Kaiser and Kaiser
[2016] FCCA 1903
•27 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KAISER & KAISER | [2016] FCCA 1903 |
| Catchwords: FAMILY LAW – Property settlement – where the property pool is very small – spousal maintenance – where the husband is a member of a very wealthy family – whether monies annually gifted to him by his mother are “financial resources” under s.75(2)(b) – whether there are other financial resources available to the husband – where the husband has made a very generous offer of spousal maintenance but the wife will not accept that offer. |
| Legislation: Family Law Act 1975, ss.75(2), 79(2), 79(4), 90MT(1)(b) |
| Cases cited: Stanford v Stanford (2012) FLC 93-495 |
| Applicant: | MS KAISER |
| Respondent: | MR KAISER |
| File Number: | MLC 5594 of 2013 |
| Judgment of: | Judge Small |
| Hearing date: | 19 February 2016 |
| Date of Last Submission: | 8 July 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 27 July 2016 |
REPRESENTATION
| Counsel for the Applicant: | Self-represented |
| Counsel for the Respondent: | Mr Brown, Q.C. |
| Solicitors for the Respondent: | Septimus Jones & Lee |
ORDERS
SPOUSAL MAINTENANCE
That until 30 June 2024, the husband pay for the wife by way of periodic spousal maintenance, the following expenses:
(a)The rent on any property rented as a primary residence for the wife and the children of the marriage (“the rental property”), such rent not to exceed to the sum of $950 per week indexed on 1 July each year pursuant to the Australian Consumer Price Index;
(b)Any gas or electricity account for the rental property.
In order to effect the provisions of Order (1) hereof:
(a)within 7 days of the date of these orders, the wife shall provide to her current real estate agent/landlord and gas and electricity providers the husband’s address and contact details and shall instruct them to send all future rental and electricity and gas accounts to the husband until 30 June 2024;
(b)The wife shall be at liberty to provide a copy of these orders to her real estate agent/landlord and gas and electricity providers for that purpose;
(c)Within 14 days of the date of these orders the husband shall confirm his obligations under paragraph (1) of these orders in writing to the wife’s landlord or real estate agent and to her gas and electricity providers;
and
(d)Should the wife relocate from her current premises, the provisions of subparagraphs (a), (b) and (c) hereof shall pertain to any new premises leased by her.
PROPERTY
Within fourteen days of the date of these orders the husband shall do all such acts and things and sign all such documents as may be necessary to sell the Subaru (omitted) motor vehicle formerly registered in his name and shall place the nett proceeds of that sale into an account nominated by the wife for her use and benefit absolutely.
The husband shall provide to the wife all documents evidencing the details of the sale of the motor vehicle within seven days of the sale.
Whenever a splittable payment becomes payable to the husband Mr Kaiser (“the husband”) from his interest in the (omitted) Superannuation Fund (“the Fund”), it is ordered that the wife Ms Kaiser (“the wife”) is entitled to 100% of the said interest as it stood on 8 July 2016, being the specified percentage in accordance with section 90MT(1)(b) of the Family Law Act 1975 of the splittable payment, and there is a corresponding reduction in the entitlement of the husband which he would otherwise have had but for these Orders.
The operative time for the purpose of these Orders is the fourth business day after the day on which a sealed copy of these Orders is served on the Trustee of the Fund.
Having been accorded procedural fairness in relation to the making of this Order, this Order binds the Trustee of the Fund.
The Trustee of the Fund, and the husband and the wife, in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 shall do all acts and things and sign all such documents as may be necessary to calculate the entitlement of and make payment to the wife in accordance with this Order.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:
(a)each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders.
(b)insurance policies remain the sole property of the owner named thereon;
(c)each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and
(e)each party forgoes any claim they may have to any inheritances to which the other party is entitled either presently or in the future.
IT IS NOTED that publication of this judgment under the pseudonym Kaiser & Kaiser is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 5594 of 2013
| MS KAISER |
Applicant
And
| MR KAISER |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property and spousal maintenance proceedings between Ms Kaiser (“Ms Kaiser” or “the wife”) and Mr Kaiser (“Mr Kaiser” or “the husband”).
The issues in these proceedings were dramatically narrowed on the second day of the trial, when the husband made an exceptionally generous offer in relation to periodic spousal maintenance and a property settlement.
The wife, who was self-represented for most of the proceedings, was not prepared to accept that offer and so it is necessary for me to deliver this judgment.
The particular issues can be said to be the following:
A.Whether the husband should purchase for the wife a house to the value of up to one-and-a-half million dollars
B.Whether the husband’s financial resources mean that he is able to pay periodic spousal maintenance and if so, how much and for what period?
Background
Mr Kaiser was born on (omitted) 1974 and is now 42 years of age. Ms Kaiser was born on (omitted) 1976 and is now 39 years of age.
Mr Kaiser is a member of the (omitted) family, well-known prominent business people and philanthropists in Melbourne.
I do not usually include the antecedents of a party in Reasons for Judgment but in this case, Mr Kaiser’s family heritage and its possible implications for his financial capacity to pay spousal maintenance are central to the proceedings.
The parties started living together in Melbourne in (omitted) 1999 and were married in (omitted) 2000.
The parties have two children: X born on (omitted) 2001 and Y born on (omitted) 2006. The children live week about with each parent pursuant to the final parenting orders made by consent on 27 October 2015.
The parties separated on 10 March 2011 and were divorced on 22 August 2013.
Ms Kaiser is unemployed and has been studying, while Mr Kaiser is a (occupation omitted) who works as (occupation omitted) for an (employer omitted).
The husband has re-partnered and lives with his partner in her home in an (omitted) suburb.
The wife has not re-partnered and lives in rental accommodation, also in an (omitted) suburb not far from the husband’s home.
Procedural History
This matter first came before me in the duty list at Melbourne on 17 September 2013. The parties were both represented on this occasion and were able to consent to interim parenting Orders on that day.
It then returned before me for directions on 23 October 2013 where I heard the issues in dispute regarding parenting. On 25 October 2013, I delivered Judgment and handed down detailed interim parenting Orders and set the matter down for trial.
The matter then came before me for trial on 15 September 2014 when further interim orders were made by consent and the matter was adjourned to 18 November 2014.
I delivered a judgment on 18 November 2014 regarding a discrete parenting issue (specifically, the renewing of a passport for one of the children for a family holiday to (country omitted)) when it was listed for directions.
The matter returned again on 28 April 2015 for directions. The appointment of an Independent Children’s Lawyer was ordered and I made orders allowing the Father to leave the Commonwealth of Australia with the children for another family holiday. I also ordered the wife to attend Dr D for a psychiatric report and the outstanding parenting matters were adjourned to Trial.
On 18 August 2015 the matter returned for directions on the issue of subpoenas as objections had been raised by the husband’s mother to certain subpoenas issued by the wife. Those objections were upheld and orders were made for the accountant who provides accountancy services to the husband’s mother’s companies and other entities to provide an affidavit in relation to the husband’s entitlements under various trusts in which he is listed as a beneficiary.
On 26 October 2015, the matter was listed for final hearing and was heard by Judge Bender. The parties were able to come to final consent minutes regarding their two children and Judge Bender made procedural orders in relation to the filing of material about property and spousal maintenance matters.
The wife filed an Application in a Case seeking a property settlement and spousal maintenance, a supporting affidavit and a sworn financial statement on 30 November 2015.
Ms Kaiser sought orders that the husband purchase her a house in the (omitted) area of Melbourne with a minimum of three bedrooms and “sufficient area for the children and the large family dog”. She sought to live in that house rent-free and for the husband to pay all council rates and utilities costs associated with the house.
When the children decided to leave home, providing that each was over the age of 18, the house would be sold and the wife would retain 30% of the net sale proceeds.
In addition, she sought an order that the husband purchase her a new car at a minimum value of $40,000 and that his entire superannuation entitlements in the “(omitted) Superannuation Scheme” be transferred to her.
Ms Kaiser also sought orders for spousal maintenance of $500 per week when the children are residing with her and $200 per week when the children are living with their father and that the father pay all schooling expenses associated with children’s education.
The husband filed a Response to an Application in a Case and an affidavit in support on 22 December 2015, seeking that the wife’s Application in a Case be dismissed.
On 19 February 2016, the matter came before me for trial.
Ms Kaiser was the only witness in support of her application and the husband, who was represented by Queen’s Counsel, did not seek to cross-examine her.
The husband gave his evidence in chief and the matter was adjourned to 8 July 2016 part heard during Ms Kaiser’s cross examination of the husband.
On 4 July 2016, the parties came before me for directions, again regarding objections to the issuing of subpoenas by Ms Kaiser. I heard those objections and delivered Judgment on that issue on 7 July 2016.
The part-heard trial continued on 8 July 2016 with evidence being given by the husband and Mr P, the accountant for various entities owned and operated by the husband’s mother and was completed the same day after the issues had been substantially narrowed.
I reserved my judgment after submissions from both parties.
The Law and the Evidence
Property settlement
Ms Kaiser is the Applicant in this phase of the proceedings. That is, it is she who seeks an order that the husband provide her with a property settlement in the form of a house worth $1.5 million and ongoing spousal maintenance.
The onus is therefore on her to prove first that it is just and equitable in all the circumstances to alter the parties’ property interests in the terms she seeks, second that she is in need of spousal maintenance, and third that the husband has the capacity to provide that maintenance.
The first question to be asked in relation to any proposed property settlement is whether it is just and equitable in all the circumstances to alter the parties’ current property interests.
That task is mandated by s.79(2) of the Family Law Act 1975 (“the Act”) which says that the court may not make any order for a property settlement between the parties to a marriage unless the court is satisfied that it is just and equitable to do so.
In Stanford v Stanford[1], the High Court said the following at paragraph 42:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife.
[1] Stanford v Stanford (2012) FLC 93-495
In Bevan & Bevan[2] the Full Court said that the circumstances described in the above passage of the Stanford judgment “encapsulate the vast majority of cases”[3] .
[2] Bevan &Bevan [2013]FamCAFC 116
[3] Bevan &Bevan [2013]FamCAFC 116 paragraph 70
In this case the parties were living together and then married for 12 years. They acquired property together and are now divorced. Therefore there is not and will not be common use of their property in the future.
As there is nothing in this case to distinguish it from “the vast majority of cases”, despite the wife’s belief that Mr Kaiser has access to significantly greater financial resources than he discloses, I find that it is just and equitable in all the circumstances under s.79(2) to consider making orders which will result in an alteration of the parties’ property interests in this case.
The next task of the court is to identify the current legal and equitable interests of the parties in their property.
In this case the property pool is very meagre indeed. It consists of a motor vehicle worth about $8,000, the husband’s superannuation entitlements of some $39,000 and some farm equipment worth about $5,000.
The wife conceded at trial that she could not prove that Mr Kaiser owned any other property and she never claimed that she owned any other property herself.
The husband says through his counsel that he would consent to orders that:
· he sell the motor vehicle, said to be worth about $8,000, and pay the wife the entire proceeds of that sale,
· he transfer 100% of his superannuation entitlements of about $39,000 to the wife by way of a superannuation splitting order
and
· that he retain the farm equipment, whose value is put at about $5,000.
In addition to those orders, the husband proposed on the second day of trial that the court make an order that he pay the wife’s current Telstra account in the sum of $3,800, as well as any arrears currently owing on that account. That order was made and the payment was characterised as a part property settlement.
Having established the parameters of the property pool, I must now consider the contributions that each party has made to that property pool pursuant to s.79(4) of the Act.
The evidence before the court is that during the relationship and marriage the husband made greater financial contributions, while the wife’s contributions, of equal value to the husband’s financial contributions, were primarily made by way of her homemaker and parent role.
Post-separation contributions have been made by the husband by way of rental payments for the wife and children’s accommodation, the wife’s pharmacy accounts and various other utility accounts of the wife.
In those circumstances, it is clear that the majority of the financial contributions have been made by the husband while the wife has made significant homemaker and parent contributions as well.
I would quantify the parties’ contributions at 55% to the husband and 45% to the wife.
The next matter I must take into account when deciding whether to adjust the property interests of the parties is the factors set out in s.75(2) of the Act.
S.75(2) states as follows:
75(2)(a) the age and state of health of each of the parties
75(2)(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
75(2)(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
Section 75(2)(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
75(2)(e) the responsibilities of either party to support any other person; and
75(2)(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party
75(2)(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
75(2) (h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
75(2) (ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
75(2) (j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
75(2) (k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
75(2) (l) the need to protect a party who wishes to continue that party’s role as a parent; and
75(2)(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
75(2)(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
75(2)(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
75(2)(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
75(2)(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
75(2)(p) the terms of any financial agreement that is binding on the parties to the marriage; and
75(2) (q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
On the first day of trial, the husband’s counsel conceded that the wife is unable to support herself and the children at a reasonable standard of living in the circumstances of this family.
Almost the entire remainder of the trial was spent on the issue of the husband’s financial resources and whether they allow him to pay the property settlement and spousal maintenance sought by the wife.
It was the husband’s evidence that in addition to his salary, which exceeds $100,000 per year, he receives from his mother the sum of $50,000 a year by way of a gift. That the payment is a gift is evidenced in writing and it was Mr Kaiser’s evidence that he can expect to receive those monies when he asks for them. As those monies are gifts, he does not pay income tax on them.
He also conceded that his mother had paid about $133,000 to his lawyers for his legal fees in these proceedings.
Mr Kaiser’s evidence indicated that he is able to travel both overseas and domestically for summer and winter holidays and that he lives in a property owned by his partner in return for which he pays his partner about $450 per week.
It was also his evidence that he had taken an overseas business trip to the (country omitted) and (country omitted) earlier this year and that the flights for that trip had been paid by a company owned by his partner. While the company is a client of his employer, it is not otherwise associated with his work and there was no evidence adduced about any connection between the business trip and his partner’s company.
The wife has been studying and is receiving Centrelink benefits and she suffers from anxiety to the extent that she is sometimes unable to look for work. She also deposes to needing extensive and expensive dental treatment, which was not challenged by the husband at trial.
The parties share the care of their two daughters, and Mr Kaiser pays for some of their extracurricular activities but not to the extent which the wife would like.
When I consider the matters set out in s.75(2), I find that they favour the needs of the wife to a considerable extent.
In normal circumstances, I would therefore find that it would be just and equitable overall for the property of the parties to be divided 65% to the wife and 35% to the husband.
However, the husband has said that he will accept an order that the wife retains virtually 100% of the property[4]. Indeed he urges me to make that order and in all the circumstances, I believe it is just and equitable to do so.
[4] By my calculations the total property of the parties is worth $52,000. Ms Kaiser will receive cash and entitlements worth $50,800, or almost 98%.
The wife sought a property settlement in which the husband would pay for a house for her and the parties’ children to a value of $1.5 million.
There is no evidence before the court whatsoever that the husband has assets or financial resources which would give him the capacity to fulfil that claim and it is simply not possible for the court to make an order to that effect.
I will therefore make the orders as proposed by the husband so that the wife retains all the parties’ assets save for the farm equipment.
The property settlement might be set out thus:
The wife will receive:
Subaru (omitted) sales proceeds $8,000
The husband’s superannuation entitlements $39,000
Cash payment of Telstra account $3,800
Total $50,800
The husband will receive:
Farm equipment $5,000
Less cash payment of Telstra account $3,800
Total $1,200
Spousal maintenance
The wife’s actual claim for spousal maintenance as set out in her documents is in the sum of $350 per week on average. She seeks $500 per week when the children are residing with her and $200 per week when they live with their father.
However, the husband proposes to pay the wife’s rent and her gas and utility bills for the next eight years and he seeks orders in those terms. The wife’s rent alone is $950 per week, far in excess of her stated claim.
The husband’s spousal maintenance offer is extremely generous and together with the evidence of his mother having paid his considerable legal fees, indicates that he does have financial resources beyond his salary and the stated gift from his mother. I cannot quantify those resources on the evidence before me but I am satisfied that the husband has the capacity to pay the amounts for which he seeks orders[5].
[5] I note that in his Financial Statement sworn and filed 22 December 2015 the husband deposes that it is his mother who pays the sum of $895 per week for the wife’s rent as well as $65 in “other assistance” for his benefit.
I will therefore make orders that the husband pay for the wife’s maintenance her rent, gas and electricity bills until 30 June 2024.
The final issue for me to decide in this matter is whether the amounts paid by way of spousal maintenance ought to be paid directly to the wife’s landlord/real estate agent and to the utility companies, or whether they should be paid directly to the wife.
Ms Kaiser suffers from anxiety and there is evidence that there have been times when her rent and utility payments have been in arrears, causing her further distress. Indeed, Mr Kaiser’s evidence was that the electricity and water to the wife’s home had been cut off in 2014 or 2015 because of her failure to pay those accounts. In addition, Ms Kaiser complained of having several unpaid accounts at trial.
However, she says it would be insulting to her if she were not given the ability to control her own finances and she seeks an order that the monies be paid directly to her.
The husband is concerned about Ms Kaiser’s ability to manage her affairs and he wishes to pay the monies to the real estate agent/landlord and to the utility companies so that he can be certain that the rent on the property where his children spend half their time is paid and that they have the appropriate utilities.
Ms Kaiser’s presentation at trial was that of an articulate and intelligent woman who nevertheless suffered from some disturbance in her thought processes so that it was often difficult to tell exactly what she was asking the court to do.
She was focused almost entirely on trying to prove to the court that Mr Kaiser, through his family, had the financial resources to buy her and the children a house as well as paying her spousal maintenance.
It must be said that she was somewhat successful in that endeavour, although of course, the husband’s family are not liable to pay for a house for the wife and the children under the Family Law Act.
Nevertheless, as Ms Kaiser focused on the needs of the children to have secure accommodation, I find that it would be more appropriate and more likely to allay her fears about that security, if her rent, gas and electricity accounts were paid to the real estate agent/landlord and utility companies.
That will allow Ms Kaiser to concentrate on obtaining qualifications and employment so that she can help support herself and the children in the longer term without the need to worry about the baseline fundamentals of their accommodation.
I note that Ms Kaiser will still be responsible for paying her telephone account, for food, clothing and household supplies for herself and the children and for her pharmacy account, as well as for the dental treatment she says she needs so urgently.
Conclusion
This has been a difficult case, not because of its particular facts but because of the unrealistic expectations of the wife in relation to its outcome.
While married to Mr Kaiser, Ms Kaiser was the beneficiary of the largesse of Mr Kaiser’s wealthy family and the evidence is that the parties lived a very comfortable life. She no doubt expected her standard of living while married to continue after she and the husband separated.
She believed throughout the proceedings that Mr Kaiser was in receipt of distributions of money or benefits from various family trusts controlled by his mother.
Unfortunately for her, the evidence of the trusts’ accountant, Mr P, was that Mr Kaiser, although he is indeed a beneficiary of those trusts, has never received any distribution of monies from them. Mr P gave evidence at trial and his evidence on that point could not be shaken under persistent cross-examination from Ms Kaiser.
The outcome of these proceedings is that Ms Kaiser will be secure in her accommodation for the next eight years at the expense of her former husband. She will also receive the proceeds of sale of the Subaru (omitted) motor vehicle and 100% of Mr Kaiser’s current superannuation entitlements.
It is difficult to know whether Ms Kaiser will be satisfied with that settlement but she should understand that in all the circumstances of this case, it is a generous settlement at law.
It is to be hoped that she will use the time during which she is supported by the husband to resolve her health issues and to retrain for employment so that she might be able to support herself independently into the future.
I certify that the preceding eighty eight (88) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 27 July 2016
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Procedural Fairness
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Remedies
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Injunction
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Statutory Construction