Zha & Wun

Case [2021] FamCA 143

FAMILY COURT OF AUSTRALIA

Zha & Wun [2021] FamCA 143

File number(s): SYC 4269 of 2020
Judgment of: WATTS J
Date of judgment: 19 March 2021
Catchwords:

FAMILY LAW – ANTI-SUIT INJUNCTION – Where the applicant wife has commenced proceedings in China, Hong Kong and Australia – Where the respondent husband applied, pursuant to s 114(3) of the Family Law Act 1975 (Cth), for an order restraining the wife from continuing proceedings against the husband in Australia – Where it is agreed that Australia was not a clearly inappropriate forum – Where the husband has failed to provide full and frank disclosure – Where the wife has validly commenced proceedings in Australia pursuant to s 79 of the Act – Where it is not vexatious or oppressive to require the husband to involve himself in the Australian proceedings – Where on the balance of convenience the proceedings in Australia should continue – Application for an anti-suit injunction dismissed.

FAMILY LAW – INTERIM – LITIGATION FUNDING – Where the wife seeks for the husband to pay to her an amount of $500,000 by way of either an interim property order (s79;80(1)(h) of the Act) or an order as to costs (s117 of the Act), subject to certain conditions – Where the wife is entitled to an order on either basis.

FAMILY LAW – PROCEDURAL – Where there was no basis for discharging earlier injunctions made in the wife’s favour – Where the wife did not press for an undefended hearing.

Legislation:

Family Law Act 1975 (Cth) ss 4, 21, 75, 79, 80, 114, 117

Matrimonial Causes Act 1959 (Cth) s 124
Cases cited:

Antonarkis v Delly (1976) 10 ALR 251

CSR Limited v Signa Insurance Australia Ltd (1997) 189 CLR 345

Harris and Harris (1993) FLC 92-378

In the Marriage of J U and T Poletti (1990) 15 Fam LR 794

Lan & Hao (No. 2) (2017) FLC 93-795

R v Ross-Jones; Ex parte Green (1984) 156 CLR 185

Salvage & Fosse (2020) FLC 93-966

Sieling and Sieling (1979) FLC 90-627

Strahan & Strahan (interim property orders) (2011) FLC 93-466

Taylor v Taylor (1979) 143 CLR 1

Teo & Guan (2015) FLC 93-653

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538

Zschokke and Zschokke (1996) FLC 92-693
Number of paragraphs: 136
Date of hearing: 11 December 2020
Place: Sydney
Counsel for the Applicant: Mr Campton SC
Solicitor for the Applicant: Lander & Rogers
Counsel for the Respondent: Mr Lloyd SC with Mr Livingstone
Solicitor for the Respondent: Sunfield Chambers Solicitors & Associates

ORDERS

SYC 4269 of 2020
BETWEEN:

MS ZHA

Applicant
AND:

MR WUN

Respondent

ORDER MADE BY:

WATTS J

DATE OF ORDER:

19 MARCH 2021

THE COURT ORDERS THAT:

1.The husband’s Response to Initiating Application filed 17 August 2020 is dismissed.

2.The husband’s application for an injunction under s 114(3) Family Law Act 1975 (Cth) (“the Act”) is dismissed.

3.The husband’s application for an order that the ex parte orders made 7 July 2020 be set aside…

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AGLC
Zha & Wun [2021] FamCA 143
Case
[2021] FamCA 143
Decision Date

CaseChat Overview and Summary

In the matter of *Zha & Wun*, the applicant wife and respondent husband were involved in family law proceedings before Watts J. The dispute concerned the wife's commencement of proceedings in China, Hong Kong, and Australia, and the husband's application for an anti-suit injunction to restrain her from continuing the Australian proceedings. The wife also sought interim litigation funding from the husband.

The court was required to determine whether to grant the husband's application for an anti-suit injunction under s 114(3) of the *Family Law Act 1975* (Cth). Additionally, the court had to consider the wife's entitlement to interim litigation funding, either by way of an interim property order under s 79 and s 80(1)(h) of the Act, or an order as to costs under s 117 of the Act. The court also addressed the wife's application for an undefended hearing and the discharge of earlier injunctions.

Watts J dismissed the husband's application for an anti-suit injunction, finding that Australia was not a clearly inappropriate forum and that it was not vexatious or oppressive to require the husband to participate in the Australian proceedings. The court reasoned that the husband had failed to provide full and frank disclosure, particularly regarding his overseas assets, and that on the balance of convenience, the Australian proceedings should continue. The court also found that the wife was entitled to an order for litigation funding, either as an interim property order or an order as to costs, noting the importance of a "level playing field" in ensuring a fair opportunity for each party to present their case.

The court ordered that the husband's response to the initiating application and his application for an injunction be dismissed. The husband was restrained from preventing the wife's receipt of rental income from specified properties in New South Wales and China. Furthermore, the husband was ordered to pay $500,000 to the wife's solicitors within twenty-one days, to be applied towards the wife's costs and disbursements, including litigation funding. The wife's application for the proceedings to proceed on an undefended basis was dismissed.

Orders

Orders of the court

SYC 4269 of 2020

BETWEEN:

MS ZHA

Applicant

AND:

MR WUN

Respondent

ORDER MADE BY:

WATTS J

DATE OF ORDER:

19 MARCH 2021

THE COURT ORDERS THAT:

1. The husband’s Response to Initiating Application filed 17 August 2020 is dismissed.

2. The husband’s application for an injunction under s 114(3) Family Law Act 1975 (Cth) (“the Act”) is dismissed.

3. The husband’s application for an order that the ex parte orders made 7 July 2020 be set aside is dismissed.

4. In respect to the wife’s Amended Application in a Case filed 13 November 2020:

(a) The wife’s applications 2.2 and 2.3 (noting the husband’s failure to comply with orders and that the matter proceed to an undefended hearing) is dismissed.

(b) By consent, that as between the husband and the wife and pending further order, the husband shall be and is hereby restrained from doing any act or thing to prevent the Wife's receipt of rental income from the following properties:

(i) C Street, Suburb D in the State of New South Wales (with folio identifier …);

(ii) L Street, Suburb M in the State of New South Wales (with folio identifier …);

(iii) MM Street, Suburb NN (with folio identifier …);

(iv) PP Street, City R, China;

(v) QQ Street, City SS, China; and

(vi) RR Street, Suburb TT, City VV, China.

5. Within twenty-one (21) days of the date of these Orders and pending further Order, the Husband pay or cause to be paid to the trust account of the Solicitors for the Applicant Wife, Lander & Rogers Lawyers, pursuant to s 79 and s 80(1)(h) of the Act, the sum of $500,000 with that money to be applied towards the Wife's costs and disbursements as set out in Order 6 herein.

6. The sum referred to in Order 5 above shall be applied by the Solicitors for the Wife in payment of the costs and disbursements incurred or to be incurred by the Wife in the conduct of these proceedings, including but not limited to the reasonable costs and disbursements:

(a) Rendered by the Solicitors for the Wife pursuant to their Costs Agreement with the Wife including but not limited to the payment of Counsel's fees;

(b) Rendered by Accountants appointed by the Court or engaged by the Wife or the Solicitors for the Wife to report on and/or value taxation matters, including but not limited to capital gains tax and any interests of the Husband and/or the Wife in any business, company, superannuation fund, trust or entity; and/or

(c) Rendered by Valuers appointed by the Court and/or engaged by the Wife or the Solicitors for the Wife to report on or value any real and/or personal property in which the Husband and/or the Wife may have an interest, and of any business, company, trust or entity in which the Husband and/or the Wife have an interest.

7. The wife’s application that the proceedings instituted by her for a property settlement order pursuant to s 79 of the Act to proceed on an undefended basis be dismissed.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to 17.02 Family Law Rules 2004 (Cth).

Background

Background to the litigation

The husband has not filed a document in either jurisdiction setting out what orders he wants by way of a final property settlement order.BACKGROUND The husband was born … 1972 and is 48 years of age. The wife was born … 1984 and is 36 years of age. The parties met in May 2009 and married on … 2012. In May 2014 the parties relocated to Australia. The parties separated in June 2018. There are no children of the marriage. Shortly before the hearing the husband engaged with a set of draft balance sheets that the wife had prepared and provided some estimates of his own as to the value of assets and the amount of the liabilities. Their respective estimates of the net value of those assets are as follows:Property in China Wife $43,490,391 + NKHusband $33,728,016Hong Kong Wife $11,900,822 + NKHusband $6,023,399Australia / Country S / Country UU / Country WW Wife $17,552,845 + NKHusband $3,712,849 + NK The wife asserts that the pool of property for adjustment, once those assets which have been marked as having a value that is not known are taken into account, is an amount of not less than AUD$150 million. The husband concedes that the value of some of the assets in Hong Kong and the value of ten companies on the Australian/Country S/Country UU/Country WW balance sheet are not known. The wife asserts that up until 17 August 2020, when the husband filed his financial statement, the husband had elected not to disclose the fact of, or any particulars as to, or any estimate of the value of his property outside of Australia in the course of these s 79 proceedings. I accept he has not disclosed any taxation returns or published financial statements of his corporate or trading entities in Australia or outside Australia to the wife. The wife commenced proceedings in the High Court of Hong Kong which support the Australian proceedings (Exhibit A-13, wife’s affidavit filed 13 November 2020). The wife obtained injunctions in Hong Kong restraining the husband from:·Removing the Hong Kong assets up to a value of AUD$9,317,124; and·Disposing or diminishing the value of any of his assets in Hong Kong (solely or jointly owned). A further order was made in Hong Kong extending the injunction until the final determination of the Australian proceedings or the final determination of the originating summons filed in Hong Kong, whichever is the earliest. In addition, an order has been made in Hong Kong for the husband to provide disclosure of particular banking records. The wife asserts that the husband has failed to comply with that order but the husband disputes that is so. On 9 June 2020 the wife commenced divorce proceedings in the City R District Court in China. The Chinese court made a preservation order on an ex parte basis which froze the husband’s cash at bank or other property to the value of CY 150 million (approximately USD $30 million). The husband challenged the jurisdiction of the Chinese court to hear the proceedings on the basis that the wife was an Australian citizen. In those proceedings, he asserted that the matter should proceed in Australia instead of China. The husband received an adverse judgment in relation to that proposition which was delivered on 8 September 2020.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The wife also makes a claim in China based upon the husband causing her nervous shock. The evidence before me does not allow any assessment as to the nature of that claim although there is some indication that the claim is confined to about AUD$10,000.Conclusion about the course to be taken in the Australian proceedings The wife’s application in this jurisdiction shall consider all the assets of each of the parties, whether held solely or jointly, and wherever in the world they are held. The wife submits that in the event that the husband’s application for the Australian proceedings to be stayed until the completion of overseas proceedings was granted, she will not be able to access interim relief in Australia and will lose the benefit of current injunctions. I am unable to accept the second part of that submission. The husband’s application to dismiss those injunctions will be dealt with separately in these reasons. The wife argues that she would not be able to access litigation funding and that the injunctions she has obtained in Hong Kong, which hang off the Australian proceedings, might also be in jeopardy. She also asserts that she would be unable to progress her claim against the second and third respondents in Australia. As discussed later in these reasons, I find the husband has failed in his obligations for full and frank disclosure, particularly in relation to his corporate and business assets outside Australia. The wife submits that this Court at the time of a final hearing, can consider whether it deals with the property of the parties globally or deals with the property in China by way of a separate consideration in the s 79 process. The wife submits that much will depend on the findings of fact as to the justice and equity made during the course of the trial, the status at that time of the Chinese proceedings and any orders made in them. The wife says that this court can take into account the balance of the property in the world outside China when determining the s 79 adjustment orders between the parties while not making any order adjusting the Chinese property. Senior counsel for the husband submitted that it would be possible if the two proceedings were allowed to continue simultaneously that both courts could simultaneously hand down diametrically opposed property settlement orders. That is improbable. As senior counsel for the wife pointed out, the refusal of an injunction at this point in time does not mean that the final trial in the Australian and Chinese proceedings will take place concurrently. It means that they will run concurrently at the present time. It will be a matter for the docket judge, when appointed when the matter has reached an appropriate stage in the pool of matters awaiting hearing, to determine when the final hearing in the Australia proceedings are set down. This Court has processes which need to be undertaken prior to the case being ready for trial. In the end s 114(3) requires the application of the principles that relate to any interlocutory injunction.

Ratio Decidendi

Legal Principle Established

As explained by the Full Court in Strahan, s 80(1)(h) of the Act is a wide enabling provision for interim property decisions, and there is no reason to limit it, by requiring a finding of “compelling circumstances”. All that is required before the power to make an interim property order is exercised, is an assessment of whether it would be “appropriate” to make an interim order, with the “over arching consideration” being the interests of justice. There may need to be evidence of the likely cost of litigation, but only if that is the reason or part of the reason that is propounded as to why it is appropriate that the order be made.Considerations about making an interim property order in “the interests of justice” The notion of a “level playing field” is one which almost axiomatically is in the interests of justice and an important matter to consider when deciding whether it would be appropriate to make an interim property order. In In the Marriage of J U and T Poletti (1990) 15 Fam LR 794, Ellis, Strauss and Butler JJ quoted Ngyh J with approval at [796]:…It is rather, as it certainly was in Wilson and Wilson [(1989) 13 Fam LR 205], a situation where one party to the marriage controls almost exclusively what might be described as the patrimony of the parties and has control of the bulk of the assets and funds of the parties, where an order may be made to ensure that the other party, who does not have the fortune of controlling those funds, at least has an equal or near equal opportunity to present his or her case... The second step As was discussed in Harris and confirmed in Strahan, the second step in making an interim property order is to have regard to the usual matters in a s 79 order (ss 79(2) and 79(4) of the Act). A detailed inquiry is not required, but there must be some assessment of s 79 factors. Given it is an imprecise exercise, the interim property order has to be “conservative” so that the final outcome of property settlement will not be compromised by the interim property order. Either the remaining property needs to be sufficient to meet the legitimate expectations of both parties at the final hearing, or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so. Being a preliminary property order, the wife ordinarily would be able to choose how to spend the money however she wishes. However in this case, she has limited her application by seeking that monies provided pursuant to the order be earmarked for spending on the particular purpose of litigation funding.Principles in relation to interim costs orders In Salvage & Fosse (2020) FLC 93-966 (“Salvage & Fosse”), the Full Court considered principles relevant to the making of a litigation funding order pursuant to s 117 of the Act. At [8] of that judgment, the plurality said:…it is accepted by the appellant, as it must be, that s 117 of the Act empowers the Court to make such orders as to costs and is of sufficient width to empower the making of the order sought by the respondent in the proceedings.