CDJ v VAJ [2020] FamCAFC 56 | Case summary

What happened

This is an appeal from property settlement orders made in the Federal Circuit Court on 24 July 2019. The parties, Ms Long (the wife, appellant) and Mr Peng (the husband, respondent), married in 1990 and have one daughter born 1992. The primary contest at trial concerned the composition of the property pool, including whether certain offshore bank accounts and investments (notably an HSBC account, a Citibank term deposit, and a KK investment) should be included for distribution, and the appropriate division of five Australian properties. The primary judge made adverse findings as to the credibility of both parties and found significant nondisclosure of financial documents (Introduction paras 3-4 [global paras 3-4]).

Key factual threads include:

The parties effectively separated prior to December 2005, according to the primary judge (Brief factual overview para 5 [global para 11]).
The wife lived in the USA from December 2005 and later in Country X; the husband lived and worked in China from 2004 (Brief factual overview paras 4-5 [global paras 10-11]).
At trial, the parties owned five Australian properties; one (Suburb B) was joint. The wife was ordered to take the husband’s interest in that property (Brief factual overview para 10 [global para 16]).
The wife alleged substantial offshore funds (USD amounts) and assets; the primary judge found documentary support lacking and declined to include those assets in the pool (Brief factual overview paras 11-12; HSBC funds paras 1-4 [global paras 17-18, 30-33]).
The primary judge described the parties' testimony as unreliable, noting that their "solemn oath or affirmation proved to be patently false" (Introduction para 3 [global para 3]).

On appeal, the wife sought among other things:

Reversal of the date of separation (arguing separation occurred in 2013 rather than 2005);
Inclusion of the disputed HSBC and Citibank funds in the property pool;
Orders transferring the family home to the daughter; and
Leave to adduce further evidence under s 93A(2) Family Law Act 1975 (a permanent resident card for the husband).

The Full Court (Strickland, Ryan & Watts JJ) dismissed the application to adduce further evidence, dismissed the appeal in full, and ordered the wife to pay the husband's costs of the appeal assessed at $22,027.12 (Orders; Conclusion paras 1-2 [global paras 2, 36-37]).

Why the court decided this way

The Full Court’s decision rested on three interrelated foundations:

Deference to primary factual and credibility findings
- The primary judge made pervasive adverse findings about both parties' honesty and their failure to disclose financial documents of real significance. These findings were unchallenged on appeal (Introduction paras 3-5 [global paras 3-5]; Brief factual overview paras 4, 11-12 [global paras 10, 17-18]). The Full Court emphasised that the wife could not show the primary judge erred in declining to accept her oral evidence about the source and existence of contested accounts. The well-established appellate principle of deference to trial judges’ credibility evaluations informed the outcome (see discussion invoking Robinson Helicopter as authority for limited appellate interference, HSBC funds para 2 [global para 31]).
Insufficiency of evidence to include contested assets in the pool
- The wife's case required the court to accept her version of the source and continuing existence of offshore funds. The primary judge was unable to find that the HSBC or Citibank monies were part of the property pool, given the absence of corroborating bank records and contradicting evidence (the husband's mother's affidavit for HSBC) (Brief factual overview paras 11-12; HSBC funds paras 1-4 [global paras 17-18, 30-33]). The Full Court endorsed this approach: without documentary proof, inference in favour of inclusion could not be drawn.
The limited scope for admitting fresh evidence on appeal under s 93A(2)
- The wife sought to adduce the husband's Country X permanent residence card on appeal to support a later date of separation. The Full Court applied the CDJ v VAJ principle (1998) that s 93A(2) permits further evidence only where that evidence, if accepted, would show the order under appeal to be erroneous. The Court concluded the residency card would not have altered the primary judge's view that the parties had formed an intention to separate in late 2005 nor the assessment of contributions thereafter; therefore the further evidence application failed (Date of separation paras 2-4 [global paras 21-23]; para 3 specifically referencing CDJ v VAJ [global para 22]).

The combined effect of these factors, adverse credibility findings, lack of documentary support for disputed assets, and the inapplicability of proposed fresh evidence to demonstrate error, led to dismissal of the appeal.

Before and after state of the law

Before this decision:

Established authorities govern deference to trial judges on credibility and findings of fact, and the narrow compass for admission of further evidence on appeal under s 93A(2) (as explained in CDJ v VAJ (1998)). Robinson Helicopter (2016) reinforces reluctance to overturn factual findings absent error.

After this decision:

The Full Court applied those settled principles to reaffirm that:
- Appellate courts will not interfere with a primary judge's credibility assessments where the record discloses no error of law or principle (HSBC funds para 2 [global para 31]).
- Section 93A(2) must be used to admit evidence that would, if accepted, demonstrate that the trial order is erroneous; evidence which would not affect outcome should be refused (Date of separation para 3 [global para 22]).

The decision is a practical reaffirmation of those principles rather than a doctrinal shift. It underscores the evidentiary consequence of non-production of bank records and the consequences of unreliable oral testimony in family property litigation.

Key passages with plain-English translation

"their 'solemn oath or affirmation proved to be patently false'" (Introduction para 3 [global para 3]).
- Plain English: The primary judge found both parties lied under oath about important aspects of their finances. Because of that, the judge did not trust their testimony when deciding what assets existed or who owned them.
"the disposition of the Citibank funds remain a mystery" (Brief factual overview para 12 [global para 18]).
- Plain English: There was only a 2005 statement showing a term deposit; neither party produced documents showing what happened to the money afterwards. Without evidence, the court could not conclude the money still existed or who had it.
"the evidence concerning the HSBC funds 'is wholly unsatisfactory'" (HSBC funds para 3 [global para 32]).
- Plain English: The court found the wife's evidence about the HSBC account unreliable and that the husband's mother's affidavit made the wife's story less likely. The Court therefore refused to include those funds in the property division.
s 93A(2) application summary (Date of separation para 3 [global para 22], invoking CDJ v VAJ).
- Plain English: You can ask an appeal court to admit new evidence, but only if that new evidence would show the original decision was wrong. If the new evidence would not change the decision, it should be refused.

What fact patterns trigger this precedent

This decision is most directly applicable where:

Parties contest inclusion of offshore or otherwise opaque bank accounts or investments in the property pool, and documentary proof from banks or custodians has not been produced.
The trial judge reaches adverse credibility findings about a party's oral evidence concerning ownership or source of funds.
An appellant seeks to adduce fresh documentary evidence on appeal that, even if accepted, would not alter the primary judge's essential factual findings or the trial outcome.
There are cross-border elements complicating the traceability of assets (eg funds in China, USA) and practical impediments to producing records.

In these situations, the Full Court signals strong deference to the primary judge and reluctance to reconstruct the property pool in the absence of corroborating documents or a successful demonstration that the trial judge made an identifiable error.

How later courts have treated it

This judgment itself does not report subsequent appellate treatment by later courts. What can be taken from the decision is the Full Court's application of established authorities (CDJ v VAJ for s 93A(2) and Robinson Helicopter regarding appellate deference) to a fact-heavy family property appeal. Practitioners should treat the decision as an authoritative application of those principles within the Family Court's jurisdiction. For up-to-date tracking of subsequent citation history, practitioners should consult legal databases for later cases citing Long & Peng [2020] FamCAFC 56.

Still-open questions

The judgment resolves the appeal but leaves practical and doctrinal questions that often arise in transnational family property disputes:

Practical means to obtain foreign bank records
- The Full Court emphasised absence of HSBC/Citigroup records as decisive (Brief factual overview paras 11-12; HSBC funds paras 1-4 [global paras 17-18, 30-33]). It remains a live issue how best to secure such documents pre-trial (eg subpoenas, letters rogatory, statutory disclosure orders) and what coercive measures are effective across jurisdictions.
Weight to be given to third-party affidavits versus direct bank records
- The husband's mother's affidavit claiming ownership of the HSBC funds was accepted over the wife's evidence in the absence of bank records (HSBC funds paras 1-3 [global paras 30-32]). The decision reiterates that affidavits can be dispositive where independent documentation is absent, but leaves open questions of the comparative probative value of competing non-documentary proofs.
Interaction of foreign divorce/property orders with Australian property jurisdiction
- The parties had divorce and property orders in China (Brief factual overview para 8 [global para 14]). The Full Court did not treat those orders as resolving Australian property entitlements. How foreign orders operate, particularly on assets located outside the issuing country, remains fact-dependent and may raise complex issues of recognition, res judicata and public policy.
The threshold for admitting fresh evidence on appeal
- The judgment applies the CDJ v VAJ test strictly; however, practitioners will continue to grapple with what documentary proof, if produced on appeal, would be enough to demonstrate trial error given entrenched credibility findings. The case underscores that fresh evidence must be capable of altering the ultimate conclusion.
Enforcement and practical compliance with orders involving overseas funds
- The Court accepted that cross-border controls might limit immediate repatriation of funds but held that refinancing or enforcement mechanisms could achieve the severance objective (Wife to discharge mortgage paras 1-3 [global paras 24-26]). How enforcement plays out in practice, especially with funds or title interests abroad, remains factually complex and often requires separate enforcement proceedings.

For practitioners, the clear lesson is to secure primary-source documentary proof of offshore assets before trial where possible, to anticipate aggressive challenges to credibility, and to understand that fresh evidence on appeal must be capable of demonstrating a real and consequential error by the primary judge.

Judgment (23 paragraphs)

[1]

[2020] FamCAFC 56

[2]

FAMILY LAW - APPEAL - PROPERTY - Findings of fact - Where the evidence proffered by both parties was compromised and deficient - Uncorroborated testimony of party subject to adverse credit findings - Failure to give full disclosure - Application in an appeal to adduce further evidence - Further evidence could not establish error - Application in an Appeal dismissed - Appeal dismissed.

[3]

FAMILY LAW - COSTS - Where the appellant has been wholly unsuccessful and the respondent has unnecessarily incurred expense - Costs order made.

[4]

Family Law Act 1975 (Cth) ss 81, 93A(2) and 94AAA(7)

[5]

CDJ v VAJ (1998) 197 CLR 172; [1998] HCA 76

[6]

Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22

[7]

[2019] FCCA 1987

[8]

(1) The husband have leave to rely on his late filed Schedule of Costs.

(2) The Application in an Appeal filed 16 December 2019 be dismissed.

(3) The appeal be dismissed.

(4) The wife pay the husband's costs of and incidental to the appeal fixed in the amount of $22,027.12 within one (1) month.

[9]

Note: The form of the order is subject to the entry of the order in the Court's records.

[10]

IT IS NOTED that publication of this judgment by this Court under the pseudonym Long & Peng has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

[11]

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 r 17.02 Family Law Rules 2004 (Cth).

[12]

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE

[13]

This is an appeal against property settlement orders made by a judge of the Federal Circuit Court on 24 July 2019. In essence, Ms Long ("the wife"), contends that by reason of contributions she should have received at least 50 per cent of the parties' property in Australia. Based on the property pool as propounded by the wife, she received something like 22-25 per cent. On the property pool as found, the wife received in the vicinity of 50 per cent.
The respondent is Mr Peng ("the husband"). He resists the appeal and seeks to uphold the orders.
These remarkable proceedings involve an inglorious contest between parties, about whom the primary judge observed unchallenged that their "solemn oath or affirmation proved to be patently false" [68], and that each of them failed to disclose their true financial position to the Court [71]. These findings were made in relation to matters of real significance; for example, valuable real property in China (both parties), the purchase and disposition of property in the United States of America ("USA") (the wife) and USD$600,000 in savings (the wife). There are other examples but these are sufficient to establish the point.
The primary judge was also rightly critical of the parties' failure to produce documents (if necessary by subpoena) so as to establish the source and existence of disputed bank accounts and investments which one or other said should be included in the property pool [1].
For the wife to succeed in demonstrating error as to the property pool it is necessary for her to establish that the primary judge erred in failing to prefer the wife's oral evidence as to the source and existence of those accounts. However, the primary judge determined that she could "not accept the veracity of the evidence advanced by either party" and that in her Honour's view, "each party tailored his or her evidence to achieve his or her desired outcome irrespective of the truth" [140]. Quite properly, no challenge is made to these and numerous other findings concerning the deficiencies in the wife's testimony and the parlous state of the documentary evidence. The effect of this is that the wife is unable to establish that the primary judge erred in relation to the source and/or existence of various accounts and investments. The remaining grounds of appeal will also fail, the effect of which is that the appeal will be dismissed.

[14]

The husband was born in 1965 and the wife was born in 1966.
The parties married in 1990. They have one child, a daughter, who was born in 1992.
The parties are well educated and experienced in business. The husband has a PhD from an Australian university and works as a professional consultant in a company he operates in China. The wife has a Master's Degree from an Australian university and has worked as a professional with various companies in Australia.
The husband's evidence that the parties separated in 2000 was rejected [55]. He moved to China in May 2004 but in 2005 returned to Australia regularly, where the wife and the parties' daughter continued to reside.
The wife and the parties' daughter left Australia in December 2005 for the USA. Contrary to the wife's evidence that the parties did not separate until 2013, the primary judge was satisfied that the parties formed an intention to separate prior to her departure from Australia in late 2005 [56]. Thereafter, the parties lived on different continents, albeit from time to time the husband visited their daughter and spent time with the wife (in the USA and Country X) and they visited him in China.
As at December 2005, the parties owned property in Australia. The wife's evidence that she and the husband agreed that he would manage those properties so as to provide financial support for their daughter's education and support for themselves, was accepted. The husband honoured this agreement and on the wife's evidence, he provided about USD$500,000 towards their daughter's expenses.
In 2013, the wife discovered that the husband had married again. The parties were not divorced and thus, in 2013 the wife commenced proceedings in China for divorce and for settlement of property, and to prosecute the charge of bigamy. With that application, the husband stopped any financial support.
The parties were divorced in China in 2015. By consent, orders were made in relation to their property in China by the City J District Court on 12 May 2015. These orders did not purport to deal with the parties' property interests in Australia or elsewhere (for example, the wife purchased property in the USA which she said she abandoned [59]).
At the time of trial, the parties owned five Australian properties, of which only A Street, Suburb B ("the Suburb B property") was jointly owned. Three properties were in the husband's sole name and the remaining property was in the wife's sole name. Two other properties owned by the wife had been sold from which $194,000 was held in a bank account in her sole name. Otherwise, there were modest amounts of superannuation, shares owned jointly and savings at bank in the husband's sole name.

[15]

Quite properly, no challenge is made to her Honour's statement of the legal principles by which the wife's application for property settlement would be determined. The focus of the appeal concerns specific factual findings and discretionary determinations.

[16]

By Ground 1, the wife challenges the finding that the parties separated in 2005. According to the wife, the parties separated in 2013 when she discovered that the husband had married again. Ordinarily, the significance of the date of separation is that with separation the nature of the parties' respective contributions may change, as could the explicit and implicit assumptions by which they conducted their relationship and financial affairs. So long as these matters are understood, and the nature and contributions of all types across the entirety of the relationship, including the post‑separation period are evaluated, an error as to the date of separation may be immaterial. With this in mind, it was not apparent to us how the date of separation did, or might have, affected the outcome. As we understand it, the contention is that the primary judge did not take into account the wife's non‑financial contributions, particularly as a parent, post 2005 and thus her contributions made between 2005 and 2013 were overlooked. Reference need only be had to [57] and [169] of the trial reasons to establish that the primary judge recognised that the parenting arrangements had changed and gave significant weight to the wife's almost exclusive care for the parties' child post 2005. It follows, that even if the date of separation is shown to be wrong, it is an error without consequence.
In any event, in support of Ground 1, the wife sought to adduce further evidence in the appeal. This comprised evidence which established that the husband became a permanent resident of Country X on 25 December 2008, which is the same date upon which the wife acquired permanent residence. On the evidence adduced at trial, the primary judge determined that the husband had not applied for residency in Country X and did not ever live in Country X with the wife [51]. It is accepted that the husband's permanent residence card would have resulted in a different finding, namely, that the husband obtained permanent residence in Country X. However, given that it is uncontroversial that the parties and their daughter were in Country X at that time and, as her Honour found, the husband remained for only a few days, this additional evidence would have had no effect on the determination of whether the parties had decided to separate in 2005 or the assessment and evaluation of the parties' contributions.
The power to admit further evidence is governed by of the Act. In (1998) 197 CLR 172 at 201, the plurality explain that the principle purpose of this provision is to admit further evidence which, if accepted, would demonstrate that the order under appeal is erroneous. This evidence does not do so. As this is the only basis upon which the evidence is sought to be admitted, the application to adduce further evidence in the appeal will be dismissed.

[17]

By Ground 2, the wife asserts that the order which requires her to discharge the Westpac mortgage secured on the Suburb B property within 28 days is unenforceable and unreasonable. The contention being that she does not have sufficient funds to discharge the mortgage and is unlikely to complete the sale of any real estate so as to free up equity within 28 days. This challenge can be dealt with quickly. In addition to real estate, the wife has in excess of $1,000,000 cash savings. Of this amount, $194,000 is in Australia and the balance is in China. There are cross border restrictions on the movement of funds out of China, but it is uncontroversial that the wife is able to bring USD$50,000 from China to Australia annually. An application may be made to Chinese authorities for permission to remit a larger amount. The effect of this is that the wife does not have savings which would enable her to completely discharge the mortgage within 28 days. However, the wife has real estate and savings greatly in excess of the amount secured by the mortgage and there is no reason to doubt that she is well able to refinance the mortgage into her own name.
Even if the wife is unable to refinance, this does not mean that the order is unenforceable. It is indisputable that the husband could apply for an enforcement order for the sale of the property so as to achieve a discharge of the mortgage. Although this would not see the mortgage discharged within 28 days, the fact that enforcement action would take longer than the discharge required by the primary order does not detract from the efficacy of the primary order.
The point of this order is to sever the parties' financial relationship (s 81 of the Act) and is an orthodox exercise of discretion. The primary judge did not purport to direct the wife as to how she then structured her ongoing dealings with the mortgagee bank, and quite properly left it to the wife to determine how she would arrange her assets. Error as alleged by this ground has not been demonstrated.

[18]

The family home was not transferred to the parties' daughter

[19]

The gravamen of Ground 3 is that the primary judge erred by failing to order that the Suburb B property be transferred to the parties' daughter. Her point being that she intended to eventually transfer this property to their daughter and would thus be disadvantaged. The husband proposed the order under discussion and, in closing addresses before the primary judge, the wife agreed such an order could be made. However, as the primary judge observed, the wife's agreement was given in the context of her claim that she receives at least half of the HSBC, KK Company and Citibank funds. According to the wife's case presented at trial, this was an essential element for the just and equitable settlement of property. The primary judge did not make orders against those asserted items of property and came to the conclusion that to nonetheless order that the Suburb B property be transferred to the parties' daughter would be unfair to the wife and would not achieve a just and equitable outcome.
Furthermore, there were serious irregularities in the wife's (perhaps also the husband's) dealings with the mortgagee bank. It is uncontroversial that police had become involved and there was no evidence that the bank would cooperate with the parties' desire to transfer the property to their daughter. Her Honour was alive to these difficulties and there can be no doubt that her reasons for not giving effect to this aspect of the parties' agreement were sound.
Ground 3 has not been established.

[20]

By Ground 4, the wife challenges the failure to include the HSBC funds as property available for distribution. The husband's mother gave affidavit evidence that the HSBC funds belonged to her and her husband and were invested by the husband on their behalf [124]. The wife said the husband's HSBC account was "stored savings since the beginning of the marriage" [125]. Neither party produced records from HSBC or elsewhere in support of their respective positions. At best, the wife sought to rely on representations made in the loan application which resulted in the Westpac mortgage. Once it is appreciated that the wife forged the husband's signature on the document, it is a mystery as to how she reasoned that it could have any probative value.
It is accepted that the primary judge misunderstood the amount attributed in that document to the husband's HSBC account. However, the document was given little weight and the critical reason why the HSBC funds were not included as property available for distribution is that the husband's mother swore that the funds belonged to her and her husband and the primary judge was not satisfied that she could determine otherwise. The deficiencies and inconsistencies of the wife's oral evidence have already been mentioned. Although similar findings were made in relation to the husband's evidence, there can be no doubt that the primary judge had ample reason to evaluate the wife's evidence as to the source of the HSBC funds as insufficient to establish proof of the fact. There is no basis upon which we would or could interfere with the findings made as to the source of the HSBC funds (Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 331 ALR 550).
Her Honour's conclusion that the evidence concerning the HSBC funds "is wholly unsatisfactory" is a benign understatement [126]. Given that no challenge is made (for undoubtedly good reason) to her Honour's finding that the source of the funds remained unclear [154], her Honour's determination that she was not satisfied it would be just and equitable to make any order altering the interest in this account is entirely logical.

[21]

The gravamen of Ground 6 is that the primary judge should have found that the husband still has the Citibank funds available to him. Again, this finding could only have been made if the primary judge accepted the wife's oral testimony that she had not withdrawn the funds from Citibank and thus, as a matter of inference, the husband must have done so. No doubt, documents from Citibank would have shed some light on the issue. None were provided. There is simply no proper basis upon which the primary judge could have found who withdrew those funds and whether some 14 years later they even existed. This challenge has not been made out.

[22]

The wife has failed to establish any grounds of appeal and, the appeal will be dismissed.
In this appeal, the husband sought that the wife pay his costs in the amount of $22,027.12. No challenge was made to quantum and, it is the wife's position, that costs should follow the event. Given the wife's total lack of success, we agree that an order for costs is appropriate. The wife will be given one month to pay.

[23]

I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Strickland, Ryan & Watts JJ) delivered on 13 March 2020.

CDJ v VAJ

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