Ruan & Chui (No 3)

Case [2023] FedCFamC1F 630

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Ruan & Chui (No 3) [2023] FedCFamC1F 630

File number(s): SYC 4113 of 2018
Judgment of: CHRISTIE J
Date of judgment: 28 July 2023
Catchwords: FAMILY LAW – FINAL PROPERTY – Where the applicant seeks orders for property adjustment following the breakdown of the parties’ marriage – Where the first respondent’s mother and his sister are joined to proceedings – Where the nature and extent of interests in property in both Country S and Australia is in dispute – Whether entitlements to monies and various items of property are accurately reflected by the title and possession – Disclosure – Finding that the first respondent has not met his disclosure obligations – Finding that title particulars are an inaccurate record of the equitable entitlements of the parties – Finding that the first respondent has transferred commissions, bonuses and other income to which he was entitled to the account of the second respondent and to the third respondent through a vehicle established by him to direct his income and commissions – Where the first respondent has failed to pay the mortgage on the former matrimonial home as previously ordered by the Court - Where the first respondent has failed to pay school fees for the parties’ child and/or child support – Contributions – Where the Court cannot be satisfied on the evidence that the first respondent’s financial contributions have not been wholly eclipsed by his diversion of funds outside of the marriage and effort to avoid disclosure obligations and financial obligations – Where the applicant’s financial contributions are not insignificant – Where the applicant’s non-financial contributions are significantly greater than the first respondent’s – Where the funds which remain in the pool available for division are minimal against the background of the matrimonial pool during the marriage and post-separation – Order for the wife to receive the whole of the equity in the two remaining real properties in Australia – Order under s 79 of the Family Law Act 1975 (Cth) binding a third party – Where the third party has been afforded procedural fairness as a represented party in the proceedings – Where the order is reasonably necessary, or reasonably appropriate and adapted, to effect a division of property between the parties to the marriage.
Legislation:

Family Law Act 1975 (Cth) ss 75, 79, 90AE

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 6.06
Cases cited:

Bevan v Bevan (2013) 49 Fam LR 387; [2013] FamCAFC 116

Chang & Su (2002) FLC 93-117; [2002] FamCA 156

Chang v Su [2002] HCATrans 446

Hicks & Trustee of the Bankrupt Estate of Hicks [2021] FamCAFC 19

NHC v RCH (Chorn v Hopkins) (2004) FLC 93-204; [2004] FamCA 633

Norman & Norman [2010] FamCAFC 66

Omacini v Omacini (2005) FLC 93-218; [2005] FamCA 195

Oriolo & Oriolo (1985) FLC 91-653

Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173

Weir and Weir (1993) FLC 92-338
Division: Division 1 First Instance
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AGLC
Ruan & Chui (No 3) [2023] FedCFamC1F 630
Case
[2023] FedCFamC1F 630
Decision Date

CaseChat Overview and Summary

The case of Ruan & Chui (No 3) involved a complex dispute between a husband and wife over the disclosure of their respective property interests in Australia and Country S. The dispute was heard by the Australian court, which was tasked with determining whether the parties had adequately disclosed their property interests as required by law. The case involved multiple properties and financial transactions, including the V Street property, the Y Street property, the Z Street property, the BB Street property, the CC Street property, the EE Street property, and the JJ Street property, as well as various loans, gifts, and mortgages. The court was required to consider whether the husband had adequately disclosed his interests in the properties and whether the wife had adequately disclosed her interests in the properties. The court also had to consider the nature of the transactions between the parties, including whether the husband had provided his mother and sister with money representing his own commissions, and whether the husband had provided his sister with money through the vehicle of E Pty Ltd. The court had to determine whether the husband had an entitlement to the T Street property that was greater than that reflected by the title to the property, and how the acquisition of the T Street property was funded and how its outgoings were met subsequently. The court also had to consider the husband's obligation to meet mortgage payments on the home occupied by the wife and the parties' son in the post-separation period. The court's reasoning and outcome were based on a detailed analysis of the evidence presented by both parties. The court found that the husband had not adequately disclosed his interests in the properties and that the wife had not adequately disclosed her interests in the properties. The court also found that the husband had provided his mother and sister with money representing his own commissions, and that the husband had provided his sister with money through the vehicle of E Pty Ltd. The court found that the husband had an entitlement to the T Street property that was greater than that reflected by the title to the property, and that the acquisition of the T Street property was funded through a combination of the husband's and wife's savings, a loan from the husband's mother, and a mortgage. The court also found that the husband had an obligation to meet mortgage payments on the home occupied by the wife and the parties' son in the post-separation period. The final orders made by the court reflected the court's findings and reasoning, and provided for the distribution of the parties' property and the payment of debts and expenses. The court's decision in this case highlights the importance of full and frank disclosure of property interests in family law proceedings, and the consequences of failing to do so. The case also underscores the need for parties to provide detailed and accurate evidence of their property interests and financial transactions, and the need for the court to carefully consider all of the evidence presented in order to make just and equitable orders.

Orders

Orders of the court

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Background

Background to the litigation

The focus of the case was squarely on whether both parties had faithfully informed the Court about the nature and extent of their interests in property both in Australia and Country S. BACKGROUND The parties were married in 2002 in City R, Country S and commenced cohabitation in 2003. In 1998/1999, prior to the parties’ marriage, the second respondent (hereafter the husband’s mother) says she purchased a property at V Street, Suburb W, City R, Country S (“the V Street property”) using funds provided by her mother. Between 2000 and 2001 the husband’s mother says that she, the husband, the third respondent (the husband’s sister) moved into this property. The wife moved in after marriage in 2002. The husband’s sister moved to Australia at about this time. The wife’s position is that she acknowledges the V Street property was registered in the name of the second respondent, but asserts that it is beneficially owned by the husband. The husband says he had no property, just some savings at the time of marriage. In 1999 the wife purchased an apartment at Y Street, Country S, (“the Y Street property”) in her sole name. This property had a mortgage. The fact that the wife owned this property at the commencement of the parties’ relationship was not controversial. The husband says he paid the wife a sum which she was able to apply to her mortgage. The wife agreed that the husband had provided those funds. In 2003 apartment Z Street, Suburb AA, City R (“the Z Street property”) was purchased as an investment by the husband and wife. In 2004 the wife says the husband asked her to sell her property at Y Street, Country S and she did so. The husband agrees the property was sold but disputes it was sold at his request. The wife bought two apartments at BB Street, City R (“the BB Street property) and CC Street, Suburb DD, City R (“the CC Street property”). The husband says he paid part of the deposit for the BB Street property. The husband contends the parties purchased the CC Street property without a loan or mortgage and that he contributed half the purchase price. The wife contends that her brother and parents bought the property at EE Street, Suburb DD, City R (“the EE Street property”) and that the husband and wife agreed to swap properties with them so that the CC Street property was owned by the wife’s family and the EE Street property by the wife. The title remained the same. The husband denied, at least initiallity, this arrangement. In 2005/2006 the husband’s mother says that a property owned by her and her husband in City FF was demolished by the Country S government and she received compensation. She says that she gave her son one quarter of the amount but says the nature of this money is that it was a loan and not a formal agreement. The wife says that she accepts a property was demolished by the government and the four registered members of the household were allocated a sum of money. Those four members were identified by the wife as: the husband and his sister and the husband’s parents.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

An order which binds the trustee of a superannuation fund can only be made where the trustee is on notice of the application and form of order sought. I decline to make a splitting order. Accordingly, the husband will retain his superannuation.CONCLUSIONS This case has had a tortured history. It is most unfortunate that it was not able to be heard and determined on a final basis at a much earlier stage. That said it has been the husband’s repeated actions which have brought about the unsatisfactory facts. The only possible way in which an order approaching one which may be just and equitable can recognise the contributions and s 75(2) considerations in the wife’s case in light of the diminution of the asset pool by the husband is to order that the wife receive the whole of the equity in the T Street and Suburb B properties. So in making the leap from words to figures I will order that the husband receive: The wife will receive: The wife was represented by AG Lawyers. The wife was unable to meet the lawyer’s fees and at the time they filed a Notice of Ceasing to Act the wife owed those lawyers to the amount of $35,000. At the commencement of the hearing before me a representative of the intervener appeared The wife consented to an order on 10 February 2022 which provided that she pay her former lawyers $35,000. From 14 February 2022 the same orders required that she pay an amount of $50 per week towards discharge of that debt. The orders otherwise identify that she should make payment from monies ordered to be paid to her in these proceedings. I have made consistent orders.

Ratio Decidendi

Legal Principle Established

In a similar vein the Full Court recently wrote in Hicks & Trustee of the Bankrupt Estate of Hicks [2021] FamCAFC 19:86. It is trite that the integrity of the s 79 process heavily depends upon the absolute duty of parties to meet their obligations of full and frank disclosure of all information relevant to the case, including disclosure of their financial position both as to assets and liabilities. 87.Whilst at one time this Court appeared to adopt the approach in non-disclosure cases that the jurisdiction under s 79 of the Act was limited to making orders with respect to identified, identifiable or quantified assets (see, for example, Monte and Monte (1986) FLC 91-757), more recent Full Court authority supports the principle that a party should not be able to take advantage of his or her own non-disclosure such that it may be appropriate to make an order beyond the ascertained property, provided that any order made on this basis can be seen to achieve substantial justice relative to the subject non-disclosure (Weir at 79,593).(Footnotes omitted)CONSIDERATIONWhat are the assets of the parties available for adjustment between them? It is important to endeavour, in so far as is possible having regard to the evidence, to set out what assets are available for adjustment between the husband and the wife. In order to undertake this task it will be necessary to make findings about the wife’s contentions that assets in the names of his mother and his sister are assets to which the husband and wife (or the husband) have a beneficial entitlement. It will also be necessary to make findings about the husband’s contentions that properties registered in the names of the wife’s family are assets to which the wife has a beneficial entitlement. Finally, it will be necessary to evaluate the wife’s claim that the husband has transferred capital, income and or commissions to his mother and sister and to determine whether those transactions should be set aside and/or the monies regarded as a notional asset of the husband. Accordingly, the issues which appear to arise for determination are as follows:(a)Was the V Street property which was registered in the names of the husband’s parents the property of the husband?(b)Did the husband’s mother receive compensation for the demolition of the City FF property? Did she gift or loan one quarter of the amount to the husband? Alternatively did the husband have an entitlement to one quarter of the amount as a registered occupant?(c)Were the proceeds of sale of the parties’ property in BB Street applied to acquisition of property in Australia?(d)Does the wife have any interest in property in Country S?(e)Does the husband’s mother have an interest in the property registered in the husband’s name in JJ Street?(f)Was the deposit which the parties paid to acquire an investment property in Suburb MM forfeited as the husband contends or returned to the husband as the wife contends?(g)Is the husband’s entitlement to the T Street property greater than is reflected by the title to the property?(h)How was the acquisition of the T Street property funded and how have its outgoings been met subsequently?(i)Did the husband provide his mother with money representing his own commissions in the period after separation?(j)Did the husband provide his sister (through the vehicle of E Pty Ltd) with money representing his own commissions in the period May 2018 to September 2019? (k)What was the husband’s obligation to meet mortgage payments on the home occupied by the wife and the parties’ son in the post-separation period?