Jingyi & Chao

[2023] FedCFamC1F 540

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Jingyi & Chao [2023] FedCFamC1F 540

File number(s):

SYC 3653 of 2021

Judgment of:

AUSTIN J

Date of judgment:

3 July 2023

Catchwords:

FAMILY LAW – PROPERTY – Practice and procedure – Review of decision – Where the applicant sought injunctions against the respondents in respect of two parcels of real property – Where the registrar made ex parte orders restraining the respondents from further encumbering the first property – Where the registered proprietors of the first property are the second and fourth respondents – Where the applicant and first respondent husband have no registered proprietary interest in the first property – Where interference with the property rights of third parties should be minimised – Where the applicant has failed to plead her equitable claim against the second and fourth respondents in respect of the first property – Where restrictive and mandatory injunctions against the second and fourth respondents are not warranted – Where an order already exists restraining the respondents from further encumbering the second property – Where the second property was sold at auction in mid-2023 – Ex parte orders made by the registrar discharged – Application dismissed – Party/party costs awarded to the respondents in a fixed sum.

Legislation:

Evidence Act 1995 (Cth) s 135

Family Law Act 1975 (Cth) Pts VII, VIIAB, ss 90SB, 114, 117, 121

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 67, 68, 190, 191

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 1.04, 1.07, 12.17

Cases cited:

Qian & Xue [2022] FedCFamC1A 93; (2022) 66 Fam LR 204

Division:

Division 1 First Instance

Number of paragraphs:

47

Date of hearing:

3 July 2023

Place:

Newcastle (via Microsoft Teams)

Counsel for the Applicant:

Mr Lloyd SC

Solicitor for the Applicant:

JC Legal Practice

Counsel for the Respondents:

Mr Condon SC

Solicitor for the Respondents:

Juris Cor Legal

ORDERS

SYC 3653 of 2021

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS JINGYI

Applicant

AND:

MR CHAO

First Respondent

MR B CHAO

Second Respondent

C PTY LTD (and another named in the Schedule)

Third Respondent

order made by:	AUSTIN J
DATE OF ORDER:	3 July 2023

THE COURT ORDERS THAT:

1.The orders made by the senior judicial registrar on 26 May 2023 are discharged.

2.The applicant shall pay the respondents’ party/party costs of and incidental to the review hearing, fixed in the sum of $15,000.

3.Otherwise:

(a)the Application in a Proceeding filed by the applicant on 25 May 2023 is dismissed;

(b)the Response to an Application in a Proceeding filed by the respondents on 31 May 2023 is dismissed; and

(c)the Application for Review filed by the first respondent on 31 May 2023 is dismissed.

NOTATION:

A.The parties agree the payment of costs by the applicant pursuant to Order 2 should be set-off against outstanding costs of $26,400 payable by the first respondent to the applicant pursuant to order made on 5 April 2023.

Note:   The form of the order is subject to the entry in the Court’s records.

Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under a pseudonym Jingyi & Chao has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

EX TEMPORE
REASONS FOR JUDGMENT

AUSTIN J:

1. Before the Court is an application to review orders made by the senior judicial registrar (“the registrar”) on 26 May 2023.

2. The review results in the discharge of the registrar’s orders, but there is more to say about the parties’ disproportionate absorption of the Court’s resources, to say nothing of the extravagant costs they must have already incurred, in multiple pitched battles over interlocutory orders.

3. During the two years in which the litigation has been pending, there have been no less than 17 suites of substantive interim orders made, many following contested hearings, and many other procedural orders made at other court events. So far, well over 100 documents have been filed in the cause.

4. The Courts are mandated to despatch their litigious business as quickly, inexpensively and efficiently as possible, which overarching objective the parties and their lawyers must help achieve (ss 67, 68, 190 and 191 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“the FCFCA Act”); r 1.04 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”)).

5. The Family Law Case Management Central Practice Direction is published under the statutory authority of s 67(4) and s 190(4) of the FCFCA Act and r 1.07(1) of the Rules. Relevantly, the Practice Direction includes this in respect of interim hearings:

   5.21After a proceeding has commenced, unless a relevant exemption applies, a party may not file an Application in a Proceeding seeking interim orders, without complying with rule 4.03 of the Family Law Rules, which requires the parties to make a reasonable and genuine attempt to settle the issue to which the application relates.

   5.22Other than in urgent circumstances relating to issues of high risk, parties may each file a maximum of two Applications in a Proceeding without leave. Leave of the Court must be sought as part of any relevant interlocutory application. A leave application may be determined by a Judicial Registrar in chambers. An application brought by an Independent Children’s Lawyer does not require leave.

   (As per the original)

6. On occasion, leave has been sought to file more applications seeking interim relief but, in the main, the parties have blithely disregarded their procedural obligations. They can expect no more latitude. This particular interim dispute exposes the impulsive, indiscriminate, and superficial way in which the parties and their lawyers have been conducting this litigation.

   Background

7. These proceedings were commenced by the applicant against the first respondent on 19 May 2021. She then sought only parenting orders in respect of their only child under Pt VII of the Family Law Act 1975 (Cth) (“the Act”).

8. The first respondent joined issue in the parenting dispute by filing his Response in June 2021, but he widened the dispute to encompass a claim for financial relief under Pt VIIIAB of the Act. The applicant replied in August 2021, seeking dismissal of the financial cause.

9. For quite some time, the facts which would underpin the existence of the Court’s jurisdiction to entertain the first respondent’s financial claim were not pleaded by either party. The issue of jurisdiction was not raised until June 2022, at which time a judge of the Federal Circuit and Family Court of Australia (Division 2) enquired about it. On 13 September 2022, the applicant filed a Further Amended Initiating Application pleading the jurisdictional facts and then, in orders made on 16 September 2022, it was noted the applicant and the first respondent both conceded jurisdiction exists to entertain the financial cause.

10. As things stand on the applicant’s pleadings, the applicant and the first respondent were in a de facto relationship which began in 2017 and ended in 2020, though it was subject to interruption of at least 15 months between mid-2019 and late 2020. It must follow that the aggregate period of the relationship was 22 months at most. That is less than the requisite period of 24 months (s 90SB(a)), so jurisdiction under Pt VIIIAB only exists because they have a child together (s 90SB(b)).

11. The financial dispute between the applicant and the first respondent was originally confined to the first respondent’s claim to a share of a single parcel of real property at Suburb P, which has since been sold and the sale proceeds disbursed. By interim orders made in August 2021, the applicant was permitted to use the proceeds to buy another real property at Suburb O, but to otherwise spend as she pleased.

12. However, as the litigation evolved, it expanded exponentially. The dispute now involves the first respondent’s parents and a family-related corporation (named as the second, third and fourth respondents). Far from the applicant’s initial position of seeking outright dismissal of the first respondent’s financial claim, she has since pressed claims to bring multiple parcels of real property into the matrimonial pool, from which enlarged pool she proposes taking the greatest share. The first respondent has not amended his proposal since June 2021, which is now redundant because he still seeks orders for one-half of the net proceeds realised on the sale of the Suburb P property (since disbursed) and mutual indemnities.

13. On 25 May 2023, the applicant filed an Application in a Proceeding seeking another suite of interim orders against the respondents on an ex parte basis. Relevantly, she wanted restrictive and mandatory injunctions made against the respondents in respect of two parcels of real property: one at Suburb Q and the other at Suburb R.

14. The registered proprietors of the Suburb Q property are the second and fourth respondents. The first respondent has no registered share in title to it.

15. The registered proprietors of the Suburb R property are the first, second and fourth respondents, though the first respondent’s registered share is only two per cent.

16. In the latest iteration of the applicant’s claim for financial relief, she seeks declarations that the second and fourth respondents hold their respective legal interests in the Suburb Q and Suburb R properties on trust for the first respondent, such that both properties then fall into the matrimonial pool of property and are amenable to division between the former de facto spouses by an order made under Pt VIIIAB of the Act. Her claims are resisted by the respondents.

17. On 25 October 2021, the applicant was ordered to file Points of Claim articulating her claims for relief against the second respondent. She has since filed two versions of the Points of Claim, the most recent incorporating claims against both the second and fourth respondents, and the respondents have filed three versions of their Defence.

18. The most recent version of the applicant’s Points of Claim makes no reference at all to the Suburb R property or the basis of the equitable claim she makes in respect of it.

19. The most recent version of the applicant’s Points of Claim does refer to the Suburb Q property, but not in any useful way. She only asserts the second and fourth respondents have obtained advances of funds from the mortgagee under the security of the mortgage registered over the property. The Points of Claim do not plead or particularise the basis of the equitable claim she makes in respect of the Suburb Q property.

20. As requested, the applicant’s application was urgently entertained by the registrar on 26 May 2023 and, being led to believe the applicant’s rights were at immediate risk of defeat, the registrar made ex parte orders in the form sought by the applicant. To guard the respondents’ rights, the registrar ordered the applicant to serve them with sealed copies of the ex parte orders and the applicant’s interim application was adjourned for further consideration – initially to 2 June 2023, but then to 13 July 2023.

21. In the meantime, the first respondent filed an Application for Review on 31 May 2023, seeking the discharge of all orders made by the registrar. Consequently, this hearing is an original hearing of the application entertained by the registrar, subject to additional consideration of the respondents’ Response to an Application in a Proceeding and the application of the first respondent within the Application for Review, both filed on 31 May 2023.

    Evidence

22. The applicant relies upon:

    (a)her affidavit and her undertaking as to damages, both of which were filed on 26 May 2023; and

    (b)her affidavit filed on 30 June 2023.

23. The applicant also sought to rely upon about 70 pages of other documents, contained within and forming part of an email attachment forwarded to chambers just in advance of the hearing. The tender was rejected pursuant to s 135(c) of the Evidence Act 1995 (Cth).

24. The respondents rely upon:

    (a)the two affidavits filed by their solicitor, Ms Li, on 26 May 2023 and 29 May 2023;

    (b)paragraphs 42-47 inclusive of the first respondent’s historical affidavit filed on 21 October 2021;

    (c)paragraphs 23-28 of the first respondent’s historical affidavit filed on 17 January 2022;

    (d)an email dated 1 June 2023 concerning the then current payout figure of the mortgage registered over the Suburb Q property (Exhibit A); and

    (e)the Statement of Claim recently issued in the Supreme Court of NSW by the Suburb Q mortgagee seeking possession of the property (Exhibit B).

25. The applicant’s objections to the admissibility of some of those documents were overruled.

    Adjournment or hearing?

26. By their Response to an Application in a Proceeding filed on 31 May 2023, the respondents sought that the applicant’s application be adjourned until after the review hearing (Order 1). The meaning of this proposal is quite unclear because the review hearing necessarily entails re-consideration of the applicant’s application.

27. By his Application for Review filed on 31 May 2023, the first respondent sought dismissal of the applicant’s application (Order 5).

28. When quizzed about the respondents’ inconsistent proposals for both adjournment and dismissal of the applicant’s application, they confirmed the review hearing should proceed and the relief they sought was the discharge of the registrar’s orders and the dismissal of the applicant’s Application in a Proceedings filed on 25 May 2023.

    The Suburb Q property

29. The applicant seeks orders that restrain the respondents from altering the encumbrance over the Suburb Q property, pending its sale (Orders 4, 5 and 12), and to compel the respondents to place the net sale proceeds of the Suburb Q property into a controlled monies account (Orders 10, 11, 13 and 14). The orders are opposed.

30. Injunctions can be made to preserve property pending the final determination of competing claims upon such property, but interference with the property rights of third parties should be minimised (Qian & Xue [2022] FedCFamC1A 93 at [21], [22], [28] and [33]).

31. The Suburb Q property is owned exclusively by the second and fourth respondents. The applicant has no registered proprietary interest in it and, unless and until her equitable claim in respect of the property is determined, neither does the first respondent. However, the applicant has not complied with her obligation to plead her equitable claim in respect of the Suburb Q property against the second and fourth respondents. Her breach of the procedural order to do so has persisted for the last 20 months, since October 2021.

32. The applicant’s default by failing to particularise some reasonably arguable basis for an order declaring the first respondent’s equitable proprietary interest in the Suburb Q property means her application for such a declaration remains entirely bare. That is not sufficient to warrant restrictive and mandatory injunctions against the second and fourth respondents, interfering with the manner in which they wish to deal with their own asset or the net proceeds of its sale.

    Order under s 121 of the Act

33. The applicant sought an order permitting her to serve sealed copies of the orders made in this review hearing upon the incoming and outgoing mortgagees of the Suburb Q property. There is no need for such an order because the interim substantive relief sought by the applicant in respect of the Suburb Q property is refused.

    The Suburb R property

34. The applicant seeks an order restraining the respondents from further encumbering the Suburb R property without her consent (Order 15). The order is opposed.

35. The second and fourth respondents own 98 per cent of this property. The first respondent is the registered proprietor of the residual two per cent.

36. Just as with the Suburb Q property, the applicant has so far failed to plead, particularise or give any evidence about the nature of the equitable claim she asserts to trespass upon the substantial proprietary interest enjoyed by the second and fourth respondents in the Suburb R property. In any event, this application (even in respect of the small legal interest the first respondent currently enjoys in the property) is quite unnecessary because existing orders to similar effect are already in place.

37. On 7 October 2022, an order was made restraining the respondents from further encumbering numerous properties, including the Suburb R property, without advance notice to the applicant (Order 1). That order only applied until 11 November 2022, but on that date the interlocutory order was extended with indefinite operation (Orders 2 and 3). The injunction now sought by the applicant in respect of the Suburb R property would slightly tighten the restriction upon the respondents by restraining further encumbrance without her consent, instead of without her being given advance notice. No good reason is advanced for why it would be “proper” to adjust the existing injunctions in that way (s 114(1)(e)).

38. At the conclusion of the hearing it was revealed that the Suburb R property was sold at auction in mid-2023 and the sale will complete later in mid-2023. It is unclear why that fact was not made known any earlier.

    Leave to file more applications

39. The first order sought by the applicant in her application was this:

    Leave be granted for the Applicant to file more than 2 Applications in a Proceeding.

    (As per the original)

40. The application is refused. It was not even addressed by the applicant.

41. If the applicant wants to bring another interlocutory application in the future, she will need to demonstrate the circumstances which necessitate the grant of leave to do so at that time.

    Disposition

42. The registrar’s orders of 26 May 2023 are discharged.

43. The respondents sought their party/party costs of the review hearing from the applicant, assessed by them in the sum of $25,000. The basis of the claim was two-fold: first, the misconduct of the applicant by failing to comply with the procedural orders made in October 2021 requiring her to plead and particularise her claims against the second and fourth respondents in respect of the Suburb Q and Suburb R properties (which engages s 117(2A)(c), rather than s 117(2A)(d) as contended); and secondly, the applicant’s application for interlocutory relief proved to be wholly unsuccessful (s 117(2A)(e)).

44. The applicant first sought that the question of costs be reserved until finalisation of the financial cause, but that proposal was rejected. There was no merit in passing on the costs dispute to another judge to decide at a much later time in the proceedings.

45. That being so, the applicant opposed any order for costs being made against her, but only on the basis of the respondents’ alleged misconduct in the proceedings by the repeated failure to give proper and timely financial disclosure. The submissions are rejected. The contention of non-disclosure is not conceded by the respondents and no factual finding to settle that issue is possible on the material available.

46. The applicant should pay the respondents’ party/party costs, but not in the generous sum assessed by them. They may have spent $25,000 contesting the review hearing, but that is not a reasonable assessment of the party/party costs of opposing the relief sought by the applicant in the review hearing. In reliance upon the power within r 12.17(1)(a) of the Rules, the respondents’ party/party costs are assessed at $15,000.

1. Apparently, the first respondent still owes the applicant $26,400 pursuant to a costs order made against him in her favour on 5 April 2023. The parties agree the applicant’s liability to the respondents for $15,000 should be set-off against the first respondent’s outstanding liability to her for $26,400.

I certify that the preceding forty-seven (47) numbered paragraphs are a true copy of the Ex tempore Reasons for Judgment of the Honourable Justice Austin.

Associate:

Dated:       4 July 2023

SCHEDULE OF PARTIES

SYC 3653 of 2021
Respondents
Fourth Respondent:	MR TIAN