Nitaya & Paramat - [2023] FedCFamC2F 37

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Nitaya & Paramat [2023] FedCFamC2F 37

File number(s): SYC 14 of 2018

Judgment of: JUDGE ELDERSHAW

Date of judgment: 23 January 2023

Catchwords: FAMILY LAW – PROPERTY – FINAL ORDERS – Where the husband seeks various equitable and common law relief – Where the respondents seek that the husband’s application be dismissed – Where the husband and wife entered a financial agreement – Where the second respondent was not a party to the financial agreement – Where the husband divested himself of his interest in the property – Where the financial agreement was declared not binding – Where a global approach is taken – Where the second respondent’s interest in the property be excluded from the assets for division – Where the grounds of equitable and common law relief sort by the husband fail – Where it is found the financial and non-financial contributions to the wife’s interest in the property are equal as between the husband and wife – Where the wife shall pay a specified sum to the husband – Where each party shall retain all right, title and interest in all property or claim in their name of standing to their benefit.

Legislation: Family Law Act 1975 (Cth) ss 71A, 75(2)(o), 79, 90G, 90K, 90KA, 106B

Cases cited:
Adair & Adair [2019] FamCAFC 70

Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662; [1988] HCA 17

Clauson & Clauson (1995) FLC 92 – 595; [1995] FamCA 10

Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10

Greater Pacific Investments Pty Ltd (in liq) v Australian National Industries Ltd (1996) 39 NSWLR 143

Horrigan & Jennings (2018) FLC 93 – 868; [2018] FamCAFC 206

Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17

Paragon Finance plc v DB Thakerar & Co (a firm) [1999] 1All ER 400

Perrin & Perrin (No 2) [2018] FamCAFC 122

Pobjoy v Reynolds [2013] NSWSC 885

Simons & Simons [2020] FamCAFC 128

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

Weir & Weir (1993) FLC 92 – 338; [1992] FamCA 69.

Division: Division 2 Family Law

Number of paragraphs: 151

Date of hearing: 21 December 2022

Place: Sydney

Solicitor for the Applicant: Mr Brown, Browns the Family Lawyers

Solicitor for the Respondents: Mr McGirr, McGirr Lawyers
ORDERS

SYC 14 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
MR NITAYA

Applicant

AND:
MS PARAMAT

First Respondent

MR SANGSORN

Second Respondent

order made by:

JUDGE ELDERSHAW

DATE OF ORDER:

23 January 2023

THE COURT ORDERS THAT:
1.By no later than 4.00 pm on 23 April 2023 the wife shall pay the husband the sum of $93,750 (“the Sum”).
2.For the purposes of the preceding Order, payment of the Sum shall be made into the following bank account: Account Name: Mr Nitaya, BSB …25; Account Number …73.
3.Each party, including the Second Respondent, shall otherwise retain all right, title and interest in all property, bank accounts, insurance policies, superannuation, shares, and any other entitlement or claim in their name of standing to their benefit.
4.Each party, including the Second Respondent, shall be liable for any debt, claim or action in their name or brought against them, and shall indemnify the other party, or parties, in respect of the same.
5.Each party shall do all acts and things to give effect to these Orders.
6.All outstanding applications are otherwise dismissed and the proceedings are removed from the list of matters awaiting finalisation.

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).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish 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 a pseudonym Nitaya & Paramat has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE ELDERSHAW:
INTRODUCTION

These proceedings concern property proceedings pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).
The Applicant is the husband, Mr Nitaya (“the husband”), who is now 60 years of age. The First Respondent is the wife, Ms Paramat (“the wife”), who is now 59 years of age. Both were born in Country B and speak very little English. There are no children of the parties to the marriage.
The Second Respondent is the wife’s son from a prior relationship, Mr Sangsorn (“the Second Respondent”), who is now 29 years of age. The wife has a second son from a prior relationship, Mr C (known as “Mr C”), who is now 26 years of age.
Short background
In brief, the context in which I am asked to determine the husband’s application is as follows.
The parties married in 2006. Later that year, they acquired a residence at D Street, Suburb E (“the Property”) subject to a home loan secured by a mortgage. Initially, the husband paid the home loan and the wife paid for groceries and other household expenses.
The husband and wife separated in September 2012. The husband and wife remained living under the same roof until December 2014. The Second Respondent resided with them.
On 29 and 30 August 2014 the husband and wife entered a Financial Agreement (“the Agreement”). Clause 15 of the Agreement provides:
15. The parties agree as follows:
a. [The husband] do all acts and things necessary and sign all necessary documents to transfer to [the wife] at the expense of [the wife] all of his right, title and interest of the real property situated at and known as [D Street, Suburb E] in the state of New South Wales being the whole of the land more particularly described in the Certificate of title Folio identifier ….
b. That upon the transfers of the real property, [the wife] will indemnify [the husband] against all payments and liabilities including but not limited to all mortgage, rates, strata levies, taxes and outgoings of whatsoever nature and kind with respect to the real property.
c. [The husband] acknowledges that his shares in the real property will go to [the wife’s] Son, [the Second Respondent], as she is unable to re finance the current mortgage and also unable to pay for the mortgage on her own.
d. [The wife] and [the Second Respondent] agree to allow [the husband] to remain in the real property, rent free, as long as he likes. However, he must contribute his fair share to the payment of utilities bills and foods.
The Second Respondent was not a party to the Agreement.
In October 2014, the husband divested himself of his interest in the Property. The Memorandum of Transfer (“the Memorandum”) records the transferors as the husband and wife, and the transferees as the wife and Second Respondent as tenants in common in equal shares. No stamp duty was paid on the transfer and the consideration was expressed as “Pursuing to the Family Law Act.”
In December 2014, the wife left the Property and relocated to City F, where she lived until October 2022. The husband and the Second Respondent remained living in the Property.
The husband and wife divorced in July 2016.
In June 2017, the Second Respondent changed the locks at the Property and did not provide the husband with a new key. The husband was effectively excluded from the Property from that time.
On 3 January 2018, the husband commenced proceedings by filing an Initiating Application in which he sought to set aside the Agreement and relief pursuant to s 79 of the Act.
On 22 June 2021, his Honour Judge B Smith (as his Honour then was) (“the first trial judge”) declared the Agreement not binding within the meaning of s 90G of the Act. His Honour also made findings about various grounds pursuant to s 90K of the Act as to fraud, uncertainty, duress, undue influence and unconscionable retention of a benefit. Each of the s 90K grounds was found to have failed. The totality of the factual findings of the first trial judge have not been disturbed.
On 5 October 2022, the husband filed an Amended Initiating Application seeking various equitable and common law relief which I am invited to grant in the exercise of the Court’s accrued or associated jurisdiction. These Reasons concern the disposition of the substantive proceedings pursuant to Part VIII of the Act and associated matters.
Documents
The husband relies on his Amended Initiating Application filed 5 October 2022, his affidavit filed 3 November 2022, his Financial Statement filed 15 March 2022, and the Orders and Reasons of the first trial judge dated 22 June 2021.
The wife and Second Respondent rely on a Response to Application for Final Orders filed 20 December 2022, the wife’s affidavits filed 5 December 2022 and 20 December 2022, the wife’s Financial Statement filed 5 December 2022 and the affidavit of the Second Respondent filed 13 March 2018.
All parties read the affidavit of Mr G, Single Expert Valuer, filed 29 November 2022.
I have had regard to the following Exhibits:

Exhibit 1 Agreed Chronology and Statement of Agreed and Disputed Facts

Exhibit 2 Joint Balance Sheet (noting that the Respondents’ assertion of the value of the Property is its value simpliciter, without prejudice to their case that the Second Respondent’s share should not form part of the assets for division in these proceedings)

Exhibit 3 Applicant’s Case Outline document filed 9 December 2022

Exhibit 4 Respondents’ Case Outline document filed 16 December 2022

Exhibit 5 Orders and Reasons for Judgment of the first trial judge

Exhibit 6 Applicant’s Tender Bundle

Exhibit 7 Respondent’s Tender Bundle

Exhibit 8 Applicant’s written submissions
Applications

The husband seeks a regime of orders seeking equitable relief which are best expressed in full:
1. An order that the second respondent shall make restitution in integrum to the first respondent and/or the applicant and shall cause the whole of his right title and interest in the [D Street, Suburb E] in the State of New South Wales being the whole of the land more particularly described in the Certificate of title Folio […49] (“[D Street, Suburb E]”) to be transferred to the first respondent and/or the applicant.
2. In the alternative, the second respondent shall pay the sum equivalent to ½ of the current equity in [D Street, Suburb E] (to be calculated by deducting the loan liability secured upon [D Street, Suburb E] from the value of [D Street, Suburb E] to the first respondent and/or the applicant.
~~3. In the alternative, a declaration that the second respondent holds his interest in [D Street, Suburb E] on resulting trust for the first respondent and/or applicant.~~
4. In the alternative, a declaration that the second respondent holds his interest in [D Street, Suburb E] on constructive trust for the first respondent and/or applicant.
5. In the alternative, pursuant to s 106B of the Family Law Act, the transfer with dealing number […06] from the applicant and the first respondent to the first respondent at [sic] the second respondent shall be set aside.
6. That the party shall do all acts and things to sell [D Street, Suburb E] at the best price reasonably obtainable and shall do all acts and things [to] divide the proceeds of sale as follows:
a. to the payment of agent’s commissions and legal fees related to the sale
b. to the payment of any outstanding mortgage
c. to the payment to the applicant of 50% of the net proceeds of sale
d.to the payment of the balance then remaining to the first respondent, or in the alternative to the first and second respondent in such proportions as they shall agree or per order of the court.
The husband’s solicitor abandoned Ground 3 during the hearing, hence it has been struck through in the preceding extract.
The husband’s proposal assumes that the Second Respondent’s interest in the Property is included in the assets for division. This produces a balance sheet valued at about $466,542. On my calculation, the effect of the husband’s proposal is that he would retain 60 per cent of the total assets if viewed globally or, if viewed on an asset by asset basis, 50 per cent of the total net value in the Property (i.e. $187,500), and the whole of his superannuation and savings, being a further $91,542.
The wife and Second Respondent seek that the husband’s Application be dismissed with costs. The respondents’ proposal assumes that the Second Respondent’s share of the Property is excluded from the assets for division. The legal representative for the respondents suggested that the whole of the home loan be set-off against the wife’s half interest in the Property on the basis that she is joint and severally liable for it. I do not accept that contention. It disregards the fact that the Property is valued on a realisable basis and, in any event, is inconsistent with the wife’s Financial Statement in which she accepts liability for half the loan.
On the basis that half the loan is attributed to the wife’s interest in the Property, the effect of the respondents’ proposal is that the wife would retain her realisable interest in the Property at $187,500, that the husband would retain his super and savings with a combined value of $91,542, and the Second Respondent’s interest would not be disturbed.
On my calculation, using the respondents’ balance sheet, the husband would retain 32.8 per cent of the assets if viewed globally or, if viewed on an asset-by asset basis, 0 per cent of the Property and 100 per cent of the assets and superannuation he has accumulated since separation.
Credit
The husband gave his oral evidence in the Country B language through an interpreter. During cross examination, the husband was observed to make an effort to answer questions to the best of his ability. His affidavit evidence was sworn with the assistance of a National Accreditation Authority for Translators and Interpreters accredited interpreter of the Country B and English languages.
The legal representative for the husband invited me to make an adverse credit finding about the wife on the basis that her evidence was evasive. The wife also gave her oral evidence in the Country B language through an interpreter.
The wife’s oral evidence was that she “could not recall”:
(a)Separating from the husband in 2012;
(b)Entering the Agreement with the husband;
(c)The Court’s direction on 22 June 2021 to file a Financial Statement; and
(d)Closing a superannuation account, even though her 20 December 2022 affidavit deposes to doing so.
In her oral evidence, the wife answered “no” in response to whether she had withdrawn $10,000 from her superannuation during COVID-19, even though her 20 December 2022 affidavit deposes to that fact. In answer to a question about legal fees, the wife said “I don’t know, my son is in charge.”
The wife’s two affidavits were purportedly affirmed with the assistance of a Country B interpreter. On close reading, the “interpreter” was the Second Respondent, who has a material pecuniary interest in the proceedings and is another party. The wife’s Financial Statement does not contain an interpreter’s jurat, but the Court was informed by the legal representative for the respondents that it had been read to the wife by the Second Respondent. The conflict of interest arising from this is overt, a matter which was raised with the legal representative for the respondents, in the absence of the parties, as soon as it was identified. No point was taken by the legal representative for the husband’s at the time, and the case progressed on the evidence as it stood.
I decline to make an adverse credit finding about the wife. I am not certain whether the inconsistency between her affidavit evidence and her oral evidence was due to issues of credit; or whether her affidavit evidence was not her own, given I cannot be certain of its provenance and the context in which her instructions were taken and affidavits prepared and affirmed. As such, I will attach minimal weight to the wife’s evidence unless it is objectively corroborated or is otherwise the subject of a factual finding by the first trial judge.
I was also invited to make an adverse credit finding about the Second Respondent. While his engagement in the proceedings was deficient, most obviously in view of his failure to file an affidavit since March 2018, I need not make a credit finding. His evidence, while brief, is sufficient to found factual findings on the balance of probabilities.
BACKGROUND
The first trial judge found:
10. The husband was born in [Country B] [in] 1962 and is now 59 years old. He migrated to Australia in 1997 and is an Australian citizen. He was a [public servant] from 1983 to 2005. Since 2005 he has worked as a [factory worker] at [a manufacturing business]. He spoke, according to [Mr H] “poor” and “broken” English. His evidence that his ability to read English is limited to read signs was not challenged. Prior to 2005, when living as a [public servant], he had little experience in dealing with money or finances.
11.The wife was born in [Country B] [in] 1963 and is now 58 years old. She also has limited English. She has two sons from a previous relationship. [The Second Respondent] was born [in] 1993 and is now 28. Her second son [Mr C] (known as ‘[Mr C]) was born [in] 1996 and is now 24. The wife’s English is equally limited and there is no evidence to suggest that she is sophisticated in financial affairs.
12.The husband and the wife met in 2005 while she was in Australia. They commenced cohabitation in late 2005 and were married [in] 2006. Two months later the wife migrated to Australia from [Country B] as a permanent resident. She worked at the same factory as the husband from around 2007/2008 to early 2012, and commenced her own business as a [allied health worker] from 2013.
The husband and wife agree that at the time they commenced their relationship, the husband had about $3,000 or $4,000 in savings, and a motor vehicle of no stated value. The husband deposes that the wife did not have any property of significance. The wife leads no contrary evidence.
The first trial judge found:
13.On 18 December 2006, the husband and the wife purchased [D Street, Suburb E] New South Wales (‘the Property’) in equal shares. The husband and the wife lived in the [D Street, Suburb E] property throughout the relationship. [J] came to live with them from about 2005-2006 when he was about 12, and [Mr C] from about 2012 when he was about 15-16.
The purchase price of the Property was $385,500. The husband and wife funded this through a home loan from the National Australia Bank in the sum of $366,000 secured by a mortgage, First Home Buyer’s Grant (or Grants) and savings.
The parties also agree through their Statement of Agreed Facts that the Second Respondent commenced living with the husband and wife in 2007. This is inconsistent with the earlier judicial finding of 2005 or 2006, which I will apply. The husband deposes, and was not challenged with respect to:
22. The father of [the Second Respondent] and [Mr C] did not provide any financial or other assistance to them during the time the children were living with us.
[…]
57. During the periods that [the Second Respondent] and [Mr C] lived with the respondent and myself, I was, in effect, their father. Their father or fathers had no role in their life either in supporting them financially or otherwise. I would drop and pick [the Second Respondent] up from [K School] on numerous occasions, and I would also often drive him when he needed a lift to some social or extra curricular activity. On occasions, I attended events of the school such as meetings with teachers (there was a [Country B] teacher at the school who interpreted for both the wife and me). When we moved to [D Street, Suburb E], [the Second Respondent] changed school to [L School], which was closer to our home. This is where [Mr C] also went to school after he came to Australia. The children would usually walk or catch the bus to school although from time to time I would drive them or pick them up.

The first trial judge found that the parties separated in September 2012 but remained living under the same roof.
In her oral evidence, the wife precisely stated that, in 2012, her superannuation was valued at $11,000.
The husband deposes that the wife sold her business in 2013 and has not disclosed any information about that sale nor explained the disposition of any net sale proceeds. The wife adduces no evidence about the sale. That said, the sale pre-dates August 2014, being a date when all parties agree contributions should be assessed as equal. Thus, whatever occurred in 2013 with respect to this transaction, was accommodated in the parity of contributions as at August 2014, such that I need look no further into it.
Of the period August 2013 to August 2014, the first trial judge found:
12.From about August 2013 the parties corresponded through a number of letters, although living in the same house. Translations of the letters form part of [the Second Respondent’s] affidavit. The husband wanted to sell the house and rent. The wife and [the Second Respondent], who were living in the property with the husband and also with [Mr C], did not want to sell the property.
13.The husband was responsible for paying the mortgage. The wife was responsible for paying other bills. The husband ceased paying the mortgage in about mid-2014. This brought the issue to a head.
14.While there is a dispute as to how it occurred, the parties eventually agreed that [the Second Respondent] would receive the husband’s interest in the property, and take over his responsibility for the mortgage, with husband allowed to stay in the house on the basis that he would contribute his fair share to the payment of utilities bills and food.
The first letter is dated 6 August 2013 and reads:
[the Second Respondent]
Please find a house to rent via the Net and see which place you like? How much? And what are the details? This is because I am selling this house (I can't afford the loan instalments payment).
Work is very tiring for me, but last Sunday I had a chance to go for a massage and feel a little better.
Having a house, but we have no money left to spend, no savings, no money to buy things, no money for massages, etc.
So renting a house may save us some money for spending O.K.
(As per the original)
The second letter is dated 18 February 2014 and reads:
[The Second Respondent] – [Mr C]
Please help think where we are going to earn money, and how? This is in order to pay for our home loans. I myself is now finding a house to rent. I will most likely be separating from your mother because our habits and ideas are moving in different directions
(As per the original)
The third letter reads:
I don’t wish to sell this house. How can you sell it?
Renting a house is expensive and you do not get anything back in return. Paying home loans, eventually, the house will belong to us.
Massage? Why did you not ask Mom to massage for you?
We need to talk. You can't be angry for so long.
We live in the same house, we should love each other.
Why did you waste money to go for a massage? (Massage wasn't even good.)
Buying stuff? I could see you have already bought lots of things, e.g. television, stereo, a lounge cabinet. What did we buy?
I earn money, but I don't spend either, except for paying bills, car instalments, insurance, petrol, tuition fees, brother's expenditure, and Mom's food bills for family. I myself don't even have $100 left. I can put up with it for my future and for everyone.
I, on behalf of everyone, would like to apologize if we had done anything wrong. We ask for your forgiveness. Please re-consider, Dad. l will be able to work soon. Please be patient.
(As per the original)
The fourth letter reads:
Not selling the house, then you have to pay for the home loans by yourself. I will go and rent a place. I want to remove my name from being the house owner, but the lawyer said I couldn't do that because this house was bought under my name. And I am unable to use another person's name in replace of mine either. This is because the evidence of full-time work submitted to the Bank is mine. Other persons cannot sell this house, as 1 have to sign for approval before the house can be sold. I wish to live alone, or go back to [Country B]. I will open a new bank account and ask the factory to transfer money into this bank account instead. I will not pay for the home loan anymore.
Buying a house is not an easy matter. The bank will look into evidence of stable employment records. Selling a house is not easy either. Do not think that I'm heartless if I wish to live in a rented place instead.
(As per the original)
The husband ceased paying the mortgage in June 2014. The Second Respondent began making those payments instead.
In his oral evidence, the husband was asked whether he wanted to:
(a)Be taken off the home loan, to which the husband answered “yes”;
(b)Transfer the property to the wife and Second Respondent, to which he answered “yes”; and
(c)Transfer the home loan to the wife, to which he said he could not transfer the loan to her directly because she did not have a full time job. As I understood him, this explained why the title was transferred to the wife and the Second Respondent in the same transaction.
As at August 2014
As mentioned, on 29 and 30 August 2014 the husband and wife entered a Financial Agreement (“the Agreement”). Clause 15 is the relevant clause and is extracted at paragraph 7 of these Reasons.
At paragraphs 90 to 106 of his Honour’s Reasons, the first trial judge found that clause 15(d) was not void for uncertainty and constituted consideration that was real and not illusory. The first trial judge also found that the Agreement was not void or voidable on the basis/es of fraud, duress, undue influence, nor that it would be unconscionable for the wife or the Second Respondent to retain the benefit of the Agreement.
This evidence was addressed by the first trial judge at paragraphs 76 to 78 of his Honour’s Reasons, wherein his Honour found that the advice given to the husband by his former solicitor about the effect of the Agreement did not satisfy s 90G of the Act, thus:
78. [The husband’s former solicitor] referred throughout his evidence only to the “two options”. The first option was selling the Property with the husband receiving “50%” of the net proceeds of sale. That analysis was consistent with a consideration of the husband’s then legal rights in the Property. It did not involve any reference to, or consideration of, ss 79(4) and 75(2) factors, or to the possibility of a property adjustment. The second option was transferring his half of the Property to [the Second Respondent] in return for the consideration referred to in clause 15(d). Again, this proceeded on the basis only of the parties existing legal rights. The absence of any reference to a third possibility, ie. that the husband could seek to exercise his inchoate rights under the Act, confirms that the advice [Mr H] gave did not address the relevant “rights” under the Act.
(Emphasis added)
While the husband did not receive the scope of legal advice required to satisfy s 90G of the Act, the husband was advised that the “second option”, which was implemented, involved transferring ownership in exchange for a right of occupation.
The Agreement set out the assets and liabilities of the parties. No party contends that the values in the asset schedules were materially inaccurate. The wife’s net assets totalled $16,000 and included superannuation of $6,000 and savings of $1,000. The husband’s assets totalled $22,000 and included superannuation of $8,000 and savings of $4,000. The home loan is stated at $320,000. The parties have adopted the Single Expert historic value for 2014 of $450,000 i.e. a realisable equity of $130,000 at that time.
August 2014 to June 2017
The husband deposes that, on many occasions after August 2014, he paid utility and grocery bills at the Property. This included a gas bill in January 2016 and a water bill for the April to June 2016 period. This evidence was unchallenged and I accept it.
The first trial judge found at paragraph 24 of his Reasons that:
The Transfer was registered and given effect. The wife moved out of the Property in late 2014. The husband continued to live there with [the Second Respondent] and [Mr C] for a period but then, after certain disagreements, [the Second Respondent] effectively excluded the husband from the property …
On 10 September 2014, the home loan was refinanced with National Australia Bank naming the wife and Second Respondent as the borrowers. The new home loan was in the amount of $321,500. The effect of this was that the husband was relieved of the burden of the home loan, as sought by him since 6 August 2013.
As to the servicing of the loan, the wife deposes at paragraph 41 of her affidavit:
I continued to pay my share of the mortgage on a 50/50 basis with [the Second Respondent] up until around 2017. This was the time my youngest son, who was living in the [D Street, Suburb E] unit, obtained employment. As such, rather than him paying rent he paid my share of the mortgage.
The wife adduces no objective evidence as to her payment of any mortgage sums. Her evidence at paragraph 41 of her affidavit is a bare assertion to which no weight attaches.
In December 2014, the wife left the Property and moved to City F, where she remained until October 2022. The husband and Second Respondent continued to live in the Property.
The husband adduces evidence at paragraphs 63 to 68 of his affidavit about the Second Respondent’s conduct towards him. The Second Respondent has been on notice of the allegations. It was open to him to file evidence to respond to this had he wished to do so and to challenge the matters in cross examination, neither of which occurred. That said, the legal representative for the husband made no submission about the Second Respondent’s conduct towards the husband between 2014 and June 2017, and so I will take those matters no further.
The husband deposes that he travelled to Melbourne for a week in June 2017. Upon his return, the husband could not access the Property because the locks had been changed. He deposes that he has never been provided with a new key. The husband further deposes that, on about 24 June 2017, he attended the Property. The Second Respondent’s wife was home and let him in. He deposes:
…When I went to my room, I noticed that my belongings had been interfered with – they were in different places to where I had left them. I could not find my clothes, but later found a black plastic bag containing my clothing in the garage. Some of my most treasured possessions, such as a statue, were not there and I have not seen again. There were a number of documents that had been in the room (including receipts for payment of utility bills) which had been removed. I was able to collect some of my personal items but a number of my personal items still remain at the [D Street, Suburb E] unit. I do have 2 utility bills- one being an Energy Australia gas account for the period 12 January 2016 and a Sydney Water account for the period l April 2016-30 June 2016 with receipts for payment from my bank account. Copies of these were tendered as an exhibit to a previous affidavit, so disclosure of them has been made. I made these payments at the post office. There were other payments which I made for which I no longer have the documentation of the reasons set out in this paragraph.
This evidence was unchallenged and I accept it.
Of changing the locks, the Second Respondent deposes:
…I became concerned that the [husband] was not of sound mind and that it was unacceptable to bring people to the property that were worrisome for my wife and [me].
In his oral evidence, the Second Respondent said that he thought the husband had a key and that the garage door had been broken. The Second Respondent deposes that the fact the husband collected his belongings meant that the husband “had effectively moved out of the property.” I do not accept either aspect of this evidence because:
(a)The evidence about the garage door being broken appears to be a recent invention and does not explain why all locks were changed; and
(b)The evidence that the husband’s collection of his belongings was a sign that he had abandoned occupation does not accord with the placement of his belongings in a black plastic bag in the garage and disappearance of treasured artefacts.
I find that the Second Respondent changed the locks in June 2017 as to exclude the husband from the Property. This denied the husband the benefit of clause 15(d) of the Agreement.
Since 2018
On 3 January 2018, the husband commenced these proceedings.
On 30 April 2020, $10,000 was withdrawn from the wife’s superannuation fund. She accessed a further $1,617.69 from the same fund on 6 July 2020. As of 13 March 2021, the wife’s “[Super Fund 1]” fund was closed. The wife deposes to having no superannuation at present. There is no evidence to explain why the wife’s superannuation was $11,000 in 2012, then $6,000 for the purpose of the Agreement and then $11,617 in 2020.
As of 30 June 2022, the husband’s superannuation balance stood at $66,859. According to Schedule B of the Agreement, his superannuation was valued at $8,000 in August 2014, or about 12 per cent of its current value.
The husband’s taxable income for the financial year ending 30 June 2022 was $44,762. The wife’s taxable income for the financial year ending 30 June 2022 was $16,813.
The wife deposes:
8. I am currently on Centrelink benefits which provides me with $677 per fortnight. I understand that this is an unemployed Centrelink benefit. My income from Centrelink helps pay for groceries and other necessary items for my day-to day-living,
9. I am currently looking for work however it is difficult particularly considering I speak very little English. I am looking for [allied health] jobs however they are more difficult to find after the COVID-19 pandemic. There are less shops open now than prior to the COVID-19 pandemic.
10.Since I divorced from the applicant I began to gamble on poker machines. I would gamble on poker machines as a means of dealing with my loneliness and to get my mind off any stressful matters in my life. During my time in [City F], I would gamble most of my wages at the [City F] RSL.
11.Given I no longer have the income I rarely gamble however I do acknowledge that I do you have a gambling problem. I have not received any counselling or help for my gambling addiction.
(As per the original)
The wife’s bank statement with the Commonwealth Bank of Australia (account ending …33) for the period 2 October 2022 to 14 December 2022 shows all credits to her account, including her Jobseeker payment, being withdrawn at an automatic teller machine located at the City F RSL during October, and then the M Club since 2 November 2022 save for bank fees and about $75 for groceries.
Between March 2022 and September 2022, monthly credits were made to the home loan account from the account in the names of the wife and Second Respondent. The sum of $1,519 was paid at monthly intervals in March to July and $1,635 was paid in August and September 2022. There is no evidence about the source of funds paid into the offset facility, nor how the home loan has been paid, or by whom since the transfer of title occurred in October 2014.
In October 2022, the wife returned to the Property. She deposes that she “will continue to live there.” Part F of the wife’s Financial Statement records that the Second Respondent and Mr C each contribute $500 per week to her for her living expenses and for payment of the mortgage and other outgoings. This is in addition to her government allowance.
The husband resides at the Location N. He does not pay rent but undertakes chores at the Location N. Although previously a public servant, the husband is now a community worker. There is no evidence that the husband has any right of entry or occupation at the Location N as a community worker.
LEGAL FRAMEWORK
As this matter concerns property orders, Part VIII of the Act applies. Part VIII of the Act confers powers on the Court with respect to property matters between parties to a marriage.
The Court’s jurisdiction can be ousted by s 71A of the Act, that is, to the extent that there is a financial agreement made under the Act that is binding on the parties. By reason of the Orders of 22 June 2021, such barrier has been removed.
Before an order is made adjusting the parties’ property, the Court must be satisfied that it is just and equitable to do so: Stanford v Stanford (2012) 247 CLR 108 (“Stanford”). As explained in Stanford:
36. The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 is not "to be exercised in accordance with fixed rules", nevertheless, three fundamental propositions must not be obscured.
37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(A) itself, which refers to "altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
38. Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs "as [the judge] thinks fit", in any question between husband and wife as to the title to or possession of property, is a power which "rests upon the law and not upon judicial discretion". And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong:
The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down.
[…]
40. Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down". To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
The proper exercise of the jurisdiction can be to decline to exercise the power pursuant to s 79(1) of the Act: Horrigan & Jennings (2018) FLC 93 – 868.
When making a decision pursuant to s 79 of the Act, the “broad brush”, as opposed to a mathematical, approach is well established: Perrin & Perrin (No 2) [2018] FamCAFC 122.

When making an order pursuant to s 79 of the Act, the real impact or value of the adjustment in money terms is ultimately the critical issue, not its expression as a fraction or percentage of the overall assets: Clauson & Clauson (1995) FLC 92 – 595 at 81,911; Adair & Adair [2019] FamCAFC 70 at [66]; Simons & Simons [2020] FamCAFC 128 at [18].
It is legitimate for the Court to take an asset-by-asset approach or a global approach to the assets, and which one is more convenient will depend on the circumstances of each case: Norbis v Norbis (1986) 161 CLR 513. In that decision, Wilson and Deane JJ held at [831]:
…If the parties’ interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of property between them. In such cases, justice and equity may be best served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets…
I consider it is more convenient to take a global approach in this matter as:
(a)Even though no party seeks a distribution of the husband’s cash and superannuation, such that those assets will remain with him, he held about 12 per cent of his current superannuation at the time of the Agreement and had $4,000 in savings, i.e. about 16 per cent of the current cash holdings. It cannot be said that the husband accumulated the whole of these assets since separation such that an asset by asset approach may work an injustice against the wife; and
(b)Section 79(2) of the Act obliges to me to consider the overall effect of the Orders, which is more easily achieved via a global approach.
CONSIDERATION
Is the Second Respondent’s interest in the Property ‘matrimonial property’?
The husband contends that the Second Respondent’s share of the property should be included as an asset for division between the husband and wife. He submits:
[D Street, Suburb E] was transferred by the applicant and the first respondent to the first and second respondent pursuant to the [Agreement].
There is no other basis contended, or available, for the transfer of a share in [D Street, Suburb E] to the second respondent. The agreed chronology clearly demonstrates that the [Agreement] was signed by the parties on 29 or 30 August 2022; it provided for the transfer of [D Street, Suburb E] by the applicant to the respondent and contained an acknowledgement that the applicant’s shares in [D Street, Suburb E] would go to the second respondent.
This is exactly what occurred in October 2014.
On 22 June 2021 the court declared that the [Agreement] was non-binding.
Accordingly, it follows that the [Agreement] is not a contract, since it is an essential element of a contract that it may be “enforced or recognised by law”.
I do not accept that analysis for the following reasons.
Firstly, s 90G(1) of the Act opens with the words:
Subject to subsection (1A), a financial agreement is binding on the parties to the agreement if and only if …
(Emphasis added)
The parties to the Agreement were the husband and wife. Section 90G is not concerned with the Second Respondent.
Further, the declaration made by the first trial judge was:
IT IS DECLARED THAT the Financial Agreement entered into by the Applicant and the First Respondent on 29-30 August 2014 is not binding within the meaning of s 90G of the Family Law Act 1975 (Cth).
(Emphasis added)
“Within the meaning of s 90G” means “is not binding on the parties to the agreement” namely the husband and wife. Again, the fact that the Agreement is “not binding” does not apply to the Second Respondent. The effect of the declaration was that it removed the barrier imposed by s 71A of the Act that otherwise prevented the husband from prosecuting a claim for financial relief in a matrimonial cause pursuant to Part VIII against the wife. It had no bearing on the Second Respondent.
Secondly, the first trial judge, at paragraphs 93 – 106 of his Reasons, found that there were no vitiating factors that attended the making of the Agreement. As identified, the Agreement was declared non-binding as between the husband and wife. That declaration did not concern the Second Respondent. In the absence of any vitiating factor that impugns the Second Respondent as to the making of the Agreement, the transaction that favoured him is undisturbed.
The above Reasons sufficiently establish that the Second Respondent’s interest in the Property should be excluded from the assets for division. However, if I am wrong about that, I have addressed the various grounds contended by the husband.
Restitution in integrum and restitution simpliciter
It is convenient to address these grounds together. The first ground seeks:
An order that the second respondent shall make restitution in integrum to the first respondent and/or the applicant and shall cause the whole of his right title and interest in the [D Street, Suburb E] in the State of New South Wales being the whole of the land more particularly described in the Certificate of title Folio […49] (“[D Street, Suburb E]”) to be transferred to the first respondent and/or the applicant.
The second ground seeks:
In the alternative, the second respondent shall pay the sum equivalent to ½ of the current equity in [D Street, Suburb E] (to be calculated by deducting the loan liability secured upon [D Street, Suburb E] from the value of [D Street, Suburb E]) to the first respondent and/or the applicant.
The husband submits:
Restitution is returning to the proper owner property or the monetary value of their loss.
There are 3 elements of restitution namely:
1.        a benefit has been received by the defendant
2.        the benefit is at the expense of the plaintiff
3. it would be unjust in the circumstances to allow the defendant to retain the benefit
(see ANZ Banking Group v Westpac Banking Corporation [1988] HCA 17; 164 CLR 662; 78 ALR 157 at 673).
A benefit “includes any increase in wealth, in the form of money, services, property (both real and personal)…” (Cooley, Radan and Vickovich Op Cit paragraph 38.12)
Restitution clearly applies and is the most obvious remedy in the current circumstances
Cooley, Radan and Vickovich (op. cit.) summarise the position at 38.19:
“As previously noted, restitutionary remedies have been sought in many situations where it a defendant has received and accepted a benefit in circumstances where a contract is said to be unenforceable or ineffective.
A contract (or transaction) may be ineffective for a variety of reasons. The basic division is between inherently ineffective contracts and those which subsequently become ineffective. The former includes transactions which are not fully effective as contracts because of a failure to pass the law’s criteria for contract formation, or a failure to satisfy the criteria applied to show that a contract is enforceable. The three main categories are:
(1)       contracts which fail to materialise
(2) contracts which are void for mistake lack of authority, uncertainty of agreement or rendered void by statute; and
(3)       contracts unenforceable, either at common law or under statute.”
(ialics added) [sic]
An order is being made by the court that the [Agreement] is not binding pursuant to the Family Law Act. This is the consequence that it is unenforceable under statute.
It follows that the court should make an order for restitution. The most obvious and just order for restitution is an order that the second respondent transfer his interest in [D Street, Suburb E] to either or both of the applicant and the first respondent.
Alternatively, the court could make an order for payment of money by the second respondent equivalent to his gain (the equity in [D Street, Suburb E]).
The respondents’ submission about the “justice and equity” of the case are that the husband “wanted out” of the property and whether the Agreement is binding or not makes no difference to the intention of the parties.
The authority on which the husband relies, namely Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662 addresses fundamental mistake.
The brief facts were that the Australia and New Zealand Banking Group Ltd (“ANZ”) sent $114,158 purportedly on behalf of one of its customers to the overdraft facility of Jake’s Meats (“Jake’s”), a customer of Westpac. The sum remitted was $100,000 more than the ANZ customer had instructed. The overpayment was the result of a clerical error. The sum was remitted as cleared funds, thus tantamount to cash and immediately available to Jake’s. Three days later, ANZ identified its mistake and notified Westpac. In the meantime, the overpaid funds had been credited to the account and payments of $82,978 had been paid to third parties. ANZ subsequently commenced proceedings against Jake’s and Westpac to recover the overpaid money. Prior to the trial, Jake’s was placed into liquidation and the action proceeded against Westpac alone.
As to the existence of a prima facie obligation to repay monies advanced by mistake, the plurality of the High Court held at paragraph 8:
It is now common ground between the parties that, if ANZ had demanded repayment of the excess of $100,000 immediately after the transfer of funds had been received and before Westpac had in any way dealt with the money, Westpac would have been liable to repay the $100,000 to ANZ on the ground that it was money paid pursuant to a fundamental mistake. That being so, the argument on both sides has proceeded on the basis that the amount of the overpayment was prima facie recoverable by ANZ from Westpac. The result is that it is unnecessary, for the purposes of the present case, to investigate what constitutes a "fundamental mistake" for the purposes of the principle that money payable under a fundamental mistake of fact is prima facie recoverable by the payer. It can, however, be said that we can see no reason to doubt the correctness of the view expressed or implicit in the judgments in the courts below to the effect that the notion of "fundamental mistake" does not require either that the payer's mistake be shared by the payee or that the mistake be as to the existence of a fact which, if it had existed, would have resulted in the payee being under a legal obligation to make the payment. That having been said, it is preferable to leave for another day consideration of the question whether the requirement that the mistake be fundamental involves any more than that it appears that, without the mistake on the part of the payer, the payment would not have been made.
(Citations omitted).
The High Court accepted ANZ’s submission, at paragraph 11 of its Reasons, namely:
ANZ's submission about the nature of its claim can be readily accepted. The basis of the common law action of money had and received for recovery of an amount paid under fundamental mistake of fact should now be recognized as lying not in implied contract but in restitution or unjust enrichment. In other words, receipt of a payment which has been made under a fundamental mistake is one of the categories of case in which the facts give rise to a prima facie obligation to make restitution, in the sense of compensation for the benefit of unjust enrichment, to the person who has sustained the countervailing detriment. The common law right of action may arise in circumstances which also give rise to a resulting trust of specific property or funds or which would lead a modern court to grant relief by way of constructive trust. However, notwithstanding that the grounds of the action for recovery are framed in the traditional words of trust or use and that contemporary legal principles of restitution or unjust enrichment can be equated with seminal equitable notions of good conscience, the action itself is not for the enforcement of a trust or for tracing or the recovery of specific money or property. It is a common law action for recovery of the value of the unjust enrichment and the fact that specific money or property received can no longer be identified in the hands of the recipient or traced into other specific property which he holds does not of itself constitute an answer in a category of case in which the law imposes a prima facie liability to make restitution. Before that prima facie liability will be displaced, there must be circumstances (e.g. that the payment was made for good consideration such as the discharge of an existing debt or, arguably, that there has been some adverse change of position by the recipient in good faith and in reliance on the payment) which the law recognizes would make an order for restitution unjust.
(Citations omitted, emphasis added).
As to unjust enrichment if the mistaken transaction is not the subject of compensation, the High Court continued at paragraph 12:
The prima facie liability to make restitution is imposed by the law on the person who has been unjustly enriched. In the ordinary case of a payment of money, that person will be the payee. However, when the person to whom the payment is directly made receives it as an intermediary (e.g. as agent for a designated principal), there may be uncertainty about the identity of the actual recipient of the benefit at the moment of payment. If the circumstances are such that the intermediary is to be seen as being himself the initial recipient of the benefit, his prima facie liability will ordinarily be displaced when he has handed the money received on to the person for whom he received it. In such a case he has, in the event, not retained "the benefit of the windfall" but been "a mere conduit-pipe"
[…]
It must appear that the third party has effectively received the benefit of the payment with the consequence that the prima facie liability to make restitution has become his. It will subsequently be necessary to return to this aspect of the matter and consider whether the agent must also establish that he would sustain some overall detriment by reason of the mistaken payment if he were required to repay the amount to the payer and look to his principal for indemnity.
The ratio of the decision is found at paragraph 21:
…both authority and principle support the conclusion that an agent who has received money on his principal's behalf will, without more, have a good defence if, before learning that the money was paid under fundamental mistake, he has "paid it to the principal or done something equivalent" thereto. The rationale of such a general rule can be identified in terms of the law of agency and of notions of unjust enrichment. If money is paid to an agent on behalf of a principal and the agent receives it in his capacity as such and, without notice of any mistake or irregularity in the payment, applies the money for the purpose for which it was paid to him, he has applied it in accordance with the mandate of the payer who must look to the principal for recovery. In those circumstances, the benefit of the payment has been effectively passed on to the principal who will be prima facie liable to make restitution if the payment was made under a fundamental mistake of fact. If the matter needs to be expressed in terms of detriment or change of position, the payment by the agent to the principal of the money which he has received on the principal's behalf, of itself constitutes the relevant detriment or change of position. In that regard, no relevant distinction can be drawn between payment to the principal or payment to another or others on behalf of the principal.
(Citations omitted)
Firstly, the authority on which the husband relies addresses a factual paradigm removed from the present case. The relationship between the intermediate and the ultimate recipient of the funds was that of agent and principal. The relationship between the husband and the Second Respondent is that of transferor and transferee, each acting on their own behalf.
Secondly, the husband deposes:
89. I recall that at some point in these few days around the meetings with [Mr H] either the [wife], [the Second Respondent] or [Mr H] did to me words to the effect of "As long as you stay together you can remain in the house because someone is taking over the mortgage". This was my understanding of what I had signed. I did not understand that I was giving up my ownership of the [D Street, Suburb E] unit, and I understood that I could continue to live at the [D Street, Suburb E] unit as long as l wished to, for the rest of my life if needed. I understood the purpose of signing the documents I did sign was to enable [the Second Respondent] to take over responsibility for and payment of the mortgage which I was, at that time, struggling to pay.
90. I did not understand that I was giving up any share I might claim in the [D Street, Suburb E] unit. I did not know what rights l had to make a claim for property settlement after marital separation, and those rights whenever explained to me. It was not explained to me at any time that by signing the financial agreement I would be giving up or compromising in any way my right to make a claim for property settlement.
(As per the original)
In my view, the absence of advice does not produce a mistake in the relevant sense. A lack of advice produces a vacuum of information, whereas a mistake of fact indicates the presence of information, albeit the wrong information.
In any event, the husband’s oral evidence was that he wanted to release himself of the liability arising under the home loan and that he wanted to transfer the Property. This was his position in 2013 as set out in the first letter to the Second Respondent and remains his evidence nine years later. Antithetically to there being a mistake on the husband’s part, the transaction achieved those things.
Furthermore, no demand or claim for restitution was made until 5 October 2022 in the form of the Amended Initiating Application. The evidence establishes that the Second Respondent had been paying the whole of the home loan since June 2014, some eight years prior. While not quantified by any party, such a course of payments is likely to have changed the Second Respondent’s position in reliance of the transaction.
The husband lived in the Property rent-free, consistent with his rights pursuant to clause 15(d) of the Agreement until June 2017, during which time the wife and Second Respondent were responsible for the home loan repayments and other outgoings on the Property. These facts constitute consideration for the transaction for a period of three years.
Noting that the grounds refer to “to the first respondent and/or the applicant”, no submission was made about, nor is there a cogent basis for, the Second Respondent’s interest in the Property to be restored to the wife, who already holds a 50 per cent legal interest.
I find that the restitution grounds fail.
Constructive Trust
The husband’s fourth alternative seeks:
In the alternative, a declaration that the second respondent holds his interest in [D Street, Suburb E] on constructive trust for the first respondent and/or applicant.
The husband submits:
The second respondent holds his interest in [D Street, Suburb E] on trust for the first respondent and the applicant.
This must be so in circumstances where the basis for his ownership of [D Street, Suburb E] is vitiated by the order finding the [Agreement] to be non-binding.
In Greater Pacific Investments Pty Ltd v Australian National Industries Ltd (1996) 39 NSWLR 143 at 153 the court said:
“…If A does effectively avoid the transaction and (if necessary) obtain an order for rescission, the parties will be treated in equity as if the transaction had never been effected; in other words equity will treat be as if he had held the property in trust for a that is, as a constructive trustee, ab initio.”
In Paragon Finance plc the DB Thackerar and Co-(a firm) [1999] 1All ER 400 and 408-409 Millet J referred to the 2 categories of constructive trusts, the second one being:
“… those cases where the trust obligation arises as a direct consequence of the unlawful transaction which is impeached by the plaintiff. A constructive trust arises by operation of law whenever the circumstances are such that it would be unconscionable for the owner of property (usually but not necessarily the legal estate) to assert his beneficial interest in the property and deny the beneficial interest of another”.
(italics added)

Greater Pacific Investments Pty Ltd (in liq) v Australian National Industries Ltd (1996) 39 NSWLR 143 is not apposite to this matter. It concerned a contract for the sale of a property by A to B in breach of a fiduciary duty owed by A to B, pursuant to which the legal title passed from A to B. There is no evidence to establish that a fiduciary relationship exists, or has ever existed between any of the parties to these proceedings. The husband’s citation from that decision has been decontextualized. When expressed in full, the proposition is thus:
In general, where there is a contract for the sale of property by A to B made in breach of a fiduciary duty owed to A by B (or by C in whose breach B knowingly participated), pursuant to which the legal title to the property has been transferred from A to B, the transaction is in equity voidable at the instance of A, who may (if necessary) obtain an order for rescission setting it aside. Unless and until A effectively avoids the transaction and (if necessary) obtains an order for rescission, B's property rights as a result of the transaction remain unaffected. However if A does effectively avoid the transaction and (if necessary) obtain an order for rescission, the parties will be treated in equity as if the transaction had never been effected; in other words equity will treat B as if he had held the property in trust for A, that is, as a constructive trustee, ab initio. A constructive trust arises in such circumstances as a consequence of the effective avoidance or rescission of the transaction. Where, for whatever reason, the transaction has not been and cannot be effectively avoided and rescission is unavailable, it remains effective and no constructive trust can arise: see generally Daly y Sydney Stock Exchange Ltd (1986) 160 CLR 371at 386-390, per Brennan J.
(Emphasis added)
The husband relies on the second category of constructive trust described by Lord Justice Millett in Paragon Finance plc v DB Thakerar & Co (a firm) [1999] 1All ER 400 at 408 – 9, wherein his Lordship held:
Regrettably, however, the expressions ‘constructive trust’ and ‘constructive trustee’ have been used by equity lawyers to describe two entirely different situations. The first covers those cases already mentioned, where the defendant, though not expressly appointed as trustee, has assumed the duties of a trustee by a lawful transaction which was independent of and preceded the breach of trust and is not impeached by the plaintiff. The second covers those cases where the trust obligation arises as a direct consequence of the unlawful transaction which is impeached by the plaintiff.
[…]
The second class of case is different. It arises when the defendant is implicated in a fraud. Equity has always given relief against fraud by making any person sufficiently implicated in the fraud accountable in equity. In such a case he is traditionally though I think unfortunately described as a constructive trustee and said to be ‘liable to account as constructive trustee’. Such a person is not in fact a trustee at all, even though he may be liable to account as if he were. He never assumes the position of a trustee, and if he receives the trust property at all it is adversely to the plaintiff by an unlawful transaction which is impugned by the plaintiff. In such a case the expressions ‘constructive trust’ and ‘constructive trustee’ are misleading, for there is no trust and usually no possibility of a proprietary remedy; they are ‘nothing more than a formula for equitable relief ’: Selangor United Rubber Estates Ltd v Cradock (No 3) [1968] 2 All ER 1073 at 1097, [1968] 1 WLR 1555 at 1582 per Ungoed-Thomas J.
As seen, the second category of constructive trust arises in the context of fraud. The first trial judge found that there was no fraud. The husband is estopped from re-litigating that issue.
The promise contained in the Agreement was that the husband would have a right to occupy the Property rent free. The Second Respondent excluded the husband from the Property, thus depriving him of the right of occupation.
Where there is no contractual relationship to ground that right, as there was not, given the Second Respondent was not a party to the Agreement, the more appropriate characterisation is that of a proprietary estoppel giving rise to an equitable charge: Giumelli v Giumelli (1999) 196 CLR 101.
A succinct illustration of the principle was enunciated by Hammerschlag J in Pobjoy v Reynolds [2013] NSWSC 885, the facts of which are:
1. The plaintiff is a 79 year old pensioner. She is the mother of the first defendant…
2. In short, [the plaintiff] says she agreed with the defendants to sell her property at Sundown Village, Narrabundah in the ACT, on the footing that the proceeds would be applied to a new property which the defendants would purchase and which would have a granny flat for her occupation, that she would contribute to the utilities and that the first defendant would care for her. At the time the defendants lived at 2 Hartt Place, Dunlop ACT.
3. The plaintiff moved into 2 Hartt Place with the defendants and duly sold her property at Sundown Village, which yielded $116,119.29 in clear funds. On 13 July 2007 she drew a bank cheque of $80,000 in favour of the first defendant. The money was applied to reduce the defendants' mortgage at 2 Hartt Place on the basis of a statement by the first defendant that this would "reduce the mortgage and secure better terms on a mortgage on the new place with the granny flat".
4. The plaintiff accompanied the defendants to view properties with granny flats and commenced to contribute to utilities. A suitable property with a granny flat could not be found. Instead the defendants purchased the Property and commenced construction of a home on it.
5. After the purchase the plaintiff says she agreed with the first defendant to contribute to the construction of the home and drew two amounts from her account providing additional funds in the amounts of $35,437.80 on 3 May 2011 and $6,000 on 4 July 2011. Her total contribution was thus $121,437.80.
6. The first defendant and later, the second defendant, both moved into the Property. 2 Hartt Place was apparently sold. Relationships deteriorated. The plaintiff fell out with her daughter and the defendants became estranged. Subsequently both have left the Property. It is to be sold pursuant to arrangements reached in Family Court proceedings between them.
7. The plaintiff was denied her expectation of moving into a granny flat at the Property. She subsequently moved out of 2 Hartt Place and found rental accommodation in Bombala, NSW, where she now lives.
The plaintiff sued the defendant. Justice Hammerschlag held at paragraphs 12 to 14:
The type of equity which the plaintiff claims is well recognised. It is a form of proprietary estoppel known as estoppel by encouragement. It comes into existence when an owner of property has encouraged another to alter his or her position in the expectation of obtaining a proprietary interest and that other, in reliance on the expectation created or encouraged, has changed his or her position to their detriment. Equity may compel the owner to give effect to the expectation in whole or in part: see Giumelli v Giumelli (1999) 196 CLR 101, and more recently, Delaforce v Simpson-Cook (2010) 78 NSWLR 483.
The plaintiff was encouraged by the first defendant to contribute to the property on the representation made by, and an expectation created by, the first defendant, that the plaintiff would be entitled to reside there. The first defendant now seeks unconscientiously to depart from the representation and to deny the plaintiff fulfilment of the expectation which she created, and upon which the plaintiff acted to her detriment. In these circumstances, the Court will compel the first defendant to give effect to the expectation.
A constructive trust should not be imposed if, in all the circumstances of the case, there is an appropriate equitable remedy which falls short of the imposition of a trust...
For reasons of his own, the husband sought to set aside the Agreement which contained the right of occupation, rather than enforce it and claim appropriate compensation against both respondents pursuant to s 90KA of the Act. He cannot be now heard to say that the contractual right he sought to strike down, being that of rent-free occupation, should be converted into a beneficial interest akin to ownership.
Again, noting that the grounds refer to “to the first respondent and/or the applicant”, no submission was made about, nor is there a cogent basis for, the Second Respondent’s interest in the Property to be beneficially restored to the wife, who already holds a 50 per cent legal interest in the land.
I find that the constructive trust ground fails.
Section 106B
The husband’s fifth alternative seeks:
In the alternative, pursuant to s 106B of the Family Law Act, the transfer with dealing number AI 9997306 from the applicant and the first respondent to the first respondent at [sic] the second respondent shall be set aside.
Section 106B of the Act provides:
(1) In proceedings under this Act, the court may set aside or restrain the making of an instrument or making of a disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.
[…]
(2) The court may order that any money or real or personal property dealt with by any instrument or disposition referred to in subsection (1) […] may be taken in execution or charged with the payment of such sums for costs or maintenance as the court directs, or that the proceeds of sale must be paid into court to abide its order.
(3) The court must have regard to the interests of, and shall make any order proper for the protection of, a bona fide purchaser or other interested person.
(4) A party or a person acting in collusion with a party may be ordered to pay the costs of any other party or of a bona fide purchaser or other person interested of and incidental to any such instrument or disposition and the setting aside or restraining of the instrument or disposition.
The legal representative for the husband submits:
It has been found that section 106B (or its predecessor section 85) contemplates 2 possibilities-an intention to defeat an order or alternatively the likelihood of defeating an order irrespective of intention. (Halabi v Artillaga (1994) FLC 92-470 at 80, 884) In that case Nicholson CJ found that “if the necessary intention has been demonstrated there is nothing in the section which imposes the further requirement that an instrument is likely defeat such an order.”
The transfer to the second respondent was done with the intention of defeating an order in that it was done in compliance with the [Agreement], the intention of which was explicitly to defeat any order under the Act (although the [Agreement] ultimately failed to do so). See paragraph 17C of the [Agreement].
Clause 17C of the Agreement provides:
Unless otherwise specified in this agreement:
[…]
C. This agreement is a financial agreement for the purpose of Section 90C of the Family Law Act 1975 and shall operate in substitution for all the rights of either party to claim maintenance and or adjustive property orders under Part VIIIA or Part VIIIAB of the said Act and the parties accept the benefits conferred upon them by this Agreement in full and final discharge and satisfaction of all and any existing rights for each of them respectively and of all any rights which but for these presents might hereinafter be in each of them respectively to make any claim or demand or to bring any action or suit for or to recover or to receive any monies, damages or other property or benefits whatsoever from the other of any nature whatsoever. And the parties further agree to accept such benefits so conferred upon each of them respectively in lieu of any rights and hereinafter the parties shall restrain from seeking any order against each other in law or in equity and in the event that either party should hereinafter make or bring any claim, demand, action or suit contrary to the provisions hereof against the other then this agreement may be pleaded as an absolute bar thereto.
If I have understood this ground correctly, the claim that is said to be defeated must be the husband’s claim to a half interest in the Property. I do not accept this analysis.
Firstly, the Agreement did not operate to defeat a claim under the Act. It substituted the parties’ rights to make a claim for adjustive property and other financial orders under Part VIII of the Act for the rights contained in the Agreement.
Secondly, s 106B of the Act applies to an existing or anticipated order under the Act. At the time the Agreement was entered, there was no existing order. Nor could it be said that the parties anticipated an order because the intention of the Agreement was to obviate any need of proceedings under the Act which would give rise to an order. This is enunciated by Preliminary Clause 1 and Recital 15:
1. In order to arrange their property affairs, the parties have agreed to enter into this agreement under the provisions of Section 90C of the Family Law Act 1975 to deal with the division of their property, financial resources, and maintenance under Section 90 of the Act.
[…]
15. There being no prospect of reconciliation, the parties now desire to amicably settle and divide their property to avoid any expenses, delay and bitterness arising from litigation in relation to the division of their property, financial resources and maintenance under Section 90E of the Act.
Thirdly, the proposition that the Agreement defeated an anticipated claim in proceedings under the Act is misconceived given that:
(a)In the case of the wife, her interest in the Property remained unchanged save for the different identity of the co-owner; and
(b)In the case of the husband, the transfer of his interest to the wife could scarcely be said to be a transaction to defeat his claim given he was the person who undertook the transaction and is now the person complaining about it.
I find that the s 106B ground fails.
Conclusion as to the Second Respondent’s share of the Property
In the foregoing, I find that the Second Respondent’s interest in the Property and its associated liability are to be excluded from the pool of assets for division.
Value of wife’s interest in the Property
For the Reasons given at paragraph 23 above, I will apply the wife’s realisable interest in the Property on the balance sheet in the sum of $187,500.
Husband’s cash and superannuation
The husband has adduced business records to establish his cash holdings are $24,683 and his superannuation is $66,859. These will be included on the Balance Sheet.
Motor vehicles
The parties agree that their respective vehicle should be excluded from the Balance Sheet.
Balance Sheet
In light of the foregoing, I find that the assets, liabilities and financial resources of the parties are:

Owner Item Value

Wife 50 per cent realisable interest in the Property $187,500

Husband Cash at bank $24,683

Husband Super Fund 1 $66,859

Property for division $279,042
Contributions to the Property as at and since August 2014

There is no issue that contributions to the Property were equal as at August 2014.
There is no evidence from the wife or Second Respondent as to who paid the home loan and outgoings on the Property since August 2014. That said, the wife was not living at the Property and was renting her accommodation in City F while experiencing problem gambling which consumed her income. I find it is less probable that the wife contributed her income to the home loan in those circumstances and more probable that the Second Respondent paid the home loan.
There is no evidence of any party making non-financial contributions to the wife’s interest in the Property since 2014.
In the circumstances and taking a broad brush approach, I find that the financial and non-financial contributions to the wife’s interest in the Property are equal as between the husband and wife.
Cash and superannuation since 2014 and non-disclosure
Since August 2014, the husband has accumulated a further ~$20,000 in savings and a further ~$58,000 in superannuation. These are sums to which the wife has made no contribution and about which she seeks no adjustment on either a contributions or future needs basis.
In the same period, the wife has dissipated her superannuation and not accumulated any savings. She asserts that she expended her superannuation on living expenses during COVID-19 but provides no probative evidence. To the extent the wife adduces any evidence of her expenditure, it is principally in the form of gambling.
As at August 2014, the home loan stood at $321,500. It currently stands at $275,000. This reflects a reduction in debt of $46,000 over eight years, or an average of $5,750 per annum, or $479 per month. Having regard to the home loan statement for the period of March 2022 to September 2022, being the only statement that has been adduced, monthly transfers were made into the loan account from the redraw facility (account ending …96) of $1,519 in March to July 2022 and then $1,653 since August 2022. These are principal and interest sums, given the interest charged for the month is less than the sum that is credited to the loan.
The husband submits that “the court need be ‘unduly cautious’ as to the treatment of the superannuation and post separation savings of the applicant which have been fully and frankly disclosed” and “ought not take the savings accounts of superannuation of the applicant into account in the asset pool for ultimate division”. This submission is based on the contention that the wife and Second Respondent have failed to make proper disclosure: Weir & Weir (1993) FLC 92 – 338 (“Weir & Weir”).
I do not accept that the husband’s superannuation and savings “ought not be taken into account” as to do so would offend against s 79(4)(a) of the Act which directs that the Court “shall take into account” the property of the parties or “either of them”. In any event, those assets are included on the agreed Balance Sheet (Exhibit 2).
The next issue is how the husband’s superannuation and savings are to be treated. While I accept the husband’s submission that I need not be unduly cautious, the “not undue caution” relates to the wife’s position, not that of the husband. That said, the effect of the husband’s submission as to the application of Weir & Weir was plain enough. The evidence establishes that the first time the wife filed a Financial Statement was on 5 December 2022, despite an order of the first trial judge to do so by 7 July 2021. This deprived the husband of any real opportunity to investigate the matters contained in it. The first time that the wife disclosed that she had accessed her superannuation was through an affidavit filed on 20 December 2022, being the day before the final hearing. Again, the husband was deprived of an opportunity to make enquiries about this. The wife’s Financial Statement and both of her affidavits were “translated” to her by the Second Respondent, who has a pecuniary interest in the proceedings and no qualifications to do so. Part M of her Financial Statement, as to the disposal of property, is blank, despite the withdrawal of superannuation as to further infect the reliability of that document. In the circumstances, no adjustment should be made with respect to the husband’s savings and superannuation.
Homemaker contributions since August 2014
The husband deposes to some homemaker contributions between mid-2014 and April 2017. That said, he was also obtaining the benefit of occupation promised under the Agreement without the burden of the home loan.
Future needs

The husband seeks no adjustment pursuant to s 75(2) of the Act. The wife contends that she requires a roof over her head and says that to dispossess her of her home, some eight years after the husband stopped making payments towards the mortgage, would be unjust and inequitable.
As to age and health, the husband is 60 years of age. The wife is 59 years of age. Both are in relatively good health. This factor favours neither spouse party.
As to income and the capacity to appropriate gainful employment, the husband is employed full time as a factory worker for a manufacturing business and earns about $810 per week gross. The wife is unemployed but adduces no evidence of any attempts by her to appropriate gainful employment. This factor favours neither spouse party.
As to real property, third party financial resources, standard of living and financial circumstances of cohabitation:
(a)Part F of the wife’s Financial Statement records that her two adult sons, with whom she lives at the Property, pay the home loan, rates, water rates, groceries, energy bills and household supply costs on her behalf to the extent of $1,000 per week. The wife deposes to her intention to remain living at the property into the future; whereas
(b)The husband lives at a Location N. Although he does not pay rent, he undertakes personal service for the premises. There is no evidence that he has any right of occupation at the premises.
The husband, by seeking no adjustment for future needs makes a concession against interest which I will not disturb.
I do not accept the wife’s submission about having a roof over her head. It mistakes liquidity for entitlement and fails to notice that she has a significant financial resource in her two sons.
CONCLUSION
I make the Orders as set out herein.

I certify that the preceding one hundred and fifty-one (151) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Eldershaw.
Associate:
Dated: 23 January 2023

File number(s):	SYC 14 of 2018
Judgment of:	JUDGE ELDERSHAW
Date of judgment:	23 January 2023
Catchwords:	FAMILY LAW – PROPERTY – FINAL ORDERS – Where the husband seeks various equitable and common law relief – Where the respondents seek that the husband’s application be dismissed – Where the husband and wife entered a financial agreement – Where the second respondent was not a party to the financial agreement – Where the husband divested himself of his interest in the property – Where the financial agreement was declared not binding – Where a global approach is taken – Where the second respondent’s interest in the property be excluded from the assets for division – Where the grounds of equitable and common law relief sort by the husband fail – Where it is found the financial and non-financial contributions to the wife’s interest in the property are equal as between the husband and wife – Where the wife shall pay a specified sum to the husband – Where each party shall retain all right, title and interest in all property or claim in their name of standing to their benefit.
Legislation:	Family Law Act 1975 (Cth) ss 71A, 75(2)(o), 79, 90G, 90K, 90KA, 106B
Cases cited:	Adair & Adair [2019] FamCAFC 70 Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (1988) 164 CLR 662; [1988] HCA 17 Clauson & Clauson (1995) FLC 92 – 595; [1995] FamCA 10 Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 Greater Pacific Investments Pty Ltd (in liq) v Australian National Industries Ltd (1996) 39 NSWLR 143 Horrigan & Jennings (2018) FLC 93 – 868; [2018] FamCAFC 206 Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17 Paragon Finance plc v DB Thakerar & Co (a firm) [1999] 1All ER 400 Perrin & Perrin (No 2) [2018] FamCAFC 122 Pobjoy v Reynolds [2013] NSWSC 885 Simons & Simons [2020] FamCAFC 128 Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52 Weir & Weir (1993) FLC 92 – 338; [1992] FamCA 69.
Division:	Division 2 Family Law
Number of paragraphs:	151
Date of hearing:	21 December 2022
Place:	Sydney
Solicitor for the Applicant:	Mr Brown, Browns the Family Lawyers
Solicitor for the Respondents:	Mr McGirr, McGirr Lawyers

SYC 14 of 2018
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	MR NITAYA Applicant
AND:	MS PARAMAT First Respondent MR SANGSORN Second Respondent

order made by:	JUDGE ELDERSHAW
DATE OF ORDER:	23 January 2023

Exhibit 1	Agreed Chronology and Statement of Agreed and Disputed Facts
Exhibit 2	Joint Balance Sheet (noting that the Respondents’ assertion of the value of the Property is its value simpliciter, without prejudice to their case that the Second Respondent’s share should not form part of the assets for division in these proceedings)
Exhibit 3	Applicant’s Case Outline document filed 9 December 2022
Exhibit 4	Respondents’ Case Outline document filed 16 December 2022
Exhibit 5	Orders and Reasons for Judgment of the first trial judge
Exhibit 6	Applicant’s Tender Bundle
Exhibit 7	Respondent’s Tender Bundle
Exhibit 8	Applicant’s written submissions

Owner	Item	Value
Wife	50 per cent realisable interest in the Property	$187,500
Husband	Cash at bank	$24,683
Husband	Super Fund 1	$66,859
Property for division	$279,042