Kurzyp v Kurzyp

[2021] NSWSC 851

Supreme Court

New South Wales

Medium Neutral Citation:

Kurzyp v Kurzyp [2021] NSWSC 851

Hearing dates:

3 – 5 February 2021, last submissions 22 February 2021

Decision date:

15 July 2021

Jurisdiction:

Equity

Before:

Rees J

Decision:

Parties to bring in Short Minutes of Order, recording declaration of resulting trust, an account for rent, statutory sale and costs.

Catchwords:

EQUITY – resulting trust – defacto couple purchase family home in 1987 – few contemporaneous documents – defacto wife contributed to purchase price – husband held half of interest in property on resulting trust for wife – husband to account for half of rental income – defence of laches not established.

FAMILY LAW – matrimonial cause – whether the Court should determine the application – leave not required to commence proceedings under s 44(3), Family Law Act – proceedings within s 78, Family Law Act – consent implied where no objection raised until 2 years after proceedings were commenced – this Court should determine the matter.

ESTOPPEL – consent orders made in Family Court without admission that appropriate forum was in Poland – in fact, Polish Court has no jurisdiction in respect of Australian property – whether issue estoppel, Anshun estoppel or abuse of process – no estoppel or abuse of process found.

Legislation Cited:

Evidence Act 1995 (NSW) s 140

Family Law Act 1975 (Cth) ss 4, 44, 78, 79

Freedom of Information Act 1982 (Cth)

Real Property Act 1900 (NSW) s 94K

Stamp Duties Act 1920 (NSW) ss 41, 65, second schedule

Cases Cited:

Ainsworth v Criminal Justice Commission (1992) 175 CLR 564; [1992] HCA 10

Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495

Arnold v National Westminster Bank plc [1991] 2 AC 93

Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) and (No 10) (2008) 39 WAR 1; [2008] WASC 239

Black Uhlans Incorporated v New South Wales Crime Commission [2002] NSWSC 1060; (2002) 12 BPR 22,421

Blair v Curran (1939) 62 CLR 464; [1939] HCA 23

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

Calverley v Green (1984) 155 CLR 242; [1984] HCA 81

Carringville Pty Ltd v Gatto Group Pty Ltd [2003] NSWSC 123; (2003) 11 BPR 21,069

Cetojevic v Cetojevic [2006] NSWSC 431

Choi v Kim [2013] NSWSC 1774

Chung-Yi Pty Ltd v Chih-Yang Chang (No 2) [2018] NSWSC 1112; (2018) 128 ACSR 585

City of Enfield v Development Assessment Commission (1999) 199 CLR 135; [2000] HCA 5

Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9

Clementi v Rossi [2019] VSC 725

Commissioner of Taxation v Bosanac (No 7) [2021] FCA 249; (2021) 390 ALR 74

Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654

DA Christie Pty Ltd v Baker [1996] 2 VR 582

Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190; [2009] NSWCA 69

Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415

Ekes v Commonwealth Bank of Australia [2014] NSWCA 336; (2014) 313 ALR 665

Finance & Guarantee Company Pty Ltd v Auswild [2019] VSC 664

Foundas v Arambatzis [2020] NSWCA 47

French v Bremner [2019] NSWSC 1033

French v Bremner [2020] NSWCA 339

Fysh v Page (1956) 96 CLR 233; [1956] HCA 13

Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181

Gillespie v Gillespie [2013] 2 Qd R 440; [2013] QCA 99

Hill v Dunn [2019] NSWSC 419

In the marriage of Molier and Van Wyk (1980) 7 Fam LR 18

In the matter of Pacific Springs Pty Ltd [2020] NSWSC 1240; (2020) 148 ACSR 454

J A Westaway & Son Pty Ltd v Registrar-General [1996] NSWSC 413; (1996) 7 BPR 14,773

Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1

KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516; [2001] NSWCA 116

Lamshed v Lamshed (1963) 109 CLR 440; [1963] HCA 60

Napier v Public Trustee (WA) (1980) 55 ALJR 1

Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25

Ong v Lottwo Pty Ltd (in liq) (2013) 116 SASR 280; [2013] SASCFC 57

Orr v Ford (1989) 167 CLR 316; [1989] HCA 4

Owners of the Cargo of the "Kronprinz" v Owners of the "Kronprinz" (the "Ardandhu") (1887) 12 App Cas 256

Papas v Co [2018] NSWSC 1404

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 45

R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389; [1949] HCA 33

Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57

Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142

Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd [2001] NSWSC 431

Shah v Sanjiv [2014] NSWSC 1535

Shepherd v Doolan [2005] NSWSC 42

Song v Shi [2011] NSWSC 1207

Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462

Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28

Tonna v Mendonca [2019] NSWSC 1849

Tory v Tory [2007] NSWSC 1078

UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45

Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440

Watson v Foxman (1995) 49 NSWLR 315

Xie v Li [2019] NSWSC 808

Young v Lalic [2006] NSWSC 18; (2006) 197 FLR 27

Texts Cited:

Peter Grimes, The Practice of the Land Titles Office (New South Wales) – Supplement to Third Edition to 1st February 1969 (1969, Law Book Co)

Category:

Principal judgment

Parties:

Beata Kurzyp (Plaintiff)
Peter Douglas Kurzyp (Defendant)

Representation:

Counsel:
Mr A Harding SC (Plaintiff)
Mr D Moujalli (Defendant)

Solicitors:
StevensVuaran Lawyers (Plaintiff)
Watts McCray Lawyers (Defendant)

File Number(s):

2019/51555

Judgment

1. HER HONOUR: The plaintiff, Beata Kurzyp (the wife), seeks a declaration that the defendant, her former husband Piotr Kurzyp also known as Peter Douglas (the husband), holds the legal estate in a Liverpool townhouse on trust for the wife in proportion to her contributions to the consideration paid for the property. Although the wife says she contributed more than half of the purchase price, she seeks declaration of a one-half interest. In addition, the wife seeks an account of her share of rental income earned on the Liverpool property and appointment of statutory trustees for sale of the property.

2. The husband opposes the relief sought, contending that the Liverpool property was purchased with his monies alone. In addition, the wife’s claim is a matrimonial cause within the meaning of the Family Law Act 1975 (Cth) and her claim should be determined by the Family Court. The wife is also said to be Anshun estopped and the proceedings to be an abuse of process given earlier family law proceedings in Australia in 2006 and more recent legal proceedings in Poland. In addition, any relief should be refused given the wife’s unwarrantable delay.

WITNESSES

3. The wife relied on evidence from herself, her husband Peter Olek, her son Christopher Douglas and friend Alina Malchevski. The husband relied on his evidence alone. Each of these witnesses was cross-examined.

4. The wife was a conscientious, accurate and honest witness who was initially very nervous and softly spoken. The wife had a good recall of detail and made reasonable concessions. The wife was uncomfortable giving evidence about monies earned in Canada, although overall her account appeared credible.

5. The wife’s evidence was not without difficulty. Earlier affidavits were drafted at a high level of generality and omitted details on which the wife now relied, contained in later affidavits. There were differences between the wife’s affidavits filed in earlier family law proceedings, and even between her affidavits filed in these proceedings. Some inconsistencies were immaterial while others indicate that the wife may have endeavoured to improve her case by the addition of plausible detail.

6. Many of the events the subject of these proceedings occurred a long time ago and it is likely that the wife’s recollection of events is not entirely accurate or has changed over time, including as a consequence of her long-running dispute with her former husband. To the extent that the contemporaneous documents of such events differs from the wife’s recollection, I have preferred the contemporaneous documents.

7. Mr Olek gave evidence of conversations and events which occurred many years ago in most emphatic terms. It seemed unlikely that he recalled events in the level of detail described. Some of his evidence likely drew upon his usual practices as a real estate agent, rather than an actual recollection. Some of Mr Olek’s evidence was not referred to in his affidavit and may have been a late addition. That does not mean that I have rejected Mr Olek’s evidence altogether, but I have approached it with a degree of caution.

8. No issues of credit arose in respect of Ms Malchevski or Christopher Douglas. Ms Malchevski had a good explanation as to why she remembered details of a conversation with the wife’s father many years ago, as did Christopher Douglas in respect of a conversation with his father.

9. The husband was a voluble character. Although the husband had lived in Australia for six years, he said he could not speak English. He did understand and answer some of the cross-examination questions before the questions were translated for him, but then denied that he could understand the questions. This happened often. The husband took the opportunity, whenever possible, to speak ill of his former wife. On occasion, his answers were non-responsive. On other occasions, the husband made gratuitous, unsolicited comments intended to advance his case. He was prone to speeches. He tended to exaggerate. His answers were, on occasion, most unlikely and I ultimately did not accept his evidence.

10. That does not mean that the husband may not succeed in his defence of these proceedings, but simply that I have not relied on his oral evidence unless it was corroborated by a contemporaneous document, the evidence of another reliable witness, or evidence given against his own interest.

11. The evidence of all witnesses was affected by the simple fact that the critical events occurred in 1987, that is, 34 years ago. As such, the passage of time may have exacerbated the general problem that recollections given in the course of legal proceedings may be distorted, albeit innocently, by a desire to succeed. As McLelland CJ in Equity noted in Watson v Foxman (1995) 49 NSWLR 315 at 319:

… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.

FACTS

12. The wife and husband disagreed on almost every fact. Many of these facts are not relevant to the issue in these proceedings, but to wider aspects of long-running family law proceedings between them, both here and abroad. In this judgment, I have focused on the facts relevant to the Liverpool property.

13. The wife and husband hail from Poland. The wife is a book keeper. The husband is a car mechanic. In the 1980s, they met and began a relationship. They likely met in September 1981, according to statutory declarations which each signed in 1988: see [72]-[73]. The husband was then aged 21 and the wife aged 18.

14. Poland was then in the ‘Eastern Bloc’. According to the wife, the couple earned money from trading activities in Poland and Hungary, exporting and selling goods, trading in foreign currency and sharing the profits. The husband said that he had substantial business operations whilst the wife had none, “She certainly did not undertake any trading activity with me”.

Coming to Australia

15. In 1982, the husband’s mother, Alicja Stanislau, emigrated to Australia. Ms Stanislau was married to Piotr Kociszewski, being the husband’s step-father. The husband wanted to visit his mother in Australia.

16. In November 1983, the Department of Immigration and Ethnic Affairs approved Mr Kociszewski’s application for the visitor entry to Australia for the wife “subject to the undertakings given”. In light of this, the husband’s evidence that “we became a couple only in 1984” was clearly incorrect. Rather, by November 1983, the couple appear to have enjoyed a relationship of sufficient significance and stability such that the husband and his family took steps to bring the wife to Australia with him.

17. The couple made arrangements to bring foreign currency to Australia as well.

Money brought by the husband

18. On 13 December 1984, a Polish bank issued a certificate to the husband, permitting him to take foreign currency out of the country: 1,502 West German marks, 250,000 Austrian schillings and 4,000 Swiss francs.

19. According to the wife, the husband travelled from Poland to Germany on 19 December 1984 on his way to Australia, taking these foreign currencies (with a combined value of some 30,000 Deutsche Marks) together with undeclared foreign currency of some 70,000 Deutsche Marks, being monies derived from the couple’s joint trading activities. The husband agreed that he brought a lot more foreign currency to Australia than he declared in Poland.

20. The husband said that he then had savings of approximately $160,000, as well as a BMW car which was sold to pay for airfares and travel expenses. His wife did not have any assets, “She had no idea I had that much money.  She knew I was rich, but she didn’t know I was that rich.  I was then very rich.” As the husband was then aged 24, it seems unlikely that he was “very rich”.

Money brought by the wife

21. On 31 December 1984, the wife obtained a Polish passport and, on 4 January 1985, was also given a permit to take currency out of the country, being the contents of a nominated bank account, the balance of which was not specified on her passport.

22. The account was described on the passport as an “A” account, which was a type of bank account available in Poland that allowed deposits in various currencies on the condition that the currencies had to be brought to Poland from abroad and declared at the border. Currencies kept in “A” accounts earned interest and could be taken out of Poland.

23. The husband said a lot of people had “A” accounts, then said he “started that account for her, and I paid $10,000 into it so that [the wife] could … show on the border that she had enough money to live on”. This was not referred to in the husband’s affidavits and was likely to be a recent invention.

24. The wife said that her “A” account contained 40,000 Deutsche marks. The 40,000 Deutsche marks came from $25,000 Canadian dollars paid to her by Eugene Kolowski for a house remodelling project in Toronto, where she had lived for eight months. In cross-examination, the wife said that she attended high school with Margaret Kolowski, who was from Canada. The wife helped Margaret to speak Polish. Margaret’s family invited the wife for a school holiday in Canada, as the family felt grateful for her assistance. The wife went to Canada in June 1979 and returned to Poland in February 1980. Whilst living in the Kolowski’s home, Margaret was going to school and Mr Kolowski was going to work (he was a property developer). The wife slowly stated to redecorate the home and to do things around the house. At the end of her visit, Mr Kolowski gave her the money, which she took back with her to Poland in cash, declared and deposited into a bank account.

25. The husband denied this, adding “Beata was deported from Canada, and she never had any m[one]y. She was very, very, very poor … She never had any [money], unless I gave … her some, and I gave her a lot.”

26. The wife agreed that she had no bank statements in respect of the “A” account or record of withdrawing the 40,000 Deutsche Marks from a Polish bank. Whilst it was suggested to the wife in cross-examination that she had produced a number of documents from the 1980s, it is reasonably apparent that these documents were obtained in answer to a request under the Freedom of Information Act 1982 (Cth). As the wife said:

But those documents you are showing from the Department of Immigration I recovered them here in Australia, which was easy, because Australia stores a lot of documents. 

27. It was suggested to the wife that evidence given in respect of the $25,000 Canadian dollars in cross-examination was inconsistent with her affidavits. In cross-examination, the wife said that she withdrew the Canadian Dollars and used the money in her trading activities. The wife’s affidavits are not particularly detailed on precisely what happened to the Canadian dollars; the general impression conveyed by the wife’s affidavits is that the Canadian dollars were held in the bank account before being withdrawn on her journey to Australia, rather than used for trading.

28. On 7 January 1985, the wife crossed the border from Poland into Germany. The wife says she joined the husband in Germany, bringing with her 40,000 Deutsche Marks. The husband denied that she brought these monies with her.

Pooling the funds

29. The wife said that the monies taken by the couple out of Poland totalled 140,000 Deutsche Marks. On 10 January 1985, they both went to a bank in Germany (Deutsche Bank) – where the husband had already opened an account – and deposited the monies into an account in the husband’s name.

30. According to the wife, the husband told her that they did not need to open a joint bank account in Germany, “Why should we do that if I already have one? I will authorise you to operate this account”. The husband did not remember such a conversation – “It was [a] very long time ago” – but agreed that he opened an account in Germany. The husband says that all of the monies in the bank account were his, “Beata didn’t even know I had such money.”

31. The couple continued their journey to Australia, arriving in February or March 1985. The husband volunteered more than once that the wife came to Australia on a false German passport and “the whole matter ended up in Court”. This seems unlikely, as the wife had a valid Polish passport and a visitor permit arranged by Mr Kociszewski.

32. The wife says that each also brought $5,000 US Dollars (the wife also brought some Austrian schillings) which were converted to Australian dollars and used to pay living expenses. The husband volunteered repeatedly that the wife and her family were very poor and had nothing. The husband says that he brought significant assets into the country, whilst the wife brought none. This rather begs the question as to why the wife bothered to get a permit to bring the contents of her “A” account.

33. The husband was then aged 25 and the wife aged 21 and, according to their later statutory declarations, had been together for three years. The wife was some five months pregnant with their first child. The couple initially stayed at the mother’s home.

34. On 12 June 1985, the couple’s first child, Paul, was born in Australia.

Transferring pooled funds to Australia

35. In August 1985, the monies held in the German bank account referred to at [29] were transferred to Australia. According to surviving bank records, instructions were given for the German bank account to be closed and the balance, including interest, to be transferred to a savings account at Westpac Banking Corporation in George Street, Sydney in the name of the husband, being a Deutsche Mark account ending 0204.

36. The monies were transferred by Deutsche Bank on 21 August 1985 and were deposited into the Westpac account on 22 August 1985, being 142,029.71 Deutsche Mark, or $72,694.09 Australian dollars. If the German bank account held the wife’s 40,000 Deutsche marks, then a portion of these monies, being 28% or $20,473, came from the wife.

37. Unfortunately, the original notification by the International Payments Department of Westpac to the customer of the receipt has been “whited out”, it would appear, quite recently. The “whited out” text can be clearly seen by looking at the reverse side of the original document and states, “PROCEEDS TRANSFERRED TO SUSPENSE A/C”. The husband said that his mother provided this document to his solicitors, and volunteered that it would be very irresponsible and criminal to alter a document. The husband said he had no knowledge of the “white out” on the document. The real question is where the monies were transferred from the suspense account.

First Joint Account

38. According to the wife, these monies were transferred to a joint account in the name of the couple at Westpac’s Fairfield branch (First Joint Account). The wife recalled that the bank manager, Paul Tonkli, assisted them to open the joint account. Two subpoenas issued to Westpac at Fairfield seeking bank statements for this period, perhaps unsurprisingly, returned no relevant records. The husband said that the wife “stayed [in Australia] illegally for the first four years, therefore, she could not hold a joint bank account with me …”.

39. According to the husband, he had a Deutsche Bank savings book issued in his name which he took to the Deutsche Bank branch in Australia and, variously, withdrew funds in Australian dollars or Deutsche Bank cancelled his book and transferred the funds to Westpac, which converted the money into dollars. He said there was a Deutsche Bank branch in Australia where there was a two-level Woolworths store. This seems unlikely as Deutsche Bank, at the time, did not have any branches or conduct retail banking in Australia. The husband does not identify any other bank account into which these monies were deposited, other than the First Joint Account.

40. In late 1985, the wife says that the couple announced their intention to marry. The wife was then working at Koala Inn, then Searle Laboratories, then a coffee shop and, later, the Black Stump Restaurant. The husband initially said that the wife “never worked in Australia as she stayed there illegally for the first four years” then said the wife undertook temporary casual work. In cross-examination, he agreed that it was possible that the wife worked, although he did not work.

Gift from wife’s father

41. In November 1986, the wife’s father, Wieslaw Drzazga, came to Australia for three months to attend Paul’s baptism in January 1987. He brought with him US$20,000 (then worth some AUD$24,000) which he gave to the wife as a baptism and engagement present. The wife said that the father presented her with the money in cash, with her husband present. The wife deposited these funds into the First Joint Account. The wife agreed that she had no bank deposit or record of the money having been deposited into any bank account.

42. The wife’s evidence is corroborated by Ms Malchevski, who recalls having lunch with Mr Drzazga in December 1986, when Ms Malchevski invited the wife, Mr Drzazga and Paul to her Redfern apartment. During a conversation with the father, Ms Malchevski said that life in Australia could be hard and, when her parents had visited her the previous year, they had brought some money from Poland which she was able to use to buy a car, which had been a big help. Mr Drzazga told Ms Malchevski, “Alina, I also brought Beata some money from Poland. I am so happy to be able to help Beata financially with a gift of US$20,000 so they can buy their dream home.” The wife added, “now I have enough money to add to mine and Piotr’s savings so we can finally purchase a house.”

43. Ms Malchevski agreed that she was relying on her memory to recall what was said over 30 years ago, and did not make a record of the conversation at the time. Ms Malchevski did, however, recall the specifics of the conversation, in cross-examination:

… before he told me, I - I actually mention that my father brought me $2,000.  That's why - how I remember the amounts, because my father previously brought me $2,000, and I thought it was a lot of money for me.  I was a single mother then, with two jobs.  I was able to buy a car.  And so actually when I - when I said that, Mr Wieslaw said, "Well, I'm very happy too, because I brought 20,000", and I remember this - this amount simply because it was like 10 times what I received, and it was actually half of the price of the unit, which I was dreaming to buy in Randwick.  That's how I remember the specific amount.

44. The husband said he was not aware of such a gift and that the father was very poor.

Buying the townhouse

45. According to the wife, in February and March 1987, the couple began to look for a home and settled upon the Liverpool townhouse. According to the wife, the husband asked her whether they could use the gift from her father to buy the townhouse, and the wife agreed. The husband said that they could also use some of the remaining funds transferred from overseas.

46. The husband denies this conversation. The husband said he never talked to the wife about buying property. Rather, his step-father suggested that he invest in property as the husband was then considering investing in a business and “it was better to buy property, since I was paying $250 per week for accommodation”.

47. The real estate agent was Mr Olek at Richard Hutchens Real Estate in Liverpool who, as matters have turned out, became the wife’s second husband many years later. According to Mr Olek, he asked the couple if they needed assistance with a home loan. The husband said, “No. We have cash in a bank.” Although Mr Olek was relying entirely on his memory, he said there was “[n]o possibility” that the husband could have said, “I have cash in a bank.” Whilst Mr Olek had hundreds of such conversations with prospective purchasers over the years, “It was one of very little customers who was speaking to me in Polish.” In addition, it was routine for him to ask such questions and, if he was qualifying a purchaser, he did not qualify one purchaser if he had two purchasers in front of him.

48. After some negotiations, a $65,500 price was agreed. Mr Olek says that the wife gave him a cash holding deposit of $500 and the receptionist at the real estate agency gave her a receipt, “I looked at it at the point where the receptionist was actually writing the deposit receipt down.”

49. Mr Olek took instructions from the couple to prepare a Sales Advice, and told them that the property could be owned in different ways such as tenants in common or a joint tenancy. The wife looked at her husband and said, “We will buy as joint tenants, yes?”, and the husband agreed. As the wife recalls it, either she or the husband said, “We are buying it together”.

50. The husband does not recall this conversation but says, “I never considered buying the Liverpool property together with the [wife] at the time. We were not then married.” He denied ever speaking with Mr Olek about the wife having a share in the property. The husband said he invested in the Liverpool property for himself, “I didn’t invest that so that she would have a share of it. … I never said she could be an equal owner. If I had thought about that, if I had thought she - I wouldn’t have brought the property. I didn’t say that to anyone, to Olek or Nad[o]lski or anyone. I bought it for myself.”

51. Mr Olek recommended a solicitor, Chris Nadolski, to act on the purchase, and they accepted his recommendation. Mr Olek prepared the Sales Advice reflecting the couple’s instructions to buy the property as joint tenants. Mr Olek said he recalled preparing this Sales Advice, notwithstanding that he had prepared hundreds of such documents over the years.

This particular one is actually pretty much memorable because I didn’t have as many purchasers in my career selling properties, residential properties – I was doing it for a period of about two years – that came to my office and offered cash to purchase the property. So, it’s really easy to remember a person or people like that. There was the two of them sitting in front of me and saying that they have cash to purchase 67 or 65 and a-half thousand dollars property.

52. Mr Olek also prepared a cover letter forwarding the Sales Advice to the solicitor. Mr Olek recalled that the letter described the purchase as the husband and wife “as joint tenants”.

53. The wife recalls seeing a sales notice issued by the agent in both their names. However, her husband then said to her, “We will buy the unit only in my name as you do not have Australian permanent residence. I will add your name after you obtain permanent residence.” The wife said, “I trust you will do it”.

54. According to the wife, a 10% deposit was paid using cash received from the wife’s father and the wife deposited the balance of the father’s gift to the First Joint Account. In her third affidavit, the wife said she withdrew the 10% deposit from the First Joint Account. Either way, the husband denies this.

55. Mr Olek says that he received a front page of the contract for sale at the real estate office, with a note advising that the full contract had been delivered to Mr Nadolski. The contract was not then executed. Mr Olek did not see a full version of the contract prior to exchange, but spoke to Mr Nadolski in relation to exchange and settlement.

56. In her third affidavit, the wife said that she signed the contract for sale, with her husband (this is inconsistent with her first affidavit, where the wife understood from her conversation with the husband after the sales notice was issued that the property would be bought in his name alone). The wife said that she later received a letter from Mr Nadolski addressed to “B and P Kurzyp” informing them that contracts had been exchanged. The wife agreed that she did not mention this until her third affidavit in these proceedings, nor mention it in her family law affidavits. The husband says the wife did not sign the contract, “as she wasn’t meant to. At that time we were not married and she did not have the right of permanent residence in Australia” (although I note that the husband did not then have permanent residence either).

57. Neither party has a copy of the contract for sale. A subpoena to the parties’ then solicitor, Mr Nadolski, returned no documents. In cross-examination, Mr Olek also said that he saw a copy of the front page of the contract after exchange, signed by the vendors and also by the wife and husband. This was not referred to in his affidavit, which was a notable omission.

58. The sale completed on 8 May 1987. The transfer survives, signed by Mr Nadolski as solicitor for the transferee. It was registered on 15 May 1987. According to the transfer, the property was transferred to the husband alone. The wife’s name was written on the transfer but crossed out, with the change initialled by Mr Nadolski. Also added in handwriting was the husband’s occupation, car mechanic.

59. The wife said the deletion of her name was done without her knowledge or authority. The husband said he had no knowledge of the circumstances in which the wife’s name was entered and then crossed out on the transfer. The husband said that he did not know anything about this document and that Mr Olek “arranged everything”. Further, “I have nothing to do with the document. I didn’t order anything. It is a matter of Olek and Nad[o]lski.”

60. The transfer was stamped for duty for $1. This indicates that the parties on the transfer were the same as the parties on the Contract for Sale of Land when the transfer and contract were presented for stamping. In 1987, an agreement for the sale of land and the transfer were each liable to ad valorem duty: section 41(1), paragraph (1) under the heading “Conveyance of any Property” and paragraph (3)(a) under the heading “Real Property Act 1900, as amended” in the second schedule, Stamp Duties Act 1920 (NSW). However, where duty had been paid on an agreement, a conveyance “made in conformity with the agreement” was only liable to duty of one dollar: section 41(4)(a). Conveyance was defined as including a transfer: section 65.

61. However, the Stamp Duties Office’s practice was to over-stamp amendments to documents presented for stamping with a circular imprint reading “Alteration Noted. Stamp Duties Office”: Peter Grimes, The Practice of the Land Titles Office (New South Wales) – Supplement to Third Edition to 1st February 1969 (1969, Law Book Co) at 32; see J A Westaway & Son Pty Ltd v Registrar-General [1996] NSWSC 413; (1996) 7 BPR 14,773 at 14,786 in respect of an amended transfer in 1991.

62. The transfer does not bear such a stamp. This suggests that the amendment to the transfer was made after the transfer had been stamped. Usual conveyancing practice requires the purchaser to provide a stamped transfer to the vendor’s solicitor for the vendor to sign and provide on settlement: Carringville Pty Ltd v Gatto Group Pty Ltd [2003] NSWSC 123; (2003) 11 BPR 21,069 at [35] per Young CJ in Eq. The fact that the amendment on the transfer was not initialled by the vendors suggests that the amendment was made after completion and before the transfer was provided to the Land Titles Office for registration.

63. What this tells me overall is that, when the transfer was stamped for duty, the purchasers on the contract for sale of land corresponded to the purchasers on the transfer, entitling the purchasers to pay only $1 duty on the transfer. That is, the wife’s name was on the Contract for Sale of Land. Subsequently, the transfer was amended – likely after settlement – to delete the wife as a purchaser. Mr Nadolski would have been most unlikely to make such an alteration in the absence of instructions, at least from the husband and (one would hope) also from the wife. The husband’s evidence that he had nothing to do with the alteration of the transfer is also most unlikely.

64. As such, the wife’s evidence that she signed the Contract for Sale is likely correct, as is Mr Olek’s evidence regarding the couple’s instructions that the Liverpool property would be purchased together. Ultimately, whether the wife signed the Contract for Sale is not particularly germane. The fact that the wife signed the contract does not necessarily mean she contributed to the purchase price.

65. The wife says that the purchase was completed using funds from the First Joint Account. The wife said her husband went to Mr Nadolski’s office for the settlement, taking a bank cheque drawn from the First Joint Account. The wife says she checked the First Joint Account the day after the purchase was completed and recalls that, as expected, the money had been withdrawn. The husband says he paid for the townhouse with cash from his savings. The husband agreed it was possible that the monies used to purchase the Liverpool property came from the joint account.

66. Ms Malchevski recalls speaking to the wife over the phone, when the wife said, “I bought a townhouse in Liverpool”. Ms Malchevski agreed that the wife did not say that the townhouse had been purchased using the gift from her father. Rather, Ms Malchevski assumed this,

I never asked the question because it's not really my business.  My understanding was that they were short of money.  They were - she wanted to buy the - to have her own place” …

So my understanding was that with the money that Mr Wieslaw brought, they would be able to - to afford it.

67. As the wife described events in her third affidavit, the wife came to learn that her name was not on the title of the property when the couple took the title deed to the bank for safe keeping and she saw that her name was not on the document. She was upset and asked her husband about it. They then had a conversation in the same terms as already described at [53]. The husband denies this conversation.

68. The wife agreed that she did not speak to the solicitor Mr Nadolski about this at the time, “Because between us, he asked me not to overreact, and he - I don't know how to explain to you, but if your own husband tells you that one day you will get your name on the title because you are my wife anyway, why would I run to the solicitors and make a fuss about it? … I only rely on a promise of my husband, which was the most important thing to me.”

69. On completion, the Liverpool townhouse was the couple’s home for the next three years.

Marriage and permanent residence

70. In February 1988, the couple were married. The husband said they only got married “so she would not be deported. … I did not feel like getting married at all … I was really popular with girls and I didn’t intend to get married”.

71. By then, the husband was a permanent resident of Australia. On 22 February 1988, the wife’s parents in law, Mr and Mrs Kociszewski, completed a statutory declaration in support of the wife’s application for permanent residency. Mr Kociszewski declared that he had known the wife personally for three years and the husband for ten years. Since 1985, Mr Kociszewski had personally observed that the couple shared social activities and the raising of children and were not separated. He had no reservations in declaring that the couple were known to him as husband and wife. Mrs Kociszewski made a similar declaration, declaring that she had known the wife personally for six years and, since 1985, had made the same personal observations of their relationship as had her husband.

72. On 5 April 1988, the husband and wife also made statutory declarations in support of the wife’s application for residency status. The wife declared that her marriage to the husband was not contrived for the purpose of obtaining residency status; they intended to maintain a lasting marriage relationship. The wife declared that she first met her husband in about September 1981 in Poland and they decided to marry in about 1985. The declaration continued: (handwritten answers italicised)

7.   I and my spouse have the following assets or undertakings in both our names: joint bank a/c.

8.   I and my spouse have the following joint interests: everything.

73. The husband made a similar statutory declaration. By the declaration, the husband declared that he supported the application of his wife for residency status; his marriage was not contrived for the purpose of obtaining residency status and he intended to maintain a lasting marriage relationship with his wife. The declaration continued: (handwritten answers italicised)

7.   When and where did you first meet?    About September 1981 at Warsaw Poland

8.   When did you decide to get married? About 1985

9.   I and my spouse have the following assets or undertakings in both our names: Joint Bank Account

10.   I and my spouse have the following joint interests: Everything

74. These statutory declarations are vital as, in the absence of any bank statements having been produced by the parties or subpoenaed banks, the statutory declarations contain the only contemporaneous record that the couple then had a joint bank account into which – on the wife’s evidence – the money which the couple brought to Australia was transferred (see [35], [38]), the US$20,000 gift from the wife’s father was deposited (see [41]) and from which the deposit and balance of the purchase price for the Liverpool townhouse was paid (see [48], [65]).

75. In his affidavit, the husband said they may have had a joint bank account at the time for some shopping expenses. In cross-examination, the husband said, “No, we didn’t have any joint account.” He later said it was possible that they had a joint account as he left money for the wife so that she could use it when he went to Poland.

76. Whilst the husband agreed that the declaration bore his signature and, initially, agreed that he signed it (“Of course I signed it. Yes, of course.”), the husband then said he could not remember, then doubted whether he had signed it, then denied having signed it. Whilst the husband initially agreed that the declaration was true when he signed it, he later said:

I never signed such a declaration. I would never sign anything like that ...

No, it is impossible. I couldn’t have signed anything like that. There is no possibility. Which solicitor could come to me to - telling me to sign something like that? I came here in 1985 as a tourist. I didn’t think I would stay here and she didn’t even know I had that money. …

It’s impossible. I couldn’t have signed it. Which solicitor would make me sign it? I think it’s a forged signature.

77. Whilst the husband referred, and responded, to the statutory declaration in one of his affidavits (where he said that his statutory declaration “does not establish that our assets were equally owned”), he said in cross-examination that he was now seeing the document for the first time. He disclaimed that he had met his wife in September 1981 and denied that he and his wife shared everything, “… how would I share everything, my hard earned money with someone I only met a year before?” … I would never have signed anything about common ownership or shared ownership because she never had any money.”

77. The husband’s evidence in respect of the statutory declaration was most unsatisfactory and I do not accept it. Rather, these documents are likely to reflect the true position at the time the statutory declarations were made, being documents prepared on a solemn occasion in support of an application for permanent residence. It would have been obvious to the persons making the declarations that the contents of the declarations must be true and correct. I accept that the description of the couple’s relationship and financial arrangements was as then stated by the wife and the husband.

78. On 4 November 1988, the couple had their second child, Christopher. On 17 November 1988, the husband changed his surname to “Douglas”. He gave his occupation as brick cleaner. On 24 November 1988, the wife applied to the Department of Immigration and Ethnic Affairs for permission to engage in employment in Australia, as “Chemical laboratory secretary clerk”. Permission was granted in April 1989, whilst her application for resident status was under consideration. According to these records, the wife was then an illegal entrant, having overstayed her visitor permit granted in 1985. The wife says she was then working at Tridon Silverwater.

Second Joint Account

80. On 18 October 1990, the couple opened a joint bank account with the Commonwealth Bank, ending 5113 (Second Joint Account). The wife said this was because the couple intended to relocate to Poland and lease out the Liverpool apartment; the account was opened for the purpose of receiving rent. The wife said the rental income was deposited into this account from 1990. The husband said, “The rental income from the Liverpool property may have been deposited into a joint account at some stage. I do not recall.”

81. Bank statements for the Second Joint Account are in evidence, but only from 25 December 2003 on, being 13 years after it was opened. Whilst there were some deposits to this account after December 2003, none appear to have been rental payments.

82. On 12 November 1990, the wife and her children were granted an Australian resident visa. The wife said that, after she obtained permanent residence, she spoke to her husband and said, “You were going to add my name to the title of our townhouse.” Her husband said, “Don’t worry. You are my wife now. Half is yours. I will do it. Don’t worry.”

83. On 21 November 1990, the family returned to Poland. The wife said that the Liverpool apartment was managed by leasing agents, initially by Mr Olek of Realty 3000, and rented out for approximately $170 a week, with rental income deposited into the Second Joint Account. The husband said, in an affidavit filed in family law proceedings in 2006, that the family returned to Poland in 1990 and the townhouse was rented out for approximately $170 per week “when we left for Poland”.

84. Mr Olek said that he was asked to manage the property in about 1991 as the couple were leaving Australia for Poland. They came to see him at his office in Liverpool; he was then the principal of the business “Realty 3000”. He prepared a property management agreement, which both signed. Mr Olek said it was his only residential property at the time, as he specialised in commercial and industrial property. Rent was deposited into Realty 3000’s trust account and paid by cheque into the joint bank account of the husband and the wife. After electronic funds transfer became available, the rental proceeds were transferred to the joint bank account.

85. Realty 3000 issued a letter on 23 March 2000 (that is, a decade later), signed by Mr Olek, addressed “To whom it may concern” and entitled “Investm[e]nt Income” in respect of the Liverpool property, which stated: (emphasis added)

Please be advi[sed] that Mr.P. & Mrs.B. Kurzyp are owners of the above property.

The property is continuously tenanted producing gross income of $180.00 p/week-$9,360.00 p/year.

Our firm has been appointed property managers since July 1994.

86. The wife says she obtained this letter to support her application for renewal of her return visa to Australia, as she was then living in Poland and needed to lodge an application to renew the visa from time to time. It may be that there was another managing agent of the Liverpool property between November 1990 and July 1994. Perhaps significantly, the letter represented that the husband and wife were owners of the property, corroborating Mr Olek’s evidence in respect of the Sales Advice and Contract for Sale. Also consistent with his earlier evidence that the transaction was memorable because it concerned residential property, the letterhead noted that Realty 3000 was “Specialising in Industrial Properties”.

Separation

87. In affidavits later sworn by the wife in family law proceedings (see [105] and [107]), the couple separated in September 1998, reconciled in 2000 and separated again in about 2002.

88. Consistently with this, the husband and the wife were involved in court proceedings in Poland, apparently against one another, resulting in a judgment of the Regional Court in Warsaw on 26 September 2002 and a judgment of the Court of the Court of Appeal in Warsaw Sixth Civil Division on 18 November 2003, in respect of a property in Warsaw which was in the wife’s name. Inconsistently, in the wife’s first affidavit in these proceedings, she said that the couple separated in April 2005.

Husband’s Rent Account

89. On 5 June 2000, being 13 years after purchase of the Liverpool property, almost ten years after the couple had returned to Poland and begun leasing the property, and possibly after the couple had separated or when their relationship was experiencing difficulty, the husband opened an account with Westpac ending 3161 (Husband’s Rent Account). Bank statements for this account are in evidence. Regular monthly deposits were made to this account, which appear to be rental income. The bank statement narration for each deposit was “Deposit Trust A/C No 1 statement cheque”. On 12 June 2001, the last deposit was made with this narration and thereafter monthly deposits were instead made by “Deposit Realty 3000 Trust”. The last deposit by Realty 3000 was made on 7 November 2001, following which monthly deposits were described as “Deposit Trust A/C No 1”. That is, from 5 June 2000 rent from the Liverpool townhouse was instead paid into the husband’s bank account. Mr Olek does not mention this, which is a notable omission.

90. On 19 August 2003, the husband entered into a management agency agreement with Laing & Simmons, with rental payments to be made to the Husband’s Rent Account. The Liverpool property was to be leased for $190 a week. On 20 August 2003, the husband apparently signed a pro forma letter prepared by Laing & Simmons, notifying Realty 3000 that he wished to terminate the agency agreement in respect of the Liverpool property. The husband’s address is noted to be in Bondi, which was his mother’s address. Whilst the husband’s signature on the letter is different from that on his statutory declaration and his affidavits in these proceedings, it is likely that the letter was signed on his behalf by his mother, as the husband lived in Poland. The wife recognises the signature to be that of the husband’s mother. The signature on the letter is similar to that of the husband’s mother appearing on a 2008 Enduring Power of Attorney.

91. On 3 November 2003, Laing & Simmons began to make monthly deposits to the Husband’s Rent Account. Whilst the wife says that, after entry into the Laing & Simmons management agency agreement, no deposits of rent were made into the Second Joint Account thereafter, it appears that rent had not been paid into that account since, at least, June 2000.

Christopher returns to Australia

92. In August 2004, Christopher returned to Australia and lived with his grandmother in Bondi. Christopher was then 15 years old. Before leaving Poland, Christopher says he spoke with his parents about whether he would be given cash or allowed to take one of their ATM cards from an Australian bank. He saw the ATM cards, which were issued by the Commonwealth Bank and were yellow. His father suggested that Christopher should take his mother’s card to Australia and, according to Christopher, “both of my parents said to me … That bank account has rent paid into it from the Australian property.”

93. However, for at least four years, rent from the Liverpool property had not been paid into the Second Joint Account but into the Husband’s Rent Account. This gives rise to three possibilities: Christopher’s evidence is incorrect; the fact that the rent from the Liverpool property was no longer paid into the Second Joint Account but into the Husband’s Rent Account was not then known by the wife and not disclosed by the husband; or the rent from the Liverpool property was never paid into the Second Joint Account.

94. Christopher says that his father told him that he might lose the card whilst in Australia and his mother would have difficulty getting another, so Christopher was given cash to take to Australia instead. The husband said he returned to Australia with Christopher and lived here for three months before returning to Poland to live. Certainly, according to the Husband’s Rent Account bank statements, from September 2004 on, ATM withdrawals were made from the account, which was a new pattern. These included regular withdrawals from handy banks in Bondi.

95. In about November 2004, the wife filed a tax return in Poland, declaring rental income of 18,000 Polish zloty. The tax return does not disclose whether the income was earned in Poland or overseas (the husband says income from foreign sources is declared on a different tax form in Poland). The wife says that this was income in respect of the Liverpool property. The wife says that she had a conversation with the husband before lodging the return, in which he said he wanted her to declare all of the income for the Liverpool property in her tax return as he did not want to file any tax returns nor apply for a tax file number in Poland. I place no weight on this document as the tax return does not contain sufficient detail to enable me to be confident that the rental income related to the Liverpool property.

96. In early 2005, Christopher says his father took him to the Liverpool townhouse to show him where they had all lived together when he was a child. His father said that, when his mother came to Australia, there was a possibility that Christopher would live in the Liverpool townhouse with her. His father said to Christopher in Polish, “[I]t is as much her property as it is mine … I am leaving it up to your mother to decide where she wants to live when she returns to Australia”.

97. On the way home, Christopher spoke to his father about the Liverpool townhouse and his father said in Polish, “We bought it equally”, and Christopher distinctly remembered his father adding in English, “Fifty-fifty”. It was suggested to Christopher in cross examination that, instead, the husband told his son, “We bought it while we were together.” Christopher rejected this possibility. The father did not deny this conversation.

98. In cross-examination, Christopher said that, throughout their family life, there had been many conversations between family members about the Liverpool property but, as the parties “are both my parents” he was only prepared to give evidence if he could “recall something that I could recall 100%”.

A.   To be honest, throughout our family life, we've had many of those conversations. My brother, myself, my mother, my father, we spoke about these things quite numerous times about the property, but knowing that I'll be testifying, giving testimony that perhaps - you know, my side - to one side more than the other side, and knowing that these are both my parents, I had to make sure that I could only recall something that I could recall 100%. So the reason why you see one specific conversation, is I couldn't properly recall a lot of different conversations, but I might have been not sure of the date, not sure of the place, and that's why you do not see this in this affidavit, but this one particular, I do recall very specifically, and that is why I put my name to it, and that it why I put my signature to it.

Q.   So to the extent that there had been any other discussions with your father about the purchase of the Liverpool property, you don't have a clear recollection of those discussions?

A.   No. I remember discussions at dinner tables. You know, all sorts of other discussions, but I can't really confirm 100% recollection of those events, the dates or exactly what was said, so I would prefer not to really, you know, mention any of those because I cannot be 100% sure of it. But what I can recall is what has been, you know, provided in the affidavit, and that is why I decided to put my name to it.

Wife returns to Australia

99. On 2 April 2005, the wife returned to Sydney where she continues to live. The husband returned to Poland. In April 2005, $500 and $4,500 was withdrawn from the Husband’s Rent Account and deposited into the Second Joint Account, which then had no funds. Payments of a domestic nature were then made from the Second Joint Account. This is consistent with the husband replenishing the Second Joint Account with some rental income at least.

100. The wife says about a month after her return to Sydney, she went to the Laing & Simmons office to find out where the unpaid rent was being paid for the Liverpool townhouse and was told, “We were told to pay the rent to another account.” The words attributed to Laing & Simmons do not align well with the contemporaneous documents as Laing & Simmons were only retained as managing agents in 2003, when rent was already being paid by the former managing agent into the Husband’s Rent Account, into which Laing & Simmons continued to deposit rent.

101. The wife’s evidence may simply reflect the fact that, on her return to Australia, she was expecting the Second Joint Account to be where the rent was paid. Although the husband transferred funds into the account when the wife returned to Sydney, the wife soon became aware that the rent from the Liverpool property was not being deposited into the account (as indeed it had not been for some years) and made enquiries of the managing agent as to why this was so.

102. On 26 May 2005, Laing & Simmons issued a letter in respect of the townhouse “To whom it may concern”, noting that Laing & Simmons were the managing agents for the property which was managed “on behalf of the owners: Mr & Mrs B & P Kurzyp”. (The wife obtained this letter to support her application for renewal of her return visa to Australia). Rental payments, however, continued to be made to the Husband’s Rent Account.

103. On 19 February 2006, the wife revoked all powers of attorney given to her husband. In addition, the wife lodged a caveat over the Liverpool property. The caveat is not in evidence and the description of the caveatable interest is not known. On 14 May 2006, the couple were divorced by an order made by the Family Court of Australia.

Family law proceedings

104. On 4 September 2006, the wife filed an Application in the Federal Magistrates’ Court seeking ex parte interlocutory orders restraining the husband from dealing with the Liverpool property, dealing with funds standing to the credit of the husband’s Westpac account, or instructing agents other than Laing & Simmons to manage the Liverpool property or authorising Laing & Simmons to pay rental income other than to his Westpac account. As to final orders, the wife sought an order that the husband transfer his interest in the Liverpool property, the Westpac bank account and any other rental account operated by the husband in respect of the property, to the wife. The wife says that it was only during these proceedings that she discovered that she had never been added to the title of the Liverpool property.

105. In support of the Application, the wife swore an affidavit, which was brief (two pages) and described their relationship and financial affairs at a high level of generality. The affidavit was largely directed to the application for interim relief, emphasising the husband’s transfer of substantial funds to Poland and his statement to the wife on separating that “you are not going to get anything”. The wife deposed that during their relationship, the wife and the husband owned various property and bought and sold properties both in their joint names and in their sole names. Further:

The Husband has property in his sole name and I asked him about this when we were together and he said to me on many occasions “this is all ours you have a share” but he did not put that into my name.

The wife does not specifically identify this property as being the Liverpool property, but when read with the Application, it may be taken to be a reference to that property.

106. The wife also completed a Financial Statement. The wife’s property was said to total $311,000, being a motor vehicle and the proceeds of a Commonwealth bank account. Included in the financial statement was a list of property and bank accounts, in Australia and Poland, held in various names. Presumably the list was to identify property which the wife said formed part of the marital pool of assets. On the list was:

1.   Unit at 7/146 Moore Street, Liverpool in the husband’s name valued at $270,000.00

…

5.   Westpac Rental Account in the husband’s name valued at $60,000.00

…

107. On 11 September 2006, the wife swore a second affidavit in the family law proceedings, which contained additional detail (now four pages). No further details were given in respect of the portion of her first affidavit earlier extracted. The level of detail in the second affidavit remained limited. Of potential interest, the wife deposed that, at the commencement of their relationship, each had a motor vehicle, the wife owned land in Warsaw and “The Husband had DM 40,000”. This is perhaps inconsistent with the wife’s suggestion in these proceedings that the 40,000 Deutsche Mark came from her efforts in Canada.

108. Importantly, the wife did not assert in the family law affidavits that she had made a financial contribution to the acquisition of the Liverpool townhouse. The wife agreed that she did not refer in the family law affidavits to having 25,000 Canadian dollars in the bank, and agreed that this is something she would have wanted the Court to know about. The wife also agreed that she did not mention her father’s gift. The wife did not agree that she would have wanted to bring that matter to the attention of the Court, if she had contributed these monies to the purchase of the Liverpool property.

I'm not sure if I - I wanted to have this in the family proceedings - in my first two affidavit, yes, there's no mention about it, but it was a family proceeding, so basically I was covered by … Family Act, because if - we were told to pull all asset out, what we acquired during the marriage, and this will be splitted … in half to both parties. So I was concentrating more on disclosing what I acquired with my husband during the marriage than describing every fact of - of our movements.

109. The wife was firm that she had sworn two other affidavits in the family law proceedings and, although she could not recall, believed that she had addressed this matter in more detail in the later affidavits.

110. The wife said she did not have any experience as to what she should include in the affidavit and was told on concentrate on the marriage relationship, “and I had no help from solicitors”. Whilst the wife was legally represented in the family law proceedings, the wife said that she prepared the affidavit herself, “I had a solicitor, but she said that affidavit need to be written by myself. This is how I understood.” It is more likely that the wife was assisted by her solicitor to prepare the affidavit, which was prepared at an early stage of the proceedings and with brevity.

109. On 11 September 2006, the Federal Magistrate’s Court made ex parte orders, restraining the husband from dealing with the Liverpool property or the rental income. The rental income was to be paid into a trust account in both parties’ names pending the outcome of the proceedings. No further rental deposits were made to the Husband’s Rent Account. On 17 September 2006, the Second Joint Account was closed. The wife said she closed the account as she discovered that rent had not been deposited for some time.

Trouble in Poland

112. On 16 November 2006, the husband entered into a contract of sale in Poland, to sell a property which was in the wife’s name. He did so pursuant to the power of attorney which she had revoked: see [103]. According to a Notarial Deed, the husband appeared before a Notary Public in Warsaw. The deed records (translated into English):

[The husband] … acting for and on behalf of [the wife] …, married, on the basis of his Power of Attorney he has produced … He declares that the said Power of Attorney has not been changed, revoked, nor has it expired to this day.

113. The husband said that the wife did not inform him that she had revoked the power of attorney. “[S]he kept it in the drawer and I didn’t know about it.” This seems unlikely. He said that, at the time, he and the wife were still married according to Polish law, as the wife did not give him authority to arrange a divorce. This is also unlikely.

114. On 6 December 2006, the husband filed a Response in the family law proceedings, seeking different orders to those proposed by the wife including, in respect of the Liverpool property, that he be declared solely entitled to the property. The husband’s Financial Statement filed at the same time disclosed that the Liverpool property was then earning $190 a week, and incurring expenses of $50 a week.

115. In an affidavit filed in the family law proceedings, the husband deposed that he had purchased the Liverpool townhouse from funds he had in an overseas bank account, being part of his savings of $150,000 which he had prior to their marriage. Whilst the husband responded to specific paragraphs of the wife’s affidavits then filed, he did not reply to the portion of her affidavit reproduced at [105]. It was suggested to the husband in cross-examination that he did not reply to the affidavit as he agreed with it, which the husband denied.

116. On 8 February 2008, the husband appointed his mother as his attorney. On 14 May 2008, the husband attended upon a notary in Warsaw to amend the contract of sale on behalf of the wife, again relying upon the power of attorney which the wife had revoked. According to the Notary Deed, the husband again represented that they were married and that the power of attorney had not been amended, revoked or expired. Suffice to say, the wife was not pleased. In July 2008, the wife filed a crime report with the District Public Prosecutor’s office in Warsaw in relation to her husband’s actions.

End of family proceedings

117. In February 2009, the family law proceedings settled on the basis that the appropriate forum for the proceedings was in Poland. On 26 February 2009, consent orders were made in the Family Court of Australia as follows:

1.   That by consent orders, declaration and notations be made in terms of the document titled “Terms of Settlement” filed herein and attached hereto.

118. The “Terms of Settlement”, by consent and without admissions were as follows:

1.   The Application filed by the Wife on 4 September 2006 be withdrawn;

2.   The Response filed by the Husband on 6 December 2006 also be withdrawn; and

3.   Simultaneously with the making of Orders 1 and 2 the Wife will provide to the Husband a Withdrawal of Caveat over the property [in] Liverpool.

4.   Both parties agree that the appropriate forum for Family Court proceedings is Poland.

5.   There are no Orders as to costs.

6.   All previous Orders are discharged.

119. The wife duly signed a Withdrawal of Caveat form, which was registered.

120. At the time, the wife understood that family law proceedings would ensue in Poland, to divide all property of the couple, including the Liverpool property. The wife thought it would be beneficial to have all issues between them litigated in Poland in one proceedings, with only one set of legal costs.

121. The wife expected that the husband would commence proceedings in Poland as he lived there and most of the property was there. Further, “I was asked to withdraw application because it - we own other properties in Poland which Australian Court had no jurisdiction over it and I was told that it is too complicated, so it is better off for us to take all our assets back to Poland and divide everything in Poland.”

122. The wife agreed that, after the Australian family law proceedings were concluded, she travelled to Poland from time to time and could have commenced proceedings in Poland herself if she wished.

Husband’s Second Rent Account

123. On 12 November 2009, the husband’s mother signed a new managing agent agreement with Century 21 in respect of the Liverpool property, directing the agent to let the premises for $350 a week. Rent was to be paid to an ANZ bank account in the husband’s name, ending 7814 (Husband’s Second Rent Account). That bank account had been opened on 10 November 2009.

124. Rent was duly deposited to the Husband’s Second Rent Account. From time to time, withdrawals were also made from this account, some being quite large, for example, $25,000. It would appear that the husband was using the rental income as he saw fit, without regard to any claim which his wife may have to the Liverpool property or the rental income which it generated. From time to time, the managing agent corresponded with the husband, such correspondence being sent to the Bondi address and, often, addressed to his mother.

125. The wife agreed that, between 2009 and July 2018, she did not tell the husband that she still claimed an interest in the Liverpool property, “We don’t talk to each other”. The wife agreed that she did not offer to make any contribution to the outgoings of the property, “I didn’t offer any contribution because he was collecting rent himself.” They met in Queensland in 2010 as the husband requested a meeting. According to the wife, instead of discussing matters, the husband made a series of demands and was annoyed and aggressive. The meeting did not proceed further. They bumped into one another on the street in Warsaw in 2010. The wife said, “He was always aggressive towards me, so I keep away from him. … [So] [t]here was no occasion to speak about [the Liverpool property after 2009].” Tragically, in May 2015, Paul passed away. They were both at the funeral, but it was obviously not an appropriate occasion to discuss such a matter.

126. It does appear that the couple had little contact. The husband said, “This is a divorce. I haven’t had any contact with Beata. We haven’t emailed each other nor told each other.”

127. On 7 July 2017, the wife again filed a crime report in Poland in relation to the husband’s sale of the property using the revoked power of attorney (referred to at [103]). In turn, on 18 April 2018, the husband lodged a crime report suggesting that the wife’s allegation was false. In April 2018, the husband’s lawyer submitted a statement in respect of the matter, noting that the wife had not disclosed the existence of the property in the Australian family law proceeding, nor brought a case for the petition of joint marital property since completion of the Australian family law proceedings. The lawyer advised that a petition for partition of marital property would now be filed with the civil court in Poland in order to resolve any potential doubts.

Proceedings in Poland

128. On 13 June 2018, the husband filed a petition against his wife in the District Court of Warsaw, seeking the partition of joint property. The husband sought a determination that the joint property included various property in Poland but made no reference to the Liverpool property. By failing to serve a notice disputing facts, the husband admits that the District Court of Warsaw does not have jurisdiction in those proceedings to make any orders or grant any other relief in respect of the Liverpool property. The petition did refer to the Australian family law proceedings; it appears that the husband sought to have his legal and travel expenses in relation to those proceedings included in the determination by the Polish court.

129. On commencement of the Polish proceedings, the wife obtained legal advice and instructed her solicitors to lodge a caveat over the Liverpool property. The caveat was lodged on 17 July 2018, claiming an interest in the land by virtue of a beneficial interest in trust, being an equitable interest as a result of contributing monies to the purchase of the property. The wife also made enquiries of the Commonwealth Bank as to the existence of a joint bank account, apparently directed to finding the First Joint Account.

These proceedings

130. A lapsing notice was issued was in respect of the caveat. On 15 February 2019, the wife commenced these proceedings by summons, seeking an order to extend the caveat and declaratory relief in respect of the wife’s interest in the Liverpool property. In support of the application, the wife swore an affidavit which was, again, brief but, for the first time, contained details about the money which she brought to Australia (being the $25,000 Canadian dollars or 40,000 Deutsche marks), her father’s gift of US$20,000, and the use of these funds to contribute to the purchase of the Liverpool townhouse. On 20 February 2019, this Court made an order pursuant to section 94K of the Real Property Act 1900 (NSW) that the caveat be extended until further order.

131. On 13 March 2019, the public prosecutor in Warsaw decided to discontinue the criminal proceedings against the husband in respect of the sale of the property using the wife’s power of attorney. The decision appears to have turned upon a range of matters, including, that it could not be concluded that the power of attorney was effectively revoked or that the property had been purchased with the wife’s funds alone as opposed to with marital assets. In addition, the proceeds of sale were now subject to civil proceedings and should be settled in those proceedings.

132. However, on 22 November 2019, Judge Alicja Szkotnicka of the District Court of Warsaw discontinued the Polish proceedings for division of joint property due to the husband’s failure to satisfy the formal requirements of the application, having been required to do so by 26 September 2019. The wife said she discussed the suspension of the Polish proceedings with her Polish lawyer, who was going to make a complaint about the suspension. The order was later set aside by Judge Alicja Szkotnicka, on 1 April 2020.

133. On 21 December 2020, the husband’s solicitors contended that the wife was Anshun or issue estopped from agitating any interest in the Liverpool property given consent orders made in the Australian family law proceedings in 2009. On 19 January 2021, the wife served a second notice to admit facts, going to the management and rental income of the Liverpool property. The husband admitted that he has not accounted to the wife for any of the rental income earned by the Liverpool property.

Conclusion

134. The difficulty in determining what happened in this case is significant as the critical events occurred more than 30 years ago, few contemporaneous documents remain, all witnesses were giving evidence in a language other than their native tongue, and the key witnesses’ evidence was affected by the difficulties described in Watson v Foxman. My overall impression was that the husband would say whatever would assist his case, regardless of its truth, whilst the wife and Mr Olek were also inclined, albeit to a lesser extent, to add details to enhance the wife’s claim.

135. Whatever the difficulties, the burden of proof rests on the wife. The standard of proof is the civil standard, being proof on the balance of probabilities but qualified having regard to the gravity of the questions to be determined: section 140(2), Evidence Act 1995 (NSW); Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; [1938] HCA 34. As Dixon J observed in Briginshaw at 361, “The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found.”

136. When the wife and the husband came to Australia in 1985, they were a young couple (the husband was aged 25 and the wife was aged 21), had been together for three years, and were expecting their first child. They came to live with the husband’s mother and stepfather, it would appear, with the intention of staying in Australia for some time. They brought with them funds from Poland for their new life. It is inherently likely that the couple pooled their funds in the husband’s recently opened German bank account before transferring the funds to Australia.

137. According to the surviving records, the husband had a permit to take foreign currency worth some 30,000 Deutsche marks out of Poland. Both agree that he took more foreign currency out of Poland than he declared. In addition, the wife had a permit to take currency from an “A” account, into which foreign currency could be held. Self-evidently the “A” account must have had some money in it. Thus, the wife had some foreign currency. The wife’s evidence as to how she came by the 40,000 Deutsche mark is credible. The suggested inconsistency in the wife’s evidence, referred to at [27] is not of great moment, although I expect the wife’s evidence in cross-examination was the late addition of a detail as to what she thought she may have done at the time, rather than a genuine recollection.

138. The funds as ultimately transferred to Australia was 142,000 Deutsche marks, or some $72,000 Australian dollars. The ‘gap’ between the funds which the husband was permitted to take from Poland and the funds which were transferred to Australia was 112,000 Deutsche marks. Funds brought by the wife from her “A” account could well have bridged part of this ‘gap’. The wife’s 40,000 Deutche mark would have comprised only 36% of the ‘gap’. This is plausible. The husband’s evidence that he was very rich and the wife was very, very, very poor carries little weight.

139. When the pooled funds were transferred to Australia in August 1985, the couple had a two month old baby. As some of these monies, at least, likely came from the wife’s “A” account, and the couple were embarking upon family life, depositing the funds into a joint account in Australia would have been an unremarkable thing to do. The husband does not point to any other account into which the monies were deposited.

140. There is no doubt that the wife’s father came to Australia. The fact that the wife’s father gave the wife US$20,000 is corroborated by Ms Malchevski, who was a credible witness. The fact that the couple were looking for a home for their young family is inherently likely. That the wife would use the father’s gift for that purpose is also likely.

141. Whilst I accept that it would have been unusual for Mr Olek to deal with a Polish couple who had funds to buy their first home outright, and this may well have made this purchase stand out in his recollection, I otherwise place little weight on Mr Olek’s weight as to the specifics of his conversations with the couple so many years ago.

142. There is documentary evidence that the wife’s name was initially on the transaction documents. The wife’s name initially appeared on the transfer, before it was crossed out by the solicitor. The $1 duty stamp on the transfer in the absence of an “Alteration Noted” over-stamp on the amendment indicates that the husband and the wife were the purchasers named on the Contract for Sale of Land but the wife’s name was deleted from the transfer after settlement: see [60]-[63]. The alteration is consistent with the husband giving instructions to the solicitor that the Liverpool townhouse would be purchased in his name alone, either because he had provided all of the monies to pay for the property, or simply because that is how he wished the property to be held and the wife agreed at the time (as described by the wife in her first affidavit: see [53]) or the solicitor regarded the husband as the client and did not take the wife’s instructions on the subject.

143. The husband agreed that it was possible that the monies used to purchase the Liverpool property came from the couple’s joint account. The husband does not point to any other bank account in use at the time. In that event, the funds used to purchase the Liverpool property were co-mingled funds including the wife’s “A” account (to the extent that the funds had not then been exhausted), the gift from the wife’s father and the wife’s earnings from her various jobs. The inconsistency in the wife’s evidence referred to at [54] is immaterial.

144. Consistent with the couple purchasing the Liverpool townhouse using joint funds, the couple married ten months later and, in statutory declarations completed two months after their wedding, the husband and the wife each declared that they had a joint bank account and had joint interests in “everything”. The couple were then expecting their second child.

145. Also consistently with this, shortly before returning to Poland, the couple opened a joint bank account at the Commonwealth Bank, into which (according to the wife and Mr Olek) rent from the Liverpool property was paid. The husband agreed that the rent may have been deposited into a joint account at some stage, but did not recall. The husband did not point to any other bank account in his name alone into which the rent was paid at that time. By 2000, however, the husband opened the Husband’s Rent Account, being likely at a time when the couple had separated or their relationship was experiencing uncertainty. Rent from the Liverpool property was paid into that account thereafter. Consistent with the fact that the husband was thereby diverting rental income from a joint account unbeknownst to the wife are the conversations described by Christopher before his return to Australia (see [92] and [94]) and the ‘top up’ of the Second Joint Account with funds from the Husband’s Rent Account when the wife returned to live in Australia (see [99]-[100]).

146. Also consistent with the wife having contributed to the acquisition of the Liverpool property is the husband’s conversation with Christopher in 2005, when the husband said, “We bought it equally … fifty-fifty”. Christopher was a credible witness.

147. Standing against acceptance of the wife’s version of events is her failure, when commencing family law proceedings in Australia in 2006, to refer to any contributions made by her to the acquisition of the Liverpool property and the suggestion that, at the commencement of their relationship, “The Husband had DM 40,000”. The wife did not mention the 25,000 Canadian dollars or her father’s gift. It may be that in 2006, being almost 20 years after the Liverpool townhouse was purchased and in the absence of the documentary material which has now come to light in these proceedings, the wife did not have in mind the specifics of the transaction, bearing in mind that the family law affidavits referred to a large number of properties and business interests in Australia and Poland, of which the Liverpool townhouse was but one. That said, the wife’s recollection of these matters would also have been better in 2006 than 13 years later, when these proceedings were commenced.

148. It is apparent that the wife’s affidavits filed in the family law proceedings were prepared in support of an application for interim relief. The affidavits were brief. It would have be unremarkable – had the family law proceeding continued to a final hearing – for the wife to supplement these affidavits with a more substantive and detailed account. The wife said she prepared four affidavits in total in the family law proceedings, albeit the husband’s solicitors have only located two affidavits from the Court’s records in Parramatta. It is quite possible that the wife prepared additional affidavits which were not filed with the Court and became unnecessary once the proceedings resolved by consent orders.

134. Also tending against acceptance of the wife’s version of events is that she did not do anything to press her claim in respect of the Liverpool property from February 2009 until July 2018. It was not unreasonable for the wife to proceed on the assumption that the husband would commence the family law proceedings in Poland – where he lived – but after some years of inaction on the husband’s party, the wife did not commence proceedings herself. It does appear that the husband and the wife were unable to communicate on any matter of substance. I accept the wife’s evidence as to her difficulties in dealing with her ex-husband; her description was consistent with the husband’s presentation when giving evidence.

135. Matters were only brought to a head in 2018 as a consequence of the husband’s sale of a property in Poland in the wife’s name pursuant to her power of attorney, which had been revoked, and the allegations and counter allegations made in connection with that event. It was this which finally prompted the husband’s lawyer to petition for partition of marital property in Poland, but then seeking no relief in respect of the Liverpool property, which it had been anticipated – when the family law proceedings in Australia were resolved by consent – would be dealt with in the Polish proceedings. Nor does it appear that the husband has prosecuted those proceeding expeditiously since.

136. Having considered this evidence, I am satisfied on the balance of probabilities that the wife’s version of events should be accepted. The wife did bring funds from Poland to Australia from her “A” account, which were deposited into the First Joint Account. Those funds comprised 40,000 Deutsche marks or, when transferred to Australia, $20,473. Her father did give her US$20,000 on his visit to Australia. These funds were contributed to the purchase price of the Liverpool property, albeit some of the 40,000 Deutsche marks had likely been expended in the meantime and replenished by the wife’s earnings.

SHOULD THIS COURT DETERMINE THE MATTER?

152. Dealing firstly with whether this Court should determine the wife’s claim at all, the husband did not suggest that this Court lacked jurisdiction to determine the wife’s claim but submitted that these proceedings are a matrimonial cause as defined in section 4(1) of the Family Law Act and should be dealt with by the Family Court of Australia. Section 4(1) relevantly provides:

matrimonial cause means:

…

(ca)   proceedings between the parties to a marriage with respect to the property of the parties to the marriage or either of them, being proceedings:

(i)   arising out of the marital relationship;

(ii)   in relation to concurrent, pending or completed divorce or validity of marriage proceedings between those parties; …

153. The Family Court and the Federal Circuit Court are ordinarily the courts in which matrimonial causes should be instituted: Song v Shi [2011] NSWSC 1207 at [7] per Brereton J; Choi v Kim [2013] NSWSC 1774 at [14] per White J; Shah v Sanjiv [2014] NSWSC 1535 at [28] per White J. However, the wife does not seek an alteration of property interests under section 79 of the Family Law Act – which general concerns the whole of the couple’s marital pool of assets by reference to a range of statutory considerations – but the application of equitable principles in respect of one property. This Court is the natural place to determine such an application: Young v Lalic [2006] NSWSC 18; (2006) 197 FLR 27 at [3], [35], [37], [48] per Brereton J; Valceski v Valceski (2007) 70 NSWLR 36; [2007] NSWSC 440 at [24] per Brereton J; Xie v Li [2019] NSWSC 808 at [20]-[22] per Rein J. The position may be different if there were proceedings already on foot in the Family Court, or soon to be commenced, or there was an application to transfer these proceedings to the Family Court.

154. In addition, the husband’s submission was made two years after the commencement of these proceedings, when the parties have committed time and money to advancing their respective positions. There seems to be no utility in transferring these proceedings to the Family Court for relief which is other than relief sought under the Family Law Act. I decline to transfer these proceedings to the Family Court (if that is what is sought) or to refrain from determining the wife’s application.

155. Further, the husband submitted that, in order to institute the present proceedings, the wife needed leave under section 44(3) of the Family Law Act, which provides: (emphasis added)

Where …:

(a)   a divorce order has taken effect …

proceedings of a kind referred to in paragraph … (ca) … of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 …) … shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:

(c)   in a case referred to in paragraph (a)—the date on which the divorce order took effect; …

The court may grant such leave at any time, even if the proceedings have already been instituted.

156. However, leave is not required for proceedings under section 78 of the Family Law Act, which provides:

In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.

To the extent that these proceedings may be considered to be under section 78 of the Family Law Act, there is no requirement for leave.

157. The husband relied on In the marriage of Molier and Van Wyk (1980) 7 Fam LR 18, where it was held that parties may not apply to the Court under section 78 to declare their title or rights in respect of property which has already been the subject of an order under section 79: at 412. The husband submitted that, by reason of the consent orders made in the family law proceedings, an order had been made under section 79.

158. Whilst, when commencing the family law proceedings, the wife did seek an order under section 79 of the Family Law Act, the orders made, by consent and without admission, were not made pursuant to section 79 and, indeed, no order was made altering the property interests of the wife and the husband. Rather, the Court noted the parties’ agreement to abandon the family law proceedings, with no cost consequences, and to pursue the matter in Poland. Re Molier has no application on the facts of this case.

159. Further, leave is not required where proceedings were instituted with the consent of the parties. These proceedings have been on foot for two years and it is reasonable to infer that the husband consented to the proceedings being brought in this Court, having not raised the issue until the defendant served his outline of opening submissions.

RESULTING TRUST

160. There was no dispute as to the principles. Where two persons jointly provide the purchase money for the property and the property is put into the name of one of them, then, unless the relationship between the parties gives rise to a presumption of advancement, it is presumed that the beneficial ownership of the property is held in the proportions in which they each contributed the purchase money: Calverley v Green (1984) 155 CLR 242 at 246-247, 251, 258, 261, 266, 269; [1984] HCA 81; Foundas v Arambatzis [2020] NSWCA 47 at [51].

161. There is no presumption of advancement as between de facto partners: Shepherd v Doolan [2005] NSWSC 42 at [21] per White J, citing Napier v Public Trustee (WA) (1980) 55 ALJR 1 at 3 and Calverley v Green; Hill v Dunn [2019] NSWSC 419 at [32]-[34] per Henry J; Commissioner of Taxation v Bosanac (No 7) [2021] FCA 249; (2021) 390 ALR 74 at [144]-[150] per McKerracher J.

162. It falls on the party claiming there is no trust to rebut the presumption as a matter of fact, by establishing on the balance of probabilities a contrary intention of the party providing the funds or the common intention where two parties provide the funds: Nelson v Nelson (1995) 184 CLR 538 at 547; [1995] HCA 25; Black Uhlans Incorporated v New South Wales Crime Commission [2002] NSWSC 1060; (2002) 12 BPR 22,421 at [136] per Campbell J; Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 at [162]-[163] per Ward CJ in Eq; Tonna v Mendonca [2019] NSWSC 1849 at [465] per Ward CJ in Eq. As Hallen J explained in Papas v Co [2018] NSWSC 1404 at [336]:

The onus of establishing the presumption of a resulting trust lies on the person who is asserting the existence of the resulting trust. When the presumption arises, “it performs a similar function to the civil onus of proof by requiring the person against whom the presumption applies to adduce evidence, or to point to other evidence in the case, that rebuts the presumption”: Vlahos Pty Ltd v Vlahos [2017] VSCA 166, at 58, in reference to Muschinski v Dodds (1985) 160 CLR 583, at 612; [1985] HCA 78.

163. It is essential that the alleged contribution bears the character of purchase monies: Amit Laundry Pty Ltd v Jain at [166], citing Calverley at 246 and Ong v Lottwo Pty Ltd (in liq) (2013) 116 SASR 280; [2013] SASCFC 57 at [28]-[30]. As to proof of each party’s contribution, Campbell J explained in Cetojevic v Cetojevic [2006] NSWSC 431 at [36]:

… I bear in mind that in an exercise such as this precise accounting is often not to be expected, and that sometimes a broad brush estimate needs to be made to ensure that the onus of proof does not itself become an instrument of injustice. However, it is still necessary for the tribunal of fact to be in a position of being persuaded that, at the least, a certain amount of contributions were made by one particular party, and to be satisfied as to how those contributions relate to the contributions made by the other party. …

164. The husband’s opposition to the declaration of a resulting trust was on the basis that the Court would not be satisfied that the wife contributed to the purchase price of the Liverpool property. The husband did not otherwise suggest that, if I was so satisfied, a resulting trust did not arise. That approach was correct.

165. When the property was purchased, the couple were in a de facto marriage relationship. They had a young child. They intended to marry. I have found that the wife contributed to the purchase price. Her contribution was her father’s gift ($24,000) and whatever remained in the First Joint Account from her 40,000 Deutsche mark ($20,473). It may be the First Joint Account also contained joint funds of the couple derived from their business activities together in Poland and Hungary, as well as the wife’s earnings from her employment in Australia. I conclude that her contribution to the purchase price was at least half of the purchase price, entitling her to the declaration sought of a resulting trust of a one-half share.

ISSUE ESTOPPEL

166. The husband submitted that the wife was issue estopped by reason of the consent orders made by the Family Court in 2009 and the wife’s subsequent withdrawal of the caveat. These events were said to have established that the wife did not have an interest in the property justifying the caveat. By those orders, the wife and the husband submitted their family law dispute to the Polish courts and, to the extent that the Polish courts did not have jurisdiction to deal with the Liverpool property – which the parties agree it does not – then the wife must be taken to have abandoned her claim to the Liverpool property.

167. In order for an issue estoppel to arise, there must first be a judicial determination or adjudication of some identifiable issue of fact or law: Blair v Curran (1939) 62 CLR 464 at 531-532; [1939] HCA 23. This is no less so in the case of a judgment by consent: Ekes v Commonwealth Bank of Australia [2014] NSWCA 336; (2014) 313 ALR 665 at [110]-[112]. The judicial decision must be final in nature: Ekes at [110]; Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [22]. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion: Blair at 531; Tomlinson at [22]. Nothing but what is "legally indispensable" to the conclusion is finally closed or precluded: Blair at 532.

168. The consent orders (reproduced at [118]) did not record the results of any adjudication by the Court. Orders 1 and 2 of the Orders recorded that the Application and the Response be "withdrawn". The withdrawal of an application is an act of the parties, not the Court. Order 3 noted that the wife would provide the defendant with a withdrawal of caveat over the Liverpool Property. The withdrawal of court process is just that: a withdrawal before there is any adjudication or determination of the claim. A withdrawal is akin to a discontinuance. A bare discontinuance does not of itself operate as a release or an extinguishment of the claim or in any other way bar further proceedings: Owners of the Cargo of the "Kronprinz" v Owners of the "Kronprinz" (the "Ardandhu") (1887) 12 App Cas 256; KBRV Resort Operations Pty Ltd v Chilcott (2001) 51 NSWLR 516; [2001] NSWCA 116 at [39]. The issue of whether the wife had a caveatable interest in the Liverpool property was not, to use the words adopted by Bathurst CJ in Ekes at [117], “put to rest” by Order 3, which did not involve a determination by the Court on any issue.

169. The orders also made plain why the pleadings and caveat were to be withdrawn: the parties had agreed to have the substantive rights of the parties determined in another forum. It was implicit within the orders that the Family Court of Australia had not determined such rights, but was permitting the parties to bring the family law proceedings in Australia to an end without the ordinary consequences which may attend such an abandonment (that is, costs orders) so that the Polish court could determine the matters between the parties. The orders were made “by consent and without admission”. Order 4 noted the agreement of the parties that the appropriate forum was in Poland, and cannot be construed as an agreement by the parties that, to the extent that the Polish courts did not have jurisdiction over the Liverpool property, the parties’ claims were abandoned. The orders determined nothing in respect of the wife’s interest in the Liverpool property. There was no issue estoppel.

ANSHUN ESTOPPEL

170. The husband submitted that these proceeding were an attempt by the wife to relitigate issues which were the subject of the earlier family law proceedings and were thus Anshun estopped or an abuse of process, relying on Tomlinson at [22]; Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; [2001] NSWCA 142 at [24] per Handley JA (Mason P and Heydon JA agreeing); Dualcorp Pty Ltd v Remo Constructions Pty Ltd (2009) 74 NSWLR 190; [2009] NSWCA 69 at [68] per Macfarlan JA (Handley AJA agreeing). A judgment in favour of the wife in these proceeding was said to conflict with the consent orders made in those proceedings by declaring inconsistent rights in respect of the same transaction or matter: see Rippon v Chilcotin at [20]; Cleary v Jeans (2006) 65 NSWLR 355; [2006] NSWCA 9 at [61]-[62] per Young CJ in Eq.

171. It was submitted that a decision on the wife’s favour would necessarily conflict with Order 3, requiring the wife to withdraw the caveat over the Liverpool property. The wife also sought to litigate in this Court notwithstanding the agreement of the parties, recorded in Order 4, that the appropriate forum was Poland. It was submitted that the wife had given no proper explanation as to why she sought to relitigate her interest in the Liverpool property after having had an opportunity to fully litigate this issue in the earlier family law proceeding. Whilst the wife claimed that the Polish courts had no jurisdiction over the Liverpool property, this had always been the case, including when the wife consented to the orders. The wife was legally represented at the time and could be taken to have been aware of this.

172. In determining whether the principle in Anshun applies, it is not sufficient merely to ask whether a matter could have been raised in earlier proceedings; rather, it will depend on all of the circumstances of the case: Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1. One circumstance that may tend against the operation of the principle is if a party obtains further relevant material that was not reasonably available to it in the earlier proceedings: Arnold v National Westminster Bank plc [1991] 2 AC 93 at 109, cited in Johnson at 25. The critical inquiry is one of reasonableness: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 602-603; [1981] HCA 45; Tomlinson at [22].

173. It was apparently in contemplation of both parties to the family law proceedings in 2009 that a Polish court could determine the dispute between the parties with respect to all property interests between the parties, including the Liverpool property. That assumption was mistaken. I do not accept that the wife may be taken to have known, in 2009, that the Polish court did not in fact have jurisdiction to grant relief in respect of the Liverpool Property. Her evidence is to the contrary. There is no reason to assume that her family law solicitors in Parramatta were knowledgeable on the subject or were asked to, or did, advise her on that subject.

174. Further, in order for the principles of Anshun estoppel to operate, the plaintiff must have prosecuted the earlier proceeding to its conclusion by final judgment or settlement. The principles have no application where that has not occurred, such as where the plaintiff merely discontinued the earlier proceeding: DA Christie Pty Ltd v Baker [1996] 2 VR 582 at 602; Running Pigmy Productions Pty Ltd v AMP General Insurance Co Ltd [2001] NSWSC 431 at [36]; Tomlinson at [22]. The wife did not prosecute the family law proceedings to a conclusion by final judgment or settlement but discontinued the proceedings. There is no Anshun estoppel.

175. Discontinuing proceedings and recommencing further proceedings may, however, amount to an abuse of process, including where use of the Court’s procedures occasions unjustifiable oppression to a party or where the use serves to bring the administration of justice into disrepute: UBS AG v Tyne (2018) 265 CLR 77; [2018] HCA 45 at [1] per Kiefel CJ, Bell and Keane JJ. Serial proceedings discontinued prior to judgment would be an obvious example of an abuse of process: at [46]. However, as in Johnson, this is a case in which earlier proceedings were brought to completion against the background of a communicated likelihood of later proceedings being commenced: at [78] per Gageler J. There is no abuse of process here.

DELAY

176. The husband submitted that the wife seeks an equitable remedy of a declaration, which is discretionary: City of Enfield v Development Assessment Commission (1999) 199 CLR 135; [2000] HCA 5 at [58] per Gaudron J; Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581; [1992] HCA 10. As such, relief may be declined “if the party has been guilty of unwarrantable delay”: Re Refugee Review Tribunal; Ex parte Aala (2000) 204 CLR 82; [2000] HCA 57 at [56] per Gaudron and Gummow JJ citing R v Commonwealth Court of Conciliation and Arbitration; Ex parte Ozone Theatres (Aust) Ltd (1949) 78 CLR 389 at 400; [1949] HCA 33. The wife was said to have been guilty of unwarrantable delay in seeking the relief in these proceedings.

177. I take the husband’s submission to be a reference to the equitable defence of laches. Drawing on my judgment in In the matter of Pacific Springs Pty Ltd [2020] NSWSC 1240; (2020) 148 ACSR 454 at [185]-[191], in Crawley v Short [2009] NSWCA 410; (2009) 262 ALR 654 at [163], Young JA (Allsop P and Macfarlan JA agreeing) identified the elements of the defence of laches as comprising three components: knowledge of the wrong, delay and unconscionable prejudice caused by the delay. This summary has been approved in Sze Tu v Lowe (2014) 89 NSWLR 317; [2014] NSWCA 462 at [415] per Gleeson JA (Meagher and Barrett JJA agreeing); Chung-Yi Pty Ltd v Chih-Yang Chang (No 2) [2018] NSWSC 1112; (2018) 128 ACSR 585 at [96] per Ball J; Finance & Guarantee Company Pty Ltd v Auswild [2019] VSC 664 at [568] per Riordan J; Clementi v Rossi [2019] VSC 725 at [330] per McMillan J.

176. In Crawley v Short, Young JA also stated (at [164]): "the key element is whether, in all the circumstances, ‘it would be practically unjust to give a remedy’ ... Normally, that means that the defendant must show both delay and detriment suffered by the delay. As Young JA further stated in that same case (at [175]):

…all three elements must be taken together and the ultimate question asked as to whether, in all the circumstances, the plaintiff has impliedly, in equity, released the defendant from his or her claim or has so acted as to make it unfair that the claim should now succeed.

179. This evaluative analysis accords with what Meagher JA (with whom Beazley P and Emmett JA agreed) stated in Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 at [73]:

The doctrine of laches is directed to a broader and different question. That question is whether, as between the parties, it would be practically unjust to give relief which otherwise would be just. In answering that question, account is taken of the length of any delay, the nature of acts done during the period of that delay, whether the plaintiff had sufficient knowledge to justify the commencement of proceedings, whether there has been prejudice to the defendant or others and the nature of the relief claimed…

180. In respect of the element of unconscionable prejudice, there must be substantial detriment, not merely a trivial inconvenience, caused by the plaintiff’s delay: Duke Group Ltd (in liq) v Alamain Investments Ltd [2003] SASC 415 at [153] per Doyle CJ; Bell Group Ltd (in liq) v Westpac Banking Corp (No 9)and (No 10) (2008) 39 WAR 1; [2008] WASC 239 at [9314] per Owen J. The classic example of prejudice is where the defendant has reasonably acted to his or her detriment in reliance on the plaintiff’s delay: Lamshed v Lamshed (1963) 109 CLR 440; [1963] HCA 60; Bell Group Ltd at [9312]. Prejudice may also arise where evidence is lost or witnesses have passed away. In this respect, the issue is not whether evidence per se may have been lost; rather, it is whether evidence that "may have cast a different complexion on the matter has been lost”: Orr v Ford (1989) 167 CLR 316 at 330; [1989] HCA 4 per Wilson, Toohey and Gaudron JJ; Gillespie v Gillespie [2013] 2 Qd R 440; [2013] QCA 99 at [94]-[95] per Margaret Wilson J (McMurdo P and White JA agreeing).

181. Ultimately, as noted above, an evaluative analysis must be conducted, cognisant of the matters identified by Meagher JA in Gerace v Auzhair Supplies at [73], as well as "the type of transaction" under consideration (see Crawley v Short at [180]). As Dixon CJ, Webb and Kitto JJ said in Fysh v Page (1956) 96 CLR 233 at 243; [1956] HCA 13:

…If a plaintiff establishes prima-facie grounds for relief the question whether he is defeated by delay must itself be governed by the kind of considerations upon which the principles of equity proceed. If the delay means that to grant relief would place the party whose title might otherwise be voidable on equitable grounds in an unreasonable situation, or if, because of change of circumstances, it would give the party claiming relief an unjust advantage or would impose an unfair prejudice on the opposite party, these are matters which may suffice to answer the prima-facie grounds for relief…

182. I agree that the wife has delayed bringing this claim for many years. The wife understood, in 1987, that, on becoming a permanent resident, her husband would put the title to the Liverpool property in both names. The wife moved back to Poland from 1990 to 2005. In 2006, the wife came to learn that the Liverpool property had not been put in both names: the wife came to know of the wrong. Whilst the wife initially took some steps in respect of the Liverpool property, in the family law proceedings, the parties decided in 2009 to litigate the matter in Poland. Neither took any steps to do so for another nine years. It is apparent that the husband was in no hurry to progress the matter either.

183. But the critical problem for the husband in seeking to rely on the defence of laches is that there is no evidence of unconscionable prejudice caused by the delay. The husband did not give any evidence, for example, that he had acted, to his detriment, on the assumption that the wife no longer pressed such a claim. Rather, the husband simply continued to hold the property, earning rent and incurring expenses. The defence of laches is not established.

ACCOUNTING FOR RENT

184. The wife claimed an account for rent from 20 August 2003 on, when it was said that the husband took steps to have rent from paid into a different account in his name only. As noted at [89], the husband in fact paid rent into the Husband’s Rent Account from 5 June 2000. According to the bank statements for the Husband’s Rent Account, the husband received net rental income of $19,500 from 5 June 2000 to 19 August 2003. A portion of this amount, however, is not claimed by the wife and so I put it to one side.

185. The rental income was calculated from 20 August 2003 to 5 November 2009 by using gross rental income of $190 a week and allowing an agreed 25% of gross rental income as expenses. The husband submitted that the net rental income in this period should be further discounted to allow for a six week vacancy each year.

186. There is some evidence in later rental years (when records have been produced on subpoena) that, from time to time, tenancies were terminated and new tenants found. Century 21 managed the property from November 2009 until March 2020, during which time there appears to have been three tenancies: Mshait (unknown duration), Begum (4 years) then Herrara (3 years). It is reasonable, therefore, to allow for say two tenancies over the six year period from August 2003 to November 2009, with a loss of rent between these tenancies of say three months ($1,710) and a letting fee (the Century 21 agreement provided for a letting fee of one week’s rent). I will deduct half of these amounts ($950) from the half share of the rent claimed by the wife.

187. From 6 November 2009 on – when bank statements for the Husband’s Second Rent Account are available – net rental income is derived from the bank statements. The husband submitted that the net rental income should be further discounted by 20% to allow for capital expenses relating to maintenance and renovation of the property during this period.

188. Having reviewed the trust ledger for Century 21 from May 2012 to May 2020, the husband provided $4,000 to fund repairs. Other than this, maintenance expenses in relation to the property were deducted from rental income. In the absence of any evidence that the husband incurred other capital expenses which have not already been paid by the managing agent before the net rental income was deposited into the Husband’s Second Rent Account, it is not clear to me why the rental income should be further discounted. I will, however, deduct half of the $4,000 cash paid by the husband from the half share of the rent claimed by the wife.

189. Using the plaintiff’s calculation less $950 and $2,000, the wife is entitled to $89,815 in unpaid rent. The plaintiff will need to recalculate the interest on this amount.

STATUTORY SALE

190. The wife seeks orders for the appointment of trustees for sale and for the Liverpool property to be sold and the proceeds divided between the parties in proportion to their respective interests. In the event of disagreement between joint owners of property, such an order is made virtually as of course: Tory v Tory [2007] NSWSC 1078 at [42]; French v Bremner [2019] NSWSC 1033 at [472], affirmed on appeal on this issue in French v Bremner [2020] NSWCA 339 at [115]. There is no reason why such an order should not be made in this case.

191. The wife has succeeded. Her costs should be paid by the husband.

192. I request the parties to bring in Short Minutes of Order giving effect to these reasons, within 14 days.

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Decision last updated: 15 July 2021