FIELDING and FIELDING
[2012] FCWA 86
•26 SEPTEMBER 2012
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: FIELDING and FIELDING [2012] FCWA 86
CORAM: CRISFORD J
HEARD: 15 & 16 FEBRUARY AND 6, 7, 8 & 11 JUNE 2012
DELIVERED : 26 SEPTEMBER 2012
FILE NO/S: PTW 5298 of 2005
BETWEEN: KATHERINE JANE FIELDING
Applicant
AND
COLIN LAURENCE FIELDING
First RespondentAND
AMY JOYCE SAMPSON
Second RespondentAND
SANDRA PINA FIELDING
First IntervenerAND
VANESSA SANSONE VITALE
Second Intervener
Catchwords:
PROPERTY SETTLEMENT - Asset pool - Property purchased from Lotto winnings - Held in trust in the name of a third party - Unpaid judgment debt of $740,000 - Spousal maintenance owed to former wife - Debts alleged to be owed to former de facto partner
PROCEDURE - Applicant's failure to appear - Unrepresented litigants
Legislation:
Family Law Act 1975 (Cth) - s 75, s 79, s 83, s 90AE, s 106
Family Court Act 1997 (WA) - s 205U
Property Law Act 1969 (WA) - s 34
Category: Not Reportable
Representation:
Counsel:
Applicant: Self Represented Litigant
First Respondent : Self Represented Litigant
Second Respondent : Self Represented Litigant
First Intervener : Self Represented Litigant
Second Intervener : Self Represented Litigant
Solicitors:
Applicant: Self-Represented Litigant
First Respondent : Self-Represented Litigant
Second Respondent : Self-Represented Litigant
First Intervener : Self-Represented Litigant
Second Intervener : Self-Represented Litigant
Case(s) referred to in judgment(s):
Calverley v Green (1984) FLC ¶91-565
Biltoft and Biltoft (1995) FLC ¶92-614
Cierpiatka (1999) FamCA 1286 at [37]-[42]
Cowling (unreported, [Family Court of Australia Full Court] Lindenmayer, Strauss & Moss JJ, 3 March 1990)
Hannah and Hannah; Tozer and Tozer (1989) FLC ¶92-052 at p 77,597
In the Marriage of Ramsey (1983) FLC 91-301)
Nelson v Nelson (1995) 184 CLR 538
Puddy & Grossvard & Anor (2010) FLC ¶93-432 (at [84,683])
Tinsley v Milligan [1994] 1 AC 340
Vailes & Vailes [2010] FMCAfam 391
Van Rassell v Kroon (1953) 87 CLR 298
Voulis v Kozary (1975) 180 CLR 177
Zyk & Zyk (1995) FLC 92-644WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
1In this long running and acrimonious litigation the Court is asked to determine financial matters between the first respondent, [Colin Laurence Fielding], and a number of other parties with whom he has had a relationship at one time or another.
2The applicant, [Katherine Jane Fielding], originally from the United States of America, commenced a de facto relationship with Colin some time in 2000/2001. They married [in] January 2004 and separated [in] August 2005.
3Katherine commenced an application for property settlement on 30 September 2005.
4Between May 1987 and January 1996 Colin had been married to the first intervener, [Sandra Pina Fielding]. After a three day hearing in the Family Court of Western Australia in June 1998, the Honourable Justice Anderson made orders on 21 August 1998, which included provision for Sandra’s maintenance by way of a lump sum payment of $240,000. Colin has never paid any of that amount to Sandra. Sandra was granted leave to intervene in these proceedings on 10 February 2006. She sought a “resolution” of the judgment handed down by the Honourable Justice Anderson.
5On 7 July 2008 [Vanessa Vitale] was granted leave to intervene in the proceedings as a second intervener. She and Colin had been in a de facto relationship between May 1996 and October 1999. She is seeking that Colin be responsible for some debts accumulated during the course of their de facto relationship and that he reimburse her certain other money.
6In early 2007 Colin’s sister, Amy Sampson, was named as second respondent in the proceedings. It is common ground that Ms Sampson is the registered owner of a property at [K suburb] (“the property”). The ownership of this property is the central issue in the case. Ms Sampson says she holds the property on trust for the children of Colin and Sandra Fielding, and who are [Ava], aged 23 years, and [Kane], aged 20 years.
7Ava and Kane have been made aware of the proceedings. Each has sworn an affidavit and authorised their parents to act on their behalf. They do not want to be personally involved.
8Katherine maintains the property was fraudulently purchased with money that is rightly hers. She says it was purchased with her lotto winnings. Colin says the lotto winnings are his. The winning lotto ticket was drawn on 2 March 2002 and payment was made 18 March 2002.
Conduct of the litigation
9Despite the fact that each of the parties has from time to time accessed some legal advice in relation to the litigation, at trial none of them had any representation.
10The applicant, Katherine, failed to appear at the trial of the matter. Due to her long held claims of domestic violence, intimidation and threats towards her from Colin, the Court had made arrangements for her to attend the trial by way of a video link from a separate and undisclosed location. Despite these arrangements, a few days before trial, Katherine advised the Court that to attend a court hearing would compromise her health. She was not prepared to jeopardise her health. She did not communicate further at all with the Court. She advised the Court of the affidavits upon which she sought to rely at trial and the matter proceeded in her absence.
11Earlier in these proceedings on 23 May 2007, Ms Vitale had been granted leave to appear as a McKenzie Friend for Katherine. This was before she became involved as second intervener in her own right.
12Ms Vitale had access to legal representation through a specialist family law firm, but given her belief that the firm had been dishonest with her she appeared in person at trial.
13At the start of the trial Ms Vitale provided the Court with a medical report from a family doctor detailing her feelings of distress and preoccupation with the court issues. It was reported that no formal psychiatric diagnosis had been made, but that Ms Vitale was a woman who had been “subjected to high levels of duress after years of emotional and physical abuse”. The medical practitioner was not called by Ms Vitale to give evidence at trial. Although, surprisingly, not dealt with in the report, Ms Vitale said she was also suffering from Legionnaire’s Disease, Multiple Sclerosis, Post Traumatic Stress Disorder, Hashimoto’s Disease and Cancer.
14From the very beginning the credibility of all the parties has been an ongoing and contentious issue. Many different accusations have been levelled by one against another.
15At trial Sandra, Colin and Ms Sampson were supportive of each other. Sandra said she would not pursue her claim to have the spousal maintenance order enforced if the property was transferred to her and Colin’s names as trustee for their children. She said if she could be certain the home was for the children, then she would not pursue her individual claim for spousal maintenance. I was satisfied she gave her evidence in a credible and reliable manner. Ms Sampson, although present throughout, played little part in the proceedings but, again, I had no reason to doubt her version of events.
16I found Colin’s evidence to be mostly believable. He made admissions against interest which one may cynically suggest stemmed from ignorance of the implications rather than a desire to provide the Court with an honest and reliable version of events. However, he had a clearer recall of the history of interactions between himself, Katherine and Ms Vitale than they did. In view of Katherine’s failure to attend, his unchallenged evidence was at times all the Court had on some issues.
17Katherine, in her affidavit material of 10 September 2008, made general denials of the evidence of the other parties, save Ms Vitale. She sought to strike out affidavit material. I have considered all the relevant and admissible evidence contained in the affidavits she seeks to rely upon. I have also considered her objections to other evidence.
18This case presented many challenges to the Court in terms of isolating the real issues to be decided. Although each party was urged to get some legal advice on the issues to be considered in closing addresses, this did not happen. This difficulty was compounded by having to deal with highly emotional unrepresented litigants. The Court’s own observations of the stability and health of the parties suggested some reason for concern. This Court is generally ill-equipped to deal with complex health issues, physical or mental, and to ensure, in that context, and without expert evidence, an outcome is just and equitable.
Issues to be decided
19In her amended application filed 13 September 2006 Katherine seeks, amongst other things, a property settlement which reflects a 70% division in her favour of the marital assets. She had originally sought an order for spousal maintenance of $721 on a weekly basis. However, this was not pursued in her amended application. Her most recent financial statement was filed on 2 February 2006.
20The main issue for Katherine is to ensure the property is included in the asset pool and counted as her contribution. She generally alleges that she won lotto and by fraudulent means her winnings were used by Colin and his sister to purchase the property. She says the property was put in Ms Sampson’s name to put it out of reach of Colin’s creditors. She has also said that they both won the lotto and it was intended the property would be put in her name to protect it from Colin’s creditors.
21Colin is seeking that the parties each keep what they retain today. He maintains that the property is a reflection of money he won in lotto and, in any event, the home is now that of the children, albeit held on trust by his sister.
22Sandra agrees that the home should be held in trust for the children, with her and Colin being trustees of such a trust. They both say they are willing to create a discretionary trust for the children. If the Court does not agree to that, then Sandra seeks to be paid the money she is owed pursuant to the spousal maintenance order of Justice Anderson.
23Ms Sampson simply does not want to lose any money herself. She says she has always held the property for the children and that the money used to acquire it was Colin’s money. She says she has no beneficial interest in the property. She has no objection to Colin and Sandra holding the property in trust for the children.
24Ms Vitale did not have a clear idea of what she sought. Despite constant requests and directions to provide a minute of the orders she sought at trial, it was not until after the Court had adjourned part heard at the end of the third day of trial, and after Colin had given his evidence, that she filed an up-to-date minute of the orders she sought. She had failed to file a trial affidavit despite leave being granted on 1 November 2011 by Chief Judge Thackray for her to do so out of time. Her case was presented in an ad hoc and disjointed fashion. The minute of orders she did file contained, in the main, a mixture of orders relating to payment of debts and costs incurred in proceedings in other jurisdictions.
Property settlement approach
25The legislation requires a four step process in dealing with applications for property settlement. These are to:
•Identify and value the assets and liabilities of the parties;
•Assess each party’s contributions to the assets;
•Assess a range of factors set out in s 79(4)(d)-(g) of the Act; and
•Consider whether the proposed orders are just and equitable.
26In this case the Court is also asked to make decisions about the nature of other competing claims and what, if any, priority should be accorded to the various claimants.
•The pool of assets
- K suburb property
27By far the most contentious and valuable potential asset is the property. The history of its acquisition and who actually owns it lies at the heart of the parties’ various claims.
28The registered proprietor of the property is, and has always been, Ms Sampson. She accepts she has no beneficial interest in it. Colin, Sandra and Ms Sampson say the property is held for the benefit of Ada and Kane Fielding.
29On 2 March 2002 the parties, Katherine and Colin, either jointly or alone, won first division lotto of $293,775.35. Katherine deposes that she provided Colin with the $30 to buy the winning ticket. He went and bought it, and she went and claimed the winnings. This much is largely agreed.
30A cheque for the winnings was made payable to Katherine and she deposited this into her Commonwealth Bank account at the [T suburb] branch on 18 March 2002. She says Colin had no access to this account. From the monies, Katherine, in consultation with Colin, drew three cheques:
•$35,000 payable to Sandra for child support;
•$28,240 payable to Titan Ford to purchase a 1999 Ford Fairlane motor vehicle (registered in Katherine’s name); and
•$15,505 payable to Saltwater Marine to purchase a Sea-Doo boat (initially registered in Colin’s name, then transferred into Katherine’s name).
31The first two cheques were drawn on 18 March 2002 and the last on 28 March 2002.
32On 2 April 2002 $208,104.76 was transferred from Katherine’s Commonwealth Bank account to a bank account at the same branch in the sole name of Amy Joyce Sampson.
33Colin said that it had always been his intention for the funds to be deposited into Ms Sampson’s account. Colin said there had been wide ranging discussions between himself, his sister and Katherine about what should be done with the winnings prior to receiving them. When the lotto cheque was received he said he and Katherine tried to deposit it into Ms Sampson’s account at the T suburb branch of the Commonwealth Bank. Unbeknownst to them, Ms Sampson did not then have an account at that branch. The money was therefore put into Katherine’s account at that branch and at a later stage, once Ms Sampson had opened an account, it was transferred from Katherine’s account into Ms Sampson’s account.
34On 29 July 2002 the property was purchased in Ms Sampson’s name. Colin said that beforehand he, Katherine and Ms Sampson had looked at various houses to buy. This property cost $168,000 with further amounts paid in settlement, stamp duty and associated costs. The funds came from the proceeds of the lotto win which had been put in Ms Sampson’s account. Colin, and this is supported by the affidavit material filed by Katherine, discussed the fact of the home ultimately being available to Ava and Kane. It was to be used by him and Katherine during their lifetime.
35Katherine claims the transfer into Ms Sampson’s account was done without her knowledge or consent. When Katherine and Colin separated for a time in August 2002, she reported to the Fraud Squad of the Western Australia Police Department that the funds had gone missing from her account. She alleges any transfer from her bank account had been fraudulent. She deposes that Colin stole the money with the collusion of the Commonwealth Bank and that Ms Sampson was an accomplice.
36In December 2002 Katherine returned to the United States of America for migration purposes. Colin had withdrawn his sponsorship of her in October 2002. She returned to Australia in July 2003 and moved into the property with Colin, who said they sorted out their differences. Katherine withdrew her complaint to the Fraud Squad. They married [in] January 2004.
37In January 2005 Katherine and Colin moved into rental accommodation in [G suburb]. The property was rented out. The parties separated [in] August 2005. Thereafter, Colin returned to live in the property where he has remained. Ava and Kane have lived there on and off, initially, when young, seeing their father on contact visits and subsequently, as they grew older, as suited them. They have never lived there long term.
38Although a lot of the evidence to do with the property revolved around the contributions to the lotto win and how the proceeds came to be in Ms Sampson’s bank account, the issue in this particular step of the property exercise, in my view, is who actually owns the property.
39It is helpful to canvass more fully the reasons for which Colin and others gave for the property being placed in Ms Sampson’s name. This has been a major issue for Katherine.
40Katherine deposes:
10.Colin habitually makes purchases in other people’s names because he is concerned about property that he owns being seized by creditors, the Child Support Agency and the Family Court. He owes his ex-wife approximately $250,000 in a maintenance agreement.
41Taken by itself, this paragraph is of little evidentiary value. However, it accords with other evidence presented in this case, especially that given by Colin himself. It also accords with evidence he gave in civil proceedings in the District Court in 2004, some transcript of which was provided to the Court.
42In his evidence at this trial the Court asked Colin why the property was put into his sister’s name. Colin replied that in 2002 he had won the lotto. He said he did not want to collect it and when questioned why, he explained that there was the issue of Sandra’s outstanding judgment and a business debt he owed. He said he wanted to stay away from the money. He had Katherine collect the winnings for him and it ultimately went into Ms Sampson’s bank account.
43Colin confirmed the content and authorship of a copy of an undated email communication sent by him to the Commonwealth Bank Fraud Assessment Section. Relevantly, the email reads:
To Whom It May Concern:
My name is Colin Fielding and in 2002 I won first division lotto worth $295,000. Due to ongoing legal problems I decided to give it to my sister to collect and bank it in her account.
My sister could not get off work, so my girlfriend at the time collected it and was to bank it in my sister’s account, but when we attended the T suburb, she didn’t have an account at that bank. It was deposited into Katherine [Holloway’s] account for about two weeks and when my sister’s account was up and running, both Katherine and myself attended at the T suburb branch to transfer the money to Amy Sampson’s account. The bank manager was out and we were served by the assistant manager, [Kelly]. Katherine and myself went with Kelly to her office and transferred the money as worked out previously. Some time later Katherine and I departed company and then some months later I was contacted by the fraud squad. [Kirk Bartlett] of the fraud squad took my statement and also made contact with [Carl Davis] of [L] Newsagency.
This matter has raised its head again in the Family Law Court and what my sister and I are chasing is any paper work or findings of the investigation into the matter.
…
Many thanks,
Colin Fielding and Amy Sampson (emphasis added)
44Colin accepts in the email he made reference to the lotto win being deposited in an account other than his own “due to ongoing legal problems”.
45In her evidence at trial when asked by the Court why the money went to her account Ms Sampson said that money was owed to Sandra and it was decided to put the money in her name to protect it for Kane and Ava. She said money was owed to Sandra pursuant to a judgment.
46Ms Sampson deposes:
21.Colin said he wanted to stay clear of the winnings due to his current situation and that he wanted to collect the winnings and bank it into my account.
22.Katherine joined in the conversation saying that it should not go into his account because Sandra Pina Fielding, his ex-wife, would try and get it.
23.I told Colin due to work and staff shortages I could not get time off and Katherine said she would collect the cheque and put it into my account.
24.Colin wanted to buy a house in my name and this would be an investment for Collin’s children, Kane and Ava. I agreed to hold the monies on trust to buy a house for Colin’s children, Kane and Ava.
47[Iris Kelly Scoleri], who had worked as assistant manager at the Commonwealth Bank of Australia at the T suburb branch from 2001 to 2003, gave evidence.
48She said that on or about 2 April 2002 Katherine and Colin came into the T suburb branch to close an account in Katherine’s name. This was the account into which the lotto winnings had initially been deposited. She said she had not previously served Katherine or Colin as Katherine’s account had originally been opened by the manager.
49She said that Katherine and Colin wanted to close the account and transfer the balance into an account in the name of Amy Sampson. She said that when she was calculating the closing balance, Katherine and Colin waited and spoke amicably to each other. She formed the view that Katherine was aware of what was going on and participated in the closing of the account. She said Katherine mentioned the funds were being transferred back to Colin and Colin said he had won the money in lotto.
50Ms Scoleri said she checked Katherine’s signature on the withdrawal form against the signature on the Commonwealth Bank records created for the purpose of opening the account. Katherine and Colin took the new account details form for Ms Sampson to sign. Ms Sampson brought the form back the following day. The transfer into her account was then completed.
51When questioned in Court by Ms Vitale about a description of Katherine, Ms Scoleri said she could not remember what she looked like, but did have a memory of an American accent. Ms Scoleri was interviewed in the course of the police fraud investigation.
Discussion
52In hearing the evidence before the Court, including the independent evidence of Ms Scoleri, I am not persuaded the physical transfer of the funds from Katherine’s account to Ms Sampson’s account was done in anything other than the normal course. I do not accept Katherine’s version of collusion and fraud in relation to and by the bank.
53I am satisfied the property was placed in Ms Sampson’s name so that it could not be called upon to satisfy debts Colin had at that time.
54I will return later in the judgment as to whether this is an unlawful purpose and, if so, the effect of it.
55In Katherine’s application initiating proceedings filed 30 September 2005 she seeks orders pursuant to s 90AE(2) of the Family Law Act 1975 (Cth) (“the Act”) for, amongst other things, the sale of the property. She also seeks various orders against Ms Sampson, restraining her from dealing with the property apart from complying with the order for sale.
56Katherine’s aim is to ensure that the property forms part of the asset pool arising out of her marriage with Colin.
57Although I will return to the specifics of how a lottery win should be treated in the context of Family Court proceedings when I deal with the contributions of the parties, in order to make the following discussion understandable I here flag that in accordance with Zyk & Zyk (1995) FLC 92-644 I will deal with the lotto win as being that of both Colin and Kathryn. The exact contributions to that lotto win will be dealt with later in the judgment. However, for ease of reference I will refer to it as a joint win here.
58It is necessary to consider whether a trust was created and, if so, in whose favour.
Is there a trust in favour of Colin’s children?
- express trust
60Somewhat unusually in this Court the “trust” in question is not one of a discretionary nature. It is something expressly stated by some of the parties. It is common ground Colin, Sandra and Ms Sampson say that the property is held on trust for Ava and Kane. In that respect the Court needs to consider the requirements for the creation and continued existence of certain trusts.
61Three elements need to be established at the time of the creation of an express trust. (Cierpiatka (1999) FamCA 1286 at [37]-[42]) These are:
(A)A manifest intention to create a trust;
(B)Certainty of subject matter; and
(C)Certainty of both the purpose of the trust and the extent of the benefit to be conferred.
62The relevant intention is that of the person who is giving the property to be held in trust or, commonly, the settlor. Each of the elements will be considered.
(A) A manifest intention
63In this case there are three possible points in time when a trust may have been declared:
(i) when the lotto money was received by Katherine;
(ii) when the money was received by Ms Sampson from Katherine; and
(iii) when the property was purchased by Ms Sampson.
64This highlights the distinction between the winnings generally and the property.
(i) When the money was received by Katherine
65At common law, legal title in a lottery ticket is vested in the person in whose name the ticket issues (Voulis v Kozary (1975) 180 CLR 177, per Jacobs J, Van Rassell v Kroon (1953) 87 CLR 298). Legal title in a cheque vests in the person in whose name the cheque is made out. At the time the winning cheque was made out to Katherine it is likely she held the legal title to the winnings (regardless of whether Colin had a beneficial interest in the winnings through having purchased the ticket). Katherine was therefore at that time the only person entitled to declare a trust over the winnings or any part of them. The money was only in Katherine’s name for a short time and she denies intending to declare a trust in favour of Colin’s children.
66The main evidence of intention to create a trust at any point during these events is a conversation referred to by Colin and Ms Sampson shortly after the lotto win was declared, in which they allege that they and Katherine agreed that part of the money would be transferred to Ms Sampson to buy a house for Colin’s children. According to the evidence of Colin and Ms Sampson, this conversation took place before the lotto winnings were actually collected. The subject matter of the trust was not in existence at that stage and the parties simply discussed various options they had.
(ii) When Ms Sampson received the lotto money
67The bulk of the money was then transferred into Ms Sampson’s account. She became the legal owner of the money. There is no evidence that at this point in time she made a declaration of trust in relation to the money. The evidence supplied by the parties consists of a conversation which is no more than a statement of intention about the future use of the money.
(iii) When Ms Sampson purchased the property
68There is an argument that the property alone, rather than the total winnings, was put on trust for the children. For this to be the case, the party with legal title to the property would need to be the person making the declaration of trust. There is no evidence that at the time of or after the purchase of the property, Ms Sampson made a declaration of trust in favour of Colin’s children. In any event, for a declaration of trust over a piece of real property to be effective, it would have to be in writing (s 34, Property Law Act 1969 (WA)). Any transfer of an interest in land is required to be evidenced in writing. There is no evidence of a written declaration of trust by Ms Sampson. There is no evidence it was ever thought necessary.
(B) & (C) Certainty of subject matter and purpose
69Even if a clear statement of intention was found, it is difficult to establish the purpose of the trust and the benefit to be conferred on the purported beneficiaries. There is no evidence as to how the trust would operate. Both children are now adults. While they had the benefit of living in the house when they stayed with their father, there does not now appear to be any benefit accruing to them. They do not live at the property, nor earn any rental income from it, and there is no evidence of an intention to transfer the property to them. Ms Sampson deposes that she intended Colin to live in the house rent free if he paid all the outgoings, and taxes, and that if anything happened to Colin, then Katherine could live there on the same conditions. If the house was rented it would be handled by a real estate agent. Ms Sampson also deposes that Colin and Katherine would live at the property until the children were old enough to live there. They have been old enough to live there for many years now.
70It does not appear that there is adequate evidence to show an express trust existing in favour of Colin’s children, with Ms Sampson as trustee.
- Resulting trust
71The parties all agree that Ms Sampson does not hold the property for her own benefit – she does not claim to be the ‘beneficial owner’ of the property. She does not assert that she has a right to exclusive possession of the property or that Colin should pay her rent. The question is, who has the beneficial ownership. There are two lines of argument to which the Court turns to establish that Ms Sampson holds the property on a resulting trust for the benefit of Katherine and Colin.
(i) Resulting trust based on presumption
72The High Court authority of Calverley v Green (1984) FLC ¶91-565; 155 CLR 242 demonstrates that where parties contribute unequally to the purchase price of a property, the beneficial interest in the property is held in accordance with the level of contribution (subject to any presumption of advancement). In that case, Gibbs J said (at FLC 79,560–1):
Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, ie, a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser.
73The authority of Calverly v Green leads to the presumption that Ms Sampson holds the property on trust for Katherine and Colin jointly, on the basis that they provided the purchase price from the joint lotto winnings (although not necessarily equally). The Court needs look no further than the evidence relating to the source of funds for the purchase to establish this presumption, as no evidence was presented that suggested Colin and Katherine, or either of them, intended to make a gift to Ms Sampson.
74In Cowling (unreported, [Family Court of Australia Full Court] Lindenmayer, Strauss & Moss JJ, 3 March 1990), the court dealt with the creation of a resulting trust in similar circumstances to these here. In Cowling, the husband transferred the former matrimonial home to his adult son. Although there was some evidence that the son gave consideration of $30,000, he did not recall actually paying that sum. After the transfer took place the father continued to live in the house. He later unilaterally organised a sale of that home and the purchase of another, again in his son’s name, and again in which he lived. The son asserted at trial that he was holding the properties on trust for the husband’s children. There was no other evidence of this trust. However, the Court found there was the following evidence in relation to the beneficial ownership of the property:
•The son did not recall paying the purchase price;
•The husband continued to reside in the property;
•The husband arranged for the relevant sales of the property;
•Direct evidence from the son that he felt he had no beneficial interest in the property.
The Court concluded:
Thus there was ample and overwhelming circumstantial evidence that in respect of each of those properties it was the intention of both the husband and [the son], contrary to the appearance of the documents of title, [the son] was not to have any beneficial interest in any of those properties but was to hold them in trust, and that the beneficial owner was to be the husband
…
The result of all this is that there being no trust established in favour of anyone else, but there being clear evidence that it was the intention of the husband and [the son] that the latter take no beneficial interest in the Glacken Street property when it was transferred to him, nor in any of the other properties subsequently acquired in his name in substitution for it, there is a resulting trust in favour of the husband.
75Unfortunately, the Full Court in this matter did not make any reference to authorities concerning the creation of resulting trusts and it did not deal with the issue that the purpose of the trust was potentially to thwart any property order in favour of the wife.
(ii) Resulting trust based on actual intention of the parties
76In Calverley vGreen (supra at FLC 79,563; CLR 251) Gibbs J commented on the relevance of intention to the establishing of a resulting trust:
However…the presumption of a resulting trust, may be rebutted by evidence of the actual intention of the purchaser at the time of the purchase: see Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, at pp 364-365. Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained.
77Usually, the actual intention of the person who provides the purchase price is not relevant unless the other party is trying to rebut the presumption of resulting trust. Ms Sampson is not seeking to rebut the presumption. Assuming there was some challenge to the application of the presumption in this case, it would be possible to make some inferences about the actual intention of the parties that would support the existence of a resulting trust. The following facts point to an inference that Ms Sampson was not intended to have beneficial ownership of the property:
•Colin and Katherine supplied the purchase price (and there is no presumption of advancement where the parties are siblings);
•The purpose of the transaction was to keep the money away from Sandra Fielding, and not to confer any benefit on Ms Sampson;
•Colin and Katherine lived there rent-free;
•Colin and Katherine paid the outgoings on the property and in all respects acted like owners of the property;
•On Ms Sampson’s evidence Katherine would have been permitted to stay on the same terms if anything happened to Colin;
•Colin’s children have not received any benefit from the property. They do not and have not lived there as adults, even when Colin did not live there.
78I am satisfied there is a resulting trust in favour of the parties to the marriage.
(iii) Is the resulting trust affected by illegality?
79The outstanding question to consider is whether the evidence that the trust was established because Colin, and I also accept Katherine, wanted to keep the winnings out of reach of Sandra and other creditors, affects the enforceability of the trust. It could be argued that because the evidence reveals that the transaction was carried out for a purpose which is against the policy of the Act, the Court cannot enforce the resulting trust. If the trust is not enforceable the loss lies where it falls, and Ms Sampson will retain the legal and acquire the equitable interest in the property.
80The first question is whether the trust is in fact tainted by illegality. In the High Court decision of Nelson v Nelson (1995) 184 CLR 538, Deane and Gummow JJ, who with McHugh J, were in the majority, outlined the three categories of illegality:
(i)an express statutory provision against the making of a contract or creation or implication of a trust by fastening upon some act which is essential to its formation, whether or not the prohibition be absolute or subject to some qualification such as the issue of a licence;
(ii)an express statutory prohibition, not of the formation of a contract or creation or implication of a trust, but of the doing of a particular act; an agreement that the act be done is treated as impliedly prohibited by the statute and illegal; and
(iii)contracts and trusts not directly contrary to the provisions of the statute by reason of any express or implied prohibition in the statute but which are "associated with or in furtherance of illegal purposes". The phrase is that of Jacobs J in Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410 at 432.
81It is my view any illegality in this case is likely to fall into the third category. The transaction in itself was not illegal – that is, it was not prohibited or rendered void by statute. The Act does not automatically render void all transactions which might have the effect of thwarting an order of the court. However, on one view a transaction such as this which had the clear intention of thwarting the court’s earlier order in favour of Sandra is against ‘the policy of the law’.
82In Nelson the applicant asserted that there was a resulting trust in her favour on the basis that she had paid the purchase price for a home that was held in her children’s names. As the transfer was to her children, the legal presumption was that she intended to transfer the whole interest to them as a gift. However, her purpose in placing the home in their names was to allow her to obtain finance under the Defence Service Homes Act 1918 (Cth) for a second house, which she would not be entitled to if she already owned a house. One of her children argued that the resulting trust should fail because of the underlying purpose. In essence, the daughter argued that the mother could not rely on evidence of her illegal purpose to rebut the presumption of advancement. Deane and Gummow JJ commented:
In our view, neither of these approaches is to be adopted in the present case. Two factors are of paramount importance. First, as the appellants submit and we would accept, the question of illegality is bound up with the view taken of the underlying policy of the Act. To quote a United States scholar, "if illegality consists in the violation of a statute, courts will give or refuse relief depending upon the fundamental purpose of the statute" (Clark, Equity, An Analysis and Discussion of Modern Equity Problems (1928 reprint), par 401). Secondly, what is sought are equitable remedies in aid of an alleged trust and equity is equipped to attain a result which eschews harsh extremes.
The range and flexibility of equitable remedies assist in achieving an appropriate result in the particular case; this means, in the words of one commentator, "[t]he old common law idea of all or nothing will no longer have to apply"(Wade, Restitution of Benefits Acquired Through Illegal Transactions, University of Pennsylvania Law Review, vol 95 (1945) 261, at p 304). Accordingly, unlike the common law, equity may impose terms upon a party seeking administration of equitable remedies. Further, equity has not subscribed to any absolute proposition that the consequence of illegality, particularly where what is involved is contravention of public policy manifested by statute, is that neither side may obtain any relief, so that the matter lies where it falls. Rather, in various instances equity has taken the view that it may intervene, albeit with the attachment of conditions, lest there be "no redress at all against the fraud nor any body to ask it" (Turton v Benson (1718) 1 P Wms 496 at 498 [24 ER 488 at 489]).
83Their approach was that it is first necessary to establish whether the act of the party actually constitutes illegality, and secondly to establish whether that illegality should mean that they are denied an equitable remedy. In this case, Gummow and Deane JJ found that even though the mother’s behaviour contravened the policy of the law, she should be granted relief, but that “as the price of obtaining the relief she seeks for the recognition and enforcement of a resulting trust in respect of the whole of the balance of the proceeds of sale of the Bent Street property, Mrs Nelson must be prepared to do equity according to the requirements of good conscience”. This would require her to pay back to the government the subsidy she obtained on the second property. McHugh J supported these proposed orders in a separate judgment.
84In the same case, Dawson J took a slightly different approach to the question of how illegality affects the enforceability of an equitable remedy. He found that it was not necessary for a party seeking to enforce a resulting trust to rely on the illegal purpose to establish their claim, even where it is necessary to rebut the presumption of advancement. He said:
What must be established in order to rebut the presumption is that no gift was intended. There may be an illegal purpose for the transfer of the property and that may bear on the question of intention but it is the absence of any intention to make a gift upon which reliance must be placed to rebut the presumption of advancement. Intention is something different from reason or motive. The illegal purpose may be evidentiary, but it is not the foundation of a claim to rebut the presumption of advancement.
85He further found that even if rebutting the presumption of advancement means that an illegal purpose is revealed, this will not necessarily prevent the court from granting relief. He held:
The illegality must have “an immediate and necessary relation to the equity sued for”. Where reliance is not placed upon the illegality – where the court is not asked to effectuate the illegal purpose but merely to recognise an interest admittedly in existence [that of a resulting trust] – there is not, in my view, an immediate and necessary relation between the illegality and the claim.
86He also made reference to the case of Tinsley v Milligan [1994] 1 AC 340, in which two women contributed equally to the purchase price of a house, but the property was put in one name only, to assist in defrauding the department of social security. The illegal purpose was revealed in an attempt by the registered owner to rebut the presumption that a resulting trust had arisen. The court rejected the proposition that the illegal purpose meant that there was no resulting trust and the legal owner should in effect receive a windfall, especially when she had been party to the fraud. The court held that the resulting trust should be enforced, but it was in the context that the applicant did not have to rely on evidence of the illegality to establish her claim.
87All of the judges in Nelson (including Toohey J) rejected the proposition that a party alleging a resulting trust should be automatically disentitled from enforcing that trust where evidence of illegal purpose is required to rebut the presumption of advancement. They found that this gave parties who were not required to rebut the presumption of advancement an advantage on a purely procedural basis (that is based on where the burden of proof lay), and that it was a triumph of form over substance which should not be allowed to persist. The better approach was to consider in each case where illegality was revealed whether the court should decline to enforce a resulting trust in those circumstances. All of the judges agreed the resulting trust should be enforced.
88This suggests that a court has discretion whether and to what extent to enforce a trust where the trust goes against the policy of the law.
89Here there is a strong basis for determining that if Colin and Katherine’s motivation in transferring the lotto money was ‘against the policy of the law’ because they intended, inter alia, to deny Sandra the means of enforcing her Family Court orders, that does not mean that the resulting trust that is presumed to have arisen cannot be enforced. In the first place, the evidence of the “illegal” purpose is not relevant to establishing the trust. Secondly, denying the existence of the trust would not do anything to rectify the illegality. In fact, denying the existence of the trust would be likely to do the opposite, by removing the property from the jurisdiction of the court. I am satisfied the Court is able to and should enforce the resulting trust.
90Interestingly here, the person towards whom the illegal purpose was directed, Sandra, is now supportive of the property being made available to, at least, Colin. Sandra would like the property held on trust for her children. She would like to be a trustee of such a trust. If this is not an option, she would like to enforce the judgment against Colin. Neither of these options are possible without the Court making a finding of a resulting trust.
91As will be seen when the Court deals with the claim of Ms Vitale, a debt to one of the other creditors that Colin had hoped to avoid has now been paid. This was subject to a District Court judgment which was satisfied in 2010.
92In all the circumstances I find there is a resulting trust in favour of the purchasers of the property, Colin and Katherine. The manner in which the share will be allocated and how it will be dealt with will follow further in the judgment.
- Other assets
93The other assets outlined in the schedule reflect items bought by cheques drawn by Katherine from the Lotto winnings. The values attributed to the items were allocated by Colin. Those items are now over ten years old.
94The other asset is Colin’s superannuation which was accumulated by him whilst he was working for [Construction Company A] and then [Company B]. Not all of these funds were accumulated during the relationship.
- Liabilities
95The only liabilities of the parties to the marriage noted are outstanding solicitor’s fees of $25,000 incurred by Colin in the Family Court proceedings. I will not include this amount into the asset pool, but will consider it when I look at s 75(2) matters.
96In her financial statement sworn 2 February 2006 Katherine identifies $14,164 in outstanding utility, legal and veterinary expenses. There is no individual quantification. I intend to ignore these very historic expenses.
- Vitale debts
97Ms Vitale is seeking to have Colin pay a number of her debts. With all due respect, she is vague about the basis upon which she makes some of her claims. She and Colin were in a de facto relationship between 1996 and 1999.
98Part 5A of the Family Court Act 1997 permits former de facto partners, in some circumstances, to apply to the Family Court of Western Australia for a resolution of their dispute regarding how property should be divided. S 205U(2) provides Part 5A “Does not apply to a de facto relationship that ended before the commencement of this Part”. Part 5A came into effect on 1 December 2002. This Court does not have jurisdiction to determine any dispute between these parties on the basis of their de facto relationship.
99Ms Vitale says she has an interest in the case as a third party creditor. She claims to be owed money by Colin. The preliminary question that arises is whether the court has jurisdiction to determine the issue of Ms Vitale’s claim.
100The legislation sets out that third parties to whom a debt is owed by one or both parties to a marriage may be joined to Family Court proceedings (s79(10)). However, as the Full Court noted in Puddy & Grossvard & Anor (2010) FLC ¶93-432 (at [84,683]),
There is a distinction between a situation in which a judge hearing Family Court property settlement proceedings is asked to determine the existence and extent of a claim by a third party against a party to the marriage, and the situation in which a third party merely asks for an order in respect of its entitlement, or that some attention be paid to recovery of its entitlement, about which there is no issue joined as to its existence or quantum, though the husband and/or wife may resist any order in the creditor's favour.
101In this case Ms Vitale has quantified some, but not all, of the amounts she claims.
102The Full Court in Puddy suggested that jurisdiction to order parties to a marriage to make payments to third parties might be found in its accrued jurisdiction, in 90AE or in s79:
55. Nothing to which the Court has been referred persuades me that there is necessarily any prohibition upon the Court ordering parties to a marriage to make payments to a third party creditor out of their property, whether that be in reliance upon the provisions of the Act and/or the court's accrued jurisdiction at the time Biltoft was decided, or subsequent to the enactment of s 90AE in 2003, or the amendments to s 79 which were enacted in 2005.
103The Full Court expressed some doubt about whether the various sections of the Act (including s79(10)(a), s75(2)(ha) and s90AE) which refer to creditors are sufficient in themselves to give the court jurisdiction over determining a contested debt:
There is a material distinction between being a “creditor” [as the term is used in the FLA] and asserting an indebtedness which is disputed. A jurisdictional basis other than s79 thus needs to be enlivened in order for the court to entertain disputed debt claims.
104The Court found it was not necessary in that case to determine whether the jurisdiction in s90AE extended to determining the existence and quantum of disputed debts. However, the court did make the following obiter comments (at 84,684):
The disputed indebtedness of the party/parties to a marriage to a third party will almost always be relevant to determining the property of the parties to the marriage and, if controversial, thus be able to be determined by the Court in the exercise of its accrued jurisdiction, without needing to rely upon s 90AE. Absent specific legislative provision enabling the rights between creditors and debtors to be varied in the way in which s 90AE provides, the accrued jurisdiction of the Court may be insufficient to enable outcomes of the kind articulated in the section to be achieved. Conversely, s 90AE alone may be insufficient to enable the Court to determine disputed debts. However, these are matters best left of determination in an appropriate case.
105Thus, it appears that the jurisdiction of the court to determine disputed debts may be found in the accrued jurisdiction related to the exercise of power under s79, coupled with the power of the court to make orders under s90AE. If jurisdiction to determine disputed debts falls within the accrued jurisdiction of the court, the determination of the debt must be necessary to properly determine the property of the parties as required by s79. As in Puddy, it must be ‘fundamental to a determination of the “property” of the parties to a marriage in the circumstance of [the] case’ (at 84,683, para 54).
106The Full Court found that the trial judge was not in error by relying (inferentially rather than expressly) on the accrued jurisdiction of the court as a basis for determining the third party’s claim (at 84,685, para 63).
107On the other hand, the leading authority on third party unsecured creditors is Biltoft and Biltoft (1995) FLC ¶92-614, and that case establishes that a court need not in all circumstances determine and satisfy an unsecured debt before proceeding to divide property between the parties. The following principles can be extracted from that case:
•It is not necessary to accurately determine and deal with the rights of an unsecured creditor before proceeding to make property orders, but the existence of the debt should be ‘recognised, taken into account and balanced against the rights of the spouse’ (82,128)
•However, there are some situations where the court may ignore/reduce the value of an unsecured debt.
“Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred.” (82,127)
•The fact that a division of property between parties to a marriage may interfere to an extent with a third party recovering a debt does not prevent the court from making such a division.
108In relation to the third point, the Full Court in Biltoft made the following comments (82,127-128):
In relation to unsecured liabilities, we would with respect agree with the observation of Nygh J. in Af Petersens and Af Petersens (supra) at p 76,669:-
“Nor, as has been pointed out earlier, is there anything in the decision of the High Court in Ascot Investments Pty. Ltd. v. Harper and Harper to suggest that this Court cannot make an order dividing the assets of the parties because such a division might hamper a third party in his or her chances of recovery of a debt.”
Further, we are of the view that the diminution of the assets of a party to a marriage as a result of an order of the Family Court does not affect the right of an unsecured creditor to apply to a Court for an order which will then justify execution against the unencumbered assets of that party. As Elliott J. said in Hannah and Hannah; Tozer and Tozer (1989) FLC ¶92-052 at p 77,597:—
“The Family Law Act has been in operation now for nigh on 15 years - long enough for those in business or finance to realise that the property of persons with whom they deal may be the subject of competing claims under the [Family Law] Act by a spouse, or perhaps a child of the marriage. If they thus advance money or supply goods without security, then the choice - and the risk - is theirs.”
109In order to fully consider the claim of Ms Vitale it is convenient to set out the precise orders she was seeking at trial. With respect to Ms Vitale, her position is ultimately less than clear.
SECOND INTERVENER V. VITALE
ORDERS I SEEK.
1. That all the monies due and owing to be repaid to me, including the below listed monies owing to me.
2. The monies I paid for the [Business F] and [Business G] Debt. This amount was for the total of $60,000. The Debt amount to Business F was for $40,000 and the $20,000 was for Business G. Total of the two debts was $60,000.
3. That the costs of re-mortgaging my home to fund the debts in paragraph 2, and further to include the costs of the Deed of Settlement and any other costs in relation to the Settlement of the Business F and Business G debt.
4. That the Solicitors and associated costs incurred in defending myself in relation to Mr [Jordan Master’s] initial Statutory Declaration and current Affidavit in this Court Trial be repaid. The amount I am claiming is in the vicinity of $1,500.00 approx
5. That the sum of $40,000 in relation to the 1999-2001 Court Case before the Family Law Court of Western Australia in relation to ownership of a Ford Fairlane Vehicle.
6. That the sum of $3,000.00 was awarded to me in the Perth Magistrates Court by Magistrate Lane in relation to a Restraining Order I was granted against Colin Fielding which has still not been paid, to be paid and further that the associated costs in this Court Trial be reimbursed.
7. That I be repaid the monies Colin Fielding stole from me in relation to the Contracts won by my Company, [H Company]. These are the Contracts Colin Fielding in relation to the Liquidators Report. I am unable to give the exact amount of the Contracts. I was given these documents by [Ivan Farr] of [X Law Firm], who in turn received them from Katherine Fielding. I am only claiming the amounts I can prove to the Courts through the paper trail. I have tendered the copies of the receipts, invoices and bank statements. The amount I am claiming will have been at least $70,000.
8. That Colin Fielding repay the monies I loaned him in relation to his medical and dental expenses.
9. That I be repaid the debt that Colin Fielding has admitted to owing to me, in various documents including Transcripts in The Family Law Court and other Courts, and further that the Accountant [Rachel Amato], [B Accounting Firm], was the person who organised the loan of debt being for $140,000.00 Dollars, and further acknowledge that Colin and Sandra Fielding owed this debt to me in this and other Courts.
10. That Colin Fielding repay half the monies in relation to the rental p[properties that he owes. I am claiming a half share for the properties rented together. I am not including the first property we lived as we had reached an agreement in relation to these rental payments.
11. That the Defendant, C. Fielding pays the Second Interveners, V. Vitale Court costs and associated expenses.
12. That the Court adds compounded interest for the above amounts and further I request that the Court set the compounded interest rate as to what the Court considers a just and fair rate.
13. I have attached documents to substantiate my financial claims in relation to the Orders sought by me, and humbly request Your Honour to be given permission over the weekend to add the last of my financial documents to further substantiate my claim.
14. Further in relation to the Orders I Seek, I have attached a letter if explanation for Your Honours consideration and determination towards my financial claim in this claim in this case as the Second Intervener.
[sic]
110I will deal firstly with paragraphs 2 to 4 of the orders. On 2 May 2005 a judgment was entered against Colin and Ms Vitale in the District Court of Western Australia. The judgment related to a debt incurred by H Company, a company in which Colin and Ms Vitale had an interest, to Business F and an associated company, Business G.
111Jordan Masters, credit manager of F Company, trading as Business F, swore an affidavit and was available for cross-examination at trial. He deposes:
…
2 H Company opened a credit account with Business F. The credit account included Guarantees which were signed by both Vanessa Vitale and Colin Fielding. The Guarantees charged in favour of Business F, all property owned by Ms Vitale and Mr Fielding in payment of any debts incurred by H Company.
3 On 14 September 1999, H Company went into liquidation owing Business F the sum of $148,383.36.
4 Demands were made on Ms Vitale and Mr Fielding in relation to the outstanding debts owed to Business F. Further, Business F placed caveats over the property owned by Vitale which provided notification that the property at [S Suburb in Western Australia] was charged with payment of the debt owed by Vitale to Business F.
5 At the same time another creditor of H Company placed a caveat over the property of Ms Vitale’s and claimed debts against Ms Vitale in similar circumstances.
6 I had various discussions with both Ms Vitale and Mr Fielding in relation to the outstanding debt and Gaurantee. An agreement was reached whereby both Ms Vitale and Mr Fielding would pay to:
(i) Business F $40,000.00 each in exchange for releases of each of the Gaurantees [sic] and withdrawals of caveats of the property owned by Ms Vitale.
(ii)Business G, $20,000.00 each in exchange for releases of easch [sic] of the Gaurantees [sic] and withdrawals of caveats of the property owned by Ms Vitale.
…
10 The settlement sums were Paid [sic] to both Business F and Business G by:
(i) Ms Vitale on 11 October 2010; and
(ii) Mr Fielding 15 September 2010.
11 Business F and to the best of my knowledge Business G have released both Ms Vitale and Mr Fielding as Gaurantors [sic] of the debt owed by H Company and released the caveats over the property owned by Ms Vitale.
112I am not satisfied that in the cross-examination there was any successful challenge to this evidence.
113Judgment in the District Court was regularly entered after a trial. The parties have each paid the $60,000 agreed to be their share of the judgment debt. Colin was successful in negotiating a considerably reduced amount which has benefited each of the guarantors. There is no evidence that persuades me I should interfere with what has now already been finalised. Each party individually guaranteed the credit account payments. The evidence does not support that Colin should now be required to indemnify Ms Vitale for her share of the debt.
114Again, I am confronted with convoluted and uncertain evidence in relation to the order sought at paragraph 5 of Ms Vitale’s orders. The nature and basis of the claim was not really explained. I am not satisfied that any orders should be made in terms of paragraph 5.
115In relation to the orders sought by Ms Vitale in paragraph 6, this is a matter more appropriately addressed in the Perth Magistrates’ Court where, years ago, in or about 2007, the original order for costs was made.
116It was not a matter addressed when Ms Vitale first involved herself in these proceedings and it appears to have been an afterthought with little real detail given about timing and amount. In her closing, Ms Vitale explained she had left enforcement of the costs order up to her lawyers. She assumed it would go to them to pay their legal bill, which apparently remains unpaid. I do not intend to make the order sought.
117In relation to paragraph 7 of the orders sought, although Ms Vitale provided the Court with documentation and cross-examined Colin at length about these issues, there was no evidence to quantify the amount of any debt, even if I was persuaded there was any substance behind her claim. In any event, Ms Vitale alleges a criminal offence which is not within the jurisdiction of this Court.
118I do not intend to entertain the order sought at paragraph 8, given its vague and uncertain nature. I apply the same reasoning to the balance of the orders sought.
119I am not satisfied the Court has jurisdiction to deal with a number of Ms Vitale’s claims, this is even if the evidence supported the claims, which it does not. Although she may feel morally aggrieved about Colin’s behaviour, this is a long way from founding a valid legal claim. I intend to dismiss Ms Vitale’s claim in its entirety.
-Judgment debt (Sandra Fielding)
120In his judgment of 21 August 1998 the Honourable Justice Anderson made the following order:
The husband do pay or cause to be paid to the wife lump sum maintenance of $240,000 by equal annual instalments of $30,000, with the first payment to be paid to her out of the monies held in BankWest in the joint names of the parties and thereafter $30,000 to be paid each year commencing on 1 July 1999.
None of the amount ordered has been paid to Sandra by Colin. Sandra has never sought to enforce the order. She did not press the annual defaults at the time they fell due.
121Sandra said that she did not make a claim prior to her intervention in these proceedings because “I was of the understanding that the house in K Suburb was to be for my children, Ava and Kane Fielding”. This does not explain the delay between 1998 and 2002.
122In her evidence at trial she said she did not deal with the spousal maintenance previously as it was “too hard”.
123She said that she had made a decision that if the property was placed on the market for sale she would then caveat it. She had thought it was beneficial for the children to have two stable homes in which to stay - hers and the property - so she went along with it.
124The order for spousal maintenance is now 14 years old. The first payment of $30,000 was to come out of money held in B Bank in the joint names of the parties at the time of the judgment. There is no explanation why that amount was not paid to Sandra.
125Sandra provides no evidence to suggest that she personally has a need for the money by way of spousal maintenance save, in her affidavit filed 30 May 2008, where she deposes:
… I require this debt to be settled for financial security as the real estate industry is very uncertain at the present time.
126In the same affidavit she says she will claim interest on the spousal maintenance debt as no attempt has been made to clear this debt.
127At trial her position was that she is happy for her entitlement to be translated into an interest in the property, but for the benefit of her children. She does not seek to recover money for herself unless the Court is unwilling to accede to Colin’s wish to maintain the property for the children.
Legal principles
128Section 106 of the Act sets out that:
In determining whether to make an order enforcing a maintenance order, a Court must not require that there be special circumstances that justify enforcing the maintenance order merely because the maintenance payable under it is more than 12 months in arrears.
129Despite this pronouncement there is nothing to suggest that the Court must enforce a maintenance order. Depending on the circumstances of any particular case, a court may decline to enforce an order where it would be in equitable to do so. (In the Marriage of Ramsey (1983) FLC 91-301). Such circumstances may include where a party has unreasonably delayed enforcement, or where there has been a relevant change in circumstances since the orders were made.
130Specifically relating to maintenance orders, the court has power under s83 to discharge, vary or suspend an order for spousal maintenance. To discharge an order, there must be a ‘just cause for so doing’ (s83(1)(c)). To vary an order, s83(2) sets out the matters of which the court must be satisfied:
(a) that, since the order was made or last varied:
(i) the circumstances of a person for whose benefit the order was made have so changed (including the person entering into a stable and continuing de facto relationship);
(ii) the circumstances of the person liable to make payments under the order have so changed; or
(iii) in the case of an order that operates in favour of, or is binding on, a legal personal representative—the circumstances of the estate are such as to justify its so doing;
(b)that, since the order was made, or last varied, the cost of living has changed to such an extent as to justify its so doing;
(ba)in a case where the order was made by consent—that the amount ordered to be paid is not proper or adequate;
(c) that material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false.
131Section 83(7) also requires the court to have regard to the provisions of s72 and s75 for the purposes of this section. Section 83 thus gives the court power to vary and discharge orders in certain circumstances. In relation to the element of change required by ss83(a)(i), 83(a)(ii) and 83(b), Altobelli FM commented (Vailes & Vailes [2010] FMCAfam 391):
9.…paragraphs (a) and (b) of s.83(2) seem to be the most relevant. The focus of these paragraphs is change. I need to consider how circumstances of the parties have changed since the date the order was made… This means considering the evidence about their circumstances now, then, and in between. The change in question needs to be primarily, but not exclusively, financial or economic. Section 75(2) also refers to a number of non-financial circumstances, thus broadening the enquiry.
10.It is important to note that change per se does not trigger a variation of a maintenance order. Sub-paragraphs (i) and (ii) of s.83(2)(a) use the words “so changed” thus importing a qualitative or quantative element. The nature of the change must be so great, or so significant in the context of this case, that a variation is warranted.
11.In any event s.83(1) and (2) are clearly discretionary provisions. Even if change is present, the section does not mandate a variation of the order in question.
132The extensive passage of time in this case could be considered a circumstance that results in the situation of the parties being ‘so changed’ that variation or discharge is appropriate.
133In dealing with Sandra’s entitlement under the spousal maintenance order, it does not appear that there is any scope for that order to be varied simply in order for the property to be preserved as a single asset and held for the benefit of her children.
134It is also necessary to consider that Sandra became aware of the lotto win in late 2002. Even knowing this, she took no steps to explore how the judgment could then be enforced.
135I am of the view that it is appropriate in all the circumstances of this case to vary the original order. I accept there is some explanation for the delay, especially given Colin’s efforts to keep his assets away from creditors, Sandra in particular. Sandra says she was prepared to leave the spousal maintenance order unsatisfied, given she felt her children would be taken care of. She did not appear to consider her own support a priority. The intention behind the order was for her support and not for the support of the children. That was dealt with as a separate child support issue. The delay in this case has been considerable.
136I do not doubt that since her separation from Colin, Sandra has struggled financially from time to time, but has chosen not to invoke enforcement proceedings. Apart from the property, I accept there is little for her to have sought to enforce the judgment against.
137I intend to reduce the judgment by $10,000 a year since the date of the judgment. I do so as I am not altogether satisfied the whole of the delay has been adequately explained. Sandra’s financial circumstances have also changed over the years. She is currently working as a [profession omitted]. Her original affidavit sworn in 2007 also identified her as working in this area. I will quantify her existing debt from Colin as $100,000. I will return to the detail of this when I consider the overall justice and equity of the orders I intend to make.
138I find the assets at the time of trial to be:
| Assets – description | Ownership | Value |
| [K Suburb property] (registered in Ms Sampson’s name) | Joint | $375,000 |
| Ford Fairlane motor vehicle (registered in Katherine’s name) | Joint | E4,000 |
| Sea-Doo boat AQ 787 (unregistered) | Joint | E2,000 |
| Superannuation assets | ||
| Superannuation | Colin | E17,000 |
| Total Assets | E$398,000 | |
| Liabilities | ||
| Vitale debts | Colin | Nil |
| Judgment debt (Sandra Fielding) | Colin | 100,000 |
| Total net assets | $298,000 |
Contributions
139The parties met in late 1999. By March 2000 they were going out together and I accept they spent considerable time together. They had a sexual relationship. However, throughout 2000 and 2001 Katherine spent a substantial amount of time in the United States. This was to satisfy certain visa requirements. I accept that in late 2001 the parties started to live together on a more permanent basis.
140The lotto win came early in their de facto relationship, March 2002. I have little reason to doubt that Katherine may well have provided Colin the $30 to buy the ticket. I accept it is likely that she was in the newsagency when the ticket was bought. However, it is clear their attitude to the buying of such tickets was very different.
141Carl Davis, owner of the [L] Newsagency, swore an affidavit and was available for cross-examination. Colin was his first division one winner. He said he considered Colin to be a fairly large lotto player. He purchased anywhere from 12 game to 25 game slik picks as well as the syndicate tickets. He said that when Colin and Katherine came in together, Colin would buy his lotto and Katherine would buy hers. Katherine would never spend more than $2 or $3 and mainly used coupons.
142It was Colin who actually purchased the winning ticket. Mr Davis liaised with Colin over the winnings. He advanced Colin $300 on the basis that amount would be deducted from the winnings once received.
143There was a champagne celebration between Katherine, Colin, Mr Davis and his wife. There was a discussion about the winnings. Mr Davis was aware that as a result of what was going on in Colin’s life, the money would be put into his sister’s bank account.
144Mr Davis was a credible witness. Although he had a proprietor/customer relationship with Colin, I accept there was nothing more to it. He was happy to have a first division winner arising from one of his sales.
145Although Katherine collected the winnings I am satisfied that the money was largely seen by the parties as Colin’s money. An immediate payment was made towards his outstanding child support. The money went to Ms Sampson, his sister, and provision was ostensibly made for his children. I accept it was Colin who was the driving force in the purchase of property which has now increased in value and forms the single most valuable asset of the parties. I accept that it is likely Colin’s intention was that his children would benefit after his and Katherine’s death.
146The parties were cohabitating at the time of the purchase of the ticket. Given that I accept it is likely Katherine paid for the ticket, I find the parties pooled their funds at least to some extent. However, I am also conscious of the fact that the parties had different approaches to the manner in which they engaged in the general lottery process.
147In terms of the contribution to the lotto win I intend to apportion a 65% contribution to Colin and a 35% contribution to Katherine.
148The parties married on [in] January 2004 and separated in August 2005. They lived in the property until early 2005.
149It is difficult to assess the competing claims of the parties over this period of time as they relate to contributions. I accept it is likely that Colin paid most of the outgoings and upkeep on the property. The evidence suggests that Katherine was unhappy in the property as it was close to a main road and the car fumes upset her.
150I find that both parties received Government benefits for some of their relationship. From late 2004 Colin was employed as a manager of a roofing company, Construction Company A.
151Since the parties separated Colin has been solely responsible for maintaining the property. I accept he has done improvements to the property, which include painting the interior, rendering walls, installing new curtains and new roof sheeting. At one stage he paid off arrears of rates in an amount of $3,000. The parties have been separated for seven years. They had the property together for three years. I am satisfied that since separation Colin has made the overwhelming financial and non-financial contribution to the property. I also accept that he has made the overwhelming contribution to his superannuation entitlement.
152Overall, I consider that an overall adjustment should be made in Colin’s favour of 80%.
Section 75(2) of the Act
153This has been an extremely difficult matter given Katherine did not appear either at the first part of the trial or when it resumed.
154Throughout the resumed trial, Ms Vitale made veiled references to the whereabouts of Katherine. The inference she appeared to be asking the Court to draw was that Katherine had met an untimely demise at the hands of Colin. She explained that he was also likely to have been the Claremont serial killer. Colin’s view was that Katherine had simply returned to the United States. In any event, it is very difficult to determine what are primarily prospective factors when the Court has no evidence whatsoever.
155Given Katherine is likely to suffer from some form of mental health difficulty, the exact extent of which is unknown, the Court is left with an impossible task.
156Colin has outstanding legal fees, but I am far from satisfied that these are likely to be paid or that steps will be taken for their recovery.
157In all the circumstances, I do not intend to make any adjustment for these factors.
Just and equitable
158It is now necessary to consider the effect of orders that I intend to make in this case. They are orders that affect two third parties and an absent spouse. All this presents practical problems.
159Firstly, I intend to make orders transferring the property from Ms Sampson’s name to Colin’s sole name. I have considered transferring it to Katherine and Colin in accordance with their respective shares. Although I find Katherine has an interest in the property given the particular circumstances here, I do not consider it to be a practical solution to transfer it to them jointly. It is unlikely to sever the ties between the parties and it will place unnecessary restrictions on others with an interest in the proceedings.
160As the beneficial interest in the property does not belong to Ms Sampson, there is, in my view, no real issue with invoking the powers in s 90AE of the Act to direct her to transfer the property. It is reasonably necessary to do so in order to effect a division of property between Katherine and Colin, as required by s90AE(3)(a).
161The further requirements to be satisfied before exercising a power under s 90AE(1) or (2) are:
•The third party must be accorded procedural fairness (90AE(3)(c)) - Ms Sampson has been involved in proceedings as an intervener.
•The Court must be satisfied it is just and equitable to make the order (90AE(3)(d)) - Ms Sampson will not suffer financial detriment given the orders I intend to make for her to be indemnified for any expenses. She did not pay any part of the purchase price or any of the outgoings. She and Colin have been able to agree those matters since 2002.
•The Court must be satisfied that the order takes into account the following matters (90AE(3)(e)):
• the taxation effect (if any) of the order on the parties to the marriage and the third party;
• the social security effect (if any) of the order on the parties to the marriage;
• the third party’s administrative costs in relation to the order;
• the economic, legal or other capacity of the third party to comply with the order;
• if, as a result of the third party being accorded procedural fairness in relation to the making of the order, the third party raises any other matters - those matters;
• any other matter that the Court considers relevant.
162I intend to ensure Ms Sampson is not prejudiced in accordance with this requirement. The matters just referred to do not pose a problem to Ms Sampson.
163I will make separate orders reflecting a payment by Colin to Katherine. I also intend to make an order of a like nature in respect of Sandra’s entitlement.
164The practical effect of my percentage adjustment will be that Colin will retain 80% of the value of the joint property. This represents assets to the value of $318,400. Katherine will retain assets worth $79,600. Colin will have to pay this money, but it will not involve the need to obtain signatures for the transfer of any real estate. Colin will also be responsible for payment of the $100,000 remaining of the judgment debt I have ordered be paid to Sandra. It is to come from his share of the assets. He will have to pay it or he and Sandra can make their own arrangements by agreement. Given Sandra’s attitude throughout the trial, it may well be that rather than enforce her now reduced debt of $100,000, she wishes to come to an arrangement with Colin about the children’s future. These are matters for her and Colin.
165Katherine will have an order in her favour reflecting her entitlement. Given her failure to involve herself in these proceedings, the Court is not in a position to take her matters any further. Katherine’s whereabouts is unknown. Her intentions are unknown. She will have a judgment debt to enforce if she so wishes.
166In relation to Ms Sampson, I intend to make orders which ensure that she will not incur any costs related to merely holding the property in her name to suit her brother’s purpose.
167I consider the overall result to be just and equitable in all the circumstances.
Orders
1The application and the orders sought by the Second Intervener, VANESSA SANSONE VITALE, be and are hereby dismissed.
2The property situate at and known as K Suburb property, in the name of the Second Respondent, AMY JOYCE SAMPSON, on a resulting trust for the First Respondent, COLIN LAURENCE FIELDING, be transferred by the said Second Respondent to the First Respondent absolutely, with the First Respondent indemnifying the Second Respondent for all associated costs.
3Within 60 days or such other time as may be agreed between them, the First Respondent pay to the First Intervener, SANDRA PINA FIELDING, the sum of $100,000 and upon such payment order 4 of the orders of the Honourable Justice Anderson made 21 August 1998 be discharged.
4Within 60 days of the Applicant notifying the First Respondent of where and how payment is to be made, the First Respondent pay to the Applicant the sum of $79,600.
5The parties otherwise retain all assets in their respective possession and control.
6All applications be and are hereby dismissed.
I certify that the preceding [167] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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