Bradmore v ALLEN - [2012] SADC 51

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
BRADMORE v ALLEN
[2012] SADC 51
Reasons for Interim Decision of His Honour Judge Herriman
24 April 2012
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS - ADJUSTMENT OF PROPERTY INTERESTS - RELEVANT CONSIDERATIONS
Plaintiff seeks orders for adjustment of property interests under the Domestic Partners Property Act. Nature and duration of relationship in dispute. Plaintiff bankrupted during relationship. Questions as to title of parties to assets where derived by plaintiff during bankruptcy. Preliminary findings made and final judgment stood over pending consideration by bankruptcy trustee of factual findings.
De Facto Relationships Act 1996 (SA); Domestic Partners Property Act 1996 (SA) s 3, s 4, s 9, s 10; Bankruptcy Act 1966 (Cth) s 81(17), s 116(1)(b), s 116(2)(d) s 121, ss 139J ff, s 152, s153, referred to.
Re Morris; Ex parte Donnelly v CML (1997) 148 ALR 349; Rothmore Farms v Belgravia (1999) 31 ACSR 88; Morkaya v Parkinson [2010] NSWSC 1194; Thomson v Badger (1989) 13 Fam LR 559; Gazzard v Winders (1998) 23 Fam LR 716; Jones v Grech (2001) 27 Fam LR 711; LeMay v Clark [2006] DFC 95-327; [2005] FCWA 23; Hamblin v Dahl (2010) 239 FLR 111; Wren v Chandler [2004] SADC 128; Re Packer (1958) 18 ABC 97; In the Estate of Carter [1963] ALR 176; NM Superannuation PL v Young (1993) 41 FCR 182, applied.
Cummings v Claremont (1996) 185 CLR 124; Cummings v Beach Petroleum (1993) 117 ALR 235; Hampson v Circuit Finance Australia [2006] AIRC 24; Coffey v Bennett [1961] VR 264; Page v Page (1982) FLC 91-241; Luxton v Luxton (1968) 12 FLR 382; Hibberson v George (1989) 12 Fam LR 275; Lipman v Lipman (1989) 13 Fam LR 1; Williams on Bankruptcy 18th ed. 1968; McDonald, Henry & Meek's Australian Bankruptcy Law & Practice 3rd ed. 1953 by J K Manning & L G Bohringer, considered.

BRADMORE v ALLEN
[2012] SADC 51
Introduction

In this action the plaintiff seeks an order for the division of property pursuant to s 10 of the De Facto Relationships Act 1996, now known as the Domestic Partners Property Act 1996 (or ‘the Act’).
In an alternative claim, he had sought declarations that the defendant held certain interests in trust for him but, for reasons which I previously published, I determined he had no locus standi to proceed with that claim.
The hearing of this matter occupied 12 sitting days, following which I reserved judgment. For reasons which follow, this is not a final judgment but a series of factual findings and rulings which ought now be published and which, it is to be hoped, might lead to some clarification and resolution of just what ought be treated by the court as property which ought be the subject of orders under s 10 of the Act.
Background
As at the date of the hearing, the plaintiff was aged 51 and the defendant 52. Each had previously been married.
The plaintiff’s claim for division of property centres upon his assertion that between June 2001 and December 2006 he and the defendant resided together in a de facto relationship; that is to say, a close personal relationship within the meaning of s 3 of the Act. For her part, the defendant in her pleadings at first denied they ever lived as man and wife but ultimately in her evidence admitted that over some of that time there were separate periods of marital cohabitation which, however, even if aggregated, did not total the three years required by s 9(2)(c) of the Act.
The plaintiff says that during their relationship he and the defendant pooled their financial resources for their mutual benefit, but the defendant disputes that.
It is not in contest that the defendant worked throughout that time as a nurse, nor is it disputed that during any periods that they lived together, it was in a house property which she had acquired in 2000. What is disputed is the plaintiff’s claim that whilst over that time he was never formally employed, nor to any significant degree self-employed, he contributed to the relationship financially by paying certain moneys, including for a time his pension receipts, into the defendant’s bank account and that otherwise he undertook the majority of the household duties. He says that each thus made direct and indirect financial contributions to purchase, improve and maintain the assets of the de facto relationship and that those assets included the defendant’s house property at Sussex Street, North Adelaide (‘Sussex Street’) in which they resided and, as well, his indirect interest in a property on Port Road, Woodville Park (‘Port Road’). The defendant denies that.
The plaintiff says that at the commencement of the relationship and apart from a few personal belongings, he had no liquid assets, but through a family trust which he controlled he effectively owned the Port Road premises, which had previously operated as a used car lot but which were at all relevant times vacant, and, as well, commercial premises in Broken Hill (‘Broken Hill’) which were rented out. Both properties were then subject to Commonwealth Bank mortgages. He said that he was otherwise earning some income as a used car wholesaler.
On his own admission, by early 2003 he had become concerned about his financial position because a person named Ron Buttigieg, to whom he had loaned moneys totalling, he said, $400,000 (or elsewhere he said $150,000), was not repaying that loan. He had himself borrowed those moneys from various financiers and on-loaned them to Buttigieg. He had had no substantial assets of his own to match or secure those borrowings nor, it appears, had he been receiving an income of any significance, save for certain interest payments made by Buttigieg.
I will return to those arrangements later, but it is important here to note his evidence as to his financial affairs – that there were ‘shakings in the camp’ (T/S 247) – some seven months before October 2003. I further note that the signed Statement of Affairs filed in his bankruptcy asserted that he first encountered difficulty paying his debts in February 2003 (Exhibit D9).
In fact, it is readily apparent from the evidence that he was concerned about his financial position well before that time.
Even as of June 2001, when their relationship began, his trust company was substantially indebted to the Commonwealth Bank and was facing pressure from it because only one of its two properties was earning any income.
Further, the plaintiff was himself not earning a taxable income, only ‘bits and pieces’ (T/S 276).
Finally, it is of significance that within weeks of his relationship with the defendant beginning, he was, by agreement, paying the substantial sums he was receiving from Buttigieg into the defendant’s bank account and not his own. The explanation he advanced for doing that was that the defendant wanted those moneys paid to her, that they were going to become engaged and planned to buy other houses in expensive suburbs, and that he trusted her. He was tested on that explanation, it being suggested that he so diverted the moneys to disguise them from his creditors. He had earlier agreed that he then had a lot of creditors but when confronted with that challenge, denied he had any creditors at all in 2001. That was plainly a false denial, as he had already spoken of substantial borrowings he had made to on-lend to Buttigieg and his borrowings were unsecured.
I discuss his credibility elsewhere, but I reject altogether his explanation for diverting those moneys and prefer and accept the defendant’s evidence that he had in mid-2001 asked her to receive those payments into her bank account because he ‘had problems with his bank accounts’ (T/S 500) and was ‘having some financial difficulties’. I am satisfied on all the evidence and I find that he was in financial difficulties even as of June 2001 and that he then sought and obtained the defendant’s cooperation in diverting payments of income or capital receivable by him, into her own bank account so as to hide those moneys from his creditors.
Over a period of time which was never fully particularised but which I find well preceded February 2003, the Commonwealth Bank had been pressing his trust company Ian Bradmore Nominees Pty Ltd (‘IBN’) over mortgage payments for the Port Road and Broken Hill loans, so much so that at some undisclosed time there was a forced sale of Broken Hill which yielded no nett benefit to the trust. In consequence Port Road remained as the trust’s sole asset, subject to a remaining mortgage debt of $130,000.
It was in these circumstances that on 12 November 2002 the plaintiff facilitated a contract between IBN and the defendant whereby the defendant agreed to purchase Port Road for $130,000. Settlement of that contract was then delayed, as the defendant did not have access to funds to complete the purchase, but eventually it was settled on 31 March 2003 and the settlement resulted in a discharge of the Commonwealth Bank mortgage but with no nett gain to IBN, which was later placed in liquidation.
The funds deployed by the defendant to purchase Port Road nominally comprised:
(1)a loan of $103,000 from the plaintiff’s former wife, Venette, by way of a registered but interest-free mortgage;
(2)the sum of $32,000, which comprised part of a $50,000 payout received by the plaintiff in March 2003 under a disability insurance policy. In fact, that $50,000 payout had gone not directly to the plaintiff but into the bank account of IBN and from there $32,000 was paid to the defendant towards her purchase funds;
(3)a further sum of about $2,800, being the balance of conveyancing and associated costs required to complete the settlement. That amount was also provided by the plaintiff.
It is important here to note that, on the plaintiff’s own evidence, prior to that settlement on 31 March 2003 he and Venette had agreed to the terms of a property settlement whereby their former matrimonial home at 11 Primrose Court, Grange would be sold and the nett proceeds divided equally between them. In the event, the property was sold and settled on 14 March 2003 and of the nett proceeds of $207,096.66, the plaintiff’s agreed share was $103,000. The plaintiff had first expected to receive and advance that sum to the defendant to assist her purchase of Port Road but after receiving advice from his accountant, Mr Peter Balnaves (‘Balnaves’), he opted to leave the funds with his former wife on the footing that she would advance them to the defendant on an interest-free mortgage. He nonetheless acknowledged it was his money but said it was ‘cleaner’ for the money to be loaned directly by Venette (T/S 365), whom he trusted. He said he then told the defendant it was in reality his money.
The plaintiff thus says that all of the moneys advanced to complete the Port Road purchase were in reality his own and that whilst the defendant was formally the registered proprietor of the property, his plan was that ‘when things (got) brighter I’d eventually have the property back in my name’ (T/S 162). Elsewhere, he proffered other explanations for her proprietorship: that the defendant was developing her house and he the car yard and it was all going into a pot (T/S 314); that the funds he provided for its purchase were simply part of their arrangement to pool resources (T/S 323); that he had put money into the property and was expecting to benefit from it (T/S 353); that the defendant would assume he had an interest in the property because he had advanced $32,000 towards it (T/S 354); that she knew he had paid for it and ‘she realised it really was my property; that he trusted her to ‘give me the money back one day if she ever sold it … trust thing’ (T/S 355). To that end, he says and the evidence shows that, in addition to advancing the purchase moneys to her, he subsequently contributed some moneys towards its development, including architect’s fees and contractor’s fees to clear it for that purpose. In the event, development never occurred.
Notwithstanding the discharge of the Commonwealth Bank debt due by IBN, the plaintiff continued to have financial difficulties as he could not support his other borrowings from numerous financiers, having on-loaned them to Buttigieg, who had himself fallen into arrears.
In the event, on 22 October 2003 the plaintiff entered into voluntary bankruptcy, disclosing debts to those financiers totalling $578,000. In the same month IBN was placed in liquidation. His bankruptcy trustee and the liquidator of IBN were the same person, Mr Anthony Matthews (‘Matthews’), accountant and registered trustee.
The plaintiff had at one time been a licensed used car dealer, but by the time the relationship began he no longer held that licence and, on his own account, was earning income as a car wholesaler, a business he described as advising people in connection with the purchase of motor vehicles. Even so, on his own account and putting aside Centrelink payments, he did not at any time after 1996 earn a taxable income.
He also spoke in evidence of conducting a business of money lending. I have spoken of his dealings with Buttigieg, who operated a used car business known as ‘All Seasons Motors’. Buttigieg was himself unable to obtain the finance he required to operate that business, but the plaintiff was able to procure finance so it was agreed between them that the plaintiff would use his borrowing capacity to obtain moneys and on-lend them to Buttigieg. Buttigieg would in turn meet all interest payments on those borrowings by making direct payments to the financiers concerned. In addition, Buttigieg would repay to the plaintiff contributions towards principal sums from time to time due and, as well, an amount of interest over and above that amount due by the plaintiff to his financiers.
All such moneys were paid by Buttigieg to the plaintiff in cash and after June 2001 directed into the defendant’s bank account. The rate of additional interest payable by Buttigieg to the plaintiff was never formally agreed upon and, as I understood the plaintiff’s evidence, it was his option as to what that rate would be. It increased, he said, as Buttigieg’s fortunes declined, to a rate of 3‑4% per month, in other words 36-48% per annum. There was never any documentation brought into existence with respect to the plaintiff’s dealings with Buttigieg.
How the plaintiff was, in his beleaguered financial state, able to procure apparently unsecured loans totalling close to $540,000 (Exhibit D6) from numerous financial institutions was never explained.
In the event, says the plaintiff, Buttigieg defaulted in payments of principal and interest and it was that which led to his bankruptcy. The liquidation of IBN was barely surprising as, by October 2003, it had no income or assets.
In evidence the plaintiff said that Buttigieg payments into the defendant’s account ceased at the time he went bankrupt, ‘it would have been early ’03, late ’02 (T/S 183), but it is plain on all the evidence, indeed from his own counsel’s submissions, that Buttigieg money continued to be paid into that account during 2004 and apparently as late as September 2005.
It is equally clear that none of the moneys paid by Buttigieg into the defendant’s account at any time, whether as capital repayments or interest due to him or his financiers and whether received before or after bankruptcy, were disclosed by him to his trustee in his Statement of Affairs (D9) or his Income Questionnaires (Exhibits D10 and D11). The proportions of those moneys paid to the plaintiff by way of interest actually due to him were never recorded, they did not appear in any taxation papers and nor was there any attempt made at trial to identify them. Indeed, there was no evidence at trial as to what any of the Buttigieg payments represented. After being warned, the plaintiff nonetheless said that he had not disclosed such interest income to Centrelink but that he was not aware he had to.
Whatever of that, the plaintiff says that whilst some of those receipts were withdrawn from the defendant’s account, whether by her or him and whether for his or their benefit, the defendant has never fully accounted to him for the balance of those moneys and that that balance of approximately $100,000 (which was a contested amount) ought be brought into account in the property division he seeks.
The defendant responds saying that all such payments were withdrawn by the plaintiff and used for his own purposes soon after they were received, on some occasions even before then in anticipation of their receipt.
The evidence on this topic was quite unsatisfactory. The defendant’s bank accounts disclosed numerous receipts which on any interpretation of the evidence comprised Buttigieg moneys but, as well, there were numerous withdrawals. The defendant purported to identify many withdrawals as amounts taken from her account with her cooperation and for the plaintiff’s own purposes, but in a significant number of cases her evidence was shown to be plainly wrong – I comment on this elsewhere.
Even so, the plaintiff’s evidence as to this was also unsatisfactory. He acknowledged two withdrawals from the defendant’s bank accounts for his benefit but no others, yet it is evident from the timing and location of various withdrawals that he was the likely beneficiary of those as well. He was challenged about numerous transactions, including withdrawals made at various hotels and the casino, but denied them all. He denied ever using the defendant’s ATM transaction card for such purposes but, for reasons expressed elsewhere, I prefer and accept her evidence that he did.
Otherwise, on the plaintiff’s pleaded case, he carried out the greater share of the housework and duties at Sussex Street and the defendant herself contributed to the relationship through her regular income as a nurse.
On 25 March 2005 the plaintiff’s son died in a motor vehicle accident and that had some implications for events which followed.
On 16 June 2005 Matthews wrote to the defendant’s solicitors (Exhibit D18) alleging that the funds deployed by her in the purchase of Port Road were in reality assets in the plaintiff’s bankrupt estate.
In June 2005 the defendant underwent a public examination under s 81 of the Bankruptcy Act 1966 (Cth). In the course of trial the transcript of that examination was tendered in evidence but I subsequently had regard to the provisions of s 81(17) of the Bankruptcy Act and the authorities of Re Morris; Ex parte Donnelly v CML[1] and Rothmore Farms v Belgravia[2] and determined that I ought not receive it as evidence or act upon it. It was then returned to the plaintiff’s solicitors unread by me.
[1] (1997) 148 ALR 349
[2] (1999) 31 ACSR 88
At all events, following that examination there were dealings between Matthews in his dual capacities as bankruptcy trustee and liquidator of IBN, on the one part, and the defendant on the other. In consequence, the parties agreed upon an arrangement whereby the defendant paid $80,000 to Matthews in settlement and discharge of all claims against her and relating to her purchase of Port Road.
On 1 December 2006, at a time when their relationship was either faltering, on the plaintiff’s account, or over, as the defendant says, the defendant entered into a contract to sell the Port Road property to a third party for $401,500. Settlement of that sale occurred on 28 February 2007, at which time the mortgage moneys of $103,000 were repaid to Venette, who in turn paid them on to the plaintiff.
On learning of the proposed sale, the plaintiff lodged a caveat on the property but ultimately, by agreement, it was lifted and the nett proceeds of sale, being $241,211.13, were paid into the Suitor’s Fund in this Court after there was a deduction reflecting the GST payable by the defendant on the transaction.

At some time after that sale, the defendant further became obliged to pay capital gains tax (‘CGT’) and that payment was made by her in the sum of approximately $20,000.
As of September 2011 the credit standing in the Suitor’s Fund in this Court was $298,091.88.
The plaintiff then claims that he is entitled to a division of property on the footing that he provided all the funding for the defendant’s purchase of Port Road, albeit that the defendant was its nominal owner and nominally has the nett profit from its resale, that she has otherwise retained the bulk of his Buttigieg moneys and that he otherwise contributed to the betterment of the Sussex Street property, to the household duties and to the relationship generally.
The defendant’s case is markedly different. She disputes the alleged period of cohabitation as domestic partners, contending that it subsisted only for separate periods between July 2001 and March 2004 and between September and December 2004. She acknowledges that the plaintiff resided at her premises for a short time after 25 March 2005 but says they did not then live together as domestic partners.
She rejects altogether the proposition that the plaintiff made any more than nominal financial and non-financial contributions to their relationship. He did not bring any moneys into it at all, he withdrew all the Buttigieg moneys which came into her account and he contributed in a very minimal way to household work and in no significant way to the Sussex Street property itself. She describes his conduct towards her in the latter part of the relationship as abusive and on occasions violent, but concedes that she nonetheless allowed him to stay at her house because he asked to and because he was at times quite impoverished with nowhere to live.
On her account, as of the time she purchased the Port Road property he was indebted to her in the sum of $32,000 (it being the sum he advanced towards settlement). She said it was agreed as an amount due to her for (a) having provided his accommodation and living expenses up till that time, which were valued by agreement at $22,000, and (b) as to an amount of $10,000 to compensate her loss over purchasing from him a car which she said was never truly owned by him, which later went missing and was, she said, likely repossessed.
After that time, she says, he made no financial contributions to their life together and, indeed, she paid out significant sums in order to support him and meet some of his debts.
Otherwise, she said her purchase of Port Road was a legitimate transaction entered into because she was then interested in buying an investment property, because that purchase was recommended to her by the plaintiff and his accountant Balnaves, and because she contributed the unsecured portion of its purchase price: hence she maintains that its proceeds in the Suitor’s Fund are hers. The mortgage moneys were offered to her interest-free by Venette and she accepted that offer. She then had no knowledge of dealings between the plaintiff and Venette over their property settlement, nor of any assertion that those were the plaintiff’s own funds.
In consequence of the above, she argues that s 9(2)(c) of the Act has not been satisfied as their domestic partnership did not persist for three years, she rejects that the plaintiff made any significant contribution in money or kind to their relationship anyway and says that in addition to moneys she expended towards his welfare, she was obliged to pay $80,000 to the trustee because of his dealings in the sale of Port Road to her and as well CGT of $20,000. She asserts she is now entitled to the nett benefit of that sale and that he has no claim upon any of her assets.
The Plaintiff’s Locus Standi
At the commencement of trial, I queried the plaintiff’s locus standi in bringing any claim, on the footing that it appeared to me it was a chose in action which on either account must necessarily have arisen during the period of his bankruptcy and thus, under s 116(1)(b) of the Bankruptcy Act, fallen into his bankrupt estate as property of his trustee.
On that issue, the plaintiff contended that a claim under the Domestic Partners Property Act was not the type of chose in action caught by that section but was a statutory right personal to him; that it stood outside his bankruptcy.
I did not accept that reasoning and referred to a number of cases where a bankruptcy trustee had succeeded to choses in action of that kind (see Cummings v Claremont[3], Cummings v Beach Petroleum[4] and Hampson v Circuit Finance Australia[5]).
[3] (1996) 185 CLR 124
[4] (1993) 117 ALR 235
[5] [2006] AIRC 24
However, Williams on Bankruptcy, 18th edition, 1968 at p.318, observed that the ‘common law of bankruptcy’ was that a claim for property settlement pursuant to the Family Law Act in the United Kingdom was not a right which vested in the bankruptcy trustee. Such was the position in the United Kingdom then, albeit that that passage does not appear to be restated in the 19th edition of Williams.
Otherwise, the plaintiff pointed to the case of Coffey v Bennett[6], where the court, having discussed a similar passage in an earlier edition of McDonald, Henry & Meek’s Australian Bankruptcy Law & Practice (1953) (3rd edition) by J K Manning and L G Bohringer, held that the right to proceed against a deceased estate for maintenance and support was a personal right not capable of assignment by operation of law to a trustee in bankruptcy. Relying on that same authority, Frederico J in Page v Page[7] had commented that ‘similar considerations would apply in relation to applications for settlement of property by an undischarged bankrupt under the Family Law Act’ and he held that such a claim was not a right vesting in a bankruptcy trustee.
[6] [1961] VR 264
[7] (1982) FLC 91-241
The plaintiff also referred to Luxton v Luxton[8], where the Supreme Court of Victoria per McInerney J held that an action seeking a declaration of rights of property under the Marriage Act of Victoria was a personal right not capable of devolving upon the trustee. Even so, that court then held that the proceeds of any such action would likely become an asset available for distribution amongst creditors.
[8] (1968) 12 FLR 382
A useful determinant, discussed in the case of Coffey and elsewhere, is whether the cause of action under consideration is one capable of assignment or otherwise one which survives death, albeit that in Coffey the court observed that the fact that the cause might survive death did not necessarily lead to the conclusion that it ought become an asset in bankruptcy. As to that, it ought be noted that by virtue of s 9(4) of the Domestic Partners Property Act, a claim for a settlement survives death and may be assigned to the personal representatives of a deceased person.
In the course of argument before me, counsel for the plaintiff cited what he recognised as an extreme example which he suggested supported the plaintiff’s position. He referred to the status of a female in a long relationship whose sole contribution to it had been one of providing companionship and services and who had made no financial contributions of any kind. Even so, a claim would be available to that person under the legislation, albeit not in respect of any specific item of property. Such a claim was, he suggested, in the nature of a personal claim and was not and ought not be caught by s 116 of the Bankruptcy Act.
Another, perhaps more obvious, example in that context would be a claim under the Family Law Act 1975 (Cth) for payment of regular maintenance or a settlement in lieu of maintenance. It would more closely approach the position spoken about in Coffey, where the claim was one for support and maintenance under testators’ legislation.
A claim for maintenance, whether from a deceased estate or under the Family Law Act, is one aimed at securing income for a plaintiff and ordinarily a bankruptcy trustee will not pursue such part of a bankrupt’s income as is necessary for his own support or that of his or her family support. Recent amendments to the Bankruptcy Act (ss 139J and following) deal with that.
At the other end of the scale, however, might be a claim under the Family Law Act or the Domestic Partners Property Act based solely upon financial contributions made by each of the parties to a relationship. It may well be considered to be a claim of a different character to one which seeks only maintenance, as it may well result in the recovery of capital, in some cases a very substantial amount of it, which arguably ought to be available for payment of a bankrupt’s creditors. It would otherwise seem perverse that such a chose in action might not devolve upon the trustee but that any proceeds of it received during the bankruptcy would become such an asset.
I thus had serious reservations about the rationale of Page but it then came to my attention that it had been followed in Morkaya v Parkinson[9]. I found myself obliged to follow that decision, albeit that I had concerns as to whether either case focussed upon what appears to me to be an important distinction between a maintenance claim and a claim for division of property.
[9] [2010] NSWSC 1194
Even so, I took a different view about the plaintiff’s alternative claim for declarations that the defendant held her interests in the Sussex Street property or the proceeds of the Port Road property in trust for him. As to those assertions, I considered that, were they made out, they identified as assets, property interests which existed at the commencement of bankruptcy and thus necessarily became assets in the bankruptcy.
At the outset, and indeed during the course of trial, I expressed concern about those transactions occurring before and during the plaintiff’s bankruptcy and involving the payment of moneys from Buttigieg to the defendant’s account, as well, all the moneys advanced to support the purchase by the defendant of Port Road and, finally, the plaintiff’s asserted interest in that asset. I requested the parties to provide Matthews with copies of the pleadings and the transcript raising my concerns. Matthews did not seek to intervene in the action but his legal representative attended at one point.
Interim Findings
Having heard the evidence and considered the available documents and the arguments of counsel, I have decided to make the following interim findings but otherwise do not consider it appropriate to proceed to a final determination of the matter.
(1) As to credit
- the plaintiff
I found the plaintiff to be a most unimpressive and unreliable witness, indeed I had no confidence in much of what he said. There were instances in his evidence, too numerous to mention, where he demonstrated that, most notably concerning his dealings with Buttigieg and the moneys received from that person, his dealings with Centrelink, his description of his and their lifestyles, his dealings with his former wife and over the Port Road purchase, his answers to questions touching upon his bankruptcy and his dealings with Matthews.   The following observations are pertinent:
(1)He was declared bankrupt on 22 October 2003, a date when, on his own account and as I elsewhere find, he was in a de facto relationship with the defendant. He was not discharged from that bankruptcy until 8 February 2007, a date which, on any account, was well after the relationship ended.
(2)In his Statement of Affairs filed in support of his voluntary petition on 21 October 2003 (D9):
·    he declared that he had first had ‘difficulty paying … debts’ in February 2003. I have elsewhere found myself satisfied he had been in financial difficulties well before then, indeed as far back as June 2001;
·    in answer to the question whether he then had a spouse/partner, he answered ‘No’. His sworn evidence in this court was that he was at that time in a domestic relationship with the defendant and her own evidence supported that. He was asked about that answer in his Statement of Affairs and said he did not know why he had so responded, that he had made a mistake, that he had filled the wrong box in. Even so, he then disclosed his address as that of the defendant’s residence;
·    when called upon to declare his income from self-employment in the 12 months preceding that date, he stated that he had received $50,000 and that he expected to receive a further $10,000 in the following 12 months. That evidence conflicted with his evidence at trial that he had received no income for taxation purposes in that year and it otherwise exceeded by a considerable amount moneys received from Buttigieg in that period;
·    he said he had been unemployed for one year prior to then, but his evidence at trial was that he had not been employed for many years before and that he had in recent years operated as a self-employed car wholesaler, albeit for no significant reward;
·    he was not squarely asked about any receipt of a property settlement from his former spouse or an entitlement to one and his denial there were any Family Law proceedings or agreements afoot may have been strictly correct, but if his evidence that it was agreed he would ultimately receive the $103,000 advanced by Venette were to be accepted, then he plainly misled his trustee in failing to disclose that he expected a benefit from other person.
He then answered a series of questions and separately denied:
·    that he owned or was buying any land or buildings in Australia – when on his own evidence before me he asserted that by agreement with the defendant he was entitled in equity to an interest in the Port Road property;
·    at Q.34 that he had ‘transferred, given away or sold any assets worth more than $1,000 in the last 5 years’ – when on his own evidence he had transferred the whole amount of the purchase price and associated costs of the Port Road property to the defendant in March 2003;
·    at Q.35 that he did not ‘own any assets which (were) not currently in (his) possession’ – when at trial he asserted that the Port Road property was beneficially owned by him, albeit registered in the name of the defendant;
·    at Q.36 that he had not ‘contributed or otherwise assisted in the purchase or improvement of any asset valued over $1,000 which (was) held by someone else’ – when on his own evidence in the proceedings he had assisted the purchase of Port Road and subsequently contributed to its improvement and, on his own account, the improvement of the defendant’s property at Sussex Street.
Further, I note that in that document:
·    he disclosed that substantial sums totalling approximately $357,000 were owed by him to 16 different financial institutions at the time of his bankruptcy, albeit that the total of his liabilities ultimately ascertained was $570,000;
·    he denied having transferred any assets to IBN in the last five years –when on his own account he had paid to IBN the entire proceeds of his disability policy. Further, he did not disclose that part of the purchase price of Port Road was used to discharge IBN’s Commonwealth Bank liability;
·    at Q.45 he again denied owning or buying any land or buildings in Australia – contrary to his position at trial that he had a proprietary interest in Port Road;
·    at Q.48 he identified one debtor, Buttigieg, in the sum of $300,000 – but at trial he gave varying accounts as to the total of his advances and he was unable to produce any documentation whatsoever as to that sum nor proffer any corroborating evidence of it.
(3)Some 12 months after his bankruptcy, on 9 August 2004, the plaintiff was called upon to provide to his trustee a statement of his income over that period. That document (D10) disclosed that:
(a)he again falsely denied he was in a de facto relationship – when challenged in evidence over that answer he said once again he had made a mistake;
(b)he denied receiving any income apart from social security, when on his sworn evidence significant moneys comprising interest payments from Buttigieg had been paid over that period to the defendant;
(4)On 25 October 2005, he completed yet another income questionnaire for his trustee (D11) and again provided false answers to the same questions I have identified in his August 2004 questionnaire.
(5)He acknowledged in evidence that he failed to disclose to Centrelink, when seeking a pension, his asserted interest in the income and/or capital sums which were paid by Buttigieg.
He also frankly acknowledged that he filled out a false Centrelink declaration for a rental relief claim, asserting in it that he was a boarder in the defendant’s house, when, on his account and all the evidence, they were then in a de facto relationship.
(6)He provided varying accounts as to the nature of the Buttigieg payments directed to the defendant’s account. None of them were supported by any corroborating material or documentation, and Buttigieg was never called, albeit he said that he did not know where to find him.
(7)His evidence as to the periods of time that he actually stayed at Sussex Street was, as I found it, quite unconvincing, his brother was not called to give evidence of periods of residence with him and I had no confidence at all in his account of his lifestyle at relevant times.
I am satisfied that, as the defendant contended, he was effectively kept by her and spent much of his time in hotels drinking and gambling. Transactions in the various bank accounts are testament to that. I am not otherwise persuaded that at any time he derived income of any significance from his professed occupation of wholesaling cars. Taxation returns do not disclose it and nor did he adduce any evidence of such trading.
(8)He sought to assert that he contributed physically to the improvement of the Sussex Street property but, apart from perhaps two days when he did some physical work there during the course of renovations, he could not identify anything of significance that he did there, nor am I satisfied he contributed in any material way to domestic tasks. I find that on occasions he cooked food on a barbecue and he may have washed his own clothes and walked the defendant’s dog, but that was the extent of it.
(9)The best that can be said for his evidence at trial is that he ultimately chose to speak with some measure of frankness about the sources of the money used to fund the defendant’s purchase of Port Road and, as well, the circumstances in which Buttigieg moneys were paid into the defendant’s account. Of course, he had to do that in order to support his claim.
(10)No documentation was produced at trial concerning his property settlement dealings with Venette and it never emerged exactly when it was that an agreement was reached between them to share equally the nett proceeds of sale of their former matrimonial home. Even so, it is readily apparent that that agreement was concluded before 14 March 2003 and that the transfer of Port Road to the defendant and the contemporaneous discharge of the Commonwealth Bank debt, were contingent upon those proceeds becoming available to him. It is no coincidence that the Port Road transaction followed promptly upon his receipt of disability moneys and the sale of the former matrimonial home.
The documents make it plain that Venette directed her broker to pay the plaintiff the $103,000 due to him from the proceeds of sale of the former matrimonial home (Exhibit P2.44) but the plaintiff, having then spoken to Balnaves, did not accept those funds and instead the parties entered into what I am satisfied was the sham transaction whereby Venette purportedly advanced the moneys herself by way of an interest-free mortgage to the defendant. That mortgage was witnessed by Balnaves.
Had that transaction some other, legitimate, explanation, I am satisfied Balnaves and Venette could have given evidence relevant to it, but neither was called and I conclude their evidence would not have assisted the plaintiff’s contentions as to it.
(11)Further, on 4 March 2003 the plaintiff received the proceeds of his disability insurance claim, proceeds the destination of which was never disclosed to his trustee.
(12)I found it barely surprising that the trustee sought by his letter of claim (D18) to recover from the defendant the whole amount advanced by her towards the purchase of Port Road. Ultimately, upon the defendant paying the trustee $80,000, that claim was settled with the defendant and Venette but not with the plaintiff.
(13)Some attempt was made at trial by the defendant to portray the plaintiff as having been engaged in the business of loan sharking by lending and charging extortionate interest rates to Buttigieg and I was asked to take some account of dealings he had with a person or persons associated with bikie gangs. The evidence on that matter was inconclusive and I make no formal findings about it, other than to observe that I find the plaintiff’s explanations for his dealings with Buttigieg and their terms to be extraordinary, unbelievable and very likely incomplete. On his account, as Buttigieg had no capacity to borrow moneys, he used his own ability to borrow, unsecured, very substantial sums, which he apparently handed over to Buttigieg with no security, no agreement and a bare understanding that Buttigieg would repay the principal, repay the credit provider’s interest and pay him interest on top of that at rates which he was at liberty to vary and which from time to time approximated 50% per annum.
(14)Whatever the intimate and emotional relationship between the parties may have been, I am satisfied that at least in the latter part of their cohabitation, if not earlier, the plaintiff took advantage of the defendant’s good nature and comparative wealth and security, in circumstances where he was effectively homeless and without any assured income. Far from contributing materially or in any domestic sense to the relationship, he took from it and gave very little.
(15)The defendant related one particular instance where in the course of an argument he pushed her and she fell and broke her arm. The plaintiff flatly denied doing that but I much preferred her account of it and find it happened as she described. His denial did him no credit.
(16) In the face of a history of conduct deliberately intended to mislead his trustee and others, assertions about the existence of the de facto relationship (previously denied by him), of his contributions to and interest as a beneficiary in the Port Road property and about his ownership of the various and substantial amounts of capital and interest paid by Buttigieg, his conduct in coming to court after his bankruptcy discharge claiming ownership of and seeking access to those assets was nothing short of brazen.
Yet even so, he tried in some manner to say that the circumstances in which his former wife advanced moneys to the defendant to assist the purchase of Port Road, were not a sham. He never satisfactorily explained his position as to that but freely acknowledged that the $103,000 advance was the agreed amount of his property settlement with his former wife, that it was at first going to be paid directly to him, but that it was then decided that she would advance it interest-free to the defendant. The circumstances of that dealing really speak for themselves, but if there were any doubt about it, it was dispelled when he acknowledged that following the sale of Port Road by the defendant and the discharge of the mortgage, that sum of $103,000 was paid to him by Venette in the same month he was discharged from his bankruptcy, but after his discharge.
- the defendant

Having reached those conclusions, I should say that I also found the defendant’s evidence lacked credibility and reliability in a number of respects.
She presented as gullible and naïve in her understanding of business affairs. So much was evident from the circumstances in which she allowed the plaintiff, almost from the time she first met him, to use her bank account to receive and disburse through it significant sums of money. He told her and she accepted that he wished to avoid putting those transactions through his own bank accounts as he was having financial difficulties. She allowed that to happen notwithstanding a very brief acquaintance with him.
At trial she had before her a full set of her bank and credit card statements, but it became obvious that she had not considered them carefully and, in any event, lacked the ability or application to properly understand them. She had a poor memory of the timing and amounts involved in particular transactions. In consequence, on a number of occasions she proffered evidence which was ultimately shown, at times even on her own admission, to be quite wrong. On occasions her evidence on these matters unravelled dramatically and she was forced to concede that particular withdrawals that she had said were to the benefit of the plaintiff, were in fact internal transfers within her bank accounts and credit card made entirely for her own benefit. When confronted with these challenges, she was ready to acknowledge the incorrectness of her earlier evidence but it demonstrated to me that she was inclined to jump to conclusions and proffer explanations she considered would most likely bolster her own cause. So much also emerged from her evidence about who paid for the limited works carried out on Port Road.
She demonstrated a level of immaturity, a lack of preparation or thought and a cavalier attitude to the need for precision which did her no credit at all. She appeared to have proceeded on the basis that if she did not readily recognise a transaction, then it was to be concluded that it was not hers.
Further, I did not find her evidence as to the circumstances in which she became the registered owner of Port Road to be credible.
She disclaimed any awareness of the plaintiff’s interest in the $103,000 purportedly advanced towards that purchase by Venette, but given that it was interest-free and in the context of all I find she then knew about the plaintiff’s financial affairs, I do not find her denial believable. I am satisfied that just as he had told her of the reasons for his use of her bank account, he also told her that the $103,000 was his money and that it represented his share of the property settlement with his former wife. I further find that it is likely he also told her that the moneys were to be deployed in this way as he did not want his creditors to gain access to them.
Otherwise, she said the balance of the purchase price of $34,800 comprised moneys owed to her by the plaintiff, and agreed with him as owed, for the loss she sustained in her car purchase and for board. I have already touched upon this.
As to these last matters, the plaintiff denied the defendant’s allegations about the car and that there was ever any such agreement. Further, he said he had by then contributed financially to their cohabitation and that he was not indebted to her, nor had he ever agreed he was. He said that from the outset they had agreed that the moneys contributed to Port Road were his, but that she would hold the property in her name for his or their joint benefit.
The evidence as to the exact fate of the defendant’s motor vehicle was inconclusive and I can make no firm findings as to it. Otherwise, it is plain from a review of the defendant’s bank statements that there had been, even up to March 2003, numerous and substantial deposits by the plaintiff into her accounts. Had there ever arisen at that stage any question of his compensating her for board and lodging, or her otherwise claiming it from him, she could obviously have chosen to retain some of those moneys for herself by not permitting their withdrawal. Such did not occur.
I therefore reject her evidence that there was any agreement with the plaintiff that the $34,800 or any part of it represented a sum then due by him to her. On this topic I prefer the plaintiff’s account.
I find that prior to the purchase of Port Road, the parties discussed and agreed that as the plaintiff’s financial position was precarious, the defendant would purchase the property in her own name for only so much as was required to discharge the Commonwealth mortgage and that the plaintiff would advance the whole amount of moneys required to assist that purchase. I find that that transaction was promoted by the plaintiff for the twin purposes of hiding from his then creditors the proceeds of his property settlement and disability payout and otherwise maintaining control (as he perceived it) of the Port Road property.
As I noted, the plaintiff gave various and conflicting accounts as to the intended beneficial ownership of Port Road but I find that he persuaded the defendant to join in the purchase arrangement on the footing that it would be a pooled resource and that the property would be developed for their joint benefit.
The defendant’s vain persistence in her pleadings and during the trial in maintaining that she was the legal and beneficial owner of any equity in Port Road reflected, as I find it, her conviction that the plaintiff was indebted to her for supporting him over the period of their relationship, her justified dissatisfaction with the way the plaintiff had treated her whilst they were together and, as well, the fact that in consequence of her legal ownership of the property, she had had to disgorge some $80,000 to the bankruptcy trustee and liquidator, some $20,000 in CGT and doubtless some legal costs associated with advice she took about the trustee’s claim upon her.
Further as to her credibility, on her own confession she also made a false declaration to Centrelink about the plaintiff’s status as a resident in her house as a boarder, albeit that she said the plaintiff pressured her to do that.
Finally, I viewed with some concern the obvious conflict between her original pleading, which she personally signed and in which she denied there was ever a time when she and the plaintiff lived as husband and wife, and her evidence at trial as to the nature of that relationship, at least between June 2001 and March 2004. It was one thing to dispute the factual/legal issue of whether there was ever a de facto relationship or domestic partnership within the meaning of the Act, but her initial denial of any period of such cohabitation threw considerable doubt upon her credibility.
For all that, I formed a more favourable impression about her credibility than that of the plaintiff and I am satisfied that, in respect of many of his financial dealings, he overbore her will. She presented as a vulnerable and overly forgiving person who, after her initial enthusiasm for their relationship had waned or even evaporated, had on several successive occasions allowed the plaintiff to continually impose on her, to live in her house and take advantage of her relative wealth and generosity: at particular times this continued for long after she wanted him there.
Putting aside for the moment any question of a nett benefit gained by the defendant from the Buttigieg deposits and withdrawals, I am not otherwise satisfied that the plaintiff made any significant financial contribution to their relationship at all. Indeed, I find that throughout it, he took advantage of the defendant’s good nature and was essentially housed and supported by her at her own expense. Any Centrelink moneys he received were used by him to support his own lifestyle, a lifestyle involving visiting coffee houses, hotels and gambling whilst the defendant worked.
I turn then to discuss a number of factual issues which ought be resolved even at this stage.
(2) Were the parties in a domestic partnership that existed for at least three years?
In considering this question I have kept in mind these principles:
(1)Section 4(1) of the Domestic Partners Property Act provides:
This Act does not apply to—
(a)    a domestic partnership (other than a domestic partnership that was a de facto relationship) that ended before the commencement of this section; or
(b)    a de facto relationship that ended before 16 December 1996.
Note—
The Domestic Partners Property Act 1996 came into operation on 16 December 1996 as the De Facto Relationships Act 1996.
The plaintiff contended that the instant relationship having ended prior to 1 June 2007, the De Facto Relationships Act applied here.
I am not so persuaded as I find that the relationship here was at relevant times ‘a domestic partnership that was a de facto relationship’.
(2)Section 9(2)(c) of the Act enables a party to apply for a division of property only if ‘the domestic partnership existed for at least three years’.
(3)    A ‘domestic partner’ is defined as:
… a person who lives in a close personal relationship and includes—
(a) a person who is about to enter a close personal relationship; and
(b)a person who has lived in a close personal relationship;
and it must follow that, relevantly here, a domestic partnership is one where persons have lived in a close personal relationship for at least three years.
(4)A ‘close personal relationship’ is then defined as:
… the relationship between 2 adult persons (whether or not related by family and irrespective of their gender) who live together as a couple on a genuine domestic basis, but does not include—
(a)    the relationship between a legally married couple; or
(b)    a relationship where 1 of the persons provides the other with domestic support or personal care (or both) for fee or reward, or on behalf of some other person or an organisation of whatever kind;
Note—
Two persons may live together as a couple on a genuine domestic basis whether or not a sexual relationship exists, or has ever existed, between them.
(5)The Act is silent as to the manner of calculation of the three-year period required by s 9, whether it must be continuous, whether it can be aggregated, but some assistance can be gleaned from a consideration of interstate authorities dealing with similar legislative provisions or otherwise the Family Law Act.
In the earlier cases of Hibberson v George and Lipman v Lipman[11], the courts examined the particular circumstances of a period of separation and found in each case that it terminated the relationship, but later authorities have taken a more flexible approach.
[11] (1989) 13 Fam LR 1
Thomson v Badger[12] per Young J exemplifies this. From 1981 to 1988 the plaintiff and defendant had lived in an intimate relationship, in the course of which they had cohabited for 44½ months and had lived apart for 39½ months. The plaintiff alleged that the relationship was not within the De Facto Relationships Act 1984 (NSW), s 3(1). His Honour held that the existence of a de facto relationship is a question of fact. At 563:
[12] (1989) 13 Fam LR 559
Looking at the totality of the relationship over the period of seven years one can see it was not the happiest of relationships but was one which always continued on from where it left off. There was an incident, a separation and then usually a short time later the parties got back together again on the same basis as before. In my view the proper determination of the factual question raised is that there was a de facto relationship which continued between July 1981 and June 1998.
In Gazzard v Winders[13] the parties had been in a 14‑year relationship, with a six-week separation occurring at about the four years mark. Powell JA (in dissent at 725) determined that two separate relationships existed, one of four years and another of 10½. Beazley JA, however, disagreed and held (at 728):
[13] (1998) 23 Fam LR 716
… I do not endorse in an unqualified way the comments of Mahoney JA in Hibberson v George … For myself, I do not know that it accords either with reality or a proper construction of the Act to find that an interruption which, in a long relationship may be no more than a hiccup, would have completely brought the relationship to an end. In any event, I can see no reason why a short interruption of the relationship for six weeks in a period of 14 and a half years should prevent the court from taking into account the circumstance that this was a lengthy relationship of that order.
Stein JA, in concurring with Beazley JA, observed (at 731):
The relationship was a lengthy one, whether one looks at it as lasting, for the purposes of the Act, 10 and a half or 14 and a half years. However, I agree with what Beazley JA has said about short interruptions, such as here, not being such as to disentitle the court from taking cognisance of the whole period.
In Jones v Grech[14] the parties had been in a relationship over a 32-year period. During several of the early years the male partner was also in a formal marriage, though over some of the years he regularly stayed in the female partner’s premises, and through two periods covering several years the parties lived full-time in a joint residence. Powell JA (in dissent at 717) continued to adopt a strict approach to the issue of the length of a de facto relationship and determined that the parties had engaged in two distinct de facto relationships. The majority (Davies and Ipp AJJA), however, considered the entirety of the relationship period in making an order to divide the property equally between the parties. Ipp AJA (at 730) said that the court should have regard to ‘the total period (comprising any separate periods) during which parties live together in a de facto relationship’. He concluded that when assessing the contributions made by the respective parties the court must take into account ‘the aggregate of the periods during which the de facto partners have lived in a de facto relationship’, that this approach was necessary in order the give effect to the relevant NSW legislation (at 731).
In LeMay v Clark[15] the Family Court of Western Australia considered a de facto relationship that had continued for five years, had then been followed by a one-year separation and then by a one-year resumption. Thackray J did not follow the approach in Lipman, holding that the relationship had not ended and the relevant period was an aggregate of the two periods of cohabitation.
In Hamblin v Dahl[16] the court again considered an ‘on-off’ de facto relationship and Demack FM observed at 118:
Legal marriages usually “end”, in popular parlance, when a couple separate. But as a matter of law, such marriages “end” only when a Court dissolves them. Human relationships are very complicated. Many married couples separate, often on more than one occasion … In such cases it appears at the time that the marriage is over – it has “ended”. However, after the elapse of time – in some instances a very long time – some married couples get back together. No one suggests they have had two marriages, unless of course they have been through the formal process of divorce and subsequent remarriage.
These formal, public options are not available to those who live in de facto relationships. Those living in such ex-nuptial relationships, in my view, should be treated in the same way as their married neighbors – after a separation they simply resume their former “marital” relationship – they don’t start another one.
Similar conclusions were reached in Milevsky v Carson[17] and Robinson v Rouse[18].
In this Court in Wren v Chandler[19] his Honour Judge Clayton considered whether separate periods of cohabitation could be aggregated for the purposes of determining the requirement of s 9(1)(c) of the De Facto Relationships Act that a relationship existed for three years. In that case, the parties had been in a relationship since 1989, with numerous periods of separation (several months at a time) (at [23]-[25]). His Honour concluded that only one relationship existed between the parties. His Honour noted that while the parties may have lived together for specific periods of time and lived apart for other periods, it would be artificial to classify each discrete period during which they lived together as a separate relationship (at [43]).
(6)It is self-evident that the fact that the parties engage in sexual intercourse at particular times does not of itself prove the existence of a close personal relationship of the kind envisaged by the Domestic Partners Property Act.
[14] (2001) 27 Fam LR 711
[15] [2006] DFC 95-327; [2005] FCWA 23
[16] (2010) 239 FLR 111
[17] (2005) DFC 95-314
[18] [2005] TASSC 48
[19] [2004] SADC 128
On the plaintiff’s case as pleaded and led, the parties were in a de facto relationship over a period commencing in about June 2001 and ending in December 2006, albeit that he allowed that there were periods when they did not live under the same roof and that the relationship gradually deteriorated from March 2006.
The defendant’s case differed markedly. As I have noted, she originally signed a pleading asserting that whilst they resided together between July 2001 and March 2004, October and December 2004, and March and June 2005, it was never on a genuine domestic basis as husband and wife, and that plea was maintained to the point of trial.
When she came to give evidence, however, she agreed that they had lived together between June 2001 and March 2004 as husband and wife, but said that after that time no such relationship resumed, albeit that they were on occasions thereafter living under the same roof and sleeping together and she was continuing to permit him to use her bank accounts.
The plaintiff had a poor memory and was unable to give a clear account of the dates and periods of separation, and in this respect I much preferred and accept the defendant’s evidence.
The plaintiff said they separated for a year after March 2004 but that in March 2005 and following the untimely death of his son, he asked if he could return to live in the house. The defendant said that in order to support him in his grief, she permitted that to occur. She conceded that thereafter they had sexual relations but denied that it was a true resumption of their previous relationship. After he assaulted her in May 2005, breaking her arm, as I am satisfied he did, he left the house. So, on her account, that was a two‑month period.
She said that between January and June 2006 she permitted him to stay with her intermittently and that between 21 March 2006 and June 2006 he was continuously there. She had agreed to take him in in January 2006 because he had returned to Adelaide from Darwin with no money and nowhere to stay. During this period, on occasions they slept together but there was no resumption of their original relationship; indeed, she adopted the somewhat odd position that there had never been such a resumption after March 2004 because none of their attempts at it had been successful.
In any case, she said, any form of relationship with him ended in June 2006.
She pointed to the absence of financial dealings by the plaintiff with her bank accounts in 2005 and after March 2006 and asserted, as well, that she continuously had a boarder in the house in the latter part of 2006.
Her evidence to the effect that their original relationship ending in March 2004 was never resumed, does not squarely address the question of whether a ‘close personal relationship’ existed at any time after that date.
As I have said, the plaintiff conceded that their relationship deteriorated after March 2006 and that there were otherwise periods when they were not living under the same roof, but he otherwise adopted the curious and simplistic position that they had remained living together until December 2006 because it was only then that the defendant had opted, uninvited, to return the balance of his belongings to his brother’s house.

As to the periods when they did not live together, he provided various and conflicting accounts. One obvious example of this was his evidence about the year 2006, when he first said that for most of it he had lived away from Sussex Street, then he corrected that and said it was about half of that period and later he appeared to say that he had spent more of that time living at Sussex Street.
The defendant said that during most of the periods the parties lived apart the plaintiff lived with his brother in the city and the plaintiff himself acknowledged as much. Plainly, his brother could have shed some light on the periods during which this occurred had he been called as a witness, but he was not. I conclude his brother’s evidence would not have assisted the plaintiff’s case.
For her own part, the defendant spoke of having two female boarders stay with her at times relevant to the dispute. She had been quite unable to locate one of them and her attempts to find the other were feeble. I find the evidence of the latter person would not have assisted her cause.
I refer to my observations as to credit and accept neither of the plaintiff’s nor the defendant’s positions as to the period or periods during which they lived in a close personal relationship: the truth lies somewhere in between. Having considered the evidence and documents, I find that they lived on a genuine domestic basis as husband and wife and, more pertinently, in a close personal relationship as follows:
(1)between June 2001 and March 2004, following which the defendant asked the plaintiff to leave her house, telling him that he was ‘using’ her.
She said, and I prefer her evidence as to this, that during that period she had done all the housework and paid for all living expenses, that he promised to repay her for this and never did, and that the most he ever did was to occasionally cook a barbecue.
At all events, he did then leave in March 2004 and she soon afterwards returned his clothes to his accountant and changed the house locks.
(2)Following his departure, the plaintiff went to live in the city, either with his brother or a person named Mansford (since deceased), who lived near his brother. She became aware of that because they met on occasions and he told her that.
(3) After March 2004 the plaintiff repeatedly requested they resume their relationship and the defendant ultimately relented so that they then lived in a close personal relationship between October and December 2004 on terms more or less identical to their original cohabitation.
(4)Prior to Christmas 2004 the defendant again requested the plaintiff to leave because he was, as I find to be the fact, continuing to contribute nothing financially to their relationship, that he did then leave and again went to live with his brother.
(5)On 25 March 2005 and immediately after the death of the plaintiff’s son, he asked the defendant if he could return to live with her as he had nowhere to stay. She agreed to that.
Although she described their dealings from that time as a resumption of their previous relationship ‘to a degree’ (T/S 546) and said that his behaviour and his contribution to the relationship did not change from previously, I am nonetheless satisfied that they then resumed a close personal relationship on much the same terms as originally, albeit not as satisfactorily as then.
(6)That resumption ended in May 2005 when, in the course of an argument, he pushed her and she fell and broke her arm. I accept her evidence as to that incident, which she did not report to police, and find that immediately after it, the plaintiff again left the house and went to live with his brother.
(7)Between January and June 2006 the defendant intermittently lived with her in a close personal relationship and that cohabitation was more or less continuous between March and June. Again, the quality of that relationship was poorer, but I am satisfied it was nevertheless a resumption of their previous close personal relationship.
(8)On odd occasions after June 2006, the plaintiff stayed at the defendant’s house overnight and on some of them sexual intercourse may have occurred, but I find that the parties did not after that time live together in a close personal relationship.
Those findings are to some extent also reflected in the timing of entries in the defendant’s bank account relating to Buttigieg payments.
I further find that on a number of occasions during periods of separation, the defendant had asked the plaintiff to pick up some personal belongings from her house but he had failed to do that, so in December 2006 she had them transported to his brother’s house. Her action in doing that was not, as I find it, a recognition that their relationship had ended only then.
I am then satisfied and find that notwithstanding the periods during which the plaintiff and the defendant were apart, they were in a close personal relationship for at least three years. Whether it is to be regarded as a continuous relationship between June 2001 and June 2006 with intervening breaks or the aggregate of separate periods of relationship within those dates, I find it unnecessary to decide.
That finding enlivens the court’s capacity under s 9 of the Act to adjust property interests but it does not, as I apprehend it, required the court to necessarily have regard to financial or other contributions made by the parties during those periods when they were not living in a close personal relationship.
(3) As to moneys allegedly contributed to the relationship by the plaintiff
- the Venette mortgage
I have found that as of 14 March 2003 the plaintiff was entitled to, and indeed expected to receive, $103,000 from Venette as his share of their property settlement, but that he then elected not to receive it personally and otherwise requested Venette to advance it to the defendant by way of an interest-free mortgage. I find he did that because he was then in financial difficulties and did not wish to reveal or expose his ownership of those funds to his creditors.
I have further found that at that time he told the defendant those moneys were his property settlement share but that they would be provided to her by Venette.
I find that as and from that date those funds and the resulting Venette mortgage comprised an asset which Venette held in trust for the plaintiff, a trust which she later honoured. I am therefore satisfied that he was at all relevant times the sole beneficiary of the trust comprising the Venette mortgage.
As that interest remained such at the time of his bankruptcy in October 2003, it appears to me it then became an asset in his bankruptcy. As such, it cannot be a property interest capable of being dealt with under the Domestic Partners Property Act.
- the Port Road property
I have already found that the plaintiff proposed and the defendant accepted that she purchase Port Road in her own name using funds entirely provided by him, so as to disguise those funds and that asset from his creditors.
I have also found that it was agreed between them that the property would be held by her and later developed as a car yard for their joint benefit.
There being no other evidence as to the proportions in which that benefit would be shared, I find that their intention was that it would be in equal shares.
I therefore conclude that, as of the date of bankruptcy, the plaintiff had a 50% interest in the then value of that property. In this respect, I treat the Venette mortgage as of no relevance as it was in reality the plaintiff’s money.
This finding is not determinative in the sense that it would necessarily impact upon any order made under s 9 of the Domestic Partners Property Act, were I at liberty to make one, but it is relevant in the sense that I therefore conclude that as of 22 October 2003, the plaintiff’s beneficial interest in Port Road vested in his trustee in bankruptcy and is not an asset for the purposes of s 9.
- the proceeds of the plaintiff’s claim under his disability policy
I have already mentioned the plaintiff’s receipt on 4 March 2003 of $50,000, being the proceeds of a disability insurance claim made by him. Those moneys were first paid into the IBN account and then $34,800 was paid out to the defendant to assist her purchase of Port Road. The plaintiff contended at trial that the $34,800 or any asset representing it as at October 2003 (namely, part of the purchase price of Port Road) could never have formed part of his bankrupt estate under s 116 of the Bankruptcy Act because it was the proceeds of a policy of life or endowment assurance (see s 116(2)(d)(i)).
For her part, the defendant argued that any protection those moneys may have had under the Bankruptcy Act ceased at the time they were paid by the plaintiff into the account of IBN, thence in part provided to assist her purchase of Port Road.
It appears to me there are two issues here: first, whether such proceeds in the hands of a bankrupt are protected under s 116(2)(d)(i) and, secondly, whether they could form part of the plaintiff’s bankrupt estate anyway, having been received by him prior to bankruptcy and invested in Port Road.
As to the first issue, I find that, irrespective of whether disability insurance cover is attached to a policy of life assurance, any proceeds payable under such cover do not fall within the exception provided for in s 116(2)(d) of the Bankruptcy Act (c.f. Re Packer[20]; In the Estate of Carter[21]; NM Superannuation PL v Young[22]).
[20] (1958) 18 ABC 97
[21] [1963] ALR 176
[22] (1993) 41 FCR 182
As to the second question, putting aside any questions of whether they lost the protection of any available exemption once paid into IBN, and whether s 121 of the Bankruptcy Act applied to them, the $34,800 sum became part of an asset, that is to say, Port Road, which, as I have found, was at least in part beneficially owned by the plaintiff at the time of his bankruptcy. That entitlement therefore vested in the trustee and is not property to which the Domestic Partners Property Act can apply.
- the Buttigieg moneys
A great deal of the evidence of both parties focussed upon the multiple transactions that had occurred in the defendant’s bank accounts over the years of their relationship or acquaintance. (For convenience, except where it is otherwise appropriate, I have referred to a single bank account but at relevant times the plaintiff in fact had two interlinked accounts with Westpac, an ordinary operating account and a flexible mortgage or overdraft account.)
I have found that in order to hide his financial dealings from creditors, the plaintiff at particular times chose to channel all monetary receipts from Buttigieg, whether capital or interest payments due to his creditors or to him, through the defendant’s bank accounts.
The defendant’s accounts then disclosed a significant number of substantial receipts, some of the entries being reversed because of dishonoured cheques, and substantial payments, very few of which were clearly identified either as to the identity of the payer or the identity of the beneficial recipient. The only evidence as to their origins and disposition came from the parties themselves: as I have said, there were no records at all of the plaintiff’s dealings with Buttigieg or of the destination of moneys withdrawn from the defendant’s accounts, withdrawals which it appears were in cash.
As I have noted, Buttigieg was not called and the defendant’s evidence as to various transactions in her bank accounts was that (except for a period in 2003/2004 when she was expending significant moneys renovating her house and save, as well, for some inheritance and compensation moneys she received) she had not otherwise dealt with substantial deposits or receipts through her accounts. It followed, she said, that the large or exceptional entries in them were attributable to Buttigieg receipts and the plaintiff’s withdrawals of those funds.
In the context of my other findings, there was a measure of validity in that position and it accorded with other evidence as to her own income and assets, but the waters were muddied by:
(a)the inability of the defendant to separate and identify with any precision, contemporaneous and substantial withdrawals made by her during that period and for the purposes of her house renovation;
(b)her inability, upon which I have already commented, to recall or usefully identify many of the individual transactions and her inclination to simply guess at their origin and destination;
(c)the plaintiff’s bland denials of using the defendant’s ATM card at any time or, with two exceptions, withdrawing moneys from her accounts for his own benefit, denials which I am satisfied were false. Even so, that conclusion does not lead to any useful assessment of just what moneys he did withdraw;
(d)the plaintiff’s assertion that some of the receipts into those accounts represented his own interest income but there was no evidence from him or any document as to how much that was either before or after bankruptcy;
(e)the almost complete absence of any documentation or other corroboration tending to demonstrate who made withdrawals and for what purposes they were applied. As I have noted, substantial sums were withdrawn in cash;
(f)my overall lack of confidence in the credibility of either party and more so that of the plaintiff.
On the plaintiff’s case, he deposited into the defendant’s account between April 2001 and September 2005 sums totalling $97,375.68, representing Buttigieg moneys, and further sums totalling about $5,000 – in addition, he says, to other financial contributions he made to the relationship.
The defendant conceded many but not all of those deposits, but she pointed to numerous withdrawals she said were made for the plaintiff’s benefit. Whilst I have found her evidence to be unreliable, indeed plainly wrong, as to certain of those withdrawals, I nonetheless accept her claim that others were made by the plaintiff and for his benefit. To that extent I do not accept the plaintiff’s evidence that he withdrew only two sums from that account and that he never had access to the defendant’s ATM card.
Ultimately, it was not clear just what the nett position was as to those dealings and I have not yet sought to make any firm findings as to that. I think it likely, however, that the defendant’s account was overall a nett beneficiary of the various credits and debits attributable to Buttigieg and the plaintiff. Even so, as of the date of bankruptcy, and indeed after it, any surplus funds so held in those accounts were moneys held in trust for the plaintiff and, in consequence, devolved upon his trustee in bankruptcy at and after 22 October 2003. The calculation of that surplus is a matter upon which I would anticipate hearing submissions from the trustee and, if necessary, further submissions from the parties.
Interim Conclusion
Taking account of my observations and findings as to:
(1)the beneficial ownership of the Venette mortgage
(2)the plaintiff’s 50% beneficial ownership of Port Road
(3)any surplus funds standing to the credit of the plaintiff in the defendant’s bank accounts
as at the date of the plaintiff’s bankruptcy, I conclude that none of those assets comprise property available for adjustment under s 9 of the Domestic Partners Property Act. They appear to me to be assets which fell into the plaintiff’s estate in bankruptcy and they do not lose that character merely because their true provenance was disguised or hidden from the trustee, nor because the plaintiff has been discharged.
Neither the plaintiff nor the defendant ought benefit from such conduct nor should this court make any order which might frustrate the legitimate interests of the trustee in pursuing assets which properly fell into the bankrupt estate. To do so without affording the trustee an opportunity to consider his position would be to countenance an illegality.
I am in those respects mindful of the provisions of Part VI Division 3 (in particular ss 116 and 121) and part VII Division 4 (in particular ss 152 and 153) of the Bankruptcy Act.
Accordingly, whilst the trustee’s position with respect to these matters remains unresolved I am not disposed to make any order under s 9: the property available for the making of any adjustment order is not yet ascertainable.
I have decided to publish these interim findings and direct the Registrar to provide a copy of them to the trustee for his consideration. Should he choose to pursue any claim with respect to the assets I have identified, whether by interpleader or otherwise, then the making of any final orders in this matter ought be deferred until the outcome of that pursuit is known: only then can the court properly identify the property available for the making of any adjustment orders under s 9 of the Domestic Partners Property Act. He may in the meantime apply for access to such file material as may be advised.
The trustee may further wish to consider whether:
(1)any claim available to the plaintiff under s 9 was indeed a chose in action arising before discharge and which thus became an asset in bankruptcy;
(2)notwithstanding the terms of the discharge (Exhibit P1), he may proceed against the defendant in her capacity as trustee of the assets I have identified. She might in such circumstances be entitled to claim an offset but that is a question for later.
In closing, I should add that as evidence emerged during the course of the trial, I made the parties well aware of my concerns about the above matters. Even so, they elected to proceed.
In light of my conclusions and in addition to providing these reasons to the trustee, I also direct the Registrar that copies of them be forwarded to the Official Trustee, Centrelink, the ATO and the Commonwealth Director of Public Prosecutions.
I then stand over further consideration of final judgment pending any response from Mr Matthews or the Official Trustee and with that in mind will schedule a further hearing for a date to be fixed, at which time I would expect the parties to be present and would further expect to hear from a representative of the trustee.

[10] (1989) 12 Fam LR 725