Alieva & Polzin
[2025] FedCFamC1F 222
•7 April 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
FIRST INSTANCE
Alieva & Polzin [2025] FedCFamC1F 222
File number: LEC 405 of 2021 Judgment of: CAREW J Date of judgment: 7 April 2025 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Where it is just and equitable to make an order – Where there is disagreement between the parties as to add-backs and whether an inheritance is an asset or financial resource – Where the value of overseas assets needs to be considered – Where the property pool needs to be determined – Where it is not in dispute that the parties largely kept their finances separate – Where property has significantly increased in value due to market forces – Where it is contended there was a premature disposal of property – Where it is determined that no adjustment of s 75(2) factors is warranted – Where the net assets of the parties will be divided 60/40 in the husband’s favour. Legislation: Family Law Act 1975 (Cth) ss 75(2), 79(1), 79(2), 79(4), 106A
Family Law (Superannuation) Regulations 2001 (Cth) pt 6
Cases cited: Bonnici and Bonnici (1992) FLC 92-272
Cerini & Cerini [1998] FamCA 143
Chorn and Hopkins (2004) FLC 93-204
Dickons v Dickons (2012) 50 Fam LR 204
Hall v Hall (2016) 257 CLR 490
Hurst & Hurst (2018) FLC 93-851
Mallet v Mallet (1984) FLC 91-507
Marker & Marker [1998] FamCA 42
Rolfe and Rolfe (1979) FLC 90-629
Stanford v Standford (2012) 247 CLR 108
Townsend and Townsend (1995) FLC 92-569
Trevi & Trevi (2018) FLC 93-858
Number of paragraphs: 104 Date of last submissions: 24 March 2025 Date of hearing: 3‒4 March 2025 Place: Brisbane Counsel for the Applicant: Ms Kennedy Solicitor for the Applicant: ATW Family Law Counsel for the Respondent: Mr Priestley Solicitor for the Respondent: Finn Roache Lawyers ORDER
LEC 405 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS POLZIN
Applicant
AND: MR ALIEVA
Respondent
ORDER MADE BY:
CAREW J
DATE OF ORDER:
7 APRIL 2025
THE COURT ORDERS THAT:
1.The husband shall pay the sum of $2,756,222.80 to the wife within 90 days of the date of this Order.
2.In default of the payment required by paragraph 1 of this Order, the parties shall do all acts and things and sign all documents necessary to forthwith sell the property at B Street, Town C, being all the land contained in Folio Identifier … (“the Town C property”) and for the proceeds of sale to be disbursed as follows:
(a)In payment of the agent’s commission and legal expenses of the sale;
(b)In payment of the loan from Mr D and Ms D to release the mortgage number … registered on the Town C property;
(c)In payment to the husband’s solicitor’s trust account of a sum calculated to be the capital gains tax (“CGT”) payable as provided in subparagraph 3(h) of this Order;
(d)In payment to the wife of a sum equivalent to 40 per cent of the net asset pool of the parties, less the value of assets, liabilities, and superannuation the wife will retain pursuant to this Order; and
(e)The balance to the husband.
3.In order to facilitate the sale of the Town C property in accordance with paragraph 2 of this Order, the following shall apply:
(a)The parties shall agree on an agent to sell the property within 7 days of the date of default and failing agreement the agent shall be as nominated by the wife;
(b)The parties shall agree on a solicitor to act on the sale of the property within 7 days of the date of default and failing agreement the solicitor shall be as nominated by the wife;
(c)Within 7 days of appointing the agent and solicitor to act on the sale, the husband shall provide written authority to the agent and solicitor to communicate with the wife about all aspects of the sale and to include the wife in all email and written correspondence sent to the husband and to provide the wife with all information with respect to the sale and any offers made, and in the event the husband fails to provide such written authority within 7 days of the appointment of the agent and the solicitor, then this Order shall be deemed to be authority for the agent and the solicitor to communicate with the wife as set out herein;
(d)The husband shall not accept any offer to sell the property without the wife’s prior written consent to accept such offer;
(e)The husband shall cooperate with the agent in making the property available as required by the agent for any aspect of the sale process, including but not limited to open for inspections at which time the husband will vacate the property during the period of the inspection, photographs for the sales campaign and the erection of any for sale signs the agent wishes to erect;
(f)The property shall be listed for sale by expression of interest/timed auction or such other manner of sale as recommended by the agent;
(g)On or before settlement of the sale, the husband shall do all acts and things and sign all documents to assign any interest of the husband or F Pty Ltd (ACN …) in any leases relating to any improvements on the Town C property to the purchaser;
(h)Within 7 days of the exchange of contracts, the parties shall jointly obtain from an agreed accountant a written estimate of the CGT based on the sale price of the Town C property and at settlement such sum shall be deposited into the trust account of the husband’s solicitor to be held on trust for the payment of the CGT assessed in the husband’s name as a result of the sale.
4.In the event of a sale of the Town C property, the husband shall file his tax return for the relevant tax year that includes the sale of the Town C property by 1 August of that year and shall provide the wife with a copy of the lodged tax return within 7 days of it being lodged.
5.In the event of a sale of the Town C property, within 48 hours of the husband receiving a Notice of Assessment assessing the CGT payable on the sale of the Town C property, the husband shall provide the Notice of Assessment to the wife, and within 14 days of receipt of the Notice of Assessment by the wife, the parties shall authorise the husband’s solicitor to pay to the Australian Tax Office (“ATO”) a sum equivalent to the CGT assessed for the sale of the Town C property from monies held in their trust account and shall thereafter within 7 days pay each party one half of any surplus then remaining and, in the event there is a shortfall, the parties shall each pay one half of the shortfall directly to the ATO.
6.On or before payment to the wife of the sum required by paragraph 1 of this Order or, in default, on or before settlement of the sale of the Town C property, the wife shall be entitled to remove from [an outbuilding] and the main home on the Town C property all agreed personal items, household effects, furniture and contents, paperwork and chattels owned by the wife and the husband shall otherwise be entitled to retain the other personal items, household effects, furniture and contents, paperwork, chattels, farming equipment and machinery owned by the husband.
7.Contemporaneously with the payment to the wife of the sum required by paragraph 1 of this Order or, in default, upon settlement of the sale of the Town C property, the wife shall do all acts and things and sign all documents necessary to transfer to the husband all the wife’s right, title and interest in F Pty Ltd.
8.Except as otherwise specified herein, each party shall retain all other assets and resources currently in their respective sole name or possession, including but not limited to real property, personalty, household effects, motor vehicles, shares in any public or private company, savings, superannuation and any interest in any trust and/or other asset, including assets and pensions held overseas.
9.Except as otherwise specified herein, each party shall be solely liable for all debts in their respective sole name and the husband shall indemnify the wife and keep the wife indemnified with respect to any liabilities howsoever arising as a result of the wife being a shareholder or officer bearer of F Pty Ltd.
10.Both parties shall do all acts and things and sign all documents necessary to give effect to this Order and in the event either party fails, refuses or neglects to do such act or thing or sign such document, then pursuant to s 106A of the Family Law Act 1975 (Cth) a Registrar of the Federal Circuit and Family Court of Australia (Division 1) is authorised to do such act or thing or sign such document on behalf of the defaulting party.
NOTATIONS:
A.There is no Court by the name “Federal Circuit and Family Court of Australia”. This Court was formerly known as the Family Court of Australia and is now known as the Federal Circuit and Family Court of Australia (Division 1).
B.The design of the seal affixed to this Order issued by the Federal Circuit and Family Court of Australia (Division 1) was determined by the Attorney-General pursuant to the undated Federal Circuit and Family Court of Australia (Seal) Determination 2021 signed by the Attorney-General.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Alieva & Polzin has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth). In addition to the use of pseudonyms for the parties, other changes have been made to the published judgment to protect the identity of a party or a witness. Such changes (other than when a letter is used instead of a name or an address) are apparent on the face of the judgment by the use of square brackets.
REASONS FOR JUDGMENT
CAREW J:
Ms Polzin (“the wife”) and Mr Alieva (“the husband”) are the parties to this dispute concerning what, if any, property adjustment order should be made. I will refer to the parties in this litigation as the wife and the husband respectively to assist with the anonymisation of this judgment. No disrespect is thereby intended.
The parties commenced cohabitation in late 1989, married in 1996, and divorced in 2021 but they disagree about when they separated. The wife contends it was December 2016 while the husband contends that it was May 2005. The parties agree that it is not necessary to determine the actual date of separation given that it is not in dispute that they continued to share a residence until late 2016 or early 2017 when the wife moved out with the parties’ daughter, and that the focus of the enquiry should be on contributions.
The parties agree that the value of their combined (although separately held) net assets is at least $18,000,000. They are at odds about certain add backs and whether the wife’s inheritance of $800,000 is an asset or financial resource.
For reasons which will be explained, the net assets of the parties or either of them, as identified later in these reasons as $18,208,962, will be divided in the proportion 60/40 in the husband’s favour. The husband will have the opportunity to retain the property at B Street, Town C, New South Wales (“the Town C property”) but will be required to pay the wife the sum of $2,756,222.80 and if he fails to do so the Town C property will be sold and the wife will be paid a sum representing 40 per cent of the net assets less what she will otherwise retain.
PROPOSALS BY EACH PARTY
The wife’s proposal is for a division of the property in the proportion 55/45 in the husband’s favour and for, among other things, a sale of the Town C property. The precise terms of the wife’s proposed order are set out in Exhibit 14, including in the alternative (i.e. if certain assets/financial resources are included or not included in the balance sheet as the case may be).
The husband’s proposal is for each party to retain what they have save that the husband seeks an order for the wife to transfer her 10 shares in F Pty Ltd to him. The husband submits that the wife’s contributions should be assessed in the range of 25–35 per cent. If no order other than a transfer of the 10 shares is made, the result would reflect, according to the husband, a 75/25 division of the property in the husband’s favour. The precise terms of the husband’s proposed order are set out in Exhibit 10, including in the alternative. The husband opposes the sale of the Town C property where he continues to live.
ISSUES
The parties’ respective counsel had some difficulty articulating the issues requiring determination. During a case management hearing on 31 October 2024, the parties identified that the only significant issue requiring determination was as follows:
The … nature and extent of the contributions made by each of the parties at the commencement of their relationship, throughout their relationship, and after separation, and the weight that should be afforded to those contributions.
When trial directions were made on 12 November 2024, an additional two issues were identified as follows:
Whether the [husband] has embarked on a course of conduct transferring assets to the [Alieva Foundation] that has minimised the asset pool available for distribution.
The nature and value of the [wife’s] interest in the [Polzin] Family Settlement and testamentary trust established under the [wife’s] mother’s will and any value to be attributed thereto.
At the commencement of the trial, further attempts were made to identify the issues requiring determination as the two issues identified in the previous paragraph were seemingly abandoned. Further issues were raised, abandoned, raised again and ultimately an agreed list of issues was settled by counsel and emailed to Chambers after the conclusion of the evidence.
The issues requiring determination have been identified by the parties as follows:
Balance Sheet issues
1.Whether the [Alieva Foundation] is a notional addback on the Balance Sheet
2.Whether the wife’s inheritance is treated as an asset or as a financial resource
3.Whether or not the husband’s paid legal fees should be a notional addback on the Balance Sheet
Contribution and Resource issues
1.The nature and extent of the contributions made by each of the parties at the commencement of their relationship, throughout their relationship, and after separation, and the weight that should be afforded to those contributions.
2.The nature and extent of the financial resource of the wife in the [Polzin] Family Trust.
3.If not added back the nature and extent of the financial resource of the husband in the [Alieva Foundation].
4.Whether the husband has failed to make proper disclosure and the impact of that on the assessment of his credit and associated balance sheet item
(As per the original)
While the list of issues is not entirely satisfactory, e.g. I do not understand what is meant by issue number 4 under the heading “Contribution and Resource issues”, I will do my best to address and determine the issues raised.
I must say the process of identifying the issues requiring determination was an unnecessarily tortuous one and undermined the whole purpose of identifying the real issues in a case at an early stage, namely, so that trial affidavits focus on evidence relevant to issues that require determination; to ensure that parties are not ambushed at trial; and, to enhance the prospects of settlement.
BACKGROUND
Before turning to address the issues, it will be helpful to set out some background to the parties’ dispute.
As previously noted, the parties commenced cohabitation in late 1989 and married on [redacted] 1996. They divorced on [redacted] 2021. They have one child, Ms G, born [redacted] 2001, now aged 23. Ms G lives independently at a property owned by the wife.
The husband is 76 years old and was born in Germany. He came to Australia in [redacted] under a business migration program and is a permanent resident. The husband was previously married and divorced twice before migrating to Australia. He has three other adult children who live in Germany. The husband re-partnered in 2018 and lives with his de facto partner, Ms J, at the Town C property.
The wife is 59 years old and an Australian citizen by birth. The wife has not re-partnered. Ms G is her only child. The wife works in a retail business operated by her extended family.
As previously noted, the parties disagree about the date of separation. The wife contends that separation occurred on 25 December 2016, while the husband contends that they separated on 15 May 2005. The parties agree that the husband moved out of the matrimonial bedroom in 2005 but continued to live in the same residence at the Town C property until late 2016 or February 2017 when the wife and Ms G moved to Town K, New South Wales.
The wife and Ms G lived at a property in the wife’s sole name in Town K from about February 2017 until 2020 when they moved back to a separate cottage on the Town C property. The wife and Ms G left the Town C property again in October 2024.
At the commencement of cohabitation, the wife had minimal assets or savings. She owned one ordinary share in a family company, L Pty Ltd, and was a beneficiary of the Polzin Family Settlement, which is a discretionary trust established by her parents in 1976 and now controlled by her brother. The wife was employed in a retail business operated by her extended family.
The husband contends that he received an inheritance from his father’s estate in 1971. The husband and his mother inherited the estate in equal shares. It does not seem to be in dispute that the inheritance included an [redacted] business known as M Company as well as land and buildings from which the business operated. The husband became the managing director of the business, while his mother took no active role in the business. The business was operated through a company called, N Company, in which the husband was the sole director and shareholder.
When the husband migrated to Australia in 1987, he contends that he held several additional business and property interests in Germany (other than N Company and the land and buildings) including a 45 per cent interest in a group of [redacted] companies known as the P Group, an [redacted] business trading as Q Company, and a one-third interest in [redacted] company. He also contends that he owned motorised gliders, motor vehicles and had bank accounts in both Australia and Germany.
When he arrived in Australia, the husband purchased a property in Town R, New South Wales for $130,000. The folio identifier for this property is … (“the Town R property”). The location of the property is identified as S Street.
The wife concedes that at the commencement of cohabitation, the husband owned property in Germany, (although not necessarily to the extent particularised by the husband), the Town R property unencumbered, and at least one glider which she estimated was worth about $10,000.
The parties agree that at the commencement of cohabitation in late 1989, the wife moved into the Town R property. A second dwelling was constructed on the property and the parties lived between the two dwellings on the property. The second dwelling included a garage to store the husband’s glider trailer. There is no suggestion that the wife made any direct financial contribution to the construction of this second dwelling.
The wife concedes that, throughout the relationship (whenever separation occurred), the husband was not in paid employment in Australia and received income from his business/es in Germany.
On or about 22 March 1991, the husband purchased in his sole name a property at Town C, New South Wales for $310,000. The husband’s address is noted on the transfer and mortgage as being T Street, Town R (not S Street). It is unclear whether there were two properties at Town R. Neither party raised this as a possibility. Although the husband contends that he sold his house at Town R in about 1991 for $490,000, there is no evidence to support this assertion. On 19 March 1991, the husband obtained a loan from U Pty Ltd for $250,000 secured on the Town R property. Presumably, the funds borrowed by the husband were utilised in the purchase of the Town C property.
The Town R property was sold on or about 27 April 1993 for $300,000. On or about 27 April 1993, the mortgage secured on this property was released.
On or about 13 October 1998, the husband obtained a loan from the National Australia Bank Limited for $300,000 secured on the Town C property.
In about 2000, the wife purchased a property at V Street, Town K (“the V Street property”) for $90,000, borrowing the entire purchase price. The wife leased the property and was able to pay out the mortgage by about 2004.
In or about 2014, the husband established a foundation for the benefit of his children called Alieva Foundation. The Alieva Foundation was established with an initial payment of €50,000.
In 2015, the husband transferred the company, N Company, to the Alieva Foundation.
In about December 2016, the wife purchased an investment property at W Street, Town K (“the W Street property”) for $540,000 and borrowed the entire purchase price. The wife also obtained a loan from L Pty Ltd to pay the deposit and stamp duty. This is the property into which the wife and Ms G moved in February 2017.
On 9 July 2024, the wife’s mother died and according to the wife, her mother “left all of her estate equally between [the wife] and [her] siblings, albeit she established a Testamentary Trust for each of us separately”. The wife contends that her mother’s estate is worth $3,347,861.91 and that after certain expenses, the wife estimates her “share” to be approximately $800,000.
Throughout the relationship the husband received income from his business and property interests in Germany which was used at least in part for the expansion of his property interests in Australia e.g. by paying mortgage repayments and upkeep on the Town C property and for the benefit of the family generally e.g. by paying rates and other outgoings. From early in the relationship, the wife had access to a bank account of the husbands from which she paid family expenses such as electricity and groceries.
The wife worked full time in her extended family’s business until the birth of Ms G in 2001 and recommenced employment in about 2003. Initially the wife was employed one day per week but over several years she gradually increased her hours so that by the time Ms G started school in 2007 the wife was employed two to three days per week but only during school hours. That pattern of employment continued until Ms G commenced high school in 2013 when the wife increased her employment to three to four days per week until 2022 when the wife commenced working full-time hours. At some point, which remains unclear, the wife ceased being paid a wage but received payments from the Polzin Family Settlement and/or L Pty Ltd. Part of Exhibit 11 includes a schedule of payments made to the wife from 1989 to 31 December 2024 and records the increase over the years of her loan account balance.
The proceedings were commenced by the wife in the Federal Circuit and Family Court of Australia (Division 2) on 29 August 2022 and transferred to this Court on 29 November 2023.
The wife’s legal fees and outgoings up to and including the estimated costs of trial are $211,140. The husband’s legal fees and outgoings up to and including the estimated costs of trial are $209,897.
APPLICABLE LEGAL PRINCIPLES
In property settlement proceedings, the Court may make such order as it considers appropriate, altering the interests of the parties to the marriage in the property of the parties or either of them, including an order for a settlement of property in substitution for any interest in the property for the benefit of the parties, and an order requiring either or both of the parties to the marriage to make, for the benefit of either or both of the parties, such settlement or transfer of property as the Court determines (s 79(1) of the Family Law Act 1975 (Cth) (“the Act”)).
The Court cannot make an order unless it is satisfied that, in all the circumstances, it is just and equitable to make the order (s 79(2) of the Act).
In considering what order (if any) should be made in property settlement proceedings, the Court is required to take into account the following (s 79(4) of the Act):
(a)The financial contribution made directly or indirectly by or on behalf of a party to the acquisition, conservation or improvement of any property of the parties or either of them, whether or not that property still exists;
(b)The contribution (other than financial) made directly or indirectly by or on behalf of a party to the acquisition, conservation or improvement of any property of the parties or either of them, whether or not that property still exists;
(c)The contribution made by a party to the welfare of the family constituted by the parties and any children, including any contribution made in the capacity of homemaker or parent;
(d)The effect of any proposed order upon the earning capacity of either party;
(e)The matters referred to in s 75(2) of the Act so far as relevant;
(f)Any other order made under the Act affecting a party; and
(g)Any child support under the Child Support (Assessment) Act 1989 (Cth) that a party has provided, is to provide, or might be liable to provide for a child of the marriage.
The High Court of Australia in Stanford v Stanford[1] identified certain principles to be applied in property settlement proceedings. In particular, when considering whether it is just and equitable to make an order, it is firstly necessary to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.[2] Secondly, the discretion as to whether or not to make a property settlement order, although extraordinarily wide, must nevertheless be exercised in a principled way.[3] Thirdly, there is no presumption that the parties’ rights to or interests in property are or should be different from those that currently exist.[4] The consideration of whether it is just and equitable to make an order should not be considered by reference only to the matters in s 79(4) of the Act. It is necessary to give separate consideration to ss 79(2) and (4) of the Act and not to ‘conflate’ the two subsections.[5]
[1] (2012) 247 CLR 108.
[2] Ibid at 120, [37].
[3] Ibid at 120–121, [38].
[4] Ibid at 121, [40].
[5] Ibid at 120, [35].
IS IT JUST AND EQUITABLE TO MAKE A PROPERTY ORDER?
Neither party submitted that it was not just and equitable to make an order although the husband contends that a just and equitable order will be limited to one where the wife is required to transfer her shares in F Pty Ltd to him and that otherwise they each retain what they have. Even in those limited circumstances it seems to me that the just and equitable requirement is readily satisfied, not least so as to sever the financial relationship between the parties and avoid further proceedings between them as required by s 81 of the Act. The wife also continued to live at what had been the matrimonial property until October 2024 and “there is not and will not thereafter be the common use of property” by the parties.[6] Further, “the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the relationship”.[7] In such cases, the “just and equitable requirement is readily satisfied”[8] and I am satisfied in this case that it is just and equitable to make an order.
[6] Ibid at 122, [42].
[7] Ibid.
[8] Ibid.
BALANCE SHEET
The joint balance sheet (Exhibit 1) setting out the existing legal and equitable interests of the parties as contended by each party is set out below:
ASSETS 1 Husband The Town C property 14,500,000 14,500,000 2 Wife The V Street property[9] 800,000 800,000 3 Wife The W Street property 1,100,000 1,100,000 4 Joint F Pty Ltd (husband 90 per cent / wife 10 per cent) NIL NIL 5 Husband Loan to F Pty Ltd 100,268 100,268 6 Wife Loan to L Pty Ltd 56,334 56,334 7 Wife Loan to X Pty Ltd as Trustee for Polzin Family Settlement 1,278,231 1,278,231 8 Husband Y Pty Ltd NIL NIL 9 Husband Z Pty Ltd NIL NIL 10 Husband AA Pty Ltd NIL NIL 11 Wife Subaru 24,000 24,000 12 Husband Loan to CC Development 267,308 267,308 13 Wife Wife’s inheritance testamentary trust NIL 800,000 Total $ 18,126,141 $ 18,926,141 [9] This property was incorrectly referred to in Exhibit 1 as V Street.
ADDBACKS 14 Alieva Foundation (Euro 1,393,300) – AUD 2,332,624 NIL 15 Husband’s legal fees paid from capital 209,897 NIL Total $ 2,542,521 $ 0
LIABILITIES 16 Wife Mortgage on the W Street property 431,209 431,209 17 Husband Capital gains tax (“CGT”) (the Town C property) Not known To be advised 18 Husband Loan from Mr D and Ms D 1,185,976 1,185,976 Total $ 1,617,185 $ 1,617,185
SUPERANNUATION Member Name of Fund Type of Interest Wife’s value Husband’s value 19 Wife Polzin Superannuation Fund Self-Managed 900,006 900,006 20 Husband Pension and life insurance from Germany (approximately $364 per week) Not known Total $ 900,006 $ 900,006
FINANCIAL RESOURCES Ownership Description Wife’s value Husband’s value 21 Wife Polzin Family Settlement NIL Not applicable [sic] 22 Wife Wife’s inheritance testamentary trust 800,000 Total $ 800,000 $ 0
NET TOTAL ASSETS (including Superannuation but excluding Financial Resources) $ 19,951,483 $ 18,208,962
It is apparent from the balance sheet that the parties agree about most items. The items about which they disagree will be discussed seriatim.
Wife’s inheritance
Shortly before her death on 9 July 2024, the wife’s mother changed her will to set up individual testamentary trusts for each of her four adult children. There is little doubt who the testamentary trusts are intended to benefit as the trusts are named after each of the wife’s mother’s four children. The four siblings are the trustees of the wife’s trust. It seems unlikely that if the wife wanted access to her “share” as she describes it, her siblings would refuse. Indeed, the wife conceded that to be the case. In those circumstances, it seems to me that the wife has the necessary control over the trust for it to be treated as property rather than a financial resource.
The only basis upon which the wife resisted including her inheritance in the balance sheet was that probate had not been granted. No authority was cited to support that proposition.
An inheritance does not fall into a “protected category merely because it is an inheritance”.[10] The fact that the husband could not be said to have made any direct or indirect contribution to the wife’s inheritance and the fact that it was received after separation (on any view of when separation occurred) are factors to be taken into account when assessing each party’s respective contributions to the property ultimately included in the balance sheet.
[10] Bonnici and Bonnici (1992) FLC 92-272 at 79,020.
If I am wrong to include the wife’s inheritance in the property pool, I would take it into account as a s 75(2) factor in her favour.
The Alieva Foundation – add back
It is not in dispute that so-called “add backs” are “the exception rather than the rule”[11] and that separated couples are not expected to “go into a state of suspended economic animation”.[12]
[11] Cerini & Cerini [1998] FamCA 143 at [46].
[12] Chorn and Hopkins (2004) FLC 93-204 at [24] (“Chorn”) quoting Marker &Marker [1998] FamCA 42 at [2.11].
It is common ground that the Alieva Foundation was established by the husband in Germany in 2014 with an initial settlement sum of €50,000. In 2015, the husband transferred to the Alieva Foundation his shareholding in N Company of which the husband was the sole shareholder, and which owned the land and buildings from which the M Company business operated. At the time of the transfer the value of the husband’s shareholding was €274,300 but the consideration paid for the shareholding was only €1. On 30 October 2017, N Company changed its name to O Company. The Alieva Foundation recently sold O Company for €1,100,000.
It is also common ground that the current members of the board of the Alieva Foundation are the husband, the husband’s de facto partner, Ms J, and Mr BB who lives in Germany. Exhibit 4 sets out some agreed facts in relation to evidence provided by Mr BB including three documents tendered in support of his evidence. Mr BB was not required for cross-examination. I was not taken to any evidence given by Mr BB about which there was a dispute.
Mr BB has known the husband since 1992 and is the managing director of M Company. Mr BB acquired the [redacted] business from the husband’s N Company on 22 December 2005. The agreement required Mr BB to pay an initial nominal sum for 55 per cent of the business with a further payment of “at least €250,000 for the remaining 45 [per cent] of the company within 10 years from the date of the agreement”. Mr BB paid the husband monthly rent for occupation of the premises from which he operated the business, initially €7,500 plus sales tax, until 2011 when the payments increased to €7,987.20 plus sales tax. This continued until 2015. As to the balance purchase price for the business, Mr BB paid the husband €74,000 in 2011 and €250,000 in 2015.
Mr BB has been “primarily responsible for the financial management of the [Alieva Foundation] in Germany” and contends that the only funds that have been withdrawn from the Alieva Foundation have been to pay expenses such as accountancy fees and tax and refunds to the husband for expenses incurred by him when he has been in Germany to attend to business of the Alieva Foundation. Mr BB contends that “[n]o money has ever been withdrawn from the foundation by [the husband] or anyone else for private purposes”.
For the purpose of these proceedings, the agreed value of the Alieva Foundation is $2,332,624 AUD (€1,393,300).
The parties retained a single expert, Mr DD, to provide evidence about the Alieva Foundation.
The following evidence is taken from Mr DD’s report (Exhibit 2):
(a)The Alieva Foundation is a legal entity recognised in Germany;
(b)The Alieva Foundation is represented by a Board of Directors who manage the Alieva Foundation’s assets and fulfils the purpose of the Alieva Foundation with the income from the Alieva Foundation’s assets;
(c)The assets must be invested or managed in order to generate income to fulfil the purpose of the Alieva Foundation;
(d)Another “foundation body” is the “Foundation Assembly” and the husband fulfils this role for so long as he lives;
(e)The Foundation Assembly elects the “Executive Board” (I assume this is the Board of Directors) and exercises control over the Executive Board and can “influence” the Executive Board;
(f)The Executive Board must adhere to the provisions of the “foundation statutes and is subject to the control of the Foundation’s general meeting”;
(g)The “final decision” lies with the Foundation’s general meeting;
(h)The “Board of Trustees” (again I assume this is the Board of Directors) is bound by the resolutions of the Foundation Assembly;
(i)No one is entitled to the Alieva Foundation’s assets. There are only beneficiaries (the husband’s descendants i.e. his children and grandchildren) who receive income generated from the assets and the Alieva Foundation's assets may not be diminished;
(j)The income e.g. interest or rental income is to be paid to the husband in accordance with the provisions of the “Articles of Association” for so long as the husband lives and thereafter to his descendants;
(k)Assets may not be reduced, only income is to be paid out to fulfil the purpose of the Alieva Foundation;
(l)The husband has no claim to the assets of the Alieva Foundation. He can no longer retrieve the assets once donated but he has the option of distributing income to himself;
(m)The husband cannot transfer assets from the Alieva Foundation to third parties;
(n)The Alieva Foundation may be resolved but only if the Alieva Foundation can no longer fulfil its purpose permanently and sustainably;
(o)It is not possible to dissolve the Alieva Foundation without a compelling reason;
(p)Upon dissolution, the Alieva Foundation’s assets will pass to the husband’s descendants;
(q)The Articles of Association exclude a legal claim to benefits from the Alieva Foundation; and
(r)The beneficiaries can decide on distributions from the Alieva Foundation’s income through their function as the Alieva Foundation’s general meeting, however, they must pass a majority resolution to do so.
The wife does not contend that the assets of the Alieva Foundation are property of the husband. Rather, the wife seeks to add back what she contends was a premature disposal of property that would have been included in the balance sheet but for the husband’s actions.
The husband resists the notional add back, contending that:
(a)The Alieva Foundation was established two years prior to the date the wife contends the parties separated, and nine years after the date he contends the parties separated;
(b)The husband set up the Alieva Foundation with the wife’s knowledge and without her objection;
(c)The value of the shares transferred to the Alieva Foundation was €274,300 and the additional initial sum of €50,000;
(d)The husband has no entitlement to the capital fund in the Alieva Foundation;
(e)It is common ground that the husband intended the Alieva Foundation to benefit his children.
The wife does not dispute the above facts and the husband was not challenged on them. The husband concedes that the Alieva Foundation should be treated as a financial resource of his having regard to the evidence of the single expert, Mr DD.
There can be little doubt that had the husband not divested himself of assets to the Alieva Foundation they would have formed part of the balance sheet using a global approach.[13]
[13]Townsend and Townsend (1995) FLC 92-569 at 81,654.
However, I do not propose to include the Alieva Foundation as a notional asset having regard to the following findings:
(a)The wife made no direct or indirect financial contribution to the assets in the Alieva Foundation which were located in Germany;
(b)The wife conceded that if the Alieva Foundation is included in the balance sheet there should be an adjustment in the husband’s favour given his greater contribution to it;
(c)The wife’s only relevant contribution would be her contribution to the welfare of the family which does not require a nexus to the Alieva Foundation assets;[14]
(d)The wife did not dispute that the husband told her of his intention to set up the Alieva Foundation for the benefit of his children after other businesses he had owned in Germany had failed;
(e)The wife did not dispute the husband’s evidence that she raised no objection at the time he set up the Alieva Foundation;
(f)The parties agree that the Alieva Foundation is not the husband’s property; and
(g)The wife’s contribution to the welfare of the family can otherwise be afforded real and substantial recognition given that the balance sheet is substantial even without notionally adding back the Alieva Foundation.
[14] Dickons v Dickons (2012) 50 Fam LR 244 at 248, [16] (“Dickons”).
The husband’s future entitlement to receive income from Alieva Foundation will be treated as a financial resource, as accepted by both parties.
If I am wrong in failing to notionally add back the Alieva Foundation, I would adjust contributions in the husband’s favour to recognise his greater contribution.
Husband’s legal fees – add back
As with other potential add backs, whether legal fees are notionally added back is a discretionary matter.[15] While the source of the funds is of course important,[16] the Full Court in Trevi & Trevi[17] said at [34]:
The guidelines emerging from Chorn should be read together and read conformably with the Full Court authorities upon which they are based. That being so, the delineations there referred to — “the funds used existed at separation … such that both parties can be seen as having an interest in them”; or “funds used to pay legal fees have been generated by a party post separation from his or her own endeavours” or received by a party “in his or her own right (for example, by way of gift or inheritance)” - cannot be seen as determinative of the exercise of discretion but, rather, as informing it.
[15] Chorn (n 12) at [56].
[16] Ibid.
[17] (2018) FLC 93-858 at 78,455, [34].
The wife submits that the husband’s legal fees of $209,897 should be the subject of a notional add back as they were allegedly paid from capital that allegedly existed at or around the time the wife contends the parties separated. The sum sought to be notionally added back appears in the husband’s costs disclosure notice and an explanation is provided that the husband’s “overall costs, including costs to date and the estimated future costs (not including disbursements other than counsel’s fees), are likely to range up to $209,897”.
The husband’s costs disclosure notice identifies the following legal fees and disbursements paid by the husband (including monies held in trust):
Total fees paid to solicitor: $88,934.52 Total fees paid to barristers: $10,890 Total fees paid to experts: $23,486.10 Monies held in trust by solicitor: $80,412.70 Total: $203,723.32
The additional costs for preparation and a four day trial were estimated to be $67,600.
On any view, it seems that a notional add back of $209,897 is not open on the evidence. At most it might be $203,723.32 although that includes fees paid to experts and it is unclear whether that represents half of those fees or the entirety.
The wife relies on Exhibit 7 which is a schedule (described as an “Aide-memoire for Counsel”) recording legal fees paid by the husband from a FF Pty Ltd Account [redacted] [redacted] Visa Account [redacted] $143,232.04 over the period 24 August 2022 to 29 November 2024. It is not in contention that these funds were paid from an account referred to as the “[F Pty Ltd] account”. I assume, although no other mention was made of it, that this is a reference to F Pty Ltd, the husband’s interest in which is valued in the balance sheet as a “loan” of $100,268. As no reference has been made in submissions to the treatment of the funds used by the husband to pay his legal fees from an account belonging to F Pty Ltd, I can only assume that the personal use of funds has been taken into account by the single expert, Mr FF, when valuing the husband’s interest in F Pty Ltd.
As to the source for the balance of legal fees paid by the husband, the wife suggested that the funds may have come from monies held in bank accounts in the husband’s name “from at least 2017”. Exhibit 12 contains four pages of two bank accounts in the husband’s name in 2016.
The wife submits that as the husband made “no serious effort to explain the source of funds for his legal fees” and that “[the husband] had access to $280,000 as at 9 September 2016” it should be found that “the husband’s legal fees were paid from capital, being either monies he had at separation, or from drawings from F Pty Ltd, which appears on the … balance sheet”.
As far as I am aware, no notice was given to the husband that a potential add back of legal fees would be an issue for trial. It certainly was not identified as an issue for my determination at any time prior to the commencement of the trial. The issue appears to have first arisen during cross-examination of the husband when he was asked to explain what had become of funds in a bank account in his name that had a balance as at 1 July 2016 of $287,411.66. Unsurprisingly, the husband could not recall individual withdrawals or transfers from nearly nine years ago.
In the absence of the husband being given any notice that this was an issue for trial and that at least $143,232 of his legal fees may already have been taken into account in the valuation of the parties’ interests in F Pty Ltd, I am not persuaded the funds paid by the husband for his legal fees and disbursements, as identified in his costs disclosure notice, should be the subject of a notional add back in the balance sheet.
CGT
The husband resists a sale of the Town C property but agrees that if it is to be sold then the parties should obtain advice on the likely CGT and retain a sufficient sum in trust pending an assessment.
Husband’s German pension and life insurance payment
The husband receives an annuity under a life insurance policy and some other form of payment described as a government pension. It is not in dispute that the payments are received from a source in Germany and that the value of these payments in Australian dollars is $364 per week.
For some reason the payments are included in the balance sheet under the heading ‘superannuation’, (with a value attributed by the wife of ‘not known’ and no value attributed by the husband). There is no evidence that the weekly payments are commutable to a lump sum nor are they amenable to a superannuation splitting order (not that either party sought one).
It seems to me that these ongoing payments can only be treated as part of the husband’s income, and I do not understand either party to contend to the contrary.
Polzin Family Settlement
The wife is a beneficiary of the Polzin Family Settlement, which is a discretionary trust established by her parents in 1976. The Polzin Family Settlement is controlled by one of her brothers. The wife’s loan account in the Polzin Family Settlement is included in the balance sheet as property, although it is asserted in the wife’s written submissions that she has “no entitlement to call upon the monies owed to her”. There is no evidence to substantiate such a submission. In any event, the loan account balance was included in the balance sheet as an agreed item.
While the wife concedes that funds she may receive in the future from the Polzin Family Settlement “may be considered to be a financial resource”, it is asserted in the wife’s written submissions that “she will never be able to realise the money”. This is submitted to be on the basis that the Polzin Family Settlement sustained a “trading” loss of $429,646 in the financial year ended 30 June 2024. I observe that the trading operation is only part of the income received by the Polzin Family Settlement and additional income was received from rents, commissions, interest, and rebates and while the Polzin Family Settlement sustained an overall loss in the last financial year it made a profit of $411,851 in the financial year ended 30 June 2023. The Polzin Family Settlement also has capital reserves of over $9,000,000 and the wife is both an income beneficiary and a capital beneficiary.
The wife conceded that historically every time she has asked for money from the Polzin Family Settlement she has received it. For example, the wife received payments from the Polzin Family Settlement for a deposit for the purchase of real property and to pay her legal fees. In relation to the legal fees, the wife asserted that it was a loan but conceded there was nothing in writing and no discussion about it being repaid. The wife admitted that she had simply said to her brother that she had a bill to pay, and he paid it.
In Hall v Hall,[18] the High Court said:
54.The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee's discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
55.Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual inquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it.
(Citations omitted)
[18] (2016) 257 CLR 490 at 506-507, [54]-[55].
It seems to me that the potential for the wife receiving both income and capital payments from the Polzin Family Settlement is “a source of financial support which [the wife] can reasonably expect will be available to … her to supply a financial need or deficiency”[19] should she ask for it. Accordingly, it will be treated as a financial resource.
ADJUSTED BALANCE SHEET[20]
[19] Ibid.
[20] Any items with an agreed nil value have been excluded.
Husband’s Assets Value The Town C property $14,500,000 Loan to F Pty Ltd $100,268 Loan to CC Development $267,308 Husband’s Liabilities Value Loan from Mr D and Ms D ($1,185,976) Subtotal (husband’s net assets) $13,681,600 Wife’s Assets Value The V Street property $800,000 The W Street property $1,100,000 Loan to L Pty Ltd $56,334 Loan to X Pty Ltd as Trustee for Polzin Family Settlement $1,278,231 Subaru $24,000 Inheritance $800,000 Wife’s Liabilities Value Mortgage on the W Street property ($431,209) Wife’s superannuation Polzin Superannuation Fund $900,006 Subtotal (wife’s net assets including superannuation) $4,527,362 TOTAL (combined net assets) $18,208,962 CONTRIBUTIONS
It is not in dispute that the parties largely kept their finances separate. They did not purchase any property in joint names. They did not jointly borrow any funds. They did not have a joint bank account. Neither party made direct financial contributions to the acquisition of any property purchased by the other party.
The parties are in dispute about the nature and extent of indirect financial and non-financial contributions made by the wife to the conservation or improvement of property in the husband’s name and the weight that should be afforded to those contributions. Not surprisingly, the wife seeks to maximise her contributions while the husband seeks to minimise them.
The parties are also in dispute about the nature and extent of the wife’s contributions to the welfare of the family and the weight that should be afforded to those contributions. As with the indirect contributions, the wife seeks to maximise her contributions while the husband seeks to minimise them.
The wife contends that her contributions included the following:
(a)Use of her income from full-time employment from 1989 to 2001 and part-time employment from 2003, to purchase groceries, entertainment, and household items e.g. appliances, carpet, etc. for the benefit of the family (although it is conceded by the wife that she received $4,000 per month from the husband “for many years, which [the wife] used for family expenses and particularly the expenses for [Ms G]. This continued even when [Ms G] and [the wife] moved to [Town K] in 2017”);
(b)Physically assisting on the Town C property to the best of her ability after she finished work (in her extended family’s business) on weekdays and on weekends (other than on Saturday mornings when she mostly worked in her family’s business) and, when not working full time, by carrying out various physical tasks e.g. putting rocks and gravel down to transform tracks into roads prior to the construction of the cabins on the Town C property, planting and maintaining gardens around the former matrimonial home, driving a tractor on occasion, clearing and maintaining four kilometres of existing tracks, etc.;
(c)Primary care of the child from her birth in 2001, including breast feeding for the first six months, changing nappies, attending to her at night when she was a baby, bathing, dressing, and supervising her, taking her to medical, dental and other appointments, taking her to and from school (mostly), taking her to extracurricular activities (shared), attending parent and teacher interviews, helping with her homework, taking her to other activities as she got older, undertaking the preparation of her meals, purchasing her clothes, etc.;
(d)Undertaking the majority of the cooking, washing, and cleaning (although it is conceded by the wife that as a general rule there was a cleaner for four hours per week from 2001 until she left the property with the child in about early February 2017) and in circumstances which often made the tasks difficult e.g. when they lived in a caravan while their home was built, and continuing to do the husband’s cooking and laundry until approximately October 2018;
(e)Entertaining and cooking for the husband’s family and friends when they visited from Germany e.g. the husband’s three adult daughters visited on occasion (e.g. a maximum of approximately 12 times for one of his daughters);
(f)Assisting in the care and entertainment of the husband’s mother during the last two years of her life when she lived at the Town C property from 1999 to 2001 by cleaning her cottage and cooking for her on weekends (although it is conceded by the wife that the husband’s mother had 24-hour carers from Monday to Fridays, at least);
(g)Setting up the cabins on Town C for rental e.g. installing furniture and choosing décor, and managing the rental of the cabins and cleaning them in between rentals, collecting the rent etc. (although the wife conceded that the casual rentals occurred only about five times per year until longer term rentals were obtained after several years);
(h)Attending meetings with the husband up until 2022 e.g. with banks or accountants;
(i)Acting as the husband’s personal assistant until about 2020 (although the wife conceded that the husband employed a manager, initially Mr EE from 2016 – 2019 and thereafter Mr D), involving her in various tasks e.g. correcting his emails and other correspondence (as English is not his first language), collecting the mail, paying accounts, filing bank statements, arranging appointments, liaising with the accountant to complete business activity statements and end of year financial statements, and which the wife estimates to have taken at least an hour each day on average;
(j)Purchasing the V Street property for $90,000 in 2000 and paying off the mortgage of $90,000 by 2004 with the property now valued at $800,000 (the ability of the wife to pay off the mortgage in four years is likely to have limited, at least to some extent, her ability to contribute to the finances of the household);
(k)Purchasing a second property, the W Street property, in 2016 for $540,000 by borrowing the entire purchase price with the property now valued at $1,100,000 subject to a mortgage of $431,209.
I have earlier observed that the husband sought to minimise the wife’s contributions. For example, while there seemed little dispute that the wife undertook the primary role of caring for Ms G from birth to adulthood, the husband would not concede that “much of the credit for her upbringing” lies with the wife. Further, while there is no dispute that the wife did the husband’s laundry from 1989 until 2018 and that she prepared most of his meals throughout that entire time, the husband again sought to minimise the wife’s contributions in these respects by suggesting that the wife merely put his laundry in with hers and that he ate leftovers. I reject his attempts to minimise those contributions. The wife’s contributions as the primary carer for the child and in undertaking the husband’s laundry and providing his meals throughout such a lengthy period must be “recognised not in a token way but in a substantial way”.[21]
[21] Rolfe and Rolfe (1979) FLC 90-629 at 78,273. See also Mallet v Mallet (1984) FLC 91-507 at 79,126.
I find that the wife contributed at least part of her income when employed and receiving a wage to the purchase of groceries and other expenditure for the benefit of the family e.g. clothing for Ms G. I also find that the wife provided ongoing assistance to the husband in the role of a ‘personal assistant’ until at least 2016. I accept that she made appointments for him, read through and corrected his correspondence, attended meetings with him, and liaised with his accountant. I also find that the wife managed the rental of the cabins on the Town C property to the extent required until Mr EE was retained by the husband around 2016. I find that the wife made indirect contributions to the conservation and improvement of the Town C property e.g. by assisting the husband with maintaining four kilometres of tracks. The wife also assisted in the care of the husband’s mother on weekends during the period she lived with them, and provided meals and entertained the husband’s family and friends when they visited. It is not contentious that the wife purchased the properties at Town K.
The husband’s contributions are substantially conceded by the wife although the wife submits that the husband’s financial contributions to the Town C property are not as significant as claimed because he borrowed funds for the initial purchase and again borrowed funds for its expansion. The wife contends that the husband failed to establish that the property he owned in Country H at the commencement of cohabitation was the source of any capital injection to the property in his name in Australia. However, there is no dispute that the husband paid off any borrowings using his funds and that each party made their respective decisions to purchase real property independently of the other. The wife conceded that she had funds that she could have accessed to contribute to capital purchases made in the husband’s sole name but did not do so, contending only that she was not asked to do so.
The husband owned the Town R property outright at the commencement of cohabitation and used this property as security for the purchase of the initial Town C property. The husband also owned property in Germany from which he received an income throughout the relationship and after separation (whenever that may have occurred) and owned a glider in Australia. It is not in dispute that the income received from his property and business interests in Germany supported the family and were utilised in the conservation of the Town C property. The wife also concedes the husband assisted with parenting Ms G (although not to the extent that the husband contends). The husband also provided the wife with funds each month from which she concedes she paid household accounts. In addition, the wife had access to a bank account in the husband’s name from which she paid household expenses and expenses for Ms G. The husband also made indirect contributions to the conservation and improvement of properties owned by him e.g. designing and supervising the construction of the main house and two cabins on the Town C property, maintaining the grounds, constructing and maintaining roads and tracks, obtaining development approvals, overseeing the construction of improvements etc.
There has been a significant increase in value of the Town C property particularly in recent times. It was purchased in 1991 for $310,000 and retrospective valuations for the property indicate its value on 15 May 2005 was $3,325,000 ($1,700,000 for the land and $1,625,000 for the improvements) and on 25 December 2016 its value was $5,000,000 ($2,150,000 for the land and $2,850,000 for the improvements). The most recent valuation for the property (which the parties accept for the purposes of these proceedings) was undertaken on 15 April 2024 when it was valued at $14,500,000 ($10,000,000 for the land and $4,500,000 for improvements). In between the 2005 valuation and the 2016 valuation there was another structure built on the property, namely, an aircraft hangar, and after 2016 there was another hangar built on the property to which the expert attributed a value of $1,650,000 and it is not in dispute that the husband owes $1,185,976 in relation to the construction of this hangar.
Although the improvements have increased the value of the Town C property, it seems the most significant increase in value is due to market forces rather than contributions made solely by the husband.[22] I do not overlook of course the direct and indirect financial contributions made by the husband to the acquisition, conservation and improvement of the Town C property. The properties in the wife’s name have also increased in value due to market forces but not to the same extent.
[22] See, eg, Hurst & Hurst (2018) FLC 93-851 at 78,355, [26].
It seems to me that in seeking the property order that he does, the husband overlooks the significance of the wife’s contribution to the welfare of the family for which there is no requirement for there to be a nexus to any property.[23] The wife’s contributions to the welfare of the family commenced in 1989 and continued in varying degrees until at least October 2018.
[23] Dickons (n 14) at [16].
Having regard to the myriad of contributions made by the parties including initial contributions, financial and non-financial contributions to the acquisition, conservation and improvement of property, contributions to the welfare of the family, and the wife’s late inheritance, I assess that contributions should favour the husband in the proportion 60/40 which represents a 20 per cent differential in the husband’s favour.
SECTION 75(2) FACTORS
The husband is 76 years of age and retired. He contends that he has “not been in good health”, but there is no evidence that he has any such conditions that have a financial impact.
The husband receives weekly rent of $808 from the [redacted] for a lease of part of the Town C property as well as a licence fee of $288 from F Pty Ltd. Additionally, he receives a life insurance payment and a government pension of $364 from Germany. The husband’s average weekly income is $1,460. The husband’s claimed weekly expenditure is $424. If the husband is required to sell the Town C property to pay out the wife he will lose the rental income and licence fee, but he will receive capital which he could invest. Additionally, the husband is entitled to receive income from the Alieva Foundation.
The wife is 59 years of age and in good health. The wife continues to work almost full-time hours in her extended family’s business. Although she is not currently paid a salary, she receives distributions of $529 per week from the Polzin Family Settlement. It is not clear why the wife is not paid a salary, but she has an earning capacity of at least what she is receiving from the Polzin Family Settlement. Whether the distributions from the Polzin Family Settlement would continue if the wife ceased to work in the family business is unclear. The wife also receives weekly rent from the V Street property and the W Street property, which is currently rented by the parties’ adult daughter at what appears to be a subsidised rent. The wife’s average weekly income according to her financial statement is $1,379 and her petrol of $100 per week is paid by the Polzin Family Settlement. The wife’s claimed weekly expenditure is $1,759.
I have found that the property of the parties or either of them (including superannuation) is valued at $18,208,962. An adjustment in the husband’s favour on contributions of 60 per cent and 40 per cent to the wife would see each of them receive substantial property. The husband would retain property valued at $10,925,377.20 and the wife would retain property valued at $7,283,584.80. Additionally, the wife has a financial resource in the form of ongoing distributions from the Polzin Family Settlement and the husband has a financial resource in the form of an entitlement to income from the Alieva Foundation.
I do not consider any adjustment by reason of the s 75(2) factors is warranted.
WHAT PROPERTY ADJUSTMENT ORDER IS JUST AND EQUITABLE?
The husband will have the opportunity to pay out the wife rather than sell the Town C property as it has been his long time aim to create “an ecologically sustainable domestic village”. If he can raise the funds, the following table sets out his net position (I have not included property to which a nil value has been attributed in the balance sheet):
Asset Value The Town C property $14,500,000 Loan to F Pty Ltd $100,268 Loan to CC Development $267,308 Liabilities Value Loan from Mr D and Ms D ($1,185,976) Subtotal $13,681,600 Other Value Payment to wife ($2,756,222.80) Total net assets to be retained $10,925,377.20
The wife’s net position is set out in the following table:
Asset Value The V Street property $800,000 The W Street property $1,100,000 Loan to L Pty Ltd $56,334 Loan to X Pty Ltd as Trustee for Polzin Family Settlement $1,278,231 Subaru $24,000 Inheritance $800,000 Liabilities Value Mortgage on the W Street property ($431,209) Superannuation Value Polzin Superannuation Fund $900,006 Subtotal $4,527,362 Other Value Payment from the husband $2,756,222.80 Total net assets (including superannuation) to be retained $7,283,584.80
The differential between what the husband will retain and what the wife will retain is $3,641,792.40 in the husband’s favour. In my view, such an outcome is just and equitable.
In the event the Town C property is to be sold, the husband did not object to the sale process formulated by the wife.
The wife’s proposed order (Exhibit 14) includes an injunction against the husband restraining him from disposing of or further encumbering the Town C property pending its sale. I was not taken to any evidence submitted to support the balance of convenience for the granting of the injunction and in the absence of any submissions in relation to it, I do not propose to grant the injunction.
I certify that the preceding one hundred and four (104) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carew. Associate:
Dated: 7 April 2025
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