Koo and Shen

[2017] FCCA 3017

FEDERAL CIRCUIT COURT OF AUSTRALIA

KOO & SHEN [2017] FCCA 3017

Catchwords:
FAMILY LAW – Property dispute – each party making serious allegations of misconduct against the other – both parties entirely unsatisfactory witnesses – pool consisting of funds from sale of property in (country omitted) and funds held on trust from sale of property in Australia – court having greatest difficulty in ascertaining facts owing to the parties florid and unconvincing histories – pool divided equally between the parties.

Cases cited:
Stanford & Stanford (2012) 247 CLR 108

Applicant: MS KOO

Respondent: MR SHEN

File Number: DGC 2188 of 2105

Judgment of: Judge Burchardt

Hearing dates: 16 & 17 November 2017

Date of Last Submission: 17 November 2017

Delivered at: Dandenong

Delivered on: 15 December 2017

REPRESENTATION

Counsel for the Applicant: Mr Kanarev

Solicitors for the Applicant: Alphastream Lawyers

Counsel for the Respondent: Mr Shen, In Person

ORDERS

(Amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 on 19 December 2017.)

1. Of the funds presently held in trust by Slater & Gordon:-

   (a)$58,500 $42,500 be paid to the Wife;

   (b)The remainder be paid to the Husband.

2. Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

   (a)Each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders.

   (b)Insurance policies remain the sole property of the owner/beneficiary named therein.

IT IS NOTED that publication of this judgment under the pseudonym Koo & Shen is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 2188 of 2015

MS KOO

Applicant

And

MR SHEN

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is a property dispute in which the sole real assets remaining between the parties are the sum of approximately $128,000 held in trust by Slater & Gordon following sale of a home owned previously by the respondent husband and what is left of $43,000, being the sale of a property sold in (country omitted) by the wife.  She retains $22,000 or thereabouts of that $43,000 net sale proceeds.

2. Each of the wife and the husband want all of the remaining funds to be paid to them and, at least arguably in the case of the husband, he seeks that the wife be made responsible for a number of alleged outstanding loans. 

3. The parties have filed very substantial tranches of material out of all proportion to the remaining amount of cash.  They would probably like the court to write a long book to examine in minute detail all the materials they have proffered.  Given the fact that I do not believe either of the applicant or the respondent to be in any significant way truthful, it is more appropriate to do what I am going to do and that is to paint with a broad brush.

4. For the reasons that follow I am going to order that the proceeds of sale of the property in (country omitted) and funds held in trust be equally divided between the parties, and otherwise each party retain whatever assets and liabilities they may have.

Agreed Facts

1. This is a case in which agreed facts are few and far on the ground.  It seems reasonably clear from the materials that the applicant, who is of (country omitted) heritage, and the respondent, who is an Australian citizen born in China of (omitted) heritage, met in (country omitted) in 2008.  They started cohabitation in Australia in 2009 and were married on (omitted) 2009. 

2. Shortly thereafter they returned to (country omitted) (following extensive holidays that appear to have been part of the parties’ lifestyle while they were together) and ran one (business omitted), then another (business omitted) founded by the mother.

3. Although there is significant dispute as to who controlled the moneys generated by the two (businesses omitted) and as to the degree of their relative profitability, it does seem reasonably clear that the (businesses omitted) were profitable overall and not insignificant savings were engendered.  Both parties assert that they were loaned funds by their respective families while they were in (country omitted), but none of those who are said to have lent the money have been called to give evidence.  It should be noted that during the currency of the proceeding the respondent husband offered to call his father to give evidence, but since that person was not on affidavit and permitting him to give evidence would have been trial by ambush, I declined that application.

4. The parties were together until December 2013, when the marriage broke down irretrievably.  Thereafter the wife went to various forms of emergency housing and relevantly received assistance inter alia from a body which is entitled under the acronym EDVOS. 

5. The husband owned a property in Property B at the time of the commencement of the relationship and had also, according to him, bought a property in Property A on (omitted) 2009.  This was very shortly before marriage.  It is from the successive sales of the Property B and the Property A property, as best I am able to follow the parties’ confusing history, that the sums held in trust by Slater & Gordon derive.

6. The parties travelled from time to time during the relationship and I will return to that aspect of the matter when I deal with what the parties said at court. 

The Parties’ Mutual Criticisms

1. One of the salient features of this case is the relative gusto with each party makes serious allegations against the other.  Reading the husband’s affidavits, the general tenor is that the wife was at all times never really in love with him, but only concerned to obtain permanent residence in Australia.  He goes so far as to suggest that there was a deal entered into post-separation between him and the wife that she would pay him $45,000 in return for his cooperation (or more accurately, non-obstruction) of her application for permanent residence.  The husband asserts that he only agreed with the Intervention Order taken out against him in 2014 pursuant to this deal.  Indeed, he continues to complain bitterly of this being used against him.

2. The father also says that the wife was working in his own father’s hotel at the time she was receiving funds from EDVOS, who would have advanced those funds on the footing that she was devoid of resources. 

3. By way of comparison, the wife refers to the husband receiving Centrelink in inappropriate circumstances and it does appear he may have an outstanding liability and, further, refers to his driving while unlicensed.  She also makes substantial and vivid assertions as to family violence perpetrated on her by the husband. 

4. The lurid conspiracy theories that each advance in relation to these matters are overshadowed by their mutual assertions as to non-disclosure.  Reams, whole arch leaf folders, of material have been filed designed to show that one or other of the parties has assets they have not properly disclosed.  The husband goes so far as to assert that the wife has property in (country omitted) together with numerous undisclosed bank accounts here, there and everywhere.  The wife’s counter allegations are scarcely less fulsome.

5. Given, as I have already said, I have little confidence in the truthfulness of either of these two witnesses, the court’s task is rendered somewhat difficult.

What was said at Court

1. Counsel for the wife opened his case on the footing that there was about $128,000 in trust from Slater & Gordon and the wife retains $22,000 of the $43,000 received from the sale of the property formerly owned in (country omitted).  It was submitted that the parties were together for a short time, noting that their ages were 32 (husband) and 35 (wife).

2. Counsel traversed the parties’ life in (country omitted) and the running of the two (businesses omitted) with the bulk of the funds being derived from the husband’s (business omitted).  He referred to the alleged failure of the husband to disclose and suggested that the husband had abstracted some $490,000 for his own use.  It was submitted that there had been domestic violence and that it was appropriate that the wife receive the entirety of the remaining funds, given the amounts already abstracted by the husband.

The Evidence of the Wife

1. The wife, whose address is suppressed, is working as a casual (occupation omitted).  She adopted her affidavits and most recent Financial Statement as true and correct.  She currently has legal bills of some $70,000.

2. The wife put in issue whether or not the husband had completed his degree at (omitted), as he had asserted in his affidavit filed 10 November 2017.  She suggested he had enrolled, but not completed his degree.  She proffered the outlandish proposition that a friend of the husband’s had offered him $30,000, in effect, to be a ghost student and get a degree for him.  She asserted that the husband had said he had used this money for a deposit on a house in Property B.  She also referred to the fact he might have a house in (country omitted).

3. This assertion not having been put on affidavit previously, and being as outlandish as it was (it would take quite some effort to deceive (omitted) for an entire course) was one I was simply not prepared to give any weight to.

4. When the husband (who appeared for himself) cross-examined, he concentrated initially on the alleged bank accounts held overseas by the wife.  The picture that emerged of the wife’s bank accounts in (country omitted) was far from readily comprehensible.  It should be said that on their face the wife’s answers appeared to be both consistent and internally consistent, as it were.  She did, however, say that the husband’s father had helped them transfer $20,000 to help with the business.  This was an account deliberately kept secret from the husband.  This was because it was anticipated the husband would be angry if he knew about it.  The wife said that his father had been very nice when the husband was violent to her but turned against her when there were money problems and made lies for him. 

5. Cross-examination continued and essentially the husband and wife were arguing as to who had controlled the funds on (country omitted).  There were also arguments as to who had contributed how much to the businesses.  It emerged, at least to me, that there were probably more bank accounts than had first been indicated. 

6. Cross-examination about tax paid in (country omitted) was hard again to follow.  The wife’s essential position was that the husband was responsible for all income and controlled all the finances or almost all.  The wife could not remember whether she had superannuation in (country omitted), a startling assertion given her otherwise minute appreciation of her financial interests, as disclosed in her affidavits. 

7. The wife denied having jewellery and said she had returned it via the husband’s father when she was working in the hotel.  She asserted that the husband had driven over a watch. 

8. The wife asserted that her own brother had lent the parties a lot of money during the relationship.  They had to borrow money from her brother to rent a house.  Her mother and brother had also lent money for the business and bonds for rental.  It emerged that moneys had been transferred back to the brother and then transferred into the husband’s father’s account.

9. The husband obtained residence in (country omitted) and the wife was adamant that he had property in (country omitted) also.  The wife’s superannuation in Australia was $2160 and is currently $1689.  She does not have a self-managed superannuation fund.  Her funds in (omitted) have gone down because of the charging of administration fees.  She has not worked in Australia, but she then said she worked part time for three days.  She had worked part time during February and June or July in 2013 at the husband’s father’s (business omitted) and then worked for a (employer omitted) for nine months, but then left for (country omitted). 

10. The wife had run away because of violence in 2013 and obtained permanent residence in Australia in 2014.  She could have applied for her marriage visa earlier, but the husband did not want her to apply.

11. It was put to the mother that she had agreed to pay the husband $45,000 not to obstruct her visa application, but she denied this.  She said she had taken out an Interim Intervention Order.  She said the father’s father gave her $20,000 as a gift, but when problems began he wanted it back and she repaid her half of $10,000.  A total of $40,000 has been paid to the husband’s father.  She again denied an agreement to pay $45,000.  She said that the father’s father helped her with her visa application.

12. The husband then cross-examined about the help given to the wife by EDVOS.  She denied receiving any money from EDVOS, but I found her answers in this particular passage of her evidence to be spectacularly unconvincing. 

13. Cross-examination then followed in detail about account (omitted), but each of the proponents stuck to their stories.  The wife was adamant that her mother and brother had loaned moneys throughout the marriage.  She complained of not receiving all the husband’s tax lodgements in (country omitted). 

14. The wife conceded that the husband put $60,000 into the Property A property.  She went on to say that the husband’s parents gave a wedding gift, but the husband had taken it.  The wife denied that the husband had studied and denied any knowledge of a possible HECS debt.  A Centrelink debt, she said, had accrued before she knew him.

15. In re-examination, the wife was adamant that the husband wanted the $10,000 gift to pay off a credit card.  Paying off a bond in (country omitted) requires 80 per cent of the value of the house, but there is then no rent (this contradicts the wife’s first affidavit in which she said rent in (country omitted) was $550 per month).  She also deposed “we made a lot of money in (country omitted) and the husband’s business was successful”.

16. She said they saved $250,000 in three years and he kept it.  She went on to say that the husband received cash in 2013 while on Newstart. 

The Opening by the Husband

1. The husband said he wanted the assets he had before the relationship.  He said liability should be divided if they were incurred together.  He wanted the entirety of what was in the trust account.

2. The husband adopted his affidavits and most recent Financial Statement as true and correct.  He is employed as a (occupation omitted).

3. Under cross-examination the husband conceded that he lived in (country omitted) from (omitted) 2010 until (omitted) 2012.  He did not concede that this was when the bulk of the asset pool had been created.  He said that he had made money and accumulated assets before they met.  He said he had two houses before he met the wife.  He said it was not true that they owned more in (country omitted) than the assets in Australia.  He said about $200,000 was generated in (country omitted).  He did not control finances and was not bullying.  He paid for the rent.  Whatever the wife asked for he gave her.  He said their finances were separate in (country omitted), but she controlled all the rent, as she spoke (language omitted).  The total rent each month was $400 - $500, but he did not keep precise tabs on expenditure in (country omitted).  He denied having created detailed spreadsheets which were put to him by counsel and said they were prepared together (I do not accept this evidence.  It is clear from what was said that the husband did create these.)

4. He admitted that there had been a secret account, but on the second day his father told him about it. 

5. The husband roundly rejected being violent to the wife and disagreed that this was the case.  He had not been sexually violent and was not unfaithful.  He said, unresponsively to a question, that he did not like counsel using the $45,000 agreement against him. 

6. When it was put to him that he had jabbed the wife with a chopstick in September 2012, he refused to answer and then said, “My answer is no.”  He denied taking the wife’s passport.  The wife was not happy with the standard of the hotel.  He acknowledged exhibit A1 was an email sent by him.  This is dated 1.12.2003.  Relevantly, it reads:

   you can come back now, i’m not angry as much.

   If you don’t want to come.  I’m leaving (omitted) tomorrow. 

   as for your passport, I don’t know.  i left it jammed inside the door.  someone would have taken it. 

   You should have at least checked instead of letting me wait 2 hour outside. 

7. This email was sent at 7.19 am and followed a message from the wife at 5.44 am, which appears to show that she was locked out of the hotel at the time. 

8. The spreadsheet to which I have referred was tendered as exhibit A2.  Since it includes amongst items “Dad’s anniversary”, it seems almost certain that it was prepared by the husband.

9. The husband was cross-examined about transfers relating to the mortgage.  His answers were, in my view, unresponsive and argumentative. 

10. The husband said that his aunts have loaned him money after they separated.

11. The husband said he had $145,000 in his bank account when he left (country omitted).  The wife knew he had paid his aunt, because she found out after they arrived in Australia.  He said they consulted about it, but could not remember where or when.  When it was put to him that his aunt was just a post box, the husband said he did not know what counsel was saying.  His aunt wanted the money back.  Later he borrowed again.  He sold a car for $16,000 and kept the money.  It was bought from his bank account. 

12. When it was put to him that his spreadsheet showed $200 pocket money for the wife, he said this was his pocket money.  In Australia finances were shared and they both had pocket money.

13. The husband could not remember how many bank accounts he had in (country omitted).  They were all set up by the wife.  He had an account in China, but it is closed.  He had a property in China, but had sold it.  The money went into the (country omitted) account.  They had separate finances in (country omitted).  He had not provided statements from the Chinese bank account.

14. It was put to the husband that he was receiving Newstart while he was working, but as I pointed out to counsel for the wife, the important aspect of that assertion was that the wife was equally complicit in the fraud, because she well knew of it at the time. 

15. The husband said he borrowed money for his business.  He worked as a (occupation omitted) when he returned to Australia.  The wife was a very good (hobby omitted).  He conceded that superannuation could be adjusted fifty-fifty.  He said the wife stole money after they separated and he was going to put up posters at (omitted) and at her (omitted) Church.  He regretted his actions in doing this.  The money the wife had taken was $1428.  He was a very poor man at the time.

16. In re-examination, the husband said money was in a joint asset account.  He did not know where it came from.  The money came from his (country omitted) account.  The husband’s evidence in this regard was hard to understand.

Findings about the Credit of the Witnesses

1. As I have earlier indicated, I have not ended up with any great confidence in the overall veracity of either of these two witnesses.  In a sense, once one knows that they were complicit in the defrauding of Centrelink, one perhaps knows enough already to form significant judgments as to their credit.  Both were at times unconvincing and evasive.  The wife did not impress me as being in the faintest way scared of the husband.  Her answers were combative and assertive. 

2. The husband’s evidence I have already commented on.  One of the most striking aspects of it was when he was taking issue with counsel for putting to him questions which, as he put it, were raising his $45,000 agreement against him.  The way in which he upbraided counsel for this had, in my view, a distinct element of menace.  He would be a very threatening person on his own. 

1. In this evidentiary wasteland, where the parties had money rocketing around the place, to and from relatives, in and out of bank accounts in different countries and are not truthful, it is no small matter for the court to try and drag any kind of coherent narrative together. 

2. The parties met in 2008 and started living together in 2009.  By that time the husband had the two properties, the sale of which has given rise to the pool as it now stands, other than the remnants of the money from (country omitted). 

3. The parties shortly after their marriage went to (country omitted), where it stands to reason that the mother, as a native (country omitted) speaker, must have handled at least the formalities of their businesses together.  Nonetheless, and having seen him give his evidence, the father would have undoubtedly have controlled their finances to a considerable extent at least.  He is a man, as I find, very concerned with what I might describe as money generally and its minutiae.  His enormous affidavits show a considerable attention to detail.  Although not so pronounced, the wife is also a person with a very keen eye to money and her own interests. 

4. Whether the wife married the father to get a visa I will never know, but it is clear that she was keenly aware of the progress of her visa application at all times.  She has of course obtained permanent residence in 2014. 

5. In and amongst all this the husband’s father appears from time to time to have played more than one role.  I accept that he tried to help the wife out at one stage for some reason, but I also accept that he has since changed his tune. 

6. I am not able to make significant findings as to the extent of the husband’s violence on the wife, but the exhibit from (omitted) suggests in the strongest terms that at least on occasion he has behaved less than properly towards her.  I do not think he could have been as violent as the wife says.  Having seen her give her evidence, she is simply not scared of him. 

7. The parties conducted a successful business in (country omitted).  It is wholly impossible to make anything of the alleged loans advanced from time to time, notwithstanding that there is some documentation to support at least some of them.  It should be noted that the affidavits by the wife’s family members cannot be relied on as they are plainly hearsay on any view. 

8. As I find, the husband did indeed take $14000-odd from (country omitted) and has dissipated substantial amounts of that in failed business ventures in Australia.  The wife sold the home the parties had bought in (country omitted) and has kept all the $43,000 net proceeds to her own benefit.  Each of the parties has minimal superannuation in Australia.  Their superannuation, in my view, owes nothing to each other and although the husband was prepared to countenance an equalisation, I do not think it would be just and equitable to do so. 

Stanford & Stanford (2012) 247 CLR 108

1. It is clear that the only real assets of the parties for these purposes are the remaining moneys from the sale of the home in (country omitted) and the moneys held in trust.  Both parties desire all of it and it is plain that this is one of those cases where it is just and equitable that there be a property division.

The Pool

1. As earlier indicated, it is the moneys held by the wife and the moneys held in trust.  In total, these amount to $43,000 plus $128,000 i.e. $161,000.

Contribution

1. There is no doubt that the moneys held in trust derive entirely from the sale of the husband’s former property.  He paid the mortgage on it over a relatively protracted period of time and put in a substantial chunk of the purchase price.  It seems more probable than otherwise that the net proceeds of the Property B property were applied to reduce the mortgage on the Property A property and the remaining equity owes much to the husband’s payments from time to time. 

2. That is not, however, the end of the matter.  The husband has dissipated about $145,000 (obviously some of that would have gone on living expenses) that might otherwise have been available in the pool.

3. Given the utterly unsatisfactory nature of the evidence, it is no way possible to make an arithmetical adjustment.  The moneys dissipated are more than the moneys held presently in trust. 

4. The wife has had the whole of the benefit of the property sold in (country omitted).  In my view the parties’ contributions should be assessed as essentially equal to both the $43,000 held in the (country omitted) property and the moneys held in trust, which represents a balancing off of the moneys wasted by the husband. 

Future Needs

1. Both these witnesses impressed me as being intelligent and resourceful.  They are both young and in good health.  There is nothing to suggest that either deserves any adjustment in this regard. The parties have referred obliquely to possible debts, but I have not been pointed to any specific evidence about them. If the husband has a HECS debt, it is clearly his responsibility alone. It is not appropriate to contemplate any adjustment arising from any personal liabilities the parties may have. They will stand where they lie.

Conclusion

1. This is an extraordinary case on a completely unique set of facts.  In the particular circumstances and in view of the findings I have made, the wife should retain the $22,000 she has from the sale of the property in (country omitted) and should receive $58,500 of the funds held in trust.  This will mean that she has received a total of half of the total of $161,000.  In my view, in the particular circumstances of the case, this represents a just and equitable outcome.

I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 15 December 2017