Huang & Wen (No 3)
[2025] FedCFamC1F 71
•12 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Huang & Wen (No 3) [2025] FedCFamC1F 71
File number: SYC 1300 of 2018 Judgment of: HARPER J Date of judgment: 12 February 2025 Catchwords: FAMILY LAW – PROPERTY – Adjustment of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) – Where parties agreed contributions were equal – Where husband sought 50/50 division of assets – Where wife sought a 12.5 per cent adjustment for future needs plus further adjustment for justice and equity because of non-disclosure by the husband and overall division 80/20 in her favour – Where wife argued substantial non-disclosure by the husband left the quantum of the parties’ net assets unknown – Where wife sought to receive all monies held in Australia and property jointly held by the husband and the second respondent in Country T – Where wife did not establish husband’s deficiencies in disclosure merited substantial adjustment in her favour – Where wife did not establish her allegations the husband engaged in collusion and fraud with children to dissipate marital assets – Where no factual basis was established to attribute value to companies and bank accounts the wife claimed were owned by the husband – Where no single expert was agreed to value property – Where both parties sought addbacks – Adjustment of 7 per cent in favour of the wife under s 79(4)(e) – Overall division 57/43 in favour of the wife – Division of assets achieved by release of trust monies in sum of $658,010 to the wife and $24,871 to the husband.
FAMILY LAW – JURISDICTION – Where the second respondent has not engaged with proceedings – Where it is unclear if the second respondent was properly served – Where service was required outside the Australian jurisdiction – No dispute that rules of Pt 2.7 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) were not complied with – Where there is doubt if the Court has jurisdiction in relation to the second respondent and her property in Country T – Where the wife sought an in personam injunction against the husband and second respondent to transfer to her property in Country T – Where other reasons for refusing the in personam order do not require the question of jurisdiction to be determined.
Legislation: Evidence Act 1995 (Cth) ss 38, 128, 140
Family Law Act 1975 (Cth) Pt VIII, ss 75, 79, 80, 81, 95
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) Ch 2, 6, Pts 2.7, 6.2, rr 2.28, 2.40, 2.41, 6.01, 6.02, 6.03, 6.04, 6.06
Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters
Cases cited: Agnarsson & Agnarsson (No 4) [2024] FedCFamC1F 407
Aitken & Aitken (2023) FLC 94-142; [2023] FedCFamC1A 69
Akai Pty Ltd v People's Insurance Co Ltd (1996) 188 CLR 418; [1996] HCA 39
Bence & Bence [2020] FamCA 748
Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34
C & C [1998] FamCA 143
Candle & Falkner (2021) FLC 94-069; [2021] FedCFamC1A 102
Chorn and Hopkins (2004) FLC 93-204; [2004] FamCA 633
Duarte & Morse (2019) 59 Fam LR 323; [2019] FamCAFC 93
Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471; [2004] HCA 55
Gilmour & Hofte (No 2) [2024] FedCFamC1A 9
Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006; [2021] FamCAFC 19
Huang & Wen [2022] FedCFamC1F 194
Huang & Wen (No 2) [2024] FedCFamC1F 447
John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503; [2000] HCA 36
Julien & Perrin (No 2) [2025] FedCFamC1F 50
Lin & Ruan (2021) FLC 94-024; [2021] FamCAFC 90
Lithgow City Council v Jackson (2011) 244 CLR 352; [2011] HCA 36
M & M [1998] FamCA 42
Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21
Manolis & Manolis (No 2) [2011] FamCAFC 105
Martin & Newton (2011) FLC 93-490; [2011] FamCAFC 233
Nagel & Clay (2020) 60 Fam LR 550; [2020] FamCA 326
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170; [1992] HCA 66
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Omacini & Omacini (2005) FLC 93-218; [2005] FamCA 195
Phillips and Phillips (2002) FLC 93-104; [2002] FamCA 350
Sarto & Sarto (2022) 65 Fam LR 605; [2022] FedCFamC1A 16
Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262; [2000] NSWCA 29
Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52
Stone & Stone [2015] FamCAFC 18
Stopford Malloy & Malloy [2021] FedCFamC1F 123
The Commonwealth v Milledge (1953) 90 CLR 157; [1953] HCA 6
Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125
Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Vass v Vass (2015) 53 Fam LR 373; [2015] FamCAFC 51
Watson & Ling (2013) FLC 93-527; [2013] FamCA 57
Wei v Xia (No 5) (2023) 67 Fam LR 421; [2023] FedCFamC1F 679
Zao & Lee [2019] FamCAFC 169
Division: Division 1 First Instance Number of paragraphs: 189 Date of hearing: 25–29 November 2024; 2–4 December 2024 Place: Sydney Counsel for the Applicant: Ms McMahon Solicitor for the Applicant: William Chan & Co Counsel for the First Respondent: Mr Morahan Solicitor for the First Respondent: Chen Shan Lawyers The Second Respondent: Did not participate ORDERS
SYC 1300 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS HUANG
Applicant
AND: MR WEN
First Respondent
MS E
Second Respondent
ORDER MADE BY:
HARPER J
DATE OF ORDER:
12 FEBRUARY 2025
THE COURT ORDERS THAT:
1.Within 14 days of the date of these orders, the Applicant Wife (“wife”) and the Respondent Husband (“husband”) do all such things, acts and deeds and sign all documents necessary to cause to be paid to the wife the total sum of $658,010 and to the husband the total sum of $24,871, of the monies held in trust by William Chan & Co Lawyers and Notaries on behalf of the parties.
2.Subject to the above orders, the wife shall retain all interests in, and entitlement to all personal and real property now in her respective possession or control.
3.Subject to the above orders, the husband shall retain all interests in, and entitlement to all personal and real property now in his respective possession or control.
4.The wife is hereby declared solely liable for all liabilities in her sole name respectively and shall indemnify and keep indemnified the husband in respect of same.
5.The husband is hereby declared solely liable for all liabilities in his sole name respectively and shall indemnify and keep indemnified the wife in respect of same.
6.All outstanding applications are otherwise dismissed.
7.Any application seeking an award of costs is to be filed and served with an affidavit in support within 28 days of the date of these orders, and in the event no application is filed within the time specified, there shall be no order as to costs up to and including the date of these orders.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonyms Huang & Wen have been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARPER J:
INTRODUCTION
These are property division proceedings under Pt VIII of the Family Law Act 1975 (Cth) (“the Act”) between the applicant wife, Ms Huang (“wife”) and the respondent husband, Mr Wen (“husband”).
The parties met in 1994 and commenced cohabitation in 1995. They married in 1995 and separated on 26 January 2017. The parties divorced in 2018.
There are two adult children of the relationship: Ms C Wen (born 1996) and Mr B Wen (born 1997). Intending no disrespect, I will refer to them as Ms C Wen and Mr B Wen and collectively as “the children”. As will be explained, they were joined by the wife as respondents for a time in the proceedings but were no longer parties at the time of trial, although they gave evidence as witnesses called by the wife.
The second respondent, Ms E, is an acquaintance of the husband, whom he has known since at least 2013 and with whom he co-owns a property in Country T. She has not engaged with proceedings at any point and did not appear at the final hearing. It is likely she is located in Country T, and there was some doubt about service upon Ms E, which I consider below.
At the commencement of the trial, the draft joint balance sheet disclosed vast differences between the spouse parties. The wife claimed there were assets worth in excess of $22,000,000 and addbacks in excess of $12,000,000.
However, the balance sheet went through several iterations. By the end of the trial, the wife claimed there were known assets of about $2,000,000 while the husband claimed the assets were valued at $1,226,662 (Exhibit 13). The main assets were funds held in the trust account of solicitors and the husband’s interest in a property in Country T. The most substantial point of difference here was the size and value of the husband’s interest in that property. The wife claimed the husband held full ownership of this property and had not provided an updated valuation. The parties agreed a number of items of notional property should be added back and disputed others, but agreed the value of added back property was pared back to between about $450,000 and $640,000 in round figures. The wife claimed liabilities of $93,965 while the husband claimed $376,675. The main point of difference here was that the husband sought to include a debt owed by him to Ms E of $286,052.61.
The central dispute lay in the existence of assets in Country T and City K and corresponding valuations. It was the wife’s position that there was extensive non-disclosure by the husband about the existence and value of numerous bank accounts held in several countries and of his interests in and value of three companies, U1 Ltd, U2 Ltd and G Ltd. In the evidence U2 Ltd is sometimes referred to with a different spelling but I will use U2 Ltd throughout this judgment.
It was the wife’s case that the quantum of the parties’ net asset pool was completely unknown as a result of the husband’s non-disclosure and the consequent unidentified whereabouts of significant amounts of money. As explained in more detail later, she argued that the husband had made substantial unexplained and unquantifiable dissipations of property, before and after separation, and held undisclosed or inadequately disclosed interests in companies located in Country T and City K which provided him with substantial financial resources.
The wife claimed final relief awarding her the entire assets in Australia, namely, funds held in trust, the parties’ superannuation and an order compelling the husband to transfer the Country T property to her unencumbered, or alternatively an order that he pay the wife an amount equivalent to its value. The wife sought an outcome whereby contributions are assessed 50/50, but with a 12.5 per cent adjustment in her favour on the basis of future needs and limited earning capacity, and a further adjustment in her favour in respect of substantial non-disclosure by the husband, for an overall property division 80/20 in her favour.
For his part, the husband argued that he made all the financial contributions and the wife made the parenting contributions and contended he had provided the required disclosure and the only significant asset he held in Country T was a 50 per cent share in the Country T property. I address the questions of the value of his interest later. He sought to retain his interest in the Country T property and his interest in the companies. The husband contends the overall property division should be 50/50. He sought the trust monies be released to effect a 50/50 division with each party retaining their superannuation interests.
BRIEF BACKGROUND
The husband was born in 1961 in Country T. He is 63 years old. He moved to Australia in 1990 and is an Australian citizen. In 2003 he returned to Country T for work and continues to reside there. He is self-employed as a Director of a company he founded called G Ltd. He receives $750 per week in director’s fees.
The wife was born in 1960 in Country T. She is 64 years old. She immigrated to Australia in 1988 and is an Australian citizen. She is unemployed and a full-time carer for her mother.
In 1990 the wife was one of two directors and shareholders in a company called V Pty Ltd. The business manufactured products and the wife earned approximately $400 per week. In 1994 the husband was employed by V Pty Ltd as a driver.
In early 1995 the wife received an inheritance of $100,000 from her grandfather.
In mid-1995 the parties purchased a property at W Street, Suburb X (“Suburb X”) for $240,000. The purchase was funded using a portion of the wife’s inheritance money to pay the 10 per cent deposit and with a mortgage for the balance.
In 1996 the husband stopped working for V Pty Ltd and found new employment at another company.
In 1997 the husband became an Australian citizen and relinquished his Country T citizenship.
In 2000 the parties sold Suburb X for between $320,000 to $534,000. There was disagreement about the exact sale price which I cannot resolve on the available evidence.
In 2000 the parties purchased a property at Y Street, Suburb Z (“Suburb Z”) for between $440,000 to $480,000. The purchase was funded using proceeds from the sale of Suburb X for the 20 per cent deposit and with a mortgage for the balance with Westpac. It appears the parties established a joint account with Westpac at this time and the monthly repayments and expenses for the property were paid from this account.
In 2002 V Pty Ltd ceased trading and the wife founded and became the sole director and shareholder of a company called AA Pty Ltd. She earned $500 per week from this business. The husband also worked at AA Pty Ltd in various roles including as a driver and quality control inspector. He earned $350 per week.
In 2003 the husband accepted employment in Country T for a company called BB Company. The wife remained in Australia with the two children who were 7 years and 5 years of age. The husband received an annual salary of USD80,000, of which 50 per cent was paid into his Country T bank account and 50 per cent was paid into an Australian bank account held by the wife for her use. The husband stated he tried to minimise his living costs so he could send additional money back to the wife. There is no dispute that whilst in Country T between 2003 up to the date of divorce in 2018 the husband regularly sent money to the wife for family expenses and to service the Suburb Z mortgage.
The husband went on to establish a business in Country T through U2 Ltd. The husband was the General Manager and sole shareholder. According to the wife, this occurred in 2004 and the parties re-financed the Suburb Z property and the husband received $150,000 to fund the start-up costs of U2 Ltd. The husband claimed he established the company in 2007 and the start-up capital of USD100,000 was provided by prepayment from a customer in Australia. Again the evidence did not allow me to determine exactly when the husband began his operations through U2 Ltd, but I find it was no later than 2007. The company was said by the husband to have ceased operations around 2019. I will return to this later in these reasons.
The husband founded the company G Ltd in City K in 2009. G Ltd operated in tandem with U2 Ltd. U2 Ltd issued orders to factories in Country T, and on sold these items to several clients. However, it was the husband’s evidence that close to 100 per cent of U2 Ltd’s products were sold to G Ltd. The purchases by G Ltd were paid for in USD which were converted to Country T currency by U2 Ltd’s bank in Country T after approval by the Foreign Exchange Bureau. The husband’s evidence was that G Ltd has no tangible assets other than “cash from time to time” (husband’s trial affidavit, paragraph 27).
In 2012 the wife founded an import-export company in City K called CC Ltd. At this time AA Pty Ltd ceased operations. The wife stated CC Ltd was generally not a successful business and other than one year in which she earned $68,000, she otherwise only drew director’s fees of $5,000 per annum. She stated CC Ltd ceased operations around 2015.
From around 2013 there was no dispute the husband’s businesses were successful and the parties were financially comfortable.
In 2013 the husband and Ms E purchased a property in Country T at DD Street, City EE (“the Country T property”) for approximately 2,100,000 Country T currency. The property is a multiple-storey house with multiple bedrooms and is where the wife and children have stayed when visiting Country T. The husband and Ms E each hold a 50 per cent share in the property. The husband asserts the current value of his share is equivalent to $325,000. In his trial affidavit he stated that as he was no longer a Country T citizen at the time of purchase the mortgage needed to be registered in Ms E’s sole name, however during cross-examination he said he thought the mortgage was registered in his name as well, before correcting that Ms E was the only borrower under the mortgage. He remains liable to repay half the mortgage debt, the total value of which he put between 400,000 to 500,000 in Country T currency. He stated he makes ad hoc lump payments towards the mortgage from his Country T bank accounts, and possibly from his credit card accounts and some cash.
In 2015 a property at FF Street, Suburb GG (“Suburb GG”) was purchased for around $400,000 in the husband’s sole name. He states he paid $120,000 for the deposit and the balance was funded by mortgage, he claims the wife made no contribution.
In 2016 the parties renovated Suburb Z at a cost of approximately $400,000. The husband states he sent the wife USD250,000 for these expenses.
In 2016 the wife visited the husband in Country T. She suspected him of having an extramarital affair with Ms E and upon her return to Australia she asked for a divorce. The husband states he was not asked for a divorce until 2018. The parties separated on a final basis in January 2017. The wife said she received no further money from the husband after their divorce finalised in 2018.
Between 2017 and 2018 the husband alleged the wife made large transfers from the joint account to Mr HH who is an acquaintance of the wife, to AA Pty Ltd and for her own “private unauthorised use”. The wife conceded she transferred about $26,000 to Mr HH but disputed the other claims. As will be explained later, it became clear during the course of the wife’s cross-examination that Mr HH currently resides with her.
In 2019 the activities of U2 Ltd were suspended by Country T authorities and operations on its bank accounts were frozen. The husband claimed U2 Ltd had been forced to suspend activities because of “abnormal operations”, being the English translation of the reason given by Country T authorities. The connotations of this description appeared to refer to some regulatory default by U2 Ltd. According to the husband, the default arose because U2 Ltd relocated within Country T and failed to inform the Country T authorities and update its details in public registers. The wife tendered a copy of an affidavit affirmed by the husband on 30 August 2021 annexing a translation of a document called an “Explanatory Statement” dated 2 June 2020 together with an original in Country T language. The husband maintained this explained a set of circumstances created by Country T authorities which in effect put U2 Ltd out of business in 2019.
The husband gave evidence, which I accept, that U1 Ltd was established because the employees of U2 Ltd who would have become entitled to redundancy payments from U2 Ltd proposed to the husband that they set up their own business. Although the husband wanted to “get out of the business”, he also wanted his employees to have ongoing work.
In early 2019 the parties sold Suburb GG and received some $160,085 in net proceeds. Each party received $34,017 with the balance of approximately $100,000 held on trust by the wife’s solicitors. There was dispute about when the husband became aware of the plans for sale and whether the wife forged the husband’s signature on contracts for sale. The wife was cross‑examined on this point and upon the request of counsel I issued her a Certificate pursuant to s 128 of the Evidence Act 1995 (Cth) (“Evidence Act”).
In 2019 the parties undertook renovations and repairs to the Suburb Z property. The wife claimed she organised the work and paid expenses totalling $74,419.53. In late 2019 Suburb Z was sold for approximately $1,800,000. The wife received partial property payment of approximately $300,000 and the husband of $70,000. The parties agree about $680,000 in round figures remains in the wife’s solicitor’s trust account.
In early 2021 three properties were purchased in the names of the children as follows:
(a)2 N Street, Suburb P (“2 N Street”) for approximately $820,000 in the name of Mr B Wen;
(b)L Street, Suburb M (“Suburb M”) for $740,000 in the name of Ms C Wen; and
(c)1 N Street, Suburb P (“1 N Street”) for $820,000 in the name of Ms C Wen.
I note the husband in his trial affidavit states the funds came from early distributions he received from these proceedings and from loans by Ms E. All three of the children’s properties have since been sold during the proceedings pursuant to court order and the total net proceeds of $134,308.68 are currently held in trust by the wife’s solicitors on behalf of the wife. I will return to this issue later in these reasons.
In 2021 the company U1 Ltd was established. As mentioned, the husband explained in his evidence that after the closure of U2 Ltd he wanted his employees to have ongoing work and U1 Ltd was established to provide that employment. He claimed he did not want to be a shareholder in U1 Ltd, but received legal advice that unless he was a major shareholder in U1 Ltd he would have to pay redundancies to all the employees of U2 Ltd, which he could not afford. The solution was for him to take a 70 per cent shareholding in U1 Ltd, but hold those shares on trust for another entity, controlled by Ms E, as shareholder in U1 Ltd.
The wife tendered a copy of a document described as an entrusted shareholding agreement between the husband and JJ Ltd. A copy in Country T language dated 10 October 2019 was tendered together with an English translation, bearing a certification stamp dated 16 August 2021. The accuracy of the translation was not in dispute.
There was no dispute that JJ Ltd is an entity controlled and owned by Ms E.
The agreement provided that JJ Ltd owns 100 per cent of the share capital of U1 Ltd and entrusts the husband to hold 70 per cent of the shares. Clause 2.2 of the agreement is translated as follows:
2.2 [JJ Ltd] has the right to terminate entrustment of [the husband] at any time, and [the husband] shall return entrusted shares to [JJ Ltd] unconditionally. [The husband] shall transfer right of company operation and management right (if available), shareholders' right of voting and others to [JJ Ltd] or a third parted designated by [JJ Ltd] on the day receiving notification from [JJ Ltd], and complete change of industrial and commercial registration within 5 business days.
The provisions of the agreement, as they appear in the translation, also record that JJ Ltd is entitled to dispose of the shares or to transfer the rights attaching to them. The husband is obliged to hold 70 per cent of the shares for JJ Ltd and is unable to deal with them, “including but not limited to transferring, gifting, giving up or setting up pledge”. JJ Ltd retains the right to receive income distributions such as dividends.
PROCEDURAL HISTORY
Some procedural history is relevant.
On 21 March 2019 the wife filed an Initiating Application seeking financial orders in the Federal Circuit Court of Australia (as it was then known). She sought a property division of 65/35 in her favour.
On 10 May 2019 the wife filed an Application in a Case seeking orders for the sale of Suburb Z. On 6 August 2019 orders were made providing that the proceeds of sale, after repayment of the mortgage and costs of sale, be held in the solicitors’ trust account.
On 7 August 2019 the husband filed his Response to the wife’s application for final orders and sought a 50/50 property division.
On 18 June 2020 consent orders were made in relation to an Application in a Case filed by the wife on 20 February 2020. The orders provided for the parties to each receive maintenance payments, $70,000 for the husband and $100,000 for the wife, with both payments drawn from the sale proceeds of real property held in solicitors’ trust accounts. The orders also restrained the husband from transferring, selling or otherwise disposing of his shareholdings in any country. It was further ordered that the issue of expenditure of the repair and maintenance of the former matrimonial home was to be decided at final determination, for which the wife had sought the husband to pay her $32,209.77 being 50 per cent of the expense.
On 30 March 2022 the matter was transferred to the Federal Circuit and Family Court of Australia (Division 1).
On 16 September 2022 the husband filed an Amended Response to Initiating Application seeking 50/50 property division to be achieved by a cash payment from the wife, and with the husband to retain his interest in the Country T property and in his businesses U2 Ltd and G Ltd.
On 24 April 2023 the wife filed a Further Further Amended Initiating Application for Final Orders seeking inter alia that 2 N Street, 1 N Street and Suburb M be sold with her to receive the proceeds and all monies held in her solicitor’s trust account, for the Country T property to be transferred to her sole name unencumbered and for her to receive an unquantified cash adjustment payment from the husband.
On 25 September 2023 consent orders were made between the wife, the husband and the children to sell 2 N Street, 1 N Street and Suburb M. The orders note that there was no appearance by Ms E. The husband and the children consented to any surplus funds from the sale of the three properties after repayment of mortgages and associated sale costs, to be held on trust by the wife’s solicitors and thereafter paid to the wife on a final basis, with the characterisation of such payment reserved to final hearing. The Court noted it was agreed to release the children from the proceedings.
On 17 April 2024 the wife filed an Application – Contempt in which she made allegations of non-disclosure against the husband concerning his business or assets in Country T, and which she contends constitute a contempt of court. In Huang & Wen (No 2) [2024] FedCFamC1F 447 delivered on 18 June 2024, I ordered that the Application – Contempt be stood over to a date after the conclusion of the final hearing. I will not repeat the reasons set out in there, though I observed that at final hearing it was available to the wife to cross-examine the husband and ask the Court to draw inferences adverse to the husband by reasons of allegations of non-disclosure.
On 27 May 2024 the matter was listed for final hearing commencing on 2 December 2024 with an estimate of up to 10 days.
On 17 October 2024 consent orders were made listing the matter for final hearing on 25 November 2024 with an estimate of 10 days.
On 20 November 2024 the parties attended a compliance hearing. The wife was put on notice that at final hearing the husband relies upon his affidavits filed on 25 June 2024, 16 December 2022 and 14 October 2021 for the purposes of non-disclosure arguments only. The wife was ordered to provide the husband with a precis of evidence and particulars as to allegations of fraud anticipated to arise if Ms C Wen and Mr B Wen were called as possible hostile witnesses.
On 25 November 2024 final hearing commenced and ran for eight days with judgment reserved on 4 December 2024.
MATERIAL RELIED UPON
The husband relied upon the following documents:
(a)Husband’s Case Outline filed 19 November 2024;
(b)Husband’s Amended Response to Initiating Application filed 16 September 2022;
(c)Husband’s Financial Statement filed 6 November 2024;
(d)Husband’s affidavit filed 6 November 2024;
(e)Husband’s affidavit filed 25 June 2024;
(f)Husband’s affidavit filed 16 December 2022; and
(g)Husband’s affidavit filed 14 October 2021.
The husband was cross-examined with an interpreter.
As set out in her Case Outline filed 19 November 2024, the wife relied upon:
(a)Wife’s affidavit filed 6 November 2024;
(b)Wife’s Financial Statement filed 6 November 2024; and
(c)Wife’s Further Further Amended Initiating Application filed 24 April 2023.
The wife was cross-examined with an interpreter.
The children were subpoenaed by the wife to attend to give evidence. They complied with the subpoenas and gave oral evidence. An application was made by the wife to cross-examine both of them as unfavourable. I will discuss this later in these reasons.
Both Ms C Wen and Mr B Wen were cross-examined by the husband concerning Mr HH. I will return to this below.
The documents tendered and received into evidence are set out in Schedule 1 to these reasons.
No single experts were appointed in this matter.
COMPETING PROPOSALS
I described the parties’ proposals in summary at the commencement of these reasons. The husband’s proposed final orders per his Amended Response to Initiating Application filed 16 September 2022 is detailed in Annexure “A”, set out at the conclusion of this judgment. The wife’s proposed final orders per her Further Further Amended Application filed 24 April 2023 are set out in Annexure “B”. Neither party provided an updated proposed Minute of Final Orders at the final hearing.
PART VIII
Part VIII of the Act sets out the legislative provisions relating to property orders that may be sought when parties are or were married. The central provision is s 79 of the Act, which gives the Court power to make such orders for alteration of property interests as it considers appropriate.
Section 79(2) of the Act provides that:
The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the factors to be taken into account in considering what order, if any, should be made. These will be discussed in detail below.
In Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) the High Court made clear at [37] it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property (see Bevan & Bevan (2013) FLC 93-545 (“Bevan”) at [72]–[73]).
It should be pointed out that under Australian law there is no “community of property” in assets owned by spouses individually and the question of whether it is just and equitable to make an order “is not to be answered by assuming that the parties’ rights or interests in marital property are or should be different from those that then exist” at the time when the discretion may be exercised (Stanford at [37]–[39], [50]; Wirth v Wirth (1956) 98 CLR 228 at 231–232 and 247–248). Unless and until property rights or interests are adjusted pursuant to s 79, one spouse has no inchoate or other proprietary interest in the exclusive property owned by the other spouse (Bevan at [80]; Lin & Ruan (2021) FLC 94-024 at [41], [48]–[49]; Sarto & Sarto (2022) 65 Fam LR 605 at [19]; Agnarsson & Agnarsson (No 4) [2024] FedCFamC1F 407 at [46]).
After identifying the existing property, the Court must identify and assess the contributions of the parties as referred to in s 79 of the Act, whether examined on a global approach or an asset by asset approach. This is followed by assessment of other relevant factors referred to in s 75 of the Act and determine whether any adjustment is to be made to the contribution entitlements.
Stanford at [40] also made clear that the requirement pursuant to s 79(2) that it would be just and equitable to make orders altering property should not be conflated with the requirements of s 79(4). The requirement to make an order that is just and equitable permeates the entire decision-making process and is not a threshold issue (Martin & Newton (2011) FLC 93-490 at [306]; Bevan at [62], [86]).
Stanford at [41]–[42] held that the very fact of separation may lead to the ready satisfaction of the just and equitable requirement. In most cases, the Court will not need to discuss the s 79(2) issue, because the parties accept it would be just and equitable to make some form of adjustment. That is the position in these proceedings.
The final step is to resolve what order is just and equitable in all the circumstances of the case. Having regard to the language of both s 79(1) and s 79(2) of the Act, the Court is required to make orders which are appropriate, just and equitable (Zao & Lee [2019] FamCAFC 169 at [48]; Aitken & Aitken (2023) FLC 94-142 at [59]). Section 80 grants specific powers to make a range of different orders to adjust property interests.
Section 81 is also relevant, although the Full Court has held it is neither a “head of power” nor an absolute requirement; it reflects a policy of making orders which finally determine the financial relationship between the parties and avoid further proceedings.
Disclosure
As already mentioned, the wife consistently complained about the husband’s disclosure, and has done so during the course of the proceedings. At trial she argued he had failed to account for millions of dollars. As will be explained below, as a result much of the wife’s case about the composition of the balance sheet and ultimately the appropriate just and equitable outcome relied upon these assertions about non-disclosure by the husband. She claimed that the extent and nature of the husband’s assets, financial resources and liabilities are largely unknown because of his recalcitrant failure to comply with his obligations of disclosure. This general contention formed the basis of her argument that the Court should find the husband has significant undisclosed assets, and underpinned a number of arguments about the authenticity of documents.
The husband strongly disagreed. His counsel described the wife’s arguments as “the myth of non-disclosure”. In turn he complained about the wife’s own disclosure about the valuation of CC Ltd, and her relationship with Mr HH.
Determining the wife’s claims about disclosure entails some detailed consideration of the relevant rules and principles. Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“Rules”) makes detailed provision for disclosure. These rules came into effect on 1 September 2021, replacing rules to similar effect, and applied at the time of trial. Rule 6.06 stipulates parties to financial proceedings have a duty to make full and frank disclosure of “all information relevant to the proceedings, in a timely manner” (r 6.01). Rule 6.02 provides for undertakings by parties that “to the best of their knowledge and ability”, they have “complied with, and will continue to comply with, the duty of disclosure”. Both parties have provided such undertakings at several points during the proceedings. Other rules provide specifically for the provision of documents and their use in financial proceedings (rr 6.03, 6.04 and 6.06). Part 6.2 of the Rules sets out detailed procedures for disclosure including production and inspection of documents, and the provision of a list of documents.
To avoid unnecessary repetition, I set out my understanding of many of the relevant principles, summarised in the following propositions. Firstly, the duty and obligations of disclosure are “absolute” and enforce a high normative standard, fundamental to the integrity of this Court’s processes in financial cases under Pt VIII of the Act. Secondly, although described as absolute, the duties of disclosure are confined by relevance, reasonableness and proportionality. Thirdly, the obligation requires disclosure of only those documents in the possession, custody or control of the disclosing party. Fourthly, the statutory duty to uphold the overarching purpose (s 95 of the Act) imposes upon litigants requirements of efficiency, timeliness, cost and proportionality which may serve to limit the scope of arguments about disclosure by obliging a party to assess rationally and carefully not only the materiality and legitimacy of claims about disclosure but their true importance in the overall litigation. Fifthly, the obligations and purpose of disclosure require real proactive and frank conduct by a disclosing party, but are generally not intended to place one party in a position to undertake an unreasonable, overly detailed, unnecessarily fastidious or obsessive audit of another party’s expenditure, dealings and transactions over many years, as opposed to ameliorating the disparity where there is a clear imbalance between parties in their access to relevant financial information (Julien & Perrin (No 2) [2025] FedCFamC1F 50 (“Julien & Perrin (No 2)”) at [14]–[21]; Wei v Xia (No 5) (2023) 67 Fam LR 421 (“Wei v Xia (No 5)”) at [168]–[175]).
Sixthly, the possible consequences of a failure to disclose can include a finding that hidden assets exist, or taking account of the likely existence of other assets under s 79(4)(e) of the Act (s 75(2)(o) of the Act), or an order beyond the ascertained property, to achieve substantial justice relative to the non-disclosure or an order that all known assets be awarded to the innocent party (Wei v Xia (No 5) at [175]). The question is ultimately one of demonstrating injustice to a vulnerable party in need of the protection of the duty to disclose (Stopford Malloy & Malloy [2021] FedCFamC1F 123 at [22]–[24]). However, as the Full Court pointed out at [87] in Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006 the achievement of justice must be relative to the subject non-disclosure.
It is important to emphasise that to support a factual finding that assets exist beyond the known asset pool or a conclusion that notional property should be added back in the assets of a non‑disclosing party, by inferential reasoning, the claimant must adduce evidence which engenders a state of actual persuasion in the mind of the tribunal of fact and this may be unattainable if the evidence is “slight, general or scanty” (Weiv Xia (No 5) at [162]). Where an inference is relied upon “it must be more than an inference of equal degree of probability with other inferences, so as to avoid guess or conjecture” (Seltsam Pty Ltd v McGuiness (2000) 49 NSWLR 262 at 275–276, [85]–[88]; Lithgow City Council v Jackson (2011) 244 CLR 352 at [94]). In substance, the effect of the jurisprudence in this Court concerning non-disclosure is to enhance the probability of the inferences available from non-disclosure adversely to the defaulting party. Having said that, the degree of persuasion will be influenced by the overall probabilities of the situation assessed from the combined cumulative weight of all evidence, including circumstantial evidence, as a unified whole (Transport Industries Insurance Co Ltd v Longmuir [1997] 1 VR 125 at 128; Wei v Xia (No 5) at [163]–[165]).
As the trial evolved it became apparent that the husband disputed allegations of non-disclosure and that some allegations were overstated. The husband filed three affidavits on 16 December 2022, 14 October 2021 and 25 June 2024 which he relied upon at trial and which gave extensive responses to allegations of non-disclosure. The wife tendered a copy of a further affidavit sworn on 25 August 2023 in which the husband claimed compliance with his duty of disclosure. He claimed the wife’s requests for disclosure were unreasonable, not only in scope but because her requests were repetitive and based upon assumptions about the existence of business activities and property which were entirely wrong. He also tendered a bundle of correspondence between 2021 and 2024 (Exhibit 20) which showed that there has been extensive disclosure by him over a period of about four years to the various solicitors engaged by the wife. It was also tolerably clear by the end of the trial that over the history of the proceedings the husband likely provided disclosure which did not make its way to the current solicitors for the wife. The reasons for this may have been found in the fact the husband changed solicitors several times. But in any event, the evidence did not satisfy me that the wife sustained many of her allegations about disclosure.
Having said that, it was also true that in cross-examination, the husband conceded that he wilfully failed to disclose bank statements for a KK Bank account held by U2 Ltd, because there were so many he wanted to avoid the translation cost, and he feared the wife would use commercial information about clients disclosed on the bank statements to harass clients, the implication being this would damage the business. He gave evidence that G Ltd used a bank in Country LL called MM Bank and also agreed that he had not provided bank statements for the relevant MM Bank account after 2020. Again the husband conceded in cross-examination that he decided not to disclose documents relating to G Ltd for reasons of commercial sensitivity, and because he did not want the wife to be able to get an insight into the bank accounts. He also claimed that laws in Country T prevented the disclosure of commercial information outside Country T, but provided no persuasive evidence of those laws.
There also remained a number of categories nonetheless where the wife focussed as specific failures of disclosure, and which should be the subject of discussion here. Others will be discussed more fully when I come to the disputes about the balance sheet.
The wife relied upon the translation of a Country T report dated 5 November 2023 which appeared to be similar to an Australian ASIC search. This document was not entirely clear. It recorded that the husband was at the date of the document the sole shareholder, but showed the husband had been replaced as principal by Mr O from late 2019. The registration status of U2 Ltd was listed as “Existing (in business, open, registered)”. The document records that from mid-2022 the company had been removed from the List of Abnormal Operators. The wife argued it should be inferred from the “Explanatory Statement” document (above at [31]) that U2 Ltd continued operating after 2019 with six employees. She also pointed to evidence that the husband received some payments from U2 Ltd in 2020 and 2021 into #...51 after he claimed U2 Ltd had ceased operations. She tendered the affidavit of the husband sworn 24 August 2023 in which he explained transfers into his CBA account #...51 in January 2020 were for currency exchange purposes between U2 Ltd and G Ltd. In cross-examination the husband claimed this was incorrect and the reference to U2 Ltd should be U1 Ltd. When questioned on the payments into #...51, he claimed the money came from U1 Ltd in Country T currency, being foreign currency payments through a foreign exchange entity, F Company, for tax breaks as reason for why, being a person who only holds shares on trust in U1 Ltd, some $550,000 would pass from the company to his personal account in Australia to G Ltd. However, the next day under cross‑examination he denied that he had said the payments came from U1 Ltd, and explained the monies came from U2 Ltd during a period of run-off after it had ceased operations. He said in cross-examination that after 2019 “…there were still remaining activities that had to be finalised, that had to be conducted ... It was a – like an extension or a grace period that was given by the authorities to wrap things up, to finalise things” (Transcript 27 November 2024, p.57 lines 38–40). The wife referred to the 2021 financial accounts of U2 Ltd (Exhibit 7) which showed an income of 43,000 Country T currency but argued such modest income was not the correct financial position, though she provided no evidence that this was not the case. She argued it was evidence inconsistent with the husband’s statements that all of U2 Ltd’s business had been transferred to U1 Ltd and that it went to issues of credit and disclosure.
From this evidence the wife argued the Court should infer that U2 Ltd has remained in business and is controlled by the husband. On the basis of those inferences she argued a further conclusion should be drawn that the husband has failed to make proper disclosure about the financial affairs of U2 Ltd. I do not accept these arguments. The husband had disclosed his sole shareholding in U2 Ltd and said he was a director by at least 14 June 2024, as well as the fact U2 Ltd ceased operations in 2019, and stated he was unable to obtain copies of its bank accounts from that time. He also plausibly claimed that the impact of the Covid-19 pandemic created serious obstacles to obtaining documents from Country T while he was in Australia.
While the evidence is unclear, it is also general and scanty and on the basis of the overall probabilities, I accept that the husband’s explanation that U2 Ltd made some residual payments after it ceased operations in 2019 is plausible and more likely than the wife’s argument that it remains a functioning business. But even if it be inferred that U2 Ltd continued to be a functioning entity, I am not persuaded the evidence is sufficient to establish the husband controls U2 Ltd or that it is inconsistent with the husband’s argument that there had been a significant reduction in activity by U2 Ltd and the subsequent establishment and increase in activity by U1 Ltd. I do not reach a state of actual persuasion either that U2 Ltd continues as an entity with a functioning business or that the husband controls it. I note here that I reached the same view about U1 Ltd and the wife’s contention that the husband “has some degree of control or involvement in [U1 Ltd] now”. I discuss U1 Ltd in more detail below (at [123]–[129]) and am not satisfied it is a company owned or controlled by the husband.
The wife pointed to entries in bank statements which she claimed raised an inference that the husband held undisclosed accounts with NN Bank OO Bank and PP Bank. I discuss the alleged NN Bank account below at [115]. She cross-examined the husband on two bank transactions received by Mr B Wen in 2019 with the descriptor “[Mr Wen PP Bank]”. She argued it should be inferred from the transaction description that the husband owned an undisclosed PP Bank account from which funds were transferred to Mr B Wen. The husband claimed the description referred to his name and suggested the funds might have come from a Commonwealth Bank account, though he provided no evidence for this. A subpoena to PP Bank Australia showed the husband does not have any account with that bank and he denied owning an account with PP Bank New Zealand. I am not persuaded the wife has established any relevant non-disclosure by the husband in this regard permitting more robust inferences against the husband. Again the evidence relied upon by the wife is equivocal and open to a number of inferences of equal weight. Her arguments that the husband owns an undisclosed PP Bank account are little more than speculation.
The wife cross-examined the husband on two transfers for USD9,977 and USD13,000 received into CBA #...51 in July 2020 and June 2023. The transaction descriptions contained a customer reference number which she claimed pointed to the husband owning an account with OO Bank. The husband denied owning an account with the OO Bank and denied the reference referred to OO Bank. However, he could not recall what account the money was received from. The wife contended the husband’s lack of recall and his alleged issues of credit as a witness meant that it should be inferred he had an account with OO Bank. I do not agree. The weight of this evidence is not sufficiently strong to raise either non-disclosure or the existence of an OO Bank account as an issue (Wei v Xia (No 5) at [149]).
The wife cross-examined the husband at length about payments into and out of CBA account #...51 between January 2020 and early 2023, to suggest $300,000 was unaccounted for and the husband drained the account by many small withdrawals. However, the documents pointed to by the wife did not support this contention. It was clear amounts were paid to G Ltd in City K from this account in that period. However, the husband said very little about G Ltd in his trial affidavit, and the income he received from it. I referred to the fact the husband agreed he had not disclosed any bank statements for G Ltd held with MM Bank in Country LL after 2020. By the end of the trial he had produced a City K tax return which disclosed an income in City K of 200,000 local currency between 1 April 2023 to 31 March 2024. The husband agreed in cross-examination however that he received AUD95,094 into #...51 between 1 July 2023 and 30 May 2024 from G Ltd. I infer from this evidence that G Ltd will continue to be a material financial resource for the husband.
There were clearly deficiencies in the husband’s disclosure, and movements of funds over many years, not all of which were explained by the husband. I discuss further examples below in addressing contentions about adding back property to the balance sheet. As mentioned, he also conceded a failure to disclose.
Having considered the wife’s arguments and evidence carefully, I am not satisfied that the wife has demonstrated defaults by the husband as broadly as she claimed. There are plainly gaps in the information provided to the wife but it is not clear that this is the result of deliberate concealment or suppression of information. It is inevitable that where the parties lived separate lives in Country T and Australia over many years, and in the ordinary passage of time and the vicissitudes of life, matters will be forgotten and documents not retained without any malign scheming by one spouse party or another. Gaps and incompleteness in disclosure do not of themselves demonstrate a breach of the duty to disclose, nor a pattern of deliberate obfuscation or a plan to hide assets, nor the existence of hidden assets. “The requirements of efficiency, timeliness, cost and proportionality [in s 95 of the Act] may serve to limit the scope of arguments about disclosure by obliging a party to assess rationally and carefully…the materiality and legitimacy of claims about disclosure” (Julien & Perrin (No 2) at [20]). Many of the allegations of non-disclosure ultimately amounted to little more than the assertion that the husband had failed to produce documents which the wife wanted or needed to prove her overall case. The obligation to disclose does not extend that far. But more to the point, the wife failed to engender actual persuasion that the deficiencies in disclosure supported the inference of hidden assets or undisclosed financial resources of any significance beyond the conclusions already expressed above.
ASSETS, LIABILITIES AND FINANCIAL RESOURCES AT THE DATE OF THE HEARING
I turn then, to the identification of the parties’ property, liabilities, and financial resources at the date of the hearing, according to ordinary principles of law and equity.
The balance sheet tendered by the parties went through several iterations during the trial. The final updated joint balance sheet tendered by the parties during trial became Exhibit 13. A number of items on the balance sheet remained in dispute. In relation to these disputed items, I express my conclusions as follows, noting the reference to item numbers is a reference to the item number on Exhibit 13.
Item 1
The wife’s solicitors hold on trust for the parties the proceeds from the sale of Suburb Z. There was slight disagreement between the parties about the exact amount held, the wife said it was $682,881.05 and the husband claimed $688,057.10. The wife said the difference in value is likely attributable to solicitors’ fees for disposal of the property. I accept this explanation as more probable. I accept the wife’s value.
Item 2 – Funds held on trust from the sale of the children’s properties
Item 2 is $134,308.68 in proceeds from the sale of the children’s properties held in the trust account of the wife’s solicitors. By the end of the trial this item was not contentious. There was no dispute that these funds are the property of the wife by reason of consent orders made on 25 September 2023, when Ms C Wen and Mr B Wen were second and third respondents. Order 22 made on that date released them from the proceedings and provided:
22. The 1st, 2nd and 3rd respondent consent to any surplus fund from the sale of the 3 properties being held on trust in the solicitors for the wife trust account and thereafter being paid to the wife on a final basis, and that the characterisation of this payment is reserved to a final hearing.
This item will be included on the balance sheet as property of the wife.
It was the wife’s interlocutory case in Huang & Wen [2022] FedCFamC1F 194 that the husband engaged in fraudulent and collusive conduct with the children to dissipate marital assets through the purchase of the three properties. The wife sought to pursue this contention again at trial, for the purpose of impugning the credit of the husband. It is convenient to deal with this part of the evidence here, since it relates to item 2.
The husband states he contributed the funds for the deposits, stamp duty and other expenses to purchase the properties. In his trial affidavit he set out he paid a total sum of approximately $306,539.25 as follows:
(a)Initial deposit of $82,000 for 1 N Street;
(b)Settlement sum of $40,889.32 for 1 N Street;
(c)Initial deposit of $74,000 for Suburb M;
(d)Settlement sum of $27,474.93 for Suburb M; and
(e)Initial deposit of $82,175 for 2 N Street.
The husband claimed he borrowed 700,000 Country T currency and USD100,000 from Ms E between 2019 to 2020 and claimed these loans were to pay the above sums to or for the children to purchase the properties. I will discuss this claim under item 31 below.
As mentioned earlier, the wife called Ms C Wen and Mr B Wen as witnesses in her case and applied during the oral evidence of Ms C Wen to question her as though in cross-examination pursuant to s 38(1)(c) of the Evidence Act, that is, she had made a prior inconsistent statement.
It was conceded by counsel for the wife that the proposed questioning was only relevant to the credibility of Ms C Wen in relation to three documents which were apparently used in support of an application for mortgages to complete the purchase of Suburb M and 1 N Street. The issue to which these documents were said to be relevant was the wife’s contention that Ms C Wen and the husband colluded to concoct the three documents and this was said to be evidence of the husband’s broader proclivity to manufacture documentary evidence.
The three documents were a credit assessment summary from the Commonwealth Bank, a payment slip for employment with a company called H Pty Ltd, and a bank statement for an account held with NN Bank. The husband had been cross-examined about these documents and denied any knowledge of them or the circumstances of their creation. Ms C Wen also denied ever working for H Pty Ltd, completing the details of the credit assessment or holding an account with NN Bank. However, in an affidavit she swore in the proceedings on 24 February 2022 she claimed to have been employed by H Pty Ltd from 2017. This was the relevant prior inconsistent statement. Leave was granted for the wife to question Ms C Wen as if cross-examining in relation to the three identified documents.
However, the questioning of Ms C Wen went no distance to establishing any involvement of the husband in the creation of the documents, or in impugning her credibility. She claimed to know nothing about the content of the credit assessment summary, and the bank account held with NN Bank. She said that she swore the affidavit in 2022 which referred to H Pty Ltd because it had been drafted by lawyers and she was told by them the H Pty Ltd payslip existed even though she knew nothing about H Pty Ltd. She claimed that at the time she was receiving harassing emails from the wife.
This evidence was not entirely clear or entirely convincing but it makes no difference. Whatever else may be said about it, the evidence of Ms C Wen demonstrated no basis to infer some fraudulent collusion between Ms C Wen and the husband, nor any connection between the husband and any of the impugned documents. In cross-examination he denied any knowledge of them. The wife established no basis to reach a different conclusion.
Mr B Wen was similarly called as a witness in the wife’s case. He was questioned in chief concerning documents relating to the purchase of 2 N Street, and another application to cross‑examine him was made. This was refused, because the wife established no basis to treat him as an unfavourable witness. His evidence in chief established nothing to connect the husband to documents relating to the purchase of 2 N Street nor again any collusion between him and Mr B Wen.
I am not satisfied that the amount of $306,539.25 was anything other than financial support which the husband gave to the parties’ children to purchase the three properties. I do not accept such support constitutes an example of the husband attempting to dissipate “marital assets”. In any event, the net proceeds of sale have been returned to the balance sheet.
Item 3 – Country T property
The parties disputed both the valuation and ownership of the Country T property.
The wife initially contended the Country T property was wholly owned by the husband at a value of $1,200,000. By the end of trial it was agreed the property was jointly owned by the husband and Ms E, with the husband’s half share being an asset acquired by the husband during the marriage. However the wife argued that the Court should find Ms E had no equitable interest in the property and sought as final relief an in personam order for the husband to transfer the entire property to her unencumbered in Country T.
The husband argued he owns the property equally with Ms E. He says he purchased the Country T property in 2013 for approximately 2,100,000 Country T currency with Ms E and that he contributed the 20 per cent deposit. He asserts his 50 per cent share in the property is valued at AUD325,000. As mentioned, there was no dispute that a mortgage was secured against the property in Ms E’s name only though the husband’s evidence was that he remains liable for one half of the mortgage, which had at trial a debit balance of the equivalent of approximately AUD46,411, with the total value of the mortgage put at 400,000 to 500,000 Country T currency. The husband stated he makes ad hoc lump sum payments towards the mortgage from his Country T bank accounts, and possibly from his credit card accounts and some cash. I will return to this asserted liability later.
There was no evidence of the laws of Country T which governed the title arrangements of this property in Country T. The suggestion that Ms E has no beneficial interest simply purports to apply Australian legal or equitable concepts to property held in Country T. In my view, this cannot be done on the basis of assumption, and expert evidence was necessary (Wei & Xia (No 5) at [233]–[238]). I am not persuaded that the wife has discharged her onus to establish on the balance of probabilities that the husband owns the entire property. I find it is owned jointly by the husband and Ms E.
No single joint expert valuer of the Country T property was agreed despite court orders to do so. Each party accused the other of causing the ordered valuation process to fail. I am unable to resolve this particular dispute on the evidence. Nonetheless, the husband relied upon a valuation report from May 2019 attributing a value of approximately $650,000 for the property. The wife argued this report was outdated and could not be relied on. For her part, she relied upon a valuation report dated only one year later in October 2020, attributing a value of almost $1,200,000. The evidence of value is clearly unsatisfactory, but since the wife’s evidence is marginally more recent I will accept her proposed value of $1,200,000. Accordingly, the husband’s one half share will be included on the balance sheet with a value of $600,000.
Items 6 to 9 – Bank accounts
These items are four bank accounts allegedly held by the husband in Australia and overseas.
The wife claimed the husband had failed to make adequate disclosure about item 6. She claimed he gave no disclosure after 2021 when the value was $492.29. She tendered bank statements produced on subpoena supporting this value as at 2 June 2021. The husband claims the value is now nil. No evidence was provided as to the current value of this account. Item 6 will be excluded.
The husband denied holding any of the bank accounts which are items 7, 8 and 9.
The wife sought to include in the balance sheet an item for a bank account of the husband held with NN Bank, mentioned above at [87]. She claimed the balance of the account was unknown because of the husband’s deficiencies in disclosure. The husband in cross-examination at first claimed he had never held an account with NN Bank in City K. However, in correspondence from his solicitors on 22 October 2019 it was stated the husband’s NN Bank account had been dormant for several years but he was in the process of obtaining the statement. When confronted with this evidence in cross-examination he said he may have had a NN Bank account in City K in the 1990s which the bank closed because the fees charged exceeded the available balance. His counsel pointed out that in correspondence from new solicitors in May 2024, the admission of the existence of the NN Bank account was corrected. The wife did not accept this and argued it should be inferred from the first letter that the husband failed to disclose the existence of the account. I do not consider the solicitor’s letter from 2019 as sufficient to establish the existence of the alleged bank account. I am not persuaded the husband has failed in his disclosure in relation to any such account. I am not satisfied on the evidence that the husband currently owns an account of any value with NN Bank. Item 7 will be excluded.
The husband denied owning bank accounts with PP Bank and OO Bank. The wife issued subpoenas to PP Bank Australia and to the Sydney branch of OO Bank, neither had a record of an existing account of the husband. As discussed above at [87]–[88] the wife cross-examined the husband on several bank transactions and presented a case reliant on inferences to be made regarding the existence of the accounts. I am not persuaded the wife established a factual basis for the current existence of accounts held by the husband with PP Bank and OO Bank. Items 8 and 9 will be excluded.
I am not satisfied the wife has demonstrated any meaningful failure of disclosure in relation to these accounts, in the sense I am persuaded they support a conclusion of hidden assets or financial resources.
Items 10, 11 and 12
These three items are the corporate entities U2 Ltd, U1 Ltd and G Ltd initially said by the wife to be valued at $5,000,000 each, though she later conceded these values could not be sustained.
There was no expert evidence valuing these entities and the wife conceded during cross‑examination her valuations were a “guess”. The wife claimed in cross-examination that her guesses as to value were based upon her understanding of the turnover of each company. She was vague about where she obtained her information from about the turnover other than a broad reference to financial records, which implied some disclosure had been made. The wife claimed she was left with no option but to guess because the husband had failed to make adequate disclosure.
The correct approach to be applied to the resolution of a valuation dispute is a common sense endeavour after consideration of all material to fix a value satisfactory to the mind of the Court as representing the value (The Commonwealth v Milledge (1953) 90 CLR 157 at 161–162; Mallet v Mallet (1984) 156 CLR 605 (“Mallet”); Phillips and Phillips (2002) FLC 93-104).
The husband asserted his interest in each company had a nil value.
I have already found that the husband no longer controls U2 Ltd and more likely than not it has ceased operations. But in any event, it is hard to see how there is a real dispute here when there is no expert evidence about value, and the only assertion of value is a guess by the wife based upon no expertise and what seemed to be no more than a cursory examination of the turnover of U2 Ltd before it ceased operations. There is no persuasive material at all in relation to U2 Ltd which can be assessed in a common sense manner. I am not persuaded the wife has demonstrated a factual basis to infer U2 Ltd continues to have any present value. I will exclude it from the balance sheet.
The husband’s interest in U1 Ltd, if any, raised numerous questions, few of which received useful attention in submissions. It may be open to this Court to find as a fact that the shareholding of the husband in U1 Ltd is property of a party to the marriage within s 79. As explained earlier, the husband claimed his shareholding in U1 Ltd is subject to an entrusted shareholding agreement which in effect gives him no interest or rights to any income such as profit distributions from the company. The wife put to the husband that the entrusted shareholding agreement was a “concocted story” about U1 Ltd prepared by him and Ms E. The husband denied this.
I summarised earlier some salient elements of this agreement (above at [38]–[41]). The “execution, effectiveness, interpretation and performance” of the agreement are also specifically agreed to be governed by the laws of Country T (cl 9.1). This choice would, according to Australian law, cause this Court to apply Country T law as the proper law of the contract (Akai Pty Ltd v People’s Insurance Co Ltd (1996) 188 CLR 418 at 440–442), including possibly whether it was impugned by fraudulent conduct according to Country T law. But there was no evidence of Country T law, including any evidence about the legal effect of the entrusted shareholding agreement.
Be that as it may, the wife bore the onus of adducing evidence sufficient to raise an issue that the agreement was fraudulent or a concoction in the sense that it took the form of a legally effective transaction but which the parties intend should not have the apparent, or any, legal consequences (Equuscorp Pty Ltd v Glengallan Investments Pty Ltd (2004) 218 CLR 471 at [46]). Rules of evidence are procedural and governed by the law of the forum (John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 574, [192]). To prove a case of fraudulent conduct the wife had to satisfy the balance of probabilities test having due regard to the gravity of the matters alleged (s 140(2)(c) of the Evidence Act), enabling this Court to feel an actual persuasion as to the existence of the alleged fraudulent conduct (Briginshaw v Briginshaw (1938) 60 CLR 336 at 361). I accept that statements about the strength of the evidence necessary to establish so serious a matter as fraud do not refer to standard of proof but should be understood as merely reflecting a conventional perception that members of Australian society do not ordinarily engage in fraudulent or criminal conduct and a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct (Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 at 171). Although it may fairly be said the husband, who lives in Country T, is not obviously still a member of Australian society, no reason was suggested that the same conventional perception about fraudulent conduct should not apply to him. In cross-examination he stated the agreement was prepared by a Country T lawyer, was notarized in front of a lawyer at a law firm, which he named, and it was legally valid.
The wife’s evidence did not satisfy the balance of probabilities that the entrusted shareholding agreement was concocted. She did not point to any convincing evidence which raised the inference that the document was a sham to defeat the claims of the wife or lacked the legal effect which it appeared to have on the basis of the translation. She relied primarily on the date of the agreement and the general assertion that U1 Ltd was in truth some form of “phoenix” company, risen from the ashes of U2 Ltd and controlled by the husband. It is true that the husband did not call Ms E as a witness in his case. But even if I infer her evidence would not have assisted him, this does not permit a finding that the entrusted shareholding agreement is a sham or concoction. The wife does not create an issue requiring an evidentiary response from the husband merely by assertion. I see no basis to conclude the entrusted shareholding agreement should be treated as a sham or fraudulent in some way. The wife fails in proving any such contention.
Since the entrusted shareholder agreement is in evidence, and its terms have been translated, in the absence of any expert evidence about its interpretation according to Country T law, the Court is left in the position where the only option is to draw inferences from the available translation (Wei v Xia (No 5) at [230]), the accuracy of which was not put in issue by the wife. That evidence satisfies me that even if it be held that the shares in U1 Ltd are property of the husband for the purposes of s 79, his capacity to deal with them and the rights and obligations he has to Ms E in respect of them demonstrate they have no value to the husband. For the same reasons, the wife’s attempt to taint the husband with a failure to disclose financial material from U1 Ltd after 2020 does not have any force, together with the fact he said in cross-examination that he had no control over U1 Ltd and could not provide such documents. In addition, the husband claimed in cross-examination that he was advised by lawyers that he could not send such material out of Country T. The wife did not put this in issue by competing evidence.
But in any event, there was no evidence of the value of the shareholding at all which is another reason it could only be taken into account in a nominal way.
I will exclude the husband’s shareholding in U1 Ltd from the balance sheet.
G Ltd in City K is in a different category. The husband conceded it is an operating business in which he has an interest and which gives him income. However, putting aside the wife’s guess which according to her own evidence is an unfounded opinion, there is no basis to attribute any value to the husband’s interest in G Ltd. I will exclude it from the balance sheet but take it into account as his financial resource under s 79(4)(e).
Item 13
Item 13 is the company CC Ltd owned and founded by the wife. The husband claimed the wife failed to disclose a valuation for the company. The wife asserts the value of the company is nil and stated the company ceased business in 2015 and closed in 2016. I accept this is correct and item 13 will be excluded.
Item 14
Item 14 is a car owned by the wife that she values at $2,500. The husband first stated the value is unknown, then later conceded it. I accept the wife’s value.
Added Back or Notional Property
The parties agree that a number of property distributions made during the proceedings should be added back as notional property. It was agreed the wife had received $334,017 and the husband had received $104,017. I will include items 15 to 18 as agreed add backs.
The wife also seeks to include as notional property of the husband a number of large amounts said to be prematurely removed from bank accounts. These are items 19 to 21 and item 26. The husband claims there should be added back notional property of the wife. These are items 22 to 25.
To determine these disputed claims it is convenient to set out some applicable principles. It is well settled that adding back property is exceptional and may be appropriate where the parties have expended money on legal fees, where there has been a premature distribution of matrimonial assets, or “waste” or wanton, negligent, or reckless dissipation of assets designed to reduce the property pool (Candle & Falkner (2021) FLC 94-069 at [52]–[58]). Nonetheless, adding back non-existent property is problematic because it can have a distorting impact on the reality of existing property available for division, to which proper consideration must be given (Bevan at [79]; Vass v Vass (2015) 53 Fam LR 373 (“Vass”) at [139]).
Adding back property reflects a decision that, exceptionally, in the particular circumstances, justice and equity require it, for example, to address the inherent unfairness where but for the impugned expenditure the property interests available for division would be significantly greater (Watson & Ling (2013) FLC 93-527 at [29]–[34]). In cases that are not “exceptional”, justice and equity can be achieved not by adding back, but by taking up the same as a relevant s 75(2) factor which is, perhaps, “technically more correct” (Bevan at [79]; Trevi & Trevi (2018) FLC 93-858 (“Trevi”) at [30]; Vass at [138]–[139]).
It is important to remember parties do not “go into a state of suspended economic animation” at separation and are entitled to reasonably conduct their affairs and expenditure post‑separation in a manner that is consistent with properly getting on with their lives (M & M [1998] FamCA 42 at [2.11]; C & C [1998] FamCA 143 at [46]; Chorn and Hopkins (2004) FLC 93-204 at [24]; Trevi at [29]).
There needs to be some assessment of the reasonableness of the relevant expenditure (Omacini & Omacini (2005) FLC 93-218 at [39]). For example, reasonable living expenses are not usually added back (Gilmour & Hofte (No 2) [2024] FedCFamC1A 9 at [18]).
Adding back emphasises the point that satisfying the respective requirements of s 79(2) and s 79(4) of the Act to do justice and equity can require a “balance sheet” exercise, “so as to include the value of the dissipated property or expended sums within the total value of the parties’ existing interests in property, and to credit the value of same against the assessed entitlement of the dissipating or spending party” (Trevi at [47] per Murphy J).
Items 19 to 21
Items 19 to 21 are addbacks sought by the wife for withdrawals made by the husband from bank accounts in Australia and overseas, both before and after separation. She claimed the withdrawals were premature distribution of matrimonial assets and that the total sums withdrawn and the whereabouts of the funds remain unknown. However, the wife did not put a clear value on any of these items, making it difficult to add back any specific amount. However, since these items are part of her wider case about non-disclosure it is appropriate to discuss them further at this point.
She said the husband received from external sources some $850,000 into CBA #...51 between January 2020 to early 2023, and that he withdrew approximately the same amount during this period. She put to the husband that though he had claimed to be in financial difficulties in 2020, between January to May 2020 he received some $500,000 into #...51. She accepted evidence of MM Bank remittance advice that showed the husband had made two transfers to G Ltd totalling some $500,000 which correlated to the equivalent deposits into #...51 in 2020. The wife contended however, that there remained about $300,000 left unaccounted for and put to the husband that there was no “third transfer” of the funds to MM Bank, though it was not obvious on the face of the bank records that there was a sum unaccounted for. The husband maintained during cross-examination that money had been transferred into #...51 from the foreign exchange entity, and as it was company money it was then transferred out of the account. Despite the bank statements description stating “withdrawal”, he said that they were “transfers”. He set out in earlier affidavits that disclosure was made by his solicitors to the wife in 2021 that the flow of money into and from #...51 were for purposes of currency exchange for his companies’ cash flow and business requirements during the Covid pandemic, and that the money was not withdrawn for personal use (Exhibit 3, p.674, paragraph 14). In a letter dated 14 October 2021 (Exhibit 20, p.76) the husband disclosed to the wife’s solicitors an explanation accounting for the “alleged $780,000” transfer from #...51. The letter explains $249,066 was transferred from #...51 to the husband’s Net Saver account #...76 on 28 February 2020, and then returned to #...51 on 2 and 19 March 2020, and suggested the wife may have double counted and that the total amount credited to #...51 was instead $550,000. That amount was, as mentioned, accepted by the wife as having been transferred to G Ltd. In other words, funds moved in and out of the account, which does not itself demonstrate dissipation. I am not satisfied the wife has established item 19 should be added back.
Regarding items 20 and 21, the wife made claims that the husband diverted large sums of money from his companies to his KK Bank #...21 and QQ Bank #...82 accounts which he then withdrew between 2016 to 2019. She contended the money was a “marital asset” and should be added back as its whereabouts, despite many years having passed, are unknown, because of the husband’s failures of disclosure. She pointed to the growth in revenue of U2 Ltd from 18,000,000 Country T currency in 2016 to 24,000,000 Country T currency by 2018 (Exhibits 8, 9 and 10) and suggested there were millions of dollars unaccounted for in the flow of funds between the companies which had passed through the KK Bank account to which the husband had access. She asked that an inference be drawn as to the financial resources available to the husband prior to separation, and as an indication of his current accessible resources. The husband’s solicitors on 23 August 2023 sent a letter to the wife stating that the husband did not make withdrawals from his KK Bank account, rather the transactions reflected his foreign exchange trading activities between October 2016 and November 2019 (husband’s affidavit, tab J, p.166). The wife cross-examined the husband on cash withdrawals from the KK Bank account and suggested he withdrew the equivalent of AUD83,000 per year from 2016 to 2019, and that the application of the funds were not disclosed (transaction history in wife’s affidavit, p.283–370). The husband said the withdrawals had likely been to bring cash when visiting Australia, for family expenses and business purposes. The wife did not claim that the monies were expended unreasonably, nor did she clearly identify why money long since expended should be added back. Rather, she maintained that the husband’s lack of disclosure made his real financial position unascertainable. She also tendered bank statements for QQ Bank #...82 account from March 2017 to July 2021 (Exhibit 3, p.57–160) and said she had received disclosure up to 2024 which showed the account balance to be minimal.
I do not accept the wife’s arguments about these items. Characterising property which is not jointly owned by the spouse parties as a “marital asset” can create confusion. As mentioned, the starting point, as settled in Stanford, is to identify the parties’ property according to ordinary legal and equitable principles at the time of trial, and there is no community of property by reason of marriage, so once property is held exclusively by one spouse, there is no occasion to characterise it as “marital” or “matrimonial property” (Duarte & Morse [2019] 59 Fam LR 323 at [529]–[532]). While I accept there are gaps in the information about the movements of money through these accounts, I am not satisfied the wife has established dissipation of, as opposed to simply transacting with, millions of dollars over many years by the husband primarily in the ordinary course of business. On the contrary, the wife’s arguments lack reasonableness and proportionality. The husband lived in Country T for many years while the wife remained in Australia, and conducted his business activities which generated income, a material proportion of which he sent to Australia for the benefit of the wife. The evidence shows that substantial funds passed through bank accounts controlled or owned by the husband. But the nature of the husband’s business meant that was inevitable. This does not mean the husband is obliged to account for every transaction or that failure to do so demonstrates quantifiable hidden assets which can realistically be added back. I am not satisfied the wife has established items 20 and 21 should be added back.
Items 22 to 24
Items 22 to 24 are addbacks sought by the husband for transactions made by the wife for “private unauthorised purpose” from the Westpac joint account, home loan account and offset account. It was not disputed that the parties could operate the joint accounts individually, however the husband contended the wife’s withdrawals were not for marital financial purposes and therefore should be added back.
The wife agreed she spent $9,511.35 (item 22) in credit card payments for travel expenses for herself and Mr HH but argued that half the money was spent on herself so only $4,755.68 should be added back. I will accept the wife’s figure for this item.
Item 23 is for $119,638.33 in withdrawals from the home loan and offset account and was substantially comprised of one withdrawal of $80,000 in 2018. The parties did not agree on who withdrew $80,000 but acknowledged that bank statements for #...15 showed $80,000 was withdrawn on 6 April 2018 and re-deposited on 11 April 2018. This leaves approximately $40,000, of which the wife agreed only $7,126 should be added back, this included for payments of legal fees, as the remaining “unauthorised” payments were for personal expenses including a holiday overseas. I am not satisfied that the husband established any amount above $7,126 fell within an exceptional category so as to justify adding back more than $7,126.
Item 24 is for $26,071.05 transferred to Mr HH between March 2017 to August 2018, and was agreed by the wife.
Items 25 and 26
Items 25 and 26 relate to the use by both parties of funds in the home loan and offset accounts for their own businesses after separation. Item 25 is for $44,600 for transfers by the wife to AA Pty Ltd in May 2017 and April 2018. Item 26 is for $65,020 for funds transferred by the husband to G Ltd in May 2017. AA Pty Ltd no longer exists and the value of the husband’s existing interest in G Ltd is unknown and excluded from the balance sheet. Both parties engaged in similar behaviour. I am not satisfied either of these amounts should be added back.
Liabilities
Items 27 and 28
Items 27 and 28 are liabilities of the wife for $49,810.87 and $4,852.46 for ANZ accounts #...75 and #...95 under AA Pty Ltd. The wife continued to use the company credit card for living expenses after the business was deregistered. The husband conceded these debts should be included as liabilities of the wife.
Item 31
The husband claimed he owes Ms E $286,052.61. He gave evidence that she provided funding over a period of months which the husband used to assist Mr B Wen and Ms C Wen to purchase their three properties. He relied upon two acknowledgements of debt, one for 700,000 County T currency, dated 30 April 2019 and the other for USD100,000 dated 19 September 2020 as evidence supporting the existence of the alleged loan. He was cross-examined at some length about these documents and it was put to him that they were concocted by him with the collusion of Ms E for the purposes of the proceedings, which he denied.
The evidence of the husband about his liabilities to Ms E was confusing and unconvincing. However, his cross-examination showed that Ms E paid into his account no less than six deposits of USD4,977, totalling AUD40,226.69, between 29 October and 5 November 2020. An agreed summary of transactions between the husband and Ms E showed that between 2016 and 2022, Ms E had deposited a total sum of approximately $237,626.70 into the husband’s various bank accounts, and that the husband had transferred $238,918.40 to Ms E. The wife contended any loan to Ms E has been repaid by the husband. The husband denied all monies lent by Ms E had been repaid. The evidence is sufficient to infer that the husband has been lent money in the past by Ms E, and that he has made some repayments, but I am unable to find he owes no further money to Ms E. I infer it is likely the husband owes Ms E some amount but the precise quantum cannot be known on the available evidence. I will exclude this item from the balance sheet and take account of the likelihood the husband owes Ms E some money under s 79(4)(e).
Item 33
The husband sought to include a liability for $46,411 for his share of the mortgage for the Country T property. I referred to this already above at [109]. The wife argued the item should be excluded as it was not mentioned in earlier iterations of the balance sheet and only raised as being in contention when the final joint balance sheet was received on the second last day of trial. The husband said it was known that the Country T property was mortgaged and documents had been provided showing the balance owing. The wife did not accept the provided documents related to the Country T property and suggested they pertained to a separate property owned by Ms E. The documents are in Country T language and no certified English translation was provided. I do not accept the husband has proved the existence or quantum of this liability and I will exclude it.
Conclusions and asset pool
Based on these conclusions, the asset pool is as follows (figures rounded):
Ownership
Description
Agreed value
ASSETS
1.
Joint
Trust Account (William Chan & Co)
$682,881
2.
Wife
Net proceeds of three properties under the children’s name (Trust Account – William Chan & Co)
$134,309
3.
Husband
Country T property (husband’s share 50 per cent)
$600,000
4.
Husband
Car in Country T – Motor Vehicle 1
$75,000
5.
Husband
CBA #...51
$4,297
14.
Wife
Motor Vehicle 2
$2,500
15.
Husband
20 per cent net proceeds of QLD property released to husband
$34,017
16.
Husband
Partial net proceeds of Sydney property released to husband
$70,000
17.
Wife
20 per cent net proceeds of QLD property released to wife
$34,017
18.
Wife
Partial net proceeds of Sydney property released to wife
$300,000
22.
Wife
Credit Card payments for private unauthorised purpose
$4,756
23.
Wife
Home loan and offset account withdrawal by wife for private unauthorised purpose
$7,126
24.
Wife
Money transferred by wife to Mr HH from Westpac Home Loan account and credit card
$26,071
Total
$1,974,974
LIABILITIES
27.
Wife
ANZ #...75
$49,811
28.
Wife
ANZ #...95
$4,852
29.
Wife
RR Bank #...79
$23,649
30.
Wife
RR Bank #...82
$15,653
Total
$93,965
SUPERANNUATION
Member
Name of Fund
Type of Interest
Agreed value
34.
Wife
Superannuation Fund 1
Simple Super Rollover
$14,625
35.
Husband
Superannuation Fund 1
Simple Super Rollover
$12,171
Total
$26,796
NET POOL (INCLUDING SUPERANNUATION):
$1,907,805
Consequently, if there was no property adjustment, with the percentages rounded, the husband would hold 60 per cent and wife would hold 40 per cent of the net assets per cent. As noted, both parties agreed there should be a just and equitable property adjustment, and it was therefore not appropriate to leave the assets and liabilities undisturbed.
I turn now to consider the application of Pt VIII of the Act and the factors set forth in s 79 and s 75(2).
CONTRIBUTIONS
I will deal first with s 79 of the Act. Section 79(4) sets out the considerations to be taken into account by the Court in determining what order (if any) should be made under s 79 in property settlement proceedings.
Assumptions about equality of contributions should not be made, and there is no assumption that equal division is the starting point for any exercise of the Court’s discretion (Mallet at 610, 613, 625, 635–636, and 646–647). But it was an agreed position between the parties that the assessment of contributions pursuant to ss 79(4)(a), 79(4)(b) and 79(4)(c) should be equal because there was no basis in the evidence to distinguish them. The wife made a submission under s 79(4)(d) in her Case Outline about limits to her earning capacity which I will take into account under s 75(2). Section 79(4)(f) and s 79(4)(g) are not relevant. I am satisfied an equal assessment of contributions is appropriate because the ultimate assessment of contributions should be made without “giving over-zealous attention to the ascertainment of the parties’ contributions” (Norbis v Norbis (1986) 161 CLR 513 at 524).
The central issues raised by the parties concerned s 79(4)(e) and the s 75(2) factors for adjustment for future needs, to which I now turn.
SECTION 75(2) ADJUSTMENT
The Act requires me to take into account the matters referred to in s 75(2) of the Act, so far as they are relevant, when considering what orders should be made in these proceedings. As disclosed in the arguments of the parties, the following matters are relevant.
(a) the age and state of health of each of the parties
The wife is 64 years of age. She states she has a medical condition which affects her ability to eat and has required specialist surgery. She states she also suffers from anxiety and other medical issues.
The husband is 63 years old and has multiple medical conditions.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The wife does not have significant assets. She is the sole carer for her mother and will not be returning to paid employment. Her two businesses, AA Pty Ltd and CC Ltd, have both ceased operations. She relies on a carers pension and has previously borrowed money from her mother for rent. She has accrued credit card debts of $93,000 and has substantial legal fees outstanding. The wife states the money she has received from court orders has been expended on legal fees and reasonable living expenses.
The husband claims his primary assets are the half share in the Country T property and the funds held in trust by the wife’s solicitors. He is not entitled to superannuation or medical cover whilst living in Country T after ceasing his Country T citizenship.
I take account here of G Ltd as a financial resource of the husband. He received approximately $95,000 in 2023 from G Ltd that was not reflected in his City K tax return. Counsel for the husband conceded it was open to infer the husband will continue to receive similar sums from G Ltd.
I take into account the likelihood that the husband owes Ms E some amount of money.
I also take into account the disparity in earning capacity between the parties.
(d) commitments of each of the parties that are necessary to enable the party to support
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
The husband gives Mr B Wen $300 weekly for living expenses.
(e) the responsibilities of either party to support any other person; and
The wife is a carer for her elderly mother. She receives a weekly carers pension of $715.
The husband is the primary carer for his father who has a terminal illness and has required two surgeries. The husband paid the equivalent of $18,568 for the father’s medical expenses in 2021.
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation
The wife lives with her mother and Mr HH who makes contributions to the rent of the residence in Town SS.
The wife denied being in a relationship with Mr HH, and described him as a “flat mate”. I do not find this convincing. The evidence disclosed a high level of financial involvement between the wife and Mr HH from 2017. The wife paid expenses for overseas travel for Mr HH in 2017. Ms C Wen and Mr B Wen confirmed in their oral evidence that they observed Mr HH spending extended periods or “basically living” with the wife in Suburb Z from about 2017 or 2018 until it was sold.
Mr HH gave no evidence and the wife made no disclosure at all in her trial affidavit about her relationship with Mr HH, or gave a clear picture of his level of financial support.
I find that it is likely the wife lives with Mr HH and they provide a not insignificant degree of mutual financial support.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken in to account
The wife sought further adjustment in her favour because of significant non-disclosure by the husband. Each case is determined on its own facts, but the Full Court has endorsed a substantial percentage adjustment for non-disclosure. In Stone & Stone [2015] FamCAFC 18 at [67], the Full Court approved the trial judge’s approach of providing a “hedge” under s 75(2) against the husband having successfully concealed assets or income and in awarding an 8 per cent adjustment substantially for non-disclosure. In Bence & Bence [2020] FamCA 748, issues of non-disclosure, plus other factors, supported a 10 per cent adjustment under s 75(2). I discussed the disclosure issues at [75]–[91], and [140]–[143]. It appeared to be the tenor of the wife’s argument that she should receive a very substantial percentage adjustment in her favour based simply by identifying deficiencies in the husband’s disclosure. As discussed, the authorities acknowledge the role of reasonableness and proportionality as well as the need to connect any adjustment to achieve justice for non-disclosure to the subject non-disclosure. While I am satisfied the husband defaulted in his duty to disclose to some extent, the wife’s evidence did not persuade me the deficiencies in the husband’s disclosure merited an adjustment in her favour of the size she proposes.
However, having carefully considered all the evidence, and the complications in assessing the true position brought about by the deficiencies in the husband’s disclosure, invoking the notion of a “hedge” I consider adjustment in the wife’s favour is appropriate.
Conclusion
The wife sought an adjustment in her favour under s 79(4)(e) of 12.5 per cent based on her age, her carer responsibilities and her limited financial assets and earning capacity. She also sought an additional 17.5 per cent because of non-disclosure by the husband, for an overall division of 80/20 in her favour. In summary, she seeks an adjustment under s 79(4)(e) in total of 30 per cent in her favour.
The husband sought an adjustment in his favour of 5 per cent for his carer responsibilities and poor health in his Case Outline. This appeared to mean that he sought a division of the assets 55 per cent in his favour.
I am not persuaded the wife has established a basis for the substantial adjustment in her favour which she seeks, based upon her age and non-disclosure, bearing in mind her own non‑disclosure about Mr HH and the husband’s age and health problems. However, taking account of all the matters discussed above, I am satisfied there should be an adjustment in favour of the wife under s 79(4)(e) of 7 per cent.
WHETHER THE PROPOSED ORDERS ARE JUST AND EQUITABLE
The assets should be divided 57/43 per cent in favour of the wife. Although the parties agree that it would be just and equitable to make an order adjusting their property interests, s 79(2) requires the Court to be satisfied the proposed order itself is just and equitable. I am satisfied that orders achieving this outcome is just and equitable (Manolis & Manolis (No 2) [2011] FamCAFC 105 at [65], [66]).
I return here to the order sought by the wife, in the nature of a mandatory in personam injunction, compelling the husband and Ms E to take the necessary steps to transfer to her the Country T property. There are a number of reasons why this order should not be made.
Firstly, it is unclear whether Ms E was properly served when she was joined as a respondent. Orders were made by a judicial registrar on 27 July 2022 requiring ordinary service by post upon her at addresses in Country T of the application to join her as a party. In other words, these orders required service outside the Australian jurisdiction. There was evidence that these orders were followed by the lawyers for the wife. Service of an Application in a Proceeding is permitted by ordinary service, which can include post (rr 2.28, 2.40 and 2.41 of the Rules). But service outside the jurisdiction is governed by Pt 2.7 of ch 2 of the Rules. In summary, apart from New Zealand, service outside Australia in a country where the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters (“Hague Service Convention”) does not apply, must be undertaken in accordance with the laws of that country or through the “diplomatic channel”. Country T is such a country. There was no dispute that the rules of Pt 2.7 were not complied with in this regard. Ms E never filed a Notice of Address for Service, or took any part in the proceedings. The husband was not asked if he ever told Ms E about the proceedings and the claim against her interest in the Country T property. There is clearly doubt that the jurisdiction of this Court was properly attracted in relation to Ms E and her property in Country T, or that she was even aware of the proceedings. These factors alone would be compelling reasons to refuse the order. However, I do not need to determine this question because of the other reasons for refusing the order.
Secondly, there was no evidence that any order made against Ms E and the husband relating to property in Country T would be capable of enforcement in Country T. This Court will not make an order which cannot be enforced.
Thirdly, I have made findings that Ms E owns half the Country T property and that she contributed to its purchase price, at the very least, by borrowing with the husband funds to meet the majority of the purchase price, secured against the property. The wife could provide no persuasive reason why this Court should make an order compelling Ms E to give up her property interest to the wife, who made no financial contribution to the Country T property.
As an alternative, the wife argued the Court should simply order the husband to make a cash payment to her in an amount equivalent to the value of the Country T property. Since I have found the husband’s interest is limited to half the Country T property, there is no basis to order him to pay the wife an amount equivalent to its full value.
Fourthly, the outcome does not necessitate any interference with the ownership of assets in Country T. The appropriate division of assets can be achieved by the wife receiving $658,010 of the funds held in the trust account of William Chan & Co, and the husband receiving the balance of the trust funds in the sum of $24,871. Otherwise the parties should retain their assets and liabilities including superannuation.
On a 57/43 percentage division, the wife and husband will have the assets and liabilities as set out in the below table (figures rounded).
Assets and liabilities to be retained by the husband
Value ($)
Trust Account (William Chan & Co)
$24,871
Country T property (husband’s share 50 per cent)
$600,000
Car in Country T – Motor Vehicle 1
$75,000
CBA #...51
$4,297
20 per cent net proceeds of QLD property released to husband
$34,017
Partial net proceeds of Sydney property released to husband
$70,000
Superannuation – Superannuation Fund 1
$12,171
Total:
$820,356
Assets and liabilities to be retained by the wife
Value ($)
Trust Account (William Chan & Co)
$658,010
Net proceeds of three properties under the children’s name (Trust Account – William Chan & Co)
$134,309
Motor Vehicle 2
$2,500
20 per cent net proceeds of QLD property released to wife
$34,017
Partial net proceeds of Sydney property released to wife
$300,000
Credit Card payments for private unauthorised purpose
$4,756
Home loan and offset account withdrawal by wife for private unauthorised purpose
$7,126
Money transferred by wife to Mr HH from Westpac Home Loan account and credit card
$26,071
Superannuation – Superannuation Fund 1
$14,625
ANZ #...75
-$49,811
ANZ #...95
-$4,852
RR Bank #...79
-$23,649
RR Bank #...82
-$15,653
Total:
$1,087,449
COSTS
I will order that any party who seeks costs to file the relevant application within 28 days of these orders.
CONCLUSION
For all the foregoing reasons I am satisfied the orders set out at the commencement of these reasons should be made.
I note for completeness that the wife’s Application – Contempt filed on 17 April 2024 remains to be determined. In light of this judgment and the criminal standard of proof, in my view it has no reasonable prospects of success and should be dismissed. I will order all outstanding applications be dismissed to bring these proceedings to finality.
I certify that the preceding one hundred and eighty-nine (189) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Harper. Associate:
Dated: 12 February 2025
SCHEDULE 1 – MATERIAL TENDERED AND RELIED UPON BY THE PARTIES
Exhibit Label
Document
Tendered by
1
Husband’s List of Objections to the wife’s affidavit sworn on 6 November 2024
RH
2
Balance Sheet
Joint
3
Tender bundle filed 25 November 2024
AW
4
Photograph of dining room furniture held in storage
RH
5
Letter from William Chan & Co to TT Lawyers dated 27 July 2021 regarding collectables and artworks in storage
AW
6
Updated Balance Sheet filed 29 November 2024
Joint
7
Accounts for U2 Ltd June 2021
AW
8
Income statement for U2 Ltd for 2016
AW
9
Income statement for U2 Ltd for 2017
AW
10
Income statement for U2 Ltd for 2018
AW
11
Income statement for U2 Ltd for 2019
AW
12
Documents in Country T language – Payments from an accountant to husband
AW
13
Updated Balance Sheet dated 3 December 2024
Joint
14
Outline of closing submissions
AW
15
Husband’s City K tax assessment for 2023/24
AW
16
Husband’s Commonwealth Bank statements 1 July 2023 to 30 May 2024
AW
17
Australian Tax Office - Rates for Financial Year ending 31 December 2017 to 30 June 2024
AW
18
Bundle of documents relating to service on the Second Respondent
AW
19
Outline of closing submissions
RH
20
Disclosure of correspondence between parties
RH
ANNEXURE A – PROPOSED MINUTE OF ORDERS SOUGHT BY THE HUSBAND
1. Property distribution of 50% to the husband and 50% to the wife.
2. To achieve the effect of above Order 1, that the Applicant Wife do all such things, acts and deeds and sign all documents necessary to
a. cause the Respondent Husband to be paid, including by way of the monies held in Trust by William Chan & Co Lawyers and Notaries be released to the Respondent Husband, such sum as to give effect to an 50%/50% division of the non-superannuation assets within 42 days of these orders (“Financial Settlement Sum”); AND
b. return to the Respondent Husband certain personal items left in the family home, as listed in his Affidavit filed 5 May 2022 at paragraph 23, or in the alternative, cause the Respondent Husband to be paid, including by way of the monies held in Trust by William Chan & Co Lawyers and Notaries be released to the Respondent Husband, such sum equivalent to the value of those personal items.
3. That simultaneously with the Applicant’s wife’s compliance of the above Order 2,
a. the Respondent Husband retains his interest in the property located at DD Street, City EE, Country T (“Country T Property”), and indemnify the Applicant Wife against all payments and liability in relation to the Country T Property; and
b. the Respondent Husband retains his interest in U2 Ltd and G Ltd (“overseas companies”) and indemnify the Applicant Wife against all payments and liability in relation to overseas companies; and
c. each the Applicant Wife and the Respondent Husband retains all other properties in their possession, their savings in Australia and Country T and their superannuation interests, respectively.
4. That except as otherwise provided herein, each of the Applicant and the Respondent shall remain liable for any debts in his or her own name as at the date of these Orders and shall sign all documents and writings, do all acts and things and pay all moneys necessary to indemnify and hold harmless the other from any liability in relation thereto.
5. Each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party may be entitled pursuant to this order, and in respect of any other liability that may be incurred in their name.
6. That in the event that either party for any reason refuses or neglects to execute any deed or instrument necessary to give effect to any or all of the above Orders (the “Noncompliance Party”), that a Registrar or Deputy Registrar of the Family Court of Australia at Sydney be appointed pursuant to s106A of the Act to execute such deed or instrument in the name of the Non-compliance Party and to do all other necessary acts and things to give force and effect to such Orders.
7. The
applicantApplicant Wifepaysand therespondent’sRespondent Husband each bears their own costs of and incidental tothis applicationthese proceedings.
ANNEXURE B – PROPOSED MINUTE OF ORDERS SOUGHT BY THE WIFE
1. That William Chan of William Chan & Co lawyers and Notaries is appointed the agent for sale of the following properties:
a)2 N Street, Suburb P NSW (lot … in Deposited Plan …)
b)1 N Street, Suburb P NSW (lot … in Deposited Plan …)
c) L Street, Suburb M, NSW (Lot … Plan …)
including with respect to the following matters:
1.1 Determining the sale price upon offers being received;
1.2 Determining the date and time of the auction upon recommendation by the acting agent;
1.3 Nominating and engaging the Selling Real Estate Agent.
1.4 Being responsible for the preparation of and signing of the Contracts of Sale;
1.5Being responsible for signing all documents necessary to discharge the mortgage secured on all properties
1.6 Being responsible for signing of the necessary Transfers of Land and any other conveyancing documents required to complete the sales.
2. That for the purposes of Order 1, William Chan & Co Lawyers be appointed to act on the conveyance of the sale.
3. That for the purpose of effecting order 1 above, within 28 days from the date of these orders, the Trustee for the sale shall list the properties for sale and do all such acts and things and shall execute all such deeds, documents and instruments as may be necessary to sell all three properties by private treaty auction as recommended by the sales agent, at the earliest possible date price as recommended by the nominated agent or in the alternative at a price to be determined by the President of the Real Estate Institute of New South Wales (or any successor of it) or his/her nominee and to disburse the proceeds of the said sales in the following manner and priority:
3.1 Payment of sales agent's commission and advertising expenses and legal expenses of the sale.
3.2 Discharge of all mortgages secured against all three properties.
3.3 Payment of costs incurred, if any, in relation to determination of value or selling price by the President of the Real Estate Institute of New South Wales or his/her nominee.
3.4 The balance then remaining to be paid into the trust account of William Chan & Co Lawyers & Notaries.
4. That any mortgage owing on DD Street, City EE, Country T (The Country T property) be discharged by the Respondent husband in full within 21 days.
5. That the Country T property be transferred to the wife within 21 days thereafter.
6. That the monies held in Trust by William Chan & Co Lawyers and Notaries be released to the wife.
7. That the husband pays to the wife, within 28 days, the sum of ($x - to be determined following complete disclosure by the Respondents to the proceedings).
8. That the Respondents pay the wife's cost of the proceedings in a proportion to be determined by the Court.
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