Weinhopf and Weinhopf
[2009] FamCA 1084
•17 November 2009
FAMILY COURT OF AUSTRALIA
| WEINHOPF & WEINHOPF | [2009] FamCA 1084 |
| FAMILY LAW – PROPERTY – s 79 – Contributions to the marital pool – International property – Add backs – Discretionary considerations – s 75(2) considerations |
| Family Law Act 1975 (Cth) |
| Bremner & Bremner (1994) 18 Fam LR 407 Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 In the Marriage of Best (1993) FLC 92-418 |
| APPLICANT HUSBAND: | Mr Weinhopf |
| RESPONDENT WIFE: | Ms Weinhopf |
| FILE NUMBER: | BRC | 3730 | of | 2008 |
| DATE DELIVERED: | 17 November 2009 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Murphy J |
| HEARING DATE: | 19 October 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Forrest |
| SOLICITOR FOR THE APPLICANT: | Hall Payne Lawyers of Brisbane |
| COUNSEL FOR THE RESPONDENT: | Mr Byrne |
| SOLICITOR FOR THE RESPONDENT: | Simonidis Shoebridge Lawyers of Brisbane |
Orders
As and by way of settlement of property pursuant to s 79 of the Family Law Act 1975 (Cth) (as amended):
The husband shall do all such things, pay all such monies and sign all such documents as might be necessary to:
(a)Transfer to the wife within 30 days of the date of these orders any right, title, claim or interest he has, or may have, in and to the real property being H property in the State of Queensland;
(b)Transfer to the wife within 30 days of the date of these orders, the Ford Fairmont and Daewoo motor vehicles;
(c)Forthwith abandon any right, title claim or interest he has, or may have, in and to the funds standing to the credit of the wife at the Westpac bank, R branch and to any and all property of whatever type or description owned by, or in the name of, the wife situated at the date of these Orders outside of Australia to the intent that all shall vest absolutely in the wife;
(d)Forthwith abandon any right, title claim or interest he has, or may have, in and to any and all superannuation interests of the wife to the intent that same shall vest absolutely in the wife;
(e)Forthwith abandon any right, title claim or interest he has, or may have, in and to any and all furniture and other chattels, not otherwise the subject of specific order, currently owned by, or otherwise in the possession of the wife, to the intent that same shall vest absolutely in the wife .
The wife shall do all such things, pay all such monies and sign all such documents as might be necessary to:
(a)Transfer to the husband within 30 days of the date of these orders any right, title, claim or interest she has, or may have, in and to the real property situated O in the State of Queensland;
(b)Transfer to the husband within 30 days of the date of these orders the Toyota Troupe Carrier motor vehicle;
(c)Forthwith abandon any right, title claim or interest she has, or may have, in and to the funds standing to the credit of the husband at the Westpac bank, R branch, and to any and all property of whatever type or description owned by or in the name of the husband situated at the date of these Orders outside of Australia to the intent that all shall vest absolutely in the husband;
(d)Forthwith abandon any right, title claim or interest she has, or may have, in and to any and all superannuation interests of the husband to the intent that same shall vest absolutely in the husband;
(e)Forthwith abandon any right, title claim or interest he has, or may have, in and to any furniture and other chattels, not otherwise the subject of specific order, currently owned by, or otherwise in the possession of the husband, not otherwise the subject of specific order, to the intent that same shall vest absolutely in the husband.
IT IS NOTED that publication of this judgment under the pseudonym Weinhopf & Weinhopf is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC3730 of 2008
| MR WEINHOPF |
Applicant
And
| MS WEINHOPF |
Respondent
REASONS FOR JUDGMENT
The relationship between the parties to these proceedings for settlement of property spans 37 years, commencing with cohabitation in late 1972. The parties separated more than two years ago in June 2007, having been married in 1976. The parties were divorced earlier this year.
Save for one issue in respect of what is commonly known as “add backs” the property of the parties or either of them within the meaning of s 79 of the Act, and its value is agreed. It consists of property and other assets in Australia, very substantial property, owned by the wife, situated in Belgium and cash in the husband’s name in Singapore.
The property in Belgium was previously owned by the wife’s parents. A series of inter vivos gifts were made by the wife’s father (or parents) in 1984, 1991, 1995, 1999 and 2003. The first four of those five dispositions transferred real property to the wife; the last of them transferred shares, bonds and a cash investment. Other gifts were made early in the parties’ relationship.
The central issue in this case is, how should these gifts weigh in the balance in arriving at orders which represent a just and equitable settlement of property between the parties.
The Agreed Property of the Parties
Joint Balance Sheet
Description
Ownership
Value
H property
Joint
$675,000
O Land
Joint
$365,000
Westpac R Branch Term Deposit (to be confirmed by updated bank statements)
Husband
$111,000
Standard Chartered Singapore Account (to be confirmed by updated bank statements)
Husband
$887,000
Superannuation
Husband
$40,000
QSuper Superannuation
Wife
$71,000
Caresuper Superannuation
Wife
$4,740
Furniture
Wife
$30,000
Furniture
Husband
$30,000
Ford Fairmont Motor Vehicle
Wife
$1,800
Daewoo Motor Vehicle
Wife
$2,150
Toyota Troupe Carrier
Husband
$2,950
Bank Accounts in Wife’s name Westpac R Branch (to be confirmed by updated bank statements)
Wife
$7,600
Belgian and European Property
Real Property
Wife
€1,045,000
KBC Bank Accounts
Wife
€810,000
KBC stocks and bonds
Wife
€2,820,000
Funds with Argentabank Luxemburg
Wife
€62,000
It will be noted that the European property in the above table is expressed in Euros. Obviously, the value of the Euro in Australian dollars will vary from day to day. At the time of trial, a broad total of about $7.6million was adopted and I adopt it for the purpose of calculations.
Neither party contended that superannuation ought fall into a “separate pool” (as to which see Coghlan & Coghlan (2005) FLC 93-220). It has been held that superannuation is “to be treated as property even though it is not”. (See Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, par 75). It has also been held, by a later Full Court, by majority, that superannuation interests are “…another species of asset which is different from property as defined in s 4(1), and in relation to which orders can also be made in proceedings for property settlement under s 79”. (Coghlan, above, per the majority at par 40).
Whichever be correct, it is clear that either the “global” or “two pools” approach remains valid. (See Coghlan, above; In the marriage of Norbis (1984) FLC 910543).
Neither party seeks a splitting order and each party seeks to retain the superannuation interests they respectively hold.
Approach
A “two pools” approach was conceded by Counsel for both parties as being open to the Court as an approach with “one pool” comprising the Australian assets and superannuation interests and the “second pool” comprising the Belgian and European assets.
What is often described as a “two pools approach” has come to be used in cases where superannuation interests are treated separately from other property. But, the nature, form and characteristics of property or other interests comprising the subject of the s 79 application has always been significant. (See e.g., In the Marriage of Best (1993) FLC 92-418; In the Marriage of Bonnici (1991) 15FamLR 138).
The argument in favour of treating the European property, received by the wife as gifts from her parents as a “separate pool”, is said, in effect, to recognise the differences in the characteristics of that group of assets from the characteristics pertaining to the property acquired through the joint endeavours of the parties during a very lengthy relationship.
Courts have been considering the nature, form and characteristics of property consistently since the commencement of the Act (even if not expressed in those terms). There has never been a requirement for different types of property to be treated the same as other types of property (See e.g., Cahill and Cahill (2006) FLC 92-253). Nor has there ever been a requirement for different types of property to be treated differently.
The starting point (and the end point) must be to ask, how can justice and equity be achieved in the particular circumstances of this particular case.
In G and G (1984) FLC 91-582 Nygh J said (at 79,697):-
“In my view, despite what was said [by the Full Court of the Family Court] in Norbis, both approaches are legitimate unless the High Court rules otherwise provided that those who take the global approach heed the warning that the origin and nature of the different assets ought be considered and that those who favour the more precise approach do not mistake the trees for the forest, i.e. add up their individual items without standing back at the end to review the overall result in the light of the needs of the parties.”
Moreover, Mason and Deane JJ said in Norbis v Norbis (1986) 161 CLR 513, at 524:-
“It has not been suggested that there is any fundamental difference between the two competing approaches which we have considered, in the sense that one will yield more just and equitable entitlements than the other.”
The judicial pronouncements just referred to were with specific reference to an “asset by asset” approach, as distinct from a “global” approach. However, in my view, those considerations apply equally where property with particular nature, form or characteristics is grouped together and the task is approached in a “two pools” manner. However, the caveat referred to by Nygh J is, in my respectful view, important, and applies equally, irrespective of the approach which is adopted.
In this particular case, while there are good reasons for adopting a “two pools” approach by reason of the fact that the Belgian property has been acquired in a particular way and might therefore be seen as having quite different characteristics from the “other” property of the parties, I nevertheless intend to adopt a global approach.
I do so predominantly because this is a very lengthy marriage and although the European property has been acquired by the wife by way of gifts, those gifts have occurred over a period spanning some 25 years, which such period is all contained within the parties’ relationship.
The parties and their evidence
The evidentiary ambit of this case is, appropriately, narrow. This is a very lengthy marriage in which the parties, quite plainly in my view, contributed appropriately within their respective spheres (see Wilson J in Mallet & Mallet (1984) 156Clr 605 at par 15).
I consider that each of the husband and wife was attempting to give the best honest evidence that they could to the questions they were asked. I have no concerns about the credibility of either party. I consider their evidence to be truthful and frank.
Property – add backs
The general principle applicable in applications for settlement of property is that the Court should take the property of the parties or either of them as it finds it as at the date of trial. Adding back to the then existing pool of assets is the exception not the rule. (See C v C [1998] FamCA 143 at 46 where the Full Court held specifically that “The parties are entitled to reasonably conduct their affairs post separation in a manner that is consistent with properly getting on with their lives”.)
Moreover, add backs are, by definition, addressed to past conduct but seek to add back to the pool expenditure occurred in a different, earlier context and to add, in 2009 dollars, money spent at an earlier dollar value. That consideration is here made more complex by the fact that the assertions with respect to add backs are in respect of monies in a currency other than Australian dollars.
Ultimately, the claim in respect of add backs boils down to monies withdrawn by the husband in May, July and December 2007 and again in June 2009.
Those sums total approximately $200,000.00, comprising approximately $79,000, and a separate sum of approximately $120,000 incurred in unusual circumstances.
The husband gave evidence in the witness box about the latter sum. He had a motor vehicle accident in Asia (where he now lives and works) which he believes was a “set up” – that is, the accident was faked in an attempt to extort money from him. He explained the circumstances in which the money was paid which include circumstances in which he says threats of physical harm were made to him if he did not pay.
The incident was not reported to the police – the husband says because there was purported police involvement at the time of the incident, which he now suspects was part of the “scam”. No documents exist in respect of the incident. No disclosure was made of any information relating to the payment of the money to the wife or her solicitors. The first evidence of it occurred with the husband’s oral evidence in the witness box.
In that respect, the husband indicated that it was only upon very recently receiving communication from the wife’s solicitors requesting an explanation of moneys withdrawn from his Singapore account that he considered it necessary to refer to the matter – this being an explanation for why it was not contained in his affidavit.
It needs to be borne in mind by all litigants in this Court that the obligation in respect of disclosure required by this Court’s processes extends not merely to producing documents which are in the possession, or under the control, of that party. The duty of disclosure is a general one. (See Rule 13.01 of the Family Law Rules 2004). Significantly the duty is to give full and frank disclosure of all information relevant to the case in a timely manner. [emphasis added]
Of course, there are variations in the extent of the obligations, measured by the criterion of what is reasonable in the circumstances. A line-by-line explanation of post-separation expenditure may not be required in every case; it may be required in a case where, for example, wholesale fraud is joined as an issue from the outset of the proceedings. The obligation, though, also needs to be considered when a request is reasonably made for information by the other party. As the Rules make clear, proportionality is an important matter when considering reasonableness.
When account is taken of the failure to earlier disclose the payment, of what is clearly a significant sum of money, from a bank account the balance of which would otherwise clearly form part of the property of the parties, together with the highly unusual features of the expenditure described by the husband in the witness box, I consider that the sum of approximately $120,000 constitutes a “premature distribution” to the husband in the sense in which that expression is used by the Full Court in Townsend and Townsend [1995] FLC 92-569 at 61,654 per Nicholson CJ.
I do not consider that it can be described as “reasonable living expenses” of a party who, post-separation, is getting on with their life, such that the other party should share in the expenditure. I propose to add it back to the pool of assets.
It was contended on behalf of the wife that the balance of the sums should also not be regarded as “reasonable living expenses” by the husband. It was submitted that he is employed in Asia at a hotel/resort and, as a result, receives free accommodation and other benefits. It is submitted, specifically, that the husband’s renting of a home in which to reside in is, in those circumstances, unreasonable. The husband gave evidence that the accommodation provided to him is a small motel room within the complex where he works.
I do not consider that the rental by him of alternative accommodation, separate from his place of employment is unreasonable.
I reiterate that I consider the evidence of the husband to be essentially honest. It seems to me that the items of expenditure to which the husband attributed the sums withdrawn by him can be seen as being “consistent with [him] properly getting on with [his] life”.
A specific component of the total sum of $79,000 earlier mentioned, is a sum of $Singapore30,000 (about $23,800 Australian currently). The husband was unable to explain what this amount was spent on. He said that, in the Singapore bank statements, transfers from one account to another are shown as “withdrawals” as distinct from “transfers”. The expenditure occurred in December 2007. The request to explain it came late and just before the trial. The husband says he was in transit at the time and did the best he could to ascertain what it related to. On balance, I do not consider it just and equitable to add it back as against the husband.
It is conceded on behalf of the husband that $64,500 in legal fees ought be added back to the pool of assets “consistent with the authorities” (as to which see e.g., Chorn & Hopkins [2004] FLC 93-204).
The property of the parties or either of them
The property of the parties or either of them within the meaning of section 79 of the Act is, then, the pool of property earlier referred to with the addition of $184,500 which such sum is credited to the husband (being the total of the $120,000 earlier referred to and the legal fees of $64,500).
In overview, the “pool” is valued at about $10million, of which about $7.6million is overseas property, and $2.4million, Australian property.
Contributions
The contribution picture presented by the evidence in this very long marriage is, aside from the introduction of the Belgian/European property, unremarkable.
As indicated earlier, I consider it abundantly clear that each of the parties have appropriately contributed within their respective spheres.
The husband has worked overseas and, it seems clear, this has resulted in greater remuneration than might otherwise have been the case if he had remained residing in Australia. Equally, however, the wife (and their child) accompanied him to those posts and provided support. No doubt residing in some of those countries did not come without its difficulties, particularly with a child.
I conclude that the contributions of the parties in their respective spheres during the course of this long relationship were equal save for the direct financial contributions made on behalf of the wife through the agency of her parents.
It is necessary to place those contributions into context.
The parties executed a document described as a “pre-nuptial agreement” in Germany in 1976 prior to their marriage. It seems clear that the wife’s parents made the transfers of property and gifts of cash in reliance upon that pre-nuptial agreement. The wife’s parents are not parties to these proceedings. No claim is made by them in these proceedings.
I accept the argument on behalf of the husband that the pre-nuptial agreement does not preclude the husband from pursuing his application for orders pursuant to s 79, nor does it relieve the Court of its obligation to decide this matter in accordance with the provisions laid down in the Act. (See D & D Full Court, unreported, 30 April 1992, per Strauss, Lindenmayer and McCall JJ and the earlier decisions there cited).
At the commencement of the relationship neither of the parties had assets of significance. The parties lived and worked in Europe before moving to Australia. By the time they moved to Australia the parties had approximately DM140,000. When the parties moved to Australia and purchased a home in Melbourne, the mother’s parents contributed in the region of $50,000.
A later direct financial contribution (in about November 1988) of about $50,000 was used to acquire land at O in Queensland (in June 1989) for a purchase price of $51,600. The land continues to be owned by the parties and forms part of their property (now valued at $365,000).
The first of the payments just referred to was made in about 1982. Very shortly thereafter, the wife’s father gave her about DM39,000 to purchase a Mercedes Benz. The car was later sold in Australia for $30,000 and the wife alleges (and it was not challenged) that this money paid off the balance of the mortgage on the parties’ first home in Melbourne.
The wife also deposes (and again it doesn’t appear to be challenged) that the wife’s father also gave them her grandfather’s furniture which “filled a 20 foot container”.
The property in Melbourne was sold in mid-1991 when the parties moved to L in Queensland. The sale of the Melbourne property funded the parties’ home in L.
That home was rented out when the parties moved back to Melbourne so that the husband could pursue his employment there. Upon returning to Victoria (in 1996) the parties purchased a property for about $320,000, again in Melbourne. The parties used their own savings, together with a sum of about $180,000 provided by the wife’s father. That property was sold about two years later for $410,000. The proceeds were invested. In 1998 the parties moved back to their home in L in Queensland.
In about November 2001 the sale proceeds from the Melbourne property were used to purchase a unit at H in Queensland for about $348,000. The wife has lived in this property since about 2002.
It seems clear that the husband has spent little time in the property, primarily because of his work taking him overseas, the first such appointment being, apparently, a position which was located in India.
The wife contends, and there seems to be little dispute about the fact that, the cash injections from her parents permitted the parties to purchase homes - and, inferentially, homes of a better standard - which, in the absence of those gifts, they would not have been able to acquire, as well as the land at O which, otherwise, they also would not have been able to acquire.
The wife deposes that as a result of those contributions, the parties “never had to pay rent or pay off a mortgage and attributes that as being the contributing factor to the parties being able to save and invest a significant sum of money”.
In that latter regard, the property of the parties or either of them includes (allowing for add backs) nearly $1million in the Standard Chartered Bank in Singapore.
However, the husband’s employment in overseas positions also, it seems clear, contributed to the parties’ capacity to save that sum.
In In the Marriage of Money (1994) FLC 92-485, Fogarty J delivered a judgment which was ultimately approved by the Full Court in Bremner and Bremner (1994) 18 Fam LR 407 at 411-412. Fogarty J said:-
In an appropriate case, in my view, an initial substantial contribution by one party may be “eroded” to a greater or lesser extent by the later contributions of the other party even though those later contributions did not necessarily at any particular point outstrip those of the other party. …
In In the Marriage of Pierce (1998) 24 Fam LR 377, the Full Court said:-
28. In our opinion it is not so much an erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case, that of the husband, regard must be had to the use made by the parties of that contribution….
It will be appreciated that the passages there referred to relate to “initial contributions”. However, in my view, the principles there enunciated and, in particular, what the Full Court had to say in Pierce as to the importance of the use made of contributions, is of considerable significance to the facts of this case.
There is clear authority for the proposition that the intention of the donor of a gift in the s 79 context is important in ascertaining whether it ought be regarded as a contribution by a party. (See Gosper and Gosper (1987) FLC 91-818). In particular, in the case of gifts made by the parents of parties to a marriage, it is important to ascertain whether the gift was intended for one of the parties or as a joint gift to both of them. (Contrast, e.g., Pellegrino v Pellegrino (1997) FLC 92-789 with Gosper above).
In this case, there can be little doubt, if by reason alone of the terms of the pre-nuptial agreement signed by the parties, that the intention of the wife’s parents was to benefit her by the gifts made by them. I so find. In my view the gifts made by the wife’s parents ought be treated as a direct financial contribution made on her behalf.
The quantum of the gifts of money just referred to total about $280,000. However, it must be borne in mind that those moneys were contributed a significant time ago when the dollar had the value which it then had.
As important as the quantum of those gifts is, in my view, the timing and purpose of them. The gifts were timed to coincide with significant needs of the marriage relatively early in its life. In particular, the gifts allowed the parties to acquire two homes, to pay off a mortgage and to contribute significantly to the accumulation of savings. These are all important considerations and, in my view, have very considerable significance to the parties being in the position of now having over $2.3million in Australian assets (including add-backs).
Having said that, the contributions are made in the context of a very long marriage within which, in this particular marriage partnership, each of the parties have contributed, I have found, equally.
Per force of the reasoning earlier referred to, the gifts of overseas assets made by the wife’s father to the wife are also, as it seems to me, appropriately regarded as direct financial contributions made on behalf of the wife.
The contribution of those overseas assets also occurs within the context of a very long marriage in respect of which a miscellany of other contributions have been made. Those other contributions include assertions by the husband (and, for that matter, the wife) (which I accept) that indirect contributions have been made to the preservation of those assets, including, for example, the preservation of sums now represented as cash which, at least in part, have come from rental proceeds of those properties and/or the reinvestment of funds comprising part of them.
I take those matters into account, but, in my view, they pale in the enormity of the shadow cast by the direct financial contribution of the assets.
Those assets (again expressed in 2009 dollars) are valued at some $7.6million. Put another way, the current value of the Belgian/European assets represents some 76% of the total “pool” of property.
Regard should be had to the use made by the parties of those assets. Here, virtually no use at all has been made of them. The reason for this is explained by the wife. Much of the property transferred to her (at the same time as other property was transferred to her siblings) was, I accept, transferred inter vivos to avoid potential death duties in Belgium. The timing of the gifts was similarly influenced. Additionally, much of the property, the wife said (and I accept) had, in turn, been transferred from her grandparents to her father.
The wife says that she has not touched any of the property (including any income derived from the properties) and does not intend to do so. I accept that evidence.
When cross examined about her future intentions, there was some concession by her, at least as I perceived it, that minor amounts of money might in the future be used from time to time but she said no “big amounts” or “major sums” would be used by her. I accept that is her genuine current intention. The wife indicated that her parents would be devastated if she used the property or monies as if they were her own. She indicated that the intention was to pass the property through the generations and thus, she said, she considered herself as having an obligation to preserve the property for it to be passed on to the parties’ child (who is now well into adulthood).
I record that no evidence was offered by the wife as to why the property was not transferred to a trust that could, perhaps, enshrine those intentions. Nor, however, was the wife cross-examined about that topic.
The set of assertions by the wife just outlined was crucial to an initial (pre-trial) position of the wife that the property should not in fact form part of the “pool’. Plainly, it is “property” within the meaning of s 4 of the Act and must be included as part of the property of the parties or either of them. Equally, however, if I accept the evidence of the wife, the property might be seen to have somewhat unusual characteristics.
Therein lies the essential dilemma in this case. If orders of this Court are to achieve justice and equity, the husband contends that that property which plainly belongs to the wife and which, at law, can be dealt with in any manner which she chooses, at any time at which she chooses, it would be unjust and inequitable to treat that property as somehow “quarantined” from orders that would otherwise be made by the Court.
That is all the more so, it is contended, because the wife’s parents are both elderly (she deposes to her father being 86 and her mother being 79) and the wife’s current position might alter dramatically after their death. The wife was at pains to deny that her parents’ death would have any impact on her desire or willingness to use, in any substantial or significant way, any of the property or cash resources described in these proceedings as the Belgian/European property.
Central to the wife’s position is a contention that it is unjust and inequitable for the husband to (in effect) share in any of the Belgian/European property in circumstances where the property was not acquired, in any substantial or significant way, through the joint endeavours of the parties during their marriage partnership and in circumstances where she implacably maintains a current and future intention to preserve it, effectively, in its entirety.
To do so would, from her perspective, be to provide, in effect, a gift from her parents to the husband of a significant sum when the plain intention of the wife’s father (as donor) was to achieve the very opposite. That intention is not only asserted by the wife but is manifest in the pre-nuptial agreement earlier referred to.
The wife deposes (and it is not suggested to the contrary) that the pre-nuptial agreement provides that “any contributions, gifts or inheritance received by [the parties] from [their] respective families was to remain the property of the person receiving the property and that such property was to be excluded from the matrimonial property”.
Whilst ineffective at law to achieve its apparent intended purpose, the pre-nuptial agreement is, in my view, good evidence of the intention of the donor of this significant amount of property.
I accept the evidence of the wife as to her intentions with respect of the property. I accept that she has no present or future intention to deal with the vast bulk of the property. I accept that her intention is to pass it on (at least in overwhelming substance) to the parties’ child. I consider, consistent with her evidence, that any use of substantial or significant parts of that property by her would be likely to occur in extraordinary, or, at least, unusual circumstances not yet foreseen by her and not forming part of the anticipated future eventualities.
In my view, the evidence as to the history of the management of the properties, and funds emanating from them, supports that conclusion.
Specifically, I accept the evidence of the wife, for example, that she has not traded in any shares held as part of the property and that her involvement, or interest, in those shares has extended only to monitoring the movements in their price and comparing those movements with advice received from Belgian financial advisors (sought by her father but shown to her).
I propose to take the matters just referred to into account when considering s 79(4)(e) and, specifically, as a matter relevant to s 75(2)(o).
The evidence is clearly to the effect that the Belgian/European assets have been actively managed and preserved by, overwhelmingly, the efforts of the wife’s father. That, too, is a contribution made, via his agency, by or on behalf of the wife.
In considering that contribution together with all of the other contributions to which I have earlier referred, I conclude, in the exercise of my discretion, that contributions ought be assessed 85% in favour of the wife and 15% in favour of the husband.
Section 79(4)(e) – “the Section 75(2) factors”
Factors relevant to this aspect of the enquiry are, too, unremarkable.
The wife is presently 57 years of age; the husband is 58. Each of the parties are essentially in good health although each has suffered from health difficulties. The husband has suffered from undefined “stomach problems”. The wife’s health issues were more serious. She has been diagnosed twice with breast cancer and had a mastectomy in 2003. She is in complete remission.
The wife is employed as a receptionist/secretary earning approximately $50,000 per year. The husband is currently employed in a hotel/resort and his current income is in the region of $35,000 per year. As earlier referred to, his employment has some other benefits.
The husband is currently employed in Asia. He says he needs to move back to Australia by August 2011 so as to retain his permanent residence status in this country. He swears that he is intending to return to Australia at the completion of these proceedings. He deposes to the likelihood of experiencing some employment difficulties when he returns, although I note that during the 37 years the subject of these proceedings, he has been in appropriate and significant remunerative employment including, I gather, positions of some responsibility with a bank both in this county and overseas.
The wife intends to continue her employment until she retires.
The wife deposes that the husband “will be eligible for a small pension in Germany when he reaches 65 years of age” but I have no details of that. The parties each have modest superannuation.
Using an approximate total pool of about $10million, the mooted assessment of the contributions earlier referred to would see the wife retaining property of about $8.5million and the husband attaining property of about $1.5million. S 75(2)(b) obliges me to consider, if relevant, the “income, property and financial resources of each of the parties”.
It seems to me that I ought not consider that, as it were, in a vacuum. The mooted distribution of property on the basis of the assessment of contributions would, on the assumption that the wife retains all of the Belgian/European property, see her receiving in the region of $900,000 by way of property settlement. In very broad terms, that could see her retaining the unit in which she resides together with the O land with a relatively small cash adjustment to the husband. The husband would retain the superannuation, chattels and other assets together with add backs in cash to make up his $1.5million.
As earlier referred to, it seems to me appropriate, by reason of the findings made by me, to take account of the wife’s desire to preserve the Belgian/ European property owned by her as a matter relevant to be considered under s 75(2)(o). Whilst that desire is, in my view, understandable and relevant pursuant to that subsection, it seems to me that justice and equity also requires me to take into account the possibility that, contrary to evidence which I have accepted, life’s future uncertainties might lay waste to the wife’s current intentions. In that regard, it is, of course, a highly relevant circumstance that, whatever moral obligations or considerations might impact upon the wife, there is no legal impediment to her dealing with a very substantial sum in a manner of her choosing at a time of her choosing.
Although occurring in somewhat unusual factual circumstances, the conceptual difficulty expressed in that way is not without its similarities to similar issues which confront the Court. Assets pregnant with CGT if retained by a party with no present intention to sell are an example; if a liability might, or might not, be incurred, but a party who retains it, how ought that be reflected? So, too, it is by no means uncommon for a farming property to be passed from one generation to a party to a marriage with an intention that it be passed on to a subsequent generation. Whilst, of course, the Court gives due regard to that legitimate desire, it does not stand in the way of orders considered by a Court to be just and equitable. (eg. Gutherie & Gutherie (1995) FLC 92-647 at 82,547).
The wife’s evidence, which I accept, is that her father has managed the Belgian/European assets including the management of any income therefrom (although it is nevertheless income earned in the wife’s name and kept in an account in her name). The wife says, and I accept, that she knows little about the income earned from any of those investments.
Nevertheless, it is plain that the investments do earn income and I think it is a clear inference that they are likely to in the future. The wife did not seek to make a distinction between capital and income in speaking of the desire to preserve the property transferred by way of gift (which, it is accepted, is, in effect, a form of early inheritance designed to avoid death duty in Belgium). However, it is not difficult to imagine that the wife is more likely to have access to income earned from the investments even if she seeks, in accordance with her expressed desire, to preserve the capital producing such income.
In assessing, as best as can be done, any adjustment pursuant to s 79(4)(e) it is important to consider its dollar value as distinct from a percentage that has no reference to its consequences in dollars. (eg. Clauson & Clauson (1995) FLC 92-595).
It seems to me that the greater security provided by the wife’s ongoing employment and the imbalance in the property and financial resources of the parties otherwise resulting from the assessment of contributions in this case calls for an adjustment in favour of the husband.
Quantifying that adjustment must in my view take account of the fact that, although the imbalance between the parties, in terms of the dollar value of their property and financial resources, is very significant, there is, I accept, a sincere and genuine commitment on the part of the wife to preserving the vast bulk of those assets so as to pass same on, in accordance with her parents’ wishes, to the parties’ child.
Of course, the future is, by definition, uncertain and can’t be predicted. There remains the possibility of use of the property should life follow unexpected courses. There also remains the possibility of the use of income whilst preserving the capital.
In my view those circumstances, in the context of the relevant factors pursuant to s 75(2) as a whole, call for an adjustment in favour of the husband which I assess as being in the region of $300,000. That represents about 3% of the “pool”.
The conclusion thus arrived at, via a “global approach” would see the husband receiving 18% of the “pool” and the wife 83%.
Two Pools – A Similar Result?
I consider it appropriate, as part of the process of assessing the justice and equity of the assessment thus arrived at, to “check” the analysis by reference to my assessment based on a “two pools approach”.
By reason of the matters earlier described, I would assess the contribution to the Australian property as slightly favouring the wife. Notwithstanding that the parties might be seen as having contributed appropriately within their respective spheres in this very long relationship, the direct financial contributions by the wife via her parents have been very significant in this case. I consider some weighting ought reflect that.
It also must be borne in mind, though, that the disparity reflects dollar contributions made many years ago but their numerical expression is (in the absence of current values of historical dollar values) conceptualised in 2009 dollars and the dollar value of the disparity is expressed in 2009 dollars.
A 2% weighting to the wife is a 4% disparity in the respective contributions, which has a 2009 dollar value of nearly $100,000. I consider that appropriate. I assess, then, contributions to the Australian assets in the proportion 52% to the wife and 48% to the husband.
In respect of the Belgian assets, it seems to me that the husband’s contribution has been negligible. It is confined to some (direct) maintenance or repair work (which, in the scheme of things I regard as being trifling and with which, in any event, the wife says she assisted) and the husband’s direct contribution to the preservation of the assets. I can’t see that he would, in any event, have had much direct input into what happened to those assets, including their preservation. However, the husband contributed in his sphere to the Australian assets while the European assets were being managed and accumulating.
The husband’s negligible contribution to that pool might be reflected as about 3%, or about $280,000.
If about $300,000 is added by way of a s 75(2) adjustment, the husband would receive in the region of $1.7million.
I am tolerably satisfied that an assessment in the region of $1.8million arrived at via the process of analysis earlier undertaken is, then, an appropriate exercise of discretion.
Justice and equity of proposed orders
If an overall result of 82% to the wife and 18% to the husband is expressed in terms of the orders that might be made about specific property, the integrity of the findings earlier made should be preserved by ordering that the wife retain the Belgian property.
That being so, the husband will receive about 78% of the Australian assets, or property valued at about $1.8million while, in respect of those same Australian assets, the wife will receive property with a value of about $600,000.
The wife expresses a desire to retain the home unit situated at H. In my view she has a good case for doing so if same can be achieved within the overall context of the assessment of justice and equity earlier expressed. It has been her home for some time and the husband has spent little time there.
The husband currently has:
Westpac R Branch Term Deposit
$111,000
Standard Chartered Singapore
$887,000
Furniture
$30,000
Toyota Troupe Carrier
$2,950
Addbacks
$184,500
Superannuation
$40,000
Total
$1,255,450
If the wife was to transfer the O land to the husband, the total property retained by him would approximate the result otherwise arrived at by reason of the analysis earlier outlined ($1,255,640 + $365,000 = $1,620,450).
Such a result would require, then, a payment to the husband of about $180,000 in order to meet the percentage arrived at by reference to a global approach and in the region of $80,000 to meet the percentage arrived at by reference to a “two pools approach”. Those sums represent a difference to the percentage adjustments otherwise arrived at of about 1.8% and .8% respectively (or, perhaps better expressed, a difference in the disparity between the parties of about .9% and .4% respectively).
There is, it will be observed, no cash pool in Australia (or, put another way, no cash pool which, on my findings, the wife would access) from which any such additional payment to the husband would be made.
If no cash adjustment occurred, the husband would have (expressed in descriptive terms) a valuable piece of real estate and retain (or previously have had access to) over a million dollars in cash plus chattels and his (currently preserved) superannuation. The wife would retain the H property (which she is anxious to retain), some chattels, a minor amount of cash and her (currently preserved) superannuation with a current “value” of about $75,000. Neither party would have any significant borrowings.
The Full Court of this court has emphasised repeatedly that the s 79 exercise is neither an exercise capable of mathematical precision nor an accounting exercise. So, too, the Act emphasises that the overall objective is to achieve justice and equity in the orders ultimately made.
Cognizant though I am that $180,000 (or, for that matter, $80,000) is by no means an insubstantial amount of money, I see the difference between the result just described and the result/s otherwise arrived at, expressed as percentages, via the process earlier described to be tolerable within the broad exercise of discretion.
I consider it just and equitable to make orders - which do not require the payment of a cash sum by the husband to the wife – which give reflection to the property division just described.
I order accordingly.
I certify that the preceding one hundred and twenty-four (124) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy.
Associate
Date: 17 November 2009
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