Yang and Lin
[2016] FamCA 251
•20 April 2016
FAMILY COURT OF AUSTRALIA
| YANG & LIN | [2016] FamCA 251 |
| FAMILY LAW – Forum – husband seeks permanent stay – application refused. |
| Family Law Act 1975 (Cth) |
| Henry and Henry (1996) FLC 92-685 Kemeny v Kemeny (1998) FLC 92-806 Prantage and Prantage (2013) FLC 93-545 Steen and Black (2000) FLC 93-005 Voth and Manildra Flour Mills Limited (1991) 71 CLR 538 |
| APPLICANT: | Mr Yang |
| RESPONDENT: | Ms Lin |
| FILE NUMBER: | MLC | 7205 | of | 2014 |
| DATE DELIVERED: | 20 April 2016 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 15 April 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Kildea |
| SOLICITOR FOR THE APPLICANT: | Oakfair Lawyers |
| COUNSEL FOR THE RESPONDENT: | Ms Byrnes |
| SOLICITOR FOR THE RESPONDENT: | Rose Chai Lawyers & Consultants |
Orders
That the husband’s response filed 24 February 2016 to the application in a case filed 12 November 2016 is dismissed.
That the husband provide to the wife the documents listed as 2(a) to (h) in the wife’s proposed minute of orders within 21 days unless those documents have already been provided.
That any application for costs by either party be made by written submission to be filed and served by no later than 4.00pm on 28 April 2016 and any reply thereto be filed and served by 4.00pm on 6 May 2016.
That the wife’s application for spousal maintenance is adjourned to the Senior Registrar’s list at 10.00am on 11 May 2016.
That the husband comply with paragraph 4 of the orders made 27 August 2015.
That the application in a case otherwise filed on 12 November 2016 is dismissed.
IT IS CERTIFIED:
That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Yang & Lin has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 7205 of 2014
| Mr Yang |
Applicant
And
| Ms Lin |
Respondent
REASONS FOR JUDGMENT
By his response filed 24 February 2016, Mr Yang (the husband) seeks a permanent stay of proceedings for property division brought by Ms Lin (the wife). In addition to the substantive property application before the Court, the wife sought discovery. Her application in a case was filed on 12 November 2015 and it was to that application that the husband responded as indicated.
The husband’s application for a permanent stay is on the basis that Australia is the clearly inappropriate forum. The wife opposes the making of that order.
Each of the parties relied upon affidavit material as set out in their respective outlines of case. Each was represented by counsel who prepared helpful written submissions. Indeed, neither the law nor most of the facts were in dispute. It is the interpretation of both the law and the facts that determines this immediate dispute.
It was submitted by both counsel that the wife’s discovery application had to follow the husband’s application but to the extent that any determination was required, the submissions both in writing and orally addressed that.
For the reasons that follow, I am satisfied that the husband’s application for a permanent stay cannot succeed. The test for the determination of forum is the clearly inappropriate forum question (see Voth and Manildra Flour Mills Limited (1991) 71 CLR 538 and Henry and Henry (1996) FLC 92-685). In Henry, the High Court said that the test of clearly inappropriate forum was the test to be applied in Family Court proceedings.
Convenience alone does not necessarily mean that the local court is a clearly inappropriate jurisdiction. The question is whether or not the continuation of the proceedings would be oppressive in the sense of being seriously and unfairly burdensome, prejudicial or damaging, or vexatious, in the sense of being productive of serious and unjustified trouble and harassment (see Henry).
The onus lies with the husband to establish that the Australian jurisdiction is clearly inappropriate. As indicated, I am satisfied that he has failed to establish that Australia is clearly inappropriate.
As set out in Henry, the matters to be considered by the Court include:
(a)Whether if both courts have jurisdiction, each will recognise the other’s orders and decrees;
a)(b) Which forum can provide more effectively a complete resolution of the matters involved in the controversy;
b)(c) The order in which the proceedings were instituted and the stage and costs reached;
(d)The connection of the parties and their marriage with each of the requested jurisdictions;
(e)The issues surrounding the relief associated with those jurisdictions; and
(f)Whether having regard to their respective resources and their understanding of the language, the parties were able to participate in either of the jurisdictions on an equal footing.
In Steen and Black (2000) FLC 93-005, this Court held that the various factors had to be balanced against each other. The Court said that in that process, the appropriateness of a variety of issues was to be contemplated including:
Was there a significant connection between the forums selected and the subject matter of the action and the domicile and places of business of the parties?;
Was there a legitimate and substantial juridical advantage to a party in this Court?; and
Whether the law of the forum be the substantive law to be applied in the resolution of the respective parties’ rights and obligations.
Both husband and wife were born in China. The husband lives in China now but regularly comes to Australia where he has business interests. In addition, he has banking accounts here and has an incorporated entity which he controls.
There is property in Australia but the majority of property lies in China.
The husband relied on evidence of the difficulties of enforcing orders in China and whilst that is clearly a consideration, it must not be forgotten that orders are made in personam and therefore, one would expect that they would be carried out wherever the property lay. That is important here because the husband has business interests and property in Australia. There must be an assumption that if the Court makes an order, it will be carried out. It was not suggested by counsel for the husband otherwise. In addition, there is no evidence before me (and counsel for the husband confirmed that none had been presented) that carrying out an Australian order would breach Chinese laws to the extent that actions of the husband under any order of this Court could not be executed for fear of breaching Chinese law. It is an important issue where there are significant assets in China including corporate assets. If it was shown to be contrary to Chinese law to execute transfers or sell company property, the argument may have significance. As there is no such evidence, the enforcement issue is not of much relevance in this case. It was readily conceded that an order (for example) under s 106A of the Family Law Act 1975 could not be recognised in China but the exercise of that power would not be required unless there was an indication that the husband or for that matter, the wife, would not fulfil their responsibilities under the order. Further, it is the wife who opposes the husband’s application and as such, she dismisses the prospect of having to enforce the orders absent the husband complying with his obligations. She still seeks to rely upon Australian law to determine the substantive issue. As I said in discussion, she is well aware of any such risk.
The chronological evidence of what has occurred here gives rise to questions of the husband’s motivations. He issued proceedings in Australia first and at a time when he had solicitors acting for him. His application was issued in the Federal Circuit Court in Melbourne on 15 August 2014. It was not until October 2015 that the husband raised the forum issue.
The husband’s application however, did not really seek relief under Part VIII of the Act other than to plead things this way:
[1]That the husband be excused from particularising his claim until both parties have made full and frank discovery of their respective true financial positions, and all properties have been valued.
[2] Any other order as this Honourable Court deems fit.
Not only was that claim not an order seeking relief in any true sense of an alteration of property interest, one might wonder why the husband could not detail his understanding of the parties’ assets if he had an interest in them. The importance of this is that on the face of his application, the husband was not only indicating that he intended to seek the relief but that he also wanted the processes of the Court to be exercised vis-a-vis the wife to enable him to plead with particularity.
At that time, there was a business in Australia which was in Suburb B. The husband sought injunctive relief relating to the wife selling, encumbering or disposing of “the interests of the parties” in that business. A cursory examination of the husband’s affidavit filed with that application showed that the business was “controlled and run solely by the wife” and he had learned “that wife had apparently sold the business”. He did not indicate the source of his information and said that he had not spoken to the wife. Ironically (it seems to me) that on the return date and with both parties represented, agreement was made that the proceeds of the business be divided equally. Thus, there was really no significant dispute then apparent.
The orders of the Federal Circuit Court then set out (by way of notation) what the other assets were and their approximate values. The one asset that seemed contentious was one about which they agreed to seek a valuation. That was a reflection of the fact that the parties, and in particular, the husband, knew exactly what the assets were and most of their values despite pleading imprecisely.
That led the Court by consent, to order that the parties attend a private mediation and to “comply with all reasonable requests for disclosure/discovery” within a requested time frame.
Thus, by the conclusion of the first hearing before the Federal Circuit Court, there was no suggestion of any forum dispute; indeed, there was a clear indication of what the disputed assets were.
In November 2014, there was a joint approach to the then docketed trial judge for an adjournment of the substantive proceedings because of some problem about their anticipated mediation.
In April 2015 before Judge Harland, upon the wife’s application, orders were made by consent of an injunctive nature relating to the assets of the parties which, if correctly described, were controlled through corporate structures. The husband was represented by the same solicitors for that application and consented to the orders. There was still no reference to a forum problem.
On 30 June 2015, the husband, through the same lawyers, applied to the Federal Circuit Court for a divorce. He invoked the jurisdiction.
In his application, he acknowledged that there were pending property proceedings. There was again no reference to any impending forum issue.
In October 2015, the husband raised the forum issue. The matter was heard by Judge Harland on 9 October 2015 and her Honour reserved judgment.
Judge Harland noted that neither party had particularised the relief they were seeking and her Honour was critical of that practice which was “all too common” in the Melbourne Registry. I agree with her Honour’s remark that such an approach should be confined to cases of urgency or where a party has been kept in the dark or is otherwise ignorant of the financial details of the relationship. That was hard to see here when the husband was a partner in the business. I would add to her Honour’s remark by querying why the relief remained unparticularised for over a year. I can understand why the initiating application might be imprecise if the circumstances were urgent (as her Honour said) but as shown in paragraph (17) above, the parties knew what the assets were. Thus, it was not just a case of the forum issue not being raised but also no attention to detail about the relief for over a year. The October 2014 attendance at the Federal Circuit Court saw the parties indicating (if not being so ordered) that they were going off to mediation yet the relief was not then particularised. It may well have been particularised at the mediation but by the time the legal skirmish took place before Judge Harland in October 2015, the relief remained unknown to the Court.
Judge Harland then contemplated the husband’s application which was described not so much as an application for a permanent stay on forum grounds but rather that the Australian assets be dealt with by the Federal Circuit Court and the assets in China be dealt with by the Chinese Courts. Her Honour (and with great respect, correctly so) dismissed the husband’s application giving cogent reasons why a bifurcation of the proceedings was not appropriate (see paragraphs 34 onwards of the judgment). No appeal was lodged against the order arising from those reasons. Her Honour then transferred the proceedings to this Court and again, looking at the reasoning, with respect, correctly so.
It is significant therefore that there was a long delay which meant that the proceedings had come well down the litigation path. It was submitted that the proceedings in the two international jurisdictions had not gone that far but the facts above belie that. As long ago as late 2014, the parties were seeking mediation before a final trial. There were specific orders for discovery. The only conclusion was that both parties were pursuing orders in the Australian jurisdiction. Then along the pathway, there was the injunctive relief pursued by the wife relating to the assets in China. No suggestion was made of a forum problem. The husband metaphorically sat on his hands and activated the divorce jurisdiction.
In October 2015, the wife issued proceedings in China. It was said this was the equivalent of injunctive relief or holding orders relating to the proceeds of the sale of an asset which had been frozen but she was unsuccessful. She then issued the equivalent of Australian property relief in China. The husband has still not sought that relief in China which is also ironical when, before Judge Harland, he sought orders that her Honour only deal with the Australian assets so that the assets in China could be dealt with there.
Counsel for the husband pointed to the fact that there had been mediation in China and the evidence shows there was a specific agreement from the wife that there would be an exchange of evidence. That occurred. That seems to be the extent of the proceedings in China so any proceedings there are conceivably in the infancy stages.
Counsel for the husband submitted that the parties had lived 20 out of their 25 year relationship in China and that they continue to spend time in China. The majority of the assets are in China and counsel submitted that the costs of litigation will be less significant if they are conducted in China because there will be no language disadvantage for either party whereas both require translation assistance here. In addition, the valuations and expert evidence would have to come via China and again there will be translation costs.
Against those language barrier issues, there is the fact that the dispute about valuation is modest. That can be seen from the matters earlier mentioned when the case was initially before the Federal Circuit Court. The parties certainly indicated to Judge Turner of that Court that the issue was discrete. Thus, the concern about costs is hard to see. It is also ironic that costs is raised by the husband when he has had the same lawyers acting for him for over a year involved in the proceedings yet the forum issue was not raised. Raising it early would surely have saved costs.
I have mentioned the salient points put in argument but each counsel set out the facts and legal issues in much more detail. In my view, it is unnecessary for me to set those out in detail and the matters that follow indicate why the Australian jurisdiction is not clearly inappropriate.
It is agreed that both courts have jurisdiction. There is certainly a problem about the courts of China recognising the orders of the Australian Courts but for the reasons I have set out above, that is hardly likely to be an issue. To the extent that there was some concern about compliance, the parties were content to litigate about injunctive issue relating to the company assets in China last year. The argument that China will not recognise the Australian orders is of little consequence.
The husband cannot now argue that the courts of China can provide a more complete resolution of the matters involved in the controversy. He did not want a complete resolution of all matters in China as can be seen from his application before the Federal Circuit Court. To the extent that the Full Court said in Kemeny v Kemeny (1998) FLC 92-806 that causes of action could be bifurcated, this is not such an example. The husband wanted to split the property action not two different actions.
How far proceedings have travelled is a matter of impression. Here the unashamed impression is that the parties and their lawyers have travelled a long way down the path. The Court’s file is in three volumes and there have been numerous court attendances. Indeed, one might also add to the criticisms by Judge Harland I earlier mentioned that the lawyers have not reigned in the dispute here at all. The time that has elapsed is most unfortunate for the parties. The order in which the proceedings were instituted can be seen that the husband issued first and in doing so, invoked the Australian jurisdiction but then continued to do so.
There is no doubt the main connection of the husband is with China but he seems keen to continue his business prosperity in Australia. His connection is therefore hardly relevant.
There was no suggestion that the wife or the husband were advantaged or disadvantaged by staying in either jurisdiction. It was agreed that there was relief in China and as the authorities observe, it not for this Court to comment upon jurisdictional issues in other foreign jurisdictions. Indeed, the husband did not suggest that it was a problem. The wife certainly did not suggest that litigating in China would cause her to be less advantaged than Australia.
Each of the parties has some wealth. Just how much they have remains to be seen. But it could not be suggested that with the amount of time and effort spent litigating in the Federal Circuit Court they were endeavouring to prevent their wealth being dissipated.
As has been said, the onus lies with the husband to show that Australia is clearly the inappropriate forum. He has failed to do so.
Turning then to discovery, the argument was about whether the husband had provided documents and that the wife was asking again but also that she had access to these documents anyway.
The obligation in relation to disclosure is clear and unambiguous but what is remarkable here is that the very first order over a year ago showed that the parties were consenting to comply with the very obligations that the rules require of them anyway. With lawyers acting for the parties all of the way throughout this and with the numerous interlocutory hearings, the whole issue of disclosure is perplexing. Having seen the proposed orders of both counsel, I consider the one prepared on behalf of the wife best solves the problem. If there is any ongoing dispute, the parties can follow the rules. I shall make the orders set out at the start of these reasons.
I note that the wife sought costs and it was agreed that because of shortage of time and the need for me to read the documents, any submissions should be in writing. That said, it would be hard to see how the husband’s case had any significant merit if the test is the “clearly” inappropriate forum. This was clear. The usual provisions of s 117 of the Act need to be the starting point but to the extent that there is no consensus about costs, I shall determine that on written submission. The application by counsel for the wife seemed to reflect an indemnity for costs approach about which this Court has spoken a number of times (see Prantage and Prantage (2013) FLC 93-545). This is a case where the husband needs to explain why this application came as late as it did and why the approach differed from that before Judge Harland. On face value, the circumstances might fit the indemnity costs test.
There is an extant application for spousal maintenance that the parties agree requires attention. Accordingly, I have arranged for a hearing before the Senior Registrar as indicated in the orders.
I certify that the preceding Forty Six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 20 April 2016.
Associate:
Date: 20 April 2016
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