Jurisdiction under the Family Law Act 1975 (Act) can be exercised by a variety of courts.

Jurisdiction under the Family Law Act 1975 (Act) can be exercised by a variety of courts. In the “eastern” States of Australia that jurisdiction is exercised by two federal courts, the Family Court of Australia and the Federal Circuit Court of Australia, and by a variety of state courts of summary jurisdiction. The position in Western Australia is quite different and has been since the commencement of the Act. Section 41 of the Act authorised the making of arrangements for the establishment of state family courts. Western Australia was the only state to establish its own court. The Family Court Act 1975 (WA), which was later repealed by the Family Court Act 1997 (WA) (Family Court Act) established the Family Court of Western Australia (FCWA) as a court of record. The FCWA is a state court invested with federal jurisdiction in respect of matters arising under the Act and has also the non-federal jurisdiction conferred on it by the Family Court Act and other Acts.

Teo & Guan[1]

The recent case of Teo & Guan sets out in detail the Full Court of the Family Court of Australia’s recognition of the powers of the FCWA. In that judgment, the Full Court stated that the FCWA essentially has an identical set of powers conferred on it as the Family Court of Australia, a superior court of record, does.

By way of brief background[2], in the case of Teo & Guan, the husband and wife were married in 1984 and separated in 2010. The husband lived in Perth and Singapore and the wife and their adult children lived in Perth. In 2012, the parties and their three adult children executed a Deed of Family Arrangement containing declarations of trust by each party which was governed by Singaporean law. The effect of the Deed was to share the assets equally between the parties and their three adult children, with the wife to receive $2 million.

The wife filed an application in the FCWA to set aside the Deed pursuant to section 106B of the Family Law Act 1975 (Cth) in December. 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 seen the Family Court dismantle complex family trust structures. The husband subsequently filed an application in the High Court of Singapore seeking a declaration that the Deed was valid and effectual. The husband also sought orders in the FCWA for a stay and the dismissal of the wife’s claim in Australia.

The husband’s application was unsuccessful and an anti-suit injunction was made, restraining the husband from pursuing proceedings in Singapore, which the husband appealed.

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 were identical.

4. The FCWA did not fail to take into account a number of considerations the husband considered relevant.

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.

7. The existence of the Singaporean Deed was irrelevant to the wife’s application.

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”.

To be determined

The wife’s application to set aside the deed continues and is yet to be determined.

Lavan Legal comment

International and transnational marriages are becoming more common. In an age of increasing globalisation, people are increasingly marrying across national boundaries. As a result, a rising number of relationships involve parties who have assets and interests in Australia and outside of Australia. When such a relationship breaks down, one of the parties may seek orders in another jurisdiction outside of Australia, whilst the other party is content to commence proceedings in Australia.

Teo & Guan raises and deals with a number of international law and cross-jurisdictional issues. It highlights the broad discretion of Australian Family Law Courts, including the Family Court of Western Australia to deal with agreements entered into outside of Australia, and in certain circumstances, effectively stop proceedings commenced outside of Australia that deal with matrimonial property. As a result, a cautious approach must be taken when dealing with “agreements” and/or “deeds” which have been entered into outside of Australia and parties to such agreements are recommended to seek legal advice in the event of a relationship breakdown accordingly.

[1] (2015) FLC 93-653

[2] Wolters Kluwer CCH, Top ten things you need to know in family law, Issue 9, 22 July 2015

Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.