ZIHAO & YEIN

[2018] FCCA 648

FEDERAL CIRCUIT COURT OF AUSTRALIA

ZIHAO & YEIN [2018] FCCA 648

Catchwords:
FAMILY LAW – Property adjustment – overseas transactions – findings on credit – contribution by parties.

Legislation:

Family Law Act 1975, ss.79(1), 79(2), 79(4), 106A

Applicant: MS ZIHAO

Respondent: MR YEIN

File Number: BRC 8318 of 2016

Judgment of: Judge Egan

Hearing date: 9 March 2018

Date of Last Submission: 9 March 2018

Delivered at: Brisbane

Delivered on: 9 March 2018

REPRESENTATION

Counsel for the Applicant: Stephen Hartwell

Solicitors for the Applicant: Tang Lawyers

The Respondent appeared in person

THE COURT ORDERS ON A FINAL BASIS

1. That Shengyuan Wu, Solicitor of Wu & Co Lawyers Pty Ltd (“the trustee”) be appointed as Trustee for the sale of the real property at Property A, more particularly described as Lot (omitted) on (omitted) in the State of Queensland (“the property”).

2. That, forthwith, the property be vested in the trustee, to be held by the trustee on the trust for sale as follows:

   (a)The trustee is authorized by these orders to have the sole conduct of the sale in all respects on behalf of the parties in relation to the property and the trustee shall do all acts and things necessary and sign all such documents as may be required to sell the property by private treaty at a purchase price of not less than $735,000.00.

   (b)That if the property is not sold within sixty (60) days of the date of these orders, then within a further period of sixty (60) days the property be sold by auction.

   (c)In the event of sale by auction:

   (i)The trustee shall determine the appropriate marketing campaign for the property including a marketing budget for advertising, the appointment of any agents or agents for the sale of the property and the terms and conditions of such appointment and appointments;

   (ii)The reserve price for the auction shall be $735,000.00 (the “reserved price”);

   (iii)If bidding at the auction does not reach the reserve price, the trustee will negotiate with the highest bidder at the auction, or any other interested party to effect the sale, provided the real property is not sold for a price which is 5% less than the reserve price.

   (iv)Notwithstanding order 2(c)(iii) herein, if the property does not sell at auction or following auction, the trustee will immediately list the property for auction again on a date nominated by the trustee at a new reserve price nominated by a registered property valuer appointed by the current President of the Queensland division of the Australian Property Institute (the “valuer”) with the cost of this process and the valuer’s fees to be a selling cost to be paid in accordance with these orders.

3. That for the purposes of sale, the following shall apply:

   (a)The Applicant and Respondent are to do all acts and things necessary and sign all such documents as may be required to register the trustee on the title to the property and should the Respondent fail to execute any such documents, pursuant to s.106A of the Family Law Act 1975, the Registrar of the Court shall be appointed to execute all documents required to be signed.

   (b)The Applicant and Respondent are to co-operate in every way with the trustee appointed real estate agent/s in relation to the marketing of the property for sale including making the key readily available, allowing inspection of the property at all reasonably requested times by the agent/s and ensuring the property is in clean, neat and good order at the time, vacating the property prior to any inspections as directed by the Trustee to enable any prospective buyers to have access to and properly inspect the property in the absence of the Respondent.

   (c)Follow any other directions of the trustee in relation to the sale of the property and/ or inspections or viewing of the property and do all acts and things as requested by and in co-operation with the trustee as and when requested to do so.

4. That the Applicant and Respondent are restrained from taking any action which causes interference with any prospective purchaser or sale or with the responsibilities and obligations of the trustee in relation to the property.

5. That the Applicant and Respondent are restrained from communicating with any agent/s, auctioneer/s appointed by the trustee (other than to follow the directions of the trustee) or any prospective purchaser without first obtaining the prior written consent of the trustee.

6. That neither party may confer on any agent without the prior written consent of the trustee, any permission to sell or any sole or exclusive agency in respect of the property.

7. That pending the sale of the property, the Respondent shall have the sole right to use and occupy this property to the exclusion of the wife.

8. That the trustee shall determine the appropriate marketing of the property including listing price from time to time, the appointment of any agent or agents for the sale of the property and the terms and conditions of such appointment or appointments.

9. That pending sale, the Respondent shall pay or cause to be paid all outgoings on the property including rates, local authority charges, body corporate charges (if any), and maintain adequate fire and general insurance on the property and provide evidence of same to the trustee as requested by him from time to time.

10. That the trustee is hereby indemnified by the Respondent against any claims made against them upon becoming registered owners as trustee on title, consequent upon a failure to pay any of the outgoings of the nature described in the preceding order.

11. That the trustee is entitled to charge all reasonable costs and disbursements incurred by the trustee in performance of his obligations pursuant to these orders and that his fees and expenses be a first charge on trust monies.

12. That the Applicant on or prior to the settlement/completion of the sale of the property remove the caveat no. (omitted) previously lodged by her over the property.

13. That upon settlement of the sale, the sale proceeds shall be paid or held, as the case may be, in the following manner:

    (a)Firstly, in payment of all necessary selling costs including agent’s commissions, legal costs, marketing and advertising costs and all other necessary costs incurred in the sales;

    (b)Secondly, in discharge of any liabilities secured against the property by registered mortgages (if any);

    (c)Thirdly, in payment of the trustee’s reasonable costs and expenses incurred in effecting the sale and when the sale is settled;

    (d)Fourthly, to pay the remaining balance as to

    (i)Firstly, to the Applicant, the sum of $675,000; and

    (ii)Secondly, to the Respondent all of the balance remaining (if any) after payment to the Applicant of the sum referred to in paragraph (i)) hereof.

14. That subject to any specific provision of these orders each party be declared solely entitled to the exclusion of the other to all property and to chattels, of whatsoever nature and kind, in the possession of such party as at the date of the making of these orders.

15. Liberty to apply in respect of any consequential orders arising.

IT IS NOTED that publication of this judgment under the pseudonym Zihao & Yein is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRC 8318 of 2016

MS ZIHAO

Applicant

And

MR YEIN

Respondent

REASONS FOR JUDGMENT

1. I have before me an application for the making of final orders by way of adjustment of property filed by the applicant wife on 24 August 2016 by an initiating application.  There is only one real asset of the marriage that being a property situated at Property A, at the (omitted) in Queensland.  That property is described as Lot (omitted) on (omitted), being the whole of the land comprised in title reference (omitted).

2. The wife seeks an order that the respondent does all such acts and things and sign all necessary documents so as to transfer to the applicant all right, title and interest in the property to her.  By way of refinement of such orders as were sought in the initiating application, annexure A to the case summary filed on behalf of the applicant wife sought further orders so as to effect a sale of the property if the applicant was unable to have the property transferred to her.  That order was, no doubt, sought by way of amplification, by reason of the fact that she is a foreign national neither residing in Australia, having Australian citizenship, or who otherwise conducts business within Australia.  I surmise that the alternative order sought by her in relation to orders providing for the sale of the property are more appropriate from her perspective. 

3. By way of a response filed on 18 November 2016, the husband seeks that the application be dismissed, and that a caveat placed or registered over the property be removed. 

4. At the trial, the wife was represented by a solicitor and Counsel.  The husband was not legally represented.  He appeared on his own behalf with the assistance of an accredited translator.  The husband and wife commenced living together in or about (omitted) 2014.  They met in the People’s Republic of China.  On or about 14 April 2015 the husband entered into a contract for the purchase of the Property A property for the sum of $675,000.  That contract is annexure Y-1 to the husband’s affidavit filed on 18 November 2016.  On page 3 of that contract it was recorded that the sum of $1000 was paid by way of part deposit on the date of execution of the contract, and that the sum of $33,750 was payable by way of balance deposit on or before 17 April 2015.

5. The parties married in China on (omitted) 2015.  That date of marriage is not insignificant in this case.  The contract referred to above settled on 30 May 2015.  Again, that date is not insignificant.  The parties separated on 20 August 2016, some four days before the filing by the wife of her initiating application.  It can, therefore, be seen that this was a short marriage.  It is conceded by all parties that the only asset in dispute so as to constitute the subject matter of any property adjustment order is the Property A property. 

6. The dispute in relation to who paid for the property is the central issue for my determination.  On the wife’s case, she paid all of the money toward the purchase of the property, whereas on the husband’s case he paid for the whole of the purchase price for the property.  The husband annexed to his affidavit filed on 18 November 2016 a number of bank statements being exhibit Y-2 to such affidavit. 

7. There are three records on such statements which are relevant for the purpose of consideration as to who paid for the purchase price for the purchase of the Property A property.  They are as follows:

   a)15 April 2015 - credit of $41,148.90;

   b)19 May 2015 - credit of $59,985;  and,

   c)25 May 2015 – credit of $611,778.80.

8. Those three credits to the husband’s account total the amount of $712,912.70.  I accept that in respect of the purchase of the Property A property, when one adds on to the purchase price of $675,000 the amounts payable in respect of stamp duty, legal fees, and outlays, that the total one arrives at is in the order of that sum of $712,912.70.

9. During the course of the husband’s evidence, I took the husband to his bank statements being exhibit Y-2.  When I questioned him about the existence of a recorded deposit of $10,000 on 23 March 2015, he could not directly recall where that money had originated from.  He then settled, finally, upon the proposition that he might have brought it to Australia with him by way of cash after a trip to China. 

10. As to the deposit of $41,148.90 made on 15 April 2015, the husband said in evidence that such payment was made into his account by his family members from China.  He initially said in his evidence that there was a A$10,000 limit to withdrawals of money from China when paying moneys to Australia, but he subsequently amended such evidence to it being a maximum of US$50,000 withdrawals and, of course, the Chinese RMB equivalent to such amount.  The 15 April 2015 credit is recorded as having been sent by an entity called “(omitted)”.

11. The credit in the amount of $59,985 made on 19 May 2015 is a direct credit recorded as having been made from an account in the name of the husband.  In respect of each of those payments, the husband maintained that they were made through what he referred to as “an underground bank”.  He suggested that payments otherwise made than by an unauthorised underground bank could have been the subject of his identification and subsequent prosecution by Chinese fiscal authorities.  In any event, he maintained that those moneys were paid into his account by his family members.

12. He has deposed to the making of such payments in paragraphs 39-45 inclusive of his affidavit filed on 18 November 2016.  What he has not exhibited, however, is any evidence constituting a record of transfer by any family member in China from one of their family member accounts into the husband’s account.  Had he sought to justify, as he should have, the fact that payment had been made by a family member on his behalf to the exclusion of the wife, in circumstances where the wife was clearly asserting that she had made all such payments, then it was obvious that he ought to have, for the proof of his own case, annexed any such documentation.

13. The fact that he has failed to do so enables me to draw an adverse inference against him in relation to his credibility on that point, and I make such adverse finding.  What is clear, however, is that the wife has given evidence that she arranged for the payment of all moneys associated with the purchase of the Property A property.  At this juncture, it was the evident that, at the relevant time in 2015, the exchange rate between a Chinese RMB and the Australian dollar was 1:5 in favour of the Australian dollar – 5 RMB equals 1 AUD.

14. In that regard, I refer to an affidavit of the wife filed on her behalf by the wife’s solicitor, namely one Flora Tang.  That affidavit of the wife was filed on 24 February 2018.  In exhibits D to G inclusive of such affidavit, one sees direct evidence of transfers of substantial sums of money by the wife from her account in China, firstly into the husband’s account, and secondly into accounts described in the evidence as “third party accounts” which the wife alleges in total, constituted the purchase price of the property, together with stamp duty and other legal expenses and outgoings.

15. It is important to look at those documents.  Annexure D to the affidavit of the wife constitutes a document which is the subject of a translator’s declaration.  The document records that on 18 March 2015, the sum of 500,000 RMB was transferred from an account held in the name of the wife to an account held in the name of the husband.  Annexure E to the wife’s affidavit constitutes a record of two payments being made from the wife’s account to the husband’s account on the 21st day of April 2015.

16. Those payments were respectively in the amounts of 200,000 RMB and 300,000 RMB.  The husband’s bank statements record that on the 15th day of April, the sum of $41,148.90 was received as a direct credit through an entity which I find was a commission agent in China.  The arrangement seems to have been that upon payment to the commission agent, the commission agent would somehow facilitate the transfer of funds without government authorisation to an account in Australia.  The payment having been made on the 15th day of April, or having been recorded as received on the 15th day of April 2015, fits in neatly with the earlier payment of the sum of 500,000 RMB into the husband’s account in China on 18 March 2015.

17. Indeed, there is an entry of 16 April 2015 on the husband’s (omitted) Bank account (Annexure A to the husband’s affidavit filed on 22 September 2017) recording a transfer from that account as a debit in the amount of $33,750, that being the balance payable under the contract by way of deposit, something that was due on 17 April 2015.  The next record of relevance is the credit into the husband’s account of the amount of $59,985 on 19 May 2015.  If one adds that amount to the amount of $41,148.90 credited on 15 April, one arrives at the sum of approximately $100,000 AUD - roughly one fifth on an exchange rate basis of the 500,000 RMB transferred by the wife into the husband’s account in China on 18 March 2015.

18. I find that those two sums paid on 15 April and 19 May 2015 into the husband’s account, were so paid from moneys paid into the husband’s account in China by the wife.  Annexure E to the affidavit of Ms Tang records the withdrawal of the sums of 200,000 RMB and 300,000 RMB respectively from the wife’s account into the husband’s account on 21 April 2015.  I find that those transfers were made in respect of the proposed purchase of the property at Property A.  Annexure F to the affidavit of Ms Tang discloses that payments of 1 million RMB and 400,000 RMB were respectively made from the wife’s account to a third party account in the name of (omitted) on 11 May 2015.  Annexure G is an annexure which proves payment of the amount of RMB 1,230,000 from the wife’s account into a third party account in the name of (omitted) on 19 May 2015. 

19. If one adds up those payments made between 21 April 2015 and 19 May 2015 inclusive, one arrives at an amount of approximately RMB 3,130,000, or the sum of approximately $626,000.

20. I find that it was no coincidence that such moneys as last referred to were paid from the account of the wife because the husband’s bank statements record that on 25 May, the sum of $611,778.80 was received as a direct credit into the husband’s account.  I find that the monies withdrawn from the wife’s account between 21 April 2015 and 19 May  2015 inclusive were so withdrawn for the purpose of effecting the purchase and settlement of the sale of the Property A property.

21. The husband in his evidence, stated that he only credited payment in respect of the property on the part of the wife in relation to the $611,778.80 payment made on 25 May 2015, but in that regard he said in his evidence that that amount had been repaid in cash to the wife on the afternoon of his wedding in China on (omitted) 2015 – the payment was alleged to have been made by one of his sisters and one Ms T on his behalf by depositing RMB 3 million in cash (allegedly situated in two boxes) into the rear of a (vehicle omitted) driven by, and presumably alleged to have been owned by, the wife.

22. In paragraph 52 of the husband’s affidavit filed on 18 November 2016, the husband swore as follows, “I will be able to obtain affidavits from my sister and Ms T deposing to these facts”, when referring to the alleged payment of cash in the amount of RMB 3 million to the wife.  As it transpires, no affidavit deposing to any such act on the part of the husband’s sister or Ms T was deposed to by either of them, and the husband has made no attempt to otherwise seek to prove payment of such amount.

23. Additionally, evidence was given by the husband that his family resides in (omitted) which is many thousands of miles away from where the wedding ceremony took place.  Though not impossible that someone who was a member of the husband’s family might physically bring two cardboard boxes of cash in the amount of RMB 3 million thousands of miles to a wedding, I find it inherently improbable that that would have been done.  In all of the circumstances therefore, I do not accept the husband’s evidence on that point.  I do not believe him.  I find that he was attempting to explain away his non‑repayment of any of the purchase moneys with an improbable and ineffectual tale.

24. Accordingly, I find that the Property A property was purchased solely from moneys provided to the husband by the wife.  The market value of the property as at May 2015 would have been reflective of the purchase price.  There is no direct evidence of the current valuation of such property.  It has been suggested by counsel for the wife that the property is now valued in excess of $700,000 but, as indicated, there is no evidence of such valuation.  It must be said, though, that to the extent that the property has, or may have, appreciated in value, such appreciation is due to the efforts of the husband, not the wife.  The husband has continued to reside in Australia at the subject property and it must be inferred in the absence of evidence to the contrary that he has maintained such property.  The wife, on the other hand, has lived overseas and cannot seek to have attributed to her efforts any increase in value.

1. The husband is on his evidence, the owner, or at least the part‑owner, of a family (omitted) business situated in China.  No evidence was given as to the nature of the (business omitted) which might have been produced by or on behalf of the husband.  He receives some small amount of money per month by way of his share of profits.  There is no evidence to the contrary.  The wife has business interests in China and her position is that she is a woman of substance in a monetary sense.

2. There is no application for spousal maintenance on foot in this matter. I am required, when making an order for property adjustment pursuant to section 79(1) of the Family Law Act 1975 (the Act), to make such order under section 79(2) which is in all of the circumstances just and equitable.

3. There are no children of the marriage.  Each of the husband and wife had adult children who are no longer dependants.  There is asserted to be, on the part of the husband, a child aged 6 years who resides in (country omitted) and in respect of whom there is an obligation to pay the sum of $100 per week by way of maintenance, but otherwise there is no evidence as to the needs of any such child.

4. As to the matters which must be taken into account under section 79(4) of the Act, I find as follows:

   a)The wife has made a direct financial contribution in the amount of approximately $710,000 towards the acquisition of the Property A property.  The husband has, I infer, taken steps to conserve and improve such property since the time of its purchase.  He has been living in the home primarily and to the extent that there is any increase in value, the wife has not been responsible for same.  He no doubt has spent some money in minor maintenance over the years, albeit that such sums have not been quantified.

   b)As indicated earlier, the husband has made a non‑financial contribution toward the conservation and improvement of the property at Property A.  He is largely responsible for any increase in value of the property in that regard.

   c)The marriage was a short one and there was no indication that it was one likely to endure based upon mutual love and affection.  There is little evidence that the wife was a good homemaker or that she made any relevant contribution in that regard.

   d)Any order which I make is, in my opinion, not likely to affect the earning capacity of either party to the marriage.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Egan

Date: 3 April 2018