Sandine & Sandine
[2023] FedCFamC2F 378
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Sandine & Sandine [2023] FedCFamC2F 378
File number(s): BRC 7892 of 2021 Judgment of: JUDGE L. TURNER Date of judgment: 6 April 2023 Catchwords: FAMILY LAW – Property – discrete hearing to determine whether a property known as B Street, Suburb C forms part of property pool – Held B Street, Suburb C not part of the matrimonial property pool of the parties with a declaration made that applicant and first respondent hold B Street, Suburb C on trust for the second respondent and that all sale proceeds are to be paid to second respondent with the second respondent to indemnify the wife in respect to any fine or penalty imposed by Foreign Investment Review Board Legislation: Family Law Act 1975 (Cth) ss. 78, 79, Pt VIII Cases cited: Johnson & Johnson (2000) 201 CLR 488
Kuyper v Wright [2005] QDC 041
Re F Litigants In Person Guidelines [2001] FamCA 348
Scheer & Scheer [2018] FCCA 3285
Division: Division 2 Family Law Number of paragraphs: 45 Date of last submission/s: 13 March 2023 Date of hearing: 6 March 2023 Place: Brisbane Counsel for the Applicant: The Applicant appeared in person Counsel for the First Respondent: Ms Downes Solicitor for the First Respondent: Sarah Cleeland Family Lawyers Counsel for the Second Respondent: Mr Jeffrey Solicitor for the Second Respondent: Joseph Ho Lawyers ORDERS
BRC 7892 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR SANDINE
Applicant
AND: MR SANDINE
First Respondent
MR KOO
Second Respondent
order made by:
JUDGE L. TURNER
DATE OF ORDER:
6 April 2023
THE COURT ORDERS THAT:
1.These orders are to be read in conjunction with the court orders made on 6 March 2023.
2.Pursuant to section 78 Family Law Act 1975, it is declared by this court that:
(a)The real property situated at B Street, Suburb C in the State of Queensland (B Street, Suburb C) more particularly described as Lot … on Survey Plan … does not for the purposes of the alteration of property interests pursuant to section 79 Family Law Act 1975 form part of the matrimonial pool of the applicant wife and the first respondent husband.
(b)Pending the sale of B Street, Suburb C, is held wholly by the applicant wife and first respondent husband as trustees on trust for the sole benefit of the second respondent Mr Koo (aka as Mr Koo).
(c)The full sale proceeds of B Street, Suburb C held by Joseph Ho Lawyers Trust Account pursuant to Order 2(d) of the court orders made on 6 March 2023 be released within 48 hours of receipt of same to the second respondent Mr Koo (aka as Mr Koo).
3.In the event of any momentary fine and/or civil penalty imposed by the Foreign Investment Review Board against the applicant wife, arising from (or related to) the applicant wife and first respondent husband’s acquisition of B Street, Suburb C, the second respondent Mr Koo (aka as Mr Koo) shall indemnify the applicant wife in full.
4.Upon the second respondent Mr Koo (aka as Mr Koo) receiving the payment of the sale proceeds of B Street, Suburb C pursuant to Order 2(c) of these orders then the second respondent Mr Koo (aka as Mr Koo) is released from being a party to these proceedings.
5.Should the release from being a party to these proceedings not occur for the second respondent Mr Koo (aka as Mr Koo) prior to the final hearing of this matter on 16 May 2023 and 17 May 2023, then the second respondent Mr Koo is exempt from filing any trial documents or attending court for the final hearing.
6.Otherwise the parenting and property proceedings between the applicant wife and the respondent husband remain listed for final hearing for 2 days commencing at 10.00am on 16 May 2023.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Sandine & Sandine has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
The applicant wife (wife) and first respondent husband (husband) are before the court on parenting and property matters, both of which are listed for final hearing in May 2023.
Prior to the final hearing a discrete hearing is required to determine whether a house rental property situated at B Street, Suburb C, registered in joint names of the husband and the wife, forms part of the matrimonial property pool.
At the discrete hearing, the husband and the second respondent (Mr Koo) consented to orders for the sale of B Street, Suburb C and whilst the wife agreed to the proposed orders in principle, the wife refused to sign as the wife does not recognise Mr Koo as being a legitimate party to these proceedings.
Subsequently it was court ordered that B Street, Suburb C be sold and that the sale proceeds be held in trust pending further order.
In addition it was court ordered that any fine or penalty imposed by the Foreign Investment Review Board on the husband due to his acquisition of B Street, Suburb C be indemnified in full by Mr Koo.
PARTIES’ PROPOSALS
Wife
The wife is seeking for B Street, Suburb C to be declared a matrimonial asset to be included in the matrimonial property pool and that the sale proceeds of B Street, Suburb C be divided 60% to the wife and 40% to the husband.
Husband
The husband is seeking for B Street, Suburb C to be declared not to be a matrimonial asset and therefore not be included in the matrimonial property pool and that the sale proceeds of B Street, Suburb C be paid in whole to Mr Koo.
Mr Koo
Mr Koo is seeking for B Street, Suburb C to be declared not to be a matrimonial asset and therefore not be included in the matrimonial property pool and that the sale proceeds of B Street, Suburb C be paid in whole to Mr Koo.
ISSUE
The issue for the determination is whether B Street, Suburb C forms part of the matrimonial property pool.
If B Street, Suburb C is deemed to be a property to be included in the matrimonial pool then how the sale proceeds of B Street, Suburb C are to be divided between the husband and the wife will be determined at the final hearing.
EVIDENCE
In considering the issue regard has been had to:
(a)The relevant material on the court file.
(b)The exhibits.
(c)The written and oral evidence of the parties.
(d)The written and oral submissions of the parties.
(e)Relevant legislation and authorities.
The husband and Mr Koo are legally represented.
The wife is self-represented.
In accordance with Johnson & Johnson (2000) 201 CLR 488 and Re F Litigants In Person Guidelines [2001] FamCA 348, the court process was thoroughly explained to the wife, and every attempt was made to ensure that fair process was afforded to the wife during the hearing.
For the wife the following witnesses were called and cross-examined:
(a)The wife.
(b)The wife’s partner, Mr E (Mr E)
As to the wife, I find that the wife answered the questions in such a way so as to support her case, as opposed to providing answers which represented a true reflection of what actually occurred.
As to Mr E, I did not find the wife’s partner to be a reliable witness and find that Mr E gave a version of events designed to support the wife in her evidence as opposed to being truthful to the court.
I therefore find that the wife and Mr E are not credible witnesses and accordingly, where there is a discrepancy in the evidence, the evidence of the husband and Mr Koo is the preferred evidence.
For the husband the following witness was called and cross-examined:
(a)The husband
I find the husband to be a credible witness.
For Mr Koo the following witnesses were called and cross-examined:
(b)Mr Koo.
(c)Mr Koo’s mother, Ms F (Ms F).
I find Mr Koo and Ms F to be credible witnesses.
Both Mr Koo and Ms F were assisted by interpreters during their cross-examination.
The husband and Mr Koo, through their legal representatives, provided written and/or oral submissions on the day of the discrete hearing.
The wife subsequently was given the opportunity to provide written submissions which were filed in the required time frame.
The submissions of the parties have been properly considered in reaching a determination although each submission may not have been specifically addressed or responded to in the judgment (Baghti & Baghti [2015] Fam CAFC 71).
Findings of fact are made on the balance of probabilities having regard to the evidence and in what follows statements of fact constitute findings of fact.
Before considering the issue it is useful to capture the relevant history regarding B Street, Suburb C.
BRIEF RELEVANT HISTORY
The brief relevant history is as follows:
(d)The wife aged 40 runs her own business.
(e)The husband aged 41 runs his own business.
(f)In 2004:
(i)The husband and wife commenced cohabitation.
(ii)The husband and Mr Koo became friends.
(g)In 2008 the husband and wife married.
(h)In 2012 the husband commenced his business Company G (Company G).
(i)In 2013 Company G changed its name to Company H (Company H).
(j)In 2015 the husband and the wife’s first child, X, was born.
(k)In 2016:
(i)The husband and the wife purchased in their joint names their former matrimonial home at B(2) Street, Suburb C subject to a large mortgage.
(ii)Mr Koo stayed with the husband and the wife whilst holidaying in Australia then returned to China.
(l)In 2017:
(i)Mr Koo made enquiries about B Street, Suburb C which is positioned behind B(2) Street, Suburb C.
(ii)The husband and Mr Koo opened up a joint Westpac bank account (joint account).
(iii)Mr Koo caused monies from Ms F and other third-party sources totalling $553,133 to be banked into either the joint account and/or the Company G bank account (Company G account) made up of the following deposits:
(A)20 February 2017: $2,000.
(B)23 February 2017: $91,547.13.
(C)24 February 2017: $91,377.99.
(D)2 March 2017: $100,000.
(E)3 March 2017: $83,195.98.
(F)3 March 2017: $85,011.90.
(G)3 March 2017: $100,000.
(iv)Monies were then from time to time transferred by the husband to the joint account held by the husband and the wife (the matrimonial joint account).
(v)On 10 March 2017 the sum of $491,365.90 was transferred from the matrimonial joint account to the Company G account.
(vi)On 16 March 2017 the sum of $484,533.41 was transferred from the Company G account to the conveyancing firm to give effect to the purchase of B Street, Suburb C for $470,000 with such purchase registered in the names of the husband and the wife as joint tenants.
(vii)The husband and the wife’s second child, Y was born.
(viii)The husband and Mr Koo undertook extensive renovations on B Street, Suburb C with Mr Koo banking $182,904 from Ms F and other third party sources into the joint account made up of the following deposits:
(A)9 June 2017: $6,096.45.
(B)30 June 2017: $10,890.83.
(C)30 August 2017: $31,323.41.
(D)20 September 2017: $63,826.82.
(E)7 November 2017: $11,154.75.
(F)9 November 2017: $6,537.02.
(G)15 November 2017: $53,074.93
(ix)Mr Koo stayed with the husband and the wife whilst holidaying in Australia then returned to China.
(m)In 2018:
(i)Renovations continued with Mr Koo banking $98,591.27 from Ms F and other third party sources into the joint account made up of the following deposits:
(A)3 January 2018: $6,402.35.
(B)24 January 2018: $5,000.37.
(C)12 March 2018: $8,623.33.
(D)10 April 2018: $5,365.
(E)27 April 2018: $10,000.
(F)9 May 2018: $36,397.49.
(G)21 May 2018: $8,747.15.
(H)21 May 2018: $18,055.58.
(ii)Mr Koo stayed with the husband and the wife whilst holidaying in Australia then returned to China.
(iii)The husband and the wife separated, initially under the one roof, after which the husband moved into B Street, Suburb C.
(n)In 2019:
(i)The renovations on B Street, Suburb C were completed.
(ii)Mr Koo stayed at B Street, Suburb C whilst holidaying in Australia then returned to China.
(iii)The husband moved out of B Street, Suburb C.
(iv)B Street, Suburb C was tenanted with the rent being paid to the wife.
(v)The rent was used by the wife to pay the mortgage and outgoings on B(2) Street, Suburb C.
(o)In 2020:
(i)B Street, Suburb C continued to be rented with the rent being utilised by the wife to pay the mortgage and outgoings on B(2) Street, Suburb C.
(ii)The husband and the wife divorced.
(iii)The wife was informed through legal correspondence from the husband that the purchase funds for B Street, Suburb C had been solely provided by Mr Koo.
(p)In 2021:
(i)B Street, Suburb C continued to be rented with the rent being utilised by the wife to pay the mortgage and outgoings on B(2) Street, Suburb C.
(ii)Prior to the commencement of proceedings by the wife all parties attended mediation as to the property issues which was unsuccessful.
(iii)The wife then commenced parenting and property proceedings which did not include Mr Koo.
(iv)The husband and Mr Koo self-reported to the FIRB that B Street, Suburb C belongs to Mr Koo even though it is registered in the joint names of the husband and the wife.
(v)Mr Koo was subsequently joined to the proceedings as second respondent by way of court order.
(vi)Disclosure was provided to the wife as to the bank statements where monies were paid to the husband by Mr Koo before that money was utilised by the wife and the husband to purchase B Street, Suburb C.
(q)In 2023:
(i)The tenants vacated B Street, Suburb C resulting in rent monies not being available to pay the mortgage on B(2) Street, Suburb C.
(ii)The wife obtained a hardship arrangement with the mortgagee of B(2) Street, Suburb C with repayments not due until April 2023.
(iii)The investigations by FIRB have been paused pending the outcome of the family law proceedings.
(iv)The wife in an email to Mr Koo’s lawyers just prior to the discrete hearing wrote:
Without prejudice. I would like to give notice to your client Mr Koo that after these proceedings on March 6 that I will be taking steps to reporting him to the Chinese government. I will start here at the China Embassy and I will take all necessary steps to reporting successfully. Specially these particular documents I have in possession.
(v)The discrete hearing on whether B Street, Suburb C forms part of the matrimonial property pool was conducted.
As at the date of the discrete hearing:
(a)The wife and the children are living at B(2) Street, Suburb C with Mr E (even though the wife listed B Street, Suburb C on her notice of address for service).
(b)The husband is living in rented accommodation.
(c)Mr Koo is living in China.
(d)B Street, Suburb C is unoccupied.
(e)The parties agreed to the following facts:
(i)B Street, Suburb C is registered in the joint names of the husband and the wife.
(ii)The rental previously received from B Street, Suburb C was paid to the wife who used for the mortgage and other outgoings.
(f)The husband and Mr Koo agreed to the following fact:
(i)The monies used to purchase B Street, Suburb C were supplied by Mr Koo.
(g)The wife disputes this agreed fact by the husband and Mr Koo maintaining that:
(i)The monies used to purchase B Street, Suburb C were a combination of monies supplied by Mr Koo, monies supplied by the husband from business dealings between the husband and Mr Koo and monies supplied by the husband that were received as cash payments to the husband’s business.
(ii)The monies paid into the matrimonial joint account amounted to a gift from the husband to wife, no matter where the funds came from.
(iii)As the funds to purchase B Street, Suburb C came from the matrimonial joint account then B Street, Suburb C forms part of the matrimonial pool and is subject to distribution between the parties by way of property settlement.
I now turn to the law
THE LAW AS TO COURT’S ABILITY TO MAKE DECLARATIONS AS TO PROPERTY
The husband and the wife in this matter are married and therefore Part VIII Family Law Act 1975 applies when any orders are to be considered in property proceedings.
Section 78(1) provides that in property proceedings the court may declare the title or rights, if any, that a party has in respect to the property.
The term property is defined in section 4 as:
In relation to the parties to a marriage or either of them – means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion
Section 78(2) provides that where a court makes a declaration pursuant to section 78(1) then the court may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.
THE LAW AS TO DONORS/GIFTS
It was held by Nase DCJ in Kuyper v Wright [2005] QDC 041 at [22] that:
A gift in law is the transfer of any property from one person to another gratuitously. Accordingly the intent of the donor must be to give without consideration. To emphasise this latter characteristic in one case it was said that gift is “a present made without return of any kind”. While it may be possible to overstate the position an essential characteristic of a gift is that the transfer of property must be gratuitous.
THE LAW AS RESULTING TRUSTS
In the Butterworths Concise Australian Legal Dictionary (3rd ed) resulting trust is defined as:
Where the purchaser of property directs the vendor to convey the property to another person
Osborn’s Concise Law Dictionary (11th ed) provides a broader definition whereby:
An implied trust where the beneficial interest in property reverts (results) to the person who transferred the property upon trust or provided the means of obtaining it. The principal situations are… the presumed resulting trust, where property is conveyed the name of someone other than provider of the consideration
Judge McNab in Scheer & Scheer [2018] FCCA 3285 addresses resulting trusts at [49]:
Jacob’s Law of Trusts in Australia (7th ed) provides a convenient summary in respect of resulting trusts…
[1210] A resulting trust will be presumed where, on a purchase, the legal title to real or personal property is vested in someone other than the person who is proved… to have provided the purchase money.
[1212] A resulting trust is made in the foregoing circumstances because the court presumes, in the absence of evidence to the contrary, that the person paying the purchase money intended to obtain the beneficial interest in the property.
IS B STREET, SUBURB C MATRIMONIAL PROPERTY THAT IS TO BE INCLUDED IN THE MATRIMONIAL POOL?
Having considered the evidence and taking into account the written submissions I find that that there is a resulting trust whereby B Street, Suburb C is real property that legally belongs to Mr Koo and is held in trust for Mr Koo by the husband and the wife.
Therefore B Street, Suburb C does not form part of in the matrimonial pool.
I make this finding based on the following:
(a)The husband did not contribute to or provide funds to purchase or renovate B Street, Suburb C from his own monies
(i)The wife in her written evidence makes repeated references to the inability of the husband to save money and that if it was not for the wife, the parties would never have been able to raise the deposit necessary to purchase the matrimonial home at B(2) Street, Suburb C.
(ii)The evidence supports that the husband had limited income from his business ventures and that such income was unable to be sufficient to purchase and/or renovate B Street, Suburb C.
(iii)The wife was unable to provide any evidence as to monies received from the husband’s business accounts through his business dealings that would have been sufficient to purchase and/or renovate B Street, Suburb C.
(iv)The wife failed to present evidence to support her argument that Mr Koo and the husband were in business and that the business dealings (whatever they were) were sufficient to raise the necessary monies to purchase or to renovate B Street, Suburb C
(v)The wife failed to present evidence to support her argument that the husband’s business was receiving cash payments where such payments were sufficient to raise the necessary monies to purchase or renovate B Street, Suburb C.
(vi)The wife failed to present evidence to support her argument that the husband was involved in money laundering where such money laundering was sufficient to raise the necessary monies to purchase or renovate B Street, Suburb C.
(vii)The wife failed to present evidence to support her argument that the husband generated the money required to purchase B Street, Suburb C and then gave the money back to Mr Koo who then through third parties paid it back to the husband so that it appeared that it was Mr Koo who provided the monies for the purchase of B Street, Suburb C.
(viii)Based on the above I find that the husband did not provide the funds to purchase and/or renovate B Street, Suburb C.
(b)Mr Koo provided the monies to purchase and renovate B Street, Suburb C
(i)The evidence supports that Mr Koo and his mother organised for the funds to enable the purchase and renovation of B Street, Suburb C.
(ii)A reasonable explanation was provided by Mr Koo as to why the deposit of the various amounts could not be verified by bank statements due to the clandestine nature of the transactions surrounding the purchase and renovation of B Street, Suburb C.
(iii)The monies deposited into either the joint account or the Company G account to ultimately enable the purchase and renovation of B Street, Suburb C were as a result of actions taken solely by Mr Koo.
(iv)The evidence further supports that the monies deposited to either the joint account or the Company G account for the purchase or renovation of B Street, Suburb C were monies that Mr Koo arranged to be deposited either through his mother or third parties.
(v)Based on the above I find that Mr Koo was the provider of all monies required to purchase and renovate B Street, Suburb C.
(c)Mr Koo provided the monies to purchase and renovate B Street, Suburb C so as to acquire a property for Mr Koo to live in when he immigrated to Australia
(i)The husband and Mr Koo gave detailed evidence as to Mr Koo’s intention when Mr Koo provided the monies to purchase and renovate B Street, Suburb C to subsequently immigrate to Australia and have B Street, Suburb C as his home.
(ii)Mr Koo had been friends with the husband and subsequently the wife for many years.
(iii)Mr Koo (since returning to live in China) had spent many months holidaying with the wife and husband between 2016 and 2018.
(iv)The wife in her written material refers to Mr Koo as part of the family, sharing text messages and photos as to his interaction with the husband and wife’s children.
(v)In 2016/2017 it was Mr Koo who enquired about the purchase of B Street, Suburb C.
(vi)B Street, Suburb C was conveniently situated behind B(2) Street, Suburb C which meant that Mr Koo would be close to the husband and wife and their children.
(vii)During 2017 and 2018 whilst in Australia Mr Koo was involved in the renovation of B Street, Suburb C and paid for the renovations which continued into 2019.
(viii)After the parties separated in 2018 Mr Koo when holidaying in Australia in 2019 lived at B Street, Suburb C.
(ix)Based on the above, I find that Mr Koo provided the monies to purchase and renovate B Street, Suburb C with a view of B Street, Suburb C being his home when he immigrated to Australia.
(d)The arrangement to have B Street, Suburb C registered in the names of the husband and wife
(i)When B Street, Suburb C was acquired using Mr Koo’s money, the property was registered in the names of the husband and wife as joint tenants.
(ii)Mr Koo explained in his written material that he did not obtain the prior approval of the FIRB as it would take too long and he could potentially lose the property and is for this reason that an arrangement was reached whereby B Street, Suburb C be purchased and placed in the name of the husband and wife.
(iii)Having heard all of the evidence, I find that the explanation by Mr Koo was not complete as the arrangement to have B Street, Suburb C registered in the names of the husband and the wife was twofold, firstly to avoid the involvement of the FIRB and secondly to avoid questioning by the Chinese government as to how and why large amounts of money were being transferred to Australia.
(iv)The husband gives evidence that he was aware of this arrangement from the moment Mr Koo was enquiring about B Street, Suburb C and was agreeable to the arrangement, knowing that some point B Street, Suburb C would be transferred to Mr Koo.
(v)The wife’s evidence is mixed and conflicting. On the one hand the wife maintains that she knew nothing about this arrangement although on the other hand the wife was aware that the husband and Mr Koo had reached a business dealing that would result in the purchasing and renovation of B Street, Suburb C.
(vi)However it is clear from the evidence that whilst the wife may not have initially been aware of the arrangement the wife knew exactly what was going on when the renovations commenced.
(vii)Although the wife may not have spoken directly with Mr Koo about the arrangement, the evidence supports that the wife did speak about it at length with the husband.
(viii)I accept the evidence of the husband and Mr Koo that the wife was aware at the time of purchasing B Street, Suburb C or shortly thereafter that the purchase of B Street, Suburb C in joint names was solely for the purpose of acquiring the property for Mr Koo for Mr Koo to use as his home when he immigrated from China.
(ix)It is evident that the arrangement was known and accepted by the parties and that the situation only started to unravel after the husband and wife separated in late 2018.
(x)It was after the parties’ divorce in 2019 that the situation got very messy and complicated because of the way the arrangement had been carried out and the secrets being kept by the parties which could result in investigations by government bodies and subsequent penalties.
(xi)The wife’s previous acceptance of the arrangement and subsequent complicating features was evident by the information contained in the text messages sent by the wife to Mr Koo on 2 March 2020 which read as follows:
Don’t scare me by reporting me. I will have to report you and [Mr Sandine] (the nickname wife used for the husband) right now. You can lose your fucking house right now. Remember you dealt with all of this. I have screenshots of your transactions with [Mr Sandine]. You fucking moron you gonna ruin my kids future. Goes to show your true colour. You asshole. Your business and finance will fail starting this year. Keep talking [Mr Koo] you don’t know who I am and what I’m capable of. Start telling your parents you lost your house in Australia. Fuck you. You and your parents will fail starting this year the scammers. You don’t know me you shouldn’t have threatened I will make sure you fail so don’t fuck with me and my kids. You’re nothing but a piece of shit to me. I’d rather pay the fine than giving you the satisfaction of keeping your house here. I’d rather go to jail and my kids become homeless than making you win. Fuck your. Just remember this. If you’re willing to lose that house and pay the $70k fine for your friend [Mr Sandine]. This will set me back to pay my $70k back. I will give up my kids to [Mr Sandine]. I won’t help them he will not hear back from me no help from me with our kids together until my finances with again. Do that for your friend. This is my reality. Do not test me.
(xii)I give no credence to the wife’s argument it was Mr E that generated the text messages to Mr Koo in March 2020 without the knowledge or direct input of the wife and I make this finding based on the following:
(A)At the time the messages were sent the wife and Mr E had only been in a serious relationship for a very short period of time.
(B)In the messages the husband is referred to as “Mr Sandine” (which is how the wife addressed the husband) whereas Mr E calls the husband Mr Sandine.
(C)The messages are too detailed to have been put together by a third party with there being a reference to:
· “Your house” as to Mr Koo being the owner of B Street, Suburb C.
· The involvement of Mr Koo parents.
· The mention of the $70,000 fine (which is the amount of the fine that could be imposed by FIRB).
· The knowledge of how to report Mr Koo and the husband to the authorities.
· The knowledge that Mr Koo would pay the fine for the husband.
· The threat to leave the children with the husband if the wife’s finances were not sufficient.
(D)Mr E’s evidence on sending the text messages during cross-examination was vague and contradictory with Mr E being unable, when questioned by the bench, to comprehensively explain his knowledge of the situation regarding the parties and the arrangements for B Street, Suburb C.
(E)Mr E when sending other messages or emails on behalf of the wife made it clear that he was acting as a third person on behalf of the wife who he referred to as “my representee”.
(F)The tone adopted in the text messages is similar to the tone used by the wife:
· In the wife’s threat to report Mr Koo to the authorities as detailed in her email to Mr Koo’s lawyers just prior to the discrete hearing.
· In the wife’s written evidence where the wife writes about the “change” in “direction” in the parenting arrangements should B Street, Suburb C not form part of the property pool.
· In the wife’s answer to the question from the bench “how does that translate to changing directions in the parenting matters” where the wife responded “either I take the kids full time or he has to take them full-time”.
(xiii)I do not accept the wife’s argument that because the arrangement between the parties about B Street, Suburb C was not in writing then it was not a valid arrangement.
(xiv)I do not accept the wife’s argument that Mr Koo was a donor, that the husband was a promisor and that the wife was the promisee therefore resulting in B Street, Suburb C having been gifted to the wife as it was always the intention of Mr Koo that B Street, Suburb C would ultimately be transferred to Mr Koo and that Mr Koo would use it as his place of residence in Australia.
(xv)Therefore the requirement of the gift being given in a gratuitous manner as is required to support an argument that the gift had been given by a donor has not been satisfied.
(xvi)The wife was reminded as to Mr Koo’s funding of B Street, Suburb C in legal correspondence sent by the husband’s lawyers in July 2020.
(xvii)Prior to the wife commencing property proceedings in June 2021, all parties attended mediation which is evidence of the wife’s acknowledgement of Mr Koo’s interest in B Street, Suburb C.
(xviii)The wife however chose to ignore Mr Koo’s interest in B Street, Suburb C when the proceedings were commenced and went so far as to deny any knowledge of his financial contributions to B Street, Suburb C in her supporting affidavit; a position that she has continued to hold leading up to and including the discrete hearing despite comprehensive evidence to the contrary.
(xix)The court however acknowledged Mr Koo’s potential interest in the property pool and ordered for his joinder to the proceedings as the second respondent.
(xx)Shortly after court proceedings were commenced the husband arranged for FIRB to be notified as to the arrangements.
(xxi)A few months later a similar notification was made by Mr Koo.
(xxii)The credibility of the evidence of the husband and Mr Koo as the arrangement is borne out by the actions that both of these parties have taken to admit their wrongdoings to the authorities in how the arrangement was set out.
(xxiii)The wife however has not been proactive in notifying the authorities and has structured her evidence in such a way to deliberately try and have access to property that the wife knows does not form part of the property pool.
(xxiv)Based on the above I find that the parties were aware and supportive of the arrangement whereby B Street, Suburb C was being held by the husband and the wife pending the immigration of Mr Koo to Australia whereby B Street, Suburb C would be transferred to Mr Koo.
(xxv)I find that this arrangement amounts to a resulting trust and that the husband and the wife hold B Street, Suburb C on trust for the sole benefit of Mr Koo.
(xxvi)Therefore B Street, Suburb C cannot be declared matrimonial property that can be subjected to alteration pursuant to section 79.
(e)Use of the rent from B Street, Suburb C
(i)The evidence supports the husband and wife have struggled at times to make the mortgage payments on B(2) Street, Suburb C and that the struggle continues as the wife is no longer in receipt of rental from B Street, Suburb C.
(ii)I accept the evidence of Mr Koo that the reason why he allowed the wife access to the rental generated by B Street, Suburb C was to protect his equity in B Street, Suburb C.
(iii)Mr Koo held serious concerns that if the wife did not have access to sufficient monies to meet the mortgage on B(2) Street, Suburb C then the mortgagee may foreclose on B(2) Street, Suburb C and take action against the husband and the wife for any shortfall.
(iv)I accept Mr Koo’s fear that as the husband and the wife are the registered owners of B Street, Suburb C then any shortfall may have been pursued by taking action against B Street, Suburb C.
(v)I do not accept that allowing the wife to receive rental from B Street, Suburb C supports the wife in her argument that the wife together of the husband are the true owners of B Street, Suburb C.
(f)The wife’s non-financial and financial contributions to B Street, Suburb C
(i)I accept that the wife:
(A)Contributed $2,000 towards the renovations conducted by the husband and Mr Koo on B Street, Suburb C.
(B)Contributed some $450 towards the plumbing costs for B Street, Suburb C.
(C)Contributed financially for the insurance on B Street, Suburb C.
(D)Arranged for the letting agent for B Street, Suburb C.
(ii)However, I find that such contributions do not give rise to the wife any equitable interest in B Street, Suburb C as this contribution was offset and outweighed by the wife’s ability to access the rental on B Street, Suburb C and use the funds exclusively to pay for the mortgage and outgoings on B(2) Street, Suburb C since 2019 until the property became vacant in 2023.
CONCLUSION
B Street, Suburb C does not form part of the property pool and the sale proceeds from B Street, Suburb C must be paid in full to Mr Koo as the husband and the wife currently hold B Street, Suburb C on trust for Mr Koo.
However Mr Koo, I find, must be responsible for any fine or penalty that is imposed by FIRB on the wife and orders have been made accordingly.
The parenting and property matters remain listed for May 2023 for final hearing.
I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment of Judge L. Turner. Dated: 6 April 2023
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