Barklem & Barklem
[2021] FedCFamC1F 254
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Barklem & Barklem [2021] FedCFamC1F 254
File number(s): BRC 4290 of 2020 Judgment of: JARRETT J Date of judgment: 3 December 2021 Catchwords: FAMILY LAW – CHILD WELFARE – The Family Law Act 1975 (Cth) and related legislation – property and maintenance of parties – alteration of property interests – matters for court’s consideration – contribution of parties – financial contributions – generally. Legislation: Family Law Act 1975 (Cth), ss. 75(2), 75(2)(o),79(4)(a), 79(4)(b), 79(4)(C) Cases cited: Benson & Drury (2020) FLC ¶93–998
Calverly v Green (1984) 155 CLR 242
Grier & Malphas (2016) FamCAFC 84
Kennon & Kennon (1997) FLC 97-757
Pfenning & Snow (2016) FamCA 29
Robb & Robb (1995) FLC 92-555
Rodgers (No 2) (2016) FLC 92-712
SL & ELH (2005) FamCA 132
Division: Division 1 First Instance Number of paragraphs: 118 Date of last submission/s: 28 October 2021 Date of hearing: 27 and 28 October 2021 Place: Brisbane Counsel for the Applicant: Mr Kirk QC Solicitor for the Applicant: Barry Nillson Counsel for the Applicant: Mr Williams QC Solicitor for the Applicant: Phillips Faily Law
Table of Corrections 17 January, 2022 Paragraph 18: The value of the Anstey Family Trust (J) is changed to delete $128,227.00 and insert $123,307.00 17 January, 2022 Paragraph 18: The value of CBA GBP Acc #6919 (H) is changed to delete $3,567,418.00 and insert $3,454,653.00 17 January, 2022 Paragraph 18: The value of Items from Aston Hall retained (H) is changed to delete $63,612.00 and insert $62,586.00 17 January, 2022 Paragraph 18: The value of Anstey Medical Pty Ltd (H) is changed to delete $73,531.00 and insert $77,922.00 17 January, 2022 Paragraph 18: Valuation fees paid by husband for wife (W) is deleted. 17 January, 2022 Paragraph 18: The value of the total non-superannuation assets of the parties is changed to delete $14,225,039.00 and insert $14,116,139.00. 17 January, 2022 Paragraph 18: The value of CBA Acc #8404 (H) is changed to delete $592,114.00 and insert $589,065.00 17 January, 2022 Paragraph 18: The value of CBA Acc #2107 is changed to delete $1,270,544.00 and insert $1,270,553.00. 17 January, 2022 Paragraph 18: The value of the total liabilities of the parties is changed to delete $3,169,435.00 and insert $3,166,395.00. 17 January, 2022 Paragraph 18: The value of the nett assets of the parties, excluding superannuation, is changed to delete $11,055,604.00 and insert $10,949,744.00. 17 January, 2022 Paragraph 18: The value of the nett assets of the parties, including superannuation, is changed to delete $13,603,929.00 and insert $13,498,069.00. 17 January, 2022 Paragraph 100: The value the applicant is entitled to is changed to delete $7,754,239.53 and insert $7,693,899.33. 17 January, 2022 Paragraph 100: The value the respondent is entitled to is changed to delete $5,849,689.47 and insert $5,804,169.67 17 January, 2022 Paragraph 110: The value the respondent is entitled to is changed to delete $6,549,689.47 and insert $6,504,169.67. 17 January, 2022 Paragraph 110: The rounded figure is changed to delete $6,550,000 and insert $6,504,000. 17 January, 2022 Paragraph 110: The balance to which the applicant is entitled is changed to delete $7,053,929 and insert $6,994,069. ORDERS
BRC 4290 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR BARKLEM
Applicant
AND: MS BARKLEM
Respondent
ORDER MADE BY:
JARRETT J
DATE OF ORDER:
3 DECEMBER 2021
THE COURT ORDERS THAT:
1.By 4.00pm on 17 December, 2021 the parties bring into Court short minutes of property adjustment order to give effect to these reasons;
2.In the event that the parties are unable to reach agreement as to the form of a suitable order, each party must, no later than 4.00pm on 20 December, 2021 file and serve:
(a)a minute of the orders for which they contend; and
(b)written submission in support of the orders, the terms of which are in dispute, such submissions not to exceed more than 5 pages in length.
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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 Barklem & Barklem has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Amended pursuant to r 10.14(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) on 4 May, 2022
JARRETT J:
The parties seek property adjustment orders now that their marriage has irretrievably broken down. The applicant seeks that the “net property pool” be divided 65/35 in his favour. The respondents seeks a 65/35 division in her favour.
The issues between the parties are:
(a)the weight, if any, to be attributed to the husband’s initial contributions and the occasion of their receipt of money from his father during the marriage;
(b)the prolonged course of conduct by the husband perpetrated upon the wife that is contended to give rise to the warrant for an adjustment in her favour;
(c)the parties other respective contributions during the period of relationship;
(d)the wife’s future capacity for gainful employment and earning disparities;
(e)characterisation of monies received by the parties in the post-separation period, and post-separation financial issues generally.
Neither party submits that it is not just and equitable to make a property adjustment order in the circumstances of this case. Each party seeks orders adjusting their legal interests in some of the property owned by them, or one of them. The orders each seeks are different to those sought by the other. Both submit that it is just and equitable to make an order pursuant to s 79(2) of the Family Law Act 1975 (Cth). I accept those submissions and so find.
BACKGROUND AND SOME FINDINGS OF FACT
The applicant was born in 1961 and is 59 years of age. He is a medical professional. He obtained his qualification in 1985 and subsequently engaged in extensive post-graduate training. By the parties’ marriage in 1995 he was a member of Association B, had undertaken training in a medical specialty, had obtained a diploma from Association C and a fellowship from Association D in the United Kingdom. While he is not recognised as a specialist in Australia, he has been permitted to work in that area of specialty given his overseas qualifications.
The respondent was born in 1964 and is 57 years of age. She has no formal qualifications although has undertaken some tertiary study in the past. When the parties married she was living with her parents and was working in sales. She has a child, Ms E, from a former relationship. Ms E was born in 1984 and was aged 11 years when the parties married. Ms E resided with the parties whilst she attend primary and secondary school. She lived with the parties until 2002.
The parties married in 1995. At that time the applicant was 34 years of age and the respondent was 31 years of age.
They had met some years prior to their marriage and there is a dispute between them as to how their relationship might be characterised from about 1992 onwards. The respondent’s case seems to be that the parties were in a “committed relationship” and were more or less living together as husband and wife from June, 1992. The applicant contends that their relationship did not commence in the relevant sense until they married.
The argument, however, is a sterile one. Findings about these matters are not relevant to the issues that I need to determine in these proceedings. The relevant inquiries for my present purposes focus upon the parties’ contributions to the acquisition, conservation and improvement of their property and the matters raised for consideration by s 79(4)(e) of the Act. Although I must also consider the parties’ contributions as parents and homemakers, that matter is not particularly relevant on the facts of this case and neither party suggested to the contrary.
To the extent that the parties think that it matters, I prefer the applicant’s case about the nature of the parties’ relationship and their periods of co-habitation. The parties first met in 1990. The applicant was working in Australia as a medical professional and the respondent in sales. They began dating. In May, 1991 the applicant returned to the United Kingdom. The respondent went to United Kingdom to be with him and to visit her sister who was working there. She returned to Australia in July, 1991 having spent some time with both the applicant and her sister.
The applicant returned to Australia in November, 1991 and took up residence and work in Suburb F. He and the respondent commenced seeing each other again although the respondent was living with her parents in Brisbane. Sometimes the applicant stayed at the respondent’s parents’ home in Brisbane.
In July, 1992 the applicant returned to the United Kingdom. The respondent and her daughter followed and they lived with the applicant in his apartment in City T at his invitation. They arrived in October, 1992. The respondent took up employment in City T. I am satisfied and I find that she contributed to the cost of groceries and did some cleaning. She no doubt also met the costs associated with her daughter. The applicant provided accommodation for the respondent and her daughter. The applicant was studying at the time to advance his qualifications.
The parties lived together with the respondent’s daughter in City T until November, 1993, although they did holiday in Country G and Country H and the respondent’s daughter returned to Australia for a time to see her grandparents.
The applicant returned to Suburb F in December, 1993. By that time the respondent and her daughter had returned and they were living with the respondent’s parents in Brisbane. The applicant continued to spend his time in Australia and in the United Kingdom. For example he returned to the United Kingdom between March and April, 1994, May and August, 1994 and May and September 1995. The respondent lived in Brisbane with her daughter and parents but she would spend time with the applicant usually three or four nights per week. On some weekends her daughter would stay with the respondent and the applicant at his residence in Suburb F.
I am satisfied that the applicant and the respondent maintained a friendship and at times they felt committed towards each other. However, given the lengthy periods of time when they could not see each other, and the evidence as to how they conducted themselves in those periods, it was not a continuous and committed domestic relationship.
One particular aspect of the respondent’s evidence was concerning and tended, in my opinion, to demonstrate the general unreliability of her evidence. The respondent’s evidence is that the applicant proposed to her in 1994 when he returned to Australia in the middle of that year. His evidence was that there was no proposal until later in 1995. There is correspondence between the parties in evidence initiated by the respondent and dated 18 March, 1995. The terms of the respondent’s letter to the applicant is consistent with the parties not having spent any time together since December of the previous year. The applicant’s response, dated 22 March, 1995 is nonchalant. The terms of the correspondence are entirely inconsistent with the notion that the parties were engaged to be married. The terms are entirely consistent with the parties having some relationship, but not whereby the applicant, at least, was committed to it. When confronted with this correspondence in cross-examination, the respondent’s first recourse was to suggest that the date on her letter was wrong and that it really should have been 1993 rather than 1995. That was so even though the letter was in her hand, including the date and the applicant’s response was also dated 1995. She also resorted to suggesting that the document, or at least the date on it, had been manufactured by the applicant. Without a shred of evidence, she asserted, “Mr Barklem has falsified documents in the past”. It was not until she saw the original of the letter (a copy only being used in the cross-examination) that she accepted that the date must have been accurate. She would not accept that the engagement did not occur in 1994.
In 1995 the relationship solidified such that they married that year.
The parties finally separated on 2 April, 2019. There is no dispute about that. Thus, the period of cohabitation based on the applicant’s evidence is around 24 years and around 27 years on the respondent’s case. There are no children of the relationship.
ASSETS, LIABILITIES AND FINANCIAL RESOURCES
I find that as at the date of the trial before me, the parties have the following assets, liabilities and financial resources:
Assets: J Street, Suburb K (J) $4,700,000.00 L Street, Suburb K (J) $4,100,000.00 CBA Mortgage offset #...74 (J) $313,017.00 M Pty Ltd (J) $566,868.00 The Barklem Family Trust (J) -$123,307.00 Furniture and contents J Street (J) $45,200.00 CBA GBP Acc #...19 (H) $3,454,653.00 CBA Acc #...50 (H) $39,996.00 CBA Acc #...20 (H) $10,017.00 O Bank Acc #...28 (H) $4,403.00 CBA account #...79 (W) $78,432.00 Partial property settlement 01.06.21 (H) $200,000.00 Partial property settlement 01.06.21 (W) $200,000.00 Partial property settlement (W) $70,000.00 Artwork (H) $1,440.00 Artwork (W) $9,680.00 Remaining items from Property N to be sold (H) $4,484.00 Items from Property N retained (W) $89,670.00 Items from Property N retained (H) $62,586.00 Jewellery (W) $80,250.00 Q Pty Ltd (H) $77,922.00 Legal fees paid by the husband for the wife (W) $45,000.00 Valuation fees paid by the husband for the wife (W) $1,595.00 Legal fees paid (W) $84,233.00 $14,116,139.00 Liabilities: CBA Acc #...04 (H) $589,065.00 CBA ACC #...09 (H) $1,000,000.00 CBA Acc #...07 (J) $1,270,553.00 Loan to M Pty Ltd (H) $300,000.00 30 June 2021 tax debts (H) $3,750.00 30 June 2021 tax debt (W) $3,027.00 $3,166,395.00 Superannuation: The M Superannuation Fund $2,528,456.00 R Super Fund - Pension Account $19,869.00 $2,548,325.00 Nett non-super assets: $10,949,744.00 Nett assets (incl. superannuation) $13,498,069.00
At the conclusion of the trial, the parties handed up to me a joint balance sheet. The above table is based upon that joint balance sheet, although I have omitted reference to items that have no value and bank accounts with a balance of less than $500.00. Most of the items in the table above are agreed between the parties. The areas of disagreement and my findings on those disagreements are as follows.
Funds advanced to the wife, bank account and legal costs
The applicant contends that there ought to be an amount of $287,233.92 included as a partial property settlement to the wife. His evidence about that is that from 2 April, 2019 to 13 June, 2019, Q Pty Ltd (a company controlled by him and through which he operated his business) continued to pay to the respondent her usual fortnightly salary of approximately $836. Until separation, the respondent had been employed (in a loose sense) by Q Pty Ltd and paid a fortnightly wage. Upon separation she ceased that work, but the applicant caused the company to continue to pay her. The total paid to the respondent for that period was $4,180. The applicant also paid the mortgage repayments (interest only) for the three properties in which the parties had interests, the rates, water and insurance for those three properties as they fell due, the registration, insurance and maintenance costs for the respondent’s vehicle, her health insurance premiums and mobile telephone expenses. In fact, he has continued to meet these expenses since separation to the present.
On 31 May, 2019 the respondent (by her solicitors) sought that the applicant pay her $1,300 per week as well as meeting various other expenses (including those to which I have just referred) on her behalf by way of spousal maintenance. Soon thereafter the parties compromised that claim by an agreement that the applicant would pay the respondent $900 per week as well as the expenses to which I have earlier referred. In accordance with that agreement, from 13 June, 2019 to 4 May, 2020 the applicant paid the respondent $900 per week totalling $42,300 and met the other expenses.
By correspondence from his solicitors dated 30 April, 2020 the applicant claimed that by reason of a downturn in his business (by reason of the COVID-19 pandemic) he could no longer afford to meet the $900 per week he was paying to the respondent or the telephone and motor vehicle expenses he was meeting on her account. He said that he would stop those payments on 4 May, 2020. However, he proposed that certain funds in an account be used to, amongst other things, make a payment of about $288,000 to the respondent “as partial property settlement”.
Whilst the respondent opposed the characterisation of the payment as partial property settlement, she did not oppose the payment itself. She asserted that she would treat any amount expended by her to meet her “periodic support” as maintenance. She also foreshadowed an application for spousal maintenance. In response, the applicant, by his solicitors, said that he was going ahead with his plan to distribute funds to the respondent. However, the solicitors suggested that the characterisation of the payment would be left to “a later date”.
In due course, the applicant dealt with the funds that were then resident in a certain bank account that he controlled. $60,000 was retained in the account to meet a future liability of a certain trust associated with the parties and the balance was thereafter divided equally between the parties. The respondent received $287,233.92 – the amount that the applicant now contends ought to be included in “the pool”.
The respondent argues that there is no warrant for that inclusion. She argues that the sum reflects a capital advance to her at a time when the applicant ceased making periodic payments to her for her support.
At the time of the filing of her trial material, the respondent had $97,379.82 remaining available to her. In the joint balance sheet handed up to me at the conclusion of the trial, the amount in the relevant account (CBA acct #...79) was $78,432.00 which I assume is a more up-to-date figure. Some three months had elapsed between the filing of her affidavit and the hearing before me. It is unsurprising that the amount has decreased given that the fund is used by the respondent for her living expenses.
In her trial affidavit at paragraph 140 the respondent swears to having used $84,233.92 of the lump sum to meet her legal expenses. However, the same figure is described in the joint balance sheet handed up to me at the conclusion of the trial as “Addback – Wife’s Legal fees not paid from partial property settlement”. That must be an error because there does not seem to be any other source of funds from which the respondent would have been able to pay those fees.
The respondent swears that the balance ($105,620.18 as at the date of her trial affidavit but less by the time of trial) has been used to meet her living and medical expenses. I accept her evidence about that. The capital sum was paid to the respondent when the applicant ceased his periodic payments (or at least causing the company to make those payments to her). The evidence permits of a finding, which I make, that at the time of the parties’ agreement for the applicant to pay $900 per week plus other expenses, the respondent had a need for maintenance. The only source of income was the stipend she received from the applicant’s business and she was beholden to the applicant for its continuation. She had no other form of income, remained liable for the parties’ joint liabilities and had to meet her own living expenses. To his credit, no doubt the applicant recognised the respondent’s need for maintenance and decided to meet it.
The respondent concedes that the amount remaining available to her should be brought to account. So too, she concedes that the amount used for legal fees should be brought to account. Although I have some hesitation about doing so, I accept those concessions given the way the parties have conducted the case. Consequently, I have adjusted the above table accordingly.
I reject the applicant’s argument that the whole amount should be brought to account. The amount unaccounted for in the above table from the lump sum of $287,233.92 was expended by the respondent, I find, on her living expenses and medical needs.
The applicant has conducted the case on the basis that the amount he received by way of partial property settlement should be included in the parties’ assets for division in these proceedings. That is an appropriate concession by him given that it would be unlikely that at the time he received those payments he had a need for maintenance. Those lump sum payments to him should properly be viewed as payments of capital to be brought to account in these proceedings.
Applicant’s legal fees
There is a dispute between the parties about whether the legal fees paid by the applicant of $178,851.66 (the amount seems to be agreed) ought to be included in the asset table. The source of the funds for those payments is not revealed by the evidence. As the respondent submits, they may have been sourced from income generated by the applicant (I reject the submission that the income was generated from the “parties’ business”) and a partial property payment of $200,000. To the extent that the costs were paid from income earned by the applicant post separation, I decline to include those costs. To the extent that the respondent submitted that I should consider the husband’s use of those funds as use of income to which the “business” constituted by he and the wife was entitled, I reject that submission. The income generated by the business was generated solely by the efforts of the applicant post–separation. He was entitled to use the income generated by him to meet his legal costs.
It seems that about $85,000 has been paid by way of costs from the applicant’s income. The balance of his paid costs, namely approximately $187,274.65 were paid from the partial property payment. They are already accounted for in the asset table because the whole of that payment is included. I decline to exercise my discretion to include the sums contended by the respondent as legal costs paid by the applicant from his income.
Realisation costs – J Street
The applicant contends that I should include the realisation costs likely to be incurred in the event that the real property at J Street is sold. However, on the cases advanced by both parties, the J Street property will be retained by one or other of them and it will not be sold. I do not think that the costs of selling that property will likely be incurred at any time in the foreseeable future. There is no warrant for its inclusion on the evidence.
Capital gains tax and realisation costs – L Street
Finally, the applicant says that the realisation costs and likely capital gains tax that might accrue to him if the L Street property is sold should be brought to account. I am not satisfied that the property is likely to be sold. I am satisfied, and I find, that the applicant is likely to remain living there in the foreseeable future. He has friends there and on my assessment he is likely to remain there if he retires. I do not accept his self-serving evidence that he does not feel that he can live there any longer. Whilst I accept that the property when sold will incur realisation costs and capital gains tax, I am not satisfied that it will be sold any time in the foreseeable future. If it is sold after the applicant retires as he says he plans to do in three years or so time, the amount presently calculated to be the capital gains tax is likely to be inaccurate.
Valuation costs
The respondent insisted upon a valuation being carried out of the applicant’s business. For unexplained reasons, she did not accept the proposition, given the nature of the applicant’s undertaking and the fact that he was the sole owner in that business, that there was likely to be no goodwill in the business. As it turned out, the report that she insisted upon confirmed the applicant’s position and not that argued for by the respondent. The respondent seeks that the parties meet the costs of that report equally. She has paid it all and seeks the inclusion of an amount to recompense her for a half share of the S Company fees she paid. But I see no warrant for that approach. The report was obtained at the respondent’s behest and she failed on the factual issue to which the report was addressed. She should bear the costs of the report as part of the costs of her own case.
CONTRIBUTIONS
It is uncontroversial that the applicant purchased an apartment in City T in 1982 for £28,495. He funded the purchase using an inheritance and funds raised upon a mortgage secured over the property. In 1989 the mortgage was increased to £29,983.
The City T apartment was sold for £97,000 in September, 1996 soon after the parties’ marriage. The net proceeds of sale were £69,102 (approximately AU$137,500). Those net proceeds were applied by the applicant to the purchase of a vacant block of land at J Street, Suburb K for $245,000 in October, 1996.
Through his work, the applicant was able to accumulate savings. By the time of the parties’ marriage he had a bank account with a balance of AU$75,861. He also had an account in the United Kingdom with a balance of £50,192 (approximately AU$104,500). These funds were used by the applicant when the J Street property was purchased.
The applicant also had shares which he accumulated prior to the commencement of his relationship with the respondent. Those shares were sold by the applicant in March, 1998. He received net proceeds of approximately AU$60,150. These funds were used to assist with the construction of the parties’ home on the J Street property.
The applicant also had some bonds and superannuation in the United Kingdom. He also had an Australian superannuation interest with a value of about AU$3200.
The applicant had a motor vehicle which he sold for AU$43,500 in 1996. Those funds were used in the purchase J Street property.
Although the respondent had employment as in sales when she lived in Australia and in the United Kingdom, she does not contend that she made any substantive contribution to the acquisition, conservation or improvement of any of the assets that the applicant had accumulated prior to the parties’ marriage.
The respondent had, I am satisfied, a savings account balance of about AU$15,000 in 1992. In cross-examination she seemed to accept the proposition that by mid-1994 she had depleted those funds because she had to apply for a loan of $8,000 upon her return to Australia to purchase a car.
As I have already indicated, in 1996 the parties purchased vacant land described in the evidence as the J Street property. The purchase was funded using funds that the applicant was able to access together with borrowings secured over that property. Subsequently they constructed a home on that property at a cost of about $530,000. The costs of construction were met from the husband’s savings and interest only borrowings from a commercial lender secured over the property. That property is now valued at $4,700,000. The parties both were contributors to the design of the house. The wife perhaps spent more time on that aspect of the matter. It seems uncontroversial that she was responsible for obtaining the furniture for the property.
After the parties married, the applicant continued to work as a medical professional at the V Centre for a few months until he established Q Pty Ltd in February, 1996. The parties discussed the establishment of Q Pty Ltd and, whether it was by invitation from the applicant to the respondent or through agreement to establish a business together, the respondent began working in administration for the business. She also did many other things of an administrative nature to assist the applicant. The establishment of Q Pty Ltd was the way in which the applicant chose to exercise his earning capacity as a medical professional. But the evidence shows that the applicant expected the respondent to work during the marriage and together with him, to maintain the home.
According to the evidence of the respondent it only took about a year for the business to start to thrive and it became very busy. By 2000, the business had relocated to the W Centre and in 2002 the parties established a company and trust structure through which the applicant conducted and continues to conduct his business. The respondent was a director of the company which was the trustee of the relevant trust.
The applicant was working at the U Hospital. That hospital closed in 2019. Prior to its closure, the applicant worked in his business and at the hospital 4 days per week and 5½ days every fourth week when he travelled to City P. He would work between 38 to 55 hours per week generally. He would also undertake account keeping and managerial tasks at home after work hours. This work averaged another 25 hours per week. The respondent accepted this evidence.
There is no dispute that the applicant was the primary income earner during the course of the parties’ marriage. Through his business he was the sole generator of income that was then used for family expenses and the acquisition of property. There is no doubt that the applicant worked hard in his business and he has been successful. The respondent (by her senior counsel) suggested that the applicant was a workaholic.
The applicant was assisted in his work and his business by the respondent. She performed administrative work and at times, she undertook significantly more work than simple office duties. It is uncontroversial that she answered the telephone, scheduled appointments, liaised with patients and hospitals when the applicant asked her to do so, she tended to the filing, the collecting of fees, banking, Medicare account submissions, liaising with hospital staff, managing the billing for the business and had some responsibility for hiring staff. I do not accept that she would perform work at home, as she asserts.
Initially the respondent worked in her role by herself and I find that she worked on the days that the applicant worked for, more or less, the same hours as him. She accompanied the applicant to City P on his trips there. She made sure he had his lunch and she looked after the parties’ food and the like when they travelled. That position remained until 2009 when the business employed a part-time assistant and subsequently others.
The respondent’s role diminished after a part-time assistant was employed and I accept the applicant’s evidence that she worked up to 3 days per week from that point. On the days that the respondent did work, she accompanied the applicant to and from the business and worked the same hours as he did. I have dealt with how the respondent was remunerated for her work later in these reasons.
An example of the embellishment of the importance of her role by the respondent is in her evidence about the arrangements that were put in place with the owners of the W Centre. On the face of her evidence in chief, it seems that the respondent was responsible for putting together the arrangements that permitted that centre to stay open following the closure of the U Hospital. However, the applicant’s evidence demonstrates that it was he who carried out the relevant negotiations and dealings with the owner of the centre, those dealings being recorded in email correspondence between the applicant and the owners of the centre. When taxed with this in cross-examination, the respondent conceded that the applicant undertook those dealings with the owners of the centre but that the idea that spawned the process was hers. She said that she had some telephone calls with the owners.
The parties subsequently purchased other real property in the Suburb K area. Although the applicant describes purchasing other property, namely the L Street property and a property at Y Street, Suburb K as investment decisions by him, I am not satisfied that he made those decisions alone. The purchase of those properties was undoubtedly a joint endeavour by the parties to advance their financial position together. It would be significantly undervaluing the respondent’s contribution to suggest that it was the applicant alone who was responsible for making those purchases. I find that he was not. No doubt, the purchases were enabled by the applicant’s significant earning capacity, but that alone is not responsibility for them.
The L Street property was purchased in 2002 for $1,480,000. The funds for its purchase were borrowed in their entirety from a commercial lender on an interest only basis and secured by mortgage over the property. The respondent was a joint borrower with the applicant and so, should be seen as providing half of the purchase price of that property: see Calverly v Green (1984) 155 CLR 242 at 250-251 (per Gibbs CJ), 257-258 (per Mason & Brennan JJ), and 267-268 (per Deane J). The L Street property is now valued at $4,100,000.
Y Street, Suburb K was purchased in 2003 for $617,000. It was purchased using funds borrowed in their entirety from a commercial lender on an interest only basis and secured by mortgage over the property. The property was purchased in the applicant’s name only and he was the sole borrower for its purchase. Nonetheless, the respondent provided a guarantee for those borrowings. Y Street sold in 2018 for $1,075,000. The net proceeds were $403,542.00
In 2010 another property was purchased, this time in England. The property known as Property N in England was purchased for £1,563,087 in April, 2010. The applicant’s father facilitated this purchase by making a gift to the applicant of £500,000 at the time of purchase. Both parties played a significant role in the renovation of the property and its grounds. It was sold in 2021 for £1,850,000 together with a further £40,000 for some fittings and contents. The respondent accepted in cross-examination that there was a profit generated of £287,000.
In August, 2017 the respondent was diagnosed with breast cancer. I accept the applicant’s evidence that the respondent ceased working after she underwent surgery in early September, 2017. She returned to work and did some sporadic work in December, 2017 and subsequently returned to work on one day per week in January, 2018. I accept the applicant’s evidence that she commenced baby-sitting her grandchild in Brisbane on Friday of each week.
I reject the respondent’s evidence that the applicant’s treatment of the respondent worsened around August, 2017 following her diagnosis of breast cancer. She describes how she and the applicant went to City P and she carried out her normal duties at the applicant’s insistence, notwithstanding that she was unwell. She says that the applicant taunted her. However, notwithstanding that treatment by him, after her surgery the respondent gave the applicant a card in the following terms:
Good morning beloved beautiful Mr Barklem. Welcome to a marvellous Monday! I hope your breakky is delicious. I can’t wait for our talk, walk + coffee. You are my love + best friend + I cherish today + every moment spent with you. Everything about you is so special + wonderful. My love for you grows more every day! You have been so loving, thoughtful + kind to me since my operation - Thank you sweetie. I am the luckiest person to be given such a gorgeous, successful + loveable husband. I love you the sun, sea, sky, earth + stars with love Ms Barklem.
This is not the only note of such a nature to pass from the respondent to the applicant during the course of their marriage. There were notes before and after this one. I do not accept the respondent’s explanation for giving such effusive notes to the applicant as means of placating him and addressing his poor treatment of her. On her own evidence, if that was the reason she gave them, then they plainly they did not work and their continued use was unwarranted.
The wife performed the role of primary homemaker. She was responsible for maintaining the parties’ home although accept the applicant’s evidence that for much of their marriage they had the assistance of a cleaner. I also accept the applicant’s evidence that he was generally responsible for the outside work at the home and the respondent was responsible for the inside work. I find that they shared the gardening duties although not necessarily equally.
The evidence demonstrates that the husband was “very particular” (as described by senior counsel for the respondent) in relation to the food that he required. The respondent accommodated this but I am not sure what that sounds in the current assessment. I am not sure that the assessment of contributions under s 79(4)(c) extends so far as to require the court to take into account and assess the proclivities of each of the parties to the relationship. If that were the case, one wonders where the assessment process would end.
In December, 2018 the respondent underwent further significant surgery that was unrelated to her breast cancer surgery.
The applicant has continued to work as medical professional in his business since separation. The evidence suggests that the profitability of his business has reduced due to the closure of the U Hospital and increased competition. I accept his evidence about that. By way of example, his “operation” procedures have reduced from 400 a year in 2010 to 150 a year in 2020. The respondent contends that the applicant has been deliberately reducing his workload and income but there was no real attempt to prove those assertions. I do not accept them.
It is uncontroversial that during the course of the parties’ relationship and following separation, the applicant has managed the parties’ finances. That is put by the respondent as a form of control of her by the applicant. The applicant says that he did manage the parties’ finances and the respondent was comfortable with that because she neither the inclination not the skills necessary to do so. I accept the applicant’s evidence that he managed the parties’ finances for those reasons. The respondent seeks to portray the applicant as in complete control of the purse strings, that he paid her a miserable stipend from which she needed to run the household, she had very little for herself and she had to account for all of her expenditure.
I accept that the applicant caused the respondent to be paid a regular fortnightly amount from the establishment of Q Pty Ltd. The amount increased over time but by the time of separation it was $836 per fortnight. It started at $600 per fortnight. Those amounts would have been insufficient to fund the living expenses of the household (food, including food and expenses for Ms E). The respondent’s own evidence reflects this. Throughout her affidavit evidence she refers to “us” or “we” funding various purchases or expenditure. On her own evidence, the expenditure of money happened through joint decisions. When she needed more money her evidence was that she asked the applicant for it and she received it. She was given credit cards to use. Whist the applicant asked for receipts for the expenditure that was consistent with the view I formed of him as a person who could be quite “particular” (as senior counsel for the respondent described him). But I reject the respondent’s case that he was controlling of the parties’ finances to the exclusion of the respondent. Indeed, one of the issues in dispute until shortly before the trial was whether the court should bring to account $80,000 worth of jewellery that had been purchased for the respondent during the relationship.
The applicant, according to the respondent’s evidence in cross-examination, financially supported Ms E whilst she lived with them. This is a significant contribution by the applicant over a period of some 11 years until Ms E completed her University study. According to the respondent’s evidence in cross-examination “we” paid for Ms E’s university costs when she went to the United States of America to study when she left school. The source of those funds were no doubt funds generated from the business and on the respondent’s case could only have been used with the applicant’s agreement. There is no suggestion that his agreement was not easily forthcoming. Unsurprisingly given the applicant’s nature, he was able to put a figure to the financial support he says was provided to Ms E. He fixed that sum at about $100,000 in addition to other expenditure such as the purchase of a motor vehicle.
The cards written by Ms E to the applicant reveal a close relationship that was no doubt nurtured by the applicant’s attention to Ms E. It is uncontroversial that she received no financial or emotional support from her biological father.
Following separation, the applicant continued to operate the business through the corporate and trust structure that had been earlier established by the parties. The practice of distributing profit through the trust to the respondent continued although I accept that she did not receive those distributions. The use of that vehicle, however, assisted the parties generally and the applicant in particular with the taxation position.
The applicant has continued to meet the parties’ liabilities from the income generated through the business. In April, 2020 the applicant took steps to convert the parties’ interest only liabilities to principal and interest repayments. That had the effect of increasing substantially his monthly expenses. There was no adequate explanation, in my view, for the applicant taking those steps and I am satisfied that he took those steps with a view to artificially decreasing his available income for the purposes of demonstrating a limited capacity to meet the respondent’s claims for maintenance. Nonetheless, the evidence shows that until he did that he maintained regular financial support for the respondent. Thereafter, he ensured that she had financial provision although in a way about which the parties did not agree. I have dealt with the characterisation of the lump sum received by the respondent above. Were it not for her concessions that the capital sums presently in her bank account and the amount she paid for her legal expenses should be “added back to the pool” I would have considered the payment as one of lump sum maintenance. The respondent reported to Mr AA that when the applicant ceased paying her regular maintenance he had “cut her off financially”. She agreed in cross-examination that she did not tell Mr AA that the applicant had provided her with a lump sum. That was disingenuous and consistent with the view that I have formed that the respondent has embellished her evidence and attempted to present what has occurred between these parties during and after their relationship in an unbalanced way.
Although not without some difficulty, the applicant also agreed to the respondent occupying the parties’ former matrimonial home at J Street although despite an order permitting her to do so she has not taken up residence in that property.
The respondent’s Kennon argument
In exceptional cases, conduct during the course of a parties’ marriage which has had a discernible impact upon the contributions of the other party may be taken up in the contribution based assessment required by s 79 (4) of the Act: Kennon & Kennon (1997) FLC 97-757@ 84,294. The required nexus between the proven conduct and the discernible impact upon the contributions by the party affected by the conduct may be inferred from the lay evidence of the parties: Benson & Drury (2020) FLC ¶93–998 at [149].
In the present case, the respondent contends that the applicant’s conduct towards her and the discernible impact that she says it had upon the contributions made by her during the course of the parties’ relationship should be taken up in her favour. Her case identifies three types of conduct perpetrated by the applicant which she says had a discernible impact upon her contributions and made them more arduous in the circumstances, namely:
(a)physical violence;
(b)behaviour that was threatening, intimidating and frightening; and
(c)behaviour that was controlling.
In her trial material, the respondent alleges that there were five occasions of physical violence. They were:
(a)in 1991 (so before the parties commenced cohabitation even on the respondent’s case) whilst the parties were in the United Kingdom, the applicant punched her in the body multiple times with a clenched fist following an argument between them. She says that she was left “covered in bruises”. Such was the bruising that she had to wear long sleeved clothing to cover it up. She says that she told no-one, including the police “for fear of reprisals”. However, she gives no evidence of any behaviour by the applicant before or after the alleged punching that would reasonably suggest that the applicant would take reprisals against her if she went to the police for protection. She gives no evidence, for example, of threats by him to that effect. The highest her evidence on the issue gets is that following the parties’ separation, more than 25 years later, the applicant threatened to harm himself if he received a solicitors’ letter or was served with a protection order. After the alleged incident, the respondent returned home to Australia about a week later. The applicant remained in the United Kingdom. She made no complaint about him in Australia although there appears to have been nothing to prevent her from doing so. The applicant denies the punching and any incident resembling that described by the respondent.
(b)The respondent swears that during a trip to the United Kingdom (she does not say when), she recalls that the applicant was hurting her (she does not say how) and covered her mouth so she could not scream (again, she does not say how). The applicant denies any such behaviour.
(c)The respondent alleges that when she and the applicant visited Country H (she does not say when, but presumably it was while the applicant and the respondent were living in the United Kingdom between 1992 and 1993), the applicant threw her against a wardrobe when he was “yelling” at her. She alleges that this smashed the mirror on the wardrobe. She says that she cannot recall what the applicant was saying but she does remember that he had to pay the hotel for the damaged mirror. The applicant contends that there was no argument between the parties and that there was a mirror attached to a wardrobe that was dislodged and broke when his luggage impacted upon the wardrobe by accident.
(d)The next incident was said to have occurred in 1996 when the respondent alleges that the applicant kicked her in the shin while they were at work. The respondent says that it was deliberate. The applicant denies the allegation in its entirety.
(e)The respondent further says that in around 2016 or 2017 while the parties were staying at Property N in the United Kingdom, an argument erupted about the placement of a rug. She says that he grabbed her hair pulling some of it out and he pushed and shoved her. She says that he continued to push and shove her, although she does not say for how long. He would not speak to her that night. She says that she felt scared for her safety but does not suggest that she did anything to deal with those fears such as call the police. The applicant denies the allegations and specifically that he has ever grabbed her by the hair. He says that there was no such argument.
For the purposes of these proceedings, the respondent consulted with Dr BB, a forensic psychiatrist. I have an affidavit from Dr BB filed on 11 August, 2021 that appends to it a report following a consultation that he had with the respondent. The respondent reported to Dr BB the first incident of the applicant punching her (although in different terms to that sworn to by her) and the last episode about which she said to Dr BB that he “dragged her around by the hair and was pushing and shoving her and screaming, and that lasted for hours”. The other incidents were not raised with Dr BB. He specifically enquired of the respondent about how many times the respondent had physically abused her and she said that she “had lost count”.
The respondent was taxed with this in cross-examination. The complete absence of any assertion by her of any physical misconduct by the applicant towards her between 1997 and 2016 was put to her for her comment. The respondent asserted that there were too many incidents to document. It seems curious that if the occasions of physical violence were so numerous, the only occasions about which evidence was given with those that I have recounted. One might have expected a far more comprehensive recitation of the relevant incidents with particular emphasis on more recent incidents. The generality with which the respondent asserts that there were too many to recount detracts generally from the probity of her evidence about this issue.
It also sits ill with her evidence that from early 2017 she started writing down how the applicant was treating her. Even if the respondent’s memory is failing her or there were too many incidents of violence to count, one might expect there to be a record of them from which the respondent would have refreshed her memory. There is no suggestion of any physical abuse after the 2016 incident. The inference to draw from that, which I draw, is that there were none. That is entirely at odds with the respondents now contention that there were too many to count or too many to document.
I am not satisfied on the balance of probabilities that the acts of physical violence alleged by the respondent against the applicant occurred in the manner described by her or at all. Whilst I do not discount the possibility that there were arguments between the applicant and the respondent I have no confidence when I have regard to the content of the respondent’s evidence and her discussions with Dr BB as recorded by him, that the incidents occurred as the respondent alleges.
The respondent complains that the applicant was given to shouting and raising his voice at her regularly. Her descriptions in some of her affidavit evidence are quite graphic. The applicant, for his part, accepted in cross-examination that from time to time he would raise his voice at the respondent although he disavowed the notion that he was yelling or shouting at her. The respondent’s evidence included assertions by her that on more than one occasion the applicant threatened to drive the vehicle in which they were travelling onto the wrong side of the road and into oncoming traffic. This occurred on 2 occasions, the first as long ago as 1991 and the second in 1997. The respondent does not contend that the conduct, if it occurred, was repeated.
The next reported incident occurred in 2016. The respondent says that on 2 May, 2016 she and the applicant both worked in the business. The respondent says that she left to attend a doctor’s appointment that afternoon in City X and she was late to return. She alleges that when she got back the applicant yelled at her “Where have you been? You have made me late”. She says that the applicant was “so angry on the trip home and was banging the steering wheel.” She says that she felt trapped as she could not get out of the car, although she does not say why that is so. She alleges that when she and the applicant got home the applicant “kicked me in the backside. He went down to the kitchen and got a knife (I recall it was “Stay Sharp” knife with black handle) and chased me around the house with knife.” The respondent says that she ran away from the applicant downstairs to the kitchen where she says that she “hid away from Mr Barklem”. She says that she was “petrified”.
As to this incident, the applicant accepted that the respondent had gone to a doctor on the day in question and that she had returned late. He accepted that he was upset about this because he had to return to City X the next day by 8.00am. He says that he raised his voice at her when she returned but not during the drive home.
The applicant denies the balance of the allegations and says that he has never chased the respondent around the house with a knife. In fact, he says that he could very often not find a knife in the kitchen because the respondent would collect them all up and hide them and tell him that she had done so in case someone broke into the home to kill her when she was away. Although she filed an affidavit in reply to that of the applicant’s she did not cavil with this evidence.
Somewhat remarkably, the respondent did not report the applicant’s alleged conduct to the police or any other person at the time.
I am not satisfied on the balance of probabilities that this incident occurred as the respondent asserts. I prefer the evidence of the applicant. The respondent’s tendency to embellish her evidence causes me to be very cautious about accepting what she says at face value. That, coupled with what she describes as her poor memory (both short-term and to a lesser extent long-term) and the complete absence of any attempt by her to take action to deal with these issues through the relevant authorities such as the police when they occurred informs my inability to be satisfied on the balance of probabilities of her claims.
I do not accept the respondent’s evidence that the applicant controlled her access to her family, including her parents, her daughter and her granddaughter. I accept the applicant’s evidence, confirmed in part at least by the respondent’s own evidence in cross-examination, that she regularly spent time with her parents and her daughter during the parties’ relationship.
The respondent called evidence from Ms CC. She had worked with the applicant and the respondent in the business. She was also an employee of the W Centre where the business is located. She gave evidence that “Mr Barklem would often call the respondent ‘lazy’ or a ‘fucking idiot’”. She did not qualify what she meant by the characterisation “often”. She said that the respondent often appeared on edge and was running from one spot to the next although does not say why she had that appearance or what, to her knowledge, might have caused. She gave evidence that she would “at times” hear the applicant “shouting” at the respondent. She says that she could not hear what he was saying but that his voice was “raised”. She gave evidence that she came across parties arguing on one occasion. Her evidence was that the applicant would say disparaging things to her about the respondent after she had her diagnosis of cancer. Unfortunately, she gives no context to those statements she reports the applicant making. Ms CC says that she resigned from the business in 2018 because she was unable to “put up with working for Mr Barklem and his poor treatment of staff members any longer”.
The applicant called evidence from Dr DD who gave evidence that he was a friend of both the applicant and the respondent’s and had known them for many years. His evidence was to the effect that he had never seen the applicant behave poorly towards the respondent or anyone else. Their relationship appeared to be that of a loving husband and wife.
The applicant also called evidence from Ms EE a former employee of the business. She was employed from November, 2018. Her observations of the applicant and the respondent were to the effect that they were friendly towards each other and her observations were consistent with what she understood “to be a loving and caring marriage”. She says that she never witnessed any type of mistreatment of the respondent by the applicant during the period she has worked at the business. Nor has she observed the applicant become angry or aggressive towards the respondent or any other person. She says that the respondent spoke “lovingly and highly of Mr Barklem to me”.
The evidence of Ms CC, Dr DD and Ms EE convinces me that the relationship between the applicant and the respondent was one which might be expected between people who had been married for the length of time that the applicant and the respondent had been married. That is to say, it is not at all surprising that they had arguments and that they might raise their voices. The applicant might even call the respondent names from time to time. As unfortunate as that might be, I do not accept that the applicant’s behaviour towards the respondent was as extensive as the respondent suggests. I am satisfied that the respondent has embellished her evidence about the nature and extent of the applicant’s treatment of her for the purposes of these proceedings.
Taken at face value, the respondent’s evidence is that from the very commencement of the parties’ dating relationship in 1991 the applicant was physically abusive of her on occasions too compass to recall and consistently engaged in conduct such as shouting and denigrating her so that she was consistently and constantly frightened and scared of him. Notwithstanding these matters, her evidence-in-chief was that until the respondent consulted with Mr AA in 2018 she did not mention any of these matters to anyone. In cross-examination she said that she in fact mentioned that to a friend of hers but declined to give the name of that friend. There were no reports to the police nor any other appropriate authority. In his interview with her, Dr BB asked her why she had not left the relationship earlier than she did. She told Dr BB that on “multiple occasions” the applicant had kicked her out of the house “but she had struggled to make sense of things and was also financially stuck as he had control of the monies”. He records that she “also cited a lack of confidence and a lack of self-esteem”. Given that the respondent had a good relationship with her parents and had been able to call on them from time to time for assistance it is difficult to accept that if the applicant had asked her to leave the house on multiple occasions she had nonetheless decided to return in face of all of that about which she now complains.
I am not satisfied of the factual basis upon which the respondent advances what she has described as her “Kennon” claim. I am not satisfied that the conduct upon which the respondent relies to establish this aspect of her claim occurred in the manner in which she asserts. It follows that I do not consider that the respondent’s contributions were made any more difficult by the conduct she now asserts against the applicant.
I have mentioned elsewhere in these reasons that the applicant had particular proclivities about various aspects of his day-to-day life that the respondent took into account. These matters, such as preparing food that the applicant liked to eat and ensuring that he had his favourite brand of condiment do not engage the principles in Kennon in my view, notwithstanding that the plurality in that case acknowledged that relevant conduct is not limited to domestic violence.. They are the very types of matters that the Full Court were referring to when they cautioned at 84,294:
However, it is important to consider the “floodgates” argument. That is, these principles which should only apply to exceptional cases, may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks and so return this court to fault and misconduct in property matters - a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost.
CONCLUSIONS – CONTRIBUTIONS
The applicant contends that the contribution based assessment ought to take into account the applicant’s “skill set” that he brought to the marriage. His submission relies on authorities such as SL & ELH (2005) FamCA 132 and Pfenning & Snow (2016) FamCA 29. These arguments have been rejected by the Full Court: Grier & Malphas (2016) FamCAFC 84. It is not a party’s “skill set” that needs to be considered but what the parties’ skill sets/efforts actually produced in all senses.
The property that the parties now presently stand possessed of was the product of a number of distinct contributions by each of them. The applicant made significant contributions of property at the commencement of the parties’ relationship, irrespective of when they commenced cohabitation or felt that they were in a “committed relationship”. The assets that he brought to the relationship were used, generally speaking to fund the purchase and construction of the J Street property, a parcel of real estate that remains available for distribution between the parties. It has increased significantly in value since the parties acquired it by reason of market forces.
The applicant deployed his earning capacity during the course the parties’ relationship in a way that produced significant income. The parties were able to maximise the retention of that income through the respondent’s contributions represented by her work in the business. Those contributions are not to be underestimated because over a period of 23 years that represents a significant direct financial contribution by her. Were it not for her work in the business, an outsider or outsiders (as subsequently occurred in 2009) would need to be employed.
The applicant made a significant contribution in 2010 when he received a gift of £500,000 from his father. The parties were able to deploy that gift to purchase property in the United Kingdom. That turned out to be a profitable exercise and return the parties some £270,000 in profit.
Despite the submissions for the respondent and the claims that she has made in her evidence I consider that the parties supported each other emotionally as well as financially. Whilst it is the case that the applicant might have some particularity about him, putting up with those particularities is not something that sounds in the contribution based assessment in my view. I do not understand the authorities to mandate that when assessing contributions according to s 79(4)(a), (b) or (c) the individual proclivities of each of the parties to the marriage should be carefully scrutinised and weighed in the balance.
In addition to those matters I include in the contribution based assessment the contributions that the applicant has made to the respondent’s daughter Ms E and her welfare. To acknowledge those contributions in the assessment process is just: see Robb & Robb (1995) FLC 92-555. Although some authorities treat this matter as something to be taken into account pursuant to s 75(2)(o), others take it into account as part of the contribution based assessment. The way in which it is treated is a matter for the trial judge and I prefer the latter course rather than the former because what is under consideration are contributions that have occurred prior to the trial and an assessment of those matters fits more comfortably into the contribution based assessment.
The parties’ relationship was a long one and during the course of it both contributed to the best of their ability and they worked together as a team to achieve common end. Neither now suggest that the other did not make their contributions to the best of their abilities. The significant contribution made by the applicant through the property that he brought to the parties’ relationship, still recognisable in the present property owned by the parties and the gift received by him from his father in 2010, demand recognition in the contribution based assessment. To recognise those contributions and accord them some weight is not to devalue the contributions made by the respondent during the course of the parties’ relationship through her hard work and support of the applicant in his medical work or the parties other ventures such as their property investments. In respect of the latter matter, I recognise and accord weight to the direct and indirect contributions made by her including by being a joint borrower and providing personal guarantees in respect of other borrowings to assist those ventures.
Having regard to all of those matters, I consider that the appropriate way to assess the parties’ contributions to the acquisition, conservation and improvement of their property is to find that the husband made 57% of the contributions and the wife 43%. On that basis the applicant is entitled to $7,693,899.33 and the respondent is entitled to $5,804,169.67.
SECTIONS 79(4)(D) - (G)
Of these matters, only those raised by s 79(4)(e) are relevant.
The respondent is 57 years old. She is in remission following breast cancer treatment and her prognosis is excellent. She requires ongoing drug therapy and has review appointments every 6 months. There is nothing to suggest that she has not made a successful recovery from that condition. She had other health conditions that were treated by surgery in 2018. There is evidence before me that she has been diagnosed with post-traumatic stress disorder. It was submitted that the diagnosis has come “as a result of physical and emotional domestic violence perpetrated against her by the husband throughout the relationship”. However the evidence of Mr AA was that the applicant has had post-traumatic stress disorder since 1991. That is to say, it was caused by and the condition was acquired by reason of an event or events that occurred either prior to or in 1991. I have rejected the wife’s claims about the applicant’s treatment of her in 1991. Mr AA’s opinion was based upon the respondent’s self-report of those incidents. In cross-examination he accepted that he did not take personal history from the respondent with a view to establishing a baseline for her mental health prior to those incidents.
Whilst I accept that Mr AA has diagnosed the respondent with post-traumatic stress disorder, I place no weight on the diagnosis because it is based upon matters that I do not consider are proved in the evidence. Similarly, the opinion from Dr BB is, to use his words, “useless” if the factual underpinnings of the report are not proved in the evidence.
I do not accept that the respondent does not have an earning capacity. As senior counsel for the applicant argued, according to Mr AA’s opinion the respondent has suffered from post-traumatic stress disorder since 1991. Notwithstanding that diagnosis and the effects of that condition upon her since then, she has been able to maintain her work with the applicant as she has described in her evidence. That seems entirely inconsistent with the proposition that she has debilitating post-traumatic stress disorder. When she was asked in cross-examination about whether it was her hope not to ever have to return to work she confirmed that it was.
Notwithstanding that I do not accept that the respondent does not have an earning capacity, on the evidence it is impossible to make a finding as to what that earning capacity might return to her. I think it likely she has the skills and ability to work in office administration much as she has done for the 23 years leading to the party separation. On her own evidence she has developed many skills beyond that of an office assistant. There is no evidence, however, before me about the earnings in such a role other than what it was that the respondent received during the course of the parties’ relationship. I accept that the sums she received do not represent a commercial wage for such a role.
The applicant suffers from some medical issues. He has rotator cuff degeneration and back pain which he asserts will limit his capacity to work and will justify his expectation that he will retire within the next 3 years. Despite his evidence, my assessment of the applicant is that he is unlikely to retire in 3 years’ time. He is a driven man committed to his business as the last 25 years has demonstrated. It may be that his earning capacity has reduced somewhat by reason of the competition for services about which he gives evidence and the restructuring of hospitals and the like in the City X area but it is clear on the evidence that the husband nonetheless has a significant earning capacity that he is able to exercise and I so find. Presently that earning capacity is returning him $400,000 per annum for work on 3 days per week. He has the capacity to increase his hours and to return to work in City P according to his evidence in cross-examination.
Both parties will at the conclusion of these proceedings have significant property even if the contribution based assessment remains undisturbed. However the husband’s earning capacity dwarfs that of the wife. It will also have the benefit of the corporate structure that he has established for his business including the franking credits that have accumulated in the trustee company. They are not insignificant. What the husband’s evidence reveals is that he has a real flexibility about his working arrangements and income. He has the ability to increase or decrease his working hours as he sees fit so as to accommodate his lifestyle. He will have a significant income even if he chose to work only one day per week. The respondent does not have that flexibility. She is younger than the applicant and will need to provide for herself for longer.
Senior counsel for the applicant argues that in the event that I am not persuaded to include the realisation costs and estimated capital gains tax that might arise upon the sale of the L Street property, I should nonetheless take it into account at this point of the exercise in accordance with authorities such as Rodgers (No 2) (2016) FLC 92-712. I accept that submission. It is something that ought to factor into my consideration of the matters that arise under s 75 (2) the Act. However, given that the husband seeks to retain the property and to use it as his home, this matter attracts very little weight.
Having regard to those matters, I am satisfied that I ought to adjust the parties contribution based entitlements in favour of the respondent. An appropriate adjustment in her favour, in my view, is $700,000 or a little over 5% of the net value of the parties’ property. I think that sum represents about 2 years gross earnings for the applicant, an amount which he will comfortably earn, I am satisfied, before his retirement which in my view is likely to take place later than his evidence presently suggests.
On that basis, the respondent is entitled to $6,504,169.67 which I will round to $6,504,000. The applicant will be entitled to the balance of $6,994,069.
ORDERS
Both parties wish to retain the L Street property. The husband seeks to retain this property because he wants to reside in Suburb K when he retires, has friends living there and has an emotional connection to the property. He wants it as his eventual home.
The respondent to wishes to retain the L Street property because she says it is close to the beach and the National Park at City FF and she too has a connection with the area.
Presently the respondent has an entitlement to occupy the J Street property, although she has not taken up full-time residence there. Her alternative position is that she continue to retain that property.
I am persuaded that appropriate orders will see the applicant retain the L Street property and the respondent retain the J Street property. Although the applicant does not presently live in the L Street property, I accept his explanation as to why he wishes to retain that property.
The rationale given by the respondent for wishing to retain the L Street property applies just as equally to her retention of the J Street property. Her retention of that property will obviate capital expenditure on purchase costs such as stamp duty and the like (just as it would if she was to retain L Street). The retention of the J Street property respects her connection with the Suburb K area, her community, friends and environmental supports in that locality.
I have had regard to the draft orders proposed by each party. Regrettably, I do not feel comfortable in crafting a set of orders that deals with all of the issues identified in those draft orders. As will be apparent from my reasons, the respondent should receive the J Street property free of encumbrance. She proposes that the proceeds of sale of Property N be used to discharge all of the mortgages secured over J Street and L Street and the balance of those funds given to her. The applicant approaches the distribution of the Property N funds in a different way. There may be good reasons for doing so. Nonetheless, however the orders are to be framed, the respondent will have to be released from her liability in respect of the L Street property.
Many of the other draft proposed orders were not the subject of argument before me and may represent something of a difference between the parties as to the form of order. The superannuation orders are a good example. No argument was directed to those and they provide for the parties superannuation to be dealt with in different ways.
In the circumstances, I consider it appropriate to direct that the parties agree on a minute of order to give effect to these reasons for judgement and to bring in that minute within the next 14 days. In the event that the parties are unable to reach agreement about the minute of order, I will direct that they each furnish no later than 17 days from the date of these reasons the form of orders for which each of them contends together with short submissions limited to 5 pages in length dealing with those orders. I will consider those orders and if I consider that I need further submissions from the parties I will make directions about that. Otherwise I will proceed to pronounce orders taking into account those contended for by each of the parties.
I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett delivered on 3 December 2021. Associate:
Dated: 3 December 2021
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