FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Kruger & Kruger (Deceased) (No 3) [2023] FedCFamC1A 134
Appeal from: Kruger & Kruger (Deceased) by his Legal Personal Representative Mr Gregory [2023] FCWA 31 Appeal number(s): NAA 57 of 2023 File number(s): PTW 3387 of 2012 Judgment of: TREE, CAREW & RIETHMULLER JJ Date of judgment: 16 August 2023 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the appellants appeal from the primary judge’s dismissal of their claims against the second respondent that the proceeds of sale of a property were held on trust for the appellants through contractual and equitable relief – Contractual agreement – Constructive trust – Equitable charge – Where several grounds assert an inadequate exposure of reasoning – Whilst the structure of the judgment somewhat obscured what the primary judge concluded in relation to the claims, ultimately they are discernible – Where there is no universal requirement to explicitly state each and every “test” against which evidence or a party’s case is assessed – Where the primary judge’s reasoning is adequately exposed – Challenges to factual findings – Where the primary judge’s findings, particularly given her findings about the parties’ credibility, were open on the evidence – Where findings were not glaringly improbable or contrary to incontrovertible facts – Where there was an adequate evidentiary foundation for the relevant considerations – Where no ground of appeal succeeds – Appeal dismissed – No order as to costs. Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss 79, 117
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
DL v The Queen (2018) 266 CLR 1; [2018] HCA 26
Doueihi v Construction Technologies Australia Pty Ltd (2016) 92 NSWLR 247; [2016] NSWCA 105
Douglass v The Queen (2012) 290 ALR 699; [2012] HCA 34
Edwards v Noble (1971) 125 CLR 296; [1971] HCA 54
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Re Minister for Immigration and Multicultural Affairs; Ex parte Durairajasingham (2000) 168 ALR 407; [2000] HCA 1
Sidhu v Van Dyke (2014) 251 CLR 505; [2014] HCA 19
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
SS Hontestroom v SS Sagaporack [1927] AC 37
Sun Alliance Insurance Ltd v Massoud [1989] VR 8
Number of paragraphs: 81 Date of hearing: 28 June 2023 Place: Brisbane (via video link) The First Appellant: Litigant in person The Second Appellant: Litigant in person The Third Appellant: Litigant in person The First Respondent: Litigant in person Counsel for the Second Respondent: Mr Dundo with Ms Lai Solicitor for the Second Respondent: KD Legal ORDERS
NAA 57 of 2023
PTW 3387 of 2012FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MS KRUGER
First Appellant
A PTY LTD
Second Appellant
B…
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Details
- Case
- [2023] FedCFamC1A 134
- Decision Date
CaseChat Overview and Summary
In this appeal, the appellants, including Ms Kruger and B Pty Ltd, sought to challenge the decision of the primary judge who dismissed their claims for a declaration that C Pty Ltd held the proceeds of sale of Property D on trust for B Pty Ltd. The respondents, including C Pty Ltd, sought to uphold the primary judge's decision. The appeal was heard in the Federal Circuit and Family Court of Australia. The central legal issues before the court were whether the primary judge was correct in rejecting the appellants' contractual and equitable claims for a declaration regarding the proceeds of sale of Property D. The court needed to determine whether there was a valid contract for the transfer of Property D to B Pty Ltd and if there was an estoppel or constructive trust/equitable charge claim that could be upheld.
The court found that the primary judge was correct in dismissing the appellants' claims. The court upheld the primary judge's findings that there was no contract for the transfer of Property D to B Pty Ltd as there was never any concluded agreement on critical terms, including who would bear the capital gains tax. The court also agreed with the primary judge's rejection of the estoppel, constructive trust, and equitable charge claims. The court found that the evidence did not support the appellants' claims, and therefore the primary judge's decision was correct.
The appeal was dismissed, and the primary judge's decision was upheld.
The court found that the primary judge was correct in dismissing the appellants' claims. The court upheld the primary judge's findings that there was no contract for the transfer of Property D to B Pty Ltd as there was never any concluded agreement on critical terms, including who would bear the capital gains tax. The court also agreed with the primary judge's rejection of the estoppel, constructive trust, and equitable charge claims. The court found that the evidence did not support the appellants' claims, and therefore the primary judge's decision was correct.
The appeal was dismissed, and the primary judge's decision was upheld.
Orders
Orders of the court
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Background
Background to the litigation
For the reasons which follow, the appeal will be dismissed.BACKGROUND Mr Kruger Snr (“Mr Kruger Snr”) and Ms Kruger Snr (“Ms Kruger Snr”) are Mr Kruger’s parents. During their marriage, they owned lands in remote regions of Western Australia on which they conducted businesses through corporate entities. Their three children worked in the family business. Mr Kruger Snr died in 2004. Mr Kruger and Ms Kruger married in 1981 and had three children together, Ms G, Ms H and Mr J, all of whom are now adults. Throughout much of their relationship, Mr Kruger and Ms Kruger lived on various properties owned by Mr Kruger Snr and Ms Kruger Snr or entities controlled by them. They separated on a final basis in 2011. In June 2012, Ms Kruger commenced proceedings seeking a division of her and Mr Kruger’s property under s 79 of the Family Law Act 1975 (Cth) (“the Act”). In 2013, Mr Kruger died and his interests in the property proceedings ultimately were represented by Mr Gregory. In 1968, B Pty Ltd was incorporated by Mr Kruger Snr and Ms Kruger Snr. This company is the third appellant and is now controlled by Ms Kruger. B Pty Ltd is the trustee of the Kruger Family Trust. Mr Kruger and Ms Kruger operated a farming business through B Pty Ltd and the trust. After Mr Kruger died, Ms Kruger became the sole director of B Pty Ltd. In 1970, C Pty Ltd was incorporated. It is now controlled by Ms Kruger Snr. In 1992, C Pty Ltd acquired Property D on which it ran a farming business until 2005, after which B Pty Ltd effectively assumed control, and rented out most of the property for some years. C Pty Ltd sold Property D in 2020. Before the primary judge, Ms Kruger contended that C Pty Ltd held the proceeds of that sale on trust for B Pty Ltd. In 2014 and 2015, a trial of Ms Kruger’s claims against C Pty Ltd was heard by Walters J. In October 2016, his Honour determined that Property D was the property of B Pty Ltd and orders to that effect were made on 8 November 2016. C Pty Ltd appealed, and on 15 May 2018, the Full Court allowed the appeal and remitted the matter for rehearing. In November 2021, the second trial commenced before the primary judge and ran over 15 days, ultimately concluding in April 2022, with judgment being delivered on 14 February 2023.The primary judge’s decision The primary judge’s reasons extend to some 334 paragraphs, over 118 pages, arranged under headings and sub-headings. Under the heading “INTRODUCTION” the primary judge explained who the parties were, what their claims or responses comprised, and set out a brief history of the proceedings and the like. Next, under the heading “THE EVIDENCE” her Honour, amongst other things, considered the credibility of the various witnesses, something which we shall need to address shortly. A little later under the heading “FACTUAL BACKGROUND”, over some 241 paragraphs spanning 77 pages, the primary judge discussed not only background matters, but made findings on critical disputed matters, and discussed a miscellany of significant events and issues. Her Honour then turned to specifically consider “MS KRUGER’S CLAIMS IN RELATION TO PROPERTY D”, the discussion under which heading occupies some 10 paragraphs over six pages.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
In November 2021, the second trial commenced before the primary judge and ran over 15 days, ultimately concluding in April 2022, with judgment being delivered on 14 February 2023.The primary judge’s decision The primary judge’s reasons extend to some 334 paragraphs, over 118 pages, arranged under headings and sub-headings. Under the heading “INTRODUCTION” the primary judge explained who the parties were, what their claims or responses comprised, and set out a brief history of the proceedings and the like. Next, under the heading “THE EVIDENCE” her Honour, amongst other things, considered the credibility of the various witnesses, something which we shall need to address shortly. A little later under the heading “FACTUAL BACKGROUND”, over some 241 paragraphs spanning 77 pages, the primary judge discussed not only background matters, but made findings on critical disputed matters, and discussed a miscellany of significant events and issues. Her Honour then turned to specifically consider “MS KRUGER’S CLAIMS IN RELATION TO PROPERTY D”, the discussion under which heading occupies some 10 paragraphs over six pages. Ms Kruger pleaded both contractual and equitable claims in relation to Property D in her Points of Claim filed 13 July 2020, albeit refined by the orders which she ultimately sought at trial. The primary judge noted those orders (relevant to this appeal) as follows:13 b)There be a declaration that C Pty Ltd holds the remaining proceeds of sale of Property D on trust for B Pty Ltd; or alternatively that C Pty Ltd holds the proceeds of sale of Property D upon constructive trust for B Pty Ltd in such beneficial proportions as the court deems fit; or alternatively that the Property D balance be charged in equity in favour of B Pty Ltd in such amount as the court deems fit.(Footnote omitted) As pleaded, the contractual claim asserted that in 2005, C Pty Ltd (by Ms Kruger Snr) had agreed with Mr Kruger and Ms Kruger to transfer Property D to B Pty Ltd (“the Property D Agreement”). The equitable claims contended two alternatives. The first was that the Property D Agreement was a representation upon which Ms Kruger relied to her detriment, such that C Pty Ltd was estopped from denying the existence of a valid contract for the sale of Property D. The second was that B Pty Ltd acted to its detriment on the assumption that Property D had been, or would be, transferred to it under the Property D Agreement, such that either C Pty Ltd held the sale proceeds as constructive trustee for B Pty Ltd, or those proceeds were charged in an unspecified sum in favour of B Pty Ltd. However it seems as though during the trial, the delineation between the estoppel claim and the constructive trust/equitable charge claim became rather blurred, and indeed the primary judge dealt with them almost collectively. The primary judge rejected both the contractual claim (at [322]–[325]) and the equitable claims (at [328]–[331]). Specifically the primary judge found that there was no contract for the transfer of Property D to B Pty Ltd, as there was never any concluded agreement as to, among other things, who would bear the considerable capital gains tax which the transfer would otherwise have seen C Pty Ltd incur.
Ratio Decidendi
Legal Principle Established
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