MENG and NHAM - [2013] FCWA 13

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: MENG and NHAM [2013] FCWA 13

CORAM: CRISFORD J

HEARD: 24, 25, 26, 27, 30 & 31 JULY 2012; 1 AUGUST 2012 AND
22, 23, & 24 OCTOBER 2012

DELIVERED : 8 FEBRUARY 2013

FILE NO/S: PTW 887 of 2010

BETWEEN: CHEN MENG
Applicant
AND
JAMES NHAM
First Respondent
AND
YAN NHAM
Second Respondent
AND
LILY LIANG
Third Respondent

Catchwords:

PROPERTY SETTLEMENT - Pool of assets - Overseas property - Add backs - Share trading losses - s 75(2) - Composition of unit trust - Unconscionable conduct - Just and equitable outcome

Legislation:

Family Law Act 1975 (Cth)

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Category: Not Reportable

Representation:

Counsel:

Applicant: Mr G Cridland
First Respondent : Self Represented Litigant
SecondRespondent : Dr A Dickey QC
Third Respondent : Dr A Dickey QC

Solicitors:

Applicant: G G Legal
First Respondent : Self Represented Litigant
Second Respondent : Ideal Legal Services
Third Respondent : Ideal Legal Services

Case(s) referred to in judgment(s):

Black and Kellner (1992) FLC 92-287
Blomley v Ryan (1956) 99 CLR 362
Briese and Briese (1986) FLC 91-713
Commercial Bank of Australia v Amadio (1983) 151 CLR 447
Fysh v Page (1956) 96 CLR 233
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Kannis and Kannis (2003) FLC 93-135
Luciano v Luciano [2000] FamCA 1712
Malpass & Mason (2000) FLC 93-061
Martin and Newton [2011] FamCAFC 233
Neil v Nott (1984) 68 ALJR 509
Omacini and Omacini (2005) FLC 93-218
Oriolo and Oriolo (1985) FLC 91-653
Stanford v Stanford [2012] HCA 52
Tate v Tate (2000) FLC 93-047
Townsend and Townsend (1995) FLC 92-569
Vadasz v Pioneer Concrete SA Pty Ltd (1995) 184 CLR 102
Weir and Weir (1993) FLC 92-338

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WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1 [Chen Meng] aged 44 years and [James Nham] aged 52 years had a relationship of about 12 years. They met in Beijing in 1995 and subsequently married in Perth [in] 1996. They finally separated [in] 2008.

2During their relationship they lived apart for a considerable amount of time. Ms [Meng] studied in the United States and the United Kingdom for periods between 2000 and 2008. Dr [Nham] worked overseas in the United Kingdom, China and Hong Kong for periods between 2001 and 2007.
3Ms Meng has a Bachelor degree with honours in Commerce from Curtin University. Dr. Nham, who qualified as a medical practitioner in China, has worked in Australia as an acupuncturist.
4During their relationship they were the recipients of considerable largesse from Dr Nham’s parents, [Yan Nham], now aged almost 81 years, and [Lily Liang], now 80 years (“the parents”). Their finances were, and continue to be, entwined.
5The parents, who originally lived in Hong Kong, were granted permanent residency in Australia in early 1995. They now live in Perth. In the late 1980s Dr Nham and his sister, [Karen Kiew] (“[Karen]”), came to live in Perth in order to study.
6The parents have been involved in these proceedings as second and third respondents. The Court is asked to determine the entitlement of all the parties.

Credibility of the parties to the marriage and failure to disclose

7Both these parties were born in China. Dr Nham came to Australia in 1987 and Ms Meng in 1996.
8Each party to the marriage has a reasonable command of spoken English. Dr Nham said that when he came to Australia from China, he underwent a bridging course to enable him to convert his medical degree from a Chinese University to the equivalent in Australia. He had to sit an exam in the English language. He passed that exam. Despite this, his accent and somewhat convoluted sentence structure made his answers difficult to understand. Throughout the trial, both Dr Nham and Ms Meng appeared to understand what was being said and each was able to query counsel if they did not understand what was being asked of them. Although the court had fewer problems in understanding Ms Meng, I consider they both suffered some real difficulties in fully comprehending and expressing themselves in the English language, understandably, given it is not their birth language.
9In addition to this difficulty, Dr Nham represented himself in these proceedings. He had previously had legal representation but the ongoing cost had prevented him continuing with solicitors. I suspect it hampered the presentation of his case and

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allowed the Court, as a trial court, to see and hear things from him which might otherwise have been buffered by the expertise of legal representation.
10I have taken into account any possible disadvantage to him and note what was said by the High Court in Neil v Nott (1984) 68 ALJR 509 at 510, that:
… A frequent consequence of self-representation, obviously, is that the Court must assume the burden of endeavouring to ascertain the rights of the parties which are obfuscated by their own advocacy.

11In making these comments I am not critical of either Dr Nham’s behaviour in Court or his demeanour. He was at all times respectful and appropriate. There were times when in Court he was frank, to his own detriment.
12Ms Meng and Dr Nham have taken a somewhat cavalier attitude to their very clear obligation to make a full and frank disclosure in a timely fashion. Each concentrated on the default of the other at the expense of their own obligation.
13I have some doubts about the accuracy and thus reliability of the evidence of both parties.
14When Ms Meng was challenged about some deficiency in her disclosure, she said that she had been forced to “rush” back from the United Kingdom to involve herself in the Family Court proceedings in Western Australia and in doing so, failed to bring her documents with her. I was not satisfied she had disclosed all the income she had access to during her time overseas. There were other instances where I was unsure about where and how she had obtained certain documents. She was not always able to provide source documents to support her own evidence.
15Ms Meng accepted that she had breached court orders. In May 2009 the Court made orders in terms of a Minute of Proposed Orders prepared by her then solicitors. She was required to sign documents to appoint a licensed real estate agent to manage a property at [Suburb A] (“[Property A”), which she jointly owned with Dr Nham . She was also to ensure rental money from the property went into a joint ANZ offset account in the parties’ names. The money would then go towards repayment of the mortgage over the property. She accepted that she had not deposited all of the rental money into the account as ordered. She said she used some for utility expenses, repairs to the property and renovations. She said she had not kept a record of the rent. She accepted that the bank accounts showed she had only placed around $1,000 in rent into the account. She had not provided any source documents to support her expenses.
16She also accepted that she had failed to facilitate real estate agents managing the property in accordance with court orders made in October 2009. She explained that the agent Dr Nham sought to nominate was a friend of his.
17Any default on Ms Meng’s part paled into insignificance when one considers Dr Nham’s position. He had initially been legally represented. I am satisfied he was aware of his obligation of disclosure pursuant to the Family Law Act 1975 (Cth) and the Family Law Rules 2004.
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18 Dr Nham failed to make a full disclosure of his financial position. I am satisfied he made no real effort to obtain relevant documents which, if not in his possession, were certainly within his control. There was a lack of bank statements, taxation returns and source documents upon which taxation returns could be prepared. The Court was left struggling to piece together his real financial circumstances. I accept Dr Nham had made some disclosure which had not been adequately inspected by the other side at the commencement of trial. However, the disclosure he did produce was far from complete. Further documents were produced only when he was giving evidence.

19Historically, Dr Nham has had an accountant, [Mr A], prepare all his financial accounts. Mr A swore an affidavit, but was not available for cross-examination during the first or second part of the trial despite being required. It is clear from Dr Nham’s evidence that Mr A had considerable input into setting up his financial structures, his taxation matters and even his family law issues. Dr Nham said Mr A was very “stressed”. He was in Lombok. He had an auto-immune condition and heart problems. I will refer to his affidavit and any weight to be given to it where relevant in my judgment.
20Dr Nham gave many excuses for his failure to disclose, including; the documents were otherwise available to Ms Meng, the documents were in Ms Meng’s possession, the documents could be obtained under subpoena and no-one had asked him to provide specific documents. There were times I was satisfied that Dr Nham only disclosed documents after they had been produced pursuant to subpoena. He failed to provide bank records in many instances. His tax returns had not been prepared.
21When it was put to him that the International Bank of China had a branch in St Georges Terrace and statements could have been obtained through that agency, he said the computer setup in Western Australia was different from that used overseas and he presumed the overseas statements were thus not accessible.
22Significantly, Dr Nham failed to disclose his present interest in an overseas property in China. Despite his various denials and then attempts to explain the non-disclosure, these did not ring true.
23Dr Nham also admitted breaching court orders. Along with Ms Meng he failed to facilitate the consent order whereby a real estate agent would be appointed to manage the rental of their Property A property.
24Dr Nham also accepts that he breached an order made by the Court in November 2008 whereby each party was restrained by an injunction from dealing with assets of the marriage. This order was made by consent. Dr Nham had continued to draw down mortgage accounts to do some share trading as late as 2010. He said he was trying to get some money. I also accept he was involved in having a deed of rectification prepared in relation to unit holdings in a unit trust which formed a central part of these proceedings.
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25 Dr Nham also admitted completing an application to the ANZ Bank for a margin loan on 22 June 2007. In that document he stated his income as being between $60,000 and $99,999. It is clear that he was earning no such income. When it was put to him that he had lied to the bank he explained that if one was to borrow money then it was necessary to say to the bank that one was earning an income. He accepted that it was not true in his case. He said he thought he could get an income from share trading in the future. However, this was an endeavour at which he had been extremely unsuccessful in the past. He explained it was not necessary to have 100% of the income stated in the application. He accepted he had lied, but explained it as being “a bit more gentle”.

26Up until 19 December 2006 the parties maintained a safety deposit box at BankWest in Perth. It was closed, unilaterally, by Dr Nham at that time. Meng’s signature was required to close the box. Dr Nham was able to achieve the closure without obtaining her signature. He accepted that he had forged a letter seeking its closure. The letter was ostensibly written and signed by Ms Meng. Dr Nham had signed her name and, when challenged, explained that “it was the easy way”. He said he held a Power of Attorney for her and thought he could do it. This does not adequately explain why he signed her name in her stead. He said that he had used his left hand to sign the letter so that it looked more authentic.
27In the disclosure Dr Nham did provide, he inadvertently provided a document on which had been written the words “Don’t include in husband’s disclosure at this stage”. The particular document referred to was the unsigned deed of rectification of a trust deed. When challenged on why it was not to be disclosed Dr Nham said he did not consider he had to disclose the deed of rectification because at the time it had not actually been signed by him.
28Dr Nham maintained that he had left most of his financial documents in the Property A. He said that Ms Meng had been living in that property since separation and had access to them. She had refused to release them to him. The Court does not know if there were documents in Property A that belonged to Dr Nham and retained by Ms Meng. What is apparent is that there were documents at a property owned by Dr Nham’s parents at [Property I] where the parties had lived prior to separation, and which Dr Nham had failed to disclose. The documents only came to light because in March 2007 and October 2008, immediately prior to separation, Ms Meng had photographed some of those documents. The Court was able to gain some financial information on this basis.
29I will refer to other specific instances of Dr Nham’s attitude to the truth were relevant in the judgment. Dr Nham made no real attempt to hide his lack of honesty. He clearly saw his actions in a much more benign light. Although Ms Meng was generally more credible I did not consider she gave a complete account of her married life. Where relevant I will refer to this in the judgment.
30The parents were closely involved in the financial affairs of these parties, in particular, those of Dr Nham. Historically, Dr Nham and his sister, Karen, had assisted the parents in the purchase of properties in Australia. Despite appropriate

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legal advice, the parents found it very difficult to understand how they could be involved in their son’s matrimonial dispute. I accept that each of the parents has worked hard and long in order to obtain some financial security. Due to their son’s dishonest and sometimes fraudulent behaviour, they have suffered substantial losses. Despite this, they are loyal to him and the focus of their disenchantment has become Ms Meng. Given they saw little relevance in some of the issues raised by Ms Meng, their obligation to disclose relevant documents in a timely fashion was left very much wanting. They required an interpreter throughout the proceedings.
31There is a clear obligation under the Family Law Rules 2004 to make a full, frank and complete disclosure of all relevant financial circumstances in a timely fashion. This need for parties to make such disclosure in financial matters is not in doubt. (See Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 Tate v Tate (2000) FLC 93-047 and Kannis and Kannis (2003) FLC 93-135). Smithers J in a seminal passage in Briese and Briese (1986) FLC 91-713 at 75,180 said:
I believe that a person in the position of the husband in this case has a positive obligation to set out at an early stage his financial position in a clear and comprehensive manner. The Regulations, and now the Rules, are not intended as a vehicle to mask the true position, or as an aid to confusion, complexity or uncertainty. They are not intended as the outer limits of the obligation of financial disclosure, but as providing avenues towards disclosure. The need for each party to understand the financial position of the other party is at the very heart of cases concerning property and maintenance. Unless each party adopts a positive approach in this regard delays will ensue with the consequent escalation of legal, accounting and other expenses, always assuming that a party has the strength to continue the struggle for information and understanding …
In my view it is fundamental to the whole operation of the Family Law Act in financial cases that there is an obligation of the nature to which I have referred. Livesey v Jenkins makes it clear that mere compliance with rules of court or practice directions does not alter the basic principle of the need for full and frank disclosure by the parties.

32In relation to non-disclosure of assets, the Full Court in Weir (supra) stated at 79,593 as follows:
… once it has been established that there has been a deliberate non‑disclosure … then the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature.

33Dr Nham’s conduct which did not reflect well on him will be taken into account when I determine this matter.
34The fact of non-disclosure is dealt with here. The consequences will be dealt with later in the judgment.
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Orders Sought

35Ms Meng seeks 50% of the parties’ assets. The main issue for her is the composition of the asset pool. She says Dr Nham’s undisclosed and overseas assets need to be included as do assets he has wasted. She alleges he has deliberately diminished the asset pool in a variety of ways.
36Dr Nham seeks 80% of a considerably smaller pool.
37The parents want the Court to make a finding they have a four-fifths beneficial interest in units in a trust, the M & N Trust, the main asset of which is a property at [Suburb B ] (“[Property B]”). They are also seeking to be paid money owed to them by the parties pursuant to a District Court Judgment debt.
38The parents also seek reimbursement of money from Dr Nham arising from the sales of [Properties E & F]b. They maintain the purchase of the property was originally funded by them, but the property was later sold by Dr Nham. They say the money should be paid to them before any division of property between the parties to the marriage is allocated. Finally they also seek a finding they are the beneficial owners of an apartment in [China] (“the Chinese property”), in which Dr Nham appears to have a 25% interest.

Property settlement

39The approach to be taken in relation to an application for property settlement pursuant to s 79 of the Family Law Act 1975 (Cth) is a four step process (Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143). Those steps are:
•to make findings as to the identity and value of the assets and liabilities of the parties;
•to identify and assess the contributions made by the parties within s 79(4)(a), (b) and (c);
•to identify and assess the s 75(2) factors, together with any matters relevant pursuant to section 79(4)(d)-(g); and
•to consider whether the proposed orders are just and equitable.

40This is the “preferred approach” in determining an application under s 79 of the Act. It involves four inter-related steps. As the majority of the Full Court (Bryant CJ and Thackray J) said in Martin and Newton [2011] FamCAFC 233:
… there is no requirement that the justice and equity of the order, as prescribed by s 79(2), must only be considered at the fourth (and last) stage. In our view, the requirement to make an order that is just and equitable permeates the entire decision making process, and it is not impermissible to consider it at an earlier point if the particular case requires it.
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41 More recently the High Court of Australia in Stanford v Stanford [2012] HCA 52 considered the operation of s 79 of the Act. Relevantly here, the majority (French CJ, Hayne, Kiefel and Bell JJ) said:

35.It will be recalled that s 79(2) provides that "[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order". Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.

42The Court went on to confirm that the two separate enquiries required by s 79(4) and s 79(2) are not to be merged.
43I do not understand the High Court to be saying that the two sub-sections cannot be dealt with together throughout the judgment as long as a judicial officer gives each separate attention.
44As will quickly become apparent here, this is a difficult case, although the pool of assets is far from large. The case calls for a consideration of the actual assets and liabilities to be retained by each party. There are considerable “notional” assets or “add backs”. These are issues the Court has had to bear in mind right from the very beginning of the process.
45The requirements of s 79(2) and s 79(4), whilst reflecting two separate considerations are here dealt with in tandem.

Brief history of the acquisition of relevant property

46In about 1983 the second respondent [Ms Liang], acquired the [Chinese property]. She said historically she and her husband travelled to [China] several times a year for business. Hotel accommodation was expensive and she wished to provide accommodation not only for herself and her husband, but for family members and friends. The property was purchased in her name with Dr Nham, his younger brother, [Chao Teng Kiew] (“[Teng]”), and his sister, Karen, having residential ownership rights.
47Ms Liang explained that she used a stamp of the children’s signature to obtain the children’s interests. She said she wanted their names on the property to facilitate their ability to travel to China.
48She said in 1996 there was a change in the Chinese ownership of property laws and on the face of the available documents the three children, along with Ms Liang, each now holds a 25% share in the Chinese property. Ms Liang said originally there was only one certificate of title but after the 1996 reforms there are now four separate certificates of title. These titles are held by Ms Liang but were not disclosed. When she was asked in cross-examination why she would not disclose them she simply

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replied “Why should I? It is my property. I hold them in Hong Kong.” Without full disclosure of all relevant documents or expert evidence the exact nature of the ownership of the property is unclear.
49On 5 September 1983 Dr Nham and his mother became the registered proprietors of a property in Hong Kong known as Lot 258. The purchase price of $HK765,948 was paid by the parents. In September 2002 Dr Nham’s share was transferred to his father. The property was sold on or about 8 October 2009. I accept no money was ever provided to Dr Nham after either the transfer or the sale.
50In 1990, some two years after Dr Nham came to Australia to study, his parents paid a total of $106,327 for the purchase of Property E. The property was registered in Dr Nham’s name as his parents were then living abroad.
51In 1999 the property was transferred into the M & N Trust. It was then mortgaged in order to fund the purchase by the K & L Trust of the Property B. Property E was sold in mid-2001 for approximately $230,000. Dr Nham retained any proceeds of sale which were initially deposited into a NAB flexiplus mortgage loan account in his name (“the flexiplus loan”).
52In 1991 [Property F] was purchased in the name of Dr Nham. An initial amount of $50,000 was paid to secure the property. The source of these funds is contentious and will be dealt with later. The balance of the purchase price was funded by Dr Nham obtaining a loan of $70,000 from the ANZ Bank. He later increased this loan amount. The property was sold in mid-2001 for $205,000 and Dr Nham retained the proceeds of sale of about $36,883. The settlement statement shows the funds were paid to the ANZ Bank.
53In 1998 a document styled “loan agreement” was signed by Dr Nham and his parents in relation to [Properties E & F] which, at the time, were both in the name of Dr Nham. The document was stamped in March 1998. The amount Dr Nham acknowledged he owed his parents was $160,000, along with certain costs and charges. The debt was free of interest.
54In 1994 the parents provided funds for the purchase of the property at Suburb C (“Property C”). The property was originally registered in Karen’s name. It was transferred to the parents’ names in November 1995. This property was leased to Dr Nham so he could run his acupuncture business from the premises between 1994 and 2000. The property was sold in 2010. Neither party suggested that the acquisition, maintenance or sale of this property was relevant to orders sought in these proceedings.
55On 7 December 1994 Property I was purchased in the names of Dr Nham and Karen. The purchase price of $601,445 (including adjustments and costs) was paid by the parents. The property was transferred to the parents’ names in 2000. The purchase of the property was funded, in the main, by the sale of the parents’ assets in Hong Kong. A mortgage for the balance of the purchase was registered over Property C. This mortgage was later discharged by the parents. This property has been, and continues to be, the home of the parents. The parties also lived there between 1996 and 2002. Ms Meng no longer pursues any claim in relation to this property.
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56 On 3 March 1998 the parties to the marriage jointly purchased a property [Property H]. It was funded by way of a gift of $10,000 from the parents and the balance by way of an ANZ bank mortgage. This property was sold in March 2000. Ms Meng says the net proceeds of sale were to be retained as a deposit for Property A, but instead were used solely by Dr Nham. It is accepted the net proceeds of sale were around $51,000.

57The M & N Trust was established by a deed entered into on 13 November 1998. [MKN Superannuation Fund] (“[MKN]”) which is the corporate trustee, was registered on 28 October 1998. Dr Nham was the sole director and shareholder of MKN.
58The Trust was established with four initial unit holders:
•Dr Nham
•Ms Liang
•[Mr Nham]
•Dr Nham as trustee for the [Nham Superannuation Fund]

59The allocation of the units are disputed. I have determined that the parents are entitled to four fifths of the units and Dr Nham to one fifth. The reasons for arriving at this decision are contained later in the judgment.
60In November 1998, [Property D] was purchased by the M & N Trust. It was purchased by way of a loan with NAB and sold by Dr Nham in mid-2001. The proceeds of sale were used to reduce the NAB flexiplus loan in Dr Nham’s name.
61On 29 December 1998 the M & N Trust purchased a property at [Suburb C] (“[Property C]”). The purchase price of $138,000 was borrowed from the ANZ Bank. The property was rented out and the rental was applied towards payment of the mortgage. It was sold by Dr Nham in 2001 for $150,000. The proceeds of sale were used to discharge the mortgage and may also have been used for personal and living expenses.
62In 1999 the M & N Trust purchased the Property B. The parents say they paid a deposit of $2,000 for the property and the balance was financed by way of a mortgage registered on the other Trust properties. Again the NAB flexiplus loan in Dr Nham’s name was utilised for this purpose. The total cost of Property B was $223,585.
63In 2000 the parties to the marriage purchased Property A. It is common ground that the parents lent the parties $100,000 for the purchase. This amount was the subject of an acknowledgment of debt and the parents obtained a judgment against the parties in the District Court on 31 May 2010. Ms Meng initially opposed the parents’ claim. The parties now owe the parents approximately $150,000 (including costs and interest). There is also a residential mortgage to ANZ registered over Property A. Ms Meng has lived there since separation.
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64 In 2002 the parties purchased a unit at [Property G], utilising the NAB flexiplus loan for the deposit and payment of the mortgage. This property was rented out during their ownership. It was sold in May 2012 and the net proceeds distributed as set out in the asset schedule.

The Disputed Property of the Parties

65I find the assets and liabilities to be as set out in the following schedule. I then explain the disputed assets.
66Unlike the parties, I have not included any of what can be loosely described as the M & N Trust assets, or entities associated with it. My reasons for adopting this course will follow when I deal with the entitlements of the second and third respondents and lastly when I consider the justice and equity of the orders I intend to make.
67I have adopted the form of the common schedule of the parties.

Assets of the parties to the marriage

Wife

DESCRIPTION	OWNERSHIP	VALUE $
HSBC Account	Wife	3,124
HSBC Account	Wife	740
ANZ Account	Wife	1,324
Wesfarmers Shares (129)	Wife	4,156
Wesfarmers Shares (79)	Wife	2,658
Telstra Shares (2000)	Wife	7,720
IFN Shares (117)	Wife	27
APA Shares (135)	Wife	673
Money in solicitors’ trust account	Wife	52,863
Toyota [Vehicle]	Wife	6,500
Household contents	Wife	2,500
Sub-total Assets	82,285
Add backs
Proceeds of sale of [Property G]	Wife	50,000
Paid legal fees	Wife	156,027
Sub-total Addbacks	206,027
Superannuation asset	Wife	194
Total assets (including add backs and superannuation)	288,506
Liabilities
HECS	Wife	26,723

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[Property G]	Wife	22,500
Loan from [Ciro Lorenzi] (legal fees)	Wife	156,027
Total Liabilities	205,250
Net Assets	83,256

Husband

DESCRIPTION	OWNERSHIP	VALUE $
ANZ account	Husband	2,844
Lloyds UK Bank account	Husband	2,000
ANZ share trading	Husband	16
Autodom shares (33333)	Husband	500
ALN shares (301)	Husband	27
Mercedes Benz	Husband	7,000
Household contents	Husband	1,000
Sub-total Assets	13,387
Add backs
[Property G] (25,000 reflected in paid legals)	Husband	25,000
Paid legal fees	Husband	143,137
Telstra shares in wife’s name	Husband	28,507
Husband’s share losses 1999/2000	Husband	51,000
Jewellery, gold and other gifts	Husband	34,000
Sub-total Addbacks	281,644
Superannuation assets
MLC	Husband	6,909
GESB	Husband	1,150
[MKN Superannuation ]	Husband	Nil
Sub-total superannuation assets	8,059
Total assets (including add backs and superannuation)	Husband	303,090
Liabilities
HECS	Husband	3,630
Capital Gains Tax [Property G]	Husband	22,500
ANZ credit card	Husband	4,846
ANZ credit card	Husband	908
Loan from cousin (legal fees)	Husband	70,000
Sub-total liabilities	101,884
Net assets	Husband	201,206

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Joint (husband and wife)

68The parties nominated some funds as being joint. However, I was told that $21,000 in the Civic Legal Trust Account is for all the parties, not simply the parties to the marriage. I do not intend to include that amount and will make an order that it be divided equally between the four parties.

DESCRIPTION	OWNERSHIP	VALUE $
ANZ account (as at 24/10/2012)	Joint	2,433
[Property A]	Joint	1,275,000
L R Settlement	Joint	2,500
Lawn Mower	Joint	2,500
Sub-total Assets	1,282,433
Liabilities
District Court Judgment debt 27/5/10 in favour of second and third respondents (loan to purchase [Property A])	Joint	150,000
ANZ residential loan ([Property A])	Joint	448,560
Sub-total Liabilities	598,560
Net Assets	$683,873

69There are a number of items in contention, which I will deal with now:

Wife - assets

•Savings/undisclosed income

70Dr Nham says that Ms Meng disclosed savings of $42,000 in a bank account in her financial statement filed on 21 December 2010. He says this money was earned whilst she lived in the United Kingdom and studied. He wants this sum included in the asset pool.
71In that financial statement Ms Meng said that the parties held a joint ANZ Access Account and she had the use of approximately $42,000. In an affidavit filed in December 2011 Ms Meng sought to update her financial circumstances. She explained that the total amount in that account had been $82,236 with her estimated share to be around $42,000. She said the account had been reduced mostly as a result of orders made by the Court allowing each party to withdraw $25,000 for legal fees and valuations. I will include the current value in the schedule as I am satisfied the balance is otherwise accounted for in the pool or has been used for living expenses.
•Wesfarmers shares
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72 Dr Nham’s position is that these shares are presently worth $21,000 in total. He says this was the figure allocated by Ms Meng in an earlier financial statement. Ms Meng said she has not sold any shares since the swearing of that document, but Wesfarmers has carried out a restructure of their shares. This had resulted in one share lot being divided into two. Added to this is a general downtown in their market value. I accept Ms Meng’s evidence and have included the shares at what she says is the present value.

-Addbacks

73Given the exuberant manner in which the parties, especially Dr Kang, sought to add back into the pool of assets items of property that no longer exist, it is helpful to restate the general principles relating to when it is generally appropriate to add back such amounts.
74The Full Court in Omacini and Omacini (2005) FLC 93-218 conveniently summarised a number of decisions dealing with circumstances when it is appropriate to make notional addbacks to the asset pool. The Full Court said at pages 79,617 and 79,618:
30.To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees.
…
(b)Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband's receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”

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(c) In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.

Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec 75(2)(o) to applications for settlement of property instituted under the provisions of sec 79.

31.As the Full Court said in Browne v Green (1999) FLC 92-873 at 86,360:
44. We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction — a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.

75With these principles in mind I will deal with what Dr Nham seeks to add back to Ms Meng .
•Car business and unlicensed dealing of motor vehicles

76Dr Nham wishes to add back an amount of $28,000 being money he says was earned by Ms Meng in relation to a car business conducted by her at Property A after separation. He says she operated what could loosely be described as a used car yard at the property. He said there were car parts and car bodies at the property as well. He seeks to add back what he estimates is a fair value of the vehicles.
77Ms Meng admitted to having stored some car bodies for a friend at the property. There is no evidence I accept that the car bodies were of any or much value. In any event, to seek to add back such amounts does not accord with general legal principles.
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78 Ms Meng deposes that she was the defendant in a prosecution by the Commissioner for Consumer Protection in relation to the purchase and sale of motor vehicles. Documents attached to her affidavit show she was convicted on two counts that she carried on business without being the holder of a valid motor vehicle dealer’s licence. She was fined the sum of $5,942 which comprised a fine of $4,000, costs of $76.75 and other fees of $1,865.55 in relation to one count and she received a spent conviction on the second count.

79In a plea in mitigation of sentence, counsel for Ms Meng detailed that she obtained 12 vehicles at auction. The vehicles were made roadworthy and they were then registered. They were sold to acquaintances and Ms Meng received a total profit of $4,350.83.
80I can find no basis whatsoever for any amount being added back to the asset pool. Ms Meng was convicted for her actions in relation to these cars. She was doing something unlawful. If the plea in mitigation is to be believed then the fine and costs outstripped any profit she made from the conduct of the business. Dr Nham provided no real justification for the amount he sought be added back to the pool. Dr Nham is seeking to profit from Ms Meng’s unlawful activity. This is clearly inappropriate.
•Rent

81Dr Nham alleges that Ms Meng has retained income of $124,000 from renting the jointly owned former matrimonial home in [Suburb A]. Dr Nham’s method of calculating $124,000 is inexact and vague. At one stage he commenced proceedings in the District Court to evict Ms Meng from their joint property for non-payment of rent. He failed to reveal on his application that she was a joint owner of the property. Unsurprisingly, once the Court was informed of her interest, his application was dismissed.
82A real estate agent managed the property between 2002 and 2007. The evidence supports that Dr Nham managed and retained rent from the Property A himself from early 2007 until about May 2009. Ms Meng received rent from early 2009 to trial.

83The property in Suburb A is a 9,500 square metre property with a 7-bedroom house built on it. The tenants all appear to be of Chinese origin. Some are students and all are living in Australia under student visas or protection visas. This information is gleaned from the plea in mitigation referred to earlier and is generally common ground.
84I am satisfied that, by and large, the rent collected has been used to pay the mortgage over the property and to effect general repairs. Ms Meng provided a summary of the expenses she incurred, but failed to provide source documents to support the expenses. I have no doubt that if there has been any money left over during either period of habitation by the parties, each has utilised it for their own purpose. However, each has been in a similar position at a different point of time.
85I do not intend to add back any amount against either party for collection of rent.
•Tertiary fees and travel expenses
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86 Dr Nham also seeks to add back tertiary fees he says were paid on Ms Meng’s behalf by him during the relationship. He says they were $68,000. He says she also had travel expenses associated with living and studying overseas of around $30,000.

87I am satisfied that Ms Meng’s tertiary fees were paid during the relationship and that her travel expenses were also met. It was jointly agreed that she should study and this is what she did. This is a debt which should be jointly borne.
88- Liabilities
•[Ciro Lorenzi] loan

89Both parties agree that their respective legal fees should be added back into the pool. Ms Meng has a loan agreement with a friend who is a motor mechanic, Ciro Lorenzi. She gave evidence she had initially drawn down an amount of $145,536, which had increased to $156,027 by the end of the evidence. I intend to allow the borrowings in a corresponding amount to be included in the liability schedule.

Husband - assets

•[MKN Superannuation Investments Pty Ltd] (“MKN”)

90Ms Meng seeks to identify MKN as an asset of Dr Nham . This entity is the corporate trustee for the [M & N Trust].
91It is artificial to try and isolate this entity and attribute a value to it separately from the [M & N Trust] as a whole. The entire exercise is done later in the judgment.
•Shares

92Ms Meng claims that Dr Nham has failed to adequately disclose or vouch the value of any shares he currently holds, either in Australia or overseas.
93Dr Nham has been less than diligent in providing any information about his shares and trading. At the beginning of the second part of the trial he disclosed some of the relevant trading accounts which clearly had been available, online, to him at a much earlier stage. The share accounts which have been operated historically include Comsec Accounts, an E Trade Share account, a State One Trading Account, a National Share Trading Account, ANZ Trading Accounts and a Hogan Share Account. He has also held other shares.
94I am satisfied that Dr Nham does not currently trade shares in Australia, although historically he has done so on a full-time basis. Apart from where specifically set out in the asset schedule, I find Dr Nham does not have other Australian shares and does not currently operate on the disclosed accounts.
95Ms Meng also alleges that Dr Nham has, in the past, traded shares overseas. Ms Meng produced email exchanges, the content of which suggests Dr Nham had been involved in the trading of shares overseas. Dr Nham had no satisfactory explanation for the allegation.
(Page 19)
96 Dr Nham has in the past been very keen on share trading and has lived overseas for relatively long periods of time. I do not accept that he has never traded shares overseas. It is likely he continues to trade shares when he is overseas. However, in view of the failure to disclose any relevant documents, the Court is unable to ascribe any particular value to shares currently held in his name, if any. Unfortunately, given his heavy losses in the past, it is unlikely that he holds shares of any or much value at present. That cannot be said with certainty given his lack of frankness in this area.

•Overseas accounts

97It is alleged by Ms Meng that Dr Nham has money in various overseas bank accounts. Her position is that without full disclosure she cannot be satisfied there is no other money available to him.
98Dr Nham’s original position was that he has no current open overseas bank accounts. This changed during the course of evidence to accepting that there was a Lloyds bank account in the United Kingdom that had not been closed. He said it was as good as closed and probably had only around £1,000 in it. He also accepted that there was a Hang Seng Bank credit card which was still operational. He said there was only a small amount of credit left on that card and it was reserved for use overseas in an emergency situation.
99A number of overseas bank accounts put to Dr Nham were accounts operated a considerable time ago. There was no evidence to suggest considerable or any money exists in these overseas accounts. I appreciate Ms Meng’s inability to fully investigate this issue without Dr Nham’s co-operation.
100At the resumed trial there did not appear to be any further disclosure. I am not able to ascribe a value to overseas bank accounts. I accept it is part and parcel of Dr Nham’s ongoing failure to properly provide evidence and will return to this issue later in my judgment.
- Addbacks
•Money withdrawn from the MKN Superannuation

101Historically, Dr Nham and Ms Meng were joint trustees and joint beneficiaries of this fund which was established on 24 January 2000. It is no longer operating, although there is considerable uncertainty about exactly when this happened. Dr Nham firstly said the fund ceased in 2002. He then accepted he still used its bank account in 2006 and then again in 2007. It was finally closed in February 2012. Dr Nham has failed to disclose all the documents relating to the fund. No adequate financial information was provided. Dr Nham said there was nothing to disclose. Dr Nham did admit using the superannuation fund bank account as a vehicle for his share trading. Dr Nham’s position is that although it may not have been appropriate for him to use the superannuation fund bank account to conduct his own share trading, he was always using his own money. It was his belief the fund had been closed at the time, although the bank account had not.
(Page 20)
102 Ms Meng made a general allegation that Dr Nham had withdrawn money from the fund although it was accepted by her counsel the allegation really arose from not having had full disclosure rather than being able to identify any specific amounts.

103I am satisfied that the fund presently has no value, even if it ever did, which appears unlikely. The evidence does not allow me to make any findings about whether there has been a premature distribution of superannuation funds during the marriage.
•Sale of [Hong Kong Property] - $114,400

104Ms Meng says that over the period 5 September 1983 to 18 November 2002, Dr Nham was the registered owner of this property as a tenant-in-common with his mother. She says it was purchased by Dr Nham and his mother in around September 1983 for a total of $HK765,948. She says that on or around 29 September 2002 Dr Nham sold his half share to his mother for $HK500,000. This converted, at the time, to approximately $AUD114,000.
105On or about 8 October 2009 Dr Nham’s mother sold the property to a construction company for $HK4,290,000 which was equivalent to approximately $AUD600,171.
106Ms Meng seeks to add back the amount of $AUD114,000 which is the amount she says Dr Nham was entitled to in about November 2002. When asked why the amount should be included in the asset pool she said “because it happened within the marriage”. She said she had no real detail about the transaction.
107In a document called Response to Wife’s Notice to Admit, sworn by Dr Nham on 23 July, he states:
11.… The purchase of [the Hong Kong Property] was made and the purchase was funded by the Second Respondent, on September 1983 without my knowledge as I was a medical student in China at the time. Similar to [Property I], I held the property of [the Hong Kong Property] in trust for my parents and had no interest whatsoever. This is the reason that I did not disclose the property as the asset allocation between the applicant and me does not and should not involve any of my parents’ properties which does not belong to me and I merely hold in trust for them.
12.… [The Hong Kong Property] was purchased and fully funded by the Second Respondent only. I could not afford to purchase any property as I was a college student at the time of the purchase.

108During the course of cross-examination the title to the Hong Kong Property was shown to Dr Nham. Although he accepted he had signed documents relating to the transfer in 2002 and thus knew about it at the time, he denied he had ever had an interest in it or gained financially from it.
(Page 21)
109 Dr Nham said he only became aware his name was on the title when his parents wanted it transferred into their names solely. He said he signed it over to them at their request in 2002. He said at the time he felt guilty because he had lost some of his parents’ money on share trading. He just signed it back to them. He had made no contribution to it at all.

110Dr Nham sold Properties E & F in the middle of 2001. His mother says she was aware of the sale because a real estate agent had come to the Property I to discuss the issue with her son. It is common ground that the parents did not receive any of the proceeds of sale of Properties E & F despite considerable contribution to one of those properties. By the middle of 2002 they were very upset and on 16 July 2002 they wrote to their son seeking an explanation for his behaviour and the return of the funds. Again, it is common ground they received nothing. I accept they were very angry and hurt by their son’s behaviour. They had lost trust in him. They felt ashamed. His mother said that after losing trust in him the parents asked him to transfer his entitlement in the Hong Kong property to his father. In September 2002 the Hong Kong property was transferred into Dr Nham’s father’s name.
111The Court accepts that Dr Nham did not receive any money either in September 2002 or 2009 from the property. However, the manner in which he presented evidence to the Court about the property was less than satisfactory.
112Ms Meng argues that the transfer by Dr Nham of the Hong Kong property to the parents was in lieu of him having to repay money on the Properties E & F. Although the timing of the transfer may give rise to an inference that this is the case, there are other inferences that can equally be drawn. The inference I find most consistent with the evidence is that the parents felt tricked by Dr Nham. They wished to exercise some form of damage control. The Hong Kong property was held by Dr Nham as a tenant in common in equal shares. The parents did not want to run the risk of losing a part of the property they had contributed solely to.
113There is no evidence, which I accept, to suggest that in 2002 this asset although partly in Dr Nham’s name was for anyone other than his parents. I do not find he disposed of a marital asset prematurely or his actions were reckless, negligent or wanton. I do not intend to include the sale proceeds of November 2002 into the present pool of assets.
•Ms Meng’s Telstra shares - $28,507

114In about October 2006, after some discussion with Ms Meng, Dr Nham purchased Telstra shares in his name, Ms Meng’s name and the names of the parties jointly. Dr Nham had the password to Ms Meng’s share trading account and he traded her account as if it was his own. This was only changed in 2008 when Ms Meng first discovered what had been happening. Dr Nham sold three sets of shares in Ms Meng’s account, including some Telstra IPO shares. It was put to him that he had explained to her that the proceeds were for the repair of the roof of Property A. Dr Nham denies this and said he simply told Ms Meng that he needed money. In his re-examination he said he used the money for “general purposes” and also to invest further in shares.
(Page 22)
115 I consider that this was a premature distribution of joint assets. Ms Meng had an interest in the share proceeds. The manner in which Dr Nham dealt with these shares and subsequently sold them without consultation supports this view.

•Share losses
(a) 1999/2000

116Dr Nham concedes that he has lost approximately $200,000 in share trading in about 1999. He said he initially lost $150,000 and then a further $50,000. He says that it is a loss to be borne jointly. He maintains Ms Meng was aware of his trading and, in fact, initially gave him advice about it. He said the loss was a “company investment loss”. His evidence was vague as to the exact timing and source of the funds. Ms Meng deposes that some of the funds came from the proceeds of sale of Property E. These funds, she said, had been earmarked as a deposit for Property A.
117The question here is to determine the source of the funds Dr Nham concedes he lost in his share trading. Firstly, he accepts that he used $51,000 of the proceeds of sale of Property H. This property sold in March 2000.
118I intend to add this money back into the asset pool. I find this is money in which Ms Meng had an interest. I accept the money was specifically earmarked for the purchase of a further joint property. I consider the use of the money in the manner employed by Dr Nham to be a reckless or negligent waste. The parties were later forced to borrow the deposit to conclude the purchase. They still owe that borrowed amount to the parents, with considerable costs and interest. Dr Nham’s financial misbehaviour has resulted in a waste of joint assets.
119Secondly, it is common ground that when Dr Nham sold Properties E & F the proceeds of sale were initially used to reduce the amount owing on the respective mortgages over those properties.
120Property E was sold in mid-2001 at which time it was in the name of the M & N Trust. The proceeds of sale were funds which Dr Nham’s parents expected him to use to discharge the Property B mortgage. This is common ground. The exact amount of the mortgage at the time or any additional profit realised on sale was not clearly identified in the evidence.
121The net proceeds of sale of approximately $222,533 were deposited into Dr Nham’s NAB loan account. Dr Nham had a one fifth share in the units in the trust. To that extent I accept Ms Meng had some entitlement.
122Dr Nham said he had used the NAB loan to fund his share trading and other expenses.
123Property F was sold at about the same time. Whereas I am satisfied the purchase of Property E was funded by the parents I am not so satisfied in relation to Property F.
124This property was purchased about five years prior to the marriage. An initial amount of $50,000 was paid by way of deposit to secure the purchase of the property. These funds originated from the parents. They were sent to Dr Nham by telegraphic

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transfer and marked on the customer receipt as being a birthday gift to him. The funds were transferred shortly prior to his birthday. Dr Nham said the funds were sent to him for his use towards tuition fees but he utilised them as a deposit on Property F. Ms Meng says that the funds were a gift.
125Dr Nham and his parents say that the declaration on the telegraphic transfer customer receipt was simply to avoid the payment of tax on the funds. Given the timing of the transfer and the contemporaneous declaration I am satisfied that the funds were a gift to Dr Nham. There are also contemporaneous notes made by Dr Nham to suggest the funds were for his tuition fees. This gift was the deposit on the property and the balance of the funds were obtained by way of a loan in Dr Nham’s name from the ANZ bank. The loan was repaid by the rental income from the property.
126In an affidavit Dr Nham swore on 27 July 2012 he deposes:
47. … The family trust was established into which all the assets held in my name for my parents were transferred with the sole purpose of more efficiently managing the assets for my parents. … (emphasis added)

127Property F was not transferred into the name of the M & N Trust. Dr Nham said some of the balance of the proceeds of sale of Property F was used for joint purposes.
128The evidence is such that the Court is not able to say with any certainty that the proceeds of sale of Property F in which I am satisfied Ms Meng does have some interest were all used for share trading or for Dr Nham’s sole purpose. I accept the money from Property F is likely to have been utilised for living expenses and to fund Dr Nham and Ms Meng’s lifestyle at a time when they were earning very little income.
129Although Ms Meng may have some interest in Properties E & F given the date of their purchase and the manner in which these properties operated, her contribution is likely to have been minimal.
130I distinguish this money from the Property H money in which a specific amount was earmarked as a deposit on Property A.
(b) losses since 2001

131Ms Meng accepts she was involved in discussions with Dr Nham about share trading in 1999. She had been undertaking a course of study in finance and was interested in this area. However, after that time it became apparent Dr Nham was losing considerable amounts of money and utilising the equity in his parent’s properties to fund his share trading. Ms Meng asked him to stop share trading as did his parents. These discussions took place in 2001 after the sale of Properties E & F. Dr Nham accepts he gave a written undertaking not to trade in shares. The undertaking was in Chinese and is dated 3 January 2002.
132Dr Nham translated the undertaking to be simply that he would not trade in speculative shares without further discussion. The Court appointed interpreter gave evidence that the translated undertaking was to the effect that:
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I will no longer do share trading at random. I will carry out the share trading only after consultation.

133Despite this undertaking, it is clear that Dr Nham continued to trade in shares, sometimes in Ms Meng’s name and without consultation. Dr Nham said Ms Meng knew that he was trading in shares. Ms Meng denies knowledge of the extent to which he was trading. She accepts that in 2007 he asked her for some advice and she gave him some in relation to some particular Initial Purchase Options, but they were not speculative shares.
134Dr Nham conceded that in late 2001/2002 both his parents and Ms Meng were very annoyed with him. He said that initially his share trading had been profitable, but that had changed.
135Dr Nham was asked if he had documents to confirm the extent of his share trading. He simply said he was not good at keeping records.
136Ms Meng is seeking to add back an amount of $80,000 which she calculates is likely to represent the lower end of Dr Nham’s share trading losses since 2001.
137Neither Ms Meng nor Dr Nham are in a position to pinpoint the exact amount Dr Nham lost in share trading in the period between 2001 and 2012. There was not enough disclosure or identification of where certain amounts of money had been spent to accurately calculate any losses.
138Dr Nham says he did not trade between 2001 and 2006. However, he admitted that by April 2006 he had more than $60,000 in shares. On 30 August 2008 he signed a statement of his financial position for the ANZ bank indicating he had $80,000 worth of shares. He said his gross annual income was then over $105,000.

139Dr Nham’s ability to accurately fill in statements of financial position is very much in question here.
140I have already added back into the asset pool the proceeds of sale of Ms Meng’s Telstra shares. This could account for some $28,500 of the $80,000 worth of shares identified by Dr Nham in his financial statement of August 2008.
141The Court has great difficulty in quantifying the amounts Dr Nham used for his own purpose. The financial records are incomplete. Draw downs of funds in bank accounts do not necessarily identify the purpose of the draw down. The Court’s function is not to conduct an audit.
142If there is a reduction in joint assets because of a party’s conduct should this have financial consequences? Given my findings on the circumstances here, I am of the view there should be. I am unable to quantify the total loss and I intend to deal with all the trading losses later in my judgment under s 75(2)(o) of the Act.
- Liabilities
•Debt to father

143Dr Nham seeks to include an amount of $60,000 he received from his father in the schedule of liabilities. He says he wanted to buy a Mercedes motor vehicle and his

(Page 25)
father advanced money for that purpose. As it transpired, he used the $60,000 from his father to trade in shares and for living expenses. The car was eventually financed through a hire purchase agreement which was serviced by joint funds. In evidence he said of the $60,000, “It is not a gift, maybe it is a loan. They didn’t say.” When his father was asked about the money, he said he could not remember as it was a long time ago. I do not consider this to be a liability, given the lender cannot even remember it. If I am wrong in this, I do not consider the amount will be required to be repaid.
144Dr Nham also seeks to include a debt to his cousins of $70,000 to be included as a liability. This was a loan acquired post-separation to fund his legal fees. Both parties have borrowings for this purpose and I have included it in the pool.
•NAB flexiplus loan

145Dr Nham sought to include this loan as a liability in the asset pool. I have not included it as it is tied in with the M & N Trust.

Entitlements of the Second and Third Respondents

146A number of issues raised by the parents were resolved early on in the trial. It is conceded that they are the legal and beneficial owners of Property I and that the parties to the marriage have no interest in that property. It is also accepted that the $150,000 owing pursuant to a District Court judgment is a joint debt. The Court will decide the responsibility for payment of that debt vis-à-vis the parties to the marriage.
•Properties E & F

147The parents seek a return of funds from Dr Nham being funds to which they were entitled, yet he retained them after the sale of the properties at Properties E & F.
148On 20 February 1998 Dr Nham entered into a loan agreement with his parents. The circumstances of the making of the loan agreement are not entirely clear. On the face of it Dr Nham acknowledges that his parents lent him $160,000 to purchase Properties E & F and that he would repay that amount with other costs and charges. He also agrees that the debt would be satisfied by him paying the whole proceeds of sale of the properties to the parents.
149I have little difficulty in finding that the sale proceeds of Property E were utilised by Dr Nham in unsuccessful share trading. He has agreed to return four fifths of the money and to which his parents are entitled. However, he says it should be a joint liability and borne equally by Ms Meng. I disagree. Dr Nham should be solely responsible to the parents for this money lent well prior to marriage and used solely by Dr Nham.
150The parents saw fit to draw the loan agreement with Dr Nham only. This can be contrasted to the loan they advanced to the parties for the purchase of Property A. That loan agreement was in the joint names of the parties. In relation to the 1998 loan agreement, I am satisfied that the parents should be repaid by Dr Nham from his funds alone. It is a matter for Dr Nham and his parents. I will refer to it when I deal with s 75(2) of the Act.
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151 I have previously considered Property F and do not accept the circumstances of its acquisition as put forward by Dr Nham and his parents. However, Dr Nham apparently accepts he has a moral obligation to repay them a further $50,000. The Court’s assessment is that this amount was a birthday gift to him. At the very least it was forwarded to him to fund his tuition and living expenses. I am not satisfied there was ever any intention it should be repaid. The parents were very generous to all their children in this regard. If Dr Nham feels he has a moral obligation to repay that amount then he is free to do so. It is not an amount of money which should be visited upon Ms Meng.

•M & N Trust

152While according to the M & N Trust deed Dr Nham is legally entitled to 10 shares in the Trust and an additional two as trustee for the Nham Superannuation Fund, the parents have maintained the position that the deed is a ‘sham’ and that the true allocation of units should be four fifths to them and one fifth to Dr Nham. This appears to amount to an assertion that despite the legal position, the parents are beneficially entitled to additional units in the Trust. The basis of that beneficial entitlement is argued to be the verbal agreement that the parties had at the time of entering the trust deed and the way in which Dr Nham “tricked” his parents into signing the trust deed.
153Ms Meng disputed the evidence surrounding the unit allocation and subsequent attempted rectification of it. She argues that the rectification and its alleged basis is a sham, undertaken in light of the property proceedings between the parties, and that the original allocation of units should be upheld.

- Background to the Trust

154The original trust deed of the M & N Trust contains only the signature of Dr Nham. Firstly, he signed for himself, then he signed as director of MKN and finally as trustee for the Kang Fund. The court was then provided with copies of the signature pages of the deed which are also signed by the parents. Their signatures are witnessed by their son, T, who is resident in the USA. The parents and Dr Nham say that the parents signed the signature page of the deed and the application for units in the M & N Trust while they were visiting T in the USA. They say they did not view the whole deed prior to signing the documents as Dr Nham only sent them the signature pages.
155Dr Nham allocated 10 units in the trust to himself personally, and two units to himself on behalf of the Nham Superannuation Fund. He allocated four units each to his parents. This unit holding is set out in the First Schedule to the original trust deed.
156Ms Liang says that Dr Nham had told the parents he wanted to create a family trust to manage their investment properties and also for tax reasons. She said the parents agreed to form the Trust on the basis that she and her husband would have eight out of 10 units and that Dr Nham, because he would be managing the Trust, could have two units.
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157 The evidence of both Mr Nham and Ms Liang is that they had been tricked into believing that when they applied for four units each in the trust, they would be holding a total of eight out of 10 units, not eight out of 20 units. The reason they did not discover that 20 shares had, in fact, been issued was because they were not provided with the whole trust deed at the time they signed it.

158Dr Nham agrees he actively misled his parents. He said a four fifths unit allocation in his parents’ favour was what had been agreed. Dr Nham explained that he and Mr A then had different ideas about how the share holding should be allocated. He said that Mr A suggested Dr Nham maintain full control as he would be doing more of the work than his parents, who were often overseas. He denied that the share holding was an accurate reflection of the financial contributions to the Trust property. He said that rather than causing 10 units to be issued he caused 20 units to be issued. His parents held eight but he held 12. He said he did not tell his parents at the time but felt he would explain it to them later. He made notes at the time of how he would explain it to them.
159I accept Dr Nham acted dishonestly. This behaviour is entirely in keeping with his general attitude to the obtaining of funds. He was never successfully challenged on the manner in which the units were wrongly allocated, nor were his parents.
160There is some conflicting evidence about when the parents found out about the true allocation of units in the M & N Trust. Ms Liang gave evidence that she discovered the true allocation of the units when she and her husband returned to Australia from visiting their son, T, in 1999.
161Ms Liang deposes:
6.12When the second respondent and I returned to Australia in 1999, we were given the original Trust Deed by the first respondent husband. Our English was limited, therefore we did not understand the majority of its contents and relied on the first respondent husband to properly inform us. When we saw the schedule of about unit holding, we noticed the first respondent husband was allocated 10 units instead of 2 units as he previously informed (the conversation we held prior to the Trust being established). There were also two units allocated to the [Nham Superannuation Fund] where the applicant wife was a beneficiary. We queried why the applicant wife was a beneficiary and why our other children [(Teng Kiew and [Karen Kiew]) were not. We also verbally demanded the first respondent husband to change the unit holding to what they originally discussed. [sic]

162There is reference later in her affidavit that suggests the parents did not find out about the allocation until 2002. The matter was certainly raised again in 2002.
163Ms Liang deposes:
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6.29 In 2002, when the second respondent and I became aware that we did not hold the majority of unit holding, we confronted the first respondent at [Property I] and demanded that he handed over documents to substantiate the sales of the Trust properties and demanded him to account how much he owed us. The first respondent informed us verbally that he had used the sales proceeds from the Trust properties to pay for his personal loans and his share trading losses. We were extremely disappointed by his actions and we made it clear that we demanded the full repayment of the sale proceeds from the sale of [Properties E & F] less reasonable selling costs. We informed the first respondent husband that if he was not able to pay back our loans, then he must transfer his interest in [M & N Trusts]to us to offset his debts to us. The first respondent verbally agreed at the time. [sic]

164The parents had written a letter to Dr Nham on 16 July 2002 where, in relation to the Trust, they say:
1.Before Dad left, he told you that the account of K & C Company (which in fact we have never signed and acknowledged it) must be clear, the operation of this company must be put on hold, because we are not in Australia and we have no income tax to pay. [sic] (translated from the original Chinese)

165The letter does little to clarify these matters.
166Ms Meng says that the parents spoke to Dr Nham in her presence in about 2002 before she went to the United Kingdom. She said they discussed the issue regarding the properties and the shareholding in the unit trust. She says she is sure that the point was made that the ratio of share holdings in the unit trust was 12 units for Dr Nham and eight units for the parents. I do not accept her evidence in this respect. Even if I am wrong it does not justify the method employed by Dr Nham to obtain that unit allocation.
167The parents and Dr Nham only took action to rectify the trust deed in 2011. Dr Nham remained the sole director and shareholder of MKN and therefore the controller of the trust assets. Mr A had not finished all the accounts and they were then given to the parents’ accountant, Ms W, to complete. Dr Nham said his parents’ lawyer suggested preparing a deed of rectification of the original deed of Trust. There were two telephone meetings during which the rectification was discussed. Minutes of a meeting of unit holders in July 2011 show that Ms Liang, Mr Nham and Dr Nham unanimously agreed to rectify the unit holding in the M & N Trust. The authorship of the minutes is not clear, although the evidence suggests both Karen and Tom assisted in their preparation. A deed of rectification was then written to reflect what the parents say is the correct allocation of units in the Trust. That deed is not signed by Dr Nham. Ms Liang and Mr Nham continue to say that they are entitled to 80% of the units in the trust in accordance with what they say was the intended allocation.
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168 Mr A was a person of considerable interest to the Court. He was not available by any means to give evidence at trial. He remained elusive throughout these proceedings. He did have something to say in his affidavit about the unit allocations:
10.Tim has informed me that there has been some dispute about the trust unit allocations, but I am not privy to his discussions between him and his parents. I am aware that Tim currently holds 12 of the 20 units as an individual. He had previously held two units in the trust as trustee of the [Nham Superannuation Fund], but these were surrendered into his individual name when the [Nham Superannuation Fund] was wound up with the ATO.

169Mr A further deposes:
17.The [Nham Superannuation Fund] was started and subsequently wound up in the first year without every having operated. It has no value. There are no payments into the superannuation fund.

170None of the parties to the proceedings provided the Court with any evidence about the Nham Superannuation Fund. I find Mr A’s evidence to be of little probative value; it simply provides some background.
171Without any attempt whatsoever at variation or amendment to the original [M & N Trust Deed], a new superannuation fund, the MKN Superannuation Fund, has been assumed to hold the units that were once held by the Nham Superannuation Fund. The MKN Superannuation Fund was signed by the parties to the marriage in January 2000. Ms Meng and Dr Nham are beneficiaries of the fund.
172There are many issues about the Trust that were never fully explored or explained during the course of the trial. On the evidence before me I find Dr Nham did mislead his parents in a deliberate and calculated manner. How then to deal with it?

Discussion

173I find Dr Nham’s behaviour in deceiving the parents in this way to be unconscionable.
174Unconscionable conduct exists when a person is under a special disadvantage of which the other party is aware, making it unconscionable for the transaction to proceed in those circumstances. For an impairment to constitute a “special” disadvantage, it must have an effect on an individual’s ability to protect their own best interests. As Kitto J said in Blomley v Ryan (1956) 99 CLR 362 (at 415):
[unconscionable conduct] applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other

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party unconscientiously takes advantage of the opportunity thus placed in his hands.

175The types of impairment that may constitute a special disadvantage are not limited or closed. Mason J, in Commercial Bank of Australia v Amadio (1983) 151 CLR 447, explained the concept in the following terms (at 461-462):
It goes almost without saying that it is impossible to describe definitively all the situations in which relief will be granted on the ground of unconscionable conduct. As Fullagar J said in Blomley v Ryan, at p. 405:
The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-à-vis the other.

Likewise Kitto J spoke of it as "a well-known head of equity" which-
... applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands".

It is not to be thought that relief will be granted only in the particular situations mentioned by their Honours. It is made plain enough, especially by Fullagar J, that the situations mentioned are no more than particular exemplifications of an underlying general principle which may be invoked whenever one party by reason of some condition of circumstance is placed at a special disadvantage vis-à-vis another and unfair or unconscientious advantage is then taken of the opportunity thereby created. I qualify the word "disadvantage" by the adjective "special" in order to disavow any suggestion that the principle applies whenever there is some difference in the bargaining power of the parties and in order to emphasize that the disabling condition or circumstance is one which seriously affects the ability of the innocent party to make a judgment as to his own best interests, when the other party knows or ought to know of the existence of that condition or circumstance and of its effect on the innocent party.

176In this case, Mr Nham and Ms Liang were at a disadvantage vis-à-vis Dr Nham when they signed the Trust Deed. They relied upon their son to act in their interests and complete the transaction as they had agreed. They were not able to conduct their own affairs in Australia at the time and relied on Dr Nham to prepare the documents. They did not have access to any independent advice. The documents being signed were in English, and neither of the parents is a competent English-speaker. They

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trusted Dr Nham at the time. In any event, the full document was not provided to them at the time of signing. By a combination of these factors, the parents were not fully able to act in their own best interests.
177It is not in itself sufficient that a party be under a special disadvantage. There are two elements to a finding of unconscionable conduct, which were laid out in Amadio (supra) by Deane J (with whom Mason and Wilson JJ agreed) at 474:
The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or "unconscientious" that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable: "the burthen of showing the fairness of the transaction is thrown on the person who seeks to obtain the benefit of the contract" (see per Lord Hatherley, O'Rorke v Bolingbroke [46]; Fry v Lane [47] , at p. 322; Blomley v Ryan [48] , at pp. 428-429).

178It must therefore be shown that Dr Nham knew that his parents were under the disadvantages identified. He was clearly aware that they were overseas. It is clear that they trusted him because they did not seek provision of the full document. Dr Nham himself admits that he concealed the allocation of units from his parents. He was aware that they were relying on him to organise their affairs in Australia. He used this opportunity to gain an advantage for himself. In these circumstances, it was prima facie unconscionable of him to accept their agreement to the Trust deed. Dr Nham did not attempt to show that the transaction was “fair and reasonable” despite his conduct. As such the terms of the deed as signed should not stand.
179Unusually, here it is not Dr Nham who is trying to defend his actions, it is Ms Meng who says the allocation in the original Deed should stand. There was no real challenge by her to the circumstances surrounding the entering of the Deed. She now seeks to benefit from what I accept to be Dr Nham’s dishonest behaviour.
180A court exercising equitable jurisdiction has the discretion to do what is necessary to achieve ‘practical justice’ in accordance with the maxim ‘he who seeks equity must do equity’ (see Vadasz v Pioneer Concrete SA Pty Ltd (1995) 184 CLR 102 at 113-114). Here, rescission of the deed would not do justice between the parties. All the parties to the deed agree that Dr Nham was intended to have a one fifth share in the units of the trust. He was therefore entitled to four of 20 units. He currently holds 12 units. The second respondents are beneficially entitled to eight of the units he holds. A constructive trust over eight units of the trust in favour of the second respondents will do justice between the parties in this case.
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Delay

181It might be argued that the parents should no longer be entitled to equitable relief because they failed to take action when they became aware of the true allocation of trust units. However, mere delay in and of itself does not amount to a defence. As Dixon CJ, Webb and Kitto JJ said in Fysh v Page (1956) 96 CLR 233 at 243-4:
If a plaintiff establishes prima-facie grounds for relief the question whether he is defeated by delay must itself be governed by the kind of considerations upon which the principles of equity proceed. If the delay means that to grant relief would place the party whose title might otherwise be voidable on equitable grounds in an unreasonable situation, or if, because of change of circumstances, it would give the party claiming relief an unjust advantage or would impose an unfair prejudice on the opposite party, these are matters which may suffice to answer the prima-facie grounds for relief. See Lindsay Petroleum Co v Hurd and the observation in Lord Blackburn's speech in Erlanger v New Sombrero Phosphate Co.

182After 1999 the parents took neither legal action nor did they do anything to amend the Trust Deed. However, they did not advance any more money to Dr Nham for investment or other purposes without securing it appropriately. They felt ashamed their son had duped them. A loan agreement was entered into for the borrowings used by the parties to the marriage for the purchase of Property A.
183If one considers the composition of the assets of the M & N Trust from its inception, it is clear that any property held was solely for investment purposes. Initially, the Trust held 5 Property C. I accept that the parents advanced all the funds associated with this property. Property F remained in Dr Nham’s name. I have found that he funded the purchase of this property. It was not treated as a trust property. Neither the parents’ home at Salter Point, which had been totally funded by them, nor Property C, which was held in Karen’s name, was transferred to the M & N Trust. The subsequent properties forming a part of the K & L Trust assets, Property D, Property C and Property B, were effectively managed by Dr Nham and funded either directly or indirectly by the parents. Dr Nham’s contribution was the arranging for the purchase of the K & L Trust properties by using the NAB flexiplus loan facility in his name and for which the M & N Trust was the guarantor. A NAB mortgage is registered over the property.
184I find that Dr Nham is the beneficial owner of one fifth of the units in the M & N Trust and the parents are the beneficial owners of four fifths of the units. I am not satisfied that the MKN Superannuation Fund holds any interest in the units of the M & N Trust. I am not satisfied it was part of the original agreement as to who should hold units in the M & N Trust and even if I am wrong in this, there is nothing to suggest that the MKN Superannuation Fund as opposed to the Nham Superannuation Fund would hold the units in any event.
185It is also apparent from the above analysis that I do not find Dr Nham to have a separate interest in the corporate trustee of the M & N Trust. The assets of the Trust and how they are to be dealt with will follow later in the judgment.
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• Chinese property

186Ms Meng’s case is that Dr Nham currently holds a 25% share in the Chinese property. She says he gained his share in the property in January 1996 when it was purchased from an Overseas Chinese Housing Development Company. The other owners of the property are Dr Nham’s younger brother, his younger sister and his mother.
187Dr Nham’s position is that he may be a registered owner but he was only aware of that fact as a result of these proceedings. He says he has never known about the property and never signed any documents in relation to it. He says his parents funded the property and if he holds it he does so on trust for his parents.
188Ms Meng said she had been to the property. It was used by family members when they visited China. Dr Nham also confirmed he had stayed there.
189The parents say that they own the property. Dr Nham’s father was never registered as an owner of the property despite the fact that he travelled to China regularly with his wife for business and has stayed there frequently. It is a property in which all the parents’ children have an equal share.
190Ms Meng proposes that a reasonable market value for the property is the equivalent of $AUD339,000 and Dr Nham’s share is $84,000. Ms Meng has provided a valuation of this property. It was received into evidence by consent save that the parents’ Counsel, Dr Dickey QC, made submissions in relation to the weight to be placed upon the valuation.
191The entire property is valued. The method by which Ms Meng’s counsel has arrived at a value of Nham’s interest is by dividing the total value by four. The valuation does not take into account the fact that Dr Nham has a minority interest and this may impact on the value. This issue is not explored by the valuer.
192Although the valuation methodology is said to be the direct comparison approach, there is no detail of the actual comparable transactions that were used. Given this is a one quarter share, it would have been useful to have provided just exactly how the comparable values were arrived at.
193It was the parents’ obligation to make full disclosure about the property. Its value was in issue from an early stage. It is clearly relevant to these proceedings. I am of the view that it was up to the parents to provide both expert evidence and their own valuation if they seriously disputed Dr Nham’s interest in the property. None of this was done.
194I am satisfied that Dr Nham holds a 25% share in the property but I am unable to identify any value. This is a matter again I need to take into account pursuant to s 75(2) of the Act.
195I now turn to the second step in a property settlement exercise.
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Contributions

196This was a marriage of some 12 years’ duration. The parties appear to have lived together for about five of those years. Although they remained married, they lived in different countries and visited each other from time to time. There were no children of their union.
197At the date of cohabitation, Ms Meng says she had US$9,000 in a Hong Kong bank account. She translates this to $19,500 Australian dollars. The money was lent to Dr Nham’s parents by Dr Nham without Ms Meng’s knowledge during the relationship. It was repaid at some time although how it was then used is a little unclear. I accept it may well have been absorbed in day to day living expenses.
198At the commencement of cohabitation Dr Nham had a motor vehicle and interests in Property F and the Chinese property. He was running a business, but I do not consider this to have been of any great value, save it provided a small source of income.
199Throughout the relationship Ms Meng was involved in various studies, both in Australia and overseas. She received some funding for the study by way of scholarships and grants. She also did some tutoring and some interpretation/translation work while she was in Manchester, United Kingdom.
200Dr Nham had a modest income only. The most he ever earned was approximately $12,000 per annum. He worked as an acupuncturist and also in a like capacity in Hong Kong for a while.
201Neither of the parties appear to have had consistent employment. Financial contributions from paid employment have been almost non-existent. Despite the fact Ms Meng gained qualifications and a potential earning capacity, she did not appear to exercise it.
202The parties received income from rent on their various investment properties and at times from Dr Nham’s share trading. They utilised borrowed funds to pay a considerable amount of their living expenses. They had mortgages to service. Additionally, I am satisfied that they received financial support from the parents. Ms Meng also says that she received some funds from her parents, especially when she was overseas.
203The parties acquired Property A with the assistance of the parents. Each has managed that property and the tenants in it over different periods of time. Ms Meng has lived there since separation and wishes to retain that property.
204Dr Nham has a one fifth interest in the units in the M & N Trust. The only asset of the M & N Trust remaining at trial is Property B with a total value of $1.1m. I accept that the Trust was set up and largely managed by Dr Nham without input from Ms Meng. It was his parents who initially provided the funds for [Properties E & D] and Property C the equity in which was used to fund Property B. I am satisfied that it was Dr Nham who took charge of arranging the M & N Trust documents along with the unit trust documents.
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205 I accept that both the parties, much less so Ms Meng, assisted in an indirect sense to maintain some of the rental properties held by the M & N Trust and in which Dr Nham had a one fifth interest. They also did the same for their own properties at Property H, Property A and Property G. However, I consider that each of them has exaggerated that contribution. There is little to distinguish between them in that respect.

206I did not form the view that either of the parties to the marriage were particularly proactive in doing general work around their home, especially when the parents were there to do it for them.
207The parents gifted the parties to the marriage $10,000 to purchase Property H. They also provided Dr Nham with the deposit on Property F. They lent the parties $100,000 to enable the purchase of Property A to proceed.
208I am satisfied that each party looked after his or her own interests, at times to the exclusion of the other party.
209At first blush, it appears that Dr Nham has made a greater contribution simply by virtue of what he brought into the marriage and the subsequent contributions made by his parents. However, the Chinese property has never formed a part of the assets available to the parties during the marriage. In fact, no one appeared to consider it was something Dr Nham had an interest in. Ms Meng made no contribution to this property. I have no reliable evidence of the value of Dr Nham’s share. It will be dealt with in the primarily prospective factors of s 75(2) of the Act. It does not form a part of the present asset pool, but it is something to which Dr Nham will have access to in the future.
210Dr Nham did contribute the property of Property F. That was acquired well prior to marriage, although there was a mortgage over that property when the parties married. This mortgage was increased by Dr Nham during the relationship. I am not satisfied the mortgage was serviced by any income of either party. I find Ms Meng’s contribution to this property to be minimal. On sale of that property Dr Nham controlled the proceeds of sale. I accept some were used for joint living expenses, and some were used for his own purpose of share trading. I do not find this warrants any adjustment in his favour.
211It is not the fact of what property Dr Nham had when the parties married, but how it was utilised during their relationship.
212The parties to the marriage were able to secure Property H as a result of the parents’ gift of $10,000. When this property was sold, the net proceeds were used by Dr Nham to trade shares rather than pay a deposit on another property. This amount has been added back into the pool. The parties were not able to proceed with the contract given Dr Nham had spent the $51,000 deposit. The parents then lent the parties to the marriage $100,000 for the completion of the purchase of Property A. This is now the subject of the judgment debt of $150,000. Again, I do not intend to make any adjustment in his favour.
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213 The real estate in which the parties have a joint interest, Property A, has increased substantially in value. Neither party argued with any particularity that their contribution was pivotal to the increase in value. I accept that market appreciation is the main force behind any increase.

214Overall, excluding matters that I will specifically deal with pursuant to s 75(2) of the Act, I consider the contribution of these parties to their joint assets to have been equal.

S 75(2) considerations

215Ms Meng is 44 years of age. Dr Nham is 52 years of age. Neither party has re-partnered. Both of the parties appear to be in reasonable health. I am not satisfied that either is receiving any income of note.
216Dr Nham has a Bachelor of Medicine from China, which he obtained in 1986. He has a Diploma of Acupuncture. He works from time to time as an acupuncturist. However, this does not appear to have sustained him to any great extent over the years.
217Ms Meng has spent most of her adult life studying. She has a Degree in Biomedical Engineering from a Chinese University. In Australia she has a Bachelor degree with honours in Commerce. She also has a post-graduate degree in finance. She has done at least some studies towards a qualification as a financial advisor, but does not appear to have completed these studies.
218In the future Dr Nham may continue to obtain a modest income from work as an acupuncturist. I consider Ms Meng has a greater potential to earn an income and she has done some part-time translation/interpretation work. However, she does not appear to have made attempts to utilise her skills obtained during the marriage.
219Dr Nham says he will have debt to service apart from that included in the joint asset schedule. He accepts he is obliged to pay the parents a sum equal to four fifths of the gross proceeds of the sale of Property E. The parents were adamant they wanted to pursue recovery of this amount. I am satisfied they are entitled to it. However, the parents were able to take action at a much earlier stage to recover this debt based on the acknowledgement of debt by Dr Nham in 1998. They failed to do so until these proceedings commenced. Their failure to act spanned from mid-2001 until late 2008. I am not persuaded that despite entitlement they will pursue the debt with any vigour, given Dr Nham’s lack of means to satisfy it. Dr Nham presented very much as the black sheep of the family, however, I gained the impression that the parents were still very considerate of and loyal to him.
220Likewise, I have already found that the $60,000 advanced to Dr Nham by his father for a motor vehicle is also unlikely to be enforced. The money was utilised in share trading and the motor vehicle was financed by other means. His father was very vague, not only about knowledge of the loan, but also its enforcement.
221Dr Nham will have his own legal fees to pay. Demands for payment of the outstanding amount of $78,709 have been made.
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222 Dr Nham also has a debt involving the M & N Trust. This is the flexiplus loan account of $632,495. Dr Nhamalso has his one fifth interest in the units of that Trust valued at $220,000.

223Counter balanced with this, Dr Nham has an interest in the Chinese property. I am satisfied that he may well have the benefit of his share in the future, or the parents may offset it against any existing amounts he owes them.
224Ms Meng has a debt to Mr Leone, her friend, who is a motor mechanic.
225I now turn to consider the issue of Nham’s failure to make full disclosure in relation to matters relevant to the issues I have had to decide. I am satisfied there has been such a failure to disclose all relevant financial documents. I do not here take into account any specific amounts I have already added back into the asset pool which may have resulted from a failure to fully disclose information.
226It is stating the obvious that:
… The failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the Court is unable to identify the property of the parties, to properly assess contribution, or to properly assess s 75(2) factors (Luciano v Luciano [2000] FamCA 1712).

227There is considerable authority that makes clear a court can be generous in drawing adverse conclusions when there has been less than full and frank disclosure.
228There is no question that Dr Nham failed to disclose relevant documents, including those in relation to MKN, the MKN Superannuation Fund , the extent of his share trading both here and overseas and any overseas bank accounts. Dr Nham did not shy away from the fact of his non-disclosure although he sought, most unsuccessfully, to explain it.
229The general lack of disclosure has hampered the Court in fully understanding the composition of the asset pool and the magnitude of Dr Nham’s losses through share trading. Dr Nham’s own evidence supports the fact that he lost considerable amounts in share trading.
230In considering Dr Nham’s share trading for the purpose of s 75(2) of the Act, it is important to consider the timing of his losses. Initially, in around 1998, when it appears the share trading commenced, Ms Meng had been interested in this activity herself. Her own evidence is that in 1999 she had given him some advice on what shares to buy. Her concerns arose in late 2001 after it became apparent that 3 and 4 Menning Avenue, and other properties, had been sold and the proceeds utilised by Dr Nham to help cover his margin loans. Although Ms Meng was not fully aware of all his specific actions, I consider that this is a situation where up until mid to late 2001 the loss of marital funds should be borne jointly. The only exception is the money from the sale of Property H, which has already been added back into the pool.
231I draw a distinction between this period and the subsequent losses incurred by Dr Nham after late 2001. It is clear that in late 2001 and 2002 Ms Meng became

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extremely concerned about the situation and made this known to Dr Nham. A written undertaking was extracted from him. Despite this and a later court order Dr Nham continued to trade shares, at least for some of the years between the middle of 2002 and 2010. I am satisfied there should be some adjustment against him for his trading loss during this period.
232Dr Nham continued to trade shares as late as 2010 in breach of a court order made 24 November 2008 in which he was specifically restrained from conducting this activity. He justified his actions by saying he was simply trying to recoup his losses. Mortgages were extended routinely. I accept that some of that money was used to repay interest on the overdrawn amounts, purchase other property and support the parties when they were earning no income, but a considerable amount can only be explained by Dr Nham’s unsuccessful share trading or other non-marital pursuits and the interest incurred on those amounts. I take into account all these matters.
233In summary, the two main matters calling for an adjustment are the failure by Dr Nham to fully disclose all relevant financial information and his negligent actions in wasting joint assets through, amongst other things, share trading after mid-2002. Even if I take into account Ms Meng’s younger age and greater qualifications, I consider there should be an adjustment in her favour.

Just and equitable

234It is now appropriate to consider the effect of any findings I have made on the allocation of the parties’ assets and what orders should be made to ensure a just and equitable outcome. In this case it is not so much a percentage adjustment that is pivotal to this step in the property exercise, but rather it is the specific orders dealing with the main assets.
235In summary, the assets identified by the parties as their individual assets in the common asset schedule used at trial are:

Wife

Husband

Assets

82,285

Assets

13,387

Add backs

206,027

Add backs

281,644

Superannuation

194

Superannuation

8,059

Total Assets

$288,506

Total Assets

$303,090

Liabilities

205,250

Liabilities

101,884

Net Wife

$83,256

Net Husband

$201,206

236The net joint assets are $683,873. Overall, the property pool consists of the following:

Net Joint Assets

+ 683,873

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Net Wife Assets (including add backs)

+ 83,256

Net Husband Assets (including add backs)

+ 201,206

Total Net Assets

+ $968,335

237However, when one looks at the individual assets of the parties the situation appears grim. What is obvious is that each party has considerable add backs – money or assets that no longer exist. Ms Meng also has money in her solicitor’s trust account which will not be something she actually has in the future. Dr Nham’s position is worse in that he has even more add backs.
238In relation to this property pool I found the assets should be divided equally.

Wife

Husband

Assets already received/in possession

83,256

201,206

Adjustment

400,911.50

282,961.50

Total entitlement

$484,167.50

$484,167.50

239The net martial assets really revolve around Property A. This property is encumbered by the judgment debt representing the parents’ loan for the purchase of that property and also the joint ANZ mortgage over the property.
240Ms Meng has expressed an interest in retaining Property A. On this basis, she will need to assume responsibility for the two debts over that property and pay Dr Nham $282,961. If she is not able to refinance or does not want to do so, then Property A would need to be sold to satisfy all the debts and the respective entitlements.
241I consider it just that Ms Meng, if she wants to retain Property A, assume responsibility for the debt to the parents. The debt has increased by approximately one third due primarily due to her failure to accept at an earlier time that the money was legitimately owed to the parents. She had voluntarily signed a loan agreement and there is no doubt that without the parents’ input Property A property could not have been financed. I have already added back against Dr Nham the $51,000 which he had access to from the proceeds of sale of Property H, but was otherwise to be the deposit on this property.
242I also consider it appropriate that Ms Meng be solely responsible for the ANZ mortgage. I accept that Dr Nham has had access and used some of that mortgage for his own purpose.
243For example, the evidence shows that on 22 August 2008 the outstanding amount of that ANZ mortgage was $380,492. It was then drawn down by Dr Nham by

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a further $100,000 and the money was available to him on 25 and 28 August 2008. Ms Meng contends, and it is supported by the documents, that $68,000 of that amount was utilised by Dr Nham in share trading and he also received a further $18,500 in cash, although how that particular amount was utilised is unclear. The following day, 29 August 2008, Dr Nham filed his application for dissolution of marriage.
244Although I accept the evidence that some of the additional draw downs on the ANZ mortgage were utilised by Dr Nham alone, I am satisfied the bulk of the funds in relation to that jointly held mortgage were for the purpose of acquiring Property A itself or for joint purposes.
245I now turn to the M & N Trust. That has been separately identified for the following reasons:
•Firstly, on a practical basis, Property Bis not in the names of the parties and it involves the interests of the third parties to the proceedings, the parents.
•To include the whole of the flexiplus loan, which I find was used in the main for Dr Nham and the M & N Trust, artificially decreases the marital asset pool. I consider it appropriate to remove the corresponding asset of his interest in the Trust.
•The vast majority of the contributions and the dealings surrounding the M & N Trust were conducted by Dr Nham and his family of origin.
•The complexity of the financial relationship between the parents and Dr Nham really needs to be dealt with by them.

246Property B is valued at $1.1m. Dr Nham’s interest in the property by virtue of his unit holdings in the M & N Trust is $220,000. His parents hold the remaining four fifths unit holdings and that represents $880,000.
247Dr Nham has a NAB flexiplus loan which is presently drawn down in an amount of $632,495.
248This account was initially established on or about 1 December 1998 when Property D was purchased by the M & N Trust. The original loan amount was $159,042 and is now over $600,000. It is a loan account in the sole name of Dr Nham. It is presently secured against Property B. A mortgage was registered by NAB in June 1999. The account was operated solely by Dr Nham. It is not being paid and a default notice was issued by the bank’s solicitors on 23 August 2012.
249The parties identified the flexiplus loan as a joint debt, although Ms Meng says Dr Nham should be should bear responsibility for the funds he utilised. It is obvious from the schedules of joint assets that I have not included this or Dr Nham’s interest in the M & N Trust.
250It is important to appreciate that the flexiplus loan account was used for at least three different purposes. Having said that, it is difficult to identify with any precision the amount of money that was used for each purpose.
251Firstly, Dr Nham accepts he used the flexiplus loan to fund his own expenses and at times it was drawn down to its limit. In 2001 he sold properties in the name of M & N Trust (Properties E & D and Property C) and in which his parents had an interest, without their consent, in order to reduce his own debt. He used the funds to initially pay down the flexiplus loan, but subsequently withdrew the funds for various purposes, including share trading.
252This loan facility was increased in August 2006 from $330,000 to $600,000. There was no real explanation from Dr Nham about the purpose of this increase.
253It was put to Dr Nham that he had never told Ms Meng of the draw downs in the flexiplus loan account. Dr Nham asserts that Ms Meng knew that no money was going into the account. He said he thought he told her that he had a financial problem.
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254Secondly, I also accept that some of the draw downs were used for joint purposes. Ms Meng undertook many different courses of study and at times there were considerable fees associated with the study that were not covered by scholarships. Both parties lived overseas for periods of time. Neither party was earning income of any note. They both used credit cards at various times. There was interest on the drawdown itself. Money was used as a deposit on the Property G investment property and the parties to the marriage retained the profit on the sale of this property. An amount of $10,000 was used as a deposit on Property A.
255Finally, the flexiplus loan was also used for M & N Trust purposes. It was initially set up to enable money to be available to the Trust to secure Property B. The flexiplus loan was the mechanism for this. It was an account operated by Dr Nham for the purpose of the Trust, and whilst the Trust was involved in investment, the loan account was the financial vehicle for it.
256The question really is who will bear responsibility for the payment of the mortgage account.
257The parents did not suggest that they were responsible for any of that money, although the debt is guaranteed by the M & N Trust which owns Property B.
258The parents have asked the Court to make a finding that:
…
(c)The assets of the M & N Trust presently include [Property B], but does not include mortgage 8140083 (mortgage) (securing a loan obtained by the husband for his own purposes),

259I do not accept that the loan was only used by Dr Nham for his own purposes. It was not originally drawn down for him personally, but rather it was to be used for the purpose of the M & N Trust in property investment. At trial, this issue was never adequately canvassed, but the evidence supports that the draw downs were not only for the parties to the marriage, but for the benefit of the M & N Trust.
260The manner in which Dr Nham and his parents have managed their financial interactions since at least 1983, whether in China, Hong Kong or Australia is something the Court has difficulty in completely reconciling.
261The paternal family have consistently operated their financial affairs together. They have seen fit to involve Dr Nham in managing their funds. They have had the opportunity to recover monies at an earlier stage from him and have chosen not to. It is very much a matter for them as to how they manage this particular situation.
262Given the division of the joint assets, Dr Nham is not in a position to payout the flexiplus loan in full at this stage. However, I see no reason why Dr Nham should not be solely responsible for it. It should not be something that Ms Ma is involved in. The adjustment that I have proposed against Dr Nham pursuant to s 75(2) of the Act is best dealt with in this fashion. Whether Property B is to be sold, or whether the family has some means of arranging their affairs to retain it is simply a matter for them. The whole M & N Trust issue is one for the parents and Dr Nham. The parents have always maintained Ms Meng was never meant to be involved in the M & N Trust.
263Although I have separated the K & L Trust there has been an intermingling of all property identified to some extent.
264In this case the evidence does not lend itself to a precise mathematical calculation, but as a result of my findings in relation to s 75(2) of the Act, I consider it appropriate that Dr Nham be solely responsible for all the flexiplus loan despite the
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fact Ms Meng has had some benefit from it, just as I find Ms Meng should be solely responsible for the Property A debts, including the debt to Dr Nham’s parents. However, I find Ms Meng has a greater benefit by Dr Nham taking full responsibility for the joint flexiplus loan and that reflects the adjustment against him.
265If Ms Meng is able to keep Property A, then she will be responsible for the existing mortgage of ($448,560) and the debt to the parents ($150,000). On an equal division (excluding the trust and its debts) she will pay Dr Nham $282,961. The agreed valuation of Property A was $1,275,000 and this would leave her with equity of $393,479. From that she has to take into consideration her own liabilities, which include a debt to Mr Leone. She has a HECS debt, but there is no evidence to suggest immediate repayment of that debt is required.
266If the property is sold the debts will be paid and Ms Meng will have some available money.
267Dr Nham will receive some money from Property A ($282,961) and he has his entitlement in the M & N Trust ($220,000). Ostensibly, this gives him $502,961 worth of assets. He also has assets in his possession of $201,206 although, in reality, taking into account the add backs, he only has $13,387 of real assets - a total of $516,348.
268Importantly, he has the flexiplus debt of $632,495 secured over the M & N Trust. Even taking into account his unit holding and the payment from Ms Meng for Property A, he will still have debt. If he and his parents can come to an arrangement and it is accepted he will not repay the debt, he will simply have few, if any, assets at all. If they do not come to such an arrangement he will owe the M & N Trust money.
269The best that Dr Nham can hope for is an amelioration of his debt. The best Ms Meng can hope for is that she will somehow arrange her affairs such that she can retain Property A. If it is sold she will retain the bulk of the proceeds of sale.

Miscellaneous

270In this case it was urged upon the Court that I should take into account alleged legal transgressions by Dr Nham and the parents relating to various legislative requirements. These included the parents purchasing property in Australia in their children’s name when they were resident overseas and the misuse by Dr Nham of a superannuation fund. I am far from satisfied that any default is of the magnitude argued by the applicant.
271In relation to any suggestion there should be referral to authorities, I take into account the following observation by the Full Court in Malpass & Mason (2000) FLC 93-061:
There are many cases when minor irregularities are revealed in relation to taxation, social security and other issues. We think it unreasonable for the Court to burden itself with the duty to report all of these matters. Different considerations may apply in relation to more blatant and substantial irregularities.

272I am not satisfied that the matters raised by the applicant, especially given the effluxion of time and the nature of the alleged defaults are such as to warrant any referral.

Orders

273I intend to give the parties a short time to consider what orders they propose to reflect the content of my judgment. The various possibilities were never adequately
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canvassed during the course of the trial. I have set out here certain points that I consider need to be addressed.
1 The $21,000 held in the Civic Legal Trust account is to be divided equally.
2Ms Meng will have the opportunity to retain Property A with all the associated debt, including the payment to the husband. If she is unable to do so it will need to be sold.
3Dr Nham is to be solely responsible for NAB flexiplus loan and retain a one fifth interest in the units of the M & N Trust.
4The parents are to retain a four fifth interest in the units of the M & N Trust.
5The caveats lodged over the properties.
6The transfer of other assets between the parties to the marriage.

I certify that the preceding [273] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate

Wife	Husband
Assets	82,285	Assets	13,387
Add backs	206,027	Add backs	281,644
Superannuation	194	Superannuation	8,059
Total Assets	$288,506	Total Assets	$303,090
Liabilities	205,250	Liabilities	101,884
Net Wife	$83,256	Net Husband	$201,206

Net Wife Assets (including add backs)	+ 83,256
Net Husband Assets (including add backs)	+ 201,206
Total Net Assets	+ $968,335

Wife	Husband
Assets already received/in possession	83,256	201,206
Adjustment	400,911.50	282,961.50
Total entitlement	$484,167.50	$484,167.50