Zhai and Juan
[2008] FMCAfam 108
•25 February 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| ZHAI & JUAN | [2008] FMCAfam 108 |
| FAMILY LAW – Property – undefended – contributions. |
| Family Law Act 1975 ss.44, 75(2), 79 |
| Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Norbis v Norbis (1986) 161 CLR 513 |
| Applicant: | MR ZHAI |
| Respondent: | MS JUAN |
| File number: | SYC 5092 of 2007 |
| Judgment of: | Altobelli FM |
| Hearing date: | 19 December 2007 |
| Date of last submission: | 19 December 2007 |
| Delivered at: | Sydney |
| Delivered on: | 25 February 2008 |
REPRESENTATION
| Applicant: | Self Represented |
| Respondent: | No Appearance |
ORDERS
MR ZHAI is granted leave to apply out of time for alteration of property interests under s.79 of the Family Law Act 1975.
Within 28 days of the date of these orders the wife pay to the husband the sum of $99,127 AUD.
Except in accordance with these Orders, the Wife is restrained from selling or attempting to sell, disposing or attempting to dispose, mortgaging or attempting to mortgage, charging or attempting to charge the property described as Property B, being the whole of the land comprised in Certificate of Title Folio Identifier 1xxx in the state of Victoria (“the property”).
The Husband be permitted to lodge a caveat on the title on the property without requiring the consent or authorisation of the Wife.
In the event the wife fails to comply with Order (2), within a further seven days the wife do all things necessary to transfer to the husband her interest in the property subject to the mortgage no. Xxxx currently noted on the title.
Thereafter, the husband do all such acts and execute all such documents as may be required to effect a sale of the property to be sold by private treaty at a price agreed upon between the parties and failing such agreement to be determined by the President of the Australian Property Institute of New South Wales or his nominee.
In the event that the property is not sold by private treaty within four months from the date of this Order the husband within six months from the date of this Order do all acts and things and execute all Deeds, documents, instruments and writings necessary to procure the sale of the property by public auction and in particular:-
(a)Place the property with an auctioneer agent nominated by the wife (hereinafter called “the auctioneers”) for the sale of the property by public auction at the earliest possible date.
(b)Execute all documents requested by the auctioneers for the sale of the property by auction.
(c)Request the auctioneers to recommend a reserve price to be placed on the property for the purpose of the auction sale and accept such recommended reserve price.
(d)Pay to the auctioneers any sums requested for advertising expenses in relation to the auction.
(e)Give such instructions to the Solicitor for the husband for the preparation of an appropriate contract and other documents as are necessary for the sale of the property by auction.
(f)Co-operate in every way with the auctioneers in relation to the auction of the property including making a key available, allowing inspection of the property at times requested by the auctioneers and ensuring that the property is in a neat and clean condition at the time of inspection by prospective purchasers.
(g)Attend at the auction sale of the property and negotiate with the highest bidder in the event that the reserve price is not reached.
(h)Accept the advice of the auctioneers as to the acceptance of a price less than the reserve price.
(i)Execute the contract of sale.
(j)Execute all other documents necessary to complete the sale of the property.
Upon the completion of the sale proceeds of the sale be applied as follows:
(a)To pay all costs, commissions and expenses of the sale and to pay any council and water rates and maintenance levies outstanding in respect of the property.
(b)Discharge of the existing mortgage; and
(c)$99,127.00 AUD to the husband;
(d)The remaining funds to be held in trust for the benefit of the wife and to be held in a solicitor’s controlled monies trust account of the solicitor who handles the conveyance.
That in the event of either party neglecting or refusing to sign all or any necessary instruments to give effect to these Orders or any of them, either party is at liberty to apply, pursuant to Section 106A of the Family Law Act, to the Court to seek appointment of an Officer of the Court or other person to execute the deed or instrument in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to the said deed or instrument.
The husband is to notify the wife within 7 days of these orders by forwarding a sealed copy of the same by ordinary prepaid post to
(a)Property B Victoria.
(b)Property H, Victoria.
I stay the operation of orders (1) and (2) above for one calendar month and I grant leave to the Wife to apply before me to set aside these orders at any time before the expiration of one calendar month from today.
I grant leave to re-list before me on seven days notice as regards interpretation, implementation and enforcement of these orders.
IT IS NOTED that publication of this judgment under the pseudonym Zhai & Juan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
SYC 5092 of 2007
| MR ZHAI |
Applicant
And
| MS JUAN |
Respondent
REASONS FOR JUDGMENT
Introduction
This application for alteration of property interests, commonly known as a property settlement, proceeded before me on an undefended basis. The applicant husband is Mr Zhai who is currently unemployed, and in receipt of New Start Allowance. The respondent Ms Juan is his former wife. As will be apparent below, I know relatively little about her financial circumstances. The applicant husband represented himself in these proceedings. For all practical purposes the respondent wife played no role. She neither appeared, nor was represented at any time during the proceedings, either before the Family Court of Australia or before this Court. In essence, the applicant's case is that at the end of a short marriage in which he had made substantial contributions of a financial nature he was left with nothing, but his wife was left with a property in her own name. The applicant's purpose in bringing these proceedings is to achieve a just and equitable settlement of property with his former wife. The matter has a somewhat complex background involving transactions with relatives in China. It seems as if both parties met in China. The wife migrated to Australia in September 1996 but returned to China for the purposes of the wedding in December 1996. In February 1997 the wife returned to Australia. The husband joined her in May 1999, but the marriage ended in separation in October 2000, though it is possible that the separation was as early as June 2000. A divorce was granted in February 2002 which became absolute one month later.
The husband's case is that during the marriage, and particularly for that period when the wife was in Australia but he was in China he provided substantial financial support for her benefit. Moreover, when he migrated to Australia in 1999 he made available to the wife, through her mother, a substantial term deposit consisting of 250,000 yuan of which 120,000 yuan was a loan from his mother. Thus, the husband asserts, he made a financial contribution of 250,000 yuan as well as financial support of over $60,000 AUD during the marriage.
I am satisfied that the wife has been afforded natural justice in terms of being notified of these proceedings. Orders were made by me relating to notification of the respondent wife of these proceedings on
3 September 2007. I note that on 23 March 2007 Registrar Cameron made orders dispensing with the requirement for personal service on the wife, on certain conditions. There are several affidavits of attempted service, and as to compliance with directions made in relation to service are filed by the husband. Nonetheless, if I decide to make orders, I will stay those orders for a period of one month to enable the wife to bring an application before me to set aside these orders, subject to satisfactory evidence.
The Issues
A number of issues seem to arise in this case. Firstly, it will be necessary for me to consider the husband's application for leave to commence proceedings out of time. If that application is granted, I will need to approach his application for alteration of property interests in the usual manner, even though the matter proceeds on an undefended basis. I will need to ascertain whether there is any property. I will need to ascertain what contributions have been made, and then assess the same. I will need to establish whether there are future needs, and if so assess those needs. I will then need to decide what order is just and equitable under the circumstances.
The Applicable Law
The preferred approach to the determination of an application under
s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.
The law regarding commencing property proceedings out of time is found in s.44(3),(3A) and (4) of the Act:
(3) Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983 :
(a) a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a)--the date on which the divorce order took effect; or
(d) in a case referred to in paragraph (b)--the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.
3A) Notwithstanding subsection (3), where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983 :
(a) a divorce order has taken effect or a decree of nullity of marriage has been made; and
(b) the approval under section 87 of a maintenance agreement between the parties to the marriage has been revoked;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) may be instituted:
(c) within the period of 12 months after:
(i) the date on which the divorce order took effect or the date of the making of the decree of nullity, as the case may be; or
(ii) the date on which the approval of the maintenance agreement was revoked;
whichever is the later; or
(d) with the leave of the court in which the proceedings are to be instituted;
and not otherwise.
(4) The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b) in the case of proceedings in relation to the maintenance of a party to a marriage--that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
In order for an application for leave to commence proceedings out of time to be successful, the applicant must establish firstly that there is a reasonable claim to an alteration of property interest, and secondly that the applicant would suffer hardship if leave to pursue the grant were not granted. Hardship has been interpreted to mean substantial detriment, and that depends on the circumstances of each case. Much depends upon the financial circumstances of the applicant. The Court is entitled to have regard to the length of the delay, the reasons for the delay, the prejudice that would be caused to both the applicant and the respondent, the strength of the applicant's case, and whether the substantive proceedings are still capable of being tried adequately and fairly.
Leave to Commence Proceedings Out of Time
I am satisfied that the applicant would suffer hardship if leave were not granted for him to commence these proceedings out of time. The length of the delay is not such that it contraindicates leave being granted. The reasons for the delay advanced by the applicant in his evidence are primarily two‑fold. Firstly, he could not establish until shortly before the commencement of proceedings that the respondent wife in fact owned assets against which to bring an application for property settlement. Secondly, it was not until shortly before the commencement of these proceedings that separate proceedings in a Chinese court were finalised, the effect of which was to remove any doubt about whether the wife in fact received the benefit of the husband's 250,000 yuan. I have no evidence before me of any prejudice that the respondent wife would experience as a result of granting leave. The applicant's case seems strong, on a prima facie basis. The applicant is clearly in difficult financial circumstances and is dependent upon Centerlink benefits. The substantive proceedings are still capable of being tried adequately and fairly, even without the respondent wife's participation. For all of these reasons, I think it is appropriate to grant leave to commence proceedings out of time. Indeed, as I am satisfied that the wife has at all times been given notice of these proceedings but has declined to participate and as the very nature of the proceedings clearly indicates the intention of the husband to seek final orders for alteration of property interests, I think it is appropriate in this case to proceed to deal with the substantive matter as well.
Property
For present purposes the only property is the property known as Property B in the State of Victoria being the whole of the land comprised in certificate of title volume 1xxx. The evidence indicates that the wife is the sole proprietor of an estate in fee simple in this property, subject to a mortgage to Perpetual Trustees Victoria Limited. From the information produced on subpoena it appears that this might be a strata title property. It was purchased by the wife for $236,000 by way of an offer made and accepted on 4 September 2001, the year after separation. It was financed by way of a mortgage from Perpetual Trustees Victoria Limited in the sum of $60,000. Again the subpoenaed evidence indicates that as at 17 August 2007 the balance owing on that loan was $49,935.30. Accordingly, there is substantial equity in this property.
The only property owned by the husband is a motor vehicle worth $1,500, and household contents worth $500, disclosed in his financial statement filed on 20 December 2006.
Contribution
The applicant husband's evidence indicates that he had available to him 250,000 yuan which included 120,000 yuan lent to him by his mother. His evidence is that, in essence, he arranged with the respondent wife to pay this money to the wife's mother in China shortly before migrating to Australia in 1999. He asserts that the arrangement was that she would hold the monies in trust for him and the wife and make the monies available to them in Australian dollars in Australia. What he asserts that his mother‑in‑law did with the funds is not relevant for present purposes. His evidence is that the respondent wife acknowledged in legal proceedings in China that she herself gave instructions to her mother about dealing with these funds contrary to the stated purpose of making them available to the husband and wife in Australia.
It is unclear from the husband's case whether he asserts that the respondent wife in fact eventually received the benefit of these funds and used it to acquire the property referred to above. The timing of the purchase makes this a possible conclusion to draw on the facts. It was certainly implicit in the husband's case that he made a contribution to the marriage in that amount, and that the wife received the benefit of it. In the absence of contrary evidence by the respondent wife, I find it is a reasonable inference to draw. If the wife had chosen to participate in these proceedings she might have been able to adduce evidence about the source of funds that she used to purchase Property B in Victoria, and she might have been able to give evidence about what happened to the 250,000 yuan. In the absence of the respondent wife's participation in these proceedings, I am entitled to accept the husband's evidence in this regard.
The husband further asserts that he contributed in the form of providing financial support in the sum of $60,000 AUD in the period when his wife was living in Australia, and he was still residing in China.
Further, he asserts that during the time that he lived in Australia prior to separation he worked at the Commonwealth Bank and made further financial contributions to the support of the family.
There is corroborating evidence of the 250,000 yuan contribution by the husband, in the form of an affidavit from his mother, Ms L filed 7 December 2007.
Moreover, the husband produces as evidence in support of his case, a translated affidavit that appears to have been made by the wife herself. This information appears to be a translation of an affidavit that the wife made on 22 March 2006, but it is most unclear whether the affidavit was made in the context of these proceedings, or for some other purpose. The document probably has some forensic benefit because it sets out some evidence on behalf of the respondent wife that is contrary to the husband's interest. Thus, whilst on the one hand she agrees that she did request her mother in China to transfer the 250,000 yuan held by the husband to a third party for investment purposes, she also asserts that she and her husband had reached an agreement by way of property settlement which included this money. Indeed, she asserts that the payment of this money to her was part of the property settlement having regard to the benefits that he received. The husband strenuously denies these allegations. In the same document, there is some limited admission on behalf of the wife that the husband did in fact make financial contributions during the period that she was in Australia, and he was in China.
Having regard to the nature of these proceedings, and the fact that the wife has declined to participate in them, I am entitled to accept the husband's evidence at face value. I therefore find that he did make contributions by way of $60,000 payments to the wife during the course of the marriage, and a further contribution of 250,000 yuan during the marriage.
I do not have information about contribution made by the wife. It appears that she conducted various businesses during the marriage. Nonetheless the contribution made by her husband was both financial and substantial, and it would be unjust and inequitable for him to be denied the return of these funds.
Future Needs
The case was not advanced by the husband on the basis that he had future needs under s.75(2) of the Family Law Act, and indeed if I make the order for alteration of property interests sought by him there would be no such future needs. Again, as a result of the wife's nonparticipation in these proceedings I have no evidence about any future needs that she might invoke.
Just and Equitable Order
In undefended proceedings such as these it is always difficult to assess whether an order is just and equitable under the circumstances. For all practical purposes I have only had the benefit of the husband's untested evidence, and no evidence from the wife other than that referred to above. I need to consider the possibility that it is the making of these orders, and the possible subsequent enforcement of them, that will lead to the wife participating in the proceedings and possibly producing evidence to the Court which is contrary to that asserted by the husband. There is always the faint possibility that notwithstanding all the efforts that have been made to notify the wife about these proceedings she genuinely has not been on notice of them. Be that as it may, the husband was entitled to proceed on an undefended basis, and the Court can only act on the basis of the information before it. Having regard to all of the above matters I think it is just and equitable that the husband receive the benefit of an order the effect of which is that the respondent wife pay to him an Australian dollar equivalent of 250,000 yuan as at 30 January, which converts to $39,217 AUD together with a further $60,000 AUD. I intend to allow her to make that payment within 42 days failing which the husband will be appointed trustee for sale of the Property B in the State of Victoria. He will then be empowered to sell the property, to pay the expenses of the sale, to discharge the existing mortgage, to repay himself, and then to hold the remaining funds for the benefit of his wife. Under the circumstances, I think it is also appropriate to restrain the respondent from further dealings with the property, pending further order of the Court, and also to do what I can by way of order that will facilitate the husband lodging a caveat over the property.
I certify that the preceding twenty two (22) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate: Lisa Molloy
Date: 18 February 2008
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