Huang & Wen
[2022] FedCFamC1F 194
•30 March 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Huang & Wen [2022] FedCFamC1F 194
File number(s): SYC 1300 of 2018 Judgment of: REES J Date of judgment: 30 March 2022 Catchwords: FAMILY LAW – THIRD PARTIES – Application to join third parties – Where no Amended Initiating Application was filed seeking substantive orders against third parties – Application dismissed.
FAMILY LAW – INJUNCTIONS – Where the wife established a prima facie case that the husband has diverted matrimonial assets to his children – Risk of those assets being further alienated – Orders restraining the children from dealing with that property adverse to the wife’s interest.
FAMILY LAW – INTERIM PROPERTY – Application for partial property settlement by the wife – Material non-disclosure by the husband – Where the relief sought by the wife is significantly less than the amount the husband, on his own case, asserts she will receive by way of final distribution – Wife to receive $200,000 partial property settlement.
Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 3.03 Division: Division 1 First Instance Number of paragraphs: 38 Date of hearing: 25 March 2022 Place: Sydney Counsel for the Applicant: Ms McMahon Solicitor for the Applicant: William Chan & Co Lawyers Counsel for the Respondent: Ms McConaghy Solicitor for the Respondent: My Solicitors & Notaries ORDERS
SYC 1300 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HUANG
Applicant
AND: MR WEN
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
30 MARCH 2022
THE COURT ORDERS:
1.That pending further order, Ms C Wen is restrained from selling, dealing with or further encumbering the properties at L Street, Suburb M, NSW, Folio Identifier … and 1 N Street, Suburb P, NSW, Folio Identifier ….
2.That pending further order, Mr B Wen is restrained from selling, dealing with or further encumbering the property at 2 N Street, Suburb P, NSW, Folio Identifier ....
3.That the parties cause the funds held in controlled monies on their behalf by Q Lawyers to be forwarded to the wife’s solicitors to be held in controlled monies on their behalf.
4.That from the controlled monies held by the wife’s solicitor on behalf of the husband and the wife, the parties cause the sum of $200,000 to be paid to the wife by way of partial property settlement.
5.That within 28 days the husband provide full and complete disclosure of all of the documents referred to in the letter of Q Lawyers dated 22 November 2021.
6.That the wife’s Applications in a Proceeding filed 9 December 2021 and 3 February 2022 are 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 a pseudonym Huang & Wen has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Ms Huang (“the wife”) and Mr Wen (“the husband”) have separated and are currently litigating in relation to their financial matters.
They have two adult children, Ms C Wen who is aged 25 years and Mr B Wen who is aged 24 years.
The wife asserts that the husband has both a business and a domestic partnership with Ms E.
Documents annexed to the wife’s affidavit, and tendered in her case, establish that in December 2020, Ms C Wen purchased a property at Suburb P for $820,000 and in February 2021 she purchased another property at Suburb M for $740,000. In February 2021, Mr B Wen purchased a property at Suburb P for $821,750.
Both Ms C Wen and Mr B Wen have sworn affidavits in the husband’s case.
In an affidavit sworn on 24 February 2022, Ms C Wen deposed that she is a university student and since 2017 has been employed in hospitality earning $9,000 per month. She deposed that the husband gave her $40,889.32 towards the price of the Suburb P property and $27,474.93 towards the price of the Suburb M property. The balance of the purchase price in relation to each property was borrowed.
In an affidavit sworn by her on 22 May 2020, Ms C Wen deposed that she worked in hospitality and her income had been severely reduced by COVID and she was earning $300 per week.
Mr B Wen deposed in an affidavit sworn by him on 25 February 2022, that he is unemployed and that the husband gave him $82,175 towards the purchase of his Suburb P property.
In an affidavit sworn by him on 22 May 2020, Mr B Wen deposed that he was unemployed.
Despite the fact that Mr B Wen is unemployed, he was able to secure a mortgage from the Commonwealth Bank of Australia (“CBA”) of $708,634 to purchase the property.
The husband deposed in his affidavit sworn 25 February 2022, that he gave his daughter $122,889 for the purchase of Suburb P and $101,475 for the purchase of Suburb M. He deposed that he gave his son $82,175 for the purchase of his Suburb P unit. A document signed by the husband and dated 12 February 2021, produced on subpoena and presumably used in conjunction with a loan application, refers to an unconditional gift to Mr B Wen of $120,000.
Both Ms C Wen and Mr B Wen deny that the husband has any legal or beneficial interest in the properties they have purchased.
In relation to Ms E, the husband deposed that she is a business and investment partner and that she has lent him about $150,000 pursuant to a Loan Agreement which funds were used to purchase a property in China which they jointly own in equal shares.
Before me, the wife now seeks the following orders:
1. That Ms E be added as a Respondent in these proceedings
2. That Ms C Wen be added as a Respondent in these proceedings.
3. That Mr B Wen be added as a respondent in these proceedings
4. Pursuant to s114, the Respondent Ms C Wen is restrained from selling, encumbering or otherwise entering into any dealing with respect to the property known as lot … (property number 1) until further order.
5. Pursuant to s114, the Respondent Ms C Wen is restrained from selling, encumbering or otherwise entering into any dealing with respect to the property known as lot … (property number 2) until further order.
6. Pursuant to s 114, the Respondent Mr B Wen is restrained from selling, encumbering or otherwise entering into any dealing with respect to the property known as lot ... (property number 3) until further order.
7. Within 28 days, the Respondent Ms C Wen, is to provide to the Applicant full and complete disclosure in accordance with rule 6.06
8. Within 28 days, the Respondent Mr B Wen is to provide to the applicant full and complete disclosure in accordance with rule 6.06
9. Within 28 days, the Respondent, Ms E is to provide to the applicant, full and complete disclosure in accordance with rule 6.06
10. That within 14 days, the husband will provide full and complete disclosure of all documents referred to in the letter to Q lawyers dated 22 November 2021
11. Within 7 days the Respondents Ms C Wen is to forward to the Applicant a) copies of the rental agreements in respect of property number 1 & 2 b) details as to the letting agents c) copies of all monthly letting agent accounts d) details of statements showing all rents paid from all properties since purchase
12. Within 7 Days, the Respondent Mr B Wen is to forward to the Applicant a) a copy of the rental agreement in respect of property number b) details as to the letting agent c) copies of all monthly letting agent accounts d) details of statements showing all rents paid from all properties since purchase
13. That all past rental payments received from properties 1, 2 & 3 be transferred to the trust account of the wife’s Solicitor, William Chan & Co Lawyers forthwith
14. That all future rental payments from properties 1, 2 & 3 are to be transferred to the trust account of the wives solicitor, William Chan & co Lawyers within 2 business days
15. That an interim payment of $300,000 be made to the wife from the funds held in trust by her Solicitor, William Chan & Co Lawyers.
16. That Q Lawyers forward all trust monies in this matter to William Chan & Associates forthwith
17. The husband and/or Q Lawyers pay the wife’s costs of and incidental to this application on an indemnity basis
(As per the original)
In relation to Order 15, counsel for the wife sought payment of $200,000.
APPLICATION TO JOIN THIRD PARTIES
The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (“the Rules”) provide the mechanism for adding a party to proceedings in the following terms:
Part 3.2 — Adding and removing a party
3.03 Adding a party
(1) A party to a proceeding may include any person as a party by:
(a) naming the person as a party in the application, response or reply; and
(b) serving on the person a copy of the application, response or reply and all other relevant documents filed in the proceeding.
(2) A party may add another party after a proceeding has started by amending the application or response to add the name of the party.
(3) A party who relies on subrule (2) must:
(a) file an affidavit setting out the facts relied on to support the addition of the new party, including a statement of the new party’s relationship (if any) to the other parties; and
(b) serve on the new party:
(i) a copy of the application, amended application, response or amended response; and
(ii) the affidavit referred to in paragraph (a); and
(iii) any other relevant document filed in the proceeding; and
(c) serve on the other parties:
(i) a copy of the application, amended application, response or amended response; and
(ii) the affidavit referred to in paragraph (a).
(4) A party may only add another party after the first court date with the leave of the court.
(5) A party who relies on subrule (4) must:
(a) file:
(i) an Application in a Proceeding; and
(ii) an affidavit setting out the facts relied on to support the addition of the proposed new party, including a statement of the proposed new party’s relationship (if any) to the other parties; and
(b) serve on the proposed new party:
(i) a copy of the Application in a Proceeding; and
(ii) the affidavit referred to in subparagraph (a)(ii); and
(iii) any other relevant document filed in the proceeding; and
(c) serve on the other parties:
(i) a copy of the Application in a Proceeding; and
(ii) the affidavit referred to in subparagraph (a)(ii).
In relation to Ms E, it is conceded that she has not been served. She is in China.
Ms C Wen and Mr B Wen have been served with the Application in a Proceeding but no Amended Initiating Application has been filed.
The persons who are sought to be joined are entitled to know what substantive orders are sought against them so that they have an opportunity to be heard in response to the application for joinder.
The application will be dismissed.
SECTION 114 APPLICATIONS
These are the applications found at paragraphs 4, 5, 6, 13 and 14 of the wife’s Minute of Orders.
In relation to paragraphs 13 and 14 it was conceded that to make such an order would necessarily have the effect that there was no fund to meet the mortgage payments and those applications were not pressed.
In relation to paragraphs 4, 5 and 6, it is not in dispute that the Court has power to make orders against third parties to preserve the subject matter of the litigation.
Whilst there is no direct evidence that either of the registered proprietors is likely to dispose of the subject property, or deal with those properties in a manner adverse to the interests of the wife, there is a great deal of circumstantial evidence that suggests that the husband has engaged in devices to conceal his assets from the wife and that the purchase of the three properties in the name of the husband’s children is one such device.
Whilst I accept that the evidence about these dealings will be the subject of examination and cross-examination in the substantive proceedings, the evidence to this time establishes, at least on a prima facie basis, the following:
·In a joint balance sheet dated 9 March 2020, the husband asserted that he had savings of $7,218, that the “China Property” had a value of $312,000 and the “S Company” had nil value. The husband asserted he had no financial resources.
·It was not disputed by the husband’s counsel and appears to be uncontested by the husband that, shortly after that date, the husband provided some $300,000 to his children for the purchase of the three unit properties. If the husband’s assertions on the balance sheet were correct, from whence did those funds come?
·It is the wife’s case that the husband is understating and concealing his assets and his income. In his Financial Statement sworn 14 October 2021, the husband deposed to income of $677 per week, personal expenditure of $2,246 and net assets, excluding superannuation, of $275,178.
·The wife relied on bank statements disclosed by the husband. The statements for the husband’s personal account with the Commonwealth Bank of Australia (“CBA”) #…51 show that between 1 January 2020 and 31 December 2020, a total of $1,183,600 was deposited into that account. The major source of the deposited funds was “F Company” and “G Limited”. A large portion of the deposited funds was then transferred to other accounts in Australia or withdrawn at the Suburb J branch of the CBA. G Limited is the husband’s company that is situated in K City.
·The wife tendered a document produced on subpoena which demonstrated that between 5 January 2016 and 1 March 2022, a total of $US10,550,544 was paid to G Limited from one source alone.
·Ms C Wen’s loan applications included a document on the letterhead of H Pty Ltd representing that in December 2020 she was working as a finance professional earning a base salary of $96,000 per annum. Ms C Wen deposed in her affidavit that she is works in hospitality and in her affidavit sworn 22 May 2020 she deposed that her income was $300 per week.
·The mortgage repayments on Ms C Wen’s two mortgages total about $3,446 per month.
·Mr B Wen’s loan application included a document from R Limited for the period of January 2021 representing that he is a finance professional earning $54,541 per annum whereas in the two affidavits he has sworn in May 2020 and February 2022 he has sworn that he was unemployed.
·The trust account statement of the husband’s former solicitors who acted for Mr B Wen on the purchase record deposits by the husband into the trust account for the purchase totalling $106,743.
I accept that the wife has established a prima facie case that the husband has attempted to divert matrimonial assets to his children. That being so, I accept that there is a risk that those assets may be further alienated and it is appropriate that orders be made restraining the children from dealing with the property in a manner adverse to the interests of the wife.
Both Ms C Wen and Mr B Wen have been served with this application. They are aware of the orders sought by the wife and have not appeared to oppose them.
ORDERS SEEKING DISCLOSURE FROM THIRD PARTIES
It was conceded on behalf of the wife that there is no power to order disclosure from non-parties. That application will be dismissed.
HUSBAND’S DISCLOSURE
It is agreed that the husband will complete financial disclosure within 28 days.
WIFE’S APPLICATION FOR PARTIAL PROPERTY SETTLEMENT
The wife seeks a payment to her of $200,000 from the funds held in the trust account of her solicitor and the husband’s former solicitor. It is agreed that those funds total $882,881.
The wife is unemployed and receives a carer’s pension. She has no significant assets.
On the husband’s assertions on the updated balance sheet provided at the hearing, the gross assets of the parties are $1,336,925 and the parties do not disclose any liabilities which are likely to be taken into account in the substantive proceedings, other than capital gains tax which has not yet been assessed on a property in Queensland.
In his Response to Initiating Application filed 7 August 2019, the husband seeks orders that the wife receive 50 per cent of the net assets.
Therefore a payment of $200,000 is significantly less than the amount that, on his own case, the husband asserts the wife will receive.
Orders will be made as sought by the wife.
Having regard to the significant discrepancies in the financial information provided by the husband, and the wife’s allegations of material non-disclosure, I am not able to find that it is appropriate to make any orders for partial property settlement in favour of the husband.
The money held by the solicitors is the only substantial asset in Australia. If it is ultimately found that the husband has concealed assets in China, then those assets will never be available to satisfy any order made in favour of the wife.
CONTROLLED MONEY HELD BY HUSBAND’S FORMER SOLICITORS
It is agreed that those funds will be transferred to the solicitor for the wife.
I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 30 March 2022
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