TEO & UNG
[2020] FamCA 1066
•17 December 2020
FAMILY COURT OF AUSTRALIA
| TEO & UNG | [2020] FamCA 1066 |
| FAMILY LAW – JURISDICTION – stay of proceedings – where the husband filed an application in this Court seeking final property orders – where the wife seeks that the proceedings in Australia be stayed until the proceedings in China have resolved – where the husband opposes the wife’s application – where the Court has jurisdiction to make final property orders – where the proceedings in Australia were commenced first – where this Court is not a “clearly inappropriate forum” – order that the wife’s application for a stay be dismissed. FAMILY LAW – INJUNCTION – anti-suit injunction – where the wife commenced proceedings in China seeking a divorce order and property orders – where the husband seeks an anti-suit injunction against the wife in respect of her continuing proceedings in China – where the proceedings initiated in China are not identical as there is no application for the dissolution of marriage before this Court – where the pursuit of a property division in China would be considered oppressive or vexatious – order that the wife be restrained from proceeding with her application for a property division in the City N Court. |
| Family Law Act 1975 (Cth) ss 4, 34, 39, 75, 79, 114 Family Law Rules 2004 (Cth) |
| CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345 Henry v Henry (1996) 185 CLR 571 Kent & Kent (2017) FLC 93-792 Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 Skinner & Alfonso-Skinner [2010] FamCA 329 Teo v Guan (2015) FLC 93-653 Voth v Manildra Flour Mills Proprietary Limited and Another (1990) 171 CLR 538 |
| APPLICANT: | Mr Teo |
| RESPONDENT: | Ms Ung |
| FILE NUMBER: | MLC | 3974 | of | 2020 |
| DATE DELIVERED: | 17 December 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Johns J |
| HEARING DATE: | 12 October 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Dr Smith |
| SOLICITOR FOR THE APPLICANT: | Tao Jiang Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Finemore |
| SOLICITOR FOR THE RESPONDENT: | TNS Lawyers |
Orders
That pending the determination of the proceedings in the Family Court of Australia between the husband and the wife with respect to the adjustment of their property interests, the wife be restrained by injunction from proceeding with her application for property division in the City N Court in China.
That the interim orders sought in the wife’s Response to Initiating Application filed 17 July 2020 be dismissed.
That the husband’s Application in a Case filed 2 August 2020 be dismissed.
That all extant applications be added to the list of cases awaiting allocation to a judicial docket.
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 Teo & Ung 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 MELBOURNE |
FILE NUMBER: MLC 3974 of 2020
| Mr Teo |
Applicant
And
| Ms Ung |
Respondent
REASONS FOR JUDGMENT
Introduction
By Initiating Application filed in this Court in April 2020 the husband seeks final property orders. Some four months later, on 20 August 2020 the wife filed proceedings in the City N Court of the C District in China seeking an adjustment of the parties’ property interests.
On 17 July 2020 the wife filed a Response to Initiating Application in this Court seeking an adjustment of the parties’ Australian property interests pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”). She also sought a stay of the proceedings in this Court “pending the finalisation of the parties’ family law proceedings in China”. At the time that application was filed, there were no proceedings on foot in China.
On 2 August 2020, the husband filed an Application in a Case seeking that the interim orders sought by the wife in her response be dismissed and that she be restrained from continuing the property proceedings in China. The husband also sought a raft of other procedural orders, although those applications were not pressed at the hearing before me.
The matter came before me in the Judicial Duty List on 12 October 2020.
These are my Reasons for Judgment with respect to the parties’ competing applications as to the forum for their property proceedings.
Background
The husband, Mr Teo is aged 54 and is not currently employed. The husband lives in China, although is currently present in Australia.
The wife, Ms Ung is aged 51. She is currently employed as a public servant and is resident in Australia.
The parties married in China in 1991. The date of final separation is disputed; the husband asserts that the parties separated on 1 October 2011 and the wife deposes separation occurred in June 2020. Nothing at the interim hearing turns on that issue. There is one adult child of the marriage, a daughter, Ms D.
The parties migrated to Australia in 2009. Since that time the wife and the parties’ child have lived in Australia whilst the husband continued to conduct his business in China, and as a consequence, split his time between the two countries.
The husband filed an Initiating Application in the Family Court of Australia on 22 April 2020 seeking final property orders.
The matter first came before the Court on 24 June 2020. That day Registrar George made procedural orders by consent.
On 17 July 2020 the wife filed a Response to Initiating Application. She sought interim orders for a stay of the property proceedings in Australia to allow her to issue proceedings in China for an adjustment of the parties’ Chinese property interests.
On 4 August 2020 Registrar Field made orders by consent listing the matter in the Judicial Duty List, as well as orders for disclosure. The parties were also restrained by injunction from disposing or otherwise dealing with the assets of the marriage. The orders also provided the following notations:-
A.The Wife intends to issue family law proceedings in China seeking an adjustment of the parties’ interests in property located in China and will notify the Melbourne Registry of the Family Court of Australia that the family law proceedings in China has been issued.
B.The Husband remains opposed to the application for a stay of these proceedings pending finalisation of the proceedings in China.
The husband filed an Application in a Case on 2 August 2020, seeking that the wife’s interim orders sought in her Response be dismissed.
On 20 August 2020 the wife filed an application for divorce and property division at the City N Court of C District in China.
The matter returned to Court before me in the Judicial Duty List on 12 October 2020.
Material Relied Upon
The husband relies upon the following material:-
· Application in a Case filed 2 August 2020;
· Affidavit of the husband filed 2 August 2020; and
· Written Submissions dated 11 October 2020.
The wife relies upon the following material:-
· Response to Initiating Application filed 17 July 2020;
· Affidavit of the wife filed 17 July 2020;
· Affidavit of the wife filed 8 October 2020; and
· Written Submissions dated 11 October 2020.
Orders Sought
In her Response to Initiating Application filed 17 July 2020, the wife seeks the following interim orders:-
(1)Within 21 days of these orders, the Wife issue family law proceedings in China seeking an adjustment of the parties’ interests in property located in China.
(2)The parties’ respective applications before the Family Court of Australia regarding the parties’ interests in property in Australia be stayed pending the finalisation of the parties’ family law proceedings in China.
(3)The Wife notify the Melbourne Registry of the Family Court of Australia upon the finalisation of the family law proceedings in China and request that the matter be listed for Mention Hearing.
…
The husband’s Application in a Case filed 2 August 2020 sought orders as follows:-
(1)That the Wife’s interim orders sought filed on 17 July 2020 are dismissed.
(2)That the Wife be restrained by injunction from continuing the proceedings issued in China in respect of the property of the parties in that country.
(3)That all proceedings as between the Husband and the Wife be litigated in the Family Court of Australia.
…
The husband also sought further procedural orders in his application, however at the commencement of the hearing counsel for the husband advised that those matters would not be pressed.
The Hearing
The parties were both represented by counsel throughout the hearing. Both counsel referred to and relied upon written submissions forwarded to my Chambers via email on 11 October 2020.
The hearing was conducted on the papers. Each party relied upon the material referred to above and submissions made to the Court virtually via Microsoft Teams.
Given the nature of the hearing, contentious facts cannot be determined without evidence being properly tested. Accordingly, in determining the matter, I have relied upon those facts which are agreed or not in issue.
Legal Principles in Determining the Stay Application
There is no challenge to this Court’s jurisdiction to determine the husband’s application for property settlement. Section 39(1) of the Act prescribes that a matrimonial cause may be instituted under the Act in the Family Court of Australia (“Family Court”). ‘Matrimonial cause’ is defined in s 4 of the Act, and includes the following:-
(ca) 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;
These proceedings are as and between parties to a marriage with respect to their matrimonial assets. Proceedings arising from a matrimonial cause may be instituted under the Act pursuant to s 39(4) if:-
(a)in the case of proceedings between the parties to a marriage or proceedings of a kind referred to in paragraph (b) of that definition in relation to a marriage—either party to the marriage is an Australian citizen, is ordinarily resident in Australia, or is present in Australia, at the relevant date; and
(b)in any other case—any party to the proceedings is an Australian citizen, is ordinarily resident in Australia, or is present in Australia, at the relevant date.
As both parties to the marriage in this matter are present in Australia, and the wife is an ordinary resident of Australia, I am satisfied that this Court has jurisdiction to deal with the property application filed by the husband which is currently before the Court.
The first issue to be determined is whether there should be a stay of that application, as contended for by the wife. The test for determining whether the Family Court should stay the proceedings is whether it is a “clearly inappropriate forum” to exercise its jurisdiction to entertain the dispute between the parties (Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 (“Oceanic”); Voth v Manildra Flour Mills Proprietary Limited and Another (1990) 171 CLR 538 (“Voth”)).
The party seeking a stay of the proceedings, that is the wife, bears the onus of establishing that this Court is a clearly inappropriate forum. In order to demonstrate that it is a clearly inappropriate forum it must be found that the continuance of the proceedings will 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” (Voth; Oceanic).
The majority in Henry v Henry (1996) 185 CLR 571 (“Henry”) considered the matters to be taken into account in determining what is a clearly inappropriate forum at 592 – 593 as follows:-
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.
(Footnote omitted)
Murphy J helpfully summarised the non-exhaustive list of matters relevant to the application of the “clearly inappropriate forum” test in Skinner & Alfonso-Skinner [2010] FamCA 329 (“Skinner”) at [69] as follows:-
a)Whether each court will recognise the other’s orders and decrees;
b)Which forum can provide more effectively for complete resolution of the matters involved in the parties’ controversy;
c)The order in which the proceedings were instituted;
d)The stage at which the proceedings have each reached;
e)The costs that have been incurred by the parties;
f)The connection with the parties and their marriage with each of the jurisdictions;
g)The issues on which relief might depend in each of the jurisdictions; and
h)The resources of the parties and their understanding of language enabling the parties to participate in the respective proceedings on an equal footing.
Discussion
It was conceded by counsel representing each of the parties that neither the Family Court in Australia nor the Court in China will recognise the orders and decrees of the other Court.
It was also common ground between the parties that the courts in China will not deal with assets held by the parties outside of China. Further, it was conceded by both counsel that whilst the Family Court has jurisdiction to take into account and make orders in respect of property held by or on behalf of the parties in China, there may be issues with respect to enforcement of such orders affecting that property. It is that factor which has motivated the wife to seek a stay of the Family Court proceedings to enable her to pursue her applications in China with respect to properties held by the parties there.
The proceedings with respect to the parties’ property were commenced by the husband first in the Family Court, those proceedings having commenced on 22 April 2020. The wife’s proceedings in China were not commenced until 20 August 2020. Prior to the commencement of those proceedings there were two court events in the Family Court, being Case Management Hearings conducted on 24 June 2020 and 4 August 2020, with orders made on each occasion regarding the filing of court material, disclosure and injunctive relief.
The wife deposes that the proceedings in the City N Court have been referred to mediation. There is no evidence before the Court as to when those proceedings are likely to be listed for hearing or when they are likely to be concluded.
Given the husband’s application commenced in April 2020, it is likely that that application will be allocated to a judicial docket in this Court and listed for hearing in the second half of 2021.
There is no evidence before the Court as to the costs incurred by the parties to date.
The parties migrated to Australia in 2009 and the wife and the parties’ child have lived in Australia since that time. The husband’s evidence is that he has divided his time between China and Australia since 2009. At the time of the interim hearing, the husband was present in Australia.
The parties hold property in both China and Australia. The husband contends that the parties have purchased properties at F Street, Suburb G, H Street, Suburb J, and K Street, Suburb J. Since the commencement of the Family Court proceedings the wife has transferred the properties at F Street and K Street to the parties’ daughter and niece respectively. The husband contends that those transfers were conducted without his knowledge or consent. There is a significant dispute between the parties as to the nature and value of their property interests in Australia.
In addition to their Australian property, the parties have interests in China. The wife contends that the husband holds interests in two properties in C District as well as jointly held property in Suburb L. In addition the wife concedes that she holds a property at M Street, C District. The wife also contends that the husband holds an interest in a business, bank accounts, shares and a motor vehicle in China.
The wife submits that the parties’ interests in China are valued at in excess of $5.3 million, whilst their Australian interests are valued at approximately $500,000. As a result, the wife seeks to pursue her claims in the Court in China and that the Australian proceedings be stayed pending the resolution of those matters.
The husband disputes the wife’s allegations as to the extent of his interests in China and the values attributed to those interests by the wife. He deposes that the businesses established by the parties during the marriage have ceased operation. Further, he denies the wife’s allegations that he owns properties in the C District. I am unable to make any findings in relation to the parties’ contentions as to the identity and value of their interests.
The wife deposes that there is no prejudice to the husband in staying the proceedings in Australia until the Chinese proceedings have concluded. In contrast, the wife submits that she would suffer prejudice if proceedings were not stayed as she requires the powers of the Chinese Court to obtain relevant documentation in relation to the husband’s business dealings, and to restrain him from dealing with any assets prior to the separation of the matrimonial assets.
The wife submits that the Family Court is unable to make a just and equitable distribution of assets between the parties until the proceedings in China have been finalised. In contrast, the husband submits that Australia is not a clearly inappropriate forum, and thus the proceedings ought not be stayed.
There is no evidence before this Court as to what matters will likely be relevant to the determination of the proceedings in China.
As to the applications before this Court, they will be determined in accordance with s 79 of the Act. In order to determine those applications the parties will be required to adduce evidence as to the nature and extent of their interests and the value of those interests. The parties will be required to obtain valuations of their interests both in Australia and in China. That property is held in China is not an impediment to the assessment as to the value of the parties’ interests. The Court will also be required to assess the parties’ contributions and the matters relevant to a consideration of s 75(2) of the Act.
In addition to those matters, the husband has flagged the prospect that other parties may be joined to the proceedings as a result of the transfer by the wife of her interest in the properties at H Street and K Street to the parties’ daughter and niece.
Neither party appears to have any advantage over the other with respect to the conduct of the proceedings. Both parties will require the assistance of interpreters. Both parties are represented in these proceedings by Australian lawyers.
The fact that the parties have interests in property in China does not preclude this Court from exercising jurisdiction with respect to the adjustment of property in which all of the parties’ interests in that property are considered. Orders in s 79 proceedings are made in personam and not in rem (see Teo v Guan (2015) FLC 93-653 at 135). An order for one party to transfer title in real property situated overseas is an order in personam against that party as are orders for enforcement against a party. Whilst the parties in these proceedings are in this country, they are amenable to this jurisdiction and subject to any orders made in personam against them. There is no evidence before this Court as to the position with respect to the law in China in relation to property division.
Having regard to those matters, I am satisfied that this Court is able to provide a complete resolution of the matters that are involved in the dispute between the parties. I am not in a position to make the same assessment with respect to the proceedings in China.
I am not satisfied that Australia is a clearly inappropriate forum to determine the matter having regard to the fact that:-
·These proceedings were commenced first-in-time;
·The parties hold property and superannuation interests in Australia;
·This Court has the power to make orders with respect to the parties’ interests, whether held in Australia or in China;
·The concession made on behalf of the wife that the Chinese proceedings will not take into account the Australian property interests; and
·The parties are both present in Australia, are permanent residents of Australia and the wife is ordinarily resident in Australia.
Accordingly, I am satisfied that the wife’s application for a stay of these proceedings ought be dismissed.
Legal principles in determining anti-suit injunction
This Court has the power to grant an anti-suit injunction. That power arises either by reason of the Court’s implied power to protect the integrity of its own processes or arguably pursuant to s 34 and s 114(3) of the Act. The High Court of Australia (“High Court”) in CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345 (“CSR”) at 391 - 392 held:-
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. …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.
The inherent power to grant anti-suit injunctions is not confined to the examples just given. As with other aspects of that power, it is not to be restricted to defined and closed categories. Rather, it is to be exercised when the administration of justice so demands or in the context of anti-suit injunctions, when necessary for the protection of the court’s own proceedings or processes.
(Citations omitted)
In Henry, the High Court observed at 591 that:-
… 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.
As was observed by the Full Court in Kent & Kent (2017) FLC 93-792 at [56], “a person acting bona fide is perfectly entitled to invoke the jurisdiction of a court to which they and their property are amendable.” In support of that position, the Full Court relied upon the statement of the High Court in CSR at 395 that:-
Neither principle nor authority supports the view that the institution of foreign proceedings is, of itself, vexation or oppression according to the principles of equity. Similarly, neither principle nor authority supports the view that foreign proceedings become vexatious or oppressive in accordance with those principles in the event that the party against whom they are brought later commences proceedings with respect to the same subject matter in this country.
In her affidavit filed 8 October 2020 the wife deposes at paragraph 4 that she has filed an application for divorce and property division orders at the City N Court of C District. The wife seeks a dissolution of the parties’ marriage and the division of their common property in China.
The factors relevant to the question of whether the wife ought be permitted to continue those proceedings include:-
(a)If not restrained, there will be two courts seized with an identical issue, the division of the parties’ property interests with the potential of different outcomes in both courts;
(b)The parties have participated in proceedings in this court since their commencement in April 2020;
(c)Both parties have Australian lawyers;
(d)The wife, the parties’ daughter and niece (both of whom may be joined and are likely to be witnesses in the proceedings) live in Australia;
(e)In contrast, the wife deposes that the husband has not engaged lawyers to represent him in the proceedings in China which commenced some four months later.
I am satisfied that the above factors support an injunction restraining the wife from proceeding with her application for property division in the City N Court; to enable those proceedings to continue in circumstances where there is an application for division of property before this Court would in my view, be vexatious and oppressive. However, in circumstances where there is no pending application for dissolution of marriage before this Court, I am not persuaded that the injunction should extend to that part of the wife’s application in the Chinese proceedings.
I certify that the preceding fifty-six (57) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 17 December 2020.
Associate:
Date: 17 December 2020
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