Will the Court make me refinance?

Long & Peng Case Note

Recently, the Full Court of the Family Court of Australia at Brisbane (“Family Court”) decided an interesting case involving property matters. In this case, the Family Court dismissed an appeal from the Federal Circuit Court on the basis that there was not sufficient evidence to sustain the appeal, the original orders were not made in error, and the original orders were not unenforceable.

Long & Peng involved parties who had married in 1990 and had subsequently separated and moved overseas. There was some contention as to when separation occurred, however, they parties were divorced in China in 2015 and divided their Chinese property by consent in the same year. The parties had property in Australia and the USA that had not been divided.

The case involved the distribution of the Australian property, which included one jointly owned property, some jointly owned shares, monies in bank accounts owned solely by the husband, and various other separately owned items. At the original trial, the trial Judge ordered that the jointly owned property (“the property”) and shares be transferred to Ms Long (“the wife”), and the parties were to otherwise keep all property in their sole names. In particular, the wife was required to discharge the mortgage on the property within 28 days. The Judge also determined that due to the lack of evidence in relation to the monies in Mr Peng’s (“the husband”) accounts, those funds were not available to the wife. In particular, the wife asserted that the husband had in his possession some bank accounts worth around $500,000, and the husband argued that those monies were held on trust for his parents. Additionally, there was argument by both parties that the other had taken $600,000 out of a term deposit in and around 2005.

The wife appealed on the following bases:

1. That the Order requiring the wife to discharge the mortgage was ‘unenforceable and unreasonable’;

2. That the property should have been transferred to the parties’ daughter; and

3. That the monies in the husband’s accounts should have been available to wife.

The Family Court held that none of the above grounds were made out.

Firstly, the Family Court determined that the Order requiring the discharge of the mortgage was not unenforceable or unreasonable. They accepted that while the wife may struggle to pay the mortgage out, it was not unreasonable to expect the wife to refinance, or even sell the property. They also noted that should any of these processes take longer than 28 days, that does not make the Order unenforceable. The Family Court went on to highlight that the Order was made to ensure compliance with section 81 of the Family Law Act which requires family Courts to ‘as far as practicable, make such orders as will finally determine the financial relationships between the parties’.

The wife’s assertion that the trial Judge should have ordered that the property be transferred to her daughter arose from trial discussions, where the husband proposed the order at trial, and the wife agreed. The trial Judge did not make the Order because the wife only agreed on the basis that she was to receive part of the husband’s monies in his bank accounts. The trial Judge considered that to make the order without the wife also receiving monies from the husband’s bank accounts would be unfair to the wife. The Family Court did not find any error in the trial judge’s determination on this issue.

Finally, at both the trial and appeal, both parties failed to disclose their true financial position, and neither were able to provide any strong evidence in relation to the existence and ownership of funds held by the husband. Additionally, neither party was able to provide evidence as to who removed the term deposit funds. As such, the Family Court determined that the trial Judge was correct in her finding that no orders could be made in relation to those monies.

To read this short and interesting case, click here.

We understand that property matters can be very complex and can take an emotional toll on all parties involved. Here at the Family Tree, we are here to help you move through family transition in a holistic way through legal, counselling, and referral support. To learn more about our wholistic approach to family law, click here.

To visit the Family Court’s website to learn more about property settlements in general, click here.

If you have any questions, or would like to contact one of our friendly Brisbane family lawyers, click here to contact our office.

Written by Eustacis Yates & Tabitha Gulley

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