Kessig & Kessig
[2022] FedCFamC2F 557
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Kessig & Kessig [2022] FedCFamC2F 557
File number(s): DGC 3399 of 2020 Judgment of: JUDGE MCNAB Date of judgment: 1 April 2022 Catchwords: FAMILY LAW – property – long relationship – assessment of contributions made by the parties – contributions found to have been equal. Legislation: Family Law Act 1975 (Cth) ss 75, 79 Cases cited: Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Jabour & Jabour [2019] FLC 93-898
Division: Division 2 Family Law Number of paragraphs: 54 Date of last submission/s: 4 March 2022 Date of hearing: 9 & 10 March 2022. Place: Melbourne Counsel for the Applicant: Ms M Daly Solicitor for the Applicant: Tyler Tipping and Woods Counsel for the Respondent: Mr J Moore Solicitor for the Respondent: Dandenong Family Lawyers ORDERS
DGC 3399 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS KESSIG
Applicant
AND: MR KESSIG
Respondent
ORDER MADE BY:
JUDGE MCNAB
DATE OF ORDER:
1 APRIL 2022
THE COURT ORDERS THAT:
1.Within 14 days of the date of these orders, the parties shall do all things and sign all documents as may be required to list the matrimonial home situated at B Street, Town C in the State of Victoria (“the B Street, Town C property”) for sale and the following conditions shall apply:
(a)the parties do all things and sign all documents to appoint a selling agent as agreed between the parties and failing agreement, at the recommendation of the President of the Real Estate Institute of Victoria; and
(b)the B Street, Town C property shall be listed for sale and be sold on terms and conditions to be agreed between the parties but failing agreement shall be upon the recommendations of the nominated selling agent.
2.From the date hereof and until completion of settlement:
(a)the husband have the sole right to occupy the B Street, Town C property;
(b)the husband pay apportioned instalments pursuant to any, rates, insurances, taxes and other outgoings of whatsoever nature and kind with respect to the B Street, Town C property as and when they fall due;
(c)neither party encumber the B Street, Town C property without the consent in writing of the other party firstly being obtained.
3.The net proceeds of the sale of the B Street, Town C property be applied as follows:
(a)first, to pay all costs, commissions and expenses of the sale;
(b)second, to discharge the mortgage and any other encumbrance affecting the B Street, Town C property, including unpaid rates and the costs of removing any rubbish and vehicles in order to prepare the property for sale;
(c)third, 50% to the Wife; and
(d)fourth, 50% to the Husband.
4.Unless otherwise specified in these Orders and save for the purposes of enforcing any monies due under these or any subsequent Orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action and motor vehicles) in the possession and / or in the name of such party as at the date of these Orders;
(b)each party forego any claims they may have to any superannuation and/or employment related benefits belonging to or earned by the other;
(c)insurance policies remain the sole property of the owner named therein;
(d)each party be solely liable for and indemnify the other against any encumbrance of any item of property to which that party is entitled pursuant to these Orders; and
(e)each party be solely responsible for the repayment of and indemnify the other in relation to any outstanding credit card balances or personal loan(s) in their name or in which they are personally liable.
5.All extant applications otherwise be dismissed.
AND THE COURT NOTES THAT:
A.Pursuant to Section 81 of the Family Law Act1975 the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Kessig & Kessig has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
(Delivered Ex Tempore – Revised From Transcript)Judge McNab
INTRODUCTION
This proceeding comes before the Court by way of originating application filed on 7 October 2020 by the Applicant Wife to effect a division of property pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”). The Respondent Husband filed a response on 22 January 2022.
The primary asset in the matrimonial pool is a property located and situated at B Street, Town C Victoria (“the B Street, Town C property”).
The parties have a child, Mr D born in 2003 (“the child”). The child is currently 18 years of age.
The matter was listed for final hearing on 9 & 10 March 2022, and has returned before the Court on 1 April 2022 for ex-tempore delivery of judgment.
PROCEDURAL HISTORY
This matter first came before the Court on 16 November 2020 and orders were made for the parties to attend a conciliation conference with a Registrar of the Federal Circuit Court of Australia on 10 February 2021.
The matter next came before the Court on 18 May 2021 for directions adjourning the matter for to the Morwell Circuit sittings of this Court on 10 August 2021 for final hearing. This listing was vacated by consent so that the parties could attend FDRS.
On 26 November 2021 orders were made listing the matter for final hearing on 9 March 2022.
At the final hearing, the Wife relied on the following documents:
(a)trial affidavit of Ms Kessig filed 2 March 2022;
(b)initiating application filed on 7 October 2020;
(c)financial statement filed on 7 October 2020; and
(d)outline of case filed 4 March 2022.
At the final hearing, the Husband relied on the following documents:
(a)trial affidavit of Mr Kessig filed on 16 February 2022;
(b)response to initiating application filed on 22 January 2021;
(c)financial statement filed on 22 January 2021; and
(d)outline of case filed on 28 February 2022.
CHRONOLOGY
A joint chronology was prepared and placed before the Court. I will recite the relevant parts of that chronology.
The Husband was born in 1975, and he is now aged 47. The Wife was born in 1979 she is now aged 42.
In about 1997 the Husband purchased a unit in Suburb E (“the Suburb E unit”) pursuant to a 12 month vendor’s terms contract. That was purchased for a total price of $50,000 and a $5,000 deposit was paid over 12 months.
The Wife alleges that the parties commenced cohabitation in 1997, whereas the Husband alleges that cohabitation commenced late in 1998. It is not clear, precisely, when they did cohabitate, but they seemed to be in a relationship in about 1997 and they moved between houses. It seems that cohabitation of the parties commenced during the course of 1998.
In mid-1998, the Suburb E unit was transferred into the Husband’s sole name.
In 1999, the parties rented a property in Suburb F, and the Suburb E unit was rented out to tenants. It has remained rented to tenants until it was sold years later, with the rent from the tenants covering the mortgage payments.
In 2000 and 2001, the Wife says that she was employed as a cleaner, with her wage being contributed to her household expenses. She alleges that between 2001 and 2003 she was employed as a customer service officer at Employer G. The amount of the work that she did there, and how often she was employed, is a matter of some controversy. The Husband alleges, in relation to all the employment that the Wife undertook through the course of the relationship was fairly sporadic and not to the extent as alleged by the Wife. I will return to that later.
In 2001, the parties rented a property in Suburb H. That property was owned by the Husband’s father, and the Husband says they had the benefit of a cheap rental which, in effect, was a contribution to the matrimonial assets.
The parties married in 2002, and as said earlier, the child who is now aged 18, was born in 2003. The Wife alleges that, in 2004, she received a $10,000 redundancy payment, which she says she contributed to pay down the Suburb E unit mortgage. That is disputed by the Husband.
From about 1992 to 2004, the Husband worked as a tradesman, and the Wife says he did not work again until approximately 2007, whereas the Husband alleges that, from 2004 to 2007, he worked in a factory full time for approximately two years.
In 2005, the parties purchased the B Street, Town C property which is the former matrimonial home. This was purchased in the Husband’s sole name. In 2006 to 2007, the Wife alleges that she and her children (she has children from an earlier relationship) moved into the B Street, Town C property, and the Husband remained residing in Suburb H and the rental property.
From 2007, the Wife alleges that the Husband worked briefly at a farm, and the Husband says that he worked there for around six months, while he was also self-employed in sales. He commenced his own business in around 2010, but unfortunately, that was closed after a workplace accident. There is no evidence before me that the Husband has worked since about that time. I asked the Husband when he was giving evidence, as to whether he recalled when he last worked, and he said he could not recall.
The Wife says that she was employed as a carer in about 2008. Again, the Husband disputes the amount that she worked.
In 2008, the Husband was incarcerated on remand for a period of about three and a half months. This related to drug offences and a weapons matter, which the Husband said related to the ownership of a rifle stock, or some such like item.
The Wife says that she completed a health care traineeship in 2009, or one year of a two-year health care traineeship, and then went on to work in a hospital where she contributed her wage to family expenses.
The Wife alleges that the Husband started using methamphetamines in or around 2010 to 2011. There is a dispute as to the extent of the drug use. The Husband has admitted to drug use, but says that the Wife was also using drugs for substantial periods too, and that it was effectively a joint activity. The Wife denies that her drug use was as extensive as the Husband’s.
For a period in January 2013, the Wife and the child moved into a rental property in Town J, and the reasons for that are a matter of dispute. The Wife submits it was due to family violence being perpetrated by the Husband. The Husband states it was because she was having an affair. The Wife moved back into the B Street, Town C property in September 2013. She says that between 2014 and 2018 she was employed at the Employer K, and contributed her wages to family expenses, and the Husband again alleges that she only worked sporadically through that period.
The child commenced school in 2015, and the Wife asserts that she worked as a sales assistant, whereas the Husband asserts that she was working as a volunteer, and again, only sporadically.
In August 2015, the Wife was involved in a car accident, where she badly injured herself. She was in hospital for approximately five and a half weeks. She was found guilty of drug driving.
The Husband alleges that he was the primary carer for the child during that period, and was assisted by his cousin. Again, in this case, where the facts are not really clear, and it is really a matter of competing uncorroborated personal accounts, the Wife alleges that the Husband’s friend who assisted him was in fact homeless, and did not stay at the home for about a month. That is a detail which does not matter, as with many of these details, but I set them out as they have been referred to in the material.
There were facts alleged about a holiday taken in Country L and to Country M, and the costs of that. Again, that is not a matter which any final submissions were made about, and I will not go into the detail of that.
In July 2017, the Suburb E unit was sold. The net proceeds of sale were $384,799.36. The Husband asserts that he paid $190,000 to the mortgage liability on the B Street, Town C property on 10 August 2017, and that in August 2017, $53,300 was transferred from the Husband’s Credit Union account to the Wife’s bank account.
In early 2018, the Wife left the B Street, Town C property after the parties finally separated. The child has lived with the Husband, but through that time, for a period, the Wife continued to receive Centrelink carers and Australian Government Families’ payments and Child Assistance payments, until late 2019, notwithstanding she was not caring for the child. The Husband asserts that those payments were in the sum of about $37,000 over 18 months, and should be taken into account when assessing contributions.
In relation to the proceeds of the Suburb E unit, the Wife says that the Husband retained the remainder of the funds over and above the $53,000 transferred to her. Those monies partly went to the mortgage of the B Street, Town C property, and partly to pay debts which, upon questioning the Husband, it seems that there was a drug debt of about $40,000 that had to be paid and were used to pay for the rates for the B Street, Town C property. The remainder of the funds remained with the Husband.
Between 28 August 2017 and 28 May 2018, the Wife transferred to the Husband $5,920 at the request of the Husband. The Wife says that, between 2017 and 2019, she has been employed as a carer, and had contributed her wage to family expenses.
In 2018 the police raided the B Street, Town C property. The Wife alleges that this was due to the Husband’s criminal activities. She lodged a caveat in respect of the B Street, Town C property on 17 July 2018. On 14 May 2019, the Region N Magistrates Court made a final family violence intervention order against the Husband, protecting the Wife.
The Wife says that she has made contributions by purchasing the child a Motor Vehicle 1 for $5,000, and continues to pay the insurance and registration.
CONSIDERATION
In terms of the tasks I have to undertake here which is to assess whether there should be an adjustment of property interests between the parties, in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, the Full Court identified a preferred four-step process in property matters under the Family Law Act 1975 (Cth):
(1)to identify the pool of assets and liabilities generally, and usually at the time of hearing;
(2)to assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by s 79(4) of the Act;
(3)to consider the factors as are relevant contained in s 75(2) of the Act; and
(4)finally, to determine whether the order the Court proposes to make is just and equitable to both parties.[1]
[1] Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, [39] (Nicholson CJ, Ellis and O’Ryan JJ).
In relation to the assets, the significant asset is the B Street, Town C property, which has been valued at $480,000. That is an agreed value. There is no mortgage although there are arrears of rates that must be paid. There are motor vehicles in the possession of the Husband, and there is one motor vehicle in the possession of the Wife, and each party has limited superannuation. There should be no adjustment to superannuation, and none was contended for.
The Husband makes a submission that he made an initial contribution through the purchase of the Suburb E unit, being the $5,000 that he spent towards making the deposit, and he seeks an adjustment as a result of bringing that asset into the marriage. He also alludes to the fact that the Wife had received funds of $50,000 from the sale of that asset. He says, by way of contributions, that he made significant contributions to the family, including the costs of the care of the Wife’s children, other than the child, Mr D. It is submitted that the contributions made by the biological father were minimal, and did not cover the true costs of bringing those children up, or raising those children.
The Husband suggests that the Wife’s contributions are more limited than she suggests they were, because the work that she did was sporadic, and the contribution is not as she alleges. He also, as I have said earlier, wishes the Court to take into account the fact that the Wife has received significant help through the payment of benefits in relation to the care of the child, when in fact the child was not in her care, and refers to the sum of $37,000, and that is a post-separation contribution.
The Husband submits there should be an adjustment of 10% taking into account his initial contributions; post-separation contributions; the support he has given the non-biological children; and the benefits which were paid to the Wife, but should have been shared, or paid to him because he was caring for the child.
Overall, the Husband seeks that the assets be distributed 60:40 in favour of him. Through his Counsel, the Husband states that he wished to retain the property, and that the property be sold, and the payments reflecting that distribution be paid $79,000 by 1 May 2022, and the balance by 1 December 2022.
The Wife proposed that the asset split should be 60:40 in her favour. The adjustment was put on the basis that there should be a 5% adjustment because of the fact that the Wife had been, effectively, the primary carer throughout the marriage, and that should be taken into account as a significant contribution.
The submission was made by the Wife for a 10% adjustment, and it was unclear as to the basis of a further 5% adjustment. A submission was made that the claim for a further 5% adjustment was made on instructions. The specific ground for the claim was not clearly articulated.
The Wife submits that there should be no allowance made for the monies paid towards the Suburb E unit. She says that becomes an asset of the marriage, and it was a long marriage. Both the parties were in low paying jobs. There were periods when the Wife did not work, as she was looking after the child who has some special needs, and there are periods when the Husband was absent through the period. The Wife suggests that any amount that she has received by way of payments from the government such as social security payments ought to be adjusted by taking into account that the Husband used the matrimonial assets to pay drug debts, and there has been a similar amount, and they basically balance one another out.
I think it is a significant matter that the Husband has not worked since about 2011, whereas there is evidence that the Wife has worked. There is no clear evidence about what her earnings were, and I accept that, given the limited superannuation that she has accrued over the years and presuming that the employers that engaged her would be paying superannuation, the amounts that she has earned are probably reasonably low. However, that does not take into account that she may have been, working in jobs where superannuation has not been paid. There may also be superannuation that has been paid but has not been claimed. I do accept that she has been working more than the Husband for a longer period which, in my view, is a significant contribution.
In terms of the initial contribution, the evidence is unclear as to when the parties actually commenced living together. The Wife says that he was able to make the payments because he was living with her and not paying rent, and he was able to save up the $5,000 deposit through that period. The Husband denies that. There is a contest about what occurred which is not easily resolved, and it is unclear what happened, or how the deposit was paid. That goes for much of the evidence in the case. It is really one person’s word against another. In any case, I accept that the Husband has made an initial contribution by paying the deposit on the Suburb E unit however, that contribution cannot be viewed in isolation from the balance of contributions made by the parties over a long relationship: (see Jabour & Jabour [2019] FLC 93-898). That initial contribution of the deposit of $5,000 in about 1998 does not lead to a conclusion that he should receive the adjustment that he seeks.
I also take into account that both the parties were, at various times, taking drugs, and I presume this was a reasonably chaotic situation for both of the parties, but to their credit they have managed to look after the child, who made it through school, and I understand is deferring study this year. Hopefully things will work out well for him. The relative contributions made by each party may have increased and decreased over the years. I do find for much of the relationship, the Mother was the primary carer for the child.
The Court is not in a position to make firm determinations about all the matters put forward, and in fact there are authorities to the effect that the Court is not required to embark on a process of making precise mathematical calculations. In my view, taking into account the very long relationship and the competing assertions of the level of contributions, I find that the contributions to the asset pool are equal.
Future Needs
In terms of the future needs, there were very limited submissions made in relation to that. There is no evidence before the Court that the Husband has any physical incapacity to work. He is still a relatively young person. Similarly, the Wife has a capacity for work. The child (aged 18) is living with the Husband, but there is no particular submission that there is a great disparity between the future needs of the parties.
In my view having considered the evidence and submissions it is just and equitable that the matrimonial asset comprising the house to be divided 50% each, and that for the parties to otherwise retain those assets in their possession. The Husband will retain his assets, those being the motor vehicles, tools and other items that he currently has, and the Wife should retain her car.
In my view, the appropriate order to be made is for the property to be sold. I have no evidence before me which would support a finding that the Husband has a capacity to pay 50% of the value of that asset to the Wife in any timely way. Even if the asset division was as contended for by the Husband, being 60:40, there is, no evidence that he could fund that lesser payment.
CONCLUSION
In my view, the just and equitable disposition of this matter is for each party to receive 50% of the proceeds of the sale of the matrimonial home, and otherwise retain the chattels that are referred to in the evidence that are in their possession. I make orders giving effect to those reasons.
Otherwise, all extant applications be dismissed.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the Reasons for Judgment of Judge McNab. Associate:
Dated: 1 April 2022
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