Auton and Kalben

[2017] FamCA 843

FAMILY COURT OF AUSTRALIA

AUTON & KALBEN [2017] FamCA 843

FAMILY LAW – STAY APPLICATION – existence of parallel proceedings – stay granted, anti-suit injunction refused

Lan & Hao [2017] Fam CAFC 175

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538

APPLICANT: Ms Auton

RESPONDENT: Mr Kalben

FILE NUMBER: CAC 299 of 2017

DATE DELIVERED: 6 September 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Gill J

HEARING DATE: 4 September 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr G Howard

SOLICITOR FOR THE APPLICANT: Watts Mccray Lawyers

COUNSEL FOR THE RESPONDENT: Mr P Campton, SC

SOLICITOR FOR THE RESPONDENT: Campbell & Co

Orders

1. The wife’s application before the Family Court of Australia is stayed pending further order.

2. The parties are at liberty to apply to discharge the stay or to have the stay made permanent at the conclusion of the property proceedings before the Austrian court.

3. The matter is otherwise listed before the Registrar at the Canberra Registry of the Family Court of Australia.

4. Each party’s costs are reserved for further determination following the completion of the Austrian property proceedings.

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

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

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).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: CAC 299 of 2017

Ms Auton

Applicant

And

Mr Kalben

Respondent

REASONS FOR JUDGMENT

1. This matter concerns competing interlocutory applications.  The husband seeks the dismissal or indefinite stay of the wife’s application in relation to property in Australia.  The wife seeks an anti-suit injunction against the husband for the property component of current proceedings in Austria.  The context is that although both parties hold Australian citizenship, the husband also holds German citizenship, and the husband and wife each either live or claim to live in Austria, as does their son who lives with the wife.  The parties jointly own property in Suburb C in Australia.  The wife holds a share portfolio in Australia worth somewhere in the region of $420,000, along with superannuation worth somewhere in the region of $60,000.  The husband holds superannuation in Australia of about $10,000, has funds of approximately €300,000 held overseas and holds a UN pension to an unknown value, but at least by his concession worth $260,000.

2. The husband commenced divorce proceedings in Austria on 1 October 2015, and the husband and wife each engaged Austrian lawyers.  There was a suspension of those proceedings in order to allow the parties to seek to resolve the disputes which had come at the end of their relationship.  On 20 February 2017 the wife commenced property proceedings in the Federal Circuit Court, the husband responded in May 2017 and the proceedings were transferred to the Family Court of Australia.  A divorce was granted in the Austrian court in June 2017.  The husband then commenced a property application; it was common between the parties that this could not occur until the divorce was finalised in June 2017.  The husband subsequently filed regarding child related matters in the Austrian proceedings in July 2017, although it appears from the material annexed to the affidavit of Ms C that the child’s matter was live from the point of divorce and the Austrian court initiated an enquiry in relation to the child.

3. In relation to the stay application there is a requirement for the husband to demonstrate Australia to be a clearly inappropriate forum that is, that the proceedings here are vexatious or oppressive.  For the anti-suit injunction it needs to be shown that it is necessary to protect the integrity of the exercise of jurisdiction by this Court.  The wife accepted that if the stay is granted then the anti-suit application will fail.  The husband accepted that if no stay was granted then it was supportive of the anti-suit application.  It is appropriate to deal with the stay application first. 

4. In relation to a stay it is necessary that it be shown that Australia is a clearly inappropriate forum that is, that it would be vexatious or oppressive to conduct proceedings in Australia, meaning it is seriously unfairly burdensome, prejudicial or damaging or productive of serious and unjustified trouble and harassment.  Each case will turn upon its own particular circumstances.  That assessment of the circumstances is expressed in Voth,[1] in that the ordinary approach for a judicial officer is a brief indication having examined the material and taken into account the submissions of a view of whether or not the proceedings should be stayed.  Here, of the considerations addressed by the parties, the most salient matters appear to be as follows.  One, each of the parties accepts that Austria has jurisdiction in relation to the matter.  Two, it is the case that extreme caution is to be exercised in granting a stay in relation to that which is otherwise a regular invoking of this Court’s jurisdiction.  Three, it is necessary to consider whether there are parallel proceedings on foot, the stage that they have reached and the order that they were instituted. 

   [1]Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538.

5. There is some controversy in this case regarding the manner of progression of the Austrian litigation, but it is accepted that there were divorce proceedings that were instituted and participated in by both parties in Austria well in advance of the wife’s commencement of the Australian proceedings.  The wife however argues that the husband did not commence the property proceedings until after the Australian proceedings had commenced.  There is a question then as to the proper characterisation of the commencement of that application.  It is common that the husband could not commence those proceedings until the divorce was finalised. 

6. The divorce proceedings were commenced well in advance of the Australian proceedings, culminating in a divorce order and orders in relation to spousal and child maintenance.  It is apparent from the affidavit of Ms C that once the divorce was given the child proceedings became open. 

7. What is unclear and unresolved is whether the spousal maintenance proceedings constituted a proceeding regarding the parties’ various pensions.

8. It is also clear that in seeking an anti-suit injunction the wife is not seeking a cessation of the child related proceedings in Austria, that is, she accepts that they should continue regardless of an anti-suit injunction; however, what is less clear is the question of severability. 

9. In short, the Austrian proceedings have resulted in a resolution of the divorce, a resolution of child maintenance, a resolution of spousal maintenance and open cases as to property and as to the child.  I conclude that the current property proceedings in Austria are all part of the one controversy relating to the dissolution of the marriage and that they should not be considered as though they were discreet actions on the part of the husband.

10. That leaves a face value position that the conduct of the proceedings in Australia in the context of those proceedings is vexatious or oppressive, subject to the consideration of some other arguments. 

11. The other arguments most cogent of the other arguments raised were firstly as to the question of the enforceability of Austrian orders in Australia.  The enforceability of the Austrian orders appears to fall to the application of the common law that is dependent in large part upon the nature of the orders that might be made in Austria.  For example, whether the Austrian court makes an order for a certain sum which would likely be enforceable in Australia, if Austria makes an in personam order that can be enforced against the husband in Austria then again the orders would appear to be enforceable, if the Austrian court made orders changing the rights to real property in Australia, that is, orders in rem, then they are less likely to be enforceable as being in conflict with the Mozambique rule.  If it turned out that the Austrian orders were unenforceable that would strongly turn against a conclusion that the Australian proceedings are oppressive even though they might cover the same subject matter.  On the present state of the evidence the orders that will be made by the Austrian court are unknown until they are made.  That still leaves a prima facie position that the Australian proceedings are oppressive at present.

12. The second matter raised for the wife is a question of potential serious injustice to the wife because of the proceedings in Austria.  Although the wife has raised some issues regarding language and her ability to participate, those do not appear significant at this point given the nature of her participation in the Austrian proceedings to date.   The more critical question is that posed by the wife and that is the capacity of the Austrian court to take into account inheritances and superannuation.  It is common between the parties that in a case for property division in Austria those matters are not able to be taken into account.  What is not common is as to whether or not it is the case that the spousal maintenance application enables the superannuation or pensions to be taken into account.  The main focus of the arguments as to unfairness relate to the superannuation and the pensions rather than to the bequests.  That is, proceeding in Austria may provide a juridical advantage to the husband and in Australia a juridical advantage to the wife.  Voth accepts that it is not a comparative analysis of the substantive merits of the different legal systems that leads to a conclusion as to the question of whether or not the Australian court might constitute a clearly inappropriate forum.  In this case though the claim of injustice may go further, that is, to a certain absence of relief.  Voth requires the availability of relief in the foreign forum, that is, the assertion of the wife is that it is a requirement that the matters be dealt with in Australia to allow justice to be done as to all of the property and to allow for relief.

13. Although in the context of an anti-suit injunction, which in some respects may be considered to be a counterpart to a stay of local proceedings but requires different considerations, to the extent that an anti-suit injunction looks to whether proceedings may be vexatious or oppressive, in the case of Lan & Hao[2] the Full Court considered whether there was something to be gained by the proceedings in the other jurisdiction, and if so that told against a conclusion that the other proceedings were oppressive or vexatious in the context of Australian proceedings, thereby requiring an anti-suit injunction.  Here, there are lingering questions as to the degree of relief that will be available, that is, there are parallel proceedings on foot already in Austria prior to the commencement of the Australian proceedings.  Those parallel proceedings, involving as they do the questions following from the dissolution of the marriage, have included divorce, spousal maintenance, child maintenance, property and child related matters.  That has rendered the Australian proceedings at this stage prima facie vexatious and oppressive.  Ultimately they might not be dependent upon the outcome of the Austrian proceedings.  If the Austrian proceedings do not dispose fully of the dispute or result in enforceable orders then the Australian proceedings would no longer carry what is their present character, as being vexatious or oppressive. 

    [2]Lan & Hao [2017] Fam CAFC 175

14. The conclusion is that, at present, the Australian proceedings are vexatious or oppressive, but that is in the face of lingering questions.  Those lingering questions were not dealt with by expert material called by either of the parties.  While the husband attempted to lead evidence from an expert that attempt was made out of time contrary to earlier directions and in circumstances likely to have led to this hearing being aborted.  The wife did not seek to lead such evidence.  What this means is that a stay of the Australian proceedings is an appropriate remedy at present but not yet as a permanent stay. 

15. Accordingly, a stay in relation to the proceedings will be granted until further order.  The parties will be at liberty to apply to discharge the stay or to make it permanent following the conclusion of the Austrian property proceedings and an anti-suit injunction will not be made.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 6 September 2017.

Associate:

Date:  11 September 2017