Kiesinger & Paget
[2008] FamCAFC 23
•7 March 2008
FAMILY COURT OF AUSTRALIA
| KIESINGER & PAGET | [2008] FamCAFC 23 |
| FAMILY LAW - APPEAL – From decision of Family Court judge – interlocutory orders – leave to appeal FAMILY LAW - SPOUSAL MAINTENANCE – Interim – meaning of “adequately” – “adequately” to be determined having regard to the s 75(2) factors FAMILY LAW - SPOUSAL MAINTENANCE – Interim – where husband controlled over $17 million – where wife controlled over $270,000 – wife’s needs were $2,210 per week – where wife found to be unable to support herself adequately – trial Judge made an order for interim spousal maintenance of $2,000 per week and other expenses – no error of principle demonstrated or substantial injustice – leave to appeal refused |
| Family Law Act 1975, s 72, s 74, s 75(2) |
| Aarons v Knowles (1995) FLC 92-627 Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc. (1981) 148 CLR 170 Alfasi and The Alfasi Group (2006) FLC 93-271 Bruce F McLaren Holdings Pty Ltd & Ors v McLaren and McLaren (2000) FLC 93‑030 Butler, Man and Child Support Registrar [2003] FamCA 33 Mitchell and Mitchell (1995) FLC 92-601 Project Blue Sky v ABA (1998) 194 CLR 355 Rutherford and Rutherford (1991) FLC 92-255 Wilson and Wilson (1989) FLC 92-033 |
| APPLICANT: | Mr Kiesinger |
| RESPONDENT: | Ms Paget |
| FILE NUMBER: | PTW | 1586 | of | 2007 |
| APPEAL NUMBER: | WA | 17L | of | 2007 |
| DATE DELIVERED: | 7 March 2008 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Coleman, Warnick and Thackray JJ |
| HEARING DATE: | 31 January 2008 |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 23 August 2007 |
| LOWER COURT MNC: |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Dr A Dickey QC |
| SOLICITOR FOR THE APPLICANT: | Holden Barlow |
| COUNSEL FOR THE RESPONDENT: | Mr J B Hedges |
| SOLICITOR FOR THE RESPONDENT: | O'Sullivan Davies |
Orders
That the Form 2 Application in a Case filed by the applicant on 3 October 2007 and the Form 2A Response to an Application in a Case filed by the respondent on 23 October 2007 be dismissed.
That the applicant shall pay the respondent’s costs of the application as agreed or failing agreement, as assessed.
IT IS NOTED that publication of this judgment under the pseudonym Kiesinger and Paget is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 17L of 2007
File Number: PTW 1586 of 2007
| Mr Kiesinger |
Applicant
And
| Ms Paget |
Respondent
REASONS FOR JUDGMENT
Mr Kiesinger (“the husband”) seeks leave to appeal against an interim maintenance order made by Martin J on 23 August 2007. The respondent, Ms Paget (“the wife”), opposes the granting of leave.
Background
The husband and wife commenced cohabitation in 1984, prior to their marriage in 1987. They separated in 2006. They were both 45 years of age at the time of the hearing. They have two children, one of whom has left school and is working. The other child, [S], is 13 years old.
The husband acknowledged having personal assets worth about $5.5 million and “trust assets” of about $12.3 million. The parties jointly own the former matrimonial home and a villa at [Far North Queensland], worth about $2.9 million and $1.2 million. The wife has an investment in Colonial First State and a portfolio with Citigroup, worth around $89,000 and $190,000.
The wife commenced proceedings for property settlement and interim spousal maintenance in March 2007. By the time the matter came on for hearing, the wife had reduced her demands from $5,000 per week to $2,000 per week (inclusive of periodic child support). The wife also sought that the husband pay the outgoings on the former matrimonial home.
Martin J found that the wife’s income was $426 per week, in addition to child support of $874 per month (although her Honour recorded that the wife anticipated that the child support payments were shortly to be reduced to $400 per month). She found that the wife’s reasonable expenses of maintaining herself and [S] totalled $2,210 per week.
There was no issue about the husband’s capacity to meet the maintenance payment sought. The question was whether or not the wife was entitled to spousal maintenance, given the extent of her investments, which her Honour found were “currently readily available”.
Her Honour recorded the following in her judgment:
48.The husband’s case was that in the present circumstances, it is clear that the wife will receive a very substantial sum by way of settlement of property, and there will therefore be no detriment to her in being required to call on her present investments in the meantime. However, the same also applies to him, in the sense that, whether his resources are paid to the wife now or later, the net result is likely to be the same. Having regard to the parties’ financial resources overall, I do not accept that the wife should be required to deplete her capital at this stage.
…
50.These proceedings should clearly not have occurred and both parties should be criticised in this regard, the wife for making an unreasonably high claim at the outset, and the husband for not taking reasonable steps to sensibly sort this issue out at an early stage. It is, frankly, a waste of the parties’ money and the court’s time to argue about a few dollars here and there, rather than the more important issues – finalisation of the proceedings in relation to the parties’ financial affairs overall. It is also inappropriate for the parties to be directly involved in the Child Support Scheme at all, having regard to their financial circumstances.
Her Honour concluded that the wife’s claim for $2,000 per week was “reasonable in the circumstances, taking into account the wife’s income of $426 per week, but making an allowance for incidentals, and unusual expenditures”. She made an interim order for the husband to pay the wife $2,000 per week (inclusive of child support) as well as [S]’s school fees and outgoings on the former matrimonial home and the [Far North Queensland] villa.
Relevant law
The principles relevant to applications for leave to appeal against interlocutory orders are well-known. An applicant seeking leave to appeal must demonstrate that there has been an error of principle and/or a substantial injustice to one of the parties: Adam P Brown Male Fashions Pty Ltd v Philip Morris Inc. (1981) 148 CLR 170 at 177. Rutherford and Rutherford (1991) FLC 92-255 at 78,715.
It has been suggested (albeit in obiter dicta) in Aarons v Knowles (1995) FLC 92-627 that leave to appeal may also be granted where the issue is one of general importance. This proposition was cited with approval by the Full Court (Ellis, Holden and Chisholm JJ) in Bruce F McLaren Holdings Pty Ltd & Ors v McLaren and McLaren (2000) FLC 93-030 at 87,486. It was also accepted by Bryant CJ in Alfasi and The Alfasi Group (2006) FLC 93-271 at [31], although the point was conceded in that matter. A contrary view has been expressed in Butler, Man and Child Support Registrar [2003] FamCA 33 where the Full Court (Kay, Coleman and Guest JJ) said:
… Whilst questions of public importance may be relevant to an application for special leave to the High Court, unless it can be shown that there has been some error of principle affecting the parties to this suit, or that the applicant may suffer an injustice, the mere fact that the answer is important to many other people is not in our view an appropriate basis for granting the leave sought.
The decision in Aarons v Knowles was not referred to in Butler, Man and Child Support Registrar and the differing views expressed in those cases were not the subject of any submissions before us. In any event, the divergence of opinion is of academic interest only in cases such as the present where a direction was made prior to the hearing that the “proposed appeal be argued with the application for permission to appeal”. Having been given the opportunity to present his full argument on the matters raised by the proposed appeal, the husband would not be assisted by an assertion that the issue is of general importance, unless he can demonstrate that her Honour made an error of principle and/or that the order worked a substantial injustice.
Proposed grounds of appeal
The husband proposes relying on the following grounds of appeal if leave to appeal were to be granted:
1. Having found:
(a)that the wife currently and readily has investments available for her as follows [para.21]:
(i)in a Colonial First State Imputation Fund investment: about $88,842 on 30 June 2007, and
(ii)in a portfolio with Citigroup Wealth Advisers: about $189,811 on 31 July 2007;
(b)that the wife has rental income totalling $421 per week [paras.23-24];
(c)that the husband pays assessed child support for the parties’ daughter [S] [para.26]; and
(d)that the wife has reasonable expenses for maintaining herself and [S] on an interim basis of $2,210.00 per week [para.51],
the learned trial Judge erred in law in not finding that the wife is able to support herself adequately for the purposes of s. 72(1).
2.In light of the difference between periodic maintenance payments under s. 74 and alteration of property interests under s. 79, the learned trial Judge erred in law in holding [para. 48] that whether the husband’s resources are paid to the wife now (sc. in the form of periodic maintenance) or later (sc. by way of alteration of property interests), the net result is likely to be the same.
3.In determining whether the wife is able to support herself adequately for the purposes of s. 72(1), the learned trial Judge erred in law in holding [para. 48] that having regard to the parties’ overall financial resources, the wife should not be required to deplete her capital.
The submissions
Dr Dickey QC submitted on behalf of the husband that “it is now well-established that in determining a party’s inability to support himself or herself, the party’s capital and other financial resources must be taken into account”. He went on:
It is true that a party is not expected to deplete his or her entire capital before making a claim for spousal maintenance. However, it is submitted that in the present case this qualification does not apply, because:
·the wife’s capital is substantial;
·the husband has conceded that the wife is likely to receive a substantial sum by way of property settlement …;
·the husband was already subject to an order requiring him to pay all outgoings and expenses related to the upkeep of the wife’s residence.
Dr Dickey further submitted that “the law of maintenance under the Family Law Act does not distinguish between the rich and the poor” and argued it was important “to the reputation of both the Family Court and the Family Law Act that the same law be seen to apply to all litigants, regardless of their financial position”. In this regard Dr Dickey submitted that “the law of interim spousal maintenance is particularly important for spouses in “big money” cases, as a final maintenance order is altogether unlikely to be made following the order for property settlement”.
Mr Hedges, counsel for the wife, submitted that Martin J had succinctly and accurately stated the law and that she had a wide discretion in her application of the principle stated in Mitchell and Mitchell (1995) FLC 92-601 where the Full Court said:
The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself “adequately”. Where the line is to be drawn will depend upon the circumstances of individual cases.
Mr Hedges submitted that it could not be reasonably claimed that her Honour’s decision was outside the range of a reasonable exercise of discretion.
Mr Hedges also drew attention to the judgment of Nygh J in Wilson and Wilson (1989) FLC 92-033 at 77,454 where his Honour said:
On an application for interim maintenance the court conducts “not as final or exhaustive a hearing as would be the case if one were hearing the matter finally”. … It follows that the trial Judge has considerable discretion and the appellate tribunal would be much more reluctant to interfere than would be the case with an order for indefinite maintenance: Redman and Redman (1987) FLC 91‑805…
Mr Hedges argued that not only had the husband failed to identify any error or principle, but he had not established there was any substantial injustice to him in light of her Honour’s finding that “whether [the husband’s] resources are paid to the wife now or later, the net result is likely to be the same.” He also drew attention to the fact that even if the husband were successful in his appeal, he would still be required to pay child support at the maximum rate and thus any prejudice would be calculated by reference to an amount significantly less than $2,000 per week.
Mr Hedges also submitted that the matter was not one of “general importance”. He argued that whilst it might seem that the appellant’s submissions relate to a matter of general importance (i.e. that laws relating to maintenance should be seen to apply to “the rich” in the same way as they do to “the poor”), the position would remain that each future case would still fall to be determined on a case by case basis. Hence any view expressed by the Full Court on the hearing of the appeal would not resolve controversies that might arise in the future.
Statutory framework
In our view, the outcome of this application for leave to appeal turns on the proper construction of the relevant provisions of the Family Law Act 1975 and in particular s 72.
Section 72 relevantly provides as follows:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in sub-section 75(2).
Section 74 provides:
(1)In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
Section 75 provides:
(1)In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties;
(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;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(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;
(e) the responsibilities of either party to support any other person;
(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;
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(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;
(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
(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;
(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;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation;
(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;
(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
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties.
(3)In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
(4) In this section:
party means a party to the marriage concerned.
Discussion
Dr Dickey relied strongly on the opening stanza of s 72(1) which provides that a party to the marriage is liable to maintain the other party to the marriage “if, and only if, that other party is unable to support herself or himself”. In our view, this submission glosses over to two other important features of s 72(1). The first is the use of the word “adequately”, which imports a subjective element into the determination. The second is the qualifying phrase, “having regard to any relevant matter referred to in sub-section 75(2)”, appearing at the end of the subsection.
In considering the implications of the use of the word “adequately”, we concur with the views expressed in Mitchell and Mitchell (supra at 81,995), where the Full Court said, “…the question whether the applicant can support herself “adequately” is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in s. 75(2) and more specifically the paragraphs of that sub-section identified above”. (The paragraphs so identified by the Full Court were sub-paragraphs (a), (b), (g), (j), (k) and (n).)
The concluding words of s 72 cannot be treated as mere surplus. In Project Blue Sky v ABA (1998) 194 CLR 355 at [71], McHugh, Gummow, Kirby and Hayne JJ said (footnotes and reference to authority excluded):
… a court construing a statutory provision must strive to give meaning to every word of the provision. ... In The Commonwealth v Baume … Griffith CJ cited R v Berchet … to support the proposition that it was “a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent”.
In our view, the concluding words of s 72(1) direct attention to each of the provisions of s 75(2) which the Court, in the exercise of the wide discretion conferred by s 74, considers relevant in determining whether or not a spouse is able to support himself or herself adequately. The reference is not merely, for example, to s 75(2)(b) which directs the court to consider the “income, property and financial resources of each of the parties…” The Court would be entitled, for example, to have regard to s 75(2)(j), which directs the Court to consider “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”.
In our view, it was well open to her Honour to consider that the stark imbalance in the capital resources of the husband and the wife after a lengthy relationship was a relevant consideration in determining that the wife was entitled to look to the husband for periodic support pending the final hearing, rather than having to deplete her investments, which represented only a minute proportion of the wealth of the family.
For these reasons, we consider that proposed Grounds 1 and 3 lack merit. Dr Dickey did not abandon proposed Ground 2, but he acknowledged it was “very much a subsidiary ground”. In our view that proposed Ground also lacked merit since we did not regard her Honour as saying more in paragraph 48 of her judgment than that if the wife was forced to deplete her capital to maintain herself pending the hearing, there was a likelihood that the adjustment likely to be made by reference to the factors contained in s 75(2) of the Act would be increased by a corresponding amount.
We conclude that the husband has failed to demonstrate any error of principle in the way in which her Honour reached her decision, nor has the decision worked a substantial injustice. The outcome her Honour ordered was well open to her on the evidence.
The application for leave to appeal will therefore be dismissed.
Costs
Dr Dickey argued that each party should pay their own costs if the application was dismissed since “the grounds are matters that haven’t really been considered yet by the court and to that extent it is still an unknown quantity”. We disagree. In any event, the husband has been wholly unsuccessful and his financial resources greatly exceed those of the wife. He should pay the wife’s costs.
I certify that the preceding thirty-one (31) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 7 March 2008
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