GAVDE & GAVDE

[2014] FCCA 2661

FEDERAL CIRCUIT COURT OF AUSTRALIA

GAVDE & GAVDE [2014] FCCA 2661

Catchwords:
FAMILY LAW – Property dispute – both parties Indian nationals – property in India and possibly also in Australia and other countries – applicant wife seeking property orders in Australia – respondent asserting Australia a clearly inappropriate forum – respondent resident in Australia – matrimonial home in India – home far the largest asset yet identified – consideration of competing considerations – stay ordered as sought by respondent.

Legislation:  

Family Law Act 1975

Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
Henry v Henry (1996) 185 CLR 571
Moujan v Kimia [2012] FamCA 150

Applicant: MS GAVDE

Respondent: MR GAVDE

File Number: MLC 10020 of 2013

Judgment of: Judge Burchardt

Hearing date: 11 September 2014

Date of Last Submission: 11 September 2014

Delivered at: Melbourne

Delivered on: 25 November 2014

REPRESENTATION

Counsel for the Applicant: Mr Singh

Solicitors for the Applicant: Saundh, Singh & Smith Lawyers

Counsel for the Respondent: Dr Ingleby

Solicitors for the Respondent: Wisewould Mahony Lawyers

ORDERS

1. That this proceeding be stayed until further order of the Court. 

2. The matter be adjourned until 25 November 2016 at 9:30am.

3. There be general liberty to apply to the parties.

IT IS NOTED that publication of this judgment under the pseudonym Gavde & Gavde is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA

AT MELBOURNE

MLC 10020 of 2013

MS GAVDE

Applicant

And

MR GAVDE

Respondent

REASONS FOR JUDGMENT

Introductory

1. The matter presently to be determined by the Court arises from paragraph 6 of the interim orders sought in the respondent husband’s amended response filed on 9 September 2014.  The net effect of what the respondent seeks is to stay these proceedings on the footing that this Court is a clearly inappropriate forum. 

2. The applicant resists this course and seeks the dismissal of the stay application, noting that an adjournment would be required in any event if the proceeding remains active in this Court. 

3. For the reasons that follow, I am going to make the stay order that the respondent seeks. 

The history of the proceeding

1. The applicant wife filed her initiating application on 19 November 2013.  The affidavit disclosed a substantial number of properties in Melbourne, which the applicant sought be in effect frozen pending further Court order.  The final orders sought a sale of all of the properties, full and frank financial disclosure by the parties, and an equal division of the matrimonial property pool. 

2. The wife’s affidavit filed contemporaneously with her application reveals that the parties were married on (omitted) 1997 in (omitted) India.  They have two children, X, born (omitted) 1998, and Y, born (omitted) 2001.  Separation took place on 29 March 2010.  

3. The applicant deposed that the husband has been an extremely successful businessman, with a substantial number of companies, both in India and in Australia in which, according to the affidavit, the wife had in the past owned shares (albeit not in all companies as I understand it).  The applicant deposed to a matrimonial home in (omitted) India asserted to be worth 3 million dollars.  She also made widespread allegations of fraudulent conduct on the part of the husband, asserting that he had forged her signature to remove her shareholdings and on various other documents, including an alleged fraudulent transfer of the applicant’s half share of the matrimonial home to the respondent. 

4. The affidavit detailed extensive litigation between the parties pending in (omitted) India, and caveats lodged by the applicant over the properties in Australia.  The applicant also filed a contemporaneous Financial Statement.  It takes the matter no further.  It should be noted that annexed to the initiating application is a copy of what appears to be something akin to an interim spousal maintenance application in the court in (omitted) India.  It is a decision of additional District Judge (omitted) announced on 14 January 2012.  Pursuant to the orders apparently made on that occasion the wife was receiving 60,000 rupees per month as maintenance pendente lite. 

5. The husband filed an application for divorce on 17 December 2013.  That itself gave rise to a number of affidavits and a measure of disputation, but ultimately a divorce order was consented to in this Court. 

6. On 21 May 2014, the husband’s solicitor, Ms Christofidis, filed an affidavit.  That deposed to the existence of proceedings in India and also proceedings in the Supreme Court of Victoria, to which further brief reference will be made.  The next relevant development for these purposes was the respondent’s response to the initiating application, filed 18 July 2014.  It sought, in effect, that the applicant be compelled to provide an appropriately detailed account of the proceedings filed in India and in the Supreme Court of Victoria.  Also sought was mediation once financial disclosure and valuations had been obtained. 

7. On 18 July 2014, the respondent filed his first affidavit.  It confirmed the age of the parties and their date of marriage, and the date of separation.  The respondent deposed that the applicant lives in India with the children of the relationship and that he pays their school fees in India.  I note that at paragraph 12 the respondent asserted “The Applicant and I have various assets in India and in Australia.”

8. Having deposed to the existence of the proceedings in India and in the Supreme Court of Victoria, the respondent went on to depose (at paragraphs 17-18):

   “17.  The Applicant has confirmed that she will be withdrawing all current proceedings in the Indian Courts so that matters can be addressed by this Honourable Court in relation to our property settlement.  In order to do so the Applicant had sated (sic) that she required the Divorce Order in this Honourable Court to be registered in the Indian Courts. 

   18.  Although the Applicant has withdrawn some of the Court proceedings in India she has not withdrawn all of them.”

9. He went on to say at paragraph 22:

   “I will be preparing a chronology in relation to these entities at a later date as I will need to review the Court proceedings in India and historical documents in order to do so.  This process will require some time to do and I hope to complete this so that the Applicant and I can proceed with Mediation.”

10. The husband’s Financial Statement, also filed on 18 July 2014 is a masterpiece of non-statement.  Almost every single entry required to be made is simply TBA, which I take to mean to be advised.  The only material matter for these purposes in my view is that the respondent did disclose $179,000 in (omitted) Super, from which I would infer he must have lived in Australia for some time. 

11. On 23 August 2014 the applicant filed a further affidavit.  She deposed as was the fact that the matter had been before Judge Monahan on

    
    

    25 June 2014.  She deposed (paragraph 2):

    “On that date, my lawyer pursuant to my instructions informed the court that I would through my legal representative withdraw all matrimonial causes related litigation in India.  Moreover, I also instructed my lawyer to propose consolidation of the company related proceedings pending at the Supreme Court of Victoria, namely SCI 2013 05944.”

12. The affidavit also referred to the orders by which Judge Monahan had consolidated the proceedings, and ordered the respondent husband to file and serve a response, financial statement and affidavit. 

13. The affidavit deposed that the wife had instructed her lawyer to withdraw all matrimonial proceedings in India, namely (see paragraph 5 of the affidavit) a petition under Section 13 of the Hindu Marriage Act 1955, an application for a grant of maintenance, and an application under the Domestic Violence Act 2005.  The affidavit confirmed that spousal maintenance (to use the Australian term) proceedings could not in the extant circumstances be continued in India.  

14. Having complained of the inadequacy of the husband’s affidavit material and Financial Statement (a complaint I would share) she went on to say at paragraphs 11 and 12:

    “11.  The only proceedings that are pending in India are pursuant to the Indian Companies Act on a count of fraudulent share transfers and in violation of the Indian Penal Code for cheating and defrauding me of my shares in various companies as detailed in my Affidavit dated 19 November 2013.  I have no control of these proceedings, as these are serious allegations involving fraud in which the state has initiated proceedings to prosecute the Respondent Husband. 

    12.  The proceedings pending in the Civil Court in (omitted) India are as follows:”

15. There are then set out seven proceedings, albeit that only one is a criminal complaint taken out by the State.  In all of the others, the applicant is the plaintiff.  Matter number 1 is:

    “Ms Gavde v Mr Gavde – Suit for declaration to the effect that NOC (No objection certificate) obtained on behalf of me for the transfer of my 50% share of the property situated at (omitted) (omitted) India in favour of the respondent is Null and Void as the same was fraudulently obtained by the Respondent Husband.”

16. And number 6 is:

    “Ms Gavde v Mr Gavde – Suit for Partition of House No. (omitted), (omitted) India, of which I am the registered owner of a 50% share and which has been created from the combined income of the Respondent Husband and Myself.”

17. I note further that cases 2 to 5 are all actions between the applicant and companies forming part of the respondent’s group of companies seeking to have share transfers declared null and void as a result of forged and fabricated documents. 

18. I further note that in his Financial Statement filed 18 July 2014 the husband in paragraph 59 disclosed the sale of the various properties previously owned by him in Victoria for sums in excess of $1,800,000.  From annexure G-2 to the husband’s subsequent affidavit filed

    
    

    9 September 2014, it is apparent that Bell J appears to have summarily set aside caveats and ordered the applicant to pay the respondent’s associated costs on 17 December 2013. 

19. As earlier indicated the husband filed his amended response on 9 September 2014 seeking the stay.  His affidavit filed contemporaneously details yet further litigation in India, as well as making reference to the Supreme Court of Victoria proceedings.  At paragraph 22 and following, the respondent deposed:

    “22.  The Applicant and I have two children who reside in India and attend school in India. 

    23.  Our family home in India is known as (omitted)-(omitted) India.  I am a half owner with the Applicant owning the other half.  I understand the Court proceedings have been commenced against the Applicant by third parties in relation to her ownership of her half share of the home.  These details have not been provided by the Applicant. 

    24.  The Witness relevant to the Indian Court Proceedings are in India.  These would be the same witnesses who would be called to give evidence in any Court Proceedings in Australia.”

20. The respondent went on to refer to an annexure setting out a Consolidated Statement of Net Assets at G-4, and a diagrammatic version of the Corporate Structure of his companies at G-3. 

21. Annexure G-3 shows the structure of interrelated shareholding in the respondent’s companies.  There is no information whatever as to the worth of the companies.  Annexure G-4 suggests that the respondent’s assets in India have a net value of $1.6 million, approximately, less liabilities of just over $300,000, together with assets in Australia of some $233,000, with liabilities of $166,000. 

22. Of the assets in India, the respondent asserts that his half share of the matrimonial home is worth just over $1.6 million.  That of course, is roughly consistent with the wife’s assessment. 

23. The materials filed before the Court are of course self-evidently scandalous in the sense that either outrageous fraudulent conduct has been perpetrated, or it has not.  In either event, the untruthful party is behaving scandalously. 

24. The affidavit material filed by both parties is inadequate, and goes nowhere near giving the Court any kind of intelligible picture as to what the parties’ true resources and liabilities are.  

25. It is against this unsatisfactory evidentiary background that the Court is required to determine the application for a stay. 

The submissions of the respondent

1. Counsel for the respondent concentrated his submissions on what he described as the ‘Voth test’ (Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538) and its application to matrimonial cases by the High Court in the case of Henry v Henry (1996) 185 CLR 571. He referred the Court to the judgment of Cleary J in Moujan v Kimia [2012] FamCA 150 where his Honour applied Henry and paraphrased the outcome of that decision at [12] as follows:

   “The High Court decision in Henry v Henry (1996) 185 CLR 571 provides the test for the appropriate forum where there is a dispute. The test is the clearly inappropriate forum, in particular is the Local court a clearly inappropriate forum? The focus is on the appropriateness or not of that local forum, not on anything in relation to the foreign forum, but it is relevant to the inappropriateness as to whether or not the foreign forum has jurisdiction to deal with the same matter.”

2. Counsel submitted that there should be a stay if this Court was a clearly inappropriate forum and continuation of the proceeding in Australia would be oppressive or vexatious and lead to serious and unjustified harassment of the respondent.  Counsel pointed to the fact that the cases referred to in the applicant’s affidavit involved the respondent’s Indian companies.  Emphasis was put upon the fact that the applicant has not withdrawn her matrimonial claims.  A similar set of circumstances were said to exist in Moujan, and should lead to a stay being granted. 

The submissions of the applicant

1. Counsel for the applicant submitted that house prices are high in (omitted) India, that all matrimonial proceedings have been withdrawn in India, and that the partition of property orders sought were not arising in a matrimonial court.  It was asserted that the applicant wanted to sell the house, and this required a division of the property.  All proceedings in India were proceedings against Indian companies, not any Australian companies.  The applicant is seeking an opportunity to bring proceedings to this Court.  She can obtain a visa for Australia, and it was sought that the matter be adjourned if the application was not dismissed.  

The Law

1. Although Voth is plainly the point of origin of the law in Australia relating to forum issues, it was paraphrased by the plurality of the High Court (Dawson, Gaudron, McHugh and Gummow JJ) in Henry at page 587 as follows:

   “In Voth,32 this court adopted for Australia the test propounded by Deane J in Oceanic Sun, namely, that a stay should be granted if the local court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive, in the sense of “seriously and unfairly burdensome, prejudicial or damaging”, or, vexatious, in the sense of “productive of serious and unjustified trouble and harassment”.33 It was also held in Voth that, in determining whether the local court is a clearly inappropriate forum, “the discussion by Lord Goff in Spiliada34 of relevant `connecting factors’ and `a legitimate personal or juridical advantage’ provides valuable assistance”.35 In this last regard, Lord Goff of Chieveley expressed the view that legitimate personal or juridical advantage is a relevant but not decisive consideration, the fundamental question being “where the case may be tried `suitably for the interests of all the parties and for the ends of justice' ”.”

2. At page 590, the plurality continued:

   “Foreign proceedings usually fall for consideration in a context in which they involve the same or related factual issues as those involved in the local proceedings, but not the same legal issue and, perhaps, not the same parties. Even in cases of that kind it may sometimes be appropriate to grant a temporary stay of the local proceedings to allow the factual issues to be determined in the other jurisdiction.  There are more compelling considerations in favour of a stay of the local proceedings if, as can happen, there are proceedings in another country which has jurisdiction to entertain those proceedings and the proceedings are between the same parties and with respect to the same issue or controversy.”

3. At page 591, the plurality continued:

   “It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue.48 And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries,49 the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words.

   It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed. However, it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are oppressive in the sense of “seriously and unfairly burdensome, prejudicial or damaging”, or, vexatious, in the sense of “productive of serious and unjustified trouble and harassment”. And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation.”

Consideration

1. It seems clear that the husband and at least previously the wife own or have owned properties in both India and Australia, and possibly elsewhere also.

2. This means that, however the matter is ultimately to be determined, there will be proceedings in one country involving assets (or at least possible assets) in another.

3. There is, of course, a latent but no doubt vivid dispute as to the extent of the respondent’s assets both in Australia and in India.  The applicant has not had anything like full disclosure from the respondent, and it would in many ways be very difficult for her at the present time to state with confidence what the true position is. 

4. Notwithstanding this, there are a number of things that seem to me to be clear. 

5. First, both the parties are Indian nationals.  The applicant and the two children of the relationship live in India.  The applicant can only litigate in Australia by getting visas which are effectively designed to enable her to enter Australia to do so. 

6. The parties are engaged in litigation in India, which the applicant herself asserts she has no capacity to bring to an end.  They contemplate, on any view, significant litigation about the assets of the respondent in India and, most particularly, the various companies in which he has an interest. 

7. Furthermore, and in my view critically, on any view of the matter the parties are engaged in litigation in India which touches directly on the ownership of the matrimonial home which both parties agree is worth over $3 million.  These proceedings involve allegations of fraudulent conduct.  They are not matters of minor moment.

8. While it is of course the case that, on one view, the proceedings about the former matrimonial home are different in character to those that might obtain in Australia, the fact is that there is an enormous measure of overlap.  While the proceedings in India are designed to (on the applicant’s part, at least) rectify a fraudulent transfer of her interest to third parties, the fact is that she is seeking a division and sale of the matrimonial home according to her own characterisation of the proceedings in her affidavit.

1. It is also in my view highly likely that the preponderance of witnesses to be called in proceedings between these parties would be persons who are living in India.  All the materials thus far filed suggest that the respondent’s advisors, accounts and so on are in India.  This is equally plainly a relevant consideration. 

2. The full extent of the parties’ interests in Australia remains wholly unclear.  They may be very valuable or they may be (as I infer the respondent would put it) of negligible value.  To stay the proceedings in this country would be effectively to deprive the applicant of the possibility of continuing her Supreme Court proceeding (unless the applicant seeks to resuscitate it and/or set aside the orders made by consent before Judge Monahan). 

Conclusion

1. In my view, it is clear beyond doubt that the application for a stay should succeed.  The institution of this second set of proceedings, in Australia, insofar as it seeks, at the very least, division of the respondent’s assets in India is clearly a duplication of the Indian proceedings and is oppressive and vexatious in the fashion described by the High Court in Henry. 

2. To the extent that the parties’ interests have been identified with any clarity, the single item of any great value is situated in India and is the subject of proceedings in that country.  The witnesses to be called in that proceeding will overwhelmingly come from India. 

3. In my view, it is clear beyond doubt that this Court is a clearly inappropriate forum in the sense contemplated by Voth and Henry.  It would be oppressive and vexatious in the Voth sense to allow these proceedings to continue. 

4. In making this finding, I do not need to rule expressly upon the objection taken by the respondent that the applicant has not withdrawn all her matrimonial proceedings in India.  On a generous construction of the matter, it is arguable that the proceedings for the rectification of the transfer (assuming I have correctly understood its character) and the division of the property in India are not matrimonial proceedings, at least in the context of Indian law.  Nonetheless, for the reasons I have given, they clearly overlap in a most direct and effective way with projected proceedings in Australia. 

5. This is a case like that posited in Henry where, in my view, it is appropriate to stay the proceeding here until such time as the result of the Indian proceedings is known.  I note that that may take some time.  Both parties agreed that proceedings in India are likely to be protracted, and, indeed, they appear to have been underway since 2012 without any conclusion.  This is, of course, a relevant consideration, and one to which I have had regard. 

6. Nonetheless, in circumstances where this proceeding seeks to effect a property distribution between the parties where their thus far largest identified asset is not only in India but also its legal status and ownership is disputed between the parties in that country, it is all that more obvious that the case should not proceed in this Court. 

7. I would only observe finally that, were this matter to be proceeding, given its scope and scale as assessable at the present, it would seem to me a case more appropriately heard and determined by the Family Court.

8. One final matter that has caused me concern is whether in any way the applicant will be estopped in India by virtue of the apparent withdrawal of her previous applications.  It would plainly be inappropriate to shut the applicant out altogether from curial determination of her property claim against the respondent. 

9. In the circumstances, I have prepared draft orders to give effect to my conclusion but will hear further from the parties as to this aspect of the matter. 

I certify that the preceding fifty-three (53) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Associate: 

Date:  25 November 2014