Yeh & Jyu - [2014] FamCA 162

FAMILY COURT OF AUSTRALIA

YEH & JYU

[2014] FamCA 162

FAMILY LAW – PROPERTY – Husband to pay wife interim distribution of property

Family Law Act 1975 (Cth)

Bing and Bing [2007] FamCA 418, (2007) FLC 93-318
Strahan and Strahan (interim property orders) [2009] FamCAFC 166

APPLICANT:

Ms Yeh

RESPONDENT:

Mr Jyu

FILE NUMBER:

MLC

8168

2009

DATE DELIVERED:

21 March 2014

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

20 March 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr North SC

SOLICITOR FOR THE APPLICANT:

Taussig Cherrie Fildes

COUNSEL FOR THE RESPONDENT:

Mr Brown SC with Mr Mcfarlane

SOLICITOR FOR THE RESPONDENT:

Oakfair Lawyers

Orders

That the husband pay to the wife $1.15 million by way of interim distribution of property.
That BY CONSENT there be orders in accordance with the minutes of proposed orders marked Exhibit “A” sealed and attached hereto AND IT IS DIRECTED that such minutes remain upon the Court file.
That the solicitor for the wife engross the minutes and deliver them by electronic transmission to my Associate within 7 days.

IT IS CERTIFIED:

That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
That the application in a case filed 3 March 2014 and the response thereto filed 14 March 2014 are otherwise dismissed.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Yeh & Jyu 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 MELBOURNE

FILE NUMBER: MLC 8168 of 2009

Ms Yeh

Applicant

And

Mr Jyu

Respondent

REASONS FOR JUDGMENT

By application in a case filed 3 March 2014, Ms Yeh (the wife) sought a variety of interlocutory orders. The only one she pressed was for the payment to her of $1.150 million by way of partial property settlement.
In his response filed 14 March 2014, Mr Jyu (the husband) also sought a variety of orders one of which was to agree that the wife should have $150,000 but for that purpose, each of he and the wife borrow that sum from the National Australia Bank. In addition, he sought the sale of a property at B Street, Suburb F and that after the payment out of expenses and the mortgage, the proceeds be paid to the wife by way of interim property distribution.
Curiously, the issue remained contentious and required determination by the Court.
The substantive property proceedings were listed before Bennett J in February 2014 for a final hearing. Since an interim hearing in January 2011, there have been 13 hearings in this Court in various forms. It was therefore not surprising to hear the wife’s senior counsel indicate that the wife’s expenditure on legal fees has been about $500,000. It was therefore one of two reasons why the wife sought the orders she did to cover her forthcoming expenditure as she heads towards a final hearing.
From what appeared on the file, the parties had filed affidavits of evidence in chief and outlines of argument for that February trial. For reasons not canvassed, the matter did not proceed in February and has now been allocated 8 sitting days in July. That too seems unusually long having regard to the material I have read.
The parties’ trial documents just mentioned provide an illuminating pathway for the determination of this discrete application. There is disagreement between husband and wife about the value of their respective legal and equitable interests in property, much of which is in real estate and some of that, overseas.
The husband filed an outline of argument for the February trial which said that there should be an alteration of the parties’ interests such as to give the wife 40 per cent of the “net pool of assets”. Leaving aside for a moment that the Court could not seriously make that order because it does not alter the interests of the parties (and it should have been pleaded with particularity), the intention of the husband was (and remains) clear even if that “net division” was opposed by the wife. It does not matter for my purposes today but the wife wanted significantly more.
There is disagreement about the assets that the parties have. In his outline of argument, the husband listed the assets and their values as he saw them and although I have not added them precisely, the estimate was around $21 million. In her trial outline, the wife said the assets were around $32 million. The difference seems to lie in the disputed calculations and opinions of the two experts being used.
The wife asserted in the discrete application that she had nothing much other than the money she had paid to her lawyers by way of costs.
In this hearing, it became clear that, even on the roughest of mathematics, the parties (and/or the husband) will need to obtain, sell or encumber assets so that the wife receives something in the vicinity of at least $5 million that she currently does not have.
The two positions of the parties could not have been more simple. The wife said that she wanted money for her anticipated legal expenses but also that she wanted some of the money that she will ultimately receive. The husband’s position was that “wanting” or “desiring” something was not the basis upon which an interim property order should be made. It was submitted that the trial was only a few months away, there was agreement that the husband would provide $150,000 and as the assets were tied up in real property, there was a cash flow difficulty.
Senior Counsel for the wife acknowledged that if an order was made that the husband “find” the funds to pay the wife and particularly that which she was currently seeking, it may very well not achieve her desired outcome if property had to be sold. He acknowledged that the outcome may not have been successful by the July trial. That did not deter the wife from seeking her just entitlement now.
I suggested that the husband transfer the B Street property to the wife because he was seeking to sell it anyway. I suggested that would enable her to have control of the sale and its process. Whilst that was attractive to the husband, it did not find favour on the basis that it was a matter for the husband to find the funds to pay her out what she wanted.
For the purposes of jurisdiction, it was submitted that this was an application for a partial property settlement and, as senior counsel for the wife submitted, part of the rationale that justified making the order was for there to be a “level playing field”. The Full Court of this Court in Strahan and Strahan (interim property orders) [2009] FamCAFC 166 discussed the various heads of power that could be used. The Court set out how litigation funding orders were to be contemplated. This is not a litigation funding order. It is an interim division of property.
To the extent that this dispute was about “wanting” and “desiring” one’s entitlements, it was submitted that such an approach was not what should be allowed to occur. I am not convinced that that was what the wife was doing but rather, having regard to the fact that the trial had been listed in February and all of the relevant evidence was before the Court, she was entitled to say that where the husband had all of the control of significant assets and even on his case, would have to part with some of them, she should be entitled to her interests immediately.
In Strahan (supra), the Full Court observed that there was only one exercise of power under s 79 of the Family Law Act 1975 (Cth) (“the Act”) and it was preferable that there only be one final hearing. That said, if a party sought an interim distribution of property or an interim alteration of property interests, a two-step process should be followed. The first step required consideration as to whether the jurisdiction should be entertained and if so, then secondly, the applicant needed to satisfy the necessary requirements for the exercise of power under s 79 to make an order. The Full Court rejected the necessity to establish compelling circumstances but noted that one example where it may be appropriate to exercise the power was where it was necessary to make an order because a party required funds to assist in defraying the costs of litigation which, absent those funds, an injustice may be caused. I stress the importance of the use of the words “one example”. There are other examples where justice requires or justifies an interim adjustment. One such example is where such a distribution it is ultimately going to happen but it is not currently occurring because one party has absolute control and declines to make a fair distribution.
Here, the wife wishes to pay her lawyers and the husband agrees that should happen but this case is not just about funding the litigation. This is about the husband retaining the wife’s acknowledged entitlements and, as the very first step, justice requires an alteration of the interests.
As the Full Court said in Strahan (supra), once a determination is made to exercise the power, there must be evidence that satisfies the necessary requirements of s 79. The Court emphasised that in respect of the first of the steps however, more was required to be shown other than the mere fact that at the final hearing, the applicant would receive the property being sought or more than that from the other party. That observation addresses the husband’s point that just wanting the entitlement is not sufficient. The Full Court went on to say however that where there was a clear imbalance between the parties in terms of assets, a consideration is always that one party has the assets and the other does not and an injustice can be seen if the party not having those assets is simply told to wait. Part of that exercise also requires consideration of the observation of the High Court in Stanford v Stanford [2012] HCA 52 that a party has to show that it is just and equitable to alter the legal and equitable interests of the parties as they then stand. In this case, that requirement is met by the very outline of the husband that was intended to be used at the February, and (presumably) the July hearing.
Thus, once that step is satisfied, the Court must consider whether there is a circumstance that justifies entertaining the power at all at this stage. It is necessary for the Court to examine whether or not all of the requisites of s 79 can be satisfied on the evidence. The Full Court pointed out in Strahan (supra) that the financial circumstances of both parties are relevant at the substantive stage but may also be relevant to the procedural stage. This is one such case.
Having read the trial affidavits, it is clear that there is evidence to satisfy the various criteria. It is only necessary for me to refer to the husband’s material. An overview of that shows that he saw himself as having been very successful since arriving in Australia in 1989 in establishing a prosperous lot of assets. This, he said, was due to his skill and effort. He pointed to what he said was a separate life from the wife since 1997and the wife had thereafter conducted her own business. In terms of contributions, the husband highlighted that the current financial position was attributable to him yet he still thought that 40 per cent was a just and equitable division. He briefly addressed the relevant factors under s 79(4)(e) of the Act indicating that each of them could support themselves “comfortably” from the assets they had. Although the evidence before me was not tested, the schedule presented by the wife, if accepted as correct, would indicate that the husband’s statement could not be right. He may have intended that to mean after a division as he contemplated it, had occurred.
In her affidavit in support of the application, the wife set out the correspondence between the parties’ practitioners. In essence, the husband’s position was that there was insufficient cash flow for such an alteration of interests to occur. At no stage did he depart from his view that the wife was entitled to 40 per cent of the “net assets” and as the evidence seems to show, there is anything but a level playing field here.
There was also some argument in submissions about from where the money would come. As I said in discussion, having regard to what the Full Court said in Bing and Bing [2007] FamCA 418, (2007) FLC 93-318 that is not an issue that should affect the entitlement of the wife to what is effectively her money.
I am satisfied that there is sufficient evidence for me to say that to simply leave the position of the assets in the hands of the husband, as against those in the hands of the wife, would not be a just and equitable outcome even on an interim basis. There is sufficient evidence for me to find that the wife has made a significant contribution in the descriptive terms of s 79(4) . To a very large degree, the husband acknowledges there has been a contribution albeit he disagrees with the view of the wife. I am satisfied that there is sufficient evidence before me of the factors in s 79(4)(e) to enable me to at least be satisfied that the wife has an entitlement to some of the assets in the hands of the husband such as would enable me to make an order within the meaning of s 79(2) of the Act to achieve a just and equitable outcome.
In my view, there is sufficient evidence therefore to make the order that the husband agreed to under which there was a borrowing to pay the wife $150,000. To the extent that it might be suggested that they borrow jointly, that is not something that I think appropriate having regard to the large disparity in asset holdings. The husband obviously has the assets against which the borrowing can be made. In addition, he has to work out ways to pay out the wife and senior counsel for the wife said she would be generous with latitude. As no compromise was offered by the husband other than the transfer of B Street which was rejected, I do not intend to set a time limit for the payment of that sum and without any such time limit being so ordered, the payment is required forthwith. It was clear in argument however that the husband may have some difficulty raising those sums immediately. To the extent that there is a dispute about when the money is to be paid, the matter can be relisted before the trial judge for enforcement. I would otherwise have thought that 2 months should be ample time to borrow the full sum.
The husband did not otherwise press any orders in his application.
I shall certify for counsel and reserve the issue of costs to the trial judge.

I certify that the preceding Twenty Six (26) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 20 March 2014

Associate:

Date: 21 March 2014