Moreno & Moreno
[2025] FedCFamC1F 304
•9 May 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Moreno & Moreno [2025] FedCFamC1F 304
File number: MLC 12344 of 2024 Judgment of: MCNAB J Date of judgment: 9 May 2025 Catchwords: FAMILY LAW – PROPERTY – Where the wife seeks a division of assets 80 per cent in her favour – Where the husband is bankrupt – Where the paternal grandmother claims interest in a property of the marriage under s 42(2)(e) of the Transfer of Land Act 1958 (Vic) and seeks a declaration that she has a life tenancy or life interest in the property – Paternal grandmother’s application dismissed – Orders made adjusting the assets of the wife and husband 80 per cent in the wife’s favour. Legislation: Family Law Act 1975 (Cth) ss 75, 79
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 8.15
Transfer of Land Act 1958 (Vic) s 42
Cases cited: Barba v Gas & Fuel Corporation of Victoria (1976) 136 CLR 120
Burke v Dawes (1938) 59 CLR 1; [1938] ALR 135
Haslam v Money for Living (Aust) Pty Ltd (2008) 172 FCR 301; [2008] FCA 1536
Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8
Kaplan & Hankel [2025] FedCFamC1F 41
Watson v Foxman (1995) 49 NSWLR 315
Division: Division 1 First Instance Number of paragraphs: 50 Date of hearing: 1-2 May 2025 Place: Melbourne Solicitor for the Applicant: Ms Mastroianni of Sage Family Lawyers Counsel for the First Respondent: Did not participate Counsel for the Second Respondent: Mr Holzer in his capacity as the Trustee of the Bankrupt Estate of the First Respondent Counsel for the Third Respondent: Mr Williams KC with Ms Walker Solicitor for the Third Respondent: K&L Gates Counsel for the Fourth Respondent: Mr Little Solicitor for the Fourth Respondent: RNG Lawyers ORDERS
MLC 12344 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MORENO
Applicant
AND: MR MORENO
First Respondent
MR HOLZER (TRUSTEE) BANKRUPT ESTATE OF MR MORENO
Second Respondent
MS C MORENO
Third Respondent
D PTY LTD
Fourth Respondent
ORDER MADE BY:
MCNAB J
DATE OF ORDER:
9 MAY 2025
THE COURT ORDERS THAT:
1.The Amended Application in a Proceeding filed by the third respondent on 16 April 2025 be dismissed.
2.Order 2 of the orders made on 4 April 2025 be discharged.
3.Within 7 days from the date of these orders the third respondent withdraw caveat no. … registered on 27 August 2021 over the Title of the property situated at E Street, Suburb F, Victoria and more particularly described in Certificate of Title Volume … Folio … (“the Suburb F property”).
4.Within 60 days from the date of final orders, the third respondent vacate the Suburb F property and deliver vacant possession of the Suburb F property to the fourth respondent.
5.The fourth respondent do all acts and things to cause the proceeds of the sale of the property situated at G Street, Suburb H and more particularly described in Certificate of Title Volume … Folio … to be paid as follows:
(a)first, to discharge the loan owed to D Pty Ltd, secured by registered mortgage number …;
(b)second, to pay the selling agent’s costs and commissions and the conveyancing lawyer/conveyancer’s costs and disbursements;
(c)third, to pay any outstanding council rates or charges or other adjustments; and
(d)fourth, any remaining funds to be distributed as follows:
(i)80 per cent to the applicant; and
(ii)20 per cent to the second respondent.
6.The fourth respondent do all acts and things to cause the proceeds of the sale of the Suburb F property to be paid as follows:
(a)first, to discharge the loan owed to D Pty Ltd, secured by registered mortgage number ….
(b)second, to pay the selling agent’s costs and commissions and the conveyancing lawyer/conveyancer’s costs and disbursements.
(c)third, to pay any outstanding council rates or charges or other adjustments.
(d)fourth, any remaining funds to be distributed as follows:
(i)80 per cent to the applicant; and
(ii)20 per cent to the second respondent
7.The third respondent do all acts and things and sign all documents necessary to instruct K&L Gates to release the sum of $10,000 held in accordance with the orders made on 4 April 2025 to the fourth Respondent.
8.The applicant retain all personal property in her possession and bank accounts held in her name as at the date of these orders.
9.Unless otherwise specified in these orders and save for the purposes of enforcing monies due under these or any subsequent orders:
(a)The applicant be solely entitled to the exclusion of the other to all property (including choses-in-action) in their own name or in their possession as at the date of these orders;
(b)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is to be entitled pursuant to these orders;
(c)any joint tenancy of the parties in any real or personal estate is hereby expressly severed;
(d)The applicant and second respondent hereby forgo any claim they may have to any superannuation benefit or interest in any trust or deceased estate that is payable or is belonging to or owned by the other, save as provided for in these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Moreno & Moreno has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCNAB J
This matter involves the applicant wife, Ms Moreno aged 45 years (“the wife”), the first respondent husband, Mr Moreno aged 50 years (“the husband”), the second respondent is Mr Holzer, in his capacity as the trustee of the bankrupt estate of the husband, the paternal grandmother, Ms C Moreno (“the grandmother”) is the third respondent and D Pty Ltd (“D Pty Ltd”) is the fourth respondent.
BACKGROUND
The grandmother currently resides at E Street, Suburb F, Victoria (“Suburb F property”). The grandmother seeks orders that the mortgagee (the fourth respondent) be restrained from exercising any rights it may have to take possession of the property. The grandmother puts her claim on the basis that she is a tenant in possession of the property and/or has a life interest and is therefore protected by operation of s 42(e) of the Transfer of Land Act 1958 (Vic) (“TLA”).
The husband and wife commenced cohabiting between their respective parents’ homes between 1997-1999. They were married in mid-1998. The husband and wife have four children:
(a)Mr J born 2000;
(b)Mr K born 2001;
(c)X born 2012; and
(d)Y born 2015.
The grandmother and her late husband, Mr B, conducted a business, L Pty Ltd (“L Pty Ltd”), and each of them were appointed directors of the company in mid-1998. The husband worked in that business from a young age and was appointed a director in 1993. In mid-2006, the husband and wife purchased a property at G Street, Suburb H, Victoria (“Suburb H property”) for the sum of about $275,000.
The husband and wife each worked in the business with the grandmother and Mr B with Mr B being in effective control until his health failed. There are periods where Mr B resigned as a director, but I note that he was reappointed as a director in mid-2014 and subsequently resigned in mid-2015. The grandmother gave evidence that in the period of 2010 to 2011 Mr B was terminally ill and unable to participate in the operations of L Pty Ltd and that the husband and wife took over operation of the business at that point. I note that Mr B passed away in 2015. I accept the evidence of the wife that he continued to “hold the reins” in the business until shortly before he passed away. The evidence of both the grandmother and the wife was that the business was not particularly profitable and relied heavily on borrowings, including using personal credit cards for business debts. By June 2006, the Suburb F property was subject to mortgages, and it appears there was also a banking facility with the Commonwealth Bank of Australia who registered a charge on the assets of L Pty Ltd in 1993.
In 2014, the business was seeking finance and had engaged a solicitor, M Lawyers (“M Lawyers”), to source funds for that purpose. In early 2014 debt collectors were seeking payment of about $30,000.[1]
[1] Affidavit of Mr Holzer filed 28 April 2025, Annexure MH-7.
The wife gave evidence at [32] of her trial affidavit that in mid-2015 the husband told her that the loans on the Suburb F property had to be refinanced to avoid the banks taking the property from his parents and that the property would be transferred to him. In order to raise funds to refinance the Suburb F property and payout debt in the name of the grandmother and Mr B , the Suburb H property had to be offered as security to the lender. In contrast, the grandmother gives evidence at [20] of her trial affidavit that in about April 2015 (and reiterated several times subsequently until 12 October 2015) the husband told her:
30 …
“I don’t have enough money to run [L Pty Ltd]. I have no equity in the [Suburb H] property so I cannot borrow any money using [Suburb H] as security. Can you please transfer the title to the [Suburb F] property to me so I can then borrow money against the property, and if you do that I promise that you can both live in the property for the rest of your lives”.
In about April 2015, the husband engaged a local solicitor, N Lawyers, to undertake the work to transfer the property into his name. A meeting was arranged at the solicitors’ office in early2015 and attended by the husband, wife, grandmother and Mr B. The wife alleges that during the meeting the grandmother said “I would rather that [Mr Moreno] has the property than the bank. There is no point in waiting until we die.”
The grandmother says that she saw a document in the solicitors’ office on the desk marked “life tenancy agreement” and assumed that related to the tenancy agreement that she had made with the husband. She says that she was given a document to sign but was not given a copy to read before signing or after. In oral evidence, the grandmother stated that that there was no mention of a life interest at that meeting.
The grandmother gave evidence that after that meeting, she had a conversation with the wife outside the solicitors’ office whilst having a cigarette. She says that she raised with the wife that “[she] should probably see [her] own solicitor” but was told by the wife that would not be necessary because the solicitor was acting for "all of us".
The file of N Lawyers includes the following relevant documents:
(a)a letter from the firm to the husband dated early 2015 which states relevantly “we confirm that we do not act for [Mr B] and [Ms C Moreno] in relation to this matter who should obtain their own legal advice if they so require”;
(b)a written acknowledgement signed by the grandmother and Mr B which states amongst other things “we further acknowledge and declare that [N Lawyers]… has instructed us not to execute any documents in relation to the transfer to [Mr Moreno] without consulting an independent solicitor”. There was no issue raised as the authenticity of this document; and
(c)an email from N Lawyers dated 2 April 2020 to the legal service then acting for Ms C Moreno, which stated that the office did not act for the grandmother or Mr B but did act for the husband in relation to the transfer of the Suburb F property with them strongly indicating to the grandmother and Mr B that they should seek independent legal advice.
In a letter dated 16 April 2020 to the grandmother’s then lawyers, N Lawyers stated that:[2]
…
Further to your email of the 2nd of April last, we advise that we are not aware of the date or witness to the acknowledgement signed by your client as this is how the document was returned to our office.
We attach copy transfer of land document signed by your client – we are not aware whether or not she retained a copy for her records. Please note that there was a strict sense of urgency to this transaction as our client was refinancing the property to repay your client’s debts and there was never any mention of any life interest in the property whatsoever. Furthermore, and in any event, our client would not be able to obtain finance if there was a life tenant in the property.
[2] Second respondent’s affidavit, Annexure MH-6.
In 2015, there was a settlement of the transfer of the Suburb F property from the grandmother and Mr B to the husband. At that time of the transfer (as best as can be ascertained) were as follows:
Business Overdraft
$110,000
Business Loan
$120,000
Grandmother and Mr B's Home Loan
$115,000
O Financial Services Lease
$1,566.15
Vehicle Loan
$9,795
Bank Loan (Mr B)
$29,619
TOTAL $385,980.15
NAB Visa (Mr B) (at 10 December 2012)
$26,125.83
Westpac –Card (Mr B) (at 10 March 2013)
$11,575.45
Stamp duty paid by the husband
$20,630.62
M Lawyers' Debt
$2,084.23
Husband and wife’s home loan
$310,000
Bank Loan (Husband)
$29,619
TOTAL $400,035.13
The liabilities of the grandmother and Mr B were paid out so as to enable them to remain residing in the Suburb F property.
In early 2019, the husband and wife obtained a loan from D Pty Ltd in the amount of $960,000. One of the stated purposes of the loan was to payout existing securities which at that time stood at about $860,000.[3]
[3] Affidavit of Mr Q filed 2 April 2025 at [8]
The grandmother gives evidence that in around January 2020, she told the husband and wife that she could no longer give them money for L Pty Ltd. This led to a series of disputes between them where the grandmother applied for a Family Violence Intervention Order and where the husband and wife tried to evict the grandmother from the Suburb F property. The grandmother consulted with Seniors Rights Victoria who commenced acting for her in relation to the dispute and in particular as to whether there was a life tenancy or life interest in her favour.
The grandmother says that in mid-2020, she received a copy of a writ at the Suburb F property and became aware of a dispute between P Pty Ltd and L Pty Ltd. There was a default judgment ordered against the husband in favour P Pty Ltd in mid-2020. She states that a warrant for seizure and sale of the Suburb F property was issued to P Pty Ltd in late 2021.
In around March 2021, the grandmother says that she was contacted by a real estate agent about an appraisal for the Suburb F property. On 22 June 2021, her then solicitors lodged a caveat on the Suburb F property.
In mid-2021, default judgment was entered against the husband and wife in Supreme Court proceedings initiated by D Pty Ltd where they obtained a warrant of possession in respect of the Suburb F property and the Suburb H property. In mid-2021, the grandmother says that the caveat lodged against the Suburb F property was removed without her knowledge.
In early 2022, a warrant of seizure of sale was served in respect of the Suburb F property. A short time later in 2022, the grandmother commenced proceedings against the husband and wife in the Supreme Court of Victoria seeking declarations in relation to the life interest. In early 2022, Mr Holzer was appointed trustee of the bankrupt estate of the husband. He says that he was informed by the husband and wife that that no life interest existed.
In November 2023, the husband and wife separated finally. In about November 2023, the husband moved into the Suburb F property to live with the grandmother, one of the children and a relative of the grandmother. In mid-2024, a warrant of possession was issued in respect of the Suburb H property where the wife and three of the children were living. In late 2024, the wife and the children living with the mother left the Suburb H property and moved into crisis accommodation and then into rental accommodation.
As at 16 April 2025, the loan balance in respect of the Suburb H and Suburb F properties is $1,171,049.94.
PROCEDUAL HISTORY
On 30 September 2024, the wife filed an Initiating Application naming the husband as the only respondent and where she sought orders for an adjustment of their assets 80 per cent in her favour.
On 4 October 2024, the matter came before Judicial Registrar (“JR”) Dorian where orders were made for service on the husband and various procedural orders. On 21 November 2024, JR Dorian joined Mr Holzer (as bankruptcy trustee for the husband) to the proceedings as the second respondent. On this day, D Pty Ltd and the grandmother appeared as interested parties.
On 4 February 2025, JR Dorain made orders for the grandmother to file an Application in a Proceeding and affidavit in support if she wished to be joined to the proceedings. On 28 February 2025, the grandmother filed the application seeking to be joined to the proceedings. On 27 March 2025, JR Dorian made orders joining the grandmother to the proceedings as the third respondent. She also made orders for the matter to be referred for consideration to transfer to the Federal Circuit and Family Court of Australia (Division 1) and noted that it was foreshadowed that D Pty Ltd will file an application seeking to be joined to the proceedings.
On 28 March 2025, Deputy Registrar Bracewell made orders transferring the matter to the Federal Circuit and Family Court of Australia (Division 1) and listed the matter before me for an interim defended hearing. That hearing occurred on 4 April 2025, where orders were made for D Pty Ltd to be joined the proceeding as the fourth respondent, for D Pty Ltd to instruct the sheriff to not execute a Warrant of Possession in relation to the Suburb F property until the grandmother’s claim of life interest in the property has been determined and for the filing of evidence and outlines of case. The matter was listed urgently for final hearing on 1 May 2025 for an estimated duration of 2 days.
EVIDENCE
The wife relies upon:
(a)Affidavit of Mr Holzer filed 28 April 2025;
(b)Further Amended Initiating Application filed 25 April 2025;
(c)Affidavit of Ms Moreno filed 25 April 2025;
(d)Affidavit of Mr Q filed 17 April 2025; and
(e)Affidavit of Mr Q filed 17 April 2025.
The second respondent relies upon:
(a)Affidavit of Mr Holzer filed 28 April 2025.
The grandmother relies upon:
(a)Further Amended Application in a Proceeding filed 29 April 2025;
(b)Affidavit of Mr R filed 29 April 2025;
(c)Amended Application in a Proceeding filed 16 April 2025;
(d)Affidavit of Ms C Moreno filed 15 April 2025;
(e)Affidavit of Mr S filed 3 April 2025;
(f)Affidavit of Mr S filed 1 April 2025;
(g)Application in a Proceeding filed 1 April 2025; and
(h)Affidavit of Mr S filed 26 February 2025.
D Pty Ltd relies upon:
(a)Affidavit of Mr Q filed 17 April 2025;
(b)Affidavit of Mr Q filed 3 April 2025; and
(c)Affidavit of Mr Q filed 2 April 2025.
The husband did not file any documents in the proceedings and although he attended Court on the first day of the hearing.
Notwithstanding r 8.15(3)(e) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) which provides that annexures are not in evidence unless they have been tendered, I informed the parties, which they accepted, that due to the nature of the hearing and its urgency in being listed for final hearing, I will treat the annexures to all affidavits as being in evidence.
THE GRANDMOTHER’S APPLICATION
RELEVANT LAW
Section 42 of the TLA provides:
(1)Notwithstanding the existence in any other person of any estate or interest (whether derived by grant from His Majesty or otherwise) which but for this Act might be held to be paramount or to have priority, the registered proprietor of land shall, except in case of fraud, hold such land subject to such encumbrances as are recorded on the relevant folio of the Register but absolutely free from all other encumbrances whatsoever, except—
(a)the estate or interest of a proprietor claiming the same land under a prior folio of the Register;
(b)as regards any portion of the land that by wrong description of parcels or boundaries is included in the folio of the Register or instrument evidencing the title of such proprietor not being a purchaser for valuable consideration or deriving from or through such a purchaser.
(2)Notwithstanding anything in the foregoing the land which is included in any folio of the Register or registered instrument shall be subject to—
…
(e)the interest (but excluding any option to purchase) of a tenant in possession of the land;
Counsel for the grandmother relied upon the decisions of Barba v Gas & Fuel Corporation of Victoria (1976) 136 CLR 120 (‘Barba’) and Burke v Dawes (1938) 59 CLR 1. In Barba, Gibbs ACJ said:
“In Burke v Dawes ((1938) 59 C.L.R. 1, at pp. 17-18 ), Dixon J discussed as follows the effect of an earlier Victorian statutory provision which corresponded to s 42(2)(e):
In Victoria these words have received an interpretation and an application as a result of which any person in actual occupation of the land obtains as against any inconsistent registered dealing protection and priority for any equitable interest to which his occupation is incident, provided that at law his occupation is referrable to a tenancy of some sort, whether at will or for years. Thus, a purchaser under a contract of sale, who at law is in possession as tenant at will of the vendor, has been held protected in respect of his equitable ownership as purchaser (Robertson v Keith((1870) 1 V.R. (E.) 11); Sandhurst Mutual Permanent Investment Building Society v Gissing ((1889) 15 V.L.R. 329)), a lessee in respect of an option to purchase contained in his lease (McMahon v Swan([1924] V.L.R. 397)) and a wife in respect of an equitable life interest claimed under an unsigned separation agreement made with her husband (Black v Poole((1895) 16 A.L.T.155)). a’Beckett J decided the last named case in deference to previous decisions and against his own opinion, which he stated to be that ‘those words were intended to refer to a tenancy as ordinarily understood arising out of an agreement under which the person in possession was allowed to occupy in consideration of some kind of rent or service of which the proprietor was to have the benefit.’ The cases are collected and criticised by the late Dr Donald Kerr in his work on the Australian Lands Titles (Torrens) System (1927), at pp 75 et seq. But the interpretation has stood for nearly seventy years, and it would, I think, be most undesirable now to undertake the re-examination of its correctness.
Similar views were expressed by Latham CJ and by Evatt J. McTiernan J agreed with the remarks of Dixon J. The fifth member of the Court, Starke J was perhaps not so definite in the expression of his opinion but he did not disagree with what the majority of the Court said on this point. This question should therefore be regarded as settled.”
See also: Haslam v Money for Living (Aust) Pty Ltd (2008) 172 FCR 301 particularly at [23]-[28] (per Middleton J).
CONSIDERATION
In assessing the evidence of each of the witnesses directly relevant to the question of what was agreed in 2015 regarding the grandmothers continued occupation of the Suburb F property, I have regard to the approach taken by McLelland CJ in CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 318-319 as follows:
Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
Whilst that case concerned proof of a cause of action under the Trade Practices Act 1974 (Cth), is equally apt when considering claims where an agreement of the kind alleged in this kind is alleged: see Kaplan & Hankel [2025] FedCFamC1F 41 at [61] –[62] and [112] –[113].
Each of the grandmother and wife gave oral evidence in relation to the circumstances surrounding the transfer of title to the husband. The grandmother gives evidence that she is 81 years old and in very poor health. She has health conditions including osteoarthritis over her body and particularly around her spine following surgery, severe asthma and a medical condition. She presented as a person who was struggling with health and had difficulty recalling specifics of many of the matters put to her in relation to expenditure by her or on her behalf and the details of debts which were affecting the properties at the time of the transfer.
Although she was adamant that she had a clear recollection of what occurred in 2015 as deposed by her in her affidavit and what was said, I prefer the evidence of the wife. I do so as the wife gave evidence in a measured way and was prepared to make concessions where appropriate in particular in relation to the terms of the loan application which was made to the fourth respondent which included what purported to be a lease affecting the premises at the time of the application when in fact there was no valid lease operating. When cross-examined, and after some apprehension, the wife conceded:
[Counsel for the grandmother] And that tenancy agreement was a complete fabrication, wasn’t it?
WifeWell, it must have been, because, like I said, it was a bit of a blur back then.
[Counsel for the grandmother] And you knew that it was a complete fabrication?
WifeWell, yes.
[Counsel for the grandmother] You knew that […] had never at any point been living in the house or intending to live in the house?
WifeYes, that’s true.
[Counsel for the grandmother] So in putting forward this fabricated document, I suggest to you, you were lying to [D Pty Ltd]?
WifeWell, yes, that’s what we’ve seen. Yes.
[Counsel for the grandmother] And you’ve said, well, yes I lied to them, but if it kept a house over [the grandmother’s] head, that’s all right?
WifeWell, I’m just stating now that – yes.
The evidence that a false document was submitted through a mortgage broker, whilst conduct that should be deplored, does not impugn the evidence that the wife gave regarding the circumstances of the transfer of the Suburb F property. The wife gave evidence that she was unhappy entering into arrangements that saw the Suburb H property being used as a security for the business debts. There was no personal advantage to her to enter into the arrangements. The benefits flowed to the grandmother and Mr B who were able to remain living in a house where they did not have a personal liability to pay mortgages and where their debts were cleared. As put to the wife, the lie was part of an application so as to keep a roof over the grandmother’s head.
The wife gave evidence that from her discussions with the husband and the grandmother that it was intended and hoped that the grandmother would be able to continue to reside at the property, but no promise was ever made that she had a life tenancy or a life interest. She was quite clear that she was not present at any conversation where any promise was made in the terms alleged by her:
[Counsel for the grandmother] It makes sense in those circumstances, wouldn’t it, that if they’re handing over the title, they would nonetheless be promised that they could remain living there?
WifeWell, there was – at the time, [N Lawyers], he stated to [the grandmother], you know, to seek legal advice and things like that, and she declined. She stated at the time, which is in relation to what you’re asking me, the bank is going to take it anyway. He might as well have it now, and before we died, and he could whatever he wants with it.
…
[Counsel for the grandmother] No. I suggest to you that all she wanted was the opportunity to live in the property for the rest of their lives?
WifeYes, well, I would have liked to live in mine as well with my children, but unfortunately, that’s not happening either.
[Counsel for the grandmother] And I suggest to you that it was reasonable for [the husband] in those circumstances to promise them exactly that?
WifeHe never promised them. He couldn’t make a promise like that if – knowing how much financial hardship the business was in.
…
[Counsel for the grandmother] I suggest not only was it reasonable for him to make that promise, but he did make that promise. And you were then when he did?
WifeI wasn’t there when he had the conversation with his parents, making any promise, but I was there at [N Lawyers] and no promise was mentioned.
Further I do not accept that any promise was intended to create a lease or life interest given that:
(a)it would have been fundamentally important for the grandmother if such a promise had been made;
(b)the grandmother says that she was aware of the notion of a life interest or life tenancy when she attended the solicitor's office but offers no explanation as to why she did not insist on a document recording same being prepared;
(c)the grandmother accepted that there was no mention of any life tenancy when the meeting took place with the solicitor to prepare the documents;
(d)the grandmother did not dispute that she had been advised to obtain separate legal representation and advice at the time of the transfer but she did not do that; and
(e)the grandmother did not lodge any caveat in order to protect her alleged interest until much later.
The husband was not called to give evidence by any party and it appears that the husband is on sufficiently good terms with the grandmother that they live in the same house. Notably, the husband did not file an affidavit or give evidence on behalf of the grandmother. The failure to call him allows me to assume that his evidence would not have been favourable to the grandmother (Jones v Dunkel (1959) 101 CLR 298). I also note that the husband’s conduct in serving notices to vacate and attempting to evict the grandmother from the premises and advising the bankruptcy trustee that there no life tenancy does not sit with the notion that he would agree that he had promised the grandmother that she was entitled to a life tenancy or was the subject of a life interest.
The matters advanced by the grandmother to support the contention that the promise was made by the husband in the terms alleged do not stand up to scrutiny. It was asserted by the grandmother at [33] of her trial affidavit that she did not receive any money in return for transferring the Suburb F property to the husband. That evidence ignores the significant benefits obtained by her as a result of the transfer in particular the fact that the two registered mortgages over the property were cleared and the debts in name of the company, herself and Mr B were cleared as a result of the transfer. In her affidavit she asserts that she has paid water rates, council rates and insurance. The evidence tendered on behalf of the fourth respondent showed that the rates had been paid by the company and that the company continued to pay money to the grandmother until about 2020. She may have paid some rates and maintenance costs, but she was also receiving funds from the business.
In conclusion I am not satisfied that there was a binding tenancy agreement or life interest created as a result of discussions between the husband and the grandmother and accordingly the grandmother has not established that she has a life tenancy or life interest in the property such as to satisfy the provisions of s 42(2)(e) of the TLA.
This is a case where the wife, the children, the husband and the grandmother are in a very difficult situation. The wife has the care of two children under the age of 18. She has been forced to vacate what was the family home in Suburb H and is living in insecure accommodation. She herself is in poor health and has very limited means. The net pool of assets is in the sum of about $58,950.06-$88,950.06 (being the estimated net return from the sale of the Suburb H and Suburb F properties). Similarly, the grandmother is in a parlous state in terms of her health and financial position. She gives evidence that the husband is living in the Suburb F property with her and her elderly brother who also has significant health issues. She also had her grandson, Mr K, and his partner with their baby residing at the property. She gives evidence that Mr K's partner is pregnant expecting their second child and that they had moved out of that house into crisis accommodation but are wishing to come back to the Suburb F property because of bad experiences in the crisis accommodation. The consequences of the business failing has had profound effects.
THE WIFE’S S 79 OF THE FAMILY LAW ACT 1975 (CTH) APPLICATION
As noted above, the wife and the trustee in bankruptcy have agreed to orders for the division of property between husband and wife of 80 per cent in her favour. As noted above, the net asset pool is estimated to be in the sum of about $58,950.06-$88,950.06.
In my view that division of assets is just and equitable having regard to the matters set out at ss 79 and 75(2) of the Family Law Act 1975 (Cth), particularly the contributions that the wife has made to the acquisition of the property, the care of the children, her very substantial needs arising from the care of the two relatively young children and the lack of capacity on the part of the husband to make any contribution to the financial support of the children or to her. The trustee in bankruptcy agreed with submissions to that effect.
The net assets that may be available after the sale of the properties and payment to secured creditor is likely to be meagre.
CONCLUSION
Counsel and the solicitors for the grandmother represented her on a pro bono basis. The solicitors for the wife also appeared on a pro bono basis. The Court acknowledges that very significant contribution.
I certify that the preceding fifty (50) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McNab. Associate:
Dated: 9 May 2025
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