Kwok & Beng (No 2)
[2022] FedCFamC1F 263
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kwok & Beng (No 2) [2022] FedCFamC1F 263
File number(s): SYC 1577 of 2021 Judgment of: SCHONELL J Date of judgment: 22 April 2022 Catchwords: FAMILY LAW – PARENTING AND PROPERTY – Interim orders – Where the husband has commenced proceedings in Australia and the wife has commenced proceedings in China – Where the wife has filed an application to stay the proceedings in Australia – Where it is in the child’s best interests that parenting proceedings be determined in Australia – Wife’s application for stay of the parenting proceedings dismissed – Where the wife had the onus of establishing that Australia is a clearly inappropriate forum and did not discharge the onus – Wife’s application for stay of the remaining proceedings dismissed – Where the husband sought an anti-suit injunction – Where it was found that parallel proceedings in China would be vexatious and oppressive – Anti-suit injunction granted. Legislation: Family Law Act 1975 (Cth) ss 69E, 111CD Cases cited: CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345; [1997] HCA 33
Deslanders & Deslanders [2015] FamCA 913
Ferrier-Watson v McElrath (2000) FLC 93-022; [2000] FamCA 219
Henry v Henry (1996) 185 CLR 571; [1996] HCA 51
Kwok & Beng [2021] FedCFamC1F 252
Kwon & Lee (2006) FLC 93-287; [2006] FamCA 730
Lan & Hao (No 2) (2017) FLC 93-795; [2017] FamCAFC 175
Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; [1988] HCA 32
Pascari & Oxley (2013) FLC 93-536; [2013] FamCAFC 47
Pierson & Romilly (2020) FLC 93-959; [2020] FamCAFC 91
Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538; [1990] HCA 55
Division: Division 1 First Instance Number of paragraphs: 137 Date of hearing: 13 April 2022 Place: Sydney Counsel for the Applicant: Mr Moutasallem Solicitor for the Applicant: Kammoun Sukari Lawyers Pty Ltd Counsel for the Respondent: Mr Seow Solicitor for the Respondent: 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:
SCHONELL J
DATE OF ORDER:
22 APRIL 2022
THE COURT ORDERS THAT:
1.The wife’s application for a stay of the proceedings before this Court is dismissed.
2.The wife is restrained from continuing proceedings before the People’s Court District B.
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 Kwok & Beng has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
SCHONELL J:
This is an application filed by the respondent wife (“the wife”) that seeks orders staying the proceedings brought by the applicant husband (“the husband”) for parenting and property settlement in this Court, and an application by the husband for an anti-suit injunction restraining the wife from continuing proceedings commenced by her in China.
These are interim proceedings and consequently there has been no cross-examination. In those circumstances, I am unable to make findings on the disputed facts about which there are many.
DOCUMENTS RELIED UPON
The husband relied upon:
(1)Amended Initiating Application filed 24 May 2021;
(2)Affidavit of husband filed 11 April 2022;
(3)Affidavit of Ms U filed 11 April 2022;
(4)Financial Statement filed 21 December 2021; and
(5)Case Outline.
The wife relied upon:
(1)Response to Second Further Amended Initiating Application filed 1 April 2022;
(2)Affidavit of wife filed 11 April 2022;
(3)Affidavit of Mr W filed 11 Aril 2022;
(4)Financial Statement filed 26 April 2021; and
(5)Case Outline and Outline of Submissions.
The parties jointly instructed a single expert, being Mr Y who is a lawyer from China. Mr Y prepared a report and supplementary report. Each party relied on his report, which was attached to an affidavit filed 28 March 2022.
BACKGROUND FACTS
Both parties were born in China, the husband in 1978 and the wife in 1984.
The husband says the parties began a relationship in late 2008 and that the parties were married in 2011 in China. The husband says the parties began cohabitation after marriage.
The wife contends that the parties commenced cohabitation as best as can be determined sometime in 2007.
There is one child of the relationship, X who was born in 2012.
The parties seem to agree that they separated in or about August 2019.
In 2009, the husband purchased a property at Suburb D for about $880,000 in his sole name, with settlement of the sale occurring sometime in November/December 2011. The husband says that he paid a deposit of $176,000 and borrowed the balance of the proceeds of sale.
In 2010, the husband says he purchased a property at Suburb H for about $750,000, where he paid a deposit of $150,000 and borrowed the rest.
It would appear that the parties agree that in or about 2010, they purchased a property in their joint names in City S. There is an issue about how much each party paid to the purchase of the property, but it seems to be agreed that the parties also borrowed some monies.
The parties seem to be in broad agreement that during the relationship, the wife was the primary homemaker and parent and was not otherwise engaged in employment apart for about 12 months in 2015.
It seems to be agreed that the husband was the party who was the main income earner but the parties are at issue about the extent to which the husband provided the wife with funds.
In late 2013, the wife and subsequently the child moved to Australia. The husband remained in China. The husband contends that between 2013 and 2018, he travelled to Australia on many occasions to spend time with the wife and the child. The husband says that he provided monies to the wife of in excess of $100,000 per annum.
The wife contends that the husband provided limited financial support and that her parents otherwise provided her with financial support.
In early 2015, the husband looked after the child between about February and August 2015 in China, while the wife remained in Australia.
In about late 2015, the husband says that they purchased a property at Suburb F for $2.5 million. The husband gives evidence that the property was purchased in joint names. The wife says that it was the husband who suggested that it be purchased in the wife’s name. Upon the purchase, the wife and child assumed occupation of the property.
In her affidavit, the wife contends that she said to the husband:
45.… “I want [X] to have the best education possible and I believe private school definitely is better.” …
Thereafter, the child commenced school at V School.
In November 2017, the husband applied for permanent residency in Australia and in or about March 2018, the husband sold the property in China and arranged for the transfer of half of the proceeds of sale to the wife’s bank account. The husband retained the remaining half of the proceeds, which he says were ultimately remitted to an Australian bank account.
In or about June 2018, the husband says that he made the decision to move permanently from China and begin living in Australia with the wife. Upon moving to Australia, the husband commenced working in a company of which he was a 30% shareholder.
A substantial issue, which comprises numerous pages of each party’s affidavit, is the husband’s relationship with Ms Z. The husband concedes that he had an extramarital relationship with Ms Z, but the extent of that relationship and his involvement with Ms Z is clearly a controversy between the parties.
Each of the parties gives detailed evidence about the circumstances surrounding the entering into of an Agreement in 2018 (“the 2018 Agreement”), however, it seems clear that the relationship with Ms Z had a lot to do with the creation of the Agreement. The husband says that it was because of threats made by the wife that he signed the Agreement. The wife says that it was the husband’s idea to sign the Agreement.
A subsequent Agreement was prepared in 2019 (“the 2019 Agreement”). Again, the wife says that the circumstances surrounding this Agreement related to the husband’s relationship with Ms Z.
The wife says that between August 2019 and March 2021, she had no contact with the husband until she received correspondence from the husband’s solicitors in March 2021.
Upon the husband leaving in August 2019, the wife gives evidence that she approached a lawyer in China about the 2019 Agreement, and says that she decided to sell the Australian real property.
The husband gives evidence that the wife sold the Suburb H property in or about August 2020, and the Suburb F property in or about December 2020. He says both properties were sold without his knowledge and consent. He says that both properties were sold pursuant to a Power of Attorney, which he did not sign. The wife agreed that the husband did not sign the Power of Attorney.
The husband first commenced proceedings in this Court on 8 March 2021 seeking property orders, with the application being subsequently amended to include parenting orders.
On 8 March 2021, orders were made ex parte restraining the wife from dealing with the proceeds of sale of the Suburb F and Suburb H properties. On 11 March 2021, the wife appeared, and orders were made for the wife to give disclosure and for the release of some monies to the wife.
Further orders were made by consent on 23 March 2021 in relation to the monies that were the subject of the restraining orders.
On 26 April 2021, the wife filed an affidavit in the proceedings confirming that she had complied with her obligations of disclosure.
On 2 July 2021, the wife commenced proceedings in China.
On 20 August 2021, the wife filed a Response in the Australian proceedings, where she sought interim orders seeking a stay of the proceedings or alternatively, interim orders as to parenting and the release of $200,000.
On 6 December 2021, the matter came before Christie J. Her Honour records the following matters in her judgment of Kwok & Beng [2021] FedCFamC1F 252:
19.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).
…
27.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.
…
43.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.
…
46.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.
…
48.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.
49.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.
50.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].
Her Honour made orders pending further order to the following effect:
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.
EVIDENCE OF THE SINGE EXPERT
The single expert prepared a report in relation to the application of Chinese law to the present proceedings.
The report of the single expert has not been tested and no opportunity has been given for cross-examination. There was, however, no challenge to his expertise. The single expert gave detailed evidence as to Chinese law, including that:
(1)A Chinese court has jurisdiction in relation to the parties as they are Chinese nationals;
(2)A Chinese court has jurisdiction in respect of joint spousal assets in China and Australia;
(3)The 2018 Agreement and the 2019 Agreement (“the Agreements”) entered into by the parties are binding; and
(4)A Chinese court will not recognise orders made by this Court.
THE NATURE OF THE PROCEEDINGS IN EACH FORUM
As stated earlier, the husband commenced proceedings in Australia initially as to property settlement, and on 24 May 2021 amended his Initiating Application to include parenting orders.
On 2 July 2021, the wife commenced proceedings in China. On 20 August 2021, she filed a Response in this Court seeking interim orders by way of a stay, and alternative relief as to parenting and financial orders.
In China, the proceedings relate to divorce, parenting, child support and property. In addition, in China, the wife also seeks orders in relation to the Agreements entered into between the parties. In Australia, the proceedings currently relate to issues of parenting, property settlement and divorce.
The wife has applied for child support in Australia, which the husband is paying.
APPLICABLE LAW
The principles to be applied in determining whether the Australian proceedings should be stayed as sought by the wife and/or conversely an anti-suit injunction be granted as sought by the husband, are those outlined in Henry v Henry (1996) 185 CLR 571 (“Henry”). (See also CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345 (“CSR”) and Voth v Manildra Flour Mills Pty Limited (1990) 171 CLR 538 (“Voth”)).
In Voth, the High Court adopted the test advanced by Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197, namely that a stay should be granted if the local court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive and that ““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” (at 247).
The onus of proof rests on the party asserting that this Court is a clearly inappropriate forum.
In Henry, dealing with a stay of proceedings on the basis that litigation is pending in another jurisdiction, their Honours held at 591:
It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed. However, it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are 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”. And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation.
Their Honours in dealing with the “same controversy” observed at 591–592:
If separate proceedings are commenced between husband and wife in different countries, differences in procedure, in available remedies and in the substantive law with respect to marriage and divorce will ordinarily ensure that the proceedings are different in significant respects. However, the proceedings will ordinarily be concerned with the same controversy. And that will be so even if the initiating party is not the same and even if the proceedings seek inconsistent remedies or outcomes. The marital relationship lies at the heart of all proceedings between husband and wife with respect to their marital status, especially proceedings for the dissolution of marriage. In such cases, it is the marital relationship itself which is the subject of controversy. And if the marriage is still subsisting, disputes with respect to property, maintenance and the custody of children will ordinarily be but aspects of an underlying controversy with respect to the marital relationship.
As Finn J made clear in Ferrier-Watson v McElrath (2000) FLC 93-022:
29. … it is true that the majority judgment in Henry (in the first two paragraphs of the passage quoted in paragraph 19 of his Honour’s judgment and in paragraph 9 of this judgment) makes it clear that in cases (such as the present where a stay is sought of Australian proceedings where there are foreign proceedings pending) it is not necessary that an identical form of relief be sought in both the Australian and the foreign proceedings, but rather that both proceedings are “in essence, proceedings with respect to [the parties’] marital relationship”.
In Henry, the plurality identified a non-exhaustive list of factors in determining whether Australia is a clearly inappropriate forum, including:
(1)Whether both courts have jurisdiction. No issue arises unless the courts of each country have jurisdiction;
(2)If yes, will each country recognise orders made by the other? “If the orders of the foreign court will not be recognised in Australia that will ordinarily dispose of any suggestion that the local proceedings should not continue”. If they will be recognised, then “whether any orders may need to be enforced in other countries and, if so, the relative ease with which this can be done” (at 592);
(3)which forum can provide a complete resolution of the matters involved in the parties’ controversy;
(4)“the order in which the proceedings were instituted, the stage which they have reached and the costs that have been incurred” (at 592);
(5)the connection of the parties and their marriage to each jurisdiction;
(6)“whether, having regard to their resources and their understanding of language, the parties are able to participate in the respective proceedings on an equal footing” (at 592–593);
(7)Whether each party has a legitimate, personal or juridical advantage to the forum in which they chose to litigate; and
(8)Any other relevant matter in the circumstances of the case.
The clearly inappropriate forum test does not involve by implication a comparison between the two forums, nor is it a balancing exercise. The focus is on the inappropriateness of the proceedings currently before the local court, not the appropriateness of the foreign court.
The Full Court in Pierson & Romilly (2020) FLC 93-959 made plain:
14. In Nygh’s Conflict of Laws in Australia, (LexisNexis Butterworths, 10th edition, 2020) at page 208, the learned authors point out that although primary judges occasionally express their conclusions using metaphors of balancing weight, the process is not one of weighing those factors that point towards a stay against those that point away from a stay, but rather of assessing whether there are enough factors indicating that the forum is clearly inappropriate, in which case a stay should be granted. If there are significant factors pointing to the conclusion that the chosen forum is appropriate, it is immaterial that there may be many factors suggesting that another forum might also be appropriate or even more appropriate.
If the Court determines that the Australian court is a clearly inappropriate forum, then that is the end of the matter and the Australian proceedings should be stayed.
If, however, the Court determines that the Australian court is not a clearly inappropriate forum, the Court may then need to proceed to consider whether the foreign proceedings are to be stayed.
It does not automatically follow that an anti-suit injunction will be granted if there has been a refusal to grant a stay of the local proceedings. The fact that there is litigation in different countries about the same issue does not mean that it is vexatious or oppressive. Different principles apply, albeit that it may be prima facie vexatious and or oppressive if there is litigation in different countries about the same controversy. As the High Court observed in CSR at 393–394, citing with approval the Privy Council’s determination in Bank of Tokyo Ltd v Karoon [1987] AC 45:
… foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceedings. On the other hand, they are vexatious or oppressive if there is a complete correspondence between the proceedings or, in terms used in Carron Iron Co, if “complete relief” is available in the local proceedings.
(Footnote omitted)
In determining whether an anti-suit injunction should be granted, the Court will look to the matters discussed in CSR, and in particular, whether restraining the further conduct of the foreign proceedings is necessary to protect the processes and integrity of the Australian court from being abused.
Finally, the plurality in Voth made plain at 565:
… Ordinarily, however, it will be unnecessary for the primary judge to do more than briefly indicate that, having examined the material in evidence and having taken account of the competing written and oral submissions, he or she is of the view that the proceedings should or should not be stayed on forum non conveniens (i.e. “clearly inappropriate forum”) grounds.
The principles to be applied in relation to competing fora applications in relation to a child present in the jurisdiction is the best interests of the child. In Pascari & Oxley (2013) FLC 93-536, the Full Court observed:
73. In our view, the importance of the decision, as will be seen from consideration of later cases, is that the focus of the Court should be on the application which it is considering and on the principles governing that application. In particular, where that application is made directly under the provisions of the Act, such as s 63 (as then in force), or under the auspices of the welfare power in s 67ZC, the exercise of those powers is circumscribed by the best interests of the child as the paramount consideration.
…
86. We do not understand anything said by the Full Court in Karim & Khalid (including at [60]) to be inconsistent with what we have earlier said at [73], being that the principles to be applied in parenting cases which involve a foreign element will be determined by the nature of the application before the court. Where an application is made under provisions of the Act which prescribe the best interests test, whether or not a child is within the jurisdiction, then it is that test, and not the test of forum conveniens, which will apply.
While in Kwon & Lee (2006) FLC 93-287 (also referred to as EJK & TSL), the Full Court stated:
83. …
(iv) in proceedings involving competing fora when the child is in Australia and the Court’s jurisdiction is regularly invoked, and it is necessary to make a parenting order for interim residence or an aspect of parental responsibility to provide effective relief, the principles relevant to the granting of a stay or an anti suit injunction are not the appropriate principles to be applied, and the Court must make such orders as are necessary with the child’s best interests as its paramount consideration (s 60CA);
It is clear that it may be legitimate for litigation to continue in two jurisdictions. As Kent J observed in Deslanders & Deslanders [2015] FamCA 913:
23.In Kemeny v Kemeny, the Full Court (Finn, Kay and Maxwell JJ) held that although the Family Court may be a clearly inappropriate forum to litigate one matrimonial cause (for example, as in that case, where property orders had been made by an overseas court) it may nonetheless properly exercise its jurisdiction with respect to others (such as parenting matters, or with respect to property located in Australia).
(Footnotes omitted)
I will first determine the application for a stay of the Australian proceedings in relation to parenting matters. Then I will consider if Australia is a clearly inappropriate forum in relation to the balance of the applications because if this Court is a clearly inappropriate forum, it is not necessary to consider the application for an anti-suit injunction.
STAY OF THE AUSTRALIAN PARENTING PROCEEDINGS
The husband contends that the parenting issues were determined by Christie J, and as there has been no appeal from that decision, that is the end of the matter. The wife says what Christie J did was make a stop gap order.
Justice Christie’s order is referred to earlier. Her order is informed by her reasons as follows:
44.Restraining a party from continuing proceedings in another jurisdiction is not to be undertaken lightly.
45.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.
46.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.
47.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.
…
50.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].
It is clear that her Honour was not making a permanent order. As much is apparent from a combination of [27], [46] and [50] of her judgment.
The child was born in China and came to Australia when he was about 18 months old.
He has lived in Australia almost continually since that time. The child attends school here and it seems to be intended that he will remain at school here.
It is an agreed fact that the child is habitually resident in Australia.
The issue of jurisdiction is determined by reference to ss 69E and 111CD of the Family Law Act 1975 (Cth) (“the Act”). The determination is governed by the best interests considerations.
The proceedings commenced by the husband properly invoke the Court’s jurisdiction. All parties including the child are present in Australia and according to the wife’s evidence engaged in some form of mediation in Australia in relation to the child. Both parties seek interim and final parenting orders in this Court in relation to the child.
Beyond the single expert opining that a Chinese court adopts a “trinity” mode, namely dealing with parenting, divorce and property proceedings, there is no evidence from the single expert as to whether or not a Chinese court adopts the best interests of the child as the paramount consideration, whether a Chinese court relies upon expert evidence as to the best interests of the child, and whether a Chinese court has a similar mechanism such as an Independent Children’s Lawyer (“ICL”). The wife’s counsel referred to parts of the expert’s evidence where it said that the court in China “will start from the principle of maximizing the benefits to the children” (at paragraph 20(3), page 10/23), and custody “shall be judged according to the principle most beneficial to the minor children” and “will respect their true wishes” (at page 15/23). To his credit, the wife’s counsel did not submit that it represented a best interest’s consideration.
The child is present in Australia, and can be interviewed easily if necessary for the preparation of a report and an ICL can be appointed.
Both parties say they intend to remain resident in Australia. Accordingly, if issues arise in relation to the parenting of the child they can be more easily dealt with in this jurisdiction.
I note the wife’s submission that the child has extended family in China and at some stage, it will be necessary for the child to travel to China. So the submission went that as a Chinese court will not recognise Australian orders, if the child travels to China there would be no orders in place to govern the return of the child as China is not a signatory to the Hague Convention. I note, however, that the submission seems to presuppose that the husband would not return the child, and ignores the evidence that the extended family have travelled to Australia on a number of occasions to see the child.
I am not satisfied that it is in the best interests of the child for there to be parallel proceedings in relation to his welfare. I am of the view that his best interests are met by the parenting proceedings continuing to be determined by this Court.
I dismiss the wife’s application for a stay of the parenting proceedings.
STAY OF THE BALANCE OF THE AUSTRALIAN PROCEEDINGS
As stated earlier, the wife bears the onus of establishing that Australia is a clearly inappropriate forum.
The wife contends that there is an advantage to her of the proceedings in China. However, the existing controversies before both courts relate to matters arising out of the marriage of the parties. That is, they arise “out of the same sub-stratum of fact” (CSR at 401).
I propose to consider the matters specified in Henry, having regard to the evidence of the single expert, the parties and their submissions.
Do both courts have jurisdiction in relation to the parties and their marriage?
There is no issue that this Court has jurisdiction to deal with the issues arising out of the parties’ marriage.
The single expert’s evidence is that as the parties are Chinese nationals, the Peoples Court in China (“the Chinese Court”) has jurisdiction to hear matters arising from their marriage. The single expert said:
22. …
(1)… in divorce dispute cases, the Chinese court adopts the “trinity” mode, divorce judgment or divorce conciliation statement generally include divorce, parenting and property division.
I am satisfied that both courts have jurisdiction. Neither party contended otherwise.
In light of that concession on this factor, it cannot be said that this Court is a clearly inappropriate forum.
If both courts have jurisdiction, will each recognise the orders and decrees of the other?
The single expert’s evidence was that:
17. …
(1)… as far as divorce dispute cases are concerned, under certain conditions, even though the Chinese court can recognize judgement contents in respect of a divorce judgement of an Australian court to dissolve the marriage relationship, the division of property in the said judgement will not be accepted by the Chinese court, especially in respect of properties within China.
(2)In conclusion, regarding a divorce dispute case, the Chinese court will not recognize the division of property within China in any divorce verdict made by an Australian court, nor will the Chinese court accept an Australian court’s order on seizing or freezing property within China in the relevant lawsuit.
Counsel for the wife referred to a Supreme Court decision enforcing a money order made by a Chinese court and submitted that an order of a Chinese court may be enforced in Australia. Notwithstanding such submission, I was not taken to any statutory provision that would enable enforcement of a property order of a Chinese court in this country nor any authority of this Court enforcing a property order of a Chinese court.
I accept that orders of an Australian court are unenforceable in China.
In light of that concession, it cannot be said on this factor that this Court is a clearly inappropriate forum.
Which forum can provide more effectively for a complete resolution of the matters involved in a controversy?
At present, the controversy between the parties relates to divorce, parenting and financial disputes.
The Act applies to all of the property and financial resources of each of the parties, wherever acquired, as well as spousal maintenance entitlements.
The original jurisdiction of this Court includes jurisdiction in relation to persons or things wherever located. Orders in Australia can be made in personam against property wherever it is located. Therefore, proceedings in Australia can deal with the property dispute as between the parties, even though the parties’ assets may include property in China.
The wife contends that the identity and value of the husband’s assets in China is something that can be more effectively done in China. She says that there is real estate, bank accounts and interests in various companies that need to be determined and then valued. She says this can only properly be done in China. In addition, she says there are issues about the husband’s income whilst in China and that he has not disclosed his tax returns. The wife contends that comparatively, in Australia, there is only monies in bank accounts, a property at Suburb D which has sold and will settle shortly, and personal luxury items.
However, issues of valuation can be addressed in this Court by the appointment of a single expert to value property outside Australia. Likewise, this Court can hear and resolve factual issues in relation to the ownership of assets wherever they are located. This Court can make orders for disclosure. The jurisprudence of this Court is settled in relation to the consequences that may flow if a party does not comply with their obligation of disclosure.
In circumstances where the parties will be litigating in relation to parenting proceedings in this Court, it is a factor in a determination that Australia is not a clearly inappropriate forum. This Court can provide effectively a complete resolution to the controversy involving the parties as to divorce, parenting and property settlement. The wife has already engaged in the child support process in this country.
The order in which the proceedings were instituted, the stage they have reached and the costs involved
As referred to earlier, proceedings were first commenced in this Court on 8 March 2021 by the husband. The wife commenced proceedings in the Chinese Court on 2 July 2021.
The husband submits, consistent with the majority position in Henry, that the commencement by the husband of proceedings in this Court first in time renders available the submission that, prima facie, a continuation of the Chinese proceedings is vexatious and oppressive.
The wife has taken part in the Australian proceedings, consented to orders on the first return date including orders as to disclosure and, on 26 April 2021, before commencement of the proceedings in China, filed an affidavit in this Court confirming that she had complied with her obligations of disclosure. The husband submits that the wife has acceded to the jurisdiction of this Court by her participation in it.
In the wife’s Response filed 20 August 2021, she seeks final orders in this Court, both in relation to parenting and financial matters, as well as seeking interim parenting orders and orders as to a stay. The wife has clearly engaged in the proceedings before this Court. The proceedings are, however, some significant way off from being determined.
The husband has not engaged in the Chinese proceedings.
The evidence of the single expert seems to suggest that proceedings in China might be completed within six months. Notwithstanding that statement and presumably in light of the fact that more than six months has elapsed since the commencement of proceedings in China, the wife’s counsel quite properly conceded that he could not say with certainty when the Chinese proceedings would be completed.
The wife says that she has spent $30,000 on the proceedings in China and $100,000 on the proceedings in Australia. She also says that no further legal costs are expected to be incurred in the Chinese proceedings.
The husband says he has borrowed $50,000 from his parents to pay for his living expenses and legal fees. He gives no precise evidence of what he has spent on legal fees.
The husband gives evidence that his financial position is meagre and that he has limited funds. He states that he is unable to afford to litigate in China.
The husband’s capacity to engage in the proceedings in China is a factor in the determination of whether Australia is a not a clearly inappropriate forum.
The connection of the parties and their marriage to each jurisdiction
The parties are both Chinese nationals and Australian residents as is the child.
As stated earlier, the parties commenced cohabitation in or about 2007 and the wife moved to Australia in November 2013. The parties finally separated in 2019. The wife and child have lived in Australia for at least seven years prior to the commencement of proceedings.
There is property both in Australia and in China to which each of the parties makes claim. The value and extent of the Chinese property is in dispute.
Both parties are Australian residents and there is no evidence to suggest that they intend to either relinquish their residence or return to live permanently in China. The wife’s Outline of Submissions state that the wife “ordinarily resides in Australia” (at paragraph 5). The husband gives evidence that he does not intend to return to China and intends on becoming an Australian citizen.
The parties’ child started school in Australia and the evidence of the wife is that the parties wanted the best education for their child. In that respect, it can be inferred that the enrolment of the child at school in Australia was a clear intention on the part of the parties that Australia offered the child the best educational opportunity.
The wife submitted, “the degree of connection of the parties and their marriage to the Australian jurisdiction and to the Chinese jurisdiction is about equal” (wife’s Outline of Submissions, paragraph 29).
In light of that concession, it cannot be said in relation to this factor that this Court is a clearly inappropriate forum.
Whether having regard to their resources and language, the parties are able to participate in their respective proceedings on an equal footing
Both parties speak Mandarin. English is clearly not their first language. They have each sworn affidavits, which have been interpreted.
I accept that continuing to litigate in this country will require the translation of documents and the use of interpreters. That will increase costs. There is no suggestion that by this fact that they are inhibited in engaging in proceedings in this country. The parties have participated in the proceedings through their solicitor and counsel.
If proceedings take place in China, there will still need to be translations of documents referrable to the Australian assets.
The wife has retained Chinese lawyers. The wife submits, “[t]he parties are able to participate in each jurisdiction on an equal footing” (wife’s Outline of Submissions, paragraph 33).
In light of that concession, it cannot be said in relation to this factor that this Court is a clearly inappropriate forum.
Does each party have a legitimate, personal or juridical advantage to the forum in which they chose to litigate?
Each forum has advantages to one or other of the parties.
The husband contends a juridical advantage to him in Australia because the Agreements would not be enforced, and there is a prejudice to him in China as he may be ‘out of time’ to challenge the Agreements.
The wife says the bulk of the assets are in China, and that favours having the proceedings heard in China. Exhibit 1 is a Balance Sheet representing the parties’ assets. Much of the value is in dispute and a significant part of the assets alleged to be in China relates to property that once existed and/or is an addback. I cannot, therefore, determine whether the assertion that the bulk of the assets are in China is correct. All I can do in the absence of cross-examination and valuation evidence is note the competing assertions.
The wife says there is a juridical advantage to her in China because of the ease of enforcing orders made by the Chinese Court in China, the ability to undertake investigations into the husband’s affairs in China through the Court’s processes due to the husband’s alleged non-disclosure, and that she is able to enforce the Agreements in China.
The wife asserts a significant advantage to her if the issues are determined in China, but that does not mean that she cannot make submissions in this country as to how this Court should deal with the assets in this jurisdiction and in China, and what might flow if she establishes that the husband has not complied with his disclosure obligations.
Any suggested juridical advantage to the wife of proceedings in China does not mean that this Court is a clearly inappropriate forum.
As the Full Court observed in Lan & Hao (No 2) (2017) FLC 93-795:
65.Finally, it is necessary to note that “legitimate personal or juridical advantage is a relevant but not decisive consideration, the fundamental question being ‘where the case may be tried “suitably for the interests of all of the parties and for the ends of justice’”” (Henry at 587, quoting Sim v Robinow (1892) 19 R 665 at 668).
Any other relevant matter in the circumstances of the case.
I was not taken to any other relevant circumstance.
CONCLUSION
The wife bears the onus of proof to establish that Australia is a clearly inappropriate forum. Much of her argument was directed to the appropriateness of the Chinese forum. That is not the test.
In circumstances where both courts have jurisdiction but there are issues of enforcement in relation to each jurisdiction, where both forums can provide a resolution of the issues, where the proceedings were first commenced in this Court, and the wife has engaged in the proceedings, filed documents and consented to orders, while not initially challenging the jurisdiction, leads me to conclude that she has not discharged the onus she carries.
I further note that the parenting proceedings will be heard here and that it is not in the interests of the parties that there be parallel proceedings, the husband’s evidence that he cannot afford to take part in litigation in China, that both parties connections to each forum are said by the wife to be approximately equal, and that there are juridical advantages to both parties in their chosen forum, does not establish that Australia is a clearly inappropriate forum.
I find that Australia is not a clearly inappropriate forum.
The wife’s application will be dismissed.
ANTI-SUIT INJUNCTION
The husband seeks an anti-suit injunction restraining the wife from prosecuting the Chinese proceedings.
An injunction of this type is one that the Court should exercise with caution.
Both parties are present in the jurisdiction and clearly intend to remain present in the jurisdiction.
I have addressed earlier the nature of the two proceedings and have concluded that it is but one controversy, which arises out of their marriage. This Court can provide complete relief which would resolve the controversy. There are juridical advantages to both parties in their chosen forum, each has something to gain by proceeding in their chosen forum.
The wife’s counsel submits, albeit in the context of the stay as follows:
34. If Australian proceedings are not stayed, the parties are likely to be obliged to undergo the expense of conducting parallel proceedings in both Australia and China to resolve the whole of the dispute in relation to the Australian and Chinese assets. There is a risk that those courts would make conflicting orders, especially where the Chinese Marital Property Agreements purport to deal with Australian assets.
That is an entirely undesirable outcome.
Counsel for the husband said that it would be oppressive and vexatious for the husband to have to simultaneously conduct proceedings in Australia and in China. I agree that it would. Proceedings were first commenced in this Court, and the wife engaged in the proceedings and acceded to the jurisdiction for a period. The subject matter of the litigation arises out of the marriage, what the parties did during the marriage, and what the assets of the marriage are.
I am satisfied that the husband has discharged the onus on him and find that it would be vexatious and oppressive on him to continue the proceedings in China. There is, to adopt their Honours language in CSR at 393, a “complete correspondence” between the proceedings in China and Australia.
I am of the view that an injunction is necessary to protect the Court’s own proceedings and processes to avoid the very outcome that the wife’s counsel submits is possible. A single proceeding will reduce cost and avoid duplicated and inconsistent results. They each deal with the same subject matter arising out of the marriage and complete relief is available in this Court to quell the controversy arising out of their marriage.
I will make an order restraining the wife from continuing proceedings in China.
I certify that the preceding one hundred and thirty-seven (137) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Schonell. Associate:
Dated: 22 April 2022
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