Estate of Marjorie Winifred Wilson by her executors Michael Heriot Wilson & Andrew Beaumont Wilson v Wilson & Ors

[2005] HCATrans 43

[2005] HCATrans 043

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S178 of 2004

B e t w e e n -

ESTATE OF MARJORIE WINIFRED WILSON BY HER EXECUTORS MICHAEL HERIOT WILSON AND ANDREW BEAUMONT WILSON

Applicant

and

PETER BEAUMONT WILSON

First Respondent

FRANCESCO GASPARIN

Second Respondent

WILISPA PTY LTD

Third Respondent

Application for special leave to appeal

McHUGH J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 FEBRUARY 2005, AT 12.13 PM

Copyright in the High Court of Australia

__________________

MR M.H. WILSON appeared in person. 

MR J.E. MIDDLETON, QC:   If the Court pleases, I appear for the second and third respondents with my learned friends, MR P.L. BRERETON, SC and MR G.P. HARRIS.  (instructed by Williams Graham Carman)

McHUGH J:   I hold a certificate from the Deputy Registrar of the Court that she has received a communication from Mr Andrew Wilson in which he states he has given his written consent to the first executor to represent him at the hearing of the application for special leave.  The Deputy Registrar has certified that she has been informed by the first respondent, Peter Beaumont Wilson, that he does not propose a response to the application for special leave to appeal.  Yes, Mr Wilson.

MR WILSON:  Thank you, your Honour.  I think there is need to address the substantive case.  I think there is a matter of being out of time which needs to be the appeal was ‑ ‑ ‑

McHUGH J:   You might go to the merits of your case first.

MR WILSON:  The submissions, right.  The merits of the case, thank you.  Your Honour, essentially, the matter I bring here today is that the Full Court of the Family Court decided that the wife should receive a mortgage over the husband’s property to the extent of some $80,000.  The Full Court found that it was frustrated in making that order because of the bankruptcy, afterwards, after the appeal had commenced, of the husband who petitioned his own bankruptcy and the Full Court held that the Bankruptcy Act and the Family Law Act where they connected meant that the Family Court was without the power.

It is essentially my submission, your Honour, that that decision is wrong, that by the use of constructive trust the Family Court could have in this matter made a section 79 order where the constructive trust would have passed to the husband and then to the wife.

My basis of this is essentially one thing which is the Mateo Case which was a case decided subsequent to the hearing of the Family Court case but before the judgment but is not referred to by the Full Bench of the Family Court.  My case is that the Family Court’s decision here is at odds with the Mateo Case which found that a constructive trust did exist and thus we, in my submission, have a result that stands opposed.

Also, your Honour, in terms of the public policy on this, the Bill that is currently before Parliament expressly provides for constructive trust and for a Family Court to make an order which passes through to the husband in a constructive trust and does not go to the creditors of the estate.  I mention this, although it is not law, for two reasons:  one, that there is no public policy against what I am saying about the Family Court making an award for a bankrupt husband and there is no frustration – I am sorry, there is no public policy reason why that should not occur, and, secondly, it is my submission that the law is not really going to do a U‑turn here.

At the moment my submission is that the Family Court is at odds with that Bill and is the law going to U‑turn.  My submission is that the law is not going to U‑turn on passing through to a wife or to a partner but in fact the Family Court’s decision in this matter was wrong and that we had a - Mateo is the case.

McHUGH J:   Mateo is certainly an authority for the proposition than an order of the Family Court under section 79 may create a constructive trust in favour of the transferee of property, even if the order is yet to be executed.  However, the transferee does not obtain a beneficial interest into the property until a judicial order is made and the first respondents have what - have to allege bare title in the property is to be held – if it is to be held on constructive trust can only have vested in the first respondent upon the making of a 106B order, is not that so?

MR WILSON:  Yes.

McHUGH J:   So prior to the making of a judicial order the first respondent remained the mortgagor and so had no legal interest in the mortgage over the property and, as the mortgagor, the first respondent could not hold the property on trust for the wife and then upon the bankruptcy on 1 June section 116 did not apply to make the property divisible.  What is wrong with that analysis?

MR WILSON:  I think, your Honour, that the mortgage is overturned.  What we are looking at here is the husband’s equitable interest in the property which is different from a mortgage.  The mortgage gives the mortgagee, of course, that equitable interest in the property as well.  But, if

the Full Court decided that Mr Gasparin’s mortgage should be overturned then thus that would render nugatory that particular mortgage, that it would have no effect any more, and that is what the Full Court decided that, yes, in fact in this case although Mr Gasparin’s mortgage was not overturned, because it could not be, in their view – they still awarded costs against Mr Gasparin, notwithstanding that he won.

McHUGH J:   Yes.

MR WILSON:  So with the mortgage gone there is nothing to prevent the Court, under section 79, making an order in favour of the wife.  Of course, the husband had transferred the property to his brother and his wife just beforehand.

McHUGH J:   Where is the passage in the Full Court’s judgment which you criticise?

MR WILSON:  I am sorry, I do not quite – I am not quite sure, your Honour, what I am looking for.  Yes, the ‑ ‑ ‑

MR MIDDLETON:   I suspect it is paragraph 165 at page 98.

MR WILSON:  Thank you.  The issue of the bankruptcy summons is on page 46 of the appeal book.  “THE EFFECT OF THE HUSBAND’S BANKRUPTCY” is then on page 47.

McHUGH J:   Yes.  Do you have any further submissions, Mr Wilson?

MR WILSON:  Not on that issue, your Honour.

McHUGH J:   The Court need not hear you, Mr Middleton.

We are of the view that the case has insufficient prospects of success to warrant the grant of special leave to appeal.  The application must be dismissed with costs, but there will be costs for one senior counsel only in this matter.

AT 12.23 PM THE MATTER WAS CONCLUDED