Family law: Four considerations if you have assets in Australia and overseas
If you hold property or assets both in Australia and overseas, then determining where to deal with any family law matters in the event of separation can be tricky.
In light of the recent decision from the Full Court of the Family Court of Australia, Obannon & Scarffe (2021) FLC 94-009 , we have outlined four considerations to keep in mind if you hold both property both in Australia and overseas.
If you hold assets in both Australia and overseas, then the first step is to obtain family law advice both in Australia and in the country that your overseas assets are located. It is possible that one jurisdiction may lead to a better outcome in your matter, and it is best to be informed on how each country determines family law matters.
For example, some countries will exclude assets that are accumulated prior to marriage from the property pool available for division, and may not consider periods where parties are living in a de facto relationship as relevant, whereas this is not the case in Australia. Unlike in Australia, some countries will also automatically exclude inheritances or gifts from the matrimonial property pool available for division between the parties.
It is always best to be well-informed before making any decisions or taking any steps in your family law matter. If possible, advice should be sought before you file. Where you commence your family law proceedings may impact your entitlement and the outcome you achieve.
Financial proceedings can be instituted in Australia if either party to the marriage is an Australian citizen, is ordinarily a resident in Australia or is present in Australia at the time of filing proceedings.
However, another consideration to keep in mind is the principle of forum non conveniens. The Family Law Courts have power to stay or dismiss proceedings here if Australia is not an appropriate forum. The test applied in Australia is whether Australia is a “clearly inappropriate forum” to hear the matter.
This is a high bar, and the court will consider a range of issues in making this determination including:
These are some of the factors that the court will consider when determining whether proceedings in this country should be stayed or dismissed on the basis that Australia is a clearly inappropriate forum to determine the matter.
In Obannon & Scarffe, the trial Judge considered whether property settlement proceedings brought by the husband in Australia should be dismissed on the basis that Australia was a clearly inappropriate forum.
In this case, the wife instituted family law proceedings in Singapore for divorce, parenting arrangements, property settlement, spousal maintenance and child support. The husband then instituted proceedings in Australia for property settlement.
The trial Judge determined that Australia was not a clearly inappropriate forum for the matter, and instead restrained the wife from continuing the family law proceedings in Singapore in their totality. The wife appealed this decision.
On appeal, the Full Court held that the trial Judge made erroneous findings about Singaporean Law, and that they erred by seeking to directly compare the law in Singapore to the law in Australia to determine which court was the preferable forum for the matter. The appeal was allowed, and the case remitted for rehearing.
This case is a good example of how the forum non conveniens test should operate, and that it is not intended for judges to determine which country is preferable for dealing with the matter, but that it is a determination of whether Australia is a clearly inappropriate forum to deal with the matter.
An anti-suit injunction is an order restraining a party from bringing or continuing proceedings overseas. If there are family law proceedings on foot in both Australia and another country, then you should consider if an anti-suit injunction will be necessary to avoid the same issues being determined by two different courts.
The extent of the injunction sought only applies to the specific proceedings that are on foot in Australia, so that there is not an overlap with any proceedings on foot overseas.
In Obannon & Scarffe the issue of anti-suit injunctions was also considered. The proceedings brought by the wife in Singapore were for divorce, parenting arrangements, property settlement, spousal maintenance and child support. The proceedings initiated by the husband in Australia were for property settlement only. The trial Judge issued an anti-suit injunction to restrain the wife from further prosecuting any of the proceedings she had instituted in the Family Justice Courts in Singapore.
On appeal, the husband accepted that the restraint on the wife should be limited to the wife continuing the Singapore proceedings only insofar as they related to property matters (as he had sought), and that she should not be restrained from continuing proceedings in relation to other issues.
The Full Court agreed that this concession was properly made by the husband, and that it would have been sufficient for any anti-suit injunction to encompass only the property proceedings in Singapore.
The case of Obannon & Scarffe is a good illustration of how an anti-suit injunction can work, and the limits that should be placed on injunctions of this nature. Although it is useful to seek an anti-suit injunction to ensure the same issues are not being determined in two different courts, it is still possible for different parts of your family law matter to be determined in Australia and overseas, provided that they deal with different issues.
When finalising your matter, whether by way of agreement or determination by the court, it is important to think about what orders you are seeking and whether they can be enforced in both countries. This may require obtaining advices in both Australia and the country where your overseas assets are located to ascertain what sort of overseas orders can be registered and enforced in both countries. If you do not take the step of ensuring that your Court Orders can be registered and enforced in both countries, you may risk that your property settlement cannot be properly enforced and given effect as you and your spouse may have intended.
If you have separated from your spouse and have both Australian and international assets, then we recommend that you speak to a family lawyer with experience in international family law matters to get you on the right pathway as to how to best deal with your matter.
For further information, please contact our Family and Relationship Law team.