Twardowski & Twardowski And Anor
[2018] FamCAFC 153
•10 August 2018
FAMILY COURT OF AUSTRALIA
| TWARDOWSKI & TWARDOWSKI AND ANOR | [2018] FamCAFC 153 |
| FAMILY LAW – APPEAL – FINANCIAL – FORUM – Where the primary judge erred in his characterisation of an agreement governing the parties’ division of marital property and made findings that were unsupported by the evidence – Where the primary judge erred in his approach to whether Australia was a clearly inappropriate forum – Where the parties conceded error by the primary judge as to the characterisation of the agreement – Appeal allowed – Consent orders made – Costs certificates granted. |
| Family Law Act 1975 (Cth) Federal Proceedings (Costs) Act 1981 (Cth) ss 6, 9 |
| B & B (Cost Certificates) (2007) FLC 93-339; [2007] FamCA 1177 Cramer v Davies (1997) 72 ALJR 146 |
| APPELLANT: | Ms Twardowski |
| FIRST RESPONDENT: | Mr A Twardowski |
| SECOND RESPONDENT: | Mr B Twardowski |
| FILE NUMBER: | CAC | 1969 | of | 2016 |
| APPEAL NUMBER: | EA | 17 | of | 2018 |
| DATE DELIVERED: | 10 August 2018 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Ainslie-Wallace, Ryan & Aldridge JJ |
| HEARING DATE: | 19 July 2018 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 22 December 2017 |
| LOWER COURT MNC: | [2017] FamCA 1098 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Ms Curran |
| SOLICITOR FOR THE APPELLANT: | Neilan Stramandinoli Family Law |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Buckland |
| SOLICITOR FOR THE FIRST RESPONDENT: | Drexler Litigation Lawyers |
| SECOND RESPONDENT: | In person |
Orders made 19 July 2018
Appeal EA 17 of 2018 be allowed.
The orders made by Gill J on 22 December 2017 be set aside.
IT IS ORDERED BY CONSENT:
The Initiating Application for interim and final orders filed by the appellant on 1 December 2016 be stayed pending further order.
The appellant and first respondent will do all things necessary to progress, and seek an expedition of, the first respondent’s application for division of gained property in Poland.
Any of the parties be at liberty to apply, on five (5) business days’ notice, for the discharge of the stay referred to in Order 3.
The first and second respondents forthwith and within 28 days, and on an ongoing basis, provide to the appellant all documentation in relation to:
a) The property at J Street, Suburb F in the State of New South Wales, more particularly described in Folio Identifier Lot … (“the Suburb F Property”);
b) H Pty Ltd (ACN …) (“H Pty Ltd”);
c) J Street, Suburb F Pty Ltd (ACN …) (“Suburb F Pty Ltd”); and
d) The Twardowski Family Trust (“the Trust”).
The documents referred to in Order 6 above shall include but not be limited to:
a) All company documents and records, including the Constitution of H Pty Ltd;
b) Financial Statements;
c) Bank accounts;
d) Rental agreements with tenants and/or agents managing the Suburb F property;
e) Accounts and expenses; and
f) Any other document relating to either entity, the Trust or the Suburb F property.
The first and second respondents are to, within 28 days of receiving a written request by the appellant, provide documentation with respect to any transfers made out of any bank account pertaining to the Suburb F property, H Pty Ltd, Suburb F Pty Ltd or the Trust.
The first and second respondents authorise the appellant to obtain any real estate appraisal or valuation with respect to the Suburb F property and this Order shall act as an irrevocable authority to allow the appellant to obtain a valuation of the Suburb F property.
For the purpose of Order 9, the second respondent, on receiving 28 days’ notice from the appellant or her agent, take all reasonable and necessary steps to ensure that any valuer or agent appointed by the appellant be afforded access to the Suburb F property at a time mutually convenient to the valuer/agent, the second respondent and any affected third party.
The first respondent be restrained from:
a) Selling or disposing of the Suburb F property or from exercising any powers he has as a director of either H Pty Ltd or Suburb F Pty Ltd, to sell that property;
b) Further encumbering the Suburb F property;
c) Taking steps to lapse or remove the caveat lodged by the Wife and registered against the title to Suburb F property (dealing number AK …); and/or
d) Amending the Trust Deed for the Trust or changing the Trustee from H Pty Ltd or exercising any powers afforded to him under the Trust Deed, or any power afforded to him as a director of H Pty Ltd in its capacity as trustee of the Trust.
The second respondent is restrained only in relation to his exercise of powers as alternate director of H Pty Ltd or Suburb F Pty Ltd at the direction of or on behalf of the first respondent and in relation to the Suburb F property and in this regard, the second respondent be restrained from taking any action to sell, encumber or otherwise deal with the Suburb F property, or to exercise any power afforded to him as an alternate director of H Pty Ltd in its capacity as trustee of the Trust.
The first and second respondents be restrained from paying out, diverting or otherwise diminishing the amount of monies received by either of them, H Pty Ltd or Suburb F Pty Ltd as proceeds from the rental of the Suburb F property.
Orders 11, 12, and 13 do not affect the capacity of the first or second respondents to continue to meet the ongoing costs relating to the preservation of the Suburb F property such as mortgage repayments, rates and rental agent’s fees.
Liberty to apply on 5 business days’ notice.
IT IS FURTHER ORDERED:
The Court grants to the appellant a costs certificate pursuant to s 9 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the appellant wife in respect of the costs incurred by her in relation to the appeal.
The Court grants to the first respondent a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the first respondent husband in respect of the costs incurred by him in relation to the appeal.
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).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA |
Appeal Number: EA 17 of 2018
File Number: CAC 1969 of 2016
| Ms Twardowski |
Appellant
and
| Mr A Twardowski |
First Respondent
and
| Mr B Twardowski |
Second Respondent
REASONS FOR JUDGMENT
On 22 December 2017 the primary judge dismissed an application for property settlement proceedings brought by Ms Twardowski (“the wife”) in which she sought orders as between her and Mr A Twardowski (“the husband”) and the husband’s brother Mr B Twardowski (“the second respondent”). The husband’s response sought that the application be dismissed or, in the alternative, permanently stayed asserting that Australia was a “clearly inappropriate forum” in which to hear the proceedings. The husband had commenced proceedings in Poland which have not been determined. The wife objected to the exercise of jurisdiction by the Polish court.
The primary judge dismissed the wife’s application having found that Australia was a clearly inappropriate forum.
The wife’s appeal against his Honour’s orders was heard on 19 July 2018 and following submissions from both counsel for the wife and counsel for the husband, the husband conceded that given the errors of law that attended the primary judge’s orders, the appeal must succeed and the primary judge’s orders be set aside.
The parties were able to agree on orders which stayed the wife’s Australian proceedings pending the resolution of the Polish proceedings and further agreed on various injunctions to preserve and protect the Australian aspect of the case. The second respondent appeared for himself but made no submissions on the appeal. He was, however, party to the discussions about the orders and consented to their making. He sought no order for a costs certificate.
Although the orders were made on 19 July 2018, we indicated that we would provide brief reasons for allowing the appeal and for the granting of the costs certificates at a later time. These are those reasons.
The parties were married in 1989 in Poland. In 1987 the husband immigrated to Australia with the wife joining him in 1989 with their daughter. Each became Australian citizens. The parties lived in Australia until 1997 when they separated. The parties reconciled in 2001 and lived together in Poland until they separated in 2016. Both parties continue to live in Poland.
Shortly after the parties separated, the husband commenced proceedings in a Polish court seeking orders relating to custody arrangements and the payment of maintenance for the parties’ son. He sought no orders in relation to J Street, Suburb F (“the Suburb F property”). At or about the same time, the wife lodged a caveat over the title of the Suburb F property. Shortly thereafter the husband amended his application in the Polish court to claim “division of gained property”, although it was common ground that he sought no orders in relation to the Suburb F property. On 1 December 2016 the wife commenced proceedings in Australia seeking orders in relation to the Suburb F property, owned by a private family company (“H Pty Ltd”) as a holding company for the Twardowski Family Trust.
Of particular importance in the hearing before the primary judge was a document evincing an agreement between the parties which was executed on 22 June 2005 in Poland (“the 2005 agreement”). The 2005 agreement records that the parties, by entering into it, exclude the “system of matrimonial property rights” and they agree that each will preserve both the property acquired before the date of the document as well as the property acquired later on and they will manage the property independently. At the time of entering into the 2005 agreement the parties owned their respective shares in H Pty Ltd.
There was evidence before the primary judge from a Polish lawyer as to the effect of the 2005 agreement on the parties’ rights to seek adjustment of marital property. His evidence was that while the Polish Court has no jurisdiction over real property located outside Poland, given that the parties’ interest in the Suburb F property was their respective shareholdings in the company, the shares would be considered marital property.
He concluded that having regard to the 2005 agreement, it was unlikely that either the husband or wife would succeed in pursuing an application in the Polish Court for division of any real estate including the Suburb F property.
In the proceedings before the primary judge, the wife contended that Australia was the only forum in which she could obtain orders in relation to the Suburb F property.
The primary judge found that the effect of the 2005 agreement was to oust the Polish law regarding the parties’ marital property and that the scope of the proceedings then ongoing in Poland was limited by operation of the 2005 agreement.
His Honour then said:
30. 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.
…
Conclusion
33. 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.
34. 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.
Thus the primary judge dismissed the wife’s application.
The Appeal
While the notice of appeal contained ten grounds challenging his Honour’s orders, the thrust of the appeal was that the primary judge mischaracterised the 2005 agreement and its effect, made findings of fact about the operation of Polish law which were unsupported by the evidence before him, erred in his articulation and application of the relevant law and, rather than determine the issue of forum, determined the dispute between the parties.
We agree that the primary judge erred in his characterisation of the 2005 agreement and made findings about that agreement which were unsupported by the evidence.
By way of example, his Honour found at [20] that the Polish Court was likely to categorise the property located within Australia 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[.]
Both counsel for the wife and husband agreed that this proposition was not established by the expert evidence. Nor was his Honour’s subsequent finding at [21] that 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” supported by the expert evidence.
It was further agreed that the finding at [25] that “no further relief is available in Poland” mischaracterised the 2005 agreement as being a source of “relief”, whereas the expert’s evidence was that in light of the 2005 agreement, it was “unlikely” that the parties would be successful in obtaining further orders in relation to their marital property. Equally it was agreed that the conclusion at [32] that the proceedings in Poland have “already concluded in relief” was also a mischaracterisation both of the effect of the 2005 agreement and the evidence of the expert as to the Polish court’s application of it.
These errors of themselves are sufficient to cause the appeal to be allowed.
However, although the primary judge set out in a broadly correct way the legal principles relevant to the determination of whether Australia is, as the husband contended, a clearly inappropriate forum, and despite having had the benefit of detailed submissions from both parties about the application of those principles to the facts of the case, his Honour failed to take those legal principles or factual considerations into account in his determination. Instead, his Honour decided the issue solely by reference to his construction of the 2005 agreement and its effect. Further his Honour’s determination addressed itself to the issues in dispute between the parties rather than the question of forum.
For these reasons we agreed that there was merit in the appeal and that the orders of the primary judge were affected by error.
Costs Certificates
The parties sought costs certificates in relation to the appeal pursuant to the Federal Proceedings (Costs) Act1981 (Cth) (“the Costs Act”).
The conditions precedent to the ordering of costs certificates are well known and are established by the authorities (B & B (Cost Certificates) (2007) FLC 93-339). That decision, in turn, refers to the judgment of Kirby J in Cramer v Davies (1997) 72 ALJR 146.
Those decisions set out three matters which, by reference to the Costs Act, must be satisfied before a Costs Certificate is issued pursuant to either, s 6 to the respondent or s 9 to the appellant:
· The existence of a Federal appeal;
· That the appeal has succeeded on a question of law; and
· That the court concerned should have heard the appeal.
Clearly in this case there was a Federal appeal and it has been heard in the relevant sense.
It falls then to consider whether the appeal has succeeded on a question of law. Given the errors of law which attended his Honour’s orders, we are well satisfied that the appeal succeeded on a question of law within the meaning of, respectively, s 6(1) and s 9(1)(a) of the Costs Act.
I certify that the preceding twenty-seven (27) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ainslie‑Wallace, Ryan & Aldridge JJ) delivered on 10 August 2018.
Associate:
Date: 10 August 2018
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