Kwok & Beng
[2021] FedCFamC1F 252
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kwok & Beng [2021] FedCFamC1F 252
File number(s): SYC 1577 of 2021 Judgment of: CHRISTIE J Date of judgment: 6 December 2021 Catchwords: FAMILY LAW – INTERIM PARENTING & PROPERTY – Anti-suit injunction – Where the husband has commenced family law proceedings in Australia and the wife has commenced family law proceedings in the People’s Republic of China Legislation: Family Law Act 1975 (Cth) ss 69E and 111CD, Federal Circuit and Family Court of Australia Rules 2021 r 10.18 Cases cited: CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345, Henry v Henry (1996) 185 CLR 571, Lan & Hao (No 2) [2017] FLC 93, ZP v PS (1994) 181 CLR 639, Oceanic Sun Line Special Shipping Company Inc v Fay (1986) 165 CLR 197, Pascarl & Oxley (2013) FLC 93-536. Division: Division 1 First Instance Number of paragraphs: 50 Date of hearing: 1 December 2021 Place: Sydney Counsel for the Applicant: Mr Moutasallem Solicitor for the Applicant: Kammoun Sukari Lawyers Solicitor for the Respondent: Ms Sanchez, Luminous Legal ORDERS
SYC 1577 OF 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR KWOK
Applicant
AND: MS BENG
Respondent
ORDER MADE BY:
CHRISTIE J
DATE OF ORDER:
6 DECEMBER 2021
THE COURT ORDERS THAT PENDING FURTHER ORDER:
1.The wife is restrained from continuing parenting proceedings in the People’s Court District B.
2.The husband’s application filed 28 November 2021 is dismissed in so far as it seeks that the wife be restrained from continuing financial proceedings filed by her in the People’s Court District B.
3.Either party has liberty to relist on 48 hours notice to the Court and the other party, after receipt of the single expert report.
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 a pseudonym Kwok & Beng has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CHRISTIE J:
These are proceedings filed by the applicant Mr Kwok (“the husband”) for an anti-suit injunction restraining the respondent Ms Beng (“the wife”) from continuing proceedings in The People’s Republic of China (“China”) (“the Chinese proceedings”) in respect of property, parenting and divorce.
The husband seeks that an application brought by him filed 6 September 2021 be heard and determined before the wife is permitted to take any further step in the Chinese proceedings. That application sought the wife discontinue proceedings commenced by her in China and be restrained from taking any further step in those proceedings.
The wife seeks that the husband’s application be dismissed. Her application for interim relief seeks a stay of both parenting and property proceedings in Australia.
BACKGROUND
The parties commenced cohabitation in 2007, married in 2011 and separated in 2018 or 2019.
The parties have a child, X (“the child”) born in 2012.
The husband’s initiating application seeks parenting and property orders.
The wife’s response seeks final parenting and property orders.
Both parties indicated in their respective applications and responses, that they were present and ordinarily resident in Australia.
The parties had interests in three pieces of real property in Australia:
(a)C Street, Suburb D (“Suburb D”);
(b)E Street, Suburb F (“Suburb F”); and
(c)G Street, Suburb H (“Suburb H”).
The properties at Suburb F and Suburb H have been sold and the proceeds, or such of them as remain, are in the trust account of Luminous Legal (the wife’s solicitors).
The parties do not agree about the existence or value of assets in China. The issues which arise from the material of both parties appear to be:
(a)The husband has shares in J Ltd, a company in China. His interest is 18.1 per cent of the shareholding. He says its value is unknown. The wife contends it has significant value.
(b)The husband has an interest in Property K, L Street, District B, City S (“Property K”) and a space identified as Property M, N Street, Suburb T, District B, City S. The parties are in issue about the nature and value of the husband’s interest in those two pieces of real property. The husband contends that he owns one per cent of Property K. The wife contends that the husband may have transferred 99 per cent of his ownership to his sister in or about 2018. The parties may be at issue about the value of the car space.
(c)The wife is the registered proprietor of real property in City O in China which she says was transferred into her name in 2016 as an asset protection measure on behalf of her parents. She contends that that property is beneficially owned by her parents. In a similar vein, she suggests that another property registered in her sole name sold in 2019 belonged to her parents and any funds realised from the sale were returned to them.
(d)The wife says the husband has not disclosed his interest as a shareholder in P Company, a Chinese corporation. She also contends that the husband owns real property in City Q, a city in the R Region, China, where his parents reside.
(e)The wife says the husband also has an interest in a business in Australia.
On the evidence in both cases there are assets in both Australia and China. The parties are at odds about whether the bulk of the assets (in value terms) are located in Australia or China. The evidence as currently filed does not allow me to resolve that dispute.
Orders were made in this matter by Judge Smith on 8 March 2021 restraining the wife from dealing with various properties and bank accounts in Australia.
Further orders were made on 11 March 2021 requiring the wife to place funds into the trust account of her solicitor.
Further orders were made by consent on 23 March 2021 effectively extending the wife’s time for compliance with the 11 March 2021 orders.
Evidence filed on behalf of the husband suggests that the wife commenced family law proceedings in the People’s Court District B, City S, China (“the People’s Court District B”) on 2 July 2021 seeking enforcement of a “Chinese Family Law Agreement”. Proceedings had been commenced in the Federal Circuit Court of Australia on 8 March 2021, with the respondent filing a Response to an Initiating Application on 20 August 2021. The response seeks a stay of proceedings.
Effectively, each party seeks to proceed in a different jurisdiction and seeks that the other party be restrained from continuing proceedings in that jurisdiction or that his or her application be stayed.
On 25 October 2021, orders were made for a Single Expert to provide a report in respect of Chinese law. That report is not yet available.
The husband in his affidavit indicates that the wife has notified him that the Chinese proceedings are before the court on 7 December 2021 and accordingly, the application was brought before this Court on an urgent basis to consider whether it is appropriate, in those circumstances, to make orders which would have the effect of restraining the wife from taking any further step in those proceedings until such time as the parties have obtained the expert evidence foreshadowed by the orders of 25 October 2021 (or more generally).
INJUNCTIONS RESTRAINING OVERSEAS PROCEEDINGS: THE LAW
This Court has the power, in proceedings before it, to restrain a party to those proceedings from commencing or continuing proceedings in another Court. That power arises either from the Court’s inherent power to prevent an abuse of its own processes or from the power to prevent proceedings which are vexatious or oppressive or both: CSR Ltd v Cigna Insurance Australia (1997) 189 CLR 345 at 392 to 393.
The matters to be taken into account in this case given the way in which the parties have framed their competing applications are as follows:
(a)Is Australia a “clearly inappropriate forum”? If so then the Australian proceedings should be stayed, as the wife submits, and it is unnecessary to restrain the wife from proceeding in China.
(b)If the answer is no, then should the wife be restrained from continuing the Chinese proceedings as the husband seeks?
In determining whether to grant the relief sought by either party there are a number of matters to properly take into account:
(a)Do both countries have jurisdiction?
(b)Will the Federal Circuit & Family Court of Australia recognise orders made in the People’s Court District B”?
(c)Will the People’s Court District B recognise orders of the Federal Circuit and Family Court of Australia?
(d)Can one Court or the other more effectively deal with all disputed matters?
(e)Which proceedings were filed first in time?
(f)What stage are both sets of proceedings at?
(g)What connection do each of the parties have to the different jurisdictions?
(h)Are there barriers to participation faced by one party or the other in the different courts (put another way can both parties participate on an equal footing)?
(i)Is there a juridical advantage to one party or the other in the available jurisdictions?
The mere existence of simultaneous proceedings in two different jurisdictions is not of itself vexatious or oppressive conduct: Henry v Henry (1996) 185 CLR 571 at 590 to 591.
The proper question is whether two sets of proceedings would be “productive of serious and unjustifiable trouble and harassment or seriously burdensome, prejudicial or damaging”: Oceanic Sun Line Special Shipping Company Inc v Fay (1986) 165 CLR 197 at [247] as cited in Lan & Hao (No 2) [2017] FLC 93 at [37].
The wife’s application in China seeks parenting orders (as does her application in Australia). Questions of jurisdiction relating to orders concerning children are governed by ss 69E and 111CD of the Family Law Act 1975 (Cth) (“the Act”).
The test to be applied when considering jurisdictional issues involving children is not the “clearly inappropriate forum test” but rather that identified by the High Court in ZP v PS (1994) 181 CLR 639 see Pascarl & Oxley (2013) FLC 93-536. The test is derived from the requirement of the Court to make such order as will best promote and protect the interests of the subject child.
CONSIDERATION
This application is being brought at a time where the Court does not have sufficient information to properly answer some of the relevant questions which arise when an anti-suit injunction is being sought.
It is plain that the proceedings in Australia were commenced ahead of those in China.
The husband does not raise as an issue that the People’s Court District B lacks jurisdiction but rather that the wife should be restrained from invoking it.
The wife does not contend that this Court lacks jurisdiction.
Without the benefit of expert evidence it is difficult to determine whether the People’s Court District B can deal with the whole of the controversy as between the parties. The wife’s application to the People’s Court District B seeks enforcement of the “Marital Property Agreement” she contends was entered into voluntarily by both husband and wife in or about 2 August 2019.
That Agreement as it appears in the evidence is headed (in translation) “Marital Property Agreement”. It purports to assign the husband’s interest in the Suburb F, Suburb H and Suburb D properties to the wife. It also gives ownership of two cars to the wife.
While the agreement says that “the male voluntarily assigns all his personal assets in the couple’s joint assets to the female” and then goes on to set out the “specifics”, it only deals specifically with assets in Australia.
The Marital Property Agreement contains a clause which says that in the event of failure to resolve a dispute the parties agree “to bring a lawsuit at the People’s Court at the female’s district” (that being the District B).
The evidence suggests that on 4 June 2021 the wife filed a document referred to in translation as “Civil Indictment”. The importance of that document is that it contains the relief sought and reads as follows:
(1) Request for divorce between Ms Beng and Mr Kwok;
(2) Request an order that the legitimate son X should be brought up by Ms Beng, and Mr Kwok should pay child support in one lump sum (calculation basis: 25,000 yuan per month until the child is 18 years old);
(3) Request to confirm the legality and validity of the “Marital Property Agreement Agreement” [sic] signed by both the plaintiff and the defendant on August 2, 2019, and deal with it accordingly;
(4) Divide the joint property of the husband and wife in accordance with the law.”
The wife’s proceedings in the People’s Court District B thus deal with divorce, parenting, child support, enforcement of their property agreement dealing with the Australian assets and a more amorphous request to divide joint property according to [Chinese] law.
Without expert evidence there can be no determination about whether the People’s Court District B can in reality deal with all issues.
This Court has the jurisdiction to make orders in respect of the parties’ property, parenting orders and orders for divorce. This Court does not have jurisdiction to enforce the parties “Marital Property Agreement”. In appropriate circumstances this Court could hear a child support departure application.
It is also not plain, at this stage, whether one party or the other enjoys a juridical advantage in his or her chosen forum.
Both the husband and wife and the parties’ child are currently in Australia. The wife and the parties’ child resided in Australia for the majority of the relationship while the husband resided in China for the majority of the relationship. The parties and the child are all currently living in Australia. They are not citizens but are permanent residents and the child attends V School, Sydney.
Determination of issues of value, contribution and disclosure regarding financial contributions made in Australia are likely best dealt with by this Court. Similarly, issue of value and disclosure in respect of business and financial activities in China are likely best dealt with in that jurisdiction.
At the hearing the wife, through her lawyers, offered an undertaking. Ms Sanchez, who appeared as solicitor advocate for the wife, indicated that her client would give an undertaking that on 7 December 2021 any steps taken in the Chinese proceedings, will be interlocutory in nature and will not seek final relief. That was an appropriate concession.
The parties informed the Court that the letter to the Single Expert has now been agreed and a translated copy is to be provided to the expert – it is expected a report will be available within three weeks of the expert being instructed by letter.
Restraining a party from continuing proceedings in another jurisdiction is not to be undertaken lightly.
However, as regards the parenting matter it is not plain, at this stage why, having regard to the matters in ss 69E and 111CD of the Act, it would ever be appropriate to stay the father’s parenting application in Australia. In a similar vein it is difficult to understand how the child’s best interests would be served by parallel proceedings in two countries.
At this stage the Court could not be satisfied that Australia is clearly an inappropriate forum for the property and divorce proceedings. Similarly, I could not be satisfied that any parenting proceedings be heard and determined in this court would fall foul of the best interests principle given the child X, is plainly habitually resident in Australia.
By the same token the evidence is, at present, inadequate to ground an order that the wife be permanently prevented from pursuing the property litigation in China. Accordingly, it is appropriate to dismiss the husband’s interim application in so far as it relates to the financial litigation.
The wife offered an undertaking not to seek final relief in the Chinese proceedings on 7 December 2021. That undertaking was not in compliance with Rule 10.18 of the Federal Circuit and Family Court of Australia Rules 2021. The Rules require that the wife provide the undertaking in writing (or if orally) then subsequently in writing. In the absence of compliance with the provisions of Rule 10.18 the undertaking does not have the same effect as a court order. The Court can do no more at this stage than note the wife’s instructions.
The husband’s application to restrain the wife from pursuing property settlement proceedings in China is dismissed without prejudice to his right to bring it on a subsequent occasion after receipt of the Single Expert report.
For the reasons set out above the wife will, pending further order, be restrained from taking any further steps to pursue her application for parenting orders in the People’s Court District B.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Christie. Associate:
Dated: 6 December 2021
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