Karbines and Karbines and Anor - [2008] FamCA 307

FAMILY COURT OF AUSTRALIA

KARBINES & KARBINES AND ANOR

[2008] FamCA 307

FAMILY LAW – PROPERTY – trusts – husband and wife directors and shareholders of the intervener company – company monies used to make mortgage payments on house property owned by husband and wife – no evidence that company received benefit or consideration for such payments - company in liquidation – liquidators seeking constructive trust over property to extent of mortgage payments made by the company – husband and wife in breach of duties as directors and fiduciary agents of the company for making such payments – constructive trust declared – order for sale of property and payment to the company in the sum of the extent of the constructive trust

Warby and Warby (2002) FLC 93-091
Finlayson and Gillam (2002) FLC 93-121
ASIC and Edensor Nominess Pty Ltd (2001) 204 CLR 559
Lewis and Paris King Investments Pty Ltd and Rayhill and Rayhill (2006) FLC 93-278

Keith Henry and Co Pty Ltd and Stuart Walker and Co Pty Ltd and Another (1958) 100 CLR 342
Re Charge Card Services Ltd (1987) Ch 150
Commissioner of Stamp Duties (NSW) v Buckle (1998) 192 CLR 226

APPLICANT:

Mrs Karbines

RESPONDENT:

Mr Karbines

INTERVENER:

C Pty Ltd (In Liquidation)

FILE NUMBER:

MLF

2479

2005

DATE DELIVERED:

2 May 2008

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Adelaide

JUDGMENT OF:

Dawe J

HEARING DATE:

17 March 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Jordan

SOLICITOR FOR THE APPLICANT:

Maddens Lawyers

THE RESPONDENT:

In person

COUNSEL FOR THE INTERVENER:

Mr Barnett

SOLICITOR FOR THE INTERVENER:

Norman Waterhouse

Orders

It is declared that the husband and wife hold the property at E, Queensland, being Lot … on Registered Plan … in the County of … and Parish of …, Title Reference … (“the [Queensland] property”) on constructive trust for the intervener C Pty Ltd (In Liquidation) ACN … to the extent of the sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00].
That if the said sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00] has not been paid to the intervener C Pty Ltd (In Liquidation) by the 30^th June 2008 the liquidator shall be entitled to sell the Queensland property by public auction or private treaty.
The proceeds of sale are to be paid as follows:
3.1in payment of the reasonable costs of and incidental to the sale;
3.2in payment of the mortgage to the Commonwealth Bank of Australia;
3.3in payment of the sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00] due to the first intervener C Pty Ltd (In Liquidation);
3.4the balance of proceeds of sale to be held in trust by the liquidator in an interest bearing account pending further order of this Honourable Court.

IT IS NOTED that publication of this judgment under the pseudonym Karbines and Karbines and Anor is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: MLF…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] FamCA 307
Decision Date: 2 May 2008

CaseChat Overview and Summary

In the matter of *Karbines and Karbines and Anor*, Dawe J considered a dispute involving the husband and wife, the intervener C Pty Ltd (In Liquidation), and the Queensland property. The core of the dispute concerned the extent to which the husband and wife held the Queensland property on constructive trust for C Pty Ltd (In Liquidation).

The court was required to determine whether a constructive trust existed over the Queensland property in favour of C Pty Ltd (In Liquidation) and, if so, to what extent. This involved assessing the nature of the parties' dealings and the equitable interests arising from them.

Dawe J reasoned that the husband and wife held the Queensland property on constructive trust for C Pty Ltd (In Liquidation) to the extent of $65,301.00. The court ordered that if this sum was not paid by 30 June 2008, the liquidator of C Pty Ltd (In Liquidation) was entitled to sell the property. The proceeds of sale were to be applied first to the costs of sale, then to the Commonwealth Bank mortgage, followed by the $65,301.00 due to C Pty Ltd (In Liquidation), with any remaining balance to be held in trust pending further court orders.

Orders

Orders of the court

It is declared that the husband and wife hold the property at E, Queensland, being Lot … on Registered Plan … in the County of … and Parish of …, Title Reference … (“the [Queensland] property”) on constructive trust for the intervener C Pty Ltd (In Liquidation) ACN … to the extent of the sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00].

That if the said sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00] has not been paid to the intervener C Pty Ltd (In Liquidation) by the 30th June 2008 the liquidator shall be entitled to sell the Queensland property by public auction or private treaty.

The proceeds of sale are to be paid as follows:

3.1 in payment of the reasonable costs of and incidental to the sale;

3.2 in payment of the mortgage to the Commonwealth Bank of Australia;

3.3 in payment of the sum of SIXTY FIVE THOUSAND THREE HUNDRED AND ONE DOLLARS [$65,301.00] due to the first intervener C Pty Ltd (In Liquidation);

3.4 the balance of proceeds of sale to be held in trust by the liquidator in an interest bearing account pending further order of this Honourable Court.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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