KENT & KENT
[2017] FamCA 21
•20 January 2017
FAMILY COURT OF AUSTRALIA
| KENT & KENT | [2017] FamCA 21 |
| FAMILY LAW – PRACTICE AND PROCEDURE – STAY – Where the husband has commenced proceedings in Papua New Guinea – Where the wife has commenced property proceedings in Australia – Where the parties have assets in both jurisdictions – Where the husband seeks a stay of proceedings in Australia – Where Australia is not a clearly inappropriate forum – Application for stay dismissed. FAMILY LAW – PRACTICE AND PROCEDURE – ANTI-SUIT INJUNCTION – Where the wife seeks to restrain the husband from continuing proceedings in Papua New Guinea – Where the proceedings will concern the same issues being litigated in Australia – Where an anti-suit injunction is necessary to protect the integrity of this Court’s processes – Application for anti-suit injunction granted. |
| Family Law Act 1975 (Cth) |
| CSR Ltd v Cigna Insurance Australia Lth (1997) 189 CLR 345 Mallett & Mallett (1984) 156 CLR 605 Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 |
| APPLICANT: | Ms Kent |
| RESPONDENT: | Mr Kent |
| FILE NUMBER: | BRC | 11392 | of | 2016 |
| DATE DELIVERED: | 20 January 2017 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Carew J |
| HEARING DATE: | 16 January 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Dr Ingleby |
| SOLICITOR FOR THE APPLICANT: | HopgoodGanim Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Kirk QC with Mr Hackett |
| SOLICITOR FOR THE RESPONDENT: | Hirst & Co |
Orders
The application by the respondent for a stay of the proceedings commenced by the applicant on 11 November 2016 (BRC 11392/2016) is dismissed.
The respondent is restrained and an injunction hereby issues restraining him from commencing or continuing any proceedings, arising out of the marital relationship between himself and the applicant, in Papua New Guinea (in particular proceedings commenced in National Court of Justice at B Town, Papua New Guinea on 20 October 2016 MC No … of 2016 (CC4)) save as required to seek recognition and/or enforcement of orders made by this Honourable Court.
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 Kent & Kent 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 11392 of 2016
| Ms Kent |
Applicant
And
| Mr Kent |
Respondent
REASONS FOR JUDGMENT
Ms Kent (“the wife”) applies for an anti-suit injunction against Mr Kent (“the husband”) restraining him from continuing or commencing proceedings in Papua New Guinea (“PNG”) until determination of proceedings commenced by her in this Honourable Court.
The husband opposes the anti-suit injunction and cross-applies for an order that the proceedings commenced by the wife in this Honourable Court be stayed either permanently or until determination of proceedings commenced by him in PNG.
It was agreed that the husband’s stay application should be dealt with before the anti-suit injunction application.
background
The husband and wife married in 1968 and moved to PNG that same year where they remained until the wife returned to live in Australia in 1997. Before this Court, both parties say that separation occurred in October 2016.
The husband is seventy-one years of age and the wife is seventy years of age.
The parties have two adult sons, the youngest of whom was aged eighteen when the wife relocated to Australia. The adult children, now aged thirty-nine and thirty-seven respectively, generally live and work in PNG although one son’s family lives near the wife in Australia and it seems the son commutes between Australia and PNG.
Between 1997 and 2013 each of the parties was a regular visitor to the country in which the other lived (although during the period 2006 to 2013 the wife’s visits to PNG were not as frequent) and they lived together during such periods. After 2013 the wife made no further trips to PNG but the husband has continued to spend time in Australia.
On 20 October 2016 the husband commenced proceedings in PNG by Petition for Decree of Dissolution of Marriage in the National Court of PNG (MC No … of 2016 …). In this Petition the husband relies upon the ground of adultery and names a co-respondent who has not as yet been served.
On 25 October 2016 the husband informed the wife in writing (via a letter from his solicitor) inter alia that he regarded the marriage as irretrievably broken down and that he considered “all financial issues … should be determined exclusively by a court in Papua New Guinea” and he “will oppose a Court in Australia exercising any jurisdiction to determine any financial or related matter”. The letter also gave notice to the wife that she should vacate the property in which she had been living as he “intends residing in that unit, except when he is obliged to travel to Papua New Guinea”.
On 11 November 2016 the wife filed an Initiating Application in this Court seeking a property adjustment order dividing the property interests of the parties in the proportion fifty-five percent to the wife and forty-five percent to the husband (BRC 11392/2016).
On 25 November 2016 the husband filed a Notice of Motion and Application for Ancillary Relief in the National Court of Justice in PNG seeking inter alia an anti-suit injunction against the wife restraining her from continuing with the Australian proceedings (BRC 11392/2016) until the final determination of the proceedings commenced by him in PNG (MC No … of 2016 …) and for leave to file an Amended Petition for Decree of Dissolution of Marriage to include a claim for property settlement. That Notice of Motion is returnable before the PNG court on 15 February 2017.
In the proposed Amended Petition the husband alleges inter alia:
a)The husband and wife have not cohabited continuously since approximately 1997;
b)Cohabitation ceased and the wife deserted the husband when she left the matrimonial home in 1997 and took up residence in Australia;
c)Since 1997, they have lived separately and apart although the husband from time to time visited the property in Australia to see the wife;
d)It has been agreed between the Board of Kent Limited and the husband that he will retire on a date prior to 31 December 2017 and his successor as managing director is being groomed. On retirement the husband will have no further income.
The orders sought in the proposed Amended Petition include:
a)The wife receive a cash payment of $750,000 for her interest in the unit in Australia; retain the Marina berth, her personal effects and jewellery, her motor vehicle, half the contents of the unit and her bank accounts;
b)The husband to retain all other property;
c)The husband to pay the wife an annual sum of $60,000 for the rest of her life.
The wife has not as yet filed an Answer to the husband’s Petition filed 20 October 2016 and alleges that there is an agreement with the husband that she not be required to file one until after the outcome of the hearing of the husband’s Notice of Motion listed for hearing in February 2017.
That alleged agreement appears at odds with the evidence from the husband’s PNG lawyer who suggests that there is a prospect of the wife being estopped from seeking relief because she has not filed an Answer within the required time limit.[1]
[1] This was not a matter commented upon in either written or oral submissions by either party
It is not in contention that the grounds for divorce in PNG are fault based and the husband relies (in his proposed Amended Petition) on three alternate grounds namely adultery, desertion or alternatively that he and the wife have not cohabitated for a period of not less than two years immediately preceding the date of the Petition.
It is not in contention that there is property in Australia which will be relevant to any property settlement hearing and includes the following:
a)Unit in Australia which the wife values at $4,250,000;
b)ANZ Bank accounts in wife’s sole name $1,183,500;
c)ANZ Bank account in husband’s sole name;
d)Motor vehicles;
e)Marina berth;
f)Jewellery;
g)Furniture and contents;
h)Arrive Wealth Management Pension Funds;
i)Possibly a fishing vessel.
It is not in contention that there is property in PNG which will be relevant to any property settlement hearing and includes the following:
a)The husband’s eighty percent shareholding in Kent Limited;
b)Possible Insurance payout from QBE the subject of a reserved judgment in the PNG court;
c)Bank accounts;
d)Furniture and contents;
e)Fishing equipment;
f)Possibly a fishing vessel (same as mentioned above).
Kent Limited owns property in PNG including real estate (six properties), plant and equipment, inventories, stock, debtors and intellectual property rights. The balance sheet as at 30 June 2016 recorded the net assets as K57,000,000 or AUD$23,000,000 although this adopts historical values and not market values.
the stay application
By his Response to Initiating Application filed 25 November 2016 the husband seeks a permanent stay of the proceedings commenced by the wife for property settlement on 11 November 2016 and by his Response to an Application in a Case filed 12 January 2017 he seeks a stay of the proceedings commenced by the wife pending a decision of the National Court of Justice at B Town PNG with respect to the proceedings commenced by the husband in PNG.
It is not in contention 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[2]
…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.
[2] [1990] HCA 55 at [30]; (1990) 171 CLR 538
Applicable principles in determining the stay application
There is no doubt that this Court has jurisdiction to deal with the wife’s application for property settlement.[3] The question is whether the Court should exercise that jurisdiction.
[3] See s 39 Family Law Act 1975 (Cth)
To determine that question, the appropriate test is whether or not this Court is a ‘clearly inappropriate forum’[4] and the husband bears the onus of establishing that to be so.[5]
[4] Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55 at [51]; (1990) 171 CLR 538; Henry & Henry (1996) 185 CLR 571
[5] Voth v Manildra Flour Mills Pty Ltd (supra) at [51] & [31], [50]-[52]; (1990) 171 CLR 538; Henry & Henry (supra)
The High Court in Voth (supra)[6] adopted as correct the following description of the test articulated by Deane J in Oceanic Sun Line Special Shipping Company Inc v Fay[7]:
... it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds. That power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and in which both the question of comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression. The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant will be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff. Otherwise, that onus will ordinarily be discharged by a defendant who applies promptly for a stay or dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties.
and
"oppressive" should, in this context, be understood as meaning seriously and unfairly burdensome, prejudicial or damaging while "vexatious" should be understood as meaning productive of serious and unjustified trouble and harassment.
[6] [1990] HCA 55 at [51]; (1990) 171 CLR 538
[7] (1988) 165 CLR 197 at 247, 248
Relevantly, the High Court in Voth (supra) also held:
36. … the question which the [clearly inappropriate forum] test presents … focuses on the advantages and disadvantages arising from a continuation of the proceedings in the selected forum rather than on the need to make a comparative judgment between the two forums. That is not to deny that considerations relating to the suitability of the alternative forum are relevant to the examination of the appropriateness or inappropriateness of the selected forum….
37. The availability of relief in a foreign forum will always be a relevant factor in deciding whether or not the local forum is a clearly inappropriate one. But such a decision neither turns upon an assessment of the comparative procedural or other claims of the foreign forum nor requires the formation of subjective views about either the merits of that forum's legal system or the standards and impartiality of those who administer it.
…
42. … In deciding whether to grant or refuse a stay, the court does not, indeed cannot, evaluate the justice or relative merits of the substantive laws of the available forums (including the chosen forum)….
In the application of the ‘clearly inappropriate forum’ test the High Court in Voth accepted that the discussion by Lord Goff of Chieveley in Spiliada Maritime Corp. v Consulex Ltd[8] in relation to relevant ‘connecting factors’ and ‘a legitimate personal or juridical advantage’ “provides valuable assistance”.[9]
[8] [1987] 1 AC 460 at 477- 478 and 482 - 484
[9]Voth (supra) at [51]
Lord Goff relevantly stated:
… So it is for connecting factors in this sense [“that with which the action had the most real and substantial connection”] that the court must first look; and these will include not only factors affecting convenience or expense (such as availability of witnesses), but also other factors such as … the places where the parties respectively reside or carry on business. [10]
(citation omitted)
And further:
Clearly, the mere fact that the plaintiff has such an advantage [a legitimate personal or juridical advantage] in proceedings [in the local forum] cannot be decisive.[11]
[10] At page 478
[11] At page 482
Even if PNG is a more appropriate forum it does not follow that Australia is a clearly inappropriate forum.[12]
[12] Voth (supra) at [66]
Is Australia a clearly inappropriate forum?
Australia will be a clearly inappropriate forum if a continuation of the proceedings will 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", to the husband.[13] Many factors will be relevant to that enquiry.
[13] Henry (supra) at 587
Factors that may favour a stay of the Australian proceedings
Factors that favour a stay of the Australian proceedings include:
a)The husband holds an eighty percent shareholding in Kent Limited which will need to be valued and its assets, including real property, plant and equipment are situated in PNG as are documents relevant to the valuation;
b)The husband and wife have a significant personal connection to PNG having lived there together from 1968 to 1997;
c)The husband continues to regard PNG as his primary place of residence;
d)The husband commenced proceedings for divorce in PNG on 20 October 2016 and on 15 February 2017 will seek leave to amend his initiating process to include relief in relation to property settlement;[14]
e)The PNG court can provide a complete resolution of the controversy;
f)The husband informed the wife on 25 October 2016 that he insisted their financial affairs be sorted out in the PNG jurisdiction;
g)The wife through her then solicitors accepted service of his initiating legal process;[15]
h)Necessary witnesses including valuers and accountants are likely to be based in PNG and would have to be flown to Australia to give evidence thus increasing the costs of litigation;
i)There may be some difficulty transferring funds out of PNG (although what those difficulties might be and how that would ultimately affect the matter was not the subject of evidence);
j)Any orders made in PNG will be recognised in Australia.
[14] I have no reason to regard it as unlikely that the husband would be able to proceed with property settlement proceedings in PNG
[15] The wife disputes those instructions were provided but in any event jurisdiction in relation to the property proceedings remained in issue
Factors that may not favour a stay
Factors that do not favour a stay of the Australian proceedings:
a)Proceedings were regularly commenced by the wife in Australia on 11 November 2016 seeking property settlement (although this is not a significant factor);[16]
b)The parties have a significant personal connection to Australia both being Australian citizens, the wife having lived permanently in Australia since 1997 and the husband being a not infrequent visitor to Australia;
c)The parties own valuable real estate, chattels and financial investments in Australia such that any dispute over values will require witnesses to be flown to PNG thus increasing the costs of litigation;
d)The valuation of the husband’s shareholding in Kent Limited can be conducted by C Accountants, Melbourne, who have the requisite knowledge, expertise and capacity, including staff and resources located in PNG;
e)The husband intends retiring from his role with Kent Limited prior to the end of 2017 and intends living in Australia in the unit owned by the parties and returning to PNG only when obliged to do so;
f)There is a risk that the wife may not be awarded as much property in the PNG court process because the system of law in in PNG is a fault based system;
g)The Family Court of Australia can provide a complete resolution of the controversy;
h)Any orders made in Australia will be recognised in PNG.[17]
[16] Voth (supra) at [69]
[17] See paragraph 6.4 of husband’s Outline of Argument - Judgment Enforcement (Reciprocal Arrangements)Act 1976 as amended (included in the Revised Laws of Papua New Guinea and styled Reciprocal Enforcement of Judgments Act Ch 50)
Consideration of relevant factors
There is no doubt that the parties have a significant connection to both PNG and Australia. They lived in PNG from shortly after their marriage in 1968 until the wife decided to move back to Australia in 1997 to be closer to family when the parties’ youngest child was eighteen. Thereafter both parties travelled between PNG and Australia and, to some extent at least, their married life continued until, on 25 October 2016, the husband informed the wife, in writing, that he regarded the marriage as irretrievably broken down. The wife continued to travel between PNG and Australia until 2013 although with less frequency after 2006. In the letter dated 25 October 2016 the husband informed the wife that it was his intention to reside in the unit they jointly own in Australia and only travel to PNG when obliged to do so and according to his proposed Amended Petition seeking property settlement it is his intention to retire from Kent Limited on a date prior to 31 December 2017.
It appears on the evidence therefore that from a personal and practical sense it would be more convenient for both parties to have the proceedings continue in Australia.
It is not in contention that the law of both PNG and Australia has the capacity to quell the entire controversy arising between the parties as a consequence of the marriage breakdown and that orders made in either jurisdiction will be recognised by the other.
There are relevant assets in both jurisdictions which will require valuation and if there is a dispute in relation to valuation that may involve valuers or other witnesses travelling to the other jurisdiction which in turn may involve extra cost to the parties or either of them, but that is a consideration that will apply whether the proceedings take place in PNG or Australia.
The proceedings commenced in each jurisdiction are at an early stage. In my view nothing turns on who is determined to have been the first in time to commence proceedings.
As the granting of a divorce in PNG is fault based and the Supreme Court of Justice in PNG held in To-Robert & To-Robert[18] that infidelity was a relevant matter in the exercise of the court’s discretion in property settlement proceedings, it was submitted, on behalf of the wife, that there is a significant juridical advantage to the wife continuing her proceedings in Australia. The significance of that finding is not apparent from the judgment but, in any event, in relation to this issue the evidence relied upon by the wife from a lawyer practising in PNG states only that - “within the Papua New Guinean jurisdiction, there is a risk that the husband will argue that the wife should achieve a lower property adjustment, by relying on the moral ground of adultery.”
[18] [2012] PGSC 31
Mr Kirk QC for the husband argued that the same approach as to property settlement is adopted in both jurisdictions, namely one of justice and equity and that in the PNG court’s deliberations on such matters reliance is placed on the High Court of Australia’s pronouncements in Mallett & Mallett.[19] The evidence relied upon by the husband from a lawyer practising in PNG is silent on this issue.
[19](1984) 156 CLR 605
I am not satisfied that there is any juridical advantage to the wife in proceeding in this jurisdiction.
It was suggested by the husband that there may be some difficulty transferring funds out of PNG should he be ordered to do so. Other than the assertion I have no evidence of that being so. As the wife at this stage is seeking only a percentage of total assets and I do not know whether the orders she particularises will involve a payment to her of money rather than for instance a transfer to her of shares I cannot place any weight on this submission. I note also that as part of the orders sought by the husband in his proposed property settlement proceedings he seeks an order that the wife receive an annual sum of $60,000 for life. It would appear therefore that a sum of at least that magnitude is transferrable and on an annual basis.
Conclusion as whether or not a stay should be granted
In my view this is not a clear case justifying a stay and I have come to the conclusion that the Family Court of Australia is not a clearly inappropriate forum. Accordingly, I propose to dismiss the husband’s application.
the anti-suit injunction
The wife applies for an injunction restraining the husband from continuing the proceedings commenced by him in PNG.
The power to grant an anti-suit injunction arises either by reason of the court’s implied power to protect the integrity of its own processes or, arguably, pursuant to s 34 of the Family Law Act 1975 (Cth) (“the Act”) and pursuant to 114(3) of the Act which empowers a court exercising jurisdiction under the Act to grant an injunction in any case in which it appears to the court to be just or convenient to do so.[20]
[20] Teo v Guan [2015] FamCAFC 94; (2015) FLC 93-653; CSR Ltd v Cigna Insurance Australia Lth (1997) 189 CLR 345
Applicable principles in determining anti-suit injunction
While the applicable principles in determining an ‘anti-suit injunction’ are not the same as determining a forum non conveniens argument,[21] the High Court in Henry[22] said:
… the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words.
[21] (1997) 189 CLR 345
[22] (supra at 591)
As to purpose of an anti-suit injunction the High Court in CSR Ltd v Cigna Insurance Australia Ltd said:[23]
The counterpart of a court’s power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion. And in some cases, it is that counterpart power of protection that authorises the grant of anti-suit injunctions. … a court may grant an injunction to restrain a person from commencing or continuing foreign proceedings if they, the foreign proceedings, interfere with or have a tendency to interfere with proceedings pending in that court.
The inherent power to grant anti-suit injunctions is not confined to the examples just given. As with other aspects of that power, it is not to be restricted to defined and closed categories. Rather, it is to be exercised when the administration of justice so demands or, in the context of anti-suit injunctions, when necessary for the protection of the court’s own proceedings or processes.
(footnotes omitted)
[23] CSR Ltd v Cigna Insurance Australia Lth (1997) 189 CLR 345
It is argued on behalf of the husband that as there is a live jurisdictional issue to be determined in the PNG court the anti-suit injunction should be refused. Reliance is placed upon the decision of Murphy J in Skinner & Alfonso-Skinner[24] where his Honour made the statement quoted in the husband’s written outline inter alia:
39. … this court would be reluctant to grant an anti-suit injunction in circumstances where a live issue about the jurisdiction of a foreign court has not been determined by that foreign court. …
[24] [2010] FamCA 329 at [39] – [40]
That case concerned proceedings commenced for property settlement in Australia by the husband (which the wife did not object to) and for parenting orders (which the wife sought to be stayed) in circumstances where the wife had commenced divorce and parenting proceedings in Spain where she and the children lived. The husband did not cavil with the children continuing to live with the mother in Spain but sought orders that enabled him to spend time with them. The husband sought to have the wife restrained by an anti-suit injunction from continuing with the Spanish proceedings. There was a live issue about whether or not the Spanish court had jurisdiction in the parenting proceedings.
Murphy J quoted a passage from the High Court’s decision in Henry[25] which in the context of a discussion about the considerations relevant to a stay of proceedings on forum non conveniens grounds said:
To start with, no question arises unless the courts of the respective countries have jurisdiction with respect to the parties and their marriage. And if there is a question as to the jurisdiction of the foreign court, it may be necessary to adjourn the local proceedings to enable the foreign court to determine that question.
[25] (supra)
As Murphy J points out, a decision to adjourn the anti-suit injunction application, which is what was sought by the wife in that case, was a matter about which the court has a discretion. His Honour did not adjourn the proceedings pending a decision about jurisdiction. The husband’s proceedings in Australia were permanently stayed and the anti-suit injunction was not granted.
The husband in the present case is seeking to proceed with proceedings in PNG which concern or will concern (if he is granted leave to amend his originating Petition) the same issues being litigated in Australia as I propose to dismiss his application for a stay. In my view such an outcome would be oppressive and vexatious in the Voth sense. Further, as the proceedings will proceed in Australia an anti-suit injunction is necessary to protect the integrity of this Court’s processes.
Conclusion on the anti-suit injunction
For the reasons identified I propose to grant the wife’s application for an anti-suit injunction against the husband pursuing proceedings in PNG.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carew delivered on 21 January 2017.
Associate:
Date: 20 January 2017
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Stay of Proceedings
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Injunction
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Jurisdiction
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Abuse of Process
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