Goncharov & Goncharova [2025] FedCFamC1A 107 (19 June 2025)

Note: The form of the order is subject to the entry in the Court's records.

Note: This copy of the Court's Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).

Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Goncharov & Goncharova has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).

1. By Amended Notice of Appeal dated 26 March 2025, the husband appeals Orders 1, 2, 5 and 6 of final property orders made by the primary judge on 26 November 2024.
2. The pool of property available for division between the parties included three parcels of real property in Country B. Agreed single expert valuations of three properties in Country B dated 20 October 2022 were relied on by both parties. That evidence opined as to the value of the properties in Country B currency ("CBC") converted to Australian dollars ("AUD") based on the CB-AUD exchange rate set by Y Bank as at 20 October 2022. The primary judge accepted and included in the parties' property pool the conversion to AUD on 20 October 2022. The husband contends that the correct CBC-AUD exchange rate that should have been applied to the agreed valuations was the rate at the date of trial not at the earlier date. The husband also complains there was a lack of procedural fairness.

1. Property proceedings were commenced by the wife on 20 February 2020. After a four-day final hearing which commenced on 20 August 2024, the learned primary judge ordered a property adjustment of 55 per cent to the wife and 45 per cent to the husband (at [267]). To achieve this adjustment, the husband retained the three Country B properties and other assets in his possession, and the wife retained the property in Suburb E, NSW, and other assets in her possession and bank account funds were to be transferred to her. The findings and the overall adjustment are not subject to appeal.
2. The date of application of the CBC-AUD exchange rate was the point of contention between the parties in relation to the value of the Country B properties. The evidence of the single expert valuer (as translated into English) included the exchange rate of 38.8759 CBC to 1 AUD set by the Y Bank on 20 October 2022 which was not challenged by either party. Hence, the reports opined that the values of the properties in CBC and AUD on 20 October 2022 were as follows:

(a) The first property jointly owned was valued at CBC6,636,917 converted to AUD170,720;

(b) The second property owned by the husband was valued at CBC2,658,709 converted to AUD68,390; and

(c) The third property (and block of land) owned by the husband was valued at CBC16,684,139 converted to AUD429,163.

1. In correspondence with the wife one month prior to trial, the husband sought agreement that the exchange rate to be applied to convert the values in CBC to AUD should be the rate at the date of trial. The wife did not accept this position and proposed that updated valuations be obtained. The husband's counsel conceded that the husband did not respond to the invitation to obtain updated valuation reports. The wife's counsel conceded that the wife took no steps thereafter to update the valuation evidence. The result was that the only valuation evidence that existed was from October 2022.
2. The husband contended during the trial in August 2024 that the then current exchange rate should be applied by the primary judge to find the current value of the properties in AUD. The husband included in the joint balance sheet (Exhibit 9) the calculations he contended should be the findings of value using the CBC-AUD exchange rate date of 20 August 2024.
3. The husband contended during the trial that the value of the respective properties in AUD were:

(a) The first property jointly owned was valued at CBC6,636,917 converted to AUD119,465;

(b) The second property owned by the husband was valued at CBC2,658,709 converted to AUD47,850; and

(c) The third property (and block of land) owned by the husband was valued at CBC16,684,139 converted to AUD300,315.

1. The primary judge ultimately favoured the 20 October 2022 exchange rate, being the date of valuations, and included these sums in the balance sheet in her determination in the first step under s 79 of the Family Law Act 1975 (Cth) ("the Act").

1. There were nine grounds of appeal set out in the Amended Notice of Appeal, although five of the grounds were abandoned on the morning of the appeal hearing. The remaining four grounds claimed of lack of procedural fairness and judicial error in adopting the 2022 exchange rate to make a finding as to the value. There were three cascading alternate grounds of appeal in respect of the exchange rate complaint.

1. Ground five raises a claim as to a lack of procedural fairness. Any grounds of appeal going to procedural fairness are challenges to the administration of justice and should be dealt with first, before the other discrete grounds (see Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd [2006] HCA 55; (2006) 229 CLR 577 at 581, 611-612, 634; Royal Guardian Mortgage Management Pty Ltd v Nguyen (2016) 332 ALR 128 at [9]-[10]). A failure to afford procedural fairness will amount to an error of law (Goldie v Minister for Immigration and Multicultural Affairs [1999] FCA 1277; (1999) 56 ALD 321).
2. The contention in ground five is that the primary judge failed to afford the husband procedural fairness by denying him the opportunity to make further submissions or adduce further evidence in respect of the date of conversion to AUD. This complaint is not made out.
3. The husband contended that whilst the primary judge requested authorities and assistance from counsel relating to the application of contemporaneous exchange rates, she did not invite further submissions. The learned primary judge observed in her reasons for judgment that, despite her request for assistance, she was not taken to anything (at [60]) , as illustrated by the following exchange with the husband:

HER HONOUR: You don't rely upon the exchange rate that was used at the time. You don't rely on that?

[The husband]: It's fundamental of financial reporting that conversion happens on the present rate.

HER HONOUR: Well, I'm not sure about that, but, anyway, I'm sure your counsel will tell me where the authority is for that ...

(Transcript 22 August 2024, p.127 lines 23-28)

1. The transcript is replete with exchanges where the learned primary judge raised the issue of the exchange rate and invited the parties to take her to evidence and authorities in support of their proposition as to the timing of the conversion of the asset into AUD.
2. By way of illustration, the following exchange occurred:

HER HONOUR: I have valuations from October 2022, but you want to use current valuation - you want to use the current exchange rate for an underlying asset that was valued two years ago. Is that right?

...

[Counsel for the husband]: There is no evidence of the change in the underlying asset between October '22 and today's date, your Honour. My submission is that the exchange rate of today should, nonetheless, be applied to the [Country B] valuation as at October '22...

(Transcript 23 August 2024, p.236 lines 39-41; p. 237 lines 8-10)

HER HONOUR: ...I will do the best I can on historical values. It's really only - it will really just be [Country B] stuff in the asset pool as of now, I would have thought the exchange rate gets applied to. Is that right?

[Counsel for the wife]: No. That is one of the disputes between the parties. So if your Honour looks at the balance sheet that you do have, there is [Country B] properties. And the dispute between the parties is essentially about whether the current exchange rate applies, or whether that is fixed in time at the time that the property was valued.

(Transcript 22 August 2024, p.104 lines 5-12):

1. The dialogue between the primary judge and counsel makes plain that the dispute as to the exchange rate was understood. Both counsel made submissions in respect of the issue. The claim that there was no opportunity to make further submissions is not made out.
2. There was no application made to adduce further evidence. This claim is also not made out.
3. The claim of a lack of procedural fairness must fail.

Grounds 1-3 - The Failure to Apply the Exchange Rate at the Date of Trial

1. Grounds 1, 2 and 3 all raise the complaint that the primary judge made an error in law by adopting an exchange rate conversion to AUD at 20 October 2022 rather than at the date of trial.
2. Ground 1 of the Amended Notice of Appeal is pleaded as follows:

The learned primary judge's decision is infected by error in so far as it is contrary to law, which requires the court in proceedings under section 79 of [the Act] to identify and value the parties' property as at the date of trial. Specifically, the learned primary judge erred in law by accepting the value of the [Country B] properties in AUD as at 20 October 2022 and not the value in AUD at the commencement of final hearing on 20 August 2024.

1. The contention is that under s 79 of the Act the primary judge was required to identify and value the parties' property "at the date of trial."
2. The guiding principle in relation to the appropriate time to value the assets of the parties is as close to the date of trial as possible unless there is reason to do otherwise. The Full Court authority cited in the husband's Summary of Argument, Omacini & Omacini [2005] FamCAFC 104; (2005) FLC 93-218, identifies correctly (at [16]-[17]) that:
   1. ...The starting point is that ordinarily, in proceedings under s 79 of [the Act] the property and financial resources of the parties are valued as at the date of the trial...
   2. We accept that in a particular case there may be reasons which justify the selection by the trial judge of another date...
3. The learned primary judge set out in the reasons for decision:
   1. The husband has failed to persuade me that it is methodologically sound to use the valuation of the underlying assets in October 2022 but use an exchange rate almost two years later, and, where there is no evidence that the underlying assets have themselves altered in value. What is being valued are the underlying assets, not the fluctuations in currency thereafter.
4. The primary judge did not articulate any reason to deviate from the usual practice of valuing the assets as close to the trial date as possible, nor can we infer from her reasons any basis for her to have done so. In circumstances where the primary judge has not applied the exchange rate at the time of trial and has failed to reason the deviation from the usual approach, the learned primary judge fell into error in determining the property and financial resources of the parties.
5. The valuations of the Country B real properties were not in dispute. The fact there was no evidence the underlying assets had altered in value in the interregnum misses the point because the primary judge was supposedly valuing all the parties' assets in AUD at the time of trial.
6. In identifying the property and financial resources of the parties and ascribing value, applying a historical value by relying on an outdated exchange rate distorts the result and fails to carry into effect the intention of the judgment to bring about the division of the property pool at the date of trial.
7. In the appeal hearing, counsel for the wife accepted in submissions that the appropriate exchange rate to be applied to a currency exchange of funds in a bank account would be the date of the trial. She contended that was because a "currency to currency" transaction is distinct from the exercise of determining the value of foreign real property in AUD. We do not accept there is any distinction. Whether an asset is in the form of money in a bank, real property or some other species of asset, the task of the primary judge at step one of the well understood four step process in proceedings under s 79 of the Act (see Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) [2003] FamCA 395; (2003) FLC 93-143) is to determine the pool of assets.
8. We fail to see how there is any difference between the task of identifying the AUD value of currency and the AUD value of property in circumstances where the primary judge was required to identify the pool of assets in AUD.
9. Accordingly, the appeal must succeed. It is not necessary to consider the alternative grounds of appeal in circumstances where we have found the primary judge erred.

SHOULD THE COURT RE-EXERCISE THE SECTION 79 DISCRETION OR REMIT?

1. Section 36 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) ("the FCFCA Act") gives a wide power to the Full Court to affirm, reverse, vary the judgment appealed, or make appropriate orders including for the matter to be remitted for hearing.
2. If error was established the husband initially sought remittal, however in submissions did not oppose the re-exercise of discretion and identified the benefit to the parties in avoiding the cost and delay that a re-hearing would require. The wife also sought that the Full Court should re‑exercise discretion rather than to remit the matter. Neither party sought to adduce further or updated evidence.
3. Only the value of the Country B properties in AUD included in the balance sheet was proposed to be varied. Neither party sought to disturb the other findings or the ultimate outcome of orders to bring about a 55/45 division adjusting their property.
4. Given the limited issue and noting the otherwise unchallenged and undisturbed findings of the primary judge, it is appropriate to re-exercise discretion because re-hearing is an order of last resort, and the result will be that this litigation will be brought to finality as quickly, inexpensively, and efficiently as possible (s 67(1)(b) FCFCA Act).
5. The error in the finding of the value of the Country B properties at items 2, 3 and 4 of the balance sheet was confined to the value of the properties in AUD. Although both counsel supported the re-exercise of discretion, they did not provide evidence of the relevant Y Bank exchange rate to be applied.
6. Proof is not required about knowledge that is not reasonably open to question and is capable of verification by reference to a document the authority of which cannot reasonably be questioned per s 144(1)(b) of the Evidence Act 1995 (Cth).
7. Given the limited ambit of the complaint and the findings above it is appropriate to re-exercise the discretion by adopting the primary judges uncontested findings but using the exchange rate at the date of the appeal being 2 June 2025.
8. The Y Bank exchange rate had been adopted by the single valuer and relied on by both parties in the valuation evidence obtained in 2022. The Y Bank exchange rate was adopted by the parties and relied on by the learned primary judge in her reasons (at [13] and [61]). It is appropriate therefore that the same source be utilised in the re-exercise of discretion.
9. The Y Bank applicable exchange rate recorded on their website on 2 June 2025, being the rate set by the Y Bank on 31 May 2025, is 50.598.
10. The primary judge found that the parties' total property pool was $4,585,022. Applying the Y Bank exchange rate from 2 June 2025 to calculate the value of the Country B properties, the total property pool becomes $4,430,203.38, reducing the total by $154,818.62. This is illustrated by the following table which otherwise adopts the findings of the primary judge.

CBA EURO Foreign currency Account ending #...27 60,500 EURO @1.61

1. The orders now made bring about the unchallenged and undisturbed findings of a 55 per cent adjustment to the wife and a 45 per cent adjustment to the husband.
2. Fifty-five per cent of the pool to be received by the wife is $2,436,611.86. Forty-five per cent of the pool to be received by the husband is $1,993,591.52. The wife is therefore $28,865.86 below her entitlement.
3. To bring about this outcome Order 2 and 5(f) are set aside and the husband is to transfer the sum of $28,865.86 from his CBA account ending in #...27 to the wife. Otherwise, the orders of Justice Brasch of 26 November 2024 remain in full force and effect.
4. By way of these orders the husband will receive:

(a) The first property $131,169.55

(b) The second property $52,545.73

(c) The third property $329,739.10

(d) 15% share in F Company $339,450

(e) 15% share in G Company $542,485

(f) Motor Vehicle 1 $8,000

(g) CBA Streamline Account ending #...80 $258

(h) CBA Netbank Saver Account ending #...57 $26,011

(i) CBA USD Foreign currency Account ending #...35 $NIL

(j) R Bank Concession Account ending #...64 $6

(k) Funds transferred to Country B $317,000

(l) Cash somewhere in Australia $150,000

(m) Super Fund 2 $25,968

(n) The balance of the cash from the CBA account ending in #...27 after payment to the wife of $28,865.86 being the sum of $70,959.14

1. By way of these orders the wife has the benefit of the following property:

(a) Suburb E property $2,385,000

(b) CBA Smart Access Account ending #...18 $100

(c) CBA Smart Access Account ending #...27 $373

(d) CBA Smart Access Account ending #...20 $2,906

(e) Super Fund 1 $19,367

(f) Payment of $28,865.86 from the CBA account ending in #...27.

1. Section 117 of the Act sets out the statutory framework for the exercise of the discretion in respect of costs. The starting point is that each party will bear their own costs, unless the circumstances justify otherwise, having regard to the considerations set out at s 117(2A) of the Act. The husband accepted there were no grounds that justified departing from the orthodoxy of each party bearing their own costs but sought a costs certificate in the event the appeal succeeded on an error of law.
2. The wife also sought a costs certificate pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) in the event the appeal succeeded on an error of law.
3. The appeal succeeded on an error of law. It is accordingly appropriate to grant certificates in favour of both the husband and the wife for the appeal.
4. Adopting the revised figures, the property pool is reduced by AUD $154,818.62, which represents 3.5 per cent of the property pool. The outcome for the husband is that he will retain the sum of $70,959.14 in the CBA account.
5. The costs incurred by the husband in the appeal as disclosed in his costs notice were $77,760.56. The wife's costs incurred on appeal were $34,980.
6. The additional funds the husband retains from the appeal are entirely absorbed by the legal costs he has incurred, and on one view, the exercise was nothing more than a pyrrhic victory.

I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Austin, McGuire & Curran.