PIERSON & ROMILLY
[2019] FamCA 259
•26 April 2019
FAMILY COURT OF AUSTRALIA
| PIERSON & ROMILLY | [2019] FamCA 259 |
| FAMILY LAW – PROPERTY – FORUM – Application for orders under s 79 of the Family Law Act 1975 (Cth) – Where there are already proceedings on foot in France – Where the parties’ signed a pre-nuptial agreement in France – Where the parties’ divorce has been granted by a French Court – Where the wife has engaged in the litigation in France – Where the husband seeks that the Australian proceedings be stayed – Whether Australia is a “clearly inappropriate forum”. |
| Family Law Act 1975 (Cth) Foreign Judgments Enforcement Act 1991 (Cth) |
| Henry v Henry (1996) 185 CLR 571 Pagliotti v Hartner (2009) 41 FamLR 41 |
| APPLICANT: | Ms Pierson |
| RESPONDENT: | Mr Romilly |
| FILE NUMBER: | SYC | 5612 | of | 2017 |
| DATE DELIVERED: | 26 April 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Stevenson J |
| HEARING DATE: | 25 February 2019 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Goodchild |
| SOLICITOR FOR THE APPLICANT: | GJ Gooden, Solicitor and Notary Public |
| COUNSEL FOR THE RESPONDENT: | Ms Beck |
| SOLICITOR FOR THE RESPONDENT: | Dezarnaulds Basten Solicitors |
Orders
The applicant’s Further Amended Initiating Application filed on 21 May 2018 be stayed permanently.
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 Pierson & Romilly has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 5612 of 2017
| Ms Pierson |
Applicant
And
| Mr Romilly |
Respondent
REASONS FOR JUDGMENT
The proceedings
Ms Pierson and Mr Romilly are parties to litigation arising from the breakdown of their marriage in both France and Australia. By a Response to Initiating Application filed on 19 December 2017 the husband sought the following orders inter alia:
1.That the Application filed on 5 September 2017 by the applicant be dismissed or permanently stayed on the following grounds:
a. res judicata and/or
b.forum non convenience (Australia being a clearly inappropriate forum and/or
c. abuse of process.
At the hearing of this threshold issue on 25 February 2019 counsel for the husband abandoned the res judicata ground for dismissal or permanent stay of the wife's Initiating Application. A joint report by two experts in French law made clear that there is no substance to this submission. Accordingly the issue for determination is whether Australia is "a clearly inappropriate forum", as considered by the High Court of Australia in Henry v Henry (1996) 185 CLR 571. Counsel for the husband did not seem to pursue the submission that the proceedings instituted by the wife in the Family Court of Australia are an abuse of process.
Background
Both the husband and the wife, who are aged 56 and 59 respectively, were born in France. They met in the United States in 1986 and married in France in 1990. In June 1990 the parties entered into a prenuptial agreement before a French notary (Exhibit 1).
Between 1989 and 2000 the parties lived in France. They then moved to Australia for the purposes of the husband's employment.
The parties have two children, Mr H and Ms J, who are aged 27 and 25 respectively. Both children were born in France and have lived in Australia since 2000.
In 1991 the parties purchased jointly Property A in France. This property is presently unencumbered and occupied by the husband.
In 1997 the parties purchased jointly an investment property, Property B in France. In 2001 they purchased jointly a parcel of vacant land, Property C, also in France where a house was constructed in 2005/2006.
The husband, the wife and the children had been granted Australian permanent residency on 21 November 2005. The husband left Australia and returned to France when his employment contact concluded in 2005. The wife and the children remained in Australia and were granted citizenship of this country on 22 May 2008. In 2008 the parties purchased jointly Property D in New South Wales, where the wife and children (and husband when he visited Australia) lived.
In September 2008 the husband informed the wife that he no longer wished to cohabit with her. The wife deposed that the husband visited her and the children and stayed at Property D until 2010.
On 18 January 2011 the husband filed an Application for Divorce in the regional court of first instance at Town E in France. The wife requested that a court in City G or City F hear this matter. On 29 September 2011 the court in Town E determined that it had jurisdiction and granted the first procedural step in the divorce application ("Ordonnance de non-conciliation") on 9 January 2012. The wife appealed on 1 February 2012 and the Orders of 29 September 2011 were confirmed by the Appellate Court on 5 February 2013. On 22 August 2012 the wife took the next procedural step in the divorce proceedings by filing an Application.
On 28 April 2015 the regional court of first instance at Town E delivered a judgment and made orders. The court made orders inter alia for divorce and a "preferential allocation" in relation to Property C and Property D to the wife. The husband was ordered to pay to the wife a "compensatory allowance" of €250,000. The husband has made this payment to the wife.
On 10 September 2015 the wife appealed against the decision of the court in Town E. This appeal was dismissed on 7 March 2017. The appeal period against this decision expired on 17 February 2018, with no step being taken by either party. Accordingly, the Orders of 7 March 2017 are now final.
On 21 May 2018 the wife filed a Further Amended Initiating Application by which she sought orders pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) to alter the parties’ interests in property, both here and in France. As noted, the husband's Response sought orders only for a dismissal or permanent stay of the wife's application and leave to amend his relief, in the event that the Family Court of Australia is found to have jurisdiction.
The evidence and witnesses
The applicant wife relied on the following affidavits:
1. Ms Pierson (the wife) sworn on 6 February 2018
2.Ms K (expert witness in French law) sworn on 9 February 2018
3.Financial Statement sworn on 4 December 2018.
The respondent husband relied upon the following affidavits:
1. Mr Romilly (the husband) sworn on 18 December 2017
2.Ms L (expert witness in French law) sworn on 17 April 2018 and 14 December 2018.
Neither of the parties was required by the other for cross-examination. The two experts conferred and produced joint memoranda dated 14 December 2018 and 4 February 2019. Neither of these expert witnesses was required for cross- examination.
Consideration
In Henry v Henry (1996) 185 CLR 571 the High Court of Australia indicated certain factors which are relevant to the determination of a "clearly inappropriate forum" issue. This list (at 592 – 593), which is not exhaustive, was as follows:
Considerations relevant to a stay of proceedings between husband and wife with respect to their marital relationship
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.
The High Court stated that a determination as to "clearly inappropriate forum" will "depend on the general circumstances of the case, taking into account the true nature and full extent of the issues involved" (at 572).
Whether the courts of the respective countries have jurisdiction with respect to the parties and the marriage
Section 4(1)(ca) of the Act provides that a matrimonial cause includes "proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings: (i) arising out of the marital relationship ...". The wife's Initiating Application sought orders "with respect to the property of the parties to a marriage or either of them, being proceedings arising out of the marital relationship". Accordingly, the orders sought by the wife fall within the statutory definition of "matrimonial clause". Section 39(4) of the Act relevantly provides that proceedings with respect to a "matrimonial cause" may be instituted if "any party to the proceedings is an Australian citizen, is ordinarily resident in Australia, or is present in Australia at the relevant date."
The wife is an Australian citizen and ordinarily resident in Australia. She was "present in Australia" on the "relevant date", which is defined as the time of filing of her Application. Accordingly, there is no doubt that the Family Court of Australia has jurisdiction to entertain the wife's application for orders for alteration of property interests.
The expert witnesses agreed that France "has jurisdiction to complete division of property". They agreed also that French courts may refuse to exercise jurisdiction in relation to assets situated outside France because of uncertainty as to enforcement of their orders in a foreign jurisdiction. They agreed further that French courts may refuse to exercise jurisdiction for "land property outside France, considering that it should be the exclusive jurisdiction of the courts of the place of situation of the assets."
Accordingly, the courts of both Australia and France have jurisdiction to effect a division of the assets of the parties. It is thus necessary that there be a determination as to whether Australia "is a clearly inappropriate forum".
Whether both courts will recognise each other's orders and decrees
The experts agreed that an "exequatur" would be a required for transfer of property pursuant to a foreign division concerning division of assets located in France, unless both parties attend voluntarily upon a notary for that purpose. Ms K described this process as follows:
If Australia keeps the case and rules about all properties and debts, including the ones located in France, the parties will have to seek the enforcement of the decision in France.
It can happen spontaneously. If both parties agree with applying the Australian decision, they will both go and see a notaire so that he can transcribe the terms of the foreign decision in a sharing act which will be published. This act is compulsory if it relates to land property.
If one of the party refuses to sign the transcription act, one of the party will have to go to court to ask for an exequatur of the future decision.
The conditions to be met have been enumerated in the decision of the Court de cassation dated 20 February 2007 called "Cornelissen" and are as follows:
- The indirect jurisdiction of the foreign judge based on the connection of the dispute with the Judge seized;
- Compliance with the international public policy of substance and procedure;
- As well as the absence of fraud.
As regards the indirect jurisdiction of the court seized, that condition will be satisfied, as in the present case, by the finding of a sufficient link between the judge and the dispute (see Simitch judgment). Here, the jurisdiction of the Australian Judge cannot be questioned, the applicant being a national and a resident of Australia, which is also the place of the last marital home (as clearly stated by the Court of Appeal in its decision dated 2 Marc 2017).
With regard to compliance with international public policy of substances and procedure, the formal aspect of compliance with the rights of the defense, such as the independence and impartiality of the court, must generally be verified.
Finally, it is important to recall the definition of international public order, which is less rigorous than internal public order. The exception of public order, as its name indicates, must remain exceptional and little used. It tends to remove the foreign law in situations not just contrary to our conceptions but in totally inadmissible situations.
The joint memorandum of experts indicated that Ms L essentially agreed with Ms K as to this aspect of an enforcement of foreign decrees in France. The two experts noted further:
-once the exequatur is granted, the foreign judgment has the same legal weight in France than a French judgment.
-both experts agree that the length of the proceedings is variable and each stage (first instance stage, and then the appeal stage) can last between one to two years.
-in the present circumstances, one potential issue for the exequatur could be if the Australian courts decide not to apply the French prenuptial agreement. In a NY case, the NY courts decided to consider as null a French prenuptial agreement. During the exequatur proceedings of this NY judgment in France, the French courts have considered during the first instance that for this reason, the NY judgment could not receive the exequatur in France. Recently the French Court of Appeals has reversed this decision and has accepted the exequatur. The decision is currently pending before the French Supreme Court. These decisions show that until we have a clear ruling from the French Supreme Court (which may, or may not, confirm the rationale from the Court of Appeals) this could be an issue for the future exequatur of the Australian judgment in this case.
The issue of enforceability of a judgment and orders of a French court in Australia effectively relates to a transfer by the husband to the wife of his interest in Property D. It was submitted on behalf of the wife that such an order would not be enforceable in Australia either at common law; pursuant to the Foreign Judgments Enforcement Act 1991 (Cth) or under the Act. On behalf of the husband, it was contended that such a French order would be enforceable in Australia pursuant to s 78 of the Act.
Counsel for the wife submitted that a French order for transfer of Property D to the wife would not be enforceable in Australia at common law. It was submitted that four conditions must be met if a foreign judgment is to be recognised by Australian common law, such being:
1.the foreign court must have exercised a jurisdiction which is recognised by Australian courts
2.the foreign judgment must be final and conclusive
3.there must be identity of the parties
4.the judgment must be for a fixed debt, if based on a judgment in personam.
It was submitted on behalf of the wife that a French order for transfer to her of the husband's interest in Property D would not be recognised at common law for two reasons. First, an Australian court would not recognise a foreign judgment which relates to immovable property in Australia. Second, such an order would be a judgment in personam but not for a fixed debt.
It appears to me that there is substance in these submissions. Accordingly, I am satisfied that an order of a French court for the transfer to the wife of the husband's interest in Property D would be unenforceable at common law in Australia.
It was submitted on behalf of the wife that the Foreign Judgments Act 1991 (Cth) would not assist her with enforcement of a French order for transfer to her of Property D. Counsel for the wife contended that registration of a foreign judgment can be set aside pursuant to s 7(2)(a) of the Foreign Judgments Act, if the court is satisfied that "the court of the country of the original court has no jurisdiction in the circumstances of the case". Section 7(4) provides as follows:
The courts of the country of the original court are not taken to have had jurisdiction:
(a)if the subject matter of the proceedings was immovable property situated outside the country of the original court.
I accept that there is substance to these submissions. Accordingly, I am satisfied that the Foreign Judgments Act would not assist the wife with enforcement of a French order for transfer to her of the husband's interest in Property D.
The question, therefore, is whether an order for transfer to the wife of the husband's interest in Property D would be enforceable pursuant to the Act. The mechanism suggested in the submissions on behalf of the husband was by way of a declaration pursuant to s 78, in terms which would mirror the foreign order.
It would thus appear that there are potential difficulties with enforcement in each of the jurisdictions. In my view, it is not necessary for present purposes that there be findings as to enforceability. I would regard this factor as largely neutral to the outcome of the present issue, weighing neither for or against the granting of a stay of the Australian proceedings.
The order in which the proceedings were instituted the stage reached and costs incurred
The husband commenced the proceedings in France in 2011, by way of an application for divorce. The wife participated in these proceedings and herself took active steps, including the filing and prosecution of an application and an appeal. The wife engaged legal representation in France.
As part of the divorce proceedings, a court in France has ordered that the husband pay to the wife a "compensatory allowance" of €250,000 and he has made this payment. During the course of the French litigation, orders have been made for periodic provision by the husband of financial support for the wife and the parties' children.
The evidence is that the division of the parties’ property is a further step in the French proceedings. As recorded above, French courts have made orders for "preferential allocation" to the wife of Property C and Property D, with the parties needing to take certain steps with the assistance of a notary to advance the litigation.
By contrast, the Australian litigation has been on foot only since May 2018. Only procedural steps and this hearing of the threshold issue have taken place in the Australian litigation.
The experts agreed that a period of six to twelve months would be required for a notary in France to meet with the parties and provide a report as to points of agreement and disagreement. They agreed that an additional period of one to two years would be required for a judge to rule on points of disagreement (if required) and a similar time for disposition of any appeal. Thus, while the proceedings in France are advanced, I accept that they have not concluded.
There was no evidence as to the time likely to be required for finalisation of all issues of alteration of property interests in Australia. There was no evidence of the costs incurred by the parties in the French litigation to date, nor the likely amount which would be required for completion of the proceedings. There was no evidence of the likely cost of finalisation of the Australian litigation.
A French court has taken the step of making an order for payment to the wife by the husband of a "compensatory allowance" of €250,000. The joint opinion of the experts in relation to this order was as follows:
-the "prestation compensatoire" is the indemnity awarded by the divorce judge to one spouse where there are significant differences between their income and assets. More precisely, it is a sum payable by one spouse to the other to compensate the latter for the disparity in the respective living conditions following the dissolution of the marriage.
The experts opined further on the issue of the compensatory allowance as follows:
-in order to award compensatory allowance, and if French law applies, French courts are under the obligation to consider all the circumstances of both spouses to fix the appropriate amount. Therefore, French courts apply the following criteria, as set out under Article 271 of the French civil code, the determine the quantum of compensatory maintenance awarded upon divorce: the duration of the marriage; the age and health of each spouse; their professional qualifications and current employment; the consequences of the professional choices made by one of the spouses during the marriage for the sake of raising the children and the time needed to still do so, or to favour the career of the other spouse to the detriment of his or her own career; the estimated or foreseeable state of the spouses, in capital and in revenue, after the matrimonial regime has been liquidated; their existing of foreseeable rights; their respective situations concerning retirement while taking into account the decrease in retirement rights for the claimant of compensatory maintenance (namely including the professional sacrifices made to raise children).
It is thus the case that a French court has recognised the disparity in the financial positions of the parties and made an order which favours the wife. The effect upon an overall distribution of assets between the parties of this order and payment was explained as follows:
-the prestation compensatoire is part of alimony and therefore has nothing to do with the division of marital assets. Therefore, the amounts ordered for compensatory maintenance are ordered by the judge in addition to the liquidation and division of assets. The quantum of compensatory allowance is determined independently from the division of assets under the applicable matrimonial regime, the judge will however look at the spouses respective assets and determining whether the divorce creates a disparity between them.
The experts explained the consequences of the "preferential allocation" as follows:
The preferential allocation of the two properties means that the spouse benefiting from this allocation is entitled to become the owner of this property. This means that the other spouse can no longer request to become the sole owner of this property.
In other words, when spouses are joint owners of a property and one of the spouses wishes to be authorised to become the sole owner of the property, the court can decide to allocate for the future the sole ownership of the property to the spouse requesting it. This is what "preferential allocation" is in the context of the divorce proceedings (Article 267 of the French civil code grants this power to the family affairs judge during the divorce proceedings).
It is thus the case that substantial steps have been taken by French courts in terms of consideration and alteration of the comparative financial circumstances of the parties. By contrast, no substantive step has occurred in the Australian litigation.
The connection of the parties and their marriage to each of the jurisdictions and the issues on which relief may depend in those jurisdictions
The wife has strong connections in Australia, having lived in this country since 2000 and acquiring citizenship in 2008. She files tax returns in Australia, in which she includes rental from Property C as part of her income. The parties' children are Australian citizens, who live with the wife in Property D.
The parties cohabited in Sydney between 2000 and 2005, when the husband returned to France. Thereafter, he travelled to Australia and spent time with the wife and the children until 2010. They purchased Property D jointly in 2008.
The wife also has connections to France. She was born in France and members of her family live in the vicinity of Property C. Orders of a French court require the wife to lease out Property C and to be present in this area during the rental season.
The husband has no similar ongoing connections to Australia. He last lived in this country in 2005 and never acquired Australian citizenship. The husband became an Australian permanent resident in November 2005 but there was no evidence as to his present status in this country.
The experts agreed that the prenuptial agreement would have binding effect upon the division of the assets of the parties in a French court. The experts agreed further that the prenuptial agreement would mean that French law would be applied to the division of property, albeit that a major asset is located outside France. At this point, it is unclear whether the prenuptial agreement would operate to the advantage or disadvantage of either party in the French litigation.
Which forum may provide more effectively for a complete resolution of the matters involved in the parties' controversy
It seems to me that the issues in the parties' controversy could be resolved effectively in each forum. The matter of final division of the parties' property can be resolved in both Australia and France and, in my view, there is no basis for an inference that one jurisdiction would better or more effectively serve the interests of justice.
Whether having regard to their resources and understanding of language, the parties are able to participate in their respective proceedings on an equal footing
Both parties are fluent in both the French and English languages. Both parties have already engaged lawyers in the litigation in both France and Australia. The wife spends considerable amounts of time in France each year for the purpose of compliance with orders in relation to the leasing of Property C.
The husband would be required to travel to Australia for the sole purpose of the litigation. In my view this consideration favours the husband, as the wife is required to travel to France in any event for purposes associated with the French litigation.
Conclusion
The wife relied upon the decision of the Full Court in Pagliotti v Hartner (2009) 41 Fam LR 41 but, in my view, this authority is distinguishable on the facts from the present situation. In Pagliotti an Italian tribunal made final orders on 11 January 2008, by which the parties were declared to be judicially separated and which required the husband to pay to the wife maintenance in an amount of €4,800 a month.
The orders of the Italian tribunal dealt finally with the financial issues arising from the breakdown of the marriage of the parties. The written reasons of the Tribunal indicated clearly that the financial circumstances of each of the parties, including their ownership of assets in both Italy and Australia, had been taken into account in assessment of the quantum of spouse maintenance.
There was no doubt that the Italian tribunal lacked jurisdiction to determine beneficial ownership of a parcel of real property, or the proceeds of sale thereof, located in Australia. The wife was the sole registered proprietor of the Australian property. Accordingly, only the Family Court of Australia could make a determination as to the beneficial ownership of the wife's Australian real estate.
In the present case, however, both experts in French law agree that courts in France could make orders with respect to the four parcels of real estate owned by the parties, including Property D. It may be that there would be difficulties with enforcement of such a French order in Australia but there is no doubt as to jurisdiction.
It is my view that the husband would suffer real prejudice, if the wife is permitted to continue with her litigation in Australia. I consider that she has delayed too long in commencing these proceedings and participated in the French litigation to such an extent that there should be a permanent stay.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 26 April 2019.
Associate:
Date: 26 April 2019
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