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Quarantining initial contributions in a property settlement

Quarantining initial contributions in a property settlement

Barnell & Barnell [2020] FamCAFC 102

In the recent decision of Barnell & Barnell [2020] FamCAFC 102 the Full Court considered the issue of whether certain initial contributions to a relationship could be “quarantined” and dealt with separately to the other property.

The brief facts of the decision were that the wife was born in December 1968 and is 51 years of age.  The husband was born in June 1962 and is 57 years of age.

The parties commenced cohabitation in 1995 and married in March 1996.  They have 2 children aged (at Trial) 22 and 16 and were living with the wife.

The husband had been in a prior relationship, and during the prior relationship the husband received an inheritance in 1988 which he used to purchase land in Denmark.

In dealing with Property Settlement Orders the Full Court found, in summary, that the primary judge treated the husband’s introduction of the Denmark property as the sole factor distinguishing the husband’s contribution from those of the wife, resulting in the 25 percent disparity between the parties on the assessment of contributions.

As to the issue of the treatment of the introduction by the husband of the Denmark property to the marriage the Full Court comment at paragraph 42 and 43 as follows:

  1. “We are persuaded that by isolating the Denmark property in the manner in which his Honour did and by adopting a differential of as much as 25 per cent between the parties as to their contributions based entitlements as a consequence of “quarantining” the Denmark property, and giving discrete consideration to that contribution, the primary judge fell into the same error as was made at trial in each of Hurst and Jabour, as discussed in the appeals in those cases. We consider that his Honour’s approach had the overall effect of according a subsidiary role to the wife’s contributions.”
  2. “It follows from this conclusion that we are satisfied of merit in each of the wife’s grounds of appeal including that the primary judge acted on wrong principle, with the consequences of a miscarriage in the exercise of discretion. It follows that the appeal must be allowed, and the subject orders set aside.”

The Full Court effectively found against the notion of “quarantining” Property in s79 proceedings in mid to long term relationships.

Kim Wilson SC I Director I Accredited Family Law Specialist I Arbitrator | Nationally Accredited Mediator (AIFLAM)

Email: kim.wilson@kimwilson.com.au

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