Boardman and Boardman

[2018] FamCA 598

FAMILY COURT OF AUSTRALIA

BOARDMAN & BOARDMAN [2018] FamCA 598

FAMILY LAW – PROPERTY – Application by wife for an adjustment of property interests – Where consideration is given to the parties contributions – Where consideration is given to the s 75(2) factors – Orders made for the wife to receive 65 per cent of the property and the husband to receive 35 per cent of the property in circumstance where the Court is satisfied that it is just and equitable to do so.

Family Law Act 1975 (Cth)

Stanford v Stanford (2012) 247 CLR 108, [2012] HCA 52
Hickey and Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Bevan & Bevan (2013) FLC 93-545
Chapman & Chapman [2014] FamCAFC 91

APPLICANT: Ms Boardman

RESPONDENT: Mr Boardman

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: LNC 411 of 2017

DATE DELIVERED: 17 July 2018

PLACE DELIVERED: Launceston

PLACE HEARD: Launceston

JUDGMENT OF: Benjamin J

HEARING DATE: 17 July 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Peterson

SOLICITOR FOR THE APPLICANT: Peterson Legal

COUNSEL FOR THE RESPONDENT: Ms Henderson

SOLICITOR FOR THE RESPONDENT: Walker Henderson

Orders

1. Within seven (7) days of the date of this Order the parties shall do all acts and sign all documents to cause the money amounting to about $706,614 jointly held in their ANZ Online Saver account  number *****27 ‘(the proceeds of sale’) to be paid as to $503,075 to the wife and $203,539 to the husband.

2. If there are any additional monies or if there is any short-fall in proceeds of sale account the parties shall cause the additional money to be paid as to 65 per cent to the wife and 35 per cent to the husband and if there is a short-fall the parties shall cause it to be paid as to 65 per cent by the wife and 35 per cent by the husband.

IT IS NOTED

1. Each of the parties will be liable for the income tax on one half of the interest accrued or accruing on proceeds of sale.

IT IS DELCARED

1. The wife shall be solely entitled as against the husband to:-

   (a)the interest in her bank accounts referred to in her July 2018 Financial Statement;

   (b)the $16,000 camper trailer in her possession;

   (c)her motor vehicle 1;

   (d)her interest in her B Super fund; and

   (e)other personal property in her possession and/or control.

2. The wife shall be responsible, as against the husband, for the amount outstanding in respect of her MasterCard liability.

3. The husband shall be entitled as against the wife to:-

   (a)the money in his bank accounts referred to in his July 2018 Financial Statement;

   (b)the camper trailer which he recently acquired for $6,500;

   (c)cash of about $2,000;

   (d)his C Ltd shares;

   (e)     motor vehicle 2 registered number …;

   (f)his $500 box trailer;

   (g)his entitlement to outstanding recreational leave and long service leave;

   (h)his entitlements to his D Super funds subject to the splitting order set out below; and 

   (i)      other personal property in his possession and/or control.

IT IS FURTHER ORDERED

1. BY CONSENT this splitting order has effect from the operative time AND:-

   (a)in accordance with paragraph 90MT(1)A of the Family Law Act 1975 (Cth) whenever a splittable payment becomes payable in respect of the husband’s interest in D Super Fund … the wife is entitled to a base amount of $137,475 and there is a corresponding reduction entitlement of the person to whom the splittable payment would have been made but for these orders;

   (b)the operative time of this order is twenty five (25) business days after the date of service of this order on the Trustee of the superannuation fund;

   (c)the parties shall forward a copy of this order to the Trustees of the superannuation fund within seven (7) days from today’s date to confirm procedural fairness in relation to this splitting order; and

   (d)in the event that the Trustees and/or either of the parties need to apply for variation of this splitting order in terms of its mechanical provisions, they may do so within twenty eight (28) days from the date of this order, after which date this order will bind the trustee of the superannuation fund.

2. The spousal maintenance order made in these proceedings on 7 November 2017 is discharged as and from the date of this order.

3. All extant applications be and are dismissed; except as to costs.

4. Any application as to costs to be made in accordance with the Family Law Rules 2004 and within the times prescribed by the Rules.

IT IS DIRECTED

1. A copy of the ex tempore reasons for these Orders to be taken out and placed on the Court file.

IT IS CERTIFIED

1. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage Counsel to attend.

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym Boardman & Boardman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT LAUNCESTON

FILE NUMBER: LNC 411 of 2017

Ms Boardman

Applicant

And

Mr Boardman

Respondent

EX TEMPORE REASONS FOR JUDGMENT

INTRODUCTION

1. Ms Boardman (‘the wife’) and Mr Boardman (‘the husband’) have been involved in proceedings for parenting and property in this Court, and in the Federal Circuit Court initially, for a significant period of time.  The proceedings were transferred to this Court and the parties, resolved the parenting issues in what I regard as an effective and a sensible way.  What was left was the division of the modest property which these parties have accumulated over a very long period of time.  It is a case where the wife seeks an adjustment of property as to 70 per cent to herself and 30 per cent to the husband, asserting that certain property should be added back or included, and asserting that long service leave and recreational leave should be treated as a holistic sum rather than a deduction of any amount with regard to tax that may or may not apply to it.

2. The husband, on the other hand, asserts that his contributions during the marriage, particularly in terms of his skills, and his support of the family post-separation, was such that his contributions were greater than those of the wife.  Counsel for the husband asserts that any adjustment under the future needs should be modest to the extent that there ought to be a division as to 57.5 per cent of the property to the wife and 42.1 per cent to the husband.  The parties had agreed to equal division of their significant superannuation, and given the circumstances of this case and the matters to which I will refer later in these reasons, I will make that consent order at the end of these reasons.

3. Both the parties are aged 46.  It appears that they commenced cohabitation in 1994.  They married in 1998.  They separated under the same roof in July 2016, and that arrangement operated for almost five or six months.  The parties finally physically separated in December 2016.  I observed that this would have been a terrible time for all concerned and a highly emotional time and that, perhaps, is one of the reasons that the conflict in this matter has not settled down as one would have hoped in the years that have followed.  There are three children of the marriage: X, aged 16; Y, aged 14; and Z, aged nine but is about to celebrate his 10th birthday (collectively “the children”).

4. The consent orders into which the parties entered provide that the children will live about nine days a fortnight with the wife, and about three days a fortnight with the husband during the four 10-week school terms, and spend equal time with each parent over the school holiday period.  The husband is a qualified tradesman, and a pretty handy bloke from what I can gather from his affidavit in terms of working about the house.  He earns about $120,000 a year, and I will discuss his income a bit later.  The wife is employed in administration and earns about $587 per week.  In addition, she receives the Family Tax Benefit, rent assistance, and child support in relation to the three children.

5. That is likely to change in the future, although it is not clear how much it will change.  It will, perhaps, go down a little because of the parenting arrangements that have been put in place.  It will, perhaps, go up a little because of the income which the husband has set out today; his taxable income last year was, about $104,000 or $105,000 for the purposes of the Child Support (Assessment Act) 1989 (Cth), and I cannot take it any further than that.  It will be a little higher this year. 

6. It is not in issue that the wife has been the primary carer of the children throughout the relationship, and there is an issue as to the extent of care offered by the husband.  The wife relied upon: her application insofar as it was related to property, filed 17 August 2017; her financial statement, filed 3 July 2018; and her affidavit, filed the same day.  In addition, significant financial documents were tendered to me in terms of the wife, being Exhibit E1.  I have had regard to that material in the areas to which I have been taken.  The husband relied upon: his response, filed 3 November 2017; his affidavit, filed 3 July 2018; and his financial statement, filed the same day.

7. Each of the parties prepared and filed a case outline to which I have had regard in terms not of the assertions of evidence contained in those documents, but in terms of the positions that each of the parties adopted.  The husband also prepared a tender bundle, which is Exhibit E2, to which I have had regard.

THE LAW AND DISCUSSION

1. The law regarding the treatment of property is under some level of refocus and review following the High Court decision in Stanford v Stanford.[1]  Prior to that decision the preferred (although not uncontroversial approach) was the four stage process reflected by the Full Court in cases such as Hickey and Hickey and the Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143.

   [1] (2012) 247 CLR 108, [2012] HCA 52.

2. Following Stanford v Stanford (supra) the Court must firstly satisfy the requirement of s 79(2), that any order must be “just and equitable”, before then examining what orders should be made under s 79(4). 

3. This approach was later adopted in Bevan & Bevan[2], where Bryant CJ and Thackray J noted that the Stanford v Stanford (supra):-

   decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.[3]

   [2] (2013) FLC 93-545.

   [3] Ibid at para 65.

4. In Chapman & Chapman[4]the Full Court considered the independence of ss 79(2) and 79(4) and agreed that Bevan & Bevan correctly stated the law in relation to the Courts consideration of s 79(2), whether the making of an order is just and equitable.  At paragraph 19 of their joint reasons Strickland and Murphy JJ confirmed:-

   Section 79 demands a consideration, separately, of all of its requirements without conflation. 

   [4] [2014] FamCAFC 91.

5. However, their Honours disagreed with any intention of plurality found in Bevan & Bevan, (supra) in that the Court must consider the matters in s 74(2) when addressing s 79(2) of the Family Law Act 1975 (Cth) (‘the Act’). This was in view of the opposite approach adopted by the High Court in Stanford.  Bryant CJ in a separate judgment noted:-

   Whatever differences may exist as to the meaning of [84] and [85] of Bevan, I am in agreement with Strickland and Murphy JJ that it is not a requirement to take account of the matters in s 79(4) when considering the question of whether it is just and equitable to make any order under s 79(2). But as long as they are seen as separate and not conflated, the factors in s 79(4) have the potential to inform the decision under s 79(2) …

6. My task, however, is four-fold.  First, to identify the legal and equitable interest in property owned by the parties.  Second, to consider the contribution of both parties, particularly in terms of initial contribution, contribution during the time they were together, and post‑separation contribution.  Third, I am to consider the future needs of the parties, the so-called s 75(2) factors, which is a prospective task.  And fourth, my task is to consider whether, in all the circumstances, the conclusions to which I come are just and equitable and, if not, ensure that they become just and equitable which is, in a sense, to review my thinking and determine what I consider is just and equitable in all the circumstances of these parties' cases.

7. The High Court in Stanford & Stanford (supra) has said that the first thing the Court needs to do is consider whether there ought to be property orders at all once I determine the legal and equitable interests in the property.  Given the circumstances of these parties, the way the property is distributed at the present time, and their agreement in relation to superannuation, it seems to me that it is appropriate for me to consider an adjustment of property in the circumstances of these parties.  The first matter to which I will turn is the question of superannuation.  The husband has accumulated superannuation to a total of about $330,985.  The wife's accumulation is some $56,035.  Together, this totals some $387,020.

8. The parties have polished the numbers which I had talked about earlier, and came to a slightly different figure.  They say that this is a more accurate figure representing an equal division of the superannuation, and in circumstances where the Trustee has been given procedural fairness. 

9. I am told that the Trustee has not been given procedural fairness.  However, what I will do is make an order giving the Trustee and the parties leave to apply to the Court to make mechanical orders to give effect to orders which the trustee is likely to accept.  The division will mean that the totality of the superannuation of about $380,000 is divided equally between the parties, and the accumulation of superannuation from now onwards will be a matter for the parties individually rather than as a couple. 

10. In terms of the property, much of the property has been agreed.  It is agreed that the proceeds of sale of the parties' home is some $706,614.  This is in a joint account, and I note and accept that each of the parties has been paying tax on their share of the interest on that account, or will pay tax on their share of the interest on that account.  I had earlier in these proceedings made a spouse maintenance order requiring the payment of the interest on that account to the wife.  I am told, and it seems not in issue, that an amount of about $15,000 has been paid to the wife pursuant to that order 50 per cent of this is probably money to which she would have been entitled anyway, and the other 50 per cent being by way of spousal maintenance.  That spousal maintenance order will be discharged today.

11. The parties agree that there are C Ltd shares in the husband's name to the extent of about $808, that he has a motor vehicle 2 which has a value of $22,000, that there is a trailer with a value of about $500; and that the husband has long service leave entitlements which I will deal with later on in these reasons.  The parties agree that the husband has in his bank account some $8,706, and I will deal with that in these reasons a little bit later.  The parties agree that the wife has in her bank account $26,337.  She has a camper trailer with a value of some $16,000 and a motor vehicle 2 with a value of some $20,000.  She has an ANZ credit card liability of $1027 which gives her, excluding the proceeds of the sale of the home, a nett pool of assets of $61,310.

12. The significant matters with which I have to deal insofar as the pool of property is concerned is the leave and long service entitlements of the husband, and the money in the husband's bank account.  The husband's evidence is that he has a significant accumulation of recreational leave and long service leave.  He and his legal representative have valued this as an asset of some $26,988; those figures as set out in the annexure to the husband's affidavit.  The wife, through her counsel, submits that this property should be treated on a holistic basis at its gross value rather than its nett value, which amounts to some $43,900-odd.  I am a bit troubled by that course for a number of reasons.  Firstly, that whichever way the husband receives this property, he will need to pay some tax on it.

13. It cannot be said to be a modest amount which could be tax-free at some stage in the future.  If the husband takes it as leave, it will be income to him.  If he changes his employment, it will be paid out, and it will be paid out depending on the cycle in his year at some large sum.  And of course, in years to come he will need to pay child support on that sum.  Accordingly, I will treat the value of that asset as submitted by or on behalf of the husband of $26,988.

14. The second and more troubling aspect is the money in the husband’s bank account.  In March of 2018, the husband had some $54,465 in his bank account.  He deposes, and I accept, that he earns a significant income and that his expenses are less than his income.  And yet between March and this year, and despite receiving about $27,000 in income, the husband’s bank account has reduced from that $54,000 approximately to $8,400.  He was rightly questioned in relation to that change. 

15. What we learned from that were a number of things.  First of all, that the husband has bought another camper trailer for some $6,500, which has not been the subject of valuation, and the paperwork has not been produced.  I make no criticism of counsel for the husband in relation to her confusion, because it in fact reflected my confusion when I first read the papers.  I assume that the trailer was the husband’s trailer.  So that would normally be an asset to which I need to have regard.  The husband has paid school fees, and there is an issue as to what he has paid: whether he has paid $2,000 a year or a little bit more for each of the children, or whether he has paid $2,000 in total.  What is clear is he has paid significant school fees in advance which could be as low as $2,000 and which could be as high as $8,000. 

16. In addition, the husband has paid his medical insurance two years in advance and says that he spent some $4,000 on that.  Finally, he has paid some $22,500 in relation to advance child support.  This could amount from somewhere between $30,000 to $40,000 of assets which have not been properly disclosed.  I am deeply troubled by it. 

17. In addition, there is a sum of $15,000 which the husband took out to buy a caravan, but he did not buy the caravan.  In addition, the husband has about $2,000 in cash.  On the evidence before me, it is very hard for me to calculate how much money the husband actually has, although the authorities say that, given the nature of the evidence, I should not be overly troubled by that.  The wife’s counsel says that I should treat the highest level of the bank account in March of this year as the real value of that account, having regard to those other assets.  I am a little troubled by that, because it floats up and down on a fortnightly basis with the husband’s wage.  What I will do is treat that sum of the bank account and the other payments in advance as submitted by her counsel and his case outline of some $50,064.

18. Therefore, the husband’s property is his bank account and other assets including payments in advance, which I assess on the evidence before me of $50,064, his C Ltd shares of $808, his motor vehicle 2 of $22,000, his trailer of $500, and his leave and long service entitlements of $26,988, which total sum $100,360.  The reader might ask why I have not included the additional trailer.  Well, I have dealt with that in the other part in any event, and I tried to be careful not to double count that sum.  Therefore the property amounts to the superannuation to which I have earlier alluded, the $100,360 of the husband, and the $61,310 of the wife, and the proceeds of sale of their property.

1. I must now turn to the question of contribution.  From the material before me, it appears that the parties each contributed fairly equally when they first commenced cohabitation.  That was conceded by counsel for the parties at the commencement of the hearing.  Over the course of the marriage, the husband’s financial contribution has been overwhelmingly greater than those of the wife.  However, the wife’s contribution in terms of homemaker and carer have been significant, more than just significant.

2. I was taken by her evidence of the support she gave her husband and he gave her when they were doing the renovations on their home, probably in much happier times.  I am satisfied that each of those parties applied themselves as hard as they could in every sense of the word in financial, non-financial roles as home-maker and parent over the course of their relationship, and I am satisfied that their contribution over that period of time was equal.

3. Subsequent to separation, the parties were involved in these terrible proceedings.  The husband clearly paid more in terms of finances and the wife clearly provided more in terms of the care of the children, notwithstanding the husband’s concerns that he wanted to be involved in the care of the children.  I am not satisfied that the contributions post-separation were other than the contributions of this hardworking couple during the course of the relationship:  that is, equal contributions.  My next thought must go to the question of the future needs of the parties or the so-called s 75(2) factors. 

4. Each of the parties are relatively young, at least from my perspective, and they enjoy good health.  I have set out the financial resources of these parties, and whilst at some levels it sounds a lot, it is fairly modest, and that in itself makes the determinations I need to make much more challenging. 

5. Each of them are able to work;  however, the wife’s ability to work is limited by her past efforts in parenting the children and her loss of skills, although it appears that she is a determined person, to say the least, and has found some employment.  It is unlikely that she will earn the income that the husband earns, which is quite a considerable sum.  The wife has had the primary care and control of the three children to whom I have earlier referred.  Neither has commitments to support any other person of any significance. 

6. I have not had regard to the pension entitlements received by the wife, given the requirements under the Act that I should disregard those sums under s 75(2).

7. There was some submission as to the standard of living of the parties.  I am confident that the standard of living of both parties has diminished somewhat, although it is likely that the standard of living of the wife has deteriorated at a greater level.  The effect of this property order will mean that the wife does not receive the money that she otherwise received on the interest, and it is likely that she will apply that money to purchase a home or some other accommodation. 

8. The fundamental issues in terms of the s 76(2) factors are:-

   a)the care of the children; and

   b)the earning capacity and differential in earning capacity of the parties. 

   And it is significant.  In my view, there ought to be an adjustment of 15 per cent in that regard.  The effect of that would be that the total property of the parties amounts to some $868,284.  Sixty-five per cent of that sum is $564,385, of which the wife already has $61,310, which would mean out of the pool of property of the proceeds of sale of the home, she would need to be paid $503,075.  Thirty-five per cent for the husband would amount to some $303,889, of which he has $100,310, to which I have earlier alluded, which means that the payment to him from that fund should be some $203,539.  When I calculate those sums, they add up to $706,614, and that, I think, balances out.  But as I said, I will give leave for the parties to apply to this court in the event that my arithmetic is incorrect.

9. I am satisfied that that is in all the circumstances just and equitable.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 17 July 2018.

Associate:

Date:              9 August 2018