Kozinska & Ciszewski

Case [2023] FedCFamC1F 317

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Kozinska & Ciszewski [2023] FedCFamC1F 317

File number(s): MLC 1670 of 2020
Judgment of: CARTER J
Date of judgment: 28 April 2023
Catchwords: FAMILY LAW – PROPERTY – property pool is modest – whether unpaid school fees should be jointly paid by the parties
Legislation:

Child Support (Assessment) Act1989 (Cth) s 124

Evidence Act 1995 (Cth) s 140

Family Law Act 1975 (Cth) ss, 75, 79, 102NA

Cases cited:

Aleksovski v Aleksovski (2013) 279 FLR 1

Bevan v Bevan (2013) 279 FLR 1

Dickons v Dickons (2012) 50 Fam LR 24

Stanford v Stanford (2012) 247 CLR 108

Division: Division 1 First Instance
Number of paragraphs: 116
Date of hearing: 31 March 2023
Place: Melbourne
Counsel for the Applicant: Andrew Hale
Solicitor for the Applicant: Peter Lynch Lawyer
Counsel for the Respondent: Andrew Chislett
Solicitor for the Respondent: Keane Family Law

ORDERS

MLC 1670 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MS KOZINSKA

Applicant
AND:

MR CISZEWSKI

Respondent

order made by:

CARTER J

DATE OF ORDER:

28 April 2023

THE COURT ORDERS THAT:

1.The parties do all such acts and things and sign all such documents as may be required to direct that the funds held in trust for them in the account of B Lawyers be divided:

(a)$34,455 to the wife; and

(b)the balance to the husband.

2.The husband be solely liable for and indemnify the wife in relation to the funds owing to C School.

3.The wife retain for her sole use and benefit:

(a)the motor vehicle registered in her name;

(b)funds in any bank account in her name; and

(c)all her superannuation entitlements.

4.The husband retain for his sole use and benefit;

(a)funds in any bank account in his name;

(b)all his superannuation entitlements; and

(c)all his right title and interest in the company known as E Pty Ltd and hereby indemnifies the wife in respect of all liabilities relating to this entity.

5.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), superannuation entitlements, cash and motor vehicles in the possession of such party as at the date of these orders;

(b)each party retain any superannuation benefits belonging to or earned by that party to the exclusion of the other party;

(c)insurance policies remain the sole property of the owner named thereon; and

(d)each party 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.

Miscellaneous

6.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 property (including choses-in-action) owned by or in possession…

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AGLC
Kozinska & Ciszewski [2023] FedCFamC1F 317
Case
[2023] FedCFamC1F 317
Decision Date

CaseChat Overview and Summary

The case of Kozinska & Ciszewski involved a dispute between the husband and wife regarding the distribution of funds held in a trust account. The husband, who had migrated to Australia from Country D in 2002, and the wife, who migrated around 2003, had been married since 2007 and had one child together. The wife sought the entirety of the funds held in trust, claiming she had borne the sole financial burden of providing care for their child since the parties' separation in 2013. The husband contested the wife’s claims, arguing that his health issues and the financial difficulties of his business had limited his ability to contribute. The husband had started his own company, E Pty Ltd, which subcontracted for F Company, but the business was reportedly struggling. Despite the wife receiving Centrelink support since their separation, she claimed the husband had not fulfilled his obligations under the final parenting orders, which provided for the child to spend time with him. The wife also alleged that the husband had not paid child support regularly, and there were arrears of approximately $13,500. The husband had made some payments but contested the child support assessments, and the matter was before the Administrative Appeals Tribunal.

The legal issues before the court involved the application of section 75(2) of the Act in determining the distribution of the trust funds. The court had to consider the husband's and wife's respective financial circumstances and their contributions to the family’s welfare. The wife argued that since the husband had not spent time with their child and had not paid child support, she should receive the entire trust fund. The husband contended that his health issues and the financial state of his business had impeded his ability to contribute financially. The court had to weigh these factors against the statutory considerations, including the husband's age, health, and earning capacity, as well as the wife's contributions to the family.

The court found that neither party had provided persuasive evidence to substantiate their claims regarding their financial circumstances and earning capacities. The husband's evidence was inconsistent, and he did not provide medical evidence to support his claims of health issues affecting his ability to work. The wife had made allegations regarding the husband's financial conduct but had not provided documentary evidence to substantiate these claims. The court concluded that the husband's income was modest and had been negatively impacted by the financial performance of his business and his health issues. However, the court noted that the husband had used business funds for personal expenses. The wife's claim that she had borne the sole financial burden of caring for the child was not sufficiently substantiated. The court decided that the funds should be distributed equitably, taking into account the contributions and needs of both parties.

The final orders of the court directed that the trust funds be distributed in a manner that reflected the respective contributions and needs of the husband and wife. The exact distribution was not detailed in the reasons, but the court had considered the factors outlined in section 75(2) of the Act in making its decision. The husband was ordered to pay the outstanding child support arrears to the wife.

Orders

Orders of the court

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Background

Background to the litigation

The material before the Court was limited. For instance, valuations of assets had not been obtained. However, the parties wanted the matter to proceed to determination on the material that was available. I have done the best I can with the limited information provided to me. BACKGROUND AND PROCEDURAL HISTORY The parties were both born in Country D. The husband, now aged 53, migrated here in 2002. The wife, now 49 years old, arrived in around 2003. They are both Australian citizens. The parties commenced living together in 2005 and were married in 2007. There is one child of the marriage, X, born 2010. She is 12 years old and lives with the wife. Despite there being final parenting orders that provide for X to spend time with the husband, he has not sought to do so. He also does not regularly pay child support in accordance with the assessment. The last two payments he made were in June 2022, and then again a further $114 just shortly before the final hearing before me. It is common ground that the husband owes around $13,500 by way of child support arrears. The husband is contesting the assessments, and the matter is currently before the Administrative Appeals Tribunal. In around 2012 the husband started his company E Pty Ltd, through which he subcontracted for F Company. The parties agree that they separated in 2013, but remained living under the one roof. At that time, the wife commenced receiving Centrelink support. I am not aware as to whether or not a child support assessment was sought at that time. The husband said that his income continued to provide support for the parties and the child. When the child commenced school in 2016, the parties agreed she would attend C School. At that time the husband was in paid employment, and the wife was not. In those circumstances, the husband assumed responsibility for the school fees. In 2018 the husband received a workers’ compensation payment of $48,726 net. I was not provided with any documents regarding that payout. Accordingly, I do not know, for instance, how the amount was calculated; when the injury was sustained; or any breakdown as to what the payment was for. In around mid-2018 the husband purchased the property at G Street, Suburb H (“the Suburb H property”) for $560,000. It was registered in the husband’s name. The parties had been living in that property for some time as tenants. The husband said he used approximately $38,000 of his savings (which presumably came from the compensation payment), together with $16,000 the husband borrowed from his neighbour, the first homeowners grant and a mortgage of around $435,000 to fund the purchase. The wife asserted she contributed $8,000 from her superannuation which was put towards the purchase of the Suburb H property in 2018. The wife has not produced any documents from her superannuation fund to verify that she withdrew funds in 2018. Nor has she provided any bank statement to show she had those funds in an account, or any statement showing funds being paid from her to the husband. The only document the wife has produced is a typed document purporting to be a translation of text messages exchanged between the parties in July 2018. In that document she referred to giving the husband $8,000, and he is said to have responded he would give it back to her. There is no reference in the purported exchange to the date the wife is alleged to have given him $8,000, nor any reference as to the application of those funds.

Evidence

Evidence Before The Court

Notwithstanding the final parenting orders, the wife has enrolled the child at L School. She advised the Court she did not notify the husband that X was not attending J School. She said she had moved to a different suburb and it was not feasible for the child to attend at J School. The wife did not press her application that the husband meet the costs of ongoing private school fees. She further advised the child had obtained a scholarship to attend L School.THE EVIDENCE It has not been possible to include every aspect of each of the parties’ evidence. However, I have taken all the evidence into account. Just because I have not mentioned something in these reasons does not mean that I have not considered it. Section 140 of the Evidence Act 1995 (Cth) sets out that the standard of proof in these proceedings is to a balance of probabilities. The trial was conducted in person at the Melbourne Registry. Each of the parties gave brief evidence. Given the brevity of the cross examination it was not possible for me to form strong impressions of either party. I do note, however that the husband was at times unresponsive, and he was somewhat reluctant to provide information about his financial matters. The Wife The wife relied on her trial affidavit filed 17 March 2023 and her Financial Statement filed 6 July 2022. She also sought, and was granted, leave to rely on specific parts of her affidavits filed 6 and 11 July 2022. There was no objection to this course. The wife said the husband had not been upfront or honest regarding his financial circumstances. She said he had hidden his entitlement to a property in Country D. She said he “manipulates financial matters”. Whilst the wife made that assertion, she adduced no admissible evidence in support. The wife had sought to rely upon a statutory declaration from a former friend of the husband’s in that regard. That was struck out. Similarly I struck out another declaration annexed to the wife’s affidavit material purporting to be from a relative of the wife asserting she owed him funds. The wife said the husband ought be solely liable for the school fee debt in circumstances where:·she is not in paid employment; and ·the child was enrolled in C School on the basis that the husband would meet the costs of her attendance there. The wife said further in circumstances were the husband is electing to spend no time with the child, and has refused to pay any meaningful child support, she is shouldering the entire financial burden of providing care for the child. The wife said these matters meant she should receive the entirety of the funds currently held on trust. The Husband The husband relied on his affidavit filed 14 March 2023 and his Financial Statement filed 6 July 2022. As indicated, the husband operates his courier business, E Pty Ltd. He asserted the business is in dire financial straits, and that he has been unable to draw an appropriate wage from the business, largely as a result of the impact of the pandemic, and also as a result of medical issues he said he suffered. As already noted, he did not adduce any medical evidence to support his assertion regarding his limited ability to work.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Once the husband left the Suburb H property in December 2019, it does not appear mortgage repayments were made with both parties asserting they were unable to afford to do so. The wife paid for her utilities. She acknowledged she did not pay rates during her period of sole occupation. RELEVANT CONSIDERATIONS PURSUANT TO SECTION 75(2) OF THE ACT Neither party adduced persuasive evidence to corroborate their financial circumstances or income earning capacity. This made it somewhat difficult to assess and weigh the matters set out in s 75(2) of the Act. The husband is 53 years old. He said his physical health is impaired, having suffered ongoing issues with an injury. He said he also suffers with other health issues. He said these health issues have impacted his ability to work, requiring him to take time off for medical procedures, surgery, hospitalisations and generally being unwell. He adduced no medical evidence from his treating practitioners to corroborate his alleged health issues, or how these issues might impact on his earning capacity. The husband’s evidence regarding his income was not consistent. At one part of his evidence, the husband said he generally draws around $432 per week from his business. He also said he drew $482 per week from that business. In his Financial Statement filed on 6 July 2022, he said he earned $442 per week, based on the 2021 company returns. I note that there are inaccuracies in that Financial Statement. For instance, the husband claimed various payments as being made by him, when according to the business bank statements and the profit and loss statement the husband exhibited to his trial affidavit, those expenses are met by the business. On any version the husband apparently draws a modest income from the business. However, I note the business also pays for the husband’s phone, internet, electricity, and other utilities, and car related costs. The husband said he has not been able to reliably draw an income this financial year as there has been insufficient income generated for him to do so. He said currently the business income is eclipsed by its expenses. He said for the current financial year, the expenses (of $86,342) have exceeded the income generated (of $75,310) by approximately $11,032. I can see from the bank statements of the business that the husband has used funds from the business for his personal expenses from time to time, including making purchases of food and alcohol, as well as payments at chemists, clothes shops and hair salons together with cash withdrawals. The husband said in his oral evidence that these amounts will all be accounted for appropriately and claimed as his income. The husband acknowledged that previously he has generated a greater income than he currently enjoys. In 2019 for instance his personal income was $60,000. According to his personal tax estimate for the 2022 financial year, he asserted his taxable income was only $23,000. The husband also produced the taxation estimate for the business for the year ended 30 June 2022. The business income was said to be $120,196, with expenses of approximately $79,000, leaving a profit of $40,702. In his oral evidence the husband asserted that the business expenses were actually $20,000 more. He did not adduce any evidence to support that assertion. In that year the estimate sets out that the husband drew a salary of $23,000.