Burmester v Burmester
[2018] NZHC 47
•2 February 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-000485 [2018] NZHC 47
UNDER the Property (Relationships) Act 1976 BETWEEN
PETER BURMESTER
Appellant
AND
BEVERLEY JOY BURMESTER First Respondent
ANNELIESE BURMESTER SARAH BURMESTER
Second Respondents
Hearing: 11 October 2017 Counsel:
Appellant in person
D Chambers QC for first respondentJudgment:
2 February 2018
JUDGMENT OF KATZ J
This judgment was delivered by me on 2 February 2018 at 3:30pm
Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: Dyer Whitechurch, Auckland
Counsel: D Chambers QC, Bankside Chambers, AucklandCopy to: P Burmester (Appellant)
BURMESTER v BURMESTER [2018] NZHC 47 [2 February 2018]
Table of Contents
Introduction ............................................................................................................................[1] Background .............................................................................................................................[4] Approach and issues on appeal............................................................................................[10] The application of German law ...........................................................................................[17]
Issue One: Did the Judge err in classifying the JFC Account as relationship
property? ...............................................................................................................................[24]
Background [24] Family Court findings [27] Does the claimed trust fail for want of certainty? [30] If the claimed trust exists, would s 8(1)(ee) apply to it? [33] Was Mrs Burmester’s interest in the JFC Account held on trust for Mr Burmester? [37] Conclusion [53]
Issue Two: Did the Judge err by ordering that spousal maintenance continue
up until the date of distribution?.........................................................................................[54]
Background [55] Argument on appeal [57] Did Judge Burns err in extending the spousal maintenance order? [59] Conclusion [61]
Issue Three: Did the Judge err by ordering that the costs of counsel to assist
be reimbursed from Mr Burmester’s half-share of the ANZ Account? ...........................[62]
Issue Four: Did the Judge err by ordering that all adjustments arising from
the judgment be made from the ANZ Account? ................................................................[65]
Issue Five: Did the Judge err by ordering the remaining proceeds from the
sale of the family home to be Mrs Burmester’s sole property? ........................................[67]
Issue Six: Did the Judge err by accepting the value at which the German
motor vehicles were sold?.....................................................................................................[71]
Issue Seven: Did the Judge err by finding that the loan to Mr Jacobs is
relationship property? ........................................................................................................... 77]
Issue Eight: Did the Judge err by exercising jurisdiction over the partnership
and declaring that Mrs Burmester’s interest in it is relationship property?...................[84]
Issue Nine: Did the Judge err by ordering that the proceeds of the German
litigation are relationship property and vesting those proceeds in Mr Burmester? .......[97]
Issue Ten: Did the Judge err by dismissing Mr Burmester’s s 13 argument?...............[100] Section 13 – legal principles [105] Discussion [110]
Issue Eleven: Did the Judge err in his calculations of maintenance and ordering that maintenance be deducted from Mr Burmester’s share of the ANZ bank account? .....[114]
Issue Twelve: Did the Judge err by granting Mrs Burmester costs? .............................[115] Issue Thirteen: Mrs Burmester’s cross appeal and leave application............................[116] Deduction of costs from the joint bank account [120] Issues relating to the partnership [125] Summary and conclusion ...................................................................................................[130] Result ...................................................................................................................................[142]
Introduction
[1] Peter and Beverley Burmester separated on 29 June 2011, following an almost 21-year marriage. Mrs Burmester first sought relationship property orders on
12 August 2011. Unfortunately, however, resolution of the parties’ relationship property issues has been extremely protracted. This has been due, in large part, to the number of appeals (this is the fifth appeal to this court by Mr Burmester from decisions of the Family Court). There have also been repeated adjournment applications by Mr Burmester (who is self-represented) on health grounds.
[2] On 15 March 2017, Judge Burns delivered the Family Court’s substantive judgment, determining the parties’ remaining relationship property issues.1
Mr Burmester now appeals that decision to this Court. He says that the Judge erred in a significant number of respects.
[3] Mrs Burmester has filed an application for leave to cross-appeal (out of time) together with a supporting affidavit. The cross-appeal is narrowly focussed and seeks orders broadly aimed at facilitating enforcement of the Family Court’s substantive orders.
Background
[4] Mr Burmester is originally from Germany. He emigrated to New Zealand in
1989 and married Mrs Burmester the following year. At the time, Mrs Burmester was 25 and Mr Burmester was 47. The couple resided in a Remuera home that had been purchased by Mr Burmester shortly before the marriage. Mrs Burmester is a qualified teacher but the couple agreed that she would cease working outside the home after marriage. Mr Burmester had a professional background in Germany in law and business. He did not undertake paid employment during the marriage, however. Rather, the couple lived off investment income.
[5] Mr and Mrs Burmester have two daughters together, who are now in their
20s. Annaliese was born in 1992 and Sarah was born in 1994. Mr Burmester also
1 Burmester v Burmester [2017] NZFC 1817.
has two older children from a prior relationship. Mr Burmester’s eldest son joined Mr and Mrs Burmester in New Zealand in 1992, shortly before Annaliese was born, and resided with the family for seven-and-a-half years. Mr Burmester’s other child came to New Zealand from Germany in 1994, but only stayed for nine months.
[6] In 1993, while pregnant with Sarah, [redacted] Mrs Burmester left the family home with Annaliese and lived in a motel. She lodged a caveat over the family home (which was in Mr Burmester’s sole name). [redacted] Later [redacted] Mrs Burmester resumed living with Mr Burmester in the family home.*
[7] In 2001 the family left New Zealand to live in Germany, although they returned to New Zealand regularly. While in Germany, Mrs Burmester’s grandmother passed away, leaving her an inheritance which was utilised for family purposes. A year later, Mrs Burmester’s mother also passed away, leaving her with a further inheritance sum of $235,000, which was again put to family use.
[8] In 2009, Mrs Burmester moved back to New Zealand with Annaliese. The following year Sarah and Mr Burmester also returned to New Zealand and the family resumed living together.
[9] From December 2010 to February 2011, Mr Burmester and Annaliese returned to Germany to collect the family possessions for their return to New Zealand. Several months after their return, on 29 June 2011, Mr Burmester and Mrs Burmester separated. Mrs Burmester left the family home with Sarah and found rental accommodation. Mr Burmester and Annaliese remained living in the family home. Mrs Burmester withdrew $115,000 out of the couple’s joint New Zealand bank account when she left, in order to support her and Sarah in the interim, until some arrangement could be reached regarding property issues. Mrs Burmester also took steps to ensure that the couple’s ANZ joint foreign currency account (“the JFC Account”) was frozen, as she was concerned that Mr Burmester might
otherwise attempt to withdraw the funds or shift the funds elsewhere.
* This paragraph has been redacted to comply with statutory suppression requirements.
Approach and issues on appeal
[10] An appeal to the High Court against a decision of the Family Court is by way of rehearing.2 A general appeal conducted by way of rehearing is undertaken in accordance with the Supreme Court’s approach in Austin Nichols & Co Inc v Stichting Lodestar, which permits considerable latitude to the Court in determining the weight it places on the assessment and reasoning of the lower court.3 However, in the context of relationship property appeals from the Family Court, it can be difficult to characterise a particular decision as evaluative, factual or discretionary in nature.4 To the extent that these decisions involved exercises of discretion, the approach in May v May is applicable.5
[11] The issues on appeal relate to the classification, valuation or distribution of assets that the Family Court found to be relationship property. For example, Mr Burmester contends that a number of items classified as relationship property are in fact his separate property, and that Mrs Burmester, although she held legal title to such assets, actually held them on trust for him.
[12] Mr Burmester’s notice of appeal does not challenge a decision made by Judge Burns at the outset of the substantive hearing to decline Mr Burmester’s further adjournment application. Nevertheless, Mr Burmester attempted to raise that issue in his submissions. He alleges that the Judge’s decision infringed his right to be heard and “violates New Zealand’s constitution”.
[13] I am not prepared to grant leave for Mr Burmester to very belatedly raise this issue. For completeness, however, I note that if I had been required to formally determine the matter, I would have dismissed this ground of appeal on its merits, for the reasons I briefly summarise below.
[14] Mr Burmester attended the beginning of the substantive hearing before Judge
Burns and applied for a further adjournment on the grounds that he was “unfit to stand trial” due to health issues. An earlier substantive hearing date had been
2 Property (Relationships) Act 1976, s 39. See also District Court Act 2016, s 127.
3 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [5].
4 B v F [2010] NZFLR 67 (HC) at [6]–[8].
5 May v May (1982) 1 NZFLR 165 (CA).
adjourned on similar grounds. No updated medical evidence was presented to
Judge Burns, however. The Judge declined Mr Burmester’s application, noting that:
(a) Mr Burmester elected not to engage counsel, despite his health issues and having the resources to do so if he wished.
(b) The application was brought “at the last minute”.
(c) The circumstances alleged by Mr Burmester, insofar as they relate to the stress of preparing for the proceedings, were unlikely to improve in the foreseeable future.
(d)Mrs Burmester would have been severely prejudiced by a further adjournment.
[15] Following the Judge’s decision, Mr Burmester elected to leave the courtroom and not participate in the substantive hearing. Mr Burmester had, however, filed extensive evidence. Much of that evidence had been the subject of cross-examination at earlier hearings. Although it would have been open to the Judge to disregard much of Mr Burmester’s evidence, given that Mr Burmester did not make himself available for cross-examination at the substantive hearing, the Judge did not do so. On the contrary, it is apparent from his judgment that Judge Burns carefully considered Mr Burmester’s evidence. The Judge held that:6
Mr Burmester has had a number of years in which to frame his case and has had a full opportunity in which to do so. There has been no change to the way that he has considered the facts. I therefore reached the conclusion that the result would have been the same had he participated in the hearing as it will be without his participation.
[16] It is clear that the Judge carefully considered the interests of justice as between Mr Burmester and Mrs Burmester. The proceedings had been on foot for six years at the time. In the interests of finality, and enabling the parties to move on with their lives, the proceedings clearly required final determination, in the absence
of compelling reasons to the contrary. The interests of other litigants seeking access
6 Burmester v Burmester, above n 1, at [17].
to the limited resources of the Family Court are also relevant to the how Court resources should be used.7 It was open to Mr Burmester to appoint counsel to represent him, avoiding any need for an adjournment. He elected not to. Taking all of these matters into account, the Judge did not err in declining Mr Burmester’s adjournment application.
The application of German law
[17] Before addressing the various grounds of appeal, it is necessary to first make some general observations about the application of German law in this case.
[18] A recurring theme of Mr Burmester’s appeal submissions was that Judge Burns had committed egregious errors in not applying German law to various items of property that are alleged to have originated in Germany. He states, for example, that:
Thus, New Zealand courts should self-evidently apply German law. Here, Justice Burns errs applying NZ law where he should have applied German law. This error cannot be more decisive and I cannot understand that such an error can be made by a professional.
[19] Mr Burmester, in effect, contends that German law protects him from many (if not most) of Mrs Burmester’s claims under New Zealand’s relationship property legislation, other than her claim to the family home.
[20] Under common law, determining foreign law is a question of fact, to be proved to the satisfaction of the Judge,8 by expert evidence.9 The usual practice is for that expert evidence to be provided by independent practising lawyers in the relevant jurisdiction. Such experts will generally provide the Court with any
relevant statutory material, commentary or case law, and will explain the effect and
7 Cygnet Farms Ltd v ANZ Bank New Zealand Ltd [2016] NZHC 1945 at [8].
8 Lord Collins of Mapesbury (gen ed) Dicey, Morris and Collins on the Conflict of Laws
(15th ed, Sweet & Maxwell, London, 2012) vol 1 at [9-002]. And see Neilson v Overseas Projects Corp of Victoria Ltd [2005] HCA 54, (2005) 223 CLR 331 at [115]; Bumper Development Corp Ltd v Commissioner of Police of the Metropolis [1991] 1 WLR 1362 (CA) at 1368.
9 Lord Collins of Mapesbury, above n 8, at [9-013]. And see O’Callaghan v O’Sullivan [1925]
1 IR 90 at 92.
significance of the material they have provided to the particular case before the
Court.
[21] In New Zealand, s 144 of the Evidence Act 2006 provides for some (fairly modest) statutory relaxation of the requirement for expert evidence. For example, a party may provide a foreign statute or other document as direct evidence of foreign law.10 A Judge is not bound to accept or act on a statement in any document as evidence of the law of a foreign country, however.11 It is a matter for the Court’s discretion. Indeed, as the case law makes clear, expert evidence explaining foreign law will often be necessary or desirable despite the ability to take judicial notice of foreign law under s 144.12 Unless the issue is straightforward, courts will generally be reluctant to make factual determinations as to the content, effect and interpretation of foreign law in the absence of expert evidence on the topic.
[22] Mr Burmester makes a number of general assertions in his submissions as to the German law that he says applies in this case, such as:
Under German law an oral trust deed is valid and the possibility of holding a share in a joint account as a trustee on trust for the spouse or anybody else is absolutely undisputed established law practice.
…
The applicant has no witness, no supporting documents and therefore she can only prove my intention to donate if I admit it. As one can read in any German civil law commentary German law has no assumption of gift. The contrary is the case. The formal requirements for gift deeds are the highest German law knows: The deed has to be recorded in front of a German notary otherwise void.
Further under German law the termination of joint accounts leads to the result that what the partners had deposited they will recover. These legal consequences should a New Zealand court take into account considering classification.
…
NZ law does not know non-accessory land charges which are securities under German law and they constitute, to say it in short, that I am the
10 Section 144(1)(b)-(d).
11 Section 144(4).
12 See for example Cheon v Attorney-General HC Auckland CIV-2007-404-7669, 8 July 2008;
Cheon v Attorney-General (No 2) HC Auckland CIV-2007-404-7669, 21 August 2008.
beneficial owner of the realties and the applicant the legal owner or with other words these charges prove the existence of my allegations that the respondent is holding ownership of these realties on trust for me.
[23] Mr Burmester asks the Court to simply accept that German law is whatever he says it is. There is simply no basis for adopting such an approach. Many of the legal propositions advanced by Mr Burmester are contentious. His submissions as to German law are also often confusing and difficult to follow. He has not provided appropriate supporting statutory material, case law or commentary. Further, Mr Burmester lacks independence and has not practiced law in Germany for over
20 years. Taking these various matters into account, expert evidence as to German law was required if Mr Burmester wished to rely on such law in these proceedings. Mr Burmester has accordingly failed to prove German law to the satisfaction of the Court. The issues on appeal must therefore be determined in accordance with New Zealand law rather than German law.13
Issue One: Did the Judge err in classifying the JFC Account as relationship property?
Background
[24] Prior to his marriage to Mrs Burmester, Mr Burmester owned two companies that had been registered in Liechtenstein. In 2007 those companies were liquidated, and the proceeds from liquidation were transferred to a foreign currency account in Mr Burmester’s sole name. In August 2008 those funds were then transferred from Mr Burmester’s foreign currency account into the JFC account, which was a joint foreign currency account in Australia, held jointly by Mr Burmester and Mrs Burmester. In November 2014, after the parties had separated, those funds were transferred to an account with the ANZ Bank in New Zealand, with the Court’s
approval (“ANZ Account”).
13 Lord Collins of Mapesbury, above n 8, at [9-025]. And see Concord Trust v Law Debenture Trust Corp Plc [2005] UKHL 27, [2005] 1 WLR 1591 at [44]; Attorney-General for England and Wales v R [2002] 2 NZLR 91 (CA) at [32]; Mount Cook (Northland) Ltd v Swedish Motors Ltd [1986] 1 NZLR 720 (HC) at 726–727; Ho Wah Genting International Ltd v Kasuya (1998)
13 PRNZ 19 (HC) at 25; Starlink Navigation Ltd v The Ship “Seven Pioneer” (2001) 16 PRNZ
55 (HC) at [12].
[25] Judge Burns held that the funds in the ANZ Account are relationship property pursuant to s 8(1)(c) of the Property (Relationships) Act 1976 (“the Act”), and therefore distributable evenly between Mr and Mrs Burmester.14
[26] Mr Burmester contends on appeal, as he did in the Family Court, that Mrs Burmester’s interest in the funds in the ANZ Account is held on trust for him, pursuant to an oral agreement between them. Under the alleged agreement, Mrs Burmester holds her share of the funds on trust for Mr Burmester during his lifetime, on the basis that she only receives any remaining balance upon his death.
Family Court findings
[27] In the Family Court, Judge Burns noted the total lack of supporting documentary evidence as to the existence of the trust asserted by Mr Burmester. Ultimately, his Honour concluded that the claimed trust failed for uncertainty:15
[27] … There is no evidence of formalisation of this transaction. [Mr Burmester] says it was an oral agreement reiterated on a number of occasions. There is no specification as to whether the children are also beneficiaries. There is no specification as to who is to receive the income from the capital. There is nothing about who is to hold the power of appointment. There was no reference to what duties or obligations are on the trustee. There is no statement as to whether he is a discretionary or final beneficiary. There is no reference to what would happen on either party’s death. There are many other issues on which there is no clarity. If his case is accepted it would amount to him transferring his legal interest to [Mrs Burmester] as trustee and that he would have a beneficial interest (undefined).
…
[29] If Mr Burmester’s evidence is accepted there appears to be identification of him as settler and her as trustee. The transaction occurred during a marriage and therefore he says that he was the beneficiary excluding her. There is no documentation establishing that. I could not exclude the children as beneficiaries or Mrs Burmester as his wife. Mr Burmester asserts that he is the sole beneficiary but there is no documentation to establish that and the terms of the alleged oral agreement are very vague. The powers and duties of the trustees are missing. There are no powers of appointment special, intermediate and general. The extent and determination of the powers are missing. There is no classification or establishment of the purpose of the trust. Mr Burmester is asserting that it is an expressed trust by oral agreement but there is a complete lack of
14 Burmester v Burmester, above n 1, at [25].
15 Burmester v Burmester, above n 1.
formalisation. The law relating to trusts requires the establishment of three certainties which are:
(a) intention;
(b) subject matter; and
(c) objects.
…
[31] I find in this case on the evidence given by Mr Burmester that there is a failure in providing or establishing the three certainties. This is because of the lack of formalisation and the inconsistent evidence given by Mr Burmester. The evidence shows an uncertainty of intention and a lack of clarity as to what was going to form the trust property or be the subject matter of the trust. There would appear to be a number of further payments made into the joint account from time to time. No documentation establishes whether those were settlements on trust or payments into a joint account. There is uncertainty regarding each beneficiary’s beneficial interest. Mr Burmester appears to be saying that he is the sole beneficiary but he has no documentation to establish that or exclude Mrs Burmester or the children. Therefore I find on the basis of fundamental trust law that he has not established a valid express trust even if his evidence was accepted.
[28] The Judge further concluded that even if it were accepted (for argument’s sake) that there was a trust in Mr Burmester’s favour, his beneficial interest would be relationship property. His Honour was presumably relying on s 8(1)(ee) of the Act (which relates to “after acquired” property):
[37] Even if Mr Burmester’s evidence was accepted and I accepted that a valid trust had been established his own evidence shows that the person who owns the beneficial interest in the trust is himself. His own evidence establishes that that beneficial interest was established during the parties’ marriage. The beneficial interest would amount to “property” as defined by s 2 of the Act [sic]. The definition of “property” is as follows:
“Property” includes—
(a) real property: (b)
personal property:
(c)
any estate or interest in any real property or personal property:
(d)
any debt or anything in action:
(e)
any other right or interest.
[38]
The
beneficial interest would fall within that definition.
Mr Burmester’s evidence is that it is not a discretionary interest. He is
saying clearly Mrs Burmester holds the funds for him for his lifetime. Therefore I do not need to consider the case law that makes a distinction between mere discretionary interests and final interests or vested interests as a beneficiary. His own evidence does not make that distinction. Accordingly on the basis of his case as presented he would be transferring his legal interest to his wife to hold for him as beneficiary. This reinforces the view that this property was acquired by him during the course of the marriage. Section 8 applies.
(Footnotes omitted)
[29] The issue was accordingly not resolved as a question of fact, but as a question of law — no trust could have arisen even if Mr Burmester’s evidence were accepted. Further, even if a trust had been created as a matter of fact and law, Mr Burmester’s beneficial interest in that trust is relationship property. Given these conclusions, it was not necessary for the Judge to make credibility findings regarding Mr and Mrs Burmester’s evidence on existence of an oral trust.
Does the claimed trust fail for want of certainty?
[30] I have real reservations as to the Judge’s pivotal conclusion that the claimed trust failed for want of certainty. The requirements as to certainty, often labelled “the three certainties”, are:16
(a) Certainty of intention — the Court must be satisfied that the settlor intended to create a trust.
(b)Certainty of subject-matter — the property on which the trust is to operate must be clear.
(c) Certainty of object — the creator of the trust must clearly set out the purpose of the trust or the people who are intended to benefit and the extent of the benefit.
[31] Mr Burmester’s evidence was that the couple had an oral agreement that
Mrs Burmester would hold her share of the account as Mr Burmester’s trustee, on
trust for him during his lifetime. Only after Mr Burmester passed away would
16 Greg Kelly and Chris Kelly Garrow and Kelly Law of Trusts and Trustees (7th ed, LexisNexis, Wellington, 2013) at [4.1].
Mrs Burmester acquire beneficial ownership of the funds. Mr Burmester’s evidence was that this trust structure was adopted to defeat any claim on his estate by his former wives or older children.
[32] If Mr Burmester’s evidence were accepted (an issue I address further at [42]-[52] below) then the three certainties would likely be met. I will therefore proceed on that basis and consider whether, as a matter of fact, the evidence supports the existence of the alleged oral trust. First, however, it is necessary to briefly consider the Judge’s conclusion (by implication) that s 8(1)(ee) of the Act provides a complete answer in any event.
If the claimed trust exists, would s 8(1)(ee) apply to it?
[33] Section 8(1)(ee) provides that:
8 Relationship property defined
(1) Relationship property shall consist of—
…
(ee) subject to sections 9(3) to (6), 9A, and 10, all property acquired, after the marriage, civil union, or de facto relationship began, for the common use or common benefit of both spouses or partners, if—
(i) the property was acquired out of property owned by either spouse or partner or by both of them before the marriage, civil union, or de facto relationship began; or
(ii) the property was acquired out of the proceeds of any disposition of any property owned by either spouse or partner or by both of them before the marriage, civil union, or de facto relationship began; …
[34] The Judge (correctly) observed that a beneficial interest in property is nevertheless property for the purposes of the Act. On the Judge’s analysis, Mr Burmester’s beneficial interest (if his evidence were accepted) was acquired during the relationship, which would make it relationship property for the purposes of s 8(1)(ee).
[35] In my view, however, converting a legal and beneficial interest in property into a “mere” beneficial interest cannot be equated with the “acquisition” of property for the purposes of s 8(1)(ee). For the purposes of the Act, the “owner” of property is the person who beneficially owns that property.17 On Mr Burmester’s evidence, he has been the beneficial owner of the relevant funds throughout.
[36] The essential question is whether existing property rights have so changed that the new rights should be regarded as a fresh “acquisition” of property.18 It essentially comes down to a question of degree as to the point at which rights have so changed that they should be regarded as fresh “property” and therefore a fresh “acquisition”. In my view the claimed trust, if it exists, has not resulted in any material change to the underlying property rights so as to constitute fresh “property” (and therefore a fresh acquisition of property). That is because (on Mr Burmester’s evidence) beneficial ownership over the relevant property was retained by him in an uninterrupted fashion. It was only legal ownership that was transferred to Mrs Burmester.
Was Mrs Burmester’s interest in the JFC Account held on trust for Mr Burmester?
[37] Given my view that the claimed trust does not fail for uncertainty, and that s 8(1)(ee) does not apply, it is necessary to determine the core factual dispute in these proceedings, namely is Mrs Burmester’s legal interest as joint owner of the JFC Account subject to an express oral trust in Mr Burmester’s favour? As I have noted above, Judge Burns did not reach a firm conclusion on this issue, because he took the view that Mr Burmester’s claim failed as a matter of law, in any event.
[38] One of the difficulties faced by the Court in determining the core factual disputes in this case is that there has been an almost total lack of disclosure of relevant documents by Mr Burmester. Following a defended discovery hearing in October 2012, Mr Burmester was ordered to provide discovery of all the documents
sought by Mrs Burmester within 10 days, by way of verified affidavit. The Judge
17 Property (Relationships) Act 1976, s 2 definition of “owner”.
18 Refer RL Fisher (ed) Fisher on Matrimonial Property (loose-leaf ed, LexisNexis) at [10.8].
ordered that if the documents were not provided, they could not be produced at any later time by Mr Burmester:19
… there needs to be full and open disclosure of documents so that the Court in the application can progress matters on the basis of knowing exactly what [Mr Burmester] is relying upon.
[39] Mr Burmester did not file an affidavit of documents within the required time frame. Subsequently, in February 2013, he did file an affidavit of documents, but he discovered two documents only. One document is a bank statement for the period
25 May 2007 to 29 June 2007. The other is a bank statement for the period
31 January 2009 to 4 March 2009. From the description of the documents in his discovery affidavit, it appears that Mr Burmester produced these two documents as he believed they were helpful to his case. No other documents were disclosed.
[40] Mr Burmester claimed that he was unable to produce any other bank statements from the JFC Account because they had “disappeared” on the day that Mrs Burmester had moved out of the family home. He confirmed at the appeal hearing, however, that he had made no efforts to obtain replacement statements from the bank. Despite his apparent lack of access to the relevant Australian bank statements, other than the two he did discover, Mr Burmester made various assertions in his affidavits and submissions regarding their contents, including that:
Further in the case of the Australian joint foreign currency account [Mrs Burmester] has never drawn on it at all. That is proven by its full set of bank statements - bank statements do not lie - because from its opening until separation day I made one withdrawal from the Australian term deposit account and no further have been made by anybody.
[41] Ms Chambers, counsel for Mrs Burmester, submitted (and I accept) that the
Court of Appeal’s comments in Clayton v Clayton are apt in the circumstances:20
[186] In our view, when the public interest considerations lying behind the purpose and principles of the PRA are taken into account, there is merit in an approach that recognises that:
(a) parties to relationship property proceedings are under an obligation to make full and frank disclosure of all relevant information in order to ensure that the court is in a position
19 B J B v P B [2012] NZFC 8471 at [8].
20 Clayton v Clayton [2015] NZCA 30, [2015] 3 NZLR 293.
to make appropriate orders for the ascertainment and division of relationship property under the PRA;
(b) if a party who had or has relevant information available for that purpose fails to disclose it in the proceedings, the court may draw such inferences as it considers appropriate, including the adverse inference that the information would not have assisted that party if it had been disclosed; and
(c) in drawing appropriate inferences for the purpose of making findings of fact, the court may rely on all the information that has been disclosed, its experience in cases of this nature and the inherent probabilities from the non-disclosure of information.
(Footnotes omitted)
[42] Mr Burmester’s evidence is that there was an oral agreement between himself and Mrs Burmester that the funds in the JFC Account would remain his separate property, and that the money could not be accessed other than in accordance with his express instructions. On his evidence, the funds in the JFC Account remained his separate property until such time as portions of the funds were transferred from that account to the couple’s joint cheque account. Only at that time did the relevant funds become relationship property.
[43] Mr Burmester’s evidence is that the behaviour of both parties was consistent with the claimed trust. For example, Mr Burmester says that he allayed fears held by Mrs Burmester — that by receiving the funds she may have been committing tax evasion — by confirming to her that she was receiving the funds only as trustee on his behalf. Further, Mr Burmester says that the fact that Mrs Burmester did not access the Australian bank accounts without his prior permission reflects that she understood she was holding the relevant funds on trust for him, and had no independent right to them.
[44] Mrs Burmester, on the other hand, contends that she and Mr Burmester never spoke about any such trust. There was no oral agreement, as alleged by Mr Burmester. Rather, she says that after the couple’s (very bitter) separation, Mr Burmester simply invented the idea of the trust to deprive her of her legal entitlements under the Act. In her affidavit of 17 February 2015, she states:
9. At no stage did [Mr Burmester] say, and consequently did I agree, that I would hold all of the company’s assets as [Mr Burmester’s] new trustee on trust for me throughout my life. I do accept that [Mr Burmester] wanted to exclude his older children as heirs and he wanted me to inherit. It is also correct that at times [Mr Burmester] changed ownership of assets in order to avoid legal obligations such as inheritance rules and tax. He was completely averse to paying tax. Throughout our marriage I believe he paid not a cent in tax to the German or New Zealand authorities except in regard to GST when he made purchases.
…
11. Nor do I accept the claim in [29] of [Mr Burmester’s] affidavit in regard to a claimed express agreement. It is simply nonsense. There is no doubt that [Mr Burmester] attempted to control all funds during the marriage including funds in accounts held in the girls’ names. That is quite different from his claim of a trust arrangement. It is also true that [Mr Burmester] consistently frightened me and attempted to control me by telling me that if I did not do as he said I would be criminally liable for tax evasion. He consistently told me that I would be put in a German jail.
…
16. … Nor do I agree that the transfer of funds into joint names was on the basis that I was holding the account as trustee for [Mr Burmester] throughout his life. We opened the Australian joint CHF account together. Indeed, although [Mr Burmester] would sometimes refer to these funds as his, he also referred to them as our money during the marriage. His inclination was to describe all of our property as his but he also did, on a number of occasions, refer to the money as ours. Certainly I viewed it as ours. … He made it clear that I was entitled to rely on those funds as being available for me and also, of course, for the costs of bringing up our daughters.
[45] There is accordingly a direct conflict in evidence between Mr Burmester and Mrs Burmester as to the existence of an express oral trust regarding the JFC Account. In my view, Mrs Burmester’s evidence is more credible, for the reasons outlined below.
[46] The first difficulty with Mr Burmester’s claim that the funds in the JFC Account were held on an express trust for him is that there are absolutely no documents that support the existence of a trust holding such significant property assets, over such a lengthy period of time. There are no relevant tax records, letters, bank statements, correspondence with lawyers or other advisers, emails, or any other documents to support the existence of the claimed trust. I infer that if such documents existed, Mr Burmester would have discovered them. He has not.
[47] Mr Burmester’s evidence is that he intended to structure his financial affairs so as to disinherit his older children. Mrs Burmester confirms that evidence. It does not necessarily follow, however, that the claimed trust was the means adopted by Mr Burmester to achieve that objective.
[48] On Mr Burmester’s evidence, as I understand it, his older children would be disinherited in respect of the funds in the JFC Account because Mrs Burmester held her interest in those funds on trust for him during his lifetime, and she was the final beneficiary of the trust after his death. There are no trust documents, or estate planning documents, however, that support the claimed trust. This is despite the fact that Mr Burmester is clearly a careful man, with considerable business acumen and legal training. If he had genuinely wished to set up a trust in order to disinherit his children from a previous marriage, I agree with the Judge that he would have done this with much greater care. He would no doubt have appreciated that his failure to properly document his intentions regarding the trust could well result in disputes between his two families, as well as possible litigation, after his death. I find it simply implausible that Mr Burmester attempted to disinherit his older children by setting up an oral trust in Mrs Burmester’s favour over a joint bank account. The complexity of the required arrangements (including the requirement that Mrs Burmester and/or Sarah and Annaliese be the final beneficiaries in order to prevent the funds falling back into Mr Burmester’s estate) clearly called for careful documentation if future disputes were to be avoided.
[49] In my view, the more plausible explanation is that Mr Burmester endeavoured to achieve his objective of disinheriting his older children in a much more straightforward way. He elected to bring a significant portion of his separate property into the matrimonial pool by setting up a joint bank account with Mrs Burmester (the JFC Account) and transferring significant funds into it, at a time when he simply did not envisage the possibility of his marriage ending. Given the failure to discover the operating terms and conditions of the JFC Account, I infer that it is a standard joint account, the proceeds of which would legally pass to the joint account holder by survivorship in the event of the death of the other account holder,
as is usually the case with jointly held assets.21 As a result, the funds held in the JFC account would not form part of Mr Burmester’s estate in the event of his death, and his older children would accordingly have no claim on those funds. The undisputed evidence that Mr Burmester’s intention in setting up the JFC Account was to disinherit his older children accordingly tends to favour Mrs Burmester’s position (that the account was a genuine joint account) rather than that of Mr Burmester.
[50] Nor do I find Mr Burmester’s assertion that Mrs Burmester will be liable to be criminally prosecuted for tax evasion if she has a beneficial as well as legal interest in the JFC Account to be persuasive. No expert evidence has been produced to substantiate that claim. I further note that it is implicit in this assertion that, for tax purposes, Mr Burmester has treated all of the funds in the JFC Account as beneficially his. He has provided absolutely no documentation to support such a claim, however. I infer that if such documents existed they would have been discovered.
[51] Mr Burmester’s argument that Mrs Burmester did not draw on the JFC Account because she understood that she was holding the funds on trust for him, and had no independent right to them, is also unpersuasive. Mrs Burmester’s own evidence is to the contrary. I further note that Mr Burmester was 20 years or so older than his wife and a successful “retired” lawyer and businessman when the couple first met. There is nothing particularly unusual about his decision to manage the couple’s investments, including the JFC Account, in such circumstances. I also note Mrs Burmester’s evidence that Mr Burmester exercised (or attempted to exercise) a high degree of control over many aspects of her life, including the way she dressed, her friendships, her hobbies, and whether she worked outside the home. Given this broader context (which I accept), the fact that Mr Burmester also exercised a high degree of control over the family finances is not at all surprising. I do not infer from such conduct that Mrs Burmester’s interest in the JFC Account
must necessarily have been held on trust for Mr Burmester.
21 See Harvey v Gateshead Investments Ltd [2013] NZHC 2253, [2014] 2 NZLR 79 at [17] for a discussion of the rights of survivorship in an estate in the context of a joint tenancy in land.
[52] Finally, I note that Mr Burmester’s allegation that a trust existed directly
contradicts his position immediately following separation. In particular, on
9 September 2011, shortly following separation, Mr Burmester deposed that he had no interest in any trust or estate. Rather, he appears to have claimed the full value of the account as separate property. I accept Ms Chambers’ submission that Mr Burmester’s subsequent change of position is consistent with him having “invented” the trust once he realised that there was a real prospect that he would not receive the full value of the funds held in the account.
Conclusion
[53] For the reasons outlined, the Judge did not err in classifying the funds in the ANZ Account (which represent the proceeds of the JFC Account) as relationship property.
Issue Two: Did the Judge err by ordering that spousal maintenance continue up until the date of distribution?
[54] Mr Burmester contends that Judge Burns was wrong to require him to continue to pay to maintenance up until the date of distribution.
Background
[55] On 23 May 2014, following the expiry of a consent order as to maintenance, Judge Southwick QC ordered Mr Burmester to pay spousal maintenance of $1,797 per week. As part of her order, maintenance was to be payable until the last Friday of May 2016, but on the basis that either party could apply to vary or discharge the order in the event property issues were resolved prior to that date or circumstances were substantially altered. Due to delays in resolving the proceedings (largely attributable to actions taken by Mr Burmester), no final order for distribution had yet been made by May 2016. Accordingly, on 4 August 2016, Judge McHardy ordered that spousal maintenance continue until the Family Court delivered its substantive decision on property issues.
[56] In his substantive decision, Judge Burns directed that spousal maintenance continue until the ANZ Account is wound up (at which time Mrs Burmester would be in a position to support herself):22
[75] I consider that spousal maintenance should come to an end together with ongoing payment of legal fees as soon as the ANZ Account is wound up and distributed. I have found it to be relationship property and made the other orders which enables Mrs Burmester to now finalise matters except the ongoing operation of the partnership. I accept the submission made in relation to past maintenance for the gap in time that occurred with further orders being made by Judge McHardy. The calculations set out in paragraph
126 are accepted and the arrears authorised to be deducted from
Mr Burmester’s share of the ANZ Bank account. Judge McHardy has already ordered that maintenance is to continue until the resolution of relationship property. As a result of this judgment all outstanding issues relating to relationship property are now resolved. As soon as the calculations are done and the final distribution worked out the spousal maintenance can come to an end.
Argument on appeal
[57] Mr Burmester claims that any maintenance order extending beyond May 2016 is a miscarriage of justice because the need for maintenance requirement is not fulfilled. Mrs Burmester, he says, can maintain herself using her own funds. He makes further assertions to the effect that Mrs Burmester is effectively living a life of luxury at his expense.
[58] To the extent that Mr Burmester challenges the decision of Judge McHardy to extend the final maintenance order beyond the last Friday of May 2016, his submissions are misconceived. That decision was appealed to Brewer J, who dismissed it on grounds that Judge McHardy was undoubtedly correct to extend the order.23 As such, any scope for argument is limited to the subsequent decision by Judge Burns, in his substantive judgment, to extend the order from the date of the substantive judgment (15 March 2017) to the date on which the ANZ Account is
finally distributed.24
22 Burmester v Burmester, above n 1.
23 P B v B J B [2017] NZHC 715 at [28].
24 Burmester v Burmester, above n 1, at [75].
Did Judge Burns err in extending the spousal maintenance order?
[59] While an appeal against a decision of the Family Court is a general appeal, Courtney J recognised in McHoull v Paterson25 that an order for maintenance involves the exercise of a discretion, albeit a constrained one. I propose to follow, as Courtney J did,26 the approach taken by Randerson J in WPH v ITP27 and adopted by Andrews J in CAM v JMP:28
… some reasonably plain ground should be made out before this Court intervenes on appeal while recognising, consistently with Austin Nichols, that the appellate court should form its own opinion without undue deference to the assessment of the lower Court.
[60] Mr Burmester’s arguments on appeal regarding maintenance were, in large part, previously advanced in his appeal against the initial extension of the maintenance order by Judge Southwick. In particular, his key argument appears to be that maintenance is no longer needed because Mrs Burmester now has her own house and Sarah has moved out. Brewer J rejected that argument in his decision on the interim maintenance appeal.29 I do not consider the argument to be any more persuasive now, in relation to Judge Burns’ extension of the order. There is no evidence to the effect that Mrs Burmester’s financial circumstances have so changed that it justifies ceasing the maintenance order pending final distribution of the ANZ Account.
Conclusion
[61] For the reasons outlined, the Judge did not err in ordering that spousal maintenance continues up until the date of distribution of the ANZ Account.
Issue Three: Did the Judge err by ordering that the costs of counsel to assist be
reimbursed from Mr Burmester’s half-share of the ANZ Account?
[62] On 11 October 2013 Mr Foote was appointed as counsel to assist with the implementation of Family Court orders, due to obstructive behaviour on the part of
25 McHoull v Paterson [2017] NZHC 1072 at [6].
26 At [7].
27 WPH v ITP [2009] NZFLR 745 (HC) at [17].
28 CAM v JMP [2013] NZHC 592 at [18]-[19].
29 P B v B J B, above n 23, at [27] to [28].
Mr Burmester. Mr Foote assisted in arranging the valuation of household artworks, as well as valuations of a yacht and the family home. Mr Burmester refused to authorise payment of Mr Foote’s costs from the ANZ Account, as directed by the Court. Ultimately Mr Burmester was found in contempt of court for his failure to comply with the Court’s directions. That finding was upheld by Moore J on appeal.30 Mr Burmester also objected to Mr Foote’s fees and sought to have him dismissed.
[63] Ms Chambers’ position (as set out in her written submissions in the Family
Court) is that:
The costs in regard to Mr Foote were only incurred as a result of Mr Burmester’s unreasonable conduct and behaviour. But for his refusal to comply with Court orders, counsel to assist would not have been necessary. It is unusual of course to have counsel assisting in regard to such things as the mechanics of the sale of the family home, but this was clearly necessary in regard to this case. In those circumstances it is entirely fair that Mr Burmester meet the professional fees of Mr Foote from his half of these funds.
[64] The Judge accepted that submission and directed that all costs incurred by the Court in relation to Mr Foote be reimbursed from Mr Burmester’s half-share of the ANZ account. Mr Burmester contends on appeal that Judge Burns erred in making that order. I disagree. A similar course was taken, for similar reasons, in C v O.31
Mr Foote’s costs were incurred as a direct consequence of Mr Burmester’s behaviour. It is accordingly in the interests of justice that Mr Burmester be required to meet Mr Foote’s costs.
Issue Four: Did the Judge err by ordering that all adjustments arising from the judgment be made from the ANZ Account?
[65] Judge Burns ordered that all adjustments, for issues such as spousal maintenance, be made from the ANZ Account. Mr Burmester contends that the Judge was wrong to do so. However, neither Mr Burmester nor Ms Chambers
expanded on this point in their submissions.
30 PB v BJB [2014] NZHC 3165.
31 C v O FC Tauranga FAM-2004-070-300, 3 April 2007 at [18]–[21].
[66] I cannot see any proper basis for challenging the Judge’s decision on this issue. Section 33(1) of the Act provides the Family Court with a wide discretion to make such orders as may be necessary or expedient to give effect, or better effect, to any order made under ss 25 to 32, under which relationship property may be divided.
Issue Five: Did the Judge err by ordering the remaining proceeds from the sale
of the family home to be Mrs Burmester’s sole property?
[67] On 23 May 2014, Judge Southwick ordered that the family home be immediately sold.32 Mr Burmester received his share. Mr Foote held the remaining proceeds. Judge Burns vested the remaining proceeds in Mrs Burmester:33
[50] The funds being the proceeds of sale of the family home have been ordered to and are agreed to be relationship property. Mr Burmester has received his half share. Remaining proceeds are Mrs Burmester’s property. Mr Foote filed in 11th memorandum for the purposes of the hearing. … He holds on call deposit the sum of $387,685.94 … This is consistent with the evidence given by Mrs Burmester in a letter produced from Mr Foote. I order that those funds be Mrs Burmester’s sole and separate property and be transferred to her.
[68] Mr Burmester contends in his notice of appeal that Judge Burns erred by ordering the funds to be Mrs Burmester’s property, transferable to her. However, in his written submissions he simply stated that:
109. Under the above circumstances I apply for a stay of proceedings regarding the distribution from the sale of the family home until the German lawsuits are finally decided.
[69] There is no basis for such a claim. Mrs Burmester is plainly entitled to her one half-share of the proceeds of the family home, in accordance with s 8(1)(a) of the Act (I understand that the proceeds have already been distributed, in any event). Ms Chambers summed up the position succinctly:
83. A stay of proceedings regarding the distribution from the sale of the family home until the German law suits are decided is hopeless. First, the sale proceeds from the family home have already been distributed 50% each to Mr and Mrs Burmester. The issue is moot. The parties have been separated now for six years. To Mrs Burmester’s knowledge, Mr Burmester has still not issued proceedings in the German Courts. He has consistently
32 [BJB] v [PB] [2014] NZFC 3293.
33 Burmester v Burmester, above n 1.
suggested that division of relationship property in New Zealand await resolution of the division of the German land, but has taken no steps.
[70] I also note that Mr Burmester’s argument that distribution of the proceeds should be delayed pending resolution of property issues in Germany was dealt with separately, prior to Judge Burns’ decision, by Judge Southwick.34 Her Honour followed well-established legal principles, as set out in Samarawickrema v Samarawickrema,35 in rejecting Mr Burmester’s request.36 Her decision was upheld on appeal by Moore J.37 There is no basis for revisiting those (clearly correct) earlier decisions here. Mr Burmester has failed to establish any error on the part of the Judge.
Issue Six: Did the Judge err by accepting the value at which the German motor vehicles were sold?
[71] Mr and Mrs Burmester owned two cars in Germany, which were sold by
Mrs Burmester in a time of financial need, as she explains in her affidavit dated
17 February 2015:
I agree that I sold two of our cars in Germany. I accept the proceeds are relationship property. I did it because at the time I had absolutely no money and [Mr Burmester] was refusing to allow me any access to our funds. I had a daughter to support. Frankly, I felt I had little choice. For these cars I received €18,000. Annexed marked “D” are the documents I have showing the funds coming into my euro account. My solicitor has already sent copies of these bank statements to [Mr Burmester] following the three day hearing before Her Honour Judge Southwick in 2013. I hold no other documents in regard to the sale of the cars.
[72] Judge Burns accepted that the proceeds of the sale of the cars were relationship property and determined that half of the proceeds were to be paid to Mr Burmester:38
[64] This is accepted by both parties as relationship property and I rule that the proceeds of sale are relationship property. Mrs Burmester has provided evidence that the vehicles sold for €17,911.50. Those funds have been retained by Mrs Burmester and accordingly I order her to repay half share of those joint funds to Mr Burmester being the sum of €8,955.75. I
34 [BJB] v [PB], above n 32, at [21]–[23] and [37].
35 Samarawickrema v Samarawickrema [1995] 1 NZLR 14 (CA).
36 B v B, above n 33, at [37].
37 PB v BJB, above n 30, at [83]–[84].
38 Burmester v Burmester, above n 1.
direct that the adjustment be made out of the ANZ account and the exchange rate is to be at the date of hearing before me being 7 February 2017.
[73] Mr Burmester alleges that the evidence of sale price provided by Mrs Burmester — bank statements showing the amount of money coming into her account — is insufficient. He further argues that the vehicles were sold at an undervalue and should have been sold for at least €35,000. No evidence has been provided to support Mr Burmester’s valuation.
[74] The Judge clearly found Mrs Burmester to be a credible witness and was satisfied with the evidence she provided regarding the sale proceeds. There is nothing to suggest that the Judge erred in his assessment and that Mrs Burmester’s evidence as to the price she sold the cars for is untruthful or unreliable.
[75] Further, the suggestion that Mrs Burmester sold the vehicles at a significant undervalue is not supported by any evidence. I note that the reason that Mrs Burmester sold the cars was to provide funds to support herself and Sarah. In the circumstances she was clearly incentivised to obtain a reasonable price for the vehicles, rather than sell them at a gross undervalue.
[76] For the reasons outlined, this ground of appeal also lacks merit.
Issue Seven: Did the Judge err by finding that the loan to Mr Jacobs is relationship property?
[77] During the marriage, one of Mr Burmester’s companies loaned moneys to a friend of Mr Burmester’s, Werner Jacobs. Mr Jacobs lives in Europe (possibly Germany). For reasons that are unclear (but which possibly relate to either taxation or estate planning), the loan was later assigned to Mrs Burmester and is held in her sole name. Some loan repayments were received during the marriage — sometimes by Mrs Burmester and sometimes by Mr Burmester. Mr Burmester’s evidence is that the debt is secured by a registered mortgage over land owned by Mr Jacobs. That is supported by Mrs Burmester’s evidence of what she understands to be security documents.
[78] Judge Burns held that the loan is relationship property, but given the balance outstanding is more likely to be recovered by Mr Burmester than by Mrs Burmester, he directed that the sum be vested in Mr Burmester, with an adjustment for one half of the balance to be made in favour of Mrs Burmester, adjusted out of the ANZ bank account.
[79] Mr Burmester contends that the debt is held by Mrs Burmester on trust for him and that it is his separate property. As with Issue One, there is no documentary evidence to support Mr Burmester’s claim. Mr Burmester’s description of the alleged trust is somewhat difficult to follow. In his affidavit of 29 October 2012, Mr Burmester deposes:
330. In the past Industrial Lease and Finance Corporation/Liechtenstein in liquidation (ILF), which I own by 100%/my authority Hollings appendix N, has given Jacobs a loan which he repaid mainly but a residue is still due. A registered mortgage is securing that loan. [Mrs Burmester] bought the residue loan from ILF as my trustee in trust for me. The purchase price should not be paid, is not paid and [Mrs Burmester] would not been able to pay having no money.
…
332. I have given notice concerning the trust agreement with my letter dated 04/06/12, Hollings appendix Q. I cite the second last paragraph translated:
“Further you are holding as my trustee a claim against Jacobs. I hereby give notice, period of notice 14 days, terminating the trust agreement and I request transfer to me of the claim against Jacob’s after termination of the trust deed. If you do not transfer I will sue you”.
[80] As with Issue One, it is my view that Mrs Burmester’s evidence should be preferred to that of Mr Burmester. There is no evidence, other than Mr Burmester’s bare (and self-serving) assertion, that a trust ever existed. If it did, it is my view that Mr Burmester, given his legal background and his apparent tax or estate planning motives, would have documented it. There is no documentary support at all, however, for the existence of the trust. As with Issue One, it appears to be a recent invention on the part of Mr Burmester.
[81] As for Mr Burmester’s claim that the loan has no value, Ms Chambers pointed out that this is contrary to his earlier evidence. In his affidavit of assets and
liabilities, Mr Burmester acknowledged that the debt was worth between €80,000 and €100,000. Judge Burns accordingly found as follows:39
[65] … Accordingly I value the debt at €80,000.00 with an exchange rate
to the New Zealand dollar to be fixed as at the date of hearing being 7
February 2017. Once that calculation is done Mrs Burmester is to be repaid one half of it from the ANZ Bank account. The result will be that Mrs Burmester will receive the benefit of the equivalent of €40,000.00. I direct that she does all things necessary to assign any rights that she has in regard to that debt back to Mr Burmester so that it becomes his separate property and enforceable by him at his sole discretion.
[82] Mr Burmester’s final contention was that Mr Jacobs “seems to be bankrupt” and the funds are not therefore recoverable. There does not appear to be any evidence to substantiate this submission. Further, in cross-examination before Judge Southwick, Mr Burmester confirmed that the loan was secured over a building owned by Mr Jacobs.
[83] I find no error in the Judge’s approach to this issue. Clearly Mr Burmester is in the best position to recover the debt or, if necessary, to enforce the security over it. Given the level of his antagonism to Mrs Burmester, it unfortunately appears that Mr Burmester is unlikely to take any steps to recover the debt if a consequence of doing so would be that she would receive half of the proceeds. The Judge’s approach of allocating the entirety of the Jacobs debt to Mr Burmester, and directing that Mrs Burmester receive her share of it out of the ANZ Bank Account, was clearly pragmatic and sensible in the circumstances.
Issue Eight: Did the Judge err by exercising jurisdiction over the partnership
and declaring that Mrs Burmester’s interest in it is relationship property?
[84] In May 2007, three properties in Germany were transferred from the
Liechtenstein companies into Mrs Burmester’s sole name:
(a) house and land at An Den Tennisplaetzen 16; (b) land at Poggfreedweg 38; and
39 Burmester v Burmester, above n 1.
(c) the ground floor of an office building at Postrstrasse 13 (“the Post
Office Building”.)
[85] The Post Office Building has four floors. The ground floor is in the legal ownership of Mrs Burmester and the second and third floors are in the legal ownership of Sarah and Annaliese. The fourth floor is owned by a third party. A partnership between Mrs Burmester, Sarah and Annaliese operates for the purposes of renting out the Post Office Building, and operates a bank account for that purpose. (Sarah and Annaliese were both minors when the partnership was established).
[86] Ms Chambers submitted that Mr Burmester and Annaliese (who has closely aligned herself with Mr Burmester and is hostile to Mrs Burmester) have taken every possible step to prevent the business-like operation of the Post Office Building rental, including preventing the proper operation of the bank account to pay such basic outgoings as rates and tax on income. Mrs Burmester deposes that Mr Burmester has declined to contribute to the outgoings on the properties unless she does so on his terms, which she cannot accept. This has led to problems in respect of utility providers ceasing to provide gas, electricity and water to the properties. Mrs Burmester also says that Annaliese and Mr Burmester have deliberately not passed on mail to her, which almost led to the properties being compulsorily auctioned.
[87] In response to these concerns, Mrs Burmester sought from the Family Court an order for termination of the partnership, on the basis that it is completely dysfunctional. Judge Burns declined to dissolve the partnership, instead ruling as follows:40
[73] I have considered the request for the dissolution of the partnership. I consider that the Court has jurisdiction to make orders on the basis that the partnership is declared to be relationship property pursuant to s 25(1) which then enables the ancillary powers of the Court contained in s 33. The jurisdiction contained in s 33(3)(l) enables me to deal with the partnership issues. In the event that I am wrong on that I consider that the Court has jurisdiction under s 25(3) which gives the Court jurisdiction to deal with this issue. Accordingly I make the following orders:
40 Burmester v Burmester, above n 1.
(a) I vest and direct that the management of the partnership affairs is to be solely vested and controlled by Mrs Burmester on the basis that she strictly keeps to the Court orders that are made herein;
(b) that she attends to receiving the income of the partnership and attends to paying all outgoings as legally required of her by the German tax authorities and the outgoings with respect to the property and building;
(c) that she attends to and endeavours to resolve the dispute with the other owner of the floor;
(d) that she pays any professional fees or costs incurred in the operation of the partnership and she is authorised to engage a qualified lawyer or accountant in Germany to act as her agent to operate the partnership and to receive income and to account to the members of the partnership
(e) that she is to keep proper accounts and to file any tax returns and accounts as required;
(f) that the net income after of all outgoings and reasonable costs and expenses including tax liability is to be divided as to one third Annaliese Burmester; one third to Sarah Burmester, one sixth to Mr Burmester and one sixth to Mrs Burmester. The issue of the final termination of the partnership and determination of their interest to the partnership will have to be decided by the German Family Court when the underlying real estate is resolved. At that stage dissolving of the partnership can be considered. Mrs Burmester is to account and provide copies of accounts at least on an annual basis but preferably more frequently to her two daughters and to Mr Burmester.
[88] Mr Burmester challenges all of the orders made. His grounds for doing so are somewhat difficult to decipher. They are summarised in his submissions as follows:
131. Summary regarding this point:
(a) No New Zealand court has jurisdiction regarding ABS Burmester
GbR.
(b) Under German law a consented resolution of all partners is necessary for any pay-out of profits. Such a resolution does not exist. Thus, the prerequisite to make a decision regarding distribution of profits is missing.
(c) Only a German court has jurisdiction to decide whether the respondent is or is not holding her partnership position on trust for me.
(d) All the orders regarding ABS should be set aside. I note that neither Anneliese Burmester nor Sarah Burmester have been summoned to the Family Court hearing and the appealed decision does not name then in the rubrum … Thus, all these orders are established by infringing the right to be heart [sic] violating New Zealand’s constitution.
[89] The two key arguments appear to be that:
(a) the Family Court did not have jurisdiction to make any orders touching on the affairs of the partnership, due to the jurisdiction clause in favour of the Buchholz Courts in the partnership deed; and
(b)the Family Court did not have jurisdiction to make substantive orders impacting on the rights of Annaliese and Sarah, as they were not parties to the proceedings.
[90] Argument (b) is without merit. Both Annaliese and Sarah were joined to the proceedings specifically to enable the Family Court to deal with issues relating to the partnership. Mr Burmester opposed that joinder, unsuccessfully. They are both named as respondents to this appeal and have been duly served.
[91] The position regarding argument (a) is somewhat more complex. Mr Burmester relies on a partnership deed dated 31 March 2009 which is unsigned, but which appears to have been filed in 2009 with the German taxation authorities. The partnership agreement provides, in essence, that the purpose of the partnership is for the three partners (Mrs Burmester, Annaliese and Sarah) to operate a rental business and fulfil all measures and legal transactions “favourable to the purpose of the business”. Profits are to be divided by three. There are provisions regarding termination and dissolution. Resolutions must be unanimous and are to be adopted, on the translation provided by Mr Burmester, “for any actions beyond the scope of routine business activity”. On that same translation, the final clause reads: “The courts of 21244 Buchholz have jurisdiction for all disputes”. Mr Burmester submitted that this clause ousts the jurisdiction of the New Zealand courts as regards any aspect of the partnership.
[92] Mrs Burmester’s evidence is that she had never seen this document prior to these proceedings. The expert translation that she has provided (which I accept) states that the correct translation of the relevant clause (“Gerichtsstand für alle Streitigkeiten aus diesem Vertrag ist 21244 Buchholz”) is “Jurisdiction for all disputes out of this contract is 21244 Buchholz”. Ms Chambers submitted that the present dispute does not arise out of the contract, namely the partnership deed. She further submitted that the jurisdiction clause is not sufficient to oust the jurisdiction of the New Zealand courts, in any event.
[93] The Judge declined Mrs Burmester’s request to dissolve the partnership. It appears that, in his view, that issue was more appropriately dealt with by the German courts. The Judge did find, however, that Mrs Burmester’s interest in the partnership was relationship property. The Judge also, in effect, made interim orders aimed at preserving the value of the assets of the partnership until any issues relating to the underlying assets, or the partnership as a whole, can be resolved in Germany. This was presumably to address what appears to be a common theme in these proceedings, namely Mr Burmester’s willingness to “cut off his nose to spite his face” in his dealings with Mrs Burmester. In particular, although Mrs Burmester’s interest in the partnership is relationship property, Mr Burmester appears willing to undermine the effective operation of the partnership (including through Annaliese) rather than see Mrs Burmester secure any benefit from it.
[94] The only two ways that the Act can effectively be “contracted out” of is in accordance with either s 7A or s 21A. The partnership deed, even if it is valid (despite being unsigned), was not entered into before or at the time of marriage, which is a prerequisite to s 7A. As for s 21A, it is clearly directed towards the resolution of specific disputes, and does not apply to the partnership deed. I further note, for completeness, that the jurisdiction clause is not expressed as an exclusive jurisdiction clause.
[95] Furthermore, Mr Burmester again raised the argument that German law applies, as a basis for his submission that only a German court has jurisdiction to decide whether Mrs Burmester held her partnership position on trust for him. I have dealt with this above at [17]–[23]. I am satisfied that the Judge had jurisdiction to
determine whether or not the alleged trust existed, in accordance with New Zealand law. On the evidence before him, Judge Burns did not err in finding that Mrs Burmester’s interest in the partnership was relationship property.
[96] Overall, I have not been persuaded that the Judge lacked the necessary jurisdiction to make the orders he did, or that he otherwise erred in making those orders.
Issue Nine: Did the Judge err by ordering that the proceeds of the German litigation are relationship property and vesting those proceeds in Mr Burmester?
[97] As noted above, Mrs Burmester owns an interest in the Post Office building in Germany, which was transferred to her in 2007 (the partnership appears to have been subsequently set up in 2009). A previous tenant failed to make good the premises at the end of the tenancy. Proceedings were brought in Mrs Burmester’s name but were prosecuted by Mr Burmester. Issue Nine concerns the classification and distribution of the proceeds of that litigation.
[98] Judge Burns considered the proceeds to be relationship property, and found that Mr Burmester had control of the funds. He accordingly vested the proceeds in Mr Burmester and ruled that Mrs Burmester be paid a half share by way of adjustment:41
[67] … I rule that the money obtained from that litigation which arose during the course of the marriage is relationship property by virtue of the application of s 8(1)(e). The money appears to have been under the control of Mr Burmester. It is to be divided in half and the exchange rate is to be the value of the cross rate between the Euro and the New Zealand dollar as at the date of hearing before me on 7 February 2017. Adjustments are to be made out of the ANZ Bank account.
[99] Mr Burmester again raised the argument that German law applies, which I have dealt with at [17] – [23] above. He also argued that the funds were held on trust for him. Again, there is no evidence to support the existence of such a trust.
This aspect of the appeal must accordingly also fail.
41 Burmester v Burmester, above n 1.
Issue Ten: Did the Judge err by dismissing Mr Burmester’s s 13 argument?
[100] Section 11 of the Act states that on the division of relationship property under the Act, each of the partners is entitled to share equally in the family home, the family chattels and any other relationship property.
[101] Judge Burns declined Mr Burmester’s request that he exercise his jurisdiction
under s 13 to displace the presumption of equal sharing. Section 13 provides:
13 Exception to equal sharing
(1) If the court considers that there are extraordinary circumstances that make equal sharing of property or money under section 11 or section
11A or section 11B or section 12 repugnant to justice, the share of each spouse or partner in that property or money is to be determined in accordance with the contribution of each spouse to the marriage or
of each civil union partner to the civil union or of each de facto partner to the de facto relationship.
(2) This section is subject to sections 14 to 17A.
[102] Although it is common ground that Mr Burmester made significantly greater financial contributions to the relationship, the Judge found that this did not engage s 13. In dismissing the s 13 argument, Judge Burns stated that:42
[90] From the case law that I have referred to Mr Burmester’s argument to s 13 must fail. The test is a stringent one and the facts of this case fall well short of establishing any extraordinary circumstances repugnant to justice. The parties’ marriage is a long one. There are two children. The evidence clearly shows that the way of life adopted by the parties was chosen by them and continued for a significant period. There is nothing unusual about one party bringing a significantly greater sum of money to the marriage than the other. Mrs Burmester’s contribution to the marriage whilst not so much financial nevertheless was significant in bringing up and raising the children of the marriage together with a significant contribution to the children from his prior relationship. I see no injustice in this case arising out of equal sharing and in fact if there was not equal sharing I would regard that as unjust. I have no hesitation in dismissing the s 13 argument.
42 Burmester v Burmester, above n 1.
[103] Mr Burmester contends that the Judge was wrong not to exercise jurisdiction under s 13. He submits that:
(a) At least 95 per cent of the marriage was funded by Mr Burmester’s prenuptial assets, whereas Mrs Burmester only contributed her inheritance.
(b)The couple equally shared care and upbringing of their children while they lived in New Zealand. He was responsible for all matters relating to education and homework.
(c) Mrs Burmester did not have a good relationship with Annaliese. As well, Mr Burmester’s son from his previous marriage, who lived with the family for seven years, left because he could not bear Mrs Burmester’s “step-mother behaviour”.
(d)Mr Burmester contributed a great deal more to household activities than Mrs Burmester.
(e) Mr Burmester put thousands of hours of work into the Remuera home and the family yacht, despite being fully occupied with management of his investments.
[104] Mrs Burmester acknowledged the disparity of financial contribution to the marriage (but noted Mr Burmester’s wish that she give up her career in order to focus on marriage and family). She strenuously disputed, however, Mr Burmester’s claim that his contribution to the marriage and family exceeded her own in other respects.
Section 13 – legal principles
[105] The starting point is Richardson J’s dictum in Martin v Martin, commenting on an older version of s 13:43
43 Martin v Martin [1979] 1 NZLR 97 (CA) at 111. See also Joseph v Johanson (1993) 10 FRNZ
302 (CA) at 307; and Castle v Castle [1977] 2 NZLR 97 at 102.
Clearly enough “extraordinary circumstances” and “repugnant to justice” are strong words and reflect a Parliamentary intention that the primacy of the equal sharing of the matrimonial home and the family chattels it not to be eroded in the ordinary circumstances of marriage. … “Extraordinary circumstances” imposes a stringent test, particularly when it is recognised that such matters as the provision of the matrimonial home by one spouse or by gift to that spouse are not in themselves extraordinary circumstances. “Repugnant to justice”, even when stripped of its emotional overtones, is a most emphatic phrase. Moreover, it is repugnancy to justice giving full weight to the scheme and objectives of the legislation that must be established. And, when regard is had to the legislative intent that disproportionately greater contribution to the marriage partnership should not in itself justify departure under s 14 from equal sharing of the matrimonial home, it seems to me that the legislature intended to impose a rigorous test allowing very limited scope for unequal sharing of the matrimonial home and the family chattels under s 14.
[106] Richardson J then later said in Joseph v Johansen:44
… in determining whether the circumstances are truly extraordinary it is not always sufficient to focus on what the particular parties may have expected of and from their marriage and their reasonable expectations of the role and responsibilities of each within the marriage. It is proper in appropriate cases to consider whether in the New Zealand society of the times the circumstances advanced can truly be characterised as extraordinary by any standards in the context of marriages generally. That is not to make an assessment against some kind of marriage norm, but rather to consider whether tested against the whole range of marriages the particular circumstances are to be characterised as extraordinary. Thus it is not extraordinary for wives to go out to work — or to be engaged in the community or with family or to stay at home. It is not extraordinary for one spouse to provide the family home and family chattels or for there to be substantial disproportion in financial contributions. It is not extraordinary for a spouse to suffer poor health or to be less than dynamic. In considering whether the circumstances are extraordinary it is also crucial not to devalue the intangible benefits of love, friendship, companionship, loyalty, and support which may be of overwhelming importance. And full weight must be given to the diversity of marriages and the great range of circumstances within marriages. But in extreme conditions various features of a particular marriage may constitute extraordinary circumstances.
[107] Venning J added in Johnston that the legislature intended to impose a rigorous test allowing very limited scope for unequal sharing of all relationship
property, not just the family home and family chattels.45
44 Joseph v Johanson, above n 43, at 307.
45 Johnston v Johnston HC Auckland CIV-2004-404-5565, 28 June 2005 at [22].
[108] In Joseph v Johansen, Richardson J also observed that the cases where the circumstances of the marriage can fairly be characterised as extraordinary are likely to be few and far between.46
[109] In Castle v Castle the question was characterised in the following terms by
Quilliam J:47
The extraordinary circumstances will, I think, require to be those which force the court to say that, notwithstanding the primary direction to make an equal division, the particular case is so out of the ordinary that an equal division is something the court feels it simply cannot countenance.
Discussion
[110] Gross disparity of contributions is a relevant factor under s 13, but the bar is set at an exceptionally high level. In relationships of long duration, the onus of establishing that the circumstances are so extraordinary as to engage s 13 is a difficult one to discharge. Ultimately the Court must ask itself — is this case so out of the ordinary that an equal division is something the Court simply cannot countenance?48 In my view, the Judge was correct to answer that question, “no”.
[111] Section 13 is not concerned only with financial contributions. Relevantly, s
1N(b) of the Act states that “all forms of contribution to the marriage partnership … are treated as equal”. As Judge Burns noted, Mrs Burmester’s contribution to the marriage must be viewed as significant. She took care of the couple’s children and also accommodated Mr Burmester’s other children, including one who lived with the family for seven years.
[112] Nor does the fact that Mrs Burmester did not work during the marriage advance Mr Burmester’s argument. It is not uncommon or exceptional for a wife to cease working in order to devote more time to the marriage and family. In this case, Mr Burmester, who was significantly older and financially secure at the outset of the
marriage, appears to have strongly encouraged such a course. Mrs Burmester’s
46 Joseph v Johanson, above n 43, at 307.
47 Castle v Castle, above n 43, at 102.
48 See Castle v Castle, above n 43, at 102; Martin v Martin, above n 43, at 102; and DMM v SGM
[2012] NZFC 9808 at [26].
commitment to the marriage, however, precluded her from developing her own career and achieving any degree of financial independence.
[113] I agree with the Judge that there are no extraordinary circumstances in this case that make equal sharing repugnant to justice.
Issue Eleven: Did the Judge err in his calculations of maintenance and ordering that maintenance be deducted from Mr Burmester’s share of the ANZ bank account?
[114] Although this appeal ground is set out in the Notice of Appeal, neither Mr Burmester nor Ms Chambers addressed the point in their submissions. Mr Burmester has failed to discharge the onus on him of persuading me that the Judge erred in this respect.
Issue Twelve: Did the Judge err by granting Mrs Burmester costs?
[115] Mr Burmester was unsuccessful in the Family Court. There is nothing in his argument that he should not have to pay costs, given that his appeal to this Court has failed.
Issue Thirteen: Mrs Burmester’s cross appeal and leave application
[116] Mrs Burmester seeks to cross-appeal. She seeks orders relating to:
(a) the deduction of costs orders from the joint bank account; and
(b) the operation of the partnership.
[117] In essence, Ms Chambers contends that Mr Burmester’s obstructive attitude makes enforcement of aspects of the Family Court judgment difficult. Amendments to the Family Court orders are accordingly sought to facilitate enforcement.
[118] The application for leave to cross-appeal was filed out of time, but well in advance of the appeal hearing. There is no prejudice to Mr Burmester in granting the leave application. Leave to file the notice of cross-appeal and supporting affidavit is granted accordingly.
[119] I note that although Mr Burmester was directed to file and serve submissions in opposition to the cross-appeal prior to the appeal hearing, he failed to do so. At the hearing I rejected Mr Burmester’s explanation that this was due to him not having received Mrs Burmester’s submissions prior to the hearing. I accepted, however, that due to slippage in the timetable, Mr Burmester would only have received those submissions a relatively short time before the hearing. I accordingly granted him leave to file submissions in opposition to the cross-appeal following the hearing. He failed to do so.
Deduction of costs from the joint bank account
[120] The draft order that Ms Chambers sought in the Family Court in relation to deduction of costs was that:
Funds in the joint ANZ Swiss Franc account BEVBUR-CHF00, previously in Sydney and now transferred to New Zealand (“the joint Swiss Franc account”) are relationship property and shall be divided equally on settlement date, except that in regard to Mr Burmester’s 50% share, the following deductions (calculated and to be calculated at settlement on the exchanged rate at hearing date of .7342) will be made and paid to Mrs Burmester:
…
Any order as to costs made by this Court in regard to the substantive hearing or any further order made after the hearing date but prior to settlement by the High Court in regard to costs in Mrs Burmester’s favour
(Emphasis added)
[121] The rationale for seeking such an order was that Mr Burmester has persistently refused to comply with costs orders (and other court orders) and that taking steps to enforce costs orders against Mr Burmester (particularly given his approach to this litigation to date) would likely be extremely expensive, time consuming and ultimately futile.
[122] Judge Burns ordered that all costs ordered against Mr Burmester by the Family Court or the High Court “to date” were to be deducted from Mr Burmester’s half-share of the ANZ Account. He did not, however, order that any future costs orders (including High Court costs orders) could also be paid by way of deduction from that account.
[123] In my view, the Judge did not err in refusing to direct that any future costs orders also be paid by way of deduction from the ANZ account. The appropriate course is generally for any directions as to payment of costs to be made either at the time the order is made or, if difficulties arise, after the event. The Judge did not err in declining to make his order prospective, covering possible future costs orders.
[124] I am satisfied that it is in the interests of justice, however, that any costs awards that have been made in connection with the relationship property proceedings between Mr and Mrs Burmester (in either the Family Court or High Court) up to the date of this judgment, should be deducted from Mr Burmester’s half-share of the ANZ Account. For the avoidance of doubt, this includes the costs order made by Brewer J in his judgment of 22 May 2017.49 It is obviously open to Mrs Burmester to seek a similar direction in relation to any future costs awards that may be made (including any costs award relating to this appeal) at the appropriate time. Like Judge Burns, however, I am not willing to make a blanket order that all future costs orders that may be made against Mr Burmester are deductible from the ANZ Account.
Issues relating to the partnership
[125] I have set out at [87] above the order made by Judge Burns in relation to the partnership. Judge Burns directed that the management of the partnership affairs be solely vested and controlled by Mrs Burmester, subject to the requirement that she strictly adhere to various orders made by Judge Burns that were essentially directed to the proper management of the partnership and the preservation of its assets.
[126] In the cross-appeal, Mrs Burmester contends that the Judge’s orders did not
go far enough (and not as far as she requested). She seeks orders that:
Anneliese Burmester and Sarah Burmester are to do all things necessary within 14 days of the judgment of this Court to appoint Mrs Burmester as the sole agent for the partnership, both in regard to the operation of the ABS Partnership bank account and in regard to dealing with all authorities in Germany. In the event that Anneliese Burmester continues to fail to sign the necessary documents, she is to be summonsed to the Court and dealt with under contempt of court rules.
49 P B v B J B [2017] NZHC 1069.
[127] Mrs Burmester’s updating affidavit of 31 July 2017 explains her rationale for seeking this order. She deposes that Annaliese is completely uncooperative in regard to the operation of the partnership. This is due, Mrs Burmester believes, to her being completely under the control of her father. Operating the partnership bank account in Germany currently requires the signatures of all three partners. That bank account is used to pay outgoing such as rates and maintenance. Annaliese has ignored requests to sign an authority to the bank which would allow Mrs Burmester to access the German bank account independently.
[128] In the circumstances, I am satisfied that it is appropriate to make a further order, in terms of the first sentence of the draft order at [126] above, to support and facilitate the enforcement of Judge Burns’ order in relation to the affairs of the partnership. I note that Annaliese was a party to the Family Court proceedings, and this appeal, and is bound by Judge Burns’ order, as well as any further orders of this Court.
[129] I am not prepared to make the order set out in the second sentence of the draft order at [126] above, although I note that any failure by Annaliese to comply with the relevant Court orders will likely constitute contempt of Court and could ultimately result in penalties (including fines or imprisonment) being imposed.
Summary and conclusion
[130] While my reasons differ to Judge Burns in some respects, in relation to Issue One, I have found that his Honour did not err in classifying the JFC account as relationship property. I reject Mr Burmester’s claim that Mrs Burmester holds her legal interest in the relevant funds on an express oral trust for him, for the reasons I have outlined.
[131] Secondly, there was no error in extending the final maintenance order. There is no evidence that Mrs Burmester’s financial circumstances have so changed as to justify ceasing the maintenance order pending final distribution of the ANZ account.
[132] Thirdly, Judge Burns did not err by ordering that the costs of counsel to assist
the Family Court are to be reimbursed from Mr Burmester’s half-share of the ANZ
account. Counsel’s costs were incurred as a direct result of Mr Burmester’s conduct,
and it is consequently in the interests of justice that he pay them.
[133] Neither party made submissions in respect of Issues Four and Eleven. In any
event, I find no error in Judge Burn’s decision in respect of these issues.
[134] Regarding Issue Five, it was plainly correct for Judge Burns to order the remaining proceeds from the sale of the family home be Mrs Burmester’s sole property. That order was in accordance with s 8(1)(a) of the Act.
[135] In relation to Issue Six, there is nothing to suggest that Judge Burns erred in his assessment of Mrs Burmester’s credibility or the evidence, such that he was wrong to accept her evidence regarding the value at which the German motor vehicles were sold. This ground of appeal therefore fails.
[136] In respect of Issue Seven, Judge Burns did not err by finding that the loan to Mr Jacobs is relationship property. The facts do not support Mr Burmester’s claim that Mrs Burmester holds the debt on trust for him. The order vesting the debt in Mr Burmester was a pragmatic and sensible one in the circumstances.
[137] Judge Burns did not err under Issue Eight by exercising jurisdiction over the partnership or by declaring that Mrs Burmester’s interest in it was relationship property. I have not been persuaded that Judge Burns lacked the necessary jurisdiction to make the orders that he did, and I do not accept Mr Burmester’s argument that German law applies or that there is evidence that Mrs Burmester held her interest in the partnership on trust for Mr Burmester.
[138] Similarly, Judge Burns did not err in relation to Issue Nine when he ordered that the proceeds of the German litigation are relationship property, or when he vested those proceeds in Mr Burmester with Mrs Burmester to be paid a half-share in the ANZ Bank account by way of adjustment. Mr Burmester raised the argument that German law applies and that the funds were held on trust for him, and accordingly this ground also failed on the basis that German law does not apply and there is no evidence of such a trust.
[139] Judge Burns did not err in relation to Issue Ten by finding that s 13 of the Act did not apply, as there are no extraordinary circumstances in this case that make equal sharing of relationship property under the Act repugnant to justice.
[140] Judge Burns did not err in relation to Issue Twelve by granting
Mrs Burmester costs, given that Mr Burmester’s appeal to this Court has failed.
[141] Lastly, Issue Thirteen relates to Mrs Burmester’s cross-appeal. While I granted leave to cross-appeal, I do not consider that Judge Burns erred by declining to make his order for costs applicable to future costs. However, I am satisfied that it is in the interests of justice that any costs award up to the date of this judgment be deducted from Mr Burmester’s half of the ANZ Account. Further, as requested in the cross-appeal I am prepared to make a further order relating to the management of the partnership, to facilitate the enforcement of Judge Burns’ orders.
Result
[142] Mr Burmester’s appeal is dismissed.
[143] Mrs Burmester’s cross-appeal succeeds in part. In particular:
(a) I order that any costs awards that have been made in connection with the relationship property proceedings between Mr and Mrs Burmester (in either the Family Court or High Court) up to the date of this judgment should be paid by way of deduction from Mr Burmester’s half-share of the ANZ Account.
(b)I order that Anneliese Burmester and Sarah Burmester do all things necessary within 14 days of this judgment to appoint Mrs Burmester as the sole agent for the partnership, both in regard to the operation of the ABS Partnership bank account and in regard to dealing with all authorities in Germany.
(c) The cross appeal is otherwise dismissed.
[144] I direct that if costs cannot be agreed any memorandum on behalf of Mrs Burmester is to be filed and served by 23 February 2018. Any memorandum on behalf of Mr Burmester is to be filed and served by 9 March 2018. Memoranda as to costs are not to exceed five pages in length. Costs issues will then be determined on
the papers, unless I require further assistance from the parties/counsel.
Katz J
8
10
1