In case you haven’t noticed, I have embarked on a series under the category “Case of the week.”
This week’s case concerns a battle between Ms Qu and her mother, Ms Kuang, over ownership of a house in Taren Point. The house was initially bought in Ms Qu’s name. Subsequently, Ms Kuang executed a transfer (signing that transfer in Ms Qu’s name) of the house to herself.
One thing which the judgment does not make very clear is a principle which applies in cases like this which is not perhaps generally appreciated. This is that, generally speaking, the crucial moment where contributions to paying for a house count is the moment when the money is borrowed from the bank or otherwise rustled together in order to buy it. In particular, it doesn’t normally matter who actually pays off the mortgage afterwards (though that might give such a person the right to be repaid and, if necessary, to have the house sold in order to get their money back). Any proportionate shares in the house will usually be worked out on the proportions of the purchase price contributed at the outset, including contributions made by borrowing money from the bank.
In that respect, this case is not particularly novel. What is more interesting to me, having even just a little acquaintance with PRC (ie, Chinese) immigrants to Australia, is the background narrative. (See also my post on Jin v Yang.)
Both mother and daughter were originally from the PRC. Ms Kuang, the mother, appears to have come to Australia at some stage. The chronology is patchy in the judgment but she must have arrived by the early 1990s. In other words, she formed part of the wave of PRC immigration which coincided with and was indeed assisted by Australia’s Tiananmen-associated reception of Chinese at this time.
Ms Qu, her daughter, remained in China where she was brought up by her paternal grandparents. (This in itself is typical of Chinese families’ tendency to patrilineality.) She formed a de facto relationship with Mr Liu and later married him. Mr Liu’s family had a number of business enterprises and was apparently quite wealthy.
In 1995, Ms Kuang travelled back to China. This is about the time that Tiananmen immigrants were first able to return to China as a result of the consolidation of their visa status to permanent resident. Ms Qu obtained a visa to come to Australia at this time After this, she travelled to Australia a number of times. The judge doesn’t say this, but I expect one reason was to secure and to retain her permanent residence here.
As well as Ms Qu, Ms Kuang and Ms Qu’s father had a son, Daniel. He is evidently some years younger than Ms Qu, because in 1998 he was still in primary school whereas in that year Ms Qu came to Australia with Mr Liu for the birth of her (first) daughter.
Ms Kuang divorced Ms Qu’s father in 1992 and married Barry Hancock. A pattern appears to have emerged in about 1995 that Ms Kuang made requests to Ms Qu for amounts of money which were provided by Mr Liu’s family. This in itself involved some complicated dealings, as the money had to be got out of China in cash. This was usually done by passing the cash to a cousin of Mr Liu who then took it to Hong Kong, whence it could be transferred through the banking system.
In January 1998 Ms Qiu and Mr Liu came to Australia for the birth of their first child. They stayed at first in Auburn with Ms Kuang and Mr Hancock (It appears that Ms Kuang owned this house). All four of them went to look at the Taren Point house. The accounts they offered as to the reasons for this were at odds: Ms Kuang said that the only purpose of the purchase was to support a visa application for Mr Liu; Ms Qu said that she wanted to live there. There was a proposal that the purchase be made jointly by Qu, Kuang and Hancock, and a further alternative proposal that the purchase be by Ms Qu alone supported by a guarantee by Ms Kuang secured over the Auburn property. Ultimately, neither of these was proceeded with: the property was purchased in Ms Qu’s name alone for $430K. Of the 10% deposit, $16K was paid by a cheque from Barry Hancock. Money was provided by Mr Liu or his family in China at this time which Ms Qu said went towards the remainder of the deposit and other expenses associated with the purchase. Ms Kuang said this was also for her daughter’s medical expenses and for her and Mr Liu’s other living expenses.
Mr Liu’s family also came to Australia for the birth, after which he, Ms Qu and they moved into the Taren Point property. This cannot have been for long, because in May 1998 Ms Qu and Mr Liu returned to China with their daughter. After this, the house at Taren Point was rented out.
In October 1998, Ms Kuang purchased a business, Lily’s Supermarket. She did so in Ms Qu’s name. To do so, she refinanced the mortgage over the Taren Point property and took a fresh mortgage from Westpac which included about $57K to pay for stock of the business. Ms Qu said that she was unaware of this refinancing (the documentation apparently having been signed by Ms Kuang in Ms Qu’s name) although she was aware of the purchase of the supermarket by her mother in her name, for which she lent her $60K. She claimed that the reason for the purchase in this fashion was that her mother was in receipt of social security payments that she did not want to jeopardise.
In 1999, Ms Kuang and Barry Hancock were divorced.
At this point in Justice Gzell’s judgment, the chronology is harder to establish. What is clear is that the status of the Taren Point property and the funds provided by Mr Liu or his family became more critical as a result of marital difficulties between him and Ms Qu. It is easiest just to quote a big chunk of the judgment:
36 Ms Kuang requested Ms Qu to provide a power of attorney so that she could transfer Lily’s Supermarket to herself. Ms Qu went to a notary in Guangzhou who advised her that the power of attorney allowed her mother to do anything. The notary prepared a document in Chinese limiting the power of attorney to the management of the business of Lily’s Supermarket. Ms Kuang was not satisfied with that document and requested her daughter come to Australia to execute a power of attorney before a solicitor. This was done. The power of attorney in general terms without the limitation of the Chinese document was executed by Ms Qu.
37 Ms Qu said she requested information about the Taren Point property from her mother without success. Ms Qu said she would have no choice but to sell the property. Mr Liu recalled Ms Kuang discussing a plan of developing the Taren Point property with a two storey building but nothing eventuated [Ms Kuang claimed she had obtained her daughter’s approval for this]. Shortly before his divorce from Ms Qu he tried to sell the Taren Point property to a friend but Ms Kuang refused to hand over documentation. Ms Qu also said that she had difficulty with her mother in placing the property for sale.
38 In about 2001 Ms Qu and Mr Liu had agreed to separate. In about April 2002 she moved back to Sydney with her daughter while her husband remained in China. In about July 2002, Mr Liu came to Australia to formalise their divorce. It was agreed that Ms Qu should keep the Taren Point property and he would keep the property in China. Mr Liu had an argument with Ms Kuang about her refusal to provide documentation with respect to the Taren Point property. The argument ended with him pounding his head with a crystal vase.
39 After the argument Ms Kuang paid Mr Liu $30,000 and asked him to leave. Ms Kuang said that she had a discussion with her daughter in which Ms Qu said they needed money to help Mr Liu’s family and they should sell the Taren Point property. Ms Kuang said she would not do that as she wanted to live in the house when she retired but she would organise money to pay them back.
40 Ms Qu signed a contract to buy a property at Homebush. Ms Kuang repaid the $60,000 lent to acquire Lily’s Supermarket by paying the deposit on the townhouse to the real estate agent and the balance to Ms Qu. A Don Grassick who sat in court during the whole of the trial provided Ms Qu with a further cheque for $20,000. He did not give evidence and his part in events was not explained.
41 In Ms Qu’s name, Ms Kuang executed a transfer of the Taren Point property to herself. She was asked why she did not use the power of attorney and said because she had transferred Lily’s Supermarket into her own name without the power of attorney she did the same with the Taren Point property. Her purported signature of Ms Qu was witnessed by Mr Hancock. The signature of Ms Kuang as transferee was witnessed by Mr Grassick.
42 Ms Qu said she became suspicious in about March 2005 and conducted an internet title search of the Taren Point property. She said it was then that she first became aware that the property had been transferred into her mother’s name. She said she did not authorise the transfer and did not give permission for the forging of her signature. Nor did she authorise her mother to refinance the property. Ms Kuang said she did not tell her daughter that she was going to transfer the property into her name before she did so nor afterwards. She said she understood that the property had been released to her upon the payment of $30,000 to Mr Liu and $80,000 to Ms Qu.
43 In October 2004, Ms Kuang borrowed $800,000 from ING Bank secured on the Taren Point property.
His Honour held that the property belonged to Ms Qu, and that she was entitled to have the mortgage discharged and the property transferred back to her, subject to payment to Ms Kuang of the amount (to be determined by an Associate Justice) which she actually had paid herself in discharging the first mortgage and in meeting the mortgage repayments and any outgoings. This basically involved his accepting Ms Qu’s account of the circumstances in which the property was originally purchased. This extract from the judgment gives an idea of its flavour:
44 It was put to Ms Qu that by agreeing to the Lily’s Supermarket business being put in her name she was assisting her mother’s dishonesty in maintaining her claim to social security benefits. Ms Qu replied that she had no choice, she had to obey. That answer impressed me. Her mother was a determined woman who exhibited a domineering attitude in the witness box. In one of her letters to her mother Ms Qu said she was not able to convince her as she was always in the wrong, that her mother knew very well how to protect herself and would not consider her children even for a bit. She had prepared topics to speak about with her mother but once she saw her she “swallowed her words”. I can well appreciate these sentiments.
45 Of particular significance in the resolution of this difficult case is the expenditure of monies provided by Mr Liu and his family for the renovation and installation of furniture and effects at the Taren Point property. If the property belonged to Ms Kuang why would Mr Liu’s parents spend monies on it? I accept the submission that it was more likely that the property was being prepared for Ms Qu and her newborn daughter to live in as her property. Again, if the property was Ms Kuang’s, why did Mr Liu and Ms Qu continue to send monies via Mr Kit for the mortgage repayments?
46 The subsequent events are of little assistance in resolving the issue. They do establish, however, that Ms Qu was correct in stating that her mother knew very well how to protect herself. Her transferring the Lily’s Supermarket business and the Taren Point property into her own name by forging her daughter’s signature demonstrated a ruthlessness on her part.
I’m not entirely sure how somebody can be domineering in the witness box and how this can be distinguished from simple vehemence. However, there was another factor.
Ms Qu’s case was corroborated by Mr Liu. Gzell J commented that Mr Liu “had no interest in giving evidence for his ex-wife.” This might be technically correct, though I think it makes rather light of Mr Liu’s previous involvement and his likely desire to see that his daughter, now living with his ex-wife, benefited from the money he said was provided by his family.
More intriguingly, Daniel (remember him? Ms Kuang’s son and Ms Qu’s younger brother), who never went to a selective school even though Ms Kuang claimed this was the reason she wanted to buy the Taren Point property, and who left school part way through year 11 to play representative basketball in Taipei, gave evidence for Ms Qu. Daniel said that when his mother had declared an intention to retire to the Taren Point house, he had said to her “Isn’t that house belong to sister? Is she willing to give it to you?” to which his mother said: “Why not?” His Honour had no reason to disbelieve this evidence. “Cross-examination of him[Daniel] was perfunctory and he was not cross-examined on what he said to his mother about Taren Point being his sister’s house or her response.”
The clincher seems to have been that none of the people who were involved on Ms Kuang’s side who might have been expected to have given evidence of matters they were involved in gave evidence. As his Honour said, Mr Hancock did not give evidence. He was in gaol but no attempt was made to have him brought to court. Mr Grassick, who sat in court during the whole of the trial, did not give evidence.
His Honour drew an adverse inference from the lack of evidence from Mr Hancock and Mr Grassick under the principle in Jones v Dunkel (1959) 101 CLR 298.
Is anybody still reading?
Anyway, I found it interesting.