Zaro & Zan
[2019] FamCA 4
•11 January 2019
FAMILY COURT OF AUSTRALIA
| ZARO & ZAN | [2019] FamCA 4 |
| FAMILY LAW – JURISDICTION – STAY APPLICATION – proceedings commenced by wife in Australia for parenting and property orders – proceedings commenced by husband for divorce, child support, parenting and property proceedings in People’s Republic of China – husband sought stay of all proceedings in Australia – husband and child live in China – whether Court has jurisdiction to make parenting orders – whether child is “habitually resident” in Australia – consideration of bifurcation of the proceedings – stay ordered in respect of parenting proceedings – husband fails to discharge onus that Family Court of Australia is a “clearly inappropriate forum” for the property proceedings commenced by the wife in Australia. |
| Family Law Act 1975 (Cth) ss 69E, 111CD |
| Voth v Manildra Flour Mills Pty Ltd [1990] 171 CLR 538 Henry v Henry [1996] 185 CLR 571 Oceanic Sun Line Special Shipping Co Inc v Fay [1988] 165 CLR 197 Kent & Kent (2017) FLC 93-792 Lan & Hao (No. 2) [2017] FamCAFC 175 Kemeny & Kemeny (1998) 23 Fam LR 105 Yeo & Huy (No. 2) [2012] FamCA 541 LK v Director-General, Department of Community Services (2009) 237 CLR 582 Skinner & Alfonso-Skinner [2010] FamCA 329 |
| APPLICANT: | Mr Zaro |
| RESPONDENT: | Ms Zan |
| FILE NUMBER: | BRC | 2137 | of | 2018 |
| DATE DELIVERED: | 11 January 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Baumann J |
| HEARING DATE: | 16 May 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr P Hackett |
| SOLICITOR FOR THE APPLICANT: | Hirst & Co |
| COUNSEL FOR THE RESPONDENT: | Mr P Looney QC |
| SOLICITOR FOR THE RESPONDENT: | Michael Lynch Family Lawyers |
Orders
That the application by the mother for parenting orders be permanently stayed.
That the application by the husband to stay property proceedings commenced by the wife in the Family Court of Australia be dismissed.
That otherwise the proceedings be adjourned to a date to be fixed for further directions.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Zan & Zaro has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 2137 of 2018
| Mr Zaro |
Applicant
And
| Ms Zan |
Respondent
REASONS FOR JUDGMENT
Introduction
The husband, Mr Zaro (aged 47 years) and the wife, Ms Zan (aged 30 years) were both born in the People’s Republic of China (“China”) and married in that country in 2014. Both retain Chinese citizenship.
There is one child of the relationship, X born in 2015 (“the child”). At this time, the child is present in China, where the husband is living.
The husband applied for and obtained a special business skills visa which entitled the family to immigrate to Australia and stay here indefinitely. The child came to Australia for the first time on or about 4 March 2017.
Property in Australia has been purchased in the husband’s namely solely and Australian companies incorporated under the husband’s control.
On 25 December 2017, the child returned to China with her parents and when the parents returned to Australia on 6 January 2018, the child was left in China in the care of the maternal grandparents.
On 9 February 2018, following what the mother alleges was an incident of family violence that day, the parties separated.
On 13 February 2018, the husband returned to China and collected the child from the maternal grandparents. The husband deposes to returning to Australia briefly on 14 March 2018, but the child has not returned to Australia. The husband returned to China again on 4 May 2018.
On 28 February 2018, the wife commenced proceedings in this Court seeking orders for both parenting and property orders and, on an ex parte basis, the following orders were made on 8 March 2018 (subsequent to an amended Initiating Application and wife’s undertaking as to damages):
1. That the Applicant be granted leave to proceed ex parte.
2. That the child, [X] born … 2015 (“the child”) live with the Applicant mother in Australia.
3. That upon the child returning to Australia, the parties, their servants and/or agents are restrained and an injunction is issued, from attempting to remove the child from the Commonwealth of Australia.
4. That the Marshal and all Officers of the Australian Federal Police and of the Police Forces of the various States and Territories are requested and empowered to take all necessary steps to give effect to these Orders, including all things necessary to include and retain the said child’s name on the Watchlist enforced at all points of arrival and departure in the Commonwealth of Australia, and to maintain the child’s name on the Watchlist until further Order of the Court or for a further period of three (3) years from the date of these Orders.
5. That upon expiration of the period referred to in Order 3 herein and subject to any further Order of a Court of competent jurisdiction, the Australian Federal Police will cause the removal of the child’s name from the Watchlist.
AND UPON THE UNDERTAKING OF THE APPLICANT:
A. to submit to such order (if any) as the Court may consider to be just for the payment of compensation (to be assessed by the Court or as the Court may direct) to any person (whether or not that person is a party) affected by the operation of the Order or undertaking or any continuation (with or without variation) of the Order or undertaking; and
B. to pay compensation referred to in paragraph A herein to the person affected by the Order or undertaking.
THE COURT ORDERS UNTIL FURTHER ORDER:
6. That the Respondent be restrained from drawing money, including money paid in advance, further encumbering or causing the drawing of money from the following bank accounts and/or loan facilities:
a. The Commonwealth Bank mortgage registered on the former matrimonial home at [B Street, Suburb C] being mortgage number #63;
b. The Commonwealth Bank account being the mortgage account registered on the property at [D Street, Suburb E] being mortgage number #73; and
c. The Commonwealth Bank account held in the Respondent’s sole name being account number #31;
without the prior written consent of the Applicant or further Order of this Court, except to make payment of any existing loan or mortgage as and when they fall due.
7. That the Respondent be restrained from:
a. transferring or paying any funds exceeding $10,000 held by:
i. him or
ii. by any of the following corporate entities:
1. [F1] Pty Ltd CAN…;
2. [F2] Pty Ltd ACN …;
3. [F3] Pty Ltd ACN …;
4. [F4] Pty Ltd ACN …; and
5. any other entity incorporated in Australia in which the Respondent is a director and majority shareholder,
without the written consent of the Applicant, which shall not be unreasonably withheld; and
b. Transferring other property to the value of $10,000 owned:
i. by him; or
ii. any of the following corporate entities listed in Order 7(a)(ii) herein,
without the prior written consent of the Applicant, which shall not be unreasonably withheld.
c. Expending or disbursing funds from a loan or overdraft facility where:
i. the lending institution holds security in any form;
ii. over any assets owned by the Respondent or the corporate entities listed in Order 7(a)(ii) herein;
iii. whether or not the Respondent or those corporate entities is the beneficial owner of the assets or owns the assets as trustee of a trust,
without the prior written consent of the Applicant, which shall not be unreasonably withheld.
8. That notwithstanding the provisions of Orders 6 and 7 above, the Respondent pay:
a. all instalments pursuant to mortgages;
b. all rates and taxes and other outgoings;
on the real property owned by him, as they fall due.
9. That the Applicant wife have sole right to occupy the real property at [B Street, Suburb C] in the State of Queensland to the exclusion of the Respondent husband.
10. That notwithstanding the provisions of the Order 7 above, the Respondent is permitted to pay accounts for services rendered:
a. to the Respondent; or
b. any of the following corporate entities listed in Order 7(a)(ii) herein:
i. incurred in the ordinary course of carrying on;
ii. his personal affairs;
iii. in the ordinary course of carrying on business; or
iv. where those debts or obligations to pay, arose from business obligations incurred prior to 9 February 2018.
11. That the Respondent shall provide evidence of all such payments and invoices to the Applicant’s solicitor forthwith upon paying the accounts referred to in Order 10 herein.
12. That the Respondent make available for the use of the Applicant, the motor vehicle registration number … registered in the Respondent’s name or the name of a corporate entity in which he is the director and shareholder by providing the keys to the vehicle to the Applicant’s solicitors within fourteen (14) days of the date of service of the Orders on the Respondent, and at the same time providing the Applicant’s solicitors with instructions on how and when the Applicant can access/retrieve the vehicle.
13. That the Applicant is able, by this Order, to obtain from a locksmith, mechanic or other service provider, a key/key fob/remote that will enable the Applicant to operate the motor vehicle registration number .... This Order shall operate as sufficient authority for any locksmith, mechanic or other service provider to provide the Applicant with such key/key fob/remote without having to be concerned about the registered owner or seek the registered owner’s permission.
14. That the Applicant file an amended Initiating Application (Family Law) setting out the final orders the Applicant seeks and any applications for interim orders not yet considered by the Court, within one (1) business day of the date of these Orders.
15. That the Applicant have leave to serve the Respondent by way of email to his email address being … and by post to [B Street, Suburb C] in the State of Queensland … and by post to the Respondent husband’s mother’s home address in China.
16. That Applicant shall send an SMS text message to the Respondent mother’s (i.e. the paternal grandmother) mobile telephone number, being the mobile telephone number last known to the Applicant saying that “the Family Court of Australia has made Court Orders on 8 March 2018 about [X] and our property. A copy of these Orders is being sent to [Mr Zaro’s] email address and by post to your home address. There will be a further Court date at 9.30am on 15 May 2018 in the Brisbane Registry of the Family Court of Australia”.
17. That the Applicant serve the Respondent with a copy of these Orders made 8 March 2018, and a copy of the amended Initiating Application, and a copy of the Affidavits, Financial Statement and Notice of Risk filed by the Applicant, within fourteen (14) business days of the date of these Orders.
18. That within fourteen (14) days of service of these Orders upon the Respondent, the Respondent provide to the Applicant’s lawyers:
a. a completed Financial Statement including describing a value, as best the Respondent can, to his shareholdings and private companies, including but not limited to the companies listed in Order 7(a)(ii) herein;
b. a list of any trust known to the Respondent where he is a named beneficiary;
c. a list of any trust where the Respondent or a legal entity in which he is a director, acts as trustee of a trust:
i. where the Respondent or a company of which he is a director acts as trustee; and
ii. where he or any member of his family are beneficiaries or within a class of persons that could be beneficiaries under the trust.
d. a statement comprehensively setting out the assets and liabilities of the trustee held upon trust; and
e. make available to the Applicant, her legal representatives or persons authorised by her legal representatives, copies of the books and records including electronic records of the companies listed in Order 7(a)(ii) herein, F4 Pty Ltd, whether personally or in its capacity as trustee of any trust.
19. That within fourteen (14) days of service of these Orders upon the Respondent, the Respondent shall file and serve a Response to Initiating Application and Affidavit in support.
20. That the Applicant and Respondent be at liberty to relist the matter on short notice.
21. That the Applicant shall serve a copy of these Orders on the Commonwealth Bank of Australia and in doing so she will not offend s.121 of the Family Law Act 1975 (Cth).
22. That the Applicant’s costs be reserved.
23. That these proceedings be adjourned for Case Management Hearing at 9.30am on 15 May 2018 in the Family Court of Australia at Brisbane.”
On 15 March 2018, the husband commenced proceedings in China for parenting, child support and property orders in City G People’s Court. At page 4 of the husband’s tender documents is a copy of a document filed in China titled “List of Couples’ Jointly Owned Properties under Dispute”. The accuracy of the list of assets is disputed by the wife, although the Australian property interests are generally agreed. A dispute, unable to be resolved on an interim basis at this early stage of this proceedings, exists as to the assets and financial interests of the parties in China and the level of debt (if any) owed to the husband’s family.
The evidence of the wife’s solicitor Ms H, based on the title searches and Australian Securities and Investments Commission searches, confirms the existence of the Australian interests at this time. The wife returned to live in the Suburb C property on 15 March 2018. By 28 March 2018, the Australian solicitors for the husband had indicated to the wife’s solicitors that he did not “surrender to the jurisdiction of the Family Court of Australia” and had commenced proceedings in China.
On 4 April 2018, the wife filed in the Chinese court an “Application for Objection to Jurisdiction” and inter alia, asserted that her ordinary place of domicile and habitual residence was within the jurisdiction of the City J District People’s Court.
On 23 April 2018 the City G People’s Court determined that the wife was living in Australia and civil procedure in China required that the proceedings be commenced in the habitual place of domicile of one of the parties who was in China, in this case the husband, so the wife’s Objection to Jurisdiction (which in an Australian context seemed to be an application by the wife for a change of geographical forum within China), was dismissed. This allowed the proceedings in China to continue and mediation was ordered. The wife has filed an appeal against this order of 23 April 2018.
On 30 April 2018, the husband filed in this Court an Application in a Case seeking orders:
1. That the Applicant Wife be restrained and an injunction issue restraining the Applicant Wife from continuing proceedings in Family Court of Australia.
2. That the Applicant Wife pay the Respondent Husband’s costs of and incidental to this Application.
…
In her Response to an Application in a Case filed 11 May 2018, the wife sought the following orders:
1. That the Orders sought in the Application in a Case filed by [Mr Zaro] on 30 April 2018 be dismissed.
2. That [Mr Zaro] do all acts and things and sign all documents to facilitate the return of the child, [X] born … 2015, to Australia forthwith.
3. That pursuant to Section 114 of the Family Law Act 1975 [Mr Zaro] be restrained and an injunction is issued prohibiting [Mr Zaro] from leaving Australia until such time as the said child is returned to Australia.
4. That the Marshal and all Officers of the Australian Federal Police and of the Police Forces of the various States and Territories are requested and empowered to take all necessary steps to give effect to these Orders, including all things necessary to include and retain [Mr Zaro] born … 1971 on the Watchlist enforced at all points of arrival and departure in the Commonwealth of Australia, and to maintain the [Mr Zaro’s] name on the Watchlist until further Order.
5. That the Australian Federal Police be forthwith advised of the injunction restraining the [Mr Zaro] from leaving Australia.
Procedural Orders
That the following directions issue:
6. That [Mr Zaro] forthwith comply with his obligations of full financial disclosure and do so by no later than 7 days from the date of this order.
7. That the Respondent Wife file and serve any application in a case and supporting affidavits and updating Financial Statement in relation to financial matters within 21 days of the date of this order.
8. That [Mr Zaro] file and serve any response to the application in a case, supporting affidavits and Financial Statement within a further 14 days from the date of being served with the Respondent Wife’s material.
9. That the matter be listed for Interim Hearing in relation to the Respondent Wife’s application in a case on a date to be fixed by this Honourable Court.
Costs
10. That [Mr Zaro] pay the Respondent Wife’s costs of and incidental to responding to his Application in a Case filed 30 April 2018.”
The mother, accompanied by the maternal grandmother, travelled to China on 9 May 2018 (seemingly unaware the husband had returned to China himself on 4 May 2018 but returned to Australia on 10 May 2015 for the domestic violence proceedings) and on 10 May 2018, with the benefit of the order made by this Court on 8 March 2018 that the child live with her in Australia, the mother sought to retrieve the child from her kindergarten in China.
She was unsuccessful in doing so and when the mother then proceeded to the home of the paternal grandmother to see and/or collect the child, they were intercepted by security guards. The full details of that attempted recovery are disputed, save that the mother and the maternal grandmother left China to return to Australia without seeing or removing the child.
When the Application in a Case by the husband was heard on 16 May 2018, the husband’s Counsel was unsure where the husband was, but expressed a belief he may have returned to China.
Although the Court was informed at the hearing that a hearing in the Southport Magistrates Court on 16 June 2018 was scheduled in relation to the domestic violence proceedings, no information as to the results of that hearing are available to this Court at this time.
The Court expresses its regret in the delay that has occurred in the delivery of these Reasons.
Competing applications
At the hearing of the husband’s Application, oral and written submissions were delivered by Mr Hackett for the husband and by Mr Looney QC for the wife. If every submission or contention received is not mentioned in these Reasons, that is not to be construed as the Court having ignored or failed to consider such submissions.
In circumstances where the principles to be applied, as set out next in these Reasons, are well settled, the exercise of discretion this Court is required to undertake is to be considered within the matrix of those broad principles, but essentially, the issue is whether the Family Court of Australia is a “clearly inappropriate forum” and if it is, the injunction sought by the husband in his Application in a Case is to the same effect as a permanent stay of the proceedings.
At submissions of opposing Counsel, the husband at paragraphs 13 to 25 and the wife at paragraphs 19 to 20.4, recite the settled authorities which are not disputed, but for conciseness and drawing on Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at [559 to 565]; Henry v Henry (1996) 185 CLR 571 at [586 to 587]; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at [247], I record and adopt as accurate the wife’s Counsel’s submissions for context:
19. The father seeks an order restraining the mother from continuing the proceedings. The mother understands the application to be one to permanently stay the proceedings.
20. The principles relevant to a stay application may be summarised as follows:
20.1 the test for determining whether a stay will be granted is whether the Family Court of Australia is a ‘clearly inappropriate forum’;
20.2 that will be the case if continuation of the proceedings in that court would be oppressive, in the sense of ‘seriously and unfairly burdensome, prejudicial or damaging’, or vexatious, in the sense of ‘productive of serious and unjustified trouble and harassment’;
20.3 that will depend on the general circumstances of the case, taking into account the true nature and full extent of the issues involved;
20.4 relevant considerations include:
(a) the existence of proceedings in another jurisdiction between the same parties and with respect to the same issue or controversy;
(b) whether there are differences in procedure, available remedies and the substantive law in relation to such proceedings (including the issues on which relief might depend);
(c) whether each jurisdiction will recognise the other’s orders and decrees: where 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;
(d) the order in which the proceedings were instituted;
(e) the stage which they have reached and the costs that have been incurred;
(f) the connection of the parties and their marriage with each of the jurisdictions;
(g) the power to grant a stay should only be exercised in a clear case;
(h) the onus rests on the applicant 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.
I further note that the remarks of Deane J in Oceanic Sun Line Special Shipping Co Inc v Fay (supra) have been cited with approval in this jurisdiction, when considering the onus resting upon the Applicant husband to establish that the continuation of the proceedings would be “oppressive and vexatious to him” by the Full Court in Kent & Kent (2017) FLC 93-792 at [36].
In particular, in these proceedings, I regard the observations of the Full Court (Ainslie-Wallace, Aldridge and Watts JJ) in Lan & Hao (No. 2) [2017] FamCAFC 175 at [59 to 61] as opposite and their apparent reliance on what the Full Court in Kemeny & Kemeny (1998) 23 Fam LR 105 at [5.3.7] said:
In our view, this court may be a clearly inappropriate forum to litigate one cause of action between parties while at the same time retaining jurisdiction to hear other disputes between the same parties. We would, for example, see nothing inherently offensive in the notion that parties to a marriage might be required to conduct their child residence and contact matters in one country while being at liberty to conduct their financial disputes in another…
I was reminded by Counsel for the wife that the case of Lan & Hao (supra) was an application for an anti-suit injunction not a stay injunction.
I also take into account the cautious comments of Murphy J in Yeo & Huy (No. 2) [2012] FamCA 541 at [33 to 34] that:
33. In my view, what emerges is that there is nothing as a matter of principle that prevents the bifurcation of proceedings emanating from a single controversy with part of the proceedings being heard in one country and another part in another country, assuming that doing so causes no offence to international comity.
34. Frequently, though, there can, as a matter of discretion, be seen to be strong reasons for preventing the bifurcation of proceedings in such a manner. In the exercise of the discretion, an important consideration is the nature of each of those differing aspects of the same controversy and the remedies sought and available in respect of each. The evidence needed in support of those differing aspects of the controversy, and the availability of mutual recognition of each Court’s orders in each respect are, as the High Court has made clear, relevant matters.”
I further record the helpful submission of Counsel for the husband at [10 to 12] as follows:
10. In the Full Court decision in B v B (2003) 31 Fam LR 7 a father initiated proceedings in Australia regarding access to children who were living with their mother in New Zealand. That caused the mother to then initiate similar proceedings in the New Zealand courts and apply to the Australian courts for a stay of the Australian proceedings on the basis of forum non conveniens. There, Holden, Coleman and Warnick JJ held that the principles applicable to ordinary civil cases, namely the common law principles of forum non conveniens, were held to be applicable to such cases.
11. The Full Court in EJK v TSL (2006) 35 Fam LR 559 at 575-576 held the approach taken in B v B, was to apply to situations where the child was not in Australia at the time and the respondent party applied for a stay of proceedings. By way of explanation, Holden, Coleman and Boland JJ went on to enunciate the following principles:
(ii) in cases involving competing applications for differing types of relief arising from the breakdown of a marriage, or a de facto relationship (where the parties have children of that relationship), including some applications for parenting orders, it may be appropriate pursuant to the Court’s inherent power to grant a stay or an anti suit injunction based on common law principles;
(iii) the granting of relief by way of a stay of proceedings is more likely to be appropriate in a case where the child or children, the subject matter of the litigation, are resident in the foreign forum, and there is no necessity to make any order other than a stay to determine the application before the Court;
12. This approach has since been confirmed by the Full Court of the Family Court in Karim v Khalid (2007) 38 Fam LR 300.
It is not in dispute that the child has been in China since 25 December 2017 and has remained there.
To that end, at paragraphs 27 to 33 of the wife’s submissions, she contends correctly, in my view, that as the child is present in China (a non Hague Convention country) this Court may exercise jurisdiction for a Commonwealth personal protection measure only if the Court is satisfied the child is “habitually resident in Australia” (s.111CD(1)(e) of the Family Law Act 1975 (“the Act”))
If the Court has jurisdiction (which on an ex parte basis it exercised on 8 March 2018), then it seems to me that the Court must still be satisfied by the Applicant husband that Australia is a clearly inappropriate forum for the parenting issues. It follows, that if Family Court has no jurisdiction to exercise in respect of the child, then Australia is a clearly inappropriate forum in respect of parenting issues.
I propose to consider the submissions within the matrix of these principles as identified and what Murphy J described as the “non-exhaustive nature” of the maters set out in Henry (supra).
The parenting application
On balance, I am persuaded that the child was “habitually resident” in Australia at the time of her departure from Australia on 25 December 2017, for the purposes of s.111CD(1)(e) because:
a)although born in China, and a citizen of that country, when she arrived with her parents on 4 March 2017, she had the benefit of her own visa granted 24 January 2017;
b)the visa had been applied for on 25 February 2015 and permits the child to stay indefinitely, subject as always to the capacity to cancel under Australian law. There is no evidence that the child’s continued residence in China from 25 December 2017 has any adverse effect on the child’s Australian visa;
c)when the child left Australia for the last time (noting periods of travel for holidays back to China during 2017), the parents’ intention was to return the child to Australia after the Chinese New Year (approximately 15 February 2018). The child had, from early 2017, been enrolled and attended kindergarten in Australia. There is no evidence that the enrolment had been cancelled before 25 December 2017;
d)on this basis, I am satisfied that the parents maintained the joint intention for the child to remain living in Australia until the incident on 9 February 2018. At or soon after that incident, the husband and wife separated and there is no evidence to suggest a reconciliation is intended. The child, at that time, was in the care of the maternal grandparents in China. The husband’s actions since separation and his evidence is now, that China will now be the residence of himself and the child. He has, with the assistance of his parents, retained the child in China and the mother, despite attempts to do so, has not been able to remove the child from China – or even see her. The failure by the husband (or his family) to facilitate time between the child and the mother does them no credit;
e)the High Court in LK v Director-General, Department of Community Services (2009) 237 CLR 582 held (at [34]) that:
34. Thirdly, when considering where a child is habitually resident, attention cannot be confined to the intentions of the parent who in fact has the day-to-day care of the child. It will usually be necessary to consider what each parent intends for the child. When parents are living together, young children will have the same habitual residence as their parents. No less importantly, it may be accepted that the general rule is that neither parent can unilaterally change that place of habitual residence. The assent of the other parent (or a court order) would be necessary. But again, if it becomes necessary to examine the intentions of the parents, the possibility of ambiguity or uncertainty on the part of one or both of them must be acknowledged.
f)the father’s actions, in my view, amount to a unilateral change of habitual residence. The difficulties that arise in a situation, as here where the child was not wrongfully removed but has been wrongfully retained in a non-Hague Convention Country, are the reason for s.111CD(1)(e). I accept any parenting order (which is what a Commonwealth personal protection order amounts to), made in Australia (as was done on 8 March 2018), is not enforceable in China; and
g)for the reasons given, I find that the Family Court of Australia has jurisdiction to make a parenting order in respect of the child and that the mother regularly invoked the jurisdiction when present in Australia (s.69E of the Act).
However, even though the Court has jurisdiction the issue for determination is, in circumstances where China also has jurisdiction, this Court is a clearly inappropriate forum. I have come to the conclusion on the facts in this case, that the Family Court of Australia is a clearly inappropriate forum to determine the disputed parenting issues and that a stay ought be granted, for these reasons:
a)Although the mother commenced proceedings first in Australia, the father has regularly invoked the jurisdiction of the court in China;
b)The child has now resided, albeit wrongfully, in China since 25 December 2017. At the age of almost four years, most of her life has been spent in China – on my estimates at this time over 80 per cent of her life. All her grandparents live in China. Her siblings (being the children of the father from a prior relationship) live in China. The evidence is that the child has spent significant time in the care of the paternal grandparents and regular time with the siblings;
c)The mother can freely enter and reside in China as she retains citizenship. She has submitted to the jurisdiction of China, at least for the purpose of arguing, that the Chinese proceedings be transferred to another venue, because she was ordinarily resident in City J outside the jurisdiction of the City G People’s Court. I do not accept the submission of the husband that the position taken by the wife in the Chinese courts, which must be seen within the context of the Chinese proceedings, is inconsistent with the wife now asserting she is habitually resident in Australia;
d)It is to be anticipated that any parenting proceedings in China will have as their focus, the best interests of the child. Having spent the majority of her life in China (admittedly over one year between 12 December 2015 and 24 January 2017 awaiting for the visa to be granted), the overwhelming evidence about issues relating to the best interests of the child exists in China. Engagement of extended family; observations of the child’s connection with those family members and particularly siblings will have to take place in China; and
e)No anti-suit application has been brought by either parent either in Australia or China. The mother has not sought to stay the proceedings in China.
In all respects, as far as the parenting (and if necessary child support) issues are concerned, it would be oppressive in the sense identified by the authorities, and more difficult for a fulsome enquiry into the best interests of this young child, if the proceedings continued in Australia.
I find that the Family Court of Australia is a clearly inappropriate forum to determine the parenting issues and will grant a stay of those proceedings in this Court.
Property proceedings
Although with parenting proceedings now to be undertaken in China, the failure to grant a stay in the property proceedings will inevitably mean the parties will be engaged in two jurisdictions. I am satisfied this is a case where bifurcation is proper and intend to dismiss the husband’s application for a stay of the property proceedings, for the following reasons:
a)I rely upon the earlier findings of fact in respect of the parenting application without repeating them;
b)In Skinner & Alfonso-Skinner [2010] FamCA 329, Murphy J (sitting as a trial division Judge) considered and analysed some authorities as to bifurcation generally and concluded at [66 to 67] as follows:
66. In my view, what emerges is that there is nothing as a matter of principle that prevents the bifurcation of proceedings emanating from a single controversy with part of the proceedings being heard in one country and another part in another country, assuming that doing so causes no offence to international comity.
67. Frequently, though, there can, as a matter of discretion, be seen to be strong reasons for preventing the bifurcation of proceedings in such a manner. In the exercise of the discretion, an important consideration is the nature of each of those differing aspects of the same controversy and the remedies sought and available in respect of each. The evidence needed in support of those differing aspects of the controversy, and the availability of mutual recognition of each Court’s orders in each respect are, as the High Court has made clear, relevant matters.
I respectfully adopt that conclusion.
c)There is evidence from only one foreign law expert offered to the Court. Item 2 in the bundle of documents tendered and referred to in the Affidavit of the husband’s Australian solicitor Mr Hirst filed 8 May 2018, is a translation of a legal opinion prepared by Mr L of M Lawyers dated 12 April 2018. Arising from that opinion, which for the purposes of these forum issues was not objected to by the wife, the following statements are appropriate to record:
i)A system of “precedent” does not strictly apply in China as “China adopts the civil law application; therefore, the cases shall not be directly used as the basis for judges to make judgment”;
ii)Article 17 of the Marriage Law of the People’s Republic of China provides that certain property can be regarded as “property acquired by husband and wife during the period in which they are under contract of marriage shall be jointly possessed”;
iii)“it could be seen that Chinese laws have not demonstrated that there are difference [sic] in the domestic properties and overseas properties acquired during the existence of marriage relationship. The properties as listed above should be jointly possessed by the husband and wife so long as being acquired during the existence of marriage relationship”;
iv)The jurisdiction of Chinese courts over the overseas properties has not been excluded from the Law of the Application of Law for foreign-related Civil Relations of the People’s Republic of China however the Chinese courts can accept the effect of overseas laws on property in that overseas jurisdiction;
v)The disposition of overseas properties in the divorce case depends upon whether it is able to determine the value of the overseas properties, rather than the overseas factor per se, and “the Court would generally select not to dispose of the property in case the value of the property cannot be determined.” In this case, all real property interests in Australia are held in the husband’s name solely; and
vi)Understanding precedent is not a fundamental touchstone of Chinese law, the cases identified by the foreign lawyer in the opinion demonstrate that the Chinese courts can take into account overseas interests and may be able to make findings about overseas transactions.
d)Both parties accept that an order of a Chinese court in respect of property interests is unenforceable in Australia and similarly Australian court orders are unenforceable in China. The comments in Henry at [592] are important, namely:
…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.
e)Despite the husband asserting that there is more property in China than Australia, which the wife does not admit, what is clear is that if one was to adopt the concept of “community property division” (as the term was used at page 19 of the translations of the foreign lawyer), the overwhelming majority of a pool of assets so defined, is in Australia. This is so asserted by the husband in the Chinese court (see “List of Couples’ Jointly Owned Properties under Dispute” – Item 4 in the bundle of documents referred to in the husband’s Affidavit filed 30 April 2018);
f)The examination conducted by the solicitor for the wife Ms H reveals the Australian property interests, including those in the husband’s name and held through Australian companies controlled by the husband. Not surprisingly, with the husband gaining sponsorship from the Queensland Government to support the issue of his (and the wife and child’s) visa as a “Business Skills – Business Talent (Migrant)”, he heavily invested funds from China into Australia. At this early stage of the proceedings there is little clarity around the extent of:
i)remaining interests of the husband in China; and
ii)the nature and extent of any loans or other advances from his family and/or Chinese entities.
While I accept that the husband’s bare assertions (uncorroborated by any evidence from, for example, his parents) of his interests in China and his indebtedness could be true – no security appears to have been registered over Australian interests to protect the loans;
g)Whilst higher authority cautions the Court not to make a comparison (from an Australian perspective) of the two systems of family law property division, I am able to detect the differences from the foreign lawyer’s opinion. Whether that is an advantage or disadvantage is not clear. What I am satisfied about, is that a determination of property settlement in Australia under the Family Law Act 1975, will take into consideration overseas interests (even if orders are not recognised in China) including those acquired by the husband or wife before or since the marriage; and
h)The procedures for resolution with a pool of assets in the millions of Australian Dollars in either court will necessarily involve costs of translation and inconvenience where the wife intends to remain living in Australia and the husband intends to live in China.
In the end, I am satisfied that the husband has failed to discharge the onus he carries, to establish that the Family Court of Australia is a clearly inappropriate forum to conduct property proceedings. His application for a stay must therefore be dismissed.
Further conduct of the Australian proceedings
I accept, as the husband did not submit to the Australian jurisdiction, that he has not fully engaged in some of the orders made in respect of the financial issues. His Counsel’s submissions sought to contend for a discharge of some of the freezing orders etc.
With the issue of forum now determined, I regard it as proper to allow the parties to have an opportunity to discuss orders arising from the determinations made in these Reasons. I will adjourn the proceedings to a date for the pronouncement of further orders, including discharge of the parenting orders made on 8 March 2018, to a date to be fixed before me.
I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 11 January 2019.
Associate:
Date: 11 January 2019
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