Gong and Wei

[2017] FamCA 1050

FAMILY COURT OF AUSTRALIA

GONG & WEI [2017] FamCA 1050

FAMILY LAW – PROPERTY – INTERIM APPLICATION – Where wife initially sought interlocutory orders including partial property settlement, sale of property, transfer of motor vehicle to her and a child support departure order – Where husband also sought a variety of interim orders including exclusive use and occupation of a jointly owned property and the sale of another property – Where majority of the interim dispute resolved at the hearing – Where parties agreed to sell property to discharge mortgage over another existing property – Where parties agreed for the husband to pay to the wife the sum of $250,000 by way of interim property settlement – Where parties consented to husband having exclusive use and occupation of certain property –Where the contested issue remaining was an order sought by the husband permitting joint funds to be used to discharge his current child support debt to the wife – Where current child support debt was precluding him from traveling overseas to obtain necessary medical treatment – Where the sale proceeds of the joint property are to be used to discharge the husband’s child support liability to the wife.

APPLICANT: Ms Gong

RESPONDENT: Mr Wei

FILE NUMBER: SYC 5655 of 2015

DATE DELIVERED: 19 December 2017

PLACE DELIVERED: Cairns

PLACE HEARD: Cairns (via video link to Sydney)

JUDGMENT OF: Tree J

HEARING DATE: 6 December 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Cummins SC

SOLICITORS FOR THE APPLICANT: Barkus Doolan

COUNSEL FOR THE RESPONDENT:	Mr Lloyd SC
SOLICITORS FOR THE RESPONDENT:	Mills Oakely

Orders

1. That the orders made on 18 April 2017 in relation to the proceeds of sale of the jointly owned property at D Street, Suburb E (“the Suburb E Property”) be varied by providing that the following further sums be paid out:

   (a)to the Commonwealth Bank of Australia (“the Bank”) in such sums as is necessary to procure a discharge of the existing mortgage to the Bank over the property F Street, Suburb A (“the Suburb A Property”) including all costs arising out of the default under the mortgage;

   (b)To the wife by way of interim property settlement, the sum of $250,000.00;

   (c)To the husband by way of interim property settlement, a sum sufficient to discharge his present arrears of child support;

   (d)To X School, the sum of $14,412.00 owing to it in respect of outstanding school fees for the parties’ child N and all future fees with respect to N’s attendance at that school as and when they fall due;

   (e)To S School, the sum of $20,412.00 owing to it in respect of outstanding school fees for the parties’ children O and P and all future fees with respect to O and P’s attendance at that school;

   and further that:

   (f)The parties will do all things necessary to retain in the controlled monies account a sum sufficient to discharge any debt owing to the Australian Taxation Office arising from capital gains tax payable on the sale of the Suburb E Property.

2. That within 28 days of the date of the making of these orders, the wife shall provide to the husband a calculation setting out the amount the wife is entitled to be reimbursed pursuant to order 4.2 of the orders of 18 April 2017 from the proceeds of sale of the Suburb E Property which require the wife to be reimbursed as per order 8.4 of the wife’s Amended Application in a Case as follows (“the Relevant Order”):

   “… in payment to the wife of any amount outstanding to her as a consequence of the husband’s default in making payments pursuant to the orders made by his Honour Justice Watts on 22 August 2016 and the orders made by her Honour Justice Stevenson on 30 September 2016.”

3. In the event that the husband does not agree with the calculation provided pursuant to order 2, the husband shall provide his calculation of the amount owed to the wife pursuant to the Relevant Order within a further 14 days.

4. In the event that the husband does not provide quantification of the amount owed to the wife or fails to provide a response within the timeframe prescribed the amount set out in the wife’s calculation pursuant to order 2 shall be paid to the wife from the Suburb E Property proceeds upon settlement of the sale.

5. In the event that there is a dispute as to the quantification of the amount owed to the wife then the parties shall forthwith, pursuant to Rules 15.38 of the Family Law Rules, appoint an assessor to carry out the calculation and for the purpose of this order:

   (a)The wife shall provide the names of three proposed assessors who shall be accountants;

   (b)Within 7 days of receiving 3 nominations from the wife, the husband shall nominate one of the accountants as an assessor to carry out the calculation;

   (c)The assessor shall provide a report as to the amount owed to the wife;

   (d)The parties shall provide to the assessor all relevant documents necessary so that he/she may prepare a report quantifying the amount owed to the wife;

   (e)Within 7 days of the assessor providing his/her report to each of the parties the wife shall be released the amount specified in the report owed to her pursuant to the Relevant Order;

   (f)That the costs of the assessor shall be met from the Suburb E Property sale proceeds.

6. That until further order:

   (a)The husband have exclusive use and occupation of the Suburb A Property;

   (b)The wife be restrained from approaching or entering the Suburb A Property.

7. That forthwith upon receipt of any GST refund from the Office of State Revenue payable to Company K (“K”) the parties will do all things and sign all documents to pay those funds to the account in the name of K to be established by the parties, and operated only upon the joint signature of the parties.

8. That the costs of Y Accountants (“YA”) of carrying out the work for which they have been engaged to do by the parties be paid from the proceeds of sale of K or from the joint account of the parties created pursuant to order 2.6 made 7 February 2017.

9. That the husband and the wife provide all documents in their possession or control necessary for the carrying out of the work to YA as and when requested by them.

10. That within 21 days of the date of these orders the husband shall do all acts and things and sign all documents necessary to transfer into the wife’s name the registration of the German motor vehicle registration number … (noting that this order is not intended to effect transfer of the title to the motor vehicle).

11. That costs be reserved.

12. That otherwise the wife’s Further Amended Application in a Case filed 1 December 2017, and the husband’s Response filed 5 December 2017, be adjourned indefinitely.   

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 Gong & Wei 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 CAIRNS VIA VIDEO LINK TO SYDNEY

FILE NUMBER: SYC 5655/2015

Ms Gong

Applicant

And

Mr Wei

Respondent

REASONS FOR JUDGMENT

INTRODUCTION  

1. By her Further Amended Application in a Case, Ms Gong (“the wife”) sought a suite of interlocutory orders, including an interim or partial property settlement, the sale of an item of jointly owned real estate (“the Suburb A Property”), a child support departure order and the transfer to her of a German motor vehicle.  However during the course of the hearing before me, most of those matters resolved.

2. For his part, by his Response to the wife’s Further Amended Application in a Case filed 5 December 2017, Mr Wei (“the husband”) also sought a variety of interim orders, including an order for the exclusive use and occupation of the Suburb A property, and for the proceeds of sale of another property (“the Suburb E property”) to be used to discharge the existing mortgage over the Suburb A property.  Ultimately those matters were not in great contest, as I shall shortly discuss.  Rather, what remained in contest was an unusual order which the husband sought, permitting funds in a joint account to be used to discharge his current child support liability to the wife, on the basis that the existence of those arrears was precluding the husband from travelling to obtain necessary medical treatment in China, and he otherwise had no funds to discharge those arrears.

3. This is my decision and reasons arising from the hearing of the parties’ competing applications.

BACKGROUND FACTS

1. The wife was born in China in 1989, and hence is presently 28 years of age.  She moved with her parents to live in Australia on a permanent basis in 1992, when aged 3.

2. The husband was born in China in 1983, and hence is presently 34 years of age.  It appears he was born into a wealthy family, and it is common ground that he has never been in employment.

3. The parties met in China in 2007 and commenced a relationship.  To that relationship (noting that the parties married in China in 2009), three child were born, N, presently aged 8, O, presently aged 6 and P, presently aged 5.  During the relationship, the parties lived in Sydney.

4. The parties acquired a number of residential properties in Sydney.  It appears largely uncontroversial that significant sums towards their purchase were sourced from the husband’s parents, together with some borrowings, although it appears as though the husband now contends that those parental funds were loaned to him, rather than gifted.  It might also be the case that the wife contends that at least some part of those funds were in fact derived from the husband’s own commercial interests in China, rather than his parents.  Whatever be the case, the parties acquired a number of properties of significant value.

5. In November 2014, the parties acquired a company known as K Pty Ltd (“K”) from the wife’s father.  In due course, that company purchased two (or perhaps three) commercial properties.  Again these purchases were funded with a mix of funds under the parties’ control and commercial borrowings.

6. The wife says that the parties separated on 21 August 2015; the husband contends for a later date, perhaps even in 2016.  That dispute is immaterial to the matters before me.  Whatever be the case, these proceedings were commenced by the wife on 28 August 2015 although not served, it seems, until 2016.

7. Since then, the litigation between the parties has been complex.  A number of interim orders have been made from time to time, only some of which are relevant to this application.  Those include an order made by Watts J on 5 September 2016 as follows:

   3. Until further order, the respondent husband pay the difference between the rents received and mortgage payment to be made in respect of [B Street, Suburb C], [D Street, Suburb E], [F Street, Suburb A], [1 & 2 G Street, Suburb H], and [I Street, Suburb J], together with any other rates, taxes or other levies of any one or more of those properties.

8. It seems common ground that this order has not been substantially – and perhaps at all – complied with by the husband, in consequence of which the wife has expended monies under her control to meet some of those costs.

9. Next, on 30 September 2016, Stevenson J made orders, including, that the husband pay to the wife $200,000.00 by way of interim or partial property settlement.

10. Then, on 18 April 2017, Justice Rees made orders by consent, including for the sale of the Suburb E property, and for the distribution of the proceeds of sale.  Particularly order 4 provided as follows:

    4.That upon completion of the sale of the [Suburb E] property the parties must do all acts and things to pay out the proceeds of sale in the following priority:

    4.1    As provided for and orders be made in terms of Orders 8.1 and 8.2 of the Wife's Amended Application filed 13.04.2017 and in addition any land tax then due to the Office of State Revenue;

    4.2In repayment to either of the parties to reimburse any money spent pursuant to Order 2.3;

    4.3    Save and except for the deletion of the words "plus interest" in Order 8.4 as provided for and orders be made in terms of Orders 8.4, and  

    4.4    The then remaining balance to be paid to a controlled money account in the names of the parties.

11. The form in which that order was made, requires recourse to the wife’s Amended Application filed 13 April 2017.  Particularly paragraph 8 reads as follows:

    8. Upon completion of the sale of the [Suburb E] property, Trustee shall disburse the sale proceeds in the following manner and in the priority:

    8.1 In payment of the real estate agent’s fees and commissions associated with the sale and any legal costs arising from the sale;

    8.2 In order to discharge in full the outstanding loans secured by way of mortgage to St George Bank against the title of the [Suburb E] property;

    8.3 In payment to the wife of any amount paid by her pursuant to order 8 hereof;

    8.4 in payment to the wife of any amount outstanding to her as a consequence of the husband’s default in making payments pursuant to the orders made by his Honour Justice Watts on 22 August 2016 and the orders made by her Honour Justice Stephenson on 30 September 2016 plus interest;

    8.5 The balance of money shall be held in an interest bearing account in the wife’s name on the basis that the wife shall be entitled to draw on such funds in the event of the husband’s non-compliance with the interim orders referred to above.

12. Her Honour also ordered the sale of the properties owned by K, and provided for the distribution of the proceeds, including the payment to the wife of the balance that was then outstanding in respect of the partial property settlement of $200,000.00 ordered on 30 September 2016.

13. It was common ground before me that the sale of the Suburb E property was shortly to settle, and that the net proceeds of sale will be in the order of $1.8 million.

THE UNCONTROVERSIAL MATTERS

1. As I have indicated, this matter substantially resolved during the course of the hearing, as the wife conceded that the controlled monies account arising from the Suburb E property, should be used to pay out, and hence discharge, the present mortgage over the Suburb A property, in relation to which the parties are presently in default and the mortgagee in the process of selling the property.  There is no difficulty in that occurring, as the funds will shortly be available.  That concession was, no doubt, in recognition of the fact that the price obtained for the Suburb A property under a mortgagee sale is likely to be less than could be obtained by sale by private treaty.  Therefore the basis upon which the wife sought orders for the sale of the Suburb A property evaporated.

2. Senior counsel for the husband conceded that, even with the previous interim property settlement, a further interim payment of $250,000.00 to the wife would most likely be within her minimum entitlement.  I am otherwise satisfied that such an order should be made, and met from the Suburb E property proceeds.

3. Further, it was agreed that sufficient of the Suburb E sale proceeds should be retained in the controlled monies account to meet any future capital gains tax liability arising from the sale, noting that payment is unlikely to be in fact required until mid-2019.

4. Next, it was not controversial that, in order for the wife to obtain reimbursement of monies expended by her in discharge of the husband’s obligations under order 3 of the orders of Watts J of 5 September 2016, as permitted by order 4 of Rees J of 18 April 2017 from the Suburb E proceeds, a means for determining the amounts outstanding was needed, and I will order accordingly.

5. The husband sought orders for sole occupation of the Suburb A property.  The wife did not concede that in fact he remains resident there.  Particularly she relied upon some bank statements which were sent to the husband at an address of Z Street, Suburb J, rather than the Suburb A address (the Z Street property is owned by the husband’s parents).

6. The husband says that he wishes to, in due course, receive the Suburb A property as part of the division of properties under the proceedings.  Given that indication, and given the absence of any need for the property to be sold, and the fact that the wife does not wish to occupy the Suburb A property herself, there is no reason why the orders sought by the husband should not be made.

7. Ultimately, so long as was conditioned as being “until further order,” the wife did not oppose a sole occupation order.  There will therefore be an order that the husband be entitled to sole use and occupation at the Suburb A property until further order.

THE ORDERS FOR DISCHARGE OF THE CHILD SUPPORT DEBT

1. As I have indicated, the husband says that he is presently unable to leave the country, because he has not satisfied a child support debt due to the wife.  He asserts that he has an urgent need to return to China for some surgery arising from complications with his recent vasectomy reversal procedure.  He claims that he has no funds from which he can himself discharge that debt, and inferentially, that his parents and other family members will not provide him with funds to discharge it either.  He therefore seeks that the arears be met from an account which, under orders of Watts J, he established and funded with $100,000.00 so as to enable the wife to meet the costs of the parties’ children, by withdrawing the sum of $800.00 per week, and that in due course the funds from the Suburb E property be accessed so as to reimburse that account.  He did not oppose that order being by way of interim property distribution.  Senior Counsel for the husband characterised such orders as “humanitarian.”

2. The outstanding debt is of some vintage.  Further, this is not a husband who has not made provision for his children, in the sense that he has established the fund of $100,000.00 which is being accessed by the wife to meet the children’s expenses, but it is equally true that the father has not even attempted to partially discharge the outstanding arrears of child support.  It is obvious that he does have funds made available to him by his family members from time to time.  For instance, somewhat alarmingly, I was told without objection, that he had recently made costs disclosure to the wife, in which it was revealed that, to date, he has spent nearly $750,000.00 on his lawyers in this litigation.  Further, his Financial Statement does depose to the existence of some assets in China, which are presumably realisable by him, and further, it was conceded by his counsel during the course of the hearing before me, that his parents have been the persons funding his costs of travel to and from China, and the costs of his surgery there.  His class of travel to and from China was not revealed, but one suspects it is unlikely to be economy.

3. As to that, Senior Counsel for the wife noted that the husband’s parents’ conduct in paying for his travel and surgery in China, seems inconsistent with their current litigation against him in China, and there is likely some force to that observation.

4. The husband says that his parents, and indeed his brother, remain willing to provide financial support for him, but seemingly not if it benefits the wife.  No doubt the truthfulness of that assertion, and if it be true, the reasons for it, will be explored at trial.

5. The wife objects to the course proposed by the husband, primarily on the basis that she wishes to not erode the Australian assets which the parties have, as it is likely that they will provide the only ultimate source for the realisation of her entitlements in this litigation.  However the sum in question is relatively minor, being only in the order of $9,000.00, and as against the pool of assets in Australia, is inconsequential.  There can be no doubt that the husband will have a significant entitlement to the matrimonial assets, although doubtless the wife would prefer to have assets in Australia awarded to her, so as to circumvent the need for enforcement in China.

1. Senior Counsel for the wife suggested that, in denying an ability to pay the arrears, the husband was “having a lend” of the court.  However against that, it does indeed appear that the husband was recently unable to leave the country because of the debt.  That does tend to suggest some kind of genuine problem exists, unless the husband was simply being spectacularly obstinate.

2. Notwithstanding my suspicion that the husband may not have tried very hard to persuade his parents to fund the discharge of the child support arrears, and notwithstanding my suspicion that the husband may have assets presently under his control which he could readily use himself to discharge the child support arrears, I am nonetheless satisfied that the course proposed by the husband should be, in substance, acceded to.  However I am not satisfied that the $100,000.00 fund should be depleted, only to be reimbursed.  Rather, the funds should come directly from the controlled monies account established from the Suburb E sale.  I am satisfied that such a distribution may be readily accommodated in any ultimate property settlement.  Further, on a practical level, it will make those funds available to the wife and hence the children, accepting that it does slightly erode the equity in the Australian assets.

3. There will therefore be the orders for interim property settlement in the husband’s favour accordingly.

CONCLUSION

1. For these reasons there will be orders as set out at the commencement of this judgment.   

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Tree delivered on 19 December 2017.

Associate:

Date: 19 December 2017