Gilchrist and Gilchrist and Anor
[2009] FamCAFC 199
•10 November 2009
FAMILY COURT OF AUSTRALIA
| GILCHRIST & GILCHRIST AND ANOR | [2009] FamCAFC 199 |
| FAMILY LAW - APPEAL – FROM DECISION OF A FAMILY COURT JUDGE – PROPERTY SETTLEMENT – Husband’s uncle provided money in connection with the acquisition of property by the husband from his former partner – The husband re-partnered and later sold the property – Sale proceeds were expended on debts and put towards a second piece of property (already owned by the husband and wife), no proceeds were provided to the uncle – The husband and wife divorced, wife commenced property proceedings in 2005 – In 2006, the uncle commenced proceedings, raising trust issues, in the NSW Supreme Court – State proceedings were transferred, unopposed, to the Family Court – Orders and declarations were made to the effect that the husband, and husband and wife, held certain sale proceeds on trust for the uncle – Wife appealed asserting the trust was a device to avoid payment of stamp duty, the trial Judge decided the case on matters that were not pleaded, were against the evidence and wrong in law AVOIDANCE OF STAMP DUTY – Despite wife’s pleading, no submissions of illegality were made at trial – No issues arising from provisions of stamp duties legislation were raised at trial –Had the question of illegality been raised at trial there may have been matters available to be raised in response – Wife ought not be permitted to raise illegality on appeal MATTERS NOT PLEADED – Trial judge made a finding that the wife was a constructive trustee with the husband in relation to sale proceeds of the first sold property – This question of trusteeship was not pleaded – Trial Judge undertook an process of equitable tracing that was not relied upon in the uncle’s case as pleaded – In ordering relief not founded on the pleadings the trial judge fell into error Matter remitted for rehearing – Parties at liberty to make written submissions as to costs |
| Family Law Act 1975 (Cth) s 94(2) Stamp Duties Act 1920 (NSW) Uniform Civil Procedure Rules 2005 (NSW) rule 51.53 |
| Dare v Pulham (1982) 148 CLR 658 |
| APPELLANT: | Ms GILCHRIST |
| FIRST RESPONDENT: | Mr GILCHRIST |
| SECOND RESPONDENT: | Mr MINER |
| FILE NUMBER: | PAF | 856 | of | 2005 |
| APPEAL NUMBER: | EA | 127 | of | 2008 |
| DATE DELIVERED: | 10 November 2009 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Warnick, Boland and Crisford JJ |
| HEARING DATE: | 19 June 2009 |
| LOWER COURT JURISDICTION: | Family Court of Australia |
| LOWER COURT JUDGMENT DATE: | 3 October 2008 |
| LOWER COURT MNC: | [2008] FamCA 917 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr McNally SC |
| SOLICITOR FOR THE APPELLANT: | Matthews Dooley & Gibson |
| SOLICITOR FOR THE FIRST RESPONDENT: | Matthews Folbigg |
| COUNSEL FOR THE SECOND RESPONDENT: | Mr Maiden SC |
| SOLICITOR FOR THE SECOND RESPONDENT: | Williamsons Solicitors Pty Ltd |
Orders
That the appeal is allowed and Orders 2, 3 and 5 of the orders of 3 October 2008 be set aside. (Order 1 amended).
That the action by Mr Miner pleaded in Statement of Claim case number 3804/06 filed in the Supreme Court of New South Wales and determined by agreement of the parties in the Family Court of Australia be remitted for rehearing by a judge of the Family Court of Australia, other than the Honourable Justice Le Poer Trench.
That each party be at liberty to make an application by way of written submissions in respect of costs incurred by him or her in relation to the appeal by filing such submissions at the Sydney Registry of the Family Court and serving them on the other parties within 21 days of the date hereof.
That each other party have a further 14 days in which to make written submissions in answer thereto by filing such submissions at the Sydney Registry of the Family Court and serving them on the other parties.
That each party be at liberty to reply to an answer by way of written submissions by filing such reply at the Sydney Registry of the Family Court and serving it on the other parties within a further 7 days.
That each party endorse on the cover sheet the date on which a copy of that submission was served on the other parties.
IT IS NOTED that publication of this judgment under the pseudonym Gilchrist & Gilchrist & Miner is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
File Number: PAF 856 of 2005
Appeal Number: EA 127 of 2008
| Ms GILCHRIST |
Appellant
And
| Mr GILCHRIST |
First Respondent
And
| Mr MINER |
Second Respondent
REASONS FOR JUDGMENT
In December 1996, Mr Miner gave the sum of $135,000.00 to his nephew, Mr Gilchrist, in connection with the acquisition of the half-share of Mr Gilchrist’s former partner (their relationship having broken down) in a residential property at M. About a year later, Mr Gilchrist paid $120,000.00 to his former partner, who transferred her interest in M to Mr Gilchrist.
Subsequently, Mr Gilchrist married Ms Gilchrist, but that marriage broke down in the middle of 2003. Not long after separation, the M property was sold for $690,000.00 and a few months later, in October 2003, a property owned by the husband and wife at B was sold. No monies were paid to Mr Miner from the proceeds of either of those sales.
The wife commenced family law proceedings in 2005 and the issue of property settlement between the husband and wife remains pending in the Family Court of Australia.
In July 2006, Mr Miner commenced proceedings against the husband and wife in the Supreme Court of New South Wales. Those proceedings were transferred to the Family Court of Australia and were heard by Justice Le Poer Trench. The husband did not oppose the action brought by Mr Miner.
In his reasons for judgment, the trial judge described the proceedings before him as follows:
2.The action requires a determination of whether the husband and/ or the husband and the wife held any interest in…[M]…or the proceeds of the sale of that property upon trust for Mr [Miner].
3.It is common ground that there are no funds left in any identifiable fund flowing directly from the sale of the [M] property and the fund which the plaintiff seeks to attach court orders to is the fund held following the sale of a property at…[B]… .That property was, prior to its sale in 2003, owned jointly by the husband and the wife. The amount remaining from the sale of that property is about $190,000 and is held in a controlled money account by the wife’s solicitors, … pending the determination of the plaintiff’s claim.
On 3 October 2008, Le Poer Trench J made orders and declarations, including:
(1)A declaration that the husband held a one half interest in …, [M] upon trust for Mr [Miner] from no later than the last day of December 1997 until the sale of the property on 15 August 2003. Thereafter the husband held the sum of $334,078 upon trust for Mr [Miner].
(2)A declaration that the husband and wife (and each of them) held the proceeds of $277,651 from the sale of the [M] property upon trust for Mr [Miner].
…
(5) In partial satisfaction of their liability to Mr [Miner] the parties cause the amount standing to their credit in the controlled money account held by the wife’s solicitors, …, and being the balance of the proceeds of sale of the property at …, [B] to be paid forthwith to Mr [Miner].
...
Against these and other orders, the wife appeals. The Notice of Appeal contains 17 grounds, one of which, (16), was not pursued. The issues raised can be summarised.
Though at trial the wife opposed, on several bases, Mr Miner’s case that the husband had held one-half of the M property in trust for him, on appeal the only challenge to the trial judge’s first declaration, that about the husband holding on trust for Mr Miner one-half of the M property and one half of the sale proceeds, was on the ground that “the ‘Trust’ was a device to avoid the payment of stamp duty and that the Court should therefore refuse to lend its aid to any proceedings taken to enforce the trust”.
(Summary of Argument, Mr McNally SC, for the wife, para 89)
As to the declarations that the wife held part of the sale proceeds of M as trustee, with the husband, for Mr Miner and the order that the husband and wife pay the balance sale proceeds of the B property to Mr Miner, the central argument for the wife was that the trial judge decided in respect of the wife’s trusteeship of part of the M proceeds and in relation to the B monies, on bases that were:
(i)not pleaded:
(ii)not supported by evidence;
(iii)in relation to the B monies, wrong in law.
As will be seen, Le Poer Trench J recognised that part of his conclusion rested on a basis not pleaded, but for reasons he gave, made orders on that basis anyway.
Mr Maiden SC, counsel for Mr Miner at trial and on appeal, makes several concessions in relation to a comparison of the pleading with the trial judge’s conclusions, but argues that evidence necessary to support the trial judge’s essential conclusions was before him and in any event, he could have reached the same result, on the case pleaded.
Ground 15 raises a discrete point; that, in deciding upon the orders appealed, his Honour had regard to an irrelevant consideration, namely whether Mr Miner would pursue the husband and wife for any balance owing to him, if he received an order for payment to him of the fund of around $190,000.00, arising from the B sale.
Mr McNally SC seeks that, if merit is found in the appeal, those orders that affect the wife be discharged and the Statement of Claim, as against her, be dismissed.
The argument that the “Trust” was a device to avoid payment of stamp duty
Le Poer Trench J found:
198.For whatever reason, the agreement between the husband and Mr [Miner] was never formalised in writing. The closest attempt came with the preparation of a will for the husband in 2001 which acknowledged the interest of Mr [Miner] in the [M] property.
The argument of Mr McNally is succinctly contained in his written outline:
75.[Mr Miner] in his own case called and relied upon the evidence of the husband. The husband’s affidavit evidence included the following:
11.“I paid the amount of $120,000 to [Mr Gilchrist’s previous partner] and she transferred her interest in the property to me. The reason that [Mr Gilchrist’s previous partner’s] share of the property was transferred to me instead of to [Mr Miner] was because there would be no stamp duty payable if the transfer was part of a property settlement.”
76.In his Statement of Claim, [Mr Miner] pleaded:
17.“It was the intention of the parties [to the M Agreement] that the plaintiff’s interest in the [M] property not be registered, but that it be formally recorded in a deed or other document.”
77.The solicitor acting for the husband on the transaction said:
4.“I advised both [Mr Miner] and [the husband’s mother, Mr Miner’s sister] on 21 November 1996 of the stamp duty implications of transferring an interest in the [M] property to [Mr Miner] after [Mr Gilchrist’s previous partner] had been paid out. I also advised [Mr Gilchrist] on that date that [Mr Miner’s] interest in the property needed to be in writing. There was also discussion about the possibility of [Mr Miner’s] interest being held by way of a trust for his infant children.”
78.The solicitor also said in cross examination that he told the husband that to transfer the interest to [Mr Miner], it had to be in writing and there was a stamp duty implication in doing that.
79.The solicitor gave evidence that he spoke to [Mr Miner] on the telephone about [M] and said that he told [Mr Miner] about the stamp duty implications of a transfer of an interest in the property to him and also if it was to be held in trust, there would be similar implications in documenting it.
(Appeal Book references omitted)
A significant difficulty in respect of this argument is that, while Mr McNally has pointed to evidence from the husband that “the reason” that Mr Gilchrist’s previous partner’s share of the property was transferred to him instead of to Mr Miner was because there would be no stamp duty payable on that transfer, Mr Miner’s evidence was that he expected to pay stamp duty on a document to be prepared evidencing his interest in the property. The trial judge made no finding to the contrary of Mr Miner’s evidence.
Another difficulty arises out of the conduct of the case at trial. While, as Mr McNally points out, in her defence filed to the Statement of Claim, the wife had pleaded that:
29.The Second Defendant says that, if there was an agreement between the First Defendant and the Plaintiff as alleged in the Statement of Claim and referred to as the [M] Agreement, it was a term and condition of that Agreement that there be no documentation between the Plaintiff and the First Defendant to record that agreement to avoid the payment of stamp duty to the New South Wales Office of State Revenue thereby rendering that Agreement illegal and, as a result, unenforceable.
That was not a pleading directed to the transfer of the legal interest of the husband’s former partner in M to him, which was exempt from stamp duty, and to which the husband’s evidence about avoiding stamp duty related. As seen, Le Poer Trench J found that the husband intended to have a formal agreement drawn up between he and Mr Miner. The husband said nothing about stamp duty on any such document.
Nor was paragraph 29 in the wife’s Defence a pleading that the trust agreement was illegal, simply because there was no documentation of it. Rather, the claim was that it was an express term of an agreement between the husband and Mr Miner that there be no documentation so that duty be avoided, and that rendered the overall agreement illegal.
It is common ground that, despite the wife’s pleading, no submissions were made at trial on the question of illegality.
Le Poer Trench J found:
91.…The husband says that the property was never transferred into Mr [Miner’s] name because there would be stamp duty payable on the transfer, whereas the transfer directly to the husband was stamp duty exempt. It was not put to Mr [Miner] that there was any such agreement about avoiding the payment of stamp duty.
92.The husband confirms that it was his intention to have a formal agreement drawn up between he and Mr [Miner] evidencing the title to the property was to be held equally between them. …
In our view, in his oral submissions before us, Mr McNally seemed, with respect, to slide away from the narrowness of the point pleaded to argue more that the absence of documentation of the trust, of itself, meant that Mr Miner could not rely on the agreement as he asserted it, because had it been documented, stamp duty would have been payable.
However, no questions derived from the provisions of the Stamp Duties Act 1920 (NSW) (which was probably the legislation that applied at the time of the transaction) or the subsequent Duties Act 1997 (NSW), were raised at trial. We are not satisfied that, had any questions been raised, Mr Miner could not have raised matters in response, including the possibility of action to meet any obligations.
We consider that the wife should not be permitted to raise the question of illegality now.
The argument that the trial judge decided in respect of the wife’s trusteeship of part of the M proceeds and in relation to the B monies, on a basis that was not pleaded, not supported by evidence and, in relation to the B monies, wrong in law
Consideration of this argument involves initially a comparison of the basis upon which his Honour made the orders appealed with the case pleaded and/or advanced by each party at trial.
Essentially, in addressing Mr Miner’s case, Le Poer Trench J took three steps. Firstly, he found that the husband held a half-share of M and of the sale proceeds, for Mr Miner. This finding supported the first declaration, to which as we have indicated, the only challenge before us was on the basis of illegality, a challenge we have rejected.
The second step taken by the learned trial judge was to find that the wife (with the husband) became a trustee of the net (after expenses of sale and secured creditors were repaid) entire sale proceeds of the M property, for Mr Miner.
The relief claimed in this respect was as follows:
3.A declaration that the defendant’s (and each of them) [husband - first defendant, wife - second defendant] hold the proceeds of sale of the [M] Property in trust for the plaintiff and the first defendant in equal proportions, pursuant to the [M] Agreement and a further agreement between the plaintiff and the defendants, made on or about the 15 August 2003. (emphasis added)
The “M agreement” as pleaded, was the initial agreement for the husband to hold one-half of the property for the benefit of Mr Miner. As to the further agreement, allegedly made about 15 August 2003, the Statement of Claim included the assertion that at all material times, from shortly after September 1997, the wife had been aware of the existence of the M agreement and:
Sale of the [M] Property
32.On or about 15 August 2003, settlement was effected for the sale of the [M] Property, …, in consideration of receipt of the purchase price of $690,000.00, … .
33.The plaintiff was advised of the sale of the [M] Property a few days after the sale, by the second defendant in a telephone conversation.
Representations, knowledge and acknowledgements by the second defendant
34.In the course of the telephone conversation pleaded in paragraph 33 above, the second defendant made the following express representations to the plaintiff:
(a)she was aware of the [M] Agreement;
(b)she was aware that the [M] Agreement preceded her relationship with the first defendant;
(c)she was aware that the plaintiff owned half of the [M] Property;
(d)she insisted that the plaintiff demand payment of his share of the proceeds of sale of the [M] Property from the first defendant; and
(e)she had no intention of making any claim against the plaintiff’s half-share in the [M] Property.
35.In at least five subsequent telephone conversations, in or about August and September 2003, the second defendant made the following express representations to the plaintiff and/or his wife:
(a)she insisted that the plaintiff demand payment of his share of the proceeds of sale of the [M] Property from the first defendant; and
(b)she insisted that she had no intention of making any claim against the plaintiff’s half-share in the M Property.
Plaintiff’s reliance on those representations
36.The plaintiff relied on the representations pleaded in paragraphs 34 and 35 above as to the knowledge of the second defendant, and in entering into the agreement pleaded in paragraph 37 below.
Variation to the [M] Agreement
37.On or about 15 August 2003, the plaintiff and the defendants agreed that the plaintiff’s half-share of the proceeds of sale of the [M] Property would be paid to him after the settlement of the sale of a property owned by the first and second defendants at …, [B] … .(emphasis added)
38.On or about 15 October 2003, settlement took place for the sale by the first and second defendants of the [B] Property.
39.The sale price of the [B] Property was $440,000.00.
Failure to pay the plaintiff proceeds of sale
40.At no material time has the plaintiff been paid half of the proceeds of sale of the [M] Property, or any other sum, by the defendants or any of them.
…
Plaintiff’s entitlement to half of the proceeds of sale of the [M] Property
43.By reason of the matters pleaded in paragraphs 15 to 16, 19, 27, 32, 37 to 37 [sic], and 40 above, the plaintiff was and remains entitled to the sum which is half of the proceeds of sale of the [M] Property.
44.By reason of the matters pleaded in paragraphs 15 to 16, 19, 26, to 29, 31, 32, 34 to 37, and 40 above, the funds referred to in paragraph 43 above are held by the defendants (and any of them) on trust for the plaintiff.
The balance of the pleading raised estoppel, a claim for loss and damage, liability of the defendants to account, to pay equitable compensation and to make restitution.
Le Poer Trench J did not address the case on the basis of estoppel, breach of contract, a liability to account, pay equitable compensation or make restitution. Neither counsel before us suggested that he was asked to do so.
Several points about the pleading are significant.
As to any claim by Mr Miner specifically to the proceeds of sale of B, a part of the relief claimed in the Statement of Claim was:
4.An order that the defendants (or any or each of them) pay to the plaintiff the sum of $334,000, together with interest …
However, there was no relief claimed that directly referred to the proceeds of sale of the B property as such, nor to any proprietary interest in those funds held by Mr Miner.
If a claim by Mr Miner to a beneficial interest in the B money is to be found it must emerge from the references to “funds” in paragraphs 43 and 44 of the Statement of Claim, just quoted, but these paragraphs refer to half of the proceeds of sale of the M property. The proceeds of sale of B are not specifically mentioned in those paragraphs, though they are (indirectly) referred to in paragraph 37 (relied upon in paragraph 43), in relation to the “Variation to the [M] Agreement”, in the sense that Mr Miner would be paid “after the settlement of the sale of … [B]”.
If that was the identification of a claim by Mr Miner that under the Variation to the M Agreement, the B sale proceeds were held in trust for him to the full extent of his interests in the M sale proceeds, it was obtuse.
This is the moreso when as seen, the declaration sought, albeit against both husband and wife, was that they held “the proceeds of sale of the [M] Property in trust for the plaintiff and the first defendant in equal proportions, pursuant to the [M] Agreement and a further agreement between the plaintiff and the defendants, made on or about 15 August 2003”.
We will shortly set out the essential findings made by the trial judge, but before doing so, summarise some aspects of the case and the factual findings of Le Poer Trench J.
His Honour found the wife an unreliable witness. On the other hand, he found Mr Miner, the husband and a number of other witnesses in Mr Miner’s case, credible.
Some of his Honour’s findings and the “mathematics” will be more readily understood in the light of the husband’s evidence that, at about the time in June 2003 when the M property was listed for sale, he telephoned Mr Miner to request $8,000.00 to improve the property by erecting a shed which sum, he said, would be repaid to Mr Miner after the sale. The husband told Mr Miner he also would contribute $8,000.00.
On 11 July 2003, the husband and wife separated. It was only after separation that the B property was listed for sale. Perhaps significantly, as seen, the alleged variation to the “M agreement” was not until mid-August 2003.
Substantial debts had arisen during the marriage of the husband and wife. Le Poer Trench J said:
40.By the end of 2001 the [Gilchrist’s] had accrued substantial debts on mortgages against their [M] property, an investment property at [K] (hereafter “the [K] property”) and the [B] property. Substantial debts were also incurred by the husband’s landscaping business, “[Y Business]”, and the wife’s beauty salon business. The [Gilchrist’s] marriage was also undergoing some difficulty.
The total received by the husband from the M sale, after discharge of secured debts, was $278,606.00. Of those monies, a cheque of $256,130.39 (which did not include balance of deposit) was placed into a cheque account of the husband. The husband says that the proceeds of the M property were used to pay off debts and that after these debts were paid there were insufficient funds to then pay Mr Miner his share of the proceeds.
The B property was sold for $440,000.00. After discharge of mortgage debt, $148,830.00 was paid to the husband and wife together with $8,400.00 being the balance of the deposit. With interest, that sum grew to the fund of $190,000.00 available at trial.
Le Poer Trench J found:
Conclusion
184.I make the following findings of fact.
…
191.… [that from January 1998] the wife knew at all relevant times that [Mr Miner] owned one half of the equity in the [M] property.
192.At some time, probably about the middle of 2003, the husband and wife agreed to place both the [M] and the [B] property on the market for sale. At that time, the parties had considerable debt and the husband’s business was not generating sufficient income to meet all of their debts as they fell due. It was agreed between the parties that the sale proceeds would be used to pay their debts and pay out [Mr Miner] for his interest in the [M] property.
193.… The sale proceeds received by the husband from [M] consisted of $334,078 of funds that were Mr [Miner’s] entitlements.
194.The husband informed Mr [Miner] following the completion of the [M] property that his entitlements were to be paid out of the sale of the [B] property.
195.The husband used all of the proceeds of the sale of the [M] property to satisfy debts of the husband and the wife.
196.When the husband and wife agreed to sell both [B] and [M], it was agreed that the proceeds would first be applied to meet the debts and then [Mr Miner] was to be paid out of the balance, irrespective of which property settled first.
197.The [B] property was sold for less than the parties anticipated at the time they expended all of the funds from the sale of [M]. (emphasis added)
At this point we note that, as seen, Mr Miner had pleaded that:
37.On or about 15 August 2003, the plaintiff and the defendants agreed that the plaintiff’s half-share of the proceeds of sale of the [M] Property would be paid to him after the settlement of the sale of a property owned by the first and second defendants at …[B]… . (emphasis added)
As highlighted, the pleading is that both defendants “agreed” on or about 15 August 2003, with Mr Miner. As also seen, by 15 August 2003, the husband and wife had been separated for over a month. We note that in paragraph 194 of his reasons (above), Le Poer Trench J referred only to the husband informing Mr Miner “following the completion of the [M] property that his entitlements were to be paid out of the sale of the [B] property”. No issue of agency between husband and wife was explored. However, earlier, the trial judge had found:
111.The husband says that following the sale of the [M] property, he had a conversation with the wife to the following effect:
“We have to pay [Mr Miner] his money but we’ve used some of it to clear our business debts. We will need to use some of the settlement money from [B property] to help pay [Mr Miner] what he is owed. You can then have the rest of the money from [B property], which could be up to $100,000.” (emphasis added)
The husband says the wife said, “Ok there’s no other way to do it. That’s obviously what we have to do.”
112.The husband then says he spoke to [Mr Miner]. He said to him, “I’m sorry, [the wife] and I don’t have enough left after payment of our debts to give you your half share of $334,000. We have our [B] property for sale and [the wife] has agreed that we will use the proceeds of the sale to make up the remainder of the $334,000.” (emphasis added)
As can be seen, there are some differences between what the wife and husband discussed, and what the husband said to Mr Miner. This evidence, of a conversation after the sale of M, would also seem not to found the conclusion in paragraph 196 of Le Poer Trench J’s reasons, to the effect that the husband and wife agreed before the sale of both properties, how the proceeds would be applied.
Mr Maiden argues that in these paragraphs of the trial judge’s reasons just quoted, his Honour sets out the evidence of the husband giving rise to the basis of paragraph 37 of the pleading. We do not consider that what was said in those passages of itself makes the wife the party to any agreement with Mr Miner.
We will discuss the grounds of appeal relating to findings of fact later, but at this point merely note that the assertion in paragraph 37 of the pleading, that the wife agreed that Mr Miner would be paid his half-share of the M proceeds after the sale of B, does not sit easily with the other parts of Mr Miner’s pleading as earlier set out, in which he asserted that the wife, on more than one occasion, told him that he should obtain his money from the M sale proceeds.
As to the finding in paragraph 195, that the husband used all of the proceeds of the M sale to satisfy debts of the husband and the wife, there are no findings dissecting debts, whether jointly or individually owed. Moreover, at paragraph 158 of his reasons, the trial judge had said:
158.The husband agreed that when he swore his affidavit on 22 January 2007 he did not set out how he expended the $256,000 received from the sale of [M]. He said, however, that the wife’s solicitors had subpoenaed from him the materials at an earlier time that provided that information. He agreed in his affidavit of 25 September 2007 he disclosed how he applied the proceeds from [M]. He agreed that all of the funds went into meeting debts of [Y Business]. (emphasis added)
However, it may be that Le Poer Trench J considered that, notwithstanding that the M sale proceeds went into a bank account of the husband and, even if they discharged debts of “Y Business”, it still could be said that the sale proceeds paid debts of the wife. His Honour referred in several places in his judgment to an enmeshment of the financial affairs of husband and wife. The following paragraph is indicative:
218.As set out earlier I find that the wife was aware of the interest of Mr [Miner] in the [M] property prior to its sale in 2003. The husband and wife had by that time intertwined their financial affairs to such an extent that it was no longer possible to say that one of the marriage partners did not have any interest in the property which stood in the other’s name. I accept the evidence of the husband that a significant reason for the downturn in the success of his business [Y Business] was the provision of the resources of that business in finalising the [K] project. That was a project in which the wife had a financial interest. I also accept the husband’s evidence that he had contributed significant financial resources generated by his business or through borrowings to the support of the family constituted by the wife, their children and himself. I also accept he had contributed funds to the repayment of debt to the wife’s family arising out of the purchase of the [B] property. Further, I accept that the husband had contributed both directly and indirectly to the wife’s beauty salon business.
Returning to Le Poer Trench J’s reasons for judgment, after setting out his “conclusions” of fact, Le Poer Trench J addressed “THE SUBMISSIONS”. He said:
199.The submissions on behalf of Mr [Miner] call for the Court to find the existence of a trust between the husband and Mr [Miner], being a constructive trust arising out of the transactions between the two men.
200.It was submitted that during the course of the relationship between the husband and the wife, their financial circumstances had become so intertwined as to become impossible to dissect. The husband has made contributions towards the support of the wife and the children. The husband has made contributions towards the [B] property. The husband’s business made contributions towards the [K] project. As such, the proceeds of the sale of the [M] property which were used to meet “debts” could not be said to be debts particularly of one party as opposed to the other.
201.It was pure fate that saw the sale of the [M] property conclude before the sale of the [B] property. Had the [B] property settled first, then the funds available from that sale would have been used to meet the parties’ joint debts. That would have left the proceeds of sale of [M] as being paid into a trust account.
We note the reference to a “constructive trust” but relating only to the husband, of Mr Miner’s half interest in M, and the generality of the submissions recorded in paragraphs 200 and 201, especially in so far as they went to any claim against the wife.
After discussing submissions of each of the wife and husband, Le Poer Trench J turned to “THE RELEVANT LAW”, commencing with the subheading “A Brief Background to Constructive Trusts”. He said:
209.A constructive trust can be imposed in any situation where equity calls for the imposition of a trust upon the legal owner of a property; hence it can be imposed irrespective of agreement or intention by the parties: …
210.The traditional rule in Barnes v Addy (1874) LR 9 Ch App 244 is to be used to decide any third party liability and was stated by Lord Selbourne LC at 251–2 as follows:
“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.”
…
212.A constructive trust will arise “where a person assists in a breach of trust: Barnes v Addy” (supra). This means that a person who is neither a trustee nor a fiduciary can be liable as a constructive trustee if they: “(i) receive trust property into his or her possession; or (ii) knowingly assists the trustee to commit a breach of the trust or fiduciary duty: Barnes v Addy” (supra). In regard to the knowledge requirement, the categories identified by the High Court (in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 at [174-178]) are:
· actual knowledge of the breach;
· wilfully shutting one's eyes to the obvious;
· wilfully and recklessly failing to make such inquiries as an honest and reasonable person would make; and
· knowledge of circumstances which would indicate to an honest and reasonable person that there had been a breach.
213.According to the High Court decision (Barwick CJ, Gibbs and Stephen JJ; McTiernan J dissenting) in Consul Development Pty Ltd v DPC Estates Pty Ltd (1975) 132 CLR 373 a party that is found to be a constructive trustee can be ordered by the Court to:
· transfer the property subject to the constructive trust to the beneficiaries; and/or
· hold the property on a constructive trust declared or imposed by the court on behalf of the beneficiaries; and/or
· account for the value of any profit or benefit obtained from the property subject to the constructive trust.
(footnotes omitted)
Shortly after, his Honour turned to “FINDINGS”. He said:
215.I find that there is a constructive trust between Mr [Miner] and the husband. …
…
218.As set out earlier I find that the wife was aware of the interest of Mr [Miner] in the [M] property prior to its sale in 2003. The husband and wife had by that time intertwined their financial affairs … [as earlier set out].
219.I find that the husband did breach the conditions of the trust by charging his half interest in the [M] property with debts greater than 50% of the net sale proceeds of the property. I also find that the husband has breached the trust by not paying to Mr [Miner] the sale proceeds remaining after the discharge of mortgages on the property and the sale expenses. All of the funds which remained following settlement were the property of Mr [Miner] and should have been paid to him at that time.
220.As a consequence of the above findings against the wife in terms of her knowledge of the interest of Mr [Miner] in the [M] property; her knowledge of the fact that the completion of [M] property sale occurred prior to the sale of the [B] property; and her knowledge of the intention of the husband to use the sale proceeds of the [M] property to pay out debts of the parties; I find the wife became a trustee for Mr [Miner] along with the husband of Mr [Miner’s] entitlement in the proceeds from the sale of the [M] property. I find this trust arises in the manner described in the High Court decision in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (supra). Consistent with the decision in that case I find that the wife “wilfully shut her eyes” to the obvious breach of the trust; she wilfully and recklessly failed to make inquiries as an honest and reasonable person would make; and she had knowledge of circumstances which would indicate to an honest and reasonable person that there had been a breach of the trust existing between the husband and Mr [Miner].
221.I find that the time when the wife should be found to have become a trustee for Mr [Miner], as determined above, should be restricted to a time not before the time of the agreement between the husband and the wife to sell both of the properties at [M] and [B] and certainly by the time the proceeds of the sale of the [M] property were received by the husband. Although I have found that the wife did have knowledge of the interest of Mr [Miner] at a time prior to the sale of the [M] property and that there must have been breaches of the trust by the husband borrowing funds from secured mortgagees which at settlement exceeded one half of the value of the property, I do not conclude that it would have been obvious to the wife at a time prior to the agreement between she and the husband to sell both properties that there was a probability that Mr [Miner’s] interest in the sale proceeds of [M] may be misappropriated by the parties to meet other debts.
222.The consequence of the above findings is that the husband and the wife become jointly and severally liable for the payment to Mr [Miner] of his interest in the proceeds of the sale of the [M] property. As such the fund remaining from the sale of their [B] property ought to be immediately available to meet the liability of the trustees to Mr [Miner]. In these circumstances it seems to me that the submissions of the parties addressing the question of equitable tracing assume some reduced importance; however, I will address the topic of equitable tracing as this may still be useful in the context of this case. (emphasis added)
Under the heading of “EQUITABLE TRACING” that is, of the “trust funds” derived from the M sale “to” the B proceeds, his Honour discussed the “Purpose of tracing”, “The requirements for equitable tracing to be undertaken”, “The presumption of Hallett’s Case and mixing of trust and other monies”, “The lowest intermediate balance rule” and, under that heading said:
232.In the present case under consideration it was the stated intention of the husband to replenish the “trust fund” with the proceeds of the sale of the [B] property. That fact I accept was conveyed to the wife by the husband.
After addressing “Redress for the beneficiary following the finding of a breach: A constructive trust” he came to his “Conclusion on equitable tracing”. He said:
235.It seems to me that the funds which were really the property of Mr [Miner], arising from the sale of the [M] property, can be traced to the fund now left following the sale of the [B] property. This is not a strict tracing as the evidence does not support a finding that any of the proceeds of [M] were invested into the [B] property. However, the breach of the trust which I have found existed at the time the husband and wife agreed to sell both properties. This would, in itself, give rise to tracing being available to attach to the parties’ available property. This would be available in the sense that the beneficiary of a breached trust is entitled to look to the trustee to make good any loss, if necessary from the trustee’s own property. Further, the stated intention of the husband (and by inference the wife) to reimburse the trust fund from the sale proceeds of the [B] property would exempt the fund from the operation of the “lowest intermediate balance rule”.
(We note his Honour’s reference here to an inference against the wife, a position which seems to be at odds with any conclusion that the wife had expressly agreed “to reimburse the trust fund from the sale proceeds of the [B] property”)
Notwithstanding his Honour’s conclusions just quoted, as seen, his Honour did not make a declaration that the husband and/or wife held the B proceeds in trust for Mr Miner. No such declaration was sought. Rather, Le Poer Trench J ordered that “the parties (thus; it seems, the defendants) cause the amount standing to their credit…to be paid forthwith” to Mr Miner.
As to the argument that the trial judge based the declarations/orders challenged other than on what was pleaded, as we indicated at the outset, Le Poer Trench J himself recognised that a proposition that, at the date of the sale of the M property, the wife was or became a trustee with the husband in relation to the interest of Mr Miner in that property, was not pleaded. At paragraph 244 of his reasons, he said:
244.Just prior to delivering judgement in this case I called for further submissions by the parties on two points which I felt they had not addressed earlier. I asked that they address the following topics:
(a)If I accept the evidence of Mr [Miner] and his witnesses based upon the decision of Farah Constructions Pty Limited v Say-Dee Pty Limited (2007) 230 CLR 89, why should I not find that at the date of the sale of the [M] property the wife was also a trustee with the husband in relation to the interest of Mr [Miner] in that property?
…
Something of the conduct of the case to that point can be gleaned from the following. At the outset of the trial, Mr Maiden said:
MR MAIDEN: Your Honour, the action can only be between [Mr Gilchrist] and [Mr Miner]. There can be no, I would have thought, I would like to argue to the contrary or my client perhaps would want to argue to the contrary but we cannot make a claim on the asset of [Ms Gilchrist]. There is not claim in law. There is no contract. There is no trust and there is no arrangement saying that we have any proprietary interest to the assets or to the chosen action [sic] that she has at the moment in respect of their claim in respect of her common law action in the Supreme Court of New South Wales. Now, that being so - - -
HIS HONOUR: But there would still be a debt wouldn’t there. On your – what you’ve told me, if you make all these links and that [Mr Miner’s] money went into public property and then effectively was lost, he would still have a claim against both the husband and the wife wouldn’t he?
MR MAIDEN: No, he wouldn’t.
HIS HONOUR: Why not?
MR MAIDEN: He would only have a claim in debt for the balance - - -
HIS HONOUR: Yes, in debt.
MR MAIDEN: In debt, as between beneficiary and trustee. Sorry, he would have a claim as a beneficiary for the balance of the moneys owed by the trustee to him from the sale of the proceeds – from the proceeds of sale. But certainly not against [Ms Gilchrist].
In his final oral submissions, when there was discussion between bench and bar about the types of orders that might be appropriate, the following exchange occurred:
MR MAIDEN: There would be an order, that is, it would be a debt between [Mr Miner] and [Mr Gilchrist].
HIS HONOUR: For the balance?
MR MAIDEN: For the balance.
HIS HONOUR: Not [Ms Gilchrist]?
MR MAIDE: No, your Honour.
HIS HONOUR: Why is that?
MR MAIDEN: Because he, [Mr Gilchrist], was the trustee and in handling of the funds he effectively became the trustee for [Ms Gilchrist]. There is no action as between beneficiaries, save for moneys that can be traced. [Ms Gilchrist] is the second defendant on the basis that funds came in because of the agreement as between her and [Mr Gilchrist]. However, your Honour would have to find there is an action per se between [Mr Miner] and her and I think on the evidence in this case, your Honour, it’s not there.
HIS HONOUR: I don’t understand any of that so you will have to put that all in writing to me and explain how it works.
MR MAIDEN: There is no agreement specifically between [Mr Miner] and [Ms Gilchrist] as to what was to happen. That being so there is no action on any agreement. She is not his, [Mr Miner’s], trustee. Therefore, what is the action that is available to it. I will think hard but I am having difficulty at this moment seeing what the action is.
In subsequent “First Written Submissions” on behalf of Mr Miner, while reference was made to constructive trusts, by no means is it clear that even at that point Mr Miner sought to mount a case that the wife was a trustee of even the M sale proceeds, let alone the B proceeds.
Returning to the judgment of Le Poer Trench J, after recording the further submissions received from the husband and Mr Miner, he said:
250.The wife provided further submissions on the two topics. She says that the topic one raises for consideration a matter which was never pleaded by the Plaintiff Mr [Miner]. She says that the Statement of Claim sought a declaration as against the wife only in respect of the sale proceeds of the [M] property. That point is a valid point but nonetheless still raises the issue raised in relation to the High Court authority as it applies to the proceeds of the sale of the [M] property. It seems to me to be of little assistance to the wife in this case that I might find that her obligations as a trustee only arose upon receipt by the husband of the sale proceeds of that property.
We do not find it easy to discern the full dimension of his Honour’s remarks in that paragraph. Mr McNally submits that, in any event, if the trial judge wished to proceed down the path about which he sought further submissions, he ought have asked; “first of all, if the plaintiff wished to amend their pleadings, then whether or not an amended defence needed to be filed, whether there is any further evidence that need to be put on in order to overcome any prejudice, or to meet that particular case.” It is a forceful argument.
We turn then to the concessions by, and contentions for, Mr Miner. In the written summary, Mr Maiden says:
1.It is accepted by [Mr Miner] that in the Statement of Claim dated 19 July 2006 … it was not pleaded that the [wife] was the constructive trustee of the proceeds of sale of the [M] Property.
However, Mr Maiden then quotes paragraph 37 of the pleading (set out earlier in these reasons). He argues that paragraph 37 contains an assertion of the wife’s trusteeship of the B sale proceeds. He says in the written submissions:
6.[Mr Miner] contends that after the sale of [B] the monies from the proceeds should have been used to repay [Mr Miner]. As such, when the [wife] and [husband] failed to honour their agreement and held the monies coming from the proceeds of sale from the [B] property, a trust was created at that time.
7.It follows that it does not make any difference to this case or to the findings of the Court, when the trust arose. Nor does the issue of tracing arise because this matter arises specifically from the pleading … paragraph 37 referred to above, ie. variation to the [M] Agreement. It is submitted that his Honour did not have to seek to trace the proceeds of the [M] property but could have relied upon the variation to the agreement.
Mr Maiden’s outline also contended:
22.At paragraph 47 of the Statement of Claim …, it was pleaded “in breach of the terms of agreement pleaded in paragraphs 15-16 and 37 above and by reason of the matters pleaded in paragraphs 37 and 40 above, the defendants or any of them have failed to pay to the plaintiff half the proceeds of the sale of [M]”. This we respectfully submit raises clearly the issue of the proceeds following the sale of [B] being held in trust following the breach of contract and the variation of contract pleaded at paragraph 37.
As we indicated earlier, in our view, the content of paragraph 37 and later paragraphs do not, except in an unlikely interpretation, amount to a pleading of the case for which Mr Maiden contends. This view is reinforced by the observation made earlier that no declaration of trust in relation to the B proceeds was sought in the relief claimed.
Mr Maiden also conceded that, in so far as Le Poer Trench J embarked upon a tracing exercise, he had not been asked to do so. Nonetheless, Mr Maiden argued, the trial judge was entitled to make an order relating to the balance of proceeds of the B property against the husband and the wife.
As Mr Maiden put it in oral submissions “All he [the trial judge] had to find was that when [B] was sold those funds were held by [Mr and Ms Gilchrist] for [Mr Miner]”. Mr Maiden said his Honour did not need to make the findings in respect of when the wife became a constructive trustee or in respect of the issue of tracing. He said:
We are of the view that we had made our case in respect of [Ms Gilchrist], and the findings were that she was aware of what the husband was doing with the [monies] that he received and deposited into accounts that he controlled. That is that she was on notice of the trustee’s position and his breach of duty and/or of the amendment to the agreement to the payment of the funds from their jointed owned property.
We observe at this point that, having regard to Mr Maiden’s submissions both oral and written at the conclusion of the trial, it is difficult to discern what findings of fact he was seeking in respect to the case pleaded.
In oral submission he seemed to abandon the case against the wife but in written submissions to assert that she was “on notice of the trustee’s position and his breach of duty and/or of the amendment to the agreement to the payment of funds from their jointly owned property”.
In so far as no order or declaration was made against the wife specifically as a trustee of the B sale proceeds and since an appeal lies against orders, in one sense the attack upon the trial judge’s findings about equitable tracing may seem academic.
However, the wife argues with some force, that the reasons make it plain that the trial judge based the order he did make in relation to the B proceeds on findings of some sort of beneficial interest in those proceeds held by Mr Miner.
On the other hand, his Honour had determined to make an order against the B sale proceeds prior to his consideration of “equitable tracing”. It will be recalled that in paragraph 222 of his reasons, he remarked that the topic of equitable tracing assumed some reduced importance. In that paragraph, as earlier set out, his Honour said that the consequence of his findings was that the wife and husband became jointly and severally liable for the payment to Mr Miner of his interest in the proceeds of sale of the M property and “[a]s such the fund remaining from the sale of their [B] property ought to be immediately available to meet the liability of the trustees and Mr [Miner].” We do not find the legal basis for that finding, entirely clear, although it seems to derive from all of the earlier conclusions about the M agreement, the variation of the M agreement, the use by the husband of the funds and the wife’s knowledge of or behaviour in respect of, all of those matters.
In support of his contention that no injustice was done to the wife in the way Le Poer Trench J dealt with Mr Miner’s claim against her, Mr Maiden says that:
15.… During the trial there was no objection taken to the pleading and/or to any cross examination on the affidavits as not being relevant to the issues arising. It is respectfully submitted that no prejudice arose in respect of the findings of law that the learned trial judge made.
In our view, that proposition is by no means conclusive on the question of injustice or that of the extent to which the wife is bound by the conduct of the case below. It does not provide an answer to the most significant question of whether, had the case decided been the case pleaded, other positions may have been taken at any of the stages of the trial, whether in the adduction of evidence-in-chief, in cross-examination and by taking objections to evidence led on behalf of Mr Miner and/or the husband.
Before summarising our conclusions, we turn to the several grounds which attack the trial judge’s findings of fact. These in particular are:
6.His Honour erred in finding that the wife had knowledge of the intention of the husband to use the proceeds of the [M] property to pay debts of the parties (rather than to pay [Mr Miner]) prior to such payments occurring.
7.His Honour erred in finding that the husband used monies from the sale of the [M] property to pay the wife’s debts.
…
9.His Honour erred in finding that the wife had knowledge of the husband’s breach of trust, particularly in light of the fact that his Honour accepted [Mr Miner’s] evidence that the wife contacted [Mr Miner], told him of the sale and told him to ensure that he was paid from the proceeds.
The findings attacked in these grounds (at the least those referred to in grounds 6 and 9) form part of the basis for his Honour’s conclusion that the husband and wife held the M sale proceeds upon trust for Mr Miner. We are inclined to the view that each of the contentions is at least arguable, but think it unnecessary to decide whether his Honour’s findings in each of these instances was available or not. This is because we are satisfied that had the case for which the findings were used against the wife been pleaded, a quite different focus might have arisen in respect of the evidence bearing upon each of these matters.
As to whether his Honour wrongly identified and/or applied the law in relation to “equitable tracing”, in circumstances where his Honour largely constructed the case which he then decided, the question takes on an academic air.
We summarise our conclusions in relation to the arguments here considered as follows:
·The trial judge found that the wife was a constructive trustee with the husband of the M sale proceeds. That was not pleaded.
·The doctrine of “equitable tracing” was not relied upon in Mr Miner’s case.
·Contrary to Mr Maiden’s submissions, there was no pleading that the wife was a trustee for Mr Miner of the B sale proceeds.
·There was no basis pleaded for an order that the husband and wife pay the B sale proceeds to Mr Miner.
·Had a case that the wife became a constructive trustee of the M sale proceeds, let alone the B proceeds, been pleaded, it may have thrown into much greater relief questions such as whether or not the wife did receive and, if so, to what extent, benefit from the M proceeds by way of the payment of her debts, or whether it was her and the husband’s intention that she receive such benefit. As well, it would have brought into focus the question of when the breach of trust actually occurred and whether the wife came to have knowledge of it only after the event.
·By proceeding to examine whether the wife had become a constructive trustee of the M sale proceeds, his Honour paid insufficient attention to whether facts had been established to found the claim as pleaded that, by virtue of the M Agreement and the variation to it, the wife had become a trustee with the husband for Mr Miner, of one-half of the M sale proceeds. Some findings that bear on the claim as pleaded are inconsistent with one another.
In Dare v Pulham (1982) 148 CLR 658 at page 664 a case referred to by Mr McNally, the High Court said:
Pleadings and particulars have a number of functions; they furnish a statement of the case sufficiently clear to allow the other party a fair opportunity to meet it (Gould and Birbeck and Bacon v. Mount Oxide Mines Ltd. (In liq.) (16); they define the issues for decision in the litigation and thereby enable the relevance and admissibility of evidence to be determined at the trial (Miller v. Cameron (17)); and they give a defendant an understanding of a plaintiff’s claim in aid of the defendant’s right to make a payment into court. Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings (Gold and Birbeck and Bacon (18); Sri Mahant Govind Rao, v. Sita Tam Kesho (19)). …
In our view, the parties did not choose to disregard the pleadings or the issues under discussion, so that in ordering relief not founded on the pleadings, Le Poer Trench J fell into error.
The argument that the trial judge took into account an irrelevant consideration
Ground 15 is:
15.His Honour erred in taking into account an irrelevant consideration that if the Court ordered that funds now remaining from the sale of the [B] property (about $190,000) should be paid to [Mr Miner], that [Mr Miner] would not pursue the husband or the wife for the balance of money that may now be owing to him.
Of the two points in respect of which Le Poer Trench J called for further submissions, the second relates to this ground. His Honour described the point about which he asked for further submissions as follows:
…
(b)If the effect of the declaration orders of the Court is that funds now remaining from the sale of the [B] property (about $190,000) should be paid to Mr [Miner], would Mr [Miner] be proposing to pursue the husband and wife for the balance of money which may now be owing to him?
Le Poer Trench J recorded Mr Miner’s submission:
249.In relation to the second question Mr [Miner] says that subject to reserving his position in relation to the question of costs, he would not be pursuing the husband and the wife for the balance of any money found to be owing to him once the fund in the trust controlled monies account of about $190,000 had been received by him.
Mr McNally argues that this subject was entirely irrelevant to Mr Miner’s claim as against the wife. Clearly that was so. Mr McNally further argues that the presence of this topic implies that it had some effect on his Honour’s orders in respect of Mr Miner’s claim. We reject that submission. In his Honour’s reasons, the discussion of the topic comes after he has described the orders that he intends to make by way of declarations of trust in respect of the husband’s position with regard to the M property and the proceeds of sale and the order for the balance of the proceeds of B sale to be paid to Mr Miner, together with interest.
As the closing segment of his Honour’s reasons makes clear, apart from Mr Miner’s claim his Honour also was dealing with an application by the husband for the adjournment of the s 79 proceedings. Although the topic of the balance of Mr Miner’s claim beyond the B proceeds would not seem to have related directly to that adjournment, we infer that his Honour enquired about it because of the still pending property settlement proceedings.
We are mindful that the orders contain the following:
(6)The Court notes that the plaintiff Mr [Miner] subject to the question of costs which he is yet to consider does not propose to pursue the parties for any further money which may be owing to him after payment of the funds currently held by the parties in the controlled money account being the remaining proceeds from the sale of the [B] property.
Mr Miner of course may well argue that the basis upon which he offered what is recorded in the notation disappears if we set aside any of the orders he obtained. However, this notation is not an order and therefore we do not interfere with it. We think if Mr Miner wishes to raise that argument, it is one for another time and place.
Consequence of the above conclusions
In his oral reply, Mr McNally submitted:
To the extent that his Honour should have decided a case that my friend espouses, based on the varied agreement as giving rise to some form of trust, that was not decided. There is no notice of contention so I’m not in a position to deal with what the evidence said on that should your Honours have been minded to embark on a reconsideration of the matter. The decision of the trial judge should be set aside. …
…if the appeal was to succeed it should succeed on the basis that any orders against [Ms Gilchrist] be set aside; that in lieu of the orders made below in relation to [Ms Gilchrist] there be entered a verdict for the defendant. That would be the end of the proceedings as far as [Ms Gilchrist] is concerned. That would then preserve [Mr Miner’s] judgment as against the husband, and whatever follows from that in the section 79 proceedings follows. …
However, while we agree with Mr McNally that a case based on the varied agreement “as giving rise to some form of trust” was not decided, as noted during the course of our discussion, his Honour did make some findings going to Mr Miner’s claim based on the variation of the M agreement. In particular, we refer to paragraph 196 of the trial judge’s reasons earlier set out and discussed. On the other hand, as also seen, we think that, on their face, some of the findings are unsafe and inconsistent one with the other. It seems that the trial judge embarked upon determination of the claim against the wife as pleaded but deviated to address other bases. In those circumstances we think it quite possibly unfair to Mr Miner to dismiss his claim as pleaded against the wife.
However, the state of the findings precludes us from determining Mr Miner’s claim as pleaded. That matter ought be remitted for rehearing.
The question of this court’s power to remit for rehearing a claim heard in this court in its accrued jurisdiction was not raised before us. On its face the powers contained in s 94(2) of the Family Law Act 1975 (Cth) accommodate such a course. We note also that R 51.53 of the Uniform Civil Procedure Rules 2005 (NSW) provides that the Court of Appeal may, on the hearing of an appeal, if it appears to that court that there ought to be a new trial, set aside the decision and order a new trial.
I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.
Associate:
Date: 10 November 2009
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