XUEN & CHAO

[2012] FamCA 1002

FAMILY COURT OF AUSTRALIA

XUEN & CHAO [2012] FamCA 1002

FAMILY LAW – PROPERTY – urgent application – where the husband seeks an injunction restraining the wife from dealing with the parties’ Australian property – where the husband also sought an order that the wife return a substantial sum of money she had withdrawn from a joint account in Australia – where the husband sought to have the application heard ex parte – whether the interests of justice and the balancing of convenience requires the making of the injunction – consideration of prejudice to each of the parties – where the money withdrawn by the wife, prima facie, forms a significant portion of the pool that would be available for division pursuant to s 79 – where the prejudice to the husband if the injunction was not made outweighs prejudice to wife – where application heard ex parte and urgent injunction granted.

Family Law Act 1975 (Cth)

Brown & Brown (2007) FLC 93-316
Stanford v Stanford [2012] HCA 52

APPLICANT: Mr Xuen

RESPONDENT: Ms Chao

FILE NUMBER: BRC 3743 of 2010

DATE DELIVERED: 23 November 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Murphy J

HEARING DATE: 23 November 2012

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Fairon of Carroll Fairon Solicitors

THE RESPONDENT: No appearance

Orders

IT IS ORDERED THAT

1. All necessary times be abridged so as to permit the urgent listing and hearing of the Application in a Case filed by the Applicant Husband today, 23 November 2012.

2. That Application in a Case be heard today on an ex parte basis.

3. Service of the following documents be effected on the Respondent Wife by posting sealed copies, by prepaid post, to the Respondent Wife care of her brother Mr B of C Street, Suburb D, Queensland:

   a.Amended Response of the Applicant Husband filed 22 November 2012;

   b.Affidavit of the Applicant Husband filed 22 November 2012;

   c.Financial Statement of the Applicant Husband filed 22 November 2012;

   d.Application in a Case of the Applicant Husband filed 23 November 2012;

   e.Affidavit of the Applicant Husband filed 23 November 2012;

   f.Affidavit of Mr E filed 23 November 2012; and

   g.A copy of the document being Exhibit 1 in the proceedings before Justice Murphy today, 23 November 2012.

4. In addition, the Applicant Husband effect service on the Respondent Wife in the manner prescribed in the previous paragraph of:

   a.These Orders; and

   b.The ex tempore Reasons for Judgment delivered by Justice Murphy today, 23 November 2012.

IT IS FURTHER ORDERED THAT:

1. The Respondent Wife be and is hereby restrained by injunction from in any way dealing with any of the property of the parties or either of them within the meaning of s 79, Family Law Act 1975 (Cth) including, but not limited to, real property, bank accounts, superannuation funds and other assets.

2. The Respondent Wife pay forthwith to the Trust Account of Carroll Fairon Solicitors the sum of $68,000.

3. The Respondent Wife produce by way of disclosure, or otherwise sign all such documents and pay all reasonable fees as might be necessary so as to authorise copies of the following documents to be provided to the solicitors for the Applicant Husband:

   a.All documents relating to the student scholarship account for the child F identified at [39] of the Financial Statement of the Applicant Husband filed on 22 November 2012;

   b.All documents relating to all bank accounts held by the wife with the Commonwealth Bank of Australia, Suburb L Branch, in respect of the G Super Fund.

4. The further hearing of this Application in a Case be listed in the Judicial Duty List commencing at 10:00am on 18 December 2012 before Justice Murphy.

5. The Applicant Husband’s costs of and incidental to these proceedings be reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Xuen & Chao has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 3743 of 2010

Mr Xuen

Applicant

And

Ms Chao

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

1. Earlier this morning the husband filed an Application in this Case, the effect of which was to seek urgent ex parte orders in respect of property.  That application arises in circumstances where the Court is told that the wife, who was originally from China but came to Australia in 1994 and became an Australian citizen in January 2007, is this morning boarding a plane to China. 

2. Initially, the application sought an order, among others, that the wife be restrained from leaving the Commonwealth of Australia.  The application for that order was withdrawn by the solicitor appearing for the father this morning.

3. Doubt surrounds the extent to which this Court has power, pursuant to s 114 of the Family Law Act 1975 (Cth) (“the Act”), to restrain the freedom of movement of a party. That issue has been referred to in a number of cases. Recently it is referred to in the decision of the Full Court in Brown & Brown (2007) FLC 93-316, delivered on 5 March 2007.  That decision was given in the context of a complex piece of litigation involving multiple decisions of the Court. I think it is fair to say that the central question, insofar as I have referred to it today, is left open.

4. I have reservations about whether I have the power to make the order in the terms sought at paragraph 2(b) of the Application in a Case, and with respect, it seems to me that its withdrawal is a sensible course. 

5. The balance of the application seeks orders on an urgent ex parte basis that the wife be restrained from dealing with “…joint matrimonial assets of the parties including property, bank accounts, superannuation funds, and other assets”.

6. The application also seeks an order that the wife produce various documents by way of disclosure and, secondly, that she pay to the trust account of the husband’s solicitors the sum of $68,000, which it is alleged was removed by her from bank accounts.  Importantly, that cash is, I am told, an asset of a superannuation fund, and the removal of the cash by the wife, as alleged, would potentially constitute breaches of the relevant superannuation Regulations with the possibility of taxation and other penalties.

7. By way of very broad background, the parties were married in February 1994 and separated in August 2009.  They have three children:  H, who is currently aged about seventeen and a half; J, who is aged about 16; and F, who is aged about 12. 

8. Orders were made by consent on 8 December 2011 when this matter first came before Registrar Coutts upon transfer from the Federal Magistrates Court.  Those orders, in broad terms, relate to the children and again in broad terms, provide that the children live with their father.

9. Attempts were made to serve the wife with the application and supporting documentation.  Those attempts are deposed to in an affidavit of Mr E, filed 23 November 2012.  He deposes to attempting to serve the wife on Wednesday the 21^st in the afternoon, and in that affidavit indicates that, having indicated to the wife what the documents were, he placed them on the bonnet of her motor vehicle, to which she responded by driving off, saying to him, “Ask [the husband] or a professional to serve the documents.”

10. The solicitor for the wife contends that that behaviour and the attitude exhibited by it is consistent with a pattern of behaviour exhibited by the wife since the consent orders to which I have just referred were made. 

11. In particular, it is asserted by the solicitor, and no material before the Court contradicts the assertion, that the wife has failed to comply with directions of the Court, in particular, directions relating to what can broadly be described as the progress of this action, and the solicitor contends that the wife has avoided all attempts by her to discuss these proceedings, including any attempts to resolve them.

12. The catalyst for the current application can be seen deposed to in the affidavit of the husband, filed 23 November 2012. 

13. Leaving aside for a moment the reference in that affidavit to a student scholarship fund, to which I will return in a moment, the affidavit annexes a document which, although not on letterhead, is signed by, and said to be, a document under the hand of Ms K, who, the document asserts, is the branch manager of the Suburb L branch of the Commonwealth Bank of Australia. Despite the lack of letterhead, nothing on the face of the document gives cause to question its authenticity.

14. That document indicates that on 19 November the wife in these proceedings dealt with a named staff member, and at that time requested to close a term deposit in the joint names of the parties. That occurred, and the sum of $23,909.99, and an additional sum of $5937.10 from a separate account, were withdrawn by the wife and taken by her in cash.  The document goes on to indicate that the wife attended the same branch the following day, 20 November 2012, requesting to close a term deposit in the joint names of the parties, which closure occurred, with the wife taking $38,449.14 in cash.

15. That document indicates that the wife is an authorised signatory on those accounts and that the accounts can operate by reference to one signature.  The solicitor for the husband contends that it is significant that the wife at that time informed the staff member, again, according to the document, that:

    …she required the funds and had to break the term deposit, as her husband’s father was dying in China and they needed to go there immediately; that’s why the funds were required in cash, as I had offered her a free bank cheque.

16. The solicitor for the husband says that the reference to the imminent death of her father-in-law is a lie designed to facilitate the immediate payment of the moneys in cash.  The husband says that his father died some years ago, and there is nothing truthful about the statement made by the wife as contained in the document to which I have just referred. 

17. Those actions should also be seen within the context of the wife having spent a significant period of time in China since about the middle of 2009.  Her own affidavit material, filed earlier within the substantive proceedings, indicates that she was in China for a period of about six months from 23 August 2009 until about February 2010, and for a further period of six months from about September 2010 until March 2011.

18. The husband’s material reveals that the wife again left for China towards the end of December 2011 (noting that that departure occurred shortly after the making of the consent orders to which I have just referred on 8 December) and did not return to Australia for some 11 months until 1 November this year. 

19. It will, of course, be noted that the events to which I have just made reference in relation to the closure of the accounts occurred a very short time after the wife returned to Australia, and I reiterate that the husband asserts as part of his case that the wife is returning to China on a plane this morning.

20. In those circumstances, it is said that there is a need for relief of the type sought in order to protect assets so as to permit the Court to be in a position to make an order for settlement of property that is just and equitable as between the parties. 

21. In order to ascertain, however, whether the interests of justice and the balance of convenience requires the making of the injunction, it is necessary to look at the nature of the case sought to be made by the husband. 

22. Initially, a Response filed by the husband sought orders for settlement of property that would in effect see him retain 80 per cent of the assets of the parties.  More recently, an Amended Response was filed by the husband on 22 November 2012 which, relevantly, seeks an order that:

    …all of the property of the applicant wife in Australia be assigned to the respondent husband by way of final property settlement.

23. Financial statements sworn by the husband are before the Court.  Further, however, an affidavit filed by him on 22 November 2012 outlines further property and contains as an exhibit to it (JX 3) which is a table asserting the property of the parties or either of them as contended for by him.  That table reveals, consistent with the financial statements to which I have earlier referred, gross assets in Australia valued at about $1.7 million, and liabilities in Australia of about $1.1 million.  Accordingly, it asserts net assets in Australia to a value of about $600,000. 

24. The document goes on to contend that there are significant assets in China.  It is said that the “net China assets” are valued at about $875,000.  I indicated to the solicitor for the husband that, notwithstanding the nature of the current proceedings, the evidentiary foundation in respect of the Chinese assets was what might be described as “thin”.  However, the circumstances of the case are, as will already be apparent from what I have said, somewhat unusual, and the case for the husband, in respect of settlement of property, is being mounted within the difficulties to which I have earlier made reference. Those difficulties are, it is said, compounded by the need to obtain disclosure of documents, which is the subject of orders sought in the current application. 

25. Notwithstanding what might be regarded as the paucity of admissible evidence in respect of property allegedly held in China, I nevertheless note that the husband deposes to matters directly within his knowledge in that respect. 

26. In particular, he deposes to the purchase with the wife of a property in China being a penthouse in M Town in 2006 for 1.1 million yuan.  He deposes to there being no debt on that property. He deposes to the property having an estimated current value of about 2.5 million yuan and annexes a registration certificate in respect of that property.  He also deposes at the same paragraph to real property being purchased in China using cash funds from a bank account in Australia and a loan from his sister.  The latter two aspects are, of course, also within his direct knowledge. 

27. On the assumption that the “realisable assets” for the purposes of an order pursuant to section 79 are those which are listed as Australian assets in the schedule to which I have just referred, the husband seeks to maintain a case, as I have earlier indicated, that he has an entitlement to the whole of those assets.

28. That case, although not at this stage articulated with any depth or precision, would, as it seems to me on the material I have seen, seem to be founded on the need to adjust the current legal and equitable interests of the parties pursuant to section 79(2) (see Stanford v Stanford [2012] HCA 52). Thereafter, it is contended that the contributions made by him over a 15 year relationship, and most significantly of all for the purposes of the current application, the fact that no orders would be sought in respect of property of some significance in China, much of which, according to the schedule to which I have just referred, is owned either by the wife or by her brother. I assume that the husband would say that that significant amount of property ought be taken into account as a significant financial resource, pursuant to section 75(2) of the Act.

29. If the husband is successful in the case he seeks to pursue, then, the moneys withdrawn by the wife would be ordered to be returned and paid to him. 

30. The evidence in support of additional moneys said to be removed by the wife is seen at paragraph 1 of the affidavit filed 23 November 2012, together with a document which I have marked as Exhibit 1 in these proceedings.  Paragraph 1 of that affidavit says:

    This week I have received information to the effect that my former wife … has cashed in the student scholarship fund which should have begun yielding us over $100,000 toward the education costs of our son [F] this December.  Instead, she has cashed the fund for little over $50,000, which she took in cash.  I have not been able to obtain written confirmation of the amount of money taken by the wife ‘for privacy reasons’ but have been reliably informed that the money has gone.

31. It will immediately be observed that the source of the information, the circumstances in which it was received, and from whom it was received, are not there deposed to.  Exhibit 1 does not – at least on its face, as I read it – reveal that the investment “should have begun yielding us over $100,000”, but again, on its face, it seems to indicate, however, that there was an entitlement in an amount exceeding $50,000 by the end of this year.

32. If the evidence in that form is accepted, and there is indeed $50,000 missing from that fund, then the total of the amounts removed by the wife exceed $100,000, and the circumstances earlier outlined pertain to a greater extent in that if the husband is successful in his application pursuant to section 79, it would be an amount exceeding $100,000 that would be payable by the wife to the husband.

33. For the purposes of this urgent ex parte application, and notwithstanding the deficiencies in the evidentiary basis upon which paragraph 1 is deposed to, I have sufficient concerns based on what occurred at the Commonwealth Bank and the fact that those funds belong to a superannuation fund, to err on the conservative side and assume that there is a fairly arguable case that those funds may be the subject of orders for return at some future time.

34. When all of the circumstances to which I have earlier referred are taken into account, including the circumstances that, prima facie, significant property would appear to be owned in China by the wife but, perhaps, not be subject to orders or, if made, likely to be enforced, it seems to me that the husband has a sustainable case to suggest that if an injunction is not made, then there is the potential for significant prejudice to him. 

35. When the balance of convenience is considered, it seems to me on the evidence before me that the circumstances point to an injunction being granted. 

36. The prejudice to the wife is not immediately apparent, given what the evidence reveals about her financial and other circumstances in China, including her capacity to return to that country, live there, and apparently be able to support herself through a business in that country. I consider that in light of the fact that the husband has the three children living with him and the other circumstances of the case, that there is significant potential prejudice to him in the event that the injunction is not made and the funds be returned to a trust account, pending resolution of the section 79 proceedings as the application envisages.

37. In those circumstances, then, I am persuaded that, by reference to what is sometimes referred to as the balance of convenience, and in the interests of justice, having considered the potential prejudice to each of the parties, it seems to me that an urgent injunction of the type contemplated in the application should be made.

38. I will, then, make the usual formal orders in respect of the urgent hearing of the application on an ex parte basis. 

39. I will make an order, in broad terms in accordance with the Application in a Case filed 8 June 2010, in respect of substituted service of: the Application; the Affidavit of the husband, filed 22 November 2012; a Financial Statement of the husband filed 22 November 2012; the Affidavit of the husband filed 23 November 2012; the Affidavit of Mr F, filed 23 November 2012; the Amended Response by the husband, filed 22 November 2012; and the document marked Exhibit 1 in these proceedings upon the wife in the manner contemplated by that Application in a Case. 

40. I will order in addition that the solicitors for the husband serve in that same manner a copy of the orders made by me today, and in addition, a copy of the reasons for judgment when they issue from my chambers. 

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 23 November 2012.

Associate: 

Date:  30 November 2012