Wei and Wei

[2017] FamCA 584

FAMILY COURT OF AUSTRALIA

WEI & WEI [2017] FamCA 584

FAMILY LAW – PROPERTY – interim orders – where the wife seeks a partial property settlement – order made for the husband to pay the wife $50,000

FAMILY LAW – SPOUSAL MAINTENANCE – interim orders – where the wife seeks interim spousal maintenance – where there is insufficient evidence that the husband has the capacity to pay spousal maintenance

FAMILY LAW – INJUNCTIONS – where the wife seeks orders freezing assets in the husband’s bank account – order made for monies in the husband’s bank account to be held on trust by the wife’s solicitors

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth) ss 74, 72(1), 79, 80(1)(h)
Family Law Rules 2004 (Cth)

Bevan & Bevan (1995) FLC 92-600
Mitchell & Mitchell (1995) FLC 92-601
Mullen & De Bry [2006] FamCA 1380; (2006) FLC 93-293
Strahan &Strahan (interim property orders) [2009] FamCAFC 166; (2011) FLC 93-446
Waugh & Waugh [2000] FamCA 1183; (2000) FLC 93-052

APPLICANT: Ms Wei

RESPONDENT: Mr Wei

FILE NUMBER: MLC 530 of 2017

DATE DELIVERED: 30 June 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Johns J

HEARING DATE: 7 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr Kuan
SOLICITOR FOR THE APPLICANT:	Hutchinson Legal

COUNSEL FOR THE RESPONDENT: Dr Ingleby

SOLICITOR FOR THE RESPONDENT: Oakfair Lawyers

Orders

1. That by 4.00pm on 8 June 2017 the husband do all such acts and things as may be required to:-

   (a)Pay to the wife’s lawyer the sum of $250,000, such sum to be held upon trust for the husband and the wife in an interest-bearing account and not released without the prior written consent of the parties or an order of the Court;

   (b)Pay to the wife the sum of $50,000, such sum to be characterised as partial property settlement.

2. That all extant interim applications be otherwise dismissed.

3. That the matter be listed for a conciliation conference at 9.15am on 11 September 2017.

4. That the question of both parties’ costs of this day be reserved.

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 Wei & Wei 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 MELBOURNE

FILE NUMBER: MLC 530 of 2017

Ms Wei

Applicant

And

Mr Wei

Respondent

REASONS FOR JUDGMENT

Introduction

1. This matter came before me in the Judicial Duty List upon the application of the wife seeking orders for:-

   ·interim spousal maintenance in the sum of $500 per week;

   ·a partial property settlement, being one half of the monies in the husband’s NAB account; and

   ·an injunction restraining the husband from disposing of the remaining one half of the monies held in his NAB account.

2. At the commencement of the hearing the husband sought orders that the wife’s application be dismissed and that a German motor vehicle registered in the wife’s name be transferred to him.  

3. During the course of submissions the husband’s position altered and he amended his proposal to seek orders that the wife retain the German motor vehicle and another vehicle registered in her name, a Sports car. The husband proposed that the wife sell these vehicles, which she valued at $182,860 in her Financial Statement filed 19 January 2017, and purchase a new motor vehicle (of lesser value) and otherwise retain the balance of the sale proceeds by way of partial property settlement.

4. At the conclusion of the hearing I made orders requiring the husband to pay to the wife’s lawyers the sum of $250,000, such sum to be held on trust for the parties until further order and that there be a payment of $50,000 to the wife by way of partial property settlement.  Otherwise I dismissed all extant interim applications.  These are my reasons for judgment with respect to that decision.

Material relied upon by the parties

1. In support of her application, the wife relied upon the following documents: -

   ·Amended Initiating Application filed 17 May 2017;

   ·Affidavit of the wife filed 17 May 2017; and

   ·Financial Statement filed 19 January 2017.

2. The husband relied upon the following documents: -

   ·Amended Response to Initiating Application filed 2 June 2017;

   ·Affidavit of the husband filed 2 June 2017;

   ·Affidavit of the husband filed 1 May 2017; and

   ·Financial Statement filed 1 May 2017.

Background

1. The parties married in 2007 and separated in December 2016. The parties moved to Australia from China in 2012.

2. There is one child of the relationship, aged 7 years.

3. The wife is aged 41 and resides in the former matrimonial home in Suburb B. The parties’ child lives with her. The wife was the primary carer of the child during the course of the relationship and continues in that role. It is common ground that the wife is unable to work in Australia due to her Visa status.  Accordingly, her income disclosed in her Financial Statement filed 19 January 2017 is nil. The wife deposes to weekly expenses of $2,209.

4. The husband is aged 55 and resides in rental accommodation in Suburb C. Pursuant to orders made on 4 May 2017, the child spends time with the husband from 5:30pm each Friday until 6:30pm Sunday. The husband has two adult children from a previous relationship who reside in China, aged 34 and 30.

5. The husband is the sole director and shareholder of a company which manufactures noodles.  The husband deposes that the company presently makes a marginal profit and in his Financial Statement filed 1 May 2017 he asserts his weekly income is nil.  The husband deposes to weekly expenses of approximately $2,850.  

6. In 2015 the parties sold a property in Suburb D and the balance of the sale proceeds, being approximately $900,000 were deposited into a jointly held bank account. The husband deposed that the parties utilised those moneys to fund living expenses and to operate his business.

7. In September 2016 the husband unilaterally transferred the remaining monies held in the joint account, being approximately $600,000, into a bank account in his sole name. The husband deposed he transferred the monies into his sole name as he was afraid that “the Wife may withdraw all the monies without all [sic] my consent”.  The husband apparently did not recognise the irony of the situation in that he had done to the wife exactly what he feared she would do to him.

8. The husband deposed in his affidavit filed 2 June 2017 that as at that date there was $388,000 of the $600,000 remaining in his account and that from September 2016 until the date of swearing the affidavit on 1 June 2017, a period of approximately 8 months, he had spent approximately $222,000.  In his affidavit, the husband in explaining that expenditure provided a list of expenses he alleges was paid from the $222,000. That expenditure includes:-

   ·    The sum of $44,917.20 towards the mortgage secured over the title to the former matrimonial home that the wife currently occupies;

   ·    Rental accommodation expenses of $11,296;

   ·    Health insurance of $5,584.30;

   ·    Legal costs of $14,000;

   ·    Flight ticket of $2,554.61;

   ·    Household rates and utility expenses totalling $7,695.87;

   ·    Motor vehicle repairs and City Link expenses totalling $2,934.94;

   ·    Unspecified “daily living expenses” and school fees.

9. In addition to the above expenses the husband alleged that he had paid to the wife cash totalling $18,000, the receipt of which was denied by the wife.  The husband’s identified expenditure totalled $107,229.05.  The husband was unable to provide an explanation for the expenditure of the remaining $114,770.95.

10. During submissions counsel for the husband submitted that the amount in the husband’s account was $370,000 as at the date of hearing and that part of the $18,000 spent in the 6 days since the husband’s affidavit was sworn was applied by him to fund the costs of the interim hearing.

11. The husband deposed in his affidavit filed 2 June 2017 that he owes his two adult children and another relative a total of approximately $1.2million. The husband provided no evidence of any loan agreement, details of the terms of the loan or any repayment schedule. The wife in her affidavit denied the existence of that liability. She deposed that the husband has always been his children’s “source of income” and that he has supported them financially. It was conceded in submissions by counsel for the husband that he has previously purchased his adult son an apartment in China. This was confirmed by the husband in his affidavit filed 1 May 2017.  The value of the parties’ interests in Australia and China is disputed between the parties.

12. It is the husband’s transfer of the joint monies into his sole name and the expenditure of substantial amounts of that money which prompted the wife to seek interim orders for spousal maintenance, partial property settlement and orders preventing the husband from dissipating the matrimonial asset pool.

13. In relation to the husband’s proposal that the wife sell the sports car, it was conceded by the wife that she had privately sold the German motor vehicle the day before the hearing for the sum of $30,000; she had yet to receive the proceeds of that sale.  The wife opposed the husband’s proposal that the sports car be sold on the basis that that is the motor vehicle used by her and one that the parties’ child is familiar with.  It was submitted on her behalf that she did not want to cause too much disruption to the child’s life by changing motor vehicles.  I do not consider that submission to be relevant or helpful in the context of the wife’s application for maintenance, partial property settlement and injunctive relief.

the proceedings

1. The matter was conducted on the papers.  Each party relied upon the material referred to above and their counsel’s oral submissions.  Given the nature of the hearing, contentious facts cannot be determined without evidence being properly tested.  Accordingly, in determining the matter, I have relied upon those facts which are agreed or not in issue.

Relevant legal principles – Partial property settlement

1. Pursuant to s 80(1)(h) of the Family Law Act 1975 (Cth) (“the Act”), the Court has the power to make orders pursuant to s 79 of the Act for partial property settlement. In Strahan &Strahan (interim property orders) [2009] FamCAFC 166; (2011) FLC 93-446 (“Strahan”) it was recognised by the Full Court that there may be circumstances which justify the exercise of the power pursuant to ss 79 and 80(1)(h) of the Act prior to the final hearing. Boland and O’Ryan JJ note at paragraph 118 of their judgment that the approach to be taken to the hearing of an application for an interim property order is as follows:-

   … There are two stages to the hearing of such an application where the power is to be exercised pursuant to s 80(1)(h) of the Act. This is recognised by the fact that although the power under s 79 should ordinarily be exercised on a once-only basis, “circumstances may arise before there can be a final hearing” where the power is exercised. Thus the first step is to resolve whether to exercise the power before a final hearing and if it is resolved to do so then the second step involves the exercise of that power.

2. The circumstances in which the Court might exercise its power to make orders for partial property settlement was considered by the Full Court at paragraph 132, whilst acknowledging that it is preferable that there be one final hearing in s 79 proceedings the Court concluded:-

   … in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make interim property orders the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once-and-for-all order made after a final hearing.

Discussion – Partial property settlement

1. It is common ground that the husband has had unilateral access to joint matrimonial funds since separation.

2. On behalf of the wife, counsel submitted that she has been reliant upon loans from friends to support herself.  It was common ground between the parties that the wife is unable to work due to her Visa status. The wife deposed that she and her son are “in desperate need of finances to sustain our day-to-day living”. No evidence was given as to whether the husband is paying child support.

3. The wife has recently sold the German motor vehicle and will shortly have access to $30,000 from the proceeds of sale. It was submitted on her behalf that the wife requires access to further funds prior to the final hearing in order to support herself and the child of the marriage and fund the proceedings. It was on this basis that she sought an order for partial property settlement.

4. The parties’ cohabitation spanned a period of approximately nine years.  During the course of the marriage, the parties have acquired interests in corporate entities and real property.  In her financial statement filed 19 January 2017 the wife discloses interests in the following:-

   ·E Street, Suburb B (jointly owned)  $1,400,000

   Less mortgage             $1,000,000    $   400,000

   ·Sports motor vehicle  $   115,000

   ·Proceeds of German motor vehicle  $    67,860

   (sold for $30,000)

   ·Interest in F Pty Ltd and

   G Pty Ltd   $Not known

   ·Property in China  $Not known

5. The husband in his financial statement filed 1 May 2017 identifies the following property in addition to the items noted in the wife’s financial statement:-

   ·Property in China  Not known

   ·Funds at NAB  $300,000

   ·Funds at ANZ Bank, Commonwealth Bank

   and Westpac Bank  $  110,000

6. Hence, the parties disclose in their financial statements assets valued at approximately $992,860 together with their interests in their corporate entities and real property in China.  Their interest in the entities and property in China is yet to be valued.

7. The husband asserts that there is a debt owing to his adult children from his previous marriage as well as another relative.  That personal liability is alleged to total $1,200,000.  The wife does not accept that liability and in her affidavit filed 17 May 2017 deposes that the husband’s adult children live in China and work for the husband in his business and have done so since they completed their schooling.  She deposes that “the respondent husband has always been their source of income.  He supported them financially and gifted them with cars and houses”.  She also deposes that the husband’s relative, Mr H works in the husband’s business in China. 

8. In response to those allegations the husband in his affidavit filed 2 June 2017 annexes a bundle of statements evidencing the transfer of funds to him from China between the period 13 November 2013 to 2 March 2015.  Whilst those statements evidence the remittance of funds from China to the husband, they do not evidence any loan agreement between the husband and those said to have advanced the funds.  There is no evidence adduced by the husband as to the alleged loan agreement, the term of any loan, interest charged or the like.  Further, there was no evidence of the husband meeting any interest payments or other repayments in respect of the alleged loans.

9. What is clear from the material filed by the parties is that they have held two jointly-owned properties in Melbourne, one of which continues to be occupied by the wife and child.  The proceeds of sale of the Suburb D property has been deposited into a joint account and thereafter unilaterally removed by the husband and deposited by him into an account in his own name and upon which he has drawn an amount of approximately $222,000 since September 2016.  The husband has not accounted for more than $100,000 of the sums expended by him in that time.  Further, it is common ground between the parties that they hold property interests in China which are yet to be valued.  It was also conceded on behalf of the husband that he had purchased his adult son an apartment in China.

10. Neither the husband nor the wife have articulated in their applications for final relief the orders sought by them.  Nonetheless given that there is jointly-owned property it is common ground between them that there should be final property orders.

11. In his first affidavit filed 1 May 2017 the husband deposes to the assets and liabilities of each of the parties at the commencement of their relationship.  He asserts that both parties owned property in China at the commencement of the relationship.  The husband alleges that he had property of greater value at that time.  Further, the husband asserts that the wife has played no part in the operation of the parties’ Australian business interests.

12. That is disputed by the wife and in her affidavit filed 17 May 2017 she asserts that she assisted the husband in the establishment of F Pty Ltd and has acted as public officer for that entity since its registration on 14 February 2014.  Further, she deposes that she worked hard and contributed to the business.

13. That the wife has been the primary home-maker and care-giver to the parties’ child is not disputed.  The amount sought by the wife by way of partial property settlement is one half of the monies transferred by the husband from the parties’ joint account.  The husband discloses that a balance of $370,000 of those funds remains.  Hence, the wife seeks a partial property settlement of $185,000. 

14. Whilst the husband opposed an order in those terms, he conceded that it was appropriate that the wife sell the two motor vehicles in her possession and retain the sale proceeds from those vehicles by way of partial property settlement.  It was submitted on his behalf that the wife could acquire an appropriate motor vehicle for herself and otherwise retain the balance of the sale proceeds by way of partial property settlement.  Hence, it would appear that the husband is conceding that the wife has an entitlement to at least $182,860 by way of partial property settlement, being the value of the motor vehicles asserted by the wife in her financial statement.

15. It was only after that concession had been made that the wife indicated to the Court through her counsel that she had the day prior to the hearing affected a private sale of the German vehicle for the sum of $30,000.  At the time of hearing she was yet to receive payment for that motor vehicle.  The effect of that action was to leave her in a position of having a modest cash resource and the sports motor vehicle which she intends to use for herself and the parties’ child. 

16. The reality is there are many unanswered questions with respect to the parties’ interests.  For example:-

    ·The value relied upon by both parties in respect of the E Street, Suburb B property is in fact the purchase price of that property when acquired in 2015.  The parties will need to obtain an updated valuation of that property as it is likely that there has been an increase in value of that property since the time of its acquisition;

    ·There is no evidence as to the value of the parties’ business;

    ·There is no evidence as to the value of the parties’ interests in China;

    ·The assertion by the husband as to personal loans from his family in China is disputed by the wife and the husband in the face of the wife’s challenge to that assertion adduces no evidence to support his claim; and

    ·The husband has failed to particularise how he has expended a significant proportion of the proceeds of sale of the Suburb D property.

1. Doing the best I can having regard to the omissions in the parties’ evidence, I am satisfied that it is appropriate that there be a partial property settlement in favour of the wife to the extent of $50,000.  An adjustment in those terms will mean that the wife has available to her cash totalling approximately $80,000 (including the sale proceeds of the German motor vehicle) as well as the sports motor vehicle.  The total of assets held by her will be approximately $195,000. 

2. Given the concessions made by the husband as to the wife’s entitlement to retain the motor vehicles valued at approximately $183,000, I am satisfied that an adjustment in those terms is just and equitable.  I am satisfied having regard to the evidence before the Court as to the parties’ initial contributions and the contributions made by them during the marriage that the wife would receive property in that amount at final hearing.   That adjustment represents approximately 20 per cent of the identified net assets held by the parties in Australia, not taking into account the value of their entities which conduct the noodle manufacturing business.  It also does not take into account the value of their interests in China.  Accordingly, I am satisfied that in making that order the position of the husband is secure. 

Relevant legal principles – Spousal maintenance

1. The wife seeks orders for periodic spousal maintenance.

2. Section 72(1) of the Act provides that:

   A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

   (a)  by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

   (b)  by reason of age or physical or mental incapacity for appropriate gainful employment; or

   (c)  for any other adequate reason;

   having regard to any relevant matter referred to in subsection 75(2).

3. The first issue for the Court’s determination is whether the wife has crossed the threshold and established a need for maintenance, that is that she is “unable to support herself adequately” (see Bevan & Bevan (1995) FLC 92-600 and Mitchell & Mitchell (1995) FLC 92-601).

4. If the wife is able to demonstrate an inability to adequately support herself, the Court must then consider the capacity of the husband to provide such support.

5. Section 74 of the Act provides that the court may make such order as it considers proper for the provision of maintenance; in exercising jurisdiction under s 74 of the Act the Court shall take into account the matters referred to in s 75(2) of the Act.

Discussion – spousal maintenance

1. As noted earlier the wife has no income and is unable to obtain employment in Australia due to her Visa status.  The wife discloses expenses of $2,209 per week.  The husband did not challenge those matters.  Therefore I am satisfied that the wife has established a need for maintenance.

2. The next issue is the question of the husband’s capacity to pay any amount ordered for spousal maintenance. On the evidence before the court the husband is currently earning no income and it was submitted his expenses have been paid from withdrawals from his savings account.  

3. There is insufficient evidence to support a finding that the husband has the capacity to pay an order for spousal maintenance.   Accordingly that aspect of the wife’s application was dismissed.

Relevant legal principles – interim injunctions

1. The Court has powers under s 114(1)(e) of the Act to grant an injunction in relation to the property of a party to the marriage. In determining whether to make an order, the Court may, where it appears just or convenient, make such order as it considers appropriate. The matters that are to be considered are whether there is a serious issue to be tried in the sense of a serious or arguable claim for relief; whether, objectively assessed, absent the making of the order sought, there may not be property available to satisfy a determination; and also whether the balance of convenience favours the making of the order sought.

2. In the case of Waugh & Waugh [2000] FamCA 1183; (2000) FLC 93-052 the Full Court stated at [45] that there is a need for the trial Judge to have considered:

   …whether the injunctions which he ultimately granted were necessary, and went no further than necessary, to prevent the abuse or frustration of the court’s process in relation to the matter within its jurisdiction, particularly having regard to the nature of the wife’s claim in the property proceedings.

3. A differently constituted Full Court in Mullen & De Bry [2006] FamCA 1380; (2006) FLC 93-293 referred to the decision of Waugh & Waugh (supra) and stated that

   Their Honours did not say that the trial Judge had to find on the balance of probabilities,  as a matter fundamental to success, that there was such a scheme.

   Put another way, all that the Court said in Waugh was that the trial Judge had taken a fundamentally flawed approach and ought have addressed the question of whether there was any evidence of intention, as part of an enquiry into the risk of disposal of assets to defeat judgment. (emphasis in original)

4. The Full Court continued at paragraph 49 as follows:

   In some cases, the possibility (based on some evidence) of an intention or scheme may, with other factors, be sufficient to establish the probability of an objective risk of disposal with intent to defeat an order (emphasis in original).

Discussion – Injunction

1. As discussed, the husband has unilaterally transferred joint monies into his own personal account and has expended a significant amount since September 2016.

2. The husband provided no explanation as to his disposal of in excess of $100,000 of the moneys withdrawn by him from the joint account.

3. Having regard to that conduct I am satisfied that an injunction as sought by the wife is necessary to ensure that there is no further dissipation of the parties’ assets pending a final determination of the proceedings.  I am cognisant of the fact that the husband has asserted that he requires funds in order to supplement his income so as to meet his living and business expenses.  Again, doing the best I can in circumstances where the husband has failed to disclose how he has expended the parties’ joint funds, I am satisfied that it is appropriate that of the funds remaining $250,000 be paid to the wife’s lawyer to be held on trust for the parties in an interest bearing account until further order.

4. That order will leave the husband with the sum of approximately $70,000 in his account with which to meet his expenses.

Conclusion

1. Accordingly, the orders I make are as follows:-

   (1)That by 4.00pm on 8 June 2017 the husband do all such acts and things as may be required to:-

   (a)   Pay to the wife’s lawyer the sum of $250,000, such sum to be held upon trust for the husband and the wife in an interest-bearing account and not released without the prior written consent of the parties or an order of the Court;

   (b)    Pay to the wife the sum of $50,000, such sum to be characterised as partial property settlement.

   (2)That all extant interim applications be otherwise dismissed.

   (3)That the matter be listed for a conciliation conference at 9.15am on 11 September 2017.

   (4)That the question of both parties’ costs of this day be reserved.

I certify that the preceding fifty-seven (57) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 30 June 2017

Associate: 

Date:  30 June 2017