Lan & Hao (No 2)

[2017] FamCAFC 175

FAMILY COURT OF AUSTRALIA

LAN & HAO (NO. 2) [2017] FamCAFC 175

FAMILY LAW – APPEAL – ANTI-SUIT INJUNCTION – Appeal from the primary judge’s refusal to grant an anti-suit injunction restraining the husband from pursuing proceedings in China – Discussion of principles applicable to anti-suit injunctions restraining the pursuit of proceedings in foreign jurisdictions – Whether the husband had a legitimate juridical advantage in his proceedings in China – Discussion of the meaning of “the nature of the controversy” – Whether an anti-suit injunction against the husband would have had no utility – Where the injunction would have utility because it could be enforced against the husband when he is in Australia by way of contravention or contempt proceedings – Where the primary judge erroneously found the injunction had no utility – Where that finding was not material to the primary judge’s decision to refuse to grant the injunction as that decision was primarily based upon a consideration of the nature of the two proceedings which was entirely open on the evidence – Where the husband had a juridical advantage in prosecuting proceedings in China – Appeal dismissed – Wife to pay the husband’s costs of the appeal.

FAMILY LAW – APPEAL – ADDENDUM – Correction of the Reasons for Judgment pursuant to r 17.02A of the Family Law Rules 2004 (Cth) – Addition of addendum explaining the corrections.

Family Law Act 1975 (Cth) s 79

CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345
Dobson and Van Londen (2005) FLC 93-225
Ferrier-Watson v McElrath (2000) FLC 93-022
Henry v Henry (1996) 185 CLR 571
House v The King (1936) 55 CLR 499
Kemeny v Kemeny (1998) FLC 92-806
Kent & Kent (2017) FLC 93-792
Navarro v Jurado (2010) 44 Fam LR 310
Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491
Sim v Robinow (1892) 19 R 665
Skinner & Alfonso-Skinner [2010] FamCA 329
Yeo & Huy (No. 2) [2012] FamCA 541

APPELLANT: Ms Lan

RESPONDENT: Mr Hao

FILE NUMBER: SYC 4184 of 2013

APPEAL NUMBER: EA 158 of 2016

DATE DELIVERED:

29 August 2017

(Amended pursuant to r 17.02A on 22 September 2017)

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Ainslie-Wallace, Aldridge & Watts JJ

HEARING DATE: 9 August 2017

LOWER COURT JURISDICTION: Family Court of Australia

LOWER COURT JUDGMENT DATE: 16 August 2016

LOWER COURT MNC: [2016] FamCA 670

REPRESENTATION

COUNSEL FOR THE APPELLANT: Mr White SC

SOLICITOR FOR THE APPELLANT: Michael Conley Lawyers

COUNSEL FOR THE RESPONDENT: Mr Othen

SOLICITOR FOR THE RESPONDENT: York Law Family Law Specialists

Orders

(1)The appellant is granted leave to appeal.

(2)The appeal is dismissed.

(3)The appellant is to pay the respondent’s costs of the appeal as agreed or in default of agreement as assessed.

Order made 22 September 2017

(1)Pursuant to r 17.02A of the Family Law Rules 2004 (Cth), the Reasons for Judgment are amended to delete the reference to “the husband’s new partner” in paragraph 6 and to change the references to “the husband’s new partner” in paragraph 13 to “Ms Csien”.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lan & Hao has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 158 of 2016
File Number: SYC 4184 of 2013

Ms Lan

Appellant

And

Mr Hao

Respondent

REASONS FOR JUDGMENT

(AMENDED PURSUANT TO RULE 17.02A ON

22 SEPTEMBER 2017)

Introduction

1.In April 2014 Mr Hao (“the husband”) commenced proceedings in the Civil Court in B, China (“the Chinese Court”) seeking orders for the dissolution of his marriage to Ms Lan (“the wife”) and division of assets in China. On 11 September 2014 he sought to amend those proceedings to claim orders that the wife compensate him for economic loss, which he asserts he suffered when the wife transferred property and shares in a company to third parties at a low price. On 12 September 2014 the wife commenced proceedings in the Federal Circuit Court of Australia seeking orders for division of property pursuant to s 79 of the Family Law Act 1975 (Cth). The proceedings were transferred to the Family Court of Australia later that year.

2.In this matter Rees J was faced with competing applications for anti-suit injunctions, by which the wife sought to restrain the husband from pursuing his claim against her in China, and the husband sought to restrain the wife from taking further steps in the property proceedings in the Family Court of Australia.  In the alternative, the husband sought a stay of the proceedings in the Family Court pending final determination of the Chinese proceedings.

3.Each party’s application before the primary judge failed, leading to what her Honour described at [128] as the “somewhat unusual circumstance” that both sets of proceedings would continue.  As these reasons explain, in the unusual facts of this matter, we consider that the orders made by her Honour were open to be made on the evidence.

4.The wife appeals against her Honour’s refusal to grant an injunction restraining the husband from continuing to pursue his property proceedings in China.

5.The husband did not appeal from the primary judge’s refusal to stay or to restrain the wife from continuing property proceedings in the Family Court.

6.Ms Csien was originally joined as the second respondent in this appeal. However, as she took no part and does not have an interest in the appeal, these reasons do not include her as a party to the appeal.  

7.In order to understand the basis of the primary judge’s reasons and the issues raised on appeal it is necessary to set out the following facts drawn from her Honour’s reasons and the parties’ evidence. To that extent there may be some issues of controversy in this summary.

Background

8.The parties married in Australia in 2005 and separated in April 2011.  They were divorced in Australia in 2013.

9.The wife is a Chinese citizen and ordinarily resident in China. Prior to the marriage she owned property and an interest in a company in China.

10.The husband was born in China but has ordinarily lived in Australia since 1989, including during the currency of the marriage.  He is now an Australian citizen.

11.At the time of the hearing, it was not clear whether the husband was continuing to live in Australia.  His senior counsel informed the primary judge that his client was now living in China and did not intend to return to Australia.  There was no evidence to that effect and her Honour was inclined to infer from the available evidence that he was living in rental accommodation in Australia, although he was, apparently, working from time to time in China (at [37] and [89] to [93]).

12.During the relationship the wife maintained a residence in China and the husband in Australia. Each party primarily lived in his or her respective country of residence, although they also lived together in China and Australia from time to time and travelled together.

13.At the time of the hearing the husband owned a property in Brisbane and a half share in a property at Suburb E with Ms Csien.  The wife alleged that at least one of these properties was purchased with the proceeds of sale of a property at Suburb A, to which she had contributed $150,800 in reduction of the mortgage.  On 27 September 2005 the husband signed a “Loan Agreement” in which he acknowledged advances of $130,000 from the wife and her family and promised to repay them over seven years.  There was no suggestion that any repayment had been made.  The wife also asserted that the husband’s new partner holds her interest in the Suburb E property on trust for the husband.

14.The husband contended that the wife owned several properties in China and that they were acquired during the marriage.  It was the wife’s case that these properties were owned by her prior to the marriage and thus would not be regarded by a Chinese court as marital property which could be divided between the parties.

15.This is an issue of significance because the expert evidence before the primary judge as to the law in China is that the courts will only divide property acquired during the marriage, which is regarded as being owned jointly, but will not deal with property that was owned by the parties prior to the marriage.

16.On 29 June 2011 the husband filed proceedings in the Chinese Court seeking that the marriage be dissolved and that the joint spousal property be divided.  On the return date the husband withdrew the application.

17.On 28 September 2011 the husband commenced proceedings in the Chinese Court seeking orders that four properties held in the name of the wife were in fact joint property of the parties as they had been acquired during the marriage.  In four separate judgments the husband’s contentions were rejected.  He appealed from each of these decisions.  Two appeals were dismissed on 20 December 2013 and the husband withdrew the other two appeals.

18.In April 2014 the husband commenced fresh proceedings in China seeking a divorce and a property settlement.  The wife did not become aware of these proceedings until after she commenced her proceedings in Australia.

19.On 11 September 2014 the husband filed a document in the Chinese proceedings headed “Application for Addition of Claims”.  The application asserted that the wife had disposed of a building (which may conveniently be described as “Building 21”), which was said to be a joint spousal asset, at an undervalue.  This building was not one of the four properties the subject of the earlier proceedings.  He also sought orders in relation to the shareholding of a company he asserted was owned by the wife.

20.The orders sought, if the additional claims were permitted, were:

1.Order that plaintiff and defendant’s marriage be dissolved.

2.The plaintiff and defendant’s joint spousal property be divided according to law.

3.The defendant conpensate [sic] the plaintiff for economic loss of RMB 715,285 yuan the plaintiff suffered as a result of transferring the property at a low price.

4.The defendant conpensate [sic] the plaintiff for economic loss the plaintiff suffered as a result of transferring shareholding at a low price. The actual amount be based on valuation.

(As per the original)

(We note that there were two translations of the Application for Addition of Claims or “Application to Add Pleadings” dated 11 September 2014 in the appeal books.  They differed only in form and not in substance.)

21.It appears that Order 1 was necessary to found the Court’s jurisdiction but there remained the possibility that the Chinese Court would recognise the Australian divorce decree and thus found its jurisdiction in that way.

22.At the time of the hearing the parties were awaiting judgment on the Application for Addition of Claims.  According to a note from the husband’s lawyer in China appended to the husband’s written Outline of Submissions handed to her Honour, in January 2016 the Chinese Court made an order for the valuation of the company the subject of the alleged share disposition.

23.The wife filed an Application in a Case on 23 December 2014 seeking to restrain the husband from taking any steps in the proceedings in China other than to discontinue them.  In his Response filed on 27 March 2015 the husband sought an order that the proceedings in Australia be stayed pending determination of the proceedings in China or alternatively that the wife be restrained from pursuing them until that time.

24.The primary judge’s findings as to the law that will be applied by the Chinese courts were not challenged and relevantly consisted of (at [51]):

…

4.Property owned by a party prior to the marriage remains the property of that party and does not become joint property of the parties.

5.A Chinese court can make property adjustment orders only in relation to joint property.

6.Chinese courts do not have authority outside their judicial district and there is no mutual recognition of judgments between Australia and China. The Chinese court will not investigate or have regard to assets outside China.

7.Chinese courts will not recognise orders made by the Family Court of Australia concerning the partition of property although the findings of fact contained in a judgment of the Family Court of Australia can be admitted as evidence of those facts in a Chinese court.

25.The primary judge concluded at [101] that Australia was “not a clearly inappropriate forum” for the determination of the wife’s claims because her claims to a division of the property held by the husband in Australia could only properly be heard and determined here. Accordingly, it was not appropriate to stay the proceedings.  The injunction sought against the wife to restrain her from continuing the proceedings was refused because the evidence established that the Chinese Court would not deal with the property in Australia.  Thus, the Australian proceedings could not be described as vexatious or oppressive.

26.The injunction sought against the husband was refused because he was found to have a legitimate juridical advantage in proceeding in China and because there was no utility in granting the injunction in any event, as the order would not be recognised and enforced in China.

The appeal

Did the primary judge err in finding that the wife had substantial property in China, acquired after the marriage, and in finding that appeals in the Chinese property proceedings were listed for hearing on 25 July 2016? (Grounds 1(a) and 6)

27.It is convenient to deal with these two grounds together.

28.We are unable to identify any finding by her Honour to the effect that “the husband had established the wife had substantial property including five pieces of real property and shares in a company acquired by the wife in China after the marriage” as Ground 1(a) asserts. Her Honour did use these words at [120], but only to describe the nature of the husband’s claim.

29.As to the other error asserted by the wife, it is correct to say the primary judge did refer to appeals being heard in July 2016.  She said:

38.The Chinese proceedings were determined by judgment delivered in June 2013 which held that the properties the subject of the proceedings were not the property of the wife. The husband has appealed against those orders. That appeal was listed on 25 July 2016.

30.However, in her Honour’s conclusions, the following was noted:

121.The chronology relied upon by the husband suggests that he has been unsuccessful in persuading the court in China that the properties belong to the wife. On 19 June 2013, judgement was handed down in which it was determined that four properties which the husband alleged belonged to the wife, were the property of a company. The single expert states that, under Chinese law, property which belongs to a company is not property of the wife. The husband appealed against that decision. The appeals were either withdrawn or dismissed.

(Emphasis added)

31.Thus, to the extent there was an erroneous reference to the appeals being listed on 25 July 2016, it was not a material error because her Honour’s conclusions were correctly based upon the fact that the appeals had been dismissed or withdrawn.

32.The date of 25 July 2016 was the return date for a third set of proceedings in China.  In 2012 the wife obtained a judgment from a court in China “validating” a transfer of 55 per cent of the share held by her in a company to her mother.  In September 2015 the husband applied to have that judgment revoked.  That application was fixed for hearing on 25 July 2016.

33.The primary judge did not otherwise refer to these proceedings.  The parties accepted that the existence of these proceedings only became relevant if the orders of the primary judge were set aside and this Court reconsidered the orders that should be made. 

Her Honour erred in finding that the husband had a juridical advantage in prosecuting proceedings in China or alternatively should have found that despite any juridical advantage the balance of convenience favoured the grant of the injunction (Ground 4)

34.The wife submitted that the primary judge erred in finding the husband had a legitimate juridical advantage in proceeding in China for the following reasons:

·    The husband called no evidence that established that there was property in China, other than the four properties the subject of the earlier proceedings, that might properly be characterised as joint property in China; and

· In any event, the outcome of the property proceedings in the Chinese Court as to the property the husband would be entitled to in China would affect any benefit he would receive in “any adjustment orders made pursuant to section 79”.

35.The wife also submitted that if it was correct to find that the husband had a legitimate juridical advantage in his proceedings in China, the primary judge erred in failing to “weigh other relevant matters which should have caused the trial judge to find the balance of convenience favoured the grant of the injunction”.

What principles apply to anti-suit injunctions and foreign jurisdictions?

36.It is useful at this stage to set out the principles that apply to injunctions seeking to restrain the pursuit of proceedings in foreign jurisdictions.  It is important to note that the wife based her claim on the Court’s inherent or implied jurisdiction to protect its own process rather than the equitable jurisdiction to restrain unconscionable conduct or the unconscientious exercise of a legal right.  It is also necessary to recall that the primary judge found that the proceedings in Australia had been commenced in a not inappropriate forum and should proceed.  Thus, the focus was then firmly fixed on the proceedings in China.

37.The basis for the relief sought by the wife was explained by the majority in CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345 (“CSR”) in the following manner at 391 – 392:

It is clear from the rationale for the exercise of the power to stay proceedings and, also, from the words “oppressive”, “vexatious” and “abuse of process” in Voth, in Oceanic Sun and in the earlier cases considered in Oceanic Sun , including St Pierre v South American Stores (Gath & Chaves) Ltd, that the power to stay proceedings on grounds of forum non conveniens is an aspect of the inherent or implied power which, in the absence of some statutory provision to the same effect, every court must have to prevent its own processes being used to bring about injustice.

The counterpart of a court's power to prevent its processes being abused is its power to protect the integrity of those processes once set in motion. And in some cases, it is that counterpart power of protection that authorises the grant of anti-suit injunctions. Thus, for example, if “an estate is being administered … or a petition in bankruptcy has been presented … or winding up proceedings have been commenced … an injunction [may be] granted to restrain a person from seeking, by foreign proceedings, to obtain the sole benefit of certain foreign assets”. Similarly, as Gummow J pointed out in National Mutual Holdings Pty Ltd v Sentry Corporation, a court may grant an injunction to restrain a person from commencing or continuing foreign proceedings if they, the foreign proceedings, interfere with or have a tendency to interfere with proceedings pending in that court.

(Citations omitted)

38.In addition to the inherent power to protect its own proceedings, a court may exercise its equitable jurisdiction to restrain unconscionable conduct or the unconscientious exercise of legal rights.  The majority in CSR said at 393 – 394:

One well established category of case in which an injunction may be granted in the exercise of equitable jurisdiction is that involving proceedings in another court, including in a foreign court, which are, according to the principles of equity, vexatious or oppressive. Thus, it was said in Carron Iron Co v Maclaren that “[w]here [there is] … pending a litigation here, in which complete relief may be had, [and] a party to the suit institutes proceedings abroad, the Court of Chancery in general considers that act as a vexatious harassing of the opposite party, and restrains the foreign proceedings”.

In Société Aerospatiale, the Privy Council emphasised that the various cases decided in the nineteenth century with respect to vexation and oppression, including Peruvian Guano Co v Bockwoldt, have continuing significance for the grant of anti-suit injunctions. Those cases establish that the mere co-existence of proceedings in different countries does not constitute vexation or oppression. In particular, Peruvian Guano establishes that “double litigation [which] has no other element of oppression than this, that an action is going on simultaneously abroad, which will give other or additional remedies beyond those attainable in [the domestic forum]” does not amount to vexation or oppression.

More recently, in Bank of Tokyo Ltd v Karoon, Robert Goff LJ pointed out, correctly, in our view, although without specific reference to underlying equitable principle, that 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.

(Citations omitted)

39.Thus, the mere existence of proceedings in two different countries at the same time does not, of itself, constitute vexatious or oppressive conduct.

40.This accords with what was said by the majority in Henry v Henry (1996) 185 CLR 571 (“Henry”) at 590 – 591:

Parallel proceedings in another country with respect to the same issue may be compared with multiple proceedings with respect to the same subject matter in different courts in Australia. In Union Steamship Co of New Zealand Ltd v The Caradale, Dixon J observed of that latter situation that “[t]he inconvenience and embarrassment of allowing two independent actions involving the same question of liability to proceed contemporaneously in different courts needs no elaboration”. From the parties’ point of view, there is no less - perhaps, considerably more - inconvenience and embarrassment if the same issue is to be fought in the courts of different countries according to different regimes, very likely permitting of entirely different outcomes.

It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words.

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.

(Citations omitted)

41.Thus a very significant issue in a party seeking an anti-suit injunction is whether the controversy between the parties is the same in both jurisdictions, whether or not complete relief is available in the local jurisdiction and whether there is nothing to be gained in the overseas proceedings or whether, on the other hand, the overseas proceedings will give rise to additional or other remedies.

What other matters should be considered?

42.However, that is not the end of the consideration.  The majority in CSR said at 400 – 401:

In cases such as the present, where different issues are involved in the local and foreign proceedings, albeit that the different proceedings arise out of the same sub-stratum of fact, the question is not whether the Australian court is a clearly inappropriate forum for the litigation of the issues involved in the Australian proceedings. Rather, the question must be whether, having regard to the controversy as a whole, the Australian proceedings are vexatious or oppressive in the Voth sense of those terms, namely, that they are “productive of serious and unjustified trouble and harassment” or “seriously and unfairly burdensome, prejudicial or damaging”.

(Citation omitted)

43.The nature of the further matters to be taken into account were set out by the majority in Henry in the following manner (at 592 – 593):

Some of the matters properly to be taken into account in a case such as the present emerge from what has already been written. To start with, no question arises unless the courts of the respective countries have jurisdiction with respect to the parties and their marriage. And if there is a question as to the jurisdiction of the foreign court, it may be necessary to adjourn the local proceedings to enable the foreign court to determine that question. However, if both have jurisdiction, it will be relevant to consider whether each will recognise the other's orders and decrees. 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. However, if the orders of the foreign court will be recognised in Australia, it will be relevant to consider whether any orders may need to be enforced in other countries and, if so, the relative ease with which that can be done. As well, it will be relevant to consider which forum can provide more effectively for complete resolution of the matters involved in the parties’ controversy.

Other considerations include the order in which the proceedings were instituted, the stage which they have reached and the costs that have been incurred. It will also be relevant to consider the connection of the parties and their marriage with each of the jurisdictions and to have regard to the issues on which relief might depend in those jurisdictions. Moreover, it will be relevant to consider 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. The list is not exhaustive. Rather, the question 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.

(Citation omitted)

44.It is important to note that this is not a balancing exercise.  The majority in Regie Nationale des Usines Renault SA v Zhang (2002) 210 CLR 491 (“Zhang”) said at 520 – 521:

It was not a question of striking a balance between competing considerations. Rather, it was the task of the Renault companies as applicants on the motion to demonstrate that a trial in New South Wales would be productive of injustice, because it 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.

(Citation omitted)

45.Thus, in accordance with these statements of principle, we consider that the path her Honour should have taken was first to consider the nature of the proceedings in China to determine whether they raised the same or a different controversy, whether or not there was something to be gained in them, and whether there was complete relief available in Australia.

46.Ordinarily, if this consideration leads to the finding that it is vexatious and oppressive for the two proceedings to continue in parallel, in the sense that they would be productive of serious and unjustified trouble and harassment, or seriously burdensome, prejudicial or damaging, then the Court must consider the course to be taken in relation to these proceedings.

What is the nature of the relief that may be granted?

47.Such a finding does not necessarily mean that the respondent should be restrained from pursuing the foreign proceedings.  The appropriate course may be to consider a stay of the local proceedings, although as the authorities make abundantly clear, that will involve a consideration of whether the local court is a not inappropriate forum.  That consideration must be undertaken in the light of the foreign proceedings and not divorced from them: CSR at 390. Other courses may be to grant a temporary stay of the local proceedings to allow factual issues to be determined in the other jurisdiction or for it to determine whether it has jurisdiction: Henry at 590 and 592.

48.There could also be a temporary restraint against the foreign proceedings whilst the local court determines all or part of the issues before it: CSR per Brennan CJ at 378.

49.It is at this stage that the matters for consideration raised in Henry, as quoted at [43] above, come into play.

50.In Navarro v Jurado (2010) 44 Fam LR 310, Thackray J said:

63.In all these circumstances, his Honour was right to proceed on the basis that prima facie the husband’s application was vexatious and oppressive in the Voth sense.  The husband had not only commenced divorce proceedings in Australia knowing that divorce proceedings were already pending in Costa Rica, but he had also participated in the foreign divorce proceedings, having sought to have them dismissed for want of prosecution.  He had himself invoked the jurisdiction of the Costa Rican courts by seeking a “legal separation”, which the Federal Magistrate found was “either a divorce order, or a prerequisite to the granting of a divorce order”.  He had also sought other relief in Costa Rica in relation to matters arising from the breakdown of the marriage.

64.The fact the wife had made out a prima facie case was, of course, not the end of the matter.  The existence of parallel proceedings was highly relevant, but the proceedings themselves still needed to be analysed in order to determine whether the husband’s application in Australia was “seriously and unfairly burdensome, prejudicial or damaging” or “productive of serious and unjustified trouble and harassment”.

51.Our approach is also consistent with the recent decision of a differently constituted Full Court (Thackray, Strickland & Murphy JJ) in Kent & Kent (2017) FLC 93-792. There the trial judge was faced with property proceedings that had been commenced by the wife in Australia and divorce proceedings, together with an application to amend to add a claim for property orders, commenced by the husband in Papua New Guinea.

52.The trial judge, correctly in the Full Court’s opinion, refused to stay the Australian proceedings.  However, the decision to grant an injunction restraining the husband from continuing his proceedings was found to have been wrongly made.  The Court said:

59.As a result of her Honour’s order refusing a stay, there are proceedings for settlement of property on foot in Australia and proceedings for dissolution of marriage alleging adultery in PNG. There are also proceedings seeking leave to amend the petition for dissolution and leave to add ancillary proceedings for settlement of property. There is no reason advanced by her Honour, nor as we can see, validly by the wife, as to why the proceedings for dissolution should not proceed in accordance with PNG law nor why proceedings for leave to amend the petition for same cannot be heard and determined within the jurisdiction properly invoked by the husband.

60.No case is made out that those proceedings constitute a challenge to the Family Court’s orders or processes.  Nor is a case made out that the husband’s proceedings in PNG are vexatious or oppressive in the relevant sense.

61.To the extent that the proposed ancillary proceedings in PNG have similarity to the property proceedings on foot in Australia, it is in our view crucial to observe that the proceedings for leave to add that ancillary relief will be heard and determined in light of her Honour’s decision that a stay of the Australian proceedings for property proceedings should not be granted with the consequence that proceedings for property relief will proceed here. Neither any argument nor any evidence suggests that the PNG court will not have regard to international comity in deciding if leave should be granted, just as much as an Australian court would, and does, have regard to that principle. Indeed it might be thought offensive to notions of international comity on the part of an Australian court to operate upon any such assumption.

(Citations omitted, emphasis in original)

What is the nature of the controversy?

53.It is necessary to discuss what is meant by the phrase “the nature of the controversy”.  As is apparent from CSR and Henry, the presence of different issues and parties in the two proceedings is not necessarily determinative.

54.In Henry the court regarded the area of controversy as being the marital relationship, which was said to lie at the heart of all proceedings between the husband and wife.  The facts in that case were that the wife applied for an order for divorce, maintenance and property settlement in Monaco.  The husband applied for a divorce in Australia, which was his domicile although he had not lived here for many years and there was no property held here.  Indeed, the relevant property was in Switzerland. 

55.The majority in Henry described the nature of the controversy in the following manner at 591 – 592:

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.

Although the appellant first brought proceedings against the respondent in Monaco for judicial separation and, only later, commenced proceedings for divorce, both proceedings were, in essence, proceedings with respect to their marital relationship. Clearly, it was the same marital relationship which was the subject of the divorce proceedings brought in Australia by the respondent. And although it may not be quite so clear, the property proceedings instituted by the respondent in the Family Court are but an aspect of his controversy with the appellant as to their marital relationship. It may have been otherwise if they were no longer married, but so long as their marriage subsists, their dispute with respect to property is a dispute as to the rights and obligations arising out of their marital relationship and those which should attend its dissolution. As such, it is properly to be seen as part of the controversy with respect to that relationship.

56.As the courts have pointed out, however, cases involving parallel proceedings in different jurisdictions turn very much on their facts (Henry at 593). The facts in Henry were unusual – the parties had no links to Australia whatsoever, save that the husband had returned to his Australian domicile of origin.

57.It is important too to note that the ratio of that decision, as emerges from 593, is that the Judicial Registrar erred when considering the stay application by failing to take into account the question of whether the court in Monaco had jurisdiction.  That question was described by the High Court as “a most material consideration”.

58.In both Ferrier-Watson v McElrath (2000) FLC 93-022 at 87,370 and Dobson and Van Londen (2005) FLC 93-225 at 79,711 – 79,712 the court considered applications for various forms of matrimonial relief to be all part of the same controversy arising out of the matrimonial relationship.

Is complete relief available in the local jurisdiction?

59.As we have seen, the authorities indicate that the starting point for the determination of proceedings of the present kind is whether complete relief is available in the local jurisdiction or whether there is something to be gained in the foreign proceedings.  The issues as to whether the two jurisdictions would recognise or enforce the other orders are also relevant and significant.

60.In Kemeny v Kemeny (1998) FLC 92-806 the Full Court had to consider the position where the parties had obtained final property orders in the Superior Court of New Jersey and where the wife had later commenced property and spousal maintenance proceedings in Australia. The case in favour of finding that Australia was a clearly appropriate forum to re-litigate the property proceedings was described as “overwhelming”. That, however, did not prevent a consideration as to whether the spousal maintenance could continue. The Court said at 85,069:

In our view, this Court may be a clearly inappropriate forum to litigate one cause of action between parties whilst at the same time retaining jurisdiction to hear other disputes between the same parties. We would, for example, see nothing inherently offensive in the notion that parties to a marriage might be required to conduct their child residence and contact matters in one country whilst being at liberty to conduct their financial disputes in another. This case represents a graphically clear application of that principle.

See also Skinner & Alfonso-Skinner [2010] FamCA 329 at [66] and [67] and Yeo & Huy (No. 2) [2012] FamCA 541 at [33] and [34].

61.The wife submitted that in these cases a “bright line” divided the issues and that such a line was lacking here.  We observe, however, that each case must be approached on its own facts to determine whether there is something to be gained in the foreign proceedings.  The addition of a new layer of complexity, such as a bright line, is not necessary.

62.The evidence in this case was clear.  The Chinese Court would not deal with the property in Australia.  Thus, there had to be proceedings in Australia to deal with the husband’s property.  However, the Chinese Court would not recognise and enforce any orders made in Australia as to property in China.

63.Thus we consider that, in this case at least, the Court was entitled, if not obliged, to look at the two sets of proceedings themselves to see if they dealt with the same controversy or whether complete relief was available in one jurisdiction, and not determine the question simply by reference to some general descriptor of matrimonial proceedings.

64.We accept, of course, that the Court in Henry was well aware of the “inconvenience and embarrassment” that could be caused to the parties “if the same issue is to be fought in the courts of different countries according to different regimes, very likely permitting of different outcomes” (at 590 – 591). However, the factual position in this case is so different to that in Henry that we consider justice could not be done by looking at the proceedings in very broad terms.  We note, too, that in these proceedings the parties had been divorced already (although we confess that we see little in that difference).

Juridical advantage – does the husband have anything to gain in the Chinese proceedings?

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).

66.The primary judge’s conclusions on this issue were:

118.There is a juridical advantage to the husband in proceeding in China. Under Chinese law, any property acquired in China by either party after the date of the marriage and before the marriage is dissolved, is joint property and no considerations of contribution to the acquisition, maintenance and conservation of the property apply. 

119.Senior counsel for the wife submitted that there is no such property, the wife having acquired her property in China before the marriage.

120.It is the husband’s case that substantial property, including five pieces of real property and shares in a company, was acquired by the wife in China after the marriage.

121.The chronology relied upon by the husband suggests that he has been unsuccessful in persuading the court in China that the properties belong to the wife. On 19 June 2013, judgement was handed down in which it was determined that four properties which the husband alleged belonged to the wife, were the property of a company. The single expert states that, under Chinese law, property which belongs to a company is not property of the wife. The husband appealed against that decision. The appeals were either withdrawn or dismissed.

122.There remains on foot in China the husband’s application for divorce and consequent division of assets.

67.It is not easy to determine from this passage the nature of the juridical advantage found by the primary judge to be then enjoyed by the husband. The only specific reference to the proceedings in China was to those proceedings that had already been determined adversely to the husband.

68.It is clear enough that [122] of her Honour’s reasons is a reference to the husband’s current proceedings. The nature of those proceedings, however, is not discussed at all by her Honour in her reasons – they are only described in the terms set out in [122]. Therefore there is no direct reference to the Application for Addition of Claims or a consideration of the nature of the claims.

69.This is crucial because absent success on those claims, the evidence establishes that there is no property held in China that was acquired during the relationship to which the presumption of joint ownership would apply. Thus there could be no juridical advantage held by the husband as described by the primary judge.

70.Her Honour was well aware of the husband’s failure in relation to the four properties claimed by him, but also noted his claim to the fifth property and shares (at [120]). This can only be a reference to Building 21 and to the shares in the wife’s company which are the subject of the Application for Addition of Claims. Thus, we conclude that the juridical advantage identified by the primary judge was that the husband would have the opportunity to pursue those claims which, if ultimately successful, would see him compensated for the wife’s disposal of property which otherwise would have been regarded as jointly owned.

71.As we have said, the appropriate starting point for the consideration of an anti‑suit injunction is to look at the nature of the two proceedings and to ask whether there is but one controversy, whether complete relief is available in the local jurisdiction and whether there is something to be gained in the foreign proceedings. This is because the answer to those questions will indicate, prima facie, whether having two sets of proceedings on foot is vexatious and oppressive.

72.Looked at in this light, there is something to be gained in the foreign proceedings – that is, something additional to the Australian proceedings – in that the husband could obtain an order for a payment of money in China which is enforceable in China. Whilst it is true that an Australian court could fashion orders that took account of any wrongful disposal by the wife of assets which otherwise would have been treated as joint property in China, that court could not make an order enforceable in China for the wife to pay money or transfer assets to the husband. This is because the Chinese courts would not recognise such an order. Thus, as the wife does not live in Australia and only has assets in China, the only prospect that the husband has of obtaining an enforceable order for the payment of money to him is to obtain that order in China.

73.In [109] of her reasons, the primary judge described the husband’s claim in China as being different to the wife’s claim in Australia.

74.We consider that in a very much truncated form and under the rubric of juridical advantage the primary judge did in fact determine that there was something to be gained by the husband’s proceedings in China over what he could achieve in the proceedings in Australia. Thus the prima facie position is that his proceedings are not vexatious and oppressive.

75.We do not overlook the primary judge’s finding that relief was available to the husband in Australia. Her Honour said:

73.The husband’s claim against the property of the wife in China can be determined in Australia.

74.Counsel for the husband submitted that the husband’s claim against the wife’s Chinese assets could only be determined in China. I do not accept that submission.

75.However, I accept that any order made in Australia in relation to the wife’s interest in property in China cannot be enforced against that property. Despite this, the Court has jurisdiction to make orders in personam against the wife (see Hickey and Hickey and Attorney‑General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143).

76.In our opinion [75] is an acceptance of the difficulties that the husband would have in enforcing any order for the payment of money to him. In other words, complete relief may not available to him in Australia.

77.The submissions of the wife that the husband’s proceedings in China should be restrained because he had failed to adduce evidence to show that there was joint property in China can be dealt with shortly.

78.First, as Zhang makes clear at 521, the onus was upon the wife to persuade the court that the husband’s proceedings in China were unfairly burdensome. The husband, for his part, merely relied upon the existence of these proceedings which could not be pursued in Australia. The onus did not rest upon the husband to establish that he would succeed in these proceedings. Had the wife adduced evidence that indicated that the husband’s claim must fail, then the husband may have borne an evidentiary onus to rebut that evidence. The determination of that issue could well be a relevant and significant issue to take into account in deciding what relief to grant but it would not bear upon the issue as to whether the proceedings comprised the same controversy.

79.Secondly, the very nature of the husband’s Application for Addition of Claims accepts that there was no joint property in China, because he was seeking compensation for what he asserted was the wrongful disposition of such property by the wife.

80.Thus this ground of appeal is not made out.

Grounds 2 and 2(a)

2.Her Honour erred in finding there was no utility in granting an anti-suit injunction against the husband in circumstances where there was no evidence that a court in China would recognise and enforce such an order.

2a.Her Honour erred in finding an order made in the Family Court of Australia as sought by the wife would not have any effect on the continuation or otherwise of the Chinese proceedings.

81.The wife submitted that the primary judge erred when she found that an injunction restraining the husband from continuing his proceedings in China would lack utility because such an injunction would not be recognised by the Chinese Court.

82.The primary judge said:

123.There is no evidence before this court that a court in China would recognize and enforce an order which restrained the husband from proceeding in China.

124.The single expert states that there is no civil and judicial mutual assistance agreement between China and Australia. The single expert states:

Very unfortunately, as there is no bilateral civil judicial mutual assistance agreement signed between China and Australia, therefore the courts in China can only recognise the divorce decree made the Australian courts based on the “Rule of the Supreme Peoples’ Court concerning Chinese citizens applying for recognition of divorce decree procedure by overseas courts”. Judgements such as the partition of property are not binding on courts in China.

125.That statement does not suggest that any order made in the Family Court of  Australia, such as is sought by the wife, would have any effect on the continuation or otherwise of the Chinese proceedings.

126.The wife has not demonstrated that there is any utility in making the orders she seeks.

83.It is abundantly clear that an anti-suit injunction is an order made in personam against the respondent.  It is not an order directed to the foreign court. See, if an example be needed, CSR at 390 and 392.

84.Nonetheless, issues of comity are important, as the majority in CSR explained at 395 – 396:

Practice with respect to interlocutory anti-suit injunctions

The cases concerned with injunctions in restraint of proceedings in foreign courts recognise that, although an injunction of that kind operates in personam, it nevertheless interferes with the processes of the foreign court and may well be perceived as a breach of comity by that court. Comity, relevantly, was explained by the Supreme Court of the United States in Hilton v Guyot in the following terms:

“‘Comity’, in the legal sense, is neither a matter of absolute obligation, on the one hand, nor of mere courtesy and good will, upon the other. But it is the recognition which one nation allows within its territory to the legislative, executive or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens or of other persons who are under the protection of its laws.”

For this reason, the cases also emphasise that the power to grant injunctions in restraint of foreign proceedings should be exercised with caution. And that is so whether the injunction is sought in the exercise of the inherent or equitable jurisdiction.

(Citations omitted)

85.The husband’s counsel informed the primary judge that the husband had left Australia and did not intend to return.  Her Honour did not accept that to be the case and made the following findings:

37.Since August 2012 the husband has been employed as a manager for a travel company based in City I. While there is no clear statement in the affidavits upon which the husband relies as to his place of residence, I infer that he resides in rental premises in Australia. Such appeared to be conceded by his counsel in the course of discussion. Although in written submissions counsel for the husband asserts that the husband now resides in China and does not intend to return to Australia, there is no evidence from the husband to that effect.

…

89.The husband is an Australian citizen and has been living in Australia since 1989. He has worked in Australia and owns property in Australia. He does not own property in China.

90.Counsel for the husband submitted that the husband is residing in China and has no intention of returning to Australia. There is no evidence from the husband about his residence or his intentions.

91.The only evidence about the husband’s residence is found in the annexures to the affidavit of the wife where his departure cards are annexed. The husband departed Australia on 16 June 2015 and indicated on his departure card that he was an Australian resident temporarily departing for the purpose of visiting friends or relatives. He returned to Australia in November 2015 and remained in Australia until 15 February 2016 when he again filled in a departure card indicating that he was departing temporarily.

92.The single expert states in his report that, for the purpose of the Chinese proceedings, the husband is a “foreign national”.

93.I do not accept that the husband is resident in China. He maintains to the Australian government that he is an Australian resident.

86.Her Honour’s finding falls short of a finding that the husband was then in Australia and likely to remain in the country.  Nevertheless, there is, at the least, a finding that the husband is likely to be personally present in Australia at times and thus amenable to enforcement orders or contempt.  His property in Australia of course remains here.

87.Thus, the injunction could be enforced by contravention or contempt proceedings taken against the husband personally, when he is present here, or against his property in Australia.  It is difficult to see, therefore, how the proposed injunction lacked utility, even accepting that it might not be recognised by the Chinese Court.

88.Her Honour was therefore in error in concluding that the injunction lacked utility.  However, the materiality of that error is attended with some doubt and we shall return to this aspect of the matter in dealing with Ground 3.

Her Honour erred in failing to issue an anti-suit injunction against the husband (Ground 3)

89.Under this ground the wife contends that because of the incorrect finding as to the utility of the injunction and because of the incorrect finding of, or excessive weight given to, the husband’s legitimate juridical advantage in proceeding in China, the primary judge’s discretion miscarried.

90.We have found that the primary judge was not in error in finding that there was something to be gained by the husband in the proceedings in China, but was in error in finding that there was no utility in making an order restraining the husband from pursuing the proceedings.

91.The wife submitted that as the primary judge had taken into account an irrelevant consideration, her Honour’s exercise of discretion had miscarried and must be set aside.  We do not consider that the erroneous finding as to the lack of utility was material to the decision.  Her Honour’s decision appears to us to be primarily based upon a consideration of the nature of the two proceedings.  It would have indeed been material if the primary judge had found it otherwise appropriate to grant an injunction but refused it for lack of utility.

92.In the event we are wrong in taking that view then we would, as agreed by the parties, re-exercise the discretion for ourselves based on the material that was before the primary judge.  We would, for the reasons set out above, find that the husband had something to gain in his proceedings in China so that, prima facie, they were not vexatious and oppressive.  No other matter raised by the parties, which the primary judge regarded as balanced, would support an injunction save for the matters referred to by her Honour at [76] and [77] which perhaps favour the husband.  We would refuse the injunctions.

93.The remaining question to be dealt with is the issue as to whether or not “excessive weight” was given to the benefit the husband could gain in the proceedings in China.  Such challenges face a very high bar: House v The King (1936) 55 CLR 499 at 505.

94.Her Honour discussed a number of considerations that apply to both proceedings, including:

·    the order in which the proceedings were instituted, the stage they have reached and the costs involved;

·    the connection of the parties and their marriage to each of the jurisdictions; and

·    whether having regard to their resources and understanding of the language, the parties are able to participate in each jurisdiction on an equal footing.

95.The primary judge found that none of these matters pointed to or against the making of the orders sought by either party.

96.As we have discussed, her Honour did derive significant assistance from a consideration of the nature of both sets of proceedings.

97.That was a course that was entirely open to her on the evidence and no error has been demonstrated.

98.It follows that the appeal will be dismissed.

Leave to appeal

99.We consider that leave to appeal is required.  The orders that were sought by both parties were clearly interlocutory notwithstanding they may have had a final effect.  We consider that sufficient doubt attended the primary judge’s decision to warrant consideration by this Court and that if the decision was found to be erroneous, substantial injustice would be occasioned.  Thus, there will be a grant of leave.

Costs

100.The appeal has been wholly unsuccessful.  As accepted by senior counsel for the wife, in that circumstance the appropriate order is that she pay the husband’s costs of the appeal.

ADDENDUM

1.After having delivered the above judgment the Court received a letter from the solicitors for the husband on 31 August 2017. The letter contained a request that the Court, pursuant to r 17.02A of the Family Law Rules 2004 (Cth), amend the Reasons for Judgment by deleting the references to Ms Csien as “the husband’s new partner” and replace them with the words “the second respondent”. Ms Csien is the second respondent to the primary proceedings. The issue as to the nature of the husband’s relationship with Ms Csien is contentious and the primary judge did not make a finding with respect to it.

2.After receiving this letter the Registry indicated to the parties that the Court proposed to dispense with the need to file a formal Application in an Appeal and made directions for the matter to proceed in chambers on written submissions.  Ms Csien simply indicated that she consented to the proposed order. Written submissions opposing the application were received from the wife on 12 September 2017.

3.The wife’s Further Amended Initiating Application filed on 27 June 2016 seeks orders pursuant to s 106B of the Act setting aside the husband’s transfer of his interest in a property at Suburb E to Ms Csien.  Alternatively the wife seeks a declaration that Ms Csien holds 50 per cent of the Suburb E property on trust for the husband.

4.Ms Csien was not a party to the appeal.  However in the course of dealing with the appeal we became aware of the following matters from the appeal books:

·    The husband and Ms Csien purchased a property in Suburb E in April 2010, which is evidenced by a copy of a transfer dated 27 April 2010 naming them as joint tenants.

·    An undated mortgage over this property lists the husband and Ms Csien as the mortgagors.

·    A loan application to a bank dated 14 April 2010 made by the husband and Ms Csien records that they were “married with one baby”.

·    The husband transferred his 50 per cent interest in the Suburb E property to Ms Csien on 25 August 2015.

·    There are bank statements in the joint names of the husband and Ms Csien from late 2013 to 30 September 2015.

·    The husband and Ms Csien each name the other as a “spouse” in a loan application form dated 15 August 2013.

·    Ms Csien admits that the husband is named as her child’s father on the child’s birth certificate.

5.It is also necessary to record that the wife’s affidavits contain a number of allegations that the husband and Ms Csien have been in a de facto relationship.  The husband did not deal with those allegations in his evidence.

6.It must also be said, however, that Ms Csien’s evidence was that:

·    Ms Csien and the husband were never in a domestic relationship.

·    They lived together as tenants only for a period of one year from 2007-2008.

·    The husband is not the father of her child and she only named the husband as the child’s father on the child’s birth certificate “for cultural/family reasons”.

7.The wife submits that, on the basis of the evidence available to us, it was correct to describe Ms Csien as the husband’s new partner. Whether that is so or not, however, misses the point.

8.We accept that the nature of the relationship between Ms Csien and the husband is in issue and has not yet been determined. Our use of the phrase “new partner” was not intended to resolve that issue and was used merely as a convenient descriptor for Ms Csien.

9.Accordingly we accept that we erroneously described her as the husband’s partner in the Reasons on three occasions.

10.Rule 17.02A(2) provides:

17.02A Varying or setting aside reasons for judgment

The court may, at any time:

(a)vary or set aside reasons for judgment if the reasons were issued by mistake; or

(b)correct a clerical mistake in reasons for judgment, or an error arising in reasons for judgment from any accidental slip or omission.

11.We are satisfied that our reference to Ms Csien as the husband’s partner was, in all of the circumstances, an accidental slip and it is appropriate to amend the Reasons accordingly.

12.Accordingly, the references to “the husband’s new partner” in paragraph 6 will be removed and in paragraph 13 will be changed to “Ms Csien”.

I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie-Wallace, Aldridge & Watts JJ) delivered on 29 August 2017 and amended with a twelve (12) paragraph addendum on 22 September 2017.

Legal associate: 

Date of judgment:  29 August 2017

Date of addendum: 22 September 2017