Keats and Reeves - [2010] FamCA 1079

FAMILY COURT OF AUSTRALIA

KEATS & REEVES

[2010] FamCA 1079

FAMILY LAW – JURISDICTION – Forum non conveniens

APPLICANT:

Mr Keats

RESPONDENT:

Ms Reeves

FILE NUMBER:

SYC

4789

2008

DATE DELIVERED:

30 November 2010

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

The Hon. Justice Cohen

HEARING DATE:

20 November 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Kearney

SOLICITOR FOR THE APPLICANT:

Somerville & Co

COUNSEL FOR THE RESPONDENT:

Mr Tockar

SOLICITOR FOR THE RESPONDENT:

John R. Quinn & Co.

Orders

That the wife by herself, her servants or agents or otherwise be restrained from:-
1.1taking any further steps in the proceedings issued by the wife in the Principal Registry of the Family Division in England and Wales (“the English Court” on 12 February 2009 under Court no. …; and
1.2instituting any further proceedings against the husband in the English Court relating to the marriage of the parties or to any other property of either or both of them.
That pending the determination of all proceedings before the Family Court of Australia, the wife do take all necessary steps to secure the adjournment of the divorce suit and ancillary relief proceedings relating to the parties’ marriage currently before the English Court and all further appointments in those proceedings.
That it be noted that for the purpose of informing Courts outside of the jurisdiction of the Commonwealth of Australia that:-
3.1The jurisdiction of the Family Court of Australia extends to the entry of Orders in respect of property (including assets, liabilities and financial resources) of parties to proceedings before that Court wherever situate in the world; and
3.2All property (including assets, liabilities and financial resources) of the parties to proceedings before that Court wherever situate in the world is taken into account in determining the financial orders to be made in respect of the parties arising out of the breakdown of their marriage.
That the husband have leave to proceed with his Application for Divorce filed in the Federal Magistrates Court on 14 May 2009.
That costs are reserved.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4789 of 2008

MR KEATS

Applicant

And

MS REEVES

Respondent

REASONS FOR JUDGMENT

The husband, by an amended application filed on 13 July 2009, seeks an anti-suit injunction to restrain the wife from continuing divorce proceedings she has commenced in England and matrimonial property and spousal maintenance proceedings against the husband she instituted there as ancillaries to the divorce petition. He also seeks notations to the injunction of an incidental nature and the discharge of an interim consent order made by the Family Court of Australia which restrains him from proceeding with a divorce application he has made in Australia.
By her response of 20 November 2009, the wife seeks dismissal of the husband’s application and to restrain him from proceeding further with the divorce application or initiating further proceedings against the wife relating to their marriage in the court in which he has sought the divorce. She, too, seeks an order of an incidental nature to facilitate her further conduct of the English divorce proceedings.
The wife was born in Australia and is an Australian citizen, presumably domiciled in Australia, and is presently in Australia. The Court has jurisdiction over all relevant issues. The husband was born in the United Kingdom and lives in Paris. He is a citizen of the United Kingdom but claims to have an Australian Domicile of choice. The wife says he is domiciled in the United Kingdom because that is his domicile of origin. The parties married in 1983. The parties separated in October 2007. They do not agree on the date of separation. The wife says it was while they were living in Paris on 31 October. The husband claims it was 10 days earlier.
On 19 August 2008 the husband filed an Initiating Application for property settlement in the Family Court of Australia. At a Case Assessment Conference in the Sydney Registry of the Court before a deputy registrar, the wife, who appeared in person, informed the Deputy Registrar she would not participate in the proceedings or file any documents. The husband appeared by telephone from Paris. At a directions hearing on 2 December 2008, when the wife attended by telephone, the Deputy Registrar, inter alia, directed the wife to file her response to the husband’s application and her financial statement by mid January 2009. The wife failed to comply with this direction.
On 12 February 2009, the wife commenced proceedings in the Family Division of the High Court of Justice, London, by filing a divorce petition which also sought ancillary relief by way of spousal maintenance and property orders. It is necessary to find jurisdiction to make spousal maintenance and property orders in England that the divorce be granted in England. The husband’s domicile of origin in the United Kingdom was relied on by the wife as the basis for jurisdiction in the divorce proceedings.
On 14 May 2009 the husband commenced divorce proceedings in the Federal Magistrates Court, Sydney Registry. This is an entirely separate court from the Family Court of Australia, although they have overlapping jurisdiction and applications may be transferred from one court to the other. The filing registry is joint and an application for divorce would have only been accepted for filing in the Federal Magistrates Court despite the Family Court having jurisdiction to deal with divorce applications. An application would have to have been made to have the matter incorporated into the proceedings which the husband had already commenced in the Family Court for property settlement. No such application has been made. If it had been or is made, it is highly likely to be successful because, although property settlement and divorce are not interdependent in any manner in Australia, the potential circumstances here would justify transfer. The wife was personally served with the divorce application on 15 May 2009. She denies service. She says she has not looked at the documents served on her on 15 May so has not been formally served. This method of attempted evasion of service does not work in Australia. I find she was served on 15 May 2009.
On 15 May 2009 the property matter came before Le Poer Trench J in the Family Court of Australia for the undefended final hearing. The wife was present and represented herself. The husband was represented by experienced counsel. An application was filed in court on the husband’s behalf. After what appears to have been a defended hearing on 22 May, his Honour made orders appointing the husband and his solicitor as trustees for sale of real property held by the parties, including through their family trust. Property at N, Y and S, all in Sydney, was to be sold. The gross proceeds were firstly to be used to discharge older mortgages over the properties. Any balance was to be used to discharge mortgages over some or all the real property securing a loan the wife had taken for $1.5 million to purchase her interest in a marina in Sydney. Any balance from the sales was to be held in trust in an account held by the husband’s solicitors “pending final orders of this Court”.
These property orders were not the only orders Le Poer Trench J made on 22 May 2009. Other orders were made, one of which could have some significance. It is:
“That the wife be and is hereby restrained from doing any act or thing to cause or permit any further steps to be taken to prosecute and continue in any way the proceedings commencing by her in the Principal Registry of the High Court of Justice (Family Division) No. […] or any other proceedings in the United Kingdom, including but not limited to seeking, causing or permitting the entry of any decree (including any decree absolute of divorce) in such proceedings, pending further order of the Family Court of Australia”.
This order is obviously not intended to be a final anti-suit injunction to restrain the wife from continuing the divorce proceedings in England. It is intended to be and is an interim order which was made to maintain the status quo until the parties had each had a proper opportunity to argue their respective claims about whose proceedings were to continue. Two other orders his Honour made on the same day establish this to be the case. They are:
“That the Husband shall not seek to proceeding [sic] with his Application for Divorce filed in the Federal Magistrates Court on 14/5/09, pending further order”
and
“In the event of the husband seeking to move on an anti-suit injunction in relation to proceedings filed by the wife in the United Kingdom any such Application and supporting affidavit be filed and served within fourteen (14) days hereof”.
That the English decree nisi was granted after these orders were made need not undermine any otherwise established basis for granting an anti-suit injunction to prevent the wife from continuing spousal maintenance or property proceedings against the husband in England. She does not appear to wish to continue the property proceedings in England and is apparently content to have these determined in an Australian court despite the fact that when the sale orders made on 22 May 2009 are performed the only assets in Australia which the husband holds will be cash held in bank accounts.
On 20 May 2009 there had been a hearing before a District Judge sitting in the Family division of the High Court of Justice of England who determined that the wife was entitled to a decree of divorce without granting the decree. He stood the matter over to 27 May 2009 for the purpose of pronouncement of the decree. Ultimately, on 25 June 2009, Justice Ryder in the High Court of Justice, after a defended hearing where each party was more than adequately represented, granted the wife a decree nisi despite his knowledge of the restraining order Justice Le Poer Trench had made. Ryder J considered the law to be applied and in that consideration consciously rejected that part of the husband’s case which relied on the Australian injunction, the husband’s opposition to the grant and his application for the postponement of it. The grant was despite the injunction of Justice Le Poer Trench. His Honour rejected the husband’s claim that he had changed his domicile to Australia many years ago by choice. He found the parties to have separated on 30 October 2007. The parties are, in my opinion, bound by these findings. Neither has appealed from them.
The suggestion that this decision and therefore the findings implicit in it on domicile giving the High Court of Justice jurisdiction is not final because leave to appeal out of time could be sought and a consequent appeal court might find otherwise is most unconvincing. There has been no attempt to seek leave to appeal. I shall determine the situation based on what has and has not been done rather than what might be done. The grant of the decree nisi was on the ground that it was a mere formality following from the granting by a judge with jurisdiction of a certificate on 20 May 2009 to the effect that the wife had established by the proper standard the facts which entitle her to a decree nisi before the Australian court granted the injunction.
On 3 June 2009 the husband filed an Application in a Case in the Family Court of Australia for an anti-suit injunction. He amended this on 13 July 2009. It is this application which I am dealing with. On 30 July 2009, on the ground that he is seeking an anti-suit injunction in Australia, District Judge Malik in the High Court of Justice, Family Division, on the husband’s ex parte application, directed that no application to make the decree nisi absolute is to be made by either party without 72 hours notice of the other party and that the wife could apply on 72 hours notice to vary or discharge that direction.
The wife has not sought to have a decree absolute made despite the fact that ordinarily it is no more than a formality. The wife subsequently made an undertaking to the Family Court of Australia not to seek a decree absolute until I have decided the issue over the anti-suit injunction.
The actual application on which the husband moves is:
1.That the wife by herself, her servants or agents or otherwise be restrained from:-
1.3    taking any further steps in the proceedings issued by the wife in the Principal Registry of the Family Division in England and Wales (“the English Court” on 12 February 2009 under Court no. […]; and
1.4    instituting any further proceedings against the husband in the English Court relating to the marriage of the parties or to any other property of either or both of them.
2.That pending the determination of all proceedings before the Family Court of Australia, the wife do take all necessary steps to secure the adjournment of the divorce suit and ancillary relief proceedings relating to the parties’ marriage currently before the English Court and all further appointments in those proceedings.
3.That it be noted that for the purpose of informing Courts outside of the jurisdiction of the Commonwealth of Australia that:-
3.3    The jurisdiction of the Family Court of Australia extends to the entry of Orders in respect of property (including assets, liabilities and financial resources) of parties to proceedings before that Court wherever situate in the world; and
3.4    All property (including assets, liabilities and financial resources) of the parties to proceedings before that Court wherever situate in the world is taken into account in determining the financial orders to be made in respect of the parties arising out of the breakdown of their marriage.
4.That the husband have leave to proceed with his Application for Divorce filed in the Federal Magistrates Court on 14 May 2009.
5.The wife pay the husband’s costs of and incidental to this Application on an indemnity basis.
The husband, through his Counsel, Mr Kearney, argues that the restraining orders ought to be made because they are warranted on two individual grounds. One is that the proceedings brought by the wife are vexatious and oppressive in the relevant sense. The other is that the injunctions are necessary to protect the integrity of the Court’s processes. He submits, among other things, that the wife’s behaviour in instituting the English proceedings is vexatious and oppressive and has been such that it would be unconscionable to allow her to continue them. He asserts that her subsequent conduct of them after the Australian injunction had been granted and her attitude to the Australian proceedings “undermines” the integrity of the Australian Court’s processes.
Generally Mr Kearney argued that the basic principle, affirmed in the High Court of Australia in CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 (CSR v Cigna) at 393, is that where there is pending litigation in one jurisdiction in a court which can provide complete relief and a party institutes proceedings in another jurisdiction, to do so is considered to be vexatious and harassing to the other party and the Court will restrain the other party from continuing the foreign proceedings.
It is said that the wife ought be restrained from prosecuting the English proceedings because the Family Court of Australia has jurisdiction to resolve all the issues in dispute and provide complete relief. The husband commenced proceedings first and the proceedings are well advanced, the wife lives permanently in Sydney so can conveniently take part in the Australian proceedings which are to be heard in Sydney and all except insignificant assets are in Australia. It is argued that the proceedings in England and Australia are over the one controversy, that which arises from the marital relationship and its end. In reliance on Henry v Henry (1995) 185 CLR 571, Mr Kearney argued that a stay should be granted if continuation of the English proceedings is oppressive to the husband in that they are seriously and unfairly burdensome, prejudicial, damaging and vexatious because they cause him serious and unjustifiable trouble and harassment. He said that it is prima facie vexatious and oppressive to commence proceedings in another jurisdiction if proceedings over the same issues permitting the same remedies are pending in the jurisdiction where the anti-suit injunction is being sought. One obvious reason for such vexation is the prospect of “entirely different outcomes” in each.
Mr Kearney argues that the procedural history of the Australian suit demonstrates that the wife’s attitude is such that the anti-suit injunction against her is warranted to protect the integrity of the proceedings of the Family Court of Australia. He relies on the following facts and matters to which I have added my own comments:
a)The husband commenced his property claim in August 2008. In mid October 2008, a Case Assessment Conference was arranged. The wife attended in person and without representation. She informed the Registrar conducting it that she would not participate in the proceedings nor file any documents. The registrar made orders requiring the wife to file any response she sought to rely on and a financial statement – A party should not simply choose not to participate in property settlement proceedings. The rules governing their conduct have been designed to serve particular relevant purposes related to such disputes because they advance the public interest. They are designed to permit and encourage settlement before hearing in circumstances which provides the greatest potential for a just result ie where the parties know the nature and value of the property available for division and where the parties engage in procedures which are intended to permit opportunities for the parties to negotiate a consent agreement for the just division of the matrimonial property.
b)On 2 December there was a directions hearing before a registrar. The wife attended by telephone and was encouraged to file the appropriate documents and the time for filing her Response and financial statement was extended to 19 January 2009. The wife is alleged to have attempted to defeat the Court process by failing to comply with the orders for filing these and by commencing divorce proceedings in England in February 2009, for the purpose of giving the Family Law Division of the High Court of Justice for England property and spousal maintenance jurisdiction.
c)As a result of the wife’s failure to file documents, the Australian property proceedings were listed for undefended hearing on 14 April 2009 before a Judicial Registrar. Despite having filed no documents, the wife attended in person and opposed the matter proceeding on an undefended basis – As there is an absolute right to a rehearing before a judge if an application is made in time, the matter was adjourned for hearing before a judge on 15 May 2009.
d)On 11 May 2009 the wife filed an Application for Ancilliary Relief seeking property division and spousal maintenance in the English Family Law Division.
e)On 14 May 2009, the Husband filed an Application for Divorce in the Federal Magistrates Court. The wife was personally served the next day but denies service. While admitting she was handed the papers, she says she did not open or read them so she has not been formally served – Her attitude could be the result of nothing but an improper attempt to undermine the Court’s process.
f)On 15 May, the wife appeared in person despite the final property matter being listed as undefended and the wife having filed no documents. After representing herself to oppose interim orders the husband sought, orders were made to sell the N and Y real estate – These benefitted the wife as well as the husband.
g)The property proceedings were adjourned to 22 May so the husband could make an application for the sale of land at S, Sydney.
h)On 15 May, but later than the Sydney proceedings, the wife, through her English solicitors, obtained orders for substituted service of the English proceedings by retrospective service on his Australian solicitors – At the same time she did not permit service upon her of Australian proceedings through her English solicitors and required service on her in Australia via a Post Office box number, something the rules continue to permit.
i)The wife, then, on 19 May 2009, filed an application for expedition of the divorce proceedings in England. The wife made this application ex parte – Her solicitor’s affidavit made it clear that the wife was engaged in a race to get the divorce so the High Court of Justice will gain jurisdiction in the property and maintenance proceedings. The justification for this was said to be the wife’s claim that the husband has substantial assets in England and elsewhere in Europe which are beyond the reach of the Australian Family Court but has not disclosed these in his Australian Financial Statement.
j)On 22 May the Family Court of Australia made orders for the sale of real estate at S and injuncting the wife after a defended hearing in which the wife participated in person without legal representation and, again, without filing any documents – Although she opposed the orders which were made, she will benefit from them. She was represented in England when, contrary to the Australian injunctive orders, she caused or permitted the English proceedings to advance on 27 May 2009, when the decree nisi proceedings had been fixed for hearing. They were adjourned to 15 June 2009. They were heard on 25 June after being not reached on 15 June. The wife, through her solicitor, moved the English Court for a Decree Nisi. She, despite the findings and decision of Ryder J, had challenged the authority of the Family Court of Australia by proceeding on 25 June notwithstanding the restraining order of Le Poer Trench J on 22 May.
k)On 2 November 2009, the wife filed, in the Family Court of Australia, her Response to the husband’s amended application for property orders, an affidavit sworn on 29 October 2009 and a Financial Statement – These are the first documents the wife has filed in the proceedings. They were filed in response to orders I made listing the anti-suit injunction for hearing on 20 November 2009 and that the wife file her response to the husband’s application for final orders, her financial statement and any material she relies on in either proceedings by 30 October 2009. She had obtained legal representation and probably thought her chance of resisting the husband’s anti-suit injunction application would be increased by filing appropriate documents.

The matter was listed for hearing on 20 November after a hearing on 26 August during which each party undertook to take no further steps in the English proceedings until the anti-suit claim of the husband was resolved.
The wife’s response opposes the orders the husband has applied for and seeks to restrain the husband taking further steps in the Federal Magistrates Court to obtain a divorce and from taking any further steps in the same court relating to the marriage between the parties. In addition, it seeks an order granting the wife leave to proceed with the English divorce application and she also asks for a mandatory injunction to require both parties to instruct “their English lawyers” to apply for a decree absolute and comply with “any orders or directions” of the English Court.
Mr Tockar, of counsel, appeared for the wife at the hearing before me. In his written submission he makes the wife’s stance clear. He writes:
“3. Whilst the wife has no objection to the husband proceedings in the Family Court of Australia for an alteration of property interests in respect of property situate in Australia, she seeks to proceed with her application in the United Kingdom for a Decree of Divorce and ancillary relief, in respect of spousal maintenance and property outside Australia – see exhibit to the affidavit of [Mr DT] at page 75. Alternatively, the wife seeks that the parties’ Australian assets be realised and that the net proceeds be held in trust to be distributed pursuant to orders made by the Principal Registry of the Family Court of High Justice in the United Kingdom – see the wife’s affidavit at page 15, paragraph 52(1).”
The wife still holds a 20% interest in the marina. She says her interest is worth $1 million. To divide the parties’ property in accord with justice and equity, whether pursuant to s 79 of the Family Law Act or pursuant to the English legislative equivalent, it may not be necessary to sell this interest and convert it into cash. To decide whether to do so or not would require a hearing unless it is done by consent. Consent is unlikely in the circumstances. There is no indication that the husband seeks its sale. I do not know enough about the parties’ true financial situation to be able to say at this stage whether or not it will have to be sold eventually. Their manner of disclosing their finances is unenlightening on this aspect. The wife has not formally applied to sell her interest in the marina but does not need to. She is free to sell it although she should not, in doing so, commit waste. Orders have already been made to liquidate all other significant Australian assets.
In his arguments for the wife, Mr Tockar initially analysed CSR v Cigna to reveal the steps which he submits are required by that decision to be taken in deciding whether or not to grant an anti-suit injunction. He argues that the test for deciding is different depending on which of the grounds is relied on, the grounds being protection of the integrity of the Court’s processes and the Court’s equitable jurisdiction to restrain unconscionable conduct including the unconscientious exercise of legal rights.
He said that CSR v Cigna is authority, if the Court is to rely on unconscientious exercise of legal rights in another jurisdiction, that it first must decide whether the Court is an appropriate forum for hearing the dispute using the test of forum non conveniens entrenched in our law by Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538. If it is not a clearly inappropriate forum, only then should it consider the second step; whether the attempted exercise of legal rights in the foreign forum is unconscionable. The facts raising unconscionability are not closed. The test of unconscionability involves the consideration of whether the proceedings are vexatious or oppressive. Mr Tockar emphasised that in CSR v Cigna at p 390 it was said that foreign proceedings are to be held to be vexatious or oppressive only if they can achieve no more than may be achieved in local proceedings.
If the local forum is so clearly inappropriate that a permanent stay of the leave proceedings should be granted, there should be no anti-suit injunction against the party who has commenced the foreign proceedings. Nor should prosecution of foreign proceedings be restrained if the local proceedings cannot deliver remedies which are available in the foreign court.
In arguing against the injunction the husband seeks, the wife’s counsel makes the point that the findings in England that the husband is domiciled there gave the English Court jurisdiction. He concedes that the husband’s domicile in England does not make Australia a clearly inappropriate forum, but rather a less appropriate forum than England. He says that, nevertheless, because it is said by the wife that any spousal maintenance order made in England will be more easily enforceable against the husband than an Australian order because he actually lives in France, and because it will be more convenient for the husband to travel from France to England than to Australia for court hearings of spousal maintenance proceedings, they should be heard in England. He argues that the English Court would be a more appropriate forum for determining the distribution of such of the parties’ assets as are held outside Australia. It is the wife’s case that the husband has, but has not disclosed, significant assets which are outside Australia including a beneficial interest in his parents’ home in England. It is, therefore, submitted that for deciding issues involving spousal maintenance and overseas assets the Family Court of Australia is a clearly inappropriate forum and no anti-suit injunction should be granted to the husband. This is said despite the concession that Australia is the proper jurisdiction for dealing with matrimonial property in Australia.
If the Court holds Australia not to be a clearly inappropriate forum for the dispute between husband and wife over spousal maintenance and offshore property, Mr Tockar submits that the Court does not need to injunct the wife from advancing the English proceedings to protect the integrity of its processes because the wife does not wish to prevent the continuation of the appropriate proceedings here; the property proceedings.
He also submits that the commencement and continuation of the English divorce proceedings by the wife after the husband commenced property proceedings in Australia is not unconscionable and vexatious and/or oppressive because the issues in the foreign proceedings and in the local proceedings are not the same and that “complete relief”, which is available in England, is not available from the Court in Australia. He asserts that the English proceedings are for divorce and “ancillary [relief] relating specifically to spousal maintenance and to assets situate outside Australia” whereas local proceedings “relate to an alteration of property interests in respect of property situate in Australia”. He says that rather than being unconscionable, the English proceedings offer “a realistic prospect of establishing her claim for spousal maintenance” by being able to issue subpoenas which are effective in France and to obtain orders for transfer of real property interests where the real property is in England. He does not say what relief is available in England but not in Australia unless he refers to subpoenas effective in France and orders for the transfer of real property located in England. His case to say subpoenas which are most effective in France make a difference to the relief available and make the English Court more able to provide “complete relief” is based on the ability in the English proceedings to issue subpoenas which are effective in France on non-parties rather than on the husband himself. He pointed out that the husband is employed to work in France and assumed his employer is located there.
Finally, Mr Tockar argues that the power to grant an injunction to restrain foreign proceedings should be exercised with caution because, although it is an order in personam it interferes with the processes of a court of a foreign country. I accept that comity requires the law of a foreign jurisdiction to be recognised and to be effective to some extent locally, but here there is a test for interference with a foreign jurisdiction. The test must be upheld rather than emasculated by the addition of another principle.
Consistently with the orders the wife sought, Mr Tockar concluded by submitting that orders which allow the husband to pursue his claim for settlement of Australian property in Australia but allow the wife to finalise the parties’ divorce and her claim for spousal maintenance and offshore property in England are appropriate. As an alternative, presumably by permitting the wife to make an English application for property settlement encompassing all the matrimonial property available for distribution between the parties, he asks for orders that require all the Australian property to be realized with the net proceeds to be held in trust so they can be dealt with at an English property hearing which the wife must propose to institute if it has not already been instituted by her claim for relief which is ancillary to the English divorce petition. This is inconsistent with the wife’s failure to concede that her interest in the marina be sold. There is nothing said in the wife’s submissions in support of a permanent stay of the Australian proceedings, nor a part of them.
The husband commenced the proceedings in Australia before the wife commenced them in England. He originally commenced property proceedings and had not commenced divorce proceedings before the wife commenced them. At the time she commenced the divorce proceedings, she sought property and spousal maintenance incidentally in circumstances where she could not independently claim property and maintenance orders without relying on the divorce to give the English Court jurisdiction to hear those claims. That the husband has claimed only property division in Australia does not prevent the wife from responding to his claim with her claims for both property division and spousal maintenance.
The husband’s claim for divorce is currently in the Federal Magistrates Court. There is no reason why it could not be heard promptly. The Federal Magistrates Court would be able to transfer the divorce to the Family Court of Australia if it thought that the continuation of the divorce before it rather than the Family Court of Australia is in some way a reason for the Family Court not to grant an anti-suit injunction to prevent the English decree nisi from being made absolute (see s 39 of the Federal Magistrates Court Act 1999).
The inference from the wife’s initial refusal to take part in the Australian proceedings for property settlement and comply with orders is that she commenced the English divorce proceedings not because she wanted a divorce but because she wanted to obtain what she must have believed was a tactical advantage from being able to take property and maintenance proceedings in England rather than Australia. After all, divorce is quick and cheap in Australia, yet the wife who had lived in Australia since January 2008 waited until February 2009 to commence the English divorce proceedings. Separation was in October 2007. By October 2008 she could have commenced divorce proceedings here and could have obtained an Australian divorce within 6 to 8 weeks of filing for it on the only ground available which is proven by proof of 12 months separation. From what I have learnt of the English procedure, it is highly likely that the Australian divorce would have involved no more expense and possibly less than an English divorce.
I am satisfied that I should accept the husband’s Counsel’s submission that the proceedings before this Court, the Federal Magistrates Court and the English court are part of the same controversy between the husband and wife because, as was said in Henry v Henry at pp. 591-2,
“The marital relationship lies at the heart of all proceedings between husband and wife with respect to their marital status, especially proceedings for the dissolution of marriage. In such cases, it is the marital relationship itself which is the subject of controversy. And if the marriage is still subsisting, disputes with respect to property, maintenance and the custody of children will ordinarily be but aspects of an underlying controversy with respect to the marital relationship…”
This was said about the granting by a court of a stay of proceedings in it on the basis of forum non conveniens. Here the Court must first consider whether it should refuse to hear the proceedings brought by the husband because proceedings have been brought by the wife in England. This, in the circumstances that the wife commenced in England after the husband had commenced the Australian proceedings, does not make the Australian forum clearly inappropriate and make it necessary to stay them to avoid injustice. It is not necessarily the continuation of the Australian proceedings which 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’” (Regie National Renault v Zhang (2002) 210 CLR 491 at 504 quoting from Oceanic Sun 165 CLR 197 at 247). It may be that, in the circumstances in which the English proceedings were commenced, they are oppressive or vexatious.
I do not accept that because subpoenas can be served in France and be effective in English proceedings and that in England, enforceable orders “in respect of property situate in the United Kingdom” can be made as resulting in Australia being a clearly inappropriate forum. The wife admits it is not. She is quite content with dealing with property in Australia in the Australian forum. Deficiencies, if any really exist, apply to the mechanisms each party may have at their disposal in seeking to prove their cases and to the ability to apply to enforce orders in rem as distinct from orders in personam. These difficulties apply to much the same extent to English proceedings in relation to the issue of subpoenas to individuals and organisations outside the European Union and the enforcement of property transfer orders.
The wife does not suggest that, if the husband is hiding property, it is in France. She does not say where it might be. The husband has property in Australia which is already identified and held in trust in cash which can be used to meet any maintenance obligations he is found to have even more certainly than any equitable interest in property held at law by his parents might be able to be used to meet any maintenance obligations he is found to have in England. He does not live in England and does not have to go there. He does not live in Australia but will probably be required to come here to pursue the Australian proceedings. Australia, United Kingdom and France are parties to the Convention on the Recovery Abroad of Maintenance. The only assets the wife alleges with any specificity that the husband may be concealing are shares in Australian companies i.e. AMP and Telstra and “two investment mortgages and assets held by him in Europe or elsewhere”. Any interest he has in real estate in his parents’ legal possession is denied rather than concealed.
The husband commenced the property proceedings here. The wife’s argument that, for reasons of convenience to him, it is not as appropriate as the English Court for him and that inappropriateness is part of the reasons for finding the Family Court of Australia is clearly an inappropriate court to hear the property and divorce issues cannot be upheld. Virtually all the identified property is in Sydney, the wife lives in Sydney and all aspects of relief the wife seeks are available in the Family Court of Australia. Her reasonable need for spousal maintenance and her general needs relating to division of property are better able to be judged by a tribunal which understands the costs of living and accommodation needs and circumstances in Sydney. The husband does not live in England or Australia so neither tribunal is more suited to deciding his real financial situation.
I am not satisfied that there is a significant prospect, if the husband has not disclosed all his assets, that those assets are held in the United Kingdom or another European Union country rather than some independent tax haven or even the United States of America. One ought not lose sight of the fact that, in the proceedings in Australia, orders are made in personam and the parties are required to make full and candid disclosure. In the event a party is found not to have done so, orders can be made which take failure to disclose and the possible extent of that failure into account.
However the factual determinants of the justice of maintaining the Australian forum must be examined in the light of the powerful statement in Henry v Henry, where at p. 591 the High Court of Australia said:
“It is prima vexatious and oppressive, in the strict sense of those terms, to commence a second and subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in the different countries which have jurisdiction with respect to the matter are such, in our view that, prima facie, the court of one or the other should be seen as vexatious or oppressive with the Voth sense of those words”
There is, in my assessment, no proper ground for finding that the Family Court of Australia proceedings and / or the divorce proceedings if they are, as they could summarily be, transferred to this Court rather than remain in the Federal Magistrates Court, ought to be stayed. There is no substantial basis for a finding that this Court is a clearly inappropriate forum. I find that it is not vexatious or oppressive to continue the Australian proceedings so the Australian Family Court is not a clearly inappropriate forum. It is vexatious and oppressive to continue the English proceedings. The wife’s conduct in commencing them was unconscionable. There has been no basis put before me on her behalf which would warrant rejection of the prima facie inference.
The wife, by her conduct, has, in addition, acted in a manner which challenges the integrity of the processes of the Family Court of Australia. One needs to appreciate the meaning of the phrase “the integrity of the processes”. The 2nd revised edition of the Macquarie Dictionary, in the definition of “integrity”, includes two apposite meanings for it in the context of the phrase to be understood. One is: “the state of being whole, entire, or undiminished: to preserve the integrity of the empire”. The other is “sound, unimpaired, or perfect condition: the integrity of the text”. Both definitions of the word imply, in relation to the processes of the Family Court, that they must be able to operate as they are intended to; to permit the Family Court to resolve the issues which have been raised by the marital relationship and its breakdown or deterioration.
The Family Court of Australia is charged in the Family Law Act with dividing the property of the parties in a just and equitable manner. One of the obligations it has in carrying out its duty is to divide all the property once and for all time. It cannot do it if the proceedings over that division and spousal maintenance are split between two countries. The Court can best do this if it knows the financial circumstances of both parties. It should and is entitled to know the full extent of the property each party owns, their incomes and potential to earn income. Where, as happened here, a party refuses to comply with orders and requirements of the Rules of Court which exist or are made to ensure the Court is in the best possible position to know these matters and refuses to take part in the proceedings, in many instances the Court can do little or nothing and the matters must be decided on an undefended basis. However, here the case is different. The wife originally refused to take part in the proceedings simply because she wished to make her spousal maintenance claim in England and divide her property interest claims between property held outside Australia and interests in property in Australia rather than to deal with all the property in the one proceedings. As the proper course in Australia is to deal with all property and spousal maintenance in the one proceedings and the Court process is designed with that end as a goal because justice requires, so far as this can be achieved, a once and for all end to litigation between parties to a marriage. Such a result is nearly invariably able to be achieved and involves a weighing of property and spousal maintenance claims against one another.

One does not know, if she is not injuncted from continuing the English proceedings, to what extent she will in future co-operate in the Australian proceedings brought by the husband. The issues of spousal maintenance and property division; including property capable of producing income as there appears to be here, are interdependent. One does not know whether the Australian or English proceedings, if both are to continue, will be heard first. If the Australian proceedings deal only with assets in Australia, the Court will not be fully able to do justice between the parties if it does not know what orders are to be made in England. Any orders it does make are likely to be in vain because the English Court will then alter the property division between the parties by dividing the overseas property and making spousal maintenance orders. For the wife to commence the English proceedings with this prospect in mind is a clear challenge to the integrity of the Australian Court processes. The wife’s conduct has significantly interfered with the integrity of the Court process.
I am satisfied that the relief which is available in Australia is as complete as that available in England, that the issues in each jurisdiction are really the same if the whole of each proceedings would be heard in each and that there are no remedies which are not available in Australia but are available in England. I am not satisfied that the ability to issue subpoenas by the English Court which are recognised in France is a superior remedy. It is not a remedy, it is a mechanism for producing evidence. I accept it is convenient and would make it easier to obtain details of the husband’s employment if the employer is in France. Subpoenas directed at organisations which have financial dealings in Australia can be issued by the Australian Court and will be more effective in Australia than English subpoenas to the same organisations. The reverse is the case in relation to organisations in England. If the employer is really an American company, for example, those from each country will be equally as ineffective.
The property proceedings in Australia have already commenced, interim orders altering the nature of the property have already been made. These proceedings will not be able to follow their proper procedural course if the Court waits for the English Court’s determination. Of course, the English Court could well feel constrained to wait for the Australian Court’s decision. No doubt it will feel that it is faced with the same paradoxical conundrum. The situation is clearly one where the processes of the Family Court of Australia are undermined by the continuation of the English proceedings, which the wife should be restrained from continuing. She will then probably feel no alternative but to take a proper part in the proceedings in the Family Court of Australia and thereby put the Court in a position in which, because its procedural integrity and processes have been maintained, it can reach a just result in the dispute over marital property and spousal maintenance between the parties.
I should add that the wife’s Counsel’s submission that this Court should, as an alternative, simply liquidate the Australian property and leave it to the English Court to determine the balance of the dispute amounts to a breach in the integrity of process of the Family Court. A decision to do this could only be made at a final hearing. Yet this is the question I am being asked to decide now, although this is not a final hearing. I cannot imagine any situation which is more properly characterised as undermining the integrity of the Court’s processes. The wife, by seeking it, is challenging their integrity. This is no different from the Court dividing the Australian property between the parties and leaving it to the English Court to divide the offshore property and determine spousal maintenance. It has not, in any event, been conceded that I should restrain the wife from seeking orders for division of the Australian property in England or that I should restrain the wife, if property orders are first made in Australia, from seeking to in effect or actually alter them in England by later orders. Nor does the wife suggest I should restrain the husband from doing the reverse equivalent in Australia if the English property and spousal maintenance proceedings are decided before the Australian proceedings are decided. In either instance, the Australian Court’s processes and procedural integrity would be undermined.
I should and shall make orders 1, 2, 3 and 4 in the terms sought by the husband in his amended application filed on 13 July 2009, and refuse to make any of the substantive orders the wife seeks and reserve costs.

I certify that the preceding fourty-nine (49) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen delivered on 30 November 2010.

Associate:

Date: 30 November 2010