Key Takeaways
- Australian Court Retained Jurisdiction: The Court rejected the wife's forum non conveniens argument, finding that Australia was not a clearly inappropriate forum and could effectively deal with multi-jurisdictional assets.
- Inheritance Treated Separately: The husband’s $8 million post-separation inheritance was excluded from the marital asset pool but considered in the overall context of the property settlement.
- Equal Contributions Recognised: The Court found both parties made equal contributions during the 38-year relationship, including financial, homemaker, and managerial efforts.
- 60/40 Split in Wife’s Favour: The Court awarded the wife 60% of the non-inheritance asset pool, considering her future needs, earning capacity, and financial circumstances under section 75(2) of the Family Law Act 1975 (Cth).
- Cross-Border Property Division: Orders included transferring Australian properties to the husband and UK-based rental and business assets to the wife, along with a small balancing payment to achieve the intended split.
Lundquist & Lundquist (No 3) [2024] FedCFamC2F 1556
Introduction
The case of Lundquist v Lundquist (No 3) [2024] before the Federal Circuit and Family Court of Australia (Division 2) dealt with a complex property settlement following the breakdown of a long-term marriage. The case involved multi-jurisdictional assets, with properties located in both Australia and the United Kingdom. A key dispute was whether the Australian court was the appropriate forum to hear the case, as the respondent wife argued that the United Kingdom should have jurisdiction. Additionally, the case addressed the classification and treatment of a substantial inheritance received by the applicant husband post-separation.
The court was required to consider principles of forum non conveniens, determine the parties’ contributions to the marital asset pool, and make just and equitable property settlement orders in accordance with the Family Law Act 1975 (Cth).
Background
The parties began cohabiting in 1983 and married in 1984. Throughout their marriage, they resided in both Australia and the United Kingdom at different times. The separation date was contested, with the husband asserting it occurred in November 2021, while the wife claimed it occurred in October 2022. Following their separation, the husband-initiated property settlement proceedings in Australia in October 2022. However, the wife opposed the proceedings, arguing that the Australian court was not the appropriate forum and that the matter should instead be determined in the United Kingdom under the doctrine of forum non conveniens.
The couple’s asset pool was extensive and included real estate, corporate interests, superannuation, and investments across both Australia and the United Kingdom. A critical aspect of the case was the treatment of a substantial inheritance received by the husband after separation. The inheritance, which amounted to approximately $8 million, was derived from his late mother’s estate. The husband sought to exclude this sum from the marital asset pool, arguing that it was his personal property and should not be subject to division.
Key Legal Issues and Questions for the Court
The Court was required to consider:
- Forum Non Conveniens: Whether the proceedings should be stayed on the basis that Australia was an inappropriate forum for the dispute, given the wife’s argument that the United Kingdom was a more suitable jurisdiction.
- Classification of the Husband’s Inheritance: Whether the $8 million inheritance received by the husband post-separation should be included in the marital asset pool or treated as a separate asset.
- Contributions and Adjustments: What weight should be given to the financial and non-financial contributions made by each party during and after the marriage, particularly considering the wife’s role in managing investment properties and the husband’s financial contributions.
- Future Needs and Financial Adjustments: Whether the wife should receive a greater share of the asset pool under s 75(2) of the Family Law Act 1975 (Cth), considering her financial position and future earning capacity.
Case Authorities and Cited Precedents
The court considered several legal precedents, including:
Forum Non Conveniens:
- Henry v Henry [1996] HCA 51; (1996) 185 CLR 571 – Established the test for determining whether an Australian court should decline jurisdiction in favour of a foreign court, clarifying that a stay of proceedings is only granted if Australia is a clearly inappropriate forum.
Link: Full Case
- Voth v Manildra Flour Mills Pty Ltd [1990] HCA 55; (1990) 171 CLR 538 – Reinforced that jurisdiction should only be declined if proceedings in Australia would be seriously and unfairly burdensome or prejudicial to one of the parties.
Link: Full Case
Property Settlement and Inheritance Considerations:
- Calvin and McTier [2017] FamCAFC 125; (2017) FLC 93-785 – Confirmed that post-separation inheritances are excluded from the marital asset pool unless they have been intermingled with shared assets or financial dependence exists.
Link: Full Case
- In the Marriage of Bonnici (1991) FLC 92-272 – Held that inheritances received after separation do not automatically become part of the divisible property pool but may be considered when assessing financial contributions and future needs.
- Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 – Highlighted the discretionary nature of property settlements under the Family Law Act 1975 (Cth) and emphasized that courts may apply different approaches to achieve just and equitable outcomes.
Link: Full Case
Just and Equitable Division Principles:
- Hickey and Hickey [2003] FamCA 395; (2003) FLC 93-143 – Set out the four-step approach to property settlements: identifying the property pool, assessing contributions, considering future needs, and determining a just and equitable outcome.
Link: Full Case
- Stanford v Stanford [2012] FamCAFC 1; (2012) 247 CLR 108 – Emphasized that property settlements must be just and equitable, considering the history of the relationship and each party’s contributions, rather than applying a formulaic approach.
Link: Full Case
For the complete list of cited cases, please refer to the full judgment.
Court’s Findings
- Forum Non Conveniens Dismissed: The court ruled that Australia was not a clearly inappropriate forum. The wife had actively participated in proceedings without raising objections until later stages. The Australian court could enforce orders concerning the international properties in personam.
- Inheritance Treated as a Separate Asset Pool: The court applied the precedent in Calvin and McTier and Bonnici, determining that the $8 million inheritance should be considered separately from the marital assets.
- Equal Contributions to Marital Pool: The court found that both parties made equal contributions over their 38-year marriage, including financial, homemaker, and managerial efforts. The wife managed investment properties and the family’s finances, while the husband worked professionally and financially contributed.
- 60/40 Division in Favour of the Wife: Given the wife’s financial future needs under s 75(2) of the Family Law Act 1975 (Cth), the court adjusted the division of non-inheritance assets in her favour. The wife was awarded 60% of the $9.4 million non-inheritance asset pool. The husband retained the Australian properties, while the wife received the UK assets, including rental-generating properties and business interests.
- Final Orders and Asset Transfers: The court ordered the transfer of Australian properties to the husband and UK properties and corporate holdings to the wife, refinancing of certain loans into the respective party’s name, and a balancing payment of $16,341 to be made to the wife to achieve the 60/40 split.
Legal Implications and Precedent Summary
This case reaffirmed that for a stay to be granted under forum non conveniens, the Australian court must be a clearly inappropriate forum, rather than simply one of two available forums. The court reinforced the prevailing principle that inheritances received post-separation are quarantined unless there is strong justification for inclusion, such as intermingling with marital assets. The ruling also underscored that long-term relationships often result in equal contribution findings, with financial adjustments made based on post-separation realities. Finally, the case demonstrated the importance of s 75(2) factors in ensuring a fair division of assets, particularly to support the financially disadvantaged spouse.
Keywords
- Family Law
- Property Settlement
- International Jurisdiction
- Forum Non Conveniens
- Inheritance
- Contributions
- Financial Adjustments
- Federal Circuit and Family Court of Australia
Conclusion and Call to Action
The ruling in Lundquist v Lundquist (No 3) [2024] underscores the intricacies of property settlements, particularly in cases involving international assets and significant inheritances. The court’s decision demonstrates the importance of determining jurisdictional appropriateness, assessing contributions equitably, and ensuring fair financial adjustments for both parties. The case further highlights how post-separation inheritances are typically treated as distinct from the marital asset pool unless strong justification exists for their inclusion.
Navigating such complexities requires expert legal guidance. At Pentana Stanton Lawyers, we have extensive experience handling international and high-value property settlements, offering tailored advice to protect your financial interests.
Contact us today for strategic legal support in your family law matter.
