SETO & POON

FAMILY COURT OF AUSTRALIA

SETO & POON

[2021] FamCA 288

FAMILY LAW – CHILDREN – SURROGACY AGREEMENT – Legal parentage of children born in a surrogacy arrangement – With whom the children should live – Where the Court makes a declaration that the first applicant is the legal father of the children pursuant to s 69VA of the Family Law Act 1975 (Cth) – Whether orders should provide for the children to spend time with their legal and biological mother (the first respondent) and her husband – Orders made for the applicants to have equal shared parental responsibility for the children – Orders made for the children to live with the applicants – No orders made as to time between the children and the respondents.

FAMILY LAW – PRACTICE AND PROCEDURE – Whether legal professional privilege was waived in the course of proceedings – Where the Court determined that the solicitor’s advice was given with the dominant purpose of maximising payment from the applicants to the respondents – Orders made referring the proceedings to the Commissioner of Police for New South Wales and the Legal Services Commissioner for New South Wales.

Family Law Act 1975 (Cth) ss 60H(1), 69VA
Status of Children Act 1996 (NSW) s 14
Surrogacy Act 2010 (NSW) s 8

Masson v Parsons (2019) 266 CLR 554
Mann v Carnell (1999) 201 CLR 1
Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49

APPLICANT:

Mr Seto

APPLICANT:

Ms Yue

RESPONDENT:

Ms Poon

RESPONDENT:

Mr Zhu

INDEPENDENT CHILDREN’S LAWYER:

Legal Aid NSW

FILE NUMBER:

SYC

650

2021

DATE DELIVERED:

11 May 2021

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Stevenson J

HEARING DATE:

3, 4 and 11 March 2021

REPRESENTATION

COUNSEL FOR THE APPLICANTS:

Ms Lawson

SOLICITOR FOR THE APPLICANTS:

Borak & Co. Solicitors

RESPONDENTS:

There was no appearance by or on behalf of the respondents

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:

Ms Messner

INDEPENDENT CHILDREN’S LAWYER:

Legal Aid NSW

Orders

All previous orders herein are discharged.

Parentage

Pursuant to s 69VA of the Family Law Act 1975 (Cth) it is declared that the First Applicant, Mr Seto, born … 1982, is a parent, namely the father, of the twin children born to Ms Poon, date of birth … 1985, in B Hospital on … 2020.

Names of the children and registration of their births

Pursuant to s 28(5) of the Births, Deaths and Marriages Registration Act 1995 (NSW), the Court approves the names:
(a) W and
(b) Z
as the names of the twin children born to Ms Poon, date of birth … 1985, in B Hospital on … 2020, and directs the Registrar of Births, Deaths and Marriages to register the children's names as "W" and "Z".
The First Respondent forthwith do all things and sign all documents required by the Registrar of Births, Deaths and Marriages to record:
(a)the children's names as "W" and "Z" and
(b)herself as the mother and the First Applicant as the father of the children
on the children's birth certificates and the Register of Births, upon being provided with documentation by the First Applicant.
In the event that the First Respondent has not complied with Order 4 of these Orders within seven days of being provided with documentation by the First Applicant, pursuant to s 106A of the Family Law Act 1975 (Cth) a Registrar of the Family Court of Australia sign all documents on behalf of the First Respondent required by the Registrar of Births, Deaths and Marriages to ensure that the children's names and parents are recorded in accordance with these Orders.

Parental responsibility and Residence

The First Applicant, Mr Seto, and the Second Applicant, Ms Yue, ("the Applicants") have equal shared parental responsibility for the children.
The children live with the Applicants.

Travel and passport orders

Ms Poon, also known as Ms C, born … 1985, and Mr Zhu, born … 1978, their servants and/or agents are hereby restrained by injunction and irrespective of authenticated consent as contemplated in Part VII of the Family Law Act 1975 (Cth), from removing or attempting to remove or causing or permitting the removal of the children W, born … 2020, and Z, born … 2020, from the Commonwealth of Australia
AND IT IS REQUESTED THAT the Australian Federal Police give effect to this Order by placing the names of the said children on the Family Law Watchlist in force at all points of arrival and departure in the Commonwealth of Australia and maintain the children's names on the Watchlist for until the Court orders their removal.
Pursuant to s 65Y of the Family Law Act 1975 (Cth), Mr Seto, born … 1982, and Ms Yue, born … 1974, are permitted to take or send the children W, born … 2020, and Z, born … 2020, from the Commonwealth of Australia
AND IT IS REQUSTED THAT the Australian Federal Police permit the children to depart the Commonwealth of Australia with either or both of the above named persons, notwithstanding that the children's names are on the Family Law Watchlist.
For the purposes of s 11(1) of the Australian Passports Act 2005 (Cth), the children are permitted to have an Australian travel document.

Other Orders

The Independent Children's Lawyer is to provide a copy of these Orders to the First and Second Respondents by email and post, as soon as practicable following the making of these Orders.
The Independent Children's Lawyer has liberty to apply to relist these proceedings in relation to implementation of these Orders.

Notations

(A)These Orders concern twin children born on … 2020 in B Hospital to Ms Poon (date of birth … 1985) and for whom it is understood an application to register their births in NSW has been made, but not determined, at the time these Orders are made.
(B)The Court has found that the parents of the children under the Family Law Act 1975 (Cth) are Mr Seto, born … 1982, namely their father, and Ms Poon, born … 1985, namely their mother.

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

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

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 650 of 2021

Mr Seto

Applicant

And

Ms Yue

Applicant

And

Ms Poon

Respondent

And

Mr Zhu

Respondent

And

Independent Children's Lawyer

Legal Aid NSW

REASONS FOR JUDGMENT

The proceedings

The unusual circumstances of this litigation arose from the birth of twin children, W and Z in 2020. The biological parents of the children are the applicant, Mr Seto, and the first respondent, Ms Poon.
The children were born pursuant to a surrogacy arrangement which appeared to have been negotiated primarily by Ms Poon and Ms Yue. They were close friends, who referred to each other as "sister" frequently. The surrogacy agreement may have been altruistic initially but, certainly, strong commercial elements entered into the arrangement prior to the birth of the children.
The applicants, Mr Seto and his wife Ms Yue, commenced these proceedings by way of an Initiating Application filed on 3 February 2021. They named as respondents the biological mother of the children, Ms Poon, and her husband Mr Zhu. This Application was listed urgently on 5 February 2021.
Ms Poon and Mr Zhu emailed a Response to the court but such was never filed and thus did not become part of the record. They appeared in person at court events on 5 February 2021, 12 February 2021 and 19 February 2021. They submitted statements which they signed in the presence of a Justice of the Peace on 20 February 2021. On 25 February 2021 the respondents filed a Notice of Discontinuance and they did not participate in the final hearing on 1 March 2021.
In the days prior to the initial listing of the proceedings on 5 February 2021 a solicitor, Ms D, corresponded with the court as the legal representative of the respondents. She did not file a Notice of Address for Service at any stage. In an email dated 4 February 2021, she indicated to the court that the respondents had failed to place her firm in funds and thus they would be unrepresented on 5 February 2021.
As appears below, the role of Ms D in the surrogacy arrangement is a matter of real concern. When called upon to make written submissions as to a potential referral to New South Wales Police and/or the Office of the Legal Services Commissioner, Ms D suddenly left her employment with F Solicitors and took with her the respondents' file. Ms D gave no notice to her employers of her intended departure or of her intention to remove the respondents' file.
On 12 February 2021 an Independent Children's Lawyer ("ICL") was appointed, despite the very young age of the children the subject of these proceedings. I took this step due to the complexity of the legal issues raised as to the parentage of the children and the unusual circumstances of their conception and birth.

Background

The first applicant, Mr Seto, was born in 1982 in Country G and is presently 38 years of age. He migrated to Australia with his family in December 1998 and became a citizen of this country in May 2011. The second applicant, Ms Yue, was born in China in 1974 and is currently 47 years of age. She moved to Hong Kong in 2007 and met Mr Seto on a holiday visit to Australia in April 2015. They began to live together in a de facto relationship in 2016 and married in 2019. Ms Yue obtained permanent Australian residence on 21 March 2019.
Ms Yue had been married previously and was divorced from her first husband in December 2012. There were no biological children of this marriage, although Ms Yue and her then husband adopted the son of her sister, apparently due to China's "one-child policy". This child lives in China with his biological mother and is now approximately 16 years of age.
The first respondent, Ms Poon, was born in Hong Kong in 1985 and is currently 35 years of age. In 2010 she married the second respondent, Mr Zhu, who was born in Country G in 1978 and is currently 42 years of age. This family came to Australia in March 2014, on a Student Visa granted to Ms Poon. A son, Z, was born to Ms Poon and Mr Zhu in 2018.
Between 2017 and 2019 Ms Yue and Mr Seto underwent five unsuccessful IVF treatments in Australia and Country H. The last unsuccessful treatment occurred in Country H between April 2019 and June 2019. Their evidence left no doubt as to their very strong desire for children.
Ms Yue and Ms Poon met in 2015 and formed a close friendship. In June 2019 Ms Yue and Ms Poon discussed an arrangement whereby she would act as surrogate, in exchange for assistance in her obtaining Australian residence. The applicants both deposed that Ms Poon explained that she could obtain a section 143 visa, if she gave birth to the child of an Australian citizen.
Between July 2019 and November 2019 the applicants and Ms Poon made monthly attempts at conception, while she was at the peak of her ovulation cycle. There was a dispute between the applicants and the respondents as to whether these measures were confined to artificial insemination or included attempts at natural conception by Ms Poon and Mr Seto. The applicants both maintained on their oath that Ms Poon and Mr Seto engaged in sexual intercourse on four occasions, after which he refused to take part in any further such attempts for a pregnancy. The respondents denied any such activity in their unsworn statements.
Lengthy WeChat exchanges between Ms Poon and Ms Yue, however, contain numerous references to a plan for attempts at natural conception by Mr Seto and Ms Poon (Exhibit 3). Ms Yue deposed to the following conversation on 5 July 2019:
Ms Poon:I have already seen Dr L [at] K Clinic if you don't want to do this, I have another male friend who is willing to help us, the Dr has seen us both and the child can then sponsor us.
I know how much IVF costs it is better that your husband and I try to conceive naturally.
Ms Yue:I need to speak to my husband.
Ms Yue deposed Ms Poon said to her on 9 July 2019:
Ms Poon:So, this month, lets try the natural way first.
From now on, we say "that big deal". Lets not say "seeing a doctor" or "intercourse". Let's call it "That big Deal", you know, if we say anything about it, my husband may get it.
On 3 February 2020 Ms Poon and Mr Seto attended their first appointment with Dr L at K Clinic. Mr Seto and Ms Poon represented themselves as a couple and used the same address. Ms Yue attended the appointments as a supportive friend of Ms Poon.
Mr Zhu attended none of the appointments at the IVF clinic or M Hospital. Mr Zhu signed no documents in relation to the IVF procedure. Nothing in the evidence, including the records of the IVF clinic (Exhibit 4) gave any indication that their staff were aware of the true nature of the arrangement between the applicants and Ms Poon.
Between 19 February 2020 and 26 February 2020 Ms Poon took medication which induced ovulation. On 2 March 2020 the applicants and Ms Poon attended M Hospital, where she underwent an ova retrieval procedure. On 5 May 2020 Ms Yue and Ms Poon attended the hospital and two embryos were implanted successfully.
The respondents and their son Z moved into the home of the applicants on 19 May 2020. They returned to their own accommodation on 14 July 2020. Ms Yue deposed that, upon their departure, Mr Zhu said to her and Mr Seto words to the effect:
My wife [is] pregnant with 2 babies, the money is too little.
On 15 June 2020 the parties executed a document entitled "Agreement on Renunciation of Guardianship". Ms Yue deposed that this Agreement, which was written in Cantonese, was drafted by Ms Poon. In essence, this Agreement provided as follows:
Ms Poon will "voluntarily give up custody of the children" provided that Mr Seto pays:
● IVF and medical costs
●$50,000 to assist with her immigration application, and half of any costs over $100,000, and acts as a financial guarantor of the application
●a $7,000 deposit and
●$4,500 toward Ms Poon's tuition fees.
The Agreement provided that the sum of $50,000 was to be paid in instalments of $10,000 at the twelve week point in the pregnancy; $20,000 following the birth of the children and $20,000 when they attained the age of six months.
On 13 July 2020 the applicants transferred $10,000 to Ms Poon. On 18 and 19 October 2020 they transferred an additional sum of $20,000 to Ms Poon. She represented to them that she required these funds to assist with medical care for her mother-in-law in Country G.
On 20 August 2020 Ms Poon communicated by WeChat to Ms Yue that she no longer required Australian residence. Relevantly, this message read as follows:
I am very Grateful... Now I don't need to worry about my residency. Since the National Security Law passed the bill last month through Australia, Hong Kong residents are now eligible for a 5 year temporary visa with pathways to permanent residency. There are more benefits offered by another two countries, Canada and Britain...
(As per the original)
Ms Yue deposed that she and Mr Seto attended the home of the respondents on 8 November 2020, when their friend Ms P was also present. She deposed that the following statements were made, inter alia:
Mr Zhu:if you make us unhappy, we will demand even more money.
Ms P:they want more money one baby $50,000 two babies $100,000.
Ms P:if you do not pay the $100,000, you will never see the children once they are born many people happy to pay for twins.
Ms Yue deposed that, on 14 November 2020, Ms Poon said to her and Mr Seto:
I want 70% before I do anything more.
Ms Yue deposed that she understood that she and Mr Seto were required to pay an additional sum of $70,000, as they had already transferred $30,000 of the total amount of $100,000 to Ms Poon.
Ms Yue deposed to the following WeChat messages between her and Ms Poon on 15 November 2020:
Ms Poon:Is there something wrong with your memory or ears? I made it clear yesterday though you might have missed it as I was weak when I talked. If you would like to pay 70% then that needs to be paid prior to seeing the doctor.
Ms Yue deposed to the following WeChat conversation on 16 November 2020:
Ms Yue:… Now that you guys are not after permanent residency shouldn't we sign a new agreement? You are 30 weeks pregnant and so far I've Spent $110,000.00. I understand it has been tough for you but at the same time that's my hard-earned money. I don't want to be a fool anymore. Now I want everything in writing.
Ms Poon:The fact is that the twins are developing well day after day. You can really see them. I will be going into labour anytime next month. You should really think clearly, it's a shame I am seeing all this! You can't just muddle along day after day! I have been very clear in my mind from the very beginning. Now, if you have a clear mind, we can continue the deal. If not, let's terminate it!!
Ms Yue:I can't stop you from doing anything. I have never said I won't pay you. All I want is to have everything in writing. What's wrong with that? We should outline the process of surrogacy in detail. How much do you charge? What are the stage payments? What's the arrangement after the babies are born? We need to sit down and have a calm conversation to sort out everything. There is no use being angry or losing tempers. If we can talk and sort things out today, you get paid today. I don't want to drag things out! Even if you do anything harmful to the babies, I won't be able to see it. Just do things in good faith!
(As per the original)
On 16 November 2020 Ms Yue and Ms Poon exchanged messages to the following effect:
Ms Poon:If I don't receive half of the money in the coming two days, there's nothing we can talk about...
Ms Yue:We haven't achieved any agreement. Why should I pay you? Who knows how many arguments we are going not have?
On 20 and 21 November 2020 the applicants paid a sum of $30,000 to Ms Poon. On 28 November 2020 Ms Poon messaged Ms Yue:
I will talk to you about the details and other legal matters on Monday. Don't worry. We have a reliable solicitor. Everyone can rest assured.
On 30 November 2020 Ms Poon messaged Ms Yue as follows:
The way to make it legitimate is that your husband becomes the babies' permanent father through DNA tests. As for me, I need to forego custody and nominate you before the court. After that you will be the baby’s (sic) permanent guardian and custodian.
On 23 December 2020 Ms Yue and Ms Poon conducted a WeChat conversation in the following terms:
Ms Poon:From the beginning, I have not been after money. I didn't do it for money. If it was for money, I wouldn't have asked for this little money. My relatives have said a lot to me. I listen to them but also think about what they say myself and try not being affected by them. As for this, its between you and me. I trust you. You trust me. That's how we got to where we are right now.
Ms Yue:I actually know you well. I don't believe you will blackmail me with the babies. All I worry about is you seeing how cute the babies are and the fact that you gave birth to them. That's why I am so concerned about it. You know I spent all my fortune to have them. They are all I have and support my living my life.
Ms Poon:You will be the mother and will see the babies everyday. I have promised you once the babies are born, we will do the DNA test and engage a solicitor to have everything in writing. After all the legal things are sorted you guys can take the babies. This hasn't changed no matter how much I’ve suffered I have faith. I keep my promise and will hand you the babies for sure. You don't need to worry. I've got two solicitors already.
(As per the original)

The children were born by caesarean section in 2020. Hospital records (Exhibit 3) demonstrate that the babies were not breastfed by Ms Poon and commenced feeding by formula immediately. These records also indicated that Ms Poon was prescribed lactation suppression medication.
Ms Yue saw the children in hospital each day until 3 January 2021, when these visits were stopped due to the COVID restrictions. Ms Poon and the children were discharged from hospital on 5 January 2021.
On the evening of 5 January 2021 the applicants attended the home of the respondents. The applicants deposed that the following conversation took place:
Ms Poon:You need to pay a further $30,000 before I proceed with the paperwork.
Mr Zhu:If you don't pay up, I will gift the 2 babies away. A boy and a girl twins are very sought after. A lot of people will pay for them.
On 6 January 2021 Ms Poon messaged Ms Yue:
If you pay the $30,000 today, we will go to the lawyer today. If you pay tomorrow, then we will go to the lawyer tomorrow. I've told the lawyer about it already.
The applicants transferred a sum of $30,000 to Ms Poon on 6 and 7 January 2021.
On 9 January 2021 an incident took place at the home of the respondents. There was a dispute between the applicants and the respondents as to what occurred but the only evidence was contained in the affidavits of Mr Seto and Ms Yue. In effect, they maintained that Ms Yue became extremely upset after an argument with the respondents. She picked up a kitchen knife and made threats that she would harm herself. Mr Seto then calmed Ms Yue and took away the knife.
Following this incident, the respondents would not permit Ms Yue to come to their home. Mr Seto, his parents and sister continued to visit the babies every day for one to two hours.
On 15 January 2021 Ms D wrote to the lawyer for the applicants with a demand for payment of a sum of $290,000 within seven days. This letter, although lengthy, will be set out in full in these reasons. The letter of Ms D read as follows:
Dear Ms Yue
Re: Family Law Matter – Surrogacy
We refer to the matter above and confirm that we act for the birth mother Ms Poon ("our client").
We are instructed by our client that you and our client met to each other about five (5) years ago at the workplace. Upon gradually knowing to each other between you and our client, you told our client that you have physical issues of being naturally concepted and such physical issues bothered you and your husband for several years. Due to many times of failure of conception after a lot of attempts conducted by your family, you sincerely sought our client's assistance for trying to have the artificial insemination. Our client was quite reluctant to accept your request initially as she was concerning of the safety and the potential consequences caused from the artificial conception procedures. However, given that you had been constantly persuading our client to consent to the artificial insemination or vitro fertilization (IVF), our client took into account of the friendship and the difficulty of you and your husband of having no child in your marriage, for acting our client's kindness, our client finally determined to provide the assistance to your family by involving herself to try to receive the medical procedures as to being pregnant and later on give birth as the birth mother for your family.
Prior to Conception
In about July 2019, there was a verbal pre-conception surrogacy agreement (pre-conception agreement) reached between you and our client: -
1.Our client assists you to being concepted of pregnancy and deliver the birth of the baby;
2.Once the baby is born, the parenting responsibility and right to be transferred from our client as the birth mother to you the intended mother;
3.You and your husband afford and/or reimburse all expenses related to the pre-conception, during pregnancy and post-natal period including but not limited to the expenses of medical procedures and treatment, legal expenses, nutrition fees, care expenses and financial loss of the working opportunity that our client and her husband lost.
Upon the consent of the above pre-conception agreement between the parties, for meeting your requests as to be successfully concepted our client had been trying and engaging to start the artificial insemination, and as a result our client had gone through quite a lot of pain and uncomfortable physical and mental sufferings. Since the several trials of the artificial insemination were not successful, you and your husband persuaded our client to undertake the IVF as the last resort under the medical advice of the doctor. Our client instructs that the initially developed embryo which was ready to be set into the mother's uterus as per medical advice was inserted into our client's uterus on around 5 May 2020. During the process of trying to be pregnant by utilising the artificial manners in between around July 2019 and 5 May 2020, our client and her husband gave up their employments as they need to spend significant amount of time and efforts to meet the requests of you and your husband including but not limited to travelling to attend the medical appointments and especially our client's husband had to take his time off to look after our client and accompany our client for the medical check-ups. Given the fact that some medications and medical procedures cause our client's bleeding in the vagina and extreme tiredness, our client's husband had to fully look after our client at home.
During pregnancy
Between May 2020 that the embryo was inserted into our client's uterus and just prior to the birth of the babies, our client had suffered a lot of discomfort in physical, psychological and emotional perspectives. Our client instructs that carrying twins caused her most of time unable to move independently in last four months of her pregnancy, and also, she suffered frequent depression through the pregnant period. She often was feeling short of breath and insomnia due to the heavy carriage. With fully focusing on looking after her own child aged of 2 by her husband, as per instruction of our client, her husband no longer was unable to return to his employment through her pregnancy since her husband completely gave up the employment in around March 2020. Our client instructs that her family has been confronting with a lot of stress and financial difficulties resulted from the altruistic surrogacy for your family.
Post – Birth Delivery
Our client instructs that the twins were born in late 2020 via caesarean section. Our client is still in her physical recovery process till the date of this letter from the caesarean operation. Our client strongly insists that the pain, physical change of appearance, unpleasant facial exterior and large scars on the belly severely influence upon her marriage relationship as well as psychological stability that she feels embarrassing and stressful for those disgraceful changes over her body. We also are instructed by our client that since the twins born her family has been falling into the hardship of continuing financial crisis from taking care of the twins and her own child in the circumstances that both her husband and her unable to return to employments within short period of time. Our client advises that she often cannot sleep for days from that twins need a lot of attention and care. Despite, as per instruction of our client, recently you and your husband suggested to employ a maternity matron to help our client, the maternity matron is unable to provide full care as per expectation since the payment given to her is lower than the market price in comparation of the other maternity matron looking after two newly born infants. From that, our client and her husband still have to pay a lot of their attention, time, energy and efforts for the twins as well as need of taking care of their own little boy.
Moving Forward
Our client draws your attention that Section 6 of Surrogacy Act 2010 ("the Act") entitles our client to have the expenses and costs incurred before, during and after the surrogacy to be reimbursed in accordance with the reached pre-conception surrogacy arrangement between you and our client, and the arrangement is enforceable under the Act. The costs and expenses in relation to the surrogacy incurred by our client, but which is yet paid by you, that our client is entitled to claim from you, under Section 7 of the Act, in appliance to the dispute between you and our client, as per following: -
1.Our client proposes to have her expenses of nutrition fees in an estimated amount of $100,000 to be reimbursed and such fee incurred from pre-conception till the expected date in the future that she could be fully recovered from the caesarean birth delivery.
2.Our client proposes to have the anticipated cosmetic / medical expenses in an estimated range of $40,000 to $50,000 to be reimbursed and such expenses will be aiming to recover our client's physically disgraceful changes.
3.Our client proposes to have her anticipated legal expenses in an estimated amount of $50,000 to be reimbursed, including but not limited to legal advice, current non-litigious stage of the subjected surrogacy matter and any potential litigious stage of the disputes as well as the parentage rights transfers in future.
4.Our client proposes to have her anticipated costs for maternity matron in an estimated amount $24,000 to be reimbursed from which the maternity matron started to take care of the twins from 5 January 2021, who was employed for at least two months.
5.Our client proposes to have her anticipated reimbursement from the loss of earnings of her husband and herself, in an estimated range $120,000 to $150,000.
Total proposed reimbursements: $334,000 - $374,000
Our client instructs that you and your husband have proceeded the payments in various occasions as to the partial reimbursements from the above, as follows:
1.You and your husband paid $20,000 to our client in October 2020;
2.You and your husband paid $30,000 to our client in November 2020;
3.You and your husband paid $30,000 to our client in January 2021.
Total paid amount: $80,000
In light of the above, the outstanding amount is between $254,000 and $294,000 that, as per our client's instruction, she is entitled to claim from you under the Act. Our client would like to provide you with some leniency that our client proposes to have $290,000 to settle the matter as to save any further unnecessary inconvenience and potential costs between the parties.
We are instructed to receive the outstanding payments in sum of $290,000 to our firm's trust account on behalf of our client within 7 days from the date of this letter, due by 4 pm on 22 January 2021. The trust account details are as follows:
F Solicitors
Account Number: …15
BSB: …
You reserve your right to seek the independent legal advice. Should you have any enquiries in regard to this matter please contact your own legal representative.
Kind Regards
F Solicitors
The solicitor for the applicants did not make any response to this letter. On 29 January 2021 Ms D communicated further with the lawyer for the applicants in the following terms:
Gmail Nena Borak <...>
Family Law Matter – Mr Seto, Ms Yue and Ms Poon
Ms D <...>
Fri, Jan 29, 2021 at 3:59 PM
To: Nena Borak <...>
Dear Ms Borak
I refer to my email to you yesterday 28/01/2021 and the telephone call between you and my legal assistant this morning.
You did not reply my email of yesterday, but you advised us this morning over the phone call that your client's response was anticipated to send to us next Monday. Please be advised our client's letter given to your client dated 15/01/2021 is due to be replied by your client within seven days and it has been unreasonably delayed. Please also be advised that our client instructed any financial loss from the date of the letter till the matter is completed might be argued and claimed by our client depending on the circumstances.
(Quoted text hidden)
On 1 February 2021 Mr Seto, his mother and his sister attended the home of the respondents to feed and spend time with the babies. Also present was Mr Q, a former employer of Ms Poon. A lengthy discussion occurred, apparently with a view to the applicants and the respondents reaching an agreement. Mr Seto’s sister recorded this conversation without the consent of the other participants (Exhibit 1).
During this conversation a number of comments were made by the participants, including the following:
●        how do you get it legal in Australia?
●        we are doing illegal surrogacy
●        how do we settle, make this thing from illegal to legal?
●the main concern is that there was actually money but we will not present that to the court
●if you guys do not agree, you most likely won't get the kids and she won't get anything
●she can do whatever she wants if you don't settle with her
The Initiating Application was listed urgently on 5 February 2021 and the respondents were directed to file and serve affidavits by 11 February 2021, with a further interim hearing to take place on 12 February 2021. On 5 February 2021 the names of the children were placed on the Family Law Watch List. Interim orders were made for the children to spend time with the applicants from 6.00 pm until 8.00 pm each day. The applicants submitted that this arrangement had been in place since the children were discharged from hospital.
On 12 February 2021 the proceedings were listed for final hearing to commence on 1 March 2021. An ICL was appointed for the children. On 19 February 2021, and by consent, a single expert, Ms R, was appointed to conduct a psychological assessment of Ms Yue.
As noted above, the respondents informed the court during a procedural hearing on 24 February 2021 that they did not wish to participate further in the proceedings. On 25 February 2021 the first respondent sent an email to that effect to the court and attached an unfiled Notice of Discontinuance.

The parentage of the children

There is no issue that Ms Poon and Mr Seto are the biological parents of the children. The first question is whether any law of the State of New South Wales or the Commonwealth operates to constitute Mr Zhu their legal parent, to the exclusion of Mr Seto. The second issue is whether there is a basis upon which Mr Seto can be found to be a legal parent of the children.
The applicants and the ICL both submitted that the Surrogacy Act 2010 (NSW) does not apply in the present circumstances. The applicants conceded that a number of pre-conditions set out in Division 4, which allow a court to make a parentage order, were not fulfilled in the present circumstances. For example, no mandatory counselling took place and no legal advice was provided to "each of the affected parties". Further, s 8 of the SurrogacyAct expressly prohibits commercial surrogacy arrangements.
Section 60H(1) of the Family Law Act 1975 (Cth) (“the Act”) provides as follows:
60H Children born as a result of artificial conception procedures
(1)      If:
(a)a child is born to a woman as a result of the carrying out of an artificial conception procedure while the woman was married to, or a de facto partner of, another person (the other intended parent); and
(b)      either:
(i)the woman and the other intended parent consented to the carrying out of the procedure, and any other person who provided genetic material used in the procedure consented to the use of the material in an artificial conception procedure; or
(ii)under a prescribed law of the Commonwealth or of a State or Territory, the child is a child of the woman and of the other intended parent;
then, whether or not the child is biologically a child of the woman and of the other intended parent, for the purposes of this Act:
(c)the child is the child of the woman and of the other intended parent; and
(d)if a person other than the woman and the other intended parent provided genetic material—the child is not the child of that person.
(2)      If:
(a)a child is born to a woman as a result of the carrying out of an artificial conception procedure; and
(b)under a prescribed law of the Commonwealth or of a State or Territory, the child is a child of the woman;
then, whether or not the child is biologically a child of the woman, the child is her child for the purposes of this Act.
(3)      If:
(a)a child is born to a woman as a result of the carrying out of an artificial conception procedure; and
(b)under a prescribed law of the Commonwealth or of a State or Territory, the child is a child of a man;
then, whether or not the child is biologically a child of the man, the child is his child for the purposes of this Act.
(5)For the purposes of subsection (1), a person is to be presumed to have consented to an artificial conception procedure being carried out unless it is proved, on the balance of probabilities, that the person did not consent.
(6)      In this section:
“this Act” includes:
(a)      the standard Rules of Court; and
(b) the related Federal Circuit Court Rules.
The Status of Children Act 1996 (NSW) provides inter alia as follows:
14 Presumptions of parentage arising out of use of fertilisation procedures
(1)When a woman who is married to a man has undergone a fertilisation procedure as a result of which she becomes pregnant:
(a)her husband is presumed to be the father of any child born as a result of the pregnancy even if he did not provide any or all of the sperm used in the procedure, but only if he consented to the procedure, and
(b)the woman is presumed to be the mother of any child born as a result of the pregnancy even if she did not provide the ovum used in the procedure.
(1A)When a woman who is married to or who is the de facto partner of another woman has undergone a fertilisation procedure as a result of which she becomes pregnant:
(a)the other woman is presumed to be a parent of any child born as a result of the pregnancy, but only if the other woman consented to the procedure, and
(b)the woman who has become pregnant is presumed to be the mother of any child born as a result of the pregnancy even if she did not provide the ovum used in the procedure.
Note:"De facto partner" is defined in section 21C of the Interpretation Act 1987.
(2)If a woman (whether married or unmarried) becomes pregnant by means of a fertilisation procedure using any sperm obtained from a man who is not her husband, that man is presumed not to be the father of any child born as a result of the pregnancy.
(3)If a woman (whether married or unmarried) becomes pregnant by means of a fertilisation procedure using an ovum obtained from another woman, that other woman is presumed not to be the mother of any child born as a result of the pregnancy. This subsection does not affect the presumption arising under subsection (1A) (a).
(4) Any presumption arising under subsections (1)-(3) is irrebuttable.
(5)In any proceedings in which the operation of subsection (1) is relevant, a husband's consent to the carrying out of the fertilisation procedure is presumed.
(5A)In any proceedings in which the operation of subsection (1A) is relevant, the consent of a woman to the carrying out of a fertilisation procedure that results in the pregnancy of her spouse or de facto partner is presumed.
(6) In this section:
(a)a reference to a woman who is married to a man includes a reference to a woman who is the de facto partner of a man, and
(b)a reference (however expressed) to the husband or wife of a person:
(i)is, in a case where the person is the de facto partner of a person of the opposite sex, a reference to that other person, and
(ii)does not, in that case, include a reference to the spouse (if any) to whom the person is actually married.

The interaction between s 60H of the Family Law Act and s 14 of the Status of Children Act was considered by the High Court of Australia in Masson v Parsons (2019) 266 CLR 554 (“Masson v Parsons”). The plurality (Kiefel CJ, Bell, Gageler, Keane, Nettle and Gordon JJ) said, inter alia, as follows:
28.… The meaning of s 60H is not obscure or ambiguous or readily capable of more than one interpretation. As both the primary judge and the Full Court held, its effect is plainly enough to expand rather than restrict the categories of people who may qualify as a parent of a child born as a result of an artificial conception procedure.
...
39.... the “irrebuttable presumption” laid down in ss 14(2) and 14(4) [Status of Children Act 1996 (NSW)] is not in its nature a law relating to evidence or otherwise regulating the exercise of jurisdiction. It is a conditional rule of law determinative of the parental status of the persons to whom it applies which operates independently of anything done by a court or other tribunal. As such, ss 14(2) and 14(4) are not provisions to which s 79(1) of the Judiciary Act is capable of applying.
40.The appellant contended that, even if s 14(2) is properly to be conceived of as a provision which regulates the exercise of State jurisdiction in matters arising under the Status of Children Act, it is incapable of being picked up by s 79(1) of the Judiciary Act and applied as a law of the Commonwealth in proceedings under the Family Law Act because the Family Law Act has "otherwise provided".
41.What has been said so far is sufficient to dispose of the appeal. But it is appropriate to acknowledge the correctness of that submission. If ss 14(2) and 14(4) were properly to be conceived of as provisions which regulate the exercise of State jurisdiction, they could not be picked up and applied under s 79 of the Judiciary Act because the Family Law Act has otherwise provided.
...
44.... Div I of Pt VII of the Family Law Act proceeds from the premise that "parent" is an ordinary English word which is to be taken as having its ordinary, accepted English meaning. In some respects, most notably in s 60H the Family Law Act may be seen as expanding the conception of "parent" beyond ordinary acceptation by adding a limited range of persons who stand in specified relationships to children born of artificial conception procedures. Additionally, under s 60G, a person may qualify as a parent of a child born of an artificial conception procedure by reason of that person's adoption of the child under the law of a State or Territory. But ss 60H and 60G are not exhaustive of the classes of persons who may qualify as parents of children born of artificial conception procedures. It remains that, apart from those specific provisions, the question of whether a person is a parent of a child born of an artificial conception procedure depends on whether the person is a parent of the child according to the ordinary, accepted English meaning of "parent". And as has been explained, that is a question of fact and degree to be determined according to the ordinary, contemporary Australian understanding of "parent" and the relevant circumstances of the case at hand.
45.It is also necessary to appreciate, as is explained later in these reasons, that the evident purpose of s 60H and more generally of Div I of Pt VII of the Family Law Act is that the range of persons who may qualify as a parent of a child born of an artificial conception procedure should be no more restricted than is provided for in Div I of Pt VII.
It seems to me that there are two reasons why s 60H(1) is not applicable in the present circumstances. Firstly, Mr Zhu at no stage was "the other intended parent" of the children. Secondly, if he consented to the artificial insemination procedure he did so only for the purpose of personal financial gain and not because he "intended" to be a parent of the children. It seems to me that the provisions of s 60H(1) could only apply to the successful artificial conception procedure conducted by the IVF clinic and not to the previous actions of the applicants and Ms Poon which failed to result in a pregnancy.
In my view, the following considerations support a conclusion that Mr Zhu was never "the other intended parent" of the children:
1.Ms Poon and Mr Seto presented themselves to the IVF clinic as a couple who wished to become parents
2.Ms Yue presented herself to the IVF clinic as a supportive friend of Ms Poon
3.there was no evidence in the records of the IVF clinic which suggested any involvement whatsoever by Mr Zhu or that their staff were even aware of his existence at any stage
4.in cross-examination by counsel for the ICL Mr Seto said that Mr Zhu never attended the IVF clinic
5.Mr Zhu executed no documents in relation to the IVF procedure
6.the arrangement between all four parties was that the children would be placed in the permanent care of the applicants very shortly after their birth, upon payment of money and provision of assistance to the respondents in obtaining permanent Australian residence
7.hospital records demonstrated that Ms Poon declined to breastfeed the babies and was prescribed lactation suppression medication
8.the evidence of both applicants was to the effect that Mr Zhu threatened to sell the babies overseas, if the applicants failed to meet the financial demands of himself and Ms Poon
9.following the birth of the children, the respondents attempted to extract additional funds from the applicants before they would hand over the children
10.the names of the children were chosen by Mr Seto in accordance with traditions followed within his family.
On the balance of probabilities, I am satisfied and I find that none of the four interested parties ever held the intention that Mr Zhu would be a parent of the children. I am satisfied and I find that all four interested parties held a common view that Mr Seto was the intended parent of the children.
It seems to me that the evidence that Mr Zhu consented to the IVF procedure was inferential at its highest. He had no involvement whatsoever with the IVF clinic which carried out the artificial conception procedure.
It seems to me that, even if Mr Zhu consented to the IVF procedure, he did not do so as "the other intended parent" but as a party to an agreement which would bring financial gain to him personally and/or enable him to remain in Australia. I am satisfied that any consent which he may have given to the IVF procedure, in these circumstances, does not trigger the operation of s 60H(1).
Accordingly, I conclude that s 60H(1) does not operate to constitute Mr Zhu a legal parent of the children. The issue of whether Mr Seto is their legal parent falls to be determined by reference to the principles enunciated by the High Court of Australia in Masson v Parsons.
In my view, Mr Seto qualifies as a "parent" of the children consistently with these principles. I have regard to the following factors in reaching the conclusion that Mr Seto is their "parent" within the ordinary Australian meaning of that term:
1. he is their biological father
2.all four interested parties intended that he fulfil the role of parent to the children
3.he provided financial support to the children from the time of their birth
4.he spent as much time with the children and participated in their lives to the maximum extent permitted by the respondents from the time of their births
5.currently he fulfils the role of full-time parent of the children and assumes all of the associated responsibilities and duties
6.the children have lived in the full-time care of Mr Seto and his wife Ms Yue since 5 March 2021.

The best interests of the children

The children were delivered into the care of the applicants on 5 March 2021. The applicants have assumed the role of primary carers and adopted complete responsibility for the financial support and overall well-being of the children. They are unchallenged contenders for the primary care of the children.
The respondents attempted to raise concerns as to the mental health or psychological stability of Ms Yue. To that end, a single expert report from Ms R was obtained on an urgent basis. Ms R acknowledged the limitations of her report as follows:
6.... I was only able to make necessary enquiries with mainly one of the parties involved within one session and had no access to the relevant information prior to the assessments.
Ms R discussed the incident on 9 January 2021 with Ms Yue and reported as follows:
27.According to Ms Yue, she had visited Ms Poon from the 6^th to 9^thJanuary 2021. During her visits, Mr Zhu kept attacking her verbally and said that the amount of money they paid was very little and not enough for getting two babies. He also kept saying that Ms Yue was not fit to be a good mother. Ms Yue said that she had kneeled to them and begged them to give her the baby. On the 9^thJanuary 2021, when Ms Yue and Mr Seto went to see the babies, a similar interaction happened again. Ms Yue was begging Ms Poon and Mr Zhu to give her the babies. She alleged that Mr Zhu pushed her away. Then, she started to become very emotional. As she was standing near the kitchen, she went into the kitchen and grabbed a knife to hit her own arm. She denied having threatened Ms Poon and Mr Zhu. She expressed that she was devastated at the moment as she thought she would never be able to get the babies. She thought she had lost everything. She was thinking of harming herself only instead of anyone else. Such acts were stopped by Mr Seto, who told her that he was still there to support her. However, she accused that Ms Poon was filming her with a phone.
Reflections of the incident
28.Ms Yue reflected that she was under a lot of stress at the time of the incident. She was very worried that she would not be able to get the babies after all that she had done. She stated that she did not intend to harm or threaten anyone. She was feeling hopeless and wanted to harm herself. She denied having suicidal ideation or thoughts ever in the last few years. She said she calmed down after her husband reminded her that they still have each other.
Within the limitations of her assessment, Ms R proffered the following opinions:
●Ms Yue was not impressed to be suffering from any formal psychiatric diagnoses
●On DASS21, Ms Yue showed normal levels of depression, anxiety and stress
●... even though her presentation did not fit the diagnostic criteria of any psychiatric diagnoses, she is still impressed to be suffering from emotional distress.
For these reasons, I am satisfied that there should be orders which provide that Mr Seto and Ms Yue have equal shared parental responsibility for the children and that they live with the applicants. It seems to me that a declaration that Mr Seto is a parent, namely the father, of the children pursuant to s 69VA of the Family Law Act would be in their best interests. The citizenship of the children is a matter beyond the jurisdiction of the court but clarity as to parentage may well be of assistance in this regard.
In my view, there should be no orders for the children to spend time with the respondents. There is no such application before the court and the attitude of the respondents to spend regular time with the children is an entirely unknown matter. There can be no certainty that the respondents would elect to spend time with the children regularly or at all. There must be a real risk that conflict would arise at changeovers, given the history between the four interested parties.
In all other respects, the Minute of Orders submitted by the ICL seems to me to meet the best interests of the children. I agree that all necessary steps should be implemented to cause their legal names to be W and Z. The reality is that they will grow up as the children of the applicants and thus should have the security of a surname in common with their legal father, Mr Seto, rather than Mr Zhu.

The file of F Solicitors

During the final hearing, I indicated that I considered that legal professional privilege had been waived and allowed access to the file of the former solicitors of the respondents. In reaching this conclusion, I had regard to the authorities Mann v Carnell (1999) 201 CLR 1 ("Mann v Carnell") and Esso Australia Resources Ltd v Commissioner of Taxation of the Commonwealth of Australia (1999) 201 CLR 49 ("Esso").
In her statement dated 20 February 2021 Ms Poon wrote inter alia:
80.We appointed Ms D as our lawyer on this matter and see legal advice from her.
81.Ms D explained to me that there is far more than what we received that Ms Yue should compensate us for. She drafted a letter for us trying to accomplish what she believed I deserve to get back from Ms Yue. This is my only time that I used legal advice. I was hoping to resolve the matter peacefully so that the babies can continue to be raised happily. I was waiting for Ms D's response since then because according to her advice, Mr Seto and his family will settle with me.
(As per the original)
In Mann v Carnell the majority (Gleeson CJ, Gaudron, Gummow and Callinan JJ) stated as follows:
29.Waiver may be express or implied. Disputes as to implied waiver usually arise from the need to decide whether particular conduct is inconsistent with the maintenance of the confidentiality which the privilege is intended to protect. When an affirmative answer is given to such a question, it is sometimes said that waiver is "imputed by operation of law". This means that the law recognises the inconsistency and determines its consequences, even though such consequences may not reflect the subjective intention of the party who has lost the privilege...
Their Honours said also:
34.... Disclosure by a client of confidential legal advice received by the client, which may be for the purpose of explaining or justifying the client's actions, or for some other purpose, will waive privilege if such disclosure is inconsistent with the confidentiality which the privilege serves to protect. Depending upon the circumstances of the case, considerations of fairness may be relevant to a determination of whether there is such inconsistency. The reasoning of the majority in Goldberg illustrates this.
In Esso the High Court of Australia (Gleeson CJ, Gaudron, Gummow and Callinan JJ) considered the "dominant purpose" test. The findings of the majority were summarised as follows:
Held, further, by Gleeson CJ, Gaudron, Gummow and Callinan JJ, McHugh and Kirby JJ dissenting, that the test at common law for legal professional privilege in relation to documents was whether a communication was made or a document was prepared for the dominant purpose of a lawyer providing legal advice or legal services and that test should be applied to the discovery and inspection of confidential written communications between lawyer and client.
I am satisfied that Ms Poon waived legal professional privilege when she elected to disclose the advice which she received from Ms D in her statement of 20 February 2021. I am satisfied further that the dominant purpose of the advice provided by Ms D was to maximise the amount of money which the respondents could obtain from the applicants in order to secure a handover of the children. For these reasons, I permitted access to the documents produced on subpoena by F Solicitors.
At the outset, it appeared to me that the circumstances of these proceedings may require a referral by the Court to the New South Wales Police and/or the Office of the Legal Services Commissioner of New South Wales. It seemed to me that the file of F Solicitors could have substantial relevance to these issues.

Referral of proceedings

I conclude that the proceedings should be referred to the Commissioner of Police for New South Wales, for investigation as to the consequences of a surrogacy arrangement which is an apparent breach of s 8 of the Surrogacy Act 2010 (NSW). It may be that additional offences were committed by the respondents and/or Ms D in the demands for payment of money in exchange for the children.
I conclude also that the conduct of Ms D should be drawn to the attention of the Legal Services Commissioner for New South Wales, for investigation as to whether she is a fit and proper person to hold a practising certificate.

I certify that the preceding seventy-one (71) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 11 May 2021.

Associate:

Date: 11 May 2021

[2021] FamCA 288

Key Legal Topics

Areas of Law

Family Law

Statutory Interpretation

Legal Concepts

Jurisdiction

Injunction

Privilege

Remedies

Standing