It is increasingly common for parties to hold assets overseas. If a party holds property or assets in Australia and overseas, then deciding in which country you should commence property settlement proceedings is not always easy.
Which country should I commence property settlement proceedings?
If you or your former partner holds asset in Australia and overseas, you should obtain family law advice in Australia and in the country where the overseas assets are located.
Depending on how many assets are held overseas, and where you and your former partner reside, it may be more appropriate for your property settlement to be determined in the overseas country.
Each country has different laws and so there will be pros and cons to your property settlement being dealt with in Australia as opposed to it being dealt with in the overseas country. Ensure that you are fully informed about how each country determines property settlement matters, as one jurisdiction may lead to a better outcome in your matter, than the other.
How are overseas assets treated in property settlements in Australia?
See our article on this topic: Are overseas assets included in the property pool?
When can you file property settlement proceedings in Australia?
Property settlement proceedings can be filed in Australia if either party to the marriage is an Australian citizen, is already a resident in Australia or is present in Australia at the time of filing proceedings: S39(4) FLA.
But just because you can commence property settlement proceedings in Australia does not mean you should.
Which country is clearly the inappropriate forum?
The Family Courts have the power to stay (put on hold) or dismiss proceedings in Australia if the Court determines that Australia is the “clearly inappropriate forum” to hear the matter. This is known as the principle of forum non conveniens.
The non-conveniens test is stated in the cases of Voth, Henry, Spiliada, and most recently, Obannon and Scarffe [2021] FamCA FC 33.
It is difficult to argue that Australia is the clearly inappropriate forum. The bar is very high.
The kinds of factors that the court will consider in making a determination are as set out in Henry, and more recently Yeo & Huy (No 2) [2012] FamCA 541 at [35] are:
- The connection of the parties and their marriage to each jurisdiction and the issues on which relief depends in those jurisdictions;
- Whether the other country will recognise Australian orders and vice versa and ease of enforcement in each country;
- Which forum may provide more effectively for complete resolution of matters involved in the parties controversy;
- The order in which proceedings were instituted, the stage at which the proceedings have reached and the costs that have been incurred by the parties;
- The connection with the parties and their marriage with each of the jurisdictions (i.e. place of residence and assets);
- The governing law of the dispute – the issues on which relief might depend on each of the jurisdictions;
- Any advantage to litigating in either jurisdiction;
- Whether having regard to the resources of the parties and their understanding of language, the parties are able to participate in the respective proceedings on an equal footing.
When the court is assessing these factors to determine which country the dispute should be heard in and whether Australia is clearly an inappropriate forum, the task is not to weigh the factors for and against, but to assess whether there are enough factors indicating that Australia is clearly the inappropriate forum such the application to stay proceedings should be granted: Pierson & Romilly [2020] FamCAFC 91.
Case Study: Obannon and Scarffe
In Obannon and Scarffe [2021] FamCA FC 33, the Wife initiated proceedings in Singapore regarding divorce, property settlement, spousal maintenance, parenting and child support.
The Husband initiated property settlement proceedings in Australia.
The parties and the children were Australian citizens who relocated to Singapore for the Husband’s employment in 2014.
The parties separated 2016 and the Husband returned to Australia in 2018. The Wife and children continued to reside in Singapore.
The Trial Judge was required to consider whether property settlement proceedings brought by the Husband in Australia should be dismissed on the basis that Australia was a clearly inappropriate forum.
The Trial Judge determined that Australia was not a clearly inappropriate forum and restrained the wife from continuing the family law proceedings in Singapore.
The Wife appealed this decision.
On appeal, the Full Court held that the Trial Judge:
- made erroneous findings about Singaporean law;
- overlooked the fact that parties had resolved that the Singaporean proceedings would continue regarding divorce, spousal maintenance, parenting issues and child support;
- overlooked the question of whether continuation of property proceedings in Australia would be oppressive.
- erred by directly comparing the law in Singapore to the law in Australia to determine which was the appropriate forum for proceedings to continue.
- placed undue weight on which forum could more comprehensively deal with all issues in dispute, versus identifying the juridical advantage to the parties in each jurisdiction
The Full Court held: “[i]t is clear from the authorities that the test of whether the same controversy is before each Court is not one that requires complete satisfaction that every aspect of the litigation is identical.”
The Trial orders were set aside and the matter remitted for rehearing.
This case exemplifies that the test is not which country is more appropriate/preferable to deal with the matter, but whether Australia is a clearly inappropriate forum to deal with the matter, which is a much higher bar.
Case Study: Janssen & Dupont
In Janssen & Dupont [2021] FamCA 268 the Court reiterated that the task is not to weigh the factors for and against, but to assess whether there are enough factors indicating that the forum is clearly inappropriate such the application to stay proceedings should be granted.
In this case, the parties entered a French marriage contract. The Wife was living in Australia. The Husband was living in France.
The Wife filed property settlement proceedings in Australia for sale of the Australian former matrimonial home.
The Husband sought a stay of the proceedings for want of jurisdiction.
The Court was required to decide whether Australia was a “clearly inappropriate forum”.
The relevant evidence the court considered was:
- Both courts had jurisdiction.
- Evidence was that the French court could not enforce an order made in France for sale of the Australian property but the Australian court could enforce an order made in Australia for sale of the Australian property.
- Proceedings to deal with the former matrimonial home were commenced in Australia first;
- No application was before the court in France regarding the Australian property;
- The only connection to Australia was the subject property in Australia and the Wife was living in Australia.
- France was advantageous to the husband because of the laws in relation to contributions.
- Australia was advantageous to the Wife because of the laws in Australia.
The Court held that nothing indicated that Australia was clearly the inappropriate jurisdiction having regard to factors set out in Voth, Henry etc.
The Husband’s application to stay the proceedings in Australia was dismissed.
The Wife’s application for an anti-suit jurisdiction was dismissed on the basis that the husband undertook not to further prosecute the French proceedings, and evidence of an expert was that the French court would decline to exercise jurisdiction if Australia proceeded to exercise it.
Case Study: Mittleman & Eilerts
In Mittleman & Eilerts [2024] FedCFamC1F 115, the Wife filed an application for parenting and property/financial orders in Australia. The Husband filed an application to determine these matters in Country B. Both parties asserted that the jurisdiction in which they filed was the appropriate forum to determine the dispute and sought injunctions restraining the other from proceeding with their application in the relevant country.
The parties agreed that Australia was the appropriate jurisdiction for the parenting dispute.
The Court was required to determine whether financial and divorce proceedings should be determined in Australia or in the High Court of Country B.
In this case, the Wife was living in Australia and had been since 2015. The parties had one child (14) who lived with the Wife in Australia.
The Husband was living in Country B but a permanent resident of Australia and he expressed an intention to return to Australia for the purpose of setting up a business in WA.
In determining whether Australia was the clearly inappropriate forum, the relevant evidence the Court considered was as follows:
- Both courts had prima facie jurisdiction;
- Evidence was that there were no reciprocal agreements for enforcement of judgements between the countries although orders could be made in personam against the person within the jurisdiction;
- Both courts could include the value of foreign assets and order a division based on that pool, without making orders requiring the transfer or sale of foreign assets.
- There were no issues of enforcement because the Wife only sought relief in relation to assets in Australia;
- Proceedings were commenced in Australia by the Wife on 17 April 2023, seeking financial relief;
- The Husband commenced proceedings on two dates in early 2023, but did not advise the wife of such application in their correspondence to the Wife in their correspondence of 23 April 2023 and the proceedings were not served on the Wife until mid 2023;
- The proceedings in both courts were at an infancy stage;
- The cost of proceedings in Australia were greater than in country B;
- There were substantial differences between the approach in both jurisdictions. In Australia all assets at the time of the hearing are taken into account and may be adjusted and the court does not require a nexus between contribution and an asset. However, in Country B, the de facto relationship is not recognised and property acquired prior to the marriage are not except in limited circumstances generally included in the pool and adjusted, even where the non-owner can prove a direct contribution to the asset or where an asset was substantially improved by joint efforts or when a marital home was purchased in contemplation of marriage. Further, post separation contributions are relevant in Australian law but any property acquired after separation could be ignored in Country B, because of the lack of contribution by the Wife. Finally, there is no consideration of future needs factors in Country B, such as care of children and income capacity.
- Country B was therefore advantageous to the Wife because of the Laws in relation to contributions.
- Australia was advantageous to the Wife because of the laws in Australia.
- Both parties were citizens and permanent residents in Australia, as was their child and the Wife and child continued to reside in Australia. There were two properties purchased in Australia and the Husband conducted businesses here. Whilst the Husband travelled abroad regularly throughout the relationship, the parties lived together in Australia for 7 years until 2022.
- Given the Husband was a permanent resident, and his intention to return to Australia to establish a business, it was reasonable to infer he held some degree of proficiency in english, and he would be in a position to attend a hearing.
The court was swayed heavily by the fact that the Wife did not make any claim on assets situated in Country B and so there were no reciprocity or enforcement issues arising from determination by an Australian Court.
The Husband’s counsel pressed heavily in his submissions on the point that even if proceedings were determined in Australia, even if the wife’s relief was limited to Australian assets, there would need to be disclosure and valuation of the assets in Country B, in order to persuade a court that her retention of Australian assets would be just and equitable.
In relation to this point, the Court held that the disclosure process in relation to the Husband’s country B assets was in the hands of the husband, it can be done quickly and transparently, and the court did not accept that valuing assets in another jurisdiction was particularly onerous for either party and it was a common occurrence in matters before the court.
The court held it was desirable for one court to provide for a complete resolution of all matters and that the only court able to do so was the Australian court.
The Court made clear that the test was not a comparison of the advantages and disadvantages of each jurisdiction, but rather whether Australia was clearly the inappropriate forum and, in this case, Australia was not a clearly inappropriate forum.
What is an anti-suit injunction?
An anti-suit injunction restrains a party from bringing/continuing court proceedings in an overseas country.
For example, if you have filed an application for property settlement in Australia, and the other party has subsequently filed an application for property settlement in an overseas country, you should seek legal advice about obtaining an anti-suit injunction to avoid the same issues being determined by two different courts.
Usually, a clearly inappropriate forum application and an anti-suit injunction application go hand in hand.
Notably, an anti-suit injunction can only be sought to restrain the continuation of the specific proceedings that are on foot in Australia so there is not an overlap with proceedings underway in an overseas country. In the above example, this means the anti-suit injunction, if successful, would only prevent the other party from continuing property settlement proceedings. It would not cover parenting, child support or spousal maintenance matters, if the other party decided to file an application dealing with those matters in the overseas country at a later date.
In Obannon & Scarffe, the Trial Judge erroneously issued an anti-suit injunction restraining the wife from further prosecuting any of the proceedings she had instituted in the Family Courts in Singapore. She had brought proceedings relating to divorce, parenting matters, property settlement matters, spousal maintenance and child support. This was improper as the Husband had only commenced proceedings in Australia with respect to property settlement matters.
On appeal the Husband acknowledged and the Full Court agreed that the restraint on the Wife was excessive, and the anti-suit injunction should have been limited to restraining the wife from continuing only the property settlement proceedings in Singapore, not the other issues the subject of her application.
Anti-suit injunctions are useful to prevent the same proceedings in relation to the same issues being dealt with in two different courts, however there are limits as to injunctions of this nature. It is still possible, as was the case in Obannon & Scarffe, for different aspects of one family law matter to be determined in Australia and overseas, provided that they deal with different issues in dispute.
Important take aways
- The test for determining whether or not proceedings in Australia should be dismissed is the clearly inappropriate forum test;
- This test is not which country is more appropriate / less perferable, but whether Australia is a clearly inappropriate forum to deal with the issue;
- This is a much more dificult test is difficult to satisfy;
- Anti-suit injunctions are useful to prevent the same proceedings in relation to the same issues being brought and determined in Australia and an overseas country;
- Anti-suit injunctions have limitations and do not necessarily prevent different aspects of one family law matter from being determined in Australia and overseas if they deal with different issues.
Contact Us
If you have recently separated and this article has raised questions for you about which country you should commence property settlement proceedings in, please contact us to book a reduced rate consultation with one of our experienced Brisbane Family Lawyers to have a confidential discussion about your individual circumstances.
