HAO & LAN

[2015] FamCA 363

FAMILY COURT OF AUSTRALIA

HAO & LAN [2015] FamCA 363

FAMILY LAW – PRACTICE AND PROCEDURE – Registrar – Review of decision – Where the Registrar ordered that a single expert be appointed in relation to a forum issue arising in property settlement proceedings commenced by the wife – Where the husband says there should not be a single expert and the parties should have adversarial experts – Where the Court found the registrar made the correct decision – Where the Court varied the orders of the Registrar only as to provide additional time to provide a joint letter of instruction to the expert.

Family Law Act 1975 (Cth)

Spilada Maritime Corporation v Consulex Ltd (1987) 1 AC 460
Voth v Manildra Flower Mills Pty Ltd (1990) HCA 55

APPLICANT: Mr Hao

RESPONDENT: Ms Lan

FILE NUMBER: SYC 4184 of 2013

DATE DELIVERED: 10 April 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 10 April 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Tynan

SOLICITOR FOR THE APPLICANT: Somerville Legal

COUNSEL FOR THE RESPONDENT: Mr Campton SC

SOLICITOR FOR THE RESPONDENT: Michael Conley Lawyers

Orders

1. Upon review of the orders made on 30 March 2015, those orders are varied as marked hereunder:

1.      Within 7 14 days of the date of these orders, the Husband select one of the experts set out in order 1 of the wife’s Application in a Case filed 11 March 2015 to be appointed as single expert pursuant to rule 15.45, Family Law Rules 2004 (“the expert”).

2.     Within a further 7 days, the parties appoint the expert to prepare a report outlining Chinese legal principle applicable to the following issues:

2.1Whether or not the Chinese courts will recognise the parties’ marriage in the circumstances where:

2.1.1The parties’ marriage occurred in Australia and accordingly their subsequent divorce was in Australia;

2.1.2The husband is an Australian citizen and the wife is a citizen of the People’s Republic of China.

2.2Is the Chinese courts recognition of the parties’ marriage in Australia and subsequent divorce in Australia a precondition to the Chinese court’s determination of a settlement of the parties’ matrimonial property which is located in both the Australian and Chinese jurisdictions;

2.3In the event that the Chinese courts are willing to make a determination of a settlement of the parties’ matrimonial property which is located in both the Australian and Chinese jurisdictions, what are the legal principles which will be applied by the Chinese courts.

2.4Does the Chinese court have jurisdiction to determine the legal and beneficial ownership of property in Australia.

2.5 In circumstances where the Chinese court is unable or unwilling to make binding orders in relation to matrimonial property held in Australia, will the Chinese Court take into consideration the Australian property when making orders in relation to a division of the parties’ matrimonial property.

2.6In what circumstances will a Chinese court recognise an Australian judgment or decree made in relation to the division of the parties’ matrimonial property located in Australia and China.

2.7The expert is to give consideration to any other matter he regards as relevant in the preparation of his report

3.     To facilitate the previous order, within 14 21 days of the date of these orders, the lawyer for the wife shall prepare a draft joint letter of instruction to the expert and shall forward the draft letter together with any enclosures to the solicitor for the husband.  Within a further 7 14 days, the solicitor for the husband shall make any proposed amendments to the draft joint letter of instruction and return same to the solicitor for the wife.  Thereafter the joint letter of instruction shall be executed by or on behalf of both parties and forwarded to the expert.

4.     Each party shall pay half of the cost of the expert report.

1. Leave is granted to the parties to apply in relation to the progress of the proceedings or any other matter on giving seven days’ notice to the Court and to each other and in the event that a party seeks to exercise that leave in relation to a substantive order that leave is to be exercised by the filing of an Application in a Case and supported by an affidavit.

1. The question of costs of and incidental to the proceedings today are reserved.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYC 4184 of 2013

Mr Hao

Applicant

And

Ms Lan

Respondent

REASONS FOR JUDGMENT

1. On 30 March a decision was made by a Registrar to appoint a single expert in relation to a forum issue arising in property settlement proceedings commenced by the wife in this Court.  I understand that orders were substantially made in accordance with the application of the wife on that occasion.  There is an application to review the exercise of power by the Registrar.  There is a suggestion that the application was filed a day out of time.  I am not quite sure about that because of the way time is counted (Easter intervened).  In any event there is no issue on behalf of the wife about the application being filed out of time.  Proceedings for review of a delegate’s decision proceed by way of hearing a fresh hearing.  There has been some additional material filed. 

2. The circumstances are that the parties cohabited for some five years.  There were proceedings commenced in the People’s Republic of China by the husband in June of 2011.  Those proceedings were withdrawn.  There is an assertion by the husband as to the reason he did that.  He asserts that there is a provision of the relevant law which prevented, rather interestingly, matrimonial proceedings being commenced within a certain period of a confinement or in relation to issues to do with the parties having a child.  There is no child of this relationship.

3. In any event the husband withdrew those proceedings.  In September of that year he started proceedings in aid of a claim for property settlement, to have his name placed on the title of properties in Beijing which were then in the name of the wife.  Some orders were made.  There was an appeal by the wife in February 2012.  I understand that ultimately the appeal proceedings were withdrawn.  There were related proceedings by the wife in relation to properties being placed in the name of a company associated with her and those proceedings resulted in orders that the relevant properties be placed in the name of the company.

4. It is the husband’s evidence that notwithstanding the order of the Chinese court, the title of the properties remains in the wife’s name. Although he filed appeals in relation to those orders I understand that his appeals were lost or withdrawn. 

5. The parties were divorced by an order of the Federal Circuit Court in Australia on 20 October 2013.  The husband commenced further proceedings in China in April of 2014.  He asserts that the wife avoided service in relation to those proceedings. 

6. Ultimately these proceedings come about because, in September of last year, the wife commenced proceedings in the Federal Circuit Court seeking relief by way of property settlement in the form of a seven per cent adjustment of property to her, whatever that might mean.  I take it that she concedes that there is relevant property in China and the husband retains some property in Australia.  There is some evidence that there are four or five properties in Beijing still in the name of the wife.  The husband says he has an interest in two properties in Australia.  I have been told something about the value of the properties, but there is no agreed position about it I gather.

7. On 11 December last year the proceedings were transferred by Monahan J to this Court, presumably because of the international aspect of them which is one of the triggers under the protocols between the two courts for matters to be transferred.  The husband appears in these proceedings under protest, seeking to challenge the forum of the proceedings.  Directions were made and ultimately the matter came before the Registrar resulting in the orders that were made on 30 March which were made, as I say, largely in terms of the wife’s application, for the appointment of a single expert in the proceedings.  The orders contained a process whereby the single expert would be identified and then a list of questions, I think which come out of the wife’s application, as to opinions in respect of Chinese law, relevant to the forum dispute. 

8. The husband says that there should not be an order for a single expert and that the parties should be allowed to have adversarial experts in relation to the forum issue.  If he is unsuccessful in that application he would like the process of identifying the expert reversed so that he identified some experts and the wife chose who they would be.  In any event he seeks that in the first instance the wife pay the costs of the expert. 

9. Although this is a hearing afresh an order has been made by a superior court and the order stands until it is set aside or varied.

10. The rules of court deal with expert evidence in chapter 15.  And the purposes of the part in relation to expert evidence are:

    To ensure the parties obtain expert evidence only in relation to a significant issue in dispute; to restrict expert evidence to that which is necessary to resolve or determine a case; to ensure that if practicable and without compromising in the interests of justice expert evidence is given on an issue by a single expert witness; to avoid unnecessary costs arising from the appointment of more than one expert witness; and to enable the party to apply for permission to tender a report or adduce evidence from an expert witness appointed by that party if necessary in the interests of justice.

11. There is some dispute as to the provision under which this application is made whether it is rule 15.45, an order for a single expert witness.  That is the relevant provision because there was no prior order for an expert.  The option would be rule 15.49 which is headed “Appointing Another Expert Witness” and the preamble to the first subsection is:

    If a single expert witness has been appointed to prepare a report –

    and goes on:

    … to prevent a party relying on evidence from another expert on the same issue without permission. 

    So it is pretty clear as to the sequence of things.

12. Mr Campton on behalf of the husband says the tension in this case comes between the purpose of the Part to restrict unnecessary evidence and to avoid unnecessary costs - although he has something to say about that – compared to the interests of justice.  I think that is the pivot around which the argument runs.  The argument goes that because of complexities in the case it will be too hard and perhaps impracticable for the parties to efficiently manage the process of appointing and more importantly instructing in clear and unambiguous terms a single expert to provide the assistance that the Court will need on the issue.

13. Obviously the parties have come to a point of deciding that expert evidence is required.  That is properly a matter for them.  They are running this case.  The issue arises in forum proceedings as to the availability of a relevant forum, an optional forum.  If, for example, there is no option, if only one forum is available to achieve what needs to be achieved, there is no forum dispute.  The question becomes one of the range of available remedies, timeliness and so on. 

14. The forum dispute arises with the husband’s application for a stay of the proceedings the wife has commenced in this Court.  Presumably it will be relevant what the founding jurisdictional requirements are in relation to litigation in China:

    ·What is the basis of jurisdiction; 

    ·Do the parties have to be in China; 

    ·Does one or more party have to be a citizen of China and so on; 

    ·Will there be recognition of Australian orders or decrees;

    ·What are the legal principles applied by Chinese courts in relation to matrimonial property;

    ·Can or would a Chinese court would exercise jurisdiction and determine issues about the ownership of real property in Australia. 

15. Just stopping there.  It does not seem that there are any issues about the ownership of property in Australia.  I think that perhaps the wording of that needs to be amended:

    ·Circumstances under which a Chinese court might be unable or unwilling to make a binding order in relation to property in Australia. 

    Common law courts as a general proposition follow a thing called the Mozambique rule which places a restriction on courts making orders in relation to immovables in another jurisdiction, other than by way of orders in personam.  And that is sort of the issue that that question will go to.

    ·The recognition of Australian orders; and

    ·A catch all.

16. Mr Campton has built an edifice around the process of instructing an expert being an iterative process.  In other words that it might be a situation where a question is asked and the expert might need information or the answer that the expert comes back with might require further questions.  There are concerns about language, if the expert is a non-English speaking person or is not highly literate in English;  questions about the inefficiency of translation not just in respect of the letter of the law but translation of concepts that would be relevant in this area.

17. It is said that the process by which instructions are put to a single expert would be restricted or restrictive and unfair.  I think that related to those other topics.  He said, “How would the Court go about putting the facts that are not agreed to the expert?”  In that regard learned senior counsel answered his own question by the fact obviously that different versions could be put.  “It is alleged in these proceedings that … what do you say?  It is alleged in these proceedings that … what do you say?”  That would address that issue.  And it is said that all of this would be easier to do with an adversarial expert, with your own inquiry rather than having to negotiate with the other party about communication with a single expert. 

18. There could be issues about the process of valuing property in China, how long the proceedings would take in China.  That concern arises because there is such a factual dispute between the parties about what has occurred to date.  The thrust of it is that the topics will grow.  There are communication problems.  The process of instructing and obtaining a necessary response from the expert will be fluid and will evolve and involve interplay. 

19. It is argued that these are very important proceedings.  I said that forum proceedings are summary proceedings.  Mr Campton picked me up about that and said that they are not summary proceedings.  I am not now sure.  Certainly they have been regularly conducted by courts on a summary basis.  And by that I mean it is quite common, for example, that the key witnesses are rarely available and so there is no testing of their evidence about the propositions they want to put. 

20. And the questions that are necessary for the forum dispute can be identified well enough without those things being nailed down.  That is not to say that there would not be some cross-examination if there was controversy, for example, about jurisdictional issues or the matters that this hearing today goes to. 

21. It is conceded that the husband is not in a position to press the 15.4.9 application.  He has not identified his own witnesses or witness.  So he is not in a position to say that there is another school of thought about certain things or a special reason or so on.  That is all explained in terms of the fact that there has been a very short time frame in relation to these things.  I think that is true although, as Mr Tynan says, I think that could be a process for another day triggered by the release of a single expert’s report.

22. I think Mr Campton has answered his own case.  If the process of obtaining coherent evidence from a single expert is going to be difficult and convoluted then it would be a nightmare in managing the evidence of multiple experts.  He is talking about a divergent process I think.  And the Court’s interest is in a convergent process.  Civil courts have accepted for a long time that single experts address the problem that had developed in many jurisdictions whereby plaintiffs’ experts and respondents’ experts became advocates for the respective causes and you could readily predict what they would say about a particular controversy.  And that was in circumstances where there was no different body of thought about the particular issue.  Courts developed processes for managing that, such as taking evidence from experts concurrently, but that is cumbersome and expensive. 

23. The single expert rules combines a clear set of rules to which an expert has to adhere including acknowledging their obligation to the Court, a process whereby the parties are equally involved in identifying the individual expert; a process whereby the payment of the expert’s fee was divorced from the identity of one party, done under court order rather than somebody commissioning a report; and a process of communication being restricted to something that each of the parties had equal access to and not unique access to so that there was no suggestion of a secret communication.  Usually, perhaps not relevant here, there would be agreement about the source materials that would be provided to the expert for them to qualify themselves to express an opinion.

24. That mechanism has served this Court well for 10 years or more.  It seems to me that everything Mr Campton said about the inefficiencies of language, the iterative nature of the process, the fact that there might be follow-up issues all argue in favour of the order made by the Registrar.  As I said to the parties earlier there cannot be a dispute.  It is patronising and offensive to suggest that there is a dispute about the application of Chinese law or the procedure.  There will be one procedure for this litigation.  It might be that it might follow different pathways depending on how parties do something.  There will be one law in relation to these issues in China.  If that is not the case then that fact can come from the single expert. 

25. And all of the things that Mr Campton is concerned about can be addressed in the processes of the rules.  The parties can refine the questions.  They can agree about taking up further issues.  There is provision for propositions to be put.  The questions can have options, put scenarios.  All of those things can be done.  And to the extent that they might be done with two adversarial experts with slightly different wording etc. could be a nightmare. 

26. We would have a process whereby the husband’s expert had been asked to answer 100 questions with one wording.  The wife’s expert will be asked to answer 200 questions in a different sequence, and a slightly different wording.  It could be impossible or very difficult for a court to undertake the process of reconciling those opinions.  So in my view the Registrar made the correct decision.  Both parties seek to interfere a bit with the orders.  Without being rude, I think the dispute about slight changes in the times for doing things is silly in a dispute that has been brewing since 2011 and will, unless they come to their senses, continue for many years to come.

27. The Registrar’s orders contemplate the process of identifying the letter of instruction.  I think probably I will give the parties a little bit more time rather than less.  So order – I have got it as order 5 – I think it is an order that starts:

    To facilitate the previous order within 14 days –

    I might make that 21 days.  And “within a further 14 days” later in the order. 

1. There is an application behalf of the husband to reverse the process of appointment.  He has been on notice as to the experts that have been pressed on behalf of the wife since he was served with an affidavit of 11 March.  So he has had a month or thereabouts to have a look at that issue.  I might give him another 14 days but I am not going to reverse the process.  He had an opportunity to say there was an inappropriate approach taken or the wrong set of qualifications or whatever.  He has not done that.  There is no perfect way to solve this issue.  I suspect, although nobody has said it, that his main complaint with the experts proposed by the wife was that they were proposed by the wife.

2. The Registrar has made an order that the parties share in the costs of the expert report.  I do not have a reason for making a different order.  The whole point of forum proceedings is mischief.  Certainly Australian law is from Voth v Manildra Flower Mills Pty Ltd (1990) HCA 55 and Spilada Maritime Corporation v Consulex Ltd (1987) 1 AC 460. There is a concept of the mischief caused by commencing in another jurisdiction something that has already been commenced or should have been commenced or can be commenced in a different jurisdiction that it is prime facie fundamentally oppressive to require somebody to litigate in a place where they are not comfortable. That is what this is all about.

3. The answer to all of that will come in the answer to the forum dispute and I cannot prejudge it.  The parties have raised their concerns about the conduct and motives of the other party but that is not a reason for jumping one way or the other at the moment.  Of course the Court can make an order about the costs of the proceedings after the event and that is when these things would normally be done. 

I certify that the preceding thirty (30) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 10 April 2015.

Associate: 

Date:  19 May 2015