LONG & PENG
[2019] FCCA 1987
•24 July 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LONG & PENG | [2019] FCCA 1987 |
| Catchwords: FAMILY LAW – Property Settlement – final property orders – adjustment of property interests under section 79 of the Family Law Act 1975 (Cth) regarding property interests held in Australia – allegations of fraud and misappropriation of funds alleged against the wife – obligation on parties to make full and frank disclosure – each party failing to make adequate disclosure – both parties credibility in issue – whether it is just and equitable to make any order adjusting the parties interests in property – whether the order proposed is just and equitable – order made adjusting the parties interests in joint property – court satisfied that the order made is just and equitable in the circumstances. |
| Legislation: Family Law Act 1975 (Cth), ss.79, 79(4) Evidence Act 1995 (Cth), ss.101A, 102, 103, 106, 108 Federal Circuit Court Rules 2001 (Cth), r.24.03 |
| Cases cited: Stanford v Stanford (2012) 293 ALR 70, [2012] HCA 52, (2012) FLC 93-518 |
| Applicant: | MS LI |
| Respondent: | MR PENG |
| File Number: | BRC 2041 of 2016 |
| Judgment of: | Judge Tonkin |
| Hearing date: | 15 May 2019 |
| Date of Last Submission: | 15 May 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 24 July 2019 |
REPRESENTATION
| The Applicant appeared in person |
| Counsel for the Respondent: | Mr J. O’Neill (Direct brief) |
ORDERS
Within 28 days from the date of these orders, the husband shall do all things necessary and sign all documents at the wife’s expense to transfer to the wife all his right, title and interest in the property situated at A Street, Suburb B in the State of Queensland (“the A Street, Suburb B property”).
Contemporaneously with Order (1) hereof the wife shall discharge the whole of the mortgage to Westpac bank in the sum of between $297,000 and $350,000 and thereafter indemnify the husband and keep him indemnified with respect to that mortgage.
The wife shall simultaneously at the time of discharge of the Westpac mortgage pay any outstanding land rates, land taxes and water rates with respect to the A Street, Suburb B property.
Within 28 days from the date of these orders, the husband shall do all things necessary and sign all documents to transfer at his expense to the wife the whole of his right, title and interest in OO shares.
The husband is declared the sole and beneficial owner to the exclusion of the wife of the following:
(a)The property situated at C Street, Suburb D in the State of Queensland;
(b)The property situated at E1 Street, Suburb F in the State of Queensland;
(c)The property situated at E2 Street, Suburb F in the State of Queensland; and
(d)The husband’s interest in the ANZ account in the husband’s sole name.
The wife is declared the sole and beneficial owner to the exclusion of the husband of the following:
(a)The property situated at G Street, Suburb H in the State of Queensland; and
(b)The wife’s interest in the NAB account in the wife’s sole name.
The husband shall retain the whole of his interest in the HSBC account in his sole name.
The husband shall retain the whole of his interest (if any) in the KK Investment account in his sole name.
Each party shall retain the whole of his or her interest in superannuation in his or her sole name.
IT IS NOTED that publication of this judgment under the pseudonym Long & Peng is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRC 2041 of 2016
| MS LONG |
Applicant
And
| MR PENG |
Respondent
REASONS FOR JUDGMENT
Introduction
This was a unique and complex matter. The parties were well educated individuals, the husband having qualifications and working as a professional in City J China and the wife also having qualifications. At one stage, the wife was working as a professional and working as a professional in Australia. Notwithstanding that both parties held extensive qualifications, neither party produced the necessary financial records to assist in the determination of this matter. No valuations had been conducted regarding the parties’ real properties, and few bank statements (if any) were provided despite serious allegations of fraud. As will become apparent throughout these reasons, the credibility of both parties was seriously in question. Whether it was intentional or not, the parties failed to make adequate financial disclosure. The manner in which the parties chose to conduct these proceedings was completely unsatisfactory. The Court cannot operate in a vacuum.
Background
The wife was born on … 1966 and is now 53. The husband was born on … 1965 and is now 53. The parties married on … 1990. In 1990 the husband was a student at K University and the wife worked at Employer PP while studying part time at K University for her degree which she obtained in 1997. There is one child of the marriage Ms L born on … 1992. Ms L is now 27.
The wife obtained status as a professional in 2003 and worked as a profesional with various companies until 2005. She was the primary carer for Ms L and managed the parties’ finances until … 2005. The wife said the parties were also involved in a business exporting goods from China. She said she researched real estate and according to the wife she made the bulk of real estate purchases for the parties.
The husband worked as a public servant and later developed his own business. According to the husband, he left Australia in … 2004[1] to work for a company in China. The husband denied that the wife was involved in the exporting business.
[1] In the Westpac loan documents under the entry “time with his employer” the day … 2005 is recorded. It remains unclear whether the husband left Australia in … 2004.
The wife contends that the parties lived as husband and wife until late 2005 with the husband travelling quite regularly between City J China and Brisbane in 2005. The wife left Australia towards the end of 2005 and she and Ms L (then 13) moved to the United States of America (USA) for Ms L’s education. The wife contends that from … 2005 the husband handled the parties’ property investments in Australia by agreement collecting rent, paying the mortgage and managing investments. She said that the rental income received from the parties various properties was used to support Ms L’s education overseas.
Between late 2005 and 2013 the wife and Ms L lived in the USA and Country X while the husband lived in China. The wife worked in various jobs to support Ms L. The husband visited the wife and Ms L in the US twice a year and later visited once a year. After 2009 (when Ms L was 17) he no longer visited. The wife said she and Ms L visited the husband every year in China until 2010. Ms L then stopped visiting China whilst the wife continued to visit the husband.
According to the wife she believed that she and the husband were in a “committed marriage” even though they lived in different countries. She said on a visit to China in … 2013 she “discovered marriage papers hidden in a draw in the parties’ home in City J China’ and found out that the husband had married a woman in China in 2012 and he had a child to this woman. She then commenced divorce proceedings in China in … 2013.
The parties were divorced in China in May 2015. They agreed to a division of their assets and orders were made following mediation in the City J Court on 12 May 2015 adjusting the parties’ property interests. A copy of the property settlement in China entitled “Letter of Civil Mediation” dated 12 May 2015 was annexed to the wife’s affidavit filed on 25 July 2016[2]. The settlement declared that a property in O Road, City J China vested in the husband and a property at SS Street, P Town, City J, China vested in the wife. Further the husband was required to pay the wife RMB 3,500,000 (AUD$750,000) prior to 15 May 2015 and the wife was required to withdraw the prosecution brought against the husband for bigamy (which had been proved against him). The parties each retained all other property they held in mainland China. The settlement excluded “any property, creditor’s right or debt of the parties in foreign countries or in any regions including Hong Kong, City QQ or City RR.” The wife withdrew the bigamy complaint and the husband paid the wife the money referred to in the property settlement agreement.
[2]Annexure L1 of the Wife’s affidavit filed on 25 July 2016
Litigation history
The parties’ dispute commenced when the wife filed for a divorce before a Court in China in … 2013. She sued the husband for bigamy on … 2014. The bigamy charge was proved on … 2014 and the husband was sentenced to two months detention which was suspended.
The parties’ were divorced “voluntarily” in China and their property dispute resolved by agreement on 12 May 2015.[3] According to the husband no order was made in China but rather the Court in China confirmed the agreement reached by the parties following a court ordered mediation.[4] He said this was important because in the proceedings commenced by the wife in Australia she alleged that the court in China “unfairly divided the parties’ property in China” however she had agreed to the settlement.
[3]Annexure L1 of the Wife’s affidavit filed on 25 March 2019
[4]Paragraph 6 of the Husband’s affidavit filed on 16 December 2016
Following the filing of her divorce application in China the husband made a report to Queensland police alleging that the wife had stolen $300,000 from his ANZ account in 2005 “through the Westpac loan.”
On 3 March 2015 the husband filed for divorce in the Brisbane Registry.
On 5 August 2015 the husband with leave of the Court filed a Notice of Discontinuance of his Divorce application filed in Australia.
On 9 March 2016 the wife filed an application for adjustment of property interests in relation to property the parties owned in Australia.
On 8 June 2016 the husband filed an application for summary dismissal of the wife’s property application. That application was dismissed by the Court on 30 August 2017.
On 4 October 2016 the husband brought proceedings against the wife in QCAT for a warrant of possession for failing to leave the home at A Street, Suburb B. [5] His application was dismissed by the court. According to the wife neither the husband nor his solicitor attended Court on the day his application was dismissed.
[5]Paragraph 43 of the Wife’s affidavit filed on 16 December 2016
On 17 November 2016 the wife was interviewed by police at Suburb Q in relation to a report made by the husband in about 2014 that the wife stole $300,000 from him in 2005.[6] The wife claimed that the husband falsely accused her of stealing.
[6] Paragraph 57 – 58 of the Wife’s affidavit filed on 25 March 2019
On 15 March 2017 the husband commenced proceedings in the District Court for the transfer of the wife’s property in Suburb H to the husband notwithstanding proceedings had commenced in the Federal Circuit Court. The wife filed a defence. It remains unclear whether these proceedings are currently on foot.
The matter was heard before this Court on 15 May 2019. The wife was self-represented and the husband was represented by Counsel. Notwithstanding the dearth of evidence and the failure by both parties to produce relevant financial records, both parties indicated that the matter should proceed to trial. The wife initially sought a Mandarin interpreter however when advised by the Court that an interpreter was not available and the matter would need to be adjourned she indicated she wished the matter to proceed without an interpreter. It became apparent throughout the proceedings that the wife had a sound understanding of the English language and conducted the trial without difficulty including cross examining the husband and making submissions.
Evidence
The wife filed an initiating application and a number of affidavits in the proceedings including her affidavits filed 9 March 2016, 25 July 2016, 29 September 2016, 26 February 2018, 24 August 2018 and 25 March 2019 in addition to financial statements filed on 9 March 2016 and 29 September 2016.
The husband filed a response on 8 June 2016, his financial statement of the same date and his affidavits filed on 8 June 2016, 16 December 2016, 31 August 2018 and 17 April 2019 in addition to the affidavit of Mr R filed on 16 December 2016.
Competing applications
In her amended application filed on 29 September 2016 the wife sought that the property at A Street, Suburb B, Queensland be transferred to the parties’ daughter Ms L upon her return to Australia. Further she sought that the cash deposit with HSBC (approx. $500,000), the KK share portfolio (approx. $357,000), the Citibank term deposit ($596,566) and other cash deposits be divided equally between Ms L, Mr Peng and the wife. She sought an order that other property be divided equally. Further she sought an order that E Street, Suburb F, Queensland be transferred to the wife and the land situated at Suburb S be transferred to the husband. She sought an order “after the exchange of these two lands our real estate properties be divided equally in value” and the liability for the loan with Westpac be borne equally. She “demanded $600,000 in compensation from the husband for financial and emotional suffering.”
The husband sought various orders in his response however in his case outline filed on 3 May 2019 the husband sought an order that the wife’s application be dismissed. He sought a declaration that the property situated at G Street, Suburb H “is held by the applicant in a constructive trust on behalf of the respondent.” Further that A Street, Suburb B Qld be transferred to the parties’ daughter Ms L. He sought an order that the applicant pay the husband $1,000,000 plus interest from 20 October 2005 at the standard rate. He sought that the applicant pay the respondent’s costs on an indemnity basis.
Issues in dispute
The following issues were in dispute:
a)The date of final separation;
b)The value of the asset pool;
c)The husband’s knowledge of the Westpac loan;
d)Whether the wife misappropriated funds; and
e)Whether any adjustment of property interests should be made.
Legal Principles
Prior to the High Court decision in Stanford v Stanford (2012) 293 ALR 70; [2012] HCA 52; (2012) FLC 93-518, the approach to be taken when determining an application under section 79 of the Family Law Act 1975 (Cth) (“the Act”) was well established by authority: see In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-593. The Court was required to identify the property, liabilities and financial resources of the parties at the time of the hearing, to evaluate the contributions made by the parties as defined in section 79(4)(a) to (c) and to evaluate the matters contained in section 79(4)(d), (e), (f) and (g) including by reference to section 79(4)(e) the matters referred to in section 75(2) of the Act insofar as they were relevant and determine under section 79(2) of the Act having regard to all the circumstances whether the result was just and equitable. It was the justice and equity of the actual orders that the court was required to consider: See Russell v Russell (1999) FLC 92-877.
In Stanford (supra) the High Court did not disapprove nor approve of the four step approach however it was made clear in Stanford at [37] that in determining an application under section 79 of the Act the question posed by section 79(2) of the Act is whether having regard to the existing property interests of the parties (as determined by common law and equity), the Court is satisfied that it is just and equitable to make a property settlement order.
The Court in Stanford (supra) said at [39]:
“... whether it is ‘just and equitable’ to make the order is not to be answered by assuming that the parties’ rights to or interests in marital property are or should be different from those that then exist… whether making a property settlement order is ‘just and equitable’ is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised ‘in accordance with legal principles, including the principles which the Act itself lays down.’ To conclude that making an order is ‘just and equitable’ only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.”
These principles guide the Court in exercising its discretion.
Assessment of the evidence
The parties married in 1990. Ms L was born in 1992. They do not dispute they were in a committed marriage during the first 10 years with both parties in employment and the wife having primary care of Ms L.
The husband claimed that the parties separated in 2000.[7] He said he worked at K University for only 3 years and from 2000 he was an independent businessman involved in both government and privately owned businesses. He said around 2000 the parties “divided property already and at that period we signed a written agreement.” From about 2000 he was single “because his Medicare card had only his name on it.”[8]
[7] Paragraph 20 of the Husband’s affidavit filed 17 April 2009
[8] Ibid, paragraph 20
I note that the Medicare card, a copy of which is annexed to his affidavit, is in the husband’s sole name and was issued for the period “2005 to 2010.” It is unclear how the husband was able to obtain the Medicare card. He deposed that he is a Chinese citizen and has lived in City J China from … 2004. He was not a permanent resident of Australia after … 2004 on his own evidence and it is likely he was not entitled to a Medicare card particularly a card valid to “… 2010”, however, he was not cross examined on this issue.
The husband alleged in his affidavit that the wife received single parenting payments from the Australian government from 2000. The wife did not respond to that allegation nor was she cross examined about it. I make no finding in that regard.
The husband annexed to his affidavit the front page of what purports to be a copy of page 1 of his tax return forms for the years ending 2000, 2001, 2002 and 2003 asserting he was single. Those one page documents provide very little information with no address provided, no further documents attached, no reference to the husband’s occupation and more importantly no reference to his spouse though the husband was married to Ms Long at the time. The documents were unhelpful and did not establish that the husband was single. If the husband lodged his tax returns as indicated in his affidavit it would appear that he concealed information about his spouse from the Australian Tax Office.
The husband contends that he believed he was divorced and a property settlement had taken place between the parties by … 2005. He said that the wife and Ms L visited him in China and the wife claimed she was “already divorced” to the husband’s personal and company bank manager, his friend, the wife’s friend with whom the husband bought property in 2005 and a local business owner. The husband tendered a number of unsworn documents in Chinese[9] from these persons in support of his contention that the parties conducted themselves as if they were divorced. The documents annexed contain unauthorised translations. I place little weight on those documents.
[9] Annexure P2 to SP5 of the Husband’s affidavit filed 17 April 2019.
Husband’s divorce application
The husband filed for divorce on 3 March 2015. In that application he listed his residential address as O Road, City J in China. He asserted in the application that “both the husband and the wife regard Australia as his/her home and intend to live indefinitely in Australia.” He asserted that both he and the wife “ordinarily live in Australia and had done so for 12 months immediately before filing the application.” Those representations were untrue. The husband had lived in China and had done so since about … 2004 (according to the husband) and is a Chinese citizen.
In his divorce application he asserted that the date of separation was 1 January 2000 however he indicated that “at the date of separation” he did not regard the marriage as over but regarded the marriage as over on 31 December 2004. He asserted that the parties lived together in the same home from 1 January 2000 until 31 December 2004 and since the date of separation they had not lived together as husband and wife. He asserted that there were no other current or pending cases in any other court about family law however when he made that statement the parties’ family law proceedings in China had not been resolved. The husband signed the divorce application attesting to the truth of the facts deposed by him. The husband’s Counsel at trial signed the lawyer’s declaration on 2 March 2015. I reject the husband’s evidence regarding when the parties separated.
DIY divorce
The husband contends that at no stage “from 2000 onwards did we live together as man and wife although for a period we did remain in the same house but leading separate lives.”[10] He claimed that in 2002 the parties completed a DIY divorce kit and agreed to divide up their property interests. He said “that document was the reason I believed that I was obtaining a divorce. It also settled what was to happen to our matrimonial property.” He said “In 2004 we signed a further agreement that provided that property they owned at A Street, Suburb B would be jointly owned property that would eventually be transferred to our daughter Ms L. In the meantime the income from renting the property would be used to fund Ms L’s education.” [11]
[10] Paragraph 3 of the Husband’s affidavit filed on 16 December 2016.
[11]Paragraphs 16 – 17 of the Husband’s affidavit filed on 8 June 2016.
The husband said he tried to obtain a copy of the property settlement agreement from the wife’s solicitor but was advised that files older than 7 years were not retained and he was told it was likely that the documents were destroyed once the time limit was reached. He said “the copies I had stolen in the City J China burglary referred to the above.” I infer he accused the wife of removing those documents from a property he owned in China in 2013.
The wife denied there was ever any DIY divorce documents nor any separation agreement in 2002. She said she regarded their marriage on foot until she travelled from the US in … 2013 “to our home in City J China and found the marriage certificate between Mr Peng and a woman named Ms U, a birth certificate for their son Z.”[12] She said she filed an application for divorce at the Family Court in City J China as the husband is a Chinese citizen. On … 2014 she filed an application for criminal bigamy. On 12 May 2015 the parties divorced in China. She said on 22 June 2015 she received a letter from the husband’s barrister James O’Neill advising her that the husband had filed for divorce in Brisbane and the hearing was scheduled for 5 August 2015. The husband subsequently withdrew this application.
[12]Paragraph (a) of the Wife’s affidavit filed on 25 July 2016.
The husband said “Therefore, City J China court accepted Ms Long’s statement and wrongly concluded that the Australian marriage and PENG & LONG lasted until 2013. Under the pressure of “bigamy” coercion, Ms Long almost forced me to agree to ‘reconciliation’ (essentially malicious extortion) by paying about AUD$1.35 million asset (one property and AUD$0.7 million cash) in China (2015 market value) to end the ‘Australian marriage’ in China again.” He said this was “the second time of marital asset division for my Australian marriage with Ms Long.”[13] I am unable to determine from the evidence before me the separation date accepted by the Court in China. I note that the Letter of Civil Mediation confirmed by Judge V of the City J People's Court on 12 May 2015 indicates that the parties “voluntarily agreed to divorce.”[14] I find that the parties divorced in China on 12 May 2015 and divided their property in China.
[13] Paragraph 20 of the Husband’s affidavit filed on 17 April 2019.
[14] Annexure L1 of the Wife’s affidavit filed on 25 March 2019 at L 1.
The husband said Ms L was not told about their separation in 2000 however she asked her parents to divorce many times. He said they did not tell her the truth until the night of the burglary when the husband told Ms L about their relationship from 2000 and told her that a separation agreement was stolen with all other documents. He said the wife wanted to remove his Australian identification for some unknown reason.
The husband said he was regarded as single in China up until he married in 2012. He was classified as a single person by the Chinese government on 24 January 2005. He said “he showed Ms W a copy of the 2004 divorce agreement” and said “the wife was aware of that fact and had no objection.” The wife denied that.
The husband said that in 2006 he was involved in a property transaction with a friend of the wife’s in City J and the registration of that property refers to the husband as single and “the wife was aware of that.” He said he remarried because he believed he was divorced after completing the DIY divorce kit in 2002. He said “It was a shock to discover that that was not the case. My wife and I have a young son born in 2013.”
Regarding the wife’s claim to have discovered he was married “when she found marriage papers ‘hidden’ in a drawer in ‘our’ house in City J” he said there was no “our house” in City J. The papers were kept along with a lot of other legal documents in an apartment he owned in City J. This apartment was not occupied and the husband and his current wife lived in another property. He alleged that the wife had no legal right to enter his apartment and said it is her knowledge of those documents and her admitted possession of them that is one of the reasons he believes that she was the person who burgled the apartment.
When cross examined about this issue the husband said “the first separation divorce agreement was signed around 2002 or 2003. I can’t remember exactly, after that I was going to Sydney going to change my career and we lost that one. So we signed the final version of separation and divorce agreement before I left Australia in … 2004.” The wife asked the husband where were the documents to verify this however he did not respond and the wife called him a liar and put to him that those documents “don’t exist.”
During cross examination the wife asked the husband if he told the court in China that according to Australian law “from 2003 married couple separate for two years the marriage automatically dissolved and the result don’t need a divorce certificate.” He said it was most likely he said that.
The wife disputed the date of separation. She said the parties lived together in Brisbane until 2005 and the husband continued to visit the wife and Ms L in the USA and sent her money regularly as support for her and for Ms L during the time they lived in the USA. She believed she was in a committed marriage until she discovered the documents in 2013 that the husband had married someone else. She said “we have land and rental properties under both of our names, including a Westpac loan for the rental properties. Our previous residential property is also under both names, in addition our shares are under both names. We have never divided our Australian assets.” In her affidavit filed on 25 July 2016, the wife annexed documents evidencing property (L 6) and OO shares (L 7) in joint names in addition to a Westpac loan in joint names (L 8).
According to the husband the divorce hearing in China took place on … 2014. The husband provided a translation of those proceedings however that translation was his own and not through a certified interpreting service. When cross examined the wife was asked whether she told the court in China that she started living separately when “I took (my) daughter to USA for study in … 2005. Since then I and Mr Peng maintained separately living in two countries. It is, as the matter of fact separation.” She said she did not agree with the husband’s translation and therefore did not accept that she had made that statement. She accused the husband of being “a liar.” She denied the parties completed a DIY divorce kit and said at no time did she engage a solicitor to assist her to obtain a divorce nor did she sign any document about a property settlement agreement.
The husband said he told the Court in China that “in 2005 Ms Long presented a handwriting (sic) divorce agreement to me and asked me to sign and put the marriage certificate and divorce agreement together and asked me to take back to court.” When asked by Counsel why the wife didn’t challenge this during the divorce hearing in China she said “I don’t want to answer” however she agreed that she had not challenged that statement in the Court in China but said “I reject his claim now about the separation even though we live in separate countries he comes to see us and we go back to see him. We keep our family relationship and family responsibility.”
During cross examination by Counsel the wife agreed that the parties “wrote a note to divorce” but denied there was any property settlement agreement. It was suggested to the wife that she wrote a note saying “I am willing to give it (the A Street, Suburb B property) to Ms L then there is no further more property division between us.” She disagreed saying “that’s another translation trick.” She was referring to the husband’s translation of part of the proceedings before the Court in China. She agreed with Counsel that she had not obtained an authorised translation of the proceedings in China. She said “I know that’s wrong. I can’t read Chinese.” Ultimately she agreed she would “give the A Street, Suburb B property to Ms L.”
The wife was cross examined about her application for residence in Country X. She deposed in her affidavit that in 2005 “we applied for Country X Permanent Residence” as Ms L wanted to go to the US or Country X to study. I infer that the “we” referred to both the husband and wife. She said she filled out the forms online and sent the application to the Country X Embassy. She no longer retained those documents. She was granted a permanent resident card in Country X on … 2014 (L10) valid until … 2017. On the confirmation of permanent residence form which appears to be dated … 2008 (L 11) Mr Peng is listed as her spouse and an “accompanying family member.” The husband disputed that he ever applied for residence in Country X. I accept that the husband neither applied for residence in Country X nor did he live in Country X at any time with the wife. The wife said she had no assets in Country X and lost her Country X Permanent Residence status when she went to China for her divorce proceedings which took several years (… 2013 to … 2015).
Principles on separation
Establishing separation is a matter of fact. In Clisbey & Vas [2011] FAMCA 611, Stevenson J set out the principles applicable to determining whether the parties to a proceeding have separated:
“[47] A number of authorities dealt with the elements necessary to establish “separation” for the purposes of section 48 of the Family Law Act, for example Pavey & Pavey (1976) FLC 90-051 at pp 75, 211 to 213 and Todd & Todd (2) 1976 FLC 90-008 at p 75,078. These elements are:
· intention
· action
· communication
[48] This analysis was applied to a de facto relationship by McGuire FM in Aitken & Deacon [2010] FMCAFam 35. His Honour said:
[9] Those authorities make it clear that there are three elements of separation in a legal sense. They are:
(a) The development of an intention to separate. That intention need not be mutual;
(b) The communication of that intention to the other party. In my view such communication should be unambiguous and unconditional; and
(c) Some form of action upon the determination to separate.
[10] I am of the view that the test of the element of ‘communication’ is an objective one.
[11] As Watson J stated in Todd and Todd (No 2) at [75,079]:
“Separation can only occur in the sense used by the Act where one or both of the spouses form the intention to sever or not to resume the marital relationship and act upon that intention, or alternatively act as if the marital relationship has been severed.”
[12] The communication of the intention is an absolute requirement. Whilst that communication can be spoken or unspoken, it should be unequivocal, unconditional and unambiguous.
[13] Whilst there are guiding principles, it remains that each case must be determined upon its own facts. As the Full court of the Family court of Australia said in Pavey and Pavey at [75,214]:
“… it is not possible to apply some mathematical formula to these activities and determine whether a “separation” has occurred. Rather the evidence should examine and contrast the state of the marital relationship before and after the alleged separation.’”
The Full Court emphasised the need to communicate the intention to separate to the other party. That communication can be either spoken or unspoken. See the discussion in Falk & Falk.[15]
[15] (1977) 3 Fam LR 11238; FLC 90-247
Insofar as the authorities indicate that physical separation is neither a necessary nor a sufficient condition to establish a separation, the parties to a marriage may regard themselves as being married even though they are living apart for a period of time. The authorities make it clear that there are three elements of separation – an intention to separate, an action upon that intention and communication of that intention to the other party.
I reject the husband’s assertion that the parties separated in 2000. He claimed he did not leave Australia for China until … 2004. He said he and the wife drew up a DIY divorce kit both in 2002 and 2004. The wife denied that. The husband did not adduce any evidence of the terms of any property settlement. The wife denied there had been any previous property settlement and denied she had stolen any DIY documents.
The wife did not deny that the parties discussed obtaining a divorce prior to the husband’s departure to China. During cross examination she agreed that the parties “wrote a note to divorce.” I am satisfied that both parties formed an intention to separate prior to the wife leaving Australia in late 2005. I am satisfied that the parties acted on that intention. In his divorce application filed on 3 March 2015 the husband indicated that the parties no longer cohabited after December 2004. The husband said he left for China to work in … 2004 but returned to Australia regularly in 2005. The wife left Australia in late 2005 and then moved to the US with Ms L. I accept the wife’s evidence that she and the husband agreed he would manage the properties in Australia and provide Ms L with financial support for her education. I find that the parties separated in late December 2005. I find that after December 2005 the parties lived separately and apart in two different countries. I find that the parties operated on what was effectively a separation agreement regarding the properties owned by them in Australia with the husband managing those properties, collecting rents, paying expenses and providing financial support for the wife and for his daughter’s education overseas. The parties did not cohabit after this time or reconcile. I accept that the husband considered himself separated from the wife with no likelihood of reconciliation when he married his new wife in 2012.
Circumstances following separation
The husband contends that the wife suddenly took Ms L to the US “without prior notice.”[16] He said he did not know where she lived and did not have a contact number for her. He said he only had an email address. The husband claims he travelled to Brisbane in … 2006 and the wife’s mother asked him to manage the wife’s properties and A Street, Suburb B “due to the absence of the wife.” I reject that evidence and prefer the evidence of the wife that in … 2005 the husband and Ms L travelled to China and the wife left Australia in about … 2005, travelled to China and she and Ms L then travelled to the US for Ms L’s education. It is common ground that the husband continued to provide financial assistance for the wife and Ms L for Ms L’s education whilst the wife and Ms L lived in the USA and Country X until about 2013. The wife had the full time care of Ms L during this period and also provided Ms L with financial and practical support.
[16]Paragraph 9 of the Husband’s affidavit filed on 17 April 2019.
The husband claimed in 2007 that he consulted Legal Aid about how to transfer the A Street, Suburb B property into Ms L’s name after the wife’s “disappearance” from Australia over the years.[17] I do not accept that the husband was unaware where the wife and his daughter were living. On his own evidence he visited them whilst they were in the US. The wife contends that on one occasion he visited them in Country X. I accept her evidence.
[17]Ibid, paragraph 10.
The wife said in 2006 and 2007 she purchased two blocks of land at auction in the US and advised the husband about this. They cost US$20,000 and US$8,000. She later discovered that the land was not suitable for building on and tried unsuccessfully to resell them. She said the properties were costing her money so she abandoned them and has not paid rates since that time. After she moved to Country X in 2009 she stopped receiving bills with respect to those properties.
She said in 2006 and 2007 her mother transferred $34,000 out of her HSBC account and after that transfer she had a remaining balance of $1,378.06. She said she had a few thousand dollars in Y Bank in the US which is a joint account for herself and Ms L and is intended for her daughter’s emergency use. She agreed that periodically the husband sent her money in the US for Ms L’s support. She estimated that he sent overall about US$500,000 and Ms L’s tuition cost about US$300,000.
The husband agrees he continued to send the wife money for her and Ms L’s support until the wife applied for a divorce in 2013. I am satisfied that following separation in late 2005 the parties reached agreement about their financial affairs and acted upon that agreement until the wife commenced divorce proceedings. I am satisfied that they agreed to utilise the properties in Australia managed by the husband to provide continued financial support to enable their daughter to complete her education (including her tertiary education) overseas. Otherwise the parties lived independently of one another in two different countries.
The husband has remarried and has another child to support. I am unable to determine his income but do not accept he earns a meagre $202 per week but rather a substantial income as a professional. Both parties have property in Australia and in China. The wife is currently unemployed however she holds post graduate qualifications in accounting and intends to work in the future.
Parties’ assets
No joint balance sheet was provided by the parties. The wife asserts in her affidavit filed on 25 March 2019 that the parties have the following assets. No valuation of any real property was obtained by either party.
| ASSETS | ||||
| Ownership | Description | Wife’s estimated value | ||
| 1 | Joint | A Street, Suburb B, Qld | $600,000 | |
| 2 | Wife | G Street, Suburb H, Qld | $280,000 | |
| 3 | Wife | NAB cash | $194,000 | |
| 4 | Husband | Land at E1 Street, Suburb F, Qld | $350,000 | |
| 5 | Husband | Land at E2 Street, Suburb F, Qld | $350,000 | |
| 6 | Husband | C Street, Suburb D, Qld | $280,000 | |
| 7 | Husband | HSBC Term deposit | $486,215 | 16 August 2013 |
| 8 | Husband | KK share portfolio | $375,318 | 27 May 2011 |
| 9 | Husband | Citibank | $596,566 | 20 July 2005 |
| 10 | Husband | ANZ | $44,995 | 7 June 2017 |
| 11 | Wife | TT Super Fund | $24,828 | 20 March 2001 |
| 12 | Husband | Superannuation | $30,000 | |
| 13 | Joint | Shares | $4,000 | |
| Liabilities | ||||
| Joint | Westpac mortgage | $297,000 | 25 March 2019 | |
The wife deposed that the parties hold the following assets in China.[18]
[18] The wife deposed that she acquired her interest in property in China following the property settlement in China the subject of Letters of Mediation dated 12 May 2015.
| ASSETS IN CHINA | ||||
| Ownership | Description | Wife’s estimated value | ||
| 1 | Husband | O Street, City J | $2,400,000 | |
| 2 | Husband | BB Company | NK | |
| 3 | Husband | House/apartment husband lives in with current wife | NK | |
| 4 | Wife | N Street, City J | $600,000 | |
| 5 | Wife | Cash deposit in China | $600,000 | |
Financial statements
In the wife’s financial statement filed on 9 March 2016 she provided various estimates of the value of property that differed from the estimates provided in her most recent affidavit. Initially she provided an estimate of the HSBC investment at $175,000 and an estimate of the Westpac mortgage at $200,000. No mention was made of property owned by her in China. She declared she was unemployed and listed her investment income at $500 per week. In her financial statement filed on 29 September 2016 the wife listed the HSBC investment at $150,000 and Westpac mortgage at $300,000. At trial she contended that the husband held an KK share portfolio worth $375,318, a Citibank investment of $596,566 and HSBC investment of $486,215.
In the husband’s financial statement filed on 8 June 2016 he listed the following assets and liabilities:
N Street, City J, China $1,300,000
A Street, Suburb B $600,000 (50% interest)
E1 and E2 Street, Suburb F
Suburb F $490,000 (100% interest)
ANZ Suburb B $11,791
Bank AA $16,623
C Street, Suburb D $300,000
UU Company Nil
Contents $2000
G Superannuation $32,000
Westpac mortgage ($310,000) (100% interest)
Personal loan from Ms U ($744,680)
Bank AA credit card ($87)
No valuations were obtained by the husband regarding the real properties he owned. Funds held in the husband’s sole name in KK Bank and HSBC were not included in his financial statement. He declared an income of $202 per week against expenditure of $655 per week while listing himself as a professional. He failed to declare any benefit he derived from any interest in BB Company. He listed further expenditure of $887 (presumably per week) for his son. As I understand his evidence he lives in a property in China with his wife and son other than the O Street, City J property. The husband’s financial statement contains no reference to this property whether it is owned or leased by him.
In his financial statement the husband included the Westpac mortgage of $310,000 as a joint liability indicating the parties’ shared a “100% interest.” He alleged he owed his current wife $744,680. He did not list any debts owed to him by the applicant although he alleged in his affidavits that she had “stolen funds” from him (discussed below).
Both parties signed their respective financial statements. In doing so each party swore or affirmed that they had each read Rule 24.03 of the Federal Circuit Court Rules 2001 and each was aware that by law each party had an obligation to make a full and frank disclosure of his or her financial circumstances to the Court and to each other. In particular each party acknowledged that each of them had disclosed in their respective financial statements all matters that he or she was required to disclose under Rule 24.03. Further each party swore or affirmed that the information in his or her financial statement and any attachments to it within his or her personal knowledge were true. Further, where each party had given an estimate in his or her financial statement this was based on that party’s knowledge and was given in good faith and all information given in the financial statement and any attachments were true to the best of each party’s knowledge, information and belief. Each party swore or affirmed that each of them had no income, property or financial resources other than as set out in his or her financial document. Each parties’ solemn oath or affirmation proved to be patently false.
Obligation to disclose
The law to be applied and the approach that may be adopted in cases where, through the lack of a full and frank disclosure, the Court is unable to fully ascertain the extent of a party's wealth, is well settled (see Stein v Stein (1986) FLC 91-779; 11 Fam LR 353; Mezzacappa v Mezzacappa (1987) FLC 91-853; 11 Fam LR 957; Black and Kellner (1992) FLC 92-287; 15 Fam LR 343 and Weir v Weir (1993) FLC 92-338; 16 Fam LR 154).
The Full Court in Giunti and Giunti (1986) FLC 91-759 at 75,555 said:
“[32] It is obviously desirable as a general principle that the Court should first of all identify the pool of assets available and evaluate it. If each party complies with his or her obligation to make a full and substantive disclosure of their financial affairs[19] there is no problem although there may be disputes as to valuation. However if, as here, one party fails to fulfil that obligation, is it open to that party then to rely on the absence of satisfactory evidence to prevent the making of an order against him or her which otherwise justice and equity would require? It would be simple, if that were the case, to evade the jurisdiction of this court, not by outright refusal which would attract sanctions but by obfuscation and evasion.”
[19] see Briese and Briese (1986) FLC ¶91-713, affirmed by the Full Court in Oriolo and Oriolo (1985) FLC ¶91-653.
It is fundamental to the operation of the Family Law Act 1975 in financial matters that parties provide full and frank disclosure of their financial position. I am not satisfied that the parties in this case have frankly disclosed their true financial positions to the Court.
Westpac Loan
According to the husband in … 2005 the wife suggested that he should invest in property at C Street, Suburb D which was valued at $170,000. He said he agreed to allow the wife $200,000 from his ANZ account for this purpose. The property was to be registered in his name only as he was the sole source of funds. He said “I had no reason not to trust the wife.” [20]
[20] I note that the husband claims he had been separated from the wife since 2000 at this time.
The husband claimed that the wife never informed him that she had taken a loan out with Westpac nor that he was to be solely responsible for the repayments. He said he could not have taken out the loan as he was not in Brisbane at the time.
According to the wife, the husband was well aware that she applied for a joint loan with Westpac bank. She said Mr CC (a loan agent) handled the loan application. In her affidavit filed 25 July 2016 she deposed that the Westpac loan was used to purchase two rental properties one at C Street, Suburb D in the husband’s name and one at G Street, Suburb H in her name. The total loan amount from Westpac was $350,000 and the loan settlement date was … 2005. The loan was in the names of both parties. The wife was self-employed at the time and would not have had the income to support the loan repayments. She said the husband repaid the loan every month from his ANZ account from the commencement of the loan for a period of about 8 or 9 years. The loan documentation was in his custody. He received all rents from the properties that the parties owned in Australia and paid the expenses including the periodic repayments on the Westpac loan.
Throughout his various affidavits the husband continued to deny any knowledge of the existence of the Westpac loan and denied that he gave the wife any authority to apply for a joint loan. He said he was living in China when the wife took out the Westpac loan and was not in Australia when the loan settled on … 2005. He said in 2005 he visited Australia no more than 4 times and stayed for 40 days.[21] He returned to Australia during the following periods:[22]
· Departed China for Australia on … 2005 and arrived back in China on … 2005 (10 days);
· Departed China for Australia on … 2005 and arrived back in China on … 2005 (11 days);
· Departed China for Hong Kong on … 2005 and arrived back in China on … 2005;
· Departed China for Australia on … 2005 and arrived back in China on … 2005 (11 days);
· Departed China for Australia on … 2005 and arrived back in China on … 2005 (11 days)
[21]Paragraph 9 of the Husband’s affidavit filed on 16 December 2016.
[22]Annexure P5 of the Husband’s affidavit filed on 8 June 2016.
The wife maintained that the husband was fully aware of the Westpac loan and said that as the husband was living in China “he asked her to sign his name on the loan documents for convenience.” After the wife sued the husband for bigamy he accused her of forging his signature on the Westpac loan documents.
Regarding the allegation that the wife forged the husband’s signature she said “as a married couple we often signed each other’s name on some documents for convenience sake. The Westpac loan documents were mainly signed by me including signatures of his name.” She said “the signature mistake was only an issue within our family” and he was fully aware that she had signed the loan documents for both of them.
The wife said further that after she commenced proceedings for bigamy the husband alleged that the signatures on the loan documents were signed by two different persons and insisted that his signature was signed by “another male” person purporting to be him. He claimed that the wife went to the Westpac bank with someone purporting to be the husband and this person signed the Westpac loan documents in his name. He said he had not banked with Westpac before. The wife asserted that the husband deliberately “made it look like someone helped her to commit a fraud.” She said there was no Chinese gentleman involved in the whole process of the loan application. Mr CC was the only person involved in the transaction.
The wife said “it can easily be seen that the signatures were signed by one person which is me.” She claimed that in April 2014 that the husband said before the Chinese Court that “his signatures on the Westpac loan documents were signed by the wife.” I am satisfied from the wife’s own evidence that she signed the husband’s signature on at least one page of a Westpac loan document.
Westpac loan documents
The husband annexed to his affidavit filed on 31 August 2018 a copy of documents from Westpac being a loan offer for $350,000. The complete loan document was not annexed or produced in evidence.
The husband annexed a further document of several pages titled “Personal Finance Application.” The documents record that the parties were married with no dependents. I note that their daughter Ms L was 13 years old at that time. The address provided for the husband was N Street, City J. The husband’s income was recorded as $120,000 p.a. and the wife’s income recorded as nil. The document is signed on … 2005. Under cross examination the wife agreed that she completed that application form. She said “I signed some documents for him which he told me to do and some were signed by himself and faxed from his office in China.”
The husband annexed to his affidavit filed on 17 April 2019 at SP8 a copy of Westpac loan documents. The documents appear to have been faxed on … 2005 and are incomplete. The annexure begins at page 4 of 12 of the original document. Both the husband and the wife are recorded as applicants and the document records they are married. The husband’s residential address is recorded on that document as no. … N Street, City J which is identified as his own home. The wife’s address is A Street, Suburb B which is identified as her own home. The husband’s occupation is recorded as General Manager of FF Company, VV Street, Hong Kong. The wife’s occupation is recorded as a self-employed professional operating from the A Street, Suburb B address. Neither declaration on page 5 of 12 is signed. No previous employment details have been recorded on the loan application. The husband’s current income is recorded as $180,000 p.a. with the wife’s income recorded as $17,174. The following assets are recorded: A Street, Suburb B valued at $600,000, DD Land at $150,000 and Suburb S (land) at $120,000. A HSBC savings account is recorded with value of $54,352 and Citibank savings account recorded with value of $590,543. A Motor Vehicle EE is listed with a value of $30,000 and personal effects of $15,000.
A further document (page 9 of 12) annexed to the husband’s affidavit lists the security offered for the loan as being C Street, Suburb D with a value of $168,000 to be rented for $780 per month and G Street, Suburb H with a value of $167,000 to be rented for $800 per month. The documents have consecutive numbering as follows: copy of original document page 4 of 12 to page 10 of 12 and fax numbering being page 5 of 51 to page 11 of 51 pages.
Two further documents are annexed at SP8 of the husband’s affidavit which appear to be part of another original set of documents of 20 pages. Those documents are numbered page 8 of 20 (page 34 of 51 of the faxed documents) and page 15 of 20 (page 35 of 51 of the faxed documents). No other documents of the remaining 51 documents faxed (whether part of the original 12 page document or part of the original 20 page document) were annexed. There was no explanation by the husband why he annexed two different incomplete loan documents.
On page 8 of 20 (or 34 of 51 of the faxed documents) under employment details for the husband is the entry Manager P.R. China, FF Company, GG Street, Brisbane. Under the entry “time with this employer” is recorded … 2005. The document is signed and dated … 2005. The declaration authorises the husband’s employer to disclose his salary, employment and financial details. The employment details completed for the wife refer to her occupation as a self-employed professional. She has signed the declaration.
On page 15 of 20 (or 35 of 51 of the faxed documents)[23] under the heading declarations and authorities a signature entry for both the husband and the wife is signed. The wife said that she signed on her own behalf and signed on behalf of the husband. The document is dated … 2005 and the declaration confirms that the information provided to Westpac on the loan application is complete and correct and acknowledges that the lender will rely on the information when making a decision. The complete 20 page document was not produced in evidence.
[23] This document is identical to annexure L35 to the wife’s affidavit filed 25 March 2019
The wife was cross examined on the document annexed to her affidavit of 25 March 2019 at L35 (identical to the document annexed by the husband at SP8 page 35 of 51 of the faxed documents). She said she faxed the husband some of the Westpac loan documents[24] to his office in China and he sent the documents back from City J to Brisbane. She said the husband did not provide her with the full 51 faxed pages. She could not recall if he faxed the documents to her or directly to her lawyer’s office. She said L 35 has the husband’s signature on it[25]. She said “it’s his signature I recognise his signature.”
[24]Annexure L35 of the Wife’s affidavit filed 25 March 2019.
[25] Contradicting her evidence that she signed signatures for both parties
Counsel asked the wife about the signatures on L 36 annexed to the wife’s affidavit of 25 March 2019. She said she wrote her own name and the husband’s name on that document. Counsel asked the wife why she signed the husband’s name on several loan documents but felt it necessary to fax these documents to City J for his signature. She said “probably Mr Peng provide all this loan document. I don’t have access. He... have (sic) everything but this document he provided. He… said it’s part of a loan agreement.”[26] I find that the wife signed the husband’s signature on L36. I am unable to determine who signed the document L35 annexed to the wife’s affidavit. I note that the husband’s Counsel did challenge the wife during cross examination when she said she recognised the husband’s signature.
[26]Page 27 of the transcript of the Wife’s evidence at [34].
The wife was cross examined regarding a document annexed to her affidavit filed 25 March 2019 at L 34 which was a translation of proceedings before the Court in China. The wife was asked whether she had told the court in China that she did not know who had signed the husband’s signature on Westpac loan documents. She said she “couldn’t remember” making that statement to the Court. She said “I remember we bought a loan and he signed some document I signed some document….he now want to deny it but it’s the truth.”[27]
[27]Page 16 of the transcript of the Wife’s evidence at [37] to [40].
Husband’s knowledge of the Westpac loan
The husband claimed that the wife concealed the Westpac loan documents from him by using her mother’s address in City J. He failed to establish in evidence that the address provided to Westpac on the application was the wife’s mother’s address. Further he claimed that the wife was “solely able to access the Westpac records.” [28] He said when he discovered what had been done it was very difficult for him to obtain the relevant details. He gave various dates as to when he “discovered” the Westpac loan. He said “it was not until 2006 that I discovered that the wife borrowed $350,000 from the Westpac bank to finance the purchase of two properties.”[29] In his affidavit filed on 31 August 2018 at paragraph 19 the husband said that in around mid-2007 he obtained some Westpac loan documents from the wife’s mother’s apartment in City J. In his affidavit filed on 17 April 2019 at page 14 (e) the husband deposed that in 2009 “by chance he obtained Westpac letters from the wife’s mother’s place in China and started to negotiate with Westpac to find out the loan document.” He said meanwhile the wife’s mother asked him not to report the matter to Queensland police and Westpac for the sake of Ms L and (she) started to pay the loan from 2010 until 2013 “totally cash deposit into my ANZ account approximately $20,000.” He said in 2018 Westpac stopped the direct debits from his ANZ account. In his affidavit filed on 8 June 2016 at paragraph 28 he said Westpac did not send him the loan documents until … 2014. He said it was then that he discovered “I had signed the loan documents.”
[28]Paragraph 18 of the Husband’s affidavit filed 31 August 2018.
[29]Paragraph 26 of the Husband’s affidavit filed 8 June 2016.
Though the husband’s address provided on the Westpac loan application differed from his O Street, City J address, I am satisfied that Westpac had the husband’s correct address at some stage but I am unable to determine when they had his correct address. A copy of a Westpac loan statement dated 5 July 2016[30] is addressed to both the husband and the wife at the husband’s address O Street, City J in City J. The Court in China had declared the property at this address vested in the husband. This address was also provided on the parties’ rates notice for the A Street, Suburb B property in … 2010 and appears on the HSBC bank statement dated … 2013.
[30]Annexure L30 of the Wife’s affidavit filed 25 March 2019.
It was put to the wife that she went to the ANZ bank and arranged a direct debit for the monthly mortgage payments to Westpac. She denied that she went to the bank but agreed that she “put his account number there” however she said “I’m not the account holder…I can’t tell them what to do.” Later during cross examination she agreed that she signed the husband’s name on the direct debit authority. The document was signed with Chinese characters on … 2005[31]. She said “he told me to do it because he was in China. He say ‘you sign it’ I said ‘I’m going to fax you.’ He said ‘don’t worry about it, you just sign it’ and he did sign my name many times as well.” She agreed that when she signed as the husband she was being untruthful. She agreed when investigated by police she told the police she signed the husband’s signature on each occasion. She agreed that she told the court in China something different. She said she admitted to police that she made a mistake and said “I signed his name which I shouldn’t.” I find that the wife signed the direct debit authority for payment of the Westpac mortgage to be made from the husband’s ANZ account. I suspect that the husband told the wife to sign the authority however I am unable to make any finding in that regard.
[31]Annexure P15 of the Husband’s affidavit filed on 17 April 2019.
Counsel suggested that the husband returned to Brisbane during the first week in … 2005. The wife agreed. She said they were living in the same house at A Street, Suburb B at that time and they both took Ms L to some shows at the HH Company Centre. She denied that she did not tell the husband she had bought the properties. She said she did tell him and “of course he knew that.” I accept the wife’s evidence that the husband was aware they had bought the properties. From … 2005 the husband managed those properties collecting rents and paying expenses. The husband did not deny that he managed the parties’ properties in Australia from ….
When asked by Counsel what contribution the wife had made towards the Westpac loan she said that the properties were rented and the husband retained the income. He also collected rental income from A Street, Suburb B.
It is apparent from the ANZ statement annexed by the husband to his affidavit[32] that direct debits of about $2,169 were being made from the husband’s ANZ account towards a Westpac loan for an extended period of time. I simply do not accept that the husband was not aware of the existence of the Westpac loan. The husband and wife visited each other during the period 2005 until 2013 and the husband continued to provide financial support for the wife and Ms L until she filed for divorce in China in 2013. The husband had ample opportunity to raise with the wife the Westpac mortgage payments being debited monthly from his account if his claim that he had not authorised either the loan or the direct debit facility were true. There is no evidence that he raised these issues with the wife before she filed for divorce.
[32]Annexure P3 of the Husband’s affidavit filed 8 June 2016.
The husband provided no satisfactory explanation as to why he allowed direct debits to be made monthly from an ANZ account in his sole name towards a Westpac mortgage account after … 2005 for an extended period of time. Though he claims to have made enquiries of Westpac prior to the wife commencing divorce proceedings he produced no evidence of any enquiry he purportedly made. It is improbable in my view that the husband would have allowed direct debits to continue to be deducted from an account in his sole name if he had been unaware of the purpose of those direct debits. He is a professional by profession with qualifications. No doubt he is a highly intelligent man with expertise in financial matters. It beggars belief that he allow direct debits of about $2100 a month to continue to be made to Westpac where he did not authorise those payments. The husband told the Court that he regularly used the ANZ account from which the direct debits were being made and his income was deposited into that account. I formed the impression that the husband was seeking to escape liability for the Westpac loan on the basis that the wife admitted to forging his signature. The Court was advised that the issue regarding liability for the Westpac loan is currently under investigation with Westpac bank. The husband indicated that in 2018 Westpac suspended his requirement to make repayments on the loan. I infer that Westpac will not attempt to recover from the husband his share of the joint Westpac liability.
I do not accept that either party has been truthful regarding his or her involvement in obtaining the Westpac loan. I find that the husband had knowledge of a Westpac loan applied for by the wife. Further I accept the wife’s evidence that the husband faxed the wife some Westpac loan documents to Brisbane from his JJ Company Representative Office on … 2005 where he was the manager. The wife asserted this was proof that he knew about the loan.[33] I am concerned however, that according to the husband, Westpac appears to have accepted he is not liable for the loan though the husband produced no evidence to support this assertion.
[33]Paragraph 60 – 61 of the Wife’s affidavit filed 25 March 2019.
Allegations of fraud
In Refjek v McElroy [1965] 112 CLR 517 at 521, when discussing the civil standard of proof necessary to support a finding of fraud, the High Court said:
"The ‘clarity’ of the proof required, where so serious a matter as fraud is to be found, is an acknowledgment that the degree of satisfaction for which the civil standard of proof calls may vary according to the gravity of the fact to be proved: see Briginshaw v. Briginshaw (1938) 60 CLR 336 , per Dixon J.(1938) 60 CLR, at p 362 ; Helton v. Allen (1940) 63 CLR 691 per Starke J.(1940) 63 CLR, at p 701 ; Smith Bros. v. Madden (1945) QWN 39 , per Dixon J.(1945) QWN, at p 42 . (at p521) But the standard of proof to be applied in a case and the relationship between the degree of persuasion of the mind according to the balance of probabilities and the gravity or otherwise of the fact of whose existence the mind is to be persuaded are not to be confused. The difference between the criminal standard of proof and the civil standard of proof is no mere matter of words: it is a matter of critical substance. No matter how grave the fact which is to be found in a civil case, the mind has only to be reasonably satisfied and has not with respect to any matter in issue in such a proceeding to attain that degree of certainty which is indispensable to the support of a conviction upon a criminal charge: see Helton v. Allen (1940) 63 CLR 691 per Dixon, Evatt and McTiernan JJ. (1940) 63 CLR, at p 714”
In Neat Holdings Pty. Ltd v. Karajan Holdings Pty. Ltd And Ors (1992) 67 ALJR 170; (1992) 110 ALR 449, Mason C.J., Brennan, Deane and Gaudron JJ said:
“The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud ((1) See, e.g., Hocking v. Bell (1945) 71 CLR 430, at p 500; Rejfek v. McElroy (1965) 112 CLR 517 at pp 519-521). On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear ((2) Briginshaw v. Briginshaw (1938) 60 CLR 336, at p 362; Helton v. Allen (1940) 63 CLR 691, at p 701; Hocking v. Bell (1944) 44 SR (N.S.W.) 468, at p 477 (affirmed in Hocking v. Bell (1945) 71 CLR, at pp 464, 500); Rejfek v McElroy (1965) 112 CLR, at p 521; Wentworth v. Rogers (No.5) (1986) 6 NSWLR 534, at p 539 or cogent ((3) Rejfek v. McElroy (1965) 112 CLR, at p 521) or strict ((4) Jonesco v. Beard (1930) AC 298, at p 300; Briginshaw v. Briginshaw (1938) 60 CLR, at p 362; Helton v. Allen (1940) 63 CLR, at p 711; Hocking v.Bell (1944) 44 SR (N.S.W.), at p 478 (affirmed in Hocking v. Bell (1945) 71 CLR, at pp 464, 500); Wentworth v. Rogers (No.5) (1986) 6 NSWLR, at p 538 ) proof is necessary ‘where so serious a matter as fraud is to be found’ ((5) Rejfek v. McElroy (1965) 112 CLR, at p 521). Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct ((6) See, e.g., Motchall v. Massoud (1926) VLR 273, at p 276) and a judicial approach that 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.”
Counsel for the husband submitted that the Court could be satisfied that the wife fraudulently obtained a loan from Westpac for $350,000 without the husband’s knowledge or consent. I reject that submission. I make no finding given the exacting standard of proof required to make a finding that a party has engaged in fraudulent conduct.[34] Further I am satisfied that the husband both had knowledge that the wife applied for a Westpac loan in joint names and was aware that direct debits were being made to Westpac on a monthly basis.
[34] See Briginshaw v Briginshaw (1938) 60 CLR 336.
ANZ account
According to the husband the ANZ bank is conducting extensive investigations into his allegation against the wife of misappropriation of funds and fraudulent conduct. In his most recent affidavit the husband sets out hearsay evidence of what the ANZ bank has apparently uncovered none of which was supported by documentary evidence and none of which was put to the wife in cross examination. The husband seeks to recover $1,000,000 from the wife on the basis of the wife’s alleged misconduct.
The wife said she took $20,000 in cash and traveller’s cheques in … 2005 when she left Australia. The husband deposed in his affidavit filed on 8 June 2016 “In … 2005… I discovered that the wife had almost completely emptied my ANZ account. She took $300,000 from this account by transferring it to the USA.” He also stated “at the end of 2005 she fraudulently took $300,000 from my ANZ account.” He was seeking to recover this amount plus interest.
The husband produced no document to support the withdrawal of “$300,000” from his ANZ account. Further he provided no explanation as to why he did not pursue the wife’s “theft” in … 2005 having discovered then that she had depleted his ANZ bank account. The alleged theft occurred 14 years ago and was not raised until after the wife commenced divorce proceedings in China. It is unclear whether the wife’s alleged theft of ANZ funds was raised before the Court in China.
The husband made no reference to returning to Australia in … 2005 when referring to his movement in and out of China. He said he departed China for Australia on … 2005 and arrived back in China on … 2005. According to the wife the husband left Australia in … 2005 for China and took Ms L with him. She said she then left Australia and collected Ms L from China and then she and Ms L travelled to the USA. Neither party produced a passport or any authorised immigration record to verify their movements to and from Australia. I accept the wife’s evidence that she travelled to China from Australia in … 2005 and then she and Ms L travelled to the US.
The wife denied that she removed any money from the husband’s ANZ account. She observed that the husband deposed that he came to the USA to visit the wife and Ms L a few months later in 2006[35] and sent the wife and Ms L about US$80,000 per year for financial support.
[35]Paragraph 32 of the Husband’s affidavit filed on 16 December 2016.
The wife said on 31 August 2018[36] the husband finally disclosed his ANZ bank statements from … 2004 to … 2006 after multiple requests for disclosure. In her view he was “trying to patch up his ANZ stealing story.” She said the ANZ statements reveal that the allegation that she stole $300,000 from his ANZ account was pure fabrication.
[36]P1 of the Husband’s affidavit filed on 31 August 2018.
The ANZ statement for the period … 2005 to … 2005 annexed to the husband’s affidavit of 31 August 2018 date reveals that an offshore transfer of $39,990 was received into the husband’s ANZ account on … 2005 and a card entry withdrawal was made at Suburb B on … 2005 in the amount of $120,007.50. The wife denied she withdrew these or any other large funds from the husband’s ANZ account. She said she was a card holder for the husband’s ANZ account however she only had ATM access and would withdraw from this account modest amounts of about $1,000 at a time. She acknowledged when cross examined by Counsel that after she and the husband were divorced in May 2015 she continued to withdraw modest amounts from the husband’s ANZ account.
In his affidavit filed on 8 June 2016[37] the husband alleged that “at the end of 2005 the wife fraudulently took $300,000 from his ANZ account and transferred that money to the US at the end of 2005 by the use of a Travelex Passport Card.” The husband did not produce the Travelex Passport Card nor did his ANZ statements support his allegation. There was no withdrawal of $300,000. I do not accept that the wife took $300,000 from the husband’s ANZ account in his sole name.
[37]Paragraph 12 of the Husband’s affidavit filed on 8 June 2016.
Later in his affidavit material the husband alleged that a person purporting to be the husband attended upon the bank and made the withdrawal from his ANZ account. He alleged that the wife provided this male person with the relevant identifying documentation for the husband. The wife denied that allegation. I am unable to determine who withdrew funds from the ANZ bank towards the end of 2005. The ANZ statements record that withdrawals were made in various large amounts by “card entry”. On the evidence before there are a number of possibilities:
a)That the husband made the withdrawals from his ANZ account;
b)That the husband provided his ANZ card to another person whom he authorised to withdraw funds from his ANZ account and/or provided that person with additional identifying documents to enable that person to withdraw the funds on his behalf;
c)That contrary to the wife’s evidence the ANZ card she held that was attached to the husband’s ANZ account enabled her to withdraw funds in excess of $1,000 from the husband’s ANZ account and the wife withdrew those funds;
d)That the wife had possession of the husband’s ANZ card and she provided that card to another person (in addition to other identifying documents) to enable that person to withdraw funds from the husband’s ANZ account;
e)A person or persons unknown withdrew the funds from the husband’s ANZ account.
The wife denies that she stole any money from the husband’s ANZ account. The withdrawal of funds from the ANZ account remains a mystery. Had the funds been withdrawn in an unauthorised manner it is likely that the husband would have pursued that matter immediately. He did not. He did not accuse the wife of stealing funds until after she filed for divorce in China. Moreover the husband’s allegation that the wife stole $300,000 from his ANZ account in … 2005 is at variance with his conduct in continuing to provide significant financial support to the mother to ensure Ms L completed her education. In my view had she removed those funds it’s likely the husband would have required her to utilise those funds for Ms L’s education until the funds were expended. He did not do so. The husband did not suggest at any time that he had lost his ANZ card nor did he suggest that he did not have access to his ANZ account. He could have made appropriate enquiries of the ANZ bank at any time following his discovery in … 2005 that monies had been withdrawn. He provided no explanation for the delay. I infer that the husband was unconcerned about the substantial withdrawal of funds at the time the monies were withdrawn being fully aware of the circumstances of the withdrawal. It is now almost 14 years since those funds were withdrawn. I am not satisfied on the evidence that the wife removed or stole $300,000 or any large amount from the husband’s ANZ account.
Suburb F properties
The husband said he purchased after separation two blocks of land in E Street, Suburb F (“the Suburb F properties”). The husband was not asked nor did he volunteer the source of the funds used to purchase those properties. The wife annexed to her affidavit filed on 25 March 2019 title searches obtained on … 2007 indicating that the Suburb F properties were registered in the husband’s sole name on … 2005 and a mortgage to Westpac was secured against those properties.
The husband did not explain how a Westpac mortgage was secured against those properties. He claimed to have had no previous dealings with Westpac prior to … 2005 when a loan was applied for by the wife. He further claimed to be unaware of the existence of the Westpac loan of $350,000. It was not alleged that the husband’s parents contributed towards the purchase of these properties. No further evidence was adduced regarding these properties. The properties remain in the husband’s sole name.
Citibank funds
The wife said after she came back to Brisbane in June 2016 she found a bank statement regarding a Citibank Term Deposit of $596,566.56 amongst the parties’ household items. She said “I believe that Mr Peng hides this amount of money from the Court and me.”[38] The Citibank statement was dated … 2005. Only one single statement from Citibank was produced. In so far as the wife implies that she was unaware of the existence of the Citibank account I reject her evidence. In the Westpac loan documents (referred to above) a reference is made to savings of about $590,000 with Citibank in … 2005.
[38]Paragraph 24 – 25 of the Wife’s affidavit filed 29 September 2016.
The husband said he opened the Citibank account in 2000 after separation. In his affidavit filed in December 2016[39] he said “I am still trying to sort out the full circumstances of the theft of funds in 2005 and have now asked Citibank for their assistance.”
[39]Paragraph 20 – 21 of the Husband’s affidavit filed 16 December 2016.
In his summary of assets and liabilities, the husband alleged that the wife and another person purporting to be the husband depleted him of $600,000 from the Citibank account. He said the funds from Citibank were transferred out of the account at the same time or just before the wife went to the USA.
In his affidavit filed on 31 August 2018[40] the husband said “on or about 20 October 2006 approximately $600,000 disappeared from my Citibank account….The Citibank account was ‘mine’ only in the sense that it was lodged in my name. The money actually belonged to my parents and I managed it for them. In effect, I was the trustee of their money. The Chinese Court accepted this explanation and made no orders for the division of that money.” He said “I did not make a transfer out of that account and the money is not in my possession, is not in the possession of my parents nor in the possession of anyone acting on my behalf.”
[40]Paragraph 9 – 10 of the Husband’s affidavit filed 31 August 2018.
Later in his affidavit at [26] he deposed that “I have been able to ascertain that when the Citibank account matured on … 2005 and was closed and the funds were transferred on … 2006. I was not in Australia and was unaware of what had happened. I still do not know precisely where those funds were transferred and by whom.” The husband said the matter was currently under investigation with Citibank.
The husband’s mother swore an affidavit filed on 16 December 2016. She alleged that she and her husband gave their son funds of about $500,000 to invest on their behalf between 1989 and 2004. The funds were invested with HSBC. Between 2006 and 2012 they sent their son a further $300,000 to invest on their behalf and those funds were invested in KK Investment Plan. She did not assert any ownership or interest in the Citibank funds.
There are numerous inconsistencies in the husband’s evidence. He has not produced any Citibank records. He apparently did nothing to investigate the alleged unauthorised transfer of Citibank funds in 2005 or … 2006 until the wife demonstrated that funds existed at the time the parties separated and had not been accounted for by the husband.
No allegation is raised by the husband’s mother against the wife that she misappropriated Citibank funds owned by the husband’s parents. There is no evidence that the husband raised the disappearance of the funds with the wife or accused her of misappropriating those funds until after she commenced divorce proceedings. The husband does not suggest that he is a man of such great wealth that he would not notice the loss of $600,000 (from Citibank) nor take action to recover those funds upon discovering that the funds had “gone missing.” Indeed if I were to accept his sworn financial statement (which I do not accept is a truthful representation of his financial position) he earns a meagre $202 per week as a professional and owes his current wife over $740,000. I do not accept the husband’s evidence regarding the Citibank funds at all. Like the missing ANZ funds, the disposition of the Citibank funds remain a mystery.
The husband has not established that the wife had either access to these funds or removed the funds. I do not accept that the husband would not have followed up immediately the disappearance of funds from his Citibank account had those funds disappeared shortly after the wife moved to the US. This appears to be yet another coincidence where $600,000 in Citibank funds go missing at a time when $300,000 is misappropriated from his ANZ account and the wife raises a loan of $350,000 without his knowledge. The husband failed to explain why he made no enquiry at the relevant time regarding a series of events which amounted to a loss for the husband in the vicinity of $1,000,000. I find the events improbable if not fanciful. The husband now seeks to recover from the wife $1,000,000. The evidence at best leads to the conclusion that about 14 years ago there was an amount of $595,000 in the husband’s Citibank account and those funds have not been accounted for.[41] There is no evidence that the Citibank funds continue to exist.
[41] I note however that the husband expended a substantial sum in supporting his daughter’s education overseas
HSBC account
The wife annexed to her affidavit bank statements indicating [42] that the husband had a term deposit with HSBC of $486,215 and savings of $7,953 in … 2013. She deposed that in the 2015 divorce and property proceedings in China the parties gave evidence before the Court in China as follows:
Wife “We have another Australian deposit now under the husband’s name in … 2013 it was over $480,000. Here is the statement from HSBC. I have asked for half or give it to my daughter.”
Husband “Until … 2013 it was that figure now it is around $500,000. It is not the wife’s asset, it was my personal asset. The statement of the HSBC was in my apartment and the wife took it away. This asset was built up after 2005. I refuse to divide it.”
[42] Wife’s affidavit filed 26 September 2016 at L2.
The husband deposed in his affidavit that the HSBC and KK Investment funds “are my parent’s money. They are held in trust for them and all financial contributions to those funds came from my parents.” He said the wife failed to produce any document that would establish she contributed to those funds.[43]
[43]Paragraph 19 of the Husband’s affidavit filed 16 December 2016.
Regarding the HSBC funds no statements were produced. No evidence was adduced by the husband regarding any transfer of funds from his parents to any of his bank accounts. The husband’s mother filed a short affidavit asserting that the money in both the HSBC and KK Investment accounts belonged to her and her husband and was invested by the husband into HSBC and KK Investment on their behalf.
The wife disputed this. She said the husband’s parents retired 20 years ago and live on pensions. She and the husband had helped them purchase an apartment in City M, China between 2004 and 2006. She denied the funds in the HSBC account belonged to the husband’s parents. She said the money in the husband’s HSBC account was “stored savings since the beginning of the marriage.”
The wife’s assertion is inconsistent with the entry in the Westpac loan application which the wife indicated she had completed. The document dated in about … 2005 indicates that the husband’s interest in HSBC was $54,352. There is no evidence that the wife contributed towards these funds after late 2005. The husband did not include in his financial statement funds held in his sole name in an HSBC account. He told the Court in China the figure in his HSBC account was “now $500,000. It is not the wife’s asset, it was my personal asset….This was built up after 2005. I refuse to divide it” [44]
Counsel for the husband indicated that the HSBC funds still exist though no attempt was made by the husband to adduce HSBC bank statements. I find that the husband had in May 2015 and continues to have about $500,000 in a HSBC account not disclosed to the Court. It is unclear whether those funds were in a bank account in China or Australia. Moreover it is unclear whether the funds were taken into account by the Court in China certainly reference was made to those funds. The husband claims he holds those funds on trust for his parents. Before the Court in China he said the funds were “his personal asset.” The evidence regarding the HSBC funds is wholly unsatisfactory.
[44]Ibid, Annexure P2.
KK Investment Plan account
The wife annexed to her affidavit a copy of a statement from KK Investment Plan in the husband’s name as at … 2011 with a balance of $357,318.15 mainly made up of shares and cash of $55,600.02. The wife contends that the funds in the KK Investment accounts are moneys owned by the parties that have been saved since the beginning of the marriage. In her affidavit filed on 29 September 2016 at [42] the wife contends that the husband insisted on investing $400,000 into KK Investment mutual fund 10 years ago. This was the only investment decision he made. She said the fund had not significantly improved in value.
Few KK Investment Plan statements were produced. The husband annexed to his affidavit filed on 17 April 2019 at P12 the opening statement for his KK Investment indicating his initial investment was $200,000 in the period … 2005 to … 2006. The wife contends that he told the court in China that these funds were his personal asset which he built up after 2005. The husband’s mother claims that she gave the husband about $300,000 between 2006 and 2012 and he invested those funds in a KK Investment account on behalf of his parents. I find that $200,000 was deposited in the KK Investment account between … 2005 and … 2006. The source of those funds remain unclear. Though not included in his financial statement, funds of $357,318.15[45] apparently existed in an KK Investment account in the husband’s sole name in around 2011. It remains unclear whether those funds were taken into account by the Court in China. It remains unclear whether those funds continue to exist. No reference was made to any interest in the husband’s financial statement to any funds in an KK Investment account in his sole name or otherwise. Again the evidence was completely unsatisfactory.
[45]Annexure L3 of the Wife’s affidavit filed on 23 March 2019.
Statutory declaration
On … 2005 the wife swore a statutory declaration that two properties at DD Land, Suburb S and T Street, Suburb S were purchased under her name but were paid for by Peng Family Trust “so the Mr Peng’s family have rights to do anything that they wish to – to lease or to rent. I have no interest in it.”
The wife was cross examined about swearing the statutory declaration. She said “there’s no such thing as the family trust he can show us where the family trust account is.” She said when she signed the statutory declaration she made a mistake. She denied the properties were paid for by the Peng Family Trust. She said part of the money was from our family.
The husband did not produce any financial records from the Peng Family Trust in support of his assertion that the source of funds for the properties were the Peng Family Trust. No reference was made by the husband’s mother to these properties in her affidavit. I am unable to determine where the truth lies with respect to this matter. As indicated I do not accept either party as a truthful witness.
Sale of land
The wife deposed that she sold the property at DD Land, Suburb S in about October 2015 for $185,000[46]. In addition she sold the T Street, Suburb S property. Those properties were in the wife’s sole name though she had signed the abovementioned statutory declaration indicating that she had no interest in those properties.
[46] When cross-examined the wife said she sold DD Land Suburb S for $175,00 and sold T Street Suburb S for $65,00 See Transcript of 15 May 2019 at pp. 5 - 6
The wife was cross examined about the source of funds in her NAB account of about $194,000. She said the funds were the balance of the net proceeds from the sale of the two properties. She had been using those funds for living expenses. No settlement statements from the sale of the properties were adduced in evidence.
The husband gave various dates when he says the wife engaged in fraudulent conduct or misappropriated funds. Following the commencement by the wife of proceedings he made no attempt to obtain an injunction against the wife preventing her from further disposing of and/or encumbering properties registered in her sole name nor did he seek to restrain the wife from using the net proceeds of sale from those properties for her expenses notwithstanding his contention that the properties were purchased by the Peng Family Trust.
JJ Company
In his affidavit filed on 17 April 2019 the husband said his company “JJ Company” was founded jointly by him on … 2007 under the Corporations Law in China. He deposed that the value of the company was nil. He said the wife had no legal interest in this company. He did not disclose any details of the company, nor any financial statements for the company nor did he disclose any benefit or interest he derives from the company. I am unable to make any finding other than the husband has a company in China from which he conducts a business. If his evidence was accepted (which it is not) the company offers the husband only a meagre salary with no benefits.
G Street
The parties indicated that the property at G Street, Suburb H is in the wife’s sole name. No documentary proof was provided regarding the title of that property however I accept the parties’ evidence that the property is in the wife’s sole name. The husband argued that the wife fraudulently transferred the property into her own name once she had obtained the Westpac loan. Counsel for the husband suggested that the day after the Westpac mortgage was approved the wife went to the Land Titles Office and signed a transfer of the title of the land at G Street, Suburb H from the husband to herself. When cross examined about this she said “no that’s not truth that’s a lie.” Cross examination by Counsel on this issue was extremely confusing and misleading.[47] Counsel for the husband suggested that the wife had unilaterally transferred the G Street property to herself. She was shown a document annexed to the husband’s affidavit filed on 17 (sic) August 2018. The affidavit was actually filed on 31 August 2018. The document the wife was shown was at P1. There were numerous documents at P1. The wife was shown a copy of a Transfer document. Mr LL was the apparent Transferor and the document was signed by the transferor on … 2005. The Transferee was Mr Peng. No signature had been signed under the entry for the Transferee (the husband) however a solicitor had signed on behalf of the Transferee. The property on the Transfer was not identified other than via “Lot … on RP ….” Counsel did not establish any connection between the Lot number identified and the property at G Street. Moreover the wife was not identified on the Transfer document.
[47] Transcript 15 May 2019 at pp17 - 20
Similarly a further copy of a transfer document was annexed to the affidavit of the husband. The document indicated a property was transferred to Mr Peng in about … 2005. The property was identified as “Lot … on RP …” and no connection was established between the Lot number identified and the G Street property. Neither transfer document was stamped acknowledging any payment of Queensland Stamp Duty. I am not satisfied that the wife engaged in the conduct alleged. In any event the husband did not raise this as an issue until after the wife filed for divorce though he claimed she engaged in this conduct in about … 2005. He managed the parties’ properties in Australia from … 2005. I am unable to make any finding regarding the allegation against the wife. No valuation was provided for this property.
Credibility
In Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447; (2003) 77 ALJR 1598 (3 September 2003) on the question of credibility the Court said:
“119. Lies and civil proceedings: …. What is important is not the proof of untruthfulness, as such, but the significance (if any) of any demonstrated falsehoods for the issues at trial. That significance can only be judged when measured against the entirety of the relevant testimony. By its logical force, that testimony may well require that falsehoods be ignored as irrelevant or immaterial to the decision-maker's ultimate conclusion. In particular cases, it may require the decision-maker, within the pleadings, to consider and decide a case different from - or even contrary to - that advanced by the party, because such is the legal entitlement of the person concerned.”
See also the dictionary definition of credibility in the Evidence Act1995 (Cth) sections 101A, 102, 103, 106 and 108 and section 165(1)(c) of the Evidence Act as to “unreliable evidence.”
As is apparent from my assessment of the evidence I do not accept the veracity of the evidence advanced by either party and in my view each party tailored his or her evidence to achieve his or her desired outcome irrespective of the truth. In addition the evidence was in large part unreliable in so far as it was dependent on events that occurred 14 years earlier where there was little if any documentary evidence to support it.
Conclusion
The decision of the Full Court in Bevan & Bevan [2013] FamCAFC 116 provides some guidance regarding the approach to be taken in property matters following the decision in Stanford (supra). In Bevan (supra) the parties were in their sixties when the matter was heard. They were married in 1972 had two children born in 1975 and 1976 and had no significant assets at the time of the marriage. In 1994 the husband left the wife for England and worked there as a medical professional. He gave the wife a power of attorney in 1995 to allow her to deal with the parties’ property and told her she could retain all their Australian property for herself and the children and he would build a life elsewhere. There was some intermingling of finances however the wife dealt with the assets in Australia as she saw fit including selling real estate and retaining the proceeds. The parties were involved in litigation involving a trust and the wife had “unfettered access” to the net proceeds of that litigation which was in excess of $1 million. She used the funds to purchase a home and borrowed $400,000 to complete the purchase. She did so without any reference to the husband. She then borrowed against that property, invested in the stock market and lost the bulk of her investment in the global financial crisis. The husband invested in shares and deposited the proceeds into the parties’ account in Australia. Between 1994 and 2004 they holidayed overseas together funded by the wife from the parties Australian resources.
The husband commenced living with a new partner in 2006 who owned property in England. The parties divorced on 22 July 2010 and the husband commenced property settlement proceedings in July 2011. The date the parties separated was in dispute, the wife contending that the parties separated in 2000 whereas the husband contended the date of separation was May 2006.
The trial judge found that the husband made representations to the wife that she could retain the Australian property and she dealt with the property as if it was her own without consulting the husband. He found that the husband conducted himself in a manner inconsistent with his stated intention of making a clean break and continued to volunteer significant contributions to the benefit of the wife inconsistent with the notion that he was leading a separate life, accumulating property and securing his own future.
The trial judge found that each party shared some uncertainty about their relationship in the many years that followed. The trial judge found it was proper to have regard to the history and the husband’s representations in determining what property pool should be brought to account. He found the only assets against the husband’s entitlement if any ought to be measured were those remaining at the time of trial. He excluded items acquired over 18 years where the parties had “lived largely separate lives.”
The Full Court upheld the appeal primarily on the basis that the trial judge failed to properly consider whether it was just and equitable to make the order and failed to consider whether the terms of the order were just and equitable.
The Full Court said as follows:
[118] The trial Judge’s approach also seems to us incompatible with the following remarks made in Stanford concerning the three “fundamental propositions” (footnote omitted, original emphasis):
‘... if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact ... These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
In our view, if the three ‘fundamental propositions’ can truly accommodate any consideration the parties gave to how their property interests should be arranged during the continuance of their marriage, they must also accommodate express consideration given to how those interests should be arranged after separation. Indeed, the argument for doing so is stronger, given that any mutual understanding is less likely to have been affected by extraneous influences that would be at work whilst their relationship was intact.
This is not to suggest that any understanding between spouses would be conclusive of any later dispute, since an agreement can only be conclusive when the s 90G (1) formalities are satisfied or when a s 90G(1B) declaration is made. Long experience in this jurisdiction teaches that there will be cases in which other factors will be present that would make it just and equitable to make an order inconsistent with a previous understanding, even one reached after separation. But the reasoning in Stanford makes clear that such an understanding would have to be a factor to be taken into account in deciding whether it would be just and equitable to make orders altering existing interests. This reasoning is entirely consistent with what was said by the Full Court in Woodcock v Woodcock (1997) FLC 92-739 at 83,968 to 83,969.”
In accordance with the principled approach discussed by the Full Court in Bevan (supra) I intend to have regard to the manner in which the parties conducted their financial affairs post separation. Difficulties arise in determining this matter given that the parties obfuscated throughout these proceedings and have provided little to no assistance to the Court.
Assets at the date of hearing
Doing the best the Court can I find that the parties have the following assets in Australia:-
| Asserted ownership | Description of the particular asset | Estimated value of the asset |
| Joint | A Street, Suburb B Qld | Btw $600,000 and $750,000 |
| Husband | E1 Street, Suburb F | $250,000 |
| Husband | E2 Street, Suburb F | $250,000 |
| Husband | C Street, Suburb D | $250,000 |
| Wife | G Street, Suburb H | Btw $250,000 and $320,000 |
| Wife | NAB account (net proceeds from sale of Suburb S and DD Land properties) | $194,000 |
| Husband | HSBC account | NK (in 2015 approx $500,000) [48] |
| Husband | KK Investment account | NK (On … 2011 approx $357,318.15) [49] |
| Husband | ANZ | $44,995 at 7 June 2017 |
| Joint | OO shares | $4000 |
| Husband | Superannuation | $30,000 |
| Wife | Super Fund TT | $24,828 at … 2001 |
[48]Annexure P2, page 5 of the Husband’s affidavit filed on 16 December 2016 where the husband deposes at the Chinese Court hearing on 3 April 2014 to the fund’s value sitting at “around AUD0.5m”.
[49]Annexure L3 of the Wife’s affidavit filed on 25 March 2019.
The parties collectively hold assets in Australia estimated to be worth between $1,897,823 (based on the wife’s estimated valuation) and $2,117,823 (based on the husband’s estimated valuation). The wife asserts the parties jointly owe $297,000 on the Westpac mortgage whilst the husband asserts this figure is $350,000 giving the parties net assets of $1,600,823 (according to the wife) and $1,767,823 (according to the husband).
In addition the wife asserts that the husband holds interests in accounts with HSBC and KK Investment of a combined value of $857,318 and an interest in a Citibank account of $596,566.
The property at A Street, Suburb B and OO shares are in joint names. All other assets are in each party’s sole name.
The parties have now been separated for about 14 years. I am satisfied that in around … 2005 they reached agreement regarding the property they held in Australia. The husband managed those properties and continued to assist the wife financially to support the parties’ daughter. The parties conducted their affairs in this manner until the wife commenced proceedings for divorce in China. Both parties achieved a mutually desired outcome for their daughter such that she now holds qualifications from US universities, is employed and supports herself financially and lives independently of her parents.
Post separation no alteration was made to the parties’ respective interests in real property in each party’s sole name following separation in late 2005.[50] The real properties remain in one or other party’s sole name with the exception of the A Street, Suburb B property. The wife disposed of land in her sole name and retained the net proceeds of sale. I am not satisfied that it is just and equitable to make any order altering the interests each party holds in property in his or her sole name.
[50] I refer to my finding that I am not satisfied on the evidence that the wife unilaterally transferred G Street into her sole name. No evidence was adduced regarding the title of G Street. Both parties indicated this property was in the wife’s sole name.
With respect to the husband’s interest in the HSBC account in his sole name I find on the evidence before me that the husband had about $54,000 in his HSBC account at about the time of separation. I am unable to determine whether the money in this account in 2015 (about $500,000) was taken into account before the Court in China or is held on trust by the husband for his parents. It is likely there is currently about $500,000 in a HSBC account in the husband’s sole name though no documentary evidence supports this. The parties have been separated for 14 years. There is no satisfactory evidence that the wife contributed to the husband’s interest in this account after separation. Though the wife asserts that the funds comprise the parties’ savings no evidence was adduced to support that assertion. The source of the funds remains unclear. I am not satisfied that it is just and equitable to make any order altering the interest in this account.
With respect to the husband’s interest in the KK Investment account an amount of $200,000 was invested in the KK Investment account sometime between 2005 and 2006. The husband’s mother claims that the husband holds those funds (and the funds in the HSBC account) on trust for the husband’s parents on the basis that the husband’s parents contributed substantially to those funds. The husband’s mother was not cross examined about this however I recognise that the wife was self-represented and that she denies that the source of the funds were the husband’s parents. The original source of those funds remains unclear. No attempt was made by the husband to adduce any evidence regarding what happened to the balance of about $357,000 in this account in his name in 2011.
There is no evidence before me that the wife made any contribution to the KK Investment account following separation. The wife argued that the husband invested $400,000 into this account initially (in about 2008). If he did so this was after separation. The opening statement for the KK Investment account contradicts this assertion. I am unable to determine where the truth lies with respect to these funds. There was insufficient evidence to make any finding that these funds still exist and are available for distribution. I am not satisfied that it is just and equitable to make any order altering the husband’s alleged interests in those funds.
NAB account
The wife has retained the balance of the net proceeds of sale of land in her NAB account notwithstanding the existence of a statutory declaration in which she disavows any interest in those properties. She is utilising those funds for living expenses. I am not satisfied that it is just and equitable to make any order altering the husband’s interests in those funds.
Superannuation
Neither party is seeking a superannuation splitting order. I am not satisfied that it is just and equitable to make any superannuation splitting order.
Joint property
The husband expressed a wish to transfer the A Street, Suburb B property to the parties’ daughter. She is now 27 years old. The wife agreed that the A Street, Suburb B property could be transferred to the parties’ daughter however the parties suggestion that A Street, Suburb B be transferred to their daughter was in the context of competing claims for adjustment of property interests with the wife seeking a division of assets to effect an equal distribution between the parties (which would include the husband’s interests in the HSBC, KK Investment and Citibank accounts) and the husband seeking a payment of $1,000,000 from the wife.
I observe that had the parties wanted to they could have transferred the A Street, Suburb B property to their daughter at any time over the last several years however they did not do so. I suspect that the impediment to that transfer was the Westpac mortgage and the dispute between the parties as to who was liable for the repayment of that mortgage.
In bringing this application the parties seek to finalise all financial relationships between them. The circumstance surrounding the Westpac loan has been addressed extensively in this judgment. It was not until 2014 following the wife filing for divorce that the husband reported the wife’s alleged fraudulent conduct regarding the Westpac loan to Queensland police. According to the husband by letter dated 30 July 2014 Superintendent MM of the Queensland police advised that there were “sufficient grounds to warrant a criminal investigation.” The wife said she was interviewed by police and told Detective NN on 17 November 2016 that she had signed the husband’s name on a Westpac loan document. She said police told her it was wrong for her to sign the husband’s name on a loan document. She said she was told that “no fraud had been found in the process and no – one had suffered any loss.”
From late 2005 until about September 2013 the husband retained the rental income from the parties’ properties in Australia and paid expenses. He did not produce any financial statements or tax returns regarding the management of those properties. The parties currently have a joint mortgage to Westpac for which they remain jointly and severally liable with a debt between $297,000 and $350,000. Again no documents were produced to verify this. As may be seen from my findings above I do not accept the husband’s evidence that he was not aware of the existence of the Westpac loan.
Though the evidence remains unclear (given each party’s lack of candour in this matter) I assume that the Westpac mortgage is secured against the A Street, Suburb B property. I assume that the bank is likely to require the Westpac mortgage to be discharged before any transfer of title of the A Street, Suburb B property can be effected.
In Trustee of the Bankrupt Estate of Hicks & Hicks and Anor [2018] FamCAFC 37 (26 February 2018) Austin J said at [262]:
“In any exercise of discretion under s 79 of the Act, the primary judge is required to make orders that are just and equitable. Sometimes, justice and equity requires one spouse to bear exclusive liability for a debt incurred during the spouses’ relationship (see Puddy & Grossvard [2010] FamCAFC 54; (2010) FLC 93-432 at[62], [101] – [111]; Trustee for the Bankrupt Estate of N Lasic v Lasic (2009) FLC 93-402 at [197] – [200]; Biltoft and Biltoft [1995] FamCA 45; (1995) FLC 92-614 at 82,128 – 82-129; Prince and Prince [1984] FamCA 7; (1984) FLC 91-501 at 79,076).”
It is apparent from the husband’s evidence that Westpac have not required the husband to make repayments on the mortgage since about 2018. The wife did not dispute that evidence. In those circumstances it is likely that Westpac will seek to recover the liability for the Westpac mortgage from the wife. I have taken that into account in reaching my decision regarding any alteration of the parties’ interest in the A Street, Suburb B property.
The husband paid the mortgage on the Westpac loan from late 2005 until about 2010 when he deposed that the wife’s mother “started to pay the loan between 2010 and 2013.” It is unclear what if any payments were made against the Westpac loan from 2013. From 2018 Westpac stopped the direct debits towards the loan from the husband’s ANZ account. The husband did not dispute that he retained the rental income for the properties in Australia and paid expenses. He continued to contribute US$80,000 towards Ms L’s education.
The husband works as a professional though he has not disclosed accurately his income and any interest in a company he operates in China. The Full Court in Kannis & Kannis [2002] FamCA 1150 at [59] said “there exists a class of cases where the Court cannot be satisfied as to the extent of the property and can thus be less cautious than it might otherwise be the position when making an order.” With respect to the husband this is such a case.
The husband has remarried and has a child with his new wife. They live in China. He asserts he owes his wife more than $744,000 however he provided no documentary evidence to support that assertion. I place little weight on that assertion.
The wife provided practical and financial support towards the parties’ only child and was throughout Ms L’s primary carer. The husband spent very little time with the child after late 2005. The wife made no direct contribution towards the Westpac mortgage however rental income from a property in the wife’s name and joint property were retained by the husband whilst he paid the expenses for those properties. The wife made no direct contribution to the interest in the HSBC account. It is unclear whether she (or the husband’s parents) contributed towards the initial deposit of $200,000 into the KK Investment account between 2005 and 2006.
The wife has sold property in her sole name and has retained the net proceeds of sale. She is currently unemployed. Though she intends to find employment she has not worked as a professional for some years and has not worked in Australia since late 2005. She is currently living off the capital deposited into her NAB account. I note that both parties have property in China.
I find that the wife currently holds assets and superannuation in her name in Australia of about $468,828[51] or $538,828[52]. The husband hold assets and superannuation in his sole name in Australia of about $824,995[53]. In addition he has funds in his sole name with HSBC of about $500,000. I have discussed my findings regarding those funds. The wife has no capacity to pay the husband the $1,000,000 as sought by him.
[51] Wife’s value of G Street Suburb H ($250,000), NAB account ($194,000) and superannuation $24,828
[52] Husband’s value of G Street Suburb H ($320,000), NAB account ($194,000) and superannuation $24,828
[53] Suburb F properties ($500,000) C Street, Suburb D property ($250,000) ANZ account ($44,995) and superannuation ($30,000)
The A Street, Suburb B property has an estimated value between $600,000 and $750,000. Should the parties transfer their interest in this property to their daughter and each party be required to discharge an equal proportion of the mortgage, the wife would be left with between $293,828 and $390,328 whereas the husband would be left with between $649,995 and $676,495. I am not satisfied that that result would be just and equitable.
Should Westpac bank require the wife to discharge the entire Westpac mortgage the wife would be left with assets between $171,828 and $188,828. I am not satisfied that that result would be just and equitable.
If the A Street, Suburb B property was sold and each party retained an equal share of that property, each party would receive an additional $300,000 to $375,000 (less sale costs and legal costs). The wife would be left with somewhere between $593,828 and $765,328 and the husband between $949,995 and $1,051,495.
Should an order be made for the wife to discharge the entire Westpac mortgage and the A Street, Suburb B property be transferred to her on the estimated value of A Street, Suburb B property the effect of that order would be that the wife would retain equity in the A Street, Suburb B property of between $303,000 to $400,000 in addition to her interest in her NAB account, her interest in G Street, Suburb H and superannuation. However those estimates are only indicative as neither party produced any valuation for the A Street, Suburb B property. It may be that both parties’ estimates of the value of that property are incorrect.
The wife indicated that she intended to return to Australia to live in the A Street, Suburb B property. She is unemployed. The husband lives and works in China. He has a home in China. Given that the husband wished to transfer his interest in the A Street, Suburb B property to his daughter he had no expectation of retaining any interest in that property. I am not satisfied it is just and equitable to make any order settling the A Street, Suburb B property on the parties’ daughter.
I am satisfied that it is just and equitable to make an order altering the parties’ interests in joint property to sever on a final basis all financial interests between them. I intend to order that the husband transfer his interest in the A Street, Suburb B property to the wife and that the wife discharge the Westpac mortgage. I intend to order that the husband transfer his interest in the OO shares to the wife. Otherwise declarations are made with respect to all other property such that there is no alternation of the parties’ interests in that property. I am satisfied that the orders I make are just and equitable in the circumstances. I make orders accordingly.
I certify that the preceding one hundred and seventy-seven paragraphs are a true copy of the reasons for judgment of Judge Tonkin
Date: 24 July 2019
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