Chaineux v Higgs

Principles to be applied 23The factors which the Court must consider are set out in s 20 of the Property (Relationships) Act , as follows: " Application for adjustment (1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to: (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely: (i) a child of the parties, (ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties..." 24These factors are discussed by Basten JA in Baker v Towle [2008] NSWCA 73: "[43] It has been said in a number of cases that the application of s 20 involves three steps, which were identified in Howlett v Neilson [2005] NSWCA 149 (Hodgson JA, Ipp and McColl JJA agreeing) in the following terms at [25]: (1) identification and valuation of the property of the parties; (2) identification and valuation of the respective contributions of the parties, of the types referred to in s 20; (3) determination of what if any order is just and equitable having regard to these contributions. [44] What questions arise will, of course, depend to some extent on the circumstances of the individual case. For example, in some cases there will be an antecedent question as to whether the applicant is a party to a "domestic relationship" as defined in s 5 of the Act: see, eg, Delany v Burgess [2007] NSWCA 360. Otherwise, each of the three steps referred to above may require some further elucidation." 25Before the final step of deciding what adjustment is just and equitable, an identification and (so far as possible) valuation of the contributions that are being taken into account, and an identification and (so far as possible) valuation of the property concerning which it is open to the court to make an adjustment, is required: Manns v Kennedy [ 2007] NSWCA 217 per Campbell JA.

Parties ' assets at the commencement of the relationship 26Eric's assets at the commencement of the relationship were as follows: Asset, Resource or Liability EUR $US $AU Dexia Cheque Account Balance 3,948.51 7,040.98 Dexia Savings Account Balance 817.42 1,457.62 AXA Retirement Fund 2,983.27 5,319.77 Fortis Retirement Fund 33,902.14 60,454.30 ESSP Cisco Shares 8,764.86 14,176.28 Cisco Share Options 32,873.00 53,168.79 Personal Belongings 15,000.00 26,748.00 Belgium Government Retirement Pension entitlement 224,640.00 400,578.05 Employment Contract Termination Pay 120,000.00 213,984.00 Apartment in Brussels 205,000.00 365,556.00 Loan to my sister 5,000.00 8,916.00 Mortgage (-198,900.00) (-354,678.48) Personal Loan (-20,500.00) (-36,555.60) NET ASSETS TOTAL: $766,165.71

27The two substantial assets, the retirement pension entitlement and the contract termination pay were forfeited by Eric when he moved to Australia on a permanent basis. These entitlements only applied if he continued to reside in Belgium. Effectively this left him with assets of $151,603.66. 28Joanne's assets at the commencement of the relationship were as follows: Asset, Resource or Liability EUR $US $AUS Coffs Harbour property 231,000.00 JBWere Investment Fund 28,292.52 Superannuation Fund with Asgard 35,487.22 NAB Cheque Account Balance 4,414.93 Jewellery 19,798.92 Fortis Cheque Account Balance 0 0 Employment Contract Termination Pay 40,000.00 71,328.00 Belgium Retirement Pension entitlement 28,800.00 51,356.16 Mortgage with NAB (-183,645.74) Debt to Parents (-23,100.00) NET ASSETS TOTAL: $234,932.01

29Once again the two substantial assets, the retirement pension entitlement and the contract termination pay, were forfeited by Joanne when she returned to live permanently in Australia. Effectively this left her with assets of $112,247.85. 30Joanne also claimed an interest in Eric's Brussels apartment but it is clear that the property was bought in Eric's name. Apparently it would have been difficult to buy the property in both parties' names because of Joanne's foreign domicile. There is no evidence that Joanne contributed financially to the purchase of the apartment. 31At the conclusion of the relationship the parties' joint and separate assets were as follows: ITEMS EUR EUR/$AU Est. in $AU Rozelle House estimate value $1,435,000 less NAB mortgage of $716,750.00, interest and selling fees held jointly by the parties 656,940.85 TOTAL Cash in bank accounts 244,291.73 Eric's Dexia Cheque Account 1,412.48 1.9897 2,810.41 Eric's Dexia Savings Account 3,030.21 1.9897 6,029.21 Eric's Dexia Visa Card Owed -1,668.14 1.9897 -3,319.10 Eric's NAB Cheque Account 1,857.40 Joint NAB Savings Account 236,876.59 Joanne's NAB Cheque Account 37.22 (latest known balance at 10/10/08) SUPERANNUATION made of: 81,424.10 Eric's MLC Policy 20,015.99 Joanne's Asgard Policy at (30/06/08) 51,045.14 Joanne's Russell Policy at (20/06/06) 3,486.55 Joanne other employer superannuation (9% estimate based on income estimate of $AU 76,404.67 in 2007-2008-Nov 2008) 6,876.42 Household (furniture, homeware, etc) 20,000.00 Jewellery (estimate) 30,000.00 Suzuki Car 15,000.00 Honda CRV Car Unknown Less Esanda loan TOTAL ESTIMATE: $1,047,656.68

32At the time of the hearing the parties agree that the remaining assets are as follows: ITEM VALUE ($) Sum invested in controlled monies account as at 14 10 2011 (invested until 14.11.2011 at 4.35%) 719,50.76 Amount retained by Plaintiff from joint account 83,000.00 Amount retained by Defendant from joint account 110,000.00 Suzuki Swift motor vehicle in possession of the Defendant 10,000.00 Vox Platinum Earrings in possession of the Defendant 1,750.00 Household contents in the possession of the Plaintiff 4,000.00 Household contents in the possession of the Defendant 6,000.00 Gold and Diamond Ring in the possession of the Defendant 2,275.00 TOTAL $936,525.76

33Presumably this excludes superannuation. 34If one puts to one side the Rozelle property, the parties have taken possession of the remaining assets. From these assets Eric has received $87,000 and Joanne $130,025.

Parties ' financial contributions 35It is convenient to look at the contributions in Belgium separately from those in Australia. The period in Belgium was for some 21 months from April 2003 to the beginning of February 2005. At the beginning of the period both parties were working on favourable working contracts. For example, Eric had a contract which gave him performance related stock options, a retirement fund, medical cover for the family, a new, fully maintained, Audi wagon, a right to employee discounted shares, various telephone and internet benefits and lunch vouchers. Eric's net income over the relevant period of 21 months was $181,889.45. Eric calculated the value of the benefits which he received from his employment package, apart from his remuneration, at $56,440, giving him a total financial contribution of $238,329 over the 21 months period. 36Joanne's income over the period they were in Belgium came to an approximate total financial contribution of $73,683 (calculated as 9 months' net salary at $51,912 per annum for 2003 and family assistance insurance payments of $34,749). She was also provided with a fully maintained Mercedes Sports Coupe including a fuel card, meal vouchers, insurance, stock options and mobile telephone use. She has not quantified those amounts but one can assume that they would be something a bit less than the equivalent amounts calculated by Eric. 37An analysis of the family expenses over the 21 months carried out by Eric suggested that the total family expenses were $169,095.88 over the period. Eric substantially paid for these expenses with minor contributions from Joanne. Eric calculated her contributions at $9,418. Joanne continued to pay the mortgage for her property in Australia which was negatively geared and she also contributed to her investment account. 38Joanne suggests her contributions during the period that the parties were living in Belgium totalled $39,717. This included money spent on refurbishing parts of Eric's apartment to make it more suitable for their son. Having regard to the detail available, I accept this estimate which was not limited to the family expenses analysed by Eric. 39Plainly, during the course of the period in Belgium, Eric's contributions to their expenses were more substantial than those of Joanne. 40After moving to Australia there were, of course, substantial capital contributions by Eric and Joanne and also contributions based upon their respective incomes. So far as the latter is concerned Eric's income was $475,124 over the period while Joanne's income was $137,056. 41The substantial capital contributions by Eric and Joanne since arriving in Australia were as follows. 42In November 2006 Eric cashed in his superannuation of $56,979. In 2007 he contributed his inheritance from his grandmother's estate of $205,000. The sale proceeds from the sale of his apartment in Brussels in February 2008 were transferred to Australia at different times and applying the rates at the time of the transfers the funds transferred to Australia amounted to $305,593. He also received the proceeds of the stock options which he sold at $111,984. This totals a capital contribution of $679,556. 43In contrast, Joanne's contributions during this period, it was conceded by Eric, amounted to $220,588, principally being the proceeds of the sale of her property in Coffs Harbour. 44These capital contributions are almost exactly in the ratio of one to three times, in favour of Eric. 45With these funds the parties carried out house renovations, the purchase of the Sydney property and the creation of the NAB joint account which was available at the conclusion of the relationship.

Non-financial contributions 46In this case both parties have spent time making non-financial contributions to the relationship. Eric spent time improving the homes in Brussels and Rozelle while Joanne participated in the renovations, contacting suppliers and attending to other matters of that nature. 47As far as parenting contributions are concerned it is clear that both parties were involved in bringing up the two children. In respect of the period when the parties were living in Coffs Harbour before moving to Sydney Joanne gave evidence of the extensive care she gave the children and indicated that, as Eric was trying to work at home, he was not able to take such an active role. It also happened that in June 2006 Eric moved to North Sydney and only returned home to Coffs Harbour on weekends. This was due to his work commitments. After the decision to purchase the Rozelle property Eric continued to work in Sydney and was not able to assist with the children. 48When the parties were living in Rozelle they were both present and it seems that the parenting role was shared equally between them. 49One of the difficult aspects in this case is the allegation that Joanne made about Eric that he drank to excess. From an early stage in the relationship it appears that Eric would drink alcohol at night, after which he would often fall asleep. This affected his ability to be of assistance in the evenings when the children were young. 50During the relationship there were times when the burden of parenting fell upon Joanne and at other times the parties shared the parenting role equally. There is no doubt that Eric is very fond of his children and involved in their activities. Overall, and taking into account the difficulties caused by Eric's drinking habits, Joanne contributed the major part of the parenting contributions. So far as the other homemaking contributions are concerned, the contributions would appear to be approximately equal.

Conclusion 51Eric's claim is that the funds held as a result of the sale of the Rozelle property should be transferred as to $61,300 to Joanne and that he receives the balance. He also seeks the transfer of the Suzuki Swift motor vehicle to him. 52Joanne's application is that the funds should be divided as to 40 per cent to her and 60 per cent to Eric and that she should retain the items already in her possession including the Suzuki Swift motor vehicle. 53As can be seen from the above, Eric's capital contributions are three times that of Joanne. 54When the parties were living in Belgium, and after making some allowance for Joanne's employment allowances, Eric's income was a little more than twice that of Joanne. When they were living in Australia Eric's income was a little more than three times that of Joanne. 55The fact that Joanne did not contribute as much when they were in Belgium led to her Australian assets being available to contribute to the Rozelle property. 56So far as superannuation is concerned, Joanne seems to have retained her superannuation apart from $7,826.98 redeemed prior to leaving Belgium . Eric has partly cashed in his superannuation and put the proceeds, amounting to $56,979, into the parties' capital. 57For many years the only case which gave guidance on the matter of superannuation in the context of a s 20 application was Green v Robinson (1995) 36 NSWLR 96. Although there is some dispute about what the majority said, one view seems to be that comments by Powell and Cole JJA were that there had to be demonstrated some factual matter which would enable one to form a view that there had been a contribution to a spouse's superannuation entitlement. The matter was dealt with recently by the Court of Appeal in Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360. Bryson JA dealt with the matter at paragraphs [82] to [90] and his views were adopted by Hunt AJA and substantially agreed with by Hodgson JA. The views of Powell and Cole JJA were rejected and the approach of Kirby P, who had dissented, was adopted. Accordingly, superannuation entitlements are not to be viewed as belonging to the parties separately but as financial resources of the parties which need to be adjusted having regard to contributions "made directly or indirectly" by them. 58In deciding the appropriate share of the present pool of assets I bear in mind what was said in Davey v Lee (1990) 13 Fam LR 688 by McLelland J at 689: "[T]he Court is not required under s 20 to undertake a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time-consuming and expensive of litigious exercises) by examining every alleged 'contribution' of the kinds described in the section with a view to putting a monetary value on it in order to reach an accounting balance one way or the other, which is to be then eliminated by the requisite financial adjustment. Rather the Court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind." 59There has been much discussion in the authorities as to how the court is to approach this discretionary power. In Chanter v Catts Bryson JA concluded at [88] that: "It is quite usual for the Court of Appeal to take a global view in which contributions made directly or indirectly to acquisition, conservation or improvement of some identifiable property or financial resource is regarded when deciding to make an adjusting order which is to be satisfied out of some different property or financial resource; this global view rather than detailed adjustment item by item is often favoured by practicality, and by the Court's duty under s 19 to determine finally financial relationships and to avoid further proceedings." 60However the Court of Appeal has, in recent cases, held that the court can be helped in its "value judgment" by mathematical calculations, where appropriate. In Howlett v Neilson [2005] NSWCA 149 , Hodgson JA (with whom Ipp and McColl JJA agreed) said at [39]: "... while I do not think that these matters can be determined on such mathematical calculations, I think mathematical calculations are of some use in guiding and testing conclusions about what is just and equitable, and also in promoting transparency and consistency in decision-making." 61In Kardos v Sarbutt [ 2006] NSWCA 11 , Brereton J discussed whether it was preferable to employ a "global or asset-by-asset approach". His honour concluded at [51] that both approaches were valid, as long as the limitations of each were recognised: "[51] The legislation does not dictate the employment of any particular method in the formulation of an appropriate order for the adjustment under s 20 of property interests, and it is not desirable to attempt to formulate principles or guidelines designed to constrain judicial discretion within a predetermined framework [cf Norbis v Norbis (1986) 161 CLR 513 ; (1986) 10 Fam LR 819 at 1986) FLC 91-712 (Wilson and Dawson JJ). Although, in the majority of cases, the global approach is likely to be more convenient than an asset-by-asset approach, the application of the asset-by-asset approach does not of itself amount to an error of law (Mason and Deane JJ). In Norbis , Mason and Deane JJ cited with approval observations of Nygh J in G & G (1984) FLC 91-582, to the effect that (at 79,697) it cannot be required of the Family Court that it assesses contributions with mathematical precision with respect to each item, and (at 79,697) that while the Family Court was divided between those who favoured the so-called global approach and those who seek to achieve some degree of precision, both approaches were legitimate provided that those who take the global approach heed the warning that the origin and nature of the different assets ought to be considered, and that those who favour the more precise approach do not mistake the trees for the forest and add up their individual items without standing back at the end to review the overall result." 62His Honour also highlighted at [54] that " an asset-by asset approach, almost always carries the risk of undervaluing domestic contributions which are not reflected in any particular asset." 63The substance of these remarks by Brereton J in Kardos v Sarbutt was adopted in Bilous v Mudaliar [ 2006] NSWCA 38 by Ipp JA (Giles and McColl JJA agreeing) at [42] - [43]. His honour added: "Some situations do not lend themselves either to a pure global approach or to a pure asset-by-asset approach. In some cases the judge may decide to have regard to the particular contributions made to individual assets, weigh up the overall respective contributions to the parties and make differing apportionments in relation to the interests of the parties in different assets." 64In reaching my determination in this case I have attempted to set out, in detail where possible, the contributions of the parties to achieve an overall result that is just and equitable. However, the contributions of the parties in looking after the home and children, which the court has regard to pursuant to s 20(1)(b), are not to be valued monetarily as the Act does not require that this be done: Baker v Towle at [48] and [49] and Black v Black (1991) 15 Fam LR 109. 65Eric and Joanne have by their own work created their superannuation and, except in respect of any cashing in, the amount of superannuation that they hold reflects that contribution. The evidence does not address the detail of the contributions and the effect on the family finances. In these circumstances I propose to order that each party retain their own present superannuation. However, I will take into account that Eric has cashed in $56,979 and Joanne $7,826.98 which was contributed to the parties' capital. 66The non-financial contributions favour Joanne. Having regard to the contributions of the parties, I think that an appropriate adjustment is 33% of the remaining assets to go to Joanne. 67The assets, including what has already been taken by the parties but excluding superannuation, totals $936,525. Joanne's share is $309,053. By her retention she has received $130,025, leaving an amount of $179,028 due to her from the sale proceeds. Eric will be entitled to the balance of the sale proceeds and he can keep his present retention of $87,000. 68I direct the parties to bring in short minutes and to argue costs.

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