Family lawyers are increasingly being asked to deal with cases involving overseas property interests, which may include superannuation/pension interests, real property, bank accounts and the like.

Can an Australian Court deal with overseas property interests?

The power within the Family Law Act 1975 (Cth) to adjust property interests is something that operates in personam (against the parties directly) and not in rem (directly against the item of property). This means the Court can take into account overseas interests by making orders against the parties themselves, including the sale of an asset, and can also take into account the value or equity in those overseas assets as part of their assessment for the purposes of a property settlement, provided that there is appropriate jurisdiction[1].

The court’s approach

The test in this regard is to show that Australia is not a “clearly inappropriate forum” for the dispute.  This is illustrated by the case of Voth v Manildra Flour Mills Pty Ltd [2] where the High Court held that where a party has properly instituted proceedings in Australia, they have the right to have the proceedings determined unless it can be demonstrated that Australia is clearly an inappropriate jurisdiction, such that the proceedings would be vexatious or oppressive.

In a recent 2024 decision of Sweeney & Burniss[3] the Court found that Australia was the clearly inappropriate forum for the family law dispute in circumstances where the parties had resided overseas since 2009 and family law proceedings (including parenting, divorce, child maintenance, property settlement and maintenance) had been instituted in that country sometime prior.

Enforcement of the order may not be a concern where parties both reside in Australia, and orders can be made directing them to take certain action. However, where a party resides overseas, enforcement can be difficult and our courts are typically cautious about making such orders in those circumstances.

In dealing with overseas property, the Court would identify the legal and equitable interest in the same way as they would for an Australian property. In the case of Galloway & Midden (No 2)[4] the parties were Australian and had purchased property in Europe. However the laws of that country were that a foreigner could only own one property, and in this case the property purchased comprised adjoining properties on two titles. The parties therefore purchased the property with another party who acted as trustee for the couple’s son. Subsequently and prior to separation the title held by the parties was transferred to the other party’s son. At separation the wife argued that the parties were beneficially entitled to the property and it should form part of the assets even though neither title was held in her name. The husband, in contrast, argued that they should not be included in the asset pool and should be treated as a financial resource.

In allowing an appeal against the trial judge’s decision the Full Court found held that:

“Accepting that an Australian court applies Australian law in exercising in personam jurisdiction to adjust the property rights of parties in property located overseas (regardless of any rights acquired or vested in parties under foreign law) an Australian court will avoid making an order in relation to assets in a foreign country that might operate in direct conflict with the laws of that country.”

International treaties

It is also important to ensure that there are no international treaties in effect which may apply (such as exist between Australia and New Zealand and the United Kingdom), and which allow the enforcement of orders in those countries.

What about pensions or superannuation?

Where parties hold superannuation overseas it is important to note that superannuation splitting under the Family Law Act 1975 can only be made by Australian Courts pursuant to section 90XS of the Act. An order made overseas to split superannuation is ineffective in Australia. Therefore, superannuation held overseas may need to be determined or dealt with in that overseas jurisdiction.