Vang & Chung (No 6)

Case [2024] FedCFamC1F 604

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Vang & Chung (No 6) [2024] FedCFamC1F 604

File number(s): SYC 1433 of 2020
Judgment of: HARPER J
Date of judgment: 10 September 2024
Catchwords:

FAMILY LAW – PRACTICE AND PROCEDURE – Application in a Proceeding – Where the wife seeks leave to file an Application in a Proceeding – Where formal application is required from the wife – Where leave is refused – Where the wife seeks to re-agitate issues which have already been the subject of previous interlocutory determination or appeal – Where any discharge or variation of the orders pressed by the wife could undermine the efficacy of or conflict with the appellate process – Where an application agitating the same issues is an abuse of process – Where the orders pressed by the wife are dismissed.

FAMILY LAW – PRACTICE AND PROCEDURE – Subpoenas – Where the wife issued five subpoenas – Where Notices of Objection were filed in relation to each of the subpoenas – Where objectors contended that subpoenas had no relevance, were an abuse of process and constitute a fishing expedition with no legitimate forensic purpose – Where objectors contended that some subpoenaed documents were privileged – Where privilege had not been waived – Party issuing impugned subpoena must demonstrate that documents sought have “apparent relevance” to an issue in proceedings – Where subpoena must reasonably particularise the documents it calls for – Where subpoena is impermissibly broad if it requires recipient to make judgments about issues or relevance – Objections to the subpoenas largely upheld and the subpoenas set aside.

Legislation:

Family Law Act 1975 (Cth) s 79

Federal Circuit and Family Court of Australia (Family Law) Rules2021 (Cth) r 14.07

Cases cited:

Brimaud v Honeysett Instant Print Pty Ltd (1988) 217 ALR 44

Commissioner for Railways v Small (1938) 38 SR NSW 564

Department of Planning, Industry and Environment v Blacktown City Council [2021] NSWCA 145

Fisher v Fisher (1986) 161 CLR 438; [1986] HCA 61

Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30

Hamilton v Oades (1989) 166 CLR 486; [1989] HCA 21

Joubert and Anor & Verhoeven and Anor [2020] FamCA 53

Kehoe & Seden (No 2) [2022] FedCFamC1F 346

Lin & Ruan (2021) FLC 94-024; [2021] FamCAFC 90

Liu v The Age Company Ltd (2016) 92 NSWLR 679; [2016] NSWCA 115

Loulach Developments Pty Ltd v Roads and Maritime Services (No 2) [2018] NSWSC 1465

Lucas Industries Ltd v Hewitt (1978) 18 ALR 555

Merhi & Merhi and Ors(No 3) [2018] FamCA 961

Paris King Investments Pty Ltd & 1 Ors v Michael Norman Rayhill & 2 Ors [2006] NSWSC 578

Sarto & Sarto (2022) 65 Fam LR 605; [2022] FedCFamC1A 16

Seven Network Ltd v News Ltd (No 5) (2005) 216 ALR 147; [2005] FCA 510

Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52

Vang & Chung (No 3) [2024] FedCFamC1F 101

Wei & Xia (No…

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AGLC
Vang & Chung (No 6) [2024] FedCFamC1F 604
Case
[2024] FedCFamC1F 604
Decision Date

CaseChat Overview and Summary

The case of Vang & Chung (No 6) involved Ms Vang, the applicant, seeking leave to file an application in a proceeding against Mr Chung, the first respondent, and Mr D, the second respondent. The matter was before the Federal Circuit and Family Court of Australia (Division 1) and was presided over by Harper J. The central issues revolved around the wife's request for leave to file an application, the validity and relevance of subpoenas issued by the wife, and the implications of these actions on the ongoing appellate process. The court was tasked with determining whether the wife's application and subpoenas were permissible and whether they adhered to the legal standards required for such proceedings.

The court began by examining the wife's request for leave to file an application. It was noted that formal application was necessary and that the wife's attempt to re-agitate issues already decided in previous interlocutory determinations or appeals was inappropriate. The court held that any discharge or variation of the orders sought by the wife could potentially undermine the efficacy of or conflict with the appellate process. Consequently, the wife's application for leave was dismissed as it was deemed an abuse of process. Furthermore, the court addressed the wife's issuance of subpoenas to various entities, including National Australia Bank, AC Accountants, Y Pty Ltd, and AD Lawyers. The objectors argued that the subpoenas were irrelevant, an abuse of process, and constituted a fishing expedition with no legitimate forensic purpose. Additionally, it was contended that some of the subpoenaed documents were privileged and had not been waived.

The court found that the wife, as the party issuing the subpoenas, needed to demonstrate that the documents sought had apparent relevance to the issues in the proceedings. The subpoenas had to be reasonably particularised and could not require the recipients to make judgments about the relevance of the documents. Given that the subpoenas were overly broad and did not meet these criteria, the objections were largely upheld, and the subpoenas were set aside. The court emphasized the importance of adhering to legal standards in the issuance of subpoenas to prevent abuse of process and to ensure that proceedings are conducted efficiently and fairly.

In conclusion, the court dismissed the wife's application for leave to file an application in a proceeding and set aside the subpoenas issued by her. The orders also included provisions for the handling of any documents produced in answer to the surviving paragraphs of the subpoenas and mandated the return or destruction of any documents produced under the impugned subpoenas. The court's decision underscored the necessity for compliance with legal standards and the importance of avoiding the re-litigation of issues already decided.

Orders

Orders of the court

SYC 1433 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MS VANG

Applicant

AND:

MR CHUNG

First Respondent

MR D

Second Respondent

AC ACCOUNTANTS

Non-Party Objector

Y PTY LTD

Non-Party Objector

ORDER MADE BY:

HARPER J

DATE OF ORDER:

10 SEPTEMBER 2024

THE COURT ORDERS THAT:

1. The Application in a Proceeding filed by the Applicant Wife (“wife”) on 2 July 2024 and amended on 5 July 2024 is dismissed.

2. Order 1 of the orders of the Judicial Registrar made on 3 July 2024 is varied as follows:

(a) The schedule to the subpoena issued to Y Pty Ltd on 19 March 2024, other than paragraphs 10 and 11, be set aside;

(b) The subpoena issued by the wife to AC Accountants on 19 March 2024 be set aside;

(c) The schedule to the subpoena issued to AD Lawyers by the wife on 19 March 2024:

(i) other than paragraph 2; and

(ii) other than paragraph 3 read as limited to documents relating to mortgage number …69Q between the first and second respondents;

be set aside.

(d) Paragraph 2 of the schedule to the subpoena issued by the wife to AE Lawyers Pty Ltd (“AE Lawyers”) on 19 March 2024 be set aside.

(e) The subpoena issued by the wife to National Australia Bank on 19 March 2024 be set aside.

3. With respect to any documents produced in answer to the surviving paragraphs of the subpoenas issued to AD Lawyers and AE Lawyers as stipulated in Order 2:

(a) For a period of 14 days from the date of these orders:

(i) the second respondent shall have first access to, with such access to lapse thereafter;

(ii) the second respondent has liberty to attend the registry to identify any documents produced in respect of which he claims legal professional privilege, and isolate such documents in a separate envelope or electronic folder.

(b) No party other than the second respondent may have access to documents isolated pursuant to Order 3(a)(ii), pending further order of the Court.

4. Order 2 of the orders of the Judicial Registrar made on 3 July 2024 is set aside.

5. Upon the passing of 28 days from the date of these orders any document produced under a subpoena referred to in Order 2, except as required to be produced by the terms of Order 2, is to be forthwith returned by an officer of the Sydney Registry of the Federal Circuit and Family Court of Australia to the Named Person or at their direction, destroyed.

6. The Application for Review filed by the wife on 5 July 2024 is otherwise dismissed.

7. All outstanding interlocutory applications are otherwise dismissed.

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.

Background

Background to the litigation

The wife appealed the orders made on 28 February 2024 and 4 March 2024. Both appeals were consolidated and were heard on 25 June 2024. Judgment is reserved at the date of this judgment.Background The parties were in a relationship for about three years between 2015 and sometime before August 2018. There was no dispute the relationship was short. The parties married in 2017. I repeat the factual matters in Vang (No 3) at [15]–[26] regarding two properties in Suburb F, H Street (“H Street”), which was purchased in 2012, before the parties had met and E Street (“E Street”):15.The husband was also the registered proprietor of [H Street]. According to the husband, he was 21 years old in 2012, the purchase price of [H Street] was $20,000,000 and he had no capacity to pay such a large sum. At the time he had no assets and was working for [an industrial] company earning about $42,000 per annum. Rather his case is that his parents provided the entire purchase price and acquisition costs including stamp duty. The property was unencumbered, and his parents paid all costs associated with the property after acquisition. The wife’s evidence recorded statements alleged to have been made by the husband to her that he and his family were rich and well connected. He provided her with a copy of his curriculum vitae, apparently either before cohabitation or during the relationship, which claimed he was employed by a private [company] […] between 2010 and 2012.16.At the time of the purchase of [H Street], the husband contends that the father told him that he had lent the money to him for the purchase and required it to be repaid. According to the wife’s own evidence, the husband told her either before or during cohabitation “[m]y father invested in Australia so he could then sponsor me to get permanent residency” (Wife’s affidavit filed 8 January 2024, paragraph 42) The wife tendered evidence which showed that the funds for the purchase price of [H Street] came from a company called [Y Pty Ltd], this was marked Exhibit “A”. The husband was a director of [Y Pty Ltd] between [mid] 2014 and [early] 2019. The father is now the sole director. There is no evidence that the husband was a director of [Y Pty Ltd] at the time [H Street] was acquired. The wife annexed an ASIC search of [Y Pty Ltd] dated 1 April 2022 to her affidavit filed 8 January 2024 (Annexure “A1”). It showed that the company has issued 100 fully paid shares all beneficially owned by [PP Group], which has a registered office in [Country RR]. There was no evidence of the shareholders or directors of [PP Group]. However, the ASIC search discloses that there has been no change in shareholdings of [Y Pty Ltd] since [mid] 2012 when a directors’ resolution of a small company “controlled by a foreign company” was registered.17.For the purposes of this judgment, the evidence satisfies me that the husband generally acted in accordance with his parents’ wishes. Indeed, the wife seemed to accept this to be the case in her affidavit. Without finally determining the issue, for present purposes I accept he could not have provided the funds for the purchase of [H Street] in 2012. I am not persuaded the evidence supports a conclusion, even at an interlocutory stage, that the husband had any interest in or controlled [Y Pty Ltd] at the time [H Street] was acquired, as the wife seems to contend. I do not accept the husband “owned” [Y Pty Ltd]. On the contrary, the wife’s own evidence (above at [16]) supports an inference that [Y Pty Ltd] was and is owned by the father. The husband was 21 years’ old, and it is more likely he was earning modestly as he claims. For present purposes, I accept it is more likely that the funds to purchase [H Street] were provided by [Y Pty Ltd], which was likely owned and controlled by the father in 2012. 18.At the time [H Street] was sold the spouse parties were living in the property. The husband claimed the sale settled [in late] 2017, after separation. But this cannot be correct. The husband annexed to his affidavit a deposit slip and copy of a bank cheque showing that [over $21,000,000] was paid to the father personally, not [Y Pty Ltd], [in mid] 2017 (Husband’s affidavit filed 15 January 2024, Annexure “[MC]-2”). For the purposes of this judgment, I accept that the sale settled in or about [mid] 2017. More to the point, the husband gave evidence that he himself received no part of the sale proceeds. There was no evidence that he did. It is however part of the wife’s claim that the husband beneficially owned the sale proceeds of [over $21,000,000].19.[E Street] was purchased in [mid] 2017 for [over $10,000,000] roughly contemporaneously with the settlement of the sale of [H Street]. According to the wife, the husband said to her in [mid] 2017 “I plan to buy a smaller house in [Suburb F] for us to live in when we are in Australia” (Wife’s affidavit filed 8 January 2024, paragraph 94). Settlement occurred in [late] 2017. The husband gave evidence that the purchase price and other acquisition costs totalling $11,800,000 were met by a loan from his father, as had happened with [H Street]. The husband’s case was that the wife was not aware of this purchase at the time. She claimed that the funds to purchase [E Street] came from the proceeds of sale of [H Street], which had been paid to the father. There was also no dispute that at settlement of the purchase a mortgage in favour of the father was registered on the title as dealing […69Q], on its face securing a loan of the purchase price advanced by the father. As discussed further below, the wife seeks to impugn the validity of the mortgage as a sham and to set it aside. 20.There was no dispute that the father in 2018 was, and remains, incarcerated in [Country YY]. He is difficult to contact. It was the husband’s evidence that his relationship with the father deteriorated in 2017 prior to this happening.21.Since its purchase, the husband claimed that [E Street] has been rented and the rental income was used to meet the mortgage repayments. Between June 2020 and February 2021 the rent was paid into an account in his father’s name held at the National Australia Bank. Between February 2021 and November 2021 the rental income was received and held in the estate agent’s trust account. Since November 2021, the husband has been receiving the rent in an account held in his own name.22.The rental income has been [over $20,000] per month since October 2022 pursuant to a residential tenancy agreement. The husband annexed a copy of this agreement to his affidavit (Annexure “[MC]-8”). It has some peculiarities. No tenant is named. The signature of the tenant is obscured. In any event, there was no dispute that the husband has been receiving the rental income and using it to meet his own expenses, including legal fees. Consequently, there was no dispute he has used the rental income as his own money since November 2021.23.The husband claims he has made no repayments in accordance with the [E Street] mortgage since February 2021. Consequently, it has been in default for a considerable period. 24.[In] August 2023 the husband was served with a notice under s 57(2)(b) of the Real Property Act 1900 (NSW) on his father’s behalf by reason of the default in making mortgage payments and requiring repayment of the monies owing under the mortgage. The outstanding mortgage balance was said to be $14,864,805. The husband failed to make the required repayments and the father as mortgagee has exercised a statutory power of sale. [E Street] was sold at auction [in late] 2023 with a sale price of [over $14,000,000]. It sems clear that the sale price will be insufficient to discharge the secured debt in full. The wife did not seek to set aside the sale or challenge it as not a bona fide arms’ length sale.25. Settlement of the sale of [E Street] is to take place [in mid] 2024.26.The order made on 14 November 2023 and the subject of the wife’s appeal, mentioned above, provided for the release of 50 per cent of the net proceeds of sale of [E Street] to the mortgagee, the father, with such amount “not to exceed the amount of the loan owing and outstanding” to the father as mortgagee. In light of the sale price achieved [in late] 2023, there appears to be no possibility that 50 per cent of the net proceeds of sale will exceed the mortgage debt, and the balance will be held in trust by the solicitors of the father.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

The categories of documents sought from the NAB are extremely wide and suffer the same defects identified above at [57]–[58]. The subpoena should be set aside.CONCLUSION My conclusions about the subpoenas, and the limited requirement for production, make it unnecessary to express a view on the argument that the costs of compliance would be too onerous. For the reasons given the orders set out at the commencement of this judgment should be made.

Ratio Decidendi

Legal Principle Established

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