GUAN & GUO

[2021] FamCA 278

FAMILY COURT OF AUSTRALIA

GUAN & GUO [2021] FamCA 278

FAMILY LAW – PROPERTY – final consent orders – just and equitable division of property.

Family Law Act 1975 (Cth)

APPLICANT: Mr Guan

FIRST RESPONDENT: Ms Guo

SECOND RESPONDENT: Mr B Guan

THIRD RESPONDENT: Mr C Guan

FILE NUMBER: MLC 13378 of 2017

DATE DELIVERED: 1 March 2021

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Johns J

HEARING DATE: 1 March 2021

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Hutchings

SOLICITOR FOR THE APPLICANT: Robinson Gill

COUNSEL FOR THE RESPONDENT: Mr Werner

SOLICITOR FOR THE RESPONDENT:

Rayner Song Family Lawyers

SOLICITOR FOR THE SECOND AND

THIRD  RESPONDENTS

Ms Chenzi, Madison Marcus Law Firm

Orders

BY CONSENT IT IS ORDERED THAT

1. By 28 March 2021, the Husband and Wife do all such acts and things and sign all such documents necessary to place on the market for sale, the property situated at D Street, Suburb E being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“the D Street property”) (“the D Street sale”) and for this purpose the following apply:

   (a)The Husband and the Wife have joint conduct of the sale, and shall be at liberty to communicate with any estate agent, conveyancer, mortgagee or other person interested in or engaged in the sale process;

   (b)The Husband select an agent to market the D Street property for sale;

   (c)Within seven (7) days of the date of these Orders, the Husband nominate in writing three (3) conveyancing solicitors to conduct the conveyancing work for the D Street sale and within seven (7) days of being sent the Husband’s nominations, the Wife select a conveyancer from those nominated by the Husband to perform the said conveyancing work;

   (d)The sale be by way of public auction to be held within ninety (90) days of the date of these Orders unless otherwise agreed between the parties in writing;

   (e)The Husband and Wife jointly determine the listing price, reserve price, sale price, and all terms of sale and in default of agreement, the disputed issue is to be determined by a nominee of the President of the REIV upon application by one or both parties;

   (f)The Husband, in his capacity as sole director of F Pty Ltd, the trustee of the G Trust, authorise and direct the proceeds of sale to be distributed in the following manner and priority:

   (i)First, to pay all reasonably incurred expenses of and incidental to the sale, including the estate agent's commission, legal costs on the sale and any reasonably incurred and necessary disbursements not including maintenance and improvements to the property unless agreed in writing prior to the expense being incurred;

   (ii)Secondly, to pay such sum/s required to repay loan numbers …44 & …00 with the H Bank and to discharge the mortgage instrument number …5S registered in favour of Westpac Banking Corporation and any other registered mortgage secured by the D Street property (“D Street mortgage”);

   (iii)Lastly, the balance to the Husband and Wife in equal shares, to be paid in the first instance directly to their respective solicitors, Robinson Gill Lawyers and Rayner Song Family Lawyers.

2. On or before 30 June in the financial year in which the D Street property is sold, the Husband in his capacity as sole director of F Pty Ltd as trustee of the G Trust (the Trust) shall sign a trustee resolution to the following effect:

   (a)The Trust resolves to distribute the net proceeds of sale of the D Street property to the Husband and Wife (in their capacities as beneficiaries of the Trust) in equal shares.

   (b)For taxation purposes, any available capital and/or trading losses (including carry forward losses) of the Trust shall be offset against any capital gains arising as a consequence of the sale of the D Street property.

   (c)For taxation purposes, any net capital gain shall be distributed between the Husband and Wife (in their capacities as beneficiaries of the Trust) in equal shares and each shall be responsible for paying any taxation assessed on their respective shares.

3. Within 30 days after the conclusion of the financial year in which the D Street property is sold, the Husband shall cause F Pty Ltd to file an income tax return for the G Trust in accordance with paragraph 2 above and immediately provide a copy to the Wife.

4. By 5 March 2021 the Husband and Wife do all such acts and things and sign all such documents necessary to place on the market for sale the property situated at J Street, Suburb E in the State of Victoria being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“the J Street property”) (“the J Street sale”) and for this purpose the following apply:

   (a)The Husband and the Wife have joint conduct of the sale, and shall be at liberty to communicate with any estate agent, conveyancer, mortgagee or other person interested in or engaged in the sale process;

   (b)The Wife select an agent to market the J Street property for sale and the conveyancer be the same as for the D Street property sale;

   (c)The sale be by way of public auction to be held within sixty five (65) days of the date of these Orders unless otherwise agreed between the parties in writing;

   (d)The Husband and Wife jointly determine the listing price, reserve price, sale price, and all terms of sale and in default of agreement, the disputed issue is to be determined by a nominee of the President of the REIV upon application by one or both parties;

   (e)The proceeds of the sale are to be distributed at settlement in the following manner and priority:

   (i)First, to pay all reasonably incurred expenses of and incidental to the sale, including the estate agent's commission, legal costs on the sale and any reasonably incurred and necessary disbursements not including maintenance and improvements to the property unless agreed in writing prior to the expense being incurred;

   (ii)Secondly, to pay the sum/s required to discharge the mortgage instrument number …8Q registered in favour of K Bank and any other mortgage over the J Street property (“J Street mortgage”);

   (iii)Lastly, the balance to the Husband and Wife in equal shares, to be paid in the first instance directly to their respective solicitors, Robinson Gill Lawyers and Rayner Song Family Lawyers.

5. Pending the completion of Orders 1 and 4 herein:

   (a)The Husband maintain comprehensive insurance for the D Street property;

   (b)The wife maintain comprehensive insurance for the J Street property;

   (c)The Husband have sole occupation of the D Street property and is entitled to retain all rents and other incomes received from the D Street property;

   (d)The wife have sole occupation of the J Street property and is entitled to retain all rents and other incomes received from the J Street property;

   (e)The Husband and Wife are restrained from further encumbering either real property;

   (f)The Husband and Wife hold their respective interests in the D Street property and J Street property upon trust for the other pursuant to these Orders.

6. Pending completion of Orders 1 and 4 the Husband and Wife must do all acts and sign all documents necessary to apply for a (further) moratorium on the J Street mortgage, and the Husband may, at his election, apply for a moratorium on the D Street mortgage.

7. Upon the written request of the Husband but no later than the end of the financial year in which the D Street property is sold, the Wife do all such acts and things and sign all documents necessary to:

   (a)Renounce all claims against the G Trust;

   (b)Either surrender to the trust or assign to the Husband (at his election) any present entitlements she has in the G Trust;

   (c)At the written direction of the Husband, forgive or assign to the Husband any credit/debit loan accounts that she may have in the G Trust;

   (d)Consent to her removal as a beneficiary of the G Trust at the written request of the Husband.

8. The Husband shall indemnify the Wife against any taxation consequences that may be assessed against her as a result of change in entitlement in the G Trust or otherwise as a consequence of anything done pursuant to paragraph 7, save that nothing in this paragraph obliges the Husband to indemnify the Wife for any taxation liability she may incur as a consequence of the sale and distribution of sale proceeds of the D Street property.

9. Contemporaneously with paragraph 7 and 8 above, the parties do all acts and sign all documents necessary to:

   (a)Release the Wife from liability for any debts to the following entities:

   (i)F Pty Ltd ACN …; and

   (ii)The G Trust; (“collectively the Husband’s entities”);

   (b)Remove the other as guarantor for any personal debts or any debts of or with respect to the other’s entities; and

   (c)Remove the assets to be retained by the other pursuant to these Orders as security for any of their respective personal debts or any debts of or with respect to the other’s entities; and

   (d)Provide the other with proof of compliance with this paragraph and paragraph 8, where applicable.

10. Save as otherwise provided in these orders, the Husband is solely liable for and indemnify the Wife against all liabilities (including taxation liabilities, supplier liabilities, consumer liabilities, and liabilities to other beneficiaries) of or with respect to the Husband’s entities.

11. The Husband remain solely liable for and indemnify the Wife against all liabilities in his sole name or joint with another, including but not limited to:

    (a)credit card debts;

    (b)past, contingent, and future taxation liabilities;

    (c)any personal loans, including but not limited to those he alleges he owes to:

    (i)Ms L;

    (ii)Mr B Guan;

    (iii)Mr C Guan;

    (iv)Mr M;

    (v)Mr N; and

    (vi)Mr O.

12. The Wife remain solely liable for and indemnify the Husband against all liabilities in her name or joint with another, including but not limited to:

    (a)       credit card debts;

    (b)       past, contingent, and future taxation liabilities; and

    (c)       any personal loans.

13. Within fourteen (14) days of the date of these Orders, the Husband do all acts and things and sign all documents necessary to transfer to the Wife, at the Wife’s expense, the Motor Vehicle 1 motor vehicle registration number ….

SUPERANNUATION SPLITTING ORDERS

1. Having been accorded procedural fairness, Orders 15 to 17 is binding on the trustee of S Super Fund (“the Fund”).

2. Pursuant to section 90XT(1)(a) of the Act, whenever a splittable payment becomes payable in respect of the Husband’s interest in the Fund, the Wife shall be entitled to be paid by the trustee of the Fund the amount (if any) calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”), using an agreed base amount of $64,391 as at the operative time and there be a corresponding reduction in the entitlement the Husband would have had but for these Orders.

(15A)That there be liberty to apply to the Applicant and Respondent with regard to the form of the superannuation splitting Orders.

1. The operative time for the purposes of Order 15 is the beginning of the day on the fourth business day after the order is served on the Trustee.

2. Until:

   (a)The establishment of a separate superannuation interest in the name of the Wife in the Fund; or

   (b)The transfer or rolling over into another superannuation fund as nominated by the Wife of the payment split created by these Orders; or

   (c)The Wife satisfies a condition of release and is paid the payment split which was created by Order 15; or

   (d)The Wife exercises a waiver of rights within the meaning of section 90XZA of the Act in relation to the payment split created by Order 15;

   the Husband is prohibited from doing any acts or permitting any acts to be done that may render any part of his interest in the Fund a "non-splittable" payment within the meaning of Regulation 12 or 13 of the Regulations.

3. Within seven (7) days of receipt of a sealed copy of the Orders, the Wife shall arrange for a copy to be served upon the Trustee of the Fund.

4. After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (Cth), the Husband shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Wife’s request for the transfer or rollover of his interests in the Fund.

5. The trustee of the Fund and either the Husband or the Wife have liberty to apply as to the implementation or enforcement of Orders 14 to 19 inclusive of these Orders upon the giving of seven (7) days written notice to the parties.

OTHER ORDERS

1. Unless otherwise specified in these Orders and except for the purposes of enforcing payment of any money due under these or any subsequent orders:

   (a)Each party retain to the exclusion of the other all property in the possession of or registered in the name of that party as at the date of these Orders including but not limited to any jewellery, furniture, furnishings, shares and motor vehicles save any personal items of the Husband still located at J Street and agreed porcelain and vases which shall be collected by the Husband at an agreed time;

   (b)Monies standing to the credit of the parties in any joint bank accounts are to be divided evenly between the parties and the parties are to do all acts and sign all documents necessary to close any such accounts;

   (c)Each party is solely liable for and indemnifies the other against any credit card debts, personal loans and debts of whatsoever nature and kind in that party’s name;

   (d)Insurance policies remain the sole property of the named owner;

   (e)Each party is solely liable for, and indemnifies the other against, any liability encumbering any item of property to which that party is entitled pursuant to these Orders; and

   (f)Any joint tenancy of the parties in any real or personal property are hereby expressly severed.

2. Each party have liberty to apply as to the enforcement or implementation of these Orders.

3. The final hearing listed for 1 March 2021 (for five days) be vacated.

4. Neither Husband nor Wife make any claim or bring any action as against the other in any foreign jurisdiction from facts or circumstances arising and known to them prior to the date of these orders.

5. All extant applications be dismissed and this matter be removed from the pending cases list.

6. That there be no order as to costs.

NOTATION

A.It is the intention of paragraphs 2 and 3 above that each party will pay income tax upon any assessable capital gain at their separate individual marginal rates in the relevant tax year.

B.The parties agree to seek the advice of the selling agent(s) as to the optimal date(s) for the auctions of the two real properties.

C.The current totals of the H Bank loans referred to in subparagraph 1(f)(ii) are approximately $93,500 and $491,000 respectively.

D.That pursuant to Section 81 of the Family Law Act 1975 the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

E.Contemporaneously with these Orders being made, the parties have entered into a Financial Agreement for ‘dollar for dollar’ maintenance.

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 Guan & Guo 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 MELBOURNE

FILE NUMBER: MLC 13378 of 2017

Mr Guan

Applicant

And

Ms Guo

First Respondent

And

Mr B Guan

Second Respondent

And

Mr C Guan

Third Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. This matter comes before the Court today for final hearing in relation to the parties’ competing applications for adjustment of property.  The background to the matter is as follows. 

2. The applicant husband is aged 52 years and is self-employed.  He conducts a business exporting food products to parts of Asia and, in particular, to China. 

3. The respondent wife is aged 51 years.  She has historically been engaged in part-time work as an educator.  It is her evidence that since late 2019 she has been unable to work due to injury. 

4. The parties married in 1991 although they did not commence cohabitation until 1993.  There is a dispute between them as to the date of separation, it being the husband’s case that the parties separated under the one roof in late 2010.  The wife contends that separation did not occur until February, 2017.  At that time, she applied for and obtained an intervention order which excluded the husband from the former matrimonial home.  The parties divorced in June of 2018. 

5. There are two children of the relationship, Ms L, who is aged 24 and is living independently and Mr P who is aged 18 and is about to commence his first year at university, having completed year 12 last year.  Mr P lives with the wife in the former matrimonial home. 

6. The other parties to the proceeding are the second respondent, who is the husband’s father, and the third respondent, who is the husband’s brother.  They contend that they have advanced monies to the parties to assist them in the purchase of the former matrimonial home.  They allege that the monies advanced are loans to be repaid. 

7. The parties were born and married in China.  They relocated to Australia in September, 2000.  It is common ground between the husband and the wife that at the time of their marriage neither had any assets of significance.  Upon their arrival in Australia both commenced working.  The husband established a business exporting food products.  That business was established through a corporate entity, F Pty Ltd.  In 2015, the G Trust was settled.  That was a vehicle utilised by the parties to acquire property which ultimately was used as a base for the husband’s business. 

8. During the course of the marriage, the parties acquired properties in Australia.  Currently they hold interests in the former matrimonial home in Suburb E and the property acquired through the family trust, from which the husband operates his business. 

9. In addition to those two properties, the husband is the registered proprietor of a property in City R, China, which was acquired in November 2013.  There is much dispute between the parties as to the circumstances of the acquisition of that property.  It is common ground between the parties that the property is registered in the husband’s name.  The husband contends that that property is held by him upon trust for his sister.  It is his case that he assisted his sibling in the acquisition of that property, it being registered in his name, enabling her to obtain a lower-interest mortgage. 

10. The trial before me was listed for a period of some five days.  It is likely that the allegations in relation to family loans, and as to the circumstances of the acquisition of the property in China, would have occupied significant time.  This is more so given that the parties would have required the assistance of interpreters in giving their evidence in relation to these matters. 

11. The parties attended a mediation approximately two weeks prior to the listed trial.  In that mediation, the parties ultimately came to an agreement in principle as to the division of their interests. 

1. The matter was stood down this morning to enable the parties to finalise the terms of their proposed settlement.  I now have before me those terms, which have been signed by each of the parties.  It is agreed between them that the two real properties, the former matrimonial home in Suburb E as well as the investment property held by the trust, are to be sold and that after payment of identified liabilities the proceeds of sale be divided equally between the parties. 

2. The other significant interest of the parties is their superannuation entitlements.  It is agreed that there should be a superannuation splitting order, the effect of which will be to equalise the parties’ superannuation interests. 

3. There is much debate between the parties as to what the proposed terms mean in percentage terms, given their competing contentions with respect to the family loans and the interest in the China property. 

4. The wife’s view is that the pool of assets is something in excess of $3.2 million.  The husband’s position is that the China property should be excluded from the pool and the alleged debts to his family members included, with the result that the parties’ assets are valued at only $1.5 million. 

5. The parties sought to avoid the risks of pursuing those arguments at trial and compromised their positions. On any view, the parties have adopted a commercial and pragmatic approach to the resolution of this matter.  The costs of pursuing each of those arguments were likely significant, and further, there would have been an emotional cost to the parties in participating in a five day final hearing. 

6. I am satisfied that it is just and equitable to make orders as sought by the parties.  In my view, the proposed terms are well within the range of outcomes likely to have occurred had the matter proceeded to judgment.  The proposed terms appropriately reflect the many and varied contributions made by each of the parties through the course of the marriage.  They reflect the work undertaken by each of them in the development of the export business, the wife in the re-training she undertook and the work that she performed as an educator. 

7. They also reflect the contributions made by each to the welfare of the family, constituting the parties and their two children. 

8. The proposed terms also take into account the relevant s 75(2) factors, particularly the impact COVID-19 has had on the husband’s income-earning capacity as an exporter, and further, the issues confronting the wife in terms of her health impacting her capacity to work. 

9. Having regard to all of those matters, I am satisfied that the proposed orders are just and equitable.  Therefore, I will make orders in the terms signed by the parties.  The minute of proposed orders will be marked with the letter A and it will remain on the Court file.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 1 March 2021.

Associate: 

Date:  1 March 2021