Herman and Bosley
[2016] FamCA 431
•25 May 2016
FAMILY COURT OF AUSTRALIA
| HERMAN & BOSLEY | [2016] FamCA 431 |
| FAMILY LAW – JURISDICTION – Consideration of principles – Whether local forum is “clearly inappropriate” – Recognition or enforcement of the other’s orders and decrees – Resolution of the parties’ controversy – Order and stage of local and foreign proceedings – Connection to each jurisdiction – Cost, delay and practical impediments to the conduct of proceedings in Australia – Not satisfied that the Family Court of Australia is a clearly inappropriate forum. | |
| Henry v Henry (1996) 185 CLR 571; [1996] HCA 51. | |
| APPLICANT: | Mr Herman |
| RESPONDENT: | Ms Bosley |
| FILE NUMBER: | PAC | 5674 | of | 2015 |
| DATE DELIVERED: | 25 May 2016 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Hannam J |
| HEARING DATE: | 15 February 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wheelhouse SC |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan |
| COUNSEL FOR THE RESPONDENT: | Mr Tockar |
| SOLICITOR FOR THE RESPONDENT: | Abrams Turner Wheelan Family Lawyers |
Orders
That the husband’s Application in a Case filed 19 January 2016 is hereby dismissed.
Any application for costs is to be filed together with an affidavit in support within 28 days and further directions will be made in the event such application is pursued.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Herman & Bosley 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 PARRAMATTA |
FILE NUMBER: PAC 5674 of 2015
| Mr Herman |
Applicant
And
| Ms Bosley |
Respondent
REASONS FOR JUDGMENT
Introduction
After a short relationship of approximately three years the parties separated. At that time they were living in the United States, where they both continue to live.
The wife commenced proceedings in this Court seeking property orders on 20 November 2015.
On 15 December 2015 the husband commenced proceedings for divorce and associated property orders in the Supreme Court of New York.
On 19 January 2016 the husband sought to permanently stay the proceedings initiated by the wife in this Court and to restrain her from further pursuing proceedings in Australia in relation to divorce or financial proceedings.
Both the Supreme Court of New York and this Court have jurisdiction to hear and determine the respective applications for property orders. As the property proceedings were commenced in Australia first the question to be determined is whether those proceedings should be permanently stayed and the wife be restrained from proceeding with them as sought by the husband in his Application in the Case. This in turn depends upon a determination of whether the wife commenced the proceedings in a “clearly inappropriate forum”.
Background
The husband, who is 53, was born in the United Kingdom and immigrated to Australia in 1973. The wife, who is 45, was born in Australia. Both parties are Australian citizens.
The parties met in early 2012 at a conference in the United States and commenced a relationship shortly thereafter. The parties began cohabitation in July 2012 in Tasmania.
The husband owns a property in Tasmania.
In June 2013, the parties relocated to the United States. The wife commenced studies at a university shortly thereafter. The husband is a holder of an American “E3” visa sponsored by his employer.
On 17 June 2013, the husband purchased a property in New York which became the matrimonial home.
The parties were married in 2014 in the United States. The wife was then able to obtain an E3 Visa to remain and work in the United States.
The parties have lived in the United States since June 2013. The husband says that he travels to Australia one to two times per year for business purposes. The husband continues to work in the United States and says he intends applying for a “green card” when his current visa expires in July 2017. The husband is a tax payer in the United States and is not ordinarily resident in Australia for tax purposes.
There is some dispute about the date of separation as the husband says it occurred in May 2015 and that the parties continued to live separately in the same home. The wife says the parties separated in November 2015.
On 5 October 2015, police were called to the parties’ home in New York by the husband who alleged that the wife threatened him with a knife. The wife denied the allegation to police at the time and in her affidavit. Neither party was arrested or charged as a result of the incident and the husband did not seek a protection order at the time.
On the 17 November 2015, the husband instituted proceedings in New York for a protection order, and orders were made on an ex parte basis for the husband’s protection. Under that order the wife was required to vacate the former matrimonial home. The order made was made on a temporary basis and was to remain in force until May 17, 2016. The wife is defending the husband’s application for a final protection order. This status of that order and the related proceedings at the date of delivery of this Judgment is unknown.
The husband says that at the time he commenced the proceedings for the protection order there were settlement discussions on foot between he and the wife through their respective lawyers, which included divorce and property adjustment. According to the wife the husband told her for the first time in around the beginning of October 2015 that he wanted a divorce.
The husband says that the wife has been charged with breaching the United States protection order and with using a credit card in his name and without his consent and these charges are pending in United States courts.
The wife denies that there are any proceedings in existence in the relation to credit card fraud. She also says that the alleged “violation” of the temporary protection order relates to an occasion when she was accompanied by the Sheriff and returned to the former family home to collect essential items for work. She says that the she was issued with an “appearance ticket” for disobeying the court order but the prosecution is on hold awaiting the outcome of the protection order proceedings.
On 20 November 2015, the wife commenced proceedings in this Court seeking property orders. The husband received the wife’s documents on the same date, though he disputes that they were properly served in accordance with the Rules.
On 15 December 2015, the husband filed an “Action for Divorce” seeking a “judgment of absolute divorce” and ancillary marital property orders in the Supreme Court of New York. The application was served on the wife on 9 January 2016. At the date of the proceedings the time within which the wife was to file a Response had not yet expired. The husband wishes to proceed with the proceedings in New York for divorce and final property orders.
The law
The leading Full Court case concerning the question of whether proceedings have been commenced in a “clearly inappropriate forum” is Navarro & Jurado[1]. In that case the Full Court adopted the applicable principles which were established in Voth v Manildra Flour Mills Pty Ltd[2] as explained in the context of family law litigation in Henry v Henry[3].
[1] [2010] FamCAFC 210.
[2] (1990) 171 CLR 538; [1990] HCA 55.
[3] (1996) 185 CLR 571; [1996] HCA 51.
In Henry (supra), the majority of the High Court stated at 587:
In Voth, 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". It was also held in Voth that, in determining whether the local court is a clearly inappropriate forum, "the discussion by Lord Goff in Spiliada of relevant 'connecting factors' and 'a legitimate personal or juridical advantage' provides valuable assistance". 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'".
The majority went on to state at 588
…the substance of the test in Voth is simply whether the chosen forum is a clearly inappropriate forum. And, as already indicated, that is to be determined by considering whether continuation of the proceedings would be "oppressive" or "vexatious", in the extended sense in which those words were used by Deane J in Oceanic Sun.
In Navarro & Jurado (supra), the Full Court was considering the application of these principles in divorce proceedings. In a separate judgment, O’Ryan J when considering the “more appropriate forum” test which was rejected in Voth (supra) in favour of the “clearly inappropriate forum test” observed at [127]:
The two tests are not identical and the difference lies in the emphasis placed on the appropriateness of the local forum rather than the appropriateness of any available foreign forum. The clearly inappropriate test avoids a mere comparison between the competing forums and focuses on the extent to which the continuation of the proceedings in the Australian court should be regarded as inappropriate. The question of whether an Australian court is a clearly inappropriate forum requires attention to be directed to the inappropriateness of that court and not to the appropriateness or comparative appropriateness of the foreign forum. As the majority (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) observed in Regie Nationale des Usines Renault SA and Another v Zhang [2002] HCA 10; (2002) 210 CLR 491 at 503: “Thus, it should at once be noted that a court is not an inappropriate forum merely because another is more appropriate”.
Relevant factors in considering a stay on inappropriate forum grounds
First, as stated by the majority of the Full Court in Voth (supra) at 558:
The availability of relief in a foreign forum will always be a relevant factor in deciding whether or not the local forum is a clearly inappropriate one. But such a decision neither turns upon an assessment of the comparative procedural or other claims of the foreign forum nor requires the formation of subjective views about either the merits of that forum's legal system or the standards and impartiality of those who administer it. Indeed, circumstances could well exist in which the local court was a clearly inappropriate one notwithstanding that there was no other tribunal which was competent to entertain the particular proceedings…
In this matter there is clearly an available foreign forum which could entertain the particular proceedings for the relief sought between the parties.
The plurality in Henry (supra) at 592-593 identified some of the considerations as follows:
a)If both the foreign court and the local court have jurisdiction, whether each will recognise the other’s orders and decrees.
b)Whether any orders may need to be enforced in other countries and if so the relative ease with which that can be done.
c)Which forum can provide more effectively for complete resolution of the matters involved in the parties’ controversy.
d)Where foreign proceedings have been instituted, the order in which that occurred, the stage which each have reached and the costs that have been incurred.
e)The connection of the parties and their marriage with each of the jurisdictions and the issues upon which relief might depend in those jurisdictions.
f)Whether, having regard to the parties’ resources, and understanding of language they are able to participate in the respective proceedings on an equal footing.
The plurality also said at 593:
The list is not exhaustive. Rather, the question whether Australia is a clearly inappropriate forum is one that depends on the general circumstances of the case, taking into account the true nature and full extent of the issues involved.
Added to these considerations is the matter referred to in Voth (supra) which in turn adopted the discussion by Lord Goff in SpiliadaMaritime Corporation v Cansulex Ltd[4] of a “legitimate personal or juridical advantage” available to the parties in the respective jurisdictions.
[4] [1987] 1 AC 460.
These considerations are applied to the current application as follows:-
Will each court recognise/enforce the other’s orders and decrees?
The application for property settlement made by the wife envisages the assets of herself and the husband being divided equally. Having regard to the fact that all of the parties’ property other than one piece of real property are located in Australia, there would be sufficient assets in Australia against which the orders could be enforced, without the issue of enforcement in the foreign jurisdiction arising.
It is not clear whether orders obtained in the United States with respect to property could be recognised or enforced in Australia. No expert evidence was adduced in the proceedings, though it had been contemplated.
Resolution of the matters involved in the parties’ controversy
It is submitted on behalf of the applicant husband that a more complete resolution of the matters involved in the parties’ controversy will occur in the New York rather than Australia. First, the husband relies upon the pending proceedings in the United States relating to the protection order and the alleged improper use by the wife of the husband’s credit card and cheque account and breach of the protection order. It is submitted that all the proceedings are incidental to “the matrimonial relationship and will be prosecuted in the USA”. It is also noted that the husband has commenced divorce proceedings which the wife has not sought to stay.
In my view the parties’ controversy relates to an equitable distribution of the parties’ property. Although proceedings were commenced in the New York “Family Court” which are ongoing, these proceedings are in the nature of a protection orders, similar to orders restraining the conduct of a party for the personal protection of the other party heard in state and territory courts in Australia.
The wife disputes that there are any criminal proceedings on foot in relation to fraud and says the prosecution for alleged breach of the protection order is “on hold” until the protection order proceedings are determined. In any event any criminal proceedings relating to an alleged breach of a protection order and fraud do not form part of the controversy between the parties. Each of the divorce and property, personal protection and criminal proceedings have been instituted in different courts and the protection order proceedings are being dealt with in the relevant court quite separate from the property and divorce proceedings. Indeed, on the husband’s evidence the proceedings for protection order may well have been resolved by the time this judgment is delivered. The existence of the other proceedings which in my view do not form part of the parties’ controversy is not a weighty factor in determining whether Australia is a clearly inappropriate forum.
Matters concerning the foreign proceedings
Although the issue of the order in which proceedings were instituted is not of itself determinative, it is a factor to take into account, together with the stage which the foreign proceedings have reached and the costs which have been incurred.
The wife’s property proceedings in Australia were commenced first in time, by way of an Initiating Application filed on 20 November 2015. Although the husband takes issue with the manner in which he was served with the wife’s initiating documents and submits that this was not in accordance with the Rules, on his own evidence he looked at those documents shortly after he received them.
The husband’s divorce and associated property proceedings were instituted over three weeks later, on 15 December 2015, by which stage he was well aware of the wife’s application in Australia.
While it is clear that the order in which the proceedings were commenced is not determinative in the matter, it has been noted[5] that it may be prima facie vexatious and oppressive to commence a second or subsequent action if an action is already pending with respect to the matter in issue. The husband has not provided an explanation for commencing proceedings when similar proceedings were pending in another court, except to indicate that he was contemplating proceedings at an earlier stage and that the wife was aware of this. It has been submitted on his behalf that the husband had previously indicated to the Family Court in New York that he intended to seek some advice concerning commencing divorce proceedings on the same afternoon the protection order matter was first in court. He did not however, take further steps at that time to initiate property settlement proceedings.
[5] Henry v Henry (1996) 185 CLR 571; [1996] HCA 51 at 591
Each of the proceedings are at an early stage. In the Australian proceedings Financial Statements have been filed by each of the parties. If the Australian proceedings are to continue, the wife will be required to file an Amended Initiating Application as currently she seeks an order that “the husband pay to the wife an amount equal to fifty percent of the net pool of the assets of the wife and the husband”. Significant matters of valuation are outstanding and may need to be resolved.
At the date on which the forum application was heard, the wife had not yet filed her Response to the husband’s application commenced in New York, though it is apparent, that when a party files an “action for a divorce” in the Supreme Court of New York, automatic orders are made unless varied by the court, including injunctions on dealing with property held individually or jointly with some exceptions, incurring liabilities and the like. I have not been provided with any expert evidence concerning the New York proceedings but it appears they are also in their very early stages.
In my view the stage at which the proceedings have reached in the respective jurisdictions is so similar that it is not a weighty factor in determining whether the wife commenced the proceedings in a clearly inappropriate forum. The husband’s failure to provide an explanation for initiating proceedings when he was aware that similar proceedings were pending in another court is a matter to which I attach greater weight.
The connection of the parties and their marriage which each of the jurisdictions
The wife is 45 and has lived in Australia for her entire life until mid-2013 when she moved to the US. The husband who is 53 moved to Australia from the United Kingdom as a child where he exclusively lived until mid-2013.
There is conflicting evidence about each party’s future intention with respect to continuing to live in the United States. The husband moved to the US as the company he had formed was acquired by another Australian company Company B which incorporated Company B North American as a wholly owned subsidiary. The husband is responsible for the operation and development of Company B North America. This company was the husband’s original sponsor for the class of visa he obtained (E3) which is renewable every two years. The current visa is due to expire in July 2017. The husband says he has an intention to apply for “a green card” and renew his E3 visa in July 2017.
While he states that he has lived in the US since mid-2013 and intends renewing his current visa, the husband does not make a clear statement that he intends to continue residing in the United States. The husband has also made some statements which are consistent with an intention to return to Australia. For example in his sworn testimony to the Family Court in New York on 17 November 2015 in connexion with the protection order, when asked about whether he had commenced divorce proceedings the husband said
We are not yet. I’ve been trying to have a discussion logically with her. My company has gone overseas, [Company B] North America, which is an American overseas-based company. We agreed – Australia has had some significant changes. And around August of this year [2015] I indicated that I wanted to go back to Sydney to help run the head office. (emphasis added)
The wife also contends that it was the husband’s intention to work in the United States for three years only from mid-2013 and that in October 2015, when he first informed her that he wanted a divorce, he also said he wanted to move back to Australia.
The wife says in her affidavit that she moved to the United States to continue her professional training examinations to qualify as a specialist. The wife also contends that the husband is the sole employee of Company B North America and that his position was created so that he could come to the United States when she travelled there to study. She annexes a text message sent on 17 November 2015 in which the husband refers to his “desire to help run the company with [Mr C]” which the wife says is a reference to the person who runs the company in Sydney. The wife says that she had numerous conversations with the husband over time in which he said that they needed to leave the United States after she completed her exams or there would be negative tax implications in relation to a shares issue. The wife annexes to her affidavit an email in which the husband informs the wife’s sister and brother in law who reside in the United Kingdom that he had located a property he was considering buying in the United Kingdom. The message includes the following words: “I can’t see me getting the next share tranches until Q2 next year by which time it may be sold…plus to raise the money in a tax free way, I’d have to move from the USA”.
The wife says that she intends to return to Australia after completing her exams in November 2016. She also says that the husband’s contentions about her alleged connections to the United States, such as the use of the words “permanent residency” in an email relating to drivers licence requirements are consistent with her current visa status and confirms that she has no intention in settling permanently in the United States.
According to the parties’ respective Financial Statements the property held by them is comprised of real estate in Tasmania, real estate in New York, small bank balances and so far as the husband is concerned, a significant shareholding in Company B Ltd which he calculates as having a value of $313,341.00. The parties also each have an interest in superannuation funds in Australia. The husband also owns some vehicles in the United States but it appears the wife does not contend that these should form part of the matrimonial asset pool for distribution.
Having regard to the parties’ reasons for travel to the United States and likely future return to Australia, their personal histories and the location of property I am of the view that the parties do not have “little connection to Australia” as contended by the husband.
An issue referred to by both of the parties, both in relation to the connection that each of them have with each of the jurisdictions and concerning the legitimate personal or juridical advantage available in each jurisdiction, relates to the husband’s shareholding. Shares owned by the husband are in Company B, an Australian company which is listed on the Australian and US stock exchange. He also has an entitlement to future share issues. Although the husband contends that if the parties are not able to reach agreement as to the value of the entitlement, a valuer would most appropriately “be in the USA” he gives no evidence in his affidavit about the future entitlement to shares or the issues of valuation.
The wife sets out in her affidavit circumstances relating to the future entitlement to shares which includes the following
When the [husband] sold [his company] he received a significant lump sum cash payment, together with a large award of [Company B] shares and convertible notes entitling him to the award of significant amounts of further shares conditional on completing of (sic) specified milestones.
She annexes extracts from Company B’s 2013 financial reports which include an explanatory memorandum concerning the company purchase and issue of future shares (convertible notes). It is submitted on behalf of the husband that as this issue of shares is dependent upon performance in the United States market, if valuation of this entitlement becomes the subject of expert evidence, it would be require an expert who understood the performance criteria processes on the United States market. On the limited information available, I am of the view that in the event that this property is required to be valued an expert from the United States would appear to be the more appropriate witness. This would suggest a juridical advantage to the husband in conducting the litigation in New York.
Delay and other matters relating to oppression
It is submitted on behalf of the husband that there would be significant and unreasonable cost, delay and practical impediments to the conduct of proceedings in Australia while the parties are living in the United States.
He contends that significant inconvenience would be caused to both parties as each will be required to travel to Australia for the purposes of the proceedings and to conduct the proceedings through legal representative located in Australia. It is also central to the husband’s application that the proceedings be resolved as quickly as possible and having regard to the substantial delays in the Family Court and where the issue of the value of his share entitlement would be best addressed by a United States expert, it would be harsh and burdensome for the proceedings to be conducted in Australia.
It appears that the husband’s case that there is a need for the proceedings to be determined as soon as possible is related to the relief he is seeking by way of a protection order. While it is unclear why the seeking of this relief suggests that the property proceedings ought to be resolved as soon as possible, I note that the wife is defending the application for a protection order. She completely denies the factual basis for the protection order, that she was violent towards the husband and “attacked” him with a knife as he contends. While I clearly cannot make any determination of the merits of his case in those proceedings, I note that the police report of the alleged incident on 5 October 2015 attached to the wife’s affidavit indicates that the wife “seemed stunned by the allegation”, that the police officers felt that “[the wife’s] story appeared to be more truthful”. It is also not in dispute that the husband did not seek a protection order at the time of the incident but rather sought such an order approximately six weeks later. The wife also annexes email messages between the parties in the intervening time which are conciliatory and civil in tone. In my view there is little connection between the proceedings for protection order and the respective applications for property settlement. Further, I am not satisfied that there is a particular requirement for these proceedings to be expedited because of the existence of the other proceedings, which very well may be determined already.
In circumstances where the husband travels to Australia approximately twice a year for business purposes and where the wife intends relocating to Australia in approximately six months from the date of the delivery of these Reasons, I am not satisfied that it would be unreasonably costly for the parties to engage in litigation in this jurisdiction especially given the capacity for video conferencing and utilisation of other technology. Given the short duration of the marriage and fairly clear evidence concerning contributions, it is in my view a real possibility that the matter will resolve before proceeding to a final hearing.
Conclusion
In considering the matters put by each of the parties which are relevant in a determination of this matter I must at all times remind myself of Voth (supra), which held that a court is not to engage in “an assessment of the comparative procedural or other claims of the foreign forum” but is to focus at all times on whether Australia is a clearly inappropriate forum.
In my view, some practical matters and juridical advantage such as the necessity for a United States expert to value the share entitlement (if one is required), suggest that there is some advantage in the controversy being determined in New York. However, the parties are long standing citizens of Australia and there is evidence that one at least intends to reside here in the foreseeable future. There is also real property located in the local jurisdiction where proceedings were first commenced. In the circumstances of modern litigation where technology is available to enhance participation at court events and where each of the parties is otherwise on an equal footing, I am not satisfied that the Family Court of Australia is a clearly inappropriate forum. The arguments put forth to the effect that it would be unduly oppressive and vexatious for the proceedings to continue in the local forum have not been established. In these circumstances the husband’s application is dismissed.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 25 May 2016.
Legal Associate:
Date: 25 May 2016
Key Legal Topics
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Family Law
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Civil Procedure
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