Shuren & Fang (No 8) - [2024] FedCFamC1F 826

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Shuren & Fang (No 8) [2024] FedCFamC1F 826

File number: MLC 3815 of 2023

Judgment of: AUSTIN J

Date of judgment: 2 December 2024

Catchwords: FAMILY LAW – PRACTICE AND PROCEDURE – Review of decision – Property – Where the husband did not ultimately seek the remedial orders set out within his Application for Review – Where the husband instead sought the discharge of orders comprising restrictive and mandatory injunctions – Where the wife acknowledged an unconditional embargo prohibiting the husband from dealing with the unitholding of a company of which he is the sole director was unnecessary – Where the husband will be required to give the wife notice of any intended restructure of the unitholding – Where the orders of the registrar require the husband to deposit any money received by him or the company he controls into the trust account of his solicitors – Where the orders impede the husband’s conduct of a financially viable business – Where the wife’s interest in financial transparency will be achieved by ensuring she is kept appraised of money movements – Where the orders of the registrar compelled the husband to retain residual money realised on the sale of a property by his company – Where the money is the property of the company and the husband wishes to use it to pay pressing debts owed by another company – Where the balance of convenience does not favour retention of the injunction – Where several orders of the registrar are discharged and replaced by substitute orders – Ordered Application for Review otherwise dismissed.

Legislation: Family Law Act 1975 (Cth) Pt VII, ss 79A, 114

Cases cited: Tsiang & Wu & Ors (2019) FLC 93-911; [2019] FamCAFC 128

Division: Division 1 First Instance

Number of paragraphs: 45

Date of hearing: 2 December 2024

Place: Newcastle (via Webex)

Counsel for the Applicant: Dr Smith

Solicitors for the Applicant: Australian Legal Advisory Centre

Counsel for the First, Second and Third Respondents: Mr Shaw KC and Ms Swart

Solicitors for the First, Second and Third Respondents: Ascot Solicitors

Solicitors for the Fourth Respondent: No appearance
ORDERS

MLC 3815 of 2023

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS SHUREN

Applicant

AND:
MR FANG

First Respondent

B PTY LTD

Second Respondent

C PTY LTD (and another named in the Schedule)

Third Respondent

ORDER MADE BY:

AUSTIN J

DATE OF ORDER:

2 DECEMBER 2024

THE COURT ORDERS THAT:
1.The following orders are set aside:
(a)Orders 2, 3 and 4(b) made on 18 July 2024; and
(b)Order 6 made on 14 October 2024.

2.The husband must give the wife 28 days’ notice in writing of his intention as director of OO Pty Ltd (being the trustee of the OO Unit Trust) or K Pty Ltd to:
(a)cause K Pty Ltd to divest any of its current unitholding in the OO Unit Trust;
(b)cause the dilution of the current percentage unitholding of K Pty Ltd in the OO Unit Trust; or
(c)encumber the unitholding of K Pty Ltd in the OO Unit Trust.

3.The husband must give the wife 28 days’ notice in writing of his intention as director of OO Pty Ltd (being trustee of the OO Unit Trust) or K Pty Ltd to disburse from the assets of either corporation any single payment of $50,000 or more by way of loan, dividend, income, payment of a debt, or in any other form of financial accommodation to another person or entity.
4.By the seventh day of each calendar month, commencing on 7 January 2025, the husband shall furnish to the wife a written report of all financial transactions in the prior calendar month between himself and/or any of the corporations referred to in Order 3 made on 19 April 2023.
5.By 7 January 2025, and on the seventh day of each calendar month thereafter, the husband shall account to the wife in writing for the expenditure of the remaining proceeds realised on the sale by K Pty Ltd of the real property known as SS Street, Suburb F, Victoria until the proceeds are exhausted.
6.Otherwise:
(a)the Application for Review filed on 8 August 2024 is dismissed; and
(b)any and all other outstanding applications for interlocutory orders filed before 8 August 2024 are dismissed.

7.The husband’s application against the wife for costs of and incidental to the review hearing is dismissed.

NOTATION
A.The husband does not require the publication of reasons for Order 7 hereof.

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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of 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 the pseudonym Shuren & Fang has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE
REASONS FOR JUDGMENT
AUSTIN J:

These reasons dispose of the husband’s application to review the orders made by a senior judicial registrar (“the registrar”) on 18 July 2024.
Background
The spouses separated in 2015. Final property orders under Pt VII of the Family Law Act 1975 (Cth) (“the Act”) were first made between them in February 2016, with their consent.
In October 2020, those orders were set aside under s 79A(1A) of the Act and replaced by other property orders, again with the spouses’ consent.
The spouses were divorced by an order made in late 2020.
The wife commenced the current proceedings under Pt VII of the Act in April 2023, seeking substitute property adjustment orders, preceded either by the October 2020 orders being set aside under one or more sub-sections of s 79A of the Act or by an extension of time within which to review the October 2020 orders (they having been consensually made by a registrar exercising delegated judicial power).
The threshold dispute over the wife’s challenge to the October 2020 orders has been separately listed for hearing next year before a judge of the Federal Circuit and Family Court of Australia (Division 1) in August 2025 (Order 3 made on 14 October 2024).
In the meantime, multiple sets of interlocutory orders have been made between the spouses and related corporations which have been joined as parties to the proceedings. Some orders have been made consensually and others following contested hearings.
Relevantly for present purposes, the registrar made a series of interlocutory orders on 18 July 2024 and, by an Application for Review filed on 8 August 2024, the husband now reviews the registrar’s exercise of delegated power.
The registrar’s orders supposedly determined a myriad of outstanding interlocutory disputes and had this effect: the joinder of a corporation as the fourth respondent (Order 1); two restrictive injunctions against the husband (Orders 2 and 3); a mandatory injunction against the husband (Order 4); the dismissal of various interlocutory applications and responses (Orders 5 and 6); and multiple other procedural orders (Orders 7–19).
The application purported to review all 19 orders made by the registrar.
Proposals
At the review hearing, the husband confirmed he did not seek to discharge all 19 orders made by the registrar and he sought none of the remedial orders set out within his review application. Instead, he only sought the discharge of Orders 2, 3 and 4(b) made by the registrar. The wife did not oppose the husband’s belated oral amendment of the review application.
Orders 2, 3 and 4(b) made by the registrar provide as follows:
2.The Husband be restrained by injunction from dealing in any way with the unit holding in the [OO Unit Trust] of [K Pty Ltd].
3.Any proceeds of sale, distributions, or funds arising from loans or entitlements available to the Husband and/or [K Pty Ltd] as a result of the unit holding in the [OO Unit Trust] of [K Pty Ltd] from the date of these Orders be held on trust by the Husband’s solicitor pending the final determination of the Wife’s substantive application or otherwise by order of this Court.
4. Forthwith, and by close of business on 19 July 2024:
…
(b)the Husband deposit all remaining proceeds of sale from the sale of [SS Street, Suburb F] (being those funds not already expensed as at 15 July 2024 where those sums otherwise require explanation at paragraph 4(a) herein) into the Husband’s solicitors’ trust account with such funds to be held in an interest-bearing account on trust for the Husband pending the final resolution of the proceedings or further order.
The wife simply sought retention of those orders.
The second and third corporate respondents were commonly represented by the husband’s lawyers and supported the husband’s application. The fourth corporate respondent did not appear.
Evidence
The husband relied upon three affidavits he filed on 16 July 2024, 7 August 2024 and 26 September 2024.
The wife relied upon her affidavit filed on 20 August 2024.
Factual and legal premise of the dispute
The husband is a property developer and pursues that business through an intricate structure of corporations and trusts.
The husband is the sole director of and exclusive shareholder in K Pty Ltd. K Pty Ltd was the owner of a parcel of real property in Suburb F, Victoria (“the Suburb F property”), the sale of which settled in mid-2024. All but $108,000 of the net proceeds of sale have already been disbursed. The residual $108,000 is currently held in trust by the husband’s solicitors, as required by Order 4(b) made by the registrar,
The husband is also the sole director of OO Pty Ltd, which corporation is the trustee of the OO Unit Trust (“the unit trust”).
There are four corporate unitholders in the unit trust. K Pty Ltd is one of the unitholders and holds 37 per cent of the units.
Order 2 made by the registrar forbids the husband from “dealing in any way” with K Pty Ltd’s unitholding in the unit trust.
Order 3 made by the registrar forbids the husband from using any money which flows to either him or K Pty Ltd from the unit trust and requires such money to be held on trust by his solicitors.
The wife asserts the husband, if unchecked, is liable to conduct his financial affairs in such a way as to put assets beyond her reach and thereby stymy her efforts to go behind the orders made in October 2020 and to obtain fairer substitute property settlement orders between them. Part of her underlying case is that the husband substantially under-valued the assets available for distribution between them in October 2020.
The husband contends the parties agreed upon the value of the assets divided between them by the October 2020 orders and the wife is unlikely to ultimately demonstrate any basis to vary those orders. In the meantime, he contends he should not be constrained in the manner he sees fit to manage his business and minister his assets. To the extent that some impingement is justified, he contends the current orders go far beyond what is necessary.
Orders 2, 3 and 4(b) comprise an admixture of restrictive and mandatory injunctions made under s 114 of the Act.
The wife’s counsel informed the Court that she proffered an undertaking as to damages in the usual form to support the retention of Orders 2, 3 and 4(b).
The parties agreed the applicable legal principles which govern the dispute are those distilled by the Full Court in Tsiang & Wu & Ors (2019) FLC 93-911, though they advocate for different outcomes in the application of those principles. At the heart of those principles lies the propositions that, when there is a serious issue to be tried, the Court may preserve assets pending resolution of the justiciable issue and the exercise of such discretion is guided principally by the balance of the parties’ convenience.
It is not in doubt the serious issue to be tried is the wife’s application to unravel the October 2020 orders. Were it not a serious issue, the husband would presumably have already tried to summarily dismiss the wife’s application, which he has not done. The gravamen of the current dispute is therefore the enquiry into, and the balancing of, the parties’ convenience.
As the following reasons attempt to explain, Orders 2, 3 and 4(b) impose restrictions upon the husband which are too onerous and, in an exercise of discretion de novo, require amelioration but not complete eradication.
Order 2
This order prohibits any form of dealing with K Pty Ltd’s unitholding in the unit trust. The prohibition is unconditional.
The husband deposed that, in his capacity as directors of both OO Pty Ltd and K Pty Ltd, he is saddled with the burden of ensuring the property developments are profitable, which may entail raising contributions to the unit trust by the unitholders. To ensure the financial viability of the unit trust and the projects under its auspices, it is essential the unitholdings in the unit trust are kept flexible. He foresees the prospect of K Pty Ltd either increasing or decreasing the percentage share of its unitholdings in the unit trust or perhaps the need for K Pty Ltd to borrow money against the security of its unitholdings.
The wife properly acknowledged her interests would be satisfactorily preserved by requiring the husband to give her adequate notice of any intended re-structure and so an unconditional embargo upon any dealing with the K Pty Ltd unitholdings was unnecessary. Conversely, the husband conceded he could not be heard against an order compelling him to give the wife such notice. Order 2 will be discharged and replaced by an order in those mollified terms.
Order 3
This order requires the husband to ensure that any money received by him or K Pty Ltd from the unit trust is deposited into the trust account of his solicitors and held there in trust until the cause of action is finalised.
The wife is understandably alarmed at the freedom and extent of the husband’s expenditure because he conceded in his affidavit millions has been spent in the past year by him and the entities he controls in the course of his business activities. He also deposed to regularly moving large sums of money between the entities he controls and to the large sums of money which such entities need to pay to third parties, like banks and taxation authorities, to remain solvent.
Given the size of the husband’s financial empire, the flow of money is important to stability. An order which compels the husband to park all the money he and K Pty Ltd receive from the unit trust in his solicitors’ trust account is an unrealistic solution to the problem perceived by the wife.
Essentially, she is interested in financial transparency. Rather than impeding the husband’s conduct of a financially viable business, it is better to ensure she is kept appraised of money movements. That can be achieved in two ways: first, by compelling the husband to notify her in advance of any payment in the course of business made by OO Pty Ltd or K Pty Ltd to him, any related entity, or any third party in the sum of $50,000 or greater; and secondly, by requiring the husband to report to her on a monthly basis in respect of all financial transactions (regardless of amount) which occur between himself and related entities.
In the first respect, the requirement of notice will not capture the payment of lesser sums and thereby not unduly burden the husband. The figure of $50,000 is picked in an exercise of discretion as balancing the weight of the reporting onus on the husband against the need for the wife to be kept informed of significant transactions.
In the second respect, the monthly report will capture transactions between the husband and those corporate entities which the parties formerly agreed were relevant to the proceedings. In April 2023, the parties agreed upon an order requiring the husband to provide the wife with weekly bank statements of eight corporations, including OO Pty Ltd and K Pty Ltd. An order will complement that order, requiring the husband to report monthly to the wife on transactions between him and those same entities.
Order 3 will be discharged and replaced with orders to that effect. One order made by Strum J in October 2024, varying the April 2023 order, will also be discharged. The husband’s reporting obligations will then be covered by the unvaried order made in April 2023 and these orders.
As I understood the parties’ ultimate positions during submissions, neither wanted to be heard in opposition to the variation of their obligations in that way.
Order 4(b)
This order compels the husband to retain in his solicitors’ trust account the residual $108,000 realised on the sale of the Suburb F property by K Pty Ltd.
The remaining money is the property of K Pty Ltd. The husband deposed he wants to use the money to pay pressing debts owed by OO Pty Ltd. If used in that way, the money advanced by K Pty Ltd to OO Pty Ltd would be recorded in bank transfers and the financial accounts of both K Pty Ltd and OO Pty Ltd. It would also be picked up by the preceding order, which will require the husband to report to the wife on all financial transactions between OO Pty Ltd and K Pty Ltd. It will also be picked up in the corporate bank statements which the husband is required to give the wife on a weekly basis under the orders made in April 2023.
The balance of convenience does not favour the retention of the injunction in the form of Order 4(b). Under the orders made consensually in October 2020, the wife agreed to the husband retaining his shareholding in K Pty Ltd and so consequently, indirectly, ownership of the Suburb F property. As articulated, her present grievance is principally with the husband’s under-valuation of the unit trust. Even if she now retrospectively considers the Suburb F property was also under-valued, the sum of $108,000 over which they are arguing is but a small component of the wider dispute over many millions of dollars.
Disposition
Orders made in July 2024 and October 2024 are discharged and replaced by substitute orders in the manner explained.
Otherwise, the review application is dismissed and, for clarity, any and all other outstanding applications for interim orders which preceded the filing of the review application on 8 August 2024 are also dismissed.

I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Ex Tempore Reasons for Judgment of the Honourable Justice Austin.
Associate:
Dated: 4 December 2024
SCHEDULE OF PARTIES

MLC 3815 of 2023

Respondents

Fourth Respondent:

HH PTY LTD

File number:	MLC 3815 of 2023
Judgment of:	AUSTIN J
Date of judgment:	2 December 2024
Catchwords:	FAMILY LAW – PRACTICE AND PROCEDURE – Review of decision – Property – Where the husband did not ultimately seek the remedial orders set out within his Application for Review – Where the husband instead sought the discharge of orders comprising restrictive and mandatory injunctions – Where the wife acknowledged an unconditional embargo prohibiting the husband from dealing with the unitholding of a company of which he is the sole director was unnecessary – Where the husband will be required to give the wife notice of any intended restructure of the unitholding – Where the orders of the registrar require the husband to deposit any money received by him or the company he controls into the trust account of his solicitors – Where the orders impede the husband’s conduct of a financially viable business – Where the wife’s interest in financial transparency will be achieved by ensuring she is kept appraised of money movements – Where the orders of the registrar compelled the husband to retain residual money realised on the sale of a property by his company – Where the money is the property of the company and the husband wishes to use it to pay pressing debts owed by another company – Where the balance of convenience does not favour retention of the injunction – Where several orders of the registrar are discharged and replaced by substitute orders – Ordered Application for Review otherwise dismissed.
Legislation:	Family Law Act 1975 (Cth) Pt VII, ss 79A, 114
Cases cited:	Tsiang & Wu & Ors (2019) FLC 93-911; [2019] FamCAFC 128
Division:	Division 1 First Instance
Number of paragraphs:	45
Date of hearing:	2 December 2024
Place:	Newcastle (via Webex)
Counsel for the Applicant:	Dr Smith
Solicitors for the Applicant:	Australian Legal Advisory Centre
Counsel for the First, Second and Third Respondents:	Mr Shaw KC and Ms Swart
Solicitors for the First, Second and Third Respondents:	Ascot Solicitors
Solicitors for the Fourth Respondent:	No appearance

MLC 3815 of 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MS SHUREN Applicant
AND:	MR FANG First Respondent B PTY LTD Second Respondent C PTY LTD (and another named in the Schedule) Third Respondent

ORDER MADE BY:	AUSTIN J
DATE OF ORDER:	2 DECEMBER 2024

MLC 3815 of 2023
Respondents
Fourth Respondent:	HH PTY LTD