burchardt

Hearing date: 5 February 2021

Date of Last Submission: 5 February 2021

Delivered at: Dandenong

Delivered on: 8 February 2021

REPRESENTATION

Counsel for the Applicant: Mr Scriva

Solicitors for the Applicant: Tao Jiang Lawyers

Counsel for the First Respondent: Mr Potter

Solicitors for the First Respondent: Hiways Lawyers

Counsel for the Second Respondent: Mr Potter

Solicitors for the Second Respondent: Hiways Lawyers

ORDERS

1. Ms Chen is joined as second respondent;

2. Ms Sun is restrained until further order by injunction from further encumbering in any way, the properties at A Road, Suburb B; and C Street, Suburb D.

3. The matter be adjourned to this Court for final hearing before Judge Burchardt on 4 October 2021 at 10:00am with an estimated hearing time of 5 days.

4. The applicant pay the respondents costs fixed at $5,000, with payment stayed until final judgment.

IT IS NOTED that publication of this judgment under the pseudonym Go & Sun & Anor is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 3622 of 2017

MR GO

Applicant

And

MS SUN

First Respondent

MS CHEN

Second Respondent

REASONS FOR JUDGMENT

(Revised from Transcript)

1. I should indicate at the start that I propose to paint with a relatively broad brush.  That is because the parties have filed such voluminous documentation and also because the case is attended by a number of complexities, which it is inappropriate to try and resolve on any kind of conclusive or determinative way in this interlocutory hearing.

2. The matter commenced with an application in a case filed on 11 December 2020 by the husband.  He seeks to join Ms Chen, who is the mother of his former wife, and he seeks ancillary orders sought about the matrimonial home in E Area in F City.  He also notes the mother’s home in Suburb G, which he seeks to have restrained from further encumbrance.  And he seeks discovery from Ms Chen.  He further seeks release from the Harman restrictions to use any Australian trial documents in the proceedings underway in F City. 

3. On 14 December 2020, the wife filed an amended response.  She sought sole ownership of the A Road property.  She seeks that the property in E Area be sold to satisfy, amongst other things, an alleged debt to her mother, Ms Chen, in the sum of approximately AU$700,000.

4. On 21 January 2021, the husband filed an amended application in a case which takes a more nuanced position about the joinder of Ms Chen and seeks an anti-suit injunction against Ms Chen to restrain her from enforcing judgments in China that give rise to the $700,000 debt to which I have referred.

RECORDED : NOT TRANSCRIBED

1. I should note that although the most recently filed amended application in a case by the husband seeks, as it were, to finesse the position of Ms Chen, it is clear that it is intended that she be joined, because it is difficult to see how I could make an anti-suit injunction against someone who is not a party. 

2. On 22 January 2021, there was a further amended response by the husband, who seeks orders that would have the net effect of discharging inits entirety the alleged debt that he has said to owe to Ms Chen;  that he keep the E Area property;  the wife keep two properties, one is A Road, Suburb B, and another Australian property. 

3. In addition to all this, there are ongoing ancillary disputations about disclosure in which all concerned seek wide ranging further discovery from each other.

4. The history of the matter is relatively complex.  The property in E Area is unencumbered and the husband would value it as $1.7 million, and the wife at $1.6.  The husband lives there, and that property is owned in equal shares, it would seem, by the two parties.  The Suburb B property is said to be worth $1.2 million, and the further property in Suburb D $380,000, encumbered by mortgages $654,000.  And thus providing, in rough figures, a net equity of properties in Australia of $900,000.  All of those are entirely in the wife’s name. 

5. The husband has admitted signing three IOUs in favour of Ms Chen, amounting to some $700,000, but now says that following discovery and subpoenas issued in this country, it is clear that the husband and the wife received only $456,000 from Ms Chen of which it is asserted $430,000 has been repaid. 

6. Ms Chen has got judgment for $700,000 in courts in China. I thought initially there were two judgments, but it may be that there are three.  One judgment was plainly ex parte but there are arguments, not insignificant ones between all concerned, as to the extent to which those judgments, as it were, constitute judgments on the merits of the application in relation to the alleged debts. 

7. Needless to say, the wife and Ms Chen strongly deny the father’s narrative in its entirety.

8. It further appears that the husband has been able to approach the judge with carriage of what I would describe as the E Area cases, in which, as I presently understand it, endeavours are being made by Ms Chen to sell the E Area property to satisfy the alleged debt to her. It is said that the judge in China might have regard to these proceedings here and their outcome in some material way.

9. The wife says, as I indicate, that the cases in China were decided on their merits, in effect, and should not be retried here.  The issues, doing the best I can to isolate them in some meaningful way, seem to me to be:

   i)The application to join Ms Chen;

   ii)The anti-suit injunction;

   iii)The husband’s application from release of the Harman restriction;

   iv)Discovery;  and

   v)The application by the husband that the wife not further encumber the properties in Australia.

10. Turning to the joinder of Ms Chen.  Ms Chen is no stranger to this case.  She has filed an affidavit together with her response to the husband’s application in a case.  She lives in Australia with the wife and will clearly be a witness. 

11. It is impossible, as the wife inferentially seeks, for somebody to dismiss the husband’s case.  The circumstances surrounding the Chinese judgments are vividly in issue and, as I have already said once, at least by no means wholly clear.  Both the husband and the wife say that depending on the ultimate outcome of the alleged debt to Ms Chen, in which obviously the Chinese judgments play a major part the other may obtain a grossly unfair outcome in the proceedings here.  Each are not shy of saying that the other is trying to get something very close to 100 per cent of the operative property pool.  It is clear that Ms Chen’s interests are part of the dispute between the husband and the wife. 

12. It is quite clear that there is a single federal dispute arising out of the same substratum of facts.  It is clearly necessarily to join Ms Chen to resolve the dispute between the husband and wife.  I propose to make that order.

13. The next matter is the anti-suit injunction.  This Court is, of course, pursuant to the Federal Circuit Court Act, a court of law and equity.  It would seem to me to follows as a matter of first principles of the court, the court has power to grant injunctions and indeed, Mareva and Anton Piller injunctions are routinely granted.  There is no authority quoted by either side’s submissions as to whether this court, being a court of record but not a superior court of record, can grant anti-suit injunctions.

14. On first principles – bearing in mind that if I can grant any injunctions, I would have thought there is no reason why I can't grant all injunctions unless the statute restrains me – I will presume for argument’s sake that I have that power. 

15. But notwithstanding that, there are a number of important considerations:

    i)Interference with judicial process in another country is a step that should only be taken with caution; 

    ii)That is all the more the case when the legal systems in Australia and China are very different.  It is not a matter of making an anti-suit injunction, for example, in New Zealand or the United States where the legal systems correspond and dovetail quite readily;

    iii)There is the question as to how any sanction could be brought to bear upon Ms Chen if she did not comply.  And bearing in mind that if the history of the matter informs the future, any alleged actions by her in China would be likely themselves to be strongly disputed;

    iv)It needs to be also borne in mind that the husband’s case is not established.  It is hotly contested;

    v)The husband himself appears to have contact with the court in China and some capacity to inform that court of the progress of proceedings here;

    vi)The total disputed involving Ms Chen is about A$700,000.  The property in E Area would still have $1 million left over even if Ms Chen is successful in executing judgment in China.  The properties in Australia are worth around about $900,000 net, so there is clearly enough money here to readjust, if need be.  But I accept that there should be, subject to any bona fide matters, a restraint on the wife from further encumbering these Australian properties, pending the outcome of this trial.

16. If one takes a step back and remembers the two-stage and interrelated test described by the High Court most readily in Australian Broadcasting Corporation v O’Neill [2006] HCA 46, the serious question is beset by significant factual disputation. The balance of convenience makes it clear that the injunction sought is inappropriate. I do not seem to recall reading a formal undertaking as to damages by the husband, in any event. But if you bear in the mind the six matters I have itemised, it is clear that the injunction ought not be made.

17. The next matter is the Harman undertaking.  The husband wants to use documents here to prove to the Court in China that the wife and Ms Chen are lying.  And presumably, in some undisclosed fashion to either appeal or set aside any E Area judgments. 

18. The wife resists and says, in effect, that the husband will distort and make improper use of documentation, such producing a grossly unfair outcome in China. 

19. In my view, the ruling about release from any undertaking should await the trial here.  Hopefully, my findings will be determinative.  But I will consider the Harman release in my judgment.  I would say that, as a matter of first principles, it is not apparent to me why a person, who has gone on oath to say something in this country, should legitimately complain that what they say on oath should be revealed to a court in another country.  But that’s not a final conclusion.  It will have to await the march of events.

20. The next question is the matter of disclosure.  There is all too much material already filed.  The parties have an obligation to disclose.  I point out that the court as presently constituted, and I think in all its other personal emanations, is not an accountant.  My capacity to undertake forensic accounting processes is very limited as is that, so far as I am aware, of all my colleagues.  I am not persuaded at the present time that further specific discovery is justified.

21. Finally, I return to the question of the encumbrance of the Australian properties.  As I said, this clearly should apply.  It is plainly necessary, at least in theory, to prevent possible default in relation to the husband’s claim, should he lose in China but win here.

22. The costs sought by the party, who says they were thrown away, are grossly excessive.  I will just sit down with the scale and work it out. I will make that order in the orders on the scale.  I think it’s about $5000, and those costs are stayed until the judgment.

I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate:

Date: 24 February 2021