Kornfeld & Wehinger
[2023] FedCFamC1F 817
•26 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kornfeld & Wehinger [2023] FedCFamC1F 817
File number(s): MLC 1984 of 2023 Judgment of: WILLIAMS J Date of judgment: 26 September 2023 Catchwords: FAMILY LAW – JURISDICTION – Forum non conveniens – Appropriate forum where proceedings are on foot in the United Kingdom and Australia –Where the husband sought an application for an anti-suit injunction against the wife with respect to her proceeding in the UK jurisdiction – Where the wife subsequently applied to stay the husbands proceedings on the ground that the Australian forum is clearly inappropriate – Where the wife and children reside in Australia and the husband resides in the United Kingdom – Consideration as to the appropriateness of bifurcation – Determination that Australia is a clearly inappropriate forum – Husbands application dismissed Legislation: 1 Family Law Act 1975 (Cth) ss 45, 79, 106A
Domicile and Matrimonial Proceedings Act 1973 (UK)
Foreign Judgements (Reciprocal Enforcement) Act 1933 (UK)
Maintenance (Reciprocal Enforcement) Act 1972 (UK) Part I
Matrimonial and Family Proceedings Act 1984 (UK) Part III, ss 12, 13, 17
Matrimonial Causes Act 1973 (UK) ss 24B, 25, 25B
Reciprocal Enforcement of Foreign Judgements Order (Australia) Act 1994 (UK)
Cases cited: CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345
Henry v Henry (1996) FLC 92-685
Kent & Kent [2017] FamCAFC 157
Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197
Voth & Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
Yeo & Huy (No 2) [2012] FamCA 541
Division: Division 1 First Instance Number of paragraphs: 132 Date of hearing: 1 September 2023 Place: Melbourne Counsel for the Applicant: Mr Carne Solicitor for the Applicant: Davison Family Lawyers Counsel for the Respondent: Ms Bowen Solicitor for the Respondent: Clancy & Triado Table of Corrections 26 September 2023 In paragraph 61, the highlighted symbol “XX” has been removed. ORDERS
MLC 1984 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR KORNFELD
Applicant
AND: MS WEHINGER
Respondent
ORDER MADE BY:
WILLIAMS J
DATE OF ORDER:
26 SEPTEMBER 2023
THE COURT ORDERS THAT:
1.The husband’s application for divorce and financial orders under the Family Law Act 1975 (Cth) be permanently stayed.
2.The husband’s application for parenting orders be listed for further mention before a Judicial Registrar on a date to be advised.
3.Within twenty-one (21) days of the date of these Orders the wife make, file and serve an Amended Response setting out her parenting orders sought on both an interim and final basis.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kornfeld & Wehinger has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
WILLIAMS J
INTRODUCTION
The issue for the court to determine is whether financial and divorce proceedings between the parties should be determined in this Court or in the Family Court in the UK.
In February 2023, the wife filed applications for divorce and financial relief in the Family Court in Town B, United Kingdom, as she contends that is the appropriate forum to determine her applications. The parties two children and the wife live in Melbourne.
Subsequent to the wife filing in the UK, in March 2023 the husband filed proceedings in this Court for financial and parenting orders and also filed an Application for Divorce in April 2023. He contends this Court is the appropriate forum to determine financial, parenting and divorce proceedings. The husband lives in City O.
Both parties agree the courts in both Australia and the UK have jurisdiction to determine the financial issues between them.
The forum issue was listed before me for determination on 1 September 2023 and proceeded by way of submissions from both counsel. During the hearing, counsel for the wife conceded the appropriate forum to determine the parenting proceedings is Australia.
The dispute to be determined by me is therefore in relation to competing fora for financial matters and divorce.
BACKGROUND
The husband was born in the UK and is 46 years old. He is a British citizen and permanent resident of Australia. The wife was also born in the UK, although she grew up in Australia and is 47 years old. She is an Australian and British dual citizen. There are two children of the relationship, X, aged 11 years and Y, aged 9 years (“the children”).
The parties met in City O during 2007 and commenced cohabitation in Melbourne in 2008, prior to marrying in 2010. The parties lived for periods of their relationship in both Australia and the UK.
At the commencement of cohabitation, the husband owned a property at C Street, Suburb D, City O, (“the Suburb D property”) and at E Street, Suburb F, City O, (“the Suburb F property”). During the marriage, the husband sold the Suburb F property and the parties purchased G Street, Suburb H, City O (“the Suburb H property”) in the husband’s name, with the intention of it being the matrimonial home.
Shortly after the parties first child was born in 2012, they moved from Melbourne, Australia to live in the UK. The wife describes this move as a “three-year trial” to ascertain if she wished to remain living in the UK. In 2016 the wife and children returned to live in Melbourne whilst the husband elected to remain in the UK. In the ensuing four years, the parties engaged in a long-distance relationship before they separated in May 2020. Subsequent to separation, the wife and children continued to live in Melbourne and the husband remained in City O.
The parties engaged in dispute resolution in Melbourne on 15 August 2022 and 1 February 2023. The wife was represented by Melbourne solicitors. The parties have not engaged in any form of mediation or settlement negotiations in the UK.
On 1 February 2023, the wife filed an Application for Divorce in the Family Court in Town B, United Kingdom, which indicated her intention to apply for a full range of financial orders. The husband contends the UK proceedings were filed with no warning and no pre-action or protocol letters, which is denied by the wife.
On 15 February 2023, the wife’s UK solicitor served the husband with a copy of the wife’s Application for Divorce to the UK Court, which was accompanied by a letter advising the husband the wife wished to deal with the financial consequences of the divorce in the United Kingdom and she hoped a settlement could be achieved through mediation following an exchange of financial information. The letter sought confirmation from the husband he would be ready to exchange financial information by 15 March 2023. There was no reply from the husband.
On 1 March 2023, the husband filed a Response to the wife’s Application for Divorce and financial relief in the Family Court in Town B, United Kingdom. In his Response, the husband agreed the UK Court had jurisdiction to grant a divorce, but did not consent to it and stated he had commenced proceedings in Australia for a division of matrimonial property and parenting orders. On the same day, he filed an Initiating Application for parenting and property orders in this Court. In his Initiating Application, the husband sought an order restraining the wife from commencing, prosecuting, or progressing any suit, claim or proceeding to divide their property in any jurisdiction other than Australia.
The wife filed a Response to Final Orders on 6 April 2023, seeking the husband’s proceedings in this Court be stayed pending the determination of the wife’s divorce and financial application in the UK Family Court.
On 26 April 2023, the husband filed an Application for Divorce in this Court despite the wife having already filed for divorce on 1 February 2023 in the UK.
On 2 May 2023, the wife filed an application to expedite her divorce proceedings in the UK. On the same day, the husband applied for an interim stay of the UK proceedings, however, the Family Court in Town B, United Kingdom dismissed this application on 8 June 2023 and a further court date is pending.
The husband’s application was heard before me in this Court on 1 September 2023.
DOCUMENTS RELIED UPON BY THE PARTIES
The husband relied on the following documents:
(a)Initiating Application filed 1 March 2023;
(b)Affidavits of Mr Kornfeld filed 1 March 2023 and 12 May 2023;
(c)Affidavit of Mr J (expert witness as to UK law) filed 15 May 2023;
(d)Affidavit of Mr K (single expert witness as to UK law) filed 7 August 2023;
(e)Summary of Argument filed 30 August 2023;
(f)Documents tendered by counsel.
The wife relied upon the following documents:
(a)Response to Final Orders filed 6 April 2023;
(b)Affidavit of Ms Wehinger filed 6 April 2023;
(c)Financial Statement of Ms Wehinger filed 6 April 2023;
(d)Affidavits of Ms L (expert witness as to UK law) filed 13 April 2023 and 4 August 2023;
(e)Affidavit of Mr K (single expert witness as to UK law) filed 7 August 2023;
(f)Written Submissions filed 30 August 2023.
(g)Documents tendered by counsel.
The following documents were tendered during the course of the trial:
Exhibit Number Description H-1 Letter from Clancy & Triado to the husband dated 11 February 2022. H-2 The wife’s application to expedite her divorce proceedings filed in the UK dated 2 May 2023. ORDERS SOUGHT BY THE PARTIES
The wife sought orders that the husband’s current proceedings in this Court be stayed on a final basis or pending determination (including any determination by way of appeal) of the wife’s divorce and financial application issued on 1 February 2023 in the Family Court in Town B, United Kingdom.
The husband seeks orders that the wife be restrained from prosecuting or progressing any suit, claim or proceeding to divide property in any jurisdiction other than Australia.
As requested during the hearing, both counsel submitted an agreed Minute of Proposed Orders. A copy of that Minute is Annexure A to these reasons.
THE RELEVANT LEGAL PRINCIPLES
The power to grant an anti-suit injunction should not be exercised without the court concerned first considering whether its own proceedings should be stayed: see Kent & Kent [2017] FamCAFC 157 at [27].
The power to grant a stay arises from the general powers in s 45(1) of the Family Law Act 1975 (Cth) and are an aspect of the inherent or implied power of every court “… to prevent its own processes being used to bring about injustice” (CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345, 391).
In Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197, 479 Deane J said:
The power [to grant a stay] 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 for their determination that their continuation would be oppressive and vexatious to him…
In Voth & Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 (“Voth”) the High Court of Australia (“the High Court”) held a party who has properly instituted proceedings in Australia has a prima facie right to have those proceedings determined by an Australian court, unless the Australian court is a clearly inappropriate forum.
Therefore, when a dispute arises about whether a foreign court or an Australian court is the appropriate forum to determine a dispute between parties, the Australian court should remain seized of the proceedings, unless it is satisfied it is a clearly inappropriate forum. Conversely, if the court is a clearly inappropriate forum, it should stay its own proceedings and yield the controversy to the alternative jurisdiction.
In Henry v Henry (1996) FLC 92-685, 576 (“Henry”) the High Court adopted the general law test, previously enunciated by the High Court in Voth, for family law proceedings and explained a court is clearly an inappropriate forum “if continuation of the proceedings in that court would be oppressive, in the sense of ‘seriously and unfairly burdensome, prejudicial or damaging’, or vexatious, in the sense of productive of serious and unjustified trouble and harassment.”
In Henry at 565, the plurality set out a non-exhaustive list of considerations relevant to a stay of proceedings and emphasised that “the question of whether Australia is a clearly inappropriate forum… is one that depends on the general circumstances of the case, taking into account the true nature and full extent of the issues involved.”
Assuming both countries have jurisdiction, in Yeo & Huy (No 2) [2012] FamCA 541 at [35], Murphy J set out a succinct distillation of the Henry considerations as follows:
(i)whether each court will recognise the others orders and decrees;
(ii)which forum can provide more effectively for complete resolution of the matters involved in the parties controversy;
(iii)the order in which the proceedings were instituted;
(iv)the stage at which the proceedings have been reached;
(v)the cost that have been incurred by the parties;
(vi)the connection with the parties and their marriage with each of the jurisdictions;
(vii)the resources of the parties and their understanding of language and enabling the parties to participate in respective proceedings on an equal footing.
I now turn to the relevant considerations.
Whether each court will recognise the others orders and decrees
In his Initiating Application in this Court in respect to financial matters, the husband proposes he retain his assets in the UK, the wife retain her assets in Australia, and he make a payment to the wife as determined by the court. The wife has not particularised the financial orders she seeks from either the UK court or this Court.
There are three distinct possible categories of orders which require consideration as to recognition in the UK. First, a lump sum payment, secondly, periodical payments such as a maintenance payment and lastly pension entitlements. In their respective submissions, both counsel focused on recognition and enforcement, as did the three experts relied upon.
The experts relied upon were Ms L, the wife’s UK solicitor who is the Managing Partner of a specialist divorce and family law firm, Mr J, UK barrister engaged by the husband to respond to Ms L’s affidavit who practices almost exclusively in the field of matrimonial finance, and Mr K, solicitor, who practices in expatriate law and was engaged as a single expert witness by both parties.
I will first consider recognition of an order for payment of a lump sum.
Lump sum payment
Counsel for the wife relied on the expert reports of Ms L, which are annexed to her affidavits filed 13 April 2023 and 4 August 2023.
At paragraph 16 of her April affidavit, Ms L states:
… There is no international treaty to which [the United Kingdom] and Australia are both parties which provides for the direct registration and enforcement of Australian capital orders made on divorce in [the United Kingdom].
Neither the single expert witness, Mr K nor the husband’s expert, Mr J, disagreed with that opinion. Mr K states at paragraphs 18 and 19 of his report as follows:
[18] There is no statutory regime for reciprocal enforcement of matrimonial finance orders from Australia in [the United Kingdom] other that as summarised above in relation to orders for payment of money (for example, lump sum capital payments) pursuant to the [Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK)] and [Reciprocal Enforcement of Foreign Judgements Order (Australia Act 1994 (UK)] and maintenance pursuant to the [Maintenance (Reciprocal Enforcement) Act 1972 (UK)]
[19] Orders for transfers of interests in [UK] real property may be made by an Australian court, but they will not be recognised or enforced in [the United Kingdom]. This is in accordance with international common law rules of comity and national sovereignty.
At paragraph 18 of her April affidavit, Ms L refers to the powers of the UK court which do not include the enforcement of a foreign order. She concludes because the majority of assets are based in the UK, the wife would have to replicate the litigation in Australia with the equivalent process in the UK, including the provision of detailed financial disclosure in order to obtain further orders which could then be enforced against assets and pension in the UK.
Ms L refers to a theoretical alternate method of enforcement under the Foreign Judgements (Reciprocal Enforcement) Act 1933 (UK) at paragraph 19 of her April affidavit which provides for registration in the UK of an order made in Australia for the payment of a sum of money. She opines that method is not available in the UK Family Court and does not provide an applicant with the numerous and flexible methods of enforcement for a Family Court order. Such an application would be required to be made in the King’s Bench Division of the High Court and she has not been able to find any case law where that method has been successively used to enforce a foreign Family Court order.
According to counsel for the husband, if the husband were ordered to make a payment to the wife, as contemplated by him, such an order may be recognised and enforced pursuant to the Foreign Judgements (Reciprocal Enforcement) Act 1933 (UK) or the Reciprocal Enforcement of Foreign Judgements Order (Australia) Act 1994 (UK). He relies on the single expert report of Mr K annexed to his affidavit filed 7 August 2023 and the husband’s expert as to UK law, Mr J of counsel, which is annexed to his affidavit filed 15 May 2023.
At paragraphs 10 – 13 of his report, Mr K states as follows:
[10] In relation to Australian matrimonial property orders, only orders relating to money may be recognised and enforced pursuant to the UK Foreign Judgments (Reciprocal Enforcement Act) 1933 (UK) and Reciprocal Enforcement of Foreign Judgments Order (Australia) 1994 (UK). Paragraph 4 of the 1994 Order provides:
4. The following judgments shall be judgments to which Part 1 of the Foreign Judgments (Reciprocal Enforcement) Act 1933 applies, that is to say –
(a) any judgment, decree, rule or order or other final decree for the payment of money (other than in respect of taxes or other charges of a like nature or an order requiring the payment of maintenance) given by a recognised court in respect of a civil or commercial matter.
[11] This excludes non-monetary orders, for example, orders for transfer of property or delivery of chattels. Maintenance is expressly excluded.
[12] Pension sharing orders made by [a UK] court would also fall outside the scope of the 1933 Act and 1994 Rules.
[13] I have no experience of ever using the 193 Act and 1994 Order to register and enforce an Australian matrimonial finance order in [the UK]. I am not aware of any reported cases in [the UK] relating to these provisions as they apply to Australia. I conclude that the procedure is not commonly used. I am unable to offer an opinion as to the efficacy of the procedure in terms of time frame, ease and complexity and potential costs.
At paragraph 32 of his report, under the heading “Enforcement – Capital” Mr J states as follows:
In relation to capital, the Wife would have two options. First, the Wife could rely on the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) to which Australia is a participating country. This would enable the Wife to register any final lump sum orders in the Kings Bench Division. By this route, registration is a right. The [UK] court has no discretion not to register. The process is relatively straightforward. The application is made to the Kings Bench Division and made without notice to a Master supported by written evidence. The registration order is then drawn up by the judgment creditor and served on the debtor. As with a maintenance order registered under MOREA the order is enforceable as it had been made in [the United Kingdom].
Additionally, at paragraph 33 Mr J opines the wife could apply under Part III of the Matrimonial and Family Proceedings Act 1984 (UK) for orders to be made by way of natural provision following a foreign divorce, in a similar manner as pension sharing orders could be obtained.
All three experts agree the procedure prescribed by the Foreign Judgments (Reciprocal Enforcement) Act 1933 (UK) is theoretically open to the wife in the event of a default, however none were able to provide any authority or were aware of any cases when such a procedure had been successfully utilised to enforce a foreign judgement for payment of a capital sum. Mr K was unable to offer an opinion as to the efficacy of the procedure in terms of timeframe, ease, complexity and potential costs.
Counsel for the husband agreed Mr J’s evidence did not address the process subsequent to registration of an order in the Kings Bench Division and the registration process did not provide any other relief such as transfers of property on default or the procedure available under s 106A of the Family Law Act 1975 (Cth).
Counsel for the husband submitted there was no evidence the husband intended to default in payment to any sum ordered to be paid to the wife. Mr J at paragraph 27 of his report stated he was not aware of any evidence to support an assertion the husband would not comply with orders from an Australian court, and that the husband is willing to undertake that any order made in Australia could be mirrored in the UK pursuant to Part III of the Matrimonial and Family Proceedings Act 1984 (UK), following an Australian divorce. That would of course require a further application to the UK court, subsequent to conclusion of property proceedings in this court. However, because the relief sought by the wife has not been particularised, it is possible she may seek transfers of property interests in the UK and a superannuation split of the husbands UK pension which may not be registered or enforced without the relevant UK application.
Secondly, I will consider registration of maintenance payments.
Maintenance payments
Ms L, at paragraphs 20 and 21 of her April affidavit refers to the technical ability to register a foreign maintenance order in the UK, which she considers is significantly more time‑consuming than the direct enforcement of an order made in the UK. She refers to registration of an order under the Maintenance (Reciprocal Enforcement) Act 1972 (UK) and explains that the application needs to be transmitted via the Australian Central Authority to the UK Central Authority, who then has responsibility to forward the application to the local Magistrates Court. In her experience, the procedure has little or no success, not least due to the lack of resources of the statutory bodies concerned and any registration application is also liable to suspension if either party applies to vary the sum payable.
Mr J agrees with the process described by Ms L, but disagrees the process often has little or no success and that there is no difference between the enforcing a registered Australian order and a domestic order.
According to Mr K, registration of spousal maintenance is also covered by Part I of the Maintenance Orders (Reciprocal Enforcement) Act 1972 (UK) and once registered, may be enforced in in the UK as if it were an order of a UK court.
At paragraph 15 of the report annexed to his affidavit filed 7 August 2023, Mr K describes the procedure as “slow and bureaucratic, taking weeks or months for registration in the UK to take effect”. At paragraph 16 he describes the registration process whereby the initial application for registration is made to the UK Central Authority by the Australian Central Authority and thereafter the application is sent to the local Magistrates Court to enforce a registered order.
Mr K has experience of the process and described it as being sometimes made more complex because the debtor routinely applies to vary the registered order, leading to adjournments and variation hearings before enforcement can be considered. The situation is sometimes made worse when the court in which the order is registered does not have jurisdiction to deal with variation applications and he cites recent experience of the process.
Thirdly, I will consider registration and enforcement of superannuation pension entitlements.
Superannuation pension entitlements
At paragraph 17 of Ms L’s affidavit filed 14 April 2023 she states, “an Australian court cannot make an order for the sharing of [a UK] pension” and that a pension sharing order “can only be made in [the United Kingdom] under s 25B Matrimonial Causes Act 1973 (UK)”. Mr J states in his affidavit of 15 May 2023 he assumes “[Ms L] intended here to refer instead to s 24B of the Matrimonial Causes Act 1973 (UK)” which contains the power to make pension sharing orders, by which a recipient receives a pension fund of their own.
Notwithstanding this error, Mr J disagrees with Ms L and is of the opinion that if the Australian court deals with both finances in the divorce itself, then following an Australian divorce, the UK court could make a pension sharing order under s 17(1)(b) of Part III Matrimonial and Family Proceedings Act (1984) (UK). Part III provides the UK court with the power to make orders for financial provision following a divorce concluded in an overseas country and the power has been used to implement the intentions of foreign courts in relation to UK pensions.
If the financial proceedings were concluded in Australia and the divorce proceedings remained before the UK courts, the UK courts would have jurisdiction to make orders under the Matrimonial Causes Act 1973 (UK), including a pension order.
Agreeing with Ms L, Mr K concludes at paragraph 38 of the report annexed to his affidavit of 7 August 2023 that Australian matrimonial orders affecting interest in UK real property and UK pensions cannot be reciprocally enforced in the UK.
Although not all three experts agree on all aspects of registration and enforcement, it is evident there is no definitive or accepted simple method of recognition and enforcement of the three possible categories of orders which could be made into financial disputes and that further application would need to be made to the UK courts to register and/or enforce Australian financial orders. It is also evident that the mechanisms canvassed by each of the experts in relation to enforcement of payments do not include recognition or enforcement of orders for transfers of interests in property or provide for splitting of superannuation interests in UK superannuation or pension funds.
It is reasonable to infer the wife would seek to retain her assets in Australia, but whether she seeks to receive a monetary payment, a transfer of property or a split of a UK pension fund, is not known at this stage of the proceedings.
Which forum can provide more effectively for a complete resolution of the matters involved in the parties controversy
Both counsel again relied on the various experts to make submissions about this consideration.
According to Mr K, effective orders in relation to interests in real property or pension funds in the United Kingdom can only be made by the UK courts in accordance with UK law. There is no statutory nor common law provision for the reciprocal enforcement between Australia and the UK pension sharing or superannuation splitting orders.
The statutory jurisdiction for orders affecting interests in real property and pension funds in the UK is found in the Matrimonial Causes Act 1973 (UK).
Orders for property and pension sharing can be made under the Matrimonial Causes Act 1973 (UK) only in proceedings ancillary to principal relief (divorce) proceedings. If there is no application for divorce in the UK, then there is no jurisdiction to make matrimonial and pension sharing orders in the UK.
In this matter, if the wife’s application for divorce and ancillary financial relief proceeds in the UK, that court can deal with both of the wife’s applications, however it will not be able to deal with the parenting proceedings, which both parties have conceded should continue in the Australian court.
If on the other hand the husband is permitted to proceed with his application for divorce and financial relief in this court, the Australian court will be able to deal with all three applications. However, according to Mr K the Australian court will not be able to make any effective orders in relation to interests in real property or pension funds in the UK.
If there has been a divorce outside the UK, the Matrimonial and Family Proceedings Act 1984 (UK) enables financial claims to be made if the jurisdictional criteria are satisfied. In this matter, jurisdictional criteria would be readily satisfied because the husband could rely on either his domicile or habitual residence for 12 months in the UK prior to finalisation of the proceedings.
However, subsequent to finalisation of a divorce and property proceedings in the Australian court, it would be necessary for either party to then commence proceedings in the UK under the Matrimonial and Family Proceedings Act 1984 (UK) if orders were sought in relation to interests in real property or pension funds in the UK.
Section 13 of the Matrimonial and Family Proceedings Act 1984 (UK) provides that the court’s leave to apply must first be obtained and that the court shall not grant leave unless it considers that there is substantial ground for the making of an application for such an order. Mr K opines that in practice, leave is routinely granted when an applicant can establish a prima facie case for making a substantive financial claim.
An application under the Matrimonial and Family Proceedings Act 1984 (UK) requires two separate applications supported by two separate statements of evidence. The first statement in support of the application for leave must address a substantial ground for making the substantive claim. The second statement must address the substantive application and is often lengthy because each of the criteria in the legislation must be addressed in detail.
At paragraph 28 of his report, Mr K states that “an application under the Matrimonial and Family Proceedings Act 1984 (UK) cannot be started until the divorce has been finalised in the foreign jurisdiction” and in practice, the application is usually delayed until foreign financial proceedings have been completed.
If the parties are able to reach agreement about the orders to be sought, subject to leave being granted by the UK court, the court’s approval for the consent orders may be sought.
It is evident that neither the Australian nor UK courts are able to provide for a complete resolution of the parties’ controversy.
If the divorce, property and parenting proceedings are concluded in Australia, then an application would need to be made to the UK court under the Matrimonial and Family Proceedings Act 1984 (UK) to obtain orders referable to UK property and pension funds. That application requires leave of the court and a lengthy substantive application to be filed in the UK, subsequent to the finalisation of the Australian proceedings. In his affidavit filed 1 March 2023, the husband acknowledges that orders may have to be made in the UK, if orders are required to affect a split of his UK pension entitlements.
Ms L at paragraph 24 of her affidavit filed 4 August 2023 states the procedure under the Matrimonial and Family Proceedings Act 1984 (UK) (following the granting of a foreign divorce) is not intended as a route for enforcement, full financial disclosure is required, and any application is subject to the discretionary criteria pursuant to s 25 of the Matrimonial Causes Act 1973 (UK).
If divorce and property proceedings are concluded in the UK, that court will be able to resolve the divorce and financial controversy with the one application. However, that would still leave the parenting proceedings to be determined in the Australian court.
The order proceedings were instituted, the stages reached and costs incurred
The parties attempted mediation of their dispute between 15 August 2022 and when the wife filed her application for divorce in the UK court. According to the wife’s UK solicitor, in her divorce application, the wife indicated her intention to apply for a full range of financial orders. An application for financial orders can only be made within proceedings for a matrimonial or civil partnership order and can be made within the original application for divorce. Unlike this jurisdiction, the jurisdiction for the UK court to make financial orders arises from the divorce application. A financial order can only be approved by the court once the divorce proceedings have progressed to the stage of a conditional order for divorce and may only be enforced once the court has made a final order for divorce.
The wife’s UK solicitor filed a Form A in the UK divorce proceedings on 1 March 2023, which requested the court to fix a timetable for financial disclosure to be exchanged and a preliminary court hearing in the financial proceedings. On 2 March 2023, the wife’s UK solicitor sent an email to the husband notifying him she had filed a Form A. On the same day at 5.15pm the husband responded to the email of the wife’s UK solicitor and confirmed he had filed an Acknowledgement of Service of the wife’s Divorce Application. Relevantly, the husband did not advise the wife’s UK solicitor on 2 March 2023 that he had filed financial and property proceedings in this Court on the previous day.
On 8 March 2023, the wife’s UK solicitor, Ms L, served on the husband documentation she had received from the UK court, namely a Form C Notice of the First Appointment and a Form G outlining the proposed timetable for the UK proceedings.
Ms L opines in her affidavit filed 4 August 2023 that the husband’s volte-face in relation to the UK divorce proceedings and subsequent filing for divorce in Australia, was to enable him to apply to the UK court for a stay of the wife’s proceedings pursuant to the provisions of the Domicile and Matrimonial Proceedings Act 1973 (UK).
On 8 June 2023 the husband’s application for an interim stay was dismissed by the UK court, in contrast to Mr J’s opinion that a temporary stay would likely be granted. As at the date of Ms L’s affidavit, 4 August 2023, the parties were awaiting a forum hearing date in the UK.
At paragraph 32 of his report, Mr K refers to the anticipated timetable of progression of the wife’s application in the UK court. Mr J in his affidavit of 15 May 2023, paragraphs 10.6.1 – 10.6.4 refers to the procedural steps of a UK financial application. Apart from that evidence, there were no significant submissions about the future timetable of the UK proceedings nor the anticipated timetable of the Australian proceedings.
As to the Australian financial proceedings, on 5 April 2023 procedural orders were made by a Judicial Registrar at a videoconference hearing providing for the wife to file a Response, Financial Statement, and affidavit. Notation A to the orders states that the wife flagged an application as to inappropriate forum would be made, noting proceedings had been commenced in the UK.
On 18 April 2023, further procedural orders were made in chambers by a Judicial Registrar providing for the husband to file any affidavit in reply addressing the wife’s evidence as to the forum dispute and listing the matter for a Compliance and Readiness Hearing on 7 July 2023 as to the forum dispute.
On 19 July 2023, orders were made transferring the proceeding to Division One of this Court and listing the forum dispute hearing before me on 24 August 2023. Orders were also made for the parties to file their respective affidavits and for the appointment of a single expert witness.
There has not been any progression or determination of the husband’s substantive financial proceedings.
On 1 September 2023 the hearing proceeded before me.
The husband’s divorce application was also listed on 1 September 2023 before me; however, the future progress of the divorce application was not raised during submissions.
Both parties filed Cost Notices in the Australian proceedings, in accordance with the applicable rules of court. The wife’s costs to date for her Australian proceedings are $87,285.55. The husband’s costs for the Australian proceedings are $42,805.35.
In his submission as to forum, the husband estimates his costs in the UK proceedings are in excess of £30,000 and that if the matter proceeded in the UK, his UK legal costs would greatly exceed those in Australia. The wife does not provide an estimate as her costs if the matter were to proceed in the UK.
Mr K was requested by the parties to express an opinion about the potential costs of proceedings under the Matrimonial and Family Proceedings Act 1984 (UK), which he characterises as an Initiating Application for leave under s 12, rather than enforcement proceedings.
He states proceedings under the Matrimonial and Family Proceedings Act 1984 (UK) would be inherently more costly than proceedings under the Matrimonial Causes Act 1973 (UK) (where the financial application is ancillary to UK divorce proceedings) because the Matrimonial and Family Proceedings Act 1984 (UK) requires two separate applications before the case reaches a first directions appointment hearing. From his experience, if contested, such applications can incur costs in the range of £10-£20,000 and the additional costs of trial are approximately £90,000.
Mr K was unable to express an opinion about the potential costs of an application for registration under the Foreign Judgements (Reciprocal Enforcement) Act 1933 (UK) because he has not previously been involved in any such proceedings.
As to the costs of enforcement of an Australian maintenance order, if an applicant applies through the Central Authority the costs are negligible. However, if an applicant instructs UK solicitors the cost will depend on how many court hearings were concluded and the seniority of solicitors and counsel. Mr K refers to a recent case he conducted in City O which ran for over 12 months and cost the client over £20,000. Another case he conducted in another court in 2014 cost the client over £60,000.
The issues on which relief might depend on each of the jurisdictions
If the divorce proceeds in the UK, the financial proceedings will be determined pursuant to the Matrimonial Causes Act 1973 (UK). If the divorce proceeds in this jurisdiction, the financial proceedings in the UK will be determined in accordance with the Matrimonial and Family Proceedings Act 1984 (UK). The financial proceedings in Australia will be determined under s 79 and other the relevant provisions of the Family Law Act 1975 (Cth).
There were no submissions about the factors relevant to determination of the substantive financial proceedings in each jurisdiction.
The connection with the parties and their marriage with each of the jurisdictions
The wife is an Australian and British dual citizen. The husband is a British citizen and a permanent resident of Australia. The parties were married in Australia and lived periods of their relationship in both Australia and the UK.
The wife was raised and educated in Australia and has resided here with the children since 2016. The husband lived in Australia between 2012 and 2016. Thereafter, until separation the parties maintained a long-distance relationship living in different countries.
The husband has assets exclusively in the UK which include real properties, entitlements to pension and/or superannuation funds and an entitlement as a beneficiary to a trust. The wife’s assets are located in Australia and comprise a real property purchased by her subsequent to separation, entitlements in an accumulation superannuation fund and an entitlement as a beneficiary of her father’s discretionary family trust.
It was not contentious that both parties have connections with both countries and there are matrimonial assets in both jurisdictions.
The resources of the parties and their understanding of language enabling the parties to participate in respective proceedings on an equal footing
Both parties have relatively substantial resources as is evidenced by the assets referred to by both counsel and the legal fees expended in both jurisdictions. They are both professionals, speak English and can participate in proceedings in each jurisdiction on a relatively equal footing, if they are permitted to attend electronically.
The husband raised in his affidavit the expense and inconvenience of travelling to Australia but attended court personally at the hearing of this forum dispute. Although he lives in City O, it is his position that all proceeding should be heard in this jurisdiction.
Similarly, the wife lives in Australia, but it is her position the substantive proceedings, other than parenting should take place in the UK.
I can infer from the position of each party that they able to participate in proceedings in either jurisdiction and ironically, do not seek proceedings to take place in the jurisdiction where they live.
Discussion and conclusion
It is common ground between the parties that both the UK and Australia have jurisdiction in relation to the divorce and property applications, and the parenting proceedings should take place in Australia.
The wife contends that even if the parenting matters are dealt with in this jurisdiction, there is no reason why the divorce and property matters should not be separated and conducted in the UK. The husband contends all three sets of proceedings should be conducted in Australia, notwithstanding his concession that additional proceedings to affect an equalisation of his pension entitlements accrued during the marriage may have to be commenced in the UK.
Both parties agree the majority of the assets of the marriage are located in the UK which include two properties, one of which is the former matrimonial home, pension entitlements of the husband and the husband’s interest as a beneficiary in the M Trust.
It is axiomatic a number of valuations will be required to be carried out in the UK and indeed in his application in this jurisdiction, the husband seeks an order that an expert be appointed in the UK to jointly value the parties’ pension interests.
The issue of the husband’s pension interests in his family company superannuation fund, which he estimates are worth approximately £660,000 may well be contentious, particularly as the husband states in his affidavit filed 1 March 2023, other family members, namely his mother, has an interest in his family business superannuation fund, Superannuation Fund 1.
The wife will undoubtably require discovery and disclosure of Superannuation Fund 1 and documentation relating to the husband’s interest in his family trust including particulars of the extensive litigation he refers to in his affidavit. If the financial proceedings were conducted in Australia, the wife may face significant hurdles in the event she sought discovery of financial information pertinent to both the superannuation fund and the husband’s family trust, although I acknowledge the husbands position is that he will comply with his disclosure obligations.
Accepting the wife’s evidence which was essentially unchallenged, her financial position in Australia appears to be far more straightforward than the husband’s and I consider the challenges facing the wife in relation to potential discovery and disclosure may well be more substantial than those faced by the husband in relation to the wife’s Australian assets.
In his affidavit filed in March 2023, the husband deposes to significant expense to travel to Australia and his potential difficulty in meeting that expense in the future. If the financial and divorce proceedings are conducted in UK where the husband lives, he will be relieved of the financial burden of having to potentially travel to Australia to conduct the financial proceedings.
I am cognisant there are outstanding parenting proceedings in Australia, but the nature of that dispute is obviously limited by the fact the children have remained living in Australia with their mother since 2016 and the husband does not propose a change in primary residence of the children. His application is limited to the children spending time with him both in Australia and the UK, which as a matter of practicality is limited by the children’s schooling commitments and ability to travel to the UK only during Australian school holidays. I consider the ambit of that dispute to be narrow and given the parties have successfully managed the children spending time with the husband since 2016 without court intervention, capable of early resolution.
As far as connection with Australia is concerned, the husband has lived in the UK for over 11 years, having resided in Australia for a four-year limited period between 2008 and 2012. His family, family business and the former matrimonial home are all located in the UK. The wife lived in the UK from 2012 to 2016 prior to her relocation to Australia with the children. It is clear both parties have a substantial connection to the UK.
There is a real and cogent difficulty in relation to property orders if they are made in Australia. The only order which all experts agree is likely to be readily recognised and enforced in the UK is an order in relation to payment of money. None of the three experts refer to authorities or personal experience enforcing orders by way of an application to the Kings Bench Division, nor what happens once the orders are registered.
Ms L and Mr K both consider orders in relation to interest in real property pension funds in the United Kingdom can only be made by the courts of the United Kingdom in accordance with UK law, whereas Mr J disagrees in relation to pension fund orders.
Similarly, Ms L and Mr K identify the procedure to register and enforce maintenance orders as cumbersome and fraught with difficulty, whereas Mr J disagrees.
All three experts agree that notwithstanding the determination of divorce and financial proceedings in Australia, if the orders induct UK real estate or pension entitlements or required enforcement, a further application would need to be made to the UK court under the Matrimonial and Family Proceedings Act 1984 (UK), which is a two-step process requiring leave of the court.
Counsel for the husband submitted that if consensus could be reached, the application under the Matrimonial and Family Proceedings Act 1984 (UK) and subsequent consent orders to be approved would be fairly straightforward. I do not necessarily accept that submission, firstly because leave is required and secondly, there was no evidence about the matters relevant to the UK court approving property orders parties, such as whether the court would need to be convinced the orders were just and equitable, as would be the case in this jurisdiction and if so, what constitutes justice and equity in the UK.
The difficulty of recognition and enforcement of interests in real property and pension funds is particularly pertinent in this matter because of the husband’s asserted interest in his family’s superannuation fund, as opposed to the wife’s interest in an accumulation fund in Australia.
In regard to the competing applications to stay the other parties divorce applications, if the wife’s divorce application proceeds in the UK court, then that court will have the unfettered power to make a raft of orders in the financial proceedings, albeit in a staggered timetable. That will result in one set of financial proceedings in the UK.
On the other hand, if the husband is permitted to proceed with his divorce in this jurisdiction, then at the conclusion of financial proceedings in Australia one of the parties, presumably the wife, will have to seek leave to apply for orders in relation to property in the United Kingdom to obtain a full range of orders to enforce any property orders made by this Court or to possibly obtain orders splitting the husband’s UK pension entitlements. According to Mr K, that involves a two-stage process with two distinct applications and two separate statements of evidence which will result in the wife incurring further costs and consists further delay. This will result in the wife being required to sequentially conduct two sets of financial proceedings. The further set of financial proceedings which the wife will face is seriously and unfairly burdensome and will incur significant costs for both parties. It will also delay the final resolution of the controversy between them.
It is obvious both parties will incur substantial costs in conducting financial applications in both jurisdictions if they are unable to reach agreement. Based on the evidence before the court it is not possible to specify the likely future costs, but they will likely be substantial.
The wife initiated divorce proceedings which included her intention to apply for ancillary relief on 1 February 2023, almost 3 years subsequent to separation and after the parties had attempted to engage in mediation. According to the wife’s solicitor, the husband was served with the wife’s application on 15 February 2023 and on 1 March 2023 the husband agreed that the UK court had jurisdiction in relation to the divorce, whilst simultaneously filing an application in this case.
The husband did not file his Application for Divorce in Australia until 26 April 2023 and did not apply for a stay of the UK proceedings until 2 May 2023. The husband has not provided an explanation in either proceedings why he has applied for divorce in this jurisdiction or the delay in filing the Divorce Application in this court.
Both financial applications are in the early stages, and absent agreement will have to progress through several interim stages prior to allocation of a trial date. The evidence of the hearing and procedural requirements in the UK seems similar to the case management system adopted in this Court. It is not possible to predict accurate timeframes to reach a trial in either jurisdiction.
Counsel for the husband submitted that it is desirable for one court to effectively provide for complete resolution of all matters involved in the parties’ controversy following the breakdown of their marriage. That is undoubtably the optimum position, however the reality of this particular matter is that neither court is able to do so.
In my view, the continuation of financial and divorce proceedings in this court would clearly be “oppressive, in the sense of seriously and unfairly burdensome… and vexatious in the sense of productive of serious and unjustified trouble” for the wife to conduct proceedings in Australia about assets located in the UK per Henry, 576. This is particularly because two of the three experts engaged by the parties, including the single expert witness, are clearly of the opinion that any such orders in the Australian courts pertaining to transfers of interest in property or splitting of superannuation entitlements will not be capable of registration or enforcement in the UK, without a further application under the Matrimonial and Family Proceedings Act 1984 (UK). Even on the husband’s own case, if financial matters are dealt with by the Australian courts, an application will need to be made under the Matrimonial and Family Proceedings Act 1984 (UK) if orders are made other than for payment of a lump sum.
Taking into consideration all relevant matters and in particular, the additional financial application the wife would need to make in the UK, I am satisfied that Australia is a clearly inappropriate forum to determine the property and divorce application of the husband, and I will make orders in accordance with the wife’s proposed orders per the Minute of Orders alternatively proposed by the parties as submitted by counsel for both parties.
As I have determined Australia is a clearly inappropriate forum, it is appropriate to stay the husbands’ proceedings in this jurisdiction and dismiss his request for an anti-suit injunction.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Williams. Associate:
Dated: 26 September 2023
Annexure A
FAMILY LAW ACT 1975IN THE FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
AT MELBOURNE (DIVISION 1)
No. MLC 1984 / 2023
BETWEENMR KORNFELD
(Applicant Husband)
and
MS WEHINGER
(Respondent Wife)BEFORE THE HONOURABLE JUSTICE WILLIAMS
MINUTE OF ORDERS ALTERNATIVELY PROPOSED BY THE PARTIESApplicant Husband’s proposed orders
IT IS ORDERED THAT:
1.The Wife forthwith do all acts and things and sign all documents necessary to withdraw and/or discontinue her application both for divorce and financial relief in the Family Court and Town B Crown, County and Family Court, United Kingdom (Case Numbers … and …) and pending such withdrawal and/or discontinuance of that application the Wife be restrained by injunction personally, by her servants and/or agents from further prosecuting such application.
2.The Wife’s application for a stay of the Husband’s applications for divorce and for financial orders in this proceeding be dismissed.
3.All extant applications be adjourned for further mention before a Judicial Registrar on a date to be advised.
4.Within twenty-one (21) days of the date of these Orders the Wife make file and serve an Amended Response setting out her parenting and financial orders sought on both an interim and final basis.
Respondent Wife’s proposed orders
IT IS ORDERED UNTIL FURTHER ORDER THAT:
1.The Husband’s application for divorce and financial orders under the Family Law Act 1975 (Case No. MLC 1984 / 2023) be permanently stayed.
2.The Husband’s application for parenting orders be listed for further mention before a Judicial Registrar on a date to be advised.
3.Within twenty-one (21) days of the date of these Orders the Wife make file and serve an Amended Response setting out her parenting orders sought on both an interim and final basis.
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