SKNProperty proceedings under family law which concern assets held overseas may be subject to Australian law regardless of property rights acquired under the foreign law where the property is located.

Whether an Australian court has the jurisdiction to make orders concerning international assets arises from section 31(2) of the Family Law Act (1975).  It states that the jurisdiction of the Family Court “may be exercised in relation to persons or things outside Australia and the territories”.

The first step the Australian court must take is to apply the legal test known as “forum non conveniens” which requires it to ask whether the proceedings before it are clearly inappropriate, and whether they are oppressive or vexatious to the parties involved.  The court considers the general circumstances of the case and takes into account the true nature and full extent of the issues involved.

For example, the court considers whether the foreign court will recognise the Australian court’s eventual orders; costs incurred; the connection of the parties to either jurisdiction; as well as the parties ability to understand and participate in the proceedings locally or overseas.

In the case of Vaden v Vaden [2007] FMCAfam 744, the parties were British citizens recently residents in Australia but whom had been married in the United Kingdom and owned a property there registered in the wife’s sole name.  The wife wished to return to live in the former matrimonial home but the husband wanted to be declared a trustee owner of the UK property in order to obtain a rental income.  The court held that the proceedings commenced in the Federal Magistrates Court of Australia should be stayed as any judgment made here may not be enforced by a British court.

Although in Vaden v Vaden the court declined to deal with the UK property, parties must be aware that assets located overseas will not necessarily fall outside the jurisdiction of the family law courts in Australia.  Hence, the unique circumstances of each case and the appropriateness of the Australian court to hear the matter, will ultimately determine which jurisdiction – either local or international – has the power to make the final decision regarding the property in dispute.

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