Gleeson (Trustee), in the matter of Coster v Eggleton
[2024] FedCFamC2G 11
•12 January 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Gleeson (Trustee), in the matter of Coster v Eggleton [2024] FedCFamC2G 11
File number(s): SYG 887 of 2023 Judgment of: JUDGE MANOUSARIDIS Date of judgment: 12 January 2024 Catchwords: BANKRUPTCY – application by trustee in bankruptcy of discharged bankrupt for orders pursuant to s 66G of the Conveyancing Act 1919 (NSW) for the sale of two properties of which at the time he was made bankrupt the bankrupt was the registered proprietor with his de facto spouse – whether in relation to one of the properties (first property) the de facto spouse had contributed $63,000 of her own money towards the purchase price of $133,000 – de facto spouse contributed $63,000 – whether because the de facto spouse contributed $63,000 towards the purchase price of the first property the bankrupt held part of his legal interest in the first property as trustee for the de facto spouse on a resulting trust – bankrupt held part of his interest on resulting trust – whether because the bankrupt and de facto spouse raised money on the security of the first property to purchase a second property the bankrupt held his legal interest in the second property on resulting trust in the same proportion he held his legal interest on resulting trust in the first property – no resulting trust over the second property – orders for sale made on the basis that the bankrupt held and the trustee in bankruptcy now holds part of the bankrupt’s legal interest in the first property on resulting trust. Legislation: Bankruptcy Act 1966 (Cth) ss 58(1), 116(1), 121(1), 129AA
Evidence Act 1995 (Cth) s 144(1)Judiciary Act 1903 (Cth) s 79
Conveyancing Act 1919 (NSW) ss 66F(1), 66F(2), 66G
Cases cited: Blatch v Archer [1774] EngR 2
Bosanac v Commissioner of Taxation [2022] HCA 34
Calverley v Green (1984) 155 CLR 242
Coshott v Prentice [2014] FCAFC 88
Davies v National trustees Executors and Agency Co of Australasia Ltd [1912] VLR 397
Dyer v Dyer [1788] EngR 266
Pascoe v Dyason [2011] NSWSC 1217
Payne v Parker [1976] 1 NSWLR 191
Russell v Scott (1936) 55 CLR 440
S v S [1972] AC 24
Trustees of Property of Cummins v Cummins [2006] HCA 6
Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499
Division: General Number of paragraphs: 118 Date of last submission/s: 21 December 2023 Date of hearing: 31 August 2023 and 24 October 2023 Place: Sydney Counsel for the Applicant: Mr J Parrish Solicitor for the Applicant: Daniela Fazio Lawyers Pty Ltd The Respondents: Appeared in person ORDERS
SYG 887 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
IN THE MATTER OF DAMIEN CRAIG COSTER
BETWEEN: BRUCE GLEESON IN HIS CAPACITY AS TRUSTEE OF THE PROPERTY OF DAMIEN CRAIG COSTER, A REGULATED DEBTOR (DISCHARGED)
Applicant
AND: NICOLE EGGLETON
First Respondent
DAMIEN CRAIG COSTER
Second Respondent
ORDER MADE BY:
JUDGE MANOUSARIDIS
DATE OF ORDER:
12 JANUARY 2024
THE COURT DECLARES THAT:
1.Immediately before 17 November 2015, being the date on which a sequestration order was made against the estate of the second respondent (Mr Coster), Mr Coster held 47.38% of his half share in the Glenfield Park property identified in declaration 2 on resulting trust for the second respondent (Ms Eggleton).
2.All of the right, title, and interest of Mr Coster in the following properties (collectively Properties) have been and are vested in the applicant (Trustee) by operation of ss 58(1), 116(1) and 129AA of the Bankruptcy Act 1966 (Cth).
Properties
(a)The property comprised in certificate of title 162/260487 situated at 23 Melkin Avenue, Glenfield Park, New South Wales (Glenfield Park Property).
(b)The property comprised in certificate of title B383905 situated at 3185 Sturt Highway, Forest Hill, New South Wales (Forest Hill Property).
3.The Trustee and Ms Eggleton are the beneficial owners of:
(a)the Glenfield Park Property as tenants in common, with the Trustee holding a 26.31% share, and Ms Eggleton holding a 73.69% share; and
(b)the Forest Hill Property as tenants in common in equal shares.
THE COURT ORDERS THAT:
Appointment of Trustees for sale and vesting of properties
4.The Trustee and Daniel Robert Soire, registered liquidator, both of Jones Partners, Level 13, 189 Kent Street, Sydney in the State of New South Wales, are appointed trustees (Trustees for Sale) for the sale of the Glenfield Park Property and the Forest Hill Property.
5.Subject to the interests referred to in declarations 1, 2, and 3, each of the Glenfield Park Property and the Forrest Hill Property vests in the Trustees for Sale, subject to any encumbrances affecting the entire Properties, and free of any encumbrances affecting any undivided shares in the Properties, to be held on the statutory trust for sale created pursuant to Division 6 of Part IV of the Conveyancing Act 1919 (NSW).
Sale of properties and dealing with proceeds of sale
6.The Trustees for Sale are empowered:
(a)to offer the Glenfield Park Property and the Forest Hill Property for sale, and to sell the Properties by public auction with power to fix a reserve price, or alternatively, to sell the Properties by private treaty at the best available price;
(b)to obtain a valuation of the Glenfield Park Property and the Forest Hill Property by employing a registered valuer for the purposes of determining a fair and reasonable price of the Properties for the purposes of the performance of their duties as Trustees for Sale; and
(c)to lease or license the Glenfield Park Property and the Forest Hill Property on such terms as the Trustees for Sale consider appropriate and hold the net proceeds of the lease or license (after the payment of the Trustee’s remuneration, costs and expenses for so leasing or licensing either or both the Glenfield Park Property the Forest Hill Property) on trust for the Trustee as trustee of the property of Mr Coster (a regulated debtor (discharged)) and Ms Eggleton for distribution after the sale of the Glenfield Park Property and the Forest Hill Property pursuant to order 10.
7.Whilst residing in the Glenfield Park Property Ms Eggleton and Mr Coster pay all mortgage debt, rates, and taxes, and keep the Glenfield Property insured; and provide evidence of these payments to the Trustees for Sale within 7 days after the day on which the Trustees for Sale request in writing that such evidence be provided to them.
8.In relation to the Forest Hill Property Ms Eggleton and Mr Coster pay all mortgage debt, rates, and taxes, and keep the Forest Hill Property insured; and provide evidence of these payments to the Trustees for Sale within 7 days after the day on which the Trustees for Sale request in writing that such evidence be provided to them.
9.After the sale of the Glenfield Park Property and the Forest Hill Property at auction or by private treaty, the Trustees for Sale are empowered to deduct from the proceeds of sale the following amounts in the following order:
(a)the commission and other expenses of any real estate agent engaged or appointed by the Trustees for Sale;
(b)the remuneration and expenses of the Trustees for Sale in respect of the sale;
(c)the Trustee's remuneration, costs and expenses of attending to any leasing or licence activity referred to in order 6(c);
(d)the legal expenses of transferring the land to the purchaser (conveyancing costs);
(e)any taxes, including but not limited to capital gains tax, land tax, and goods and services tax (GST);
(f)necessary adjustments of rates and taxes on settlement of the sale;
(g)insurance and any other reasonable expenses for the protection and maintenance of the Properties;
(h)the cost of attending to remove and dispose of any personal property on the Properties; and
(i)the debt secured over the Properties by Suncorp-Metway Limited pursuant to registered mortgage Al603979 and registered mortgage Al660431.
10.The Trustees for Sale hold the proceeds of sale (after deduction of the expenses referred to in orders 6(c), 9 and order 11) on trust for the Trustee as trustee of the property of Mr Coster, a regulated debtor (discharged), and Ms Eggleton in the shares specified in declaration 3 and to pay to each that sum, after adjustments set out above and subject to order 11.
11.If Ms Eggleton or Mr Coster do not comply with orders 7 and 8 the Trustees for Sale shall be at liberty to deduct from Ms Eggleton’s share of the net proceeds of sale the cost of those expenses before paying Ms Eggleton her share of the net proceeds of sale.
Possession of the Properties
12.By 28 February 2024:
(a)Ms Eggleton and Mr Coster vacate the Forest Hill Property, and remove from that property all vehicles, rubbish, and chattels that are not vested in the Trustee (FH personal property); and
(b)Ms Eggleton deliver to the Trustees for Sale the keys and security codes (if any) for the Forest Hill Property, such delivery to be made at Jones Partners, Level 13, 189 Kent Street, Sydney; or at such other place as Ms Eggleton and the Trustees for Sale may agree.
13.By 12 April 2024:
(a)Ms Eggleton and Mr Coster vacate the Glenfield Park Property, and remove from that property all vehicles, rubbish and chattels that not vested in the Trustee (GP personal property); and
(b)Ms Eggleton deliver to the Trustees for Sale the keys and security codes (if any) for the Glenfield Park Property, such delivery to be made at Jones Partners, Level 13, 189 Kent Street, Sydney; or at such other place as Ms Eggleton and the Trustees for Sale may agree.
14.If Ms Eggleton and Mr Coster do not comply with orders 12 and 13:
(a)the Trustee for Sale have liberty to apply for the issue of a writ or writs of possession; and,
(b)upon the issue and execution of any writ of possession issued pursuant to (a), the Trustees for Sale shall be authorised to remove and dispose of the GP and FH personal property on the Properties as they consider appropriate.
Option for Ms Eggleton to offer to purchase
15.Ms Eggleton may purchase the interest the Trustees for Sale have in either or both of the Properties without the Trustees for Sale requiring her to pay a 10% deposit, but otherwise on such terms as the Trustees for Sale consider appropriate.
Remuneration of the Trustee and the Trustees for Sale
16.The Trustees for Sale shall be entitled to be remunerated on the basis of their fees attached to their Consent to Act dated 30 May 2023 and accepted for filing on 1 June 2023.
Liberty to apply
17.The Trustee, the Trustees for Sale, and Ms Eggleton each have liberty to apply on such notice as the circumstances warrant, in relation to the interpretation, implementation, variation, or any other matter arising in relation to the making or implementation of these orders.
Service of orders
18.In addition to any other method by which the Trustee may serve orders of the Court, the Trustee may serve a sealed copy of these orders on Ms Eggleton and Mr Coster:
(a)by placing a sealed copy of these orders in a sealed envelope addressed to Ms Eggleton and Mr Coster and then and placing then envelope in the letterbox situated on the Glenfield Park Property; and
(b)by sending a copy of the sealed orders to the email address specified in the notice of appearance filed by Ms Eggleton and Mr Coster on 23 June 2023.
Retirement of Trustees for Sale
19.The Trustees for Sale may, without notice to the Court, retire as statutory trustees for sale of the Properties when they complete the sale of the Properties and distribute the proceeds of sale in accordance with these orders.
Costs
20.By 9 February 2024 the parties file and serve short written submissions on costs.
21.Unless by 16 February 2024 any party notifies the Court that he or she wishes that there be oral argument on the question of costs, Judge Manousaridis shall be at liberty to determine the question of costs on the papers without conducting any further hearing.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
On 17 November 2015 a sequestration order was made against the estate of the second respondent, Mr Coster, and the applicant (the Trustee) was appointed Mr Coster’s trustee in bankruptcy. At the time the sequestration order was made, Mr Coster and the first respondent, Ms Eggleton, were the registered proprietors as joint tenants of two properties, one in Glenfield Park (GP property), and the other in Forest Hill (FH property).
By application filed on 1 June 2023 the Trustee seeks declarations that, by the operation of ss 58(1), 116(1), and 129AA of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act), he holds the interest Mr Coster held in the two properties immediately before Mr Coster became bankrupt; and that the Trustee and Ms Eggleton hold the properties as tenants in common in equal shares. The Trustee also seeks orders under s 66G of the Conveyancing Act 1919 (NSW) (Conveyancing Act) that he and another registered liquidator, Mr Soire, be appointed trustees for sale of the properties, and that the trustees for sale sell those properties and, after the deduction of expenses and the discharge of debts secured on the properties, pay the proceeds of sale equally to Ms Eggleton, and to the Trustee.
Mr Coster and Ms Eggleton (respondents) contend they do not hold their interests in the properties in equal shares. The basis of that contention is the claim that Ms Eggleton contributed $63,000 towards the $133,000 purchase price of the GP property at the time she and Mr Coster purchased that property in 1995, the source of the $63,000 being a compensation payment of $84,615.36 Ms Eggleton received. The respondents contend that Mr Coster’s contributions towards the purchase of the GP property has been limited to no more than 50% of the $70,000 of the purchase price, being the amount he and Ms Eggleton borrowed to pay the purchase price of $133,000. For that reason, the respondents contend that Mr Coster held only a 26.31% beneficial interest in the GP property,[1] which in turn means that Mr Coster held the balance of his legal interest, namely, a 23.69% beneficial interest in the GP property, on trust for Ms Eggleton. Stated another way, the respondents contend that Mr Coster held 47.38% of his half share in the GP property on trust for Ms Eggleton.[2] The respondents also contend that Mr Coster held the same percentage of his legal interest in the FH property on trust for Ms Eggleton. The basis of that contention is that the respondents financed the purchase of the FH property with a bank loan that was secured by both properties.
[1] ($133,000 - $63,000) x 50% = $35,000, which is 26.31% of $133,000
[2] 23.69/50 x 100 + = 47.38
The Trustee submits that the respondents have not discharged the burden that lies on them to prove that Ms Eggleton contributed $63,000 towards the purchase price of $133,000 for the GP property; but even if Ms Eggleton did contribute $63,000, the evidence displaces the presumption that she and Mr Coster intended that they hold their beneficial interests in the GP property in the proportions of the amounts they each contributed towards the purchase price of the GP property. The Trustee further submits that even if Mr Coster holds part of his legal interest in the GP property on trust for Ms Eggleton, the fact that Mr Coster and Ms Eggleton mortgaged the GP property to secure a loan to purchase the FH property is incapable of giving rise to any trust of Mr Coster’s legal interest in the FH property.
The respondents advance three further contentions or sets of contentions. The first is that Ms Eggleton and the Trustee made an agreement in around 31 July 2020 under which the Trustee would transfer to Ms Eggleton his interest in the properties for $10,000. The second is the contention that Ms Eggleton had made numerous attempts to purchase the Trustee’s interest in the properties, but the Trustee acted unreasonably. The third contention relates to the Trustee’s treatment or alleged treatment of a debt or debts Mr Coster owes or owed to the Australian Taxation Office (ATO).
In these reasons for judgment, therefore, I consider the following questions:
(a)Did Ms Eggleton contribute the $63,000 she claimed she did towards the purchase of the GP property?
(b)If (a) is answered in the affirmative, did Mr Coster hold around 47.38% of his 50% legal interest in the GP property on trust for Ms Eggleton?
(c)If (b) is answered in the affirmative, did Mr Coster also hold around 47.38% of his 50% legal interest in the FH property on trust for Ms Eggleton?
I will then consider whether I should make orders under s 66G of the Conveyancing Act. It is at this point that I will consider whether the Trustee and Ms Eggleton entered into an agreement to the effect Ms Eggleton contends, and whether the correspondence and other dealings between Ms Eggleton and the Trustee and his representatives gives rise to any matters that are relevant to determining whether I should make orders under s 66G of the Conveyancing Act. I will consider separately the respondents’ contentions concerning the Trustee’s treatment of Mr Coster’s ATO debts.
I will begin by setting out in narrative form the evidence and some findings. Unless the context suggests otherwise, unqualified statements of facts are to be taken to reflect a finding of the facts stated.
EVIDENCE AND SOME FINDINGS
Ms Eggleton and Mr Coster are in a de facto relationship, having commenced their relationship in around 1990.[3] Mr Coster, who was born in 1972,[4] was then a motor mechanic apprentice; and Ms Eggleton worked in a café.[5] Ms Eggleton left school in 1990 when she was in year 11.[6] It is open to infer, and I find, that in October 1995 Ms Eggleton was around 22 years of age.
[3] T54.35
[4] T90.5
[5] T54.40
[6] T54.20
On 3 June 1993 Ms Eggleton was involved in a motor vehicle accident; and she made a claim for compensation. Ms Eggleton, through her solicitors, Walsh & Blair, settled her claims by 13 October 1995.[7]
[7] CB155
Ms Eggleton receives compensation payment
By letter dated 13 October 1995 Walsh & Blair informed Ms Eggleton they had received a cheque representing the amount for which Ms Eggleton settled her claim; and enclosed a cheque for $84,615.36 which, they said, represented the balance of money owing to Ms Eggleton after deducting legal costs and disbursements.[8]
[8] CB155
Ms Eggleton and Mr Coster purchase GP property
At around the time she received her compensation payment, Ms Eggleton and Mr Coster entered into a contract to purchase the GP property for $133,000. Settlement of that property occurred on 8 December 1995.[9] The instrument of transfer contained an acknowledgment by the transferors that they had received consideration of $133,000. Paragraph F of the instrument of transfer provided as follows:
TRANSFEREE NICOLE MARGARET EGGLETON & DAMIEN CRAIG COSTER TENANCY: JOINT TENANTS[9] CB51
There are a number of documents that are relevant to identifying the source of the $133,000 the respondents used to pay for the purchase of the GP property. These are as follows:
(a)A letter dated 25 October 1995 from Commonwealth Bank of Australia (CBA) that a loan of $70,000 had been approved “to help you buy a new house”.[10]
(b)A letter dated 8 December 1995 from CBA to the respondents stating:[11]
We confirm settlement has been effected with your solicitor and the Bank handed over $121150.85 in exchange for deed and documents to your property.
Your equity in the transaction amounting to $51150.85 has been debited to your account number in terms of your instructions.
(c)A loan statement dated 30 June 1996 issued by CBA in relation to a loan account held by the respondents that records a carried forward balance of $70,600 as at 31 December 1995.[12]
[10] CB161
[11] CB167
[12] CB167
Source of $63,000 that was used to purchase GP property
In her affidavit Ms Eggleton says she deposited the compensation cheque into her “sole account before it was closed to open a combined account between” the respondents “for the home loan”.[13] Ms Eggleton further says that, “[a]s this occurred 25 years ago”, her bank could not provide her with the records without an “archive search which was quoted to cost $60 per hour and once they started the process, they were unable to stop until the documents are found”. Ms Eggleton says she could not afford this cost.[14]
[13] CB147, [11]
[14] CB147, [11]
Ms Eggleton was cross-examined about why, given the documents she had annexed to her affidavit, she had not annexed any documents relating to the account into which she says she deposited her compensation payment (which cross-examining counsel referred to as the “transactional account”). Ms Eggleton said that she had found the documents annexed to her affidavit “in an old ironing box in [her] wardrobe”.[15] It was put to Ms Eggleton that she has more documents available to her than the documents she annexed to her affidavit, and, in particular, that she did have bank statements from the “transactional account”. Ms Eggleton gave the following evidence:[16]
[15] T62.20
[16] T63.20-T64.10
. . . What I’m putting to you is a positive proposition which is that you maintained not only bank account statements, and loan statements for the loan account that you had with the Commonwealth Bank but also your transactional account?‑‑‑It – this is all – this is all the home loan statements, not a transactional account.
I understand that but what I’m suggesting to you is amongst the various documents that you keep at home, which would seem to be somewhat voluminous, you have, amongst those documents, bank statements from the Commonwealth Bank of Australia relating to your transactional account with the Commonwealth Bank?‑‑‑It’s in relation to the home loan; it’s not in relation to ‑ ‑ ‑
Okay?‑‑‑ ‑ ‑ ‑ like, it’s just a home loan account. It’s ‑ ‑ ‑
Okay. I will come at it in a different way then?‑‑‑Okay.
When you and Mr Coster purchased the Glenfield Park property, some of the money was paid from the bank, and some of the money was paid by way of a deposit, okay, and that money was paid into a joint Commonwealth Bank account?‑‑‑Yes.
Right. So what I’m suggesting to you ‑ ‑ ‑?‑‑‑Sorry, I’ll rephrase it. I can’t really remember if that’s how it was processed. All I know was the money was in my account, ‑ ‑ ‑
Right?‑‑‑ ‑ ‑ ‑ we had done the home loan. I can’t actually remember was that money taken out of that, put into this straight onto the home loan; I – I don’t remember any – how that was done if that makes sense.
Okay?‑‑‑I just ‑ ‑ ‑
How about I come at it ‑ ‑ ‑?‑‑‑I actually surprised myself when I found this in the cupboard so ‑ ‑ ‑
Right. How about I come at it perfectly directly, in fairness to you; you have, at home, amongst your papers, a bank statement showing the source of the money, being the deposit, to buy the Glenfield Park property?‑‑‑Other than what’s in here do you mean?
Other than what’s in here?‑‑‑No, this is all I had. That’s why I submitted what I had.
Okay. Thank you?‑‑‑I attempted to get further evidence but was unable to do that.
Ms Eggleton was extensively cross-examined about whether she could have obtained from CBA the bank statements CBA issued in October-November 1995 (1995 bank statements) in relation to the account into which Ms Eggleton said her compensation had been paid, and the account out of which Ms Eggleton claimed the proceeds of the compensation payment were paid towards the purchase price of the GP property. Counsel’s cross-examination was in large part based on an email Ms Lisa Grey, a debt consultant whom the respondents had engaged, sent to Mr Gleeson on 23 July 2020. In that email Ms Grey stated (errors in original): [17]
I can confirm that I have spoken to Ms Eggleton and she we are seeking for the below option 2. Regarding monies from her personal injury claim were used to purchase property in joint names and that as a result of this financial contribution, Nicole believes that she are entitled to some greater share of the net equity.
As you have requested additional documentation to accept this claim, Nicole has contacted her Financial Institution to request Documentation for the Information required in the below email sent from Bruce Gleeson to even consider the 3rd offer that has now been presented to Jones Partners.
Upon speaking to her Financial Institution, they informed her that to request these statements to show the information required, I would have to request these be searched in there Archive department and this would be at a cost of $60 per hour, once this request is made I am unable to stop this process no matter how many hours they have been searching for, which means it could take hours at a cost that is not affordable. They also advised Nicole of the time it may take due to the matter being twenty-five (25) years ago.
Nicole was then advised that another option would be to request to access this information under the Australian Privacy Principle, she have opted for this option as its at no cost, this unfortunately will take longer than the first option, they have sent me the paper work to complete this request, as they were located in Hobart it may take up to 2 weeks with the current postal service in this Pandemic, and up to 30 days once I return that paper work.
If for any reason they are unable to locate the information required, Nicole will have no other option than to request this to be heard in a Supreme Court as she have previously discussed this with her Lawyer when he assisted in retrieving the information confirming her Compensation settlement.
Nicole has supplied the Documentation confirming the compensation settlement to Jones Partners.
Once we receive the information requested, Nicole will forward this with urgency to hopefully come to an agreement.
[17] CB85
Ms Eggleton’s cross-examination included the following:[18]
[18] T74.25-T75.25
Okay. Did you ask them how long it was likely to take to find documents from 1995?‑‑‑They told me it could take a week, it could take two months, it could take six months; that’s how they worded it.
But okay, did you ask them how much money it was likely to cost?‑‑‑They told me exactly it was $60 an hour. Once I gave them the okay, “Can you start searching”, they can’t stop it so if it took six months it was going to take me six months of however many hours that they searched for that document.
Yes, but what I’m asking you though, it might take six months to procure the result, that doesn’t mean they’re sending – spending 24 hours a day, seven days a week for six months searching for it?‑‑‑But I – I couldn’t guarantee that at that cost; that would have been a cost, like, a large cost to me. I can’t get – I couldn’t guarantee, they couldn’t guarantee how long it was going to take so yeah, it could have took five hours, it could have took 150 hours.
Yes?‑‑‑That was just what I was told.
Well, hold on a minute, you weren’t told it could take 150 hours, were you?‑‑‑Well, they told me timeline.
Yes?‑‑‑They put it – so it could have took 12 months; they couldn’t give me a timeline.
All right. I think what you just said initially was that they said it could take, was it, one month, three months, six months?‑‑‑As a – yeah.
I think even shorter, wasn’t it; one week, one month, six months?‑‑‑Well, that’s how they sort of worded it.
MS ..........: Two.
MR PARRISH: Two – two weeks, okay. All ‑ ‑ ‑?‑‑‑From memory, that’s how they worded it.
Yes?‑‑‑And once I said yes, they can’t stop that search.
Okay. You did not though ask how many hours it might take on average to find bank statements from 1995?‑‑‑I can’t recall the actual whole conversation, but ‑ ‑ ‑
Okay?‑‑‑ ‑ ‑ ‑ they couldn’t tell me how many hours it would take. It was a lot of documentation to go through from – since 1995.
I see. But the fact of the matter is you understood that at a cost of $60 an hour, for however many hours it might take, they could find the – the one document that would prove definitively?‑‑‑No, they couldn’t guarantee that.
After further cross-examination along these lines, counsel for the Trustee put to Ms Eggleton the following:[19]
So – well, what I’m going to put to you, Ms Eggleton, is that the reason why you did not make a request to the Commonwealth, through their archive department, for the search of these bank statements at $60 an hour, is simply because they wouldn’t have shown that the money for the purchase of the Glenfield Park property came from you?
[19] T77.40
Ms Eggleton responded:[20]
No, that’s not correct. It’s because . . . having a family with four kids, and living week to week, having a gamble of paying $60 an hour for that gamble of a period of time, was not something I could afford.
[20] T77.45
Counsel for the Trustee continued to press Ms Eggleton, in response to which she gave the following evidence:[21]
MR PARRISH: So Ms Eggleton, I put to you that the reason you didn’t in fact instruct the archive department of the Commonwealth Bank to obtain this information is because it wouldn’t have helped you?‑‑‑It would have helped me ‑ ‑ ‑
It would have?‑‑‑ ‑ ‑ ‑ if they could find that information.
Okay?‑‑‑But there’s no guarantee they could find that information so the information I gave Bruce will clearly show ‑ ‑ ‑
Well, leaving that to one side, you obviously accept ‑ ‑ ‑?‑‑‑You see, you’ve got to keep in mind this is 28 years ago so the filing system 28 years ago is not what it is today.
Yes, I understand that?‑‑‑And to even find what I actually submitted to Bruce was actually probably a bonus for me because I probably wouldn’t have been able to even get that. Well, I couldn’t get that because I asked Tim Abbott from Walsh & Blair for that exact information but he couldn’t ‑ ‑ ‑
Okay. I understand?‑‑‑I don’t know what you want me to say. It is what it is. It’s, you know, I’m not sitting here making – making it up that I received a compensation payment, and then I put it into a home loan. I was 21, the home loan was 133,000. You can clearly see the Commonwealth Bank loan was 70,000; it just shows whatever was left there is what my – my compensation went into. I mean I – I can clearly – I didn’t have 60 odd thousand dollars sitting in my bank just for no reason to go into that home loan. I – I don’t know what else I can do. If I had further information to give, I would definitely be giving it; that’s – that’s for sure because I – I don’t really want to be sitting here arguing something that I know happened, and is rightly – rightly mine.
[21] T78.25
The cross-examination about Ms Eggleton’s not having done more than she did to obtain the 1995 bank statements did not end there. Counsel for the Trustee directed Ms Eggleton’s attention to that part of Ms Grey’s email to Mr Gleeson in which she said that Ms Eggleton had been “advised that another option would be to request to access this information under the Australian Privacy Principle, she have opted for this option . . . at no cost”. Ms Eggleton was then cross-examined as follows:[22]
Okay. I understand. So you could have obtained it for free under the Australian Privacy Principle?‑‑‑I guess so but again, there’s still no guarantee they will find that.
No, of course ‑ ‑ ‑?‑‑‑Yeah.
‑ ‑ ‑ but it wouldn’t have cost you any money?‑‑‑I – I guess not. I – I don’t – yeah, I can’t remember.
And you decided not to pursue it?‑‑‑Well, because I found the evidence that I submitted which I believed would have been enough.
Right. But then we come to this court proceeding, which has been on foot for a number of months, the option remained for you to make that application under the Australian Privacy Principle?‑‑‑Again, I didn’t believe I would need it with what I submitted. Knowing that that’s true in fact I guess I should have maybe looked into another option, but knowing that that was true in fact, and I have the original documentation here if that needs to be looked at, just to show that it’s – yeah, it is what it is, I guess.
[22] T81.40 – 82.10
This part of Ms Eggleton’s cross-examination was conducted on the assumption that there was such a thing as the “Australian Privacy Principle” under which it was open to Ms Eggleton, in July 2020, to request CBA, at no cost to Ms Eggleton, to search and provide to Ms Eggleton bank statements CBA issued in October and November 1995. The only basis of this assumption, however, is what Ms Grey in the email she sent to Mr Gleeson on 23 July 2020 recorded Ms Eggleton said about the “Australian Privacy Principle”. Counsel for the Trustee, however, was not in a position to identify any material that would explain what the “Australian Privacy Principle” was, and whether under that “principle” it was indeed the case that in 2020, without any cost to Ms Eggleton, the CBA could have obtained within 30 days, and without cost to Ms Eggleton, bank statements that had been issued in 1995. That counsel for the Trustee was not in a position to explain from any material that was in evidence, or otherwise, what the “Australian Privacy Principle” was, is apparent from the following exchange that occurred in the course of cross-examination (emphasis added):[23]
HIS HONOUR: Why – why is it more in the witness’s power than it is in your power to obtain these documents?
MR PARRISH: Well, she had discovered upon an application – a process of making application under the Australian Privacy Principle, whatever that is.
HIS HONOUR: Well, I will ask again; why do you say it was that Ms Eggleton had greater power than your client to obtain this evidence? Do you say that she did or not from the bank?
MR PARRISH: Well, it’s quite possible because this application, under the Australian Privacy Principle – whatever that might be ‑ ‑ ‑
[23] T81.30 -T81.40
In the course of oral address I undertook searches on my computer after which I informed the parties of the following (emphasis added):[24]
HIS HONOUR: Yes. So there’s a privacy policy issued by the Commonwealth Bank dated 1 October 2019. I have this, but I’m not – just take my word for it that that’s what I have, and I’ve used the wayback machine to access it for around 2020. So there’s a section there which says – section 8, I think:
Can you see what information we had? You can ask for a copy of your information like your transaction history. Is there a fee? There’s no fee to ask for your information but sometimes we might charge an access fee to cover the time we spend. If there’s a fee, we will let you know how much. Generally the fee is an hourly rate plus photocopying costs and other expenses. You will need to pay us before we start or give us permission to take it out of your account.
Now, in due course, the email [that is, Ms Grey’s email of 23 July 2020] itself is ambiguous in terms of what that policy is, but what I’m going to ask for submissions is whether pursuant to section 144 of the Evidence Act, subsection (1) . . . I can have regard to that document and, if so, whether I should because on the face of it, it makes that 20 [sic] July document very consistent. That is, whichever way you go . . . if you want information you will have to pay for the search. So I’m only signalling that now, not because I’m expecting anything by way of submission because it’s obviously not appropriate and unfair . . . .
[24] T158.25-T159.10
As I foreshadowed at the hearing, on 30 November 2023, after I had reserved judgment, I caused my Associate to send the following email to the parties:
His Honour has requested that I bring the following to the parties’ attention:
During the hearing Ms Eggleton was cross-examined about the following passage in the email Ms Lisa Grey sent to Mr Gleeson on 23 July 2020 (CB85) (errors in original):
Upon speaking to her Financial Institution, they informed her that to request these statements to show the information required ,I would have to request these be searched in there Archive department and this would be at a cost of $60 per hour, once this request is made I am unable to stop this process no matter how many hours they have been searching for, which means it could take hours at a cost that is not affordable. They also advised Nicole of the time it may take due to the matter being twenty-five (25) years ago.
Nicole was then advised that another option would be to request to access this information under the Australian Privacy Principle, she have opted for this option as its at no cost, this unfortunately will take longer than the first option, they have sent me the paper work to complete this request, as they were located in Hobart it may take up to 2 weeks with the current postal service in this Pandemic, and up to 30 days once I return that paper work.
The cross-examination appears to have proceeded on the assumption that it was open to Ms Eggleton to obtain from the Commonwealth Bank of Australia (CBA) bank statements it issued in October and November 1995 at no cost to her.
His Honour has undertaken a “Google” search of the words “CBA Privacy Policy” which returned a link which, when pressed, led to the web page Group Privacy Statement - CommBank (
His Honour then searched on the Internet Archive Wayback Machine (which is at Internet Archive: Wayback Machine). The “Wayback Machine” is a search engine that searches web pages that have been saved over time. (For a description of the “Wayback Machine” see Home Grown Brands Australia Pty Ltd v Sperling Enterprises Pty Ltd [2021] FCCA 1597, at [42] ff.) The search revealed that had been saved between 23 June 2020 and 27 November 2023. 19 October 2020 is one of the days on which on which was saved. That led to a page headed “Group Privacy Policy Statement” (Statement). The Statement “describes how your personal information and credit information is collected and handled by . .. . the Commonwealth Bank of Australia”. Section 5 of the Statement is as follows:
“5a. Accessing, updating and correcting your information
You can contact us and ask to view your information. For more detailed information, we may ask you to fill out a request form. If your information isn’t correct or needs updating, let us know straight away.
How can I access my information?
You can ask us for a copy of your information, like your statements or transaction history, by visiting a branch, going online (such as Netbank, CommBiz or CommSec) or calling us (see We’re here to help, Section 6a). To get a copy of the credit information we have about you, you can visit a branch or call us.
If you would like more detailed information, please fill out the Request for Access to Personal Information Form (PDF).
How will we handle you request?
There is no fee to ask for your information, but sometimes we might charge a fee to cover the time we spend gathering the information you want. If there’s a fee, we’ll let you know how much it is likely to be, so you can choose if you want to go ahead.
We try to make your information available within 30 days after you ask us for it.
In some cases, we can refuse access or only give you access to certain information. For example, we might not let you see information that involves other people. If we do this, we will write to you explaining our decision”
His Honour invites submissions on the following questions:
1.Is it open to his Honour to have regard to the Statement under s 144(1) of the Evidence Act 1995 (Cth) for the purpose of determining the means by which it was open to Ms Eggleton to attempt to obtain from CBA banking records it issued in October and November 1995?
2.If 1 is answered in the affirmative, is it open to his Honour to find, on the basis of the Statement, that the fee for which a person making a request for personal information pursuant to section 5 of the Statement would not be charged is a fee for making the request itself; and not for work CBA might be required to carry out to obtain and provide the information requested?
HH would appreciate a response by 7 December 2023.
The parties filed submissions in response to this request; and I will refer to those submissions later in these reasons.
Mr Coster gave the following evidence under cross-examination about whether he had contributed any money towards the purchase price of the GP property:[25]
[25] T100.40-T101.10. Mr Coster made an affidavit (which was read at the hearing) in which he makes conclusory statements to the effect that Ms Eggleton paid the difference between the $133,000 and $70,000 loan using money she obtained from a personal injury settlement. Given its conclusory nature, I have not treated Mr Coster’s affidavit as evidence.
Right. Now, returning to the purchase of the Glenfield Park property – this is in 1995?‑‑‑Yes.
You gave evidence, I think, that you had been working as a mechanic since approximately 1988 or 1989?‑‑‑Yes.
So by that stage you had been working in full-time employment for about six or seven years?‑‑‑On and off. Yes.
Yes?‑‑‑Yes.
All right. And you had built up savings in that time?‑‑‑No.
No?‑‑‑On a – on a mechanic’s wage?
Yes?‑‑‑Are you kidding?
All right. And so when it – when it came to purchasing that property, nevertheless, you contributed some money to the purchase of that property?‑‑‑I had no money.
Okay?‑‑‑I had no money at all. No savings. Yes. It – it is what it is.
Advice about joint tenancy?
Ms Eggleton and Mr Coster engaged the services of a solicitor in their purchase of the GP property. In her affidavit Ms Eggleton says she was “never advised” by her solicitors at the time she purchased the property about “the ramifications of being joint tenants” and that “my share of the property would not be treated as being for my sole use and benefit”.[26]
[26] CB148, [12]
In evidence given under cross-examination Ms Eggleton said she could not remember whether she had met with a solicitor to discuss the contract of sale. Ms Eggleton accepted, however, that she met with a solicitor at the time she and Mr Coster entered into the contract to purchase the GP Property “for the purpose of obtaining legal advice in entering into a legal arrangement to buy the” GP property;[27] and that the solicitor acted on behalf of Ms Eggleton and Mr Coster throughout the course of the conveyance of the GP property.[28] Ms Eggleton also gave evidence that she did not recall whether the solicitor explained to her and Mr Coster that they would be purchasing the GP property as joint tenants.[29]
[27] T58.35
[28] T58.40
[29] T59.35
Ms Eggleton also gave the following evidence in cross-examination about whether she and Mr Coster had any discussion about owning the GP property and the FH property in different shares:[30]
All right. Well, you and Mr Coster didn’t discuss the two of you owning the properties in different shares, did you?‑‑‑It’s – it’s always just been acknowledged that it was – there was different shares on those – between me and Mr Coster.
When you say “acknowledged” do you mean that it was implicit or do you mean – because I’m putting to you – you – the two of you didn’t discuss this?‑‑‑Well, Damien – well, we’ve just had that knowledge. Like, my compensation went into the Melkin Avenue property so we just had – we had that knowledge of each other that I had more equity in that property.
When you say that you had that knowledge of each other, or it was just an understanding ‑ ‑ ‑?‑‑‑It was an understanding, yeah.
It was an understanding but it – I mean but what I’m suggesting to you is that the two of you didn’t discuss that?‑‑‑We would have in the past. I can’t recall when but yeah, one hundred per cent.
[30] T67.35-T67.45
Purchase of FH property
In 2014 Ms Eggleton and Mr Coster purchased the FH property. They financed the purchase of that property with a loan from Suncorp Bank. Ms Eggleton and Mr Coster gave evidence under cross-examination about the circumstances in which they purchased the FH property. Ms Eggleton gave the following evidence:[31]
[31] T64.15-T64.40; T66.35-T67.15
Okay. Now, I want to move forward some nine years to 2014 when you and Mr Coster purchased a property on the Sturt Highway ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ Forestville, so if I refer to it as the Forestville property you understand ‑ ‑ ‑?‑‑‑Forest Hill, yeah.
Forest Hill, I beg your pardon?‑‑‑Yeah.
And that’s a vacant block of land, isn’t it?‑‑‑That’s right.
Okay. Now, by this time you and Mr Coster had children; is that correct?‑‑‑Correct.
Okay. And by 2014 you and Mr Coster intended to purchase some further land together?‑‑‑Correct.
Yes. And you and Mr Coster inspected the Forest Hill property before you purchased it?‑‑‑Correct.
And you and Mr Coster arranged to refinance, and borrow to purchase that property?‑‑‑Correct.
Okay. And the two of you refinanced with Suncorp Bank; is that correct?‑‑‑Correct.
And in doing so, am I right in understanding first of all you obtained a loan to purchase the Forest Hill property?‑‑‑Yes.
And second of all you transferred your mortgage from the Commonwealth Bank over the Glenfield Park property across to Suncorp; is that correct?‑‑‑I believe so.
. . . .
MR PARRISH: Okay. All right. Now, when you approached Suncorp for the purpose of obtaining a loan over this property – that’s the Forest Hill property – they didn’t reject your application, did they?‑‑‑Not that I remember.
No. You approached them, and you applied for that loan with Mr Coster jointly?‑‑‑Yes.
Yes?‑‑‑I thought that’s – yeah, it was the only way we could do it.
Yes. Well, when you say it’s the only way you can do it, it’s because it’s the only way you could do it if the two of you owned it jointly, isn’t it?‑‑‑I guess so. I’m not too sure. We never tried to do it separately.
No, and ‑ ‑ ‑?‑‑‑I just needed somewhere to house – I’ve got horses ‑ ‑ ‑
Yes?‑‑‑ ‑ ‑ ‑ so I just needed somewhere to, yeah, put my horses so I didn’t have to agist them any more.
I see. And do you and Mr – did you – no, I will withdraw that. But, of course, when I just asked you that you and Mr Coster approached the bank jointly, it’s because the two of you intended to buy the property together?‑‑‑Well, we never attempted to do it on our own because – so with the – with the Melkin Avenue property, so Mr Coster had used equity in that a couple of times for the business that he had so the equity that I used to purchase the Forest Hill was my equity in that property.
Your equity in the Glenfield Park property?‑‑‑Yes.
That’s what you say?‑‑‑I put that towards – yes. I guess that’s the way to say it, yeah.
Mr Coster gave the following evidence:[32]
[32] T96.5-T97.5
At the time of buying the Forest Hill property ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ you understood that you and Ms Eggleton were buying it as joint tenants?‑‑‑Yes.
Yes. You understand – or you understood at that time that there was a difference between being a joint tenant or a tenant in common?‑‑‑Not really. No.
Okay. But nonetheless, the two of you applied for a loan with Suncorp Bank to fund the purchase of this property?‑‑‑Yes.
You did so jointly?‑‑‑Yes.
Yes. And ‑ ‑ ‑?‑‑‑Can I just elaborate on that a bit?
Yes?‑‑‑Nicole organised everything to be done for that property as I was flat-out driving trucks. I – Nicole sourced the property, she found the property. She chased the finance down for the property. I turned up and signed the papers. That’s – that was it.
Okay?‑‑‑Okay. That’s ‑ ‑ ‑
And the reason why you signed the papers and were a party to the loan is because the two of you tended to pool your assets together, don’t you?‑‑‑Well, it’s more to keep her happy than ‑ ‑ ‑
Well, be that as it may ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ it’s fair to say that you and Ms Eggleton pool your assets together, don’t you?‑‑‑Yes. Yes.
Yes. So you had a joint loan account for Glenfield Park?‑‑‑Yes.
Yes. You had a joint – a second joint account with the Commonwealth Bank?‑‑‑Yes.
Yes. You had a joint account with Suncorp?‑‑‑Yes.
And by that I mean you had a joint loan account for the Forest Hill property?‑‑‑Yes.
You had another joint account with Suncorp which replaced the Commonwealth Bank loan account for Forest Hill – sorry – for Glenfield Park?‑‑‑I don’t – I – you’ve lost me there. I ‑ ‑ ‑
Okay?‑‑‑The way I remember it was we had a Commonwealth account for the house and then we couldn’t get the money for the – the property so she got a loan through – she got a broker and brokered a loan through that and that ended up being Suncorp. So that’s ‑ ‑ ‑
Okay?‑‑‑That’s how it come about. Yes.
Further evidence about the purchase of the FH property is contained in Ms Eggleton’s solicitor’s letter dated 17 February 2023.[33] The solicitor stated that Ms Eggleton and Mr Coster purchased the FH Property in about April 2014 for $265,000; and they financed the purchase with a loan from Suncorp Bank of $170,000, secured by a registered mortgage over the FH property; and a loan from CBA for $95,000, secured “against the equity in the [GP] property (i.e. the equity in the home loan from [Ms Eggleton’s] compensation monies”).
[33] CB310
Mr Coster’s bankruptcy
As I have already noted, on 17 November 2015 a sequestration order was made against Mr Coster’s estate. The administration of his bankruptcy appears to have been uneventful: on 30 November 2015 he submitted a statement of his affairs; and, on 16 November 2018, he was discharged from bankruptcy. It appears that Mr Coster and Ms Eggleton retained the services of Ms Grey.
Communications between the Trustee and Ms Eggleton before commencement of proceeding
On 27 January 2016 the Trustee sent a letter to Ms Eggleton in which he stated that on his appointment of Mr Coster’s trustee in bankruptcy, Mr Coster’s interest in the GP and FH Properties became vested in the Trustee.[34] The Trustee set out a number of options for dealing with Mr Coster’s interests in the properties, these being the Trustee’s seeking and receiving an acceptable offer from Ms Eggleton, as co-owner, to purchase Mr Coster’s interest; the Trustee’s requesting that Ms Eggleton, as co-owner, join with the Trustee to sell the properties; or, if Ms Eggleton declines to make an offer or join in the sale, the Trustee’s considering applying to the Supreme Court of New South Wales for the partition and mandatory sale of the properties pursuant to s 66G of the Conveyancing Act. The Trustee concluded his letter by inviting Ms Eggleton to submit an offer to purchase Mr Coster’s interests in the GP and FH properties.
[34] CB65
On 24 April 2019 Ms Eggleton sent a letter to Ms Renee Burton, who worked in the office of the Trustee, in which Ms Eggleton offered to purchase the Trustee’s interests in the properties for $5,500.[35] Ms Eggleton’s offer was based on three scenarios – a “forced sale valuation”, a “mid point of valuation”, and a “fair market valuation”. In each of these scenarios Ms Eggleton assigned values and deducted from them the debts secured on the properties, and costs of sale. Ms Eggleton also includes values that represent the “Bankrupt’s 50% share”. Ms Eggleton was not cross-examined about what she understood by “Bankrupt’s 50% share”. Ms Eggleton also includes what she describes as “Doctrine 75%”. That appears to be a reference to a claim Ms Eggleton intended to make on the basis of the doctrine of exoneration.
[35] CB194 – CB195
On 6 August 2019 Ms Grey requested Ms Cheng, who worked in the Trustee’s office, for an update to Ms Eggleton’s offer.[36] Ms Cheng responded by email sent on 7 August 2019 in which she said that before the Trustee could consider the offer, he required the further information about the GP property referred to “in the attached letter to Ms Eggleton”.[37] The “attached letter” is not in evidence. Ms Grey responded by stating she will have a meeting with Ms Eggleton on 15 August 2019 to discuss the Trustee’s letter.[38] By email sent on 20 September 2019 Ms Grey provided to Ms Cheng the information the Trustee had requested.[39]
[36] CB191
[37] CB191
[38] CB190
[39] CB189
On 26 September 2019 Ms Chen sent an email to Ms Grey informing her that the Trustees rejected Ms Eggleton’s offer of $5,500. The Trustee was not satisfied Ms Eggleton has a valid claim under a doctrine of exoneration against the properties. Ms Cheng said, however, that the Trustee was willing to accept an offer of $40,000 payable in three instalments over 90 days. In an email sent to Ms Eggleton on 11 October 2019, Ms Grey said she would advise the Trustee’s office that Ms Eggleton intended to seek legal advice.[40]
[40] CB188
On 2 April 2020 the Trustee sent a letter to Ms Eggleton’s lawyers noting that no agreement had been reached to transfer the Trustee’s interests in the property to Ms Eggleton, but that the previous offer he had made remained open.[41]
[41] CB221
On 22 July 2020 Ms Grey sent to Ms Cheng and to Mr Davis (on behalf of the Trustee) an email attaching a letter dated 17 July 2020 from Ms Eggleton to Ms Chen, real estate listings, and a letter from Walsh & Blair dated 16 July 2020. The letter confirmed that Walsh & Blair had acted for Ms Eggleton on a personal injuries claim that was resolved in October 1995, and that after payment of legal costs, disbursements, and medical accounts, Ms Eggleton received the sum of $110,926.00. In her letter to Ms Cheng, Ms Eggleton offered $7,000 for the Trustee’s interest in the properties.
Mr Gleeson responded to Ms Eggleton’s offer by email sent on 23 July 2020.[42] The Trustee said he was unable to consider Ms Eggleton’s offer further because, in her offer, Ms Eggleton indicated she has a claim “for the Doctrine of Exoneration”, but Ms Eggleton provided no information to the Trustee. The Trustee said (underlying in original):
[42] CB82
[I]t is not clear whether you are asserting that:
1.Monies from your personal injury claim were used to purchase property in joint names and then such property was mortgaged whereby the mortgaged funds were then exclusively or otherwise used in Damien's business - if this is what you are asserting then it will be necessary for documentation to be provided, ie mortgage statements and financial statements for Damien's business that shows such transactions. If no such information is available then it is not possible for me to merely accept the claim.
OR
2.Monies from your personal injury claim were used to purchase property in joint names and that as a result of your financial contribution, you believe that you are entitled to some greater share of the net equity - in other words you believe you may potentially have some kind of resulting trust argument. Again, in the absence of further clarification and information that appears to provide some prima facie basis for such argument, it is not possible for me to merely accept such assertion.
Either way, I request that you provide further clarification urgently and with additional supporting documentation so that I can properly consider the offer. Additionally if you need to seek professional advice, then I encourage you to do so.
Ms Grey responded with the email of 23 July 2020 to which I have already referred. In an email sent to Ms Grey on 24 July 2020 the Trustee said that it was not up to him “to further explain what further information [Ms Eggleton] needs to provide”.[43] Nevertheless, in an email he sent on 24 July 2020, the Trustee said he was prepared to accept on a without prejudice basis $12,000 for the transfer of his interest in the properties.[44] On 31 July 2020 the Trustee sent a further email to Ms Grey in which he said he would accept an amount of $10,000 conditional on Ms Eggleton “incurring the legal cost of preparing a satisfactory deed evidencing the transaction”.[45] Ms Eggleton responded on 4 August 2020 with the following email:[46]
Thank you for your email,
Unfortunately as my previous email explained I am not in a financial position to accept any higher offer that you have requested in your below email,
To ensure my best interests are considered, I am needing more time to look into this matter further.
I will email you as soon as I know what option/avenue I will be looking at to have this matter settled at the earliest convenience for us both,
Please don’t hesitant to contact me further if required.
[43] CB84
[44] CB244
[45] CB242
[46] CB241
On 30 September 2022 the Trustee’s lawyers sent a letter to Ms Eggleton. The lawyers stated the Trustee had instructed them to register the Trustees’ interest in the properties.[47] The letter noted that the Trustee has assessed that the value of the FH property had increased because of a zoning change that permits the construction of dwellings; and that the Trustee decided there was sufficient equity in the FH property to warrant its sale for the benefit of the unsecured creditors. The letter then stated that if Ms Eggleton wished to make an offer to purchase the Trustee’s interest in the properties, Ms Eggleton should do so together with a valuation report or three market appraisals prepared by three local real estate agents; evidence of a final loan approval or access to funds to purchase the Trustee’s interest; and “[s]such other written evidence by way of source documents (such as Bank statements, Loan Agreements, etc) to support your offer”.[48]
[47] CB291
[48] CB292
On 26 October 2022 Ms Grey sent to the Trustee’s lawyers an email. Ms Grey referred to a meeting held on 13 October 2022, and noted that Ms Eggleton was prepared to resolve the matter by offering $15,000 to purchase the Trustee’s interest in the properties; that she would pay the legal fees “for the Deed required”; and that the money would be paid within 30 days after written acceptance.[49] Ms Grey then noted matters she said Ms Eggleton wanted the Trustee to take into consideration. These included the claim that Ms Eggleton “has made all payments towards both mortgages, rates, water and insurance for the past seven (7) years”.
[49] CB298
The Trustee’s lawyer responded by letter dated 25 November 2022 and headed “without prejudice, save as to costs”. After setting out, in some detail, the information the lawyers acknowledged Ms Eggleton had provided, the letter included the following:[50]
[50] CB304
Trustee’s decision
With respect, despite the passage of time that has been afforded to Ms Eggleton to produce direct evidence in support of her claim to a greater share of the equity in each of the Forest Hill and Glenfield Park properties, no persuasive evidence has been provided. In fact, the additional material provided under cover of your letter strengthens the Trustee's position and his 50% interest in each of the properties at the very least.
The Trustee will reserve his right to make further enquiries in relation to Ms Eggleton’s serviceability of the loans (ie, her income) from the acquisition of each of the properties and more recently, where the medical certificate provided squarely states Ms Eggleton was unable to work for a period of time. During that period of time Ms Eggleton was not working, someone would have been required to maintain the mortgages for each of the properties and the council rates (in addition to living expenses). We suspect this was maintained by the bankrupt. If we are correct, then those additional mortgage repayments and other costs made by the bankrupt may constitute an equitable charge in the Trustee’s favour at the very least.
With respect to Ms Eggleton’s personal injury monies, we confirm that in our recent telephone conversation with you, you indicated that Ms Eggleton's position is that the use of her personal injury award gives her a greater interest in the properties by reason of her contributions made to the acquisition/ improvements of those properties.
In the initial offer, Ms Eggleton represented to the Trustee that she had received $110,926.00 (“the award”). In the without prejudice meeting with Ms Eggleton and yourself in October 2022, Ms Eggleton indicated the award was used first to purchase the Glenfield Park property and then because the Glenfield Park property was used as collateral to the security taken over the Forest Hill property, she claims a greater interest in the Forest Hill property.
The 2 letters provided by Ms Eggleton from Walsh & Blair lawyers are inconsistent. We believe the Walsh & Blair 1995 letter accurately represents the award as paid to Ms Eggleton ($84,615.36) and thus able to be used at her discretion rather than the higher amount more recently advised by Walsh & Blair lawyers.
Notwithstanding the above, there is no direct evidence on the papers to support Ms Eggleton’s position that she made a greater contribution to the acquisition of the Glenfield Park property. Even if there was, the parties are in a long standing defacto relationship to which we say, the principles enunciated by the High Court in Cummins(a bankrupt) v Cummins [2006] HCA 6 would apply.
In our opinion, a relationship exists between the bankrupt and Ms Eggleton such that
the presumption of advancement would apply.
That said, we are instructed to make an application to the Federal Circuit and Family Court of Australia (Div 2) for orders akin to s66G of the Conveyancing Act, 1919 (NSW) so that the properties can be sold without delay. Whilst it is the Trustee's intention to seek orders from the Court that Trustees for Sale be appointed over each of the properties at the same time (in the interest of saving costs), as set out in our letter to Ms Eggleton of 30 September 2022, the Trustee proposes to first take steps to realise
. . . .
There then followed a number of further offers and counteroffers. On 17 February 2023 Ms Eggleton offered to pay the Trustee $70,000;[51] and on 6 April 2023 the Trustee offered to sell his interest in the properties for $200,000.[52] At the time the Trustee made this offer he had a kerbside appraisal of the GP property contained in a letter dated 20 February 2023 from Scout Corp (SC appraisal), which I assume is a real estate agent; and a valuation of the RH property dated 7 March 2023 prepared by Herron Todd White (HTW valuation). I marked these two documents MFI-2 and MFI-1 respectively, reserving my judgment on whether I would admit them into evidence. I consider they are admissible for the purpose of determining the reasonableness of the offers made (to the extent that is relevant), and to the exercise of the power under s 66G(1) of the Conveyancing Act.[53]
[51] CB312
[52] CB316
[53] I have arranged in chambers to mark MFI-2 and MFI-1 as exhibits C and D respectively.
The SC appraisal valued the GP property at between $450,000 to $490,000; and the HTW valuation valued the FH property at $200,000 on an “as is” basis, and $550,000 on a “building entitlement” component basis. The HTW valuation noted that the basis on which it has valued the FH Property on the assumption of the FH having “building entitlement” is an email a senior town planner of Wagga Wagga City Council had sent on 8 September 2022.
On 5 June 2023 Ms Eggleton, through her lawyer, offered to pay the Trustee $98,918 for his interest in the properties.[54] By that time, Ms Eggleton had obtained market appraisals for both the GP and FH properties from a Ms Gaffney, who I assume is a real estate agent. Ms Gaffney appraised the GP property to have a value of $420,000 to $440,000,[55] and the FH property to have a value of $300,000 to $350,000.[56] The Trustee, through his lawyers, rejected Ms Eggleton’s offer by letter dated 29 June 2023, but counter-offered to sell his interest in the properties for $185,000.[57] The last offer appears to have been made on 21 June 2023, when Ms Eggleton offered to buy the Trustee’s interest in the properties for $105,000.[58]
DID MS EGGLETON CONTRIBUTE $63,000 TOWARDS THE PURCHASE OF THE GP PROPERTY?
[54] CB317
[55] CB320
[56] CB324
[57] CB321
[58] CB3309
Trustee’s submissions
The Trustee submits that Ms Eggleton has not discharged the burden of proving that she contributed $63,000 towards the purchase price of $133,000 for the GP property. That submission is based on Ms Eggleton’s not having adduced into evidence bank statements that evidences such payment, and on what the Trustee submits is the “Blatch v Archer principle”.[59] The Trustee submits that the “Blatch v Archer principle” operates if the following “conditions” are met:[60]
. . . . (a) the missing witness would be expected to be called by one party rather than the other, (b) his evidence would elucidate a particular matter, (c) his absence is unexplained.
[59] Applicant’s Amended Outline of Closing Submissions, [9]. I have considered the reasoning associated with Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63, 98 ER 969 in Yalda v Consulate General of the Republic of Iraq, Sydney [2021] FCCA 499, at [10]-[16]
[60] Payne v Parker [1976] 1 NSWLR 191, at page 201, particularly at E
The Trustee submits these conditions are satisfied in relation to the 1995 bank statements: it would be expected that Ms Eggleton, rather than the Trustee, would adduce the 1995 bank statements; the 1995 bank statements, if adduced, would have elucidated a particular matter, namely, whether Ms Eggleton did contribute $63,000 towards the purchase of the GP Property using the proceeds of the compensation payment she received on 13 October 1995; and Ms Eggleton has given an unsatisfactory explanation for not having tendered the 1995 bank statements. In these circumstances, the Trustee submits, the following “evidentiary presumptions” are available:[61]
(a)the uncalled evidence would not have assisted Ms Eggleton;
(b)the direct evidence of Ms Eggleton may be more readily rejected and the inferences for which she contends may be treated with greater reserve;
(c)any inferences available against Ms Eggleton’s case may be more strongly drawn; and
(d)an assessment of the overall weight of the evidence unfavourable to Ms Eggleton.
[61] Applicant’s Amended Outline of Closing Submissions, [15]
The Trustee finally submits that the evidence Ms Eggleton has in fact adduced is no more than “limited material” which “does not itself clearly discharge the onus” that lies on Ms Eggleton to prove that she contributed the $63,000 or a lesser amount that in any event exceeded the amount Mr Coster contributed to the purchase of the GP property.[62]
Determination
[62] Applicant’s Amended Outline of Closing Submissions, [28]
Incontrovertible facts
There are facts established by the evidence which the Trustee has not challenged (incontrovertible facts) that are relevant to determining whether Ms Eggleton contributed $63,000 towards the purchase price of the GP property. These are as follows:
(a)by around 13 October 1995 Ms Eggleton had received a compensation payment of $84,615.36;
(b)in around October 1995 Ms Eggleton and Mr Coster entered into a contract to purchase the GP property for $133,000;
(c)by 25 October 1995 CBA had approved a loan of $70,000 to assist Ms Eggleton and Mr Coster purchase the GP property;
(d)by letter dated 8 December 1995 CBA confirmed to Ms Eggleton and Mr Coster that settlement of the purchase of the GP property had been effected, and CBA had handed over $121,150 in exchange “for the deeds”, noting that “[y]our equity in the transaction amounting to $51,150.85 has been debited to your account number in terms of your instructions”; and,
(e)at the time of these events, Mr Coster was around 23 years of age employed as an apprentice mechanic, and Ms Eggleton was around 22 years of age.
The incontrovertible facts, considered alone, compel as the only rationally available inference that the source of the $63,000 that Ms Eggleton and Mr Coster paid towards the purchase price of $133,000 for the GP property was entirely, or almost entirely the $84,615.36 compensation payment Ms Eggleton received on 13 October 1995. The Trustee has not identified any evidence that is capable of supporting as a tangible possibility that, contrary to the inference the incontrovertible facts compel to be drawn, Ms Eggleton and Mr Coster obtained the difference between the purchase price of $133,000 and the loan of $70,000 from a source other than the compensation payment of $84,615.36 Ms Eggleton received. In those circumstances, I do not accept the Trustee’s submission that the evidence on which Ms Eggleton relies constitutes “limited material” which “does not itself clearly discharge the onus” that lies on Ms Eggleton to prove that she contributed the $63,000 or a lesser amount that in any event exceeded the amount Mr Coster contributed to the purchase of the GP property.
It is the case that the incontrovertible facts leave open as a possibility that the bank account to which CBA, in its letter dated 8 December 1995, said it had debited $51,150.85 was held jointly by Ms Eggleton and Mr Coster; and that there was a credit balance in that account before Ms Eggleton received her compensation payment. As I have already noted, however, Ms Eggleton has deposed that she deposited the compensation cheque into her “sole account before it was closed to open a combined account between” the respondents “for the home loan”. This part of Ms Eggleton’s evidence was not challenged in cross-examination; and in any event, it is supported by the evidence Mr Coster gave under cross-examination that at the time he and Ms Eggleton purchased the GP property he had no savings. If I were to accept Ms Eggleton’s and Mr Coster’s evidence in this regard, then it would be open to me to find, having regard to the incontrovertible facts, that Ms Eggleton paid at least $63,000 of the $84,615.36 into the account from which CBA, in its letter dated 8 December 1995, debited the amount of $51,150.85 which, together with the $70,000 CBA had agreed to loan, CBA paid on settlement. I consider later whether I should accept Ms Eggleton’s and Mr Coster’s evidence.
Whether Blatch v Archer conditions are satisfied
I will now consider whether what the Trustee submits are the conditions for the application of the “principle” in Blatch v Archer apply to the 1995 bank statements. As to the first condition, the Trustee submits Ms Eggleton would be expected to adduce the 1995 bank statements because Ms Eggleton had a process available to her, namely, the “Australia Privacy Principles”, to request CBA to search its archives; that “process was free of charge”; Ms Eggleton was aware of this process since at least July 2020; and she therefore had ample time to pursue it.[63] By contrast, the Trustee submits, while it was possible for the Trustee to attempt to procure the 1995 bank statements by subpoena, the Court should not reason from the availability of a subpoena that it was in the Trustee’s power to lead evidence of the 1995 bank statements, because the Trustee had “no practical ability to obtain the material evidence”.[64] That is so for the following reasons:
(a)The Trustee was unaware Ms Eggleton was not going to lead evidence of the 1995 bank statement until Ms Eggleton served her evidence on 25 July 2023. It was reasonable for the Trustee to assume before 25 July 2023 that Ms Eggleton would have adduced evidence of the 1995 bank statements “because such evidence was central to her case, she had available to her a process of obtaining the 1995 statements free of charge, and her authorised representative had informed the [Trustee] three years earlier that Ms Eggleston would avail herself of that process”.[65]
(b)The matter had been listed for hearing of 31 August 2023. That was “scarcely enough time for [the Trustee] to identify this omission, consider what if anything he should do about it, prepare, file and then serve subpoenas, and then afford the subpoena recipients sufficient time to answer the subpoena”.[66]
(c)There “was and remains a scarcity of funds in the former bankruptcy estate such that [the Trustee] was justified in refraining from incurring costs that would be associated with the answering a subpoena”.[67]
[63] Applicant’s Amended Outline of Closing Submissions, [17(d)]
[64] Applicant’s Amended Outline of Closing Submissions, [20]
[65] Applicant’s Amended Outline of Closing Submissions, [19(a)]
[66] Applicant’s Amended Outline of Closing Submissions, [19(d)]
[67] Applicant’s Amended Outline of Closing Submissions, [19(e)]
I do not accept these submissions.
(a)First, they rely on assumptions it is asserted the Trustee held, and on assumptions about what it was reasonable for the Trustee to do or not do. There is no evidence, however, from the Trustee or otherwise about these matters. There is no evidence the Trustee assumed before 25 July 2023 that Ms Eggleton had indeed obtained the 1995 bank statements; there is no evidence the Trustee directed his mind to assessing what costs would be incurred if he were to instruct his lawyers to issue a subpoena to CBA calling for the production of the 1995 bank statements; there is no evidence the Trustee made or caused others to make enquiries of CBA about whether CBA could in fact produce the 1995 bank statements if a subpoena were served on CBA and, if so, the time by which CBA would be in a position to determine whether it would be able to produce the 1995 bank statements, and if so, by when CBA would be in a position to produce such documents; and there is no evidence about the funds available in the bankrupt estate.
(b)Second, and in any event, the evidence suggests the Trustee did not assume that Ms Eggleton had obtained the 1995 bank statements. In the Trustee’s lawyer’s letter dated 25 November 2022, for example, it was stated that “despite the passage of time that has been afforded to Ms Eggleton to produce direct evidence in support of her claim to a greater share of the equity in each of the Forest Hill and Glenfield Park properties, no persuasive evidence has been provided”;[68] and the lawyers did not refer to or make any enquiry about Ms Eggleton’s having made a request to CBA, under the “Australian Privacy Principle”, for the production of the 1995 bank statements.
(c)Third, if the Trustee did in fact assume that Ms Eggleton had obtained the 1995 bank statements, it would have been unreasonable for him to have assumed so. Ms Grey’s email of 20 July 2020 explicitly contemplated that Ms Eggleton might not be able to obtain from CBA the 1995 bank statements, even if she were to pursue the process under the “Australian Privacy Principle”. Ms Grey said that if “for any reason they are unable to locate the information required, [Ms Eggleton] will have no other option than to request this to be heard in a Supreme Court”. The reasonable assumption the Trustee ought to have made, to the extent he made any assumption, on the basis of Ms Eggleton not providing to him the 1995 bank statements, is that Ms Eggleton had not obtained them from CBA.
(d)Fourth, the Trustee’s submission assumes that, under the “Australian Privacy Principle”, there was a process available to Ms Eggleton to request CBA, at no cost to Ms Eggleton, to search for and, if found, provide to Ms Eggleton the 1995 bank statements. The Trustee, however, has adduced no evidence about the existence or contents of “Australian Privacy Principle”, or about whether the “Australian Privacy Principle” afforded to Ms Eggleton a “process of obtaining the 1995 statements free of charge”. As I have already noted, at the hearing, counsel for the Trustee said “whatever that is” and “whatever that might be” in relation to the “Australian Privacy Principle”. That indicates that counsel conducted his cross examination of Ms Eggleton in a state of ignorance about what “Australian Privacy Principle” was, and about its contents.
(e)Fifth, under the orders I made on 27 June 2023, the Trustee was required to file additional evidence by 9 August 2023. The Trustee, therefore, would have had to consider by 9 August 2023 whether he should obtain evidence, including the 1995 bank statements, by serving a subpoena. It may be accepted that had the Trustee at that point decided it would be appropriate to issue a subpoena against CBA to produce the 1995 bank statements, there is a likelihood that a subpoena would not have been issued and served on CBA within time to permit CBA to search for, and if available, produce the 1995 bank statements by the time of the hearing on 31 August 2023. Nevertheless, if the Trustee had made enquiries of CBA, and if the Trustee considered it important enough to his case to be given the opportunity to serve a subpoena to CBA for the production of the documents, it would have been open to the Trustee to apply to have the hearing date vacated for such time as the CBA may have indicated it was necessary for it to comply with a subpoena.
(f)Sixth, there is no evidence on the basis of which it is open to find that, had Ms Eggleton in July 2020 requested CBA to search for and provide the 1995 bank statements, CBA would have been able to find and provide them. In the absence of evidence that the 1995 bank statements would have been produced, had Ms Eggleton made a request under the “Australian Privacy Principle”, it would not be open to satisfy the first conditions of the “principle in Blatch v Archer”.
[68] CB301
I am therefore not satisfied that it would be expected that Ms Eggleton would adduce the 1995 bank statements. On the contrary, I am satisfied that it was equally open to the Trustee to take steps to have before the Court the 1995 bank statements.
I next to turn to the third of the conditions for the operation of the “principle in Blatch v Archer”. The explanation the Trustee submits Ms Eggleton gave for not adducing the 1995 bank statements is the evidence she gave under cross-examination that she “didn’t think she would need it”. [69] The Trustee submits that his is an unsatisfactory explanation because it was in effect “a forensic decision by a party to adversarial litigation to refrain from taking steps to procure and lead particular evidence”, and this “is not an explanation of example identified by Glass JA in Payne as capable of meeting the Court’s approval”.[70] There are two observations that may be made about that submission.
(a)First, given the Trustee has not identified evidence or any other matter that is capable of undermining the inference that is available to be drawn from the incontrovertible facts, it was reasonable for Ms Eggleton to proceed on the basis that she would not need the 1995 bank statements in this proceeding.
(b)Second, the Trustee’s submission does not take into account the other evidence Ms Eggleton gave about her attempting to obtain the 1995 bank statements. Ms Eggleton says she made inquiries from CBA, and she was told it would cost her $60 an hour for the time CBA would spend to search for the 1995 bank statements; and there was no guarantee CBA would be able to locate those documents. If accepted, this evidence provides a satisfactory explanation for Ms Eggleton not proceeding to request CBA to undertake a search for the 1995 bank statements.
[69] Applicant’s Amended Outline of Closing Submissions, [26]
[70] Applicant’s Amended Outline of Closing Submissions, [26]
It is the case that during cross-examination counsel for the Trustee put to Ms Eggleton that she does in fact have in her possession the 1995 bank statements, but she has chosen not to adduce them into evidence because they would not help her case. Given the incontrovertible facts, and the absence of evidence or any other matter that is capable of undermining the inference that is compellingly available to be drawn from the incontrovertible facts, there is no rational basis on which I could find that Ms Eggleton possesses the 1995 bank statements, but has withheld them because she knows they would not assist her case.
It is also the case that during cross-examination counsel for the Trustee put to Ms Eggleton that she did not instruct CBA to undertake a search for the 1995 bank statements because she knew the bank statements would not assist her. There are at least two difficulties with the proposition counsel put to Ms Eggleton. First, the proposition is inconsistent with the unchallenged evidence Ms Eggleton gave that she did make enquiries about CBA searching for and providing the 1995 bank statements. If Ms Eggleton believed the 1995 bank statements would not assist her case, she would not have enquired of CBA about its searching for the 1995 bank statements in the first place. Second, and in any event, given the incontrovertible facts, and the absence of evidence or any other matter that is capable of undermining the inference that is compellingly available to be drawn from the incontrovertible facts, there is no rational basis on which I could find that Ms Eggleton did not instruct CBA to search for the 1995 bank statements because she believed the 1995 bank statements would not assist her case,
I am therefore not satisfied that the third condition of the “principle in Blatch v Archer” is satisfied in relation to the 1995 bank statements.
Thus, of the three conditions for the operation of the “principle in Blatch v Archer”, only the second is satisfied in relation to the 1995 bank statements. That means that the “principle in Blatch v Archer” is not engaged in relation to Ms Eggleton not adducing into evidence the 1995 bank statements.
Assumption the Blatch v Archer conditions satisfied
Let it be assumed, however, the Trustee is correct in his submissions that it would be expected that Ms Eggleton, rather than the Trustee, would adduce the 1995 bank statements; the bank statements, if adduced, would have elucidated a particular matter, namely, whether Ms Eggleton did contribute $63,000 towards the purchase of the GP Property; and Ms Eggleton has given an unsatisfactory explanation for not having tendered the bank statements. How would that affect the inferences that would otherwise be available to be drawn on the basis of the incontrovertible facts? I attempted to put that question to counsel during oral address, in response to which counsel made the following submissions:[71]
Your Honour, the starting point is, of course, that Mr Coster purchased the property jointly with Ms Eggleton. That introduces to the landscape a new factor, a different factor, one which calls – one which challenges the inferential strength of those three facts your Honour has referred to by reason of the fact that Mr Coster, who took a legal interest in the property as joint tenants and, indeed, the starting proposition is that equity is at home with the legal interest so he took an equitable interest in the property, as well. That introduces, I submit, a – that certain – that fact introduces a new raft of circumstance which impairs the inferential strength of the documents your Honour’s referred to. It does that because it introduces a new counterfactual scenario, one which might ordinarily be expected to occur, and that is where a co-owner of a property makes a contribution to the purchase price of that property, and that, indeed, is strengthened by the circumstances where Mr Coster jointly borrowed for the purchase of this property with Ms Eggleton.
These facts impair the strength of those – the inferential strength of the documents your Honour’s referred to and, indeed, the question remains at large, well, where was – how much money did Ms Eggleton pay to the purchase of the property, and I put it in that sense, your Honour.
[71] T135.5-T135.20
The facts surrounding Ms Eggleton’s and Mr Coster’s purchase of the GP property closely resemble the facts in Calverley. As is the case with Ms Eggleton’s and Mr Coster’s purchase of the GP property, the plaintiff and defendant in Calverley purchased the property as joint tenants; they jointly borrowed money to finance the purchase of the property; they jointly granted a mortgage over the property to secure the loan; and they purchased the property for the purpose of living in it. Further, like Ms Eggleton and Mr Coster, the plaintiff and defendant in Calverley retained a solicitor to act on the conveyance, although, when doing so, they represented to the solicitor that they were husband and wife.[108] One potentially material difference between the facts in Calverley and the facts before me is that the defendant in Calverley intended to purchase the property himself until he told the plaintiff that the financier required that the defendant and plaintiff purchase the property jointly. That, however, is not a matter that any of the justices in Calverley considered material in determining whether the presumption of resulting trust was to be rebutted; and it is not a difference I consider material.
[108] Calverley v Green (1984) 155 CLR 242, at page 254: “The parties represented themselves to the mortgage broker and to the solicitor who acted for them in the purchase as husband and wife.
The objective facts the Trustee contends prove that Ms Eggleton and Mr Coster intended to acquire an equal share in the GP property, regardless of their contributions, are in substance no different from the objective facts that were present in Calverley which the High Court held did not rebut the presumption of a purchase money resulting trust. That Mr Coster was a joint purchaser is equivocal because that “can be viewed as either an explanation of [his] acquisition of a beneficial interest in the property or as an explanation of [his] being but a trustee for [Ms Eggleton]”.[109] Equally equivocal is Mr Coster’s and Ms Eggleton’s purchasing the property for the purpose of living in it as a family because that, too, “can be viewed as either an explanation of [his] acquisition of a beneficial interest in the property or as an explanation of [his] being but a trustee for [Ms Eggleton]”.[110] Mr Coster’s and Ms Eggleton’s jointly borrowing money to fund the purchase of the property and granting mortgage over it is also neutral; because that can be explained as Mr Coster and Ms Eggleton each assuming a 50% responsibility for the loan, rather than an acknowledgment that they each own 50% of the property.
[109] Calverley v Green (1984) 155 CLR 242, at page 271
[110] Calverley v Green (1984) 155 CLR 242, at page 271
I have yet to address the Trustee’s reference to the parties having joint transactional accounts. There is no evidence that Mr Coster and Ms Eggleton had any joint transactional accounts at the time they purchased the GP property. Even if they did have such accounts, this evidence would also be equivocal in relation to showing whether Ms Eggleton and Mr Coster intended to acquire the beneficial interest in the GP property in equal shares.
Finally, there is the Trustee’s submission that it was commonly the practice of Ms Eggleton and Mr Coster “to pool their assets and share them jointly for the furtherment of their family”.[111] That submission may be correct by the time Ms Eggleton and Mr Coster purchased the FH property; but the evidence does not support this being the case at the time they purchased the GP property. If anything, the evidence suggests that the GP property was the first substantial asset Ms Eggleton and Mr Coster purchased.
[111] Applicant’s Amended Outline of Closing Submissions, [41]
Formal submission that presumption of advancement applies to de facto spouses
The Trustee makes the formal submission that, should I find that a purchase money resulting trust arises from Ms Eggleton having contributed an amount that exceeds the amount Mr Coster contributed, I should find that the presumption of advancement applies to de facto spouses.[112] In Calverley a majority held that the presumption of advancement does not apply to de facto spouses. It is therefore not open to me to decide otherwise.
[112] Applicant’s Amended Outline of Closing Submissions, [41A]
Conclusion
I am not satisfied the evidence establishes that Ms Eggleton and Mr Coster, or either of them, intended that they would hold the beneficial interest in the GP property in equal shares, regardless of Ms Eggleton having contributed $63,000 towards the purchase price of $133,000. That means that, at the time the sequestration order was made against him, Mr Coster held 47.38% of his 50% legal interest in the GP property on trust for Ms Eggleton, which means that the Trustee now holds 47.38% of his 50% legal interest in the GP property on trust for Ms Eggleton.
THE FH PROPERTY
This part of the Trustee’s claims may be dealt with briefly. The only basis on which Ms Eggleton claims she has a beneficial interest in the FH Property in excess of her 50% legal interest is that Ms Eggleton used “my equity in that [that is the GS] property”. In other words, Ms Eggleton and Mr Coster claim they hold their beneficial interests in the FH property in the same proportion as they hold their beneficial interests in the GP property because Ms Eggleton and Mr Coster mortgaged the GP property as security for the loan they used to acquire the FH property.
These facts are incapable of giving rise to a purchase money resulting trust. As I noted earlier, such trust is a legal response to facts, those facts being the payment by person A of the purchase price for property, and the legal title being conveyed to person B. Granting a mortgage to secure a loan that is used to purchase property does not constitute the use of money to purchase the property. The correct legal analysis that applies to Ms Eggleton’s and Mr Coster’s purchase the FH Property wholly on the basis of a loan that was advanced to them jointly is that they both purchased the property by taking out a loan jointly which they jointly used to pay the entire purchase price of the FP property. That is the analysis Mason and Brennan JJ applied in Calverley. One question their Honours considered was whether the payment of instalments of a mortgage over a property that had been granted to secure a loan to purchase the property constituted payment towards the purchase price. Their Honour held it did not:[113]
It is understandable but erroneous to regard the payment of mortgage instalments as payment of the purchase price of a home. The purchase price is what is paid in order to acquire the property; the mortgage instalments are paid to the lender from whom the money to pay some or all of the purchase price is borrowed. In this case, the price was $27,250, of which $18,000 was borrowed from the mortgagee by the plaintiff and defendant jointly. The balance was paid by the defendant out of his own funds, being part of the proceeds of the sale of the Mount Pritchard property. Thus the plaintiff and defendant both contributed to the purchase price of the Baulkham Hills property. They mortgaged that property to secure the performance of their joint and several obligation to repay principal and to pay interest. The payment of instalments under the mortgage was not a payment of the purchase price but a payment towards securing the release of the charge which the parties created over the property purchased.
[113] Calverley v Green (1984) 155 CLR 242, at page 257-258.
The position, therefore, is that, at the time of his bankruptcy, Mr Coster held a 50% beneficial interest in the FH property that reflected his legal interest in that property.
SECTION 66G OF THE CONVEYANCING ACT?
Power and Principles
Subsection 66G(1) of the Conveyancing Act provides:
Where any property (other than chattels) is held in co-ownership the court may, on the application of any one or more of the co-owners, appoint trustees of the property and vest the same in such trustees, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition.
The expression “co-ownership” is defined in s 66F(1) of the Conveyancing Act to mean “ownership whether at law or in equity in possession by two or more persons as joint tenants or as tenants in common”; and the expression “held upon statutory trust” in relation to property is defined in s 66F(2) to mean a “trust to sell the same and to stand possessed of the net proceeds of sale, after payment of costs and expenses, and of the net income until sale after payment of costs, expenses, and outgoings, and in the case of land of rates, taxes, costs of insurance, repairs properly payable out of income, and other outgoings upon such trusts, and subject to such powers and provisions as may be requisite for giving effect to the rights of the co-owners”. Also relevant is s 66G(3) of the Conveyancing Act which, in effect, provides that unless the trustee that is to be appointed is a “trustee corporation”, at least two individuals must be appointed as trustees.[114]
[114] Coshott v Prentice [2014] FCAFC 88, at [20]: “[W]e consider that the appellants correctly contended that s 66G requires that, where a corporation is not appointed trustee for sale, there must be at least two trustees. It follows that the appeal against the orders for sale must be allowed in part.”
The Conveyancing Act is a statute of the Parliament of New South Wales, and is a law that is capable of being “picked up” by s 79 of the Judiciary Act 1903 (Cth) (Judiciary Act), which provides:
The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
I am therefore bound to apply s 66G of the Conveyancing Act to the extent it is capable of being applied to the circumstances of this case.
Black J in Pascoe v Dyason summarised the principles that govern the exercise of the power conferred by s 66G(1) as follows:[115]
[115] [2011] NSWSC 1217, at [5]
[5] The purpose of this section is ‘to provide a mechanism for terminating the co-ownership [of property] where the co-owners themselves cannot agree on how the co-ownership should be determined’ . . . . In Callahan v O'Neill [2002] NSWSC 877, Young CJ in Eq observed:
‘It is fairly clear that, as a general rule, any co-owner holding at least 50% of a parcel of real property is entitled almost as of right to an order for partition or sale under s 66G of the Conveyancing Act. It is only in situations where it would, under settled principles, be inequitable to permit such an application, including cases where there has been a contract not to make an application that the order may be refused. This appears from cases such as Ngatoa v Ford (1990) 19 NSWLR 72 and Williams v Legg (1993) 29 NSWLR 687.’
[6] Although the Court has a discretion whether or not to make an order under this section, the grounds on which the Court will ordinarily refuse to make it are limited. For example, if it is inconsistent with a proprietary right or a contractual or fiduciary obligation, and there is no general jurisdiction to refuse to grant such an order on the basis of hardship or unfairness . . . . In Hogan v Baseden (1997) 8 BPR 15,723 at 15,723, Mason P observed that it 'would not be a proper exercise of discretion of the power to decline relief under s 66G ... to refuse an application on grounds of hardship or general unfairness.' His Honour also noted that:
‘[I]n the unhappy event that the parties are unable to settle their differences then the making of an order appointing trustees for sale seems inevitable unless the respondent could establish a legally binding agreement not to put her out of occupation of her home, or circumstances that would ground some estoppel to similar effect.’ (at [59]).
[7] In Chalhoub v Chalhoub [2005] NSWSC 572 at [17]-[18], McLaughlin AsJ observed that, where a plaintiff and defendant are registered as tenants in common in equal shares, then prima facie the plaintiff is entitled to relief by way of an order under s 66G of the Conveyancing Act for sale of the relevant property and for the division of the net proceeds of such sale between the plaintiff and the defendant in equal shares. It was for the defendant, who denied the plaintiff's entitlement to such relief, to establish that the legal rights of the parties consequent upon their status as registered proprietors as tenants in common in equal shares were in some way altered by the invocation of equitable rights recognised by a Court of Equity or that there was some other reason why the Court should, in the exercise of the limited discretion reposed in it by s 66G of the Conveyancing Act, decline to make an appointment of statutory trustees or sale of the subject property.
[8] In Cain v Cain [2007] NSWSC 623 at [9]-[10], Young CJ in Eq noted that the Court will usually consider it appropriate to make an order under s 66G of the Conveyancing Act unless persuaded by cogent arguments from those who oppose. His Honour then noted Counsel’s summary of the categories of cases in which the Court has declined to grant such an order as including: where the legal title is held by trustees and the trust instrument contains its own procedure for sale; where the plaintiff's conduct rates as an estoppel against the sale; and where an order would be incompatible with a contractual or equitable duty binding the applicant. In Tory v Tory [2007] NSWSC 1078 at [42], White J noted that an order under s 66G of the Conveyancing Act ‘is almost as of right unless on settled principles it would be inequitable to allow the application’, and observed that an application would be refused if making the order would be inconsistent with a proprietary right or contractual or fiduciary obligation or on the basis of conventional estoppel or equitable estoppel. In Spathis v Nanos [2008] NSWSC 418 at [19]-[20], Jagot AJ observed that the discretion was not at large and is not to be exercised by reference to personal views about hardship or unfairness. The Court of Appeal also noted that the discretion to refuse relief under s 66G of the Conveyancing Act was a ‘limited one’ in Ross v Ross [2010] NSWCA 301 at [36]; see also National Australia Bank Ltd v Pasupati [2011] NSWSC 540 at [20].
Reasons for not making an order under s 66G(1) of the Conveyancing Act?
Agreement?
As I noted at the beginning of these reasons, Ms Eggleton contends that in July 2020 she and the Trustee made an agreement under which the Trustee agreed to sell his interest in the properties for $10,000. Ms Eggleton submits that this agreement arises from the email the Trustee sent to Ms Grey on 31 July 2020 (to which I refer above), in which the Trustee said he would accept an amount of $10,000 conditional on Ms Eggleton “incurring the legal cost of preparing a satisfactory deed evidence the transaction”.[116] As I have also noted, Ms Eggleton responded by email on 4 August 2020 in which she said she was “not in a financial position to accept any higher offer that you have requested in your below email”; that Ms Eggleton needed “more time to look into this matter further”, and she would email the Trustee as soon as knows “what option/avenue” she would be looking into to have the matter settled.[117]
[116] CB242
[117] CB241
This exchange of email manifests no agreement. Ms Eggleton said she could not accept the offer.
Unreasonableness?
I have set out the correspondence, including the offers and counter offers that were made for the transfer by the Trustee of his interest in the properties. I have identified valuations or market appraisals the Trustee and Ms Eggleton had each obtained in relation to the GP and FH properties. It remains to add here the debt that was secured on each of those properties. According to an email Suncorp sent to the Trustee’s lawyers on 23 August 2023, the balance of the mortgage debt secured on the GP property was at that time around $212,357.31; and the balance of the mortgage debt secured on the FH property was around $126,276.25.[118] Given the market appraisals that were available to the Trustee, the offers to sell to Ms Eggleton his interest for $200,000, and then for $170,000 were not unreasonable.
[118] Exhibit B
ATO
In her affidavit Ms Eggleton submits that the Trustee has not considered amounts totalling $12,531.99 Ms Eggleton claims Mr Coster had paid to the ATO. That submission appears to be directed to the list of creditors the Trustee annexed to his first affidavit which includes the ATO being a creditor for $124,772.[119] In her written submissions filed on 28 August 2022, Ms Eggleton makes submissions about other creditors contained in the Trustee’s list of creditors. In her oral submissions, Ms Eggleton said that her submissions in relation to the amount of the debts owed to the ATO, as listed in the list of creditors, was relevant to the amount the Trustee intended to pay to creditors.
[119] CB110
Ms Eggleton’s contention about the ATO and the two other creditors are not relevant to whether an order under s 66G(1) of the Conveyancing Act should be made. Even if Ms Eggleton is correct, her contentions only affect a small proportion of the debt the list of creditors states is owed to the ATO; and there is also the Trustee’s remuneration that is or may potentially become owing even in the absence of any creditor lodging a proof of debt. Thus, if Ms Eggleton’s contentions in relation to the debts identified in the list of creditors owing to the ATO and other creditors are correct, they are not a reason for not exercising the discretion in favour of making an order under s 66G(1) of the Conveyancing Act.
Conclusions
I am satisfied it is appropriate that I should make an order under s 66G(1) of the Conveyancing Act, and that the Trustee and Mr Soire, both having signed a consent to act as trustees for sale, are persons it is appropriate be appointed as trustees for sale of the GP and the FH properties. I am also satisfied that the appropriate notices to the occupiers of the GP and FH properties have been given.
DISPOSITION
I propose to make a declaration that immediately before he became bankrupt, Mr Coster held 47.38% of his 50% legal interest in the GP property on resulting trust for Ms Eggleton. I will also make declarations substantially to the effect of the declarations the Trustee claims in paragraphs 1 and 2 of the application, but modified to reflect my conclusion that Mr Coster held 47.38% of his 50% legal interest in the GP property on resulting trust for Ms Eggleton.
I also propose to make orders substantially to the effect of the orders the Trustee claims in the application, other than the orders the Trustee claims in paragraphs 11(e), 20, and 21 of the application, which relate to costs. I propose to order that by 9 February 2023 the parties file short written submissions about the costs of the proceeding. The Trustee should specifically address the question whether the Trustee should obtain an order that the respondents be ordered to pay all of his costs of the proceeding, or that all of his costs of the proceeding should be deducted from the proceeds of sale of the GP and FH properties, given that the Trustee failed in his claim that Mr Coster held 50% of his interest in the GP Property, and that it is arguable that most of the hearing, and most of the evidence, was directed to whether Mr Coster had held part of legal interest in the GP property on resulting trust for Ms Eggleton.
I certify that the preceding one hundred and eighteen (118) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Manousaridis.
Associate:
Dated: 12 January 2024
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