Eastgate and Cardiff & Anor
[2020] FamCA 387
•21 May 2020
FAMILY COURT OF AUSTRALIA
| EASTGATE & CARDIFF AND ANOR | [2020] FamCA 387 |
| FAMILY LAW – PROPERTY – FORUM – Where the parties are New Zealand citizens – Where the parties resided in Australia for 15 of their 20 years together – Where the wife established a discretionary Trust in New Zealand at or just prior to the commencement of the relationship – Where the Trust acquired property in New Zealand and Australia during the marriage – Where the wife is the one of two Trustees, but sole appointor and primary beneficiary of the Trust – Where that Trust is the owner of real property both in New Zealand and Australia – Where the parties are the joint owners of real property in Australia – Where the husband filed an Initiating Application seeking orders pursuant to Pt VIII and Pt VIIIAA of the Family Law Act 1975 (Cth) – Where the husband seeks to bring to account the property held by the Trust in proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) – Where the Trustees filed an application in the New Zealand Family Court seeking a declaration that neither the husband nor the wife have a personal interest in the Trust property – Where the wife and the Trustees seek a stay of the Australian proceedings to allow that application to be determined by a court in New Zealand. FAMILY LAW – PROPERTY – FORUM – JURISDICTION – Where, pursuant to s 19(1)(a) of the Trans-Tasman Proceedings Act 2010 (Cth), the Court must be satisfied that the New Zealand court has jurisdiction to deal with the matters in issue – Consideration of s 7 of the Property (Relationships) Act 1976 (NZ) – Where s 7 of the Property (Relationships) Act 1976 (NZ) does not confer jurisdiction on a New Zealand court over “foreign immovable property” or “movable property” where the parties are not domiciled in New Zealand – Consideration of Samarawickrema v Samarawickrema [1994] NZFLR 913 – Where neither the wife nor the Trustees could cite authority for their submission that this Court could stay part of these proceedings to permit the New Zealand application to be decided – Where s 19 of the Trans-Tasman Proceedings Act 2010 (Cth) is to be read in the context of the entire Act and is not unclear, ambiguous or lacking clarity – Where the Court is not satisfied that a New Zealand court would have jurisdiction to deal with the matters in issue – Application dismissed. FAMILY LAW – PROPERTY – DECLARATION OF APPLICABLE LAW – Where the wife and the Trustees sought, in the alternative, that this Court make a finding as to the applicable law to govern the Trust – Where no authority was cited to support the proposition that a judge hearing this application at an interlocutory stage has jurisdiction, or power, to make an order binding upon a trial judge who ultimately hears and determines this proceeding at a trial – Application of Pagliotti & Hartner (2009) FLC 93-393 – Where there is no evidence before the Court as to the effect of applying New Zealand law to the Trust – Where there is no basis for granting the alternative claim of the Trustees and the wife – Application dismissed – Where orders are made for the filing of any costs application. | |
| Corporations Act 2001 (Cth) Nygh’s Conflict of Laws in Australia, M Davies, A S Bell, P L G Brereton, LexisNexis Butterworths, 8th ed, 2010 | |
| Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27; [2009] HCA 41 Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Australian Investment & Securities Commissioner; Richstar Enterprises Pty Ltd v Carey (No 6) [2006] 153 FCR 509; [2006] FCA 814 Baker v Bowketts Cakes Ltd [1966] 2 All ER 290 BP and KS (2003) FLC 93-157; [2002] FamCA 1454 Cain and Cain (1987) FLC 91-808; [1987] FamCA 28 Chief Commissioner of Stamp Duties for New South Wales v Buckle (1998) 192 CLR 226; [1998] HCA 4 Enright v Fox (1989) 5 NZFLR 455 Gallo v Dawson (1990) 93 ALR 479; [1990] HCA 30 Gamble v Killingsworth & McLean Publishing Co Pty Ltd [1970] VR 161 Gartside v Inland Revenue Commissioners [1968] AC 553 Hastings and Hastings (1990) FLC 92-176; [1990] FamCA 168 Hannema and Hannema (1981) 7 FamLR 542 Kennon v Spry (2008) 238 CLR 366; [2008] HCA 56 Michael Wilson & Partners Ltd v Nicholls (2008) 74 NSWLR 218; [2008] NSWSC 1230 Neilson v Overseas Projects Corp of Victoria Ltd (2005) 223 CLR 331; [2005] HCA 54 Pagliotti & Hartner (2009) FLC 93-393; [2009] FamCA 18 Samarawickrema v Samarawickrema [1994] NZFLR 913; [1995] 1 NZLR 14 Schafer v Blyth [1920] 3 KB 140 |
| APPLICANT: | Mr Eastgate |
| FIRST RESPONDENT: | Ms Cardiff |
| SECOND RESPONDENT: | Ms Cardiff & Mr Nash as Trustees for the N Trust |
| FILE NUMBER: | BRC | 14812 | of | 2018 |
| DATE DELIVERED: | 21 May 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 15 May 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Alexander |
| SOLICITOR FOR THE APPLICANT: | MBA Lawyers |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Williams QC with Mr Gordon |
SOLICITOR FOR THE FIRST RESPONDENT: | McAdam Family Law |
| COUNSEL FOR THE SECOND RESPONDENT: | Dr Sayers |
| SOLICITOR FOR THE SECOND RESPONDENT: | Leishman Legal |
Orders
Pursuant to s 17(1)(2)(b) of the Trans-Tasman Proceedings Act 2010 (Cth) the time for filing an application for an order staying these proceedings is extended to the respective dates upon which each of the First Respondent and the Second Respondent filed their Response to the Applicant’s Initiating Application.
That the applications for an order staying these proceedings made by each of the First Respondent and the Second Respondent be dismissed.
That the applications of each of the First Respondent and the Second Respondent for orders in the alternative to an order staying these proceedings be dismissed.
Any party seeking an order for costs is to file and serve within twenty-one (21) days of these Orders:
(a) An Application in a Case;
(b) An affidavit identifying the amount claimed for costs and an itemisation of the calculation of that amount;
(c) Written submissions of no more than ten (10) pages in support of the application.
Any party who elects to respond to an application for costs made against that party shall, within twenty-one (21) days of service upon that party of the documents identified in Order (4), file and serve:
(a) A Response to the Application in a Case;
(b) Any affidavit sought to be relied upon;
(c) Written submissions of no more than ten (10) pages.
Any party served with the documents identified in Order (5) may file and serve, within fourteen (14) days of service of the documents identified, written submissions in reply of no more than five (5) pages.
Any application for costs made will be listed for hearing on a date to be fixed.
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 Eastgate & Cardiff and Anor and 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 BRISBANE |
FILE NUMBER: BRC 14812 of 2018
| Mr Eastgate |
Applicant
And
| Ms Cardiff |
First Respondent
And
| Ms Cardiff & Mr Nash as Trustees for the N Trust |
Second Respondent
REASONS FOR JUDGMENT
By an Initiating Application filed in the Federal Circuit Court of Australia (“the FCC”) at Brisbane on 19 December 2018, Mr Eastgate (“the husband”) seeks orders for property settlement[1] consequent upon the breakdown of the approximate 20 year relationship and marriage between the husband and Ms Cardiff (“the wife”). The husband’s Part VIII and Part VIIIAA proceedings were transferred by the FCC to this Court by order made on 28 October 2019.
[1] Pursuant to Part VIII and Part VIIIAA of the Family Law Act 1975 (Cth) (“the FLA”).
The wife is named as the First Respondent to the husband’s application. Named as Second Respondent is the wife and one Mr Nash in their capacity as the current Trustees (“the Trustees”) of a family discretionary trust established by the wife in New Zealand in 1998 and known as “the N Trust” (“the Trust”). The Trust is joined in the proceedings on the basis that property owned by the Trust is in issue in these proceedings.
On 4 March 2019, Mr Nash, in his capacity as one of the Trustees of the Trust, filed an application in the New Zealand Family Court at City B pursuant to the Property (Relationships) Act 1976 (NZ) (“Property (Relationships) Act (NZ)”) for orders:
Determining whether or not either or both of the Respondents (the husband and the wife) have any personal property interests pursuant to the Property (Relationships) Act 1976 in the N Family Trust established by the Applicant [sic] by Deed of Trust dated 11 August 1998.
The husband has filed an “Appearance under Protest to Jurisdiction” in the New Zealand proceeding on grounds including that the “New Zealand Family Court does not have jurisdiction to deal with all property in issue”. By an order made by consent by the Family Court at City B, the New Zealand proceeding is adjourned pending the determination of this application to this Court.
Taken from their respective Minutes of Orders Sought on this application, the wife and the Trustees join in seeking orders to this effect on this application:
a)That pursuant to s 17(2)(b) of the Trans-Tasman Proceedings Act 2010 (Cth) (“the TTPA”) the time for filing an application to stay Australian proceedings on forum grounds pursuant to s 17(1) of the TTPA be extended to the respective dates upon which the wife and the Trust filed each party’s Reply;
b)That insofar as these proceedings relate to the legal and equitable interests held in the N Trust that pursuant to s 19(1) of the TTPA these proceedings be permanently stayed;
c)In the alternative, that any determination by an Australian Court in these proceedings of the property interests of the husband and the wife in the property of the Trust (including but not limited to declaratory relief or orders for a party to the proceedings to transfer, sell or otherwise deal with the property of the Trust) be determined pursuant to the governing law of the N Trust; namely the laws of New Zealand; and
d)That the husband pay the wife’s and the Trust’s costs of and incidental to the proceedings.
For the reasons which follow, other than the extensions of time sought by the wife and the Trustees to mount their applications under the TTPA, which the husband did not oppose, the applications of the wife and the Trustees ought be dismissed. In summary, as will be explained:
a)Neither the wife nor the Trustees have satisfied this Court of the condition for this Court to stay these proceedings, that condition being expressed in s 19(1)(a) of the TTPA. Specifically, satisfaction that a New Zealand court “has jurisdiction to determine the matters in issue between the parties”;
b)This Court, at this interlocutory stage of these proceedings, does not have jurisdiction or power to direct a trial judge ultimately seized of the determination of these proceedings as to the law to be applied, or the powers available, in the exercise of the jurisdiction under Part VIII and Part VIIIAA of the Family Law Act 1975 (Cth) (“the FLA”).
Factual background
The husband was born in 1950 and is currently 69 years old. He is retired. The wife was born on in 1951 and is also 69 years old. She likewise describes herself as retired.[2]
[2] See, for example, the wife’s Financial Statement filed on 5 March 2019.
The parties commenced cohabitation in New Zealand in 1998 and married there in 2000. Whilst each party retains New Zealand citizenship, in 2005 they relocated to live in City C, Australia apparently on a permanent basis, living in the former matrimonial home at Suburb D owned by them as joint tenants. The wife has continued to live in the jointly owned former matrimonial home since the parties’ final separation in April 2018 (on the wife’s case)[3] or May 2018 (on the husband’s case).[4] There is no forensic need to resolve that difference on this application. There are no children of the parties’ relationship.
[3] Paragraph 24 of the wife’s affidavit filed on 5 March 2019.
[4] Paragraph 8 of the husband’s affidavit filed on 19 December 2018.
On the wife’s evidence, it was shortly prior to the commencement of the parties’ cohabitation “in or around October 1998”[5] that on 11 August 1998 the wife established by Deed of that date the Trust, a family discretionary trust. Clause 27.1 of the Deed provides for the Trust to be governed by and construed in accordance with the laws of New Zealand. By operation of that clause and under the Trusts (Hague Convention) Act 1991 (Cth) it can be concluded that the law of the Trust currently is New Zealand law. The description “currently” is only because clause 27.1 also empowers the Trustees to change the governing law of the Trust and to transfer any of the trusts appointed, and Trust property, outside the jurisdiction of New Zealand courts. There is no suggestion on the evidence before me of any intention to so do.
[5] Paragraphs 7 and 8 of the wife’s affidavit filed on 5 March 2019.
On or about 25 August 1998,[6] and thus likewise shortly prior to the commencement of the parties’ cohabitation on the wife’s case, the wife transferred to the Trust her residential property at R Street, Suburb P, New Zealand, which property the Trust still retains.
[6] Paragraph 14 of Mr Nash’s affidavit filed on 7 March 2019.
By Deed dated 24 September 2001, the husband became an “eligible beneficiary” of the Trust.[7]
[7] Paragraph 11 of Mr Nash’s affidavit filed on 7 March 2019.
It is the husband’s case that for several years prior to the parties’ relocation to Australia in 2005, he and the wife worked together in the business the wife had established shortly prior to the commencement of their relationship (“the business”).[8] It appears that profits from the business were directed to property acquisitions by the Trust and, on the wife’s case, to the acquisition of the former matrimonial home in Australia.
[8] Paragraphs 10 and 21 of the husband’s affidavit filed on 19 December 2018.
During the marriage between 2002 and 2004, the Trust acquired three real properties in New Zealand in addition to the R Street property earlier referred to. On or about 22 February 2002, the Trust acquired the real property situated at M Street, Suburb G. On or about 26 June 2003, the Trust acquired the property situated at L Street, Suburb G and on or about 2 July 2004 the Trust acquired Q Street, City B.
Also during the marriage in November 2002, the Trust purchased (off the plans) a property situated at Suburb J in Australia and completed that purchase on or about 13 January 2005.
I interpolate here that one of the alternative orders sought by the husband in these proceedings is a declaration pursuant to s 78 of the FLA that the Suburb J property is held on trust for his benefit pursuant to an implied, resulting or constructive trust in a percentage to be determined.
In April 2005, the husband and wife purchased the former matrimonial home at Suburb D on the City C, Australia in joint names. Whilst the property is in the joint names of both parties, it appears that the wife seeks to agitate an issue that an agreement entered into by the parties on 16 May 2005 impacts upon the husband’s capacity to make any claim upon the former matrimonial home.[9]
[9] Paragraphs 29-34 of the wife’s affidavit filed on 26 March 2020.
As already noted, following the parties’ final separation in April or May of 2018, the wife has continued to reside in the former matrimonial home.
Subsequent to the parties’ separation, the husband received an inheritance from his mother in the total amount of NZD230,000, most of which is retained in bank accounts in New Zealand and is yet to be distributed.
The wife deposes to the fact that the husband has filed an Application for Divorce in the FCC at Brisbane[10] and it may reasonably be inferred that, if not already issued, a Decree of Dissolution of the parties’ marriage will be made by that court.
[10] Paragraph 15 of the wife’s affidavit filed on 26 March 2020.
The evidence of both parties establishes that leaving aside real property, each party owns movable property in Australia and in New Zealand including items such as bank accounts; the furniture and contents of the former matrimonial home; and motor vehicles.
Extension of time
Section 17 of the TTPA provides:
17 Application to stay Australian proceeding on forum grounds
(1)A defendant in a civil proceeding in an Australian court may apply to the court for an order staying the proceeding on the grounds that a New Zealand court is the more appropriate court to determine the matters in issue.
(2) The application must be made within:
(a)30 working days of the Australian court after the day on which the defendant was served with the initiating document for the proceeding; or
(b)if, before or after the end of that period, the plaintiff or defendant applies to the Australian court for a shorter or longer period–any shorter or longer period the Australian court considers appropriate.
On the evidence of the Trustees, they were served with the husband’s Initiating Application on 21 December 2018.[11] It follows that the Trustees were required, under s 17 of the TTPA, to make the relevant application by 7 February 2019, being 30 business days after 21 December 2018. However, the Trustees did not file their Response containing the application for a stay until 7 March 2019.
[11] Paragraph 12 of the wife’s affidavit filed on 7 March 2019.
Whilst s 17 of the TTPA obviously provides the Court with power to extend time to permit the filing of an application after the 30 working days period has expired, the TTPA does not prescribe any considerations necessary in order for the Court to consider it “appropriate” to extend the period.
The Court was not directed to any authority on the point.
Section 3 of the TTPA identifies the “purpose” of the TTPA as including to:
(a)
streamline the process for resolving civil proceedings with a
trans-Tasman element in order to reduce costs and improve efficiency; and
…
(c) implement the Trans-Tasman Agreement in Australian law.
Having regard to the statutory purpose of the TTPA, and the absence of prescription in the TTPA as to when or in what circumstances it is “appropriate” to extend time under s 17 of the TTPA, it would appear that the discretion to extend time is unfettered.
However, as with any such discretion it must be exercised judicially. It seems to me that this requirement will be met by having regard to the usual non-exhaustive list of considerations identified on the authorities where there is a provision to extend time. I therefore regard the following considerations as relevant:
a)The length of the delay and any explanation for it;
b)The nature and history of the proceedings;
c)The conduct of the parties in relation to the proceedings;
d)The consequences for the parties of the grant or refusal of the application for extension of time including the avoidance of injustice to one or both of the parties;
e)Whether any party is prejudiced by the delay and will not be properly compensated by an order for costs;
f)The commitment of the Court to do justice and secure promptness and economy.[12]
[12] Schafer v Blyth [1920] 3 KB 140; Baker v Bowketts Cakes Ltd [1966] 2 All ER 290; Gamble v Killingsworth & McLean Publishing Co Pty Ltd [1970] VR 161; Gallo v Dawson (1990) 93 ALR 479; Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175.
In the present case, the husband raises no objection to time being extended. That evidences that the husband is not prejudiced by any delay and obviously the husband has been on notice of this application for a considerable period. The subject delay is not of a significant period and each of the wife and the Trustees have offered explanations for that delay, mainly surrounding the feature that service of the husband’s Initiating Application was immediately prior to the Christmas vacation and the unavailability of legal advisors to attend to the matter, together with the wife’s temporary hospitalisation in the relevant period.
In my judgment, particularly having regard to the feature that the husband raises no objection, it can readily be concluded that the subject time period provided for in s 17 of the TTPA ought be appropriately extended.
Section 19(1)(a) of the TTPA
Section 19(1)(a) of the TTPA provides:
(1)On application under section 17, the Australian court may, by order, stay the proceeding if it is satisfied that a New Zealand court:
(a)has jurisdiction to determine the matters in issue between the parties to the proceeding;
The obvious starting point in considering “jurisdiction to determine the matters in issue between the parties to the proceeding” is to identify the matters in issue raised by the husband’s Part VIII proceedings by reference to the jurisdiction that an application under Part VIII enlivens.
Section 4 of the FLA contains the definition of “matrimonial cause” including, in (ca):
proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:
(i)arising out of the marital relationship;
...
By section 31(1) of the FLA original jurisdiction is conferred on this Court with respect to:
(a)matters arising under this Act … in respect of which matrimonial causes are instituted … under this Act;
…
and by subsection (2) of that section the jurisdiction of this Court “may be exercised in relation to persons or things outside Australia and the Territories”.
Part VIIIAA of the FLA has the object of allowing the Court, in relation to the property of a party to a marriage, to:
(a) make an order under section 79 or 114; or
(b) grant an injunction under section 114;
that is directed to, or alters the rights, liabilities or property interests of a third party [defined as meaning a person who is not a party to the marriage].
A party to marriage ordinarily resident in Australia, or who is present in Australia when the Initiating Application was filed (the husband fulfils both of these) may institute Part VIII proceedings (s 39(4) of the FLA).
Part VIII of the FLA contains the juridical source of power for the Court to declare property interests; to adjust property interests in accordance with one or more of the kinds of orders specified within Part VIII, if it is just and equitable to make such an order (s 79(2) of the FLA).
Because the jurisdiction conferred by the FLA is in personam there is no objection in principle to the exercise of jurisdiction in respect of assets whether movable or immovable outside the jurisdiction.[13]
[13] See, Nygh’s Conflict of Laws in Australia, M Davies, A S Bell, P L G Brereton, LexisNexis Butterworths, 8th ed, 2010 at [27.22].
It is well settled that a court exercising jurisdiction under the FLA applies the law of the forum to the determination of the dispute, and may adjust the property rights of the parties regardless of any rights acquired or vested in them by foreign law.[14]
[14]Hannema and Hannema (1981) 7 Fam LR 542; Cain and Cain (1987) FLC 91-808.
This is subject to two qualifications. First, the Court will take care not to make any order in relation to assets situated abroad that operate in direct conflict with the laws of the country of situation conformably with the principle that courts acting in personam will not make orders that would require the respondent to do something that is illegal in the place in which it is to be done.[15] Second, s 42(2) of the FLA provides that where it would be in accordance with the common law rules of private international law to apply the laws of any country or place (including a State or Territory) that the Court shall apply the laws of that country or place.
[15]Michael Wilson & Partners Ltd v Nicholls (2008) 74 NSWLR 218.
It was not suggested by any party to this application on the hearing of it that this Court did not have jurisdiction to determine all of the matters in issue between the parties the subject of these proceedings including, for comparative purposes:
a)All of the property rights of the husband and the wife, including any with respect to the Trust;
b)Those rights with respect to the jointly owned former matrimonial home located on the City C, Australia;
c)The husband’s claim for an equitable interest in the Suburb J property in the legal ownership of the Trust;
d)The movable property of either party whether situate in Australia or New Zealand (or elsewhere);
e)The adjustment of any right of property of either party to the marriage.
It is next necessary to consider whether a New Zealand court has jurisdiction to “determine the matters in issue between the parties” in the husband’s Part VIII proceedings.
It is to be noted in passing that at this stage the only proceeding in New Zealand is the application of Mr Nash in his capacity as one of the Trustees of the Trust. The wife is not an applicant but is named together with the husband as a respondent. The outcome of that application obviously will not determine how all of the property of the husband and the wife is to be divided. There is yet no proceeding on foot in New Zealand to determine any issue beyond the issue identified in the application brought by Mr Nash as earlier referred to.
Proof of foreign (New Zealand) law
It is trite that proof of foreign law is treated by Australian courts as a question of fact, not of law. It follows that decisions of other judges about foreign law create no precedent.[16]
[16]Neilson v Overseas Projects Corp of Victoria Ltd (2005) 223 CLR 331.
The only evidence of an expert relied upon on the hearing of this application was the affidavit of Ms F a barrister and solicitor of the High Court in New Zealand, filed in the Trustee’s case.
I consider that it may fairly be observed that Ms F’s affidavit evidence was exceedingly narrow in its scope in terms of providing comprehensive evidence as to the law of New Zealand.
Sections 174 and 175 of the Evidence Act 1995 (Cth) and Part 9 of the TTPA permit the Court to receive into evidence foreign statutes and law reports. Pursuant to those provisions as applicable, the following items were adduced into evidence as exhibits:
Exhibit Number
Document
1.
Property (Relationships) Act 1976 (NZ)
2.
Trans-Tasman Proceedings Act 2010 (NZ)
3.
Domicile Act 1976 (NZ)
4.
Judgment of the New Zealand Court of Appeal in Samarawickrema v Samarawickrema [1994] NZFLR 913; (1995) 1 NZLR 14
5.
Trustee Act 1956 (NZ)
6.
Family Proceedings Act 1980 (NZ)
Section 7 of the Property (Relationships) Act (NZ) provides:
7 Application to movable or immovable property
(1) This Act applies to immovable property that is situated in New Zealand.
(2) This Act applies to movable property that is situated in New Zealand or elsewhere, if one of the spouses or partners is domiciled in New Zealand—
(a) at the date of an application made under this Act; or
(b)at the date of any agreement between the spouses or partners relating to the division of their property; or
(c) at the date of his or her death.
(3)Despite subsection (2), if any order under this Act is sought against a person who is neither domiciled nor resident in New Zealand, the court may decline to make an order in respect of any movable property that is situated outside New Zealand.
Self-evidently by the express terms of s 7 of the Property (Relationships) Act (NZ) the Family Court of New Zealand does not have jurisdiction with respect to immovable property located outside of New Zealand. There is thus a lack of jurisdiction with respect to:
a)The former matrimonial home situated at the City C, Australia in the joint ownership of the husband and the wife; and
b)The matter in issue raised by the husband in these proceedings as to the beneficial ownership of the property at Suburb J, Australia in the legal ownership of the Trust.
Whilst I acknowledge the principle that because foreign law is a question of fact, a decision by a court of New Zealand is not to be taken as conclusively binding on this Court, the decision in Samarawickrema v Samarawickrema [1994] NZFLR 913 (“Samarawickrema”) is of the Court of Appeal in New Zealand, the highest appellate tribunal in New Zealand save for the Supreme Court.
There was no suggestion on the hearing of this application that Samarawickrema is not an authority which would be followed by other courts in New Zealand, including the Family Court, or that it did not correctly articulate the scope and operation of s 7 of the Property (Relationships) Act (NZ).
In Samarawickrema, the court was tasked with considering the validity of the trial judge’s approach to property settlement proceedings where the husband was the owner of land in Sri Lanka. The trial judge acknowledged he was not permitted to “classify” the Sri Lankan property under the Property (Relationships) Act (NZ), nor could he make any orders which either directly or indirectly affected it. However, the trial judge determined that he could and should take it into account in determining a just division of the New Zealand assets and directed the wife to sign a document renouncing any claim to the Sri Lankan property. That decision was initially affirmed by the High Court of New Zealand. However, on appeal the Court of Appeal rejected that approach stating:
What the Judge did was to treat the Sri Lankan property as matrimonial property, without expressly classifying it as such. He then divided the total matrimonial property equally by vesting New Zealand assets in the wife up to the assumed value of the Sri Lankan property …
… [the trial judge] was pre-empting the jurisdiction of the Sri Lankan Courts.
Earlier in that judgment, the Court of Appeal set out some general principles commencing with reference to s 7:
… subs (1) recognises the general principle of law that all questions concerning rights over immovables are governed by the law of the place where the immovable is situated.
…
Because the Act does not apply to immovables situate out of New Zealand, we do not think such property can be said to fall within the classifications of matrimonial property and separate property in ss 8 and 9, or within the provisions in respect of the matrimonial home in ss 11 and 12. To so classify a foreign immovable is to apply the Act to it, which s 7 does not authorise.
…
Section 7(1) goes further than merely to preclude a classification of a foreign immovable or an order as to its disposition. It precludes any interference by a New Zealand Court in the rights of the spouses in respect of the foreign immovable under the lex situs. The Court may in some circumstances be able to have regard to the existence of the foreign immovable to the limited extent indicated in Enright v Fox, but in doing so it must be careful to ensure that it is not applying to the foreign property the philosophy of the New Zealand statute. The claims in respect of the foreign property are to be decided by the local law, and should not be the subject of compensating adjustments in respect of the New Zealand assets to ensure that the final division of the total assets reflects a New Zealand approach.
I interpolate here that the reference to Enright v Fox (1989) 5 NZFLR 455 is a reference to ss 14 and 16 of the Property (Relationships) Act (NZ) which relate to, respectively, short marriages and when both spouses owned homes at the beginning of the relationship. Neither apply in this case.
I find as a fact as to New Zealand law that the Family Court of New Zealand does not have jurisdiction under the Property (Relationships) Act (NZ) with respect to immovable property located outside New Zealand and that there is thus a lack of jurisdiction with respect to the real properties located in Australia as earlier referred to.
It is not in issue as regards “domicile” referred to in s 7 of the Property (Relationships) Act (NZ) that neither the husband nor the wife are domiciled in New Zealand nor have they been so domiciled since they relocated to Australia in 2005. Section 9 of the Domicile Act 1976 (NZ) provides for a person acquiring a new domicile. It is clear that the husband and the wife acquired domicile in Australia when they relocated to Australia in 2005 with the intention of living indefinitely in Australia, as both have done for the past 15 years. The wife did not raise any dispute on her evidence with the husband’s evidence concerning the parties’ intention, nor did she offer any other evidence of her intention.
Because s 7 of the Property (Relationships) Act (NZ) only applies to movable property “if one of the spouses … is domiciled in New Zealand” at the dates prescribed in the section, as the evidence currently stands the New Zealand Family Court would not have jurisdiction under that Act with respect to any movable property of either the husband or the wife whether situate in Australia or in New Zealand. The movable property of the parties or either of them includes, on the evidence:
a)The furniture and contents of the former matrimonial home;
b)The bank accounts of either party;
c)The parties’ respective motor vehicles.
It follows from the foregoing that the findings of fact as to New Zealand law are that a New Zealand court does not have jurisdiction to determine the matters in issue between the parties to the proceedings as to real property located in Australia nor as to the movable property of either party whether situate in Australia or in New Zealand.
It follows from these findings that this Court is not, within the meaning of s 19(1)(a) of the TTPA:
… satisfied that a New Zealand court:
(a)has jurisdiction to determine the matters in issue between the parties to the proceeding;
In expressing that conclusion I reject the submissions of each of senior counsel for the wife and counsel for the Trustees that s 19(1)(a) of the TTPA can permissibly be interpreted to mean that the condition it expresses is engaged if only some part or some aspect of “the matters in issue” is considered.
In support of his submission in this respect, senior counsel for the wife relied upon the definition of “proceeding” in s 4 of the TTPA which provides:
proceeding in a court or tribunal includes:
(a) an interlocutory proceeding in the court or tribunal; and
(b)a proceeding that relates to an application made to the court or tribunal (including an application for interim relief under Part 4).
That an interlocutory proceeding, or a proceeding that relates to an application made to the court, is within the inclusionary definition of “proceeding” provides no point of reference to the subject proceeding in this case, namely, the husband’s application enlivening the jurisdiction under Part VIII of the FLA or “the matters in issue between the parties to the proceeding” in the husband’s Part VIII proceeding as has been discussed.
In my judgment, there is no uncertainty, ambiguity or difficulty in the text of s 19(1)(a) of the TTPA. That text is to be considered in the context of the whole of the Act designed as it is to “streamline the process for resolving civil proceedings with a trans-Tasman element in order to reduce costs and improve efficiency” (s 3).
As the High Court observed in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) (2009) 239 CLR 27 at [47], per Hayne, Heydon, Crennan & Kiefel JJ:
… [t]he task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language … of legislation is the surest guide to legislative intention…
(Footnotes omitted)
In my judgment, the clear meaning of the text of s 19(1)(a) of the TTPA read in the context provided by the Act in its entirety requires focus upon “the matters in issue between the parties to the proceeding”, that is, not only some or part or an aspect of the matters in issue, in determining whether the condition is fulfilled.
For his part, counsel for the Trustees sought to place reliance upon s 182(1) of the Family Proceedings Act 1980 (NZ) (“Family Proceedings Act (NZ)”). That section provides as follows:
182 Court may make orders as to settled property, etc
(1)On, or within a reasonable time after, the making of an order under Part 4 of this Act or a final decree under Part 2 or Part 4 of the Matrimonial Proceedings Act 1963, the Family Court may inquire into the existence of any agreement between the parties to the marriage or civil union for the payment of maintenance or relating to the property of the parties or either of them, or any ante-nuptial or post-nuptial settlement made on the parties, and may make such orders with reference to the application of the whole or any part of any property settled or the variation of the terms of any such agreement or settlement, either for the benefit of the children of the marriage or civil union or of the parties to the marriage or civil union or either of them, as the court thinks fit.
I confess to failing to see how this provision has any relevance whatsoever to the operation of s 19(1)(a) of the TTPA. However, in deference to the submission I will engage with it.
No order has been made under Part 4 of the Family Proceedings Act (NZ). Section 4 of that Act, with limited exceptions, confers jurisdiction only where at the commencement of such proceedings any party to the proceedings resides or is domiciled in New Zealand. The only exception to the requirement to domicile is s 27 providing for an application for a declaration as to validity of a marriage or its dissolution. The wife advances no evidence to suggest any intention to fulfil the requirements of s 182(1) of the Family Proceedings Act (NZ) nor as to Part IV of the Matrimonial Proceedings Act 1963 (NZ).
In my judgment, s 182(1) of the Family Proceedings Act (NZ) is of no relevance to the issues to be determined on this application.
Section 21(1) of the TTPA provides that an Australian court cannot stay a civil proceeding on forum grounds connected with New Zealand otherwise than in accordance with Part 3 of the TTPA containing s 19(1)(a).
It follows from my findings of fact as regards New Zealand law and from my conclusion that the condition expressed in s 19(1)(a) of the TTPA is not fulfilled, that the application of each of the wife and of the Trustees for the stay of these proceedings on forum grounds must be dismissed.
The alternative claim
As already noted, in the event that a stay of these proceedings is not granted, the Trustees and the wife joined in seeking an order:
That any determination by an Australian Court in these proceedings of the property interests of the Applicant and First Respondent in the property of the Second Respondent (including but not limited to declaratory relief or orders for a party to the proceedings to transfer, sell or otherwise deal with the property of the Second Respondent) be determined pursuant to the governing law of the N Trust; namely the laws of New Zealand.
Neither counsel for the Trustees nor senior counsel for the wife referred the Court to any authority to support the proposition that as a judge hearing and determining this application at an interlocutory stage there is jurisdiction, or power, to make an order binding upon a trial judge who ultimately hears and determines this proceeding at a trial, as to the law the trial judge is to apply. This lack of reference to authority was so despite the Court bringing to the attention of each counsel authority to indicate the absence of any such jurisdiction or power, as appears in Pagliotti & Hartner (2009) FLC 93-393 particularly at [144]–[148].
I have already articulated in the foregoing discussion (at [32]–[39]) the law applied by this Court in exercise of its jurisdiction, together with the qualifications there expressed, and need not restate that discussion here. The evidence before me did not establish that s 42(2) of the FLA is engaged, nor that there is any operative choice of law agreement between the parties to the marriage that New Zealand law should govern the issues of matrimonial property.[17]
[17]Hastings and Hastings (1990) FLC 92-176.
Aside from the tender into evidence of the Trustee Act 1956 (NZ), in relation to which no specific submissions at all were directed, there was no attempt to establish any relevant content or scope of the “laws of New Zealand” with respect to the Trust, either under the general law of trusts or any law applied where a spouse brings proceedings under the Property (Relationships) Act (NZ). It was thus left entirely unclear as to what extent (if any) or in what respects (if any) application of “the laws of New Zealand” would diverge from the law applied by this Court exercising jurisdiction under Part VIII of the FLA as regards the Trust.
Despite the Trustees relying upon the expert evidence of Ms F, that expert did not address at all any questions concerning the trust law of New Zealand.
Under the general law in Australia concerning the rights of beneficiaries of a discretionary trust the beneficiaries cannot claim to be entitled to any specific part or percentage of the assets or fund of the trust. Any right of a beneficiary to that fund, whether capital or income, is subject to the exercise of discretion by the trustee on how the fund is to be allocated among the objects. A beneficiary of a discretionary trust does not have any proprietary interest. Governed by the terms of any operative deed, a beneficiary has the right to prevent misappropriation of the capital; a right to take and enjoy whatever part of the income the trustee chooses to give; and the right to require the trustee to exercise bona fide the discretion as to whether, and if so, to whom income should be distributed. In short, the interest of a beneficiary in the income or capital of the trust is a mere expectancy which is not in the nature of a property interest on the general principles of trust law.[18]
[18] See, for example, Chief Commissioner of Stamp Duties for New South Wales v Buckle (1998) 192 CLR 226; Gartside v Inland Revenue Commissioners [1968] AC 553.
That noted, for the purpose of the definition of “property” in some statutes a discretionary beneficiary’s level of control over the trust property may be taken into account. One example is under the Corporations Act 2001 (Cth).[19] Another example is the concept of “property” and “financial resources” within the meaning of the FLA.[20]
[19] Australian Investment & Securities Commissioner; Richstar Enterprises Pty Ltd v Carey (No 6) [2006] 153 FCR 509 at [29]-[45] per French J.
[20]Kennon v Spry (2008) 238 CLR 366.
Counsel for the Trustees directed his submissions to the express terms of the Deed governing the Trust, rather than upon any relevant content of New Zealand law, apparently so as to establish that an order of this Court at the conclusion of these proceedings may place the wife in conflict with those terms. Counsel submitted, by reference to clause 21.1 of the Deed, that the wife “is not the sole Trustee or otherwise in control of the Trust, nor does she have the power to resettle the Trust Fund or any part thereof in her own favour”.
I engage with this submission conscious that it will be a matter entirely for the trial judge ultimately determining these proceedings to make any relevant findings with respect to the Trust and the question of the wife’s control. The following observations are in no way binding upon the trial judge. My engagement with this submission is only for the purpose of determining this interlocutory application.
As discussed with counsel for the Trustees during the course of argument, clause 21.1 of the Deed does not, in my opinion, have the effect for which he contends. Clause 21.1 is directed only to misappropriation of Trust assets by a Trustee, in the capacity of Trustee, by restricting the Trustee from resettling any Trust funds in the Trustee’s own favour.
It is plain that the wife is not confined to the role of Trustee. The wife is not only one of the current Trustees but is the “Principal Family Member” and a “Primary Beneficiary” as those terms are defined in the Deed. Clause 23.1 vests in the wife as the “Principal Family Member” the power of appointment of Trustee and the power of removal of Trustee. The powers of appointment or removal contained in clause 23.7 of the Deed are wide and clause 23.7(e) contemplates the Trust having only one Trustee. Read with the wide powers the Deed reposes in the Trustee/s, including as to vesting the property of the Trust, the submission of counsel for the Trustees is, in my judgment, unsustainable.
Finally, raised in the affidavit of Ms F is the potential difficulties of registration of an Australian judgment in New Zealand if the subject matter of that judgment involves property not situated in New Zealand, pursuant to s 61(2) of the Trans-Tasman Proceedings Act 2010 (NZ). Section 72 of the TTPA is a mirror counterpart with respect to registration of New Zealand judgments in Australia. Obviously enough the form of orders to be determined ultimately will be a matter for the trial judge. However, jurisdiction and enforcement are distinct concepts. In circumstances where the wife resides in Australia it does not appear to be axiomatic that there would be any need to register any judgment determining these proceedings in New Zealand. To the extent that the ultimate orders made require the wife to do certain things, even with respect to the Trust, the usual means of enforcement with respect to a person resident within the jurisdiction would be available.
As was noted by Warnick J in BP and KS (2003) FLC 93-157, after an extensive review of authority, the following (at [78]–[82]) is relevant:
78.There are a number of Family Court cases in which findings were made that the capital of discretionary trusts was either “property” of a person who could control the trust or the “defacto property” of such a person. While such findings might impliedly leave the court at liberty to deal with that property as the court sees fit, this is not necessarily so.
79.The significance of such a finding may initially be that the assets of the trust can properly be included in a “pool” of assets for division between the parties. To do so is a notional step in a process of reasoning, as distinct from the executive nature of a court order dealing with trust assets.
80.Even when such a finding underpins a court order, there is a difference between firstly, an order requiring a payment from, for example, husband to wife, (albeit the only source of funds is the capital of a discretionary trust of which the husband is trustee or appointor or otherwise in control), leaving it to the husband to act, presumably according to law, and secondly an order requiring a trustee to pay funds from a trust to satisfy an order for property settlement.
81.As seen, Ellis J in Davidson (No 2), Maxwell J in Alcaine and Santow J in Andco Nominees were circumspect in the “reach” of the orders they made, or were prepared to countenance.
82.While the distinction between orders designed to facilitate satisfaction of other orders for property settlement by distribution from a trust and orders that direct that result may seem fine, it is nonetheless real.
(Emphasis in original)
In my judgment, there is no basis for granting the alternative claim of the Trustees and the wife for that order.
The applications of the wife and the Trustees for a stay of these proceedings and for the order sought in the alternative are dismissed.
I include in the orders made provision for a timetable for written submissions on the question of costs and for the listing of any application on a date to be fixed.
I certify that the preceding eighty-six (86) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 21 May 2020.
Associate:
Date: 21 May 2020
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