The case of Scarffe & Obannon [2020] FamCA 77

The case of Scarffe & Obannon [2020] FamCA 77, a first instance decision by the Honourable Justice Wilson is a useful and detailed resource for practitioners dealing with matters where there is international litigation.

The issue was the hearing of an interim defended application for an anti-suit junction. The court described it as:

“…the essential contest in this application was whether to stay or to dismiss this proceeding on the basis that it is clearly the inappropriate forum for the hearing and determination of property proceedings between the parties.”

The wife had already commenced property litigation in Singapore. The husband had sought to restrain those proceedings in Singapore without success.

The husband’s case was that the litigation in Singapore would not fully and exhaustively determine all property issues between the parties “because issues relating to superannuation fall for determination and only this court, says the applicant, has jurisdiction to determine issues for splitting Australian superannuation amounts.” The husband also pointed to the fact that the majority of the assets were located in Australia.

The husband sought a declaration that Australia is not a clearly inappropriate forum. He sought to restrain the wife from taking action in Singapore and other ordinary “applications in relation to valuation and disclosure”.

The court determined that the Australian proceedings should not be stayed or dismissed, that the Australian court was “not clearly the inappropriate forum” for the hearing and determination of the lis pendens between the parties, that the wife was to be restrained by an in personam anti-suit injunction in relation to the litigation in Singapore, and the matter would be managed by a registrar of the court.

The parties have three children. They have lived in the UK and Australia and moved to Singapore in 2014. The husband returned to Australia in May 2018. The wife and the children live in Singapore. Everybody is an Australian citizen.

The wife and the children have had dependency passes linked to the husband’s employment contract. The wife has her own employment pass until the end of 2020 but may not be renewed and significantly, the matrimonial property is located in Australia, including jointly owned real estate, funds in bank accounts, investments and superannuation. Not relevant to the central issue is the fact that the wife also has a 50% interest in her late father’s residuary estate.

In Singapore, the husband’s application was dismissed, and he did not appeal.

The wife provided relevant information about the history of the matter and how Singaporean divorce law applies.

While the wife had some funds in a bank account in Singapore, as well as her company, all joint funds are in Australia.

The husband pointed, at paragraph 18 of his affidavit, to the fact that the Singapore court may not make orders in relation to Australian property and it will not take into account the wife’s interest in her late father’s estate (the estate was said to be $11 million), the Singapore court may not take into account the period during which the parties lived in a de facto relationship which was between 1997 and 2014 and in Singapore, allegations of his conduct during periods of confusion in respect of his sexual orientation would be relevant.

The court determined that an important issue was the extent to which the Singaporean family law and the Australian family law are different. The court recorded expert evidence in Singaporean law.

An expert, Ms H, a registered legal practitioner admitted to practice in Singapore, provided information. She had been asked to provide a report “relating to the matrimonial dispute between the parties and the application of Singaporean matrimonial law”. She had been provided with a list of questions. She exhibited to her affidavit the letter of instructions. She provided a report. She received a further list of questions and responded and indicated that she understood the joint expert rules of the Family Law Rules.

The wife objected to the evidence indicating that Ms H was not an independent expert, as required, and the report had not been produced in a form as it needed to be.

The court read the report. The court extracted as follows:

“Several things must be said about the interaction between Singaporean family law and its application to the facts of this case. In no special order those matters include the following –

(a)      the procedure set out in s 112(10) of the Singaporean Women’s Charter, as recorded in paragraph 11 of the first report of Ms H has certain superficial parallels to s 79(4) of the Family Law Act yet no equivalent to s 75(2) appears to be relevant in Singapore whereas in Australia, s 75(2) factors are critical to property division cases;

(b)      in Singapore s 112(2) of the Women’s Charter has a parallel to s 79 of the Family Law Act in that a threshold issue is whether the division is just and equitable, but under s 79(4) of the Family Law Act the fact-specific enquiry is significantly more sophisticated and intricate;

(c)      s 114(2) of the Women’s Charter has at its aim placing the parties in the financial position as if the marriage had not broken down whereas that is not a legislative imperative under the Family Law Act;

(d)      periods of marriage as well as periods of cohabitation unmarried are taken into account in Australian family law, a seemingly different regime to that encompassed by s 112(2) of the Women’s Charter, as explained at paragraph 19 of the Ms H first report;

(e)      the observations in paragraphs 30, 31 and 32 of the Ms H report about extreme and undisputed conduct is not the law of Australia, as I surveyed in Keskin & Keskin [2019] FamCA 384”.

The court then considered the Kennon & Kennon jurisdiction and set out the evolution of the learning and recorded position in relation to family violence in property division cases. That is extracted in paragraph 31 of this Decision referring to paragraphs 28 through to 40 of the case of Keskin & Keskin, a 2019 FamCA 384 case, which traced, significantly, the history of the Kennon & Kennon developments. I will provide a separate note in relation to that case.

Continuing the discussion of the differences and similarities between the two jurisdictions, the court considered that whereas in Australia, the irretrievable breakdown of a marriage is relevant, but that sections 95(3) of the Women’s Charter involves proof of one of five matters demonstrating the irretrievable breakdown of the marriage.

Australia applies a different test to determine the issues of forum non conveniens.

At paragraph 35, the court set out seven critically important matters in the comparison:

“35.     The information given by Ms H was most helpful in this case and I have been assiduous to avoid reading those portions of the reports (where appearing in two letters) that applied the Singaporean law to the facts of this case. After all, that is my task. That said, several critically important matters arose from a better understanding of Singaporean family law compared to Australian family law. They include –

a.     obtaining a divorce order in Singapore is more complex than it is in Australia;

b.     periods of pre-marital cohabitation in Singapore may be treated differently than they would be under the Family Law Act;

c.     the considerations in which the Singaporean courts engage in dividing property seem to be less intricate than are the considerations under s 79(4) of the Family Law Act;

d.     under Singaporean law, no equivalent exists to the extensive array of matters that a court must consider under s 75(2) of the Family Law Act;

e.     Singaporean courts have power to divide assets wherever located;

f.      Singaporean courts have power to split superannuation without the complexities that attend superannuation splitting orders under the Family Law Act; and

g.     an order of this court is amenable to enforcement in Singapore but in order to do so, except in relation to a maintenance order, a separate civil proceeding must be commenced instead of the precise order being registered and enforced as would a foreign judgment be enforced in Australia under the Foreign Judgments Act.”

Paragraph 36 of the judgment said as follows:

“The point of remarkable significance in this case is that no assets exist in Singapore beyond the respondent’s start-up business and an unknown sum in her bank account. Plus, the respondent and the children have no real connection to Singapore.”

The court had referred to the useful submissions that were provided and these are discussed from paragraphs 38 to 55 of this judgment and paragraph 56 of the applicable legal principles.

The court then discussed the applicable legal principles.

The court was making a decision in a contested interlocutory application. The court was aware that therefore the matter was “necessarily bereft of the detail and depth of examination of fact and law that will be undertaken at the trial of this proceeding”.

The court considered the “undesirability of judges, on the hearing of interlocutory applications, making findings of fact”. The cases referred to were Marvel & Marvel (2010) 43 Fam LR 348, Deiter v Deiter [2011] FamCAFC 82, Eaby & Speelman [2015] FamCAFC 104, Redmond & Redmond [2014] FamCAFC 155.

The court said at paragraph 61:

“ I have proceeded on the basis on this application that any findings of fact have been made with great circumspection and only for the purposes of deciding this interlocutory application.”

The court then considered the anti-suit injunction.

The court referred to the decision of Hillam & Barret [2019] FamCA 193 which was a decision of the same Judge, the Honourable Justice Wilson. The reference was to paragraphs 40 – 64.

His Honour then restated the principles in this present case.

The two main issues were identified to be “this court’s power to make such an order” and “whether the jurisdiction should be exercised in the circumstances of this case”.

I refer the reader to the detailed discussion in the case.

At paragraph 46, the court discussed Lederer & Hunt (2007) 36 Fam LR 587. The court said:

“In that case the Full Court proceeded on the presupposition (in respect of which no party took issue) that in appropriate circumstances the Family Court had power to grant an anti‑suit injunction, whether grounded in s 34 of the Family Law Act or in the inherent or implied jurisdiction of the Family Court to make necessary and appropriate orders so as to avoid injustice.” 

In Lederer & Hunt, the Full Court addressed issues “about the equitable foundation for the grant of an anti‑suit injunction”.

The court referred to a decision of Whung & Whung (2011) 45 Fam LR 269. This was a decision of O’Reilly J and the question that was adopted as that the relevant test is whether the local court is a clearly inappropriate forum. 

“In answering that enquiry, a court determines the competing advantages and disadvantages arising from continuing with a proceeding in the selected forum.”

O’Reilly J held that was “relevant to consider whether jurisdiction exists in the court of another forum to deal with the same subject matter which is before the Australian court and the stage which that other proceeding had reached in that other forum”.

In this matter, at paragraph 54, His Honour found that he was not persuaded that this court was a clearly inappropriate forum.

The question of the jurisdictional basis for the grant of an anti-suit injunction was considered by His Honour in his judgment.

At paragraph 59, he made reference to Cole v Abati (2016) 55 Fam LR 329.

“There, the Full Court (Thackray, Strickland and Murphy JJ) made three important observations. First, the court referred to statements of principle in the High Court in CSR Ltd & Cigna Insurance Australia Ltd (1997) 189 CLR 345 to the effect that anti-suit injunctions can be granted either in the exercise of an inherent power to protect the court’s processes or in the exercise of the court’s equitable jurisdiction. Second, the court questioned whether the Family Court of Australia was a court of equity. Third, the court proceeded on the footing that it was open to the learned trial judge to grant an injunction in the same circumstances as an injunction could be granted by a court of equity. In the upshot, the Full Court dismissed an appeal from the trial judge’s grant of the anti‑suit injunction.”

The Full Court has emphasised these questions:

“i)     whether there in truth is but one controversy;

ii)      whether complete relief is available in the local jurisdiction; and

iii)     whether something is to be gained in the foreign proceeding.”

The court then considered Underwood & Underwood [2017] FamCAFC 267. The following passages were quoted:

“22.  The matter came before the primary judge in a duty list and on the face of the material before the Court there were proceedings in Australia and the USA between the same parties involving the same controversy the continuation of one or the other of which was prima facie vexatious or oppressive in accordance with the test laid down in Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 at 554.

23.    The approach adopted by the primary judge was therefore appropriate.”

At paragraph 64, the court said:

“Self-evidently, it is undesirable for a proceeding to be on foot in Singapore in which the precise subject matter is being addressed as is being addressed in this court.”

At paragraphs 66 - 68, the court said:

“66.  In my view, in this case it cannot be said that the precise same litigation is on foot in Singapore as it is in this court. While true, the Singapore court has power to grant orders in personam against both parties. Yet those orders are likely to be of little utility having regard to the fact that the majority of the property is in Australia. Enforcing any orders made by the Singapore court will be problematic in Australia whereas an order of this court is enforceable according to its terms without more.

67.    It seems to me that even if all things were equal, and here they are not, the enforceability of orders of this court in respect of assets located in Australia renders this court the preferable forum over the court in Singapore.”

68.    To my mind the appropriate way forward is twofold – first, to refuse the respondent’s stay application and second, to grant the applicant’s anti-suit injunction.”

This is a very interesting case and the detailed examination of authorities, the jurisdictional power, and the types of issues to be determined is of use to practitioners.