Barklem & Barklem (No 2)
[2022] FedCFamC1F 290
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Barklem & Barklem (No 2) [2022] FedCFamC1F 290
File number(s): BRC 4290 of 2020 Judgment of: JARRETT J Date of judgment: 4 May 2022 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)
Family Law (Superannuation) Regulations 2001 (Cth)
Superannuation Industry(Supervision) Regulations 1994 (Cth)
Division: Division 1 First Instance Number of paragraphs: 11 Date of last submission/s: 20 December 2021 Place: Brisbane Solicitor for the Applicant: Barry Nilsson Lawyers Solicitor for the Respondent: Phillips Family Law 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:
4 MAY 2022
THE COURT ORDERS THAT:
Definitions
1. That for the purposes of these Orders, the following definitions shall apply:
1.1.‘the Applicant Husband’ means Mr Barklem;
1.2.‘the Respondent Wife’ means Ms Barklem;
1.3.‘the parties’ means the Applicant Husband and Respondent Wife;
1.4.‘Property N’ means the property located at Property N, GG Village, HH City, …, United Kingdom, Title Numbers …, …, … and S.);
1.5.‘the L Street property’ means the property situated at L Street, Suburb K being more particularly described as Lot … on RP …, City FF, Title Reference, …;
1.6.‘the J Street property’ means the property situated at J Street, Suburb K being more particularly described as Lot … on RP …, City FF, Title Reference, …;
1.7.‘Q Business’ means Q Pty Ltd, Australian Company Number …;
1.8.‘M Company’ means M Pty Ltd, Australian Company Number …;
1.9.‘Barklem Family Trust’ means the discretionary trust established by Deed dated 21 March, 2002 between Mr JJ as settler and M Company as trustee;
1.10.‘Q Group’ means Q Business, M Company, and Barklem Family Trust;
1.11.‘the M Company Super Fund’ means the parties’ self-managed Superannuation Fund established by Deed dated 26 March, 2002 for which the parties are the trustees and members.
Transfer of the L Street property
2. That within 60 days of the date of these Orders (or such earlier date as requested by the Applicant Husband), the Respondent Wife (‘the transferor’) transfer to the Applicant Husband (‘the transferee’) all of the Respondent Wife’s right, title and interest in the L Street property, and for that purpose the following shall apply:
2.1.the transfer documentation shall be prepared by the transferee’s solicitor and delivered to the transferor’s solicitor for signature;
2.2.the transfer documentation must be signed by the transferor within 14 days of it being received;
2.3.if the transferee requires the return of the transfer for stamping purposes then:
2.3.1.the transferee’s solicitor will advise the transferor of this requirement at the time the transfer documentation is delivered;
2.3.2.subject to the transferee’s solicitor giving an undertaking to use the transfer for stamping purposes only but to otherwise hold the transfer in escrow pending settlement, the transferor must sign and deliver the transfer to the transferee’s solicitor no later than 14 days of it being received.
Release of the L Street mortgage
3. That prior to or contemporaneously with the transfer of the L Street property pursuant to Order 2 above, the Applicant Husband obtain at his sole expense, the release of the Respondent Wife from the Commonwealth Bank of Australia loan account ending #…04, Commonwealth Bank of Australia loan account ending #…09 and Commonwealth Bank of Australia loan account ending #…07, and the mortgage registration number …, with the Respondent Wife to sign any documents necessary to cause her release.
Payment of expenses of the L Street property
4. That pending the transfer of the L Street property the Applicant Husband is solely liable for and indemnifies the Respondent Wife against the following outgoings in and about the L Street property:
4.1.instalments and money due under the Commonwealth Bank of Australia mortgage;
4.2.rates and water;
4.3.any land tax assessed; and
4.4.the premiums for the continuation of current insurance policies on the house and contents located on the real property.
5. The Applicant Husband has the sole right to use and direct the rental income received for the L Street property pending the transfer of the property to him, but noting that the income will be attributed to each party equally up until the transfer of the property for the financial year ended 30 June, 2022 in each party’s respective tax return.
Transfer of the J Street property
6. That within 60 days of the date of these Orders (or such earlier date as requested by the Applicant Husband) and contemporaneously with Order 2, the Applicant Husband (‘the transferor’) transfer to the Respondent Wife (‘the transferee’) all of the Applicant Husband’s right, title and interest in the J Street property, and for that purpose the following shall apply:
6.1.the transfer documentation shall be prepared by the transferee’s solicitor and delivered to the transferor’s solicitor for signature;
6.2.the transfer documentation must be signed by the transferor within 14 days of it being received;
6.3.if the transferee requires the return of the transfer for stamping purposes then:
6.3.1.the transferee’s solicitor will advise the transferor of this requirement at the time the transfer documentation is delivered;
6.3.2.subject to the transferee’s solicitor giving an undertaking to use the transfer for stamping purposes only but to otherwise hold the transfer in escrow pending settlement, the transferor must sign and deliver the transfer to the transferee’s solicitor no later than 14 days of it being received.
Release of the J Street property
7. That prior to or contemporaneously with the transfer of the J Street property pursuant to Order 6 above, the Applicant Husband obtain at his sole expense, the release of the Respondent Wife from the Commonwealth Bank of Australia loan account ending #…04 and Commonwealth Bank of Australia loan account ending #…09, and mortgage registration number …, with the Respondent Wife to sign any documents necessary to cause her release.
Payment of expenses of the J Street property
8. That pending the transfer of the J Street property the Applicant Husband is solely liable for and indemnifies the Respondent Wife against the following outgoings in and about the J Street property:
8.1.instalments and money due under the Commonwealth Bank of Australia mortgage;
8.2.any land tax assessed; and
8.3.the premiums for the continuation of current insurance policies on the house and contents located on the real property.
Removal of the Respondent Wife from Q Group
9. That the Applicant Husband shall retain the parties’ interest in Q Group.
10. That the parties (either in their personal capacities or in their respective capacities of any role, office holder, trustee or shareholder within Q Group) shall do all acts and things and sign all documents as are necessary to give effect to Order 9 by no later than 30 June, 2022 or at any such earlier time requested by the Applicant Husband, including but not limited to the following in relation to Q Group:
10.1.resign the Respondent Wife as a director, secretary, trustee, principal, appointer or any other position held by the Respondent Wife in Q Group and join with the Applicant Husband to appoint him or his nominee in those roles;
10.2.transfer to the Applicant Husband or his nominee, the Respondent Wife’s shareholdings in Q Group;
10.3.the Respondent Wife to relinquish any beneficial interest she may have at law or in equity to any of the entities/trusts within Q Group, including any claim to be considered for a distribution of capital or income (be it past (including unpaid distributions), present or future) to the Applicant Husband;
10.4.the Respondent Wife to transfer to the Applicant Husband all of her right, title and interest in each of the entities/trusts in Q Group, including any monies standing to her credit in or debit either in her name solely or jointly with the Applicant Husband;
10.5.the Respondent Wife to relinquish any claim to any funds otherwise owing to her by any of the entities/trusts within Q Group;
10.6.forgive, transfer and/or assign all of the Respondent Wife’s rights, responsibilities, title and interest in any debit or credit loan account within Q Group that she has to the Applicant Husband or to his nominee;
10.7.the Applicant Husband to indemnify the Respondent Wife and keep her indemnified with respect to any liability whatsoever (past, present or future) relating to any of the entities/trusts within Q Group, including in relation to any personal tax payable by the Respondent Wife as a result of distributions to her from Q Group; and
10.8.the Applicant Husband shall use his best endeavours to secure the release of the Respondent Wife of all personal guarantees given by her on behalf of Q Group or any other document by which she pledged security for the due performance of a financial commitment of Q Group and indemnify and keep indemnified the Respondent Wife with respect to those guarantees;
10.9.the Respondent Wife will continue to facilitate the Applicant Husband distributing funds (notionally) to her from Q Group for the financial year ended 30 June, 2022 and for that purpose:
10.9.1.the Applicant Husband will facilitate the preparation of the Respondent Wife’s tax return for the 30 June, 2022 financial year;
10.9.2.the Respondent Wife will sign and return the tax return provided within 14 days of receiving it, subject to review from her accountant;
10.9.3.the Applicant Husband will pay any tax associated with the distribution to the Respondent Wife from the Q Group as well as in relation to the allocation of income/expenses to her from the L Street property (pending the transfer of that property);
10.9.4.the Respondent Wife shall pay the Husband any tax refund received by her for the financial year ended 30 June, 2022 in relation to the distributions made by Q Group and/or in relation to the L Street property or the tax paid by the Applicant Husband in relation to those matters, within 14 days of receiving such refund.
11. That pending the implementation of Order 9 and 10, the Respondent Wife (either in her personal capacity or in her respective capacity of any role, officer holder, trustee or shareholder within Q Group) is restrained and an injunction is hereby granted restraining her from drawing upon the assets and/or loan accounts of Q Group and/or further encumbering Q Group, unless otherwise agreed with the Applicant Husband.
12. That the Applicant Husband is responsible for the preparation of any documents necessary to give effect to Orders 9 and 10.
13. That the Applicant Husband shall indemnify the Respondent Wife and keep her indemnified in relation to any liabilities or duty, capital gains tax, income tax, fringe benefits tax, goods and services tax or any other tax or liability arising as a result of the implementation of Orders 9 and 10.
Property N furniture and contents items to be retained by each party
14. That the Respondent Wife retain the following items from Property N with any shipping or storage costs associated with them to by met by her:
14.1.Painting 1;
14.2.Painting 2;
14.3.Painting 3;
14.4.Painting 4;
14.5.A desk;
14.6.A table;
14.7.A cabinet;
14.8.Two armchairs;
14.9.A mirror; and
14.10.A chest of drawers.
15. That the Applicant Husband retain the following items from Property N with any shipping or storage costs associated with them to by met by him:
15.1.4 armchairs;
15.2.Painting 5;
15.3.Painting 6;
15.4.Painting 7;
15.5.A table;
15.6.A carpet; and
15.7.Two lamps
Assets and Liabilities to be Retained by Applicant Husband
16. That the Applicant Husband retain as his absolute property, the title and possession to and of the following:
16.1.the L Street property pursuant to Order 2 above;
16.2.Q Group;
16.3.the Applicant Husband’s bank accounts;
16.4.the furniture and contents in the Applicant Husband’s possession;
16.5.the furniture and contents at the J Street property set out in these Orders;
16.6.the M Company Super Fund (save for the amount split to the Respondent Wife pursuant to these Orders);
16.7.his interest in R Super Fund;
16.8.the furniture and artwork from Property N pursuant to Order 15 above;
16.9.save as otherwise be set out herein, all shares and investments held in his sole name;
16.10.the partial property settlement paid to the Applicant Husband in the sum of $200,000; and
16.11.all other proprietary interests of whatsoever nature in the Applicant Husband’s current possession and/or control.
17. That the Applicant Husband retain sole liability for and indemnify the Respondent Wife with respect to:
17.1.the Applicant Husband’s tax debt in relation to the financial year ended 30 June, 2021;
17.2.the Respondent Wife’s tax debt in relation to the financial year ended 30 June, 2021 in the sum of $3,027.20 according to the tax return that has been prepared and the Respondent Wife will sign and return the tax return within 14 days from the date of these Orders;
17.3.the Applicant Husband’s credit card debts;
17.4.the loan owing from the Applicant Husband to M Pty Ltd;
17.5.any liabilities relation to any of the entities within Q Group; and
17.6.any other loan, lease or credit card liability held or registered in his sole name.
Assets and Liabilities to be Retained by Respondent Wife
18. That the Respondent Wife retain as her absolute property, the title and possession to and of the following:
18.1.the Respondent Wife’s bank accounts;
18.2.the J Street property (unencumbered) pursuant to Order 6 above;
18.3.the Respondent Wife’s jewellery;
18.4.the Motor Vehicle 1;
18.5.furniture and contents of the J Street property, save for those to be retained by the Applicant Husband;
18.6.the furniture and artwork from Property N pursuant to Order 14 above;
18.7.the partial property settlements and legal fees paid by the Respondent Wife (or by the Applicant Husband on her behalf) in the amount of $400,828.
19. That the Respondent Wife retain sole liability for and indemnify the Applicant Husband with respect to any loan, lease or credit card liability held or registered in her sole name.
Transfer of Motor Vehicle 1 from Barklem Family Trust to the Respondent Wife
20. That within 60 days from the date of these Orders the Applicant Husband cause the transfer of the Motor Vehicle 1 registration … from Barklem Family Trust to the Respondent Wife for the written down value of the vehicle being $Nil, with the Respondent Wife to prepare the transfer forms.
Joint bank accounts
21. That within 60 days of the date of these Orders (or such earlier date nominated by the Applicant Husband provided it is no earlier that the transfer of properties pursuant to these Orders), the parties shall do all acts and sign all documents necessary to close any joint bank accounts (including but not limited to the GBP account ended #…19) and thereafter distribute the proceeds to the Applicant Husband and/or if otherwise nominated by the Applicant Husband, remove the Respondent Wife’s name and access from any joint account.
22. That pending the closure of the parties’ joint bank accounts and/or removal of the Respondent Wife’s name and access from any joint bank accounts, the Applicant Husband is solely entitled to the use of the funds in the joint bank accounts, and the Respondent Wife will sign any such documents necessary for the Applicant Husband to otherwise draw upon the joint signatory GBP account ended #…91 as may be requested by him:
22.1.in order for him to cause the reduction or discharge of the J Street property and L Street property loan accounts/mortgages noting he may need to rely upon those funds to give effect to the transfer of the properties pursuant to these Orders;
22.2.to pay the sum pursuant to Order 23.2;
22.3.to otherwise use the funds provided that the J Street property and L Street property loan accounts/mortgages have been discharged and/or there are sufficient funds remaining in the account to cause their discharge.
Collection of the Applicant Husband’s items from the Surfside Court
23. That within 60 days from the date of these Orders and contemporaneously:
23.1.the Applicant Husband arrange for his agent to attend the J Street property at a time mutually agreed with the Respondent Wife to collect the following items at the J Street property identified in the All Asset Appraisals valuation dated 1 October, 2021:
Unit No. Identification No. Product Description 1. 18 Outdoor setting 5. 27 Wall mirror 1 10. 48 Tea pot 13. 61 Creamer 16. 72 Wall mirror 21 17. 74 Dining table and chairs 18. 82 Silver kettle 21. 97 Patio set 25. 109 Chair 26. 110 Bookcase 31. 129 Side table 32. 130 Reeded lamp 33. 135 Mahogany desk 39. 151, 153 Four candlesticks 55. 186 Step ladder 23.2.the Applicant Husband shall cause the sum of $15,745 to be paid to the Respondent Wife.
The M Super Fund
Respondent Wife to transfer 100% of benefits in the M Super Fund to the Applicant Husband (“Splitting Order 1”)
24. That in accordance with paragraph 90XT(1)(b) of the Family Law Act 1975:
24.1.the Applicant Husband (or such other person to whom a splittable payment is payable) is entitled to be paid the specified percentage of each splittable payment from the Respondent Wife’s interest in the M Super Fund;
24.2.the Respondent Wife’s entitlement (or the entitlement of such other person who is specified in s.90XE of the Family Law Act 1975) in the M Super Fund is correspondingly reduced by force of this Order; and
24.3.the specified percentage for the purposes of this Order is 100%.
25. Splitting Order 1 operates from Operative Time 1, the operation of which is ordered in Order 35.
26. That the Trustee of the M Super Fund ("the Trustee") shall do all such acts and things and sign all such documents as may be necessary to:
26.1.calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Applicant Husband in Order 24; and
26.2.pay the entitlement whenever the Trustee makes a splittable payment of the Respondent Wife’s interest in the M Super Fund.
27. That procedural fairness as required by s.90XZD of the Family Law Act 1975 has occurred by reason that the Applicant Husband and the Respondent Wife are the Trustees of the M Super Fund.
28. That the Court notes:
28.1.that service of this Order on the Trustee will enliven the operating standards under Part 7A of the Superannuation Industry (Supervision) Regulations 1994;
28.2.that the Trustee is required to observe the additional obligations under Part 7A of the Superannuation Industry (Supervision) Regulations 1994; and
28.3.that any payments from the Applicant Husband’s superannuation interest in the M Super Fund made after the Trustee has observed its obligations under Part 7A of the Superannuation Industry (Supervision) Regulations 1994 are not splittable payments in accordance with Division 2.2 of the Family Law (Superannuation) Regulations 2001.
Split of Applicant Husband’s benefits in the M Super Fund to the Respondent Wife (“Splitting Order 2”)
29. That in accordance with section 90XT(4) of the Family Law Act 1975, a base amount of $1,055,940.00 is allocated to the Respondent Wife out of Applicant Husband's interest in the M Super Fund.
30. That, in accordance with section 90XT(1)(a) of the Family Law Act 1975:
30.1.the Respondent Wife (or such other person to whom a splittable payment is payable) is entitled to be paid, using the base amount allocated in the immediately preceding clause of this Order, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
30.2.the entitlement of Applicant Husband in the M Super Fund (or the entitlement of such other person who is specified in s.90XE of the Family Law Act 1975) is correspondingly reduced by force of this Order.
31. That Splitting Order 2 operates from Operative Time 2, the operation of which is ordered in Order 35.
32. That the Trustee of the M Super Fund ("the Trustee") shall do all such acts and things and sign all such documents as may be necessary to:
32.1.calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Respondent Wife in Order 30; and
32.2.pay the entitlement whenever the Trustee makes a splittable payment of the Respondent Wife’s interest in the M Super Fund.
33. That procedural fairness as required by s.90XZD of the Family Law Act 1975 has occurred by reason that the Applicant Husband and the Respondent Wife are the Trustees of the M Super Fund.
34. That the Court notes:
34.1.that service of this Order on the Trustee will enliven the operating standards under Part 7A of the Superannuation Industry (Supervision) Regulations 1994;
34.2.that the Trustee is required to observe the additional obligations under Part 7A of the Superannuation Industry (Supervision) Regulations 1994; and
34.3.that any payments from Applicant Husband's superannuation interest in the M Super Fund after the Trustee has observed its obligations under Part 7A of the Superannuation Industry (Supervision) Regulations 1994 are not splittable payments in accordance with Division 2.2 of the Family Law (Superannuation) Regulations 2001.
Operative Times
35. That the operative times for Splitting Order 1 is fourteen (14) days from the issuing of the sealed Orders from the Court and for Splitting Order 2 the operative time is immediately following the implementation of Splitting Order 1.
36. Service of this Order on the Trustees shall be deemed to have occurred on the date of this Order by reason that the parties are Trustees and the Court notes that service will enliven the operating standards of Part 7A of the Superannuation Industry (Supervision) Regulations 1994.
Transfer of Underlying Interests
37. That after service by the Trustees, of the payment split notices pursuant to r.7A.03 of the SIS Regulations in accordance with the operating standards under the Superannuation Industry (Supervision) Regulations 1994, the Respondent Wife shall do all such acts and things and sign all such documents as may be necessary, including but not limited to exercising her request pursuant to r.7A.06 of the SIS Regulations (“the applicant husband’s r.7A.05 request”) for the transfer or rollover of the transferable benefit to another complying superannuation fund (“the Respondent Wife’s new fund”).
38. That contemporaneously with the transfer of the Respondent Wife’s interest in the M Super Fund to the Respondent Wife’s new fund, the Respondent Wife shall do all such things and sign all such documents as may be necessary in accordance with the governing rules and trust deed of the M Super Fund to resign as a member of the M Super Fund and as a Trustee of the Fund and the Respondent Wife shall if requested by the Applicant Husband, join with the Applicant Husband to appoint another Trustee of the Fund as nominated by the Applicant Husband prior to the Respondent Wife’s resignation and/or amending the Trust Deed for the Fund to enable the Fund to become a single member fund if necessary to ensure compliance with all applicable legislation.
IT IS NOTED THAT:
A.It will be necessary for some of the property syndicates owned by the M Super Fund to be liquidated in order for the superannuation split to the Respondent Wife to occur and that the Applicant Husband will facilitate the accountant for the Fund to ensure that this occurs at the earliest opportunity.
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 is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JARRETT J:
On 3 December, 2021 I delivered reasons for judgment in this property application and directed the parties to bring in minutes of orders consistent with those reasons.
The parties did so in late 2021 pointing out some errors in my reasons concerning values for certain items of property under consideration and providing orders agreed in all respects save one.
The finalisation of the matter was then delayed by the uncertainty that developed at about that time concerning the jurisdiction of this Court to deal with the matter. That uncertainty has now been clarified by the decision of the Full Court of the Federal Circuit and Family Court of Australia (Division 1) in Nevins & Urwin (heard and determined 21 April, 2022, orders made on 21 April, 2022, reasons for judgment reserved). I am satisfied that this Court has jurisdiction to deal with this matter.
I have caused corrected reasons to issue in accordance with the parties’ suggestions.
It remains to settle the form of order to be made, which as I say, is largely agreed. The issue in dispute concerns the amount of a superannuation splitting order necessary to give effect to my reasons.
The Applicant submits that my contributions based assessment at paragraph 100 of the reasons for judgment was 57%/43% in his favour. He further submits that “the future needs adjustment” was 5% (at paragraph 109) and the result was an overall division of 52%/48% in his favour. Thus, he says a splitting order that reflects that is appropriate – $1,031,121 rather than the $1,051,368 contended for by the respondent. There is a difference of $20,247.
To support her argument, the Respondent argues that paragraph 109 of my reasons for judgment refers to the future needs adjustment being $700,000 or a little over 5% resulting in her retaining 48.15% of the parties’ nett property. She argues that the reasons for judgment identifies a contributions based assessment of 57/43 in the Applicant’s favour but at paragraph 109 when referring to the adjustment to the Respondent I say, “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.”
The Respondent’s argument about the approach taken in my reasons is to be preferred because it aligns with what I said. I did not find that the “future needs” adjustment was 5%, but rather I assigned a dollar value to that adjustment of $700,000. I did not fix a percentage for that adjustment.
Based on the corrected table of assets and liabilities, the Applicant is entitled to $7,693,899.33 and the Respondent the balance of $5,804,169.67. After the adjustment of $700,000, the Respondent’s entitlement becomes $6,504,169.67, which I have rounded to $6,504,000. I have considered whether there ought to be an adjustment to the $700,000 adjustment having regard to the reduction in the overall nett value of the parties’ assets by reason of the corrections (about 0.784%) but in my view none is called for. It still represents a reasonable adjustment as set out in my earlier reasons.
Presently, the Respondent has nett assets in her possession worth $5,448,060.00, based upon the assets she will retain as recorded in the parties’ correspondence to my chambers.
Accordingly, to make up her entitlement, the amount of the superannuation split should be $1,055,940.00. I have made orders accordingly.
I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Jarrett. Associate:
Dated: 4 May 2022
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