HUSBAND SEEKS TO STAY PROPERTY PROCEEDINGS DUE TO A PENDING CASE IN CHINA
Lam & Ho [2020] FCCA 3581 (16 November 2020)
This is a property proceeding where the respondent husband files an application to stay the further hearing of proceedings until the conclusion of the proceedings between the parties in China.
Facts:
These proceedings commenced when the Applicant Wife (‘the Wife’) issued proceedings seeking property relief. The Respondent Husband (‘the Husband’) files an application to stay the further hearing of the proceedings or to adjourn the further hearing of the proceedings until the conclusion of proceedings between the parties in China.
The Wife alleges, but without expert evidence, that there is approximately some 1 or $2 million of property in China that should be regarded as property of the Husband and Wife.
A significant factual dispute between the parties is whether the sum of approximately $335,000 was advanced by the Husband's father to the Husband or to the Husband and the Wife as a loan in about 2013.
The Wife's case, it is that a sum very similar to that amount and arriving in similar tranches was, in fact, the property of the Husband and the Wife that was paid to the Husband following the settlement of a compensation claim arising from a compulsory acquisition of property in China. It is the Husband's case, supported by his father, that that property was the property of the Husband's father alone. It is the Wife's case that that was property of the Husband and her arising from the compensation claim and she points to a document where she is named as a party to that compensation agreement.
The judgment in regard to the Chinese proceedings relating to the debt alleged by the Husband's father would be available relatively soon. In addition to that, the Wife's case was that she expected judgment in regard to the divorce proceedings, which commenced in 2018, some time relatively soon, in a matter of weeks.
Issue: Should the court stay the proceeding until the conclusion of proceedings between the party until the conclusion of proceedings between the parties in China?
Law:
- Family Law Act 1975 SS.75(2), 79(5)
Analysis:
It is easy to see how the determination of a debt in China of an amount equivalent to the asset pool, if that is going to resolve that debt question in these proceedings and/or the determination that the Husband or the Wife or the Husband and the Wife owns somewhere between or around about 1 to $2 million worth of property in China would have a substantial effect on the assessment of section 75(2) factors.
It was also going to be simply impossible for the court to reliably and thoroughly determine section 75(2) factor adjustment when the amount of the property and debt that each party had is not known. It may be appropriate that the proceedings be further adjourned, depending on the state of the Chinese proceedings.
The issue of the ownership of the Chinese property or the Husband and the Wife's entitlements thereof is a very significant matter. It may or may not have been able to determine the issue of the loan without waiting for the Chinese proceedings any further and then, of course, there is the issue of whether the loan would be enforced were it found to be a loan.
It will be better able to do justice between the parties when more information is available and, hopefully, those proceedings have been determined.
Conclusion: Hence, The Court orders the stay of the proceeding on the basis that there remain proceedings (or foreshadowed to be such proceedings) before the courts in China with respect to the legal and equitable property interests of the parties, which may impact the outcome of this proceeding.
