Whung & Whung
[2011] FamCA 137
•4 March 2011
FAMILY COURT OF AUSTRALIA
| WHUNG & WHUNG & ORS | [2011] FamCA 137 |
| FAMILY LAW – PROPERTY – Application for stay of proceedings – Forum non conveniens – Whether clearly inappropriate forum – Competing applications for anti-suit injunctions – Determination that local forum is not a clearly inappropriate forum – Determination to grant anti-suit injunctions – Relevant principles for each application considered and applied |
| Family Law Act 1975 (Cth) ss79, 90AE (2) and (3) Family Law Rules 2004, Rule 6.02(1) |
| British South Africa Cov Companhia de Mocambique [1893] AC 602 Family Law, Anthony Dickey QC, 67 ALJ 538 |
| APPLICANT: | Ms Whung |
| FIRST RESPONDENT: | Mr Whung |
| SECOND RESPONDENT: | Mr C |
| THIRD RESPONDENT: | Mr V |
| FILE NUMBER: | BRC | 5594 | of | 2010 |
| DATE DELIVERED: | 4 March 2011 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | O'Reilly J |
| HEARING DATE: | 7 December 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Forrest SC, with him Mr Carter |
| SOLICITORS FOR THE APPLICANT: | McKelvey & Hu Lawyers |
| COUNSEL FOR THE RESPONDENTS: | Mr Hackett |
| SOLICITORS FOR THE RESPONDENTS: | Wesley Lawyers |
Orders
The husband’s application for a stay of these proceedings is dismissed.
Until further order the husband is restrained and an injunction is granted restraining him from commencing and/or continuing any legal proceedings in Taiwan Republic of China against the wife for dissolution of their marriage and/or any matters arising from that marriage, in particular, in respect of division of their property and spousal maintenance.
Until further order the third respondent is restrained and an injunction is granted restraining him from commencing and/or continuing any legal proceedings in Taiwan Republic of China against the wife for any declaration of beneficial ownership of any of the property of the wife and/or the husband held in the third respondent’s name and/or for the payment of compensation funds received from the L City Council in relation to its resumption of the property situate at …, G, Queensland being Lot … on registered plan no ….
These proceedings be listed at 10.00am on Monday 7 March 2011 for one full day for determination of par 3 of the husband’s response filed 16 September 2010 (directions, interlocutory restraints, interim property division, disclosure) and all extant costs applications including those already reserved and those sought in the wife’s application in a case filed 18 November 2010 pars 2, 3 and 5.
IT IS NOTED that publication of this judgment under the pseudonym Whung & Whung is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 5594 of 2010
| Ms Whung |
Applicant
And
| Mr Whung |
First Respondent
And
Mr C
Second Respondent
And
Mr V
Third Respondent
REASONS FOR JUDGMENT
Applications
There are four applications for determination.
The first is for a stay of proceedings brought pursuant to s 79 of the Family Law Act 1975 (Cth) (the Act) in this Court on the basis that it is a clearly inappropriate forum.
The second and third are for interlocutory anti-suit injunctions in relation to proceedings on foot in Taiwan Republic of China.
The fourth is for the applications for anti-suit injunctions to be dismissed.
Principal proceedings in this Court
By initiating application filed on 17 June 2010 Ms Whung (the wife) seeks a s 79 property order in relation to her marriage with Mr Whung (the husband). The wife has joined Mr C an adult child of the husband and his first wife as the second respondent and Mr V an adult child of the wife and the husband as the third respondent.
The wife seeks that this Court deal with or make orders or declarations about:
(a)property in Australia namely:
(i)B, registered in the names of the wife and the husband
(ii)D, registered in the name of the second respondent
(b)property in Taiwan namely:
(i)property registered variously in the names of:
a.Ms J (husband’s sister in law, not a party)
b.Mr K (husband’s eldest son, not a party)
c.the second respondent
d.the third respondent
e.W (not a party)
f.the second respondent and an unidentified person (not a party)
(ii)property registered in the name of the wife
(c)moneys paid to the wife, the husband and/or the third respondent by the L City Council as compensation in relation to the resumption of land in Australia at G and such further moneys as may be paid pursuant to current proceedings in the Land Court of Queensland by way of further compensation
(d)a mortgage secured against a property in H City registered in the name of the wife
(e)moneys owed to the husband or the wife by third parties by way of loan agreements, other investments including cash at bank or otherwise held and personal property.
The wife seeks several declarations as to the beneficial ownership of all of the properties held in the names of the second respondent, the third respondent and the other persons mentioned who are not parties, namely that all are held beneficially for the husband and the wife.
Importantly, the specific relief the wife seeks is that:
(a)she retain the properties in Taiwan registered in her name
(b)the husband transfer to her all his interest in the properties in Australia (B and D), the second respondent also transfer to her all his interest in D and the husband and the third respondent ensure she is given vacant possession of B
(c)she have all of the proceeds and prospective proceeds of the property at G resumption compensation (other than an amount remitted to Taiwan in 2009 which she alleges was “at the direction of” the husband)
(d)the husband have all of the Taiwan properties registered in the names of third parties, and that she “surrender” and transfer to him all her interest in those properties
(e)the husband have all moneys owed to her and the husband by way of loan agreements, all other investments of the husband including cash at bank or otherwise held and personal property currently in his possession
(f)she have all of her investments including cash at bank or otherwise held and personal property currently in her possession
(g)the husband cause the mortgage referred to, to be discharged and any debt secured by it either repaid or refinanced into his name “or the name of some other third party” and indemnify the wife in relation to all liability for that debt.
By his response filed on 16 September 2010, the husband seeks:
(a)declarations that all real property in Australia and in Taiwan registered in the names of the second respondent, the third respondent and other persons who are not parties are held by them beneficially
(b)a declaration that the third respondent held all of his legal interest in the G land beneficially and holds a “15.49/30.82” interest in the resumption proceeds of certain of the lots and the same interest in the chose in action against the resuming authority “whether present future or contingent”
(c)a declaration that a registered mortgage in the wife’s favour as mortgagee in relation to B is unenforceable and should be removed from the freehold land register
(d)“in the alternative to any part of” those matters, an order that all right title and interest in “the property of the third parties and/or chose in action” vest in and be declared to be property of the parties in such shares as the Court determines and be dealt with, as between the husband and the wife, in accordance with (e) and (f)
(e)a declaration pursuant to s 78 of the Act that all interests in real property in the names of either the wife or the husband including those in a specified list are held on behalf of the wife and the husband as tenants in common in equal shares (the list, it would appear, includes property not referred to in the wife’s initiating application, eg, a property at M in Queensland)
(f)by way of a just and equitable property division between the wife and the husband pursuant to s79 the real property, personal property and assets of the wife and the husband including cash investments, securities, shares and other forms of property be divided 60%/40% in the husband’s favour
(g)to achieve this the husband have specified properties by reference to the list in order of a stated priority (including specified property in Taiwan and in Australia, including B) up to 60% of the value of the pool with the wife to have the remainder of the specified properties in the list (including properties in Taiwan and in Australia, including the property at M) as well as cash investments or other assets to make up 40% of the pool
(h)declaratory and supportive orders and
(i)a restraint against the wife pending completion of the carrying out of the orders.
Other proceedings in this Court
On 23 April 2010, Mr V (the third respondent here) commenced proceedings in the Supreme Court of Queensland against the wife for a declaration and consequential relief concerning the compensation moneys received from the L City Council in relation to the resumption of the G land. The relief sought by him in those proceedings includes a finding that the wife has acted in breach of specified provisions of the Powers of Attorney Act 1988 (Qld) “fraudulently”, “to obtain” moneys belonging to him.
By order made by P Lyons J in the Supreme Court of Queensland on 1 September 2010, on the wife’s application, those proceedings were transferred to this Court pursuant to s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth).
Proceedings in Taiwan
Divorce proceedings instituted by husband
On 24 April 2010 (or 29 April 2010) the husband applied in the H District Court in Taiwan for a divorce from the wife.
A divorce was granted in that court on 9 November 2010.
The wife is appealing that decree. Apparently, divorces in Taiwan are fault based, and the grounds of appeal by the wife are directed to error in finding that she was the party at fault and/or to matters of procedural fairness.
The husband explained in his material, as did two Taiwanese lawyers to whom I will refer in more detail in due course, that in Taiwan a divorce order is a prerequisite to a matrimonial property order. One of the two lawyers said that divorce and property proceedings are capable of being commenced at the same time, although there cannot be a property order until there is a divorce order. The other lawyer said that a litigant “can only apply” for property division after there is a court order for divorce.
As at the hearing date, 7 December 2010, the husband made plain that whilst he had not yet instituted in Taiwan any matrimonial property proceedings he intended to do that and indeed at the time of institution of the divorce proceedings intended to do that as soon as a divorce order was obtained. I understand, from correspondence sent to the Court since 7 December 2010 that the husband now has commenced property proceedings in Taiwan: letter to the Court from the wife’s solicitors dated 4 February 2011, cc. the husband’s solicitors, indicating that the filing date of the husband’s property proceedings in Taiwan was 13 January 2011.
Other proceedings
On 18 June 2010, the third respondent instituted proceedings in Taiwan against the wife in relation to the same subject matter as his proceedings against the wife in the Supreme Court of Queensland proceedings, now transferred to this Court, but, as I understand the matter, limited to a portion of the resumption proceeds which it is alleged the wife transferred to herself in Taiwan (written submissions Mr Hackett, pars 24, 27).
Other proceedings in Australia
On about 4 August 2010, the wife instructed her lawyers to commence “no fault” divorce proceedings against the husband in the Federal Magistrates Court. An application was listed and a hearing date fixed for 13 October 2010. As at 7 December 2010, the matter had been stood over until 22 December 2010.
In Australia, unlike in Taiwan, the institution of property proceedings is not dependent upon the institution of divorce proceedings and the obtaining of a divorce order.
The detail of the applications
Against that background, it is necessary to describe more specifically the four present applications:
1.By the husband’s response filed 16 September 2010 to the wife’s initiating application filed 17 June 2010, he seeks that the wife’s s 79 proceedings be stayed “pending determination of the proceedings instituted by the Respondents against the Applicant in Taiwan”, or alternatively that there be directions (including as to pleadings in relation to the second and third respondents), interlocutory relief (including an injunction against the wife from dealing with property or assets in her name or control), an order for interim property division (namely that the wife pay the husband $400,000), orders for specific disclosure and other matters.
2.By application in a case filed 22 September 2010, the wife seeks that until further order the husband be restrained from commencing and/or continuing any legal proceedings in Taiwan against the wife for dissolution of their marriage and/or any matters “arising therefrom” in particular in respect of division of their property and spousal maintenance.
3.By application in a case filed 18 November 2010, the wife seeks that until further order the third respondent be restrained from commencing and/or continuing any legal proceedings in Taiwan against the wife for declaration of beneficial ownership of any of the matrimonial assets of the wife and the husband held in the third respondent’s name and/or for the payment of compensation funds received in relation to resumption of the G land.
4.By response filed 3 December 2010, the husband and the third respondent seek that the wife’s two applications for anti-suit injunctions be dismissed.
Past orders
On 23 November 2010, Bell J, by consent, made an interim restraint order until 7 December 2010 against the third respondent from continuing any legal proceedings in Taiwan against the wife in similar terms as mentioned in her application in a case filed 18 November 2010 against him.
On 7 December 2010, I ordered that such restraint be enlarged until judgment in these four applications, or earlier order.
Order of determining the applications
Properly, Counsel agreed that the husband’s application for a stay of the wife’s proceedings should be determined first, such that if I should determine that this Court is a clearly inappropriate forum for her property claim against the husband, it would not be necessary to consider her application for anti-suit injunctions, but that if I should determine that this is not a clearly inappropriate forum for the wife’s property claim I would then need to consider and determine her applications for anti-suit injunctions: CSR Limited v Cigna Insurance Australia Limited (1997) 189 CLR 345 at 397-8.
I would add, in the context of the passage in CSR at 397-8, that the wife does not seek that, in Taiwan, the husband and the third respondent should seek a stay or dismissal of their Taiwan proceedings. Rather, she seeks the anti-suit injunctions I have mentioned. I need not concern myself, therefore, with consideration of whether there should be an order that the husband and the third respondent seek a stay or dismissal of their Taiwan proceedings.
Principles relevant to the husband’s stay application and as to first instance approach to the matter
The test is not whether another forum is more appropriate, but whether the local court is a clearly inappropriate forum. Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 559 – 60. Henry v Henry (1995) 185 CLR 571 at 577, 586-7.
The question whether the local court is a clearly inappropriate forum requires attention to be directed to the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the foreign forum. That is to say, it focuses on the advantages and disadvantages arising from the continuation of the proceedings in the selected forum rather than on the need to make a comparative judgment between the two forums. Voth at 558.
The substantive law of the forum is a very significant factor in the exercise of the court’s discretion, but the court should not focus on that factor to the exclusion of all others. Voth at 566. Henry at 589. However, to apply the test of whether the local court is a clearly inappropriate forum, it is relevant to consider whether jurisdiction exists in the courts of another forum to deal with the same matter which is before the Australian court, and, where there are proceedings in another forum the stage at which they have reached. Henry at 592.
In Voth, the High Court adopted for Australia the clearly inappropriate forum test propounded by Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247 – 248. Voth at 564. Henry at 587. Those principles stated in Oceanic Sun at 247 – 248 per Deane J are:
… [The] power is a discretionary one in the sense that its exercise involves a subjective balancing process in which the relevant factors will vary and in which both the question of the comparative weight to be given to particular factors in the circumstances of a particular case and the decision whether the power should be exercised are matters for individual judgment and, to a significant extent, matters of impression. The power should only be exercised in a clear case and the onus lies upon the defendant to satisfy the local court in which the particular proceedings have been instituted that it is so inappropriate a forum for their determination that their continuation would be oppressive and vexatious to him. Ordinarily, a defendant would be unable to discharge that onus unless he can identify some appropriate foreign tribunal to whose jurisdiction the defendant is amenable and which would entertain the particular proceedings at the suit of the plaintiff. Otherwise, that onus would ordinarily be discharged by a defendant who applies promptly for a stay or dismissal if he persuades the local court that, having regard to the circumstances of the particular case and the availability of the foreign tribunal, it is a clearly inappropriate forum for the determination of the dispute between the parties. The reason why that is so is that, once it is accepted that the adjectives “oppressive” and “vexatious” are not to be narrowly or rigidly construed and are to be applied in relation to the effect of the continuation of the proceedings rather than the conduct of the plaintiff in continuing them, the continuation of proceedings in a tribunal which is a clearly inappropriate forum would, in the absence of exceptional circumstances being established by the plaintiff…be oppressive or vexatious to such a defendant if there is some available and appropriate tribunal in another country. …(emphasis added)
Earlier, Deane J said as to “oppressive” and “vexatious” at 247:
… If the plaintiff is not acting bona fide or in the pursuit of a legitimate advantage in pursuing the proceedings in the legal system of this country, that will, of course, make it much easier for a continuation of the proceedings to be characterised as vexatious or oppressive, since there would be little, if anything, to put into the balance against the inconvenience which would be sustained by the defendant. On that approach, “oppressive” should, in this context, be understood as meaning seriously and unfairly burdensome, prejudicial or damaging while “vexatious” should be understood as meaning productive of serious and unjustified trouble and harassment. (emphasis added)
In the application of the principles stated by Deane J in Oceanic Sun, the discussion by Lord Goff in Spiliada Maritime Corp v Consulex Ltd [1987] AC 460 at 477 – 478 and 482 – 484 as to relevant “connecting factors” and “a legitimate personal or juridical advantage” provides valuable assistance. Voth at 525. The well known passages in Lord Goff’s speech in Spiliada are too lengthy to set out.
The onus of proof will differ according to whether the applicant is an applicant to set aside service effected outside the jurisdiction pursuant to leave or an application to stay the proceedings. In the former, the onus remains on the plaintiff. In the latter, the onus is on the defendant. Voth at 564 – 5.
It is impermissible to resolve the question of whether the local court is an inappropriate forum by holding that only one court should exercise the jurisdiction to determine the proceedings, that a foreign court is the appropriate forum or more appropriate forum, and thus to conclude that the selected forum is a clearly inappropriate forum. Henry at 578. Thus, a court is not an inappropriate forum merely because another is more appropriate. Regie Nationale Des Usines Renault SA v Zhang (2002) 210 CLR 491 at [24].
As to parallel proceedings in two countries, the majority in Henry said at 591:
It is prima facie vexatious and oppressive, in the strict sense of those terms, to commence a second or subsequent action in the courts of this country if an action is already pending with respect to the matter in issue. And although there are cases in which it has been held that it is not prima facie vexatious, in the strict sense of that word, to bring proceedings in different countries, the problems which arise if the identical issue or the same controversy is to be litigated in different countries which have jurisdiction with respect to the matter are such, in our view, that, prima facie, the continuation of one or the other should be seen as vexatious or oppressive within the Voth sense of those words.
It does not follow that, because one or other of the proceedings is prima facie vexatious or oppressive within the Voth sense of those words, the local proceedings should be stayed. However, it does follow that the fact that there are or, even, that there may be simultaneous proceedings in different countries with respect to the same controversy is highly relevant to the question whether the local proceedings are 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”. And it also follows that courts should strive, to the extent that Voth permits, to avoid that situation. (footnotes omitted).
Earlier in Henry the majority said at 590:
Foreign proceedings usually fall for consideration in a context in which they involve the same or related factual issues as those involved in the local proceedings, but not the same legal issue and, perhaps, not the same parties. Even in cases of that kind it may sometimes be appropriate to grant a temporary stay of the local proceedings to allow the factual issues to be determined in the other jurisdiction. There are more compelling considerations in favour of a stay of the local proceedings if, as can happen, there are proceedings in another country which has jurisdiction to entertain those proceedings and the proceedings are between the same parties and with respect to the same issue or controversy. (footnotes omitted)
Importantly, as to the meaning of “the same issue” or “the same controversy”, in the marital context, the majority in Henry said (591-2):
If separate proceedings are commenced between husband and wife in different countries, differences in procedure, in available remedies and in the substantive law with respect to marriage and divorce will ordinarily ensure that the proceedings are different in significant respects. However, the proceedings will ordinarily be concerned with the same controversy. And that will be so even if the initiating party is not the same and even if the proceedings seek inconsistent remedies or outcomes. The marital relationship lies at the heart of all proceedings between husband and wife with respect to their marital status, especially proceedings for the dissolution of marriage. In such cases, it is the marital relationship itself which is the subject of controversy. And if the marriage is still subsisting, disputes with respect to property, maintenance and the custody of children will ordinarily be but aspects of an underlying controversy with respect to the marital relationship.
In Henry the majority then made observation as to the particular facts in that case in discussion as to the “same controversy” test. Their Honours adverted to possible distinction however between whether a marriage is still subsisting, or a divorce has occurred in that it “may not be quite so clear” that property proceedings are an aspect of the one controversy once a divorce is obtained. These observations were obiter in Henry, which expressly was narrowed to the matter of competing applications in the local forum and the foreign forum in relation to dissolution of marriage proceedings: Henry at 593.3; and see order 2 at 594. Their Honours’ observations nonetheless are important as to whether property proceedings post divorce are in the same category, which question the High Court seemed to leave open as not necessary for decision in that particular case (592):
Although the appellant first brought proceedings against the respondent in Monaco for judicial separation and, only later, commenced proceedings for divorce, both proceedings were, in essence, proceedings with respect to their marital relationship. Clearly, it was the same marital relationship which was the subject of the divorce proceedings brought in Australia by the respondent. And although it may not be quite so clear, the property proceedings instituted by the respondent in the Family Court are but an aspect of his controversy with the appellant as to their marital relationship. It may have been otherwise if they were no longer married, but so long as their marriage subsists, their dispute with respect to property is a dispute as to the rights and obligations arising out of their marital relationship and those which should attend its dissolution. As such, it is properly to be seen as part of the controversy with respect to that relationship.
At the time Henry was published on 17 April 1996 amendments to the Act already were in place so that property proceedings were not dependent on divorce proceedings either concurrent pending or completed: Family Law Amendment Act 1983 (Cth).
Finally, the majority in Henry said (592-3):
…[N]o question arises unless the courts of the respective countries have jurisdiction with respect to the parties and their marriage. …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. (footnotes omitted)
In Navarro & Jurado [2010] FamCAFC 210 O’Ryan J, although a dissentiente in the result in that appeal, at [166] usefully referred to Nygh’s Conflict of LawsIn Australia, M Davies, A S Bell, P L G Bereton, LexisNexis Butterworths, 8th ed., 2010 at [8.29]:
[8.29]…[I]t seems fairly clear from the court’s emphatic statement in Zhang that the primary judge should not weigh the relevant factors against one another. In Voth itself, the majority said that the primary judge’s focus should be ‘upon the inappropriateness of the local court and not the appropriateness or comparative appropriateness of the suggested foreign forum’, a phrase recently repeated with approval by the majority in Puttick v Tenon Ltd. Although primary judges occasionally express their conclusions using metaphors of balancing and weighing, the process is not one of weighing those factors that point towards a stay against those that point away from a stay, but rather of assessing whether there are enough factors indicating that the forum is clearly inappropriate, in which case a stay should be granted. If there are significant factors pointing to the conclusion that the chosen forum is appropriate, it is immaterial that there may be many factors suggesting that another forum might also be appropriate or even more appropriate. The factors are not to be weighed to see where the balance lies because that would, in effect, be a Spiliada-like ‘more appropriate forum’ test. …(footnotes omitted)
It is important to observe that in Voth, at 565, the majority said as to the function of the primary judge in this type of application:
…There may well be circumstances in which the primary judge may conclude that it is desirable to give detailed reasons balancing the particular weight to be given to the presence or absence of particular connecting factors and explaining why the local forum is or is not a clearly inappropriate one. Ordinarily, however, it would be unnecessary for the primary judge to do more than briefly indicate that, having examined the material in evidence and having taken account of the competing written and oral submissions, he or she is of the view that the proceedings should or should not be stayed on forum non conveniens (i.e. “clearly inappropriate forum”) grounds. (emphasis added)
Mr Hackett of Counsel, for the husband and the third respondent, urged that I should apply the principles set out in Gilmore & Gilmore (1993) FLC 92-353. However, in Henry the majority criticised the Full Court’s summary of principles in Gilmore as misleading in three important respects: see Henry at 588-9. Thus, it is inappropriate to refer to Gilmore at least in respect of the matters criticised by the High Court.
In summary, it is appropriate that I proceed to deal with the matter as outlined in Henry at 592-3.
Although I already have set out above the relevant passage in Henry at 592-3 as to relevant matters to be considered, it is convenient to refer to the non-exhaustive list in that passage broken down as follows:
1.No question arises unless the courts of the respective countries have jurisdiction with respect to the parties and their marriage.
2.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.
3.It will be relevant to consider which forum can provide more effectively for complete resolution of the matters involved in the parties’ controversy.
4.Other considerations include the order in which the proceedings were instituted.
5.Other considerations include the stage which the proceedings have reached.
6.Other considerations including the costs that have been incurred.
7.It will 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.
8.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.
9.It will be relevant to consider “the general circumstances of the case”, taking into account “the true nature and full extent of the issues involved.”
Additionally, as already explained, there is the question of whether there would be legitimate personal or juridical advantage to the wife in not staying her proceedings here, and whether continuation of the wife’s proceedings here would be oppressive or vexatious to the husband and the other respondents, “in the Voth sense”, as explained in Henry at 591.
Jurisdiction
It is not in issue that the courts of both Australia and Taiwan have jurisdiction with respect to the parties and the marriage.
The wife however seeks declaratory relief as to beneficial ownership of property in Taiwan registered in the names of non-parties to the marriage, two at least of which are not joined in the proceedings here.
In the husband’s response to the wife’s initiating application, he seeks similar relief, but only “in the alternative” to his primary case that the third party registered owners in Taiwan are the beneficial owners.
Mr Hackett submitted that this Court does not have jurisdiction to make a declaration concerning the beneficial ownership of property in Taiwan registered in names of parties who are not parties to the proceedings, submitting also that s 90AE of the Act requires that third parties be afforded procedural fairness.
This submission does not isolate the separate questions involved in it, namely first the substantive question whether this Court has any power to adjudicate upon title to land in a foreign jurisdiction, whether registered in the names of third parties or not; and secondly the procedural question of whether if there is jurisdiction to make orders in relation to the foreign land the registered owners of that land in Taiwan who presently are not parties to the wife’s proceedings can be afforded procedural fairness and if so how.
Mr Forrest submitted that the jurisdiction of this Court is in personam not in rem “so can be exercised in respect of real property situated outside the Commonwealth of Australia”. He submitted thus that “an order for one party to transfer title to real property situated overseas is not an exercise of jurisdiction in respect of title to, or possession of foreign land and does not therefore offend the Mocambique rule”: British South Africa Cov Companhia de Mocambique [1893] AC 602. He submitted that this Court can make findings in equity in aid of in personam relief concerning real property situated overseas, so as to bind the husband and the wife, and at least the parties presently joined.
Whilst as a statement of broad principle such is not incorrect, there are potentially several difficulties with its application in this particular case. In respect of these, I will make observation. However, I make plain that what follows is observation only and that it is not necessary to dispose of the present applications for me to form any concluded view on the matters I will raise. If the proceedings are not stayed, these aspects of the matter however should I think be the subject of preliminary determination prior to trial.
First, whilst it is clear that there is in personam relief available for an order for mere transfer of foreign land, the relief sought by the wife indeed seems to invite adjudication in respect of “title to” foreign land, because before this Court could order transfer of the foreign land in Taiwan it would need to presume to adjudicate upon the title to it that is, whether the third party registered owners hold legal title for themselves beneficially or for the husband and the wife beneficially. The Mocambique rule makes plain that the English (and Australian) courts will not exercise jurisdiction to determine ownership of foreign land because “any such controversy can only be determined in the State in which it depends: Mocambique at 623.4; 625.5; 626.2, 631.5, 633.5. See also Nygh (above) at [3.108]-[3.110]. In this context, “title” and “ownership” are not limited to bare legal title but right to it or its proceeds by proven beneficial ownership.
In this regard, it is most relevant that one of the two Taiwanese lawyers to whom I have referred made plain that Taiwanese law does not recognise “blind” trusts, and that title derived via a trust (bare legal title held on trust beneficially for another) will be recognised only if the “trust relation” is “registered with the Taiwanese government” so that if the trust is not registered “the relevant property will be beneficially owned by [the] person in whose name the property is”: affidavit of N, pars 18-19. The other Taiwanese lawyer said it is difficult to succeed in a claim that there are assets held by third parties on trust for the divorced parties (“even more difficult” than another matter he mentioned not directly relevant to this part of the analysis): affidavit of O , par 3.4.
Secondly, whilst it is plain that Mr Forrest’s submission is based upon the ability of this Court to grant in personam relief concerning foreign land, by an in personam order for its transfer, thus involving “the first exception” to the Mocambique rule: see Nygh at [3.121]-[3.128]; [3.130]; and whilst the discussion in Nygh at [3.121] refers to authority to the effect that a court has jurisdiction “to determine whether an alleged trust in respect of foreign land exists” (see also, in the same paragraph, the authorities mentioned at footnote 342), it is the case that “not every equitable obligation can be enforced in this way”: [3.124]. Attempted “enforcement” of transfer of title in this particular case would be against the registered third party owners in Taiwan, either by the husband and/or the wife, not against the husband and/or the wife. In this context it is important to bear in mind that whilst proceedings may be in personam, that does not mean necessarily that ensuing orders are in personam, because orders concerning status are orders in rem. Thus, in Family Law, Anthony Dickey QC, 67 ALJ 538, Dr Dickey said:
A final point that may be conveniently be made here is that orders under s 79 are in personam, as well as the proceedings under this section. As is well known, the fact that proceedings are in personam does not necessarily mean that the ensuing orders are in personam. For example, proceedings for dissolution of marriage are in personam, though an order dissolving a marriage is in rem. Orders in rem are orders which concern status. They are binding against the whole world. …
Earlier, Dr Dickey said:
Because property proceedings under s 79 are in personam, and because the power of the Court to alter property interests under this section is otherwise unrestricted as to location, at the very least an order can always be made requiring one of the parties to deal with property in a particular way – for example, transfer it to the other party – regardless of where in the world the property is situated. In this way, an order under s 79 can certainly be directed against property abroad.
However, the following in Dr Dickey’s article also is apt:
It may be objected that an order under s 79 cannot be made in respect of foreign property as this offends the common law jurisdictional bar on domestic courts adjudicating upon rights to foreign land as laid down in British South Africa Co v Companhia de Mocambique ([1893] AC 602). It now seems clear, however, that this jurisdictional limitation does not apply to proceedings under s 79, as the rule in the Mocambique case concerns proceedings only to determine existing title to, or existing right to possession of, foreign land. Proceedings under s 79 are of a different character. They concern rights arising from a matrimonial relationship, even though these rights may ultimately involve the disposition of foreign land. This point was made in respect of equivalent English proceedings by the Court of Appeal in Hamlin v Hamlin ([1986] Fam 11 at 21). The Family Court may nonetheless always decline in the exercise of its discretion to make an order under s79 in respect of foreign land. It may do so, for example, if the order cannot be enforced in the foreign jurisdiction: see In the Marriage of Allison (No 2) [(1981) 7 Fam LR 953, at 954]; Hamlin v Hamlin (supra, at 18).
It is plain that the Court will not make an order that cannot be enforced.
Mr Forrest argued that because the wife is not seeking the transfer to her of any of the properties in Taiwan (see her specific claim set out earlier, in which she seeks a Taiwan property in her name, the B and D properties in Australia, all of the G proceeds and her personal investments, cash at bank and personal effects) this is not a problem. However, her claim is predicated that if the pool be measured by inclusion of the properties said to be held by third parties in Taiwan beneficially for the husband and the wife, the husband could or should then enforce the trusts in Taiwan, or that this Court should and would determine that somehow he could have them beneficially and that the third parties accordingly without fight would yield them up to him. This does not seem to be very fair, nor a just and equitable result. The effect of such an order would be to require the husband to have the trusts recognised in Taiwan which, according to the two Taiwanese lawyers either cannot be done because “blind” trusts are not observed, or, at the least, that such would be “difficult”. Thus, unless this Court could be satisfied either that the third party registered owners in Taiwan voluntarily would yield the properties to the husband, or that the husband in Taiwan separately could bring proceedings for transfer of those properties to him, or enforce transfer orders made in this Court against third parties, this Court may well decline, in the exercise of its discretion, to make any order under s 79 premised upon some ability of the husband to gain the foreign lands for himself beneficially.
Nygh (above) includes the following discussion at [27.27] and [27.31]:
[27.27]As the jurisdiction of the Family Court is in personam, there is no objection in principle to the exercise of jurisdiction in respect of assets whether moveable or immoveable outside the jurisdiction. Thus, in respect of real property situated overseas, an order that one spouse transfer his/her interest to the other is not an exercise of jurisdiction in respect of title to or possession of foreign land, but an order in personam against the respondent, and so would not offend the Mocambique rule. (emphasis added, footnotes omitted)
However, in this passage importantly the authors refer to “an order that one spouse transfer his/her interest to the other”, which seems to contemplate that the foreign land the subject of such an order be held in the title of one spouse or the other. That is not the case here.
Thus, more relevant to this particular case is the following in Nygh, under the subheading “Choice of law”:
[27.31]Where a Court having jurisdiction under the Family Law Act exercises jurisdiction, it will apply its own law to the determination of the dispute, and may adjust the property rights of the parties regardless of any rights acquired or vested in them by foreign law, although it should take care not to make any order in relation to assets situated abroad that might operate in direct conflict with the laws of the country of situation, conformably with the principle that courts acting in personam will not make orders that would require the respondent to do something that was illegal in the place in which it was to be done. (emphasis added, footnotes omitted)
In Michael Wilson & Partners Ltd v Robert Colin Nicholls [2008] NSWSC 1230 (see footnote 72 to par [27.31]), Brereton J (a current co author of Nygh) considered an objection to an order for the production and inspection of documents in the context of whether the New South Wales Supreme Court can order a party to act in contravention of a law of a foreign State. He said:
[6] There is, so far as I have been able to ascertain in the limited time available, a dearth of authority on the question. Counsel referred to none. In Ex parte Pollard (1840) Mont & Ch 239 (referred to in Duder v Amsterdamsch Trustees Kantoor [1902] 2 Ch 132 at 140) Lord Cottenham LC said (at 250):
It is true that in this country contracts for sale, or (whether expressed or implied) for charging lands, are in certain cases made by the Courts of Equity to operate in rem; but in contracts respecting lands in countries not within the jurisdiction of these Courts they can only be enforced by proceedings in personam, which Courts of Equity here are constantly in the habit of doing: not thereby in any respect interfering with the lex loci rei sitae. If indeed the law of the country where the land is situate should not permit or not enable the defendant to do what the Court might otherwise think it right to decree, it would be useless and unjust to direct him to do the act; but when there is no such impediment the Courts of this country, in the exercise of their jurisdiction over contracts made here, or in administering equities between parties residing here, act upon their own rules, and are not influenced by any consideration of what the effects of such contracts might be in the country where the lands are situate, or of the manner in which the Courts of such countries might deal with such equities.
[7] That passage indicates that a Court of Equity will not make an order in the nature of an injunction or a decree for specific performance which would require the defendant to do something that was illegal in the place in which it was to be done. (emphasis added)
The real difficulty in the present case thus, potentially, is whether “the first exception” to the Mocambique rule can be used by this Court to make an in personam order, but one which would operate in rem, in relation to foreign land, in circumstances in which the order would need to be premised upon a finding on equitable principles of the existence of a resulting trust or trusts, but where “the law of the country where the land is situate should not permit or not enable the defendant to do what the Court might otherwise think it right to decree”, such that “it would be useless and unjust to direct him to do the act”.
As mentioned however I do not need to decide this aspect of the matter at present. It needs to be fully argued. For present purposes, in relation to the present stay application, I would simply observe that Mr Forrest’s submission is not without difficulty in two respects: first, whether indeed the relief the wife seeks would require this Court to adjudicate upon title to or ownership of foreign land, relating to its beneficial ownership, and make orders about it under “the first exception” to the Mocambique rule; and secondly whether in the particular circumstances of this case, even if there were no jurisdictional impediment by that exception, this Court in the exercise of its discretion might not exercise jurisdiction, for the reasons canvassed.
Thus, in relation to “the first exception”, in Mocambique itself, Lord Herschell LC observed as to the Courts of Chancery (626-7):
Story, in his Conflict of Laws, ss. 544, 545, although he says that to the extent of the decision in Crawstown v. Johnston there may, perhaps, not be any well-founded objection, nevertheless expresses the view that the doctrine of the English Courts of Chancery on this head of jurisdiction seems carried to an extent which may perhaps in some cases not find a perfect warrant in the general principles of international public law, and therefore it must have a very uncertain basis as to its recognition in foreign countries so far as it may be supposed to be founded upon the comity of nations. … (emphasis added, footnotes omitted)
It is one thing thus to speak of the existence of jurisdiction, but another to consider, properly, whether there might be circumstances giving rise to it not being exercised.
I am concerned thus as to any too ready assumption that this Court would exercise jurisdiction in respect of the properties in Taiwan registered in the names of third parties, by making an order for their transfer to the husband, or alternatively not making such an order but premising a just and equitable s 79 property order upon a finding that these properties are held by way of resulting trust for the husband and the wife (despite Taiwanese law). Hence, even if jurisdiction lies, there may be good discretionary reason not to exercise it.
N’s evidence that a “trust relation” must be “registered with the Taiwanese government”, and that a relationship of trust will not be recognised absent such registration contemplates the existence of legislation in Taiwan to this effect. If indeed land ownership in Taiwan is governed by legislation of the Taiwanese government then, by way of preliminary observation, this Court may be unlikely to make orders contrary to those foreign land laws and so decline to exercise jurisdiction even if it exists.
Having made these observations, however, in relation to particular elements of the wife’s claim here, it is clear nonetheless that this Court has jurisdiction under s 79 to make such just and equitable property order as between the wife and the husband as in all of the circumstances it is able to make.
The matter of joinder raised by Mr Hackett as to who, properly, should be parties to the wife’s proceedings here is a matter for her legal advisers including as to methods of service in Taiwan.
For my part, despite s 90AE(2)and (3), which are provisions conferring power to make orders binding third parties, and the statutory mandate in s 90AE(3)(c) that the power is conditioned upon third parties having been “accorded procedural fairness in relation to the making of the order”, such does not affect the procedural principle that ordinarily the persons and entities must be joined as parties to the action in order to be bound, in particular in relation to real property rights and interests. Further, s 90AE(3)(c) must be read conformably with rule 6.02(1) Family Law Rules 2004:
RULE 6.02 – NECESSARY PARTIES
6.02 (1)A person whose rights may be directly affected by an issue in a case, and whose participation as a party is necessary for the court to determine all issues in dispute in the case, must be included as a party to the case.
Example
If a party seeks an order of a kind mentioned in section 90AE or 90AF of the Act, a third party who will be bound by the order must be joined as a respondent to the case.
Thus, if the wife does not join the registered owners of the properties in Taiwan in respect of which she seeks to have declarations of beneficial ownership by herself and the husband, she would meet considerable difficulty in relation to this part of her claim.
Mr Forrest, in this regard, relied on Moran & Moran (1995) FLC 92-559, a single justice decision by Bulley J. In Moran, consideration seems not to have been given to the circumstance that the daughter in that case, despite any declaration between the husband and the wife, could maintain a claim to beneficial ownership of a real property asset, even if declared “as between the husband and the wife” to belong to the husband. For example, in any later proceedings between the husband and the daughter, the presumption of advancement might apply.
In that case, in interlocutory proceedings for the striking out of claimed declaratory relief between the husband and the wife on the basis that necessary third parties were not joined, his Honour considered that the form of declaration sought made it clear that no order was sought “against” any third party or the property of any third party which would be binding on the third party, but only declarations in relation to property “as between the husband and the wife” (Moran, 81,581). However, in affording declaratory relief consideration must be given to the utility of such a declaration, as a discretionary factor. To my mind, there would be little utility in such a declaration if a third party registered land owner was not joined so as to be bound by it: Lancely & Lancely (1984) FLC 92-491 (cited in Moran at 81,584). Although in Moran reliance was placed on Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337 at 354, there is nothing in this authority to suggest that if third party rights are to be the subject of any meaningful declaration (that is, one with utility) the relevant third parties ought not be accorded procedural fairness and joined in the proceedings.
However, these matters, whilst important, and are not matters affecting jurisdiction in relation to the wife’s s 79 claim.
This Court has jurisdiction in relation to the matter cross-vested to it by P Lyons J in the Supreme Court of Queensland (relating to beneficial entitlement of the G land resumption proceeds) and it is appropriate to exercise it for the purposes of the s 79 proceedings in order to ascertain the nature and extent of the divisible pool: Valceski v Valceski [2007] 70 NSWLR 36 at [34], [59], [65] per Brereton J.
The Courts in Taiwan, it would appear, may not have jurisdiction in respect of the controversy as to beneficial ownership of the G land resumption proceeds. Even assuming, however, for the purpose of argument that the courts in Taiwan have jurisdiction in relation to that matter, it is appropriate for those proceedings to be determined in this Court as part of the “one justiciable controversy”: Valceski (above) at [65].
The third respondent’s separate claim in Taiwan relates also to the G land resumption proceeds, namely a portion of the proceeds which it is alleged the wife transferred to Taiwan in her name. That, too, is part of the same controversy. Once beneficial ownership of the whole proceeds be determined here, as between the wife, the husband and the third respondent, the amount belonging to the husband and/or the wife (being the whole or a portion) will be regarded as part of the pool. If the wife already has received a portion of the proceeds beneficially, that can be brought to account in the usual way, that is, by way of “add back” to the extent of moneys spent other than for her proper maintenance or other recognised exception where add back is not ordered, or if not spent be regarded as available funds in the pool for the purpose of a just and equitable order. Indeed, if the wife be proved to be not entitled to any part of the G land resumption proceeds, but that she has received such, this Court also could order that she disgorge any such moneys to the husband and/or the third respondent.
The courts in Taiwan, it is common ground, cannot make orders effectively dealing with the B and D properties. This has effect that in any property proceedings in Taiwan the former matrimonial home at B, according to the wife’s Counsels’ submissions, would “never be dealt with”.
In conclusion, whilst this Court and the Taiwanese courts have jurisdiction with respect to the parties and the marriage, there are difficulties or potential difficulties in respect of the jurisdictional reach of each country’s courts in relation to land in the other country.
Recognition
The wife relied on evidence by O, legal practitioner in Taiwan, who said:
3.5… [I]f a property division order is made by the Australian court it is highly like that it will be endorsed by the Taiwanese Courts. Whilst endorsement does not mean immediate enforceability in Taiwan, an application could then be made to the Taiwanese Court based on that endorsement for enforcement of such an endorsed order. The prospects of enforcement are then good.
The husband relied on evidence by O, legal practitioner in Taiwan, who said:
21.… Even where a judgment in relation to property settlement is obtained in Australia, a party would need to bring the judgment back to the Taiwanese court and persuade the Taiwanese court to recognize the judgment. Taiwan as a country has the territorial right over its citizens to make a judgment for its citizens. This territorial right is not taken lightly, and in my experience a party would find it very difficult to persuade the Taiwanese court to recognise the Australian judgment.
The evidence thus is conflicting on the point whether the Taiwanese courts would recognise a s 79 order made by this Court. One lawyer says that “endorsement” is highly likely, and does not preclude the prospect of enforcement following endorsement, saying that the prospects of enforcement are “then good”. The other says that in his experience recognition would be “very difficult”.
There is no basis to prefer the evidence of either lawyer as to recognition of a s 79 order. By way of observation however neither lawyer said categorically that recognition could not be achieved.
Mr Hackett submitted that the relief the wife seeks here in relation to the real properties in Taiwan “will not be able to be enforced in Taiwan”. This submission is not supported by either lawyer’s evidence. The thrust of the submission, however, it must be acknowledged, relates to the quite different matter of the law in Taiwan relating to “blind” trusts, which I have mentioned earlier, and will deal with further in a different context below.
Mr Hackett’s submission should be understood in this context, that is, if a s 79 order purported to deal with real properties in Taiwan not registered in the names of the husband or the wife.
Mr Forrest submitted that orders of the Taiwan courts are not likely to be recognised here, other than in relation to money judgments (written submissions, par 22, footnote 3), which analysis would appear to be correct:
The Supreme Court, High Courts and District Courts of Taiwan are item 25AB on the table in the Schedule to the Foreign Judgments Regulations 1992, which by regulation 4 “are taken to be superior courts” for the purposes of the Act. In this regard, see section 5(2) of the Foreign Judgments Act 1991. The Regulations do not appear to extend the operation of Part 2 of the Act, which relates to the reciprocal enforcements of judgments, to non-money judgments, insofar as regulation 5(7) provides that if the Governor-General is satisfied that substantial reciprocity of treatment will be assured in relation to non-money judgments, those regulations must provide for the kinds of non-money judgments to which the Part applies by specifying or describing certain things. In the absence of such specification or description in the Regulations, it does not appear that the Regulations would be effective to extend Part 2 to non-money judgments. This analysis is supported by Davies, Bell and Brereton in Nygh’s Conflict of Laws in Australia (LexisNexis Butterworths, 8th ed., 2010): see Chapter 41, note 35.
Mr Hackett said as to “the likely relief the husband seeks in Taiwan” i.e. a “50/50 split” (written submissions, par 44):
44.… [T]hat does not necessarily require an alteration of the property interests in Australia or Taiwan on the basis that the property in the names of third parties will not be recognised as property of the husband and the wife. What will result because of the greater property held in the wife’s name is a money judgment in favour of the husband.
Even if (for the sake of argument) a 50/50 split by the Taiwanese court may be likely, Mr Hackett’s submission that what “will” result necessarily would be a money judgment in favour of the husband would seem to prejudge the matter and is at best a prediction. Possibly, however, it may be a reliable prediction if in Taiwan the husband should seek against the wife only a money judgment in his favour, for the reason of non-enforceability here of any non-money judgment.
Mr Forrest resisted that any proceedings should result only in a money judgment for the husband, having regard to the significant pool of property which the wife contends should be identified as able to be divided between the husband and the wife including the properties registered in Taiwan in the names of third parties.
The position appears to be, nonetheless, that a money judgment in Taiwan would be recognised here, and that a non-money judgment would not.
The relief the wife seeks here is to surrender or “give up” the properties in Taiwan registered in the names of third parties (once the declarations she seeks are made, if they are made), so that the husband have their value in the pool, and that she “transfer” all “her” interest in those properties to the husband. The trust laws in Taiwan, however, once more fully analysed, potentially would support Mr Hackett’s submission, that is to say, if this Court were minded to make the declarations sought by the wife and order such transfers, that they would or might not be able to be enforced in Taiwan.
Mr Forrest submitted adamantly that the style of the orders sought by the wife in her initiating application here has effect that the wife is not asking for any property in Taiwan to be transferred to her, such that, according to his submission, the wife would not be seeking to register any order of this Court in any Taiwanese court. This submission has difficulty because, if in this Court the wife were to be granted the relief she seeks, she nonetheless is seeking an order that she “transfer” to the husband all “her” interest in the properties in Taiwan registered in the names of third parties, so that, seemingly, either the husband would need to endeavour to register such an order by this court in Taiwan, or outside any court process, endeavour to have the registered owners in Taiwan transfer legal title to him.
In relation to recognition, I need to advert again however to the potential difficulties for the wife in relation to jurisdiction for the declarations and orders she seeks, and even if there be jurisdiction, whether as a matter of discretion this Court would exercise it. Thus, if the wife’s proceedings here are not to be stayed, there should be no assumption that any resultant s 79 order along the lines she seeks would be made, if it would be futile, in the sense of incapable of enforcement. This has been discussed already. Thus, the better view may be that Mr Hackett’s concern is not one which, at the end of the day, may be likely to arise. On the other hand, if in proceedings here this Court should conclude that indeed secret trusts obtain in relation to the properties in Taiwan registered in third parties’ names, and see fit to exercise jurisdiction in relation to them, and if those registered owners are parties to the wife’s proceedings here, potentially this Court could make in personam orders against them. This would require joinder, service, and amendment thus to the wife’s initiating application seeking relief directly against the registered owners in Taiwan. In s 79 proceedings here, the Court will have regard to the parties’ “wish lists” (that is, the specific relief sought by the wife and the husband) but will refuse it if it is unable to be enforced, and make some other order, being the best it is able to make, if considered just and equitable in all of the circumstances. It is premature yet however to consider precisely what order as between the husband and the wife, or any other parties, this Court may be likely to consider to be both just and equitable, and enforceable.
It is sufficient to observe that, in relation to recognition, difficulties obtain either way. The centrality of the issue for the wife is whether this Court could, or would, make some sort of order to operate in personam in relation to the registered owners of the properties in Taiwan (which, as I have said, would require their joinder) in the context of greater difficulty for the wife of the reality that even if her proceedings here continue, this Court might be constrained to apply Taiwanese land law (indeed Taiwanese statutory land law) to the properties in Taiwan registered in the names of third parties. There is thus no necessary conclusion that a question of recognition would arise if the wife’s proceedings here not be stayed, because in any event she might not obtain an order which would require foreign recognition for its enforcement.
Complete resolution
Mr Hackett submitted that complete resolution could be effected in the Taiwan courts because “all of the respondents” are prepared to submit to that jurisdiction, the non-parties who have land interests in Taiwan are located there and the bulk of the parties’ property, that is, including that contended for by the wife, is in Taiwan.
However, the relevant passage in Henry speaks of “complete resolution of the matters involved in the parties’ controversy”.
Although, in her proceedings here, the wife faces the difficulties to which I have referred in relation to the real properties in Taiwan registered in the names of third parties, it would appear she has even less chance of resolution in Taiwan in relation to them.
The Taiwan courts, it would appear, may be precluded from entertaining the wife’s claim for a declaration that the Taiwan properties she lists in her initiating application are held by third parties beneficially for the husband and the wife, on the basis that Taiwan does not recognise “blind” or “resulting” trusts.
N, the lawyer relied on by the husband, said:
18.In Taiwan there is a trust law which states that if you purchase property and intend there to be a trust relation, that trust relation must be registered with the Taiwanese government. Attached hereto and marked Annexure “A” is a true copy of that Taiwanese trust law.
19.This is especially the case with real estate property, because if a relationship of trust is to be established or found, it must first be properly registered with the relevant government office in Taiwan. If this does not occur the relationship of trust will not be recognised and the relevant property will be beneficially owned by the person in whose name the property is. Generally in Taiwan if a person purchases property and registers that property in the child’s name, the purchase will be recognised as a gift for that child.
20.Only recently, on or about 23 January 2009, the death tax in Taiwan was reduced to 10% of the net property value. Before that, the death tax was set at up to 50% depending on the asset, the beneficiary and other factors. This is and has been a significant factor considered by many parents at the time when making gifts of property to their children to avoid the operation of death tax upon the asset.
O, the lawyer relied on by the wife, said:
3.4Courts in Taiwan will generally order an equal division of properties between two spouses. A claim for a greater than equal share of matrimonial assets by a party can be considered by the court for the sake of justice, but such claims rarely succeed. It is even more difficult to succeed in respect of a claim that there are assets held by third parties on trust for the divorced parties.
As I understand N’s evidence, par 19, his view is not just that it is “difficult to succeed” in a claim that assets are held by third parties on trust for divorced parties (O’s view) but that (as stated in par 19) if the trust is not registered “the relationship of trust will not be recognised”.
In Taiwan therefore, if N’s evidence be a correct statement, the wife could not have resolution of this part of her claim. It would be defeated instantly as bad in law. Thus, as conceded by Mr Hackett (written submissions, par 62; and see par 67(f):
67. …
(f)The determination of the issue concerning the alleged “blind” trusts alleged by the wife in Taiwan and Australia is decisive in Taiwan against the relief she seeks. …(emphasis added)
In short, the wife in Taiwan, realistically, would be precluded from litigating this part of her claim, which is a large part of it, Mr Hackett conceding that the bulk of the property in contest is in Taiwan. It is not an answer to say that the wife could have “resolution” of this part of her claim by its being “decisive” against her. She seeks “resolution” in the sense of being able to litigate it in a forum which will hear her legal argument as to the potential application of equitable resulting trust principles. Whilst it is by no means certain that in the wife’s proceedings here trust law as it applies in Australia would apply to real property held in Taiwan and, presumably, governed by statute there (a matter not argued in these applications), I will say more about this below when dealing with juridical advantage), certain defeat (or even likely defeat) in Taiwan would preclude the prospect of “resolution” in the sense explained, that is, at least the chance to have this Court hear argument in relation to exception to the Mocambique rule (discussed already) in relation to jurisdiction and its exercise.
The husband, it appears, had a building company in Taiwan wound up in insolvency in 1987, and the husband has not owned real property registered in his name in Taiwan since then.
Instead, the wife argues, all of their properties in Taiwan were purchased either in her name or the names of third parties, including their children.
Indeed, even in Australia, the wife points to property which she alleges is beneficially owned by her and the husband, but purchased in the names of the second respondent and/or third respondent.
Mr Hackett drew attention to N’s evidence, submitting that the circumstance that Taiwanese law does not recognise “blind” trusts has particular relevance to Chinese culture which includes the practice of gifting property to children and family members.
However, there is not “resolution” for the wife if she be immediately foreclosed from presenting factual argument, for example, as to ownership of the source of funds used to purchase the real properties in Taiwan held in the names of third parties and thus immediately foreclosed from claiming these as marital assets. Mr Forrest submitted (written submissions, par 25):
25.… [I]t appears, on their evidence [the Taiwanese lawyers] that beneficial ownership of property determined through equitable principles such as the principles applicable to the determination of resulting trusts is not something that will be available as a remedy or source of relief for the Wife in litigation in Taiwan. Such equitable principle is applicable in the determination of the proceedings here in this Court. Accordingly, it is only through litigation of the matters in dispute in this country that justice can really be done for the Wife in respect of her claims that property was acquired by the Husband and the Wife in Taiwan and, importantly, here in Australia but for certain reasons registered in the names of third parties. There is ring credibility, prima facie, about the assertions when regard is had to the fact that the Husband has no property registered in his name in Taiwan. The Wife’s explanation for this is totally plausible and lends, prima facie, support to her case.
Mr Hackett, despite earlier contention that this Court does not have jurisdiction to make declarations concerning the beneficial ownership of property in Taiwan (par 48 above); and that in any event such relief will not be able to be enforced in Taiwan (par 85 above), in another part of his submissions seemed (inferentially) to contend to the contrary, namely that in Australia the equitable principles relating to the determination of resulting trusts would apply to the property in Taiwan held in the names of third parties. Thus, at written submissions, pars 62 and 67(f), he contended:
62.…There is a significant legal advantage to the husband litigating that issue [alleged trusts in Taiwan and Australia] in Taiwan as Taiwanese law does not recognise “blind” trusts of the type alleged by the wife. …
…
67.…
(f)…The husband therefore has a significant and justified legal advantage to want to prosecute proceedings there [in Taiwan]. …
This part of Mr Hackett’s written submissions at par 67(f) followed immediately his submission that the determination of the “blind” trust issue alleged by the wife is “decisive” in Taiwan against the wife (set out earlier).
My reference to the last two sentences in Mr Forrest’s written submissions, par 25, is limited to the context of observing that if the proceedings here are not stayed, and if equitable trust principles apply to the properties held by third parties in Taiwan, on the evidence gathered to date she has a respectable case to present, that is to say, it could not be said at the outset that it is hopeless or unarguable, or that there is no proper controversy to resolve concerning the alleged trusts.
The wife thus, at least potentially, can argue for resolution of the trust issues here, but in Taiwan that remedy it appears is likely to be foreclosed to her.
Specific argument was not presented as to whether equitable trust principles can apply to real property in a foreign country governed by a foreign statute which does not recognise trusts of the type alleged. Rather, Mr Hackett’s submissions, demonstrated at pars 48 and 85 above, contended against both jurisdiction for this, and enforceability, but at pars 62 and 67(f) inferred to the contrary; whereas Mr Forrest’s submissions contended in favour of jurisdiction and enforceability, but seemed not to address the question whether, even if there is jurisdiction here, in the exercise of discretion it would or should be exercised, as discussed.
It is not inappropriate, however, that the wife have the opportunity to raise her trust arguments here, in circumstances in which, it would appear, such would be foreclosed to her in Taiwan.
All other matters raised are justiciable here and can be afforded complete resolution in the one proceeding in this Court, including in relation to the Supreme Court proceedings transferred here pursuant to the cross-vesting legislation. There are separate Land Court proceedings, however, this Court will be able to take notice of any judgment the Land Court gives and take such into account.
The proceedings transferred from the Supreme Court cross-vested here can be consolidated with the s 79 proceedings. I have referred already to the third respondent’s separate proceedings in Taiwan, which similarly can be dealt with in the same proceedings here.
Order in which proceedings instituted
The wife instituted her proceedings here on 17 June 2010 for a s 79 property order.
The husband instituted proceedings in Taiwan on 24 April 2010 (or 29 April 2010) for a divorce from the wife.
It is common ground that in Taiwan an order for property division cannot be obtained until after a divorce order is obtained. It is not however the case that property proceedings in Taiwan cannot be commenced until after a divorce order is obtained.
N, the lawyer relied on by the husband, said:
10.An applicant for divorce in Taiwan has two years after the granting of the divorce by the court to make application for division of the matrimonial assets or property of the marriage. The court cannot make orders for the division of the matrimonial assets or property of the marriage until the order for divorce is obtained.
11.An applicant may apply to the court for orders for the division of the matrimonial assets or property of the marriage at the same time the litigant applies to the court for the divorce. However, in my experience the litigants often suffer stress from the marriage, and it complicates and delays the divorce proceeding where the application for division of matrimonial assets is made at the same time.
12.Usually people prefer to do the divorce first where circumstances are such that they do not want to continue together as a married couple, and where they want to separate as soon as possible. For some people in Taiwan this is the primary consideration.
13.Often the practice will be dictated by the individual’s needs. In [the husband’s] case, the breakdown of the marriage had already brought on so much stress and strain for him that it was a requirement for him to have the divorce finalised as soon as possible. In his case the property settlement proceeding should start after the completion of the divorce.
14.After the divorce is granted, the couple should endeavour to agree to a distribution of the property of the marriage. If one party does not cooperate, the other party can apply for the residual (sic) property after the dissolution of the marriage. It usually takes about 6 to 10 months to proceed to trial.
O, the lawyer relied on by the wife, said to similar effect: his affidavit, par 3.1, but, contrary to N’s evidence, par 11, that an applicant can apply for both divorce and property proceedings at the same time, said that in Taiwan a party “can only apply” for property division after he/she obtains a divorce order. Possibly, O’s statement should be read as relating to a limitation period, rather than inability to commence property proceedings “at the same time”. However, I do not think anything turns on this in relation to the present matter.
The husband said that he commenced the divorce proceedings in Taiwan with the intention of seeking a division of matrimonial property in Taiwan after the grant of the divorce. It was submitted on his behalf, thus, that because in Taiwan the divorce and property proceedings are “in one line”, “the husband commenced his proceedings before the wife commenced her proceedings”.
There was dispute in the material as to whether the wife was served with the husband’s divorce application before she commenced her s 79 proceedings here. The husband alleges service on her on 7 May 2010. The wife denies that she was served with the husband’s proceedings before the commencement of her proceedings here on 17 June 2010. Mr Hackett submitted that the wife’s denial is false, based upon evidence and matters referred to in his written submissions, par 30. The wife deposed that she was not aware of the husband’s divorce proceedings in Taiwan “until late June” 2010, that is, after she commenced her proceedings here. The materials relied upon by Mr Hackett include an affidavit by the wife’s lawyer, O, which by par 4(a) and Exhibit A show a “confirmation notice of service of the divorce proceeding and a mediation notice on [the wife] on 7 May 2010 whereby [the wife’s] personal seal is affixed”; and a letter by the wife to the Taiwan court 10 July 2010 (Annexure H to the husband’s affidavit), referring to contact by her with the Taiwan court on 17 June 2010, containing the words that “The petitioner was only aware of the existence of this lawsuit [the husband’s divorce suit] upon the contact”, that is, her contact with the Taiwanese court on 17 June 2010. A cursory glance however at the detail in the wife’s initiating application filed here on 17 June 2010 shows the strong likelihood of its having been prepared ahead of the filing date.
Mr Forrest eschewed such a notion, relying not only on the exception to the Mocambique rule (previously referred to) but also on three further authorities, namely Damberg v Damberg (2001) 52 NSWLR 492; [2001] NSWCA 87; National Commercial Bank v Wimborne (1978) 5 BPR [97423]; and Paramasivam v Flynn (1998) 90 FCR 489. Wimborne did not relate to foreign land holdings, but rather, liability under a guarantee. Nor did Paramasivam, but rather, the proper law relating to fiduciary obligations, referring to application of the law with the “closest and most real connection” with the parties’ transactions: 502B-D; 503E-F.
I will deal now more closely with Damberg.
That decision was by Heydon JA (as he then was) with whom Spigelman CJ and Sheller JA agreed, on appeal from Purdy J, a single justice of this Court, the appeal being determined in the New South Wales Court of Appeal in the circumstances explained at [3]-[4].
By way of background, Heydon JA at [12] explained that the parties to matrimonial proceedings, namely the husband and the wife, had acquired substantial properties in Australia although most of their lives had been lived in Germany. The husband was a land developer whose modus operandi was to buy blocks of land in Germany, subdivide them, then lease or sell them.
At [35], Heydon JA outlined the issues on appeal, the first of which was:
(a)Was the presumption that the transfer of the German properties by the husband to the children was an absolute transfer rebutted with the consequence that the children held only on resulting trust?
At [36] (recorded only in the full text of the judgment, not in the part extracted in 52 NSWLR 492, which omitted pars [36]-[97]), Heydon JA said:
[36]The first main issue considered by the trial judge was whether the German properties acquired by the children in 1983 and 1988 out of which the advances made to the parents were sourced were owned by the children on resulting trust for the husband, or absolutely. The question was whether the presumption that the placing of property in the name of a child where the costs of purchase were paid by the husband, which raises a presumption that the husband intended to make a gift to the child, had been rebutted. The trial judge found that it had been, and the husband accepted this finding before moving to arguments critical of the reasoning about tax avoidance. On the other hand, the children attacked the trial judge's finding on the presumption of advancement, before moving to arguments defending the trial judge's reasoning about tax avoidance.
This paragraph is important as to the structure of the balance of Heydon JA’s judgment although, as mentioned, pars [36]-[97] were excised from the reported version.
At [109], Heydon JA referred to Martin v Martin (1959) 110 CLR 297 and to Nelson v Nelson (1995) 184 CLR 538, as to the “intersection” between resulting trust principles and illegality, referring in particular to Deane J and Gummow J in Nelson (at 564), in particular as to the policy of relevant statute upon any claimed resulting trust.
In relation to his Honour’s reference to Nelson, I would refer further, without elaboration, to that decision at 552.2, 553.5, 554.5, 555.3 and 564, as to the construction of statutes relating to trusts, statutory prohibitions in relation to trusts, statutory policy in relation to trusts, the “equity of the statute” doctrine and other matters.
At [113], Heydon JA observed, in the context of that particular case:
113.The content of German law is vital from several points of view.
At [115], his Honour said (again, in the context of that particular case):
115.Secondly, the content of German law is crucial to the inquiry: “did the husband’s conduct defeat the policy of the German statute?” According to Deane J and Gummow J that is an essential inquiry, and according to McHugh J it is an inquiry which is relevant… . Further, Deane J and Gummow J’s inquiry into policy includes an inquiry as to whether the statute actually prohibits the conduct or merely attaches consequences to it…
Although the “intersection” between resulting trusts and illegality referred to concerned illegality of purpose in relation to the formation of a trust (not directly applicable here) the importance lies in the necessity to observe the foreign law, in particular foreign statutory law, in relation to resulting trusts and land holdings, and any underlying policy of the foreign statutory law.
At [188]-[143], his Honour considered extensively the authorities concerning the proposition that if the foreign law is not proved, the lex fori applies. That is not a concern here. However, the foreign lawyers yet have to put into evidence whether the Taiwanese law they contend as to “blind” trusts is statute law (which, presumably it is) and if so its precise terms.
In the course of that dissertation, at [127] and [139], his Honour referred to authorities concerning making foreigners accountable to Australian law: at [127] referring to Elders IXL Ltd v Lindgren Pty Ltd (1987) 79 ALR 411 at 415; and at [139] referring to cited authority concerning the circumstance of the lex fori applying. In Elders, Fox J, when dealing with an application to serve a cross claim outside the jurisdiction was required to determine whether a prima facie case had been pleaded. He said “I have nothing before me as to Japanese law, assuming it to be the proper law” (in that case, in relation to a contract) and:
…people in Japan are not to be made liable or threatened with liability on the basis of the law of an Australian State or States, when they have, expressly, or by operation of law, made Japanese law applicable.
Although plainly enough his Honour there was dealing with a “governing law” clause in a contract, by analogy, if people in Taiwan have conducted their purchase of land transactions on the basis of the operation of Taiwanese statutory law, it might be difficult to persuade this Court that resulting trust principles applicable in Australian law should apply.
At [139], Heydon JA said:
139.My second observation relates to the suggestion, in some of the authorities, that the application of the lex fori is limited to the common law as settled by judicial decisions and excludes all statutory provisions. Here again I think the expressions of the rule have been coloured by the historical context and go back to a time when the great body of English law was judge-made; statutes were creatures of exception, outside the general body of the law. …
Thus, as to the effect of foreign statutes, Heydon JA said at [161]:
161.…[A] second order problem arises when the children seek to escape the consequences of the trial judge’s finding of resulting trusts by relying on the Martin v Martin line of authorities and on Nelson v Nelson. Those cases compel attention to the precise terms of the relevant prohibition, if any. Those terms can only be found in German law, and in what is probably enactment by the federal German legislature. …
I would refer also to Heydon JA at [163], [166], [168] and [173]-[176]. In particular, I will set out [163] and [168]:
163.Beyond those considerations, however, there is a decisive factor. The resistance of the children to the resulting trusts which the trial judge found depends on showing some aspect of German law defeating those resulting trusts. They appeal to Nelson v Nelson. The High Court majority in Nelson v Nelson called for a close analysis of the relevant German statutory provisions. To substitute for an analysis of relevant German statutory provisions an analysis of irrelevant Australian statutory provisions is simply to fail to carry out the mandate of Nelson v Nelson.
…
168.Here the children contend that it is their right to prevent the resulting trusts from being recognised by reason of what they allege is non-compliance with German law. Under Nelson v Nelson, the only way in which the children's right can be vindicated is by imposing a condition that the tax allegedly owing be paid. The "enforcement of the right claimed" by the children "would indirectly involve the execution of the revenue law of" Germany.
In short, by reference to those paragraphs, if the land transactions between the husband and the wife and the third party registered owners in Taiwan occurred in Taiwan, and not in Australia, there may be little to recommend that Australian trust law should apply to them.
Thus, these principles potentially do not assist Mr Forrest’s submissions, nor the wife’s case as to juridical advantage here.
I would add, by further reference to Paramasivam, observation as to authority concerning the governing law of expressed trusts: 502B-C; 503B and D-E. However, in relation to resulting trusts, it would appear that they are to be governed by the law of the place in which their subject matter, if land, is situate.
Moreover, the choice of law principles, in relation to equitable obligations, is succinctly put in Nygh (above) at [21.10]:
[21.10]…A number of cases are regularly cited in support of the proposition that, notwithstanding the existence of international elements, any equitable claims in respect of which an Australian Court has jurisdiction are to be governed by the law of the forum. Conventional objections to any choice of law rule identifying the law of the forum as applicable law include that [examples added].
This is to be contrasted with the paragraph in Nygh at [27.31] (already set out, but which requires repetition here):
[27.31]Where a Court having jurisdiction under the Family Law Act exercises jurisdiction, it will apply its own law to the determination of the dispute, and may adjust the property rights of the parties regardless of any rights acquired or vested in them by foreign law, although it should take care not to make any order in relation to assets situated abroad that might operate in direct conflict with the laws of the country of situation, conformably with the principle that courts acting in personam will not make orders that would require the respondent to do something that was illegal in the place in which it was to be done. (emphasis added, footnotes omitted)
Thus, as explained, there may not be juridical advantage to the wife in her proceedings here, in relation to the issue of her claimed relief concerning beneficial ownership of real properties in Taiwan registered in third parties’ names.
As to the husband, the case presented for both parties assumed juridical advantage to the husband in property proceedings in Taiwan, so that he would have “something to gain” by property proceedings there.
This I think, is a fallacy. If, in proceedings in Taiwan, both parties would be precluded from raising “blind” trusts, they would be equally disadvantaged, in such proceedings. Indeed, there could be no juridical advantage to the husband, in proceedings in Taiwan, unless, by extra curial or secret arrangement with the third party registered property owners there, they, individually, recognised the alleged trusts, but inequitably excluded recognition of the wife as an equal beneficial owner, to the husband’s ultimate advantage. Indeed, even the notion of juridical advantage to the husband in property proceedings in Taiwan assumes that, by some secret arrangement, he, exclusively of the wife, would gain 100% beneficial interest in those properties, or such beneficial interest as was arranged when those properties were purchased. Otherwise, in proceedings in Taiwan, there would be juridical disadvantage to both the husband and the wife, by the exclusion of the properties registered in third parties’ names so that the pool overall would be smaller and thus they would have together a pool for division of considerably less value.
The submission, thus, of juridical advantage to the husband of the parties’ property proceedings being conducted in Taiwan carries with it, by necessary implication, that the pool (by judicial determination there of the nature and value of the property pool for division between the husband and the wife) would not be able to include the properties in Taiwan registered in the names of third parties.
In short, if the view is correct that in relation to the real properties in Taiwan registered in third parties’ names, both this Court, and the Taiwan courts, would apply the same law, then plainly there would be no juridical advantage to the wife in maintaining her proceedings here, and no juridical advantage to the husband by the property proceedings being conducted in Taiwan.
If there is such advantage, however, Zhang (above), as discussed in Nygh at [8.29], already set out, makes clear that the aspect of juridical advantage, like all other relevant factors, is not to be balanced and weighed, one against the other, the focus being upon the question whether such factors indicate that the local forum is or is not a clearly inappropriate forum, such that it is immaterial that a foreign forum might be “more appropriate”, as such would involve a Spiliada-like test of “more appropriate forum”, rather than the Oceanic, Voth and Henry test whether the local forum is a “clearly inappropriate forum”.
In essence, thus, the primary judge should not “weigh” the relevant factors one against the other, but rather focus on the question whether the wife’s chosen forum here is clearly inappropriate, having regard to relevant matters, and not on “the comparative appropriateness” of the suggested foreign forum.
Thus, whilst Mr Hackett’s submission, if it be correct (which I doubt), of juridical advantage to the husband of the parties’ property proceedings being conducted in the Taiwan courts, such is not to be “weighed” against the wife’s contrary legitimate personal or juridical advantage here, if such exists, to see “where the balance lies”. If there is juridical advantage to the wife (although the specific matters which I have raised were presumed, but not properly argued), there is no good reason to deprive the wife of it, and even if neutral in terms of juridical advantage to the wife, no reason to conclude, by reason of that, that her proceedings here are in a clearly inappropriate forum.
It would be interesting to know, in this context, whether the third party registered owners of the real properties in Taiwan, put in contention by the wife, regard themselves as beneficial owners, by generous bounty, or out and out gift, or whether, in truth, they acknowledge that they hold their legal title beneficially for the husband and the wife or either of them. They know this. That is to say, they know whether, leaving aside application of the Taiwanese land laws, they would assert beneficial interest, or whether it would be unconscionable for them to do so, for example, on the basis that they paid no moneys towards their acquisition, or whether, in relation to any children who are registered owners, or near relatives, they would assert the presumption of advancement. A question to be asked of them, and each of them, is whether, if the properties held in their names legally were to be sold, they would claim for themselves the full proceeds of sale, or yield them up to the husband and the wife.
These are matters which, in conscience, only they, by reason of the conferment of legal title on them, know.
It will be interesting thus, regardless of Taiwanese land law, to see whether the wife would be able to obtain affidavits from each of the third party registered owners in Taiwan that they do not regard themselves as beneficial owners.
This, however, is to digress.
It is sufficient to observe that the wife may or may not have juridical advantage here, a matter not presently very clear.
If the wife’s proceedings here not be stayed, however, the several matters mentioned concerning jurisdiction in relation to the properties in Taiwan registered in the names of third parties, according to the Mocambique rule, and exceptions to it, and, whether if there is jurisdiction according to the Mocambique rule, it should be exercised or refused, as discussed, and the choice of law principles and their application in this regard, will all need to be determined, probably, as mentioned, by way of preliminary determination in the wife’s proceedings here if they not be stayed.
None of these prospective matters, however, prevent my ability to consider, for the purpose of the husband’s stay application, whether there is or is not juridical advantage to the wife in continuing her proceedings here. At best, in order to dispose of this aspect of the matter, it is sufficient to observe that this is not clearly established.
Further, Mr Hackett’s submission as to juridical advantage to the husband if the property proceedings are heard in Taiwan demonstrably is a fallacy as there would be juridical disadvantage to both, as explained.
Husband’s ill health
The list of matters to be considered in Henry, to which I have referred, expressly is not exhaustive.
The husband has deposed to “severe illness”. Since 1998, he has suffered diabetes. Since 1993, hypertension. Since 2008, heart disease. Since 2008 and 2009, neurotic depression. He has had two angioplasty surgery episodes in 2008 and 2009; “emergency treatment” in Brisbane in March 2010, with recommendation for “stent surgery”; and hospitalisation in Brisbane in August 2010, with a diagnosis of “nephrotic syndrome” and nephrotic “renal impairment”, requiring renal biopsy and removal of bone marrow. He cites his medication record as at 9 September 2010, listing some 16 medications.
He deposed that his health conditions continue, and that he wishes to continue to receive health care for his health conditions in Taiwan. He deposed to experiencing difficulties with health care practitioners in Australia, as he does not speak English, such that an interpreter is required. He feels “more comfortable” receiving health care in Taiwan where he can speak his own language “freely and directly” with his health carers.
He deposed that, if he is required to “answer” the wife’s property proceedings here, he would be likely to require “ongoing medical treatment in Australia”, which he believes would be productive of “serious and unjustified trouble and harassment” to him.
These matters are referred to in his affidavit filed 9 November 2010, at various paragraphs: 20, 54-66.
However, by the husband’s own deposition, he spends about 9 months per year in Taiwan, and thus, presumably, 3 months per year either in Australia, or elsewhere.
Litigation for the husband will be stressful, whether in Taiwan or here.
The circumstance that in any event he spends 3 months per year outside Taiwan, seemingly for his own other purposes, has effect that I am unable to conclude that his health circumstances are such that he cannot “answer” (participate in) the wife’s proceedings here. Indeed, the husband’s evidence is couched in terms of “preference”, not medical necessity.
Oppression and vexation
It is for the husband to prove (supported by the second respondent and the third respondent) that continuation of the wife’s proceedings legitimately commenced here would be oppressive or vexatious to him in the Voth sense.
In Zhang, the High Court made clear that “it is not a question of striking a balance between competing considerations”: Zhang at [78].
In my view, the wife’s commencement of her proceedings here was not vexatious or oppressive, although commenced later in time than the husband’s proceedings in Taiwan. Arguably, it is not to the point whether she knew or did not know of the husband’s earlier commencement of proceedings in Taiwan, for reasons already explained, namely, the basis of actual or perceived legitimate juridical advantage to her here.
As to whether continuation of the wife’s proceedings here would be oppressive or vexatious to the husband, or the second respondent and/or the third respondent, on the basis of the relevant matters for consideration I am unable to so conclude, and would determine that the husband (and the second respondent and the third respondent) have failed to discharge the requisite onus on them.
In short, on the basis of the matters which I have canvassed, there is nothing “oppressive”, that is, “seriously and unfairly burdensome, prejudicial or damaging”, and nothing “vexatious”, that is, “productive of serious and unjustified trouble and harassment” to the husband and the second and the third respondents if the wife’s proceedings, legitimately commenced here, continue.
It would be repetitious to summarise the matters I have mentioned, and thus unnecessary to do so.
Conclusion – is this a clearly inappropriate forum
Taking into account all of the evidence, all of the relevant matters as I have analysed them, and Counsels’ submissions, I conclude that this Court is not a clearly inappropriate forum for litigation of the husband’s and the wife’s property proceedings, nor the third respondent’s proceedings cross-vested here.
I need not summarise all of the matters to which I have referred, and I will not do so. Instead, I would refer to the detailed analysis of all relevant matters which I have set out.
There is nothing in that analysis upon which, properly, I could conclude that this Court is a clearly inappropriate forum for determination of the property proceedings between the husband and the wife. The wife’s proceedings legitimately have been commenced here. The wife cannot have complete resolution (or at least the opportunity for that, in the sense I have explained) of all issues she wishes to litigate, if her proceedings do not continue here. The matter of recognition I have discussed. Discretionary factors relating to the order in which proceedings were instituted, the stage they have reached, and costs implications, have been discussed. The “connecting factors” have been discussed, as has personal or juridical advantage. The husband’s health and preference for health treatment in Taiwan has been discussed.
My conclusion that there is no oppression or vexation (in the Voth sense) has been explained.
In Henry, the final matter for consideration was expressed to be “the general circumstances of the case”, taking into account “the true nature and full extent of the issues involved.” These matters have been fully canvassed.
In the exercise of my discretion therefore, having regard to all relevant matters, I conclude that the wife is entitled to pursue her proceedings here as a not clearly inappropriate forum with the result that the husband’s application for a stay will be dismissed.
In so determining, I would refer again to the principles in Oceanic, per Deane J at 247-8 (set out above already), in particular that the exercise is a quite “subjective” one, and a matter for “individual judgment”, and “to a significant extent” one of “matters of impression” for the individual primary judge.
Moreover, as Deane J cautioned in Oceanic (247-8, set out above) the power to order a stay should only be exercised “in a clear case”, and “the onus lies upon the defendant” to satisfy the local court that it is “so inappropriate a forum” for determination of the proceedings “that their continuation” would be oppressive or vexatious to the defendant.
There is, in the circumstances of the matters I have discussed, no “clear case” for a stay and, as I have determined, the husband has failed to discharge the onus on him to demonstrate that this is a “clearly inappropriate forum” for the determination of property proceedings between the husband and the wife.
The result is that I will dismiss the husband’s application for a stay.
I would refer to the view of the majority in Voth at 565 as to the function of the primary judge “in this type of application”, that whilst the individual primary judge may see fit to give “detailed reasoning”, ordinarily it would be unnecessary for the primary judge to do more than “briefly indicate” that, having examined the materials, and taken into account the competing written and oral submissions he/she is of the view that the proceedings should or should not be stayed. In this particular case, however, in deference to Counsels’ arguments, and the very significant matters potentially affecting the rights of the parties, which I have mentioned, it has been necessary to provide detailed reasoning.
Other proceedings in Taiwan
Mr Hackett referred (written submissions, par 31) to other proceedings between the husband and the wife in Taiwan, namely:
(a)criminal defamation proceedings, in which the wife’s Taiwanese lawyer appeared on 23 February 2010; and
(b)criminal forgery proceedings, in which the wife’s Taiwanese lawyer is instructed.
Mr Hackett conceded, properly, during the course of argument that the existence and currency of these proceedings is not relevant to the husband’s stay application. Indeed, such is correct.
The wife’s claimed anti-suit injunctions
The two proceedings in Taiwan just referred to, properly, are not the subject of the wife’s application for anti-suit injunctions.
As previously outlined, the wife’s claims for anti-suit injunctions are limited as follows:
2.By application in a case filed 22 September 2010, the wife seeks that until further order the husband be restrained from commencing and/or continuing any legal proceedings in Taiwan against the wife for dissolution of their marriage and/or any matters “arising therefrom” in particular in respect of division of their property and spousal maintenance.
3.By application in a case filed 18 November 2010, the wife seeks that until further order the third respondent be restrained from commencing and/or continuing any legal proceedings in Taiwan against the wife for declaration of beneficial ownership of any of the matrimonial assets of the wife and the husband held in the third respondent’s name and/or for the payment of compensation funds received in relation to resumption of the [G] land.
It is plain that an anti-suit injunction against proceedings in the foreign forum is not the automatic corollary of refusal to order a stay of proceedings in the local forum, and must rest to be determined on discrete factors.
It is fundamental also that anti-suit injunctions are not made against the foreign court, but against the individual litigants there.
Broadly, there are two bases for the grant of an anti-suit injunction, as explained in CSR (above) per the majority, at 390-3.
The first is sourced in the Court’s inherent power to prevent its processes being abused, and its power to protect the integrity of those processes: CSR at 391.
The second is the power deriving from the Chancery Court to make orders in restraint of unconscionable conduct or the unconscientious exercise of legal rights: CSR at 392-3; or, where, upon equitable principles, the institution or continuance of proceedings in the foreign court would be “according to the principles of equity”, vexatious or oppressive: CSR at 393-4:
…Thus, it was said in Carron Iron Co v Maclaren [(1855) 5 HLC 416 at 437] that “[w]here [there is]…pending a litigation here, in which complete relief may be had, [and] a party to the suit institutes proceedings abroad, the Court of Chancery in general considers that act as a vexatious harassing of the opposite party, and restrains the foreign proceedings”.
…
[I]n Bank of Tokyo Ltd v Karoon [[1987] AC 45 at 60] Robert Goff LJ pointed out, correctly, in our view, although without specific reference to underlying equitable principle, that foreign proceedings are to be viewed as vexatious or oppressive only if there is nothing which can be gained by them over and above what may be gained in local proceedings. On the other hand, they are vexatious or oppressive if there is a complete correspondence between the proceedings or, in terms used in Carron Iron Co, if “complete relief” is available in the local proceedings. (emphasis added)
See also, in this Court, Lederer & Hunt [2007] FamCA 55 at [26]-[30]; [33]-[46]; [49] and [69].
At this juncture, it is necessary to consider discretely the two quite separate anti-suit injunction applications brought by the wife.
In the first, as against the husband, there is at first blush no basis to stay his divorce proceedings in Taiwan. He has been granted a divorce, the subject now of appeal by the wife. However, if an anti-suit injunction is to be granted, it is I think appropriate to include (as sought) proceedings in Taiwan in relation to dissolution of marriage, in case the wife’s appeal be allowed, and because of the view in Henry as to their being “one controversy” in respect of a marital relationship.
In relation to the wife’s application for an anti-suit injunction that the husband be restrained from “commencing and/or continuing any legal proceedings” in Taiwan in respect of “division of their property and spousal maintenance” Mr Hackett expressly relied on the “same submissions” as relied on by the husband to support his stay application, acknowledging that (absent any stay or anti-suit injunction) there will be parallel proceedings in Taiwan and in Australia.
Mr Forrest put the wife’s case for anti-suit injunction against the husband’s institution of matrimonial property proceedings in Taiwan upon the terms of the equitable principles which I have set out, namely, that because of the existence of the wife’s property proceedings here (if a stay be refused) in accordance with the principles of equity it would oppressive and vexatious for the wife to both have to prosecute her case here and defend parallel proceedings in Taiwan; that the foreign proceedings should be viewed as vexatious and oppressive because “there is nothing to be gained” by them over and above what might be gained in the proceedings here; and there is (or would be) “complete correspondence” between the wife’s matrimonial property proceedings here and any matrimonial property proceedings which the husband might commence in Taiwan.
I accept this submission. In so doing, I am conscious that the case presented for both parties presumed juridical advantage to the husband in property proceedings in Taiwan, so that he would have “something to gain” by property proceedings there. As demonstrated, however, this would appear on its face to be a fallacy. If, in proceedings in Taiwan, both parties will be precluded from raising “blind” trusts, they will be equally disadvantaged in property proceedings there. There could be no advantage to the husband unless, by extra curial or secret arrangement with the registered owners of properties there, they recognised the trusts, individually, but inequitably excluded recognition of the wife as equal beneficial owner, to the husband’s ultimate advantage. Indeed, even the notion of juridical advantage to the husband in property proceedings in Taiwan assumes that by some secret arrangement he, to the exclusion of the wife, would be able to take advantage of his, or his and the wife’s, beneficial interest in those properties, or such beneficial interest as was arranged when the properties were purchased.
Based on these principles, I am satisfied that an anti-suit injunction against the husband is appropriate.
In Lederer v Hunt (above) the Full Court at [30] set out part of O’Ryan J’s reasoning at first instance including [91]-[95], concerning his Honour’s satisfaction also in that case that there was a serious question to be tried and that the balance of convenience favoured granting the injunction, in particular, in that case, because there would be irreparable loss to one party unless the injunction was granted and no prejudice to the other parties because they could obtain complete relief in this Court.
I am not certain whether these principles apply to anti-suit injunctions, which necessarily are based on the particular equitable and other principles I have mentioned, as opposed to the broader interlocutory injunctive power. Argument was not addressed. However, in case these matters apply also, I will add that I am satisfied that there is a serious question to be tried, in particular as to the proper law to be applied in relation to the properties in Taiwan registered in third parties’ names, with potentially considerable impact on the size and value of the pool, as discussed, at least open to argument here, but not available to the wife in Taiwan. I am satisfied also that the balance of convenience favours granting the anti-suit injunction against the husband because the wife potentially would suffer irreparable loss if that issue is determined in Taiwan, Mr Hackett conceding it would be determined quite decisively against her because of the applicable law there, which outweighs prejudice to the husband if, indeed, as between the husband and the wife, in equity the Taiwan properties registered in third parties’ names should be regarded as property of the husband and the wife or either of them.
There were no submissions as to whether an undertaking as to damages by the wife should be given. I will deal with this aspect of the matter below.
In relation to the second application, against the third respondent, the restraint sought is in the same terms as the existing interim restraint.
Mr Hackett, again, relied on the “same submissions” as relied on in support of the stay application.
He submitted that the amount of compensation moneys the subject of the cross-vested litigation is $2.95 million, “one half of” $5.9 million land at G resumption compensation; that the third respondent’s proceedings in Taiwan in relation to money from those proceeds which it is alleged the wife transferred to Taiwan is less than that (about $300,000); and that the proceedings cross-vested here “did not seek relief in relation to” the moneys the subject of the third respondent’s proceedings in Taiwan so that anti-suit injunction relief in relation to the third respondent’s proceedings in Taiwan is “unnecessary”.
Against that, Mr Forrest submitted that the third respondent’s proceedings in Taiwan “seek relief arising out of the same factual circumstances” as the cross-vested proceedings here. This much, plainly, is correct, as in both proceedings there will need to be finings as to beneficial ownership of the resumption moneys.
It would be oppressive and vexatious for the wife to have to deal with the third respondent’s proceedings in Taiwan; there is nothing to be gained by them and complete correspondence in relation to the issues.
There is a serious question to be tried as to ownership of the moneys as a whole. The balance of convenience favours the granting of the injunction as the cross-vested proceedings already are here and because no prejudice to the third respondent would flow, he being a party already to the proceedings here.
I would add, in relation to both anti-suit injunctions, that each is appropriate also to protect the integrity of this Court’s process, now set in motion. Further, I am conscious of the need for caution in the interests of comity in relation to the making of anti-suit injunction orders.
As to width of the injunctions sought, the phrase “any legal proceedings in Taiwan” at first glance appears excessive. However, in context, the words are qualified by specific other words relating to declaration of beneficial ownership of any matrimonial assets and the compensation funds and thus are not wider than necessary.
I turn now to the evidence of the two Taiwanese lawyers.
O said:
3.6.If the Australian Court grants an injunction against [the husband], restraining him from continuing proceedings in Taiwan, the prospects of the Taiwanese Court enforcing that are not very good.
N said:
21.Australian law does not have the right to stop Taiwanese jurisdiction. Even if an Australian Court granted an order such as a stay or injunction, in my experience it is likely that the Taiwanese court would not recognise it because [the husband] and [the wife] are both citizens of Taiwan.
However, as the injunctions will be against persons who are litigants here, and not injunctions against the foreign court, this Court would have the power to deal with the husband and/or the third respondent in contempt if the injunctions were not abided.
On the basis of the matters I have considered, in relation to both anti-suit injunctions sought, I will grant them in the terms sought. Each is sought “until further order” and will be so prefaced. I will not second guess the reason for such. Argument was not addressed. In CSR, such matters were canvassed: CSR at 390, footnote [98]. However, as expressly the anti-suit injunctions were sought until further order and no argument was addressed to “permanent” anti-suit injunctions, I will order in the terms sought.
None of the parties suggested that the anti-suit injunctions, if granted, should be the subject of undertakings as to damages by the wife. It would appear that in relation to anti-suit injunctions granted upon the equitable basis that commencement or continuance of the restrained proceedings would be oppressive and/or vexatious, that there is nothing to be gained by the restrained proceedings and complete correspondence with the proceedings here, undertakings are not appropriate. Neither the husband nor the third respondent sought undertakings as to damages in argument. However, as the matter was not argued it would be appropriate for me, upon delivery of these reasons for judgment, but before pronouncing the orders, to invite argument on that aspect of the matter and I will do so.
In anticipation of that, I would refer to CSR, at 390:
… The phrase "anti-suit injunction" is now in common use and, at least in some instances, resembles an injunction granted to protect the legal or equitable rights of the plaintiff or a common injunction to protect the processes of the Chancery Court against interference by the processes of other courts. However, it should be borne in mind that the term "injunction" in the parlance of equity has no fixed definition and that it is legal usage which decides which court orders are to be identified as injunctions.
Because stay orders and anti-suit injunctions are the remedies by which actual or potential conflict is resolved, … (footnotes omitted)
The authorities footnoted included ISC Technologies Ltd v Radcliffe (unreported; High Court of Justice (Chancery Division); 7 December 1990) at 10-12, in which Millett J pointed out that “neither an order for an account and payment nor an order to restore a fund to the party entitled was an injunction within the meaning of the relevant rule of court”; and further authority to the effect that an order for return of a specific chattel was not a form of injunction.
Potentially thus the proper view is that the parlance “anti-suit injunction”, is just that, namely a parlance, and that in essence it is not the type of order attracting an undertaking as to damages because, unlike other injunctions where a position is “preserved” until final relief, the effect of the anti-suit injunction is that “the actual or potential conflict is resolved” with effect, I am inclined to think, that undertakings as to damages are not appropriate, even if the order, for one reason or another be expressed to operate until further order.
Finally, if it be the case that the matters of serious question to be tried and balance of convenience are irrelevant considerations in relation to anti-suit injunctions, because resolution of the conflict has been achieved, I would not like it thought that I have taken these matters into account in making my determination, arrived at independently on the basis of the matters I have explained. Rather, as expressly I have said, I have addressed the matters of serious question to be tried and balance of convenience in case they apply.
I will hear argument in relation to undertakings as to damages.
I certify that the preceding two hundred and seventy-nine (279) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly delivered on 4 March 2011.
Associate:
Date: 4 March 2011
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