Sun & Yeng (No 2)
[2023] FedCFamC1F 854
•11 October 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Sun & Yeng (No 2) [2023] FedCFamC1F 854
File number SYC 8025 of 2022 Judgment of WILSON J Date of judgment 11 October 2023 Catchwords FAMILY LAW – MAJOR COMPLEX FINANCIAL PROCEEDINGS LIST – major issue in the litigation is the source of AUD $5 million claimed by the husband’s mother – money emanating from Country B – allegations that the AUD $5 million may have been illegally obtained – ruling during the running of the trial – husband’s mother complaining that no probative value is served by examining the source of funds by which AUD $5 million is transferred from Country B to Australia – held, cross-examination is perfectly permissible.
FAMILY LAW – PRACTICE & PROCEDURE – applicant’s application for adjournment to issue a subpoena to migration authorities – application granted.
Legislation Family Law Act 1975 (Cth), s 79
Conveyancing Act1919 (NSW), s 66F
Gaming and Betting Act1912 (NSW)
Cases cited Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 186 CLR 622
Black v Freedman (1910) 12 CLR 105
Black & Kellner (1992) 15 Fam LR 343
Cao & Trong [2022] FedCFamC1F 754
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Gollan v Nugent (1988) 166 CLR 18
Gordon v Chief Commissioner of Police [1910] 2 KB 1080
In the Marriage of Biltoft (1995) 19 FamLR 82
In the Marriage of Kannis (2002) 30 Fam LR 83
In the Marriage of Monte [1986] FamCA 1
John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd (2010) 241 CLR 1
Lamru Pty Ltd & Kation Pty Ltd (1998) 44 NSWLR 432
Nelson v Nelson (1995) 184 CLR 538
Pavey & Matthews v Paul (1987) 162 CLR 221
Paviello & Paviello [2022] FedCFamC1F 592
Russell v Wilson (1923) 33 CLR 538
Stanford v Stanford (2012) 247 CLR 108
Sun & Yeng [2023] FedCFamC1F 565
The Juliana (1822) 165 ER 1560
Division Division 1 First Instance Number of paragraphs 42 Date of last submission 4 October 2023 Date of hearing 25, 26, 27, 28 September 2023, 3 and 4 October 2023 Place Sydney Counsel for the applicant Mr L. Glick One of His Majesty’s Counsel with Mr J. Mellas of counsel Solicitor for the applicant Lander & Rogers Counsel for the first respondents Mr J. Lloyd of Senior Counsel with Mr G. Stapleton of counsel Solicitor for the first respondents Longton Legal Counsel for the second respondents Mr D. Brown One of His Majesty’s Counsel with Mr D. Edney of counsel2 Solicitor for the second respondents XR Consulting Pty Ltd ORDERS
SYC 8025 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN MS SUN
Applicant
AND MR YENG
First Respondent
MS HAU
Second Respondent
ORDER MADE BY
WILSON J
DATE OF ORDER
4 OCTOBER 2023
THE COURT ORDERS THAT
1.The applicant has leave to issue a subpoena to the Department of Home Affairs in relation to the second respondent husband’s visa application with all times for production abridged.
2.The further hearing of this proceeding is adjourned to 10:00am on 8 November 2023 for no longer than three days for the resumption of the part heard trial.
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 Sun & Yeng has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILSON J
THIS APPLICATION
On 4 July 2023, on the sixth day of the trial of this proceeding in the Major Complex Financial Proceedings List, upon a substantial volume of documents having been produced by the husband in response to a call made for their production while he was being cross-examined, counsel for the wife applied to adjourn the trial so that the documents produced could be translated and instructions obtained in respect of them prior to the resumption of the husband's cross-examination.
Debate about Mr Glick KC's adjournment application took most of the sixth day of a projected eight day trial.
THE OPPOSITION BY MS HAU
On behalf of Ms Hau (the husband's mother and the former mother-in-law of the applicant wife) Mr Brown KC opposed Mr Glick KC's application to interrupt the forward motion of this trial, arguing that no useful purpose would be served in granting the adjournment because any investigation into the propriety or otherwise with which money came into the hands of the claimant of that money (relevantly here, the husband's mother) could never provide an evidentiary or legal foundation for a defence to a claim for money had and received of the type made by the husband's mother in this litigation.
THE ISSUE IN CONTEXT
To better understand the factual basis underpinning this ruling, it is necessary briefly to touch upon certain factual issues raised thus far in the trial. Expressed most basically, in an application under s. 79 of the Family Law Act 1975 between the husband and the wife, the husband's mother has asserted an entitlement to funds in excess of AUD $5 million used in part to acquire certain real property. That property is not in the name of the husband's mother. The manner in which the husband's mother cast her claim to the AUD $5 million fluctuated up until the commencement of the trial, her claim having been struck out by my orders made on 7 July 2023 (Sun & Yeng)[1]. On 26 September 2023, on the second day of the trial, I granted the husband's mother leave to rely on her further amended points of claim. In that document, the second respondent for whom Mr Brown KC appeared, pleaded as follows –
(a)the second respondent (Ms Hau) is the first respondent's mother, the applicant's former mother-in-law and the separated wife of the husband's father;
(b)Ms Hau has no command of the English language, whether written or spoken;
(c)in early 2023 Ms Hau was informed by her migration agent that it was necessary to deposit AUD $5 million in Australian investments in order to obtain a significant investor visa in Australia;
(d)the husband assisted Ms Hau in establishing bank accounts to be used to receive funds transferred from Country B and then to make such investments as Ms Hau's migration agent advised her for the purposes of applying for the significant investor visa;
(e)two bank accounts, each with Commonwealth Bank of Australia, were opened in Ms Hau's name;
(f)Ms Hau authorised her son (the first respondent) to operate those two CBA accounts as an authorised signatory; and
(g)in 2019 the husband, in the exercise of his powers as an authorised signatory, drew AUD $5,851,860 in an unauthorised manner from Ms Hau's CBA accounts and deposited the entirety of the misappropriated funds into a bank account in the joint names of the husband and the wife from which the husband and the wife paid the balance of the purchase price on two parcels of real property at K Street, Suburb J in the state of New South Wales, such amounts aggregating $2,432,060.
[1] [2023] FedCFamC1F 565.
Ms Hau contended that when the misappropriated funds of AUD $5,851,860 were deposited in the joint account of the husband and the wife, the misappropriated funds were impressed with a constructive trust in favour of Ms Hau being the person from whom those funds had been fraudulently misappropriated. Ms Hau contended that the use of the misappropriated funds to purchase the Suburb J properties amounted, among other things, to a fraudulent breach of the constructive trust previously asserted.
Ms Hau alleged that legal title to the two Suburb J properties was held jointly by the husband and wife and that rent received by the husband and wife in respect of those two parcels of land had not been remitted to Ms Hau.
Ms Hau relied on the observations of the High Court in Black v Freedman[2] in contending that the husband's fraudulent misappropriation of the misappropriated funds constituted him as a constructive trustee of those funds. Ms Hau contended that the husband holds his interest in the Suburb J properties on a constructive trust for Ms Hau, rendering the husband liable to account to Ms Hau for any profits or other benefits earned by him from the Suburb J properties.
[2] (1910) 12 CLR 105.
As an alternative claim to the constructive trust case just narrated, Ms Hau advanced a restitutionary claim in which, so she asserted, a prima facie liability arose in the husband and the wife to pay the amount of the misappropriated funds to Ms Hau by way of an action for money had and received. Ms Hau's claim to money had and received was said to be grounded in the three contentions urged in paragraph 53 of Ms Hau's further amended points of claim. Those were –
(a)the transfer to the husband and the wife of the fraudulently misappropriated money;
(b)the fact that by reason of the transfer of the fraudulently misappropriated money to the husband and the wife, they were enriched at the expense of Ms Hau; and
(c)the fact that the payment of the misappropriated funds into the joint account of the husband and the wife occurred without Ms Hau's authority and without the husband or the wife having any proper entitlement to receive the misappropriated funds from Ms Hau.
Ms Hau then raised allegations predicated on her being required to prove certain matters in her money had and received claim. She contended that if contrary to her primary position, Ms Hau was required on her money had and received claim to prove that –
(a)the husband and wife did not receive the misappropriated funds as bona fide purchasers for value without notice of Ms Hau's ownership of the misappropriated funds;
(b)the husband and wife were on notice of Ms Hau's ownership of the misappropriated funds or their fraudulent misappropriation;
(c)the husband and wife continued to hold the misappropriated funds or their identifiable proceeds at the time the husband and the wife received notice of Ms Hau's ownership of the misappropriated funds; or
(d)it would be unjust for the husband and wife to not repay the misappropriated funds
then neither the wife or husband provided any consideration to Ms Hau in exchange for the transfer of the misappropriated funds into the joint account and neither the husband and the wife received the misappropriated funds into their joint account as bona fide purchasers for value.
Ms Hau contended that the husband had actual notice of Ms Hau's ownership of the funds and their fraudulent misappropriation as he was the person who fraudulently misappropriated the funds.
Ms Hau also contended that the misappropriated funds, having been used to fund the entirety of the purchase of the two Suburb J properties, transformed the Suburb J properties into identifiable proceeds of the misappropriated funds.
Ms Hau pleaded further alternatively again, that the wife had actual notice of Ms Hau's ownership of the misappropriated funds, of their fraudulent misappropriation and of their use in the purchase of the two Suburb J properties. Ms Hau contended that it would be unjust for the husband and the wife to not repay the misappropriated funds to Ms Hau.
In terms of the relief sought, Ms Hau alleged that the husband holds his interest in the Suburb J properties on a constructive trust for Ms Hau and that Ms Hau is a co-owner of the Suburb J properties within the contemplation of s. 66F of the Conveyancing Act1919 (NSW). Ms Hau contended that she was entitled to seek orders for the appointment of trustees for the sale of the Suburb J properties and that both the husband and the wife were liable to pay to Ms Hau the amount of the misappropriated funds as money had and received along with other relief concerning interest.
The wife was cross-examined at length about her role in the procurement of the sum of AUD $5 million which Ms Hau needed to support the application for the significant investor visa. In particular, the wife was pressed about her role in a trail of emails between the migration agent and the husband's parents in connection with the husband's parents' application for a significant investor visa. In essence, the wife gave evidence that she received the emails from the migration agent then the wife on-sent them. Those emails became exhibits as part of Ms Hau's case.
On 28 September 2023, when Mr Brown KC was cross-examining the wife about the sum of AUD $5 million that Ms Hau and her husband needed in relation to the migration visa application,[3] Mr Glick KC as counsel for the wife raised with me whether the documents about which the wife was being cross-examined had been discovered.[4] Mr Brown KC answered by stating that the documents were discovered on Tuesday, 26 September 2023. That provoked Mr Glick KC to make a call on the husband on 28 September 2023 for the husband to produce the whole of the file from the Department of Foreign Affairs and Trade.[5]
[3] T234.
[4] T235.
[5] T236, T237 and T238.
THE DOCUMENTS PRODUCED
At 10:00am on the sixth day of the trial of this proceeding, Mr Glick KC announced that the husband had produced a collection of documents in response to Mr Glick KC's call. Some of the documents were in the English language while others were in Country B language. Mr Glick KC highlighted a form 80 (presumably prepared under the Migration Regulations) recording in typed form the husband's father's personal particulars for assessment including character assessment in connection with a visa as a temporary resident. Who prepared that form was not stated nor was the identity of the person who made handwritten annotations to the form. Mr Glick KC said he wanted to explore issues about that form with the husband during the husband's cross-examination. Other documents in the Country B language were produced which Mr Glick KC said needed to be translated, especially those from L Pty Ltd. Other documents still revealed that the husband's father had applied for a visa in the significant investor stream. On 7 August 2023 (over 10 years ago), Ms M of the Australian Department of Immigration wrote by email to the husband's father informing the husband's father that he had informed the consulate that the husband's father would use the AUD $5 million held by CBA to make what was called "the complying investment". Ms M wrote in the relevant signed declaration. It was said that the source of funds emanated from the husband's father's employment or business income yet the bank records provided revealed that recent deposits in substantial amounts were made into the husband's father's bank account with N Bank prior to those funds being transferred to the husband's father's bank account with CBA. Ms M sought further evidence of the source of funds from the bank in the form of historical bank records to support the accumulation and continuous ownership of the nominated funds to make the complying investment for the year 2010 with further evidence of profitability of P Ltd or any other business from which the husband's father had generated the source of the said funds. Ms M stated in her email that such further information should take the form of financial statements corroborated by enterprise income tax returns and representative payment receipts.
That email was written in the English language. The email chain at the top of the email reveals that Ms M's email went from Ms M of Department of Foreign Affairs and Trade to a person called Mr Q of L Pty Ltd. The email chain also included Ms R of L Pty Ltd, the wife as well as the husband.
Another email produced by the husband incorporated a letter dated 15 October 2023 from Ms M of Department of Immigration and Citizenship, written in the English language, addressed to the husband's father at an address in Country B. The opening line of the letter from Ms M stated that Ms M wished to advise that the husband's father's application for a visa had reached the stage that the visa applicant was invited to select and make a complying investment of at least AUD $5 million.
Self-evidently, the answers to interrogatories posed by Ms M in her earlier email of 7 August 2023 had been satisfactorily answered because the visa application had progressed by 15 October 2013 to the visa applicant being invited to select the mechanism by which he (repeat, he) would provide the required investment of AUD $5 million. Mr Glick KC submitted that the husband had selectively provided certain information by way of disclosure but not the totality of the information about the husband's father's visa application and, more importantly, of the sum of AUD $5 million deposited to become what has been described in this litigation as "the Waratah Bond". It will be recalled that a cornerstone of this litigation is the contention of Ms Hau concerning the AUD $5 million that was wrongfully appropriated from her CBA accounts then deposited into the joint accounts of the husband and wife and applied, at least as to part, in the acquisition of the two Suburb J properties.
Mr Brown KC submitted that the antecedent history of how the AUD $5 million came into the hands of Ms Hau and her then husband to be deposited into Ms Hau's bank account was a ruse and an unnecessary distraction. He submitted that the evidence incontrovertibly revealed that the sum of AUD $5 million was in fact sourced from Country B and paid into an Australian bank. He submitted that Ms Hau has rights under principles relevant to the doctrine of money had and received for the return of the sums that were misappropriated and that Ms Hau also has rights to trace those funds into assets, to the extent that the misappropriated funds were converted from cash into one or more assets.
Mr Brown KC relied on a short document in the nature of written submissions headed "second respondent's outline of submissions regarding irrelevance of issues being explored in cross‑examination'". It is utile to paraphrase the propositions advanced in that submission.
At the forefront, Mr Brown KC contended that the propositions advanced by Mr Glick KC in his cross-examination of the husband were irrelevant and should not be permitted to go further. Under the rubric of his client's opposition to the wife's adjournment application, in reality, counsel for Ms Hau advanced the contention that Mr Glick KC's cross-examination about the source of funds from Country B underpinning the deposit into Ms Hau's account of AUD $5,851,860 was irrelevant in respect of which Ms Hau sought a ruling from me.
Mr Brown KC paraphrased the two threads of Mr Glick KC's cross-examination about the sum deposited into Ms Hau's account. First, it was said that the cross-examination was directed to demonstrating that the deposited sum had been generated by some kind of illegality and that Ms Hau should be denied the relief she seeks by reason of that illegality. Second, it was said that the deposited funds of AUD $5,581,860 were not exclusively Ms Hau's legal and beneficial property but rather they were owned in part by Ms Hau's former husband (the husband's father) who, not being a party to this proceeding, attracted the operation of principles espoused by the High Court of Australia in John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd.[6]
[6] (2010) 241 CLR 1.
So far as the illegality argument was concerned, Mr Brown KC contended that it is no defence to a claim for the recovery of property to argue that the plaintiff came into possession of the property improperly. In support of that contention, Mr Brown KC relied on the observations of the High Court in Russell v Wilson.[7] That case related to a suit brought by the owner of an illegal gaming house to recover cash and cheques seized by police which the police sought to retain by arguing that the gaming house owner had no lawful title to the cash and cheques having regard to the fact that the gaming house owner had obtained the money through unlawful gaming.
[7] (1923) 33 CLR 538.
Mr Brown KC contended that Russell v Wilson stands for the proposition that a suit for the recovery of property taken from a plaintiff may not be defended by challenging the plaintiff's title without the defendants themselves asserting a superior title. To my way of thinking, that distillation is unduly simplistic. While true that all six members of the High Court dismissed the appeal, separate reasons were provided by all except Isaacs and Rich JJ. I drew nothing to support Ms Hau's contentions from the reasons of Knox CJ. Higgins J relied on issues concerning the limitation period provided for in the legislation with which the case was concerned as did Gavan Duffy J. Starke J relied on the wording of the Gaming and Betting Act1912 (NSW). So far as the joint judgment of Isaacs and Rich JJ was concerned, their Honours expressly observed that the contention between the police and the gaming house owner did not involve any reliance upon any illegal transaction.[8] That is very far from the challenge advanced in this litigation. Isaacs and Rich JJ provided observations about possession of the cheques and cash, the rights that such possession conferred, the consequences of any break in possession and the legal rights that flowed from possessory title.
[8] Russell v Wilson (1923) 33 CLR 538, 546.
That case has little if anything to do with the facts of this case. This case is not one properly characterised as a "finder's case" where possession of an item is said to confer a title greater than all but the true owner. Nor is this case one involving the jus tertii doctrine. Nor is this case one to which the observations about the Gaming and Betting Act are pertinent or applicable.
So far as the wife's cross-examination of the husband about beneficial ownership of the sum of AUD $5,581,860 was concerned, Mr Brown KC submitted that no doubt could be seriously raised that the misappropriated funds came from an account in Ms Hau's sole name with the consequence that she was the legal owner of that money in her account. Mr Brown KC submitted that even if it were the fact (and Ms Hau did not concede as much) that Ms Hau held the legal title but not the full beneficial ownership of the money that was misappropriated, that would not provide a defence to Ms Hau's money had and received claim. That, so he argued, was for the simple reason that any claim involving the rights or property of a trust should ordinarily be invoked by the trustee.[9]
[9] Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432, 436.
In reply to Mr Brown KC's contentions, Mr Glick KC submitted that Ms Hau's propositions were misconceived. Mr Glick KC stepped through the logic of his contentions in the following manner –
(a)in accordance with the principles adumbrated in Stanford v Stanford,[10] the first task of the Court is the identification of the legal and equitable interests of the parties;
[10] (2012) 247 CLR 108.
(b)here, Ms Hau raises a claim for the misappropriated funds, relying on the common law doctrine of money had and received in which it is relevant to investigate whether it is unjust for the recipient to retain the money allegedly had and received;
(c)who must prove the requisite injustice is in issue in the money had and received claim;
(d)it may become a proven fact that Ms Hau brought the money into Australia in a manner contrary to the law of Country B and if that becomes the fact, evidence of foreign law (the law of Country B relating to the removal of sums of or greater than a particular amount) may become relevant in which case an application to adduce foreign law may be applicable;
(e)the propositions advanced on behalf of Ms Hau when relying on concepts of detinue and jus tertii are not on point;
(f)even if Ms Hau contends that the misappropriated money was owned by her both legally and beneficially, the documentation from the Department of Immigration and Citizenship dated 15 October 2013 is addressed to Ms Hau's then-husband (that is to say, the husband's father) and it invited the husband's father to select the form of investment that he chose when investing AUD $5 million in Australia;
(g)that letter was not addressed to Ms Hau;
(h)Mr Glick KC rhetorically posed the question whether Ms Hau was the agent for a disclosed principle;
(i)by Ms Hau baldly asserting that the money was her own did not lead to the conclusion that any part of the responsibility to repay the money should be attributed to the wife, or for that matter to the husband because the Court retains a discretion to be exercised judicially to ascribe to one or other of the husband or the wife the responsibility to repay it (that is, consonant with the holdings in Cao & Trong[11]);
(j)it is wrong for a submission to be advanced on behalf of Ms Hau to contend that the skirmish between the husband and the wife does not necessarily draw into the debate any questions of the origin of the funds or the manner in which those funds were transmitted to Australia;
(k)at a factual level, the source of the funds from Country B and the role of each party in this litigation necessarily underpins considerations relevant to the justice and equity of the making of an order under s. 79 of the Act;
(l)the traceable proceeds of the money misappropriated from Ms Hau's account totals $2.2 million in the Suburb J properties, and it is no defence to a money had and received claim by raising Torrens system indefeasibility;
(m)even if Ms Hau persuaded me that she is entitled to the full sum on her money had and received claim, in the exercise of the Court's discretion under s. 79 of the Family Law Act, it is nevertheless competent for me to conclude that the husband should pay the sum ordered to be paid to Ms Hau out of the amount awarded in the husband's favour;
(n)if it is found that the husband's compliance with his disclosure duties was defective,[12] at one extreme, a Court addressing a s. 79 application is entitled to award 100% of the property pool in favour of the party not in default of his or her disclosure duties;[13] and
(o)if Ms Hau succeeds on her common law claim to money had and received, she would become a creditor and, in accordance with principles espoused In the Marriage of Biltoft,[14] it is wholly discretionary whether the Court undertaking a s. 79 exercise orders the whole or part of the creditor’s claim to be met by each party equally, or whether the creditor’s claim is to be met from one or other of the parties, or if a finding is here made of the sort as was made in Nelson v Nelson[15] of illegality, then the Court may decline to lend its aid at all.
[11] [2022] FedCFC1F 754.
[12] Paviello & Paviello [2022] FedCFamC1F 592, 7.
[13] In the Marriage of Monte [1986] FamCA 1; Black & Kellner (1992) 15 Fam LR 343; and In the Marriage of Kannis (2002) 30 Fam LR 83.
[14] (1995) 19 FamLR 82.
[15] (1995) 184 CLR 538.
CONSIDERATION
The first question is the probative value about cross-examination concerning the source of funds making up the sum of AUD $5,581,860 in Ms Hau's account immediately prior to the alleged fraudulent misappropriation.
To my way of thinking, the cross-examination was relevant to one or more of several matters. Those were –
(a)precisely where the sum of AUD $5,581,860 came from, that is to say, from what source account did it come and whether that sum was made up of several smaller sums which aggregated a total of AUD 5,581,860;
(b)how, if Ms Hau's former husband was the visa applicant who was invited to choose the source of his investment in Australia, the money came to be deposited in an account in Ms Hau's name, not in the name of the visa applicant;
(c)whether any contravention of Country B law was involved in transmitting such a large sum as AUD $5,581,860 from Country B to Australia; and
(d)whether the husband's father is entitled to make any form of claim (legal or equitable) in respect of the sum allegedly misappropriated (AUD $5,581,860) and if so, whether according to John Alexander's Clubs Pty Ltd v White City Tennis Club Ltd, the husband's father is a necessary party to this litigation.
I am not prepared to accept Ms Hau's contention at this stage of the litigation that Ms Hau has an unimpeachable title as full legal and beneficial owner of the sum of AUD $5,581,860 to an order for the return to her of that sum. If the funds came to be deposited in Ms Hau's account by being partially supplemented by funds supplied by Ms Hau's former husband, he may well be entitled to those funds, whether in whole or in part. If the cross-examination of the husband elucidates evidence that the husband's father has contributed funds to make up his claim of AUD $5,581,860 then, prima facie at least, the husband's father may have a claim to the funds and at present, he is not a party to the proceeding. It seemed to me that the cross-examination of the husband was purposeful in that respect.
I reject the contention that cases such as Russell v Wilson, Gordon & Chief Commissioner of Police,[16] or Gollan v Nugent[17] are apposite. Each involved factual issues very far removed from the facts with which this case is concerned. This case does not involve questions of a person's possessory title or of the jus tertii. However, this case does involve issues about the source of the sum of AUD $5,581,860 standing in Ms Hau's account immediately prior to the alleged misappropriation.
[16] [1910] 2 KB 1080.
[17] (1988) 166 CLR 18.
Further, the cross-examination legitimately explores how the visa applicant (the husband's father) chose to invest in Australia and how the money came (from whatever may have been its source) to be banked in Ms Hau's account, rather than in the account of the visa applicant.
The second issue related to the so-called illegality of transferring the amount of AUD $5,581,860 from Country B to Australia. Factual issues of the sort canvassed in Nelson v Nelson[18] may well be enlivened. The consequences of any illegality, if illegality is somehow demonstrated, may invoke the statement of principle offered by Deane and Gummow JJ in Nelson,[19] namely, that where principles of illegality operate, the result is to impugn the plaintiff's legal and equitable rights.
[18] (1995) 184 CLR 538.
[19] Nelson v Nelson (1995) 184 CLR 538, 550.
Mr Brown KC purported to invoke the notion that Ms Hau, as the one-time possessor of the sum of AUD $5,581,860, had an unimpeachable title to that money against anyone other than the true owner. It is too early to express a concluded view on that submission, except to say that the observations of Deane and Gummow JJ in Nelson point in the opposite direction. Where illegality is proved leading to the consequence that illegality operates, the plaintiff's legal and equitable rights are impugned.
On behalf of the wife, Mr Glick KC is currently cross-examining the husband with a view to elucidating the precise source of the AUD $5,581,860 and how that money was generated. That seems to me to be perfectly permissible. Whether Mr Glick KC is able to establish that some or part of the sum of AUD $5,581,860 was derived from funds obtained in breach of Country B law remains to be seen. However, he should not be prevented from exploring that.
The next issue to which the cross-examination of the husband was legitimately directed related to –
(a)the justice of making the orders sought by Ms Hau on the money had and received claim; and
(b)the overall justice and equity of making a s. 79 order on the application of the husband and wife.
In addition, it must be kept uppermost in mind that in this litigation, I am exercising the equitable jurisdiction of the Court and that in accordance with principles of equity recited by Lord Stowell in The Juliana,[20] whereas a court of law works its way to short issues and confines its views to them, a court of equity takes a more comprehensive view and looks to every connected circumstance that ought to influence its determination upon the real justice of the case.
[20] (1822) 165 ER 1560, 1567.
This case has not yet reached the stage where counsel have been invited to make full and exhaustive submissions in relation to Ms Hau's claim based on money had and received. However, in openings, enough has been already said of the asserted claim to money had and received to record certain propositions. They are as follows –
(a)whereas actions at common law for money had and received were once identified as a species of quasi-contractual claims, since Pavey & Matthews v Paul,[21] a claim for money had and received is now a species of unjust enrichment;
(b)that taxonomy has been repeated in Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation;[22]
(c)primary liability turning on the unconscionable retention of the property has been rejected by the High Court in David Securities Pty Ltd v Commonwealth Bank of Australia;[23] and
(d)unjust enrichment is not a cause of action in and of itself although it will properly found declaratory relief and so the relevant remedy is restitutionary in nature.
[21] (1987) 162 CLR 221.
[22] (1988) 186 CLR 622.
[23] (1992) 175 CLR 353, 378 – 379, 385.
I take the view that Mr Glick KC's cross-examination of the husband is purposeful and I overrule the objection in respect of it.
SUBPOENA
Mr Mellas, junior counsel for the wife, sought leave to issue a subpoena to the Department of Home Affairs as the successor in title to the Department of Immigration and Citizenship. That subpoena was for the production of the entire file connected with the husband's father's visa application. In my view, leave should be granted for the issue of that subpoena and for all relevant times under the Rules to be abridged in connection with the production of that document.
FURTHER HEARING
The trial in this proceeding will resume on 8, 9 and 10 November 2023 with counsel addressing written submissions on 5 December 2023.
I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Wilson. Associate:
Dated: 11 October 2023
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