Beng & Kwok
[2022] FedCFamC1A 117
•26 July 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Beng & Kwok [2022] FedCFamC1A 117
Appeal from: Kwok & Beng (No 2) [2022] FedCFamC1F 263 Appeal number(s): NAA 95 of 2022 File number(s): SYC 1577 of 2021 Judgment of: MCCLELLAND DCJ, CAREW & HENDERSON JJ Date of judgment: 26 July 2022 Catchwords: FAMILY LAW – APPEAL – LEAVE TO APPEAL – Whether an order is final or interlocutory – Where regard must be had to the legal rather than the practical effect of the order – Where the order is interlocutory – Where the applicant failed to establish that the decision is attended by sufficient doubt to warrant reconsideration – Where leave to appeal is refused – Costs ordered in a fixed sum Legislation: Acts Interpretation Act 1901 (Cth) s 13
Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 7, 26(1)(b), 28
Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth) regs 1.03, 4.02
Cases cited: Bank of Tokyo Ltd v Karoon [1987] AC 45
Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246; [1981] HCA 20
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17
CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345; [1997] HCA 33
Gronow v Gronow (1979) 144 CLR 513; [1979] HCA 63
Henry v Henry (1996) 185 CLR 571; [1996] HCA 51
Licul v Corney (1976) 180 CLR 213; [1976] HCA 6
Medlow & Medlow (2016) FLC 93-692; [2016] FamCAFC 34
Silk Bros Pty Ltd v State Electricity Commission (Vic) (1943) 67 CLR 1; [1943] HCA 2
Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6
Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538; [1990] HCA 55
Pearce, Dennis, Statutory Interpretation in Australia (LexisNexis Butterworths, 9th edition, 2019)Number of paragraphs: 49 Date of hearing: 26 July 2022 Place: Sydney Counsel for the Applicant: Mr Gould Solicitor for the Applicant: Luminous Legal Counsel for the Respondent: Mr Moutasallem Solicitor for the Respondent: Kammoun Sukari Lawyers Pty Ltd ORDERS
NAA 95 of 2022
SYC 1577 of 2021FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS BENG
Applicant
AND: MR KWOK
Respondent
ORDER MADE BY:
MCCLELLAND DCJ, CAREW & HENDERSON JJ
DATE OF ORDER:
26 JULY 2022
THE COURT ORDERS THAT:
1.Leave to appeal is refused.
2.The applicant shall pay the respondent’s costs of and incidental to the appeal fixed in the sum of $7,000 within 28 days from the amount held on trust by Luminous Legal on behalf of the parties with such sum to be included as part of the applicant’s entitlement to property as agreed or by judgment of this Court.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Beng & Kwok has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAREW J:
On 22 April 2022, the primary judge dismissed the applicant’s application for a stay of proceedings commenced by the respondent in this Court (relating to divorce, parenting and property settlement proceedings) and granted the respondent’s application for an anti-suit injunction against the applicant in relation to proceedings commenced by the applicant in the People’s Republic of China (relating to divorce, parenting, property settlement, enforcement of two agreements entered into between the parties in 2018 and 2019 and child support).
If granted leave to appeal, the applicant would seek to challenge the judgment[1] on the grounds that the primary judge failed to take into account certain matters and placed too much weight on other matters. If successful in her appeal, the applicant seeks the dismissal of the anti-suit injunction against her continuing proceedings in China, and a stay of all proceedings in Australia other than the parenting proceedings pending in this Court.
[1] See s 26(1)(b) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCOA Act”).
For the following reasons, leave to appeal will be refused.
BACKGROUND
The applicant and respondent married in China in 2011 and separated in Australia in 2019. The applicant has lived in Australia since 2013 and the respondent has lived in Australia since 2018, although he was a frequent visitor to Australia in the period 2013 to 2018. There is one child of the marriage who is 10 years of age and he has lived most of his life in Australia. The parties and the child currently live in Australia.
The parties have property in both Australia and China although the extent of that property is in dispute.
In 2018 and 2019, the applicant and respondent entered into two agreements that deal with some of their property. The catalyst for each agreement apparently related to the respondent’s admitted extra-marital relationship. There is a dispute between the parties about the circumstances leading to the agreements with the respondent alleging that he entered into the agreements as a consequence of threats made to him by the applicant. By contrast, the applicant contends that the agreements were the respondent’s idea.
In 2019, the applicant sold certain property in Australia without the knowledge or consent of the respondent.
On 8 March 2021, the respondent commenced proceedings in this Court initially in relation to property settlement and subsequently by amendment to include parenting matters. On 8 March 2021, an ex parte order was made restraining the applicant from dealing with the proceeds of sale of property sold by her in 2019.
On 11 March 2021, the applicant appeared in this Court and an order was made directing the applicant to provide disclosure and permitting the release of some funds to her. A further order was made by consent on 23 March 2021 in relation to the funds that were the subject of the restraining order.
On 26 April 2021, the applicant filed an affidavit in the proceedings confirming she had complied with her obligations of disclosure.
On 2 July 2021, the applicant commenced proceedings in China. Those proceedings relate to divorce, parenting and property proceedings (including reliance on the 2018 and 2019 agreements) and child support. It is common ground that the applicant has applied for child support from the respondent in Australia and that child support is being paid.
On 20 August 2021, the applicant filed a Response in the Australian proceedings seeking a stay of the proceedings or alternatively an interim parenting order and release of further funds.
On 6 December 2021, in the absence of any expert evidence on the relevant law in China, an order was made, until further order, restraining the applicant from continuing parenting proceedings in China but otherwise dismissing the respondent’s anti-suit injunction. The applicant offered an undertaking not to seek final relief in the Chinese proceedings when that matter was next before the Court in China but no formal undertaking was provided. Each party was given liberty to relist the matter on short notice once the single expert evidence was obtained.
The parties subsequently obtained evidence from a single expert in Chinese law that included the following evidence:
(1)A Chinese court has jurisdiction in relation to the parties as they are Chinese nationals;
(2)A Chinese court has jurisdiction in respect of joint spousal assets in China and Australia;
(3)The 2018 Agreement and the 2019 Agreement (“the Agreements”) entered into by the parties are binding; and
(4)A Chinese court will not recognise Orders made by the Australian court.
LEAVE TO APPEAL
It appears to be common ground that the ‘judgment’ appealed against (defined to include an order or decree[2]) is an interlocutory order and that leave is required.
[2] See s 7 of the FCFCOA Act.
That concession is properly made given that the question as to whether an order is interlocutory or final is determined by applying the test: “Does the judgment or order, as made, finally dispose of the rights of the parties?” [3] In applying that test, regard must be had to the “legal rather than the practical effect of the order”.[4]
[3] Licul v Corney (1976) 180 CLR 213 at 225.
[4] Carr v Finance Corporation of Australia Ltd (1981) 147 CLR 246 at 248.
In the current case, the order made by the primary judge does not dispose of the rights of the parties, which are yet to be determined. The order made by the primary judge is thus interlocutory.
Section 28(3)(e)(i) of the Federal Circuit and Family Court of Australia Act 2021 (Cth) (“FCFCOA Act”) provides that an appeal from a ‘prescribed judgment’ of this Court requires the leave of the Full Court. That section is in the following terms:
(3)Leave of a Full Court of the Federal Circuit and Family Court of Australia (Division 1) is required to appeal to the Court from:
…
(e) the following judgments:
(i)a prescribed judgment of the Federal Circuit and Family Court of Australia (Division 1) constituted by a single Judge;
A ‘prescribed judgment’ is defined in reg 4.02(1)(a) of the Federal Court and Federal Circuit and Family Court Regulations 2012 (Cth) (as amended) (“the Regulations”) as follows:
(1)For the purposes of paragraphs 28(1)(b) and (3)(e) of the Federal Circuit and Family Court Act, the following judgments are prescribed:
(a)an interlocutory decree (other than a decree in relation to a child welfare matter);
The ‘Federal Circuit and Family Court Act’ is defined in reg 1.03 of the Regulations as the Federal Circuit and Family Court of Australia Act 2021.
Curiously, the heading preceding reg 4.02 states the following:
Leave to appeal—prescribed judgments of the Federal Circuit and Family Court of Australia (Division 2)
Although s 13 of the Acts Interpretation Act 1901 (Cth) provides that all material from and including the first section of an Act or legislative instrument (which includes regulations) to the end is part of the Act (or in this case the Regulations), and therefore the heading above reg 4.02 is part of the Regulations, “where the enacting words are clear and unambiguous, the … headings, must give way, and full effect must be given to the enactment”.[5]
[5] Dennis Pearce, Statutory Interpretation in Australia (LexisNexis Butterworths, 9th edition, 2019) at pages 194–195 citing Latham CJ in Silk Bros Pty Ltd v State Electricity Commission (Vic) (1943) 67 CLR 1 at 16; see also Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 601.
It is apparent that the heading incorrectly confines the application of the regulation to judgments of the Federal Circuit and Family Court of Australia (Division 2). The enacting words of the regulation apply to prescribed judgments of the Federal Circuit and Family Court of Australia (Division 1) (s 28(3)(e) of the FCFCOA Act) and the Federal Circuit and Family Court of Australia (Division 2) (s 28(1)(b) of the FCFCOA Act). The heading requires amendment.
Leave to appeal will generally be granted only where the “decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and whether substantial injustice would result if leave were refused, supposing the decision to be wrong”[6] (emphasis in original). In considering whether the decision is attended by sufficient doubt, it is necessary to consider the grounds of appeal.
GROUNDS OF APPEAL
[6] Medlow & Medlow (2016) FLC 93-692 at [57].
Grounds 1 and 2
With respect to the applicant, the first two ‘grounds’ of appeal are not grounds of appeal at all. The first merely notes that the primary judge referred to the order as interim but did not include that word in the issued order. As already noted, it is common ground that the judgment appealed from is interlocutory. The second ground merely asserts, without more, that if leave to appeal is not granted the applicant will suffer substantial injustice, a matter relevant to the determination of whether or not leave to appeal should be granted.
Ground 3
The third ground contends that the primary judge did not take into account the 2018 and 2019 agreements, which are binding under Chinese law, “to the effect that in the event of a dispute … that dispute would be heard exclusively in the Chinese jurisdiction”.
The applicant submits that the confluence of the following factors “trouble” the applicant:
(a)The binding nature of the 2018 and 2019 agreements in China and in particular that any dispute be determined in China;
(b)The dispute about the extent of property of the parties or either of them in China;
(c)The difficulty in “appropriately” investigating the Chinese property in Australia;
(d)The inability of the Chinese property to be “adequately” dealt with in Australia; and
(e)That Australian orders will not be recognised in China.
And that “it should follow that the appropriate place for a just resolution of complex questions relating to property should be the Chinese Court”.
With respect to the applicant, the applicable test is not which jurisdiction would be more appropriate but whether or not the Australian court is a “clearly inappropriate forum”.
The primary judge approached the competing applications before him, with respect correctly, by commencing to determine the stay application followed by the anti-suit injunction application (at [54] of the reasons for judgment of the primary judge).[7] The primary judge identified, again with respect correctly, and by reference to the leading authorities (at [44]–[45]) of Voth v Manildra Flour Mills Pty Limited (“Voth”),[8] Henry v Henry (“Henry”),[9] and CSR Limited v Cigna Insurance Australia Limited (“CSR”),[10] that a court will be a clearly inappropriate forum if the continuation of proceedings will be oppressive i.e. seriously and unfairly burdensome, prejudicial or damaging, or vexatious i.e. productive of serious and unjustified trouble and harassment. The primary judge then identified the non-exhaustive list of factors in determining whether Australia is a clearly inappropriate forum by reference to Henry (at [50]) as follows:
[7] CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 390 (“CSR”).
[8] (1990) 171 CLR 538.
[9] (1996) 185 CLR 571.
[10] (1997) 189 CLR 345.
(1)Whether both courts have jurisdiction. No issue arises unless the courts of each country have jurisdiction;
(2)If yes, will each country recognise orders made by the other? “If the orders of the foreign court will not be recognised in Australia that will ordinarily dispose of any suggestion that the local proceedings should not continue”. If they will be recognised, then “whether any orders may need to be enforced in other countries and, if so, the relative ease with which this can be done”;
(3)which forum can provide a complete resolution of the matters involved in the parties’ controversy;
(4)“the order in which the proceedings were instituted, the stage which they have reached and the costs that have been incurred”;
(5)the connection of the parties and their marriage to each jurisdiction;
(6)“whether, having regard to their resources and their understanding of language, the parties are able to participate in the respective proceedings on an equal footing”;
(7)Whether each party has a legitimate, personal or juridical advantage to the forum in which they chose to litigate; and
(8)Any other relevant matter in the circumstances of the case.
(Citations omitted)
As there is no challenge to the continuation of the parenting proceedings in Australia, it is unnecessary to say anything further about that part of the primary judgment (at [58]–[59]).
In concluding that Australia was not a clearly inappropriate forum (at [126]), the primary judge made the following relevant findings:
(a)Courts in both China and Australia have jurisdiction to determine the proceedings and neither party contended otherwise (at [81]);
(b)Orders made in China are unlikely to be enforceable in Australia and orders made in Australia are unenforceable in China (at [84]–[85]);
(c)Courts in both Australia and China can provide a complete resolution to the controversy involving the parties as to divorce, parenting and property settlement and the applicant has already engaged in the child support process in Australia (at [92]);
(d)The respondent commenced proceedings in Australia before the applicant commenced proceedings in China (at [93]) and the applicant has already participated in proceedings in Australia, although they are a long way from finalisation (at [96]);
(e)The parties’ connections to both Australia and China is about equal (at [103]–[108] noting the concession of the applicant);
(f)The parties’ are able to participate in each jurisdiction on an equal footing (at [110]–[113] noting the concession of the applicant);
(g)Each forum has advantages and/or disadvantages for each party including in relation to the 2018 and 2019 agreements (at [115]–[121]);
(h)The parenting proceedings will be determined in Australia (at [125]).
Accordingly, there is no merit in Ground 3.
Ground 4
The fourth ground of appeal incorrectly asserts that the primary judge did not take into account the apparent inability of the applicant to enforce in China any orders made in an Australian Court. As already noted, the primary judge took this into account at [85].
There is no merit in Ground 4.
Ground 5
The fifth ground of appeal contends that “undue weight” was given to the respondent’s argument that he could not afford to litigate in China without any reference being made to the respondent’s interest in $1,900,000 held in trust nor the expected sale proceeds of a further property in the sum of approximately $690,000. The respondent’s alleged financial strain was but one factor taken into account (at [101] and [125]) among the many factors taken into account including those already identified at [31] above. Contrary to the submission made by the applicant, the primary judge did not make a finding that the respondent could not afford to litigate in China, rather it was noted that the respondent made that claim and as such it was a factor to consider. Challenges based on the weight placed on particular evidence are notoriously difficult[11] and the applicant has not established this ground.
[11] Gronow v Gronow (1979) 144 CLR 513.
Ground 6
The applicant contends that this ground i.e. failing to take into account the applicant’s claim that the respondent has significant assets in China, is “subsumed” by Ground 5. There is no merit in this ground.
Ground 7
The applicant contends that the primary judge failed to take into account the incapacity of the applicant, via the Australian judicial system, to investigate the respondent’s financial position in China. It is submitted by the applicant that she would have “difficulty” exposing, in an Australian court, the “true nature” of the respondent’s wealth in China and that the capacity of the Chinese court to do so “would be expected to be superior” such that the applicant would be at a juridical disadvantage litigating in Australia.
Contrary to those submissions, the primary judge noted at [91] “the consequences that may flow if a party does not comply with their obligation of disclosure”. Further, the primary judge noted that the Australian court can appoint a single expert to value property outside Australia and can hear and resolve factual issues in relation to the ownership of assets wherever they are located. The primary judge also noted the ability of the Australian court to make orders in personam such as to affect the property (indirectly) of the parties or either of them wherever it is located (at [89]).
There is no merit in Ground 7.
Miscellaneous
While the grounds of appeal do not separately identify any challenge to the granting of the anti-suit injunction; for completeness, it is noted that the primary judge identified, correctly with respect, that an anti-suit injunction does not automatically follow where there has been a refusal to grant a stay of the local proceedings (at [55]). The primary judge noted that “[d]ifferent principles apply, albeit that it may be prima facie vexatious and or oppressive if there is litigation in different countries about the same controversy”.[12]
[12] Citing CSR which in turn cited Bank of Tokyo Ltd v Karoon [1987] AC 45.
The primary judge, again correctly with respect, noted (at [56]) that “[i]n determining whether an anti-suit injunction should be granted, the Court will look to the matters discussed in CSR, and in particular whether restraining the further conduct of the foreign proceedings is necessary to protect the processes and integrity of the Australian court from being abused”.
Ultimately, the primary judge concluded (at [136]) as follows:
I am of the view that an injunction is necessary to protect the Court’s own proceedings and processes to avoid the very outcome that the wife’s counsel submits is possible. A single proceeding will reduce cost and avoid duplicated and inconsistent results. They each deal with the same subject matter arising out of the marriage and complete relief is available in this Court to quell the controversy arising out of their marriage.
CONCLUSION
As the applicant has failed to establish that the “decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court” leave to appeal will be refused. While it is unnecessary to consider the second requirement to leave to appeal being granted i.e. substantial injustice, it is simply noted that other than asserting the applicant would suffer substantial injustice if leave were refused, the Court was not taken to any additional evidence to support that assertion and no submissions were made on the issue.
Leave to appeal should be refused.
MCCLELLAND DCJ:
I agree with the order proposed by Carew J and the reasons for same and have nothing to add.
HENDERSON J:
I agree with the order proposed by Carew J and the reasons for same and have nothing to add.
COSTS
CAREW J:
The respondent seeks his costs in accordance with the schedule filed in the sum of $15,367. However, the schedule is not prepared on a party and party basis but rather on an indemnity basis. The applicant has been wholly unsuccessful. As it is the preference of this Court, and indeed the parties, to fix costs rather than put parties to the additional expense of having costs assessed,[13] costs will be fixed in the sum of $7,000.
[13] Stopford Malloy & Malloy (Costs) [2018] FamCAFC 6 at [10]–[12].
MCCLELLAND DCJ:
I agree with the order proposed by Carew J and the reasons for same.
HENDERSON J:
I agree with the order proposed by Carew J and the reasons for same.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Deputy Chief Justice McClelland and Justices Carew & Henderson JJ. Associate:
Dated: 29 July 2022
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