Ly v The Director of Public Prosecutions

[2015] VCC 184

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

Revised
Not Restricted
Suitable for Publication

Case No. CI-06-01181

IN THE MATTER of the Confiscation Act 1997

and

IN THE MATTER of an offender, Quang Ha LY

and

IN THE MATTER of an Application for Exclusion Order, pursuant to section 20 of the Confiscation Act 1997 by Tham LY

BETWEEN:   

Tham LY	Applicant
and
THE DIRECTOR OF PUBLIC PROSECUTIONS for Victoria	Respondent

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JUDGE:	HER HONOUR JUDGE MILLANE
WHERE HELD:	Melbourne
DATE OF HEARING:	28 October and 1, 2, 4, 11 and 12 December 2014
DATE OF JUDGMENT:	27 February 2015
CASE MAY BE CITED AS:	LY v The DPP
MEDIUM NEUTRAL CITATION:	[2015] VCC 184

JUDGMENT
---

Subject:  Application for Exclusion Order

Catchwords:             Confiscation – Exclusion application

Legislation Cited:       Confiscation Act 1997 (Vic), Drugs, Poisons and Controlled Substances Act 1981 (Vic), Evidence Act 2008 (Vic), Property Law Act 1958 (Vic), Family Law Act 1975 (Cth), Relationships Act 2008 (Vic)

Cases Cited: R v Ly (2009) VCC 0986, Ly v The Queen [2012] VSCA 24, Baumgartner v Baumgartner [1987] 164 CLR 137, MuschinskivDodds [1984] 160 CLR 583, Parij v Parij (1997) 72 SASR 153, Taleb v DPP [2014] VSC 285, Jones v Dunkel (1959) 101 CLR 298, Green v Green 91989) 17 NSWLR 343, Parij v Parij (1997) 72 SASR 153, Read v Nicholls [2004] VSC 66, The Director of Public Prosecutions v Ali (No 2) [2010] VSC 503, Cressy v Johnson [2009] VSC 52, Jeffrey-Potts v Garel [2012] VSC 237, Stowe v Stowe (1995) 15 WAR 363, Lloyd v Tedesco (2002) 25 WAR 360, HuenvOfficial Receiver [2008] FCAFC 117

Judgment:Application dismissed

APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr A. Buckland	Theo Magazis & Associates
For the Respondent	Ms R. Burton	Office of Public Prosecutions Victoria

HER HONOUR:

Introduction

1 This proceeding involves an application under section 20 of the Confiscation Act 1997 (the Act) for an exclusion order in relation to a residential property, 4 Robinson Court, Delahey in the State of Victoria (the property).

2       It was common ground that the provisions of Version Nos. 043 of the Act, applied to this application.

3       Tham Phuong, the applicant, initiated the application using the name Ly. Quang Ha Ly (Ly), is the father of her two children.  The applicant alleged a de facto relationship with Ly spanning some 18 years.

4       The application arose out of the making of a restraining order, initially on 6 April 2006 and finally on 9 May 2006, under section 18 of the Act in relation to the property and other property, namely $41,510 in cash (the cash) and two motor vehicles, a Lexus Wagon and a Honda Sedan.

5       By notice dated 29 June 2006 and filed under section 19A of the Act, Ly declared three persons, Tung Tran, Tham Phuong and Huynh Thi Thank Nga had an interest in the restrained property.[1]

[1] Exhibit A1, TP-2

6       On 17 April 2009 a jury convicted Ly of the following offences:

·    trafficking in a drug of dependence, namely diacetylmorphine (heroin) in a large commercial quantity between 21 January 2006 and 22 March 2006, contrary to section 71 of the Drugs, Poisons and Controlled Substances Act 1981; and

·    knowingly dealing with the proceeds of crime on 22 March 2006, namely the cash, contrary to section 194(3) of the Crimes Act 1958.

7         A guilty plea was entered at the commencement of the trial in March 2009 to a further count of trafficking heroin, contrary to section 71AC of the Drugs, Poisons and Controlled Substances Act 1981. Ly was sentenced on 13 August 2009. On the same day an order was made pursuant to section 33(1) of the Act for forfeiture of property which included the property, the cash and the two motor vehicles. On 29 February 2012, Ly’s total effective sentence was reduced by the Court of Appeal to 10 years’ imprisonment with a minimum of 7 years.

8       The circumstances of the offending were summarised both by the sentencing judge and in the decision of the Court of Appeal.[2] These summaries indicate that Ly established and operated a well organised and well planned trafficking business in which others were employed as traffickers.  The trafficking of heroin offence was detected over a 53 day period.  The business operated seven days per week, essentially between 8 am and 11 pm and involved trafficking 1,393.9 grams of heroin to individuals who placed orders by telephone and were directed to certain housing commission flats in Wellington Street Collingwood to collect the drugs.  The sentencing judge estimated the turnover of the business was somewhere between $520,000 and $681,000.[3]

[2] Rv Ly (Unreported, County Court of Victoria, Judge Wood, 13 August 2009) [5]-[29] and Lyv The Queen [2012] VSCA 24 [8]-[15]

[3]R v Ly, [29]

9       The offence of trafficking in a large commercial quantity of heroin is a Schedule 2 offence (item 1(a)) under the Act.  All of the restrained property was liable to automatic forfeiture under section 35 unless an exclusion order was made under section 22 of the Act. 

10      The application filed on 16 May 2006 sought to exclude all of the restrained property from forfeiture. 

11      The application was opposed by the Director of Public Prosecutions (the DPP).  At the commencement of the hearing on 28 October 2014, I upheld the DPP’s objection to the admissibility of certain evidence contained in the applicant’s affidavit sworn in support of the application on 13 November 2013.

12      An application to adjourn was granted, as was leave to file and serve an amended application. Among other things, the latter confined the application for exclusion to the property. In addition to making a costs order against the applicant, a timetable for the filing and service of any further affidavit material was imposed.

The relevant legislative provisions

13      The Act establishes a scheme for forfeiture of the proceeds of certain criminal offences.  Section 3 defines the words: “interest” in relation to property and “tainted property” in relation to an offence. For the purposes of this application, the applicant sought to establish an interest in relation to the property under paragraph (a) of the definition only.  The parties proceeded on the basis that only paragraph (a) of the definition of tainted property applied. The terms are defined as follows:

"interest", in relation to property, means—  

(a)a legal or equitable estate or interest in the property; or

…

and

"tainted property", in relation to an offence, means property that—

(a)   was used, or was intended by the defendant to be used in, or in connection with, the commission of the offence;

…

14 Section 20 of the Act permits any person claiming an interest in the property to apply to this Court for an order, in this case, under section 22.

15      Where an interest is established, section 22 relevantly provides:

22.Determination of exclusion application—restraining order —

automatic forfeiture

On an application made under section 20, where the restraining order has been made in relation to a Schedule 2 offence for the purposes of automatic forfeiture—

….

(b) where the application is made by a person other than the  

defendant, the court may make an order excluding the  

property from the operation of the restraining order—

(i) if the court is not satisfied that the property in which the

person claims an interest is not tainted property but is  

satisfied that –

(A) the applicant was not, in any way, involved in the   
     commission of the Schedule 2 offence; and

(B) where the applicant acquired the interest before the
     commission, or alleged commission, of the
     Schedule 2 offence, the applicant did not know that 
     the defendant would use, or intended to use, the
     property in, or in connection with, the commission of
     the Schedule 2 offence; and

(C) where the applicant acquired the interest at the time
     of or after the commission, or alleged commission,
     of the Schedule 2 offence, the applicant acquired
     the interest without knowing, and in circumstances
     such as not to arouse a reasonable suspicion, that
     the property was tainted property; and

(D) where the applicant’s interest in the property is not
     subject to the effective control of the defendant;
 …

(ii) if the court is satisfied that the property is not tainted

property and that –

(A) the applicant’s interest in the property is not subject 
     to the effective control of the defendant;
…

16      Section 132 of the Act directs that any question of fact in this application must be decided on the balance of probabilities.

The evidence

17      On the return date, the material tendered consisted of affidavits with exhibits as follows:

On behalf of the applicant –

·    Two affidavits sworn by Tham Phuong on 15 November 2013 (absent those parts ruled inadmissible) and on 12 November 2014;[4]

[4] Exhibits A1 and A2 respectively

·    an affidavit sworn by Minh Thang Nguyen (Nguyen), on 10 November 2014;[5] and

[5] Exhibit A3

·    an affidavit sworn by Ly, on 13 November 2014.[6]

[6] Exhibit A4

On behalf of the DPP –

·    An affidavit sworn by Detective Senior Constable John Boursinos in support of the application for a restraining order on 5 April 2006;[7]

[7] Exhibit R1

·    an affidavit sworn by solicitor, Simon O’Keefe on 23 September 2014;[8]

[8] Exhibit R2

·    an affidavit sworn by police officer, Detective Sergeant Jason Halls on 24 September 2014;[9]

·    an affidavit sworn by police officer, Detective Sergeant Sandra Dorman on 20 October 2014;[10] and

·    an affidavit sworn by the General Manager Compliance for Crown Melbourne Limited, Michelle Fielding, on 24 October 2014.[11]

[9] Exhibit R3

[10] Exhibit R4

[11] Exhibit R5

18      The applicant, Ly and Nguyen were each subjected to cross-examination with the assistance of an interpreter.  Ly via video link to Beechworth Correctional Centre and Nguyen via video link to the Melbourne Remand Centre where he was awaiting sentence, consequent on conviction by a jury of trafficking amphetamines and possessing proceeds of crime offences.

19      The deponents of the DPP’s affidavits were not required for cross-examination.

A summary of various background matters

20      Ly is 44 years of age.  He was born in Vietnam.  He was educated to the equivalent of Year 11 and, after leaving school, he was apprenticed as a jewellery maker.

21      At about age 18 Ly left Vietnam and spent some four years or so in the Philippines as a refugee.  Ly has lived in Australia since 1994. 

22      He deposed to having held various jobs in seasonal picking, in restaurants, in factory work and as a delivery driver.  Ly produced copy documentation which provided some independent proof of employment and earnings for limited periods as follows:[12]

[12] Exhibit A4, QHL-1

·    correspondence dated 13 January 2000 on the letterhead of ‘Melton C. Lane, Clothing Manufacturer’, certifying that Ly had been employed with that business as a delivery driver for the previous three years, earning $820 gross per week;

·    Australian Taxation Office Notices of Assessment for the financial years ending 30 June 2003 and 30 June 2007.  These indicated taxable income in two financial years of $20,598 and $26,087 respectively;

·    correspondence dated 13 July 2003 signed by T.K. Tan advising that due to the sale of his business, Ly’s employment had ceased as from 30 June 2003;

·    a PAYG payment summary indicating gross payments from Van Hai Pty Ltd of $31,200 for the financial year ending 30 June 2008; and

·    fortnightly payslips for the period 11 July 2008 to 4 September 2008 inclusive, from Van Hai Pty Ltd trading as Furlong Bottle Shop.

23      Under cross-examination, Ly acknowledged receipt of assistance from Centrelink in the form of a Newstart Allowance, which he recalled was paid during periods of unemployment between jobs.[13] A certificate of disclosure attached to the affidavit of Detective Sergeant Dorman, among other things, showed payments were made between 21 December 1999 and 19 June 2000 ($4,279.30), 20 June 2000 and 27 June 2001 ($8,031.83) and between 28 June 2001 and 7 June 2002 ($7,811.95).[14]

[13] TN 215

[14] Exhibit R4, SD-7

24      Ly deposed to marriage in Vietnam in 1994 which ended some months after his wife, who had been sponsored to come to Australia, left Ly. 

25      The applicant is 42 years of age.  She too was born in Vietnam.  The applicant completed her education to the equivalent of Year 10 and then worked in retail.

26      The applicant deposed to marriage in Vietnam in 1993 to a man of Vietnamese background, which she said ended in separation shortly after the applicant emigrated to Australia in 1994. 

27      The evidence did not establish that either marriage had been formally ended.

28      The applicant and Ly deposed they met in 1995.  Their relationship has produced two children, the eldest (now 17 years of age) born in late 1997 and the youngest (now 14 years of age) born in late 2002.

29      The property was purchased in 2000 for $235,000.  A copy of a receipt for a cash deposit of $23,500 issued by a real estate agent to Ly on 23 December 1999 and copies of correspondence and a Memorandum of Account, both dated 1 February 2000, from solicitor, Evelyn Liew to Ly at 167/240 Wellington Street, Collingwood provide some independent evidence of Ly’s purchase of, and his financial contribution to, the purchase of the property.[15] In his affidavit, among other things, Ly swore the funds for the purchase came from a gift from his three brothers, who reside in the United States of America, totalling approximately $50,000 (at the time US$30,000), which he applied in the payment of the deposit and to the balance of the purchase price, together with approximately $20,000 from his own cash savings.[16]

[15] Exhibit A4, QHL-2

[16] Exhibit A4

30      The claim by both the applicant and Ly that she had made direct financial contributions to the purchase was, however, challenged by the DPP.  The applicant and Ly alleged she contributed $50,000 received from her uncle, Nguyen. In affidavits, sworn in November 2014, it was further alleged that the applicant paid the stamp duty.  At hearing, Ly and the applicant agreed this was $9,760.

31      Settlement apparently took place on or about 10 February 2000 and on 2 March 2000 Ly was registered as the sole proprietor of the property.  An Easy Start Home Loan mortgage obtained from the ANZ Bank for $130,000 payable over a term of 25 years and 2 months was registered on the same date.[17] Ly deposed that, initially, he repaid the loan at the rate of approximately $900 per month and later at the rate of $250 to $300 per week. This evidence indicated that Ly probably made mortgage payments in the order of $10,000 to $15,000 per annum following settlement.

[17] Exhibit R1,JB-2

32      In their affidavits sworn in November 2014, both the applicant and Ly claimed they had deliberately chosen to register Ly as the sole proprietor and for Ly to take out the loan. As my discussion of the evidence reveals shortly, I found the various explanations offered for the decision not to recognise the applicant’s financial contribution on title or in the loan arrangement, unconvincing.

33      Copy correspondence dated 15 January 2004 from the Bank and addressed to Ly at the property, notified that the amount required to discharge the mortgage, as at that date, was $110,708.94.[18] It was common ground that the balance was paid during January 2004.[19] This evidence indicated that in the period between settlement and discharge of the mortgage, Ly had paid more than $19,000 of the principal in addition to interest repayments.

[18] Exhibit A4, QHL-3

[19] Exhibits A4 and R1

34      In their affidavits sworn in November 2014, the applicant and Ly asserted he was a gambler, who had applied the proceeds of his winnings, approximately $150,000 to discharge the mortgage in January 2004.[20] The applicant deposed she had seen the cheque from the casino after Ly came home.

[20] Exhibits A2 and A4

35      Attachments to the affidavits of Detective Sergeant Dorman and General Manager Compliance, Ms Fielding included copies of documents described as ‘Patron Detail Reports’ (or ‘Patron Gaming Records’) for both Ly and the applicant,[21] as well as a document to aid interpretation of the data contained in these documents.[22]

[21] Exhibits R4 and R5, SD-3 and SD-4 and MF-1 and MF-2

[22] Exhibits R4 and R5, SD-5 and MF-3

36      Among other things, the last mentioned documents recorded the following matters, as at 3 September 2014:

·    Ly and the applicant had registered as patrons from 31 May 1997 and 12 August 1999 respectively.  Membership allowed them to accumulate points based on gaming and non-gaming activity, which could be redeemed as goods and services;

·    both held Bronze Signature Club Cards;

·    the addresses recorded by Crown for Ly and the applicant were the property and 7 Centenary Ct, Kings Park respectively;

·    the Player Yearly Transaction Report recorded attendances at Crown in each of the years 2000 to 2006 inclusive for Ly.  Ly’s gambling activity report showed large amounts of cash (for amounts ranging between $107,600 in 2000 and $620,800 in 2004) were tendered at gaming tables to buy gaming chips in each of the years 2000 to 2005 inclusive.  With adjustment for losses, Ly’s winnings between 2000 and 2004 amounted to $248,589.  However, when extrapolated over the six-year period, with adjustment for losses, Ly’s winnings exceeded his losses by only $198,389;

·    Ly’s ‘Patrons Documents report’ showed transfers into and out of Ly’s deposit account.  Among other things, the document produced recorded cash deposits and cash withdrawals in the deposit account between 9 December 2002 and 15 April 2005 of amounts between $5000 and $174,300.  Most of these involved Chip Purchase Vouchers (CPV) or cash for chips (CCHP).  Notably, on 11 January 2004 there was a cash deposit (CDEP) of cash chips (CCHP), for the equivalent of $174,300 into the account.  On the same date separate cash withdrawals were taken from the deposit account for $104,300 from cash paid and for $50,000 from a cheque paid by Crown back into Ly’s account by Ly (CRWN).  There were further cash deposits (in total $155,000) and cash withdrawals (in total $175,000) on 15 and 16 January 2004;

·    the Player Yearly Transaction Report recorded attendances at Crown in each of the years 2001, 2005 and 2006 for the applicant.  The gambling activity recorded for the applicant showed that in 2001 and 2005, $24,300 and $28,500 were tendered respectively.  Whilst the applicant’s record showed winnings of nearly $7000 in 2001, the report demonstrated an overall loss in favour of Crown.

37      The records summarised above did not indicate that a cheque or cheques were paid to Ly by Crown in January 2004, which could account for the applicant’s evidence that she had been shown the cheque from the casino, allegedly used in the discharge of the mortgage.

38      Under cross-examination the applicant contradicted her affidavit evidence by insisting two cheques, one for $100,000 and the other for $50,000 dated a few days apart had been used. The applicant was shown and identified photocopies of the two cheques she said had been handed to her lawyers. These documents were not tendered.  Accordingly, despite the inconsistencies in her evidence it remained the case that the mortgage could have been discharged in the manner described by both the applicant and Ly.

The application to exclude

39      Both the applicant and Ly alleged a de facto relationship commencing from 1995.  This relationship continued, despite Ly’s incarceration since August 2009.

40      In their affidavits filed before and since the adjourned hearing date, the applicant and Ly deposed that the purpose when acquiring the property had been to provide a family home in which to live and raise their children.[23] However, in later oral evidence both the applicant and Ly claimed that, from the start their intention had been to establish an asset to be held by Ly for the benefit of their children only.[24] The applicant agreed at hearing there had been no joint project to purchase the property for themselves.  She indicated she had been happy for and intended that Ly take title because, if they separated, they had decided he would leave the property to the children.[25]

[23] Exhibit A1 and Exhibit A4

[24] TN 180-182 and 204-205

[25] TN 180-182

41      The applicant, nonetheless, alleged the acquisition of the property involved a joint endeavour for the purpose of providing a home and establishing an asset for their children.[26] The applicant’s contribution to this endeavour was, she claimed, both financial and indirect in that she had:

[26] TN 461-465

·    played an active role selecting the property and contributed $59,760 of her funds to the acquisition of the property;

·    over a relationship spanning some 18 years, contributed to household expenses from her own funds[27] and contributed to the family as a homemaker and full-time carer for their children, the eldest born before and the youngest after the purchase; and

·    continued to make contributions since Ly’s imprisonment to the upkeep of the property and through the payment of household expenses and in her role as a homemaker and carer for their children.

[27] TN 260-261

42      The non-financial contributions were said to have enabled Ly to work and gamble. These and the contributions to household expenses from her own funds were said to have enabled Ly to direct funds (either from his earnings or winnings) to the repayment of the mortgage and expenses associated with the property.

43      The Court was urged to find that, based on the factual scenario asserted by the applicant, various aspects of which the evidence of Ly and Nguyen was intended to corroborate, a constructive trust had arisen in favour of the applicant from the time the property was purchased or such later time as the Court determined.

44      The applicant submitted it would be unconscionable to deny her an equitable interest in the property to reflect financial and indirect contributions made throughout a long-standing relationship.[28] It was submitted the Court should find the applicant had acquired an equitable interest in the property entitling her to at least 50% of the beneficial ownership of the property.[29]

[28] TN 250-252, 260-261, 296-299 and 308-312

[29] TN 297

45      As mentioned, the DPP opposed the application.

46      The parties provided the Court with numerous authorities and, at my request, a list of agreed questions for determination. By the conclusion of the hearing, concessions made during submissions narrowed these to the following questions:

1.    Did the applicant acquire an interest in the property pursuant to any constructive trust? If yes, when did the constructive trust take effect (see Q3 below)?

2.    If the applicant established an interest in the property, under section 22(b), was the Court satisfied that the property in which she claimed an interest was not tainted property?

a.    if no, subsection 22(b)(i) applied and Q3 below required determination;

b.    if yes, subsection 22(b)(ii) applied and Q4 below required determination;

3.    If subsection 22(b)(i) applied:

a.    Under paragraph (A): was the applicant relevantly ‘involved’ in the commission of Ly’s Schedule 2 offence?

b.    Subject to determination of when the applicant acquired any such interest?

i.if prior to the commission of the schedule 2 offence, paragraph(B) applied and the Court was required to determine whether the applicant knew that Ly would use or intended to use the property in connection with the schedule 2 offence? or alternatively

ii.if on or after the commission of the schedule 2 offence, paragraph (C) applied and the Court was required to determine whether the applicant acquired such interest without knowing and in circumstances such as not to arouse a reasonable suspicion, that the property was tainted property?

c.    Under paragraph (D): was any interest of the applicant in the property subject to the effective control of the defendant?

4.    If subsection 22(b)(ii) applied:

a.    Under paragraph (A): was any interest of the applicant in the property subject to the effective control of Ly?

The law relating to the imposition of a constructive trust

47      A constructive trust arises by imposition of equity, despite the absence of any intention (express or presumed) to create a trust.  It is remedial in character and, in cases where a constructive trust has been found to exist, courts have construed the circumstances as creating a trust where, according to the principles of equity, it would constitute a fraud to deny the trust.

48      It was not asserted that any constructive trust was based on a common intention that the property should be held by Ly subject to a beneficial interest in the applicant. On the contrary, as mentioned, were their oral evidence accepted, both Ly and the applicant had intended to create an asset for their children, to be held by Ly for their benefit, alone.

49      The applicant relied on particularly the High Court decision in Baumgartner v Baumgartner.[30] In that case, a couple living in a de facto relationship pooled their incomes for living expenses and fixed commitments. Sometime after they commenced to live together they acquired a house with a mortgage in the male’s name only.  He had contributed the proceeds of the sale of a unit owned by him in which the parties had previously lived together. 

[30] [1987] 164 CLR 137

50      Without revisiting all of the facts of Baumgartner, following the failure of the parties’ relationship, the assertion that the property, which it was found had been financed in part through pooled funds, remained the male’s to the exclusion of any interest in the woman, was rejected by the High Court as unconscionable conduct. This conduct attracted the intervention of equity and the imposition of a constructive trust at the suit of the woman.[31]

[31] Ibid 149

51      The High Court, constituted by four Justices (including His Honour, Deane J) and the Chief Justice, approved and applied the reasoning of Deane J in the earlier decision of MuschinskivDodds.[32]

[32] [1984] 160 CLR 583, 620

52      In Muschinski Deane J had explained the general equitable principle which restores to a party contributions made in a failed joint relationship or endeavour when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them, in the following words:

“… The principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specifically provided that that other party should so enjoy it.  The content of the principle is that, in such a case, equity will not permit the other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him to do so….”

53      In Muschinski Deane J, nonetheless, warned against using the remedy of constructive trust other than as a reflection of and as a means of enforcing the principles of equity:[33]

“The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice. As an equitable remedy, it is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles… Viewed as a remedy, the function of the constructive trust is not to render superfluous, but to reflect and enforce, the principles of the law of equity.

Thus it is that there is no place in the law of this country for the notion of "a constructive trust of a new model" which, "(b)y whatever name it is described, ... is ... imposed by law whenever justice and good conscience" (in the sense of "fairness" or what "was fair") "require it …. Under the law of this country - as, I venture to think, under the present law of England… - proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion…, subjective views about which party "ought to win" … and "the formless void of individual moral opinion….”

[33] Op cit 615-616

The development and application of the equitable principle of unconscionable conduct

54      It is unnecessary to embark on a lengthy exegesis of all of the cases to which the parties referred, many of which were distinguishable on their facts or on the law generally relating to constructive trusts. 

55      Some, but not all, of the authorities cited during the course of the hearing, in which a court had been asked to apply the principles of unconscionable conduct, involved the breakdown of a de facto or marriage-like relationship, where property had been acquired by only one party.[34] 

[34] Contrast, for instance, Parij v Parij (1997) 72 SASR 153 where the de facto relationship failed with the

56      As Gleeson J (as he then was in the New South Wales Court of Appeal) observed in Green v Green: [35]  

“The most common case of intervention of that kind to be found in the Law reports is the case where the person in whose favour a constructive trust is found has, directly or indirectly, made a financial contribution towards the cost of acquiring, improving, or maintaining the property in question…”

[35] (1989) 17 NSWLR 343, 353F

57      In Green the majority of the court relevantly found that a constructive trust had been established.  Over the entire period of the relationship, the de facto husband had represented to the de facto wife that she would have some form of proprietary interest in the home provided for her; it had been the common intention of the parties that she would have a proprietary interest in a property which had not been transferred to her prior to her de facto husband’s death and the de facto wife had acted to her detriment in relation to their joint lives in the face of the relevant promises or representations made.[36]

[36] Ibid 356-357

58      In this application, howsoever characterised, the relationship between the applicant and Ly remained on foot, although the applicant submitted that the making of the forfeiture order had interrupted their joint endeavour to establish a home and an asset for their children. I will revisit this issue shortly.

59      The applicant placed particular reliance on the decision delivered by the South Australian Full Court in Parijv Parij in 1998.[37] Parij was applied in 2004 by Justice Nettle (as he then was) in Readv Nicholls.[38]

[37]Parij Op cit

[38] [2004] VSC 66 [47]

60      The DPP, on the other hand, relied on the decision of Justice Hargraves in DPP v Ali (No 2).[39] The facts of that decision were said to resemble those in the present application.  The DPP also placed particular reliance on the decision of Kaye J in CressyvJohnson, delivered in 2009.[40] In Cressy, Kaye J preferred the approach adopted by appeal courts sitting in New South Wales and Western Australia, (before and since the decision delivered in Parij).  Essentially, each superior court had rejected the idea that contributions made as a homemaker and to the welfare of the family unit would suffice to give rise to a beneficial interest in property. 

Parij

[39] [2010] VSC 503

[40] [2009] VSC 52

61      In Parij the parties lived in a de facto relationship for 17 years, during which time a home was purchased in joint names.  The male partner also purchased two other properties in his own name.  The Full Court found that the woman had made a substantial, albeit indirect contribution to the assets acquired over a period of many years.  The Court held that, in addition to the jointly owned property, the woman was entitled to an interest in the male partner’s accounting business and in the two properties purchased in his name.

62      The propositions advanced by the leading judgment of Debelle J in Parij, on which the applicant particularly relied are summarised in point form as follows:

·    the decisions in Muschinski and Baumgartner establish that –

“.. when determining whether it is unconscionable for one party to a de facto relationship to retain the sole beneficial ownership of property acquired in the course of the relationship, regard will be had to the manner in which the parties have conducted their relationship and the contributions each have made.  When assessing their respective contributions, regard will be had to non-financial contributions as well is to financial contributions.  The latter proposition is clear from the references to the “practical equation between direct contributions in money or labour and indirect contributions in other forms such as support, home making and family care” in Muschinski … and in the reference to “contributions either financially or in kind” in Baumgartner…; [41]

·    a wife’s non-financial contributions as a homemaker in a marriage or marriage-like situation must be recognised in a substantial and not merely token way in recognition of the fact that by her attention to the home and children the husband was freed to earn income and acquire assets;[42]

·    in Parij it was appropriate to have regard to the indirect contributions made over 17 years as the primary carer of the family and homemaker and the wife having allowed the use of family assets as security for further business loans obtained by the male partner.[43]

[41] Ibid 163

[42] Ibid 163 and 167

[43] Ibid 167

63      As is evident from the passage taken from Debelle’s J’s judgment above, the proposition that assessment of the respective contributions of parties to a joint endeavour should have regard to non-financial contributions in determining the extent of the contribution of one party to the acquisition of assets, was derived from Muschinski and Baumgartner.  It has since been affirmed on numerous occasions.

Read

64      In Read the de facto partners both died during 2002, having lived together for the better part of 40 years. Before she died Read sought relief under Part IV of the Administration and Probate Act 1958 for provision for her proper maintenance and support out of the estate of her partner, Nicholls. He left the whole of his estate to his mother. Nicholls’ estate consisted of a holiday house and a house in Fitzroy, purchased by him in 1978 and 1987 respectively, as well as furniture. The Fitzroy property had been their home from approximately 1989.

65      Read’s estate continued the Part IV proceeding following her death and argued, in the alternative, that Nicholls held the properties upon constructive trust to the extent of at least 50% in favour of Read, in accordance with the equitable rules established in Muschinski and Baumgartner, as developed by Parij and discussed by the Court of Appeal in New South Wales in Green.[44]

[44]Read, [34]

66      The Part IV claim failed.  However, Nettle J, proceeded to decide the case, as he said, with specific reference to the principles of unconscionable conduct essayed in Muschinski and Baumgartner.

67      In Read there was no evidence of direct financial contribution to and little direct evidence of any indirect financial contribution to the acquisition of either property.  Over a very long relationship, the contributions made essentially amounted to:

·    payment of rent/board with likely contribution to household expenses in each of the properties that Read lived with Nicholls and, as a result, indirect contribution to the pool of funds available for the purchase of property by Nicholls;[45] and

·    non-monetary contributions as wife and homemaker.[46]

[45] Ibid [50]

[46] Ibid [53]

68      In valuing the indirect contribution of Read as a wife and homemaker Nettle J took a similar approach to that taken by the Full Court in Parij. As can be seen from the passage set out below, His Honour gave particular weight to the likely significant support and comfort provided by Read during a lengthy relationship and the likely impact on Nicholls’ ability to earn income, some of which was applied in the acquisition of the properties:[47]

“Consistently with the sort of approach suggested in Parij, I take the view that the relationship between Ethel Read and Kyran Nicholls endured for so long and that the support and comfort that she is likely to have given him for the period of its duration was so significant that Ethel Read’s contribution should be regarded as equal to the financial contributions made by Kyran Nicholls out of his income.  But I am also of the view, consistent with the sort of approach that was adopted in Baumgartner and Muschinski, that the financial contributions made by Kyran Nicholls from sources other than income should be subtracted from the purchase price of the properties before the calculation of equal shares in the shares should be computed on the basis of the balance.”

[47] Ibid [63]

69      The applicant also cited the decision in Jeffrey-PottsvGarel, a more recent example of a Victorian court having reaffirmed the proposition articulated by Muschinski and Baumgartner and applied in Parij,[48] that assessment of the parties’ respective contributions includes non-financial contributions.

[48] [2012] VSC 237, [297]

70      In Jeffrey-Potts competing scenarios were put by two close friends about the purchase of a number of units and the development of a sizable property portfolio. There had been an intermingling of their personal and business lives.  Justice Forrest found a joint enterprise existed, in pursuit of which the parties had pooled resources, capital, skill and management for the purpose of their joint relationship and for their mutual security and benefit.  He concluded a constructive trust should be imposed and, when valuing their contributions, His Honour took account of the financial and non-financial contributions made. In Jeffrey-Potts, however, Forrest J paid particular regard to the extent of their respective roles in acquiring and managing the property portfolio.[49]

Cressy

[49] At [293]

71      Cressy involved a claim under Part 9 of the Property Law Act 1958. The parties’ domestic relationship had endured for some nine years. During and after the domestic relationship ended the defendant had acquired seven properties in his own name.

72 Relief was granted under the Part 9 application. When determining the statutory claim Justice Kaye took into account the contributions made by each party. For the plaintiff these included her primary responsibility for payment of household items such as food, clothing and the like[50] and, particularly her responsibility as the primary carer of the three children of the relationship, subject to the qualification that due to her part-time work as a sex worker, the plaintiff had not been involved in as carer on a full-time basis.[51]

[50]Cressy, [152] and [166]

[51] Op cit [165] and [169]-[170]

73      Resolution of the statutory claim was not the end of the matter. In Cressy it had been necessary to make findings on the plaintiff’s alternative claim that the defendant held the properties on a constructive trust on behalf of herself and the defendant.

74      The plaintiff’s case was that the parties had conducted their relationship on the basis that, in effect, they pooled their assets, in such a way that she thereby contributed to the acquisition and maintenance of the properties acquired by the defendant. The plaintiff submitted that, on the failure of the relationship, it was unconscionable for the defendant to assert his legal interest in the seven properties, to the exclusion of any interest by her.[52]

[52] Op cit [183]-[184]

75      In Cressy, Kaye J applied the principles relating to constructive trusts derived from both Muschinski and Baumgartner. He had regard to the particular features of the relationship between the parties and the respective roles adopted during the currency of the relationship, noting that, unlike Muschinski and Baumgartner, the plaintiff’s contribution to the properties acquired had been less direct. The plaintiff was, he found, the homemaker and primary carer of the children and she bore the majority of the household expenses out of her part-time earnings. The plaintiff submitted her role in the relationship had facilitated the performance by the defendant of his own role, in purchasing and funding debts over the seven properties.[53]

[53] Op cit [188]-[190]

76      Kaye J determined that it would be unconscionable in accordance with equitable principles for the defendant to depart the relationship holding the legal title to each of the seven properties without any adjustment to his interest to allow for the contributions made by the plaintiff.  He found, the constructive trust extended to properties other than the property purchased after the termination of the relationship.[54]

[54] Op cit [200]-[201]

77      The applicant, however, contested his Honour’s conclusion that the contributions made must contribute to the acquisition, maintenance or improvement of the property in question and that this, not the Parij approach (the latter having been followed in Victoria by Nettle J in Read), better reflected the principles derived from Muschinski and Baumgartner.

78      As earlier mentioned, in Cressy, Kaye J discussed relevant case law. In summary, Kaye J considered what support was to be found in the case law for the plaintiff’s claim to a constructive trust in the circumstances described.  He too noted the passage from the judgment of Deane J in Muschinski, to which Debelle J had earlier referred in Parij, in support of the principle that regard must be had to non-financial contributions when assessing the parties’ respective contributions.[55] 

[55] Op cit [191]

79      His Honour, however, observed that courts have given different emphasis and meaning to this passage from Deane J’s judgment and that the decision in Parij represented the ‘high watermark’ for persons in the position of the plaintiff.  Read was footnoted in Cressy.  I understood this to be an acknowledgement by Kaye J that another judge of the Supreme Court had followed the approach taken by the South Australian Full Court and of the particular weight afforded by Nettle J to the likely significant support and comfort given by Read over a long relationship when construing a trust and valuing her beneficial interest.

80      Kaye J, found that the proposition stated by Debelle J in Parij had to some extent at least been qualified by decisions in other States in New South Wales in Green and in the Western Australian Full Court in Stowev Stowe[56] and in Lloydv Tedesco.[57]

[56] (1995) 15 WAR 363

[57] (2002) 25 WAR 360

81      I have rejected the submission that Kaye J’s reasoning was in some way flawed simply because two of the decisions to which he referred were delivered before Parij.  Parij was considered and Green and Stowe were cited and discussed by the Full Court in 2002 in Lloyd. 

82      It is unnecessary to recite at length the relevant passages from Green, Stowe and Lloyd. Suffice to say that the qualification mentioned can be gleaned from the following observations:

·    in Green, Gleeson CJ stressed that: “the mere existence of a matrimonial or de facto relationship, combined with express or implied undertakings to provide support and accommodation, will not form a sufficient basis for concluding that there is a constructive trust by virtue of which a proprietary interest in the home occupied by the parties is created... In a legal system which does not include concepts of family or community property, and where an obligation on the part of a husband to house and provide for his wife is commonly regarded as an incident of the matrimonial relationship, an undertaking of the kind referred to cannot of itself confer upon a wife a legal or equitable interest in the matrimonial home. If the matter is considered in terms of a promise or representation by the husband, and an acting by the wife to her detriment on the faith of that promise or representation, then a claim made on the narrow basis set out above would normally fail at both levels. The acceptance of an obligation on the part of the husband to house his wife would not normally be regarded as an undertaking to give her a proprietary interest in the home in which they live, and wives usually have reasons for living with their husbands other than an expectation that they will increase their assets”;[58]

·    in Stowe, the Full Court similarly stressed that: “on existing equitable principles, where there is no common intention to share all the property of one of the spouses, and there is no pooling involving all such property, and where only particular properties (but not all) owned by one spouse have been improved by contributions of the other spouse, contributions by the latter to the general welfare of the parties (whether to the general benefit of a family or to business activities carried on by them) cannot give rise to a constructive trust over all such property. ... Where the contributions of one spouse do not result in assisting or enabling the other to acquire particular property, or in improvements to particular property ... equitable relief of the kind sought is not available...”;[59] and

·    in Lloyd the Full Court similarly stressed that a claimant following the failure of a de facto relationship must do more than show that he or she has provided love, care and support. As Kaye J observed, in Lloyd the Court emphasised that the contribution made by the relevant party must go further than enhance the material wellbeing of the parties to the relationship, but must contribute to the acquisition, maintenance or improvement of the property in respect of which the trust is claimed.[60]

[58] Op cit 353

[59] Op cit 374

[60]Lloyd, [16], [30]-[31] and [86] and Cressy, [195]

83      The passages extracted from Kaye J’s judgment below, help explain why he considered the qualification implicit in the views expressed above better reflected the reasoning of Deane J:[61]

[61]Cressy, [196]-[198]

“… the constructive trust identified by Deane J, and discussed in the interstate decisions to which I have referred, constitutes a remedy postulated on contributions made by parties in a relationship to property held by one of the parties to the relationship, where the relationship subsequently has failed without attributable blame, in circumstances in which the legal owner of the property would derive an unintentional benefit at the expense of the other party, if not for the intervention of equity.

In other words, the remedy of constructive trust is not a response by equity to a perceived unfairness where, on the termination of a personal relationship, legal arrangements between the parties do not reflect the commitment and contributions of each party to that relationship.  Rather, the equitable remedy of constructive trust is available to adjust the legal interest in property of a party or parties to a relationship, where, during and on the basis of the continuation of the relationship, one party has made a contribution to the acquisition, maintenance or improvement of the property, such that it would be unconscionable for the other party, on the failure of the relationship, to insist strictly on his (or her) legal rights without an appropriate adjustment commensurate with contribution made by the former party to the property.  Accordingly in order to be entitled to an interest under a constructive trust the plaintiff must establish that the contribution, on which she relies, was not simply directed to advancing the welfare of the defendant, and of the family unit of which she was then a part.  Rather, the contribution of the plaintiff, on which the constructive trust is to be based, must have been directed to the acquisition and maintenance of the assets in respect of which the plaintiff claims an interest under the constructive trust.

On the other hand, as expressly recognised by Deane J in Muschinski…, the context of the relationship between the parties is important in identifying the contribution by the party claiming rights under a constructive trust.  In a “de facto” relationship, such as in this case, a contribution may be made in a different form, and in a less direct manner, then a relationship which is wholly commercial in character, such as a joint-venture or a partnership.…”

In Cressy Kaye J found the arrangements between the parties were such that it could be fairly said that they combined their financial resources; that by directing her part-time earnings to the maintenance of the defendant and the family, the plaintiff had enabled him to devote his income largely to the acquisition and maintenance of the property and by undertaking the burden of prime carer for the three children she had enabled the defendant to focus his efforts on acquiring, financing and maintaining the properties in circumstances where the contributions made by the plaintiff were clearly postulated on the continuation of her relationship with the defendant.[62] In other words, the plaintiff in Cressy had established on the evidence that her contributions were directed to the acquisition and maintenance of the properties not solely to maintaining the joint relationship.

Ali

[62] Op cit [199]

84      As mentioned, the DPP relied on Ali primarily due to the perceived similarity between the facts of that case and those of the current application.

85      The Ali property, the subject of a forfeiture order made under the Act, had been the family home. The husband was the sole proprietor. At some stage he allowed others to use the house to manufacture illegal drugs whilst the family lived elsewhere. The husband and three co-accused were tried and, following a no-case submission, the husband was acquitted by direction and returned to live with his family at the Ali property. The co-accused were convicted and imprisoned.

86      Leaving to one side for the moment the arguments raised under the Charter of Human Rights and Responsibilities Act 2006 and under the hardship provision of the Act, [63] the wife applied to exclude the Ali property. She claimed a 50% interest based on a constructive trust.

[63] Section 38

87      The facts as stated by the wife in Ali were uncontested. The Ali property had been purchased by the husband after his first marriage ended and before the second marriage had been arranged in Lebanon.

88      Hargraves J, rejected the submission that discussions between the husband and the wife’s father before the marriage amounted to a common intention that, if the marriage proceeded, the wife emigrated to Australia and she looked after the husband’s children from the first marriage, she would be entitled to a one-half interest in the Ali property. His Honour found that, at best, the evidence established an understanding as to what might happen if the marriage failed.[64]

[64]Ali, [78]-[80]

89      After marrying and emigrating to Australia the wife had been a traditional Lebanese housewife, looking after the children from both marriages and attending to the domestic duties in the Ali property. She had received Centrelink benefits which were pooled with any income or benefits received by the husband, who was responsible for the family’s banking and finances.

90      Ali was another case in which the Court considered the principles of unconscionable conduct established in Muschinski and Baumgartner and the proposition that contributions may be of a non-financial kind and may include contributions such as home making and parenting.[65] However, as the passages extracted below show His Honour rejected the submission that those principles applied to the case at hand:[66]

“The joint relationship between Mr and Mrs Ali was that of marriage. That marriage continues. In these circumstances, there was no room for the operation of these principles of constructive trust. The making of a civil forfeiture order under the Act will not bring the marriage to an end. The evidence does not permit a finding that ownership of the house was a separate joint endeavour or undertaking between Mr and Mrs Ali, either for the purposes of their relationship or at all. Mr Ali had already purchased and fully paid for the property prior to proposing marriage to Mrs Ali.

…The acquisition and ownership of the Ali family home was not the result of any joint endeavour or undertaking between Mr and Mrs Ali. Her contributions to the marriage, by allowing her social security payments to be pooled for the purposes of general family expenditure, and by her role as a wife, parent and homemaker, have insufficient relationship to the ownership of the home to justify the imposition of a constructive trust in her favour.”

[65] Op cit [82]-[84]

[66] Op cit [85]-[86]

91      In my view the passages cited provide indirect support for the approach taken by Kaye J in Cressy, among other things, by emphasising the need to establish a sufficient relationship between the contributions made during a relationship and the ownership of the property in which a beneficial interest is said to have arisen.

92      In Ali, both the fact that the joint relationship had continued and there was no separate joint endeavour vis-à-vis the Ali property, which had been purchased and paid for by the husband in advance of the marriage, proved fatal to the application of the principles of unconscionable conduct.

93      If, as submitted on behalf of the applicant, the observation made by Hargraves J about the continuation of the joint relationship was obiter,[67] in this application, the question remains whether the continuation of the relationship precluded consideration of the operation of the principles of constructive trust.  The DPP submitted there was no apparent unconscionability element in the present application because the relationship continued and, as in Ali, the forfeiture order had not brought this to an end. 

[67] TN 465-466

94      At hearing, the applicant acknowledged that unconscionability did not arise merely from the fact of a relationship she and Ly sought to characterise as a de facto relationship.[68]  Nevertheless, the applicant submitted that the making of the forfeiture order had interrupted their joint endeavour to establish a family home and asset for their children.  In this regard, the applicant submitted her circumstances vis-à-vis the operation of the Act were analogous to those described in the decision of the Full Court of the Federal Court of Australia in HuenvOfficial Receiver.[69]

[68] TN 461

[69] [2008] FCAFC 117

95      In Huen, the Court found the former wife had complied with and intended to continue to comply with conditions of a joint endeavour under which the bankrupt had agreed to provide a home for her and the children, on the condition that the former wife pay all future outgoings indemnifying the bankrupt against any liability to the mortgagee or otherwise in respect of those outgoings and make no further claim against him under the Family Law Act 1975 or otherwise for maintenance and support of herself and the children. The Court held it would be unconscionable for the bankrupt or trustee claiming through him, to seek to realise the value of the bankrupt’s presumptive interest in the property while the joint endeavour remained on foot and the former wife continued to perform her obligations.[70]

[70] Ibid [70], [76]-[77] and [81]

96      In this regard, the decision of Justice Croucher in Talebv Director of Public Prosecutions[71] also gives some support to the applicant’s position that unconscionability can arise from the operation of the Act.  Taleb involved an application for exclusion under the Act.

[71] [2014] VSC 285

97      In Taleb Croucher J found a common intention that the brother-in-law’s company hold the proceeds of the sale of units owned by the company and constructed with funds advanced by Taleb on trust for her to the extent of the funds advanced.  The units and subsequently the proceeds of the sale of the units were the subject of a restraining order.  The proceeds were held by the Assets Confiscation Office (ACO).  Croucher J found Taleb had an interest in the proceeds of sale to the extent of the amount advanced. He granted the application for exclusion of that interest and directed the ACO to pay Taleb.

98      However, as my discussion of the evidence shows, it was not necessary to decide whether any unconscionability could and did arise from the operation of the Act, because the applicant failed to establish on balance whether and the extent to which any financial and/or indirect contributions as were made during the course of the relationship, had facilitated or enabled the acquisition or maintenance of the property.  Relevantly, it had not been suggested in this application that expenditure had been incurred on any improvements since the purchase of the property.

99      Finally, there appear to be different approaches by Victorian judges to the application of Parij in order to found a constructive trust of the kind contemplated by the High Court in both Muschinski and Baumgartner.  For the purpose of this application, I have followed the approach recommended by the decision in Cressy primarily because this issue was considered in some detail by Kaye J in his analysis of relevant case law and in his discussion of the circumstances in which a constructive trust might properly derive.

Assessment of credit

100     I formed the view that the evidence of the applicant and Ly was unreliable.  They both sought to maximise the applicant’s role in and contributions made to the acquisition of the property. Their accounts were based on revisionism. I have not accepted their evidence on factual matters critical to the determination of this application in the absence of credible objective evidence, corroborative of these matters. 

101     I was further persuaded that the DPP’s attack on Nguyen’s evidence was well-founded.  His evidence was vague and did not adequately corroborate the evidence of the applicant and Ly, that she had made direct financial contribution to the purchase of the property.

102     My reasons for these findings are stated in a summary fashion below and then more fully in my discussion of the facts alleged.

103     The applicant has lived in Australia for some 20 years.  I formed the view that, when cross-examined about her English language skills, the applicant sought to minimise these.[72] Her direct responses at times and her apparent ability to read some English text, the latter evident at different times during the hearing, suggested an understanding of the spoken language and something more than a minimal understanding of written text. I have, however, accepted that the applicant and her witnesses, Ly and Nguyen, for each of whom English is not their first language, required assistance from the Vietnamese speaking interpreter, particularly where more complex questions were involved.

[72] TN 90-92

104 During the course of cross-examination, the applicant invoked the privilege against self-incrimination. She objected to giving evidence relating to information given by her to Centrelink or to the Department of Human Services about her relationship status and to Centrelink or any government authority about her address or addresses. Having been informed of the options available to her, the applicant indicated she was willing to give the evidence without being required to do so. She was granted a certificate under section 128 of the Evidence Act 2008 in respect to this evidence.

105     Quite apart from the revisionism to which I have already referred, the applicant’s evidence was at times contradictory and plainly implausible. For the time being, two examples, suffice to illustrate my concern with her evidence.

106     In paragraph 11 of the first affidavit, sworn in November 2013, the applicant swore she had no prior criminal convictions. She had, in her words: “never been in trouble with the police” and she had not been aware of any unlawful activity on the part of Ly or use of the restrained property in connection with any unlawful activity. 

107     Attached to the affidavit of Simon O’Keefe, sworn on 23 September 2014, are Certified Extracts, each dated 9 December 1998. These establish that the applicant was found guilty of three offences committed at Collingwood on 13 October 1998, namely possession of heroin, handling/receiving/disposing of stolen goods and possession of property being the proceeds of crime.[73] On each charge, the applicant was placed on a good behaviour bond for 12 months and ordered to pay $100 to the Court Fund.

[73] Exhibit R 2,SOK-5

108     In her further affidavit sworn on 12 November 2014, the applicant corrected her first affidavit by acknowledging the earlier court appearance. The applicant sought to explain the statement in her first affidavit by swearing that she had understood the court appearance would not leave her with a criminal record, as no conviction had been imposed.

109     Like much of her oral evidence, the applicant’s responses to cross-examination about her earlier court appearance were at best equivocal.[74]

[74] TN 138-143

110     The applicant acknowledged she knew the importance to her application of proving no relevant knowledge of Ly’s criminal activity and of showing the Court that Ly was the only one involved with drugs and criminality.

111     The applicant was shown the Certified Extracts, parts of which she appeared to read. 

112     Before and even after being confronted with material contradicting the assertion that she had never been in trouble with police, the applicant resisted any notion of prior wrongdoing. At different stages during cross-examination, the applicant variously denied charges had been laid, that she had pleaded guilty or that she had possessed the drug heroin in 1998. She, nonetheless, had the presence of mind to remind counsel that no conviction had been recorded. She attributed the statement made in the earlier affidavit to having misunderstood the legal effect of no conviction being recorded.

113     The applicant was, however, driven to agree with the proposition that going to court on these charges amounted to being in trouble with the police. 

114     I found the applicant’s attempt to explain the plainly misleading impression conveyed by the statement made in the first affidavit, before evidence of the earlier court appearance compelled an explanation, unconvincing and implausible.

115     A further example of likely revisionism involved the applicant’s evidence relating to the ownership of the cash. When police executed a search warrant at the property on 22 March 2006, Ly, the applicant, their young sons and other persons were present.  Among other things, police found the cash located in a pot in the pantry ($12,000), inside an air conditioner ($15,900) and in the drawer of a bedside table in the master bedroom ($13,010), approximately 82 grams of heroin concealed in a hollowed-out section of a hammock, a notepad located in a bedside drawer in the master bedroom containing entries, which correlated with telephone discussions of quantities of drugs intercepted in the days preceding the search and a Nokia mobile telephone, which police were able to connect with the offending.[75]

[75] Exhibit R1, R2 and SOK-1

116     As mentioned, Ly was also convicted of a proceeds of crime offence and the cash was forfeited as tainted property in respect to the drug offence, the Schedule 2 offence. The applicant’s further application to exclude the cash was withdrawn on the first hearing date. I was told no other person had asserted ownership of the cash or applied for its exclusion.

117     In this application, subject to establishing an interest in the property, if the Court was not satisfied the property was not tainted property, a further matter the applicant was required to prove was that she was not in any way involved in the commission of the offence.[76]

[76] Section 22(b)(i)

118     Under cross-examination the applicant gave evidence that the property was a three bedroom house. She said that in March 2006 she and the children were living at and she was using the various rooms in the property. They shared the master bedroom with Ly and, another person the applicant described as an “auntie”, occupied a further bedroom.[77]

[77] TN 144-145

119     Among other things, the applicant recalled that bedside tables and an air conditioning unit were located in the master bedroom and there were pots in the pantry.

120     The applicant was shown a selection of photographs taken at the property during execution of the search warrant.[78] From these photographs the applicant identified the master bedroom and the pantry and the kitchen pots kept in the pantry.[79]

[78] Exhibit R3, JH-5

[79] TN 147-148

121     When shown photographs of bundles of cash found in a kitchen pot, in the air conditioner and wrapped in newspaper in a bedside drawer, the latter located alongside the bed in the master bedroom, the applicant indicated that she had known about these amounts. She denied it had been usual for bundles of cash to be left throughout the house (the property) or knowing that the bundles of money hidden in the manner shown did not come from lawful activity (“it wasn’t like that”[80]).

[80] TN 149

122     The applicant gave what I considered a contradictory and inherently improbable account of how the money came to be at the property and concealed by her in the manner shown.

123     The applicant told the Court this money belonged to a male friend, who had a bottle shop. This friend had asked them to keep the money after he was caught binge drinking and drunk (“he supposed to use the money for his business but he went over for binge drinking - for binge drink and he was drunk, and he didn't leave my - our house with the money, so he left behind - he asked us to keep the money for him” (sic)[81]). Clearly on this version of events Ly knew about the money because the friend had given the money to them both for safekeeping.

[81] TN 150

124     However, as Ly was “a big” and “frequent” gambler, whom the applicant believed would take the money for gambling if he saw it, the applicant claimed she hid it from him in the different locations at which the money was found by police (“so as soon as if he seen the money he could take the money with him for gamble to go to the casino, that's why I myself have to hide the money at different places away from his sight.”[82]).

[82] TN 150

125     According to the applicant, the friend and owner of the money had previously agreed to testify but later changed his mind. Nevertheless, having on a number of occasions indicated that the friend was a male, both during cross-examination and re-examination, the applicant contradicted this evidence by identifying the friend as a female and purported to name one of the three persons whom, on 29 June 2006, Ly declared had an interest in the restrained property.[83]

[83] TN 151-152,185 and ExA1, TP-2

126     Apart from the contradictions noted above, I found implausible the suggestion that the location of the bundles of money and the manner in which the money had been hidden, amounted to concealment from Ly.  This is not to deny, however, that as agreed, Ly was a gambler.

127     In short, my assessment of the applicant was that she was not a witness of credit.

128     Ly’s evidence was that the property was always intended as an asset for their children. He anticipated that on his release he would return to live in the property with the applicant and their children.[84] Ly clearly has an interest in the exclusion application succeeding.

[84] TN 204-205

129     Following adjournment of the hearing, as already mentioned, affidavits were sworn on 12 November 2014 by the applicant and on 13 November 2014 by Ly. The DPP, in my view correctly, drew attention to the similarities in the order of the content and the expressions used in each affidavit.

130     Under cross-examination, from the outset, Ly appeared evasive in his responses. At first, Ly was keen to deny he was aware of the content of the applicant’s affidavits. However, when pressed about having read these, Ly indicated he was aware that in the applicant’s affidavit(s) she had informed the Court about the nature of their relationship.[85]    

[85] TN 202-203

131     Ly denied assistance with the content of his affidavit but agreed that his instructions had been written down by lawyers and typed. He was not, however, able to explain the similarities between the affidavits where these suggested direct corroboration of numerous matters raised by the applicant in her further affidavit.[86]

[86] The comparisons made were between paragraphs 17, 20, 22, 23, 24 and 25 of Exhibit A2 and paragraphs    

132     In the circumstances described, I have accepted the DPP’s submission that the failure to adequately explain this matter cast doubt on the independence of Ly’s testimony.

133     Mr Nguyen is a relative of the applicant. As mentioned, he was on remand awaiting sentence when cross-examined. He appeared nervous and evasive when at first questioned about whether he had discussed the case with the applicant. He denied speaking at any time with the applicant or Ly about the case.  As the following exchange shows, Nguyen’s responses about when and how he came to give evidence tended to be evasive and confused particularly about whether he was already on remand when contacted to give evidence:

“Who asked you to give evidence in this matter?  – – – Since I been remanded, actually before that, before I got remanded, Tham contacted my former residence to enquire about my whereabouts in order to asked me to be a witnessed for her court case and she found out that I already been remanded and when I rang home I was informed of her looking for me.

Who asked you to give your evidence in this case?  – – – She contacted my former residence.  When I rang home, I was told about her contact and that’s – began from that.

Then how did you know you were required to make an affidavit, Mr Nguyen? – – – After she contacted me at my former residence to ask for my help, I received a message.  I rang home to answer her question and told that I was – I had been at the MRC, her lawyer would contact me at the MRC.

So her lawyer asked you to help and you agreed.  Is that right?  – – – I – I left a message at home for Tham and her lawyer went to look for me, and I just wanted to tell the truth about what happened years, years ago.

At the lawyers – at Ms Phuong’s lawyers request.  Is that right?  – – – No-one requested me to do anything, but what actually happened, I just wanted to tell the truth and wanted to tell the story of – in relation to the amount of money in the past.

Because you were asked by Ms Phuong’s lawyers to?  – – – Yes.

Have you spoken to anyone else about Ms Phuong’s case?  I am here in this position telling whom?

… Telling?  – – – Whom?  Whom should I tell the story to.

And the affidavit in front of you is typed by someone from Ms Phuong’s lawyers as far as you know?  – – – Yes.

134     I will say more about the adequacy of Nguyen’s evidence to corroborate any aspect of the applicant’s application shortly.

The disputed facts

135     These are discussed below under various headings.

The applicant’s first affidavit (as corrected)

136     As mentioned, the applicant and Ly commenced a relationship in 1995.  In her first affidavit the applicant painted a picture of a long-standing continuous de facto relationship with Ly, in the course of which they had established a family home at the property.  At paragraph 14 of her first affidavit the applicant deposed as follows:

“I met my partner Quang Ha Ly in 1995 and we immediately commenced a relationship.  We have been in a relationship for over 18 years since 1995.  During the entire period we have resided together as a couple and since 2000 in the property at 4 Robinson Court, Delahey… That property which was purchased in the year 2000 has been a family home where we have raised our two children, born in 1997 and 2002.  We have shared mutual commitment to live as a family and raise our two children.  I have relied upon my de facto husband for the care and support of the children including financial support.”

137     At paragraphs 15 and 17 to 18, the applicant set out details of the purchase of the property on 10 February 2000, which included evidence of the purchase price and payment of the deposit, the loan and the identity of the solicitor who handled the purchase. The applicant produced a copy of the Bank’s correspondence to Ly on 15 January 2004 notifying him of the amount required to discharge the loan.[87]

[87] Exhibit A1, TP-6

138     A further assertion that money received from Nguyen, whom the applicant said owed money to her father, was contributed to the purchase price was ruled inadmissible on the first hearing date.

139     At paragraphs 21 to 23, the applicant relevantly deposed she was still living at the property with the two children, having lived continuously in the property since its acquisition in 2000.  She said she was unemployed. The Newstart Allowance was her only income.  In what appeared to generally reference non-financial contributions made to the acquisition of the property, the applicant further deposed that she had been taking the children to and from school every day and had made a significant contribution to the family household by caring for and raising the children.

140     Under cross-examination, the applicant confirmed that, she had relied on Ly for care and financial support and that prior to his imprisonment, Ly had paid the household bills and mortgage repayments. Through her responses the applicant, nonetheless, indicated she too had contributed to electricity, gas and water expenses from her Centrelink income and had made other non-financial contributions by doing the housework and cooking meals and by attending to the daily care of the two children.[88]

[88] TN 89-90

141     Finally, in the first affidavit, the applicant deposed that, following Ly’s incarceration, she had paid the utilities, including Council Rates and had maintained what she considered was the family home. As to these matters, I have accepted the applicant probably has remained living at the property with the children. However, if some or all of this evidence was intended to bolster her case for an equitable interest in the property, the applicant did not produce any documentary or independent evidence corroborative of her claim to have met expenditure on maintaining the property as an asset since August 2009.

142     As mentioned, the applicant’s further affidavit was filed after the adjourned hearing. In this affidavit the applicant revisited various issues including financial and indirect contributions she alleged were made to the acquisition of the property. This further affidavit raised for the first time what, if true, were significant issues about the manner in which the relationship between the applicant and Ly had been conducted. 

143     The applicant’s further affidavit - the relationship with Ly

144     As mentioned, in many cases where a court has construed a trust because it would be unconscionable to allow one party to retain the benefit of particular property to the exclusion of the other party, the parties had been living in a de facto relationship. 

145     That from 1995 the applicant and Ly had been in a relationship of some kind, which had produced two children, was not challenged.  How best to characterise a relationship the applicant’s counsel repeatedly described as “unusual”, however, was an issue.  This was because the relationship and the manner in which it was conducted, provided the context in which it was said the joint endeavour to acquire the property had arisen and continuation of the relationship provided the context in which any contributions were made to the acquisition of the property.

146     Documentary evidence adduced by the DPP after the applicant swore her first affidavit contradicted, firstly, the applicant’s sworn evidence that during the entire period of their relationship she and Ly had resided as a couple and since 2000 this was at the property; secondly, the assertion that they had lived together as a family at the property and, lastly, the assertion that she had lived continuously at the property since its purchase. 

147     The last mentioned observations are not intended to suggest that statutory definitions of what constitutes a de facto relationship or a domestic relationship apply to this application.[89] However, as was apparent from the applicant and Ly’s later evidence, their relationship may have had some of the characteristics of a de facto relationship as defined by law but not others.  In this case, my findings about the manner in which the relationship had been conducted, nonetheless, helps explain why the applicant failed to establish on balance, that during and on the basis of the continuation of the relationship she had contributed directly or indirectly to the acquisition or the maintenance of the property, such that it would be unconscionable to deny her interest.

[89] See both section 4AA of the Family Law Act 1975 (Cth) and section 35 of the Relationships Act 2008 (Vic)

148     Copies of licence and address information for the applicant kept by the Roads Corporation to 30 September 2014 and certificates of disclosure for Ly and the applicant produced by the Department of Human Services-Centrelink on 16 October 2014 were attached to Detective Sergeant Dorman’s affidavit, sworn on 20 October 2014.[90]

[90] Exhibit R 4, SD-6, 7 and 8

149     The first of these documents established that, on six occasions, the Roads Corporation was notified of changes of address, effective from dates between 4 March 1998 and 18 April 2006.  The last mentioned date represented the first and only notification of a change of address to the property. The addresses notified and the dates from which they were effective were: 113/253 Hoddle Street, Collingwood, effective from 4 March 1998; 167/240 Wellington Street, Collingwood, effective from 21 December 1999 (that is to say, 2 days before the deposit monies were paid by Ly);[91] 4 Chircop Close, Sydenham, effective from 24 April 2001; 159/240 Wellington Street, Collingwood, effective from 7 March 2003; 7 Centenary Ct, Kingspark, effective from 13 February 2006 and the property, effective from 18 April 2006. Notably, the notification of change of address to the property took effect after the initial restraining order was obtained on 6 April 2006.

[91] Other documentary evidence relating to Ly, to which I have already referred, indicates this was the address 

he gave to Centrelink and to his solicitor in the period he purchased the property - Exhibit R 4, SD-6, 7 and

8 and Exhibit A4, QL-2

150     Another certificate of disclosure produced was for the applicant in the name of: “Tham Hong Phuong”.  She was noted to be a current customer.  The applicant’s address history was recorded as: 167/240 Wellington Street Collingwood, from 26 May 1999 to 24 March 2001; 4 Chircop Cl Sydenham, from 25 March 2001 to 8 April 2002; 159/240 Wellington Street, Collingwood, from 9 April 2002 to 29 June 2004; 185/240 Wellington Street Collingwood, from 30 June 2004 to 6 January 2005 and 7 Centenary Crt, Kings Park, from 7 January 2005 to 23 January 2007.

151     The applicant’s current residential address was the property. With some variation in the dates, five of the addresses notified matched addresses notified to the Roads Corporation, between 1999 and April 2006. The Roads Corporation was not also notified of the address given to Centrelink at 185/240 Wellington Street, Collingwood for the period 30 June 2004 to 6 January 2005.

152     The applicant’s payment history indicated payment to her of a Parenting Payment Single benefit (the PPS) along with Family Tax Benefits between January 2000 and June 2006.  The total approximate gross amount received between 29 December 1999 and 27 June 2000 was $6,677.64.  In each subsequent year, the applicant received approximate gross amounts of between $15,979.67 and $22,153.43.

153     I have already mentioned the first certificate of disclosure which related to Ly.  In addition to providing information about the payment of a Newstart Allowance, this document reported an address history for Ly at 167/240 Wellington Street Collingwood from 25 May 1999 to 24 June 2000 and at the property from 25 June 2000 to 31 January 2009. 

“16. I contributed financially to the purchase of the property. The sum of $50,000.00 was given to me by my uncle Minh Thang Nguyen who I believe owed money to my father.  As between my father and I, this money was to be a gift to me.  That is my belief based on our discussions at the time.  Also, I have not repaid my father for it and he has never asked me to do so.  I used all of this money for the purchase of the property in Robinson Court.  I received the money from Minh Thang Nguyen over a period of time.  After he had paid me about $30,000, I instructed Minh Thang Nguyen to pay the final sum of $20,000.00 into my de facto husband’s ANZ Bank Account.  In addition to this sum, I also paid for the stamp duty on the purchase of the property.  The stamp duty was paid from savings that I accumulated through Centrelink payments.  I did not spend much money and kept some savings at home.

17.  I was involved in every aspect of the purchase of the property in Robinson Court, Delahey.  Towards the end of 1999 we began looking for a property to purchase as the family home.  We inspected properties together, including attending upon various real estate agents.  The property in Robinson Court, Delahey was seen by the two of us and we agreed to purchase the property.  I attended with Quang Ha Ly when he made an application for a bank loan.  We looked at loans with other banks including the Westpac Bank but settled on the ANZ Bank.  I attended with him to see a conveyance and lawyer and attended on the date of settlement with him.  There was no first home owners grant in relation to the property. My de facto took a more active role merely because he could speak more English than me and I was at times occupied with my son who attended with us on every occasion.

18.  Although we discussed whose name the property would be registered in, it was not an issue for either of us.  I cannot recall exactly the details of what we discussed.  However, I know that we agreed that the property was to be purchased as the family home for us and for our children so I did not mind if I was not on the title. We considered it would be more convenient if the property was registered in Quang Ha Ly’s name because he spoke English much better than I. Accordingly, he could communicate more easily with the bank, council, utilities providers and for other matters about the property.  The loan with the bank was also solely in the name of Quang Ha Ly so, for that reason also, agreed it would be simpler and consistent for the property to be registered in his name.

19.  As referred to in my first affidavit, a loan of $130,000 was obtained with the ANZ Bank which was approved in February 2000.  The loan was in the name of Quang Ha Ly as he was the only one of the two of us that was employed.  Again I was present when my de facto attended at the bank to make and finalise the loan application.

20.  I am aware that the loan with the ANZ Bank was paid in its entirety in January 2004 with the proceeds of winnings by Quang Ha Ly from the Crown Casino. I was aware of the win as he showed me the cheque from the casino when he came home. It was a significant event for me as the gambling had been a real issue in our relationship.  I told him and insisted that the money be used to pay off the loan on the property.

21. The winnings from Crown Casino were in the amount of approximately $150,000.00.  I attended with my de facto partner to the ANZ Bank in St. Albans at the time the cheque was banked. The money was then used to pay off the loan and once again I was present when this was done.

…

24. My de facto and I had separate bank accounts.  Once again this was not an issue. I had an account in which I received my Centrelink payments.  Generally, I paid for the household items and weekly shopping which included food, clothing and other household consumables.  Quang Ha Ly’s income would generally service the loan with the bank and pay the utilities (electricity, gas, water rates), although I would also contribute at times if funds were short.”

186     As mentioned, Ly deposed that the purchase price of $235,000 was paid with funds gifted by his brothers (approximately $50,000), his savings (approximately $20,000), the contribution made by the applicant from funds received from her uncle ($50,000) and a loan from the Bank ($130,000). The discrepancy between the amounts Ly swore were applied to the purchase (on the figures supplied, $250,000 in total) and the purchase price helped reinforce the impression that the account of direct financial contributions made by the applicant was probably revisionist.

187     Ly also swore that the applicant paid the stamp duty without providing any detail of the amount or source of the funds from which it was paid.[115]

[115] Exhibit A4

188     The motive for registering the property in Ly’s name only, the extent to which the applicant was involved in the process leading to the purchase of the property and the discharge of the mortgage and any other financial contributions by her to the acquisition and maintenance of the property were articulated by Ly in his affidavits in the following paragraphs:

“15. I had the property placed in my name as I spoke English which would make dealing with various matters relating to the purchase of the property easier.  In addition, the loan was solely in my name as I was the only one employed so once again this would just make matters easier and simpler.  My partner and I discuss that we both intended that the property would be the family home and for the children.  It did not matter that it was only in my name because we were in a relationship and already had a child together.

16. My partner was involved in the whole process and in all aspects of purchasing the family home. We went out together inspecting properties and visiting real estate agents.  She attended with me on all occasions and during every step in meetings with solicitors, real estate agents and the banks.

17. In January 2004 I paid out the loan with the proceeds of a significant win that I had at the Crown Casino of approximately $150,000.00. As gambling had been an issue in our relationship Tham Phuong insisted and told me to use the proceeds of the win at the casino to pay off the loan.  There was considerable discussion about using the money to pay out the loan. We attended together at the St. Albans branch of the ANZ Bank to deposit the Crown Casino cheque and pay out the ANZ loan.

…

21. My partner and I had separate bank accounts. Her bank account was used for her Centrelink payments. She would pay for household expenses and weekly shopping for the children and the home. This included grocery shopping and clothing for the children and myself. She would also contribute to the bills of the house at times when money was short. My bank account was used for my income and savings, and my income would generally be used to meet the mortgage repayments and bills”.

189     Leaving to one side for the moment the question of any direct financial contribution, the evidence of the shared aspiration to establish a home and asset for their children in the long-term and the support given by the applicant to find, select and effect the initial purchase of the property, if true, was insufficient to establish an equitable interest in the applicant in the property acquired.

190     As to the allegation that the applicant’s contribution of $50,000 to the purchase price, I make the following observations.

191     Under cross-examination, Ly conceded he had no documents or other evidence to support the assertion that the applicant had contributed money towards the purchase of the property or evidence of the payment of this amount to him or into his bank account.[116]  He professed some ignorance of the applicant’s finances. He said he had not wanted to ask her, the applicant, about money matters and he confirmed they had kept their money matters separate (“As I said before, I didn't ask her or raise the money matters in detail with her.  All I knew was she got some money returned to her by an uncle.  Her father wanted to give her that amount of money via the uncle and she told me that and on general information, yes, I knew it but I didn't ask her in detail what and what”[117]).

[116] TN 210

[117] TN 210

192     Nguyen’s affidavit was sworn on 10 November 2014.[118] In summary, he swore that, in approximately 1998 to 1999, he borrowed the equivalent of $50,000 from the applicant’s father. At the time Nguyen said he operated a furniture business from 75 Osborne Street Springvale, under the registered business name: “Mingh T. Nguyen”. According to Nguyen, for approximately three to four years, he used this business name to sell household furniture imported from Vietnam and later used the same name to operate a clothing business. Nguyen indicated he closed the clothing business and ceased employment due to health issues a number of years before he swore his affidavit.

[118] Exhibit A3

193     Nguyen deposed that he had arranged for the applicant’s father to pay for furniture stock ordered by him over the period mentioned on the basis that her father would be repaid later. The total purchase price had been approximately A$50,000, which at the request of the applicant’s father he, Nguyen, paid to the applicant. The mostly cash payments were made to the applicant in a number of instalments from earnings from the business. These, Nguyen recalled, were paid between late 1999 and early 2000. The final instalment of $20,000 was, however, paid into Ly’s ANZ Bank account at the request of the applicant, who at the time had indicated that she and Ly were intending to purchase a property in which to live with their son.

194 The only documentation produced by Nguyen was a copy of a Certificate of Registration of Business Name, which confirmed registration of the business name under the Business Names Act 1962 on 3 February 1997.

195     Cross-examination of Nguyen revealed the following matters:[119]

[119] TN 132-137

·    Nguyen believed he had some documents at home relating to the purchase of the furniture but, because he was on remand, he had not been able search for these. Nguyen could not say what documentary evidence was retained, because after seven years had elapsed, as was his right, he had discarded business records;

·    as to the value of the furniture imported, according to Nguyen it was imported regularly (on several occasions) for sums he could not remember but thought were: “1,000 here, 5,000 there or so. Just a total sum of what I imported”;

·    owing to Vietnamese laws governing the transfer of money overseas, at the time it had been difficult for the applicant’s family to give her money. Coincidentally, he was running a business and this led to the arrangement alleged;

·    Nguyen was not able to say to what use the money he said he deposited in an account operated by Ly was put.

196     I have accepted the thrust of the submission made by the DPP that Nguyen’s evidence, which was vague and lacked any concrete detail of the advancement of funds, did not amount to corroboration of the claim that the applicant had contributed $50,000 to the purchase of the property.

197     Various matters specifically noted in submissions made on behalf of the DPP are summarised along with my comments in the following points:

·    no documentary proof of the operation of the furniture import business was provided;

·    the evidence did not identify or prove what furniture items were purchased or the quantity of same. To this I would add there was no evidence of the extent of the loan arrangement allegedly entered into with the applicant’s father;

·    if, as alleged, there were several and regular imports of furniture stock over a period of some months, the quantity and cost of which varied, I did not find plausible the suggestion that Nguyen could still remember these stock transactions without resort to records or, for that matter, recall the time frame in which he said $30,000 of the loan was repaid by various cash instalments. The evidence that, after seven years, Nguyen had lawfully disposed of business records and those that he did retain were inaccessible because he was on remand did not adequately explain why these records or those which remained were not retrieved by the applicant at an earlier date.  Her application to exclude was first notified in May 2006 and the order for forfeiture was made in August 2009;

·    the evidence of the father’s intentions (or for that matter the family’s intentions) vis-à-vis the applicant was hearsay. To that I would add that the applicant failed to explain the absence of any evidence from her father to support the alleged making of the gift and the circumstances under which any money was paid to her. I infer from the unexplained failure to call evidence from him that her father’s evidence would not have assisted the applicant in proving receipt of $50,000 in the period alleged and contribution of this sum to the acquisition of the property;[120]

·    the alleged payment of $20,000 into Ly’s account was not proved. Importantly, Ly at no stage corroborated this assertion. On the contrary, under cross-examination, he gave evidence that the applicant had kept the money received from her uncle and on the day of settlement she accompanied him to the Bank where they deposited the $50,000 amount;[121]

·    if any monies were paid in cash these amounts could just as easily have been applied by the applicant to other expenses. In this regard, I note that in his final submissions the applicant’s counsel conceded that Nguyen’s evidence alone could not establish that any payments he said he made to her between late 1999 and early 2000 were applied to the purchase of the property.

[120]Jones v Dunkel (1959) 101 CLR 298

[121] TN 211

198     As to the alleged payment of stamp duty, I note the following matters.

199     Exhibit JB 2 to the affidavit of Detective Senior Constable, John Boursinos, sworn in support of the initial application for a restraining order on 5 April 2006, contained a copy of the Transfer of Land dated 10 February 2000.[122] This document bears a stamp with the date 15 February 2000. This confirmed that $9,760 in duty was paid.

[122] Exhibit R1

200     In earlier evidence given under cross-examination, the applicant indicated her only source of income for the period 29 December 1999 to 27 June 2000 was Centrelink payments totalling $6,677.64 and, when asked, she had not been able to recall whether she had other assets or savings as at 27 June 2000.[123]

[123] TN 93

201     Under cross-examination, the applicant was challenged about her ability to pay the stamp duty required from her own funds, namely the Centrelink benefits mentioned above. In response, the applicant stated she had paid stamp duty from savings she received from her previous relationship (“Even though the amount I received from Centrelink appear only that much, but I got my own savings from the previous marriage, my first husband gave me some and I – I saved some ” and “but I got some sort of business, I was helping him out and I got some money from helping him out and that was my savings, my own savings.”[124]). 

[124] TN 176

202     The applicant was challenged about her failure to provide information about these savings or allege payment of stamp duty earlier. In this regard, the applicant at first prevaricated by asserting she had not been asked about the savings, she then claimed ignorance of what had been required of her at the time her earlier affidavit had been sworn and, lastly, the applicant said this payment had only come to mind, after she went home and searched for information. I found the explanations given unconvincing. This was particularly so in light of her failure to resolve the contradiction between having positively asserted in the further affidavit that the source of the savings used to pay stamp duty had been her Centrelink payments and the applicant’s later oral evidence.

203     Ly’s oral evidence that when they commenced living together the applicant had savings from money given to her by her former husband, about which he had not wanted to enquire and, his further suggestion that the applicant had paid stamp duty from these savings failed to resolve this contradiction  (“Savings – her savings was always her savings and remain there, you know, and she only mentioned the fact that she got some savings, I didn't dare to ask how much or – or did this – how often the amount, but her savings still there until the day we bought the house”[125]).

[125] TN 212-213

204     The evidence of leaving the loan arrangement and registration of the property in Ly’s name alone was inconsistent with the applicant having made any direct financial contribution to the acquisition of the property.

205     As mentioned, I found the reasons advanced for Ly registering the property in his name and acquiring the debt (convenience because Ly was the only one employed and had a better command of spoken English, the agreement that the property would be a family home for them and for their children and Ly’s later oral evidence that Vietnamese custom dictated that property or the matrimonial home was held by the husband as the breadwinner and head of the house[126]) unconvincing.

[126] TN 209

206     On this issue, I make the following observations.

207     Firstly, if Ly’s employment was a factor, the evidence of employment at the time of and subsequent to the purchase was unsatisfactory.  As mentioned, the correspondence dated 13 January 2000 from the Manager of Melton C. Lane, produced by Ly, stated that Ly was employed as a delivery driver on a gross weekly income of $820 and had been so employed for the previous three years.[127] The Centrelink record, on the other hand, disclosed that Ly received support in the form of a Newstart Allowance for successive periods between 21 December 1999 and 7 June 2002.  This record did not also disclose details of any employment.  In short, the circumstances of Ly’s employment at the time of purchase were unclear in the absence of satisfactory documentary corroborative evidence.

[127] Exhibit A4, QHL-1

208     Secondly, whilst I accept that Ly’s command of English might be better than the applicant’s, they can and do communicate in English.

209     Thirdly, the evidence of any discussions between the applicant and Ly preliminary to the purchase of the property was at best vague.  If, however, the applicant and Ly had discussed and agreed that Ly would hold the title of the family home for the ultimate benefit of their children, nothing of the sort was suggested by the earlier explanations advanced in their affidavit materials.  This evidence was likely a further instance of revisionism.

210     Fourthly, why and how the factors already mentioned could have had any bearing on, for example, the Bank accepting two borrowers instead of one or made inconvenient the registration of the property in both names was never explained. 

211     Lastly, the first and only time custom was raised as a potential explanation for leaving the property and debt in Ly’s name alone, was during cross-examination of Ly.

212     On the evidence summarised above, I could not be satisfied on balance that any one of, or in combination, the reasons advanced for Ly acquiring title and the debt, adequately rebutted the strong presumption that Ly borrowed monies and took title alone because at the time he held both the legal and equitable ownership of the property. 

213     As to any indirect financial contributions, at hearing Ly agreed with the proposition that he had taken responsibility for the financial and material position of the family and that the applicant had been responsible for looking after the home and the children.[128] It was never the case that the applicant and Ly had pooled their funds from any source.  On the contrary, they were both at pains to make clear their funds were kept separate.

[128] TN 220

214     Under cross-examination Ly, nonetheless, claimed that the applicant had attended with him to make mortgage repayments and, if she had the money, she also contributed to these payments.[129] 

[129] TN 210-211

215     Notably, in her first affidavit the applicant had made no mention of expenditure from her own funds on household items such as weekly shopping and the like or on payment of the loan or utility expenses when funds were short.

216     For the reasons summarised below, I was not satisfied on balance that the applicant had directly contributed to the payment of the mortgage debt nor was I satisfied as to whether and the extent to which the applicant contributed from her own funds to household expenditure:

·    as mentioned, their evidence indicated that the applicant and Ly deliberately kept their money matters separate.  The strong impression was that they did not share funds or spending and there was a lack of trust between them in this regard.  Ly more than once indicated they kept their money separate and added he had no actual knowledge of the applicant’s savings or the amount of her Centrelink payments.  The applicant on the other hand, said she hid money from Ly because he gambled:[130]

[130] TN 207-208

·    there was no satisfactory evidence of the circumstances of Ly’s employment or the extent of his income received between late 1999 and the date of his arrest.  As mentioned the Centrelink record showed payments to Ly between 21 December 1999 and 7 June 2002. The letter from an employer in January 2000 nevertheless suggested that Ly was employed and had been for the previous three years.  The only notice of assessment tendered for the period prior to discharge of the mortgage was for the year ending 30 June 2003 and this indicated income from employment of $20,598 during that financial year;[131]

[131] Exhibit R4, SD-7 and Exhibit A4, QL-1

·    there was no satisfactory evidence of the extent to which Ly had funds from other sources such as gambling which could have been and were directed to repayments prior to the discharge of the mortgage in January 2004.  Ly argued the Casino records did not properly reflect his winnings.  Ly said he normally took $500-$1000 to bet and typically continued betting with his winnings.  He said this practice and the fact that friends accompanying him pooled their bets probably accounted for the amount tendered of $620,800 in 2004 as recorded by Crown.[132]  Of course this was not the only large sum tendered because, as the record also showed the sum of $391,000 was tendered in 2003.[133] This evidence notwithstanding, the record showed significant gambling activity, with substantial net winnings in the years up to and including 2004 some of which could have been applied by Ly in the repayment of the mortgage;

·    if, as alleged the applicant was paying for household expenses and contributing to bills as well as maintaining separate homes, I found untenable Ly’s further suggestion that she had accumulated savings from her Centrelink payments which enabled the applicant to contribute to the acquisition of the property and to contribute to mortgage repayments; [134]

·    if as alleged, the applicant maintained a separate home prior to Ly’s arrest in March 2006 there was no satisfactory evidence of the amount and source of funds available for her to contribute to mortgage repayments much less to additional household expenditure when they were living as a family at the property.

[132] TN 217-222

[133] Exhibit R5, MF-1

[134] TN 213

217     In short, I was not satisfied on balance that Ly had required and had received financial input from the applicant in the repayment of the mortgage debt.

218     The allegation that Ly had discharged the mortgage, from his own funds whatever the source of these funds, meant that during January 2004 his ownership of the property was complete. The fact that the applicant insisted Ly apply his winnings in this way, if true, may evidence a desire to better secure her children’s future but was insufficient to establish an equitable interest in the applicant in the property acquired. 

219     On the evidence summarised above, I could not be satisfied on balance of whether and the extent to which the applicant made financial contributions to the acquisition of the property from her own funds (Centrelink benefits or savings) in repayment of the mortgage. This is not to deny, however, that, from time to time, the applicant probably applied some of her Centrelink payments toward family expenses such as food and clothing and the like.  Nevertheless, the evidence such as it was did not establish a sufficient link between this level of contribution to the welfare of the family unit and Ly’s acquisition of the property and subsequent discharge of the mortgage.

The applicant’s further affidavit – non-financial contributions following the initial purchase

220     In her further affidavit the applicant further sought to emphasise how and the extent to which her contribution to the family as a full-time homemaker and carer for their children had freed Ly to work and gamble and apply his money to the payment of the mortgage and other expenses. She deposed as follows:

“22. During the course of our relationship up until his imprisonment my de facto husband went to work, gambled and often socialized. I performed all the household duties without any assistance. This too was another cause of arguments between myself and Quang Ha Ly. He would go to work, deal with any paperwork relating to bills and gamble. He would spend long hours away from home. The times he would be away from home would vary depending on what type of work he was doing at the time. Usually he would leave home in the mornings between 8:00 a.m. – 9:00 a.m. and finish work around 5:00 p.m. He would not return home until much later as he would then go out gambling or socialising. When he worked in restaurants he would come home even later.

23. I would stay at home and cook, clean and wash for the family on a daily basis. I would wash the car, do the gardening, take the rubbish out and do the grocery shopping. I would buy clothing for the children and Quang Ha Ly. I would take the children to school and pick them up after school, although their father helped at times. Quang Ha Ly was able to work full time as I stayed at home to raise the children and do all the housework. It enabled him to earn a living for the family to pay off the mortgage and to gamble at the casino.

…

25. We lived like a normal family and performed roles that were generally expected of a husband and wife (and mother). I maintained the family home and cared for the children on a full time basis which is the reason why my de facto husband was able to work. I have continued to maintain the property and pay all expenses since Quang Ha Ly was sentenced in August 2009. We have remained in a relationship and I have visited regularly with the children whilst he has been in custody.”  

221     Ly’s affidavit effectively reiterated this aspect of the applicant’s evidence when he deposed as follows:

19. During the course of the relationship, up until my incarceration, I would usually leave in the morning at approximately 8:00 a.m. and return between 7:00 p.m. and 8:00 p.m. The times I would return home would vary depending on the work I was doing at the time. If I was working in a restaurant then I would finish later and not return home until 10:00 p.m. or 11:00 p.m. Generally I would go to work and then socialise and gamble.

20. My partner did all the housework. She undertook all cooking, cleaning and shopping duties. She would take out the rubbish, do the gardening and washing, make the school lunches for the children, take the children to school. Tham Phuong would do all the weekly shopping for the home and the children.

...

22. I was able to work due to the fact that my partner looked after the children, took them to and from school and generally maintained the family home.

23. The relationship is still ongoing.  Although I have been in custody for almost 6 years, my partner visits regularly with the children. I know she still takes care of them and the home. We have lived a life mostly together for the better part of 18 years and the common bond is our two children.”

222     Based on the evidence already summarised, I could not be satisfied of the extent to which the applicant undertook the responsibilities of homemaker and as carer for the couple’s children during the periods they were not separated. Moreover, it was by no means clear that by undertaking household duties and caring for the children the applicant had enabled Ly to fund the purchase of the property and pay the mortgage debt by working and gambling and, subsequently, to fund the discharge of the mortgage in or about January 2004 from his own funds. On the contrary the applicant’s case was that she had actively opposed Ly’s gambling activity and, in that sense, it could not be said that the applicant’s role in the relationship had enabled Ly to focus on gambling to finance the acquisition of the property.

223     This is not to deny, however, that the applicant probably undertook these important roles at different times and has since parented the children and acted in the role of homemaker in the absence of their father since August 2009.

Conclusions and orders

224     For the reasons articulated above I find the applicant has not established a beneficial interest in the property.  In these circumstances it has been unnecessary to proceed to also consider the matters raised by section 22 of the Act.

225     The application to exclude 50% of the property from the operation of the order will be dismissed and I will from the parties as to form of the order and any further orders.

    commercial like endeavour in Taleb v DPP [2014] VSC 285. In Taleb funds from the sale of units, in the  
    development of which the applicant’s funds had been employed on the basis they would be repaid from the
    proceeds of sale, were restrained under the Act.

   16, 17,19, 20, 21 and 22 of Exhibit A4