WARREN & HORODECKI

[2016] FamCA 875

FAMILY COURT OF AUSTRALIA

WARREN & HORODECKI [2016] FamCA 875

FAMILY LAW – PROPERTY – FORUM – Where the wife initiated proceedings in Australia and the husband subsequently initiated proceedings in Poland – Where the wife is precluded by an agreement signed in Poland from seeking orders in that jurisdiction in respect to the husband’s property – Where there are substantial doubts as to the enforceability of any orders made by the Court in Poland – Where the parties and their child live in Poland – Where the parties hold no assets or superannuation in Australia – Where no orders are sought in this jurisdiction in respect to the parties’ child – Where the Court finds Australia is a “clearly inappropriate forum”– Order made that the wife is permanently restrained from continuing with these proceedings.

FAMILY LAW – EVIDENCE – Admissibility – Whether a letter from the wife’s solicitors to the husband’s solicitors containing an offer of settlement should be admitted into evidence – Where the Court would be misled should the letter not be admitted – Where the Court is not satisfied that the letter was prepared in furtherance of a deliberate abuse of power.

Evidence Act 1995 (Cth) ss 131(2)(g), 131(2)(k)
Family Law Act 1975 (Cth)

Henry v Henry (1996) 185 CLR 571
Voth v Manildra Flour Mills Pty Ltd and Anor (1990) 171 CLR 538

APPLICANT: Ms Warren

RESPONDENT: Mr Horodecki

FILE NUMBER: MLC 1510 of 2016

DATE DELIVERED: 14 October 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Melbourne

JUDGMENT OF: Justice Stevenson

HEARING DATE: 4 August 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Vohra

SOLICITOR FOR THE APPLICANT: Mills Oakley

COUNSEL FOR THE RESPONDENT: Mr Lloyd SC with
Ms Giacomo

SOLICITOR FOR THE RESPONDENT: Eddy Neumann Lawyers

Orders

1. The letter of 29 July 2016 from Mills Oakley to Eddy Neumann Lawyers, together with the letter of 2 August 2016 from Eddy Neumann Lawyers to Mills Oakley, are admitted into evidence as Exhibit 1.

2. The wife is permanently restrained from continuing with proceedings entitled and numbered MLC1510 of 2016.

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 Warren & Horodecki 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: MLC 1510  of 2016

Ms Warren

Applicant

And

Mr Horodecki

Respondent

REASONS FOR JUDGMENT

The proceedings

1. The applicant wife, Ms Warren, and the respondent husband,

   
   

   Mr Horodecki, are parties to litigation in both Poland and Australia, arising from the breakdown of their marriage.  The wife commenced the Australian proceedings by way of an Initiating Application filed on 25 February 2016, by which she sought the following interim and final orders:

   2. Final orders sought

   1.That pursuant to section 79 of the Family Law Act 1975 (Cth)
   (“the Act”) there be such alteration of the interests in the property of the Applicant Wife and the Respondent Husband as this Honourable Court deems just and equitable.

   2.That pursuant to sections 72 and 74 of the Act, the Respondent Husband pay such periodic maintenance to the Applicant Wife, for the maintenance of the Applicant Wife, as this Honourable Court deems appropriate.

   3.That pursuant to sections 72 and 74 of the Act, the Respondent Husband pay such further lump sum to the Applicant Wife, for the maintenance of the Applicant Wife, as this Honourable Court deems appropriate.

   4.A declaration pursuant to Section 78 of the Act that the Respondent Husband holds all of his right, title and interest in the real property situate and known as [Property X], Warsaw … Poland (including all equity in the property net of the mortgage loan and any other encumbrance on title), upon trust for himself and the Applicant Wife.

5.That the Applicant Wife be excused from further particularising the property and spousal maintenance orders sought by her until the completion of financial disclosure by the Respondent Husband and the valuations of property.

6.The Respondent Husband pay the Applicant Wife’s costs of and incidental to this Application.

3. Interim or procedural orders sought

1.That until further Order the Respondent Husband, by himself, his servants, employees and agents be and is hereby restrained from selling, encumbering, transferring or disposing of any interest held by him in any and all real and personal property, whether held in Australia or elsewhere, including but not limited to any
chose-in-action and/or financial resources, and including all and any and all interest in the following assets:

(a)[Property X], Warsaw … Poland;

(b)Bank Accounts and Cash reserves, including, but not limited to:

(i)Carried Interest Rights with [Company M];

(ii)Citi Bank Handlowy S.A. (Citigold) – current accounts in PLN, EUR, and GBP currencies; savings accounts in PLN and EUR, and Citi Bank Premier Miles Mastercard;

(iii)Deutsche Bank Polska S.A. – PLN and EUR current and savings accounts;

(iv)ING Direct – current account;

(v)Royal Bank of Scotland (RBS) – current and savings accounts and RBS Mastercard;

(vi)(Lloyds) TSB Bank plc; and

(vii)British Airways AMEX (“the Bank Accounts and Cash Reserves”)

(c)motor vehicles, jewellery or art work in the Respondent Husband’s possession or control;

(“the Parties’ Assets”).

2.That within twenty-eight (28) days of the date of this Order, the Respondent Husband make file and serve a Financial Statement in the form prescribed by the Family Law Rules 2004 wherein he is to provide a full and frank disclosure of all income, expenses, assets, liabilities, superannuation entitlements and financial resources earned, paid, owned and/or held by him or on his behalf, whether in Australia or elsewhere.

3.That within twenty-eight (28) days of the date of this Order, the Respondent Husband disclose to the Applicant, at his expense, all documents in his possession, power or control which relate to any asset, liability, income, expense, superannuation or financial resource in which he holds any interest with that disclosure including but not being limited to all of the Parties’ Assets.

4.That the Respondent Husband forthwith execute an authority in favour of the Applicant Wife’s lawyers, Mills Oakley, in terms of Exhibit “A” annexed hereto (with appropriate amendment, as applicable), directed to each entity or Financial Institution with which the parties hold the Bank Accounts and Cash Reserves.

5.That in default of the Respondent Husband forthwith executing the authorities required to be executed by him pursuant to order 4 herein, upon application being made accompanied by a brief affidavit sworn in support by Applicant Wife or her lawyers, a Registrar of the Family Court of Australia at Melbourne be appointed pursuant to Section 106A of the Act to execute all such authorities in the name of Respondent husband in order to give validity and operation to the terms of order 4 herein.

6.That within seven (7) days the Respondent Husband pay to the Applicant Wife the sum of AUD$200,000 by way of partial property settlement.

7.That within fourteen (14) days the Respondent Husband pay to the Applicant Wife’s lawyers, Mills Oakley, the sum of AUD$50,000, such sum to be utilised on account of the costs and disbursements incurred or to be incurred by the Applicant Wife in the conduct of these proceedings.

8.That pursuant to section 77 of the Act, until further order the Respondent Husband pay periodic maintenance of AUD$2,200 per week to the Applicant Wife, for the maintenance of the Applicant Wife, the liability for such payments to be back-dated to the date of filing of this application and the first such payments to commence within seven days of the date of this Order and to be paid thereafter by weekly direct deposit into the Applicant Wife’s nominated bank account.

9.That the parties forthwith jointly appoint appropriately qualified single experts to undertake valuations of the following assets:

(a)      [Property X], Warsaw … Poland; and

(b)All and any Carried Interest Rights issued by the Respondent Husband’s employer, [Company M]

with the expense of such valuations to be met by the Respondent Husband in the first instance.

10.The Respondent Husband pay the Applicant Wife’s costs of and incidental to this Application.

1. The wife’s Initiating Application was served on the husband at his home in Warsaw on 18 March 2016.  The husband’s Australian solicitors, Eddy Neumann Lawyers, filed a Notice of Address for Service on 26 April 2016.  The husband filed a Response to Initiating Application on 6 May 2016, by which he sought the following orders:

   Final orders sought by you the respondent

   …

   1.That the Application herein filed by the Applicant on 23 February 2016 be dismissed.

   2.That the Applicant Wife pay the costs of and incidental to this Application on a full indemnity basis.

   Interim or procedural orders sought by you the respondent

   …

   1.That the Applicant Wife be permanently restrained from continuing with proceedings initiated by her on 23 February 2016.

   2.        Costs.

2. On 5 May 2016 the husband commenced proceedings in Poland.  As to the nature of these proceedings, the husband deposed as follows:

   25.On 5 May 2016 I commenced family law proceedings for divorce, child maintenance and division of property in Warsaw.  Annexed hereto and marked with the letter “A” is a copy of the documents filed in those proceedings.

   The document annexed to the husband’s affidavit was a single page written in Polish, which was accompanied by no English translation.

3. The husband’s Polish lawyer, Ms K, swore a six paragraph affidavit on 5 May 2016.  Ms K gave scant information concerning her qualifications and experience.  In that respect, she deposed only:

   1.I am an Attorney-at-Law practising in Warsaw, Poland.

   She further deposed:

   2.I have been instructed by Mr [Horodecki] to act on his behalf in all matters concerning issues relating to the dissolution of his marriage in Poland including all issues related to the division of spousal property and children’s issues relating to the child [Z].

3.On 5 May 2016 Mr [Horodecki] commenced proceedings in the Polish Courts relating to divorce, child maintenance and division of property.  Annexed hereto and marked with the letter “A” is a copy of the documents filed by Mr [Horodecki] in those proceedings.

Ms K annexed to her affidavit a copy of the same document, which was similarly unaccompanied by any English translation.

1. The wife’s Polish lawyer, Ms O swore a detailed affidavit of 62 paragraphs on 26 July 2016.  Ms O set out her qualifications and experience as follows:

   3.I am a lawyer qualified to practise law in Poland.  I graduated with honours (merit) from full-time studies at the Faculty of Law and Administration of Warsaw University in 1999.  In my final year, I participated in a programme in studies in English and European Law run by the University of Cambridge.

   4.In 2000 I passed the entry examinations for apprenticeship as a barrister (Adwokat) and legal counsel (Radca Prawny).  In 2004, I became a barrister cum laude (with honours) at the Warsaw Bar.

   5.During my university studies, I was employed in a large
   Polish-English law office.  In 2004, I opened my own practice, focusing on litigation in the following areas: family law, civil law, commercial law, labour law, criminal law, bankruptcy law, and handling cases before the European Court of Human Rights in Stasbourg, however over time family law has emerged as my specialisation, both domestically and internationally.

   6.Since 2007, I have been an Advocate Judge of the Upper Disciplinary Court for Advocates.  In 2008, I undertook postgraduate studies at the College of Business Law at the Law Faculty at Warsaw University.  I have also undertaken studies in Spanish law.  I am fluent in written and spoken English language and also speak Spanish, German and Russian, in addition to my mother tongue, Polish.

   7.I am a member of the International Academy of Family Lawyers and since 2015 have participated in numerous family law cases with international/cross-border aspects.

2. Ms O deposed inter alia as follows:

   9.In early June 2016, I was provided by Mills Oakley with a copy of the Husband’s petition for divorce filed in the Circuit Court of Warsaw on 5 May 2016, and an English translation of that document, both of which were provided to Mills Oakley by the Respondent Husband’s Australian lawyers, Eddy Neumann, under cover of a letter from Eddy Neumann to Mills Oakley dated
   26 May 2016.  This was the true Annexure “A” of the Husband’s affidavit sworn 6 May 2016, which was omitted from the original filing, and I confirm it is not a lis pendens (that is, it is not a pending court action).  In fact, after reviewing the court files, I found this case to contain formal errors which the Husband was summoned to rectify, only doing so very recently, namely on 27 June 2016.  A court hearing was scheduled for 8:15 am on 22 October 2016, however this appears to be an error on the part of the court as this is a Saturday morning and courts are not in session on Saturdays in Poland.  Accordingly, the hearing has been rescheduled for 8.15am on 22 September, 2016 (Warsaw time).

   10.I am informed by the Wife and verily believe she has not yet been served with any Polish court proceedings commenced by the Husband, including those initiated by the pleading contained in Annexure “A” of the Husband’s affidavit sworn 6 May 2016.  I can confirm this is indeed the case as I verified this myself with the court.  It appears the pleading was not delivered to the Wife due to a legal error which was only recently rectified by the Husband, and only now will the process of delivery of the petition by the Polish court to the Wife be initiated.

   11.The Husband is able to commence and continue proceedings in Poland for custody of the parties’ daughter [Z] and/or divorce, irrespective of the pending property/financial proceedings issued by the Wife in Australia.

   12.As the Wife is a foreign citizen and, I am informed by her and verily believe, does not speak Polish, the Husband has an obligation to report this fact to the Polish Court.  Following this disclosure, it then becomes mandatory for the essence of the Polish proceedings to be translated into the native language of the respondent (in the case of the Wife, English), including the initial pleading and interpretation during the hearings.  This protective measure by the court is designed to reduce the level of disadvantage experienced by a foreigner engaged in court proceedings in Poland.  The Husband did not alert the court about this crucial information in his original pleading and was thus summoned to clarify his wife’s knowledge of/proficiency in the Polish language and whether an interpreter would be required during the hearing (which it will).

3. The wife’s Polish lawyer, Ms O deposed, in relation to the nature of the husband’s proceedings in Poland:

   58.The proceedings already instigated by the husband in Poland are solely for divorce, not division of property.

   With respect to all concerned, I was not assisted by the uncertainty in relation to the precise nature of relief sought by the husband in the Polish proceedings.

1. The husband’s application for a permanent stay of the wife’s Australian proceedings came before me for hearing on 4 August 2016.  The wife’s application for an injunction to prevent the husband from continuing with the Polish proceedings was listed for determination on the same day.

Background

1. The husband was born in 1972 and is currently 44 years of age.  He was born in Poland but moved to Sweden at the age of approximately 12 years, with his parents and extended family.  He assumed Swedish citizenship and holds only a Swedish passport.  The husband is not a citizen of Poland.  The wife was born in 1974 in Melbourne and is presently 42 years of age.  She is an Australian citizen and holds only an Australian passport.

2. The parties met in 1999 when they both were working in London.  In March 2000 the wife returned to Melbourne and the husband took up employment in Copenhagen.  The parties began to live together in London in October 2000 and spent approximately six months in Warsaw from June 2001.  The wife returned to Melbourne in November 2001 and the husband joined her in December 2001.  The parties married in Melbourne in 2002 and lived there from June 2002 until July 2003, while the husband completed a Masters degree at A University.

3. The husband returned to London immediately upon the completion of his Masters degree and the wife joined him there in January 2004.  The parties lived in London between 2004 and 2009.  For most of that period the husband worked in project finance for a bank and the wife was a business manager for the UK public service.

4. The parties’ daughter Z (“the child”) was born in 2007 in London and is presently nine years of age.  The child is a citizen of Sweden and Australia.  After the parties’ separation in January 2016 the child continued to live with the wife in Warsaw.  By agreement between the parties she spends time with the husband on a regular basis.

5. In May 2009 the family moved to Warsaw and the husband took on a position as an investment director with Company M (“M”).  This company is registered in Luxembourg and based in Paris.

6. The wife remained at home to care for the child for approximately two years after the parties moved to Warsaw.  In approximately 2011 the wife was accepted into a Masters course at B University in Australia.  The wife already held two Bachelor degrees from C University in Australia.

7. In August 2012 the family moved to City P, in the course of the husband’s employment with M.  They returned to Warsaw in June 2013, with the husband continuing to spend one to two days per week in City P.

1. In April 2014 the parties decided to purchase a family home in Warsaw (“the Warsaw property”).  On 7 April 2014 the wife signed a “conditional purchase contract” in relation to this property.  On 14 April 2014 she signed an agreement which created a “separate property regime”.  The wife’s unchallenged and uncontradicted evidence was that, at the time she executed the “separate property regime” agreement, the husband said words to her which included the following:

   “Half of the assets in my name are yours anyway.  We share everything 50:50”

   and

   “Half is yours, half is mine”.

2. On 23 June 2014 the husband entered into a contract to purchase the Warsaw property at a price of €727,000.  The recitals to this purchase contract included the following:

   [3.2]“currently, their marital relationship is governed by the separate property regime, introduced on the basis of a spousal agreement …

   [3.4]“number 86 will be purchased by [Mr Horodecki] only … [Ms Warren] hereby represents and (warrants) that she will not have and she will not assert any claims against [Mr Horodecki] …”

3. The wife gave unchallenged and uncontradicted evidence as to her understanding of the necessity for this agreement and the husband’s representations to her on that matter.  She deposed:

   I believed that I was giving permission for my husband to be sole owner of the house in his name, to be held by him on behalf of both of us.  I assumed that I had to acknowledge that the respondent was purchasing the property from his assets, because only the respondent’s name was on the deed.  Again, I had no independent legal advice, as I had trust and confidence in my husband in financial matters.

1. Further in relation to the “separate property regime” agreement the wife deposed as follows:

   34.That on 7 April 2014, we entered into a pre-purchase agreement (PPA) with the seller in the presence of a Notary Public.  The documents were only provided in Polish and this was also the case for the following two deeds relating to the purchase.  However, a sworn English translator was present to provide a live translation of the document to me.  I have since recalled the respondent informing me it was not necessary for me to attend the entire meeting and so I left earlier than he did.  As I was considered a foreigner in Poland, possessing at that time only temporary residence status with no EU attachment other than as the respondent’s spouse, the final sale was subject to approval from the Minister of Internal Affairs.  In hindsight I vaguely remember this was a requirement when we were considering the previous house purchase in 2011 however as we did not proceed further then, I had forgotten about this process.

   35.To avoid impeding the final sale should ministerial approval be delayed, the respondent suggested I give him the right to make the purchase in his sole name.  Also as I was not employed, the respondent indicated his loan application would be more rapidly processed if it was based on his income alone and that I would be exempt from any liability pertaining to the loan if my name was not on the house title.  Accordingly, we entered into a “separation of property regime” document (SPR) a week after the PPA was signed on 14 April 2014.  A true copy of that deed, translated in to English, is set out at Annexure “KW-2” of my first affidavit.

2. In her affidavit of 26 July 2016 the wife deposed:

   40.I did not receive copies of any of the deeds translated into English after signing them, nor did I demand it because once again I felt that I could trust the respondent and did not suspect any foul play until almost 18 months after the final purchase agreement was entered into (that is, until later 2015).  As I was completely dependent upon the respondent, the separation of our assets was not taken literally by me, and I assumed the respondent was genuine when he assured me that the SPR document was a mere formality intended to make the purchase of our home more expedient.

3. The wife’s Polish lawyer, Ms O, gave this opinion as to the effect of the separation of assets agreement:

   59.However, in relation to the division of property in the District Court Civil Section in Poland (distinct proceedings which need to be started separately), the court will regard the “separation of assets” notarial deed made 14 April 2014 as binding and valid, with the effect that all assets captured by that deed, including the family home at [Property X] in Warsaw, will be regarded as the sole property of the Husband.

   60.It will be difficult and most likely impossible to set aside that deed in Poland.  The form of the notarial deed ensures the deed is read out loud to the parties by the notary, with a sworn translator present and interpreting for the Wife.  Apart from that, the separation of asset regime is one of the methods by which spouses may adopt as matrimonial regime upon joint consent.  Moreover, setting aside the deed requires proving misrepresentation, error, deceit or threat and only in those circumstances would the deed be declared null and void.  Some other conditions also need to be proven, namely:  a material error (misrepresentation) occurred as to the subject of the transaction or a threat involving serious danger to a person of assets of high value.  Time limits are important too – there is a binding time of one year to bring the issue of error etc. to the attention of the other party in writing.

   61.In my view, having regard to my knowledge and experience in this area of the law, I am not aware at this point of any circumstances that give the Wife a sound legal basis to have that deed set aside in Poland.

   62.The Wife is entitled to equal share of the accumulated wealth during the marriage until the date of the deed introducing the separation of assets (that is, 14 April 2014).  It is difficult to estimate this amount but it would exclude the real property at [Property X], Warsaw, the main asset of the parties’ marriage.  The Polish Court is unlikely to exercise their power [to] identify assets outside Poland and bring these within their determination.  The Wife will encounter problems when pursuing foreign assets both in terms of costs (translations, fees, and time (response rate, if at all).  Polish Courts will send letters to financial institutions or other overseas entities, however there is no mandatory requirement for other jurisdictions to comply with their requests and thus no sanction or remedy is available to the Wife if this occurs.

4. The husband gave no evidence concerning the circumstances in which the parties entered into the separation of assets agreement.  It would appear that he elected to adopt a stance of silence in relation to the wife's version of these events.

5. The husband’s Polish lawyer, Ms K, offered no evidence in relation to the effect of the separation of assets agreement.  She asserted only as follows:

   5.Ms [Warren] has a right to apply for Orders for a property settlement and for spousal maintenance in the Polish courts.

   She deposed further:

   I have seen Ms [Warren’s] Initiating Application and have read the orders she seeks on an interim and final basis.

   Ms K gave no evidence that she had read the wife’s affidavit sworn on 22 February 2016, which made extensive reference to the separation of assets agreement.  It may be that she is unaware that the parties have entered into this agreement.

Admissibility of letter dated 29 July 2016 from Mills Oakley to Eddy Neumann Lawyers and reply dated 2 august 2016

1. An issue arose during the proceedings as to the admissibility of this correspondence.  The letter from Mills Oakley was headed “Without prejudice save as to costs”.

2. On behalf of the husband, it was contended that the letter of 29 July 2016 is admissible pursuant to subsections 131(2)(g) and 131(2)(k) of the Evidence Act 1995 (Cth). Section 131 provides as follows:

   Exclusion of evidence of settlement negotiations

   (1)      Evidence is not to be adduced of:

   (a)a communication that is made between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or

   (b)a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute.

   (2)      Subsection (1) does not apply if:

   (a)the persons in dispute consent to the evidence being adduced in the proceeding concerned or, if any of those persons has tendered the communication or document in evidence in another Australian or overseas proceeding, all the other persons so consent; or

   (b)the substance of the evidence has been disclosed with the express or implied consent of all the persons in dispute; or

   (c)the substance of the evidence has been partly disclosed with the express or implied consent of the persons in dispute, and full disclosure of the evidence is reasonably necessary to enable a proper understanding of the other evidence that has already been adduced; or

   (d)the communication or document included a statement to the effect that it was not to be treated as confidential; or

   (e)the evidence tends to contradict or to qualify evidence that has already been admitted about the course of an attempt to settle the dispute; or

   (f)the proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is in issue; or

   (g)evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced in the proceeding, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence; or

   (h)the communication or document is relevant to determining liability for costs; or

   (i)making the communication, or preparing the document, affects a right of a person; or

   (j)the communication was made, or the document was prepared, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty; or

   (k)one of the persons in dispute, or an employee or agent of such a person, knew or ought reasonably to have known that the communication was made, or the document was prepared, in furtherance of a deliberate abuse of a power.

   …

   (4)      For the purposes of paragraph (2)(k), if:

   (a)       the abuse of power is a fact in issue; and

   (b)there are reasonable grounds for finding that communication was made or a document was prepared in furtherance of the abuse of power;

   the court may find that the communication was so made or the document was so prepared.

   …

1. In my view it is necessary to set out in full the contents of this correspondence.  The letter of 29 July 2016 from Mills Oakley to Eddy Neumann Lawyers read as follows:

   Ms Jacqueline Cull
   Eddy Neumann Lawyers
   Level 1, 255 Castlereagh Street
   SYDNEY  NSW  2000

   By Email:
   [email protected]
   …@eddyneumann.com.au

   WITHOUT PREJUDICE SAVE AS TO COSTS

   Dear Practitioners,

   [Warren] and [Horodecki]– MLC1510 of 2016

   We refer to the telephone discussion between your Ms Cull and our Mr Harriss/Ms Lapchine today.

   We confirm the following proposal put on our client’s behalf on a strictly without prejudice save as to costs basis:

   1.That your client forthwith swear/affirm and serve a financial statement in the form prescribed by the Family Law Rules 2004 wherein he makes a full and frank disclosure of all income, expenses, assets, liabilities, superannuation entitlements and financial resources earned, paid, owned, controlled and/or held by him or on his behalf wherever situated (that is, for the avoidance of doubt both within, and outside of, Poland).

   2.We are content for such financial statement to be served on a strictly without prejudice basis (with regard to the Australian proceedings) and expressly acknowledge that the provision of that financial statement is not to constitute your client having acceded to the Australian jurisdiction.  However, our client is to be entitled to rely upon the contents of the financial statement and any representations contained within it in the Polish property/financial proceedings.

   3.That your client execute an authority in favour of our firm, alternatively, our client’s Polish lawyers, in the terms set out in exhibit “A” annexed to our client’s initiating application directed to each entity or financial institution with which your client holds bank accounts and cash reserves (including your client’s employer [Company M]).  Again, our client is to be entitled to rely upon any information and documents produced, pursuant to the authorities, outside of the Australian proceedings.

   4.That the parties forthwith participate in an urgent private mediation in relation to financial matters (that is, property settlement, spousal maintenance and child support) presided over by an agreed mediator, in Poland, such private mediation to be attended also by the parties’ respective Polish legal representatives.

   5.That pending the provision of the financial statement by your client, the Australian proceedings be adjourned sine die with the hearing on 4 August 2016 to be vacated and, upon your client providing his sworn financial statement, the Australian proceedings be discontinued by our client with no order as to costs.

   In putting this proposal we emphasise that one of our client’s primary objectives in commencing the Australian proceedings was to compel your client to make a full and frank disclosure of his financial circumstances, which on our client’s instructions he has to date strenuously resisted.

   Our client’s request for your client to make a full and frank disclosure of his financial circumstances is not unreasonable given her scant knowledge of your client’s financial circumstances.

   Indeed, we note that in the very first telephone conversation between your Ms Cull and our Mr Harriss on 5 April 2016, your Ms Cull acknowledged that your client would need to make a full financial disclosure to our client, and you advised that you would be sending a blank financial statement to your client for completion, and a request that we be provided with copies of the source documents we had sought in our client’s initiating application.

   Please advise by close of business Monday 1 August 2016 whether this proposal is acceptable to your client.

   If it is not, and the contested hearing in relation to the forum issue proceeds and, as we expect, our client succeeds in resisting your client’s application for a stay on the grounds that Australia is a “clearly inappropriate forum” then a copy of this letter will be produced to the Court in support of an application that your client pay our client’s costs of and incidental to that stay application.

   Such costs will be sought on an indemnity basis.

   Yours faithfully

   DAMIAN HARRISS
   PARTNER
   FAMILY LAW ACCREDITED SPECIALIST

2. The husband’s Australian solicitors replied to this letter on 2 August 2016.  This letter read as follows:

   We refer to the offer contained in your letter of 29 July 2016.

   Your offer is rejected.

   We are ready to proceed with the hearing on Thursday, 4 August 2016.

3. In her affidavit of 26 July 2016 the wife deposed that she had decided to “investigate my legal rights” during a trip to Melbourne in December 2015 / January 2016.  The wife deposed that she had received an offer of settlement from the husband in November 2015, which was put to her by a Polish lawyer whom she had engaged at his suggestion.  The wife’s unchallenged and uncontradicted evidence was that she discovered from this lawyer, for the first time, that the separation of property deed precluded her from making any claim in relation to the Warsaw property under Polish law.  Accordingly, the wife elected to obtain legal advice as to her rights under Australian law.

4. It was abundantly clear that a significant issue for the wife is full and frank disclosure by the husband of his financial circumstances.  The husband deposed that he “had not received any correspondence from [Ms Warren] or her lawyer seeking full and frank financial discovery” prior to the filing of the Initiating Application on 25 February 2016.

5. In her affidavit of 22 February 2016 the wife deposed:

   24(c)       In relation to “liquid”, or movable assets, the respondent is generally very secretive about his financial affairs and he has refused my many recent requests of him to make a full and frank disclosure of his financial circumstances for the purposes of negotiating a property settlement.  Nevertheless, I believe the respondent has a number of bank accounts and cash reserves, including, but not limited to:

   (i)carried interest rights with [Company M]

   (ii)Citibank Handlowy SA (Citigold) – current accounts in PLN, EUR, and GBP currencies;  savings accounts in PLN and EUR and Citibank Premier Miles Mastercard

   (iii)Deutsche Bank Polska SA – PLN and EUR current and savings accounts

   (iv)ING Direct – current account

   (v)Royal Bank of Scotland – current and savings accounts and RBS Mastercard

   (vi)Lloyds TSB Bank PLC

   (vii)British Airways Amex.

   The wife deposed further in her affidavit of 22 February 2016:

   25.I seek orders in the terms sought in my Initiating Application, requiring the respondent to make a full disclosure to me of his financial circumstances.  In particular, I seek orders that the respondent make file and serve a Financial Statement disclosing all of his income, expenses, assets, liabilities, superannuation entitlements and financial resources, disclosure of relevant documents in his possession regarding his financial circumstances and, finally, the execution by the respondent of authorities in favour of my lawyers, Mills Oakley directed to each financial institution with which the respondent holds bank accounts and cash reserves.

6. As noted, the wife's Initiating Application was served on the husband on 18 March 2016.  The husband has thus been on notice since 18 March 2016 that the wife seeks that he make full and frank financial disclosure.  He has been on notice also that the wife’s preferred outcome is a settlement of all issues arising from the breakdown of the parties’ marriage, on the basis that she has full knowledge of his and their financial position.  For undisclosed reasons, the husband apparently has elected to keep the wife in ignorance as to his assets, superannuation, liabilities and financial resources.

7. In her affidavit of 26 July 2016 the wife deposed:

   27.That as to paragraph 13 I say that the respondent remains in full control of our finances and to date he has not furnished me with any evidence or information about our financial position despite my numerous informal and formal requests that he do so, including requests put to him at a meeting between us both and our respective Polish lawyers (being his former Polish lawyer and my new lawyer Ms [O]) in early March 2016.

   28.Whilst I would much prefer to reach a mutually agreeable settlement with the respondent, it has become clear that the respondent is never going to voluntarily make a full and frank disclosure of his financial affairs and reluctantly I had no choice but to commence these proceedings.

8. In her affidavit of 26 July 2016 the wife set out the reasons for her reluctance to engage in litigation in Poland.  Objection was taken successfully to most of this material and only the following remained in evidence:

   50(a)       Poland is a non-English speaking country and I understand only very basic Polish.  Accordingly when confronting the local legal system I will require an English translator at all times …

9. The wife’s Polish lawyer Ms O gave evidence in relation to full and frank disclosure by litigants, in the circumstances of these parties, in that country.  She deposed:

   32.The Polish court will pose questions about the financial status of the Husband, however it possesses no cogent powers to independently investigate the actual financial circumstances of the Husband nor to verify whether any of the information provided by the Husband is accurate and/or complete.  Either of the parties might demand detailed evidence of the other party’s financial circumstances, however such motions could not be followed by the court in many instances as it is likely to significantly prolong the duration of the proceedings.

   33.The term “full and frank financial disclosure” as a specific legal concept or special procedure does not exist in Polish law.  The party demanding the division of assets normally indicates such assets they seek to be divided in his/her motion and files evidence in support of motion for the court to send requests for information to various institutions (for example, banks).  The court does not run the evidence procedure ex officio, even though in the division of assets procedure the court is obliged to establish the assets and their values (art. 684 CCP).  Therefore, the Polish court is heavily reliant upon the party seeking property orders to ascertain what is to be divided, which assumes the party is aware of the couple’s complete inventory of assets and their values and location, which, of course, is not always the case.

   34.There is no real power of compulsion in the Polish courts to compel a litigant to provide a full and frank disclosure of their financial circumstances (including in relation to assets located outside of Poland).  The court assumes the litigant will act truthfully and volunteer such information to the court and to the other litigant, and the court will inform each litigant of their obligation to do so (art. 304 CCP).  An oath can also be taken when testifying which, if breached, can lead to a criminal offence being prosecuted if the provided testimony is proven to be fraudulent.  However, in my years of practice I have never heard of such a criminal case being brought against a family law litigant in Poland.

   35.A litigant in the Husband’s position is not obliged to swear an oath deposing to his overall financial circumstances, however, upon demand he might produce source documents (e.g. bank statements, payslips, income tax returns etc.) to substantiate his financial circumstances.  However, he is not expected to do it voluntarily, but upon being summoned to produce specified papers.

   36.The consequences of a litigant failing to co-operate, or comply, in the discharge of his obligation to make a full and frank disclosure, might be of procedural or criminal nature (I refer to paragraph 34, above).  The procedural consequences might be that the court might deem a particular circumstance as existing if someone constantly refuses to produce a relevant document or information
   (art. 233 § 2 CCP) or might order some costs to be paid by such a party (art. 103 § 1 and 2 CCP).  The court cannot fine a litigant for non-compliance with the obligation to file a specified document (which might happen when a document is vested with a third party, e.g. bank – art. 251 CCP).  However, it must be noted that if at a later date additional assets from the marital property pool are identified, and were not subject to division in the original proceedings, then a new case can be instigated to divide these previously unaccounted for/undisclosed assets.  That requires a separate case with all its accompanying nuances – namely the payment of filing fees, new evidence, timeframe etc.

1. It is thus apparent that the wife has genuine concerns, which appear to be validly based, that the husband will not make full and frank financial disclosure unless and until he is compelled to do so.  It is clear that Polish law affords to the wife very limited means by which she can obtain full and frank financial disclosure from the husband.

2. I conclude, in these circumstances, that the wife commenced the Australian proceedings primarily for the purpose of obtaining financial disclosure from the husband and with the intention of utilising this information in a mediation in Poland.  I conclude that the wife's intention was to attempt to achieve an overall resolution with the husband of all issues arising from the breakdown of the marriage.

3. In my view the Mills Oakley letter of 29 July 2016 (“the letter”) should be admitted into evidence pursuant to section 131(2)(g) of the Evidence Act.  Both of the affidavits sworn by the wife give the impression that she wishes to litigate her issues with the husband in Australia and is opposed to engagement with the Polish legal system.  As noted, a large amount of the material which the wife offered in support of her opposition to engaging in the Polish legal process was struck out from her affidavits.  Nonetheless, the clear import of the wife's affidavits was that she objects to engagement with the Polish legal system.

4. As noted, the letter gives the opposite impression and indicates a willingness and intention on the part of the wife to resolve issues arising from the breakdown of the marriage in Poland.  The letter stated specifically that the wife commenced the Australian proceedings primarily to obtain full and frank financial disclosure from the husband.  The letter stated clearly that the wife would discontinue the Australian proceedings upon the husband's provision to her of a sworn Financial Statement.

5. In these circumstances, I find that the wife's affidavit evidence as to her opposition to engaging with the Polish legal system would be misleading unless the letter is admitted into evidence. I will admit the letter and the reply into evidence pursuant to section 131(2)(g).

6. I am not satisfied that the wife's commencement of the Australian proceedings is "a deliberate abuse of power" for the purposes of section 131(2)(k) of the Evidence Act.  The wife had a legal right to institute proceedings in Australia for relief pursuant to Part VIII of the Family Law Act 1975 (Cth). The Australian proceedings clearly are a "matrimonial cause" within the definition contained in section 4(ca) of the Family Law Act, being "with respect to the property of the parties to the marriage" and "arising out of the marital relationship". Section 39(4) enables "an Australian citizen" to commence proceedings pursuant to the Family Law Act in relation to "a matrimonial cause".  The wife is an Australian citizen and, accordingly, had a right to initiate proceedings in this country.

7. As noted, it seems that the wife's principal motivation in commencing the Australian proceedings was to procure full and frank financial disclosure from the husband. I am not persuaded that this motivation takes the wife's commencement of the Australian proceedings into the realm of "a deliberate abuse of power" for the purposes of section 131(2)(k) of the Evidence Act.  As noted, further, I am satisfied that the wife holds genuine and validly-based concerns that the husband will decline to make full and frank financial disclosure unless and until he is compelled to do so.  In any event, the letter will be admitted into evidence pursuant to section 131(1)(g).  The question whether Australia is an appropriate forum is a separate issue.

Consideration

1. In Voth v Manildra Flour Mills Pty Ltd and Anor (1990) 171 CLR 538 the High Court held that a party who has properly instituted proceedings in Australia has a prima facie right to have those proceedings determined by an Australian court unless Australia is a "clearly inappropriate jurisdiction". The High Court held that the mere fact that a tribunal in some other country would be a more appropriate or convenient forum for the particular proceedings does not necessarily mean that the local court is a clearly inappropriate jurisdiction.

2. In Henry v Henry (1996) 185 CLR 571 (“Henry”) the High Court held that the "clearly inappropriate forum" test is to be applied in proceedings in the Family Court of Australia. Dawson, Gaudron, McHugh and Gummow JJ said at 587:

   In Voth, this Court adopted for Australia the test propounded by Deane J in Oceanic Sun, namely, that a stay should be granted if the local court is a clearly inappropriate forum, which will be the case if continuation of the proceedings in that court would be oppressive, in the sense of "seriously and unfairly burdensome, prejudicial or damaging", or vexatious in the sense of "productive of serious and unjustified trouble and harassment".  It was also held in Voth that, in determining whether the local court is a clearly inappropriate forum, "the discussion by Lord Goff in Spiliada of relevant 'connecting factors' and 'a legitimate personal or juridical advantage' provides valuable assistance".  In this last regard, Lord Goff of Chieveley expressed the view that legitimate personal or juridical advantage is a relevant but not decisive consideration, the fundamental question being "where the case may be tried 'suitably for the interests of all the parties and for the ends of justice'".

3. Their Honours considered the matters which might properly be taken into account and observed as follows at 592-593:

   Some of the matters properly to be taken into account in a case such as the present emerge from what has already been written.  To start with, no question arises unless the courts of the respective countries have jurisdiction with respect to the parties and their marriage.  And if there is a question as to the jurisdiction of the foreign court, it may be necessary to adjourn the local proceedings to enable the foreign court to determine that question.  However, if both have jurisdiction, it will be relevant to consider whether each will recognise the other's orders and decrees.  If the orders of the foreign court will not be recognised in Australia, that will ordinarily dispose of any suggestion that the local proceedings should not continue.  However, if the orders of the foreign court will be recognised in Australia, it will be relevant to consider whether any orders may need to be enforced in other countries and, if so, the relative ease with which that can be done.  As well, it will be relevant to consider which forum can provide more effectively for complete resolution of the matters involved in the parties' controversy.

   Other considerations include the order in which the proceedings were instituted, the stage which they have reached and the costs that have been incurred.  It will also be relevant to consider the connection of the parties and their marriage with each of the jurisdictions and to have regard to the issues on which relief might depend in those jurisdictions.  Moreover, it will be relevant to consider whether, having regard to their resources and their understanding of language, the parties are able to participate in the respective proceedings on an equal footing.  The list is not exhaustive.  Rather, the question whether Australia is a clearly inappropriate forum is one that depends on the general circumstances of the case, taking into account the true nature and full extent of the issues involved.

4. The Polish lawyers for the parties expressed different opinions as to whether courts of that country would recognise Australian orders. 

   
   

   Ms K for the husband opined:

   6.If the Australian courts make orders with respect to Polish real property it is highly doubtful that the Polish courts would recognise or enforce such orders.  Matters concerning real property are reserved to an exclusive jurisdiction of the Polish court and it is highly probable that orders relating to Polish real estate that are made in Australia will not be recognised or enforced by Polish courts.

1. Ms O expressed a different view.  She opined:

   40.Ms [K] has deposed in paragraph 6 of her affidavit that "it is highly doubtful that the Polish courts would recognise or enforce" an order made in an Australian court and that "matters concerning real property are reserved to an exclusive jurisdiction of the Polish court".  This is not entirely correct.

   41.The decisions of foreign courts in civil matters are recognised by law (a rule stipulated in art 1145 CCP) as long as there are no extraordinary circumstances (art. 1146 – exceptions).  The exceptions – in brief summary – are (1) the decision is not final and binding in the country where it was issued, (2) the decision was given in a case where Poland has exclusive jurisdiction (which is not the case here), (3) the defendant was not properly delivered the claim and therefore could not properly defend his rights, (4) the party to the proceedings was deprived of the rights for defence,
   (5) lis pendens, namely, the same claim was pending in Poland prior to the claim instituted abroad (which is not the case here),
   (6) is contrary to a judgement, which was issued either in Poland or abroad but it was recognisable, between the same parties and for the same claim, or (7) the recognition would be contrary to the fundamental rules of public order in the Republic of Poland.

   42.Anybody who has a proper legal interest in the outcome, or "standing" may demand that a foreign judgement is to be recognised or, alternatively, does not deserve to be recognised (art. 1148).  Further, art. 1150 CCP states, that the decisions of foreign states in civil matters, which are suitable for execution, become execution titles after their enforceability is confirmed by the Polish court.  The enforceability will be confirmed if the decision is enforceable in the state where it was issued, and there are no obstructions listed in article 1146 CCP.  Ms [K] might make her statement to the orders which are not final in the course of the proceedings they were made in.

   43.It is true that real estate issues are reserved for exclusive jurisdiction of the Polish courts (art. 1103.8 CCP).  However, this does not embrace the matters concerning the division of assets in marital property, where the jurisdiction in Poland exists, but is not exclusive (art. 1106.2 CCP).  The case of the Wife in Australia, to my best knowledge, is not about an order on real estate or possession of it – it is a claim for among other things, (1) full financial disclosure, which is a remedy that in Poland cannot be effectively granted to the wife, (2) financial claim for maintenance.  As such, I do not foresee any problems with enforcing an Australian judgment in Poland when it is made, and especially, if a particular decision states the amounts to be executed.

1. Notably, Ms O opined that a non-final decision made in the Australian proceedings would not be enforced by the courts of Poland.  That being so, any orders for interim relief as sought by the wife would not be enforceable within the Polish legal system.  It would thus appear that any interim orders made by the Family Court of Australia would be unlikely to assist the wife.

2. Further, Ms O opined that the wife's claims in Australia do not include "an order on real estate or possession of it". In fact, the wife seeks a declaration, pursuant to section 78 of the Family Law Act, to the effect that the husband holds the Warsaw property upon trust for both of the parties.  It thus appears to me that the wife in fact makes a claim which would fall within the ambit of "an order on real estate or possession of it."

3. Accordingly, I am satisfied that there are substantial doubts as to whether any orders made by the Family Court of Australia would be enforceable within the Polish legal system.

4. As noted above, the evidence was unclear in relation to the precise relief which the husband has sought in the Polish proceedings.  As noted further, the wife's Polish lawyer expressed doubts as to whether the husband's proceedings have been instituted properly in that country.  I have referred above to the evidence of Ms O, to the effect that the husband's proceedings are defective due to his failure to provide a Polish translation to the wife.

5. It appears that the courts in both Poland and Australia could deal effectively with all issues between the parties arising from the breakdown of their marriage.  It is only in Australia, however, that the wife could seek orders in relation to the Warsaw property.  It is thus the case that Australia potentially offers to the wife a juridical advantage over the Polish forum.  As indicated above, however, I have substantial doubts as to whether any orders of this court in relation to the Warsaw property would be enforceable in Poland. 

6. I would observe that the wife sought no orders in relation to the parties' child  in her Australian Initiating Application.  At least as at the date of commencement of these proceedings, therefore, the wife evidenced no intention to invoke the jurisdiction of this court pursuant to Part VII of the Family Law Act.

7. The proceedings in both Poland and Australia each are in their infancy.  No orders have yet been made in either jurisdiction.  As noted, the letter of Mills Oakley (Exhibit 1) indicates an intention on the part of the wife to initiate a mediation in Poland and a desire to resolve all issues by agreement with the husband in that forum.  The wife thus demonstrated that she wished to take the next step in Poland, in the process of resolution of the issues between the parties in relation to the breakdown of the marriage.

1. It seems that the parties and their marriage and the issues in respect of which relief might depend (Henry) have more numerous and closer connections with Poland than Australia.  In fact, the only real connection with Australia is the citizenship of this country held by the wife and the parties' child.  Their daughter in fact holds dual Australian and Swedish citizenship.

2. The parties hold no assets or superannuation in Australia.  Their only real estate asset is located in Warsaw and any valuation issues which may arise would need to be addressed by Polish experts.  The only bank accounts of the husband are located in European countries.

3. Both of the parties live in Warsaw.  The wife deposed that she lives with the child in a rented apartment in the same district of Warsaw as the former matrimonial home.  She deposed further:

   8.I signed a monthly lease for a 2-bedroom apartment in Warsaw for myself and [the child] which commenced on 9 January 2016.  The level of financial support to be provided by the respondent for [the child] and myself has not yet been agreed or resolved.  However, in late November 2015 after I opened a personal bank account in Poland, the respondent transferred a lump sum of ZƗ 30,000 (Polish Zloty), the equivalent of approximately €6,800 (approximately AUD$10,600), to cover the cost of six-months rent.  In February 2016, the respondent paid me a further sum of ZƗ 1500 which I assumed was for [the child's] support.  I am living off these monies paid to me by the respondent with occasional expenditures made against the family credit card, which is in the respondent's name but of which I am secondary card holder.  I am doing my best to run a tight budget but these monies are barely enough to cover my rent and grocery bills.

   The husband deposed that he pays child support and education expenses for the parties' daughter.  The parties' child lives and attends school in Warsaw.  She was born in London and has lived only in England and Poland.  As noted, the wife raised no issues in relation to parenting arrangements for the child in her Australian Initiating Application.

4. The wife does not speak Polish and would require translation into English of all elements of the litigation in Poland.  On the other hand she has engaged Ms O, who speaks English and on the face of her detailed affidavit, is well equipped to advise the wife and guide her through the Polish proceedings.  The husband speaks English and has engaged lawyers in Australia.

5. Neither the wife nor the husband was present for the hearing on 4 August 2016.  The expense and inconvenience of their attending multiple court events in Australia is self-evident and warrants no further comment.

1. For these reasons, I conclude that Australia is a clearly inappropriate forum for resolution of the issues arising from the breakdown of the parties' marriage.  I will accede to the husband's application for a permanent stay of the wife's Australian proceedings.

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on

14 October 2016.

Associate: 

Date:  14 October 2016