Case Note: Teo & Guan [2015] FamCAFC 94.  In today’s increasingly global culture, it is not uncommon for family law agreements to be entered into outside of Australia, but which have some legal effect within Australia.

The recent Full Court of the Family Law decision of Teo & Guan explores some cross-jurisdictional and international law issues from a Family Law Perspective.

Brief Relevant Facts

The husband and wife were married in Singapore in 1984, separated in 2010 and have 3 adult children.

The husband lives about 7 months per year in Perth, Australia, and spends the balance of his time in Singapore.

The wife lives in Perth, Australia, and is an Australian citizen.

In February 2012, the parties and their children executed a Deed of Family Arrangement (“the Deed”). The Deed made declarations of trust by each party, and “regulated the ownership” of assets located in both Australia and Singapore.

In general, the effect of the Deed was that the 5 parties were to share matrimonial assets equally.

The wife was to receive her $2 million share by way of instalment payments.

The Deed had the following key clauses:

a.  The division of the “Collective Assets” in particular as between the husband and the wife shall be in full and final settlement of all matters and present and future claims between themselves including and not limited to any claims for matrimonial assets in any proceedings whether in Singapore or anywhere else (emphasis added)

b.  The Deed shall be governed and construed in accordance with the Laws of Singapore.

In December 2013, the wife filed an application in the Family Court of Western Australia (“FCWA”), seeking to set aside the Deed pursuant to Section 106B of the Family Law Act 1975 (“the Act”).

Section 106B of the Act provides for the Court to set aside transactions entered into for the purpose of defeating an order (or anticipated order) of the Court in Family Law Proceedings.

The Court has very broad powers in this regard, and we have even seen the Family Court dismantle complex Family Trust Structures (refer to our case note on Kennon v Spry here).

On 28 February 2014, the Husband filed an Originating Summons in the High Court of Republic of Singapore seeking:

a.  A Declaration that the Deed is “valid effectual and binding” on all parties to the Deed;

b.  An Order that the wife “withdraw or cease all action and proceedings” in the FCWA; and

c.  An injunction restraining the wife and her servants and agents from “carrying on” the proceedings in the FCWA.

These type of proceedings are commonly described as an “anti-suit injunction”.

On 20 March 2014, the husband filed a response to the wife’s application in the FCWA, seeking final orders for a stay and the dismissal of the wife’s claim in the FCWA.

On 25 March 2014, the wife filed an Application in a Case in the FCWA seeking an anti-suit injunction to the husband’s proceedings in the Republic of Singapore (effectively, an “anti-anti-suit injunction”).

On 8 April 2014, the trial judge in the FCWA made an order restraining the husband from prosecuting the proceedings in Singapore. The trial judge found that:

a.  The FWA was not a “clearly inappropriate forum” to hear the dispute; and

b.  The proceedings commenced in Singapore were “vexatious and oppressive to the wife”.

This decision was appealed by the husband to the Full Court of the Family Court.

The Appeal

The Appeal raised two main questions:

  1. Does the FCWA have power to grant an anti-suit injunction? This was described by the Full Court as a “novel” issue; and
  2. If the power exists, should the injunction be granted?

In relation to the first question, the Court held that the FCWA does have jurisdiction to grant an anti-suit injunction.

In relation to the second question, it was held that:

  1. The FCWA had the ability to determine all aspects of the dispute, including over the choice of law clause, the creation of trusts over real property in Singapore, and the effect on third party beneficiaries (i.e. the children).
  2. The FCWA had not erred in law and fact by finding that the FCWA is not a clearly inappropriate forum.
  3. The Singaporean proceedings were vexatious and oppressive, particularly where the issues raised in both Courts are identical.
  4. The FCWA did not fail to take into account a number of considerations the husband considered “relevant”. Many of these considerations were considered so “lacking in merit” that they were not discussed further in the decision, and some other discussions were left for trial.
  5. The wife had valid grounds for commencing a Section 106B claim.
  6. There was no failure of the FCWA to properly exercise its discretion to allow the wife’s anti-suit injunction. It should be noted that when dealing with these grounds the husband submitted that there would be unspecified advantages in obtaining a Singaporean judgment determining title to and interest in the property located in Singapore. The Court highlighted that there does not appear to be any dispute about the existing legal or equitable ownership of any of the assets in Singapore.
  7. The Deed was irrelevant to the wife’s application.

It should be noted that as the husband’s appeal as entirely unsuccessful, the husband was ordered to pay the wife’s costs in the appeal. This departed from the usual presumption that “each party bears their own costs”.

Our Concluding Comments

This decision is noteworthy as it raises deals with a number of international law and cross-jurisdictional issues.

Further, this decision highlights the broad discretion of Australian Family Law Courts to deal with agreements entered into outside of Australia (and in certain circumstances, effectively block proceedings commenced outside of Australia) that deal with matrimonial property.

This also highlights the importance of taking urgent Family Law advice, and dealing with disputes.

It should be noted that Australian proceedings were commenced prior to the Singaporean proceedings.

We note this judgment only deals with the anti-suit injunction, and not whether the Deed is to be set aside by an Australian Court.

We will provide a further case update, if and when a decision is made on the wife’s application dated December 2013 to set aside the Deed on the basis it was entered into to defeat the Australian Family Law proceedings.

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BACKGROUND

Ms Karen Foster was a bus driver who suffered significant injuries when the defendant lost control of his car and a drove into her bus while she was on shift. Her injuries were typical of “whiplash” – neck and back pain that restricted her range of movement and impacted her daily life, as well as secondary psychological injuries.

Ms Foster could not work as a bus driver following the accident, and claimed to rely on her house mate for a large amount of household duties. She was nearly fifty at the time of the accident, had been employed as a bus driver since 2009 and had not worked in an office since 2000. She described her computer skills as poor and her capacity to do everyday tasks as low.

There was however a discrepancy between Ms Foster’s description of her capabilities and the testimony of the medical professionals who assessed her – some assessed her at 0% impairment and others higher. There were also disparate testimonies regarding the amount of care she required from her housemates.

LEGAL ISSUES

The court had three main issues to determine:

  • What was the true extent of the plaintiff’s injuries?
  • Whether the injuries were covered by the Civil Liability Act 2003 (QLD) or the Workers’ Compensation and Rehabilitation Act 2003 (QLD)?
  • How much to award the Plaintiff for loss of future earning capacity?

Although the court had to consider many varied reports regarding the plaintiff’s injuries, it determined that a 6% cervical spine injury, 0% lumbar spine injury and 6% psychological impairment were an appropriate assessment of the plaintiff’s injuries.

Despite the fact that the Plaintiff was driving a bus in the course of her employment when the accident occurred, the court found that there was no evidence of “the exigencies of the employment of the worker by the employer” – in other words, despite the location of the accident, it had nothing to do with the obligation of the employer to the plaintiff, and therefore the damages award rates stipulated in the Civil Liability Act 2003 (QLD) applied.

Finally, the court determined that, although the Plaintiff claimed she had wished to remain employed as a bus driver until the retirement age of 70, this was not likely considering the evidence provided of the plaintiff’s pre existing medical conditions. It determined that economic loss could be awarded until the age of 62 in this case. It also determined that while the plaintiff’s ability to work was diminished, it was not exhausted, and she could in fact obtain gainful employment in the future.

The total damages awarded were $539,764.92.

LESSONS LEARNED

This is an example of how courts approach cases were there is a large amount of factual discrepancy. Many injured persons feel that medical professionals do not believe they are injured, and can be discouraged if they receive conflicting medical reports.

This case also illustrates that even where an injury clearly occurs in the workplace, the court looks for a connection to the liability of the employer when assessing the application of the Workers’ Compensation and Rehabilitation Act 2003 (QLD).

This article was written by Michaela Vaughn and Natasha Duff.

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The recent decision of Crick & Bennett [2018] FamCAFC 68 concerned an appeal against the finding of the primary judge and included a discussion on the parties “presenting as a couple”.

The primary judge dealt with the issue of whether and for what period a de facto relationship existed between Ms Bennett and Mr Crick.

Ms Bennett contended that the de facto relationship commenced in mid-2001 when Mr Crick moved into her property and continued until 9 June 2014 when he left that property.

Mr Crick contended that the parties were in a de facto relationship from 2002 until February 2004. He accepted that he continued to reside in the property until 9 June 2014 but noted that the parties lived separately and apart under one roof during that time.

Was there a de facto relationship? If so, did the de facto relationship end in February 2004 or on 9 June 2014?

A person is considered to be in a de facto relationship with another person if “having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis” pursuant to section 4AA(1) of the Family Law Act 1975 (Cth). Those circumstances may include:

  • the duration of the relationship;
  • the nature and extent of their common residence;
  • whether a sexual relationship exists;
  • the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
  • the ownership, use and acquisition of their property;
  • the degree of mutual commitment to a shared life;
  • whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
  • the care and support of children; or
  • the reputation and public aspects of the relationship.

The primary judge found that a de facto relationship existed between Mr Crick and Ms Bennett from late 2001 until 9 June 2014.

The primary judge found that the parties frequently “presented as a couple”. The evidence was that:

  • The parties started to sleep in separate bedrooms in February 2004. A sexual relationship existed until then (according to Mr Crick) or 2005 (according to Ms Bennett).
  • Mr Crick provided financial support after February 2004. He transferred $300 per week into Ms Bennett’s bank account. Mr Crick described this as board whereas Ms Bennett described this as a contribution towards living expenses.
  • The parties did not acquire any joint property, acquired no joint liabilities and had no joint bank accounts. They each retained their respective property and were responsible for the outgoings in relation to it.
  • The parties demonstrated a degree of mutual commitment to a shared life. The parties continued to provide mutual support for each other with Ms Bennett undertaking the majority of domestic tasks and Mr Crick providing financial support. Their relationship continued in that manner until Mr Crick left the home in June 2014.
  • The parties had a child born in late 2003.
  • The parties attended many social and family events and school functions with the child. These events included family Christmases and birthdays, which were celebrated at the home of the parties as well as the homes of other relatives.

Mr Crick appealed. He sought to argue, among other things, that the finding that the parties “presented as a couple” introduced an impermissible gloss to the terms of section 4AA of the Family Law Act 1975 (Cth). He submitted that the notion of a “couple” itself is not a relevant consideration for the purposes of section 4AA(2) of the Family Law Act 1975 (Cth).

The Court found that that it not entirely correct. “The ultimate task of the Court is to determine whether the parties had ‘a relationship as a couple living together on a genuine domestic basis’. The concept of a couple is thus part of the test. How that test is met is determined by the considerations required by section 4AA(2). None of those directly refers to ‘couple’. It is here that care needs to be taken not to add a gloss to the words of the section.”

The Court noted that “shorn of the gloss of ‘presenting as a couple” the primary judge found significant evidence of the public aspects of the relationship and supported a finding that there was a de facto relationship. The expression “presented as a couple” was intended to refer to the conduct to which the evidence referred.

If you would like to know about separation and de facto couples, click here.

This article was written by Emario Welgampola & Brooke Nickerson.

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Do the Courts ever sleep?

by Andrew Lind on 21 June, 18

The answer to this question is normally, yes.

The filing registry of the Commonwealth Courts normally closes at 4:30pm. A document sent for filing after this time is taken to have been received when the filing registry is open on the next day pursuant to rule 24.05(2) of the Family Law Rules 2004. This rule is important for the ordered control of the Court’s business, among other reasons.

However, in the recent decision of Whooten & Frost (Deceased) [2017] FamCA 975 the Court held that a document sent for filing at 7:40pm was taken to have been received at that time.

Facts

Ms Whooten married Mr Frost in 2003. They separated in June 2015.

In late 2016, Mr Frost sustained serious injuries following a farming accident. So serious were his injuries that he was placed on an electronic life support system.

Having been made aware of his position, Ms Whooten electronically filed an application instituting property settlement proceedings at 7:40pm on 1 December 2016. Mr Frost passed away at 11:00pm on 1 December 2016 after the hospital turned off his life support with the knowledge of his family.

If an application instituting property settlement proceedings is filed before the death of a party, the proceedings may be continued by the deceased party’s estate. This is not the case if an application has not been filed at the time of death.

Ms Whooten’s application instituting property settlement proceedings was filed electronically before the death of Mr Frost but it was deemed by the operation of rule 24.05(2) to have been filed after his death because it was received by the filing registry after 4:30pm (and therefore, it was taken to have been received on 2 December 2016).

Should the application be continued?

Decision

The Family Court of Australia found that the rules cannot become instruments of injustice.

No new or unforeseen right was being created in treating the application as having been filed at the moment it was electronically filed. There is no history here other than that both parties knew that their property settlement had not been resolved. There was no doubt that Ms Whooten had wanted to activate the jurisdiction of the Court. This was not a case in which the parties had sat on their rights such that prejudice to the other party follows. As such, to deny Ms Whooten the right to institute property settlement proceedings would be an injustice.

It was ordered that Ms Whooten’s application received electronically by the Court at 7:40pm be deemed to have been filed on the same day at that time notwithstanding rule 24.05(2).

Do the Courts ever sleep? Yes, but they are awake to prevent an injustice.

Written by Emario Welgampola and Brooke Nickerson.

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The viability of financial agreements which are a bad bargain for one of the parties has been questioned following the recent decision of the High Court of Australia in Thorne v Kennedy [2017] HCA 49.

Facts

Ms Thorne was a 36-year-old Eastern European woman of relatively insignificant means living in the Middle East. Mr Kennedy was a 67-year-old Greek Australia property developer with assets in the order of between $18 million and $24 million.

Ms Thorne and Mr Kennedy met online in mid-2006 on a website for potential brides. Arrangements were subsequently made for Ms Thorne to move to Australia to marry Mr Kennedy. Mr Kennedy made it clear that she would have to sign a pre-nuptial agreement if she wished to marry him as he intended for his children to inherit his assets.

She was taken to see a solicitor about the proposed pre-nuptial agreement on 19 September 2007. The solicitor gave her emphatic advice not to sign it as it was the worst agreement she had ever seen. The solicitor advised that the agreement was designed to protect the interests of Mr Kennedy alone. The agreement essentially provided that:

  • If the couple separated within three years of the date of marriage, Ms Thorne would receive nothing; or
  • If the couple separated after three years of the date of marriage, Ms Thorne would receive $50,000.00 from Mr Kennedy.

The terms of the agreement were said to be non-negotiable. Ms Thorne signed the agreement on 26 September 2007 – some four days before the wedding.

The pre-nuptial agreement also contained a term that they would each enter into and sign a second agreement within 30 days of signing the first. The terms of the second agreement were substantially the same on all essential points. Ms Thorne signed the second agreement on 20 November 2007 despite advice from her solicitor again to not sign the second agreement.

Decision

The High Court of Australia unanimously set aside the agreements on the basis of unconscionable conduct. The majority also set aside the agreements on the basis of undue influence.

Unconscionable Conduct

The majority of the High Court found that Ms Thorne was at a special disadvantage that was in part created by Mr Kennedy, because:

  1. He created the urgency with which the agreement was to be signed and the haste surrounding the second agreement.
  2. Ms Thorne had no reason to anticipate that he would insist upon terms of marriage that were as unreasonable as those contained in the agreements.
  3. Ms Thorne and her family members had been brought to Australia for the wedding. Mr Kennedy’s ultimatum was not accompanied by any offer to assist them to return home.

These matters increased the pressure which contributed to the substantial subordination of Ms Thorne’s free will in relation to the agreements. Mr Kennedy took advantage of this vulnerability to obtain the agreements which were, on the uncontested assessment of Ms Thorne’s solicitor, entirely inappropriate and wholly inadequate.

Undue Influence

Ms Thorne was thought to have been subject to undue influence on the basis of six factors:

  1. There was a lack of financial equality between the couple.
  2. Ms Thorne did not have a permanent status in Australia at the time.
  3. She was reliant on Mr Kennedy for all things.
  4. She was emotionally connected to the relationship. Her relationship with Mr Kennedy presented as an opportunity to fulfil her longstanding desire to have a child.
  5. Ms Thorne had prepared emotionally for the marriage.
  6. Their upcoming marriage was public. Her parents and sister had been flown to Australia from Eastern Europe, guests had been invited, her dress had been made and the reception had been booked.

There would be significant consequences to Ms Thorne if the wedding did not go ahead.

The majority of the High Court acknowledged that parties are free to enter into bad bargains. The very nature of these types of agreements is that their terms will often favour one party. However, the majority noted that bad bargains will not always be upheld. Bad bargains may be evidence of duress, undue influence and/or unconscionable conduct.

Written by Emario Welgampola and Brooke Nickerson.

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