Cole and Abati
[2016] FamCAFC 78
•13 May 2016
FAMILY COURT OF AUSTRALIA
| COLE & ABATI | [2016] FamCAFC 78 |
| FAMILY LAW – APPEAL – INJUNCTION – The husband appealed against an anti-suit injunction restraining him from commencing proceedings in Indonesia in relation to the wife’s property – The injunction was granted on the basis that such proceedings would be in breach of a binding financial agreement between the parties – The trial judge did not err in her construction of the agreement, did not fail to take account of relevant facts, did not fail to give adequate reasons and did not fail to consider principles of comity – Appeal dismissed – Order for the husband to pay the wife’s costs. |
| Family Law Act 1975 (Cth) – s 90B, s 90KA |
| CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 Hilton v Guyot (1895) 159 US 113 Licul v Corney (1976) 180 CLR 213 Teo & Guan (2015) FLC 93-653 |
| APPELLANT: | Mr Cole |
| RESPONDENT: | Ms Abati |
| FILE NUMBER: | MLC | 10475 | of | 2013 |
| APPEAL NUMBER: | SOA | 25 | of | 2015 |
| DATE DELIVERED: | 13 May 2016 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Thackray, Strickland & Murphy JJ |
| HEARING DATE: | 13 October 2015 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 23 March 2015 |
| LOWER COURT MNC: | [2015] FamCA 185 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Richardson SC |
| SOLICITOR FOR THE APPELLANT: | Harris Freidman Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr North SC with Ms Nichols |
| SOLICITOR FOR THE RESPONDENT: | Nicholes Family Law |
Orders
The appeal be dismissed.
The appellant pay the respondent’s costs of and incidental to the appeal as agreed and in default of agreement, as assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Cole & Abati has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT MELBOURNE |
Appeal Number: SOA 25 of 2015
File Number: MLC 10475 of 2013
| Mr Cole |
Appellant
And
| Ms Abati |
Respondent
REASONS FOR JUDGMENT
Introduction
The husband appeals an order of Macmillan J restraining him from taking legal proceedings in Indonesia relating to property owned by the wife.
The injunction was granted on the basis of her Honour’s finding that the husband’s intention to pursue such proceedings “flies in the face” of a binding financial agreement signed by the husband and the wife.
Background
The husband is an Australian citizen. He owns assets in Australia, New Zealand and Indonesia which are said to be worth around $63 million.
The wife is Indonesian. She owns assets in Indonesia worth around $3 million, acquired with money the husband gave her before their marriage.
The parties were married in April 2012. On their wedding day, they executed an agreement dealing with financial matters (“the agreement”).
The wife was pregnant at the time of the marriage. She moved from Australia to Indonesia before the baby’s birth in 2012. The husband visited regularly, although staying only for a few weeks at a time.
The parties separated in December 2012, and were divorced by an Indonesian court in May 2014.
In December 2013, the wife filed proceedings in the Family Court of Australia seeking a declaration that the agreement was binding and an order restraining the husband from seeking relief in Indonesia in relation to her assets.
At the hearing before the primary judge in August 2014, the matter proceeded by way of submissions after the husband conceded that he would commence proceedings in Indonesia if an anti-suit injunction was not made in Australia.
On 23 March 2015, her Honour declared that the agreement was a binding financial agreement pursuant to s 90B of the Family Law Act 1975 (Cth) (“the Act”). Her Honour went on to grant the injunction, which is the subject of this appeal, restraining the husband from pursuing proceedings in Indonesia.
The appeal
The husband originally appealed against the declaration that the agreement was binding; however, by his Amended Notice of Appeal filed on 13 August 2015, the husband now appeals only against the anti-suit injunction.
The husband also originally challenged the court’s jurisdiction and power to make the injunction, but that part of the appeal (Ground 2) was abandoned.
The husband’s remaining complaints are fourfold:
·That the primary judge erred in her construction of the agreement and reached erroneous conclusions as to its effect (Ground 1).
·That her Honour’s discretion miscarried as a consequence of her failure to take into account various facts said to be relevant (Ground 3).
·That her Honour failed to give adequate reasons and failed to address significant contentions advanced before her (Ground 4).
·That her Honour failed to have regard to the principles of international comity of courts (Ground 5).
Relevant provisions of the agreement
To understand the complaints about the construction of the agreement, it is necessary to set out the provisions we consider most relevant, albeit we accept the document must be considered as a whole to ascertain its true effect.
Various uncontentious “background” facts are stated by way of recital at the commencement of the agreement, including the following:
[The husband] has transferred to [the wife] monies totalling approximately $A3,000,000, prior to the parties executing this Agreement. [The wife] has purchased real estate and other property in Bali with such funds, including the villas which she manages.
The following clauses then appear under the heading “Purpose of agreement”:
1.[The husband] and [the wife] intend and plan to enter into marriage. Because of their mutual feelings of love and honour for each other, they enter into this Agreement to eliminate, as much as possible, any future impediment to their marriage which might arise from uncertainties about their respective financial responsibilities to each other.
2. [The husband] and [the wife] desire, to the fullest extent permitted by law:
2.1To resolve before their marriage all possible financial claims which they might have, or later require [sic], against the other or the other’s estate;
2.2To provide for the settlement of all property, and other rights that may arise from the marriage.
3. [The husband] and [the wife] want this Agreement to:
3.1Promote harmony between them;
3.2Reduce the possibility of litigation if they separate;
3.3Create certainty about their financial legal responsibilities towards each other if they separate.
4.[The husband] and [the wife] intend their marriage to be permanent but want to define their financial rights and response abilities [sic] if they separate.
5.[The husband] and [the wife] want to keep all of their current and future separate property free from any claim of the other except as expressly set out in this Agreement.
6.[The husband] and [the wife] intend this Agreement to set out their interest in and rights to property:
6.1 As at the date of this Agreement; and
6.2 If their relationship ends.
7. [The husband] and [the wife] want to:
7.1So far as it is possible to contract out of Part VIII of the Family Law Act 1975 if they separate;
7.2Enter into an agreement under Section 90B of the Family Law Act 1975 setting out:
7.2.1If they separate, their property and financial resources at the date of this Agreement, or at a later time, and before the divorce, is to be dealt with [sic]; and
7.2.2The maintenance rights of either of them if they separate.
...
9.Each of [the husband] and [the wife] has separate property. In anticipation of their marriage they want to provide that each will retain full and complete control and right of [sic] their separate property and the appreciation in their values [sic] without interference or claim by the other party.
10.[The husband] and [the wife] want to fix their obligations to each other should they separate. They want to accept the terms of this Agreement instead of any full discharge of all other rights and claims.
…
The next portion of the agreement appears under the heading “Plans”. Senior counsel for the husband placed particular emphasis on Clause 12:
12.[The husband] and [the wife] are residence [sic] of New South Wales, Australia and maintain their primary residence in New South Wales, Australia. [The wife’s] parents live in Indonesia, and [the husband] and [the wife] may visit Indonesia for a portion of each year. [The wife] may inherit property in Indonesia. Despite this, they intend to maintain their primary home in New South Wales, Australia and remain residents of the State of New South Wales and the country of Australia.
Clause 14 appears to us to be of particular significance:
14.It is the desire and intention of [the husband] and [the wife] to retain the sole ownership and control of their own individual assets and financial resources that they now own or may later require [sic] as though they were not married and free from any claim of the other arising out of their cohabitation or marital relationship under any law or [sic] any state or country, subject to the terms of this Agreement.
Clauses 19 and 20, which appear under the heading “Property, liabilities and resources”, contain assurances by the parties that schedules attached to the agreement disclose their current assets and financial resources. In the case of the wife, this included the property in Indonesia acquired with the funds she received before the marriage. Although no significance was placed upon it before us, or at the hearing below, Clause 22 comprises a statement of the parties’ expectation that if they separated, the wife “will have sufficient assets and income to support herself pursuant to the terms of this Agreement”.
Appearing under a heading “Separate property”, the next part of the agreement is also of particular significance:
23.[The husband] and [the wife] want to protect their separate property as defined below, from claims by each other if they separate.
24.The term “separate property” means:
24.1All property, whether real or personal, tangible or intangible, owned by each of them at the date of their marriage;
...
…
26.Both [the husband] and [the wife] will have the unfettered right to dispose of their separate property by gift, transfers to or in trust, or by will during their lifetimes without interference by the other.
27.During the marriage, both [the husband] and [the wife] will have full rights to own, control of disposure [sic] of their separate property as if the marriage did not exist; if either of them seeks to mortgage, sell or transfer their separate property and the consent of the other is required by the purchaser or mortgagee, the other will do everything reasonably necessary to complete the intended transaction.
28.Both [the husband] and [the wife] specifically reject the concept of unintentional creation of joint property or unintentional change of separate property to joint property. All property acquired by either of them after their marriage will be separate property unless the owner in writing other [sic] transfers the property to joint tenancy or designates it as joint tenancy. All property acquired by either of them after the marriage will be presumed to be separate property unless clear contrary positive action is taken by the parties.
...
31.Except as specifically provided in this Agreement, each of [the husband] and [the wife] waives, relinquishes and releases all right, title and interest in and to any and all of the others [sic] separate property.
Although no reference was made to the provision until we raised it, we consider Clause 34 has some potential relevance in at least providing context. It appears under the heading “Legal advice and declarations”.
34. Both parties have been advised that they may have or later require [sic] property or spousal maintenance rights as de facto spouse’s [sic] or as de facto or legally married spouses in another state or country. Those rights may be affected partially or wholly by this agreement.
Clauses 53 and 54 appear under a sub-heading “Recitals, schedules, annexures and headings”:
53.All recitals and schedules to this Agreement are true and correct in all material respects and are part of this Agreement and enforceable as clauses of this Agreement.
54.Headings are for convenience only and are not intended to change the interpretation or enforceability of this Agreement and have no further meaning, force and effect.
Further relevant provisions are contained under the sub-heading “Jurisdiction”:
56.If, during their marriage, the parties reside in all owned [sic] property in any country other than Australia, the parties’ interests, rights and responsibilities and despite the law of that country, be set by this Agreement.
57.If the parties change the estate [sic] or country of residence:
57.1They intend the validity, interpretation and enforce with [sic] this Agreement to be governed by the laws of Australia and New South Wales;
57.2They will promptly review this Agreement with the help of local legal practitioners and will execute a new Agreement with all amendments that are reasonably necessary to conform to the law of the state or country of their new residence and that as closely as possible effect their original intention to [sic] set out in this Agreement.
57.3They will execute any Agreement or agree to other formalities necessary to conform to the law of the state or country of their new residence; and
57.4All legal inconsistencies between the laws of the state or country of their new residence and the laws of Australia and New South Wales which govern this Agreement, will be resolved by applying the laws of Australia and New South Wales.
58.If at any time during their marriage, the parties become residence [sic] of a country under the laws of which they may acquire a property interest commonly known as “community property”, their property interest will remain the same as they [sic] would have been under the terms of this Agreement construed in accordance with the laws of Australia and New South Wales as at the date of this Agreement.
Under a heading “Distribution of property on separation”, the following significant clauses appear:
72.Except as otherwise provided in this Agreement neither [the husband] nor [the wife] will have or acquire any right, title or claim in or to the others [sic] separate property or estate upon separation.
73.Each of [the husband] and [the wife] waives, releases and relinquishes any and all claims and rights of every kind, nature or description that he or she may acquire by reason of the marriage in the other’s property or estate under the present or future laws of the state of New South Wales or any other state or territory of Australia having jurisdiction over them.
Clause 78 provides that in the event the parties separate, the husband would pay the wife an amount, the quantum of which would depend upon the duration of the marriage. If married for less than five years, the wife would receive nothing more, save for a one-off payment of $100,000 of spousal maintenance pursuant to Clause 80.
Under a heading “Machinery provisions”, Clauses 83 and 84 provide:
83.If [the husband] and [the wife] separate they each covenant and agree to prepare and execute a Financial Agreement under Section 90C, 90D or 90UD, if necessary, pursuant to the terms of this Agreement.
84.If they separate neither [the husband] nor [the wife] will seek an order inconsistent with this Agreement.
Under a heading “Other issues”, Clauses 96 and 97 provide:
96.This Agreement declares the parties’ intentions as to the disposition of the beneficial interest in their property, notwithstanding any past or future disparity between this Agreement and their contributions to the acquisition or preservation of their property .
97.Neither party will make any claim for any adjustive orders in relation to the property or financial resources of the other.
The reasons of the primary judge
As the court’s jurisdiction and power were controversial at the hearing below, much of Macmillan J’s judgment was directed to those topics. We now need not concern ourselves with that part of the reasons.
In deciding whether she should exercise her discretion to grant the injunction, the primary judge recited many provisions of the agreement:
·at [78], her Honour said that the “recitals to the agreement include the following”, and then set out Clauses 1, 2, 3, 4, 5, 6, 9, 10, 14, 23, 26, 27 28 and 31, but did not refer to Clause 7;
·at [79], her Honour observed that “[i]t was a provision of the agreement that all recitals and schedules to the agreement form part of the agreement and be enforceable as clauses of the agreement” (here her Honour was referencing Clause 53); and
·at [80], her Honour said that “[t]he operative clauses of the agreement itself included the following”, and then set out Clauses 72, 73, 83, 84, 96 and 97.
Having recited all these clauses, her Honour gave these reasons for decision:
81.I am satisfied that although one purpose of the agreement was to contract out of Part VIII of the Act, that that was not its only purpose. If it had been the only purpose, as counsel for the husband submitted, both the recitals and the operative provisions of the agreement to which I have referred would be otiose. In my view, the agreement makes the parties’ intentions clear. I am satisfied that the purpose of the agreement was to define the parties’ respective financial positions in the event of their separation, which included the retention of the property they each owned as at the date they each signed the agreement. It is a contract and they are bound by the provisions of that contract, irrespective of the fact that the agreement is a binding financial agreement and that this Court cannot make orders pursuant to Part VIII of the Act.
82.In my view, the husband’s decision to seek orders in the Denpasar District Court with respect to the property in the wife’s name in Indonesia flies in the face of the provisions and the intent of the agreement.
83.As previously discussed, counsel for the husband addressed in some detail the Court’s equitable jurisdiction to grant injunctive relief “where a party has commenced proceedings in a foreign court in breach of a contractual promise, for example, in breach of an exclusive jurisdiction clause, a choice of court clause, an arbitration agreement or an agreement not to sue at all”. However, as counsel for the wife submitted, the Court’s power is not confined to exclusive jurisdiction clauses and, as conceded by counsel for the husband, the Court’s power is not limited to closed or existing categories.
84.The promises the husband and wife have made in this case are not limited to a promise not to commence proceedings in another jurisdiction. In this case, the husband and the wife have promised not to seek an order inconsistent with the terms of the agreement. That agreement provides, when read in conjunction with the recitals to the agreement, that “except as otherwise provided in this Agreement neither [the husband] nor [the wife] will have or acquire any right, title or claim in or to the others [sic] separate property or estate upon separation”.
85.In all of the circumstances I am satisfied that the husband, by the issuing of proceedings in the Denpasar District Court or any other court, seeks to do what he has contracted not to do. In my view, the wife is entitled to rely upon the provisions of the agreement entered into in good faith, she herself foregoing any claim against the husband’s property as well as foregoing any rights she may have had pursuant to Part VIII of the Act.
Her Honour then referred at [86]–[92] to matters the husband submitted should weigh against the grant of the injunction. We will refer to this part of the reasons when we come to the relevant part of the husband’s complaint.
Leave to appeal
The husband sought leave to appeal but his counsel expressed doubt as to whether leave was required. Both parties ultimately submitted that the subject order was “final” (in the sense used, for example, in Licul v Corney (1976) 180 CLR 213). In the absence of any submission to the contrary, including any authority which suggests to the contrary, we are content to proceed on the basis that the subject order is final, with the consequence that leave is not required.
The jurisdiction exercised by the primary judge
Before dealing with the grounds of appeal, we will make some brief observations about injunctions of the type granted by the primary judge.
The High Court has said that anti-suit injunctions can be granted on one of two grounds; namely, in the exercise of an inherent jurisdiction to protect the court’s processes, or in the exercise of the court’s equitable jurisdiction. Within the latter category, it is accepted that an injunction may lie where proceedings have been commenced or threatened in a foreign court in breach of a contract, including a promise not to sue in a foreign jurisdiction: CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345.
Although the Family Court of Australia is arguably not a court of equity, her Honour accepted that she could grant the injunction in the exercise of the power conferred by s 90KA of the Act, which provides:
The question whether a financial agreement … is valid, enforceable or effective is to be determined by the court according to the principles of law and equity that are applicable in determining the validity, enforceability and effect of contracts and purported contracts, and, in proceedings relating to such an agreement, the court:
(a)… has the same powers, may grant the same remedies and must have the same regard to the rights of third parties as the High Court has, may grant and is required to have in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction…
The power of the Family Court of Australia to grant an anti-suit injunction has been discussed in Teo & Guan (2015) FLC 93-653, which was delivered after the judgment which is the subject of this appeal. However, it is important to appreciate that the context in Teo & Guan was quite different, because no issue arose in that case about the application of s 90KA (or other similar provisions which confer power on the Family Court to grant the same remedies as the High Court may grant “in proceedings in connection with contracts or purported contracts, being proceedings in which the High Court has original jurisdiction”).
In the absence of any challenge to her Honour’s approach, we intend to proceed on the basis that it was open to her Honour to grant an injunction in the same circumstances as an injunction could be granted by a court of equity.
Did her Honour err in her construction of the agreement?
Counsel for the husband submitted that the primary judge proceeded on the basis that the wife was seeking the injunction in aid of a legal right, and he noted that her Honour found that the husband “seeks to do what he has contracted not to do”. Counsel disputed this finding, asserting that there was “no enforceable contractual promise in the agreement that the parties cannot commence proceedings in a foreign court”. It was therefore contended that the injunction made by the primary judge was “not in aid of a legal right”.
It was submitted on behalf of the husband that he had only promised not to invoke the jurisdiction of Australian courts and that if it was intended that the agreement contain an enforceable contractual promise that the parties could not commence proceedings in a foreign court then this should have been provided for in express promissory terms.
Counsel for the husband correctly submitted that the duty of a court when construing a written document is to endeavour to ascertain the intention of the parties from the words of the instrument itself, and that the instrument must be construed as a whole. He further submitted that it is necessary to classify the contractual terms in order to distinguish between promises and contractual undertakings and non-promissory terms. Counsel also drew attention to authority indicating that only by the use of clear language could a choice of law clause be interpreted as an implied contractual obligation not to sue in a jurisdiction that would apply a different law.
Counsel for the husband also referred to Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 as being authority that:
the general words of a release should be construed by reference to the subject matter of the particular disputes which the recitals said the parties had resolved to settle on the terms of the deed or agreement. In other words, the intention of the parties that appears from the terms of the contract and any other proper evidence will control and de-limit the operation of general words of a release. The general words should not be permitted to subvert what the parties should be taken to have intended when the release is properly construed in its context.
Relying on the same authority, counsel for the husband submitted that:
It may be inequitable for the releasee to set up the general words of a release in answer to a liability that has nothing to do with the subject matter of the deed of release. If the liability was quite extraneous to it and the releasee’s attempt to defend the liability by resort to the general words of the release was unconscionable and opportunistic [sic].
Boldly, counsel for the husband went on to submit that her Honour:
failed to recognise that the principal issue was construction of the contract and that in doing so there are relevant established principles of construction. Her Honour made no reference to any of the principles [of construction] she was applying and in the circumstances she should have done so. This was an error.
Counsel for the husband also complained that her Honour:
·made no findings as to which provisions were promises and contractual undertakings and which were non-promissory terms; and
·failed to explain the effect of Clause 53 (in advancing this complaint, counsel noted that recitals are not an operative part of a contract, although a court may consider them in deciding upon an interpretation of a part of the contract that is ambiguous or uncertain).
Counsel for the husband submitted that while it was only the clauses described by her Honour as “operative clauses” that should contain “express promissory terms”, her Honour was bound to consider the document as a whole, and she failed to consider relevant clauses.
The husband’s counsel then referred to various clauses, some of which had not been mentioned by her Honour, which he submitted referred only to the parties contracting out of their rights under the Act and not to rights under the laws of any other jurisdiction. He also submitted that:
·Clause 31, if construed as a recital, could not be promissory, and if construed as an operative clause, must be confined to disputes that were within the contemplation of the parties, which could refer only to Clause 7, which dealt only with rights under Part VIII of the Act;
·Clauses 56, 57 and 58 were not “choice of jurisdiction” provisions; and if they were construed as “choice of law” provisions, they were “merely declaratory and not promissory”; and
·Clause 84 cannot be interpreted as a promise not to commence proceedings in a foreign jurisdiction because it had to be interpreted consistently with Clause 7, which dealt only with Part VIII of the Act.
In his oral submissions, counsel for the husband claimed that Clause 12 was the only recital in which the parties recorded a statement as to intended facts operating into the future, and that this made clear that their intention was to reside in Australia. Counsel in effect submitted that this expectation explained why it was within the contemplation of the parties that they were dealing only with their rights under Australian law.
We find no merit in this first part of the husband’s complaint for these reasons:
·Her Honour clearly recognised that the principal issue was the construction of the agreement (see [81] and following of the reasons).
·There was no obligation on her Honour to refer to the “relevant established principles of construction”, precisely because those principles are so well established that they only require statement if they might be of assistance in interpreting any ambiguity or uncertainty.
·There was no need to explain the effect of Clause 53 in circumstances where its effect appears obvious; namely, that while recitals are ordinarily not treated as being operative provisions, the recitals here were to be regarded as if they were operative provisions.
·There is nothing in the reasons to suggest that her Honour treated Clauses 56, 57 and 58 as choice of jurisdiction clauses or as “promissory” choice of law provisions (see [83] in particular).
·While her Honour did not recite Clause 7, this is no doubt because it was common ground that at least one of the things the parties “want[ed] to” achieve was to contract out of Part VIII. The husband’s argument overlooks the fact that there were also other things the parties “want[ed] to” achieve. We find no reason to see Clause 7 as governing the effect of the entire agreement in the face of the other objectives that Clauses 2, 3, 4, 5, 6, 9 and 10 indicate the parties wanted to achieve.
·There is no reason to accept that the parties did not have in their contemplation proceedings other than in Australian courts, given especially that the wife’s property was all located in Indonesia, and given that Clause 58 contemplated that the parties might take up residence overseas, notwithstanding what was said in Clause 12.
·There is no reason not to treat Clause 84 as a promise not to commence proceedings inconsistent with the agreement in any court, local or foreign. The fact it appears under a heading “Machinery provisions” (as was stressed by counsel for the husband in his oral submissions in reply) is neither here nor there, especially as the agreement expressly provided in Clause 54 that the headings were to be ignored.
We accept the submissions of senior counsel for the wife that the “intent and effect of the agreement could not have been clearer”, and that the argument advanced on behalf of the husband “leads to an absurd outcome” and would “render any certainty as to the parties’ property rights on the breakdown of the marriage, illusory”. The primary judge recognised this when she said at [81] that if the only purpose of the agreement was to contract out of Part VIII, “both the recitals and the operative provisions of the agreement … would be otiose”. We accept that strictly, not all of the recitals and operative provisions would have been otiose, but a good many of them would have been, for example, Clauses 2, 3.3, 4, 5, 6, 9, 10, 14, 23, 31, 58, 72, 73, 96 and 97.
The reading of the document advanced by the husband is not only inconsistent with many individual provisions, but also with the whole tenor of the agreement. As the primary judge observed at [84], the promise made by the husband here was not limited to commencement of proceedings in another jurisdiction, but rather was an agreement not to seek any inconsistent order.
Accordingly, we consider the injunction was granted in aid of the enforcement of the wife’s legal rights under the agreement to have her property kept free from claims by the husband, regardless of where such claims were asserted.
Ground 1 therefore fails.
Did her Honour fail to take into account relevant facts?
By Ground 3, the husband asserts that her Honour’s discretion miscarried as a result of her failure to take into account relevant facts. Although there were a number of matters referred to in the ground which it was alleged her Honour had not taken into account, the submissions did little more than repeat the complaint. We accept the submissions made by counsel for the wife concerning the lack of merit in those specific complaints.
The real complaint that was advanced under this ground was not in fact addressed in the ground itself. While that would be basis enough for us to decline to consider it, counsel for the wife addressed it in his written outline. It relates to the failure of the primary judge to accept one of the husband’s contentions advanced at trial, which her Honour summarised at [86] as follows:
The husband and wife having entered into the agreement on the understanding as to where they would reside, and the wife having almost immediately acted to the contrary, it would be vexatious and oppressive for her to seek to rely upon the provisions of the agreement to her advantage when she has acted contrary to the understanding upon which the agreement was based;…
This submission, supported by reference to Clause 12 of the agreement, was disposed of by her Honour as follows (original emphasis):
88.Counsel for the wife relied upon the fact that the provisions of the agreement envisaged the possibility of the parties changing their state or country of residence. In response to counsel for the husband’s submission that the wife, having taken up residence in Indonesia, had not taken any steps in accordance with clause 57 of the agreement to review the agreement and execute a new agreement with the necessary amendments to conform with the law or country of the new state or country of residence, counsel for the wife submitted that clause 57 refers to “the parties” and does not contemplate a change of residence by one party. This is consistent with clause 57.2, which provides that the parties “will execute a new Agreement with all the amendments that are reasonably necessary to conform to the law of the state or country of their new residence” [emphasis added].
89.It is the husband’s evidence that the wife “returned to Indonesia to give birth to [the child] to be near her family”. There is no evidence to suggest that at the time the wife entered into the agreement she did not intend to live permanently in Australia or for that matter to return when she left Australia in anticipation of [the child’s] birth.
90.As counsel for the wife submitted, whilst parties may not be contemplating separation at the time of entering into a financial agreement, they enter into such agreements having regard to the possibility that they might separate.
91.I am satisfied that it is appropriate to exercise the Court’s discretion in this case in favour of the wife. As counsel for the wife submitted, refusal to do so would be likely to result in the loss of the benefits intended to be conferred upon the wife by the agreement, particularly given the husband’s concession that he will institute proceedings in the Denpasar District Court, supported by evidence that that Court will not be bound by the provisions of the agreement. The parties entered into the agreement of their own free will, an agreement which precludes courts exercising jurisdiction pursuant to the Act from making orders pursuant to Part VIII of the Act, and which, having regard to the schedules to the agreement, confers a significant benefit upon the husband.
On appeal, it was submitted for the husband that none of the findings made by her Honour provide “a response for the conduct of the [wife]”. It was noted that in April 2012, the wife went to Indonesia and never returned to Australia other than to participate in the proceedings. Attention was also drawn to the wife’s affidavit in which she said “after we were married I moved to Bali”. Counsel also submitted that her Honour had failed to discuss “the immediacy of the separation, that is, they signed [the agreement] on the date of their marriage with a specific contemplation that never came into being” (appeal transcript, 13 October 2015, p 15).
We find no merit in this complaint.
The husband’s own evidence, which her Honour recited, seems to us to provide the explanation (if one were needed) of the “conduct” of the wife after the marriage, namely that she “returned to Indonesia to give birth to [the child] to be near her family”. Thereafter, it was not in dispute that the husband “regularly” came to stay with the wife in Indonesia. We were not taken to any evidence to suggest that the wife had unilaterally decamped upon the marriage. Nor do we accept the inference in the oral submissions of counsel for the husband that it was for the wife to assert that her departure overseas was “consensual” or that she remained in Indonesia with the husband’s “good grace” (appeal transcript, 13 October 2015, p 16).
In any event, Clause 14 seems to us to contemplate residence in another country, and Clause 57 expressly provides for it. Were it necessary to do so, the infelicity in Clause 57 could be rectified so the preamble would read, “If the parties change their state or country of residence” in lieu of “If the parties change the estate or country of residence”.
Ground 3 therefore fails.
Did her Honour give adequate reasons?
Ground 4, apart from making a broad statement that her Honour failed to give adequate reasons, also broadly stated that she failed to address the resolution of “significant” (but unspecified) contentions argued before her.
We find no merit in this ground. We have elsewhere addressed specific complaints relating to the adequacy of her Honour’s reasons. Otherwise, we consider the reasons were clear and to the point, and addressed all of the husband’s contentions worthy of consideration.
Did her Honour fail to have regard to principles of comity of courts?
In support of the proposition that her Honour failed to take into account principles of international comity, reliance was placed on the judgment of the majority of the High Court in CSR v Cigna to the effect that although an injunction restraining proceedings in foreign courts operates in personam, it nevertheless interferes with the processes of the foreign court and may well be perceived as a breach of comity by that court. Accordingly, as the majority in CSR v Cigna explained, the power to grant such injunctions should be exercised with caution regardless of whether the injunction is sought in the exercise of the court’s inherent or equitable jurisdiction.
It was submitted on behalf of the husband that her Honour did not exercise the power with any caution and that she erred in what she said in the following paragraph:
92.I do not agree that in all of the circumstances of this case it would be, as submitted by counsel for the husband, “an inappropriate lack of judicial restraint to endeavour by orders in personam to hinder the courts of another country in acting entirely the same way where they properly hold jurisdiction”. This injunction is not in any way an attempt to hinder the jurisdiction of any other court. It is an injunction directed to the husband to prevent what I am satisfied would be unconscientious conduct on his part, given the provisions of the agreement he has entered into.
It was argued that this paragraph indicates that her Honour misunderstood what “comity” means. In support of this proposition reference was made to these observations of the Supreme Court of the United States in Hilton v Guyot (1895) 159 US 113 at 163–4, which were approved by the majority of the High Court in CSR v Cigna at 396:
“Comity”, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.
Counsel for the wife submitted that the complaint was misconceived and argued that the considerations of comity “arise acutely where an injunction is issued to restrain extant proceedings”. It was submitted that her Honour did not misunderstand the concept of “comity”, but rather found that in the circumstances, it was appropriate to restrain the husband from what her Honour considered was unconscionable conduct by the husband. It was therefore submitted that “[t]here are no facts in this case that give rise to a comity problem”.
We do not accept that comity issues arise only where there are already proceedings overseas; however, we accept that there is little scope for the application of principles of comity in cases such as the present, where one party threatens to engage in conduct which is in clear breach of contract: CSR v Cigna at 396.
Ground 5 therefore fails.
The outcome and costs
There being no merit in the appeal, it will be dismissed.
Counsel for the husband properly acknowledged that if the appeal was dismissed, there was nothing he could offer to resist the order for costs that was sought, other perhaps than Clause 85 of the agreement, which provides as follows:
85.If they separate, each of [the husband] and [the wife] will be solely responsible for all legal fees, costs and disbursements related to the interpretation of this Agreement, the preparation and execution of an agreement after separation or after divorce or any court proceed [sic] or related to the separation or the interpretation of this Agreement. This paragraph will not affect the ability of a court to make an order for costs in any enforcement proceedings.
The proceedings below are, in our view, properly to be characterised as “enforcement proceedings”, and the appeal takes its character from the nature of the proceedings below. By operation of its final sentence, Clause 85 does not affect the ability of this court to make the order for costs sought by the wife.
Having been wholly unsuccessful in the appeal, and being in a far stronger financial position than the wife, the husband should pay the wife’s costs of the appeal, to be assessed if not agreed.
I certify that the preceding seventy-two (72) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Thackray, Strickland & Murphy JJ) delivered on 13 May 2016.
Associate:
Date: 13 May 2016
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