Wen & Zan
[2023] FedCFamC1F 233
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Wen & Zan [2023] FedCFamC1F 233
File number: MLC 11085 of 2016 Judgment of: WILLIAMS J Date of judgment: 3 April 2023 Catchwords: FAMILY LAW – PROPERTY – Competing applications for property settlement – Substantial assets in Australia and Country B – Whether Country B assets should be included in asset pool for division between the parties – Previous proceedings between the parties in Country B – Dispute about composition of the asset pool – Dispute about valuations of Country B assets – Assessment of contributions and future needs of the parties – Where husband imprisoned – Consideration of lack of financial disclosure by the husband – Held Country B and Australian Assets should be divided 60 per cent to the wife and 40 per cent to the husband. Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 72, 75, 79, 117
Cases cited: Bevan & Bevan [2013] FamCAFC 116
Brown & Brown (2007) FLC 93-316
Chang & Su [2002] FamCA 156
Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588
Dickons & Dickons [2012] FamCAFC 154
Gould & Gould [2007] FamCA 609
In the Marriage of Hickey [2003] FamCA 395
In the Marriage of I & I (No 2) (1995) FLC 92-625
Jamine & Jamine (No. 2) [2012] FamCAFC 104
Jones v Dunkel (1959) 101 CLR 298
Kannis & Kannis [2002] FamCA 1150
Lan & Hao (No. 2) [2017] FamCAFC 175
Re F: Litigants in Person Guidelines (2001) FLC 93-072
Stanford v Stanford (2012) 247 CLR 108
Trevi & Trevi (2018) FLC 93-858
Vass & Vass [2015] FamCAFC 51
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447
Zan & Wen [2022] FedCFamC1A 158
Division: Division 1 First Instance Number of paragraphs: 366 Date of last submission/s: 12 December 2022 Date of hearing: 12–14 November, 12 December 2018, 8 April, 27–29 May, 22–25 July, 10–11 October 2019, 13–14 February 2020, 3–4 November, 5 December 2022 Place: Melbourne Counsel for the Applicant: Mr McCormick Solicitor for the Applicant: Goldsmiths Lawyers Counsel for the First Respondent: Ms Teicher (12 November 2018 – 14 November 2018)
Ms Treyvaud (12 December 2018)
Mr Grant (8 February 2019 – 8 April 2019)
Mr Atkinson (27 May 2019 – 25 July 2019)
Litigant in person (from 16 September 2019)Solicitor for the First Respondent: Tao Jiang Lawyers (until 10 December 2018)
Easton Legal (11 December 2018 – 15 April 2019)
Kennedy Partners (23 April 2019 – 16 September 2019)
Litigant in person (from 16 September 2019)The Second Respondent: Litigant in person The Third Respondent: Litigant in person ORDERS
MLC 11085 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS WEN
Applicant
AND: MR ZAN
First Respondent
MS BAI
Second Respondent
MR GAO
Third Respondent
order made by:
WILLIAMS J
DATE OF ORDER:
3 April 2023
THE COURT ORDERS THAT:
1.Within 60 days of the date of these orders, the husband:
(a)pay to the wife the sum of $4,797,343;
(b)pay to the second and third respondents $300,000 together with accrued interest pursuant to the Loan Agreement between them dated 1 September 2017.
2.The husband is restrained by injunction from:
(a)encumbering, disposing of and/or otherwise dealing with his interest in the property situate at C Street, Suburb A, being all the property more particularly described in Certificate of Title, Volume …, Folio … (“Suburb A Property”); and
(b)drawing down and/or increasing the level of indebtedness of the NAB mortgage, account no. …66, registered on title to the Suburb A Property as instrument no. …7B.
3.The second and third Respondents are restrained by injunction from encumbering the Suburb A Property.
4.Forthwith, the husband do all necessary acts and things and sign all documents to transfer to the wife all of his right title and interest in the property situate at D Street Suburb E, Victoria and more particularly described in Certificate of Title, Volume … Folio … (“Suburb E Property”), unencumbered.
5.The wife shall have the sole use and occupation of the Suburb E Property.
6.The husband is restrained by injunction from:
(a)encumbering, disposing of and/or otherwise dealing with his interest in the Suburb E Property; and
(b)drawing down on and/or increasing the level of indebtedness of the NAB mortgage, account no. …23, registered on title to the Suburb E Property as instrument no. …2L.
7.The second and third respondents are restrained by injunction from encumbering the Suburb E Property.
8.Forthwith, the husband shall do all necessary acts and things and sign all documents to transfer to the wife his interest in the Motor Vehicle 1, at the expense of the wife.
9.The wife retain and/or receive as her property, for her sole use and benefit and the husband relinquish and/or transfer all of his right, title and interest (if any) in the following property:
(a)the Suburb A Property Net Sale Proceeds, being the Net Sale Proceeds referred to in the orders dated 14 June 2022, and which pursuant to those orders are to be paid to Goldsmiths Lawyers at settlement of the sale of the Suburb A Property;
(b)the Suburb E Property;
(c)the Motor Vehicle 2 (registration ..);
(d)the Motor Vehicle 1;
(e)furniture and chattels and all of her personal effects in her possession;
(f)funds held in bank accounts in the wife’s name; and
(g)all funds/entitlements held in all superannuation funds in the wife’s name.
10.The husband retain and/or receive as his property for his sole use and benefit and the wife relinquish and/or transfer all of her right, title and interest (if any) in the following property:
(a)interim distributions paid to him pursuant to Order 10 of the interim orders dated 24 November 2016, Order 7 of the interim orders dated 02 June 2017 and Order 7 of the interim orders dated 20 February 2018.
11.The husband:
(a)be solely liable for and indemnify the wife against any liability encumbering any item of property to which he is entitled; and
(b)retain sole liability for and indemnify the wife with respect to any loan, lease, credit card or other liability held or registered in his sole name including any past, present and future personal or company and trust taxation liability.
12.Unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action, chattels and livestock) in the possession of such party as at the date of these orders, including any entitlements and/or distributions as a beneficiary of any trust;
(b)monies standing to the credit of the parties in any bank account are to be retained by the party named on the bank account;
(c)monies standing to the credit of the parties in any joint bank account are to be retained by the wife and the account forthwith closed;
(d)each party forego any claims they may have to any superannuation, long service leave, redundancy, retirement, retrenchment and like benefits belonging to or earned by the other;
(e)insurance policies and income protection policies remain the sole property of the beneficiary named therein;
(f)the husband be liable for and indemnify the wife against any liability encumbering any item of property to which the wife is entitled pursuant to these orders; and
(g)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
13.Pursuant to section 106B(1) and (4A) of the Family Law Act 1975 (Cth), the loan agreement dated 1 September 2017 between Mr Zan (the husband) and Ms Bai and Mr Gao (the second and third respondents) be varied to the extent that it provides for a charge and/or the lodging of a caveat by the second and third respondents on the property of the husband in Australia.
14.In the event the husband or the wife commence proceedings in Country B pertaining to matrimonial property in Country B, including any enforcement proceedings arising from these orders, within 7 days of commencement, they advise the second and third respondents via email.
15.In the event that any party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders then pursuant to section 106A, a Registrar or Deputy Registrar of the Federal Circuit and Family Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and do all acts and things necessary to give validity in operation to such deeds, documents and instruments. Default will be deemed to have occurred if after 14 days of a request to execute any deed, document or instrument necessary to give effect to these orders, the request has not been complied with.
16.All extant applications are otherwise dismissed, save for any orders already made to give effect to the sale of the Suburb A Property being the orders dated 14 June 2022 and 7 October 2022.
17.Certified for Counsel.
IT IS NOTED BY THE COURT:
A.That pursuant to section 81 of the Family Law Act 1975 (Cth) it is intended that these Orders shall as far as practicable finally determine the financial relationships between them and avoid further proceedings between them.
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 the pseudonym Wen & Zan has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILLIAMS J:
This is an application for property proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). The applicant and the first respondent were married in 1998, separated in July 2016 and divorced in March 2018. They have one child, Mr F, currently aged 18 years, who has lived with his mother since the parent’s separation.
The second and third respondents entered into a Loan Agreement with the husband on 1 September 2017 and lent him Country B currency 2,000,000 (approximately AUD $433,000). They were joined as respondents to the proceeding on 14 February 2019 and sought orders for the sum advanced to be repaid to them.
At the commencement of the proceedings, the husband and wife were in dispute about parenting orders for their son. The parenting applications were resolved by consent and final orders were made on 28 May 2019.
Unfortunately, the trial of the dispute continued over a number of years. There are many reasons for the protracted timeframe which include:
(a)the husband was incarcerated at the time of the commencement of the trial. In September 2018, a jury found the husband guilty of assaulting the wife and in November 2018 the husband was sentenced to five years imprisonment;
(b)all parties required the assistance of interpreters;
(c)the husband terminated the services of his fifth set of solicitors in 16 September 2019 and thereafter acted on his own behalf whilst imprisoned;
(d)the Covid-19 pandemic and multiple lockdowns stopped face-to-face trials in the Melbourne registry of the court;
(e)the prison was subjected to a number of Covid-19 outbreaks and lockdowns which precluded the making of a gaol order for the husband to personally attend court;
(f)the limited time the prison permitted the husband to attend electronic hearings and technical difficulties with the prison electronic facilities;
(g)the second and third respondents acted on their own behalf and were in lockdown in Country B during the eventual resumption of the trial; and
(h)the technological challenges to include electronic participation of all four parties and their respective interpreters.
The trial commenced in the Federal Circuit Court of Australia (as it was then styled) prior to my elevation to the Family Court of Australia on 8 February 2019. Prior to the Chief Judge of the Federal Circuit Court transferring the proceeding to the Family Court on the morning of 8 February 2019 there was no evidence adduced and the four days were occupied with preliminary matters and an opening by the wife’s counsel.
At the eventual commencement of the trial in May 2019, I raised this issue with counsel for both parties, on the basis that if there was any objection to the opening of the case occurring in the Federal Circuit Court, then the case would have to restart in the Family Court and counsel for the wife would have to recommence his opening address. I arranged for both parties to have a transcript of the opening address, and both counsel were content with that approach. Thereafter, in May 2019 the wife commenced her evidence and was cross-examined.
The husband was represented by various law firms until 16 September 2019 when the fifth firm who acted on his behalf, sought leave to withdraw from acting on his behalf. Thereafter, the husband acted on his own behalf, which compounded the difficulties of the case, as he was incarcerated and required an interpreter.
In accordance with Re F: Litigants in Person Guidelines (2001) FLC 93-072 the husband was provided with procedural advice, although he often sought to misconstrue what had been said about procedural matters in Court. It is apparent from his Further Amended Final Submissions that he must have had some assistance from a person with a modicum of legal training as the submissions refer to case law and other legal principles. When questioned who had prepared his written Outline of Closing submissions, the husband said he had done so in his first language and that he had emailed the document for translation.
Background
The husband is aged 58 and the wife is aged 52. They met in Country B in 1995, commenced living together around 1997 prior to marrying in 1998.
In 1988, both parties resigned from their jobs, borrowed approximately $20,000 from the wife’s uncle and set up a company. They subsequently repaid the wife’s uncle the amount borrowed.
In May 2002, they established G Ltd (“G Company”) where the wife worked full-time until 2005. She undertook administration duties for the company.
In 2004, the company purchased a dilapidated property at H Street, which was renovated between 2006 and 2008. The husband asserts he had a dispute with a builder who undertook renovations to the property, which was finally resolved at mediation in August 2013.The wife contends the original one storey building was demolished and a new building was built on the premises by the parties, which was subsequently renovated by the tenant of the premises, Tenant J, to meet its specific requirements.
In 2005 their son, Mr F was born. The husband has another son, Mr K, from a previous marriage, who was born in 1988.
In 2008, the parties, Mr F and Mr K all migrated to Australia on a 163 Business Visa.
From 2008 onwards, the wife had no involvement with the running of G Company and or L Ltd (“L Company”).
According to the husband, on 1 January 2009 the parties entered into a postnuptial agreement in Country B. At first instance the Country B court upheld the husband’s claim about the postnuptial agreement, however upon appeal the first instance decision was overturned. The postnuptial agreement is discussed below.
After their arrival in Australia in 2009, the parties purchased a retail franchise for $210,000 to satisfy immigration requirements. The wife managed the store and worked five days a week. The business was sold in either 2012 or 2013.
From 2012 onwards, the husband lived in Country B for approximately six months a year and travelled frequently between Country B and Australia to manage the business.
On 17 December 2013, according to the husband, the wife entered into a Letter of Commitment whereby she transferred her shareholding in G Company to the husband. The veracity of the Letter of Commitment was an issue in the same proceedings in Country B as the postnuptial agreement and is also discussed below.
In April 2019, the parties purchased a property in Suburb M for $1.3 million and were registered as joint proprietors. In 2014, the parties purchased another property in Suburb N for $1,277,000 using the equity in the Suburb M property.
On 17 October 2014, the husband became the registered proprietor of a business in Country B, which he asserts he is unable to sell, because it is attached to property owned by Mr K.
The husband asserts that around October 2014 he obtained a loan of Country B currency 2 million from the P Bank, the proceeds of which were exchanged into Australian dollars and used for daily living expenses. He asserted the repayment of that loan was due in October 2015.
On 30 December 2014, the parties purchased the Suburb A property for $2.1 million, with the husband registered as the sole proprietor and thus the mortgage encumbering the property was in his name.
In March 2015, the parties sold the Suburb N property for $1,450,000 and in July 2015 sold the Suburb M property for $1,600,000. The mortgage encumbering the properties was discharged at settlement and the net proceeds of sale were transferred into the NAB offset account #...50.
The husband asserts that in August 2015 he obtained a loan from Q Bank of Country B currency4 million. Of the funds advanced, Country B currency 2 million were applied to discharge the loan obtained from the P Bank in October 2014, and the balance, Country B currency 2 million, was transferred to an Australian bank for daily living expenses. Repayment of the Q Bank loan was due in August 2016. The wife does not admit the husband’s assertions about either loan.
In December 2015, the parties purchased the Suburb E property. Thereafter the property was rented for $900 per week, until December 2016.
The husband asserts that a lease agreement was entered into between G Company and Tenant J on 1 January 2016 for the H Street property. He further asserts the document was provided to the Country B court by Tenant J during the court’s investigations arising from the litigation. The wife disputes the document was produced by Tenant J and produced another lease, which she said was obtained during the course of Country B property proceedings. The lease dispute is discussed below.
The husband asserts he obtained a further loan from Q Bank around July 2016 for Country B currency 2.45 million, which was secured against G Company. That was not admitted by the wife.
The husband asserts that in August 2016, he applied the funds from the July 2016 Q Bank loan to partially repay the August 2015 Q Bank loan. In order to fully discharge the loan, he also borrowed Country B currency 400,000 from a friend and applied funds from the G Company.
In August 2016, the husband asserts he commissioned R Accountants to conduct an audit of the G Company which was completed on 18 November 2016.
The husband asserts that in September 2016, he obtained a further loan from Q Bank for Country B currency 3,400,000 which was due to be repaid in September 2017. He said the wife signed a mortgage confirmation letter and mortgage commitment as a co-borrower/guarantor, which is not admitted by the wife. According to the husband, that loan was applied to discharge the Q Bank of Country B currency 2.45 million advanced in July 2016 and to repay the friend’s loan of Country B currency 400,000. The balance of the loan proceeds were paid to the G Company.
On 2 November 2016, the wife executed a Power of Attorney in favour of a Country B lawyer authorising the lawyer to initiate and take all steps against the husband in divorce litigation.
On 9 November 2016, the wife signed a cost agreement with the Australian family lawyers and on the same day accused the husband of assaulting her, which he denied. The parties separated on that day.
On 10 November 2016, the wife transferred $1,090,000 from the NAB offset account in the husband’s name, into an account in her name. On 11 November 2016, an order was made reversing the transfer into the wife’s account.
On 14 November 2016, the wife filed an application for ex-parte orders restraining the husband from dealing with the Australian and Country B properties and disposing of or reducing the balance of funds in the NAB offset account.
On 14 November 2016, the wife sold shares in Country B to the value of $218,000 which were ultimately transferred into her mother’s bank account. She also transferred $65,482 into an Australian ANZ account which was applied to pay legal fees.
On 20 November 2016, the wife issued an application against the husband in Country B in the Suburb S Local Court seeking a divorce and investigation of assets held by the husband. The proceedings were later withdrawn by the wife because she contends the husband refused to authorise his lawyers to accept service on his behalf.
In early 2017 the husband was charged with assaulting the wife and on 4 February 2017 the husband commenced living in the Suburb E property.
In June 2017, the wife returned to Country B to obtain financial documents relating to Country B assets because the husband had failed to comply with disclosure in those proceedings. On 16 July 2017, the wife again travelled to Country B after discovering the husband had applied to the Country B court to liquidate the L Company. The wife lodged an application to prevent the liquidation of the company, but withdrew the application because of her alleged lack of standing.
On 24 August 2017, the husband changed his solicitors and a second firm of solicitors filed a Notice of Address for service on his behalf.
On 1 September 2017, the husband’s new solicitors, despite the existence of an injunction made on 14 November 2016, prepared a loan agreement between the husband and the second and third respondents for the advance of Country B currency 2 million which was purportedly secured against the Suburb A property.
The husband asserts the loan from Q Bank (Country B currency 3,400,000) was due for repayment and he discharged the loan with the funds obtained from the second and third respondents, funds advanced from friends and an employee of G Company and from funds in the company bank account.
On 30 October 2017, the wife issued a further application in the Country B courts, which was subsequently withdrawn because she contends the husband wrote to the court stating he was unable to return to Country B to defend the proceedings.
On 4 December 2017, the husband issued an application in the Suburb W District Court seeking a divorce, property and parenting orders.
On 5 December 2017, the wife filed an application in the Suburb W Local Court seeking a declaration the alleged loan by Mr U to G Company was invalid. The application was subsequently withdrawn because the wife was no longer a Country B citizen and could not proceed in that court. Thereafter, she reissued her application in the City Z Court. The husband relied on the two postnuptial agreements to assert the wife was no longer a shareholder of the company and therefore did not have standing to bring the application. The appeal decision had not been handed down by that stage and the wife withdrew her application on 3 July 2018.
On 17 April 2018, the second and third respondents lodged a caveat against the Suburb A property, purportedly pursuant to the loan agreement between them and the husband.
On 9 May 2018, the wife filed an application in the Suburb Y Local Court against the husband seeking a division of the Country B property. The application was dismissed because the Court did not recognise the Australian divorce order and regarded the parties as still being married. According to the wife she was advised the divorce order would be recognised in the City Z Court.
The husband’s assault trial in the County Court took place between August and September 2018. In September 2018, he was convicted of assault and remanded in custody prior to being sentenced to 5 years imprisonment.
In January 2019, the husband sold the L Company shop (AA Street) for Country B currency 1.2 million, without the knowledge or consent of the wife, and in breach of an injunction.
On 8 February 2019, the proceeding was transferred to the Family Court of Australia and was listed for final hearing on 27 May 2019.
The husband’s appeal against his criminal conviction was heard by the Supreme Court of Victoria Court of Appeal in mid-2020. Judgment was delivered in mid-2020 and leave to appeal was refused. The husband was represented by senior and junior counsel at the appeal.
Proposals of the parties
The wife submitted a minute of her proposed final proposed, which are as follows:
1.That within 60 days of the date of these Orders, the Husband pay to the Wife the sum of $6,624,000.
2.The Husband is restrained by injunction from:
(a)encumbering, disposing of and/or otherwise dealing with his interest in the property situate at C Street, Suburb A, being all the property more particularly described in Certificate of Title, Volume …, Folio … (“Suburb A Property”); and
(b)drawing down and/or increasing the level of indebtedness of the NAB mortgage, account no. …66, registered on title to the Suburb A Property as instrument no. …7B.
3.The 2nd and 3rd Respondents are restrained by injunction from encumbering the Suburb A Property.
4.Forthwith, the Husband do all necessary acts and things and sign all documents to transfer to the Wife all of his right title and interest in the property situate at D Street Suburb E, Victoria and more particularly described in Certificate of Title, Volume … Folio … (“Suburb E Property”), unencumbered.
5.The Wife shall have the sole use and occupation of the Suburb E Property.
6.The Husband is restrained by injunction from:
(a)encumbering, disposing of and/or otherwise dealing with his interest in the Suburb E Property; and
(b)drawing down on and/or increasing the level of indebtedness of the NAB mortgage, account no. …23, registered on title to the Suburb E Property as instrument no. …2L.
7.The 2nd and 3rd Respondents are restrained by injunction from encumbering the Suburb E Property.
8.Forthwith, the husband shall do all necessary acts and things and sign all documents to transfer to the wife his interest in the Motor Vehicle 1, at the expense of the wife.
9.The wife retain and/or receive as her property, for her sole use and benefit and the husband relinquish and/or transfer all of his right, title and interest (if any) in the following property:
(a)the Suburb A Property Net Sale Proceeds, being the Net Sale Proceeds referred to in the orders dated 14 June 2022, and which pursuant to those orders are to be paid to Goldsmiths Lawyers at settlement of the sale of the Suburb A Property;
(b)the Suburb E Property;
(c)the Motor Vehicle 2 (registration …);
(d)the Motor Vehicle 1;
(e)furniture and chattels and all of her personal effects in her possession;
(f)funds held in bank accounts in the wife’s name; and
(g)all funds/entitlements held in all superannuation funds in the wife’s name.
10.That the husband retain and/or receive as his property for his sole use and benefit and the wife relinquish and/or transfer all of her right, title and interest (if any) in the following property:
(a)interim distributions paid to him pursuant to order 10 of the interim orders dated 24/11/2016, order 7 of the interim orders dated 02/06/2017 and order 7 of the interim orders dated 20/02/2018.
11. That the husband:
(a)be solely liable for and indemnify the wife against any liability encumbering any item of property to which he is entitled; and
(b)retain sole liability for and indemnify the wife with respect to any loan, lease, credit card or other liability held or registered in his sole name including any past, present and future personal or company and trust taxation liability.
12.That unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action, chattels and livestock) in the possession of such party as at the date of these Orders, including any entitlements and/or distributions as a beneficiary of any trust;
(b)monies standing to the credit of the parties in any bank account are to be retained by the party named on the bank account;
(c)monies standing to the credit of the parties in any joint bank account are to be retained by the wife and the account forthwith closed;
(d)each party forego any claims they may have to any superannuation, long service leave, redundancy, retirement, retrenchment and like benefits belonging to or earned by the other;
(e)insurance policies and income protection policies remain the sole property of the beneficiary named therein;
(f)the Husband be liable for and indemnify the Wife against any liability encumbering any item of property to which the Wife is entitled pursuant to these orders; and
(g)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Spousal Maintenance
13. This is an order to which section 77A of the Family Law Act 1975 applies.
14.The amount of $100,000 of the property to be retained by the Wife is attributable to the provision of maintenance for the Wife.
15. Either party be at liberty to apply in relation to the enforcement of these Orders.
Other Matters
16.Pursuant to section 106B(1) and (4A) of the Family Law Act 1975, the loan agreement dated 1 September 2017 between Mr Zan (the Husband) and Ms Bai and Mr Gao (the 2nd and 3rd Respondents) be set aside, further or alternatively varied, but only to the extent that it provides for a charge and/or the lodging of a caveat by the 2nd and 3rd Respondents on the property of the Husband.
Miscellaneous
17.In the event that any party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders then pursuant to Section 106A, a Registrar or Deputy Registrar of the Federal Circuit and Family Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and do all acts and things necessary to give validity in operation to such deeds, documents and instruments. Default will be deemed to have occurred if after 14 days of a request to execute any deed, document or instrument necessary to give effect to these Orders, the request has not been complied with.
18.All extant applications are otherwise dismissed, save for any orders already made to give effect to the sale of the Suburb A Property being the orders dated the 14 June 2022 and 7 October 2022.
19. Certified for Counsel.
20. Such further or other orders as this Honourable Court deems appropriate.
IT IS TO BE DIRECTED
21. That this Minute of Orders remain on the Court file.
IT IS NOTED BY THE COURT:
A.That pursuant to Section 81 of the Family Law Act 1975 it is intended that these Orders shall as far as practicable finally determine the financial relationships between them and avoid further proceedings between them.
B.The Court is satisfied that the property adjustments being the subject of these Orders are just and equitable.
The husband’s proposed orders were Annexure D to his 2nd Revised Outline of Case and are as follows:
PROPERTY
Sale of Suburb E
1.Within 14 days, the husband and wife do all acts and things and sign all documents necessary to sell the real property situated at D Street, Suburb E (“Suburb E property”).
2. For the purpose of implementing order 1:
2.1The husband and wife do all acts and things to appoint an agreed real estate agent be appointed to place Suburb E on the market for sale within 14 days of the date of these orders, and if the parties cannot reach agreement as to the real estate agent, then the real estate agent be as recommended by the Real Institute of Victoria (“the selling agent”);
2.2The method and sale price be as agreed between the parties and failing agreement, as recommended by the selling agent;
2.3The completion date for any contract of sale be not more than 90 days unless otherwise agreed between the husband and the wife; and
2.4The husband and wife do all things required by the selling agent to facilitate the marketing of the property including providing access for inspections and maintaining the property in good condition.
3.Upon the completion of the sale of Suburb E, the husband and the wife do all things required to apply the proceeds as follows:
3.1First, to meet the sale costs including marketing expenses and selling agent commissions;
3.2Second, to pay all other arrears bills related to Suburb A Property and Suburb E Property, including but not limited to water, electricity, Network fee, Council rate, etc.,
3.3Third, to pay all taxes related to the sale of the Suburb A Property, including but not limited to Land tax, Capital gains tax, and the personal income tax arising therefrom, as well as the corresponding accountant fees. The husband appointed an accountant to calculate the tax that should be paid after the house was sold.
3.4Fourth, to repay the loans owed to the 2nd and 3rd defendants the sum of $300,000 in full and final settlement of the loan to the husband in accordance with the agreement entered by them on 1 September 2017;
3.5Fifth, the balance then remaining to deposit at the frozen NAB offset account #...50.
The sale of Suburb A
4.The balance has been held in the Goldsmith Lawyers trust account transfer to the NAB offset account #...50.
The motor vehicles
5.Within 14 days, the husband and wife do all acts and things and sign all documents required to sell the Motor Vehicle 1 registered in his name and upon the completion of the sale of the vehicle apply the proceeds to the NAB offset account#...50.
Distribution of sale proceeds
6.As soon as practicable following the sale of Motor Vehicle 1, the husband do all acts and things and sign all documents required to close the NAB offset account #...50 and distribute the balance of the funds in that account as follows:
6.1 60% to the wife; and
6.2 40% to the husband Personal Property
7.Save as otherwise provide for in these orders, each of the parties retain for their sole name and benefit all personal property including closes in action in their personal possession and/or control in Australia including but not limited to:
7.1The balances in any bank account in Australia in their sole name or held jointly with any person other than a party to these proceedings; and
7.2Any interest in a superannuation fund in their name.
Indemnity
8.Save as otherwise provided in these orders, each of the parties remains solely liable for any debt in Australia in their sole name and indemnify each other in respect of any debt attached to any property they receive pursuant to these orders.
The second and third respondents sought orders providing for the sum owing to them to be paid by the husband and the wife.
Documents relied upon
The wife relied upon the following documents:
(a)Further Amended Initiating Application filed 22 October 2018;
(b)Affidavit of the wife filed 22 October 2018, 7 November 2018, 10 January 2019, 28 March 2019, 1 June 2022 and 13 October 2022;
(c)Financial Statements filed 22 October 2018 and 1 June 2022;
(d)Outline of Case document filed 7 November 2018;
(e)Outline of Closing Submissions dated 4 November 2022;
(f)Reply submissions filed 29 November 2022;
(g)Supplement to the Outline of Reply submissions filed 2 December 2022;
(h)Documents tendered by counsel, including documents produced pursuant to subpoenae.
The wife sought to rely upon affidavits filed by her on 13 October 2022, 20 October 2022, and 24 October 2022. The wife’s affidavit filed on 13 October 2022 addressed the husband’s allegations she had advertised the Suburb A property for short-term rental and possibly leased it. She also sought to adduce evidence from a health professional about her current mental health and to adduce evidence of updated valuations of the two Australian properties. The husband objected to the wife relying on the affidavits.
I will permit the wife to rely on her affidavit filed 13 October 2022 particularly because it addresses the husband’s claims that she has attempted to lease the Suburb A property and the consequences he contends flow from leasing the property.
The wife was content not to rely on the affidavit about her current psychological issues and the affidavit annexing updated valuations of the properties. However, because the husband has subsequently adopted the updated property valuations in his final submissions, I will allow the wife to rely on the affidavit of the property valuer annexing the updated valuations.
Whilst judgment was reserved, the Suburb A property was sold for $3,120,000 pursuant to a Contract of Sale dated 25 March 2023. The wife’s solicitors emailed a copy of the Contract of Sale to my chambers and to the husband, as foreshadowed by the wife’s counsel. I will adopt the sale price as the value of the Suburb A property.
The husband relied upon the following documents:
(a)Amended Response filed 9 November 2018;
(b)Affidavits of the husband filed 27 February 2017, 9 August 2017, 7 November 2018, 20 March 2019, 4 February 2020 and 26 October 2022;
(c)Affidavits of Ms BB filed 7 November 2018 and 13 March 2020;
(d)Affidavit of Mr CC filed 26 February 2020;
(e)Financial Statement filed 7 November 2018;
(f)Asset valuation report for G Ltd to understand the market value of the industrial real estate located at H Street, City Z issued by DD Company;
(g)Second Revised Outline of Case received 4 November 2022;
(h)Outline of Closing Submissions on behalf the husband received 30 November 2022;
(i)Documents tendered, including documents produced pursuant to subpoenae.
The husband sought to rely upon his affidavit filed 26 October 2022, which was purportedly filed pursuant to orders made on 7 October 2022 permitting him to file and serve any further affidavits on or before 21 October 2022. Counsel for the wife objected to the husband relying on the affidavit. I will permit the husband to rely on the affidavit and I have addressed below the deficiencies in that evidence and in particular the lack of probative weight of the hearsay documents annexed to it.
The second and third respondents relied upon the following documents:
(a)Application in a Case filed 5 February 2019;
(b)Affidavit of Ms Bai filed 5 February 2019;
(c)Documents tendered, including documents produced pursuant to subpoenae.
The following documents were tendered during the course of the trial:
Exhibit Number Description W-1 Business Certificate/Client receipt from EE Bank dated 4 December 2017 W-2 Article – Caveats against dealings in Australia and New Zealand W-3 Extract from Judicial College of Victoria (Victoria Criminal Proceedings) W-4 Red Book Valuation dated 19 October 2018 W-5 Aide Memoire dated 12 November 2018 W-6 Email dated 26 October 2018 from wife’s solicitors to husband’s solicitors requesting further discovery & documents W-7 Record of Orders made in the Criminal Jurisdiction – Victoria;
Certificate of Conviction under s 178 of the Evidence Act 2008; and
Sentencing Reasons (November 2018)W-8 2 x Redbook Valuations and VicRoads certificate of registration W-9 Aide memoire prepared on behalf of the Wife – comparison asset and liability table W-10 Letter & Disclosure Statement and Costs Agreement from Goldsmith Lawyers to Wife dated 11 November 2016 W-11 Note (undated) the wife asserts is in the husband’s handwriting W-12 Folder of documents provided by Husbands former lawyers to HH Accountants W-13 Emails between wife’s solicitor and the court purportedly from Husband W-14 Tab 18 – Customer particulars report of NAB W-15 Tab 12 – Valuation of room 1.10 and 1.17 of commercial building W-16 Tab 11 – Valuation of room 1.10 and 1.17 AA Street W-17 Tab 10 – Valuation of the H Street Property W-18 Docs at Tab 35 and 36 containing to sale of Country B properties in January 2019 W-19 Account transaction statements of Husband’s account– P Bank W-20 Balance sheet of G Company as at 31 December 2015 at Tab 3 W-21 Marked up financial statement of Husband at Tab 33 of the folder of documents for cross-examination of husband W-22 Note probably in husband’s handwriting referring to court on 18 August 2017 at Tab 22 of the folder of documents for cross-examination of husband W-23 Letter of guarantee signed by Husband 30 August 2017 at Tab 21 of folder of documents for cross-examination of husband W-24 NAB Bank Statements for the mortgages secured against the Suburb E and Suburb A, CBA statements for the wife and the wife’s Super Fund 1 Balance
Exhibit Number Description H-1 Power of attorney to authorise Wife’s Country B lawyers and certified translation (purportedly dated 2/11/16) H-2 Invoice from AB Company dated 29 March 2019 H-3 Invoice from Husband’s solicitors to Wife’s solicitors dated 21 May 2019 and email is response dated 24 May 2019. H-4 Translated of reasons for judgment in Country B proceedings dated 12 July 2019 H-5 Affidavit of Ms AC affirmed 9 November 2017 H-6 Original copy of Disclosure Statement and Cost Agreement dated November 2016/2017 H-7 Transcript of Court proceedings of 27 August 2018 H-8 NAB notes of transfer from Husband’s to Wife’s account 10 November 2016 H-9 Outline of Submissions of Husband
Exhibit Number Description 2/3 R-1 First loan agreement for Country B currency 3,400,000 between Mr Zan, Ms Bai and Mr Gao 2/3 R-2 3 certificates of title of Country B properties, copies of which the witness asserts were handed to her by the husband 2/3 R-3 Copy of photograph of Suburb A property (C Street, Suburb A VIC) 2/3 R-4 Translation of loan agreement (2/3 R-1) 2/3 R-5 Translation of certificates of title of Country B properties (2/3 R 4) 2/3 R-6 Translation of social media conversation thread between Ms Bai and Ms BB 2/3 R-7 Letter of Guarantee dated 1 September 2017 EVIDENCE
The standard of proof in this case is the balance of probabilities (s 140 Evidence Act 1995 (Cth)).
Section 140 of the Evidence Act 1995 (Cth) provides:
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject matter of the proceeding; and
(c) the gravity of the matters alleged.
The husband and wife relied upon their respective affidavits. The affidavits exhaustively recounted the history of the parties’ relationship in regard to the dispute. I have examined that evidence and do not propose to repeat it in these reasons. It is not necessary for a trial judge to refer to every piece of evidence or argument presented during a trial.
In Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62], Gleeson CJ, McHugh and Gummow JJ said:
…A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
Credibility of Witnesses
The wife gave evidence and was cross-examined by counsel for the husband. She impressed as a mostly truthful witness, although she rarely directly answered questions. At times she sought to exaggerate her case in a manner she perceived would be advantageous to her. She also was unable to provide satisfactory answers to questions about her failure to repair and thereafter rent the Suburb E property. She was not challenged about the quintessential element of the husband’s case, that she had forged the documents she relied upon to establish the financial position of the husband in Country B. Where evidence conflicts, I prefer the evidence of the wife to that of the husband, for reasons explained in my comments about the husband.
The husband gave evidence and was cross-examined by counsel for the wife. He was not an impressive witness. His answers to questions were seldom responsive to what he was actually asked and he did not provide credible explanations for discrepancies between his evidence and documents. Counsel for the wife submitted the husband was an appalling witness who lied continuously and whose evidence should not be accepted by the court. As an example, counsel for the wife relied upon cross-examination by the husband’s counsel of the second respondent. Obviously on instructions from the husband, it was put to the second respondent that the husband did not show her the certificates of title to the Country B property, as she had asserted. In reply, the second respondent produced the copies of the certificates of title in court and they were tendered as Exhibit 2/3 R-2.
Counsel for the wife submitted during cross-examination he was evasive and argumentative, refused to answer questions and made speeches which he thought were self-serving. He clearly regarded the court process as a joke as evidenced by his smirking when he was cross-examined by the second respondent. His invariable answers, whenever documents were put to him that were contrary to his case, was to assert the documents were fake, untrue or forged by the wife. That was particularly notable when documents related to the valuation of all income from the Country B businesses and properties. According to the husband, all of the documents which valued the Country B properties for the purposes of the loan from the Q Bank (tabs 11 to 14 of the folder for cross-examination) were forged by the wife. The lease agreement for Tenant J (tab 5) which showed yearly rental as Country B currency1.1 million and not Country B currency 400,000 was also forged by the wife. The payment invoices and receipts (tab 7) which showed the income from Tenant J paid to Mr K exceeded the rental referred to in the husband’s lease, were according to the husband also forged by the wife. The balance sheet of G Company as at 31 December 2015 (Exhibit W-20) which did not record any loan of Country B currency 25 million from the husband’s cousin was also forged by the wife.
Many of his denials were absurd including his refusal to accept that the building had five floors and not three floors as he had asserted, until photographs of the building, including a floor directory, were shown to him.
His evidence about the loan application to NAB (Exhibit W-14) was also absurd. According to the husband, when faced with the document which disclosed the value of the H Street property as 20 million and his gross monthly income as $37,984.50, his evidence was the bank had advanced the loan to him without verifying with him that the details in his application were correct, despite the fact he had signed the document.
The appeal judgement of the City Z Court found that the Agreement on Matrimonial Property and the Letter of Commitment, which the husband relied upon at first instance in Country B, displayed abnormal signs of ageing due to human factors and that it was highly unlikely the time interval between the two documents was four years. That statement clearly implies that if there have been any forgeries in litigation between the parties, it was by the husband for the Country B proceedings.
On two occasions the husband breached orders which were made by this Court preventing him from encumbering or disposing of assets in Australia and Country B. The first was on 1 September 2017 when he entered into a loan agreement with the second and third respondents and the second was when he sold the property at AA Street for Country B currency 1.2 million when it had been valued two months prior at Country B currency 2 million.
In summary, counsel for the wife submitted that none of the husband’s evidence should be accepted except where it is corroborated by evidence from independent third parties, of which there are none, and the husband’s evidence regarding his financial position in Country B should not be accepted because it is contrary to documentation comprised in the wife’s cross-examination folder.
I agree with and accept the submissions of counsel for the wife and below refer to many discrepancies between the husband’s evidence and documents produced by the wife. For the reasons submitted by counsel for the wife, where the evidence between the wife and the husband differs, I prefer and accept the evidence of the wife.
Ms BB, the husband’s girlfriend gave evidence and was cross examined. She gave evidence which she thought would be most advantageous for and supportive of the husband. I consider her evidence to have little probative value because she was so obviously aligned with the interests of the husband.
Ms Bai, the second respondent gave evidence and was cross-examined. She answered questions in a mainly responsive manner and I accept her as generally truthful. She did however fail to disclose the proceedings and judgment in Country B.
Mr CC, was an expert witness engaged by the husband about the process of documents obtained by the Country B courts. He was cross-examined by counsel for the wife. He was responsive to questions asked and made appropriate concessions, including he relied on investigations which were not carried out him and he did not practice in City Z. I refer to his evidence in greater detail below.
Issues in dispute between husband and the wife
The disputed issues waxed and waned throughout the lengthy trial and depended to some degree, which legal proceedings were simultaneously underway in Country B and whether the husband was represented or acted on his own behalf. The first substantive dispute was whether this Court should include the Country B assets in the current application for property adjustment. I address this issue later in these reasons when considering the composition of the asset pool.
There were further disputes about the asset pool which included the valuation of the Country B properties, if included in the asset pool, the veracity of an alleged significant liability owing to the husband’s cousin in the Balance Sheet of the G Company, the size of the building in Country B which impacted on the valuation of the property, whether the claim of the second and third respondent should be paid from the Australian assets, the failure of the husband to made full and frank disclosure of assets in Country B and whether any capital gains tax liability would flow from the sale of the Suburb A property.
The parties were also in dispute about the extent of the husband’s asserted initial contributions, future needs of both parties and whether the wife should receive lump sum spousal maintenance.
RELEVANT LEGISLATION
Property proceedings between parties to the marriage are governed by the provisions of s 79 of the Act.
Section 79(1) of the Act provides that the court may make such orders as it considers appropriate altering the interests of the parties in the property.
Section 79(2) provides as follows:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
If the Court is satisfied that it is just and equitable to make an order altering the interests of the parties in property, s 79(4) of the Act sets out the matters which the court must take into account when considering what order (if any) should be made.
Section 79(4) provides as follows:
In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
Prior to the decision of the High Court in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”), the preferred approach to determine property matters was set out by the Full Court in the matter of In the Marriage of Hickey [2003] FamCA 395 (“Hickey”).
The approach, as set out in Hickey may be summarised as follows. Firstly, the court should make findings as to the identity and value of the property pool. Secondly, the court should determine the contributions of the parties both direct and indirect, including financial and non-financial contributions and then determine the contribution based entitlements of each of the parties, as a percentage of the value of the property of the parties. Thirdly, the court should determine whether any further adjustment should be made to the contribution based entitlements of the parties, after giving consideration to the relevant matters referred to in s 75(2) of the Act. Fourthly, the court should consider the effect of those findings and decide what order for division of property is just and equitable.
In Stanford, the High Court noted that s 79(1) enables the court to make such orders as it considers appropriate. However, prior to making any orders for the adjustment of parties interests in property, the court must determine whether it is just and equitable to make any property orders, or to alter the parties interests in property.
At [36] of Stanford, the High Court said:
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
The High Court stated in Stanford at [37]:
First, it is necessary to begin consideration of whether it is just and equitable to make property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property… The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order."
At [40] of Stanford, the High Court stressed that the question of whether it is just and equitable to make property settlement orders should not be answered by starting with an assumption:
…that one or other party has the right to have the property of the parties divided between them, or has the right to an interest in a marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down". To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4) without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
The High Court further stated at [42]:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship and the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
In Bevan & Bevan [2013] FamCAFC 116 (“Bevan”), the Full Court considered which matters might be taken into account in determining whether it is just and equitable to alter existing property interests.
At [84] and [85], Bryant CJ and Thackray J said:
84.Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4) which make clear that in considering “what order (if any) to make, the court must take into account the matters referred to in that subsection.
85.This requirement to consider the s 79(4) matters, in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, we determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation.
In Bevan, Finn J stated at [169]:
Findings of fact concerning of the parties financial history (i.e. the contributions) and their present circumstances and future prospects made in the context of s 79(4) will also assist, but such findings cannot (according to Stanford) be conclusive in determining whether or not it is just and equitable to make an order altering any particular property interest.
In summary, in the majority of matters the decision as to whether or not it is just and equitable for the Court to make property orders is resolved by the breakdown of the marital relationship and the mutual applications of the parties to the Court for orders altering their respective.
IS IT JUST AND EQUITABLE TO ALTER THE PARTIES’ PROPERTY INTERESTS?
In this matter the parties have separated and both parties have made applications to the Court seeking orders altering their respective property interests.
The parties are no longer living in a marital relationship, and as stated at [42] of Stanford, there will not “thereafter be the common use of property by the husband and the wife”.
I am satisfied that it is just and equitable to alter the parties’ property interests.
Having satisfied myself that it is just and equitable to make an order altering the interests of the parties in the property, the approach and considerations I must make are as follows:
(a)determine the assets comprising the property pool and attribute value to them;
(b)identify and give weight to the various contributions of each of the parties as set out in s 79(4)(a)–(c) and make an assessment as to the entitlements of the parties based on their respective contribution;
(c)identify the relevant considerations as set out in s 79(4)(d)–(g), including the matters set out in s 75(2) so far as they are relevant, and then decide whether any further adjustment is appropriate;
(d)consider whether the proposed orders are just and equitable.
THE PARTIES’ EXISTING INTERESTS IN PROPERTY
The wife provided an ‘Updated Asset & Liability List - Australian and Country B Assets’ which was annexed to her Outline of Closing Submissions. In his Second Revised Outline of Case the husband also annexed a document described as Respondent’s List of Legal and Equitable Interests in Property & Liabilities in Australia and another document described as Respondent’s List of Legal and Equitable Interests in Property & Liabilities in Country B. I have adopted the document annexed to the Wife’s closing submissions, but have incorporated the husband’s valuation of assets, where it differs from the wife’s valuation.
The table of Assets and Liabilities, including disputed assets is as follows:
AUSTRALIAN ASSETS
Legal Ownership
Estimated Value
C Street, Suburb A
Husband
$3,120,000
D Street, Suburb E
Joint
$1,450,000
Husband’s savings
Husband
$ Unknown
Wife’s savings
Wife
$3,498
Motor Vehicle 2 (registration …)
Wife
$20,000
Motor Vehicle 1 (registration …)
Husband
$17,520
Total Australian Assets
$4,611,018
Liabilities
Debtor
Estimated Amount Owing
Suburb A NAB Mortgage
Husband
($1,750,871)
Suburb E NAB Mortgage
Joint
($1,070,493)
Personal Loan from the 2nd and 3rd Respondents in September 2017
Husband
Husband asserts ($300,000) is owing.
Wife disputes.
Capital gains tax arising from sale of Suburb A property (asserted by husband)
Husband
($400,000)
Total Australian Liabilities
($3,521,364)
Total Net Non-Super Assets
$1,089,654
Superannuation
Ownership
Est Amount
Super Fund 1
Wife
$7,324
Total Superannuation
$7,324
TOTAL NET AUSTRALIAN ASSETS
$1,096,978
ADD BACKS
Est Amount
Funds wife received as interim property distributions from NAB account …50 pursuant to court orders
$160,000 (agreed)
Funds husband received as interim property distributions from NAB account …50 pursuant to court orders
$145,000 (agreed)
Funds in NAB offset account
$1,090,000 (sought by husband)
Loss of rent from wife’s failure to lease the Suburb E property
$180,000 (sought by husband)
TOTAL NET ASSERTED AUSTRALIAN ASSETS WITH ADDBACKS
$2,671,978 (inc all addbacks)
COUNTRY B ASSETS
Legal
Ownership
Wife Est. Value
Husband Est. Value
G Ltd including: H Street, City Z
Husband sole director holding 95% of shares. Wife holds 5% of shares
Country B currency 37,327,145
AUD $8,125,052
(If loan from husband's cousin does not exist)
Country B currency 11,890,493
AUD $2,586,440
(If loan from husband’s cousin exists)
Husband does not accept HH Accountants 21/11/2018 Report
L Ltd
Husband sole director - holds 90% of shares.
Wife holds 10% of shares
Country B currency 915,128
AUD $199,060
HH Accountants Report 21/12/2018
Husband does not accept HH Accountants 21/12/2018 Report
Property situate at AA Street, Suburb S, City Z
Husband
Country B currency 2,612,610
AUD $568,512
HH Accountants Report 21/12/2018
Country B currency 2,000,000
AUD $401,848
On 21/01/2019 husband sold the property (refer para 29 of husband’s 20/03/2019 affidavit) for less than his own est. value of Country B currency 2,000,000 (AUD $400,000 E) as stated in his Amended Case Outline filed 20/11/2018. Property sold without wife’s consent and/or knowledge and in breach of injunctive orders.
Property 1 and Property 2 of AL Street, City Z
Husband
Country B currency 846,780
AUD $184,261
HH Accountants Report 21/12/2018
Husband does not accept HH Accountants 21/12/2018 Report
Property AG
Husband
Country B currency 120,000
AUD $26,108
Country B currency 120,000
AUD $26,108
Wife's Country B Bank Accounts
Wife
Nominal
Not Agreed
Husband's Country B Bank Accounts
Husband
Unknown
Nominal
Not Disclosed
Husband's Share Portfolio a/c (AH Ltd)
Husband
Country B currency 130,449
AUD $28,375
(as at 3/11/2017)
Not Disclosed
Husband's linked share trading account
Husband
Unknown
Not Disclosed
Total Country B Assets
Country B currency $41,952,112
AUD $9,131,368
Country B currency 16,515,460
AUD $3,592,756
Country B currency 2,120,000
AUD $427,956
PLUS value of items
husband disputes
COUNTRY B LIABILITIES
Debtor
Wife Est. Amount Owing
Husband Est. Amount Owing
Personal Loan from second and third respondents (to discharge Q Bank Loan)
Husband +/or G Company
Not Agreed
Country B currency (1,400,000)
AUD ($300,000)
Total Country B Liabilities
Nil
Country B currency (1,400,000)
AUD ($300,000)
TOTAL NET COUNTRY B ASSETS
Country B currency 41,952,112
AUD $9,131,368
(If loan from husband's cousin does not exist)
Country B currency 16,515,460
AUD $3,592,756
(If loan from husband's cousin exists)
Country B currency 720,000
AUD $127,956
PLUS value of items husband disputes and/or not disclosed
ADD-BACKS
Wife’s Add-back - Funds husband transferred from P Bank a/c …77 to either: himself or his son Mr K or to other unknown source(s)
Country B currency 935,282
AUD $203,366
Wife’s Add-back - Known rental paid by Tenant J to an unknown source and/or the husband’s son, Mr K from Nov 2016 - April 2019
Country B currency 3,373,039
AUD $671,000
Not disclosed by husband
Wife’s Add-back - $100,000 husband repaid to lenders
Country B currency 500,000
AUD $100,000
Husband’s Add-back - Funds in Wife's RR Bank Account 2013
Not Agreed
Country B currency 756,504
AUD $152,000
Husband’s add-back – Wife’s sale of shares in November 2016
Country B currency 1,004,000
AUD $218,702
Husband’s Add-back - Funds wife transferred to her mother's account November 2016
Not Agreed
Double up with add back of share account funds
Country B currency 1,055,124
AUD $212,000
Husband’s Add-back - Funds in Wife’s Share account in March 2017
Not Agreed
Double up with add back of share account funds
Country B currency 81,095
AUD $16,294
Husband’s Add-back – Funds transferred from Country B to Wife’s ANZ account …25
Not Agreed
Double up with add back of Share account funds
Country B currency 325,904
AUD $65,482
Total Add-backs
Country B currency 4,808,321
AUD $974,366
Country B currency 3,222,627
AUD $664,478
TOTAL NET COUNTRY B ASSETS WITH ADD-BACKS
Country B currency 46,760,433
AUD $10,105,734
(If loan from husband’s cousin does not exist)
Country B currency 21,323,781
AUD $4,567,122
(If loan from husband’s cousin exists)
Country B currency 3,942,627
AUD $792,434
PLUS value of items husband disputes
Note: As at the date of the HH Accountants report, the exchange rate between AUD and Country B currency was approximately 1:5. As at this date, the exchanged rate is approximately 1:4.6.
The first issue to determine is whether to include the Country B assets in the pool of assets available for distribution between the parties.
On the first day of the trial, 12 November 2018, the husband’s first counsel purported to make an oral application for a stay of these proceedings, pending the determination of the Country B property proceedings. This was referred to by the husband’s counsel as bifurcation of the proceedings.
The husband issued proceedings in Country B on 4 December 2017 and I was informed the first return of the application was heard on 18 September 2018, in the absence of both parties. Annexure W-37 to the wife’s trial affidavit is a copy translation of the civil complaint filed in the Suburb W Local Court in City Z.
Between November 2016 and 30 October 2017, prior to the issue of the husband’s Country B proceedings, the wife had issued two applications in the Country B courts. Both applications were ultimately withdrawn by her. Details of the applications are provided by the wife in paragraphs 213(a) and (b) of her trial affidavit.
After the issue of the husband’s application in the Country B courts, the wife filed two further applications in Country B on 5 December 2017 and 9 May 2018. Paragraphs 213(c) and (d) of the wife’s trial affidavit refers to circumstances of her being forced to withdraw the first application and the second being dismissed.
On 9 November 2018, three days prior to the scheduled commencement date of the trial, the husband filed in this proceeding an Amended Response and a Case Outline document.
Neither the Amended Response nor the Case outline sought orders for a stay or “bifurcation” of the Australian proceedings. Despite no formal application, the husband’s counsel sought to make the oral application.
The husband’s evidence about the respective roles of the Australian and Country B courts is at paragraph 51(n) of his trial affidavit. That paragraph makes assertions as to legal matters, which are not within the husband’s expertise.
The husband’s counsel submitted that there were complex issues in Country B that only the Country B court had the ability to determine. These include:
(a)the validity and enforceability of two alleged postnuptial agreements;
(b)the validity of the purported loan in the G Company accounts;
(c)the dispute about the leases at H Street.
It was additionally submitted that because the valuation of the Country B assets had not yet been completed, the Australian proceedings should not proceed. It was then conceded that the valuation would be available prior to the resumption of this proceeding.
The order for the valuation of the Country B assets was made by consent on 2 June 2017. At that time there was no suggestion this court could or should not include the Country B assets in the property pool.
Counsel for the husband submitted the Country B proceedings were likely to be determined within the next 12 months. She referred me to report of Mr CC, which is annexure MCC-1 to his affidavit, as evidence of the likely time frame for determination of the Country B proceedings. I was directed to the last paragraph on page 26 of Mr CC’s report. That paragraph does not provide any timeframe is to when the Country B proceedings are likely to be to be determined. There was no objective evidence at all about the likely timeframe for further hearings of the application.
Counsel for the wife submitted that according to the wife’s expert on Country B law, Ms JJ, the Country B proceedings would not proceed without the presence of both the petitioning party and the respondent.
A complicating factor was the husband’s incarceration. In September 2018, he was found guilty of assaulting the wife. In November 2018, he was sentenced to five years imprisonment with a non-parole period of three years. The husband was obviously unable to travel to Country B whilst his serving his sentence in Australia and as submitted by his counsel, the husband would need to travel personally to Country B to participate in the Country B court proceedings.
At that time, the husband had instructed his criminal lawyers to draft a Notice of Appeal in relation to the criminal conviction. There was no evidence adduced on behalf of the husband about the possible timeframe of the hearing of any appeal, nor the prospects of success. Counsel for the wife tended as W-3 extracts from the Victorian Judicial College Criminal Procedure Manual. Ultimately, the husband’s appeal against his conviction was dismissed in June 2020.
The application remained unresolved and by the time of the next court date the husband’s previous solicitors had ceased to act on his behalf.
On 10 December 2018, the husband’s solicitors filed a Notice of Ceasing to Act. On 11 December 2018, the following day, a new firm filed a Notice of Address for Service for the husband. On 12 December 2018, the matter was listed before the Court and another counsel appeared on behalf of the husband. The matter was further adjourned to 8 April 2019 for a five day trial.
On 8 April 2019, the first of a five day listing in the Family Court the husband’s third counsel sought leave to personally withdraw from acting on his behalf and leave for his instructors to also withdraw.
Both counsel and the husband solicitors sought to withdraw because the husband had breached an injunction made by me on 2 June 2017, which restrained him from selling or disposing of assets in Country B.
Paragraphs 29 and 30 of an affidavit filed by the husband on 20 March 2019 deposes to him selling a commercial property in City Z, Country B, in breach of that order. He deposes to the sale price of approximately $240,000, whereas the value was jointly engaged by the parties, HH Accountants, valued the property at approximately $520,000.
The funds were deposited into the trust account of the husband’s then solicitors. A copy of the trust account ledger was produced by the husband solicitors pursuant to an order made by me.
The trust account ledger demonstrated that part of the proceeds of sale were deposited into the husband’s solicitors trust account. On 22 February 2019, the sum of $50,000 was refunded to the husband and/or his girlfriend, by his solicitors.
On 4 March 2019 and 5 March 2019, the sum of $25,000 was deposited into the solicitors trust account being a total of $50,000. Thereafter, further sums totalling $50,000 were deposited into the trust account.
In March 2019, there was a series of letters between the solicitors for the wife and the solicitors for the husband about the source of the funds deposited into the husband solicitors trust account.
Counsel for the husband conceded that unless the deposits into the trust account were unrelated to the proceeds of sale of the City Z property, he could not continue to act on behalf of the husband, nor could the solicitors.
In the wife’s affidavit sworn 28 March 2019, she deposes to the circumstances of the Country B judge and her lawyer in Country B finding out about the sale of the AA Street property, and additionally the husband paying the income from the H Street property, to his son, Mr K via a Country B bank account.
After hearing submissions from counsel for the husband, I considered it appropriate that leave be granted to enable him to withdraw from acting on behalf of the husband.
I adjourned the proceeding until later that afternoon to enable the solicitor for the husband to make submissions about whether granting him leave to withdraw from the proceedings should be subject to any conditions.
After hearing submissions from the solicitor for the husband, I granted leave for him to withdraw from the proceedings subject to him:
(a)providing advice to the husband that the husband would not be permitted to personally cross-examine the wife, in the event he did not obtain legal representation to commence the trial on the adjourned date;
(b)the consequences of the trial proceeding without the husband cross-examining the wife;
(c)there would be no further adjournments granted and the trial would proceed on the adjourned date irrespective of whether the husband was legally represented.
The trial was adjourned for further hearing on 27 May 2019. The wife and ICL sought their costs incurred because of the adjournment and orders were made. I advised all parties the reasons for the costs order would be addressed in my final reasons.
On 27 May 2019, the husband’s new lawyers and new counsel did not pursue the oral application for a stay of this proceeding pending the resolution of the Country B proceedings. Rather, in a comprehensive document titled Revised Outline of Case on Behalf of the Respondent Husband, the issue of this court’s jurisdiction was addressed. The husband’s 2nd Revised Outline of Case, which he relied upon when self-represented at the conclusion of the trial, effectively repeated the document prepared in May 2019, with some updating amendments.
It was submitted this court should accede to the husband’s application to make property adjustment orders that deal only with each of the parties’ respective entitlements in the Australian assets, which would effectively leave the extant proceedings in Country B to determine the parties’ respective entitlements to the Country B assets and to make any necessary enforcement orders.
The wife’s position was this Court should deal with assets both in Australia and Country B and that in personam orders should be made against the husband relating to the Country B assets.
In support of his submission for this Court to deal only with the assets in Australia, the husband contended there were various disputes which this Court was not able to properly determine, including the inability to identify with any precision the value of the Country B assets. The submissions refer to the inability of the husband’s counsel to cross-examine the valuers of the various real properties in Country B because the valuers had not complied with requests to attend the trial. Other issues raised included the validity of loans in Country B because of the reluctance of Country B witnesses to participate in litigation here, the Court’s inability to value ongoing businesses in Country B which were underpinned by the disputed real property valuations and loans, which this Court is unable to analyse by reference to any understanding of the commercial landscape of Country B and the husband’s incarceration in Australia and the forensic disadvantage he experiences in obtaining documents and source material with respect to his contentions as to the value of the Country B assets.
Furthermore, this Court could not have any confidence that orders made in this jurisdiction would be adopted or enforced by the Country B courts. It is common agreement that Country B is not a signatory to international treaties concerning the recognition or enforcement of orders made by courts in Australia and at its highest, this court can exercise of jurisdiction by making in personam orders against the husband, but those orders would still require enforcement in Country B.
Subsequent to three hearing days in May 2019 the trial was further adjourned to 22 July 2019.
On 12 July 2019, the Country B Court had determined the husband’s property application in Country B. The primary focus of the proceeding was the validity of two postnuptial agreements allegedly entered into by the parties in Country B.
Interestingly, despite the submissions of his counsel about the necessity for the husband to personally attend the proceedings in Country B, it is evident from the judgment that the proceeding was filed by the husband on 15 January 2018 and that the issue of the validity of the postnuptial agreements was determined in the husband’s absence. The wife attended personally.
It seems that neither the husband nor the wife thought to advise their Australian legal representatives these proceedings in Country B would be determined in July 2019. To the surprise of counsel for both parties, the judgment was produced on the weekend before the resumption of the trial on 22 July 2019 and a translation of the judgment was tendered as Exhibit H-4 on 22 July 2019.
At paragraph 153 of the wife’s first trial affidavit, she deposes to the husband alleging the parties had entered into two Country B post nuptial agreements. The first agreement is a Marital Property Agreement dated 1 January 2009 and the second agreement is a Letter of Commitment dated 17 December 2013. Unsigned copies of the agreements together with English translations are annexure W-29 to the wife’s first trial affidavit. The execution clauses of both documents do not make provision for the signature of a witness attesting the signature of the parties.
At present the wife does not have the necessary skills to transition in to the workplace, and has limited English capability. She has undertaken a vocational course.
She was primary carer of the parties’ son Mr F prior to him recently turning 18. As Mr F has had little to do with the husband during his incarceration, it is unlikely the husband will have any future meaningful involvement with his son.
The wife’s expenses are set out in her Financial Statement filed 22 October 2018. The wife was not challenged about these expenses other than she does not pay the claimed weekly mortgage payments of $2,431 relating to both the Suburb A and Suburb E properties, as the mortgage payments are met from the offset account. She also does not personally pay Mr F’s education expenses which are referred to at Part N of the Financial Statement, as these fees also are paid from the offset account. There was no further updated financial information about the wife’s financial position.
The wife as at the date of cross-examination received a new start allowance and family tax benefit A and B.
During the marriage the parties enjoyed a high standard of lifestyle both in Australia and Country B. In the future the wife will need to support herself from her own resources.
The husband was born in 1964 and is currently 58 years old. Prior to his incarceration he was cohabiting with his girlfriend. At the conclusion of his sentence it is likely that the husband will be deported to Country B.
The extent of the husband’s income from the Country B assets is unknown due to his failure to make full and frank disclosure. The husband attributes this to his inability to travel to Country B subsequent to him being charged. I do not however accept that justification for his inability to disclose relevant assets and his general financial circumstances in Country B.
At the very least, the husband receives and presumably will continue to receive rental income, via G Company, the Tenant J property and will have considerable assets in Country B.
The husband submits that the wife’s assertions that the husband has minimal future needs have failed to consider the impact of his incarceration on his capacity to maintain the Country B businesses, his mental and physical health, his ability to fund adequate legal representation to proceed with an appeal from his criminal conviction and his inability to contribute meaningfully to raising his third son. I do not accept that submission because the husband has had lawyers represent him in the Country B proceedings, has continued to receive rental income from Tenant J and was represented in his criminal appeal by senior and junior counsel. I do accept he will have a moral responsibility to support his child with his girlfriend. There is no evidence about the extent of his legal obligations to do so, nor the financial support provided by the child’s mother, who has supported the child during the husband’s incarceration, or his obligations to contribute to that support if he is deported to Country B.
In his second Revised Outline of Case, the husband submits that there should be an adjustment in favour of the wife of 15% of the Australian assets as a result of the imbalance between the parties’ future needs. He does not address the appropriate adjustment if the court includes the Country B assets.
Section 79(4)(f) and (g)
The parties were initially in dispute about the parenting arrangements for the child, however agreement was reached during the course of the trial that the child would remain living with the wife.
Section 75(2)(o): any fact or circumstance which in the opinion of the Court, the justice of the case requires to be taken into account
Under this section, I will take into consideration the disbursement of the funds in the NAB offset account, the wife’s failure to rent out the Suburb E property and the rent from Tenant J received by the husband post separation.
Counsel for the wife submitted that the husband had failed to comply with his discovery and disclosure obligations. His failures to make full and frank disclosure are set out in paragraphs 156 to 164 of the wife’s first trial affidavit.
The husband at paragraph 52(a) of his trial affidavit sworn and filed 7 November 2018, deposes that he has made significant discovery, although he acknowledges that his discovery is incomplete. He asserts:
(a)he needs to travel to Country B personally to obtain certain documents, including Country B bank account statements;
(b)his ability to obtain documents has been compromised as a result of his incarceration.
The wife’ asserts that as a result of the husband’s failure to make full and frank disclosure, the following matters are largely unknown:
(a)the husband’s income, including income from the two companies in Country B and rental income from Tenant J;
(b)the financial position of the two Country B companies.
At paragraph 161 of the wife’s trial affidavit she summarises the husband’s failure to disclose documents, in accordance with the orders made in June 2018.
The documents the husband has failed to disclose include:
(a)his personal tax returns and assessments for the three most recent years;
(b)a list of his Australian bank accounts;
(c)incomplete provision of bank statements for the past three years relating to three Country B bank accounts;
(d)a list of his overseas bank accounts;
(e)his Country B share portfolio statements together with linked Country B share trading accounts;
(f)complete disclosure of all of his Country B bank accounts, specifically P Bank accounts …11 and …49;
(g)incomplete provision of bank statements for the past three years for four of his Country B bank accounts;
(h)incomplete disclosure of NAB home loan account statements for the past three years including home loan account …66 and …23;
(i)no statements disclosed for Q Bank loan …00 (personal loan);
(j)a list of all real property held in Country B registered in the husband’s name together with title documents for each property;
(k)a list of shares held and dividend statements for the past three years for all shares held by the husband in all companies;
(l)incomplete disclosure of taxation returns of G Company;
(m)incomplete disclosure of financial statements and bass statements;
(n)no disclosure of current statements of assets and liabilities for companies;
(o)no disclosure of receipt and expenses journals for relevant companies;
(p)incomplete disclosure of bank statements for the past two years for company bank accounts;
(q)no disclosure of minutes of directors meetings;
(r)no disclosure of the company register;
(s)no disclosure of documents confirming whether or not he has an interest in a trust;
(t)no disclosure of documents relating to any potential superannuation entitlements;
(u)incomplete disclosure of leases, rental statements, and lists of bank account into which rental income has been deposited;
(v)no disclosure of the husband’s interest in Property AG or his Country B share portfolio;
(w)no list of assets the husband has disposed of in the previous three years.
In response to this assertion, the husband submits that that the wife has failed to comply with her discovery obligations. Paragraph 52(a)–(e) of the husband’s trial affidavit set out the alleged failure of the wife to comply with discovery.
Exhibit W-5 is an Aide Memoire which sets out the wife’s submissions in relation to her disclosure, and her response to the husband’s allegation that she has not complied with her discovery and disclosure obligations.
After considering the evidence of each party in relation to their respective discovery and disclosure obligations, and in particular the evidence under cross examination, I am satisfied:
(a)the wife has complied with her discovery and disclosure obligations;
(b)the husband has failed to comply with his discovery and disclosure obligations.
Counsel for the wife submitted I should draw inferences against the husband, as follows:
(a)the husband’s income is greater than disclosed;
(b)the husband owns Property AG in Country B;
(c)the husband owns a share portfolio with a linked share trading bank account;
(d)the value of the Country B real estate is at least as identified in the HH Accountants report.
The Full Court in Chang & Su [2002] FamCA 156 at [67] listed the relevant authorities of the law to be applied and the approach that may be adopted where the court is unable to determine the extent of the parties’ wealth, because of a lack of a full and frank disclosure.
The Full Court (Bryant CJ, Finn and Boland JJ) in Gould & Gould [2007] FamCA 609, set out the correct approach to be taken in relation to a failure to comply with the disclosure requirements. After considering past authorities, including Kannis & Kannis [2002] FamCA 1150 (“Kannis”), at [26]–[27] the Full Court set out the correct approach:
26.While the decision of the Full Court (and indeed also of Holden CJ) in Kannis confirms the earlier decisions which were cited by the Full Court and which establish that a robust approach can be taken by the court in cases of non-disclosure, neither that decision, nor any of the earlier decisions cited, would, in our view, support the approach which the trial Judge in this case took in paragraph 24 of his reasons for judgment, being to reduce his assessment of the husband’s contributions of account of the husband’s non-disclosure.
27.Rather the appropriate approach for his Honour to have adopted in this case would have been to have increased the asset pool to take account of non-disclosure by the husband, and indeed his Honour had already done this to some extent in accepting the schedule of assets prepared by the wife’s Counsel (see also paragraphs 12 and 14 of his Honour’s reasons). Alternatively, or even in addition, had his Honour been persuaded that on the balance of probabilities there existed assets other than those contained in the asset pool contained in his reasons, his Honour could have made some adjustment in favour of the wife on account of the husband’s non-disclosure pursuant to the provisions of s 75(2)(o), as did Holden CJ in Kannis.
In Kannis, the Full Court emphasised the “absolute” nature of the duty to disclose and stated at [51]:
Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude that the asset pool is greater than demonstrated. In those circumstances it might be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour…
The Full Court in Jamine & Jamine (No. 2) [2012] FamCAFC 104 approved the approach in dismissing an appeal by a husband when the trial judge found the husband had failed to make full and frank disclosure, and the wife received a 5 per cent adjustment in her favour pursuant to s 75(2)(o).
I accept the submissions of counsel for the wife that the husband’s failure to disclose documents and information, is a consideration relevant to the exercise of my discretion.
Conclusion as to Contributions
I do not intend to attach percentages to the parties’ initial contributions, those made during the marriage and post separation.
As the Full Court said in Dickons & Dickons [2012] FamCAFC 154:
23.We wish also to refer to the approach of the Federal Magistrate in attributing percentages to differing periods within the relationship, or types of contribution made. There is in our view little to be gained, and much to be said against, approaching the task of assessing contributions by attaching percentages to components of it. (The same, it might be said, applies to attributing a percentage to each of the relevant s 75(2) factors).
24.There can be little doubt that the classification of contributions by reference to terms such as "initial contributions", "contributions during the relationship", and "post-separation contributions", can be helpful as a convenient means of giving coherent expression to the evidence in a s 79 case and to giving coherence to the nature, form and extent of the parties' respective contributions. However, the task of assessing contributions is holistic and but part of a yet further holistic determination of what orders, if any, represent justice and equity in the particular circumstances of this particular relationship. So much is clear from the terms of s 79 itself and, in particular, s 79(2). The essential task is to assess the nature, form and extent of the contributions of all types made by each of the parties within the context of an analysis of their particular relationship.
The husband, in his case outline submitted that he had made overwhelmingly larger financial contributions to the assets of the marriage, and that he should receive proper acknowledgement of his significant initial contributions which assisted funding the family’s migration to Australia. He also acknowledged the greater non-financial and indirect contributions made by the wife in relation to home duties and care of their son Mr F.
The court should find the husband’s contribution to the Australian assets should be assessed at 55 per cent in his favour and 45 per cent in favour of the wife. He did not make any submissions about contribution findings if the Country B assets are included and indeed did not seek any findings from this court as to the Country B assets.
The wife, in her case outline, submitted that the contributions of the parties, both financial and non-financial were largely equal.
Having regard to weighing up and assessing the myriad of contributions of the parties, both financial and non-financial, direct and indirect, at the commencement of the relationship, during the relationship and post separation, and their contributions as homemaker and parents, I assess the parties contributions as equal.
Conclusion as to future needs
The wife sought an adjustment of 20 per cent in her favour for future needs and s 75(2)(o) factors including both the Australian and Country B assets.
In his Second Revised Outline of Case, the husband submits that there should be an adjustment in favour of the wife of 15 per cent of the Australian assets as a result of the imbalance between the parties’ future needs. He does not address the appropriate adjustment if the court includes the Country B assets.
I do not accept the submissions of either party as appropriate.
After considering and balancing the future needs of the parties and also considering the relevant s 75(2)(o) factors, I am satisfied it is appropriate to make an adjustment to the wife of 10 per cent of the determined asset pool, including both Australian and Country B assets.
Adjustment of interests
As a result of the findings made relating to contributions and future needs, and consideration of the relevant s 75(2)(o) factors referred to in these reasons, I am satisfied it is just and equitable to make orders adjusting property between the parties, so that the wife is entitled to 60 per cent of the combined Australian and Country B asset pool and husband should receive 40 per cent of that asset pool.
It is also appropriate for the wife to receive the whole of the Australian assets as she will most certainly face the prospect of further proceedings in Country B, including enforcement difficulties against the husband. Her immediate needs in Australia, including accommodation and lump sum cash to support herself, are obvious. The conduct of the husband throughout the proceedings does not give the court any comfort he will comply with in personam orders. It is only by retention/transfer of all Australian assets to the wife, that she has any prospect of receiving a portion of what the court has determined is just and equitable. The husband has also received a partial property distribution of $145,000 from the Australian assets.
Because of the husband’s lack of financial disclosure, which is addressed in these reasons, it is impossible to make clear findings about the extent of his assets and income in Country B. The husband is likely to be deported to Country B at the conclusion of his sentence, although he may well choose to challenge any such decision. I am satisfied the extent of the husband’s assets and income in Country B have not been disclosed to this court and that the husband will avail himself of those assets and income, in addition to the assets and income identified during this proceeding.
The adjustment of property which I propose to make must be just and equitable, both in terms of percentage adjustment, in real terms and the orders implementing the adjustment must also be just and equitable.
On the asset pool as determined by me this will result in the wife receiving $6,981,023 and the husband receiving $4,654,016, less his liability to the second and third respondents.
The division of assets I have determined is as follows:
Wife’s Assets
Australian Assets
C Street, Suburb A
$3,120,000
D Street, Suburb E
$1,450,000
Wife's savings
$3,498
Motor Vehicle 2 (registration …)
$29,000
Motor Vehicle 1 (registration …)
$16,520
Super Fund 1
$7,324
Funds wife received as interim property distributions from NAB account …50 pursuant to court orders
$160,000
Sub Total of Assets
$4,786,342
Less Liabilities
Suburb E NAB Mortgage
($1,070,493)
Suburb A NAB Mortgage
($1,750,871)
Sub Total of Liabilities
($2,821,364)
Net Australian Assets
$1,964,978
Country B Assets
Proceeds of sale of wife’s shares
Country B currency 1,004,000
AUD $218,702
Payment from Husband
AUD $4,797,343
TOTAL NET ASSETS
AUD $6,981,023
Husband’s Assets
Australian Assets
Partial Property Settlement
AUD $145,000
Country B Assets
G Ltd including: H Street, City Z
Country B currency 37,327,145
AUD $8,125,052
L Ltd
Country B currency 915,128
AUD $199,060
Property situate at AA Street, Suburb S, City Z
Country B currency 2,612,610
AUD $568,512
Property 1 and Property 2 of AL Street, City Z
Country B currency 846,780
AUD $184,261
Property AG
Country B currency 120,000
AUD $26,108
Funds husband transferred from P Bank a/c …77 to either himself or his son Mr K
Country B currency 935,282
AUD $203,366
Total Assets
AUD $9,451,359
Less Payment to the wife
AUD $4,797,343
Net Country B Assets
AUD $4,654,016
Less payment to second and third respondents
AUD $300,000
TOTAL NET ASSETS
AUD $4,354,016
Spousal Maintenance
The wife sought future spousal maintenance by way of a lump sum payment of $100,000.
Section 72 of the Act sets out the requirements for an order for spousal maintenance. Section 72 provides as follows:
Right of spouse to maintenance
(1)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).
(2)The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.
The first matter which must be answered in order to determine the rights of a party to spousal maintenance, in this case the wife, is whether or not she has a demonstrated that she is unable to support herself adequately by reason of one of the factors set out in s 72(1) of the Act.
In Brown & Brown (2007) FLC 93-316 at [161] the Full Court summarised the principles to be applied. These include the following:
(a)the idea that “ adequate” means a subsistence level has been firmly rejected;
(b)where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties standard of living may have to be lower if financial resources are insufficient to maintain the standard;
(c)it is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately.
Because of my determination that the wife will receive all the assets in Australia and subject to enforcement, a substantial payment from the husband, I am not persuaded the wife has satisfied the first limb of s 72(1) that she is or will be unable to adequately support herself. I do not intend to make any order for lump sum spousal maintenance.
Legal Costs arising from the listing on 8 April 2019
The trial could not proceed on 8 April 2019, because of the husband’s conduct, and in particular his breach of Order 2 of the orders made on 2 June 2017. That is the second occasion the husband breached injections made by this Court.
The first occasion was on 1 September 2017, when he entered into the loan agreement with the second and third respondents contrary to the injunction made on 14 November 2016.
Counsel for the wife and counsel for the Independent Children’s Lawyer both sought the husband pay their costs of the day.
Section 117(1) of the Family Law Act 1975 (“the Act”) states, subject to the provisions of s 117(2), that the general rule in proceedings in this Court, is that each party to proceedings, shall each bear his or her own costs.
Section 117(2) of the Act provides as follows:
If, in proceedings under this Act, the Court is of the opinion that there are circumstances that justify it in doing so, the court may subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
Section 117(2A) of the Act provides, that in considering what order (if any) should be made for the payment of costs, the Court shall have regard to the following matters:
(a)the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
In the Marriage of I & I (No 2) (1995) FLC 92-625, the Full Court said that the relevant matters in s 117(2A):
“…must all be taken into account and/or balanced in order to determine whether the overall circumstances justified the making of an order for costs”
I am of the view that the husband’s conduct in breaching, for the second time, an order restraining him from selling assets of the parties, and failing to disclose the sale to the wife’s practitioners until very late in the day, justifies an order that the husband pay the costs of both the wife and the Independent Children’s Lawyer, incurred as a result of the applications by his lawyers to withdraw from the proceedings. The husband has had the benefit of the full proceeds of sale of the property, of approximately $240,000.
In reaching my decision that the husband should pay the costs of the other parties, I have had regard to the relevant matters set out in s 117(2A) of the Act.
The quantum of the costs sought by the wife are reasonable in the circumstances namely $4,400 per day for counsel’s brief fee and $2,695 for the wife’s solicitor to attend court, a total of $7,095. The quantum of costs sought by the Independent children’s lawyer, namely $2,732, being counsel’s costs and instructing solicitors costs, are also reasonable.
I accordingly made orders that the husband pay the days costs of each party and that such amount be paid within seven days. I also note that the solicitor for the husband, prior to me granting him leave to withdraw from the proceedings, did not oppose the order for costs in the amount sought.
I certify that the preceding three hundred and sixty-six (366) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 3 April 2023
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