Fing & Ma (No 2)
[2025] FedCFamC1F 294
•8 May 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Fing & Ma (No 2) [2025] FedCFamC1F 294
File number: MLC 321 of 2022 Judgment of: MCNAB J Date of judgment: 8 May 2025 Catchwords: FAMILY LAW – PROPERTY – where the husband and wife were married for about 15 years – where funds were transferred from Country H to Australia – where the wife states that the funds were the inheritance of her daughter from a previous marriage after the passing of her former husband – where those funds were used to purchase properties in Australia under the daughter and a company’s name – where the husband says that the funds belonged to him by way of his successful business ventures in Country H and the properties are held by the daughter and the company as a first limb Barnes v Addy constructive trustee – where, in the alternative, he claims that the properties belong to him under a purchase money resulting trust – where the husband seeks an adjustment of property as between him and the wife after declarations that the properties are held on trust for him – where the wife, daughter and third respondent seek the dismissal of the husband’s application – where, in the alternative, the wife seeks an adjustment of property as between her and the husband of 60 per cent in her favour – Orders made dismissing the husband’s application. Legislation: Family Law Act 1975 (Cth) s 79
Transfer of Land Act 1958 (Vic) s 42
Cases cited: Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; [1990] HCA 11
Barnes v Addy LR 9 Ch App 244
Belmont Finance Corp Ltd v Williams Furniture Ltd (No 2) [1980] 1 All ER 393
Clifton & Aspen [2023] FedCFamC1F 376
Dovgan & Dovgan [2021] FamCA 306
Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22
Fing & Ma [2023] FedCFamC1F 938
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143; [2003] FamCA 395
Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kaplan & Hankel [2025] FedCFamC1F 41
Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563; [1995] HCA 68
Paragreen v Lim Group Holdings Pty Ltd (2020) 61 VR 293; [2020] VSCA 84
Quincey & Quincey [2024] FedCFamC1A 30
Re Richflow Pty Ltd (In Liq) [2024] VSC 618
Simmons v NSW Trustee and Guardian [2013] NSWSC 1688
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
Watson v Foxman (1995) 49 NSWLR 315
Wei & Xia (No 5) (2023) 67 Fam LR 421; [2023] FedCFamC1F 679
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Yong & Weng [2024] FedCFamC1F 440
Division: Division 1 First Instance Number of paragraphs: 176 Date of last submissions: 25 November 2024 Date of hearing: 13-17, 20-24 May 2024, 29-30 August 2024 Place: Melbourne Counsel for the Applicant: Mr Wilson KC with Mr Clarke and Mr Lim Solicitor for the Applicant: Francis Lim Barristers & Solicitors Counsel for the First Respondent: Ms Chia Solicitor for the First Respondent: Lakey Family Law and Mediation Counsel for the Second and Third Respondents: Mr Seelig with Mr Tesoriero Solicitor for the Second and Third Respondents: Destra Law ORDERS
MLC 321 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR FING
Applicant
AND: MS MA
First Respondent
MS LIAN
Second Respondent
K PTY LTD
Third Respondent
ORDER MADE BY:
MCNAB J
DATE OF ORDER:
8 MAY 2025
THE COURT ORDERS THAT:
1.The applicant’s second further Amended Initiating Application filed 14 May 2024 be dismissed.
2.The applicant vacate and give to the second respondent vacant possession of C Street, Town D (“Town D property”) by no later than 8 July 2025.
3.Within 14 days the applicant at his expense remove any caveat lodged against the titles of properties owned by the second and/or third respondents being:
(a)The Town D property; and
(b)E Street, Suburb AJ.
4.Within 28 days of the date of this order:
(a)any party shall notify the Court of any application for costs accompanied by a written submission limited to (10) A4 pages together with a schedule of costs claimed;
(b)within 14 days thereafter any submission in response limited to (10) A4 pages be filed; and
(c)any application for costs be determined on the papers in chambers.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Fing & Ma has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCNAB J
INTRODUCTION
This matter involves the applicant husband, Mr Fing born 1960 (“the husband”), the first respondent wife, Ms Ma born 1962 (“the wife”), the wife’s child from a previous marriage is the second respondent, Ms Lian born 1989 (“the daughter”), and the third respondent, K Pty Ltd (“the third respondent”), of which the daughter is the sole director and shareholder, and who is the trustee for the K Family Trust.
The husband seeks declarations that properties held in the name of the daughter and third respondent are in fact held on constructive trust for him pursuant to a first limb Barnes v Addy LR 9 Ch App 244 (‘Barnes v Addy’) claim. In the alternative, he claims that he is entitled to those declarations as a result of a purchase money resulting trust. He further seeks a property adjustment order pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The husband claims that he accumulated approximately 23,335,000 foreign country currency in Country H through various entrepreneurial activities between 2004 and 2011. He alleges that these funds were transferred to Australia via a “trust agreement” with the wife’s sister, Ms L (“the maternal aunt”), with the intention that they be held on his behalf by the wife.
Conversely, the respondents maintain that the husband cannot prove that he was the source of the funds and that it was Mr G (“Mr G”), the wife’s deceased former husband, who had purchased apartments in City P, Region Q in Country H (“the apartments”) and was a successful businessman who was the source of the funds. They say the sale proceeds arising from the sale of the apartments were transferred to Australia via the maternal aunt and were used to benefit the daughter. They seek that the husband’s application be dismissed in its entirety.
BACKGROUND
Key Non-Party Witnesses
The history of this matter is highly contested and central to the findings I must make. The detail that the parties descended into in relation to the background was significant. In order to assist I set out the relevant actors in the narrative:
(a)Mr G, the former husband of the wife and the father of the daughter;
(b)Ms L, the maternal aunt who assisted in facilitating the transfer of moneys from Country H to Australia;
(c)R Ltd, previously known as R1 Ltd and alternatively known as R2 Ltd;
(d)Mr S, the nephew of the wife and the cousin of the daughter who was involved in the business dealings in Country H including with R Ltd;
(e)Ms T, a distant relative who was involved in R Ltd;
(f)Ms U, who was involved in R Ltd;
(g)Mr V, the daughter’s uncle and to whom the husband transferred his interest to R Ltd;
(h)Mr W, an alleged business associate of the husband;
(i)Mr X, an alleged business associate of the husband;
(j)Mr Y, an alleged business associate of the husband;
(k)Mr Z, an alleged business associate of the husband;
(l)Mr AA, an alleged business associate of the husband; and
(m)Mr BB, an alleged business associate of the husband.
The Parties
The husband was born in Country H in 1960. In 1997, he migrated to Australia with his first wife and their daughter. They were divorced in 2004.[1]
[1] Affidavit of Mr Fing filed 27 October 2023 ‘Husband’s affidavit’ at [6].
The wife was born in Country H in 1962. She was married to Mr G in 1985. They cohabitated from 1985 until 1996, although she says that from 1991 to 1996 this was “not so much as husband and wife.” They were divorced in late 2001.[2] The daughter is the only child to that marriage. The wife says that even after divorcing, she and Mr G were amicable and they continued to have a close relationship, with Mr G supporting the wife financially.[3]
[2] Affidavit of Ms Ma filed 14 November 2023 ‘Wife’s affidavit’ at [5].
[3] Wife’s affidavit at [37].
In 2001, Mr G became unwell and had surgery.[4] In 2005, Mr G was diagnosed with a medical condition. He passed away in 2005.[5] The wife alleges that as a result of his successful business ventures, Mr G was wealthy and this wealth enabled him to own a luxurious house, cars, have nannies, housekeepers and a cook, as well as sending the daughter to a private international school.[6]
[4] Wife’s affidavit at [38].
[5] Wife’s affidavit at [41].
[6] Wife’s affidavit at [28], [30], [32] and [33].
The wife alleges that throughout the years she has discussed with the husband his background. She says that the husband said that he did not start school until he was 10 years of age and he had to fake his date of birth in government documents to get free admission into high school.[7] She gives evidence that the husband moved to Country CC in the 1990’s before relocating to Australia in about 1998. When he was residing in Australia, he obtained a PhD, but was unable to find work in that field and instead opened a business in City DD which was unsuccessful. She says this caused him to lose his savings forcing him to return to Country H in 2002.[8] There is no evidence that the husband had any business acumen up to 2002.
[7] Wife’s affidavit at [46].
[8] Wife’s affidavit at [47].
History of the Relationship
The wife says that in late 2002, she met the husband when he was working as a consultant in City EE in Country H. At the time, the daughter, who was aged about 13 years, had returned from a study trip in Australia and she wished to return to Australia to do her studies. The wife consulted with the husband regarding obtaining a visa for the daughter. She says that she was informed by the husband that it would be difficult for the daughter to obtain a student visa due to her age and suggested that they instead apply for an investment visa.[9] She states that she and the husband commenced a romantic relationship shortly thereafter.[10] The wife says that she moved into an apartment in City FF, Region Q in Country H in October 2003 and in December 2003 the husband had joined her there as well.[11]
[9] Wife’s affidavit at [42].
[10] Wife’s affidavit at [43].
[11] Wife’s affidavit at [53].
The husband denies that he was a registered agent in February 2002, and asserts that he was a consultant.[12] The husband agrees that he and the wife started living together in a de facto relationship from 2003 before getting married in early 2005 in City FF, Region Q in Country H.[13] The husband advertised, or worked in a business that advertised, his services as an agent and I find that he worked in that field whether or not he was registered.[14]
[12] Husband’s affidavit at [9].
[13] Husband’s affidavit at [11].
[14] Exhibit R2-42.
The wife says that in 2004 she was asked by the husband to provide proof of her real estate assets for the visa application. She was unable to do this as there was no real estate in her name and the visa application was cancelled.[15] A subsequent spousal visa application for the wife with the daughter as a dependent was prepared in 2006. The detail of that application is relevant to the credit of the parties and is dealt with in more detail below.
[15] Wife’s affidavit at [45].
The husband says he met Mr G in City FF, Region Q in Country H in mid-2005 whilst Mr G was in the Intensive Care Unit at the GG Hospital and he states that he was told by the wife that Mr G was admitted under an assumed name to avoid being located by creditors due to his failed businesses.[16] This is categorically denied by the wife, who says that the husband met Mr G earlier and produces photographs depicting the pair together at an earlier time at social functions.[17] She states that Mr G had requested to meet the husband in early 2004 and the husband had also asked the wife to get him work with Mr G helping to manage the apartments Mr G had purchased, details of which are dealt with below.[18] I do not accept that the husband only met Mr G in 2005 when he was close in hospital but in fact met and knew him from about 2004.
[16] Husband’s affidavit at [21].
[17] Wife’s affidavit at [120].
[18] Wife’s affidavit at [56]-[57].
The wife gives evidence that in early 2003, Mr G moved to City P, Region Q in Country H, with the daughter joining them shortly thereafter.[19] The wife says that they had moved to Region Q as Mr G was buying the apartments as an investment, and as he knew his medical prognosis was not great, he had asked the wife to also move to look after the properties for the daughter who was his only child.[20] The wife contends that Mr G purchased the apartments in City P, Region Q. It is the respondents’ case that these are the apartments which were purchased for the benefit of the daughter and that she inherited these on the passing of Mr G.
[19] Wife’s affidavit at [51].
[20] Wife’s affidavit at [52].
The wife states that the apartments were purchased by Mr G in the names of various family members and other individual to circumvent laws regarding property ownership in Country H at the time and that they then signed power of attorneys allowing Mr G to deal with the apartments and at [62] of her affidavit she sets out the list of apartments purchased and the names they were purchased in. The daughter continues to own one of those apartments.
The wife states that in around 2006, following the passing of Mr G, she asked Mr S to assist her in selling the apartments for the daughter as they were planning to move to Australia.[21] She says that Mr S arranged for the apartments to be sold and that once a sale price was agreed, the proceeds of sale for most of the properties went into his bank account before the proceeds were transferred to accounts in the husband’s name, with some funds also going directly into the husband’s bank accounts. She gave evidence that she believed that the husband would act in the daughter’s best interests in dealing with those funds.[22]
[21] Wife’s affidavit at [72].
[22] Wife’s affidavit at [73].
The account provided by the wife is largely corroborated by the daughter. She gives evidence that she recalls her father being wealthy and she deposes to having received an inheritance in the form of the interest in the apartments upon his passing of around $4,348,720 which was used to purchase real estate in Australia.[23]
[23] Affidavit of Ms Lian filed 14 November 2023 ‘Daughter’s affidavit’ at [11]-[12].
The daughter states that between 2006 and 2009 all the apartments were sold and at [76] of her affidavit she produces a list of 67 of the apartments that were sold and their sale price. The wife says that in about 2008, she told the husband to transfer the moneys received from the sale of the apartments to the maternal aunt so that she could transfer the funds to the daughter and her in Australia.[24]
[24] Wife’s affidavit at [82]-[83].
Aside from the purchase of the apartments, both the wife and daughter state that Mr G purchased various other properties during this period. The wife sets out:
(a)in about early 2005, Mr G gave her the properties at HH Street, City FF, Region Q in Country H. The wife says that she later transferred a half share in the HH Street property to the husband at his request supposedly for the migration application. These properties were sold in 2013 for $341,367 and the wife states that the husband travelled to Country H to arrange their sale;[25] and
(b)in either 2003 or 2004, Mr G purchased properties called the “Building JJ” at KK Street, Region MM, City FF, Region Q in Country H and apartments at “Building NN” at KK Street, Region MM, City Region Q in Country H. She says that these properties were later sold and the proceeds were used for the purchase of the apartments.[26]
[25] Wife’s affidavit at [66].and [67].
[26] Wife’s affidavit at [68].
In around mid-2008, the wife and the husband moved to Melbourne. The daughter remained with the maternal aunt in Country H before moving to Melbourne in early 2009.[27]
[27] Wife’s affidavit at [92]-[93].
The respondents give evidence that the funds from the daughter’s inheritance were used by her to purchase properties in Australia. This narrative is denied by the husband. The husband says that the funds which were utilised to purchase real estate in Australia and transferred from Country H were not derived from Mr G but were earnt by him through various business ventures and investments that he undertook in Country H and were subsequently transferred by the maternal aunt to Australia.
The parties agree that they separated on a final basis in about December 2020.[28]
[28] Wife’s affidavit at [2].
THE ALLEGED TRUST FUNDS
The moneys that were transferred from Country H to Australia are labelled by the husband as the ‘trust funds’. He claims that there are three trust funds which constitute the moneys which were transferred to Australia.
First Trust Fund
Following their relocation to Australia, the parties offer different accounts as to the transfer of money from Country H. The wife says that the money from the sale of the apartments was transferred from the maternal aunt. She states that money was transferred into M Bank accounts in her and the daughter’s name.[29] She sets out at [95] and [97] of her affidavit various transactions which represent the transfers being made. Whilst this is not entirely contested by the husband, he says that the funds that were transferred were what he had earnt in Country H as a successful businessman and he claims that there was a ‘trust agreement’ whereby it was agreed that he would transfer his money to the maternal aunt and she would arrange for that money to be transferred to the wife’s bank accounts in Australia. He claims that the wife and the maternal aunt would hold these funds on behalf of him for his benefit and would disburse those funds as directed by him.[30] In relation to the agreement, he states that in about April 2008 he and the wife called the maternal aunt who was in Region AO, Country H from their home in City P, Region Q in Country H for her assistance to transfer the moneys to Australia where they agreed the above:[31]
[29] Wife’s affidavit at [94].
[30] Husband’s affidavit at [103].
[31] Husband’s affidavit at [103].
He states that at this time the maternal aunt was working as a finance professional in Country H and through this she had contacts in Country OO who could assist with the transfer of the funds to Australia.[32]
[32] Husband’s affidavit at [104].
He says that in total he transferred a total of 23,335,000 foreign country currency from various bank accounts in his name after the telephone discussions between him, the wife and the maternal aunt.[33] He estimates that pursuant to this agreement, and based on statements and records from M Bank and CBA, that in 2008 the maternal aunt transferred to the wife USD$2,297,920 (which he estimates to be $2,640,019 based on historical exchange rates) and he considers this to be the ‘first trust fund’.[34]
[33] Husband’s affidavit at [105].
[34] Husband’s affidavit at [109].
This is disputed by the wife who submits that the money always belonged to the daughter but was transferred into her account due to her concerns about behavioural problems affecting the daughter at that time and to protect it from being wasted by the daughter. [35] The husband was at pains to demonstrate that the daughter’s behaviour was out of control at this time and that she was given to extravagant spending and drug use.[36]
[35] Wife’s affidavit at [94].
[36] Transcript 29 August 2024, p 914 lines 28-33 and p 929 lines 8-16.
Second Trust Fund
The husband alleges that notwithstanding the ‘trust agreement’, in 2011 and 2013 and without his knowledge, USD$512,855 (estimated to be the equivalent of $540,391 at the time) was transferred to the daughter by the maternal aunt and he labels this as the ‘second trust fund’.[37]
[37] Husband’s affidavit at [111].
Third Trust Fund/Share Trading Agreement
There is also controversy surrounding the opening of a share trading account which the husband says the wife authorised him to open in the daughter’s name as well as a PP Bank account but that he would provide the funding for the account and be its sole beneficiary.[38] The husband states that he also used the account of his nephew’s wife, Ms QQ, in 2007 to trade shares.[39] He alleges that pursuant to the agreement with Ms QQ and the wife he opened an account in Country H in the daughter’s name and the following transactions occurred:[40]
(a)in November 2007, he transferred 3,000,000 foreign country currency from his PP Bank (“PP Bank”) account to Ms QQ’s PP Bank account;
(b)on two dates in December 2009, he transferred a total of 4,970,000 foreign country currency from Ms QQ's PP Bank account to his PP Bank account;
(c)on three dates in December 2009, he transferred a total of 6,300,000 foreign country currency from his PP Bank account to the maternal aunt’s PP Bank account;
(d)on four dates in December 2010, he transferred a total of 2,360,000 foreign country currency from Ms QQ's PP Bank account to the daughter’s PP Bank account;
(e)in February 2012, the maternal aunt transferred 4,900,000 foreign country currency from her PP Bank account to the daughter’s PP Bank account; and
(f)in February 2014, he transferred 4,800,000 foreign country currency from the daughter’s PP Bank account to the maternal aunt’s PP Bank account.
[38] Husband’s affidavit at [112].
[39] Husband’s affidavit at [114].
[40] Husband’s affidavit at [115].
He claims that the moneys arising from this agreement constitutes the ‘third trust fund’.
The wife and daughter deny the husband’s claim that she authorised him to open accounts for share trading purposes in the daughter’s name.[41] She contends that in 2007, she opened a PP Bank account in the name of the daughter as well as a share trading account. She says that the husband did access the accounts and handled shares in the daughter’s name, although they were purchased using the money from the sale of the apartments. She states that she believes that the husband either lost the money or it has gone missing.[42]
[41] Wife’s affidavit [85].
[42] Wife’s affidavit at [87].
The maternal aunt gave evidence by her affidavit filed 14 November 2023. She states that in about late 2008, she had a conversation with the husband and wife over the phone about her wishing to move Australia where she alleges that the husband said the best option would be for her to obtain a business investment visa which required evidence of investment activities, such as share trading.[43]
[43] Ms L’s affidavit filed 14 November 2023 ‘Ms L’s affidavit’ at [31].
She gives evidence that following this conversation, the wife told her to hold some of the money that was going to be transferred to her so she could qualify for an investment visa (with the consent of the daughter). She says that she did this and used some of the money to invest in shares before later selling the shares and transferring the money to Australia.[44]
[44] Ms L’s affidavit at [32].
The maternal aunt states that she did not end up applying for an Australian visa as the Country H stock market did not do well during those years and as her children grew up she became less enthusiastic about moving to Australia. She then says she returned the money to the daughter’s PP Bank account after deciding that she would not move to Australia. She annexes to her affidavit several of the remittance slips from PP Bank being:[45]
(a)in November 2011, the maternal aunt transferred 200,000 foreign country currency to her mother’s (Ms RR) PP Bank account;
(b)in February 2012, she transferred 4,900,000 foreign country currency to the daughter’s PP Bank Account; and
(c)in February 2012, she transferred 210,900 foreign country currency to the daughter’s PP Bank account.
[45] Ms L’s affidavit at [35].
PROPOSALS
On 5 May 2022, the Court made orders for the filing and service of a Statement of Claim by the husband and, in response, for the respondents to file and serve Defences to the Statement of Claim (and again on 18 July 2023 and 23 August 2023). At trial the husband relied on an amended Statement of Claim filed on 9 November 2023.
The Husband’s Case
The husband seeks in his Statement of Claim that:
As against the 2nd Respondent
1)An order that the [daughter] account to the Husband for her receipt of funds in relation to the [F Street] Apartment as alleged in paragraphs 24 to 25 and 28 to 29.
2)A Declaration that the [daughter] holds the [E Street] apartment as a constructive trustee for and on behalf of the Husband.
3)An order that the [daughter] account to the Husband for her receipt of rentals from and her use and occupation of the [E Street] apartment as alleged in paragraphs 36 to 37 and 40.
4)An order that the [daughter] account to the Husband for her receipt of rentals in relation to the [N Street] apartment as alleged in paragraphs 47 and 48.
5)An order that the [daughter] account to the Husband for the receipt of the proceeds of sale of the [N Street] apartment as alleged in paragraph 51.
As against the 3rd Respondent
6)A Declaration that the 3rd Respondent holds the [Town D] property as a constructive trustee for and on behalf of the Husband.
In his second further amended Initiating Application filed 14 May 2024 (after the hearing had commenced), his orders sought were:
1)A declaration that the Third Respondent holds the property situated at [C Street, Town D], Victoria […] and more particularly described in Certificate of Title Volume […], Folio […] ("Town D Property") as trustee for the applicant Husband.
2)A declaration that the [daughter] holds the property situated at [E Street, Suburb AJ], Victoria […] and more particularly described in Certificate of Title Volume […], Folio […] ("[E Street Property]") as trustee for the applicant Husband.
3)A declaration that the [daughter] held the property situated at [F Street], Melbourne, Victoria 3000 and more particularly described in Certificate of Title Volume […], Folio […] ("[F Street Property]") as trustee for the applicant Husband.
3A)A declaration that the [daughter] held the property situated at [ N Street] […] and more particularly described in Certificate of Title Volume […], Folio […] ("[N Street Property]"} as trustee for the applicant Husband.
4)Pursuant to section 79 of the Family Law Act 1975, the net equity in the matrimonial assets pool be divided as follows:
a. 90% to the applicant Husband: and
b. 10% to the first respondent Wife.
5)The parties shall forthwith take all necessary steps and execute all necessary documents to cause the real property situated at [C Street, Town D] […] ("the [Town D Property]") to be sold by public auction.
…
8)The parties shall forthwith take all necessary steps and execute all necessary documents to cause the real property situated at [E Street, Suburb AJ] […] ("the [Suburb AJ Property]") to be sold by public auction.
…
11)The net proceeds of sale of [F Street] Melbourne 3000 shall be distributed as follows:
a 90% to the applicant Husband; and
b 10% to the first respondent Wife.
In his closing submissions, however, the husband proposed a split of the parties’ assets to be 65 per cent in his favour.
The husband seeks that the declarations be made pursuant to a first limb Barnes v Addy constructive trustee claim.
It is noted that in none of the evidence or pleadings filed throughout these proceedings prior to the hearing did the husband claim that the funds transferred from Country H and the subsequent real estate acquired in Australia was for the benefit or purpose of the family. He made it plain in his evidence that these funds belonged solely to him and consequently any assets arising from those funds also only belonged to him. Indeed, it was only when it was raised by the Court that his failure to seek an adjustment of property pursuant to s 79 of the Act may have meant that the Court lacked jurisdiction to deal with the matter did he amend his application to seek a division of the assets 90 per cent in his favour which was subsequently amended to 65 per cent in his favour.
In closing submissions, the husband raised a claim, which was absent from any iteration of his Statement of Claims, that he owned the subject properties pursuant to a purchase money resulting trust on the basis that the evidence supported a finding that he had been the source of the funds used to purchase the properties. The husband submitted that he was entitled to move beyond his pleaded case as the evidence was said to plainly support such a claim.
In response to the unpleaded claim, the daughter and third respondent say that the husband has pleaded his case on the basis of a first limb Barnes v Addy constructive trust and that a purchase money resulting trust is an entirely different equitable claim and where he has not amended his pleading, his case must therefore fail.[46]
[46] Second and third respondents’ submissions filed 29 October 2024 ‘Second and third respondents’ submissions’ at [28]-[29].
Counsel for the daughter and third respondent specify that prosecuting a first limb Barnes v Addy claim and a purchase money resulting trust are different where a first limb Barnes v Addy requires fraud and a purchase money resulting trust is about the intention behind the contribution. Counsel stated that the husband was never cross-examined regarding intention and the husband, on his own evidence, was unaware the properties were purchased until after the fact, meaning there could not have been any formed intention in respect of the purchase of the properties or any common intention for the properties to be purchased in one name for the benefit of another person.[47]
[47] Transcript 25 November 2024, p. 1111-1112 lines 27-34 and 1-4.
Counsel for the daughter and the third respondent state that where there was an absence of particulars regarding the formation of the trust, the intentions of the parties, when it was agreed to and what the trust was going to do, the case cannot change where there would have been further evidence adduced by the parties, including evidence in response, and cross-examination regarding the matters.[48] They submit that in these circumstances the case should not be able to change in the final days of the trial and the husband should be bound to his pleadings.
[48] Transcript 25 November 2024, p. 1112 lines 23-38.
Generally, proceedings in this Court do not proceed by way of pleadings. The authorities and the relevant statutory provisions governing the Court’s approach to pleading are canvassed in Yong & Weng [2024] FedCFamC1F 440 (‘Yong’) at [17] and following (per Strum J).
At [20], his Honour referred to Quincey & Quincey [2024] FedCFamC1A 30 at [28] where Tree J referred to Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279 at 296–297 (‘Banque’), where Dawson J said:
It is, of course, the purpose of pleadings to define the issues between the parties so that they may know the case which they have to meet and in order that the proceedings upon trial may be conducted in an orderly fashion by reference to those issues. The defined issues provide the basis upon which evidence may be ruled admissible or inadmissible upon the ground of relevance. But modern pleadings have never imposed so rigid a framework that if evidence which raises fresh issues is admitted without objection at trial, the case is to be decided upon a basis which does not embrace the real controversy between the parties. Special procedures apart, cases are determined on the evidence, not the pleadings. It is incumbent upon the trial judge to see that the pleadings or particulars are amended so that the record reflects the proceedings as they have been conducted, but his failure to do so will not result in the invalidity of those proceedings: Dare v Pulham (1982) 148 CLR 658 at 664; Water Board v Moustakas (1988) 62 ALJR 209 at 211; 77 ALR 193 at 197; Leotta v Public Transport Commission (NSW) (1976) 50 ALR 666 at 668; 9 ALR 437 at 446; Maloney v Commissioner for Railways (NSW) (1978) ALJR 292 at 295; 18 ALR 147 at 151.
(Emphasis added by Tree J)
At [23] of Yong, Strum J then concluded after referring to further relevant authority:
23In the circumstances, I consider that, especially in this Court, the purpose of pleadings, where ordered and/or filed, is to define the issues between the parties so that they may know the case which they have to meet and in order that the proceedings, at trial, may be conducted in an orderly fashion by reference to those issues. However, they are not determinative of proceedings, which are delineated by the orders sought in applications, responses and/or replies, and the evidence adduced in support thereof.
In Clifton & Aspen [2023] FedCFamC1F 376 at [112], Aldridge J took a more rigid approach to the role of pleadings in family law proceedings:
112Points of claim and points of defence identify the metes and bounds of the dispute that the applicant seeks to make against other respondents and, as with the statements of claim and defence, parties are bound by their pleadings. The case they seek to run is to be heard and determined by reference to the pleadings. Pleadings are not therefore not a general invitation to dance, but a precise articulation of the allegations made against the respondents. Contrary to the submissions of at least junior counsel for the wife in this matter, there is no right to amend the points of claim at any time the applicant feels fit.
In line with that approach, which in my view is a conventional approach in commercial cases, when determining an application in this proceeding regarding the adequacy of pleadings and where the matter was at a point of devolving into an extended fight about pleadings, I stated (Fing & Ma [2023] FedCFamC1F 938 at [26]):
26…I am not minded to order further and better particulars of the [Statement] of Claim or to strike out parts of the claim. The question of whether the claims made by each party in their respective pleadings are established by the evidence that they file is a matter for trial and final submissions. The parties have fixed the case that they intend to make by the pleadings and they shall not be permitted to move beyond the pleaded cases.
Given the weight of authority referred to by Strum J in Yong, I am bound to adopt a more expansive approach to receiving the late made claim in closing submissions regarding the purchase money resulting trust. The respondents did not seek leave to adduce any further evidence in response to the claim although I also note that the husband did not seek leave to amend the pleadings. I also note the exhortation of Dawson J in Banque (referred to above), that it is incumbent on a trial judge to ensure pleadings are amended to reflect the record of the evidence and the conduct of the trial, however I am not minded to require that in this case given that the written submissions reflect such and I am conscious of costs.
As with most issues of this kind where the exercise of discretion is involved, the question of whether a new case can be raised will depend on the particular nature of the case, the existing claims made, the breadth of the evidence received and consideration of the issue of prejudice and whether due process has been afforded. The notion that a party can proceed on the basis that the terms of pleadings do not have a consequence would seem to ignore the accepted purpose of pleadings and render the process of pleading an expensive and pointless exercise. Notwithstanding my concerns, I will deal with the husband’s claims made in submissions in regard to a purchase money resulting trust.
The Respondents
The respondents, by way of a further amended Response to Initiating Application, seek that the husband’s application be dismissed on the basis that the husband is unable to prove on the evidence provided that he has an equitable interest in the properties. In summary they contend that:
(a)the husband cannot prove that the funds used to purchase the properties were his funds or that he earned the funds as alleged or at all;
(b)he has failed to establish any fraud on the part of the daughter that would undermine her interests as the person named on the titles of the properties; and
(c)the respondents have established that the funds used to purchase the properties are the daughter’s funds.
The wife seeks orders in the event that the Court makes the finding that the properties are held on trust by the daughter for the wife or the husband, then there be a split of assets as between the husband and wife of 60 per cent in favour of the wife.
EVIDENCE
In a document the husband lists all the documents filed in these proceedings. He filed his trial affidavit on 27 October 2023, an affidavit in reply on 18 December 2023 and further affidavit in reply on 14 February 2024 (albeit only in reply to an affidavit which was filed by Mr SS, who ended up not giving evidence). His Amended Statement of Claim was filed 9 November 2023.
By a document filed 10 May 2024, the wife says she relies upon:
(a)Financial statement of Ms Ma filed 10 May 2024;
(b)Amended Response to Initiating Application filed 15 November 2023;
(c)Trial affidavit of Ms Ma filed 15 November 2023;
(d)The wife’s further and better particulars filed 29 October 2023; and
(e)Defence of the wife filed 4 July 2022.
By a document filed 30 April 2024, the second and third respondents say they rely upon:
(a)Amended counterclaim filed 26 March 2024;
(b)Affidavit of Mr SS filed 30 January 2024;
(c)Affidavit of Mr S filed 15 November 2023;
(d)Affidavit of Ms Ma filed 15 November 2023;
(e)Affidavit of Ms Lian filed 14 November 2023;
(f)Affidavit of Ms L (the maternal aunt) filed 14 November 2023;
(g)Affidavit of Mr V filed 14 November 2023;
(h)Affidavit of Ms TT filed 13 November 2023;
(i)The second and third respondents’ further and better particulars filed 27 October 2023;
(j)The second and third respondents’ further and better particulars filed 25 September 2023;
(k)Affidavit of Mr Fing filed 21 September 2023;
(l)The second and third respondents’ further and better particulars filed 22 August 2023;
(m)Defence of the second and third respondents filed 15 July 2023;
(n)Affidavit of Mr Fing filed 2 November 2022;
(o)Affidavit of Mr Fing filed 28 April 2022;
(p)Response to Initiating Application file 17 March 2022; and
(q)Affidavit of Mr Fing filed 17 January 2022
On 30 August 2024, the 12th day of the hearing and after the hearing of evidence had concluded, orders were made for each party to file and serve written final submissions. The husband filed his submissions on 27 September 2024, the wife on 28 October 2024, the daughter on 29 October 2024 and the husband filed his reply on 16 November 2024. On 25 November 2025, the matter was listed for the hearing of closing submissions.
The husband gave evidence over five days with the assistance of an interpreter.
The wife gave evidence over a day.
The daughter gave evidence for slightly over a day.
RELEVANT LAW
Section 79 of the Act
In respect to the parties' dispute regarding the division of their property in these proceedings, s 79 of the Family Law Act 1975 (Cth) (“the Act”) sets out the following:
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d)an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2) The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In exercising that discretion, the Court is required to take into account the matters set out in s 79(4) of the Act, as follows:
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The High Court in Stanford v Stanford (2012) 247 CLR 108 at [35] confirmed that before an order is made adjusting the parties' property, the Court is required to make a determination that it is just and equitable to do so. That determination is to be made not as a discrete or preliminary issue, but the Court must consider the matters set out in s 79(4) of the Act.
In Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143, the Full Court held at [39] that, in considering the matters set out in section 79(4) of the Act, the preferred approach was to adhere to the following four steps:
(a)identify and determine the value of the asset pool of the parties as at the date of the hearing (this necessarily involves identifying both the assets and liabilities);
(b)identify and assess each of the parties' financial and other contributions up until the date of the hearing (this can include the financial contributions made before, during and after the marriage);
(c)assess how future and other events may have a financial impact on either of the parties, such as their age and state of health and their income and property or financial resources (known as the s 75(2) factors); and
(d)step back and examine this formula-based reasoning against the history of the marriage, intangible considerations and other contingencies so as to consider whether the outcome represents a just and equitable result.
First Limb Barnes v Addy
The rule in Barnes was stated by the High Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [111]-[112]:
111 The “rule in Barnes” Stated: In Barnes Lord Selborne LC said:
Those who create a trust clothe the trustee with a legal power and control over the trust property, imposing on him a corresponding responsibility. That responsibility may no doubt be extended in equity to others who are not properly trustees, if they are found either making themselves trustees de son tort, or actually participating in any fraudulent conduct of the trustee to the injury of the cestui que trust. But, on the other hand, strangers are not to be made constructive trustees merely because they act as the agents of trustees in transactions within their legal powers, transactions, perhaps of which a Court of Equity may disapprove, unless those agents receive and become chargeable with some part of the trust property, or unless they assist with knowledge in a dishonest and fraudulent design on the part of the trustees.
The form of liability referred to in the first part of the last sentence is often called the “first limb” of Barnes, and the form of liability referred to in the second part of the last sentence is often called the “second limb”. In Barnes itself, the Court of Appeal in Chancery (Lord Selborne LC, James and Mellish LJJ) upheld the decision of Wickens VC that two solicitors, Mr Preston and Mr Duffield, had not received any trust property and had no knowledge of any dishonest and fraudulent design to make them parties to the breach of trust by the sole trustee. It was insufficient that Mr Preston had been alive to the danger of the course of appointing a sole trustee and that Mr Duffield had prepared the appointment of that trustee.
112It has become common to describe the first limb as involving “knowing receipt” and the second limb as involving “knowing assistance”. Lord Selborne LC did not use the expression “knowing receipt”. It seems to have been employed first in 1966 by the editors of Snell’s Principles of Equity. Even then, it was only introduced by inserting under the pre-existing heading “Receipt of Trust Property by Stranger to Trust” a new subheading, “Knowing Receipt or Dealing”. However, in 1972 Brightman J adopted the expression in Karak Rubber Co Ltd v Burden (No 2). He said that the labels “knowing receipt or dealing” and “knowing assistance” employed by Snell were “an admirable shorthand description of their different natures”. Those labels have been commonly used since then. In contrast, Lord Selborne LC’s expression was “receive and become chargeable”. Persons who receive trust property become chargeable if it is established that they received it with notice of the trust.
(Footnotes omitted)
See also the summary of Lord Selborne’s speech in Barnes in Belmont Finance Corp Ltd v Williams Furniture Ltd (No 2) [1980] 1 ALL ER 393 at 405:
If a stranger to a trust (a) receives and becomes chargeable with some part of the trust fund or (b) assists the trustees of a trust with knowledge of the facts in a dishonest design on the part of the trustees to misapply some part of a trust fund, he is liable as a constructive trustee.
Purchase Money Resulting Trust
A ‘purchase money resulting trust’ may arise in circumstances where a legal estate in property held in the name of another is taken to ‘result’ to the person who advances all or part of the purchase money for the property. This occurs because the law presumes a person who purchases property in the name of another does not intend to gift the beneficial interests in that property to the other person.[49]
[49] Re Richflow Pty Ltd (In Liq) [2024] VSC 618 (citing Bosanac v Commissioner of Taxation (2022) 275 CLR 37 and DKL v LYK [2019] SASC 100) at [68].
Onus of Proof
To inform my determination, many of the submissions made by each party go to matters of factual findings, credit and onus of proof. As to the operation of the onus of proof, in Wei & Xia (No 5) (2023) 67 Fam LR 421 (‘Wei’), Harper J summarised the applicable principles as follows:
148It is trite to observe that all parties bear the onus of establishing their case on the balance of probabilities (s 140 of the Evidence Act). Bowen LJ long ago observed in Abrath v North Eastern Railway Co (1883) 11 QBD 440 at [457]:
Wherever a person asserts affirmatively as part of his case that a certain state of facts is present or is absent ... that is an averment which he is bound to prove positively.
149This statement of onus is deceptively simple. The concept of onus can be applied in various senses. Heydon J in Strong v Woolworths Ltd (2012) 246 CLR 182 (“Strong v Woolworths”) said at [44] that the appropriate material to support a discharge of onus of proof “could include direct evidence, evidence from which circumstantial inferences can be drawn, and the teachings of common experience”. His Honour then at [46]–[65] explained the operation of the concepts of the “persuasive” onus of proof and “evidential” burdens of proof and the different senses in which these expressions have been used. It is unnecessary to repeat this discussion at any length, except to distinguish three analytical categories for the Court as trier of fact. The first is whether the party with the legal or persuasive burden of proof, usually the husband, has called sufficient evidence “to raise an issue as to the existence or non-existence of a fact in controversy” (Strong v Woolworths at [52]). Failure to do so leads to a conclusion that the burden of proof is not satisfied. The second situation is where a party, usually the husband, calls evidence “sufficiently weighty to entitle, but not compel, a reasonable trier of fact to find in [that party’s] favour” (Strong v Woolworths at [53]), which then places a “provisional” or “tactical” burden on the opposing party, to call contradicting evidence or risk losing on the issue. The third situation is where the party bearing the persuasive burden adduces evidence so powerful i[t] would compel a reasonable trier of fact to find in that party’s favour if the evidence is not answered (Strong v Woolworths at [54]).
There is a large volume of evidence in chief tendered by each party which goes into great detail about the range of activities that have occupied these parties over about 20 years. I will make reference to those matters which are relevant to the determinations that I am required to make and the matters dictated by legislation that I am required to have regard to. A trial judge is not expected to deal with every piece of evidence (Whisprun Pty Ltd v Dixon (2003) 200 ALR 447); or grapple with every submission (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247).
In assessing credibility and whether each element of a cause of action has been proved, I have regard to the approach taken by McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 (‘Watson’) as follows:
Where, in civil proceedings, a party alleges that the conduct of another was misleading or deceptive, or likely to mislead or deceive (which I will compendiously described as “misleading”) [sic] within the meaning of s 52 of the Trade Practices Act 1974 (Cth) (or s 42 of the Fair Trading Act), it is ordinarily necessary for that party to prove to the reasonable satisfaction of the court: (1) what the alleged conduct was; and (2) circumstances which rendered the conduct misleading. Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court “must feel an actual persuasion of its occurrence or existence”. Such satisfaction is “not … attained or established independently of the nature and consequence of the fact or facts to be proved” including the “seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding”: Helton v Allen (1940) 63 CLR 691 at 712.
Considerations of the above kinds can pose serious difficulties of proof for a party relying upon spoken words as the foundation of a causes of action based on s 52 of the Trade Practices Act 1974 (Cth)… in the absence of some reliable contemporaneous record or other satisfactory corroboration.” (non-italic bold emphasis added)
(Emphasis added)
Whilst that case concerned proof of a cause of action under the Trade Practices Act 1974 (Cth), it is equally apt when considering claims of breach of trust: see Kaplan & Hankel [2025] FedCFamC1F 41 at [61] –[62] and [112] –[113].
PROPERTY POOL
By way of a document filed 10 May 2024, the wife lists the assets and liabilities as between her and the husband as:
Description
Ownership
Value
Assets
1
NAB Account No. …54
Husband
$2,000
2
Motor Vehicle 1
Husband
$2,000
3
Household contents
Husband
$5,000
4
CBA Account ending …63
Wife
$1,650
5
CBA Account ending …65
Wife
$95
6
CBA Account ending …55
Wife
$0.13
TOTAL $10,745.13
LIABILITIES
7
Personal loan from daughter
Wife
$76,638
8
Litigation funding loan
Wife
$110,000
TOTAL $186,638
SUPERANNUATION
NIL
TOTAL ASSETS MINUS LIABILTITES -$175,892.87
The husband, by way of a document filed on 30 April 2024, submits that the asset pool as between him and the wife is as follows:
Description
Ownership
Value
Assets
1
NAB Account No. …54
Husband
$2,000
2
Motor Vehicle 1
Husband
$2,000
3
Household contents
Husband
$5,000
TOTAL $9,000
LIABILITIES
4
Personal loan from Mr VV
Husband
$38,000
5
Personal loan from Ms WW
Husband
$125,000
TOTAL $163,000
SUPERANNUATION
NIL
OTHER
Description
Ownership
Value
6
Net proceeds of sale of F Street, Melbourne, VIC 300
Unknown (sold by daughter for $815,000)
7
E Street, Suburb AJ, VIC
$980,000
8
C Street, Town D, VIC
$8,000,000
TOTAL (EXLCUDING ITEM 6) $8,98[9],000
TOTAL ASSETS MINUS LIABILTIES $8,826,000
As outlined above, before any adjustment of the parties’ property interests, I must identify and determine the value of the asset pool between them as at the date of the hearing. This is significant as dependent on my findings it may drastically reduce any claim pursuant to s 79 of the Act.
ISSUES FOR DETERMINATION
Given the evidence and submission of the parties, the issues for determination are:
(a)whether the husband is entitled to equitable relief under the first limb of Barnes v Addy (knowing receipt) and declarations of beneficial ownership;
(b)whether, in the alternative to (a), the husband is entitled to the benefit of a purchase money resulting trust.
Whilst I am not required to make an explicit finding on each disputed piece of evidence (Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378), the following are significant disputed factors which go to the issues for determination:
(a)whether the husband established R Ltd and that he was a wealthy businessman as alleged by him;
(b)whether the husband prepared the respondents’ visa applications in 2006 as alleged by the respondents or if the wife engaged a migration agent to assist with the application as alleged by the husband;
(c)whether the husband’s business activities in Country H were the source of funds used to purchase properties in Australia in the name of the daughter and the third respondent; and
(d)whether the daughter and an associated corporation purchased the properties in Australia as alleged by the respondents or if the wife, using the husband’s funds, purchased and registered the properties in the daughter’s name unknown to him as alleged by the husband.
CREDIBILITY AND FINDINGS OF FACT
The Migration Application Dispute
I turn to this issue first as it is a matter that arose in cross-examination. It goes to the credit of the husband and the wife and was raised as a matter of importance for the husband as he stated it was a prime example of the wife’s dishonesty.
As noted above, the wife gives evidence that in 2006, the husband started preparing a spousal visa application for herself and the daughter (as a dependent) to move to Melbourne. She says that the husband was the sponsor of the application and prepared all the documents.[50] The husband says that he did not prepare the application, but rather the wife engaged a migration agent to assist with the application.[51]
[50] Wife’s affidavit at [88].
[51] Husband’s affidavit at [12].
The husband gives evidence that in 2009, when the wife engaged a migration agent to prepare an application for permanent residency for her and the daughter, the agent obtained through a Freedom of Information Act request all documents relating to the application prepared in 2006 for the spousal visa application.[52] He says that these documents remained in the households where the parties lived when in Australia[53] and that he typed into his laptop an exact copy of the documents to remind himself of some of the inconsistencies evidenced by these documents as he did not have a scanner or photocopying machine.[54]
[52] Husband’s affidavit at [23].
[53] Husband’s affidavit at [24].
[54] Husband’s affidavit at [25].
He says included in these inconsistencies is that the application for a provisional partner visa in 2007 did not state that Mr G had passed. He says this is due to them being unable to provide a death certificate bearing Mr G’s name.[55] Consequently, he alleges that as the immigration department believed that Mr G was alive, they required him to confirm in writing or by telephone that he consented to the daughter migrating to Australia.[56] The husband believes, having viewed the documents containing the contact details, that either the wife or daughter forged documents to the immigration department and arranged for another person to pose as Mr G.[57] He raises these matters to attack the credibility of the wife and daughter and a propensity on their part to create false documents. The wife says that she has no knowledge of this and that if it is true, it was organised by the husband as he prepared the application.[58]
[55] Husband’s affidavit at [26].
[56] Husband’s affidavit at [27].
[57] Husband’s affidavit at [28].
[58] Wife’s affidavit at [90].
The husband, however, gave entirely inconsistent evidence regarding his copying of the wife’s migration documents. The husband produced a document dated 29 December 2006 which purports to be an exact copy he made of a document from Mr G which gives his consent to the daughter relocating to Australia.[59] He makes reference to this document at [10] of his affidavit filed 3 November 2022 where he annexes it to the affidavit and states:
bStatement dated 29 December 2006 allegedly made by R1’s late husband, the late [Mr G]. I typed and saved this document in my laptop because the late [Mr G]’s signature must have been forged since he had already passed [in] 2005.
(footnotes omitted)
[59] Exhibit A3.
During cross examination the husband confirmed that the document annexed to the affidavit of 3 November 2022 was the same document that he typed word for word in 2010, although he conceded that there might have some slight mistakes in his typing.[60] The document purports to be the same statement also annexed to his trial affidavit as ‘Exhibit MF-5’, however, the font style and the size of the font differed and a typographical error in the annexure to the 3 November 2022 affidavit had been corrected. This error being a reference to “nember” instead of “number”. The husband gave evidence that notwithstanding in his trial affidavit that he stated that ‘MF-5’ was an “exact copy”[61] he conceded that when he provided a copy to his solicitors to remind them of the document, he founds errors and made corrections.[62] He clarified that the copy annexed to his affidavit of 3 November 2022 was the correct copy and his computer software automatically detected that there was a spelling mistake and made the correction when he was transferring the document from his hard drive to his computer.[63] When it was raised with the husband that it was his evidence that the document was stored on his laptop, he said that the document was actually typed into a desktop PC and when he stopped using that computer he copied the documents onto a hard drive.[64] This is contradictory to his evidence in both his trial affidavit at [25] and his 3 November 2022 affidavit at [10] that he typed the document onto his laptop. He stated that this contradictory evidence was as a result of a memory error.[65]
[60] Transcript 16 May 2024, p 309 line 1; 310 lines 11-15.
[61] Husband’s affidavit at [25].
[62] Transcript 16 May 2024, p 312 lines 19-20.
[63] Transcript 16 May 2024, p 315 lines 1-14.
[64] Transcript 16 May 2024, p 317 lines 8-27.
[65] Transcript 16 May 2024, p 317 line 30.
I do not accept the husband’s evidence regarding the preparation of the wife’s migration documents. I think it more likely than not that he is the person that created the documents used in the application and that he was the architect of the scheme he now accuses the wife of creating. He had relevant experience in making migration applications and his evidence about the providence and production of documents was inconsistent and unconvincing.
The husband’s credit was fraught throughout the hearing and subject to reasonable and effective attack. When his evidence was undermined by cross-examination he readily sought to create a fresh factual scenario. He was an unconvincing witness.
I find the evidence of each of the wife and the daughter to be credible and they gave their evidence in a truthful and convincing manner. Contrary to the assertions made in the amended Statement of Claim regarding their lack of understanding of financial matters, they each were thoughtful and confident in their responses, did not embellish their evidence and had a good recall of the events in dispute. The daughter gave the impression of a bright person who was concerned with lifestyle and managing her wealth. She gave convincing accounts of her involvement in purchasing and maintaining the assets in Australia. She understood the financial benefits of purchasing property in the name of the third respondent. She did not give the impression of being a puppet or stooge of the mother and most certainly did not give the impression being ignorant of financial matters. Her evidence was that the purchase of the property at C Street, Town D, VIC (“Town D property”) was made by her due to its potential to substantially increase in value (which it has).
Each of the witnesses called on behalf of the wife and daughter gave measured and credible evidence. Where there were gaps in evidence as a result of documents not being located or being lost through the passing of time, there was no attempt made by them to backfill the evidence or create alternative scenarios.
The husband on the other hand did not give the impression of possessing any particular knowledge relating to real estate development or investment in Australia. The husband’s trial affidavit simply referred to the wife purchasing and renting out several of the properties. This is most unusual in circumstances where he alleges that the money that was used to purchase the properties was his money and not the wife or daughter’s. No explanation was given by him as to why he had not accessed the funds and purchased properties in his name either to live in or as an investment. Rather than display the entrepreneurial elan that he says that he possessed in Country H, he instead spent his time at the Town D property raising animals and growing produce for sale.[66]
What was the Source of the Funds Transferred to Australia?
[66] Affidavit of Mr Fing filed 29 April 2022 at [60(h)].
Husband’s Case
The husband pleads that between 2004 until 2011 he accumulated substantial wealth through his business activities in Country H and he held funds in 6 bank accounts in Country H which were managed by him, being:[67]
[67] Amended Statement of Claim filed on 9 November 2023 ‘Amended Statement of Claim’ at [7].
Bank Name
Account No. / Card No.
PP Bank
…36
PP Bank
…70
XX Bank
…31
XX Bank
…59
YY Bank
…99
YY Bank
…97
The husband lists various ways he earnt money throughout his relationship with the wife as a reason of explaining his capacity to earn the funds that he says were transferred to Australia, these being:
(a)from early 2002 to early 2003, the husband says that he worked as a consultant at ZZ Company. He also says that during this time he operated his own business assisting students.[68]
(b)in about April 2003, he says he met Mr W and Mr X in City P, Region Q in Country H.[69] He deposes to Mr X being an investor who had just purchased an unfinished building in AB Street in City P with Mr W having a team of renovators who could complete the unfinished building but lacked money to purchase the materials required.[70] He states that he made an agreement with Mr W that he would purchase all the materials in return for a half share of the profits from the renovations. When it was raised with the husband during cross-examination that he did not have enough funds at the time to purchase the material, he gave evidence that he only required 500,000 foreign country currency.[71] He alleges that the renovations were completed in late 2003[72] and he continued working with Mr W on other renovation projects until 2008.[73] He states that during this time he met Mr Y who also had a team of renovators and in mid-2008 he operated a property management business, R Ltd (detailed below). During this time he was approached by clients who wanted to renovate their units and he agreed to manage each client’s renovation on the basis that the client paid a 20 percent deposit. He says that Mr Y was engaged to provide labour for the renovation works and the husband provided the renovation materials. He states that after receiving the balance owed from the client, Mr Y would be paid for the labour he provided.[74]The husband deposes to much of this work being paid in cash and that when he was too busy to collect the cash payments Mr S would do so on his behalf and then deposit the cash into his bank account before paying the moneys to the husband’s personal bank accounts.[75]
(c)the husband says that in about mid-2004, he established R1 Ltd before having the company renamed to R Ltd.[76] He deposes to this being the same company as R2 Ltd as they have the same Country H name.[77] The husband states that he believed at the time that the law in Country H prohibited a citizen of another country from registering or holding shares in a property management company in Country H and at his request, Mr S, Ms T and Mr AM agreed to hold shares in the company on his behalf.[78] He says that in about late 2004, he found out that he held a valid Country H Identity Card and he could use it to register and hold shares in the company, and in about late 2004, 30 percent of shares in R Ltd held by Mr S were transferred to him and he appointed himself as its director.[79] The husband gives evidence that from 2004-2008, R Ltd managed three apartment buildings, including the building the wife and daughter say Mr G had purchased some of the apartments.[80] He says that during this period he employed several staff members and R Ltd carried out maintenance and security work at the three apartment buildings, making annual net profit of around 200,000 foreign country currency (around $43,461).[81]
(d)the husband gives evidence that between June 2004 and August 2008, and whilst he was managing the three apartment buildings via R Ltd, he was approached by owners who wanted to lease their units out to tenants.[82] He says that he arranged and paid for leasing advertisements, prepared lease agreements and was responsible for the maintenance of leased units and received a 10 percent commission on rent from the landlords he assisted. He states that during this time he employed Mr Z to assist him in dealing with the landlords and tenants and that Mr Z would collect the rent in cash whereby it would be provided to the husband, sometimes with the assistance of Mr S, and he would deduct his commission and provide the balance to the landlords.[83]
(e)The husband states that during the period he managed the three buildings under R Ltd, prices in the area rose significantly and he received enquiries from owners who wanted to sell their units.[84] He says that he employed Mr AA to assist him, and he arranged and paid for sale advertisements, prepared sale contracts and collected money from purchasers.[85] He gives evidence that it is his belief that during this time in Country H, banks would not lend money for the purchase of established or old apartments and therefore upon, or shortly after, the execution of the contract of sale, the purchaser would pay the entire purchase price into his personal bank accounts and he would charge a commission of three percent to each the purchaser and the vendor.[86] Again, he deposes to Mr S collecting payments from purchasers when he was unable to and that within a few days Mr S would then transfer them into the husband’s bank accounts.[87]
(f)The husband states that in about October 2004, he met Mr BB who was an investor in City P.[88] He says that in late December 2004, he agreed to contribute money for a joint investment to purchase a block of land in City P which later resold for a significant profit in about late 2005.[89] He gives evidence of a further two investments with Mr BB comprising of land in Town AC and City AD, both of which he says were sold for a significant profit.[90]
[68] Husband’s affidavit at [35].
[69] Husband’s affidavit at [36].
[70] Husband’s affidavit at [36]-[38].
[71] Transcript 15 May 2024, p 207 lines 1-3.
[72] Husband’s affidavit at [40].
[73] Husband’s affidavit at [41]-[42].
[74] Husband’s affidavit at [44].
[75] Husband’s affidavit at [45].
[76] Husband’s affidavit at [48].
[77] Husband’s affidavit at [49].
[78] Husband’s affidavit at [51].
[79] Husband’s affidavit at [52].
[80] Husband’s affidavit at [59].
[81] Husband’s affidavit at [60]-[63].
[82] Husband’s affidavit at [64].
[83] Husband’s affidavit at [65]-[67].
[84] Husband’s affidavit at [71].
[85] Husband’s affidavit at [72]-[73].
[86] Husband’s affidavit at [74] and [76].
[87] Husband’s affidavit at [75].
[88] Husband’s affidavit at [79].
[89] Husband’s affidavit at [81].
[90] Husband’s affidavit at [82]-[85].
The husband largely rejects any assertion by the wife and daughter that Mr G had amassed great wealth and had purchased the apartments which were later alleged to be inherited by the daughter. He says that during his time managing one of the apartment buildings where the apartments were said to be purchased.
The husband states that the witnesses called by the respondents were close family and they did not call the “friends” used as nominees to purchase the apartments.[91] In particular he was critical of Mr S’s evidence.
[91] Husband’s reply submissions at [78].
Generally, the husband states that the evidence of the wife, daughter, and Mr S, suffers from serious credibility issues and the Court ought to, as far as possible, base its conclusion on documents, objectively established facts and apparent logic of events.[92]
[92] Husband’s submissions at [1].
The husband states that the respondents did not produce any documents to support their evidence that Mr G paid a 30 percent deposit for the purchase of the apartments, that tradesmen were engaged to complete the incomplete works at the apartments or that the net proceeds of the sale of the apartments were transferred to the husband’s bank accounts.[93]
[93] Husband’s submissions at [34].
In relation to the assertions of the respondents that the husband did not operate any businesses in Country H and did not have a substantial income, he says that the respondents have been unable to prove how he received about 74,600,000 foreign country currency between 2006 and 2009 and that if he were to have received the net proceeds of sale of the apartments (which he denies) it would still not be close to 74,600,000 foreign country currency.[94]
[94] Husband’s submissions at [56].
He also submits that prior to the sale of the first of the apartments in late 2006, he received 1,029,536 foreign country currency, 1,400,000 foreign country currency, 698,489.70 foreign country currency and 693,900 foreign country currency where he says it cannot be disputed that these funds were derived from his businesses as they could not be from any sale of the apartments.[95]
[95] Husband’s submissions at [61].
Similarly, he contends that based on the evidence provided by the daughter, in May 2007 only eight of the apartments had been sold for net proceeds of 417,185 foreign country currency yet he says that before that date 8,320,529 foreign country currency was credited into his account.[96]
[96] Husband’s submissions at [62] and [63].
He also points to the net proceeds of four apartments which were sold from early 2009 onwards for a total of,302,065 foreign country currency, stating that this sum could not form part of the 22,755,00 foreign country currency he provided to the maternal aunt in 2008.[97]
[97] Husband’s submissions at [65].
He also raises the dispute regarding the ownership of R Ltd/, where he rejects the respondents’ contention that the company was established by Mr G who paid the 1,500,000 foreign country currency establishment fee. He again says that the respondents have not produced credible evidence to support their claim and the evidence that they have adduced in relation to R Ltd is inconsistent. For example, the husband states that if the assertions of the respondents are to be believed, being that R Ltd was established to only managed the apartments on behalf of Mr G, then the evidence that R Ltd derived income from managements fees either means fees were collected from the alleged nominees even though they derived no benefit from the arrangement or there were no fees collected but the income was declared and tax was paid on the non-existent income.[98]
[98] Husband’s submissions at [189].
The balance of the husband’s submissions goes to what the husband submits are inconsistences regarding the purchase of the apartments and a lack of evidence to support their claims. This includes the husband again rejecting the notion that Mr G had amassed great wealth and had the funds to purchase the apartments. The husband is critical of what he submits is a lack of documentation by the respondents where he says that, if their claims are correct, would have been easy to obtain.
The husband submits in his written submissions in reply that he has demonstrated the implausibility of the claims made by the second and third respondents and that they did not produce bank documents to show that proceeds of sale of the apartments of at least 23,335,000 foreign country currency was transferred into his bank accounts in Country H.[99] He restates matters submitted in his written submissions before concluding that there is an evidentiary gap in the respondents’ case and the Court should find that he has discharged his onus of proof that he has an absolute proprietary claim over the 23,335,000 foreign country currency and the second and third respondents have failed to discharge their onus of proof in relation to their assertions relating to the 23,335,000 foreign country currency .[100]
[99] Husband’s reply submissions at [99]-[103].
[100] Husband’s reply submissions at [122]-[125].
Criticism of Mr S Evidence
In his written submissions at [90], the husband asserts that although Mr S alleged that he was told by Mr G that there was a policy in Country H which restricted the number of real estate each individual could own, it was not explained by Mr S why Mr G could not purchase some of the apartments.
The husband says that if the assertions of Mr S were true, there is no reason as to why he could not retrieve the other 36 purchase and 43 sales contracts which are absent from their evidence.[101] In these circumstances, he submits that it is reasonable for the Court to infer that the other contracts would not assist the respondent’s claims that the 23,335,000 foreign country currency was derived from the sales of the apartments.[102]
[101] Husband’s submissions at [92].
[102] Husband’s submissions at [93].
The husband submits that when cross-examined regarding the sale of the apartments and the sale contracts, Mr S was evasive and perjured himself.[103] In this regard, the husband says that when Mr S was cross-examined he gave evidence that when the apartments were sold, the owners were not required to go to City P as he was authorised to deal with the apartments and that the apartments were sold without the involvement of the owners.[104] However, upon being informed that 31 of the owners who sold their apartments signed and thumb printed the respective sale contracts, Mr S changed his evidence to the purchasers not being required to sign the contract personally, notwithstanding that 73 of the purchase contracts and 66 of the sale contracts were signed and thumb by the purchasers.[105]
[103] Husband’s submissions at [99].
[104] Husband’s submissions at [100].
[105] Husband’s submissions at [103].
The husband states that Mr S’s evidence was that he signed as attorney for 54 vendors, although when showed where a vendor signed and thumb he agreed that it was not his signature.[106] The husband submits that Mr S attempted to explain these discrepancies by saying that his agent dealt with filling out the forms despite it being clear certain contracts were signed and thumb by the owner/vendor.[107] The husband says that when Mr S was questioned why he did not sign as attorney, he said it was because it was unnecessary, yet when he was shown an example where he signed a sale contract as attorney, he agreed that it was possible that he had signed 17 sale contracts as attorney for the vendors.[108]
[106] Husband’s submissions at [104].
[107] Husband’s submissions at [108].
[108] Husband’s submissions at [109]-[110].
The husband submits that it was only Mr S who gave evidence that Mr G told him that he would pay for the deposit of the apartments and although such assertions fall under an exception to hearsay, they should be afforded little to no weight because.[109]
(a)Mr G could not be cross-examined;
(b)it is difficult for the Court to assess evidence concerning things said by a person who is dead;
(c)the Court can never be certain it knows all the circumstances; and
(d)no bank documents were produced to prove that Mr G paid the deposits for any of the apartments.
[109] Husband’s submissions at [117(B)(iv-v)].
The Court does not accept the husband’s accounts of his business acumen or his evidence generally about his efforts being the source of funds used to purchased assets in Australia. His evidence at trial that R Ltd was only the source of 4 percent of his earnings in Country H is at odds with his first affidavit and is a scenario raised in response to the credible evidence of Mr S, filed subsequent to the husband’s trail affidavit, that R Ltd did not generate profits sufficient to fund the purchase of the properties in Australia. There is no explanation before the Court to explain the failure of the husband to provide any documents to support the claims that he makes regarding the business that he conducted (other than bank statements which are replete with errors) and which do not establish the source of the funds. The failure to produce any documentary evidence of the business enterprises that he says that he conducted has to been seen in the context of him alleging that he was operating an enterprise earning a significant income and hiring several people.
Money in the Bank Belongs to the Husband?
When confronted with the patently unsatisfactory evidence regarding the husband's earnings during the period he claims to have earned the funds that were subsequently transferred to Australia to purchase the properties, the husband relied on the proposition that because the funds were transferred from a bank account in his name that this establishes that they were his funds.
The husband contends that he has a prima facie proprietary right over all the money or credit balances which were in his bank accounts and that the daughter has an onus to rebut this presumption that the money in his bank accounts did not belong to him, which he says she has been unable to do.[170]
[170] Husband’s submissions at [54].
The husband submits that he does not call for a reverse onus of proof, but that the onus of proof may shift and where it is not disputed that 23,335,000 foreign country currency was transferred from his bank account, that he had a proprietary interest in this amount unless the daughter could discharge the onus of proving that the moneys were from the sale of the apartments she lawfully inherited from Mr G, which he contends she has not.[171]
[171] Husband’s reply submissions at [26]-[28].
The husband submits that to establish the chose in action over the credit balances in his bank accounts in Country H he is only required to prove that he was the bank’s customer at the relevant time, not how he earnt the funds and that this has never been disputed.[172] The husband states that in circumstances where the daughter says that credit balances in his bank accounts in Country H belonged to her, she has the onus to prove that she caused for some or all of the proceeds of the sale of the apartments in his bank accounts in Country H.[173]
[172] Husband’s reply submissions at [40].
[173] Husband’s reply submissions at [42].
He submits that he is not required to prove how much each of his businesses earned in 2004-2008 and that it is sufficient to prove that about 74,600,000 foreign country currency was received into his bank accounts and then from which bank accounts the 23,335,000 foreign country currency was transferred to the maternal aunt.
It is said in robust terms that the respondent's position that the money in the husband's bank accounts were not his unless he could prove he earned it defies logic, common sense and is contrary to the authorities in this country and in England. The following passages are referred to in support of that submission:[174]
[174] Husband’s reply submissions at [19]-[22].
19 In Russell v Scott (1936) 55 CLR 440, at 450-451; Dixon and Evatt JJ said:
“The contract between the bank and the customers constituted them joint creditors. They had, of course, no right of property in any of the moneys deposited with the bank. The relation between the bank and its customers is that of debtor and creditor. The aunt and the nephew upon opening the joint account became jointly entitled at common law to a chose in action. The chose in action consisted in the contractual right against the bank, i.e., in a debt, but a debt fluctuating in amount as moneys might be deposited and withdrawn.”
20In Croton v R (1967) 117 CLR 326, Barwick CJ, with whose judgment McTiernan J agreed, said at page 331:
“But, though in a popular sense it may be said that a depositor with a bank has ‘money in the bank’, in law he has but a chose in action, a right to recover from the bank the balance standing to his credit in the account with the bank at the date of his demand or the commencement of action. That recovery will be effected by an action for debt.”
21In Citigroup Pty Ltd v National Australia Bank Ltd (2012) 82 NSWLR 391; [2012] NSWCA 381 Barrett JA said:
“41 The accepted analysis of the banker-customer relationship where the account is in credit casts the bank in the role of the customer’s debtor. Money notionally ‘in’ the customer’s account is in truth money owned by the bank which is owed by it to the customer and payable on demand made by the customer by way of ‘withdrawal’: see, for example, Carr v Carr [1811] Eng R 606; (1811) 1 Mer 541n; 35 ER 799; Devaynes v Noble (1816) 1 Mer 529; 35 ER 767; Foley v Hill [1848] Eng R 837; (1848) 2 HL Cas 28; 9 ER 10002.”
Although three other members of the Court (Bathurst CJ, Allsop P, and Meagher JA) joined in a separate but concerning judgment, and Macfarlan JA took a different view with respect to one question in the proceedings, none took issue with what Barrett JA had said at [41].
22In Paget’s Law of Banking, 14th Edition (2014) at page 770, paragraph 28.35, after referring to a passage by Lord Millett in Foskett v McKeown [2001] 1 AC 102, at 127 regarding the distinction between “following” and “tracing” an asset, the learned authors said:
“Hence, in order to follow its property, the claimant must establish that it has (legal or equitable) title to the property in question. Similarly, in order to establish a tracing claim, the claimant must establish that it had (legal or equitable) title to the (original) property in the substituting person’s hands immediately prior to the substitution.
In terms of banking payments, it is for the most part artificial and inaccurate to think of ‘following’ the money as a tangible asset. A bank account does not physically hold money; rather it is merely a statement of the extent of indebtedness as between the bank and its customer. Hence, Lord Miller in Foskett v McKeown [2001] 1 AC 201 at 128 explained that where money passes from one bank account to another, what the claimant traces is not a physical asset, but the value represented by the balance on the account.”
Those authorities may support the proposition that, in Australia, the relationship between a bank and a customer is that of debtor-creditor. However, they are not authority for the proposition that because funds were deposited into an account in the husband's name that this establishes that he or she had an un-rebuttable proprietary interest in those funds. As between the bank and the customer, the customer has a chose in action for the return of the funds deposited upon demand, but the customer does not necessarily establish that, as against third parties, that he or she is the owner of the funds.
The husband has not established by credible evidence that he is the owner of the funds which were deposited in bank accounts in Country H in his name and subsequently transferred to Australia.
The respondents by their evidence have rebutted the claim by the husband that because he had funds in that account, he was the owner of those funds. Whilst the evidence called by the wife and daughter is imperfect as there are records of transactions that are missing, those matters have been explained, in particular by:
(a)the length of time since the transactions occurred, being about 20 years;
(b)where it relates to real estate purchased in Country H about 20 years ago by a person who is now deceased;
(c)the difficulty of obtaining all the physical paperwork relating to all parts of the transactions including in circumstances where the documents would have been in possession of Mr G or departments in Country H where Australian Courts have no power of subpoena;
(d)where there have been witnesses who have given clear evidence in support of the respondents and corroborated by available documentary records when available;
(e)where the respondents have produced thousands of pages of documentary records where available and which are consistent with their evidence;
(f)the convoluted nature of the transactions which were constructed so as to obscure the identity of the true owner of the properties which were sold, being that the apartments were purchased in the name of various individuals to circumvent restrictions on the number of apartments that could be purchased with a single bank loan; and
(g)witnesses called by the daughter and the third respondent giving credible evidence both in their written and oral evidence.
I accept the evidence of the daughter and third respondent’s witnesses that Mr G was a successful businessman in Country H, that he supplied the funds to make arrangements to be the beneficial owner of apartments in Country H and that he intended the daughter to inherit his wealth on his passing and made arrangements as alleged by the respondents for this to occur.
There were submissions made by the respondents regarding the authenticity/accuracy of bank statements produced by the husband. I am not required to settle this controversy given the finding I have made is that the funds in the bank have not been proved by the husband to be owned by him, whatever their amounts may be. To adopt the expression in Watson, the Court does not feel an actual persuasion of the matters claimed by the husband as to the source of the funds.
The Husband’s Knowledge of Assets Purchased in Australia
I also reject a central plank of the husband’s case that he was unaware that the properties in Australia were purchased in the daughter’s name or in the name of the third respondent.
The Daughter’s Case
The daughter gives evidence that the wife has always had access to her bank accounts, particularly when the parties first arrived in Melbourne. She provides at [139] of her affidavit a history of the funds contained in her bank accounts in Australia from 2009-2010.
The daughter states that in about 2010/11, she purchased without finance Motor Vehicle 2 for $100,000 and this was registered in her name.[175] In about mid-2018, the daughter purchased Motor Vehicle 3 for $118,000 and says she financed the purchase.[176]
[175] Daughter’s affidavit at [146].
[176] Daughter’s affidavit at [154].
In relation to real estate which was purchased in Australia, the daughter gives evidence that:
(a)in mid-2009, she purchased F Street, Melbourne 3000 (“F Street property”).[177] She states that in around early 2010, this property was leased and she received rental income.[178]
(b)in late 2009, E Street, Suburb (“E Street property”) was purchased in her name for $800,000 including stamp duty of about $43,070. The E Street property was rented between early 2014 and early 2015
(c)in late 2009, she purchased N Street, Suburb AJ VIC(“N Street property”) for $400,000 including stamp duty of about $19,070 in her name.[179]
(d)in late 2010, she received accounting advice and established the K Family Trust (“the trust”), with the third respondent being the corporate trustee. She says that she is the appointor of the trust and that the third respondent is a general beneficiary with the husband and the wife.[180]The daughter states that in around early 2014, the Town D was purchased through the trust for $2,100,000. She states that she paid a deposit of $315,000 and claims that her reasoning for purchasing the property was due to her father having always invested in real estate, she wanted to become a property developer and she heard from friends the amount of money they had made by buying land in the outer suburbs of Melbourne.[181]
[177] Daughter’s affidavit at [140].
[178] Daughter’s affidavit at [141].
[179] Daughter’s affidavit at [144]-[145].
[180] Daughter’s affidavit at [147].
[181] Daughter’s affidavit at [149].
She submits that she never intended to purchase the Town D for the purposes of her, the husband or the wife living there and that the purchase was simply a lucky investment decision.[182] She says she was then approached by the wife regarding the prospect of the husband and the wife living at the Town D property and she eventually agreed.[183]
[182] Daughter’s affidavit at [150].
[183] Daughter’s affidavit at [151].
The daughter gives evidence that on about mid-2014, she established the AP Trust which she used to conduct a business from 2014 until 2019.[184] In 2017, she enrolled into the AN Institute to study and she wanted to develop residential houses on the Town D property.[185]
[184] Daughter’s affidavit at [152].
[185] Daughter’s affidavit at [153].
The daughter states that in about mid-2019, she placed the N Street property on the market for sale and a short time later the property was sold to the husband’s niece for $400,000.[186] The proceeds of the sale were paid into the daughter’s bank account but the husband says that property was transferred into his name and he holds it on trust for his niece.[187]
[186] Daughter’s affidavit at [156].
[187] Daughter’s affidavit at [156].
The daughter says that in about 2021, she placed the F Street property on the market for sale and the sale was settled in early 2022, with the proceeds being received into her bank account.[188]
[188] Daughter’s affidavit at [157].
Husband’s Case
Conversely, the husband says that the wife purchased the F Street property for $660,000 using his funds which were transferred pursuant to the trust agreement with the maternal aunt and that the daughter made no contribution to the acquisition of the property.[189]
[189] Husband’s affidavit at [118].
Again, he says that in about late 2009, the wife purchased, using his funds from the trust agreement, the E Street and N Street properties for $800,000 and $400,000 respectively and that the daughter made no contribution to the acquisition of the property.[190]
[190] Husband’s affidavit at [121] and [123].
He pleads that in about early 2014, the husband and wife agreed to purchase the Town D property and that he sold further assets in Country H to raise funds for the purchase. He pleads that the property was otherwise purchased with the trust funds and, in breach of the trust, the wife caused the third respondent to be the registered proprietor of the Town D property.[191]The property was purchased for a total of $2,215,500 and he says that neither the second or third respondents made any contributions to the acquisition of the property.[192] He says that it was a joint decision between him and the wife to purchase the property and that he was not informed that it would be purchased in the name of the third respondent.[193]
[191] Amended Statement of Claim at [59].
[192] Husband’s affidavit at [127].
[193] Husband’s affidavit at [156] and [157].
He states that the daughter then disbursed moneys from her account and by late 2020 there was an amount of $160,000 which represented the traceable proceeds from the sale of the N Street property.[194] In late 2020, the wife transferred $130,000 from the account in the name of the daughter to herself with the balance of $30,000 being transferred to the husband.[195]
[194] Amended Statement of Claim at [52].
[195] Amended Statement of Claim at [53].
Findings
The husband’s evidence regarding the steps taken to purchase property was inconsistent. Notwithstanding his assertions that the money transferred from Country H was his money, he has stood by and knowingly allowed properties to be purchased in the name of the second and third respondents, although he says that initially he was unaware of this occurring. At one point during cross examination, he claimed that, in his view, the properties were not his properties but were for the family and that as they had formed a family “all these things belong to the family.”[196] This is contrary to the claims he has made throughout his evidence that the money belonged solely to him and therefore so did the properties. At the commencement of the trial, the husband’s position was that the Court should simply make a declaration that he owned the properties and did not seek any adjustment pursuant to s 79 of the Act between him and the wife.
[196] Transcript 17 May 2024, p 351 lines 11-14.
The husband gave evidence during cross examination that when purchasing the Town D property, he went with the wife to see an accountant.[197] This is despite the husband saying at [160] of his trial affidavit that after he argued with the wife regarding placing the Town D property in both their names, the wife visited an accountant on her own. He claimed that the reason for this omission was that it is standard to visit an accountant when purchasing a property so he did not believe it was a relevant detail to include.[198]
[197] Transcript 17 May 2024, p 351 lines 17-26.
[198] Transcript 17 May 2024, p 353 lines 6-7.
The husband asserts that he became aware in about early 2010 that the wife had purchased the F Street, E Street and N Street properties in the name of the daughter and he became frustrated and angry but did not pursue the matter further as he wanted to preserve the marriage.[199] Nonetheless, his evidence shows that he allowed the maternal aunt to transfer money from Country H to the wife after being aware that the properties were purchased in the daughter’s name. This is inconsistent with his claim that the funds were his.
[199] Husband’s affidavit at [155].
The husband was cross examined regarding the daughter’s purchase of Motor Vehicle 2 in about 2010/11 for $100,000 in her name and without finance in circumstances where, by his evidence, the daughter was a 20-year-old student who had no independent funds and was reliant on the wife.[200] The husband claimed that she did some part-time jobs and used his money to purchase the car,[201] although it was not clear as to why he allowed the purchase of the car with his money. I find it difficult to accept his evidence in his reply affidavit at [58] that he purchased the car to support the daughter as he thought he would help her impress people in her personal and professional life. He was highly critical in his evidence of what he saw as the daughter’s extravagant and profligate lifestyle (constituted in part by the purchase of luxury cars and spending). I do not accept that he purchased a luxury car for her to impress her friends or at all.
[200] Husband’s affidavit at [158].
[201] Transcript 17 May 2024, p 377 lines 1-21.
I find that his conduct in standing by and watching the daughter purchase properties and expensive motor vehicles (apparently with his money) is inconsistent with the notion that the trust agreement in the terms pleaded had been made. The court is entitled to take into account post-contractual conduct to ascertain whether a contract was made: see Dovgan & Dovgan [2021] FamCA 306 at [250] (per Harper J) which refers to relevant authorities:
250… Any subsequent statements or conduct inconsistent with the existence of a concluded contract are directly relevant to proving contractual intention and the formation of a contract: Howard Smith and Co Ltd v Varawa (1907) 5 CLR 68; (1907) 14 ALR 169; [1907] HCA 38; Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251 at 9255-6; Sagacious Procurement at [105] per Giles JA.
That conduct in standing by whilst the properties were purchased in the daughter’s name is inconsistent with the submission that it was intended that the properties remain his pursuant to a resulting trust (even if he could establish that they were purchased with his money, which he has not done.).
Indefeasibility of Title
The second and third respondents raised that even if the husband could establish that he owned the funds that were transferred to Australia, in Victoria, s 42 of the Transfer of Land Act 1958 (Vic) (“TLA”) establishes indefeasibility of title and sets out the statutory exceptions. The exceptions for indefeasibility of title in Victoria are as follows:
(a)a fraud of the registered proprietor (s 42(1));
(b)the estate or interest of a proprietor claiming the same land under a prior folio of the register (s 42(1)(a));
(c)where any portion of land has, by wrong description of the parcel or its boundaries, been included in the folio — this is where there are concurrent folios have issued for the same part of a parcel of land (usually through an earlier registered survey which contained an error) — this exception does not apply where the proprietor of the land was a purchaser for value or derived title from such a purchaser (s 42(1)(b));
(d)the reservations, exceptions, conditions and powers contained in the Crown grant of the land (s 42(2)(a));
(e)any rights subsisting under any adverse possession of the land (s 42(2)(b));
(f)any public rights of way (s 42(2)(c));
(g)any easements subsisting over or upon or affecting the land (s 42(2)(d));
(h)the interest (but excluding any option to purchase) of a tenant in possession of the land (s 42(2)(e));
(i)any unpaid land tax (s 42(2)(f)); and
(j)any unpaid rates and other charges which can be discovered from a certificate issued under s 121 of the Local Government Act 2020 (Vic) or s 158 of the Water Act 1989 (Vic), or any other enactment specified for the purposes of the legislation to apply by proclamation of the governor in council published in the Government Gazette (s 42(2)(f)).
In Paragreen v Lim Group Holdings Pty Ltd (2020) 61 VR 293, Tate, Kaye and Niall JJA stated in relation to the requirement to establish fraud at [59]-[61] and at [75]-[76]:
59Those sections are central to the operation of the Torrens system of registration of title, or, more accurately, title by registration. For more than one century, it has been repeatedly and consistently recognised, in the authorities, that the fraud, referred to in s 42 and s 43 (and in the equivalent provisions in interstate legislation), refers to actual fraud, involving dishonesty or ‘moral turpitude’.
60In 1905, Lord Lindley, delivering the judgment of the Judicial Committee of the Privy Council in Assets Co Ltd v Mere Roihi said, in terms that have been adopted in innumerable decided cases:
[B]y fraud in these Acts is meant actual fraud, ie, dishonesty of some sort, not what is called constructive or equitable fraud. ... Further, ... the fraud which must be proved in order to invalidate the title of a registered purchaser for value ... must be brought home to the person whose registered title is impeached or to his agents
61 Similarly, in 1917, in Butler v Fairclough, Isaacs J stated:
Now, the ‘fraud’ that is contemplated by sec 72 is actual fraud, moral turpitude. ... And further, it must be the fraud of the registered proprietor himself or his agents.
…
75At the risk of repetition, three points are clear from the foregoing analysis of the judgments in Bahr.
76First, the Court confirmed the long-standing principle that the exception of fraud, in s 42 and s 43 of the Transfer of Land Act, refers to actual fraud, that is, dishonesty or moral turpitude. A finding of equitable or constructive fraud is of itself insufficient to constitute fraud under the Transfer of Land Act, unless the conduct of the registered proprietor, as such, involves actual dishonesty.
In Simmons v NSW Trustee and Guardian [2013] NSWSC 1688 where Hammerschlag J held at [27]-[28]:
27To prevail against the indefeasibility given by s 42 of the Act, a person claiming a first limb Barnes v Addy personal equity must establish fraud, meaning actual fraud, moral turpitude: Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [192] - [198].
28Counsel for the plaintiff cited the decision of the Queensland Court of Appeal in Tara Shire Council v Garner [2003] 1 Qd R 556 in support of a submission that a first limb Barnes v Addy claim can prevail against indefeasibility given by s 42 without fraud being established. However, this notion was specifically disapproved of in Farah Constructions v Say-Dee at [194]–[196].
The husband has not expressly pleaded fraud and the evidence lead by the husband does not raise fraud and certainly does not establish fraud on the part of the daughter who has the benefit of s 42 of the TLA.
Rather, the husband pleads:
19. The Wife, using the Trust Funds, in [late] 2009:
a.purchased [F Street] Melbourne 3000 (F Street apartment) for $660,000.
b.paid the State stamp duty on acquisition of about $34,670.
20.In breach of trust, the Wife caused the 2nd respondent to be registered as the proprietor of the [F Street] apartment.
21The 2nd Respondent well knew that she had not made any contribution to the acquisition of the [F Street] apartment, that it was purchased by the Wife and registered in her name by using funds belonging to the Husband, that the Husband was ignorant of the fact that the apartment was registered in her name and that the Husband believed he was the beneficial owner of the apartment.
PARTICULARS
Such knowledge is to be inferred from the following: both the 2nd Respondent and the Wife knew that neither had any entitlement to such funds, that the funds used to purchase the apartment were the funds of the Husband and that the Husband did not intend the 2nd Respondent to receive such funds, or the apartment purchased with such funds.
22In the premises the 2nd Respondent at all times held the [F Street] apartment as a constructive trustee for and on behalf of the Husband as a first limb Barnes v Addy constructive trustee.
These properties were purchased in the daughter’s name with the knowledge of the husband and he has stood by and repeatedly watch this happen. He was aware that two of the properties were rented out and that the daughter was receiving that rent. There is no fraud alleged in relation to that.
The husband raises in relation to the submission that the pleading does not refer to fraud, that this Court is not a court of pleadings and, in any case, parties should be able to depart from the strict form of the pleading. As acknowledged above, this is not a court of pleadings and generally matters do not proceed by way of pleadings. Where the case is of a nature that pleadings may assist the parties and the Court by fixing the claims that are being made with an explanation of how they are made and the material facts supporting the claims set out, then it is obviously important that parties conduct the case on the basis of the pleaded claims. This is particularly important where an allegation of fraud is made or needs to be made in order to make good a cause of action. Irrespective of the status of pleadings in this Court, rules of conduct for both solicitors and members of the independent bar require that an allegation of fraud must be clearly made and there must be a proper basis to raise such an allegation: Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563 at 573. The claim of fraudulent conduct was not pleaded or clearly raised in the husband’s evidence and he has failed to defeat the indefeasibility of title established by this section. Any alternate claim under a purchase resulting trust or tracing fails because the husband has not established a proprietary right in the funds used to purchase the properties.
CONCLUSION
The husband has failed to prove:
(a)that he has a proprietary interest in the funds used to purchase the properties in Australia and any claim arising under a purchase money resulting trust or as constructive trustee must therefore fail;
(b)that there was a trust agreement as alleged as between himself, the wife and the maternal aunt;
(c)that the daughter or third respondent had requisite knowledge of any trust obligations;
(d)a clear and contemporaneous intention existed to support a resulting trust; or
(e)fraud on the part of the daughter such as to defeat the infeasibility of title established by s 42 of the TLA.
As the husband has not established ownership of the Australian properties and the wife does not contend that she has any interest in those properties, the asset pool is limited to the parties’ modest cash and household goods and there is essentially no asset pool. On the evidence of each the husband and wife, the asset pool minus the Australian properties is in the negative. I will therefore not make any orders pursuant to s 79 of the Act.
For these reasons, the application must be dismissed, and I will make the orders sought by the respondents.
I certify that the preceding one hundred and seventy-seven (177) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McNab. Associate:
Dated: 8 May 2025
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