Hong & Cao
[2018] FamCA 40
•2 February 2018
FAMILY COURT OF AUSTRALIA
| HONG & CAO | [2018] FamCA 40 |
| FAMILY LAW – PRACTICE AND PROCEDURE – STAY – Where both parties were born in Taiwan – Where the husband, an Australian citizen, has lived primarily in Taiwan since 1997/1998 and the wife, also an Australian citizen, has lived in both Australia and Taiwan – Where the wife initiated property settlement proceedings in Australia in June 2015 – Where the husband participated in the same without objection until December 2016 – Where the husband obtained a divorce order in Australia in July 2016 and applied to register the same in Taiwan in October 2016 – Where the wife objected to the registration of the divorce order in Taiwan in November 2016 – Where the husband subsequently applied for the dismissal or stay of the Australian proceedings – Where there are no proceedings the equivalent of property settlement proceedings on foot in Taiwan – Where the relevant Taiwanese Court has jurisdiction to determine any application, the equivalent of property settlement proceedings, brought by either party – Where the property of the parties is valued in the vicinity of $200,000,000.00, of which property valued at about $27,000,000.00 is situated in Australia and the remainder in Taiwan – where the Court is not persuaded that Australia is a clearly inappropriate forum. FAMILY LAW – PRACTICE AND PROCEDURE – ANTI-SUIT INJUNCTION – Where, as an alternative, the husband seeks to restrain the wife from commencing and/or continuing proceedings in Taiwan – Whether an anti-suit injunction is necessary to protect the integrity of this Court’s processes – Application for anti-suit injunction granted – order made in a form more restricted than that sought by the husband. |
| Family Law Act 1975 (Cth) Foreign Judgments Act 1991 (Cth) Foreign Judgments Regulation 1992 (Cth) |
| Cao v Tan [2012] FamCA 225 CSR Ltd v Cigna Insurance Australia Ltd (1997)189 CLR 345 Henry v Henry (1996) 185 CLR 571 In the Marriage of Gilmore [1993] FLC 92-353 Kemeny v Kemeny [1998] FLC 92-806 Navarro v Jurado (2010) 44 Fam LR 310 Oceanic Sun Line Special Shipping Co Inc. v Fay (1988) 165 CLR 197 Puttick v Tenon Ltd (2008) 238 CLR 265 Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 Spiliada Maritime Corporation v Consulex Ltd [1987] AC 460 Teo v Guan [2015] FLC 93-653 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 Kent & Kent [2017] FamCAFC 157 |
| APPLICANT: | Mr Hong |
| RESPONDENT: | Ms Cao |
| FILE NUMBER: | BRC | 5044 | of | 2015 |
| DATE DELIVERED: | 2 February 2018 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Hogan J |
| HEARING DATE: | 9 May 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Wilson QC with Mr Alexander |
| SOLICITOR FOR THE APPLICANT: | Hillhouse Burrough McKeown |
| COUNSEL FOR THE RESPONDENT: | Mr North SC with Mr Hackett |
| SOLICITOR FOR THE RESPONDENT: | Accuro Legal (Sydney) |
ORDERS
IT IS ORDERED THAT
The application by Mr Hong for a stay of the proceedings commenced by Ms Cao on 4 June 2015 (BRC5044/2015) is dismissed.
Ms Cao is restrained and an injunction hereby issues restraining her from commencing any legal proceedings in Taiwan against Mr Hong in which she seeks:
(a)a change to the statutory property regime application to the matrimonial property and the property of each party pursuant to Article 1010 of the Civil Code of Taiwan (as amended); and/or
(b)to claim for separation of property pursuant to Article 1030-1 of the Civil Code of Taiwan (as amended); and/or
(c)an injunction or related proceedings/suits in respect of the apartment at M Street, Suburb N, City O, Taiwan or any other Taiwanese asset held by either party; and/or
(d)orders for the provision of financial support, whether by way of the provision of spousal maintenance or alimony.
AND IT IS FURTHER ORDERED THAT
The question of costs arising out of or incidental to Mr Hong’s Application in a Case filed 23 December 2016 is reserved for determination.
In the event either party seeks an order that the other pay the costs of and incidental to Mr Hong’s Application in a Case filed 23 December 2016:
(a)each party has leave to file one affidavit by that party containing any evidence relevant to the issue of costs and one other affidavit in support of the same provided that such affidavit is filed within fourteen (14) days of the date of this Order; and
(b)any such party shall file and serve any written submissions in support of such application for costs within twenty-eight (28) days of today; and
(c)the party against whom an order for costs is sought shall file and serve within a further fourteen (14) days thereafter any written submissions in answer to the submissions filed and served by the party seeking costs; and
(d)the party seeking an order for costs shall file and serve any further written submissions within seven (7) days of its service, strictly in reply to the submissions served by the party against whom an order for costs is sought,
and any such application for costs shall be considered in Chambers.
The Application in a Case filed by Ms Cao on 23 December 2016 by which she seeks orders compelling Mr Hong to provide financial statements of those entities named within it to P Accountants Taiwan so as to facilitate the valuation of various entities is adjourned to the judicial duty list on a date to be advised.
The Amended Application in a Case filed by Ms Cao on 2 May 2017 whereby she seeks orders to compel Mr Hong to reinstate her as a “statutory supervisor” of C Inc. is adjourned to the judicial duty list on a date to be advised.
The Application in a Case, filed 28 April 2017, by which leave was sought for Mr Hong to adduce evidence from Ms Q and Mr W at the hearing on 9 May 2017 is dismissed.
NOTATION:
(A)It is noted that the Application in a Case, filed 28 April 2017, by which Mr Hong sought leave to adduce evidence from Ms Q and Mr W was dismissed on the basis that it was not pressed at the hearing on 9 May 2017.
(B)It is noted that, whilst the parties told the Court on 9 May 2017 that they were basically agreed about the provision by Mr Hong of documents to P Accountants so as to facilitate the valuation of various corporate entities, the Court has made Order (5) in case any discrete dispute about this matter requires judicial determination, and, in the event the parties are in complete agreement, the application can be delisted upon the Court receiving joint correspondence from the parties advising that the issue of the production of financial documents by Mr Hong to P Accountants has been resolved by agreement.
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 Hong & Cao 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 5044 of 2015
| Mr Hong |
Applicant
And
| Ms Cao |
Respondent
REASONS FOR JUDGMENT
By Application in a Case filed 23 December 2016, Mr Hong seeks the following relief:
a)dismissal of the property settlement proceedings commenced by Ms Cao in the Federal Circuit Court on 4 June 2015 on the basis that Australia is a clearly inappropriate forum; or, alternatively
b)a stay of these property settlement proceedings on the basis that Australia is a clearly inappropriate forum; or, alternatively
c)the grant of an anti-suit injunction restraining Ms Cao from continuing with or commencing legal proceedings in Taiwan against him for dissolution of their marriage and/or any matters arising from their marriage.
Ms Cao opposes the grant of such relief.
The determination of whether Australia is a clearly inappropriate forum or, alternatively, whether it is appropriate to grant the anti-suit injunction sought occurs within the following factual matrix.
Summary and overview of relevant factual matters and circumstances
Both parties were born in Taiwan.
Ms Cao migrated to Australia in 1986 with her first husband and their two children. She became an Australian citizen in 1988. When in Australia, she resides at premises located in Brisbane.
Mr Hong came to Australia in 1986, became an Australian citizen in 1989 and returned to live in Taiwan in about 1997/1998.[1] He has lived in that country permanently since then.
[1] Ms Cao asserts the date as 1997, whereas Mr Hong asserts this occurred in about 1998.
The parties commenced a relationship in December 1986. It seems that Ms Cao contends they commenced cohabitation at that time, whereas Mr Hong asserts that they did not live together until 1992. Resolution of this factual dispute is unnecessary for the determination of the current application.
The parties married in Australia in 1996. They have three children, all of whom are now adults:
a)R, born in 1987; and
b)S, born in 1992; and
c)T, born in 1994.
Two of these children are full-time students and live with Ms Cao.
From the time Mr Hong returned to live in Taiwan (being either 1997 or 1998), Ms Cao lived in each of Australia and Taiwan for parts of each year. As I appreciate the material, Mr Hong did not reside in Australia at any time after he returned to live in Taiwan.
The parties separated on either 28 October 2014 (according to Mr Hong) or on 22 April 2015 (according to Ms Cao). Resolution of this dispute is unnecessary for the purpose of determining Mr Hong’s current application.
The parties have significant property in both Australia and Taiwan. Much of this is held via corporations controlled by either of them. Save for chattels and household items and the like, the property of the parties (identified by reference to the person in whose name it is owned or the entity by which it is owned) and its location is as summarised in the table which is Annexure “A” to these Reasons.
It seems accepted that the parties’ total wealth (whether held jointly, in individual names or by entities controlled by one or both of them, or in which one or other of them have an interest) is in the vicinity of $200,000,000.00. Of this, property valued at about $27,000,000.00 is located in Australia.
On 4 June 2015, Ms Cao, who was then ordinarily resident in Australia, commenced property settlement proceedings in the Federal Circuit Court. Reference to the Initiating Application filed that day establishes that (speaking broadly), in addition to each party being solely entitled to all property and/or financial resources in that party’s possession as at the date orders are made, she seeks orders that:
a)Mr Hong transfer to her[2] his interest as a shareholder in any of the companies in the B Group[3] and resign from any office he holds in any company in that Group; and
b)Mr Hong transfer to her[4] such interest in the Taiwanese Property[5] as the Court determines necessary so as to achieve a just and equitable apportionment of the parties’ property.
[2] Or her nominee.
[3] As defined in Annexure “A” to the Initiating Application filed 4 June 2015.
[4] Or her nominee.
[5] As defined in Annexure “A” to the Initiating Application filed 4 June 2015.
Mr Hong filed a Response, Financial Statement and affidavit on 10 July 2015. Reference to the Response establishes that, speaking broadly, he seeks orders that:
a)he retain for his sole use and benefit (subject to any liability) all shares in his name alone in Hong Enterprises Pty Ltd (an entity which is part of the B Group), all shares held in his name alone in the Taiwanese interests, all bank accounts held in his name alone, all furniture and contents in his control and possession and any pension plan held in his name alone in Taiwan; and
b)Ms Cao transfer to him her right, title and interest in two specified companies which are part of the B Group (namely, B International Holdings Pty Ltd and B Australia Holdings Pty Ltd) and indemnify him in respect of any Division 7A loan held by her in respect of the Group (and in respect of any consequences arising from such loan, including but not limited to tax liabilities) and resign as director of specified companies within that Group; and
c)Ms Cao transfer to him all of her right, title and interest in a specified Taiwanese company (C Inc.); and
d)provided Ms Cao transfers to him the interests referred to above, he pay her a sum equivalent to the value of her shares in B International Holdings Pty Ltd (four ordinary shares) and B Australia Holdings Pty Ltd (16 ordinary shares and 16 preference shares), as these are valued by the Court expert; and
e)he transfer or otherwise relinquish all of his right, title and interest in, and Ms Cao retain for her sole use and benefit absolutely and take, subject to any liability:
i)all assets held in her sole name in Taiwan (save for the shares in C Inc. Incorporated); and
ii)the real property situated at U Street, Suburb V in the State of Queensland; and
iii)all shares held in her sole name in B Finance Pty Ltd and C Inc. Australia Pty Ltd; and
iv)particularised motor vehicles, furniture and contents in her control and possession, the funds held in bank accounts in her name alone and all superannuation entitlements held in her name alone.
On 7 August 2015, the proceedings were transferred to this Court. After a contested hearing, Forrest J made various injunctive orders on 22 October 2015. His Honour also ordered that Ms Cao be entitled to draw from the accounts of any entity in the B Group in Australia or Taiwan, either by way of director’s fees or salary or director’s loan or dividend payment as she may be advised, a net amount that does not exceed $15,000.00 per calendar month for the payment of her personal and household expenses, with any amount in excess of such sum only to be drawn with the prior written consent of Mr Hong or an order of this Court.
Procedural directions, intended to advance of the hearing of the matter, were made by a Registrar on 13 October 2015.
On 4 November 2015, Mr Hong filed an application for a divorce order in Australia.
Further procedural directions were made by a Registrar on 8 December 2015.
On 5 February 2016, Ms Cao objected to the November 2015 application for divorce on the basis of her assertion that the parties had separated in April 2015.
On 7 March 2016, Mr Hong discontinued the November 2015 application for a divorce order.
On 4 May 2016, Mr Hong filed a second application for a divorce order. He subsequently filed an Application in a Case seeking an order that service on Ms Cao be deemed to have occurred.
Further procedural directions were made by a Registrar on 12 July 2016.
On 18 July 2016, an order was made dispensing with the necessity for service on Ms Cao of the application for a divorce order (which had been filed on 4 May 2016). A notation to the order recorded the documents relied on regarding the multiple attempts that had been made to serve documents on Ms Cao. A divorce order was also made that day.
On 22 July 2016, Mr Hong filed an Application in a Case by which he sought to be relieved of aspects of the restraints imposed by the orders made by Forrest J on 22 October 2015. After a contested hearing, Carew J made orders on 27 July 2016 which disposed of that interim application.
Ms Cao did not institute an appeal[6] in relation to the divorce order, nor did she apply to have the divorce order rescinded.[7]
[6] As that term is defined in s 55 of the Family Law Act 1975 (Cth).
[7] Section 58 of the Family Law Act 1975 (Cth).
The divorce order made on 18 July 2016 took effect on 19 August 2016.
On 14 October 2016, Mr Hong took steps to register the Australian divorce order with the Household Registration Office in Taiwan.
It seems that Ms Cao was told of his actions by the Household Registration Office on 20 October 2016. As I understand it, she received a notice from the Household Registration Office that day by which she was notified that her household registration had been removed from a particularised address.
It appears the Household Registration Office was satisfied with the material provided to it by Mr Hong and, despite Ms Cao’s objection, maintained the registration in Taiwan of the Australian divorce order.
On 4 November 2016, Ms Cao filed a Civil Litigation Complaint in the Taiwan City O District Court. By it, she objected to the registration in Taiwan of the Australian divorce order. The bases for her objection is Taiwan’s Civil Law Article 402 (which relates to the recognition of foreign judgments) and also because she was not served with or, she alleges, made aware of the Australian divorce proceedings and consequently did not participate in the same.
In the Civil Litigation Complaint, Ms Cao asserts that the Australian divorce order should not be recognised in Taiwan and seeks that the Court should declare that the parties are still legally married in Taiwan. In those proceedings she contends, by way of broad summary, that:
a)the Federal Circuit Court lacked jurisdiction in respect of the divorce because the parties had lived in Taiwan for the majority of their marriage, are domiciled in Taiwan and both have not habitually resided in Australia for many years; and
b)the sole jurisdiction of the divorce litigation belongs to the Court of Taiwan; and
c)the parties’ marriage should be declared to remain existing because it provides her with various (and significant) proprietary rights, maintenance and inheritance rights; and
d)expert evidence she obtained suggested that the Australian divorce order was invalid according to subsection 402(1) of Taiwan Civil Procedural Law, such that the marriage between the parties remains in existence; and
e)the Australian divorce order is contrary to the Republic of China public policy and morals because, in essence, the ground upon which it relies for its grant is that the relationship has broken down irretrievably, a ground different to that applicable in the Republic of China (Ms Cao contends that Mr Hong sought an order for divorce in Australia because this is a no fault jurisdiction, whereas proceedings in Taiwan for divorce require findings of fault and an assessment of attributable liability and the degree of liability); and
f)she is entitled to a protection order and spousal maintenance.
A further contention made by Ms Cao in her opposition to the recognition in Taiwan of the Australian divorce order seems to be that the nature of the proceedings she had commenced in Australia on 4 June 2015 was similar to proceedings for a change to the separation of property regime regulated under Article 1010 of the Taiwanese Code of Civil Procedure and did not involve an application for a divorce.
At about the same time as she filed the Civil Litigation Complaint, Ms Cao also filed an application for a temporary protection order and an application for an injunction to prevent Mr Hong from living in the former matrimonial apartment in City O. As I understand Taiwanese law, given that this apartment is registered in his name, Ms Cao only has the right to live in it if the parties are married.
On 14 November 2016, the parties participated in mediation in City O. This resulted in agreement that, pending the determination of her proceedings in the Taiwan City O District Court, Mr Hong pay Ms Cao an amount of NTD $70,000.00 (AU$2,950.50) per month so that she could obtain alternate accommodation in City O.
On 1 December 2016, Mr Hong asked that Ms Cao withdraw her objection to the registration of the Australian divorce order by discontinuing her Civil Litigation Complaint so that all “family law issues” could be dealt with by the Family Court of Australia.[8]
[8] Affidavit of Mr Hong filed 26 April 2017 at [57] and "SCH-7".
However, by correspondence authored 7 December 2016, Ms Cao’s solicitors confirmed that she refused to withdraw her objection to the registration of the Australian divorce order and that she refused to withdraw the other litigation on foot in Taiwan.
On 7 July 2017, the relevant Taiwanese Court refused Ms Cao’s application for a declaration that the Australian Divorce Order (dated 18 July 2016) should not be recognised in Taiwan and for a declaration that the parties are still married in Taiwan. The Taiwanese Court determined that the Australian Divorce Order should continue to be recognised in Taiwan.
On 9 August 2017, Ms Cao commenced an appeal against this determination, by which her Civil Litigation Complaint was dismissed. As I understand the evidence, she maintained the same contentions as those she raised unsuccessfully at the “first instance” hearing of her Complaint. On 22 August 2017, her appeal against the dismissal of her Civil Litigation Complaint was heard. It seems Mr Hong’s lawyer attended the Court hearing on his behalf.
Mr Hong states his Taiwanese lawyer told him that, during the hearing, the Judge made various statements urging the parties and their legal representatives to settle the matter; that the Judge requested that the parties have their legal representatives bring a settlement proposal, including for property settlement of the marital property of the relationship on the basis that the parties are divorced, to the next hearing. Mr Hong also says that his Taiwanese lawyer told him that the Judge said it was his preference to deal with the property settlement of the marital property of the relationship so that both parties’ interests could be protected and the divorce and property settlement could be dealt with at the same time before the same Court.
At the hearing of Mr Hong’s application to re-open, Mr Wilson QC (on behalf of Mr Hong) accepted that the recounting outlined above is not one which is accepted by Ms Cao as accurate: rather, it seems the parties are in dispute about what was said by the presiding Taiwanese Judge at the hearing on 22 August 2017. Given the nature of the current application and that neither Counsel sought to cross-examine any deponent, the issue of what was said on 22 August 2017, and in what context, remains unresolved.
It seems Ms Cao has a further right of appeal in respect of the Civil Litigation Complaint (by which opposition is taken to the registration of the Australian Divorce Order) before the Taiwanese Court’s determination in the matter is final.
On 8 September 2017, Ms Cao filed a further Civil Litigation Complaint in Taiwan, alleging Mr Hong had conducted an extra-marital affair with a named co-defendant. As I understand it, in these proceedings, Ms Cao seeks the sum of NTD $1,650,000.00 (approximately AUD $70,000.00) on the basis that, in allegedly conducting an extra-marital affair in about 2013, Mr Hong and his co-defendant committed a tort against her by ‘intentionally and wrongfully damaging her legal status as a spouse.’ As I understand his response, Mr Hong asserts that Ms Cao commenced these proceedings because she was previously unsuccessful in an earlier criminal complaint that he had committed adultery (adultery being a criminal offence in Taiwan, punishable by imprisonment).[9]
[9]The evidence in Mr Hong’s case is to the effect that, on the basis of the same allegations detailed in her Civil Litigation Complaint filed 8 September 2017, Ms Cao initiated criminal proceedings for adultery against him in 2015: after the Prosecutors’ Office investigation of the allegations failed to find sufficient evidence to support a charge of adultery, the complaint was dismissed; Ms Cao appealed the determination (it is alleged that she did so twice) to the Taiwan High Prosecutors’ Office; as a result of the appeal/s Mr Hong participated in further investigations and, after the Prosecutors’ Office determined there was insufficient evidence to support a charge of adultery, Ms Cao’s subsequent appeal/s were dismissed.
Mr Hong’s case also involves the assertion that, in about mid-September 2017, Ms Cao appealed (he says, for the second time) a criminal complaint she had previously made against him in which it was alleged he had forged her seal/signature. As I understand the evidence in his case, it is to the effect that Ms Cao initiated criminal proceedings against him in Taiwan on 15 January 2016, alleging that he had forged her seal or signature on the Minutes for C Inc., relating to the renewal of the Bank H line of credit during the period of 2011 to 2014, without her permission; the Prosecutors’ Office dismissed this complaint on the basis that there was no evidence to support it; Ms Cao appealed this decision; after December 2016, the Prosecutors’ Office conducted a further investigation and dismissed the complaint a second time; Ms Cao appealed this decision, after which he was charged by the Prosecutors Office with forgery: as this charge is strenuously denied by Mr Hong, there will be a criminal court hearing in Taiwan.
That the parties are in dispute about whether Ms Cao appealed only once (and subsequently applied for a review after her unsuccessful appeal) or twice to the Taiwan High Prosecutor’s Office with respect to the criminal proceedings she had initiated against Mr Hong in Taiwan alleging forgery seems perfectly demonstrative of the overall level of dispute in this matter.
Uncontentious matters
Both parties are Australian citizens and there is no doubt that this Court has jurisdiction to deal with Ms Cao’s application for property settlement.[10]
[10] See s 39 of the Family Law Act 1975 (Cth).
Mr Hong has participated in the Australian proceedings, which have been underway since 4 June 2015. Further, it seems that both parties have been participating in, and dealing with, the Australian proceedings on an equal footing: for example, the orders made by Forrest J on 22 October 2015 have ensured that each party has access to funds for the purpose of their participation in these proceedings; both parties have engaged Australian lawyers and, given that none of their affidavits contain the jurat required when evidence is given with the assistance of interpreters, I assume both clearly have sufficient proficiency in the English language to permit them to instruct those lawyers without particular assistance.
After marrying in Australia (on 29 October 1996), the parties’ marriage has been registered in Taiwan. Consequently, the appropriate Court in Taiwan has jurisdiction to determine all matters arising out of their marriage: thus, Taiwan provides an alternative forum to Australia and is a “foreign tribunal” with the jurisdiction to determine their property settlement proceedings.
However, the current Taiwan City O District Court proceedings commenced by Ms Cao are not the equivalent of the property settlement proceedings she commenced in Australia in June 2015. There is no proceeding equivalent to the current property settlement proceedings on foot in Taiwan at present.
Ms Cao claimed she was ordinarily resident in Australia when she commenced the property settlement proceedings in June 2015 and claimed she was ordinarily resident in Taiwan when she commenced civil proceeding there on 4 November 2016.
If Ms Cao is successful in the Civil Litigation Complaint proceedings she commenced in the Taiwan City O District Court, such success will not of itself preclude her or Mr Hong from commencing the equivalent of property settlement proceedings in Taiwan.
It appears uncontentious that all of the Taiwanese interests are constituted by, or arose from, shares transferred to Mr Hong by his father or from funds gifted to him by his father.
As already noted, Mr Hong has been legally advised during the course of the Australian proceedings and, as at 20 December 2016, had spent $614,500.00 on them. Ms Cao has also been legally advised during the course of these proceedings and, whilst there is no evidence of her actual expenditure on the same to date, the orders made by Forrest J on 22 October 2015[11] permit each party to access funding up to an amount of $800,000.00.
[11] As amended by consent.
In so far as the Australian proceedings are concerned, they have been underway since 4 June 2015. The parties are awaiting the completion of various expert reports in relation to the value of the Taiwanese property. Directions have already been made in relation to their participation in mediation once this has occurred.
To the extent it is a money judgment,[12] a judgment or order made by Taiwanese Courts will be recognised in Australia.[13]
[12] As defined in s 5.3 of the Foreign Judgments Act 1991 (Cth).
[13]Section 5 of the Foreign Judgments Act 1991 (Cth); Reg. 3 of the Foreign Judgments Regulations 1992 (Cth); Item 25AB of the Schedule to the Foreign Judgments Regulations1992 (Cth).
Whilst there are other proceedings (involving criminal complaints and what has been characterised by Ms Cao’s legal representatives as ‘corporations law type complaints’) in which the parties are involved in Taiwan, none of these relate to the alteration of the interests of the parties in property as sought in the property settlement proceedings commenced by Ms Cao in Australia on 4 June 2015.
However, some of these other proceedings in Taiwan are relevant to the determination of the constitution of the property of the parties for the purpose of the current property settlement proceedings – for example:
a)Mr Hong is involved in litigation with his brother arising from the transfer by their father of shares to Mr Hong – in this litigation, Mr Hong’s brother asserts that 4,998,000 of the B Development shares and 150,000 of the Company E shares held by Mr Hong and his Taiwanese interests (being his most significant assets) should be transferred to their father’s estate; and
b)Ms Cao is (or has been) the respondent in criminal and civil proceedings brought against her by Mr Hong’s sister in respect of the transfer of US$4,000,000.00 to a trust established by Ms Cao in Taiwan for the benefit of her son from her first marriage – the allegation, it seems, is that these funds constituted part of Mr Hong’s father’s estate and Mr Hong asserts that, if the amount is not repaid, he will be expected to repay it from the property of the parties.
To date, P Accountants Taiwan has quoted the amount of $383,000.00 to value the Taiwanese companies. The quote to value the Taiwanese real property is in the sum of $27,000.00.
Contentious matters
Ms Cao says that she devotes her time between Australia and Taiwan. Mr Hong contends that she lives in, or has her domicile in, Taiwan. Particular emphasis was placed upon the fact that, when Ms Cao commenced proceedings in the Federal Circuit Court in June 2015, she asserted that she was ordinarily a resident in Australia[14] whereas, in proceedings she recently commenced in Taiwan, she claimed that she is ordinarily a resident in that country.[15] Whatever inconsistencies of account may exist, are not, in my view, relevant to the determination of whether Australia is a clearly inappropriate forum for the determination of the proceedings by which Ms Cao regularly invoked this Court’s jurisdiction.
[14] Initiating application, filed 4 June 2015, page 3, item 11.
[15] Affidavit of Mr Hong filed 26 April 2017 at [13] and SCH-1.
It is also clear that the parties are in dispute about the contributions made by Ms Cao to various items of property – for example:
a)Ms Cao asserts that she made financial contribution to the Taiwanese apartment and all renovations to the same, whereas Mr Hong asserts that a third of the money spent on the renovations came from Australian companies he established in Australia using funds gifted to him by his father before he moved back to live in Taiwan and that the remaining two thirds of the funds were gifted to him by his father; and
b)Ms Cao asserts that she met expenses associated with the Taiwanese apartment but Mr Hong contends he paid these when he and his father lived there with Ms Cao and that he paid the mortgage and maintenance fees after he moved out from the property and has done so since then; and
c)Ms Cao asserts that she holds shares in B Development, whereas Mr Hong contends that she does not; and
d)Ms Cao asserts that Mr Hong used dividends from B Development to repay principal, whereas he asserts that he used such dividends to reinvest in the business, pay mortgage repayments and meet living expenses; and
e)Ms Cao asserts that she assisted in the care of Mr Hong’s father, whereas he denies this assertion.
Whilst resolution of these issues cannot obviously occur in the context of the determination of the current application, that such disputes exist suggests that it is more likely than not that each party may lead evidence from people living in Taiwan to seek to substantiate their respective contentions.
In addition, Mr Hong asserts that Ms Cao has failed to disclose the existence of property and/or bank accounts in Taiwan. He says this is particularly problematic and relevant because this Court has limited and/or no ability to issue a subpoena to banks or other relevant organisations located in Taiwan to require the production of documents about accounts or property held there by Ms Cao or, on his case, her daughter on trust for her. That is, in essence, he contends that Ms Cao is able to act to conceal the existence of property in Taiwan in a manner which could prejudice him in the Australian proceedings.
Whilst the existence of this asserted juridical disadvantage (which, of course, at this stage is in the nature of a contested assertion of fact) is relevant in the determination of whether this Court is a clearly inappropriate forum for the adjudication of Ms Cao’s property settlement proceedings, it seems to me that authority suggests that the primary focus is answering this question is on considering whether there is the possibility that Ms Cao (the party who has regularly invoked this Court’s jurisdiction and who has a prima facie right to insist on the exercise of the same) might be deprived of a legitimate claim to the prospect of juridical advantage if an order is made in the terms sought by Mr Hong.[16]
[16] In the marriage of Gilmour [1993] FLC 92-806.
Evidence from the Taiwanese lawyers
Each party obtained evidence from a lawyer entitled to practice in Taiwan: Mr Hong from Ms Q and Ms Cao from Ms X. Neither Ms Q nor Ms X was required for cross-examination at the hearing before me.
Summary of relevant evidence given by Ms Q[17]on behalf of Mr Hong
[17]Affidavits of Ms Q filed 26 April 2017 and 2 May 2017.
Ms Q states that the registration of the Australian divorce order by the Household Registration Authority is only for the purpose of completing household procedures and does not affect the effect of the order. She says that, if the Taiwanese Court does not recognise the Australian divorce order, the parties will continue to be legally married in Taiwan and Ms Cao will be entitled to inheritance rights, maintenance rights and a right of separation of matrimonial property.
Ms Q’s evidence is that a consequence of the Taiwanese Court’s determination not to recognise the Australian divorce order would be that the “statutory regime” applies and the parties’ property relationship is governed by the application of the same. As I understood her evidence about this issue, the statutory regime prescribes that property acquired before marriage and property acquired during marriage are owned respectively and that, if property is owned by a husband or wife respectively, each party is entitled to manage, use or collect the fruits from and/or dispose of his or her own property respectively.
Ms Q says that, in Taiwan, any property division of matrimonial property made before or after a divorce is based on a claim of distribution of matrimonial property and the only thing that differs is the timeframe to be considered – that is:
a)if an order to apply the “separation of property” regime is made before parties divorce, the calculation of matrimonial property begins on the date of marriage and ends on the date the order is made; whereas
b)if the order to apply the “separation of property” regime is made upon a divorce by juridical decree, the calculation of matrimonial property begins on the date of marriage and ends on the date of filing the petition for divorce.
Consequently, Ms Q emphases that, in Taiwan, the time for the calculation of matrimonial property and its value is affected by whether the Australian divorce order is recognised or not.
Ms Q says that, if the Taiwanese court confirms the existence of the marriage as sought by Ms Cao, then Ms Cao may request the distribution of the remainder of property once she files an application to the Court for an order to use the “separation of property” regime on the grounds the parties have not lived together for more than six months or, if she makes the same request when she files an application for divorce in Taiwan.
As I understand her evidence, Ms Q says that either the husband or wife can ask the Court to declare the application of the “separation of property” regime if certain conditions are met.[18] Further, once an order to apply the separation of property regime is made, the party can then petition for the distribution of matrimonial property before divorce: this requires an equal distribution between parties of property, save for that property which has been acquired as a gift or from succession or solatium (that is, something given as compensation or by way of consolation) unless the Court thinks this result is obviously unfair.
[18] As prescribed in Article 1010.
Again as I understand it, Ms Q also says that the application of the “separation of property regime” results in each party retaining ownership of any property in his or her name, with the Court to calculate the amount to be paid/received by a party (but the Court does not order the transfer of shares between parties unless they agree).
Ms Q also says that, before parties are divorced, a Taiwanese Court may make an order about the parties’ living expenses. Further, where a party has applied to use the “separation of property” regime and a Court makes an order that the property regime is changed to the “separation of property” regime, then either party may petition the Court for the distribution of matrimonial property after the end of the original property regime. She says alimony is only relevant to divorce through juridical decree and, after parties divorce, a duty to pay living expenses of the household no longer exists. Further, in principle, there is no relationship between the distribution of matrimonial property and the payment of spousal maintenance or alimony, as these are two independent matters.
Ms Q says that, if matrimonial property is not distributed as at the time of the divorce, then either party may petition the Court within two years of becoming aware of the remainder of the property, or within five years after the divorce.
Ms Q also says that a Taiwanese Court will deal with all of the property of the husband and wife (whether in Taiwan or elsewhere), with each party to bear the onus of proof in respect of property owned by that party overseas: for example, if an applicant can prove the existence of property in Taiwan and overseas, then such property will be included in the calculation of the “remainder of the property” (which is that which neither husband or wife owns outright or contributed to the relationship by its receipt by way of inheritance or gift). As I understood her evidence, in Taiwan, distribution of the remainder of matrimonial property does not involve specific items of property but, rather, an assessment of an amount, with the parties then left to agree about whether they will include foreign and/or overseas property in the amount that one is required to pay to the other. That is, it seemed to me that her evidence was that the Taiwanese Court would leave it up to the parties to work out what property each will receive in order to satisfy the amount that the Court concluded each should receive.
Ms Q opines that, if the parties are not divorced in Taiwan but an Australian Court makes an order in property settlement proceedings, the Taiwanese Court may consider the property distribution to be contrary to the Republic of China public policy or morals and refuse to recognise it.[19] However, Ms Q also asserts that courts in Taiwan seldom deny the effect of foreign Court judgments simply because the foreign country’s family law system is contrary to public policy or morals of the Republic of China.
[19]Affidavit of Ms Q filed 26 April 2017, report at [35].
Ms Q says that, if an Australian property order is not recognised in Taiwan, either party may initiate proceedings with respect to property distribution, spousal maintenance or alimony in Taiwan: whilst either party may be able in such proceedings to use testimony given in Australian proceedings, (unsurprisingly, I think) any reasoning expressed in the determination of the Australian proceedings would not bind the Taiwanese Court.
Summary of evidence given by Ms X[20] on behalf of Ms Cao
[20]Affidavits of Ms X filed 26 April 2017 and 2 May 2017.
Ms X represents Ms Cao in the Taiwanese proceedings. She confirms that there are no property settlement proceedings on foot in Taiwan at present.
Whilst some of her evidence appears to me to be somewhat inaccurate (namely, the assertion that Mr Hong’s application for a divorce order was granted “as a result of” the absence of Ms Cao’s participation in those proceedings)[21], no particular challenge was made to the balance of her evidence.
[21]Affidavit of Ms X filed 26 April 2017 at par [6].
Ms X’s evidence is that it would be extremely prejudicial to Ms Cao to apply for a property division in the Taiwanese Courts because:
a)Court costs are exorbitant and Ms Cao would be required to pay these at first and may subsequently apply to recover the same from Mr Hong; and
b)a statutory property system applies, with the consequence that:
i)property is considered within the classes of pre-marital and post- marital property; and
ii)if a party cannot prove that property falls within either of these categories, then it is considered as post-marital property; and
iii)if a party cannot prove that property is owned by either that party or the other party, then it is considered to be “community property”; and
iv)after property which falls within the category of inheritances, gifts and pensions is excluded and after debts are discounted, property is apportioned between parties on an equal basis.
It seems to follow from this evidence that, given that much of the Taiwanese property is likely to fall within the category of inheritances or gifts (or the fruits of the same) received by Mr Hong from his father, the property remaining for consideration and apportionment on an equal basis is likely to exclude such property.
Ms X’s also said that, whilst proceedings in Taiwan which involve property matters between parties following the breakdown of a marriage are not limited to a consideration of “domestic” property, she has not discovered any judgment made by Taiwanese Courts that has dealt with the division of assets held outside of Taiwan.
Whilst it is not entirely clear to me, I wonder if this may be the consequences of the Taiwanese Court’s approach (as described by Ms Q) to determine the dollar amount payable by one party to the other and leave it to the parties to agree about the specific items of property each will receive so as to equate to that dollar amount.
Ms X’s evidence is that Ms Cao’s proceedings in Taiwan in relation to the Australian divorce order do not have any impact on proceedings in Australia for the Australian property order. However, the proper question, in my view, is whether the Taiwanese proceedings relating to the recognition of the Australian divorce order have any impact on the recognition and/or enforceability in Taiwan of any order made in the Australian proceedings (rather than whether there is any impact on “the proceedings” themselves).
Ms X does not agree with the suggestion that, absent divorce, a Taiwanese Court may not recognise orders made in Australian property settlement proceedings (because these might be seen as contrary to the Republic of China’s fundamental principles of law and concepts, public policies and morals) because:
a)in Taiwan, parties to a marriage can seek an adjudication of distribution of property before divorce; and
b)if the Court applies the “separation of property” regime, then the statutory marital property regime which originally applied is eliminated and the spouse may apply for distribution of the remainder of the property in accordance with Article 1030-1 (such that it has little to do with public order or good customs); and
c)given that, in Taiwan, parties can apply for this adjudication of distribution of property before divorce, there is no reason to think that any order made in Australia adjusting the parties property interests before a divorce would be contrary to morals, public policy and the fundamental principles of law in Taiwan; and
d)in a previous 2012 decision, the Taiwanese Court did not consider a judgment of the Australian Court in adjusting the property interests was contrary to Taiwan’s public order or good customs.
Whilst, perhaps, more in the nature of a submission, Ms X opines that, if the Australian divorce order is not recognised in Taiwan, both parties are in the same boat: whilst such circumstance would allow Ms Cao to apply for alimony, she would have to establish that she is reduced to difficulties in her living circumstances – something Ms X opines may be difficult for her to do if she has, in fact, received property as a consequence of an adjudication in the property settlement proceedings.
Conclusions about the evidence given by the Taiwanese lawyers
Doing the best that I can, it seems to me that the relevant evidence given by Ms Q and Ms X also establishes the following:
a)notwithstanding Ms Cao’s objection to the registration of the Australian divorce order, either party could commence the equivalent of property settlement proceedings in Taiwan; and
b)the Civil Code of the Republic of China does not limit the property of a husband and wife which may be the subject of orders to domestic property only and, whilst neither has discovered any judgment by a Court in Taiwan which related to the division of foreign assets, a Taiwanese Court can deal with property situated in Australia; and
c)Orders made in this Court are capable of being recognised in Taiwan, pursuant to that country’s Civil Law Article 402 (which prescribes requirements about service and requires that the contents of the same are not contrary to public policy or morals in Taiwan); and
d)even if Ms Cao consented to the registration of the divorce order obtained by Mr Hong in Australia, the objection previously filed by her would not be dismissed because the Taiwanese Court, once seized of the matter (as it is) will review whether the judgment by the foreign Court (here, the divorce order) conforms with Article 402 of the Code of Civil Procedure.
Applicable principles
It is uncontentious that the Court has the power to stay its own proceedings. As noted by the High Court in Voth v Manildra Flour Mills Pty Ltd[22]
… the traditional power to stay proceedings which have been regularly commenced, on inappropriate forum grounds, is to be exercised in accordance with the general principle empowering a court to dismiss or stay proceedings which are oppressive, vexatious or an abuse of process and the rationale for the exercise of the power to stay is the avoidance of injustice between parties in the particular case.
[22](1990) 171 CLR 538, 554.
Reference to authority[23] establishes that:
[23]Oceanic Sun Line Special Shipping Co Inc. v Fay (1988) 165 CLR 197; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538; Henry v Henry (1996) 185 CLR 571; CSR Ltd v Cigna Insurance Australia Ltd (1997)189 CLR 345 per the majority of the High Court (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ); In the Marriage of Gilmore [1993] FLC 92-353; Kemeny v Kemeny [1998] FLC 92-806; Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491; Puttick v Tenon Ltd (2008) 238 CLR 265; Navarro v Jurado (2010) 44 Fam LR 310.
a)the power to order that proceedings regularly instituted within jurisdiction should be dismissed or stayed on ‘inappropriate forum grounds’ is an aspect of the inherent or implied power of every Court to prevent its own processes being used to bring about injustice: in the sense that maintenance of proceedings in Australia would be vexatious (that is, productive of serious and unjustified trouble and harassment) or oppressive (that is, seriously and unfairly burdensome, prejudicial or damaging) if it is concluded that Australia is a clearly inappropriate forum; and
b)such power is a discretionary power, in the sense that its exercise involves a subjective balancing process in which relevant factors vary and in which:
i)the question of the comparative weight to be given to particular factors in the circumstances of a particular case; and
ii)the decision about whether the power should be exercised,
are both matters for individual judgment and, to a significant extent, matters of impression; and
c)such power should only be exercised in a clear case: the discretion to grant a stay should be exercised with great care or extreme caution; and
d)the onus is upon the applicant for an order dismissing proceedings or staying them (here, Mr Hong) to satisfy the Court that the Court is a clearly inappropriate forum: it is not a question of striking a balance between competing considerations but, rather, for Mr Hong to demonstrate that a continuation of the proceedings in the local forum (Australia) will be productive of injustice because it will be oppressive or vexatious in the Voth sense – if he demonstrates there are enough factors to indicate that the local forum (Australia) is clearly inappropriate, a stay should be granted; and
e)as the application of the test involves only a consideration of whether Australia is a clearly inappropriate forum – and not a comparison of the appropriateness or comparative appropriateness of the foreign forum in which proceedings have been (or are capable of being) commenced (here, Taiwan) – even if it was concluded that a Court in another jurisdiction (here, Taiwan) is the ‘more appropriate’ forum, this does not necessarily mean that Australia is a ‘clearly inappropriate’ forum; and
f)in cases in which the ascertainment of the natural forum is a complex and finely balanced question, the Court may more readily conclude that the selected forum is not a clearly inappropriate forum; and
g)the task of a trial judge is to determine whether an applicant has established that continuation of proceedings in Australia will be oppressive or vexatious in the sense spoken of by Deane J in Voth; and
h)to determine whether Australian proceedings are vexatious and oppressive in the relevant (Voth) sense, regard must be had to the controversy as a whole and the general circumstances of the case, taking into account the true nature and full extent of the issues involved; and
i)the process of determining whether, in the circumstances of a particular case, Australia is a clearly inappropriate forum involves assessing whether there are enough factors which indicate this to be the case or not; and
j)the following (non-exhaustive) factors[24] are those to which regard should be had:
[24]As expressed by Lord Goff of Chieveley in Spiliada Maritime Corporation v Consulex Ltd [1987] AC 460 at 477 – 478 and 482 – 484 and as generally summarised by Kent J in Cao v Tan [2012] FamCA 225 at [38].
i)the availability of an alternative forum; and
ii)whether the other potential forum will recognise Australian orders and vice-a-versa and the ease of enforcement in each country; and
iii)which forum may provide more effectively for a complete resolution of the matters involved in the parties’ controversy; and
iv)the order in which proceedings were instituted, the stage which they have reached and the costs incurred in each jurisdiction; and
v)the connection of the parties and their marriage with each of the potential jurisdictions and the issues on which relief may depend in those jurisdictions; and
vi)the governing law of the dispute; and
vii)the place of residence of the parties; and
viii)factors of convenience and expense, such as the location of witnesses; and
ix)whether, having regard to their resources and understanding of language, the parties are able to participate in the respective proceedings on an equal footing; and
x)any legitimate juridical advantage in litigating in either jurisdiction; and
xi)the general circumstances of the case, taking into account the true nature and full extent of the issues involved; and
k)whilst this Court may be a clearly inappropriate forum to litigate one matrimonial cause, it may nonetheless properly exercise its jurisdiction with respect to others.
Overview of submissions made in support of Mr Hong’s application
Mr Wilson QC submitted that it is vexatious for Mr Hong to have to continue with the Australian proceedings in circumstances where there is a multiplicity of proceedings on foot in Taiwan. Given that the majority of these proceedings do not relate to the issues enlivened by the property settlement proceedings commenced by Ms Cao in Australia, I do not accept that having to continue in the proceedings Ms Cao commenced in Australia and to which he submitted originally without demur is productive of serious and unjustified trouble and harassment to him.
Given Ms Q’s opinion that, if the parties are not divorced in Taiwan but an Australian Court makes a property order, the Taiwanese Court may consider any property distribution to be contrary to Republic of China public policy or morals and, consequently, refuse to recognise it, Mr Wilson QC submitted that it is oppressive for Mr Hong to litigate the property settlement proceedings in Australia in circumstances where Ms Cao has acted as she has in relation to his attempt to register the Australian divorce order.
I am not persuaded by Ms Cao’s actions in responding to Mr Hong’s registration in Taiwan of the Australian divorce order in the manner that she has means that it is seriously and unfairly burdensome, prejudicial or damaging to Mr Hong for the property settlement proceedings commenced by Ms Cao in Australia to continue.
To the extent that Mr Wilson QC submitted that it is oppressive for Mr Hong to litigate the property settlement proceedings in Australia in circumstances where, at present, there is nothing to prevent Ms Cao from commencing “property proceedings” in Taiwan as well, such concern can be addressed by the making of an anti-suit injunction in appropriate terms.
Whilst Mr Wilson QC emphasised that the Australian Court should not have to predict the likely outcome of the proceedings brought against Mr Hong by his brother (which has the potential to have a significant impact on the quantification and valuation of the parties property) or of the proceedings brought by Mr Hong’s sister against Ms Cao in relation to her dealings with an amount of US$4,000,000.00, such issues are more, in my view, about timing than anything else: that is, such proceedings may impact upon the time at which the current proceedings for property settlement orders can be finalised but they do not, in my view, persuade that it is oppressive or vexatious for these property settlement proceedings to continue to be prosecuted in the jurisdiction selected by Ms Cao and to which Mr Hong has previously submitted.
Mr Wilson QC submitted that it is oppressive or vexatious for the Australian proceedings to continue alongside the Taiwanese proceedings (by which he was not referring to proceedings in Taiwan seeking orders in the nature of property adjustment orders) because:
a)Mr Hong is required to pay spousal maintenance by both an order made in this Court and pursuant to an agreement reached at mediation conducted in Ms Cao’s Civil Complaint proceedings in Taiwan; and
b)Mr Hong is required to participate in these proceedings and a multiplicity of proceedings in Taiwan; and
c)Mr Hong may not be able to achieve finality in respect of final property settlement in whatever terms are determined by this Court; and
d)if the Australian divorce is not registered in Taiwan, Ms Cao may apply to Taiwanese Courts for a change to the statutory regime that applies to all of the property in Mr Hong’s or a corporate name; and
e)if the parties remained legally married in Taiwan, Ms Cao has the ability to bring various proceedings against Mr Hong, including criminal proceedings for adultery if he enters into a new relationship; and will be able to continue to obtain information about him and remains entitled to a significant inheritance; and
f)given Mr Hong continues to operate extensive business interests in Taiwan, he is put to considerable expense and delay when, as was the case determined by Carew J, he has to apply to this Court for relief from the restrictions imposed upon him by the existence of Orders made here; and
g)Mr Hong will be required to incur legal costs in two jurisdictions; and
h)the consequence of the Taiwanese proceedings instituted by Ms Cao is that the finalisation of the Australian property settlement proceedings, by way of an order that takes effect in both Australia and Taiwan, cannot be achieved; and
i)there are not insignificant difficulties and procedural uncertainties associated with the registration in Taiwan of any final property order made by this Court; and
j)as the majority of Mr Hong’s property is located in Taiwan, there are not insignificant practical difficulties and not insignificant expenses associated with these property settlement proceedings continuing to finalisation here, namely those associated with:
i)the translation from Mandarin to English of all documents for all assets, financial resources and liabilities held in Mr Hong’s name and by the Taiwanese interests; and
ii)the requirement for an interpreter to be present during the course of the trial; and
iii)causing witnesses who primarily reside in Taiwan to travel to Australia or those costs associated with seeking leave for them to appear by electronic means; and
iv)the parties travelling to Australia to participate in the proceedings (given that Mr Hong primarily lives in Taiwan and Ms Cao now asserts that she does as well); and
v)the fact that, on each occasion Ms Cao institutes proceedings or makes a complaint in Taiwan, Mr Hong is required to seek leave from this Court before disclosing any documents from these proceedings to his Taiwanese lawyers or in, or to, the Taiwanese Court or relevant authority.
It was also asserted on behalf of Mr Hong that, whatever the Court fees payable in Taiwan, the quantum of the same is not as much as the costs associated with travel, translation and legal fees associated with the Australian proceedings. Further, reliance is placed on the assertion that Ms Cao has told the Taiwanese Court that she primarily resides in Taiwan; that she is a Taiwanese citizen who speaks and reads Mandarin and that the majority of the property of the parties is in Taiwan.
It was also contended that, if Ms Cao is successful in her proceedings in Taiwan, the parties will be divorced in Australia but married in Taiwan and either will be able to apply for the division of matrimonial property in Taiwan (either by divorce or application of the separation of property regime) and Mr Hong may be subjected to a “double distribution” of the property pool: something which is suggested to be more likely than not given the manner in which Ms Cao approached the issue of the payment of spousal maintenance: namely, that, having obtained an order in Australia for the payment of a monthly amount, she subsequently sought that he pay an additional amount in Taiwan. I think it relevant to note that, whilst Ms Cao was successful in seeking further financial support from Mr Hong, the payment of the same was by agreement and not order.
Whilst it was also submitted to the effect that, notwithstanding that Ms Cao refuses to withdraw the proceedings in Taiwan, she refuses to comply with orders made by this Court, any alleged non-compliance can be the subject of further interlocutory applications for compliance and/or orders for costs (including on an indemnity basis).
Overview of submissions made in opposition to Mr Hong’s application
Mr North SC emphasised that I would err if I concluded that Taiwan was a more appropriate forum and, by virtue of such assessment, simply went on to conclude that Australia is a clearly inappropriate forum. I accept this submission entirely.
It was submitted that I would be persuaded that orders made by this Court are recognised in Taiwan pursuant to Taiwan’s Civil Law Article 402.[25] It was also submitted that I would accept Ms X’s evidence of a significant cost advantage to the parties if the proceedings are litigated in Australia.
[25]On the basis of the evidence given by Ms X at [8] of her affidavit filed 26 April 2017.
Further, it was submitted that the length of time between when Ms Cao filed her Initiating Application for final orders and Mr Hong’s objection to the forum is such that this delay is a significant factor: especially given that a consequence of Mr Hong’s decision not to object until December 2016 has been that the parties have incurred not insignificant costs in these proceedings, which are at the stage of the impending preparation of expert valuations.
It was submitted that Ms Cao has given evidence about the time she has spent in each of Australia and Taiwan since 2009: in essence, it is to the effect that she has generally divided her time between the two countries equally but, in the last few years has spent more time in Taiwan than in Australia. Whilst Ms Cao contends that, at least in relation to the last few years before the parties separated, this was so that she could provide care to Mr Hong’s elderly parents, Mr Hong does not accept such assertion.
It is submitted that the issue of the recognition in Taiwan of the Australian divorce order obtained by Mr Hong and the current property settlement proceedings are distinct matters and that the proceedings Ms Cao has commenced in Taiwan have nothing to do with the issue of appropriate property adjustment between the parties following the breakdown of their marital relationship. In addition, Ms Cao does not accept the assertion that orders made in the Australian proceedings will not result in final property adjustments between the parties.
Is Australia a clearly inappropriate forum?
In Voth, when discussing the function of a primary judge in this type of application, the majority of the High Court said[26]that:
…. There may well be circumstances in which the primary judge may conclude that it is desirable to give detailed reasons balancing the particular weight to be given to the presence or absence of particular connecting factors at explaining why the local forum is or is not a clearly inappropriate one. Ordinarily, however, it will be unnecessary for the primary judge to do more than briefly indicate that, having examined the material in evidence and having taken account of the competing written and oral submissions, he or she is of the view that the proceedings should or should not be stayed on forum non conveniens (i.e. “clearly inappropriate forum”) grounds. (Emphasis added)
[26] At p 565.
The property settlement proceedings commenced by Ms Cao in June 2015 were regularly commenced. Mr Hong participated in them without objection until December 2016. There are no proceedings, the equivalent to the current property settlement proceedings commenced by Ms Cao in June 2015, currently on foot in Taiwan.
In the present case, the property of the parties with the overwhelming value is located in Taiwan and encompasses corporate and property interests, all of which need to be the subject of expert valuation. Of course, the corporate and property interests in Australia also need to be valued. Whilst Mr Hong has not lived in Australia since about 1997, Ms Cao has lived between Australia and Taiwan, spending varying amounts of time each year in each country. Whilst Ms Cao has had a more physical connection with Australia than Mr Hong since 1997 at least, both retain connections to this country given their corporate and property interests here; and both have maintained Australian citizenship. Their marriage – which was solemnised in Australia – has also been the subject of a divorce order made in this country.
It is clear that Mr Hong regards Taiwan as his primary place of residence. It is also clear, it seems to me, that Ms Cao has, on occasion, maintained that Australia is her primary place of residence and, more recently, has asserted that Taiwan is her primary place of residence.
That it appears that Ms Cao may now spend more time in Taiwan than has, perhaps, previously been the case is not, in my view, determinative of whether Australia is a clearly inappropriate forum for the resolution of the dispute about how the property of the parties is to be dealt with following the breakdown of their marital relationship.
Necessary witnesses (including, for example, valuers and accountants) are likely to be located in both Australia and Taiwan. Consequently, it may be necessary to cause experts to travel wherever the litigation occurs. Given the financial resources of the parties in this case, it is unnecessary to attempt some sort of comparative ‘least expensive’ assessment of the likely costs associated with this aspect of the parties’ participation in ongoing litigation; it could not be thought, nor was it submitted, that the factor of the cost associated with litigation in either Australia or Taiwan was of particular relevance, other than for the purpose of noting the quantum of funds already expended by each party on the Australian proceedings to date.
It is clear that the fact of the proceeding in Australia has meant that the parties have been required to incur the costs of translation to date. It is also clear that, if Mr Hong’s application is unsuccessful, they will continue to be required to incur the costs associated with having documents, including financial records, translated into English. Such costs would not be incurred if the proceedings took place in Taiwan – although there would be costs associated with having the contents of documents and financial records relating to the property held in Australia translated from English.
It is also relevant, I think, to note that the parties have already treated the issue of their divorce separately to the issue of their financial uncoupling in the sense that, after Ms Cao commenced property proceedings in June 2015, Mr Hong was content to participate in them without demur until it appeared that she did not accept the fact of him obtaining a divorce order in the no-fault forum of Australia. In this sense, then, it might be thought that the fact that Mr Hong did not take issue with the property settlement proceedings taking place in Australia and that he in fact sought and obtained a divorce order here, demonstrates his acceptance of Australia as an appropriate forum for the resolution of issues between him and Ms Cao consequent upon the breakdown of their marriage.
Whilst there may well be some inconvenience and expense to the parties in having to travel to Australia if the property settlement proceedings here are not stayed, both parties have previously lived in Australia and travelled here; there is no language barrier which has prevented them from participating in the proceedings here to date (such that it would disadvantage either of them in a manner in which the other is not similarly disadvantaged) and each has the financial resources to continue to travel to Australia in the future for the purposes of the proceedings, as has previously occurred.
Further, the expressed concern that the Taiwanese Court may consider an Australian property order to be contrary to the Republic of China public policy or morals when applying Article 402 and may refuse to recognise it if the parties are not divorced in Taiwan but an order is made in the property settlement proceedings in this Court “under the premise that they are divorced” seems to me to be hard to reconcile with Ms Q’s evidence to the effect that parties who are yet to divorce in Taiwan are able to approach the court there to seek the application of the “separation of property” regime.
Further, I am not persuaded that the evidence establishes that the relevant Taiwanese Court would not recognise an order made by an Australian Court in the finalisation of the property settlement proceedings instituted her by Ms Cao.
The only proceedings in which the parties are engaged in Taiwan are those in which Ms Cao challenges Mr Hong’s application for the registration of the divorce order he obtained in Australia and various other suits, some of which involve disputes about matters which are relevant to the identification, quantification and/or valuation of the property of the parties. As remarked to Mr Wilson QC during the course of the hearing, the resolution of the litigation which relates to the identification, quantification and/or valuation of the property of the parties (such as that in which Mr Hong is involved at the suit of his brother and that in which Ms Cao is involved at the suit of Mr Hong’s sister) seems to me to be more relevant to the timing of the completion of the property settlement proceedings than to any other issue.
Here, there are not simultaneous proceedings in different countries with respect to the resolution of the parties property settlement proceedings (however described) following the breakdown of their marriage relationship. Whilst being engaged in different litigious proceedings in more than one jurisdiction may well be an impost for both parties, I am not persuaded that the fact of such litigation means that the continuation of the property settlement proceedings regularly commenced by Ms Cao is oppressive or vexatious in the Voth sense.
Further, whilst Mr Hong asserts that Ms Cao’s behaviour demonstrates that she is determined to use every legal avenue available to her in Taiwan to bring applications, complaints and criminal charges against him so as to tarnish his reputation, cause him stress and impact his ability to work in his business and cause him to incur costs (his evidence being to the effect that, as a consequence of her actions, he has spent approximately NTD $2,500,000.00 – approximately AUD $107,000.00 – on legal fees in Taiwan), the cost consequences of prosecuting unsuccessful proceedings in Taiwan is a matter for the relevant Taiwanese Courts.
In addition, I am not persuaded that the concerns expressed by one party (here, Mr Hong) about the behaviours of another (here, Ms Cao) in the alternative forum (Taiwan) persuade that Australia is a clearly inappropriate forum for the determination of Ms Cao’s application, such that the continuation of the same here is oppressive or vexatious to Mr Hong or an abuse of the process of this Court.
I acknowledge that the circumstances of this case are such that it may well be thought that Taiwan might be the “more appropriate” forum for the resolution of the property settlement proceedings (however described) between these parties following the breakdown of their marital relationship. However, those circumstances, as discussed throughout these Reasons, are not such as to persuade me that it is seriously and unfairly burdensome, prejudicial or damaging or productive of serious and unjustified trouble and harassment for the property settlement proceedings regularly commenced by Ms Cao in Australia to continue.
I am not persuaded that Mr Hong has discharged the onus of persuading that Australia is a clearly inappropriate forum for the resolution of the parties’ property dispute and, consequently, I am not persuaded that the proceedings regularly commenced by Ms Cao should be dismissed or stayed as sought by Mr Hong.
Application for the making of an anti-suit injunction
Having determined that Australia is not a clearly inappropriate forum, it is necessary to consider whether to grant an anti-suit injunction in the terms sought by Mr Hong in the Application in a Case filed 23 December 2016 or in such other terms as considered appropriate.
The power to grant anti-suit injunctions is a counterpart of the Court’s power to stay its own proceedings on the ground of forum non conveniens. It involves an exercise of power[27] by the Court to protect the integrity of its own processes once these are in motion. Consequently, an anti-suit injunction may be granted when it is determined necessary for the protection of the Court’s own proceedings or processes.[28] The mere coexistence of proceedings in different countries does not of itself constitute “vexation/oppression”: for example, the litigation in the foreign forum may provide other or additional remedies beyond those attainable in the local jurisdiction.
[27]Either implied or pursuant to ss 34 and 114(3) of the Family Law Act 1975 (Cth): CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345; Teo v Guan [2015] FLC 93-653;
[28] see: CSR v Cigna Insurance Australia (1997) 189 CLR 345 at 394.
It is clear that the relief accorded by the making of an anti-suit injunction should be restricted to only what is required to protect the integrity of the processes set in motion by a regularly instituted proceeding: that is, an anti-suit injunction may be granted if foreign proceedings interfere with, or have a tendency to interfere with, or may, if instituted, interfere with proceedings pending in this Court.
In opposing the relief sought by Mr Hong, Mr North SC submitted that there is no utility in restraining Ms Cao’s current proceedings in Taiwan because the evidence establishes that, as the Taiwanese Court is seized of the matter, it will continue to review whether the Australian divorce order conforms with Article 402 of the Code of Civil Procedure irrespective of Ms Cao’s position.
I accept this submission in so far as it relates to Mr Hong’s application to restrain Ms Cao in the prosecution of her proceedings in Taiwan about the Australian divorce order. Whilst the evidence seems to be to the effect that she has been unsuccessful in her attempts to prevent the registration of the Australian divorce order, it also seems that her final avenue of redress is underway.
However, the same cannot be said about proceedings which are of the same nature as the property settlement proceedings commenced by Ms Cao here. I note, as mentioned earlier, that, in opposing the recognition in Taiwan of the Australian divorce, Ms Cao outlined there that the nature of the proceedings she had commenced in Australia on 4 June 2015 was similar to proceedings for a change to the separation of property regime regulated under Article 1010 of the Taiwanese Code of Civil Procedure. Further, it seems to me that the evidence establishes that either party could currently commence proceedings in Taiwan to seek a change to the separation of property regime.
I do not accept that there is no utility in an order preventing Ms Cao from commencing the equivalent of property settlement proceedings in Taiwan. I consider that the utility lies in preventing those problems which are likely to arise if the identical issue/s or the same controversy was to be litigated in different countries. Further, such proceedings, if commenced in Taiwan, would, I think, interfere or have a tendency to interfere with the current proceedings pending in this Court and with the due process of this Court and would, in my view, constitute both a challenge to the Court’s decision not to stay its own proceedings and also amount to a challenge to the integrity of the Australian proceedings.[29]
[29] Kent & Kent [2017] FamCAFC 157 at [67].
Given the past interactions of the parties are highly suggestive of the likelihood of future rancour and the costs which would likely be incurred if Ms Cao was to commence proceedings in Taiwan of an equivalent nature to the current property settlement proceedings (within which an Order for the payment of periodic financial support has already been made), I am satisfied that it is both oppressive and vexatious to permit even the possibility that such an event might occur.
For these reasons, I am persuaded to accede to Mr Hong’s application for the making of an anti-suit injunction. However, I am not persuaded that the terms of the order as sought in Mr Hong’s Application in a Case filed in December 2016 are appropriate.
Rather, I consider that an order in the terms set out at the commencement of these Reasons is the appropriate manner by which Ms Cao will be restrained from commencing proceedings of a specified nature in Taiwan.
Costs
In the event that either party seeks an order for the costs of and incidental to Mr Hong’s Application in a Case filed 23 December 2016, I propose to consider any such application in Chambers after the receipt of written submissions in support of the same.
I certify that the preceding one hundred and thirty (130) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 2 February 2018.
Associate:
Date: 2 February 2018
ANNEXURE “A”
Australia: the B Group
Taiwan: the Taiwanese interests
B International Holdings Pty Ltd:
· Ms Cao owns four shares, with the other shareholding owned by Hong Enterprises Pty Ltd (a holding company controlled by Mr Hong and a solicitor from the firm representing him)
· Owns 11 two-bedroom unencumbered units at Suburb Y (which Ms Cao estimates to be worth about $5,000,000.00)
· rental income = approximately $90,000.00 per annum (before tax)
B Australia Pty Ltd:
· the parties’ main property development company
· shareholders are B Australia Holdings Pty Ltd and B International Holdings Pty Ltd
B Property Pty Ltd:
· established for the purpose of developing an unencumbered piece of land at Suburb Z (which Ms Cao estimates to be worth about $10,000,000.00)
· wholly owned by B Australia Pty Ltd
B Australia Holdings Pty Ltd:
· Ms Cao holds 16 ordinary shares and 16 preference shares
· Hong Enterprises Pty Ltd holds 33 ordinary shares and 33 preference shares
· Mr Hong holds 51 ordinary shares and 51 preference shares
· its assets are: over 250,000 Telstra shares; 10,000 – 20,000 New Zealand Telstra shares; German motor vehicle (purchased in 2009 for approximately $60,000.00); and approximately $300,000.00 in cash
B International Holdings Pty Ltd:
· Ms Cao holds one third of the shares (four shares)
· Hong Enterprises Pty Ltd holds the balance of the shares
B Realty Pty Ltd:
· held 100 per cent by B Australia Pty Ltd
· owns 16 townhouses at Suburb AA (which Ms Cao estimates to be valued at between $7,000,000.00 and $8,000,000.00)
U Street, Suburb V:
· land purchased in Ms Cao’s name in 1990; unencumbered
· site of the former matrimonial home
· Ms Cao estimates the property to be valued at between $2,000,000.00 and $3,000,000.00
14.89 per cent of B Development Incorporated:
· consists of entertainment venues
· said to be valued at more than NTD300,000,000 ($125,000,000.00)
at least 34.5 per cent of E Co Ltd :
· assets include: an 11 story building in City O; 20 per cent in B Development Incorporated and 8.75 per cent of B Development Incorporated
B Industrial Incorporated:
· 83.5 per cent by Mr Hong
· 16.5 per cent by Ms Cao
· holding company, with assets which include: 3.37 per cent of B Development Incorporated; C Inc. and approximately NTD200,000,000 ($8,370,000.00)
B Industrial Limited:
· assets of cash of more than NTD100,000,000 ($4,100,000.00)
at least 21 per cent of B Development Incorporated:
· “handed down” by Mr Hong’s father in 1997
· consists of: 180 acres, 36 golf courses and about 100 hotel rooms
30 per cent - > 33 per cent shares in H Incorporated:
· owns real estate including an underground level of the building and more than 10 car parks
60 per cent of F
· owned by C Inc.
34 per cent of G Pty Ltd:
· owned by C Inc. Incorporated
16.7 per cent of B Enterprises Pty Ltd:
· owned by C Inc.
40 per cent of J Pty Ltd:
· owned by Ms Cao
The BB property:
· matrimonial home in City O
· purchased in May 2010 four NTD167,000,000 ($7,077,726) in respect of which approximately NTD17,500,000 ($732,270.00) was spent on renovation costs
Various parcels of land
4
12
3