LONG & PENG

[2020] FamCAFC 56

FAMILY COURT OF AUSTRALIA

LONG & PENG [2020] FamCAFC 56

FAMILY LAW – APPEAL – PROPERTY – Findings of fact – Where the evidence proffered by both parties was compromised and deficient – Uncorroborated testimony of party subject to adverse credit findings – Failure to give full disclosure – Application in an appeal to adduce further evidence – Further evidence could not establish error – Application in an Appeal dismissed – Appeal dismissed.

FAMILY LAW – COSTS – Where the appellant has been wholly unsuccessful and the respondent has unnecessarily incurred expense – Costs order made.

Family Law Act 1975 (Cth) ss 81, 93A(2) and 94AAA(7)

CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 76
Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22

APPELLANT: Ms Long

RESPONDENT: Mr Peng

FILE NUMBER: BRC 2041 of 2016

APPEAL NUMBER: NOA 72 of 2019

DATE DELIVERED: 13 March 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Brisbane

JUDGMENT OF: Strickland, Ryan & Watts JJ

HEARING DATE: 6 February 2020

LOWER COURT JURISDICTION: Federal Circuit Court

LOWER COURT JUDGMENT DATE: 24 July 2019

LOWER COURT MNC: [2019] FCCA 1987

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr Yu

SOLICITOR FOR THE APPELLANT: Pi-En Hsu Lawyers

COUNSEL FOR THE RESPONDENT: Mr Hanlon

SOLICITOR FOR THE RESPONDENT: Queensland Legal Practice

Orders

1. The husband have leave to rely on his late filed Schedule of Costs.

2. The Application in an Appeal filed 16 December 2019 be dismissed.

3. The appeal be dismissed.

4. The wife pay the husband’s costs of and incidental to the appeal fixed in the amount of $22,027.12 within one (1) month.

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

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

Appeal Number: NOA 72 of 2019
File Number: BRC 2041 of 2016

Ms Long

Appellant

And

Mr Peng

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is an appeal against property settlement orders made by a judge of the Federal Circuit Court on 24 July 2019.  In essence, Ms Long (“the wife”), contends that by reason of contributions she should have received at least 50 per cent of the parties’ property in Australia.  Based on the property pool as propounded by the wife, she received something like 22-25 per cent.  On the property pool as found, the wife received in the vicinity of 50 per cent.

2. The respondent is Mr Peng (“the husband”).  He resists the appeal and seeks to uphold the orders.

3. These remarkable proceedings involve an inglorious contest between parties, about whom the primary judge observed unchallenged that their “solemn oath or affirmation proved to be patently false” [68], and that each of them failed to disclose their true financial position to the Court [71]. These findings were made in relation to matters of real significance; for example, valuable real property in China (both parties), the purchase and disposition of property in the United States of America (“USA”) (the wife) and USD$600,000 in savings (the wife). There are other examples but these are sufficient to establish the point.

4. The primary judge was also rightly critical of the parties’ failure to produce documents (if necessary by subpoena) so as to establish the source and existence of disputed bank accounts and investments which one or other said should be included in the property pool [1].

5. For the wife to succeed in demonstrating error as to the property pool it is necessary for her to establish that the primary judge erred in failing to prefer the wife’s oral evidence as to the source and existence of those accounts. However, the primary judge determined that she could “not accept the veracity of the evidence advanced by either party” and that in her Honour’s view, “each party tailored his or her evidence to achieve his or her desired outcome irrespective of the truth” [140]. Quite properly, no challenge is made to these and numerous other findings concerning the deficiencies in the wife’s testimony and the parlous state of the documentary evidence. The effect of this is that the wife is unable to establish that the primary judge erred in relation to the source and/or existence of various accounts and investments. The remaining grounds of appeal will also fail, the effect of which is that the appeal will be dismissed.

6. The Court is of the unanimous opinion that the appeal does not raise any question of general principle.  The Court’s reasons in short form (s 94AAA(7) of the Family Law Act 1975 (Cth) (“the Act”)) follow.

Brief factual overview

1. The husband was born in 1965 and the wife was born in 1966.

2. The parties married in 1990.  They have one child, a daughter, who was born in 1992.

3. The parties are well educated and experienced in business.  The husband has a PhD from an Australian university and works as a professional consultant in a company he operates in China.  The wife has a Master’s Degree from an Australian university and has worked as a professional with various companies in Australia.

4. The husband’s evidence that the parties separated in 2000 was rejected [55]. He moved to China in May 2004 but in 2005 returned to Australia regularly, where the wife and the parties’ daughter continued to reside.

5. The wife and the parties’ daughter left Australia in December 2005 for the USA. Contrary to the wife’s evidence that the parties did not separate until 2013, the primary judge was satisfied that the parties formed an intention to separate prior to her departure from Australia in late 2005 [56]. Thereafter, the parties lived on different continents, albeit from time to time the husband visited their daughter and spent time with the wife (in the USA and Country X) and they visited him in China.

6. As at December 2005, the parties owned property in Australia. The wife’s evidence that she and the husband agreed that he would manage those properties so as to provide financial support for their daughter’s education and support for themselves, was accepted.  The husband honoured this agreement and on the wife’s evidence, he provided about USD$500,000 towards their daughter’s expenses.

7. In 2013, the wife discovered that the husband had married again.  The parties were not divorced and thus, in 2013 the wife commenced proceedings in China for divorce and for settlement of property, and to prosecute the charge of bigamy.  With that application, the husband stopped any financial support.

8. The parties were divorced in China in 2015.  By consent, orders were made in relation to their property in China by the City J District Court on 12 May 2015.  These orders did not purport to deal with the parties’ property interests in Australia or elsewhere (for example, the wife purchased property in the USA which she said she abandoned [59]).

9. At the time of trial, the parties owned five Australian properties, of which only A Street, Suburb B (“the Suburb B property”) was jointly owned.  Three properties were in the husband’s sole name and the remaining property was in the wife’s sole name.  Two other properties owned by the wife had been sold from which $194,000 was held in a bank account in her sole name.  Otherwise, there were modest amounts of superannuation, shares owned jointly and savings at bank in the husband’s sole name.

10. Although the parties said that the primary judge should transfer the Suburb B property to their daughter, the orders required the husband to transfer his interest in that property to the wife and for the wife to discharge the Westpac mortgage secured thereon (between $297,000 and $350,000).  The wife received the jointly owned shares and otherwise, each party was declared the sole and beneficial owner (to the exclusion of the other) of the property in that party’s name.

11. Based on concessions by counsel for the husband in closing addresses, it was established that the husband had $500,000 in an HSBC account in his sole name.  According to the husband, those monies, as well as a KK investment, are held on trust for his parents.  The primary judge was unable to determine the source of the funds deposited in these accounts and the wife’s claim for the inclusion of these funds as property available for distribution failed.

12. It was accepted that as at 20 July 2005, the husband owned a Citibank term deposit in the amount of $596,566.56 [113] which was fully withdrawn by late 2005/2006. The husband said that the monies were withdrawn by the wife. The wife said she had been unaware of the Citibank account and suggested that the husband still had the Citibank funds (albeit probably elsewhere). Other than the 20 July 2005 statement, neither party produced any documents from Citibank as to the withdrawal (or existence) of the funds. The primary judge determined that “the disposition of the Citibank funds remain a mystery” [120]. On the basis that there was no evidence that the Citibank funds continued to exist, the wife’s claim that those monies be included as property available for distribution failed.

Discussion

1. Quite properly, no challenge is made to her Honour’s statement of the legal principles by which the wife’s application for property settlement would be determined.  The focus of the appeal concerns specific factual findings and discretionary determinations.

Date of separation

1. By Ground 1, the wife challenges the finding that the parties separated in 2005.  According to the wife, the parties separated in 2013 when she discovered that the husband had married again.  Ordinarily, the significance of the date of separation is that with separation the nature of the parties’ respective contributions may change, as could the explicit and implicit assumptions by which they conducted their relationship and financial affairs.  So long as these matters are understood, and the nature and contributions of all types across the entirety of the relationship, including the post‑separation period are evaluated, an error as to the date of separation may be immaterial.  With this in mind, it was not apparent to us how the date of separation did, or might have, affected the outcome.  As we understand it, the contention is that the primary judge did not take into account the wife’s non‑financial contributions, particularly as a parent, post 2005 and thus her contributions made between 2005 and 2013 were overlooked.  Reference need only be had to [57] and [169] of the trial reasons to establish that the primary judge recognised that the parenting arrangements had changed and gave significant weight to the wife’s almost exclusive care for the parties’ child post 2005.  It follows, that even if the date of separation is shown to be wrong, it is an error without consequence.

2. In any event, in support of Ground 1, the wife sought to adduce further evidence in the appeal. This comprised evidence which established that the husband became a permanent resident of Country X on 25 December 2008, which is the same date upon which the wife acquired permanent residence. On the evidence adduced at trial, the primary judge determined that the husband had not applied for residency in Country X and did not ever live in Country X with the wife [51]. It is accepted that the husband’s permanent residence card would have resulted in a different finding, namely, that the husband obtained permanent residence in Country X. However, given that it is uncontroversial that the parties and their daughter were in Country X at that time and, as her Honour found, the husband remained for only a few days, this additional evidence would have had no effect on the determination of whether the parties had decided to separate in 2005 or the assessment and evaluation of the parties’ contributions.

3. The power to admit further evidence is governed by s 93A(2) of the Act. In CDJ v VAJ (1998) 197 CLR 172 at 201, the plurality explain that the principle purpose of this provision is to admit further evidence which, if accepted, would demonstrate that the order under appeal is erroneous. This evidence does not do so. As this is the only basis upon which the evidence is sought to be admitted, the application to adduce further evidence in the appeal will be dismissed.

4. Counsel for the wife indicated that success on Ground 1 required success in the application to adduce further evidence, which has not been achieved.  But even if that evidence was admitted, as we have already observed, there can be no doubt that the primary judge took into account the wife’s contributions as a parent post 2005.  The reality that the wife and the parties’ daughter lived in different countries to the husband, as a consequence of which the wife was overwhelmingly responsible for their daughter’s care (as well as contributing financially) was not overlooked and, in this respect, the challenge misstates the trial reasons.  The effect of this is that error as asserted by Ground 1 has not been established.

The wife is to discharge the Westpac mortgage

1. By Ground 2, the wife asserts that the order which requires her to discharge the Westpac mortgage secured on the Suburb B property within 28 days is unenforceable and unreasonable.  The contention being that she does not have sufficient funds to discharge the mortgage and is unlikely to complete the sale of any real estate so as to free up equity within 28 days.  This challenge can be dealt with quickly.  In addition to real estate, the wife has in excess of $1,000,000 cash savings.  Of this amount, $194,000 is in Australia and the balance is in China.   There are cross border restrictions on the movement of funds out of China, but it is uncontroversial that the wife is able to bring USD$50,000 from China to Australia annually.  An application may be made to Chinese authorities for permission to remit a larger amount.  The effect of this is that the wife does not have savings which would enable her to completely discharge the mortgage within 28 days.  However, the wife has real estate and savings greatly in excess of the amount secured by the mortgage and there is no reason to doubt that she is well able to refinance the mortgage into her own name.

2. Even if the wife is unable to refinance, this does not mean that the order is unenforceable.  It is indisputable that the husband could apply for an enforcement order for the sale of the property so as to achieve a discharge of the mortgage.  Although this would not see the mortgage discharged within 28 days, the fact that enforcement action would take longer than the discharge required by the primary order does not detract from the efficacy of the primary order.

3. The point of this order is to sever the parties’ financial relationship (s 81 of the Act) and is an orthodox exercise of discretion. The primary judge did not purport to direct the wife as to how she then structured her ongoing dealings with the mortgagee bank, and quite properly left it to the wife to determine how she would arrange her assets. Error as alleged by this ground has not been demonstrated.

The family home was not transferred to the parties’ daughter

1. The gravamen of Ground 3 is that the primary judge erred by failing to order that the Suburb B property be transferred to the parties’ daughter.  Her point being that she intended to eventually transfer this property to their daughter and would thus be disadvantaged.  The husband proposed the order under discussion and, in closing addresses before the primary judge, the wife agreed such an order could be made.  However, as the primary judge observed, the wife’s agreement was given in the context of her claim that she receives at least half of the HSBC, KK Company and Citibank funds.  According to the wife’s case presented at trial, this was an essential element for the just and equitable settlement of property.  The primary judge did not make orders against those asserted items of property and came to the conclusion that to nonetheless order that the Suburb B property be transferred to the parties’ daughter would be unfair to the wife and would not achieve a just and equitable outcome.

2. Furthermore, there were serious irregularities in the wife’s (perhaps also the husband’s) dealings with the mortgagee bank.  It is uncontroversial that police had become involved and there was no evidence that the bank would cooperate with the parties’ desire to transfer the property to their daughter.  Her Honour was alive to these difficulties and there can be no doubt that her reasons for not giving effect to this aspect of the parties’ agreement were sound.

3. Ground 3 has not been established.

HSBC funds

1. By Ground 4, the wife challenges the failure to include the HSBC funds as property available for distribution. The husband’s mother gave affidavit evidence that the HSBC funds belonged to her and her husband and were invested by the husband on their behalf [124]. The wife said the husband’s HSBC account was “stored savings since the beginning of the marriage” [125]. Neither party produced records from HSBC or elsewhere in support of their respective positions. At best, the wife sought to rely on representations made in the loan application which resulted in the Westpac mortgage. Once it is appreciated that the wife forged the husband’s signature on the document, it is a mystery as to how she reasoned that it could have any probative value.

2. It is accepted that the primary judge misunderstood the amount attributed in that document to the husband’s HSBC account.  However, the document was given little weight and the critical reason why the HSBC funds were not included as property available for distribution is that the husband’s mother swore that the funds belonged to her and her husband and the primary judge was not satisfied that she could determine otherwise.  The deficiencies and inconsistencies of the wife’s oral evidence have already been mentioned.  Although similar findings were made in relation to the husband’s evidence, there can be no doubt that the primary judge had ample reason to evaluate the wife’s evidence as to the source of the HSBC funds as insufficient to establish proof of the fact.  There is no basis upon which we would or could interfere with the findings made as to the source of the HSBC funds (Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550).

3. Her Honour’s conclusion that the evidence concerning the HSBC funds “is wholly unsatisfactory” is a benign understatement [126]. Given that no challenge is made (for undoubtedly good reason) to her Honour’s finding that the source of the funds remained unclear [154], her Honour’s determination that she was not satisfied it would be just and equitable to make any order altering the interest in this account is entirely logical.

4. The effect of this is that Ground 4 has not been made good.

5. Ground 5 was abandoned.

Citibank

1. The gravamen of Ground 6 is that the primary judge should have found that the husband still has the Citibank funds available to him.  Again, this finding could only have been made if the primary judge accepted the wife’s oral testimony that she had not withdrawn the funds from Citibank and thus, as a matter of inference, the husband must have done so.  No doubt, documents from Citibank would have shed some light on the issue.  None were provided.  There is simply no proper basis upon which the primary judge could have found who withdrew those funds and whether some 14 years later they even existed.  This challenge has not been made out.

Conclusion and costs

1. The wife has failed to establish any grounds of appeal and, the appeal will be dismissed.

2. In this appeal, the husband sought that the wife pay his costs in the amount of $22,027.12.  No challenge was made to quantum and, it is the wife’s position, that costs should follow the event.  Given the wife’s total lack of success, we agree that an order for costs is appropriate.  The wife will be given one month to pay.

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ryan & Watts JJ) delivered on 13 March 2020.

Associate:

Date: 13 March 2020