INTERNATIONAL ELEMENTS IN FINANCIAL CASES IN FAMILY LAW I INTRODUCTION

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1 INTERNATIONAL ELEMENTS IN FINANCIAL CASES IN FAMILY LAW MICHAEL KENT SC AND PAUL DOOLAN * I INTRODUCTION 1. In many financial cases involving what may be conveniently described as international elements, the preliminary question which arises is whether a Court invested with jurisdiction under the Family Law Act 1975 (Cth) ( the Act ) has jurisdiction to determine the case If such jurisdiction exists, there is a further question as to whether a foreign country or foreign system of law also has jurisdiction and from a practice perspective in assisting the client whether, in that circumstance and on the facts of the case presented, there are advantages or disadvantages to either party of resolution of the case in the foreign forum as compared with the Australian forum. 3. Many legal systems impose a community property regime either from the inception of marriage or upon death or divorce. For example, California and some other States in the United States of America, France, Belgium, the Netherlands and New Zealand all have community property regimes which may be attractive to a client unlikely to achieve an equal division of assets in the Australian regime. There are jurisdictions such as Sweden and other European countries where homemaking and parenting contributions may not carry the significance they might have in a property-adjustment case litigated here. The parties may have entered into a pre-nuptial agreement in a foreign country which has binding effect * 1 Michael Kent SC is a member of the Queensland Bar. Paul Doolan is a Partner in Barkus Doolan Family Lawyers, Sydney. The authors acknowledge the assistance of Justin Carter of the Queensland Bar in the preparation of this paper. The Family Court of Australia (s 39(1)(a)); the Supreme Court of a State or Territory s 39(1)(b); the Federal Magistrate s Court (s 39(1A)); or a court of summary jurisdiction of a State or Territory (s 39(2)). Proceedings cannot be instituted in a Court of a Territory unless one of the parties is, at the date of institution of proceedings, ordinarily resident in that territory (s 39(8)). The Family Court of Western Australia is also invested with federal jurisdiction if conditions are satisfied.

2 2 in that country but is not binding here. A client may therefore need to know and consider at the outset of a matter whether there are advantages in seeking to invoke a foreign jurisdiction as compared with Australia or vice versa. For reasons which will become apparent, these questions may require urgent consideration with the input of a foreign law expert so that the jurisdiction of the more favourable forum is invoked at an earlier time. 4. In a case with the potential to be litigated either in Australia or overseas, a number of associated issues also arise for consideration, namely:- (a) (b) (c) (d) Even if the jurisdiction of the Australian forum can be enlivened, what is the likelihood of the Australian Court declining to exercise that jurisdiction on the ground that the Australian forum is clearly inappropriate? To what extent will it be necessary to enforce any Australian judgment or Orders in a foreign country and how difficult (or impossible) is such enforcement likely to be? Is the Australian Court likely to grant an anti-suit injunction to restrain proceedings for financial relief in an overseas jurisdiction or grant a stay of any Australian proceedings on the basis that such proceedings are vexatious or oppressive? Even if Australia may be a clearly inappropriate forum to litigate one matrimonial cause (for example, maintenance), might it nevertheless be proper for the Australian Court to exercise its jurisdiction with respect to others (for example, property located in Australia)? 5. This paper discusses some of the private international law aspects of property division and maintenance consequent upon the breakdown of marriage or a de facto relationship having international elements. 2 2 For a detailed treatment of this subject see Nygh s Conflict of Laws in Australia, Eighth Edition published 2010, Lexis Nexis Butterworths.

3 3 II JURISDICTION AND DISCRETION A Jurisdiction Source of Power 6. Under s 39(1)-(1A) of the Act, the Family Court and the Federal Magistrates Court relevantly have jurisdiction in matrimonial causes instituted under the Act. The definition of matrimonial cause in s 4 of the Act is defined as relevantly including maintenance proceedings and proceedings with respect to maintenance agreements (paragraphs (c), (caa), (d), (ea)), and proceedings with respect to the property of the parties or either of them (paragraphs (ca), (cb)). 7. In addition, under s 39B(1) of the Act, the Family Court and the Federal Magistrates Court relevantly have jurisdiction with respect to matters arising under the Act in respect of which de facto financial causes are instituted under the Act. De facto financial causes, as defined in s 4 of the Act, relevantly includes maintenance proceedings (paragraphs (a), (b)), and proceedings with respect to the property of the parties or either of them (paragraph (c), (d)). 8. Section 39(4) (with respect to matrimonial causes) and s 39A (with respect to de facto financial causes) provide that proceedings of those kinds may be instituted under the Act if, whether parties to a marriage or in any other case, a party to the marriage or to the proceedings is an Australian citizen, is ordinarily resident in Australia, or is present in Australia, at the relevant date as defined in s 39(4A) and s 39A(2) of the Act, respectively. 9. With respect to de facto relationships (which are defined in s 4AA of the Act to include same-sex relationships), there are additional jurisdictional requirements that must be fulfilled. The Court may only make a maintenance order under s 90SE or s 90SG; or a declaration of interests in property under s 90SL; or an order altering property interests under s 90SM; only if the Court is satisfied:-

4 4 (a) (b) That either or both of the parties to the de facto relationship were ordinarily resident in a participating jurisdiction when the application was made; and Either both parties were ordinarily resident in such a jurisdiction for at least a third of the relationship, or the applicant made substantial contributions in such a jurisdiction; (alternatively to (a) and (b) that both were ordinarily resident in a participating jurisdiction when the relationship broke down); and (c) Either:- (i) (ii) That the period, or the total of the periods, of the de facto relationship is at least two years; or That there is a child of the de facto relationship; or (iii) The applicant made substantial contributions (as referred to in s 90SM(4)(a),(b) or (c) and a failure to make the order or declaration would result in serious injustice to the applicant; or (iv) That the relationship is or was registered under a prescribed law of a State or Territory. 3 B Nature of Jurisdiction Extra Territorial and In Personam 10. Part of the common law, often applied to deny jurisdiction where proceedings involve foreign land and questions relating to the title of foreign land, is a rule which is known as the Mozambique Rule, derived from the decision of the House of Lords in British South Africa Co v Companhia de Mozambique, 4 which operates for two propositions which may be expressed as follows:- (a) A local Court will not exercise jurisdiction in respect of the title to, or possession of, land situated beyond the Court s territorial jurisdiction on the basis that only the Court of the place where the land is situated can effectively enforce an Order for possession of, or title to, the land; and 3 4 S 90SB; s 90SD; s 90SK. [1893] AC 602.

5 5 (b) No action can lie in respect of trespass or other actions based on the plaintiff s title to land situated beyond the Court s territorial jurisdiction The Mozambique Rule has recognised exceptions, and for present purposes, the in personam jurisdiction of courts of equity to enforce personal obligations with respect to foreign land is to be noted. 12. A Court exercising jurisdiction under the Act in family law exercises jurisdiction in personam and not in rem. There is therefore no offence to the Mozambique Rule for the exercise of jurisdiction with respect to foreign land. Thus, because proceedings for the adjustment of property rights pursuant to s 79 of the Act, for example, are in personam, 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, but an Order in personam against that party. Likewise, Orders for enforcement, including in relation to property located overseas, are made in personam. 13. As authorities in family law make plain (such as Pagliotti v Hartner, 6 Cain v Cain, 7 Pastrikos v Pastrikos, 8 Hannema v Hannema, 9 Gilmore v Gilmore 10 ), once a matter within the definition of matrimonial cause enlivens the jurisdiction of the Australian Court, it is Australian law which the Court applies, and it may adjust the property rights of the parties in property located overseas, regardless of any rights acquired or vested in the parties under foreign law. 14. This may be qualified to the extent that, having regard to the principle that a party ought not be ordered to do something illegal in the place it is to be done, when exercising jurisdiction in personam, Courts ought be alive to avoiding the making of an Order in relation to any assets located in a foreign country that might operate in direct conflict with the laws of that country See Nygh s Conflicts of Law in Australia, ibid at pp (2009) FLC at 83,253. (1987) FLC (1980) FLC (1981) 7 Fam LR 542. (1993) FLC Michael Wilson and Partners Ltd v Robert Colin Nichols [2008] NSWSC 1230 at [6]-[7] per

6 6 15. As a general rule, jurisdiction of a Court in personam depends upon the presence of the respondent in the jurisdiction. However, in the context of family law, it is important to note that s 31(2) of the Act provides:- s 31(2) [Extra-Territorial Jurisdiction] Subject to such restrictions and conditions (if any) as are contained in s 111AA, the regulations or the standard Rules of Court, the jurisdiction of the Family Court may be exercised in relation to persons or things outside Australia and the Territories. 16. Thus, a Court exercising the jurisdiction conferred by the Act has extra-territorial jurisdiction over persons or things outside Australia. This extra-territorial jurisdiction exists not only in proceedings for property adjustment, but also in relation to ancillary relief. In Gould v Gould; Swire Investments Limited, 12 the Full Court of the Family Court, in upholding the setting aside of dispositions by the husband to companies incorporated overseas, which were not registered nor carried on business in Australia, pursuant to the former s 85 of the Act (now s 106B) held that that s 31(2) of the Act provided the Family Court with an extraterritorial jurisdiction both as regards persons and things in broad, general lanaguage. Further, that the words subject to such restrictions and conditions in s 31(2) should not be read as empowering the Regulations or the Rules to exclude the jurisdiction otherwise given to the Court by statute. 17. It ought be plain enough that the extra-territorial jurisdiction conferred by s 31(2) does not override the conditions set out in s 39, outlined above, in which jurisdiction may be exercised. Moreover, it has been held that a Court should not exercise extra-territorial jurisdiction where any Order the Court might make would be clearly futile. 13 C Discretion to Decline Jurisdiction Brereton J. (1993) FLC and see Nygh s Conflicts of Law in Australia, ibid at p 565. Tallack v Tallack [1927] P 211; Ding v Ding (1976) 1 Fam LR 11, 231 and Woo v Woo (1976) FLC

7 7 18. Australia is not a party to any international agreement or convention governing the exercise of jurisdiction or containing rules for preventing forum-shopping. Notwithstanding that the Australian family law courts might properly entertain a financial proceeding within its jurisdiction under the Act, the doctrine of forum non conveniens under the conflict of law rules in Australia may compel the Court to decline to exercise its jurisdiction, otherwise properly enlivened, having regard to the principles set down by the High Court in Oceanic Sun Line Special Shipping Co Inc v Fay and Voth v Manildra Flour Mills Pty Ltd, 14 which are considered below. In applying the forum non conveniens test, where there are proceedings on foot both in Australia and an overseas jurisdiction, the Australian family law court may, subject to additional criteria being established, stay the Australian proceedings on the ground that it is a clearly inappropriate forum or, conversely, enjoin the maintenance of the overseas proceedings. III STAY ORDERS: "VEXATIOUS OR OPPRESSIVE" A General Principles 19. In Henry v Henry, 15 the High Court (Dawson, Gaudron, McHugh and Gummow JJ, Brennan CJ dissenting in part) determined that where proceedings were on foot in the Family Court, notwithstanding that that Court might have jurisdiction with respect to the matter, applying the test of forum non conveniens might require those proceedings to be stayed on the basis that the Family Court was a clearly inappropriate forum for those proceedings and that the maintenance of the Australian proceedings would be vexatious or oppressive. 16 In CSR Ltd v Cigna Insurance Australia Ltd, the majority of the High Court (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ) identified the power to stay such proceedings as an aspect of the inherent or implied power of every court to Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538. (1996) 185 CLR 571. (1996) 185 CLR 571 at per Dawson, Gaudron, McHugh and Gummow JJ.

8 8 prevent its own processes being used to bring about injustice. 17 A stay order should be sought in circumstances where one party seeks to have Australian proceedings stopped to continue proceedings overseas. 20. The forum non conveniens test emerged from two previous decisions of the High Court in Oceanic Sun Line Special Shipping Co Inc v Fay and Voth v Manildra Flour Mills Pty Ltd. 18 In Voth, the High Court (Mason CJ, Brennan, Deane, Dawson and Gaudron JJ, Toohey J dissenting in this respect) adopted the statement of principle espoused by Deane J in Oceanic Sun Line that: " it is possible to identify in summary form what I see as the modern content of the traditional principles governing the power of a court in this country to order that proceedings which have been regularly instituted within jurisdiction should be dismissed or stayed on inappropriate forum grounds. That 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 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 will 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 will 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." 19 The significance of the High Court's decisions in Oceanic Sun Line and Voth for private international lawyers, which were subsequently extended to apply in financial matters in family law cases in Henry v Henry, was that those decisions rejected the "more appropriate forum" test laid down by the House of Lords in (1997) 189 CLR 345 at 391. Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197; Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538. (1988) 165 CLR 197 at

9 9 Spiliada Maritime Corp v Cansulex Ltd, 20 which involved a comparison of the propriety of the forums in which proceedings had been commenced, in favour of the "clearly inappropriate forum" test (forum non conveniens), which involved only a consideration of whether Australia was a clearly inappropriate forum. 21. Even if the Family Court is satisfied upon applying the forum non conveniens test that it is not a clearly inappropriate forum, the Court must further determine whether the Australian proceedings are "vexatious or oppressive" in the sense identified by the High Court in Voth before staying the Australian proceedings. 21 In this regard, Deane J stated in Ocean Sun Line, which was adopted by the majority of the High Court in Voth, 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. Admittedly, that approach to the vexatious and oppressive test is less stringent and less rigid than would have been accepted in the nineteenth century. Under it, the applicable test pursuant to traditional principles can, in the ordinary sense, properly be seen as an inappropriate forum test. It cannot, however, properly be seen as a more appropriate forum test since the mere fact that a tribunal in some other country would be a more appropriate forum for the particular proceeding does not necessarily mean that the local court is a clearly inappropriate one." The majority of the High Court in Henry v Henry 23 identified the following nonexhaustive list of factors relevant to the determination of a clearly inappropriate forum issue:- 1. No question arises unless the courts of the respective countries each have jurisdiction [1987] AC 460. Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 at 564 per Mason CJ, Deane, Dawson and Gaudron JJ. (1988) 165 CLR 197 at 248. (1996) 185 CLR 571 at

10 10 2. Whether the Courts of each country will recognise the others Orders and decrees. 3. The order in which proceedings were instituted, the stage reached and the costs incurred. 4. The connection of the parties and their marriage with each of the jurisdictions and the issues on which relief may depend in those jurisdictions. 5. Which forum may provide more effectively for a complete resolution of the matters involved in the parties controversy. 6. Whether having regard to their resources and understanding of language, the parties are able to participate in the respective proceedings on an equal footing. In emphasising the non-exhaustive nature of the factors to be considered, the majority held that, 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. 23. Drawing upon the exposition of the law by the majority of the High Court in Henry v Henry, 24 in Kemeny v Kemeny, 25 the Full Court (Finn, Kay and Maxwell JJ) held that although the Family Court may be a clearly inappropriate forum to litigate one matrimonial cause (for example, as in that case, where property orders had been made by an overseas court) it may nonetheless properly exercise its jurisdiction with respect to others (such as parenting matters, or with respect to property located in Australia). 26 B Examples 24. In Pagliotti v Hartner, 27 the Full Court (Coleman, Boland and O'Ryan JJ) expressed difficulty with the view that the Family Court could be a clearly (1996) 185 CLR 571 at per Dawson, Gaudron, McHugh and Gummow JJ. (1998) FLC (1998) FLC at 85,069. (2009) FLC

11 11 inappropriate forum in circumstances where it was the only forum where the relevant dispute could be determined. 28 In that case, the husband sought a stay of the wife's application in the Family Court with respect to real property located in Australia, in circumstances where the parties had been previously involved in matrimonial proceedings in Italy, but where the adjustment of their interests in the Australian real property had not been determined by the Roman Tribunal. 25. In Porto v Porto, 29 Cronin J refused an application by the husband for a stay of proceedings instituted by the wife in the Family Court on the basis that proceedings were on foot before the courts in Portugal. His Honour ultimately refused the application for a stay on the basis that the Family Court was not a clearly inappropriate forum insofar as the Australian proceedings were not "vexatious or oppressive" in the Voth sense because the nature of the proceedings before the Portuguese courts was, on the evidence of the foreign law before the Family Court, of a preliminary inquiry only In Cashel v Carr, 31 the Full Court (Bryant CJ, Coleman and Boland JJ) refused leave to appeal against a decision of Steele J refusing the husband's application that proceedings commenced by the wife in the Family Court be stayed as vexatious and oppressive in circumstances where proceedings were on foot in the District Court of Hong Kong. In addition, the Hong Kong Court of Appeal had dismissed the wife's appeal against a decision dismissing the wife's application for a stay of the proceedings on foot in Hong Kong. The Full Court applied the principles in Henry v Henry such that the fact that, in this finely balanced case, the husband had commenced proceedings first did not remove the refusal of the stay from the ambit of the reasonable exercise of Steele J's discretion In Garrett v Cowell, 33 Moore J refused an application by the husband to stay property proceedings brought by the wife in Australia in circumstances where both parties resided in Switzerland and that proceedings had been instituted in (2009) FLC at 83,254. [2007] FamCA 454. [2007] FamCA 454 at [31]-[47]. (2005) FLC (2005) FLC at 79,868. [2007] FamCA 778.

12 12 Switzerland, albeit stayed pending the determination of the stay application with respect to the Australian proceedings. Notwithstanding that the risk of duplication loomed large, Moore J did not consider that this amounted to "oppressive or vexatious" in the Voth sense, particularly having regard to the fact that the proceedings in Australia would permit both parties to conduct the litigation in their first language, concluding that: "Weighed in the balance, I am unable to conclude that this court is a clearly inappropriate forum. I am unable to find that the continuation of the wife's property application would be oppressive to the husband in the sense that it would be seriously and unfairly burdensome for him and nor am I able to find it would be vexatious to him in the sense that such a course would be productive of serious and unjustified trouble and harassment. It will require him to prepare his case according to the procedures of this court and for him to retain legal advice in Australia, if that is his decision, file evidence in this registry and argue his case at the final hearing according to Australian law. But that does not put the proceedings in the category of oppressive or vexatious, more particularly when it is considered that there are counter-veiling considerations: the proceedings would be conducted in the parties' first language, they maintain a strong connection with this country through their citizenship at least, the wife's proceedings were properly invoked and she has a prima facie right to have the jurisdiction exercised, little seems to have been done in the property proceedings in either country and costs are not raised as a consideration, and there is not insubstantial property located here. The risk of duplication is a concern and there are other factors pointing in the other direction, but none of it compels the finding that this court in Australia would be a clearly inappropriate forum to hear and determine the parties' property settlement claims." In Vaden v Vaden, 35 Brown FM considered whether the property aspects of proceedings in the Federal Magistrates Court should be stayed in circumstances where the parties, who were married in the United Kingdom and British citizens but resident in Australia, disputed the settlement of property, which was real property located in the United Kingdom and registered in the wife's name. There were no proceedings on foot in the United Kingdom with respect to the property and the wife expressed no intention to bring such proceedings. Brown FM ultimately stayed the property aspects of the Australian proceedings on the basis that if the wife did institute proceedings in the United Kingdom the local [2007] FamCA 778 at [78]. [2007] FMCAfam 744.

13 13 proceedings would be vexatious and, further, that his Honour was not satisfied that the British courts would recognise a judgment of the Federal Magistrates Court In Hastings v Hastings, 37 both parties were New Zealand citizens who married in New Zealand and lived there after marriage and their three children were born there. At the time of their separation the parties were resident in Singapore. Upon separation, the wife and children returned to New Zealand before travelling to Australia where they lived. The husband was living in New Zealand. The wife applied to the Family Court of Australia for property settlement and lump sum maintenance for herself and for interim child maintenance. The husband had filed an application in the New Zealand Family Court for property settlement and sought a stay of the Australian proceedings on the basis that the New Zealand Court should hear and determine the parties claims against each other arising out of their matrimonial relationship. Bulley J held that, whilst the Family Court of Australia had jurisdiction to entertain the wife s applications, the parties had previously agreed, via correspondence between their respective solicitors, that all issues relating to matrimonial property should be governed by New Zealand law and on that basis stayed the Australian proceedings because the substantive law of New Zealand was to be applied and it was clearly inappropriate that the property proceedings between the parties be determined by the Family Court of Australia. Bulley J further held that whilst the wife s claim for lump sum spousal maintenance was not subject to the parties agreement to apply New Zealand law, it was inextricably interwoven with the property claim and should also be stayed. IV ANTI-SUIT INJUNCTIONS: LIS ALIBI PENDENS A General Principles [2007] FMCAfam 744 at [42]-[70]. (1990) FLC

14 In CSR Ltd v Cigna Insurance Australia Ltd, 38 the High Court (Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ, Brennan CJ dissenting) discussed the different principles that applied to determining whether an anti-suit injunction should issue as opposed to those in stay cases. The majority distinguished antisuit injunctions from stays on the footing that, in contrast to the rationale stated above with respect to the latter, the former was premised on the court s power to protect the integrity of [its] processes once set in motion. 39 The majority further founded the power to issue anti-suit injunctions as a power deriving from the equitable jurisdiction, such that anti-suit injunctions may be made in restraint of unconscionable conduct or the unconscientious exercise of a legal right. 40 Although the forum non conveniens test must be applied in both situations, it is not decisive in either case. An anti-suit injunction should be sought in circumstances where one party seeks to have the overseas proceedings stopped to continue Australian proceedings. 31. The majority in CSR Ltd stated the principles to be applied with respect to antisuit injunctions thus: "It will generally be the case that, where an anti-suit injunction is sought in the exercise of equitable jurisdiction, the matters relied upon for the grant of the injunction will or can be raised as issues for determination in the foreign proceedings in respect of which the injunction is sought. Because that is so, an interlocutory anti-suit injunction is vastly different from other forms of interlocutory relief. Ordinarily, an interlocutory injunction preserves the subject matter of a proceeding pending its final adjudication. Where, however, the issue is whether a matter should be litigated in the courts of one country or of another and application is made for an interlocutory antisuit injunction by reference to considerations which will or may fall for determination in proceedings in that other country, the injunction, if granted, operates with the consequence that the matter in question is heard and determined in the court granting the injunction. Certainly that is so with respect to that aspect of the matter advanced in support of the injunction. Thus, an interlocutory anti-suit injunction is effectively a final determination as to where the matter or some particular aspect of it is to be litigated. In a case in which an anti-suit injunction is sought on equitable grounds, the central question is whether the court to which application (1997) 189 CLR 345. (1997) 189 CLR 345 at 391. (1997) 189 CLR 345 at 392.

15 15 is made or some other court should hear and determine the matter in issue or, at least, that aspect of it involved in the application for injunction. And where the courts concerned are, respectively, an Australian court and a court of another country, there is involved in that question the further question whether the Australian court is an appropriate forum, in the Voth sense of it not being clearly inappropriate, for the determination of that matter. The fact that there is that further question, the preclusive nature of an interlocutory antisuit injunction and the importance of comity combine to require an Australian court to consider whether it is appropriate, in the sense that it is not clearly inappropriate, for it to determine the matter in issue before granting an anti-suit injunction. If the Australian court decides that it is clearly an inappropriate forum, that will be the end of its involvement and the occasion for considering whether to grant an anti-suit injunction or other relief will not arise. If the Australian court reaches the opposite conclusion, namely, that it is not a clearly inappropriate forum, then it must go on to determine whether to require the applicant to seek a stay or dismissal of the foreign proceedings or to grant an anti-suit injunction." In distinguishing between the issue of stays and anti-suit injunctions, the High Court in CSR Ltd held, 42 as applied by the Full Court in Lederer v Hunt (Bryant CJ, Finn and Boland JJ), 43 that "there [is] no general rule that an anti-suit injunction will not be granted unless the applicant for the injunction has sought a stay in the 'foreign jurisdiction'" The Full Court (Finn, May and Boland JJ) emphasised, in Dobson and Van Londen, 45 that in considering whether an anti-suit injunction should issue, "the unity of matrimonial causes should be the starting point". 46 point, the Full Court continued: Elaborating on this "Regard must therefore be had to the fact of the relationship in this country between property settlement orders, spousal maintenance orders and child support obligations. This interrelationship can easily be seen by reference to the provisions of s 79(4) of the Family Law Act which sets out the matters to which regard must be had in making an order under s 79 for property settlement (1997) 189 CLR 345 at (1997) 189 CLR 345 at (2007) FLC (2007) FLC at 81,351. (2005) FLC (2005) FLC at 79,712.

16 16 When regard is had to this interrelationship between proceedings and orders for property settlement, spousal maintenance and child support, we consider that it is vexatious and oppressive to commence and prosecute proceedings for spousal and child maintenance in a foreign court: when both parties are seeking orders for property settlement in this country; when identical issues relating to the parties financial positions and the needs of their children will need to be examined in all proceedings in question; and when all financial matters can be determined in this country." Although the Family Court may issue anti-suit injunctions enjoining parties the subject of its jurisdiction from litigating in overseas courts, the Full Court has affirmed that the exercise of its own jurisdiction cannot be constrained by anti-suit injunctions issued by overseas courts. In Kemeny, the Full Court stated that: "Ultimately the issue whether to accept or decline jurisdiction is a matter for this court alone which cannot be fettered by a foreign court's granting of an anti-suit injunction. However, in our view when determining whether Australia is clearly an inappropriate forum in which to allow the wife to relitigate matters which have already been fully litigated before a superior court of another sovereign nation, the existence of such an order made after proceedings where all parties were represented, while by no means determinative of the outcome of the forum application, remains an additional matter to be given consideration." 48 B Examples 35. In Skinner v Alfonso Skinner, 49 Murphy J at first instance refused an application by the husband for the issue of an anti-suit injunction enjoining proceedings instituted by the wife in Spain for divorce, financial orders and limited parenting orders in circumstances where the wife and children lived (and continued to live) in Spain, but where the bulk of the parties' property was located in Australia. His Honour ultimately stayed the Australian proceedings except insofar as they related to the settlement of property. The Spanish court had, however, not determined whether its jurisdiction was properly enlivened by the wife's application (2005) FLC at 79,716 79,717. (1998) FLC at 85,069. [2010] FamCA 329 at [42]-[45] (Note that at the time of writing an application for leave to Appeal to the Full Court is pending).

17 Consonant with the view expressed by the Full Court in Kemeny stated above, which were founded on the interrelationship between notions of national sovereignty and the comity of those nations, his Honour stated that: " the prospect of a jurisdictional argument in a foreign court may need to be decided before the relevant proceedings for stay or injunction in the local court; a discretion exists in the local court as to whether to adjourn or not. The court's discretion in respect of the application ought, in my view, be informed by reference to findings about the interests of justice. Within that consideration, the important matter of international comity must be taken into account. In my judgment, no offence is done to notions of international comity by determining the instant application in the absence of a finding by the Spanish Courts that they have jurisdiction with respect to the proceedings initiated by the wife. No such order made by this court purports in any sense to impinge upon an independent decision by the Spanish court about its jurisdiction. If, ultimately, that court decides there is no jurisdiction, then any anti-suit injunction made by this court either becomes redundant or serves to underscore or put beyond doubt, the matters the subject of it. If, on the other hand, the Spanish court decides it has jurisdiction, then issues relevant to anti-suit injunction or the stay of proceedings in this court, remain relevant and unaffected by any ultimate Spanish decision on that issue. I cannot see that either party is prejudiced by this court proceeding to determine the applications before it without deciding the issue of the Spanish court's jurisdiction or adjourning these proceedings to allow that to occur definitively." In Ashforth v Ashforth, 51 Rose J granted an anti-suit injunction sought by the husband with respect to proceedings instituted in the Family Division of the High Court of England and Wales in circumstances where the financial relief sought was the same in both sets of proceedings on the ground that the Family Court was not a clearly inappropriate forum, notwithstanding that real property the subject of the dispute was located in England. In this regard, his Honour made remarks with respect to the relatively small property pool and the financial and emotional strain of duplicated proceedings remaining on foot, 52 but concluded that the valuation of [2010] FamCA 329 at [42]. [2010] FamCA 37. [2010] FamCA 37 at [44].

18 18 property in England and giving instructions and obtaining legal advice were not prohibitive of the dispute being determined by the Family Court In Morton v Morton, 54 Watt J refused an application by the husband for an antisuit injunction enjoining the maintenance of proceedings brought by the wife in the United Kingdom in circumstances where the Family Court was a clearly inappropriate forum, and instead granted the wife's application to stay the Australian proceedings. The learned judge's decision turned upon the jurisdiction of the United Kingdom court to make a pension division order (referred to as "a superannuation splitting order" in Australia) with respect to the husband's pension fund, which was in the payment phase at the relevant time. Watt J concluded: "That circumstance, not by itself but considered together with all the others, does in my view amount to a clear case within the meaning of the judgment of the High Court in Henry, and in my view the attainment of justice in this case will be much better served if the litigation takes place in a forum that has the capacity to deal with all financial issues arising out of this marriage, noting that in England the wife has instituted maintenance proceedings as well as property proceedings and proceedings for a pension sharing order. The wife has instituted proceedings for a divorce in England and so the English court will be able to deal with all matters arising out of the relationship and its breakdown, and indeed documents tendered to me show that the granting of a divorce may not be far away once this determination is made. In all the circumstances I consider that the Family Court of Australia is a clearly inappropriate forum for this matter to proceed in." 55 V PURSUING FOREIGN-BASED PROPERTY A Injunctions 39. In cases where a party is living in Australia but is in control of assets located overseas, the in personam nature of family law jurisdiction, both as to substantive relief and enforcement of it, gives rise to considerations of the risk of that party [2010] FamCA 37 at [23]-[40]. [2008] FamCA 854. [2008] FamCA 854 at [40].

19 19 leaving Australia to escape the jurisdiction of an Australian Court or to deal with foreign-based assets. 40. In such cases, it may be necessary to consider not only the common use of injunctive relief to restrain dealings with property to preserve assets, but also the possibility of injunctions to restrain the party from leaving Australia. 41. In Restein v Restein 56, Guest J considered a case where the parties were living in Australia at the time of separation but the husband was allegedly in control of substantial overseas investments of not less than US$ 40 million managed through a number of foundations or trusts. Guest J, on an urgent application brought ex parte, ordered the husband to forthwith surrender to the Family Court of Australia all passports in his name and further ordered that the husband be restrained from leaving the Commonwealth of Australia. 42. In Brown v Brown 57, the Full Court of the Family Court (Kay, Warnick and Boland JJ) considered the use of s 114(3) of the Act to found injunctions restraining freedom of international movement in financial cases. At paragraph 195 of the judgement, the Full Court noted a number of single instance decisions where such power was accepted to exist, at least impliedly. B Service of Subpoenas Outside the Jurisdiction 43. Australia is currently in the process of ratifying the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("the Service Convention"), which will enter into force on 1 November 2010 absent objection from another contracting State. The Service Convention applies in all cases where there is an occasion to transmit a judicial or extrajudicial document for service abroad, except where the address for service is not known (Art 1) No. MLF 2665 of 2002, Unreported judgement of Guest J, delivered 4 July (2007) FLC

20 The Commonwealth Attorney-General's Department serves as the Central Authority under the Service Convention (Art 2), which forwards the document annexed to a request in the model form to the Central Authority in the addressee State (Art 3), and the Central Authority in the addressee State shall either itself serve or arrange to have the model form, including the summary of the document to be served, served by an appropriate agency (Art 5). The model forms are available at Upon service, the Central Authority in the addressee State must complete a certificate in the model form to be forwarded directly to the applicant (Art 6). Notwithstanding Australia's accession to the Service Convention, however, it may still use consular or diplomatic channels to effect the service of documents (Art 9). The Central Authorities for the addressee States that have acceded to the Service Convention are listed on the Attorney-General s Department website. 46. Regulation 12 of the Family Law Regulations 1984 (Cth) ("the Regulations") governs the service of documents in countries that are a party to the Convention, and documents that must be served in accordance with that Convention must be served in accordance with reg 12 of the Regulations. 47. Under reg 12(3), the party to the proceedings who desires to serve a judicial document abroad must file a request for service in accordance with the Form in Sch 1 of the Regulations with the Registrar, and deposit certain documents with the Registrar, who shall forward those documents direct to the Secretary of the Commonwealth Attorney-General's Department for transmission to the country of service upon being sealed with the seal of the court (reg 12(5)). The documents required to be deposited with the Registrar are identified in reg 12(4) thus: (a) (b) (c) the document to be served; a translation of the document into the language of the country in which the service is to be effected; a copy of the document to be served and of the translation; and

21 21 (d) such further copies (if any) of the document and translation as are required by the Convention. 48. Under reg 12(6), upon the Registrar receiving a certificate certifying that the deposited document has been served on a person on a date specified in the certificate, the certificate may be filed and is then evidence of the matters stated in the certificate. If personal service is required, however, the certificate will not prove personal service unless it also certifies the means by which the person who served the document identified the person served, or other evidence is furnished showing that the document came to the notice of the subject person (reg 12(7)). 49. Part 7.6 of the Family Law Rules 2004 (Cth) ("the Rules") provides for the service of documents in non-convention countries, which permits service in accordance with the law of the non-convention country or through diplomatic channels to effect service in accordance with the Rules. Part 6 the Federal Magistrates Court Rules 2001 (Cth) governs the service of documents in that Court. Part 2 of the Evidence and Procedure (New Zealand) Act 1994 (Cth) makes special provision for the service of Australian subpoenas in New Zealand. C Taking Evidence Abroad and Use of Foreign Evidence in Local Proceedings 50. Under sub-s 7(1) of the Foreign Evidence Act 1994 (Cth), the Family Court may make any of the following orders (in respect of proceedings before the Family Court or the Federal Magistrates Court (sub-s 9A(1)), on the application of a party, if it is in the interests of justice to do so: (a) (b) (c) for examination of a person outside Australia on oath or affirmation at any place outside Australia before a judge of the court, an officer of the court or such other person as the court may appoint; or for issue of a commission for examination of a person outside Australia on oath or affirmation at any place outside Australia; or for issue of a letter of request to the judicial authorities of a foreign country to take the evidence of a person outside Australia or cause it to be taken.

22 Subsection 7(2) of the Foreign Evidence Act lists the matters that the Court must have regard to in deciding whether it is in the interests of justice to make any such order. The same powers are conferred on other courts exercising jurisdiction in family law matters by s 11 of the Foreign Evidence Act. Subsection 9(1) of the Foreign Evidence Act permits the use of evidence taken in an examination (or a record of that evidence), which under s 4 includes documents produced at the examination and answers made to written interrogatories presented at the examination, ordered under sub-s 7(1) upon being tendered as evidence by a party to the proceeding. Subsection 9(2) provides that such evidence is not admissible, however, if it appears to the court's satisfaction that the person said to be outside Australia was in Australia and able to attend the hearing, or if the evidence would not have been admissible had it been adduced at the hearing. 52. It is preferable to rely on letters of request for the examination of witnesses outside Australia because examiners are not able to compel witnesses to testify before them, and the provisions of the Foreign Evidence Act permitting examinations to be conducted outside Australia do not override local laws to the contrary. 58 An application for the issue of a letter of request may be made ex parte without notice to the other parties, but if the Court decides to make an order for its issue the applying party must give notice to the other parties advising that they may participate in the examination If the Court decides to make an order for the issue of a letter of request, under s 8(2) the Court may relevantly include in such order whether examination, crossexamination or re-examination of the person, whether the person's evidence is given orally, on affidavit or otherwise; and attendance of the legal representative of each of each party to the proceeding in question and participation of those persons in the examination. It appears that the Court may also request that the Director of Public Prosecutions v Alexander (1993) 33 NSWLR 482 at 486 per Hunt CJ at CL. Parsons v Martin (1984) 58 ALR 395 at 404 per Bowen CJ, Northrop and Toohey JJ.

23 23 recipient of the letter cause subpoenas to issue for the production of documents for the use of the parties in taking evidence the subject of the letter of request For an example of where a letter of request was refused, see Park v Citibank Savings Ltd. 61 See also, generally, the discussion of the issue of letters of request by the High Court in Hardie Rubber Co Pty Ltd v General Tyre & Rubber Co. 62 D Family Law Rules 55. The Family Law Rules contain various provisions that are relevant to s 79 cases where some of the property of the parties or either of them is located overseas. 56. For example, rule which provides for a person to make an affidavit outside of Australia; rule dealing with letters of request under the Foreign Evidence Act 1994; and rule which provides for the adducing of evidence by electronic communication by a witness in a foreign country. Of course, all of the relevant rules governing procedure have application and it will usually be necessary to obtain expert evidence from a suitably qualified expert as to the value of any assets located overseas and in many cases, where the cooperation of a party may not be readily forthcoming, it will be necessary to engage foreign-based lawyers to assist in performing part of the task of identifying and proving ownership of assets and of course proving foreign law in relation to ownership and the nature of proprietary rights enjoyed. There is a need for parties to proceedings, even under the earlier State based de facto legislation or common law, to make full and frank disclosure of all relevant financial circumstances including foreign real property. The New South Wales Court of Appeal in Paino v Paino [2008] NSWCA 276 (per Hodgson and McColl JJA) noted the requirement of a Court (in dealing with a matter under the NSW Property (Relationships) Act) to make findings as to the property of the parties and the value of that property, including real property based overseas. Even though the valuation exercise may be difficult (particularly in the case of landholdings in Director of Public Prosecutions v Alexander (1993) 33 NSWLR 482 at 499 per Hunt CJ at CL. (1993) 31 NSWLR 219. (1971) 129 CLR 521 at 552 et seq per Walsh J (McTiernan ACJ, Stephen and Mason JJ concurring).