Family ‘old money’ is irrelevant in property settlements or spousal maintenance orders

by Andrew Lind on 3 July, 19

The recent decision of Kaiser v Kaiser [2016] FCCA 1903  has held that the affluence of an ex-husband’s  family ought not to have a bearing on his liability under the Family Law Act1975 (Cth) to financially maintain his ex-wife. Ms Kaiser (“the wife”) sought an order to have Mr Kaiser (“the husband”) purchase her a 1.5 million dollar home in Melbourne, as well as pay spousal maintenance, despite the former couple’s asset pool only totalling $50 000.  This was on the premise that Mr Kaiser’s family, whom the Court regarded as “well-known prominent business people and philanthropists in Melbourne”, were of such a heritage as to have “implications for his [the husband’s] financial capacity to pay spousal maintenance”.

The case is illustrative that marrying into a wealthy family will not necessarily guarantee a wife or husband the same affluent lifestyle he or she enjoyed in marriage by virtue of kinship, post separation.

The Case

Mr and Ms Kaiser were married in 2000 and had two daughters in the following years. Mr Kaiser’s family was an affluent family in Melbourne with particular notoriety.  In 2013 Mr Kaiser and Ms Kaiser separated. By 2016, Mr Kaiser had continued his employment and moved in with a new partner, while Ms Kaiser, now 39, commenced studying but was unemployed. Ms Kaiser had significant arrears owing and also claimed to need urgent dental treatment.

Orders Sought

Ms Kaiser brought an application before the Federal Circuit Court of Australia seeking a number of orders from her husband, particularly that:

  • The husband purchase her a home with three bedrooms and “sufficient area for the children and the large family dog” in a particular suburb;
  • The husband allow the wife to live in this home rent-free and that the husband pay all council rates and utilities associated with the house;
  • The husband buy the wife a car worth $40 000 minimum;
  • The husband’s entire superannuation be transferred to her; and
  • The husband pay spousal maintenance of $500 a week when the children lived with her and $200 per week when they did not.

Court Orders

Property Settlement

In order to alter the former couple’s interests in their property pool in the terms that the wife sought, and whether it was “just and equitable” to do so, the Court had to first consider the total value of the couple’s property pool, and the extent to which each party had an interest therein. The Court concluded that there was nothing to distinguish this case from the vast majority of cases, “despite the wife’s belief that Mr Kaiser had significantly greater financial resources than he disclose[d]”. Ms Kaiser could not prove that Mr Kaiser had purchased any other property, or had the financial means himself to pay for the house she had sought.

As such, the Court noted that the couple’s total pool only included a motor vehicle worth approximately $8000, the husband’s superannuation entitlements of $39,000, and some farm equipment worth roughly $5000. Of which, in accordance with s79(4),Her Honour initially quantified the parties’ contributions at 55% from the husband by way of financial contributions and 45% from the wife by way of homemaker and parent contributions. This was altered to 65% to the wife and 35% to the husband after a consideration of the surrounding circumstances and future needs. This division did not factor in the financial status of the husband’s family.

Her Honour noted that while the wife was “somewhat successful” in proving 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”, her Honour concluded that the “husband’s family are not liable to pay for a house for the wife and the children.”

The Million Dollar Home

Her Honour held that it was just and equitable in all of the circumstances to alter the parties’ property interests in the terms that the husband sought. This “generous offer” included to sell the car and provide the proceeds to the wife, to give the wife 100% of the husband’s superannuation and pay spousal maintenance. The husband required that the $5000 farming equipment remain his. The husband also offered to pay the wife’s Telstra account. This amount totalled $50, 800.  Orders were made on terms proposed  by the husband, with her Honour regarding the wife’s expectations that the financial circumstances of the husband’s family be factored in to the settlement “unrealistic”.

Spousal Maintenance

Her Honour also accepted the husband’s offer to pay for his ex-wife’s rent (at $950 a week), gas and electricity bills for eight years. The Court ordered that the “generous offer” be incorporated in the orders. Interestingly, her Honour ordered that the spousal maintenance payments by the husband be directed  to the wife’s electricity companies and land lord, and not to the wife herself. Her Honour noted that due to the wife’s current arrears and anxiety, this was a more appropriate option, noting that:

“This 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.”

Lessons

Kaiser v Kaiser illustrates that family law property settlements are limited to the parties’ own property pool, and not the finances attached to one party’s family. The Court will only consider the property and finances accrued by the couple themselves. This decision however, needs to be carefully distinguished and differentiated from situations where one party has already received or is about to receive a financial benefit from their family, in which case that benefit will have a bearing on the property settlement.

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