Yuan & Shun (No 2)
[2023] FedCFamC2F 668
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Yuan & Shun (No 2) [2023] FedCFamC2F 668
File number(s): MLC 6943 of 2017 Judgment of: JUDGE HARLAND Date of judgment: 1 June 2023 Catchwords: FAMILY LAW – final property hearing – undefended – husband and counsel excused from hearing after adjournment opposed – non-disclosure – wastage – gambling Legislation: Family Law Act 1975 (Cth) ss. 75(2), 75(2)(o), 79(1)-(2), (4), 81, 102NA, 106A
Sentencing Act 1991 (Vic) s.85B(1)
Transfer of Land Act 1958 (Vic) s. 32
Cases cited: Benson & Drury [2020] FamCAFC 303
Black & Kellner (1992) FLC 92-287
Chang & Su [2002] HCATrans 549
Kowaliw and Kowaliw (1981) FLC 91-092
Stanford v Stanford (2012) 247 CLR 108
Division: Division 2 Family Law Number of paragraphs: 62 Date of last submission/s: 15 May 2023 Date of hearing: 15 May 2023 Place: Melbourne The Applicant No appearance Counsel for the Respondent Mr Ellis Solicitor for the Respondent Stephen Peter Byrne Lawyer ORDERS
MLC 6943 of 2017 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR YUAN
ApplicantAND: MS SHUN
Respondent
order made by:
JUDGE HARLAND
DATE OF ORDER:
1 June 2023
THE COURT ORDERS THAT:
1.The husband his servants and agents be and are hereby restrained by injunction from:
(a)transferring, disposing or otherwise dealing with the husband’s interest in the real property situate and known as D Street, Suburb E in the State of Victoria being the whole of the land more particularly described in Certificate of Title Volume … Folio … (“Suburb E property”); and/or
(b)encumbering or further encumbering the Suburb E property; and/or
(c)drawing down upon the loan account ending #...02 secured by mortgage encumbering the Suburb E property.
2.The solicitor for the wife send a letter to the occupants of the Suburb E property by registered post notifying them that the wife is seeking orders for the sale of the Suburb E property which would require them to vacate that property.
3.The parties do all acts and things and sign all documents necessary to list the Suburb E property for sale on such terms and conditions as shall be determined solely by the wife (“the Sale”), including but not limited within 14 days of a written request:
(a)irreovacably instructing a selling agent of the wife’s choice to conduct the conveyancer on the instructions of the wife;
(b)signing and producing to the wife a statement produced in accordance with Section 32 of the Transfer of Land Act 1958 (Vic);
(c)signing and producing to the wife a Contract of Sale; and
(d)signing and producing to the wife any other document or doing any other thing necessary to facilitate the sale of the Suburb E property.
4.Upon settlement of the sale of the Suburb E property, the proceeds be applied as follows:
(a)firstly, payment of all costs and commissions of the sale;
(b)secondly, to discharge any encumbrance on title; and
(c)thirdly, the remaining proceeds of sale to the wife.
5.In the event that either party fails to comply with Order 3 of these Orders, then a Registrar of the Federal Circuit and Family Court of Australia is empowered and authorised to exercise all necessary documents on behalf of the non-complying party pursuant to section 106A of the Family Law Act 1975 (Cth) and by way of consequential arrangement to this order: -
(a)An affidavit by the compliant party and/or their solicitor setting out the non-compliant party’s failure to comply with these orders will be sufficient evidence of non-compliance; and
(b)The compliant party nominate a solicitor who is authorised to sign documents of PEXA transfers and such solicitor shall sign on behalf of the non-compliant party upon the written request from the compliant party to do so upon provision of a sealed copy of these Orders.
6.The wife have liberty to apply with respect to the sale.
7.The husband pay and indemnify the wife against all liability of or in relation to his asserted Australian Tax Office debt, Motor Vehicle 1 debt or any other debt held in his joint or sole name.
8.Unless otherwise specified in these orders and save for the purposes 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 and motor vehicles) in the possession of such party as at the date of these orders;
(b)each party be solely entitled to the exclusion of the other to all monies standing to the credit of either of them in any bank account in their sole name;
(c)each party forgoes any claims they may have to any superannuation benefits or other employment related benefits belonging to or earned by the other or any future inheritances received;
(d)all insurance and pension policies remain the sole property of the owner named therein; and
(e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
9.Each party do all acts and things and sign all documents necessary to give effect to these orders.
AND THE COURT NOTES THAT:
A.Pursuant to s.81 of the Family Law Act 1975, these orders shall as far as practicable finally determine the financial relationship between the parties 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 a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE HARLAND
At the commencement of the trial, the husband sought an adjournment. I refused that application and gave reasons.[1] I will not repeat those reasons here. After refusing that application, the husband’s Counsel and solicitor sought leave to withdraw. Counsel for the husband briefly conferred with his client and confirmed that his client was not seeking that the Court make an order pursuant to s.102NA of the Family Law Act 1975 (Cth), and that his client did not wish to participate without his solicitor and Counsel. I granted the husband’s solicitor and Counsel leave to withdraw and the trial proceeded on an undefended basis.
[1] See Yuan & Shun [2023] FedCFamC2F 603.
The wife’s Counsel drew the Court’s attention to the fact that the husband had in fact never filed a reply to the wife's response, seeking property orders despite filing an affidavit and financial statement addressing financial matters on 28 November 2017. He was legally represented at that time.
I am satisfied that the husband is well aware of the wife’s case and the allegations she makes against him. This was made very clear from the case outline filed by the husband’s solicitor which sought to rely on the husband’s affidavit and financial statement filed in 2017. The case outline also set out his arguments. Those documents were not permitted at trial after the husband elected to leave the Court. Both parties also had the benefit of interpreters.
The wife relied on the documents listed in her case outline. This case has a lengthy procedural history. It is not necessary to set out these details. Some, but not all, of the significant delay has been due to delays in the husband’s criminal proceedings being finalised due to the pandemic.
The wife gave brief oral evidence. The wife's position is that in the event the Court does not find it just and equitable to award her with the whole of the net proceeds of sale of the former matrimonial home at D Street, Suburb E (“Suburb E property”), she intends to make an application to the County Court of Victoria for compensation pursuant to s. 85B(1) of the Sentencing Act 1991 (Vic) and would seek an injunction restraining the husband from dealing with the proceeds of sale pending that application. She has not yet made that application. The wife does not seek a split of the parties’ superannuation.
In her amended response, the wife sought the opportunity to refinance the mortgage and have the Suburb E property transferred into her name, but at trial, she simply sought the sale of the property, acknowledging that given she is not working, she would not be able to discharge the mortgage without family assistance.
The wife also alleges that the husband has engaged in significant wastage and that as a result of these matters and the significant non-financial and parenting contributions that she has made during and post separation, she seeks the whole of the equity of the Suburb E property.
The wife lives in rental accommodation. It is her understanding that the husband has relatives living in the Suburb E property. I will order her solicitor to put the occupants on notice that the wife will be seeking vacant possession in order to sell the property. Given the lack of the husband's cooperation, including in obtaining a valuation of the property, it may be necessary for the wife to make an application for a warrant of possession.
BACKGROUND
The husband is 51 years old. He is an Australian citizen. The wife is 32 years old and is a permanent resident. Both were born in Country F. They have one child X, born 2012, aged 10. The wife is solely responsible for her care. X has not seen the husband since 2018.
The wife came to Australia to study. The parties met in 2010 and began living together in 2011. The husband sponsored the wife’s spousal visa and married in 2012. The wife says the parties separated under the one roof in 2015. The husband says the parties separated in mid-2017.
PROPERTY GENERAL PRINCIPLES
Part VIII of the Family Law Act 1975 (Cth) (“the Family Law Act”) governs property, spousal maintenance and maintenance agreement between married couples. The major provisions relating to marital property division are contained in ss.79(1); 79(2); 79(4); & 75(2) of the Family Law Act 1975 (Cth).
In Stanford v Stanford (2012) 247 CLR 108, the High Court considered the operation of s.79 of the Family Law Act. In this case, the majority stated at [35]-[36] that:
It will be recalled that s 79(2) provides that "[t]he 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. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”
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.” [Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:
Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.
Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.
Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).
In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation. Both parties seek property adjustment orders.
The High Court also pointed out that what is just and equitable is different in every case.
It is important to have regard to the myriad of contributions the parties have made over the whole of their long relationship and take a holistic approach to the assessment of the parties’ contributions.
In this case I must also consider the family violence the wife was subjected to which is relevant to the considerations that I must consider holistically amongst all the other contributions (see Benson & Drury [2020] FamCAFC 303).
Whilst the wife’s evidence is unchallenged, nevertheless the Court must be satisfied that the outcome is just and equitable.
FAMILY VIOLENCE
The family violence the wife has been subjected to in this case has had a significant impact on her.
In her trial affidavit the wife deposes to being subjected to various forms of serious family violence throughout the relationship. She deposes to being subjected to coercive control, isolation, surveillance by cameras in the house that the husband had secretly installed, financial control and sexual assault.
Extracts of police leap records, the sentencing records, the wife’s victim impact statement, the summary of offences and the wife’s statement to police were tendered into evidence marked as Exhibits 3, 7, 8, 10 and 11. I will briefly summarise some of the family violence incidents and intervention orders recorded in these documents.
In 2013 when X was an infant after an argument with the wife, the husband put X’s belongings in the car and drove X and the wife to the Suburb G police station. The police leap records show the husband intended to leave X at the front of the station. Police officers contacted the Department of Families, Fairness and Housing (“DFFH”) and after talking to the parties, it was clear the wife wanted to keep the baby but the husband was pressuring her to give her up. On application by the police, an out of hours magistrate granted an interim intervention order listing the wife and X as protected persons. No criminal charges were laid.
In mid-2017, the husband assaulted the wife by grabbing her around the throat and smashed her mobile phone. The husband later on two occasions in the following days attempted to, and sexually assaulted the wife. The wife reported these incidences to the police and the police later that day issued a Family Violence Safety Notice listing the wife and X as protected persons. An Interim Intervention Order was later taken out by the police in mid-2017.
About a week later, the wife was with X in the former matrimonial home when she heard someone in the rear of the house and noticed a camera in the kitchen had been moved. She grabbed a hammer and locked herself in a bedroom with X. Whilst in the bedroom, she could see the husband crawling through the house via an app on her phone. The police attended the home and found the husband hiding in the home. This incident would have been terrifying for the wife and X. The police already wanted to question the husband in respect of two breaches of the Intervention Order within that same week including attempted contact with X through his sister, Ms H at her child care centre and posting a photo of the wife to social media. The husband was later remanded, charged and convicted of persistently contravening the 2017 Intervention Order.
The husband’s criminal trial for offences against the wife was delayed for many months. He was eventually sentenced and convicted in 2022 of multiple criminal charges for offences against the wife in 2017. He has been sentenced to a term in prison with a non-parole period. If he is released after the non-parole period, allowing for the time he served before being convicted, X will be 15 years old.
The wife gives evidence of the devastating impact of the violence and assaults on her. Her victim impact statement was tendered as Exhibit 8. She also gives evidence that X was in the next room when the husband sexually assaulted her. She believes X heard what happened based on things she has said.
The wife gives evidence that she had to stop working in 2021 due to the trauma that she has experienced, and has been diagnosed with depression and Post Traumatic Stress Disorder (“PTSD”) by her psychologist. She has received some funding from the Victims of Crime Assistance Tribunal for psychological treatment. She has not been able to afford to obtain a report from her psychologist for this trial. No doubt the criminal trial being delayed would have added to her stress. I am satisfied that the family violence the wife experienced made her contributions more arduous during the relationship. I am also satisfied that her ability to work has been affected by the trauma she has experienced.
FINANCIAL DISCLOSURE AND DISCLOSURE OBLIGATIONS
The husband’s ongoing non-disclosure has been a major issue in these proceedings. The husband has failed to comply with multiple orders and as a result of his non-compliance, the wife has had to issue several subpoenas in an attempt to clarify the husband’s financial circumstances. The affidavit of her solicitor filed on 31 August 2021 refers to the extensive analysis of bank statements that he has undertaken in order to try to gain an understanding of the husband’s financial position. There were gaps in the statements produced by subpoena and what he discovered raised several questions and showed significant sums of money coming in and out of the husband’s accounts, including his personal bank account, his mortgage home loan and his credit card. These amounts total several hundred thousand dollars.
The bank accounts produced under subpoena also show the husband engaging in significant gambling at B Venue, Suburb C. The wife’s solicitor sets out some of the transactions that he found and says there was a pattern of the husband withdrawing significant sums of cash from his personal bank account at or near B Venue and also redrawing from his home loan account, placing funds into his personal account and then making significant cash withdrawals from B Venue.
The husband also claims to have borrowed significant sums from friends and family members. Again, an analysis of the bank statements shows that the individuals provided more sums than shown in the loan agreements and that the husband has not made any repayments towards these proposed sums. The wife’s solicitor details these concerns in the wife’s trial material, including the missing documents, inconsistencies in the documents and the significant movement of cash.
The husband has been aware of the significant allegations of non-disclosure and use of significant funds, yet despite having well over a year, made no attempt to address those issues. I do not accept that his being incarcerated explains this as he has had the same firm of solicitors on the record for well over a year and, indeed, instructed his solicitors to consent to orders requiring him to respond to that affidavit.
Given this, I am comfortably satisfied that the husband has deliberately failed to comply with his disclosure obligations and I cannot be satisfied that the husband’s true financial position cannot be identified.
ATTEMPTS TO ACERTAIN THE PARTIES’ EXISTING LEGAL AND EQUITABLE INTERESTS
After attempts to engage a joint valuer for the former matrimonial home in accordance with Court orders of 06 March 2023, due to lack of response from the husband, the wife obtained her own valuation. The valuation is in evidence. The valuer was not given internal access to the property and valued the property at $785,000. The mortgage is currently approximately $256,000. The mortgage has continued to be paid and the wife understands there are currently family members of the husband who live in the property.
The wife has a small amount of superannuation of $26,979. The husband has not disclosed his superannuation entitlements since 2017. In 2017 he disclosed Motor Vehicle 2 and Motor Vehicle 1 subject to a car loan. Again there is no updated disclosure from the husband. The balance the husband has in any bank accounts currently is also unknown.
The husband has alleged various loans including to the Australian Tax Office (“ATO”) but again there is no disclosure. I am not satisfied that he has the debts he alleges. To the extent such debts exist the husband should indemnify the wife.
The wife also has a personal loan of $30,000 with Mr J and has borrowed $80,000 from her mother for legal fees and living expenses. This is not surprising given that her weekly expenses exceed her income. She will need to pay these debts and her legal fees from the net proceeds of sale. Her costs notice shows her having estimated costs of $106,389. She has paid Counsel’s fees but the vast majority of her legal fees remain unpaid.
The wife alleges that the husband has engaged in significant wastage during and after the marriage. This includes in early 2012 when she alleged the husband drew down $200,000 from the mortgage, making a payment to his brother. The husband has not provided an explanation for this period and the wife says that the documents inspected and analysed by her solicitor and referred to in his affidavit show withdrawals at or near B Venue of at least $624,640 between late 2014 and late 2021.
Counsel for the wife submitted that the issues of the husband's non-disclosure has led to an inability to ascertain the asset pool and sited various authorities including Chang & Su [2002] HCATrans 549, Black & Kellner (1992) FLC 92-287 and Kowaliw and Kowaliw (1981) FLC 91-092 amongst others. In Chang & Su, the husband failed to discharge his duty of financial disclosure and the Court made orders in favour of the wife to receive more than the known assets. Counsel went on to further submit that it is well settled law that the court should not be unduly cautious about making findings in favour of an innocent party when there has been deliberate failure to discharge the duty of disclosure.
In her case outline and at the commencement of the trial, the wife sought to notionally add back significant sums totalling over $900,000 which she says represents premature distributions to the husband including those I discuss at paragraph 37. I cannot be satisfied that these funds still exist. In those circumstances, as I indicated to Counsel during the course of the trial, my preferred option is to take into account these unexplained withdrawals and transfers of funds and the husband’s failure to provide any explanation as well as his non-disclosure as a significant factor under s.75(2)(o) due to the extent of the husband’s non-disclosure.
In closing submissions, the wife’s Counsel referred to figures the husband included in his case outline which includes alleging that he now owes the ATO $350,000 and still has a car loan and other debts to individuals. It is trite to say case outlines are not evidence. There is no evidence to support any of these alleged loans. He also referred to several authorities. It is not necessary to refer to them here.
I cannot establish what the true asset pool is because of the husband’s actions both with respect to his non-disclosure and the evidence of significant wastage that the husband has failed to explain. Given this, it is artificial and unhelpful to refer to percentage divisions.
CONTRIBUTIONS
Initial Contributions
At the commencement of the relationship the husband owned the Suburb E property which was subject to mortgage. He bought the property in 2007 for $380,000 with a home loan of $300,000. There is no valuation evidence as to the value of the property at the commencement of the relationship.
The wife had approximately $50,000 in savings.
Contributions during the relationship
The wife’s evidence is that she was responsible for the home making role which included cooking and cleaning for other family members who stayed at the home for various periods including the husband’s niece who stayed with them for two years in 2013.
The wife stopped working and studying about a month before X was born and did not return to work at the husband’s request.
The wife describes the husband as being very jealous and controlling and says that he subjected her to verbal and physical abuse. He controlled what she could wear, isolated her and would accuse her of having multiple affairs. In 2013, the wife discovered that the husband had installed cameras around the house. After she complained to the husband about them she believed he removed them. In 2017 she discovered that he had installed smaller, less visible cameras.
The husband controlled the parties’ finances including their family tax benefit.
The wife resumed working as an allied health worker one or two days a week from early 2015 and in early 2016 resumed her studies.
During the relationship she took X to Country F for three months in 2014. Her mother paid the costs of the trip. She says the husband made no contact with her during that three month period.
The wife deposes to the husband dropping X at childcare most days when she attended work 3 days a week and she would collect her. She says the husband never attended any parent meetings with X’s teachers. She says that the husband did not have a close relationship with X and provided little assistance with respect to X’s care.
The wife says the parties separated under the one roof in 2015 when the wife moved into a separate bedroom. The husband says the parties separated in mid-2017 when the police issued a Family Violence Safety Notice against the husband listing the wife and X as protected persons and prohibiting the husband from attending the former matrimonial home. The wife and X moved out of the Suburb E property later that year.
Early in their relationship, the husband worked for K Company. Later the husband worked for himself using the trading name L Company. L Company had contracts with K Company. The husband made financial contributions during the relationship from his income and provided some minor parenting assistance.
Post-separation contributions
The husband claimed he had to shut down L Company when he was on remand for 15 days in 2017. The husband claimed to the wife’s solicitor at one of the Court events that he sold L Company to his nephew who trades as M Company. The husband’s nephew produced partial documents but the wife’s solicitor raises some doubts about the legitimacy of some payslips which appear to have been generated on the same day, and do not show annual or sick leave entitlements accruing.
In his affidavit, the solicitor raises doubt that the husband sold his business L Company at all and suspects that particularly given the lack of evidence that his nephew had any involvement in logistics companies, that in fact, the husband controlled, M Company as well. The solicitor’s affidavit includes details of individual transactions from accounts for various time periods. I accept this evidence and am not satisfied that the husband had to shut down his business as claimed and that thereafter he was an employee of his nephew’s business.
SECTION 75(2) FACTORS
The husband has not provided any financial support for the wife or X since 2017. After the commencement of the Court proceedings, the husband spent limited periods with X supervised by family. When orders were made for time to be officially supervised, the husband did not take up that opportunity and has not seen X since 2018. The husbands parenting application was dismissed on 11 July 2022 as the Court no longer had jurisdiction due to the Children's Court having open proceedings in relation to X. These proceedings are still on foot however Counsel for the wife submitted that it is anticipated DFFH will withdraw their application on the next return date. Given his incarceration, it is unlikely that the wife will receive child support from the husband in future.
The wife hopes to finish a qualification next year and then plans to find work in allied health. She has looked at Indeed and thinks she could earn approximately $60,000 full time. In all likelihood the wife will work part-time for the next few years whilst she has sole parenting responsibilities for X.
Whilst the wife refers to having good supports, her family lives in Country F. Given X’s age, and the fact that she has sole care for X, she is likely to work part-time rather than full time, for some period to come. The husband has never paid child support and is unlikely to in the future.
The wife's financial statement states she is currently in receipt of the Family Tax Benefit and JobSeeker. The wife gave oral evidence that she is exempt from finding employment due to her diagnosis of depression and PTSD and that she is unable to work until her psychologist and general practitioner deem her fit to return to the workforce. I accept this evidence.
Certainly as noted above the husband made contributions during the relation including his initial contribution. The husband will remain incarcerated for several years. Due to his non‑disclosure and failure to explain the significant transactions the wife has uncovered, it is impossible to know what the husband’s financial circumstances are.
CONCLUSION
I have considered the various contributions the parties made during the relationship and the wife’s significant post-separation contributions as well as the relevant s. 75(2) factors. The husband’s conduct in failing to meet his disclosure obligations as well as the evidence of significant waste which he has had ample opportunity to address has made the actual asset pool impossible to identify.
In all of the circumstances I am satisfied that it is just and equitable that the wife receive the whole of the net equity in the Suburb E property and that she keep her superannuation and other assets in her control. She will need to pay her legal fees and the loans she took out to assist with her post-separation living expenses from that sum.
For these reasons I make the orders at the beginning of these reasons.
I certify that the preceding sixty-two (62) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Harland. Associate:
Dated: 1 June 2023
0
4
0