Twardowski and Twardowski and Anor

[2017] FamCA 1098

FAMILY COURT OF AUSTRALIA

TWARDOWSKI & TWARDOWSKI & ANOR [2017] FamCA 1098

FAMILY LAW – JURISDICTION – Clearly inappropriate forum – oppressive proceedings – where the parties have already taken a remedy in the foreign jurisdiction

Family Law Act 1975 (Cth)

Gilmore v Gilmore (1993) 110 FLR 311 Henry v Henry (1996) 185 CLR 571 Kima v Kima [2017] FamCA 401 Kennon v Spry [2008] HCA 56 Oceanic Sun Line Special Shipping Co. Inc. v Fay (1988) 165 CLR 197 Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538
APPLICANT:	Ms Twardowski

1st RESPONDENT: Mr A Twardowski

2nd RESPONDENT: Mr B Twardowski

FILE NUMBER: CAC 1969 of 2016

DATE DELIVERED: 22 December 2017

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Gill J

HEARING DATE: 26 May 2017, 2 June 2017 and 24 October 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Knox, SC

SOLICITOR FOR THE APPLICANT: Neilan Stramandinoli Family Law

COUNSEL FOR THE 1^ST AND 2^ND  RESPONDENTS: Mr Buckland on 2 June 2017 and Mr Howard on 24 October 2017

SOLICITOR FOR THE 1^ST AND 2^ND RESPONDENTS: Drexler Litigation Lawyers

Orders

1. The application of the wife commencing property proceedings in the Family Court of Australia is dismissed on the basis that Australia is a clearly inappropriate forum;

2. In the event that a party seeks orders consequential to Order 1 that party is to file and serve any application and further material in support within 21 days of the date of these Orders.

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 Twardowski & Twardowski and Anor 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 CANBERRA

FILE NUMBER: CAC 1969 of 2016

Ms Twardowski

Applicant

And

Mr A Twardowski 

First Respondent

And

Mr B Twardowski
Second Respondent

REASONS FOR JUDGMENT

1. The parties in this matter are the wife, Ms Twardowski, the husband Mr A Twardowski and the husband’s brother Mr B Twardowski (the second respondent).  The husband and wife commenced their relationship in Poland in about 1983, subsequently moving to Australia and becoming Australian citizens.  They retained their Polish citizenship.  In 1997 they separated and each left Australia.  They reconciled in about 2001 in Poland.  In 2005 they entered into what has been referred to in these proceedings as the “legal document” (the legal document) in Poland which purported to govern the framework under which each would own the property of the marriage.  The husband and wife again separated in 2016 in Poland. 

2. The contest between the parties involves whether or not proceedings in relation to part or all of the property of the parties should be conducted in Australia.  The husband and wife have three children, one being under the age of 18.  He is the subject of proceedings in Poland.  No party suggests that he should be part of the proceedings in Australia.  The husband asserts that Australia is a clearly inappropriate forum for resolving any of the parties’ property dispute, while the wife asserts that Australia is the only place in which she might obtain relief in respect of the parties’ Australian owned property.

3. The critical contest between the parties was the availability of relief in Poland in relation to the Australian property held by the parties.

Material relied upon:

1. By way of her amended list of documents to be relied upon, filed 25 May 2017, the wife indicated that she relies upon:

   a)Affidavit of the wife, filed 1 December 2016;

   b)Financial Statement of the wife, filed 1 December 2016;

   c)Affidavit of Mr C, filed 10 February 2017;

   d)Affidavit of the wife, filed 28 April 2017;

   e)Further Affidavit of Mr C, filed 28 April 2017;

   f)Affidavit of the wife, filed 21 May 2017;

   g)Case Outline and Submissions, filed 27 March 2017; and

   h)Submissions in Reply, dated 25 May 2017.

2. By way of his submissions, dated 26 May 2017, the husband indicated that he relies upon:

   a)Affidavit of the husband, filed 13 February 2017;

   b)Affidavit of the husband, filed 22 May 2017;

   c)Affidavit of Mr C, filed 10 February 2017; and

   d)Further Affidavit of Mr C, filed 28 April 2017.

The litigation history

1. Proceedings are currently on foot in both Poland and Australia. The general chronology is as follows:

   a)22 June 2005 the husband and wife executed the ‘legal document’ in Poland dealing with division of past and future property between them;

   b)2 September 2016 – husband initiated proceedings in Regional Court of City D, Poland for Divorce and Custody of E.

   c)20 September 2016 – wife’s solicitors wrote to the husband’s solicitors in relation to commencing proceedings re the Australian property (“Suburb F property”). The wife lodged a caveat in relation to the property.

   d)4 October 2016 – husband amended his application in the Polish court to include ‘division of gained property’.

   e)24 October 2016 – mother makes application for father’s application for division of property in Poland to be set aside, on the basis that there are ongoing property proceedings in Australia (annexure Q of husband’s affidavit 22 May 2017)

   f)28 November 2016 – husband commenced proceedings in different court, the District Court in G Town, in relation to ‘division of gained property’.

   g)1 December 2016 – wife filed initiating application in the Family Court for a property order in relation to the Suburb F property.

   h)2 December 2016 – Polish Regional Court in City D made findings in relation to E’s living arrangements, with the husband ordered to pay child support to the wife.

   i)January 2017 – parties attended mediation in relation to E.

   j)3 January 2017 – wife objected to the husband’s application for division of gained property in the District Court in G Town, on the basis that there are proceedings on foot in relation to property in both City D and Australia.

   k)13 February 2017 – G Town district court dismisses the father’s application for property orders.

   l)7 March 2017 – father lodges appeal against decision of G Town district court to dismiss his application.

   m)2 June 2017 – forum hearing commences in Australia with submissions taken from the Applicant.

   n)8 June 2017 – G Town district court hears father’s appeal. Dismisses appeal, however proceedings in City D regional court still on foot.

   o)24 October 2017 – forum hearing finalises in Australia with submissions taken from the Respondent – judgment reserved

The Polish property

1. The value of the property in Poland was contested.  However the scope of that property is a commercial property held by the husband, with three horses and an apartment held by the wife.  Jointly the parties hold a number of paintings and two recreational blocks of land.

The Australian property

1. The husband and wife are both shareholders in H Pty Ltd.  The husband has ten ordinary class shares, the wife ten B class shares.   HPL is the sole shareholder of J Street, Suburb F, Proprietary Limited (JPL) as the Trustee for the Twardowski Family Trust (TFT).  The Director for that entity is the husband with an alternate Director being the second respondent

2. JPL holds the title to J Street, Suburb F, a property acquired by the parties in 1995.

3. The Twardowski Family Trust was settled and is governed by a trust deed established in 1995.  That trust provides that the husband and wife, along with their children, grandchildren, their parents, their siblings and any future spouse of either of them are the beneficiaries.  The husband is the appointor.

4. While it was argued for the husband that the Australian property of the parties is the shares held by each of them, given that the husband is both the controller and appointor of the trustee, and that he and the wife are both beneficiaries entitled to due administration of the trust, and given that the trustee could appoint the whole of the trust to the husband or the wife in accordance with the deed that governs the trust, “the potential enjoyment of the whole of that fund” is "property of the parties to the marriage or either of them” and further the value of the property is the value of the assets.[1]  This is particularly so “where property is held under such a trust by a party to a marriage and the property has been acquired by or through the efforts of that party or his or her spouse, whether before or during the marriage”.[2]

   [1]Kennon v Spry [2008] HCA 56 per Gummow and Hayne JJ

   [2]Kennon v Spry [2008] HCA 56 per French CJ

The law relating to forum

1. The principle governing whether the proceedings should continue in Australia is not a question as to which jurisdiction is a preferable forum, but as to whether Australia is a clearly inappropriate forum.  In Kima[3] I extracted the law in relation to what it means to be clearly inappropriate as follows:

   The applicable test for whether this court should deal with the matter is whether this court is a “clearly inappropriate forum”[4] for the hearing of the dispute.  The question is directed to whether the proceedings here are vexatious or oppressive[5].  Oppressive means “seriously and unfairly burdensome, prejudicial or damaging” and vexatious means “productive of serious and unjustified trouble and harassment.”[6] These questions are directed to the avoidance of injustice between the parties[7] and involve a “subjective balancing process” in the “circumstances of a particular case”[8] requiring, as the circumstances of the case determine, consideration of a number of different factors, directed to whether Australia is a clearly inappropriate forum.

   [3]Kima v Kima [2017] FamCA 401

   [4] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 565.

   [5] Henry v Henry (1996) 185 CLR 571 at 588 per Dawson, Gaudron, McHugh and Gummow JJ in critiquing Gilmore v Gilmore (1993) 110 FLR 311.

   [6] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 555 adopting Deane J in Oceanic Sun Line Special Shipping Co. Inc. v Fay (1988) 165 CLR 197.

   [7] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554.

   [8] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 556 adopting Deane J in Oceanic Sun.

2. A number of factors were identified in Voth and Henry as potentially, but not necessarily, having a “real bearing on the matter”[9] depending on the features of the particular case, being:

   a)Given that the “jurisdiction to grant a stay or dismiss the action is to be exercised with ‘great care’ or ‘extreme caution;’”[10] the “obligation on the domestic courts of this country to exercise jurisdiction which is conferred upon them… (unless)… it is established that the forum is clearly inappropriate”[11] establishes the right of a plaintiff who has regularly invoked the jurisdiction of the court to have his or her case heard.[12] Noting this as the starting point, care must be taken not to give this matter “undue emphasis”[13] such that it obscures the inquiry as to whether Australia is a clearly inappropriate forum;

   b)The consideration of whether there are parallel proceedings on foot in the other forum, and the degree to which they involve the same subject matter, legal issues and parties.[14] The currency of parallel proceedings prior to the institution of proceedings leads to a prima facie position that the proceedings in Australia are oppressive; 

   c)Consideration of whether “it is fairly arguable that the substantive law of the forum is applicable in the determination of the rights and liabilities (including the extent of the liabilities) of the parties.”[15] This does not normally involve evaluation of “the justice or relative merits of the substantive laws of the available forums”;[16]

   d)The availability of relief in the foreign forum.[17] An absence of relief in the foreign jurisdiction would, in general terms, make it a difficult task to establish that Australia is a clearly inappropriate forum.  In assessing the availability of relief, the “selected forum’s administrative problems, e.g. congested lists and lack of administrative resources, (are) matters of a kind to which our courts do not usually have regard”;[18] and

   e)An examination of “connecting factors” and “legitimate personal or juridical advantage.”[19] This includes consideration of matters such as “convenience or expense (such as availability of witnesses), but also other factors such as the law governing the relevant transaction…and the places where the parties reside or respectively carry on business.”[20]  The differing English test for forum, on this matter asks “where the case may be tried ‘suitably for the interests of all the parties and for the ends of justice.’”[21] Applied to the Australian test, care must be taken not to convert the question of clearly inappropriate forum into a question of mere preference of forum based on legitimate juridical advantage, but rather “regard must be had to the interests of all the parties and the ends of justice.”[22]  The focus is not on the advantage the plaintiff may gain or lose (recognising that an “advantage to the plaintiff will ordinarily give rise to a comparable disadvantage to the defendant”[23]) but whether the ends of justice would be defeated by the differing system.

   [9] Henry v Henry (1996) 185 CLR 571 at 589.

   [10] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554.

   [11] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 559.

   [12] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 554.

   [13] Henry v Henry (1996) 185 CLR 571 at 589.

   [14] Henry v Henry (1996) 185 CLR 571 at 590.

   [15] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 556 adopting Gaudron J from Oceanic Sun at 266.

   [16] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 560.

   [17] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 558.

   [18] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 561 adopting Oceanic Sun at 254.

   [19] Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 565 adopting Lord Goff in Spiliada.

   [20] Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 478.

   [21] Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 482.

   [22] Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 483.

   [23] Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 at 482.

3. However, in identifying considerations, the question is whether to litigate here would cause injustice to one or more of the parties. 

The significance of the legal proceedings in Poland

1. It may be seen that the current Polish proceedings were commenced prior to the Australian proceedings.  The property proceedings were commenced shortly before the Australian proceedings, but only after the wife engaged with the husband about those proceedings in advance of filing, which she is obliged to do. While there is a prima facie position that commencing where there are already proceedings on foot in the foreign jurisdiction is oppressive, the pre filing communication by the wife is sufficient in this case to mean that the sequence of the commencement of the actions is not significant.

2. Numerous assertions as to the operation of Polish law were made by the husband.  His expertise on the operation of the legal system in Poland has not been established.  The embedding of his submissions and opinions within the affidavit material is contrary to proper practice and unhelpful to the proper resolution of the case.

3. Expert evidence in relation to Polish law and the Polish legal system was obtained from Mr C, a Polish lawyer with a specialisation in international aspects of Polish civil law, including family law.  He prepared two reports.  The first was relied upon by both parties, the second initially relied upon by the husband and then opposed by the husband.

4. The second report, which clarified the first report following the legal document being brought to Mr C’s attention, was opposed on the basis of a lack of reasoning to the conclusion.  However, Mr C sets out his reasoning connecting the legal document (the entry into which was undisputed) with the other accepted facts of the case, then giving an opinion based on expertise as to its effect and corresponding significance within the Polish legal system.  This grounded the admission of the opinion.

5. Insofar as proceedings involve real property located in Poland, Polish law is that the Polish Courts have exclusive jurisdiction.  Property within Poland other than real property is also within Polish jurisdiction.  Property, other than real property, located outside of Poland is within the optional jurisdiction of the Polish Courts.  Real property located outside of Poland is not within the jurisdiction of Polish Courts.

6. In this case the property located within Australia is likely categorised as other than real property, on the basis it is shares in a Proprietary Limited company that are owned rather than real property directly.  The location of this property, its genesis and governance within Australia, means that if the Polish Courts exercised jurisdiction it would likely be by the application of Australian law

7. The Polish Courts have jurisdiction in relation to the whole of the property of the parties, although they are not required to exercise it in respect of the Australian property.

8. The legal document was identified as having considerable significance for the Polish proceedings.  The circumstances of the document are that it was entered into on 22 June 2005.  At that stage it appears that the only significant property of the parties was the Australian property.  On that same day the husband purchased an apartment in Poland in the wife’s name, in apparent reliance on the operation of the legal document.

9. The effect of the legal document is that, by agreement between the parties, a division of property of the parties under Polish law has been effected that means that each party is to retain their particular interests in property as held at the time of the legal document, and is to hold, to the exclusion of the other party, their interests in property acquired after the entry into the legal document.  It excludes an adjustment of the parties’ interests and excludes recourse to the Polish Courts for that purpose.  It institutes what was described by Mr C as a “legal regime of separate property.”

10. The document results in the “cessation of the system of property conjugal community.” That is, the substantive law of the jurisdiction deals with the property of the parties, already giving relief in such a manner that relief beyond the terms of the legal document is not available to the parties in Poland, although it appears relief is available to give effect this division. To the extent that the parties jointly hold parcels of property, that would now be regarded by the Polish Courts as an “investment relationship.” Mr C’s view was that the husband would not be successful in pursuing a division of any real estate property under Polish law and that his proceedings did not in fact seek to divide the property the subject of the legal document. 

11. To the degree that no further relief is available in Poland, it is the product of the relief in relation to the same subject matter that the parties have already obtained for themselves. 

12. According to Mr C, to the extent that there are proceedings on foot in Poland, they are to be limited in scope by the operation of the legal document.

1. However, the position of the husband [24] was that the Australian property was deliberately excluded from the operation of the legal document.  No such limitation was identified by Mr C.  The wife’s position is that the legal document was in relation to property acquired both before and after the document.  She says the only property acquired before was the Suburb F property.  There is no restriction in the document[24] indicating a lack of application to any aspect of the parties’ property.

   [24] Annexure F affidavit of Ms Twardowski 29 November 2016

2. The legal document, on its construction by Mr C and on its terms as translated “preserves both the property acquired before the date of concluding this agreement as well as the property acquired later on and shall manage and administer its property independently.”

3. The parties have already obtained a remedy in Poland, by consent, that ousts the capacity of the Polish Courts to effect a division other than in the terms of the legal document.

4. It may be seen that no further remedy to adjust property interests on the basis of the parties’ marriage is available in Poland.  This is not the same as saying that no remedy is available. Rather, the remedy has been taken.

5. Parallel proceedings in a foreign jurisdiction speak to the oppressiveness of commencing proceedings in Australia, as the parties are already in pursuit of their remedy in that foreign jurisdiction.  The duplication of proceedings in those circumstances is a strong indicator of oppression, provided relief is available in that foreign jurisdiction.

6. There is a much stronger argument that local proceedings are oppressive where those parallel proceedings have already concluded in relief to each of the parties and all that appears to remain are the ancillary consequences of that relief.

Conclusion

1. The proceedings commenced in Australia by the wife conflict with the remedy obtained under Polish law by the parties to regulate their property position by virtue of their matrimonial relationship.  The particular item of property that she says should ground the jurisdiction of the Family Court of Australia has already been the subject of remedy under Polish law.

2. This is an attempt to revisit under Australian law a remedy already obtained in Poland.  The conduct of proceedings in Australia under those circumstances would be oppressive such as to render Australia a clearly inappropriate forum.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Gill delivered on 22 December 2017

Associate: 

Date:   22 December 2017