Pearce & Pearce (No 3)

Case [2022] FedCFamC1F 418

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Pearce & Pearce (No 3) [2022] FedCFamC1F 418

File number(s): SYC 2654 of 2017
Judgment of: CAMPTON J
Date of judgment: 10 June 2022
Catchwords: FAMILY LAW – PROPERTY – Discrete issues – Where the intervener, being the husband’s mother, asserts she advanced funds to the husband and wife by way of loan – Where determination of this discrete issue is necessary to ascertain the pool available for distribution between the husband and wife – Where the wife contends the advanced sums were a gift to the husband and wife’s children or alternatively were held by the intervener on trust for the husband and wife’s children – Where the intervener advanced funds to the husband and wife on the husband’s assurance that the funds would be repaid – Finding that funds advanced by way of loan – Where the agreement reached between the husband and the intervener did not provide for security – Where it would be unconscionable to permit the husband and wife to depart from that promise and retain the benefit of the intervener’s advance.  
Legislation:

Evidence Act 1995 (Cth) s 136

Family Law Act 1975 (Cth) ss 79, 106B

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 10.10

Cases cited:

Ashton v Pratt (No 2) [2012] NSWSC 3

Chaudhary v Chaudhary [2017] NSWCA 222

Darmanin v Cowan [2010] NSWSC 1118

Gray v O’Donnell [2009] NSWSC 259

Heydon v The Perpetual Executors Trustees and Agency Co WA Limited (1930) 45 CLR 111; [1930] HCA 26

Pearce & Pearce [2022] FedCFamC1F 170,

Pearce & Pearce (No 2) [2022] FedCFamC1F 193

Picwoods Pty Ltd v Panagopoulus [2004] NSWSC 978
Division: Division 1 First Instance
Number of paragraphs: 197
Date of hearing: 7 – 9; 22 March 2022
Place: Sydney
Counsel for the Applicant: Mr Scarlett
Solicitor for the Applicant: Hudson Law Pty Ltd
Counsel for the Respondent: Mr Roberts
Solicitor for the Respondent: Barkus Doolan
Counsel for the Intervener: Mr Stapleton
Solicitor for the Intervener: Watts McCray

ORDERS

SYC 2654 of 2017

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR PEARCE

Applicant
AND:

MS PEARCE

Respondent

MS R PEARCE

Intervener

ORDER MADE BY:

CAMPTON J

DATE OF ORDER:

10 JUNE 2022

THE COURT ORDERS THAT:

1.Within seven days of the date of this Order the husband and the wife do all things as are necessary to pay to the intervener or as she may direct in writing the sum of $751,244.90 from the NAB account of the husband and the wife ending #...82.

2.The costs of all parties of and incidental to the Response to Initiating Application filed by the intervener on 13 March 2019 be reserved.

3.The proceedings be listed for case management and directions by Microsoft Teams at 9.30 am on 10 August 2022.

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…

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AGLC
Pearce & Pearce (No 3) [2022] FedCFamC1F 418
Case
[2022] FedCFamC1F 418
Decision Date

CaseChat Overview and Summary

The case of Pearce & Pearce (No 3) involved a dispute between the husband, wife, and the intervener, the husband’s mother. The intervener claimed that she had advanced funds to the husband and wife by way of a loan, and sought to recover the sum of $751,244.90. The wife contended that the sums were a gift to the husband and wife’s children or were held by the intervener on trust for the children. The matter came before the Federal Circuit and Family Court of Australia.

The court was required to determine whether the funds advanced by the intervener were a loan or a gift, and whether it would be unconscionable to permit the husband and wife to retain the benefit of the advance. The court considered the evidence and the circumstances of the case, including the agreement between the husband and the intervener that the funds would be repaid.

The court found that the funds were advanced by way of a loan, as the intervener had advanced the money on the husband’s assurance that it would be repaid. The agreement between the husband and the intervener did not provide for security, and it would be unconscionable to permit the husband and wife to depart from that promise and retain the benefit of the intervener’s advance. The court ordered that the husband and wife pay the intervener the sum of $751,244.90 from the NAB accounts holding the proceeds of sale of the Q & T properties.

The court also noted that the intervener had been delayed in prosecuting her claim, and reserved the costs of all parties of the intervener’s Response to an Initiating Application filed on 13 March 2019. The court listed the matter for case management and directions.

Orders

Orders of the court

SYC 2654 of 2017

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:

MR PEARCE

Applicant

AND:

MS PEARCE

Respondent

MS R PEARCE

Intervener

ORDER MADE BY:

CAMPTON J

DATE OF ORDER:

10 JUNE 2022

THE COURT ORDERS THAT:

1. Within seven days of the date of this Order the husband and the wife do all things as are necessary to pay to the intervener or as she may direct in writing the sum of $751,244.90 from the NAB account of the husband and the wife ending #...82.

2. The costs of all parties of and incidental to the Response to Initiating Application filed by the intervener on 13 March 2019 be reserved.

3. The proceedings be listed for case management and directions by Microsoft Teams at 9.30 am on 10 August 2022.

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.

Background

Background to the litigation

For the reasons that follow, orders will be made that the husband and the wife pay to the intervener or as she may direct the sum of $751,244.90 from the NAB accounts holding the proceeds of sale of the Q & T properties. No orders will be made as to recovery of the second advance; the intervener shall elect the role she proposes to pursue as to that claim in the substantive s 79 hearing, including whether she continues as a party to these proceedings. I will reserve the costs of all parties of the intervener’s Response to an Initiating Application filed on 13 March 2019. BACKGROUND The intervener was born in 1946. She is presently aged 75. The husband was born in 1975. The wife was born in 1975. They are both aged 47. The husband and wife commenced living together in April 2009. They married in the United Kingdom in 2010. They have two children together, being:(a)X, who was born in 2010 and is currently aged 11; and(b)Y, who was born in 2013 and is currently aged 8. The husband has a child from a prior relationship, Z, born in 2005, currently aged 17. He lives with his mother in the UK. For the purpose of this judgement, I shall refer to Z, X and Y collectively as (“the children”). The husband has a further child from more recent relationship, W, born in 2019, currently aged two. He lives with his mother, Ms D, in Sydney. The husband’s relationship with Ms D broke down in October 2019. In August 2020 the husband married Ms AA. He and Ms AA are now separated. The husband, the wife and X migrated from the United Kingdom to Australia in 2013, shortly prior to Y’s birth. The husband and wife separated on 11 December 2016. An Order for divorce was made in 2018 and became absolute. On 4 May 2017 the husband filed an Initiating Application in this Court seeking orders as to parenting and property adjustment. The wife filed a Response to an Initiating Application on 16 June 2017. On 28 February 2019 an order was made granting intervener leave to intervene in the proceedings. The intervener filed a Response to an Initiating Application on 13 March 2019. Judgments had been delivered in the matter by Ryan J on 17 April 2019 and 29 November 2019. Those judgments record that from at least late 2019, the intervener was in a position to prosecute her relief by way of her Response filed on 13 March 2019. Final consent parenting orders as to X and Y were made on 28 November 2019. They provide for the X and Y to live with the wife and spend alternate weekends and half of each school holiday with the husband. The matter first came before me for trial management on 2 November 2021. Trial directions were made on that day so that s 79 relief sought by each of the husband and the wife together with the claim of the intervener would proceed for final determination over four days commencing on 7 March 2022. The matter came before me again for trial management on 11 February 2022. On that date each of the husband and wife informed me that the single forensic accounting expert evidence would not be ready in time for the anticipated trial dates. Directions were made facilitating the progression of that evidence relevant to the s 79 dispute. In circumstances where the intervener had been delayed for more than two years in prosecuting the discrete relief contained in her Response, that part of the proceedings was listed for hearing commencing on 7 March 2022 as recorded earlier in these reasons.

Evidence

Evidence Before The Court

On the morning of the first day of the hearing an oral application of the intervener for leave to amend her relief was refused. These reasons for judgment assume familiarity with the ex tempore judgment delivered on that date being Pearce & Pearce (No 2) [2022] FedCFamC1F 193.EVIDENCE The intervener relies on the following documents:(a)Response to Initiating Application, filed on 13 March 2019; (b)Her affidavits, filed on 24 April 2019 (“the April 2019 affidavit”) and 3 December 2019 (“the December 2019 affidavit”); (c)A Case Outline, filed on 28 February 2022 and marked as Exhibit “I1”; and(d)A statement of contended findings of fact and legal conclusions, dated 16 March 2022 (“the intervener’s statement of contentions”). The husband relies on the following documents:(a)His affidavit, filed on 3 February 2022; (b)His Financial Statement, filed on 3 February 2022; (c)A Case Outline, filed on 4 March 2022 and marked as Exhibit “H1”; and (d)A statement of contended findings of fact and legal conclusions, dated 16 March 2022 (“the husband’s statement of contentions”). The wife relies on the following documents:(a)Second Amended Response to Initiating Application, filed on 23 December 2021; (b)Her affidavit, filed on 21 February 2022; (c)Her Financial Statement, filed on 21 February 2022; (d)A Case Outline, filed on 4 March 2022 marked as Exhibit W1; and (e)A statement of contended findings of fact and legal conclusions, dated 16 March 2022 (“the wife’s statement of contentions”). A direction was made at the commencement of the trial pursuant to s 136 of the Evidence Act 1995 (Cth) such that no documents in the tender bundles of each party or exhibits to any affidavit would constitute evidence of any fact adverse to the case of the other, unless that document and the proposition of fact to be proved or inferred from the document had been put to the other party or relevant witness in cross-examination. On the first day of the trial, the husband made an oral application to rely on two affidavits filed in the proceedings on 22 May 2019 and 3 December 2019. For reasons given in the ex tempore judgment, Pearce & Pearce [2022] FedCFamC1F 170, his application was refused. THE AGREED FACTS On 8 March 2022, being the second day of the trial, the parties provided a “Statement of Agreed Facts” which was marked as Court Exhibit 1. It recorded the agreed facts in this case as follows:1.On 14 June 2014, the husband exchanged contracts to purchase S Street, Suburb P for $400,000.2.On 28 June 2014, the parties exchanged contracts to purchase T Street, Suburb P for $992,000.3.On 6 August 2014, the intervener deposited $751,244.90 into the Commonwealth Bank account number …19 in the name of the husband.4.On 7 August 2014, a cheque in the sum of $897,215.58 was withdrawn from the said bank account. This represents the payment of the balance of the purchase price of T Street, Suburb P.5.The purchase of T Street, Suburb P settled on 8 August 2014. (As it was recorded)HISTORY AND FINDINGS

Decision

Reasons for decision

The rights of the intervener to recover the second advance as a creditor of the husband will form part of the substantive s 79 determination. The Court will determine in that hearing any priority as between the repayment of the loan to the intervener and the wife’s s 79 entitlements. It is the husband’s case in that future trial that his adjusted s 79 entitlement will be applied in satisfaction of the second advance in favour of the intervener. CONCLUSION For all of the above reasons, I make orders as set out in the forefront of this judgment.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.