Kuong and Han

[2008] FamCA 729

FAMILY COURT OF AUSTRALIA

KUONG & HAN [2008] FamCA 729

FAMILY LAW – ENFORCEMENT OF ORDERS - Property Orders - impracticable for order or part of an order to be carried out

Family Law Act 1975 (Cth) - s79A

APPLICANT: Ms Kuong

RESPONDENT: Mr Han

FILE NUMBER: SYF 2130 of 2006

DATE DELIVERED: 11 June 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Judicial Registrar Johnston

HEARING DATE: 11 June 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Alkadamani

SOLICITOR FOR THE APPLICANT: CASTRISSION & CO

COUNSEL FOR THE RESPONDENT: On his own behalf

Orders

1. I order that the property orders at paras 1, 2, 10 (pages 5 to 8) of the orders made on 18 December 2007 are set aside pursuant to s 79A(1) of the Family Law Act 1975.

2. I order that the wife file and serve an amended application for final property orders together with all affidavits in support not later than 18 July 2008.

3. I order that the husband file and serve an amended response for final property orders together with all affidavits in response not later than 19 September 2008.

4. I otherwise order that the final property proceedings be listed for hearing by Judicial Registrar for one day at 10 am on 16 October 2008.

5. I order that by consent and until completion of the substantive property proceedings both parties are restrained from taking any step to transfer, sell, charge or encumber, mortgage or to dissipate the property known as “the Hong property”.

6. I order that pending further order both parties are restrained from receiving the title deeds to the said property.

IT IS NOTED that publication of this judgment under the pseudonym Kuong & Han is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Ct

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2130  of 2006

Ms Kuong

Applicant

And

Mr Han

Respondent

REASONS FOR JUDGMENT

1. This is an application in a case by the wife filed on 9 May 2008 in which the wife seeks that the order for property settlement made on 18 December be varied or set aside, for the Court to determine other orders in substitution for the said property orders and that the application is made pursuant to s 79A of the Family Law Act 1975. 

2. The husband has responded to the wife’s application and he in effect seeks what I might broadly describe as enforcement orders.  That is by way of a response to an application in the case which was filed very recently.  My copy does not appear to have a Court date, but it is dated 28 May 2008.  In that response the husband seeks further orders that the wife in effect be ordered to comply with certain of the obligations in the substantive orders.

3. The orders, as I say, were orders made on 18 December 2007.  They included provisions in relation to the parties’ children, and then they recorded the fact that each of the parties had received separate legal advice.  Then the orders provided from page 5 a package of orders in relation to the parties’ property.

4. For this to be understood, I need to paraphrase some of the orders. Paragraph 1 of the orders in effect required the wife to sign all documents necessary to transfer to the husband her interest in the Hong Kong property , that being the major asset of these parties.  In turn, the same order required the husband to cause the transfer documents to be prepared and delivered within 28 days to the wife’s solicitor.

5. Paragraph 2 of the orders required that the transfer documents, that is, those transfer documents prepared by the husband, were to be held by the solicitor for the wife in escrow pending receipt by the wife from the husband of all moneys payable to the wife pursuant to orders 6 and 8. 

6. I will turn next to paragraphs 6 and 8 of the orders because they bring into being fundamental obligations under the orders.  Paragraph 6 of the orders provided to the effect that within 35 days the husband hand a bank cheque in favour of the wife’s solicitor for payment to the wife of a sum equivalent to HK$2 million, that being said to be the equivalent of approximately $285,700 Australian dollars.  The order provided that the wife and the husband would be responsible for their own bank charges, if any, currency exchange loss, if any, and government tax of levy liabilities, if any.

7. Paragraph 7 of the orders provides as follows:

   Order that within 35 days from the date of these orders the respondent husband provides to the solicitor for the applicant wife, Castrission & Company, a statement on oath as to:

   (a)all of his interest held by him or on his behalf by any person or entity in any investments with [M] Investments Australia Limited of which the respondent husband is a named account holder or a named joint account holder; and

   (b)all of his shares, options or other securities in [X] Limited held by him or on his behalf by any person or entity; and

   (c)all of his interest held by him or on his behalf by any person or entity in any units in any managed fund or trust of which the respondent husband is a named account holder or a named joint account holder (hereinafter referred to as the respondent husband’s investments).

8. Paragraph 7 goes on to provide as follows:

   For the avoidance of doubt the respondent husband’s interest in the following three superannuation accounts are specifically excluded from this order:

   (a)       Telstra Super Personal Plus membership number […]; and

   (b)      [S] Plan membership number […]; and

   (c)[X Limited] Retirement Plan membership number […].

9. Paragraph 8 of the orders provides as follows:

   Order that within 35 days from the date of these orders the respondent husband do all acts and things and sign all documents as may be necessary to cause to sell, redeem or convert into cash the respondent husband’s investment mentioned in Order 7 with the proceeds of such sales, redemption or conversion being payable to the trust account of the solicitor for the applicant wife, Castrission & Company, for payment to the applicant wife.

10. Order 9 provides as follows:

    Order that [M] Investments Australia Limited and [X] Limited be permitted to pay the proceeds of sale or conversion into cash of the investments and interests of the respondent husband in such entities to the trust account of the solicitor for the applicant wife, Castrission & Company, for payment to the applicant wife in accordance with the provisions of order 8 above.

11. Paragraph 10 of the orders is highly controversial and it provides as follows:

    Order that on condition that the funds payable under order 8 are equivalent to a minimum of $280,000 Australian dollars (AUS $280,000) then the exchange of the transfer documents and the bank cheques for the sum of all the moneys referred to in orders 6 and 8 above shall also satisfy all of the following conditions:

    (a)the venue of the exchange shall be at the office of the respondent husband’s solicitors; and

    (b)contemporaneously and at the same time as the said applicant wife’s solicitors hand the transfer documents to the said respondent husband’s solicitors the respondent husband’s solicitors shall hand the bank cheques in favour of Castrission & Company for the sum of all the moneys referred to in orders 6 and 8 above; and

    (c)the acknowledgement of the completion of this exchange shall be made in writing by both parties’ solicitors.

12. What has subsequently occurred is that the husband says that he has borrowed money from his relatives, that being the moneys referred to as being required to be paid by him to the wife pursuant to paragraph 6 of the orders. 

13. What I think occurred was that the husband arranged for a bank cheque in the amount of $285,700, but in fact that has never been received by the wife.  That is, the wife has not been prepared to accept that in circumstances where there has not been a settlement between the parties.  This is for the reason that the wife says that a proper interpretation of the orders is that under paragraph 10 of the orders, and I have referred in detail to the requirements of that paragraph, the funds which were to be forthcoming in respect of those policies that I have referred to under the provisions and that are referred to in paragraph 7 of the orders, came to a minimum of $280,000.  Learned counsel on behalf of the wife says that this is because of the language that is used in paragraph 10, and that provides specifically for the exchange.  That is, the exchange of transfer documents prepared or completed by the wife in return for cheques provided by the husband in the amounts as required under the orders. 

14. The position is that in fact moneys have not changed hands and both parties are very frustrated that they have been unable to bring their financial relationship, to completion.  

15. The husband says that his solicitor advised him to sign these orders in circumstances where the husband would now lead the Court to believe that he was informed that paragraph 10 really did not have any operation and that it was not really something which he needed to worry about in circumstances where other provisions referred to the parties’ obligations. 

16. It was said by the husband firstly that under paragraph 3 the wife was to do all acts and things and sign all documents necessary, or as may be reasonably requested by the husband’s solicitor of her, to transfer to the husband all her right, title and interest in the Hong Kong property, and that the husband was to be responsible for the costs of that transfer. The husband says that there is ample provision under the orders to enable that to be done, and that the way the Court should interpret those orders is simply to excise the requirements under paragraph 10 of the orders.  He said his advice was that he did not have to interpret the package of orders in accordance with what purports to be a requirement of paragraph 10.  That is, that he had to pay a minimum of $280,000 out of those investments for the necessity to bring into operation those provisions about exchange and the wife handing the transfer documents to the husband’s solicitors for the sum of the moneys in orders 6 and 8 above. He says that in those circumstances really what the Court should do is simply require the wife now to send to the husband the transfer documents in return for the husband sending the wife a cheque in the amount referred to in paragraph 6, and the amounts which the policies and investments referred to in paragraph 7 involve.

17. The difficulty with this is that I am struggling to understand really what the whole package of orders requires.  The reason that I am struggling is really because of the way that paragraph 10 of the orders was drafted.  That contemplates that there is to be a minimum of $280,000 in those policies or investments referred to in paragraph 7, and it is clear at least from the husband’s material, that those policies have not produced anything like that amount.  Even if one provides meaning to paragraph 10 and includes it, it does not make any provision - that is, the overall package of orders does not make any provision for what is to happen in the event that those policies and investments did not realise a minimum of $280,000. 

18. In those circumstances I cannot see that that is a complete order under s 79 because it does not bring finality to the parties’ financial circumstances.  All it does is provide for certain things, as I have referred to them under the obligations set out in the orders.  But it leaves a gaping hole, as it were, about what is to happen in the event that those investments and policies did not come up to a minimum of $280,000.  The husband says I should not worry about that, as I have said, and simply go ahead and interpret the orders to require him to have to pay the wife the amount in paragraph 6 of the orders, namely the $285,700 Australian and then require the wife to provide him with the transfer documents which will then enable him to achieve the transfer of the wife’s interest onto the register, which will have the result of him having the entire ownership of the property.

19. In those circumstances where I cannot read meaning into the orders in such a way as to understand that there is an entire package of orders which would enable the parties’ financial relationship to be brought to finality, it seems to me that those orders ought to be set aside as the wife is seeking. 

20. Section 79A of the Act is the provision that enables the Court to make orders to vary or set aside orders. Sub-paragraph (b) of s 79A(1) provides that:

    Where an application by a person affected by an order made by the Court under s 79 in property settlement proceedings if the Court is satisfied that:

    (b)in the circumstances that have arisen since the order was made it is impractical for the order to be carried out or impracticable for a part of the order to be carried out then the court may in its discretion vary the order or set the order aside, and if it considers appropriate make another order under s 79 in substitution for the order so set aside.

21. What has happened since the orders were made is that those funds referred to in paragraph 7 and also in paragraph 10 have not realised anything like $280,000. Therefore that requirement in paragraph 10 was not able to be brought into effect.  In those circumstances, and in the circumstances where there is no provision made for that eventuality, it seems to me that circumstances have arisen since the order was made which have made it impractical for a part of the order to be carried out. If we then just start picking and choosing which parts of the orders apply it seems clear to me that that is quite different from what the overall package required.

22. In all those circumstances in my view the situation which is presented to the Court is one which is contemplated by s 79A of the Act, and therefore the Court ought to set those orders aside.

I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Johnston.

Associate: …

Date:  26 August 2008