Peterson & Davis (No 3) - [2022] FedCFamC1F 650

Federal Circuit and Family Court of Australia
(DIVISION 1)
Peterson & Davis (No 3) [2022] FedCFamC1F 650

File number(s): PAC 1208 of 2016

Judgment of: CAMPTON J

Date of judgment: 31 August 2022

Catchwords: FAMILY LAW – PROPERTY – TRUSTS – Part VIIIAB property adjustment proceedings – Jurisdiction and s 90RD of the Family Law Act 1975 (Cth) considerations – Leave to commence out of time required – Where the applicant was a discharged bankrupt at the time of commencing proceedings in this Court, and named the trustee in bankruptcy as a respondent to her Initiating Application – Where the respondent’s parents joined to the proceedings assert an interest in two real properties held by the applicant and respondent during their relationship – Where the interests of the applicant in those real properties vested in the trustee in bankruptcy – Where the respondent’s parents seek a finding of an express bare oral trust or the imposition by equity of a constructive trust – Existence of express and constructive trusts – Examination of facts concerning whether intention to create a trust existed – Where the fourth respondent did not give evidence in her case – Inferences drawn arising from failure to give evidence – Intention to create a trust not established – Consideration of maxims of equity concerning unconscionability – Evidence insufficient to establish that it would be unconscionable for the trustee and respondent to retain their interests in the real properties – Unclean hands – Circumstances in which equitable relief (if established) would have been denied because of unclean hands – Remedy by way of equitable charge – Adjustment of property interests pursuant to s 90SM of the Family Law Act 1975 (Cth) – Sale of real properties.

Legislation:
Bankruptcy Act 1966 (Cth) ss 58, 73, 74, 77A, 109, 116, 115, 153, 153A, 153B

Conveyancing Act 1919 (NSW) ss 23C, 23D, 66G

Crimes (Administration of Sentences) Act 1999 (NSW) s 77

Family Law Act 1975 (Cth) Pt VIIIAB, ss 44, 117B, 90RD, 90SF, 90SK, 90SM

Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2009 (Cth), Item 86A

Federal Court Act 1976 (Cth) s 51A

Real Property Act 1900 (NSW) s 42

Federal Circuit and. Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6, Pt 7.2, 13.01, 13.02, rr 7.34, 6.06, 7.36, 12.06

Cases cited:
Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16

Barry v Heider (1914) 19 CLR 197; [1914] HCA 79

Black Uhlans Inc v NSW Crime Commission (2002) NSWSC 1060

Briginshaw v Briginshaw (1938) 69 CLR 336; [1938] ALR 334

Carantinos v Magafas [2008] NSWCA304

Commissioner of Stamp Duties (QLD) v Jolliffe (1920) 28 CLR 178; [1990] HCA 45

Corin v Patton (1990) 169 CLR 540; [1990] HCA 12

Trustees of the Property of Cummins (A Bankrupt) v Cummins (2006) 227 CLR 278; [2006] HCA 6

Currie v Hamilton (1984) 1 NSWLR 687

Gascoigne v Gascoigne [1918] 1 K.B. 223

Hohol v Hohol (1980) FLC 90-824; [1981] VR 221

Horrigan & Horrigan [2020] FamCAFC 2

Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 9

Kation Pty Ltd v Lamru Pty Ltd (2009) 257 ALR 336; [2009] NSWCA 145

Kessey v Kessey (1994) FLC 92-495; [1994] FamCA 162

Kettles and Gas Appliances Ltd v Anthony Hordern and Sons Ltd (1934) 35 SR (NSW) 108

Khalif & Khalif & Anor [2020] FamCA 39

Khalif & Khalif [2021] FamCAFC 123

Mallett & Mallett (1984) 156 CLR 605; [1984] HCA 21

MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3

Micheletto (Trustee), El-Debel (Bankrupt) v El-Debel [2020] FCA 1031

Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78

Peterson & Davis [2022] FedCFamC1F 402

Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457; [1981] HCA 7

Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23

Rochefoucauld v Boustead [1897] 1 Ch 196

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

Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17

Stephens & Stephens & Anor (Enforcement) (2009) FLC 93-425 [2009] FamCAFC 240

Walsh Bay Developments Pty Ltd v Federal Commissioner of Taxation (1995) 130 ALR 415; [1994] Federal Court of Australia 703

Warner v Hung; Bellpac Pty Ltd (rec’s and mgrs apptd) (in liq) (2011) 297 ALR 56; [2011] Federal Court of Australia 1123

Watson v Foxman (1995) 49 NSWLR 315

Weige v Cupton Pty Ltd [2012] NSWCA 414

Weir & Weir (1992) FLC 92-338; [1992] FamCA 69

Division: Division 1 First Instance

Number of paragraphs: 486

Date of hearing: 30 May – 3 June 2022

Place: Sydney

Counsel for the Applicant: Mr George

Solicitor for the Applicant: Williamson & Learmonth Solicitors

Counsel for the Respondent: Mr Schonell

Solicitor for the Respondent: Adams & Partners

Counsel for the Second Respondent Trustee: Mr Marshall SC with Mr Eardley

Solicitor for the Second Respondent Trustee: Mercantile Legal Services

Counsel for the Third and Fourth Respondents: Mr Cook SC

Solicitor for the Third and Fourth Respondents: McEvoy Legal
ORDERS

PAC 1208 of 2016

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MS PETERSON

applicant

AND:
MR DAVIS

First respondent

MR CUSSON

Second respondent

MR B DAVIS (and another named in the Schedule)

Third respondent

order made by:

CAMPTON J

DATE OF ORDER:

31 August 2022

THE COURT ORDERS THAT:
1.Pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) it is declared that a de facto relationship commenced between the applicant and respondent in March 1999 and terminated on 15 March 2010.
2.The orders sought by the third and fourth respondents in paragraphs 1, 2, 3, 4, 7, 8 and 9 of their Further Response to an Amended Initiating Application filed 6 May 2022 and as sought by the respondent in paragraphs 1, 2, 3, 4, 8, 9 and 10 of Exhibit 4 are refused and such relief is dismissed.
3.It is declared that the land comprised in folio identifier … known as 1 N Street, D Town (“1 N Street”) and … known as 2 N Street D Town NSW (“2 N Street”) (collectively, “the D Town properties”) are subject to an equitable charge in favour of the third and fourth respondents to the value of the sum of all mortgage instalments, land and water rates, land tax, and maintenance costs as paid by the third and fourth respondents for the period 14 November 2008 to the date of these orders less the sum of rent from the D Town properties received by the third and fourth respondents for the said period, the value of such charge as agreed or assessed pursuant to Order 5.
4.The value of the sum due annually of the amount paid by the third and fourth respondents by way of any mortgage payments in respect of the D Town properties, less the sum of rent they received from 14 November 2009 to the date of these orders shall attract interest at a rate of four per cent above the cash rate published by the Reserve Bank of Australia for each such annual period. The annualised value of that interest shall be included in the charge in their favour upon each of the D Town properties.

Assessment of the value of the equitable charge
5.Failing agreement in writing as between the respondent, the second respondent (“the trustee”) and the third and fourth respondents as to the value of the equitable charge upon the D Town properties pursuant to Orders 3 and 4 within 21 days of the date of these orders, the respondent, second respondent and the third and fourth respondents are to do all things as are necessary to cause the value of the said charge to be determined by an assessor appointed pursuant to r 7.34 of the Federal Circuit and Family Court of Australia(Family Law) Rules 2021 (Cth) (“the Rules”) on the basis that:
(a)The costs of such assessor are to be paid in the first instance in the following proportion and manner:
(i)25 per cent by each of the respondent and second respondent; and
(ii)The balance of 50 per cent by the third and fourth respondents;

as and when such costs are claimed by the assessor and due.
(b)Each party shall have liberty to apply within 28 days after the issue of the determination of the assessor to seek such further contribution to the costs of the assessor to be payable by the other party(s) as are considered just pursuant to s 117 of the Act.
(c)For the purposes of the appointment of the assessor pursuant to this Order:
(i)The respondent, the trustee and third and fourth respondents are to confer and agree, if possible, as to the identity of the assessor and as to the instructions to be provided to the assessor (which must include a copy of these orders and reasons) by way of the procedures provided for in the Rules; and
(ii)In the event they are unable to agree to the identity and/or instructions to be provided to the assessor within 42 days of the date of these orders, each of the said respondent, the trustee and third and fourth respondents have liberty to file an Application in a Proceeding (and affidavit in support thereof) seeking orders to facilitate the appointment of the assessor and implementation of this order;
(iii)In the event such Application in a Proceeding is filed pursuant to this order, the party so filing has liberty to seek a listing of the Application in a Proceeding by email correspondence (copied to the other parties) to the chambers of Campton J for the purposes of any determination as sought by way of the said Application in a Proceeding.

Suburb B proceeds of sale
6.The respondent and the trustee shall do all acts and things as are necessary within 28 days from the date of these orders to cause the balance of the proceeds of sale of the property known as C Street Suburb B, NSW (“the Suburb B proceeds”) to be applied as to:
(a)50 per cent to the second respondent;
(b)7.5 per cent to the applicant; and
(c)42.5 per cent to the respondent.

Sale of the D Town properties
7.That the third and fourth respondents do all things as are necessary to deliver up vacant possession of the D Town properties to the trustee within 28 days of this order.
8.Within 28 days from the date of these orders the respondent and the trustee shall do all such things and sign all such documents as may be necessary to list for sale and sell D Town properties on the following terms:
(a)That each property be listed for sale by private treaty with a Real Estate Agent as agreed between the respondent and the trustee in writing within 28 days of the date of these orders and in the event there is no such agreement, the identity of the Real Estate Agent shall be determined by the CEO of the Real Estate Institute of NSW; and
(b)The listing price of each property shall be determined by the single real property expert, Mr E of H Real Estate; and
(c)The sale price of each property shall be as agreed as between the respondent and the trustee in writing and in the event there is no agreement as to the sale price within three days of the making of any offer to purchase each respective properties, the sale price shall be determined by the single real property expert, Mr E of H Real Estate; and
(d)The solicitor or conveyancer to act on the sale of each of the D Town properties shall be nominated by the trustee in writing, and the respondent shall do all things to provide proper and timely instructions to the solicitor or conveyancer for the purposes of the sales, and in the event the respondent refuses or neglects to provide such proper and timely instructions, the trustee shall provide instructions on behalf of the respondent to the said solicitor or conveyancer.

9.In the event that either or both D Town properties are not sold within three months of the listing of the properties in accordance with Order 8 above, then the respondent and the trustee shall do all things as are necessary to procure a sale by public auction of both or either unsold property on the following terms:
(a)The auctioneer shall be agreed as between the respondent and the trustee in writing and if there is no agreement, the auctioneer shall be nominated by the CEO of the Real Estate Institute of NSW; and
(b)The reserve price to apply to the auction shall be fixed as agreed between the respondent and the trustee in writing, and failing such agreement, within four weeks of the appointment of the auctioneer, the reserve price shall be determined by the single real property expert, Mr E of H Real Estate.
(c)The action shall take place within five weeks from the date of the appointment of the auctioneer in accordance with this order; and
(d)In the event that the either or both of the D Town properties are not sold by auction or by private treaty negotiation 21 days after the auction, the respondent and the trustee shall do all necessary things and sign all necessary documents to procure a second auction within five weeks of that date otherwise upon the same terms and conditions as applied in the first auction.

10.Upon completion of the sale of each of the D Town properties the respondent and the trustee shall do all necessary things as are necessary to cause the proceeds of sale to be applied in the following priority:
(a)In payment of an amount sufficient to discharge any mortgage secured upon the said sold property;
(b)In payment of an amount sufficient to discharge the equitable charge upon the properties in favour of the third and fourth respondents in accordance with Order 3 above;
(c)In payment of outstanding legal costs and disbursements, real estate agents’ commission and other (including auction) expenses incurred on the sale, and any adjustments for council and water rates, land tax and any other outgoing secured upon the property;
(d)In payment of any fees incurred in the nomination of the real estate agent (or real property valuer, if any) pursuant to these orders together with valuation fees (if any), and in the event either the respondent or the trustee has paid the other’s share of such nomination fees or valuation fees (if any), or any real estate agent fees for the marketing of the property for sale or auction, that one half of fees paid for the other be reimbursed to the payer;
(e)In reimbursement to the trustee for any monies reasonably expended on the written advice of the listing agent on the properties in preparation of the properties for sale;
(f)In payment of any capital gains tax incurred by any party on the disposal of the properties;
(g)In payment of the balance then remaining as to:
(i)50 per cent to the trustee;
(ii)7.5 per cent to the applicant; and
(iii)42.5 per cent to the respondent.

Remaining property
11.The respondent shall forthwith, and in any event within seven days, do all such things and sign any documents necessary so as to transfer to the applicant all his right, entitlement and interest in the J Bank Account number …47.
12.In the event any party fails or neglects to execute any document so as to give validity and effect to these orders, a Judicial Registrar of this Court is empowered pursuant to s 106A of the Act to execute such document on behalf of the party in default upon being satisfied of such failure and neglect by way of affidavit evidence, and the party in default shall pay the reasonable costs of the party making application pursuant to this order as assessed by a judicial registrar on a solicitor client basis.
13.Each of the applicant and respondent otherwise be declared to hold to the exclusion of the other all cash at bank, items of furniture and personalty, motor vehicles and superannuation entitlements in their respective possession or control as at the date of these orders.

Costs and finalisation of proceedings
14.The costs of each party are reserved for 28 days from the date of these orders.
15.Save and except for as determined by these orders, any and all outstanding applications are dismissed.

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 the pseudonym Peterson & Davis has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CAMPTON J:
Introduction

Ms Peterson (“the applicant”) filed in what was then the Federal Circuit Court on 17 March 2016 an Initiating Application seeking orders for property settlement subsequent to the termination of a de facto relationship between herself and Mr Davis (“the respondent”).
The applicant and respondent agree that their de facto relationship commenced in 1999. They did not marry. There are three children of their relationship, namely:
(a)X born in 2001, now aged 21 (“Mr X”);
(b)Y born in 2004, now aged 18 (“Mr Y”); and
(c)Z born in 2006, now approaching 16 (“Z”), (collectively, “the children”).
The respondent’s case throughout the six year course of these proceedings was that he and the applicant separated in 2006 and thereafter each continued to reside at their home at C Street, Suburb B (“the Suburb B property”). The applicant vacated the Suburb B property with the children on 15 March 2010. She contends that this was the date of their separation.
The proceedings had been listed for final trial commencing 6 April 2020, then 10 August 2020 and again commencing 26 June 2021. Each of the trial dates were vacated due to the impacts of the COVID-19 pandemic.
No declaration pursuant to s 90RD of the Family Law Act 1975 (Cth) (“the Act”) had been made prior to the commencement of the current trial. The provisions of the Act which give this Court jurisdiction over financial disputes between de facto parties specifically confers powers in relation to de facto relationships which break down on a final basis after 1 March 2009. In the event the respondent’s contention as to the date of the termination of the relationship was accepted, absent any “opt in” by the parties to the de facto relationship, this Court would have no jurisdiction to determine the financial dispute between the applicant and respondent, or the disputes between the other parties to these proceedings.
Parties to relationships which ended prior to 1 March 2009 may “opt in” to the regime prescribed under Pt VIIIAB of the Act provided they comply with the mandatory provisions of Item 86A of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2009 (Cth) (“the Amendment Act”). Those provisions include that the choice to “opt in” is in writing and is signed by both of the parties to the de facto relationship with the benefit of independent legal advice from a legal practitioner about the advantages and disadvantages at the time the advice was provided to the party making the choice. Additionally, signed statements are required from the said legal practitioners. None of the requirements of the Amendment Act for an “opt in” had been completed prior to the start of the current trial.
The respondent, upon being appraised of the above matters, conceded and agreed that the date of separation and hence the termination of the de facto relationship was 15 March 2010.

The applicant and the respondent resided in New South Wales for the duration of their relationship. The geographical requirement for the purposes of jurisdiction pursuant to s 90SK of the Act is satisfied.
On 5 October 2011 the applicant became bankrupt on her own petition. The Official trustee in Bankruptcy was appointed trustee of the applicant’s bankrupt estate.
On 2 February 2012 Mr Cusson (“the trustee”) was appointed trustee of the applicant’s bankrupt estate in place of the official trustee.
The applicant was discharged from bankruptcy 6 October 2014. She was a discharged bankrupt at the date of filing her Initiating Application on 17 March 2016. The trustee was named as the second respondent to the applicant’s Initiating Application and has remained a party to the proceedings from that time.
The Initiating Application for relief pursuant to s 90SM of the Act was not filed within a two year period from the date of the termination of the de facto relationship as prescribed by s 44(6) of the Act. Notwithstanding the absence of any s 90RD declaration as to the date of termination of the de facto relationship being made, and the issue of jurisdiction on the respondent’s case being in contest at that time, consent orders were made in the Federal Circuit Court on 15 November 2016 granting the applicant leave to commence proceedings for property adjustment out of time pursuant to s 44(3) of the Act. That subsection of the Act is applicable to parties to a marriage, not to parties to a terminated de facto relationship. It was agreed that such leave ought to have made reference to s 44(6) of the Act.
The third respondent is Mr B Davis. The fourth respondent is Ms Davis. They are the respondent’s parents (“the third and fourth respondents”). By an order made on 15 November 2016 they successfully applied to be joined as parties to these proceedings.
A major issue in the proceedings centres upon two real properties at 1 N Street, D Town (“1 N Street”) and 2 N Street, D Town (“2 N Street”), (collectively, “the D Town properties”). They were legally and beneficially held by the third and fourth respondents until 14 November 2008. They are currently legally held by the respondent and the trustee. The third and fourth respondents contend the properties are beneficially held for them by the respondent and the trustee, and seek a finding of an express bare oral trust or the imposition by equity of a constructive trust. In the event that relief is refused, they seek a declaration that the D Town properties are subject to an equitable charge in their favour valued at the sum of the mortgage repayments and maintenance costs, less the value of rent received from the D Town properties from 14 November 2008 to date. By way of another alternative, they seek that the trustee and respondent pay them equitable compensation to that value.
The respondent’s relief prosecuted as to the D Town properties all but mirrors the relief sought by the third and fourth respondents.
The trustee opposes the relief sought by the respondent and the third and fourth respondents. He seeks the retention of his legal entitlement in the balance of proceeds of sale of the Suburb B property (“the Suburb B proceeds”) and in each of the D Town properties in addition to an accounting from the third and fourth respondents as to the rents they have been collecting from tenants of the D Town properties.
The applicant also resists the relief of the respondent and the third and fourth respondents as to the D Town properties. She seeks orders for the sale of the D Town properties and that the proceeds of sale be paid in satisfaction of her bankruptcy debts and to meet the trustee’s remuneration and expenses.
By the conclusion of the trial, all parties agreed that in the event the primary claims as to the D Town properties being held on trust failed, there was a requirement to account as between the respondent, the trustee and third and fourth respondents for difference in the value of the mortgage repayments and some other costs paid by the third and fourth respondents in respect of the D Town properties from the date of their transfer on 14 November 2008 to date and the rent received by the third and fourth respondents from the D Town properties for that period. They agreed that the evidence as it stood at the conclusion of the trial did not permit a safe finding being made as to that value and that if agreement could not be achieved as to that value in a short period of time, an assessor ought to be appointed pursuant to the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) to determine the value of the equitable charge.
The parties’ positions as to the D Town properties
As was agreed by each party and for the reasons that follow, I find that a central task in this matter is to determine the current beneficial owners of the D Town properties. Each of the different claims relating to these properties arise out “a common substratum of facts” such that the different claims are so related that the determination of one is essential to the determination of the other. I find that the matter is “entirely within federal jurisdiction” (see Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd at 512 per Mason J). This is consistent with that identified by the High Court in Rizeq v Western Australia (2017) 262 CLR 1 at [57], and with the mandate prescribed by s 43 of the Federal Circuit and Family Court of Australia Act 2021 (Cth).
The trustee takes the legal interest of the applicant in the D Town properties “subject to all liabilities and equities which affect it in the [applicant’s] hands” (see Brereton J in Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17). In the event the respondent and the third and fourth respondents are successful in their claim as to the D Town properties, those properties would not form part of the pool of property of the applicant, the respondent and the trustee for the purposes of the s 90SM dispute. Hence it is logical to determine that claim first in sequence.
The parties’ positions as to the s 90SM relief
The trustee did not seek any relief greater than his vested legal entitlement to the Suburb B proceeds or in the D Town properties after satisfaction of any requirement to account to the third and fourth respondents and selling expenses in respect of those disposals.
This relief was refined by way of his updated Case Outline document filed on 28 May 2022, in which the trustee sought approval of his remuneration and payment of his expenses incurred on the disposal of the Suburb B property other than as provided for by the 11 August 2021 orders of Foster J and now seeks that they be paid from the Suburb B proceeds “off the top” before any adjustment between he, the applicant and respondent. He sought that the respondent meet any shortfall of the trustee’s remuneration as now claimed and expenses should the proceeds of sale be insufficient to meet that liability.
The applicant conceded by the conclusion of the trial that in the event the trust claim as to the D Town properties was successful, there was no warrant for property adjustment. She said during submissions that in the event the trust claims of the third and fourth respondents failed, notwithstanding the relief identified in her Further Amended Initiating Application filed on 12 May 2022, she did not seek any adjustment in her favour against the trustee from his legal interest the vested property by way of adjustment. To some extent this is consistent with the final position of the trustee. The applicant sought an adjustment in her favour from the respondent’s legal interest in the property identified in the balance sheet that did not vest in the bankruptcy trustee. During submissions the applicant did not specify the value of that property adjustment between she and the respondent sought by way of a percentage of the legal interests of the respondent or as a fixed sum cast against the value of those legal interests. Doing the best I can to quantify her claim, I will proceed upon the basis of that recorded in Exhibit 2, being her Case Outline filed 27 May 2022, as follows:
13.…it is just and equitable that the Court order pursuant to s 90SM of the Act that the applicant receive 75 [per cent] of property acquired by the parties during their relationship.
Having regard to her absence of challenge to the 50 per cent legal interest of the trustee by way of the vested property, I have little alternative but to assume the applicant seeks an adjustment in her favour to the value of 25 per cent of the pool available for adjustment (50 per cent remaining with the trustee and the other 50 per cent being with the respondent). Putting it another way, the applicant seeks an adjustment for half of the “remaining” identified property available for adjustment, excluding the vested interested of that property in the trustee in bankruptcy.
In her Case Outline, the applicant foreshadowed a potential amendment to her relief so as to cap the trustee’s remuneration on the bankruptcy at $200,000. This relief was not articulated in her Further Amending Initiating Application dated 12 May 2022. She made no application during the course of the trial for leave to amend that relief. In those circumstances I do not consider that prayer was before me.
The respondent sought, on the success of the third and fourth respondents’ claim as to the D Town properties, that it would be just and equitable for him to receive 80 per cent of the remaining non-superannuation property of the parties. This in reality would be 80 per cent of the Suburb B proceeds. He contended that a contribution finding would be in accordance with the legal interests of him and the trustee in the Suburb B proceeds, and thereafter sought an adjustment from that contribution finding of 30 per cent in his favour.
The respondent’s Amended Response to an Initiating Application filed on 18 May 2022 did not seek any relief as to the D Town properties should his parents’ claim in respect of those properties be unsuccessful. The respondent tendered a Minute of Order during the course of the trial marked as Exhibit 4, which refined his relief pursuant to s 90SM of the Act. That Minute set out his position in the event the trust claim failed, being that he would seek to retain the D Town properties and refinance the mortgages, and pay to the trustee the sum of $213,100 contended to be “10 per cent of the matrimonial asset pool”. In default of such payment, the respondent sought that the D Town properties be sold and particularised a method of such sale. It was the respondent’s contention that in the event the trust claim as to the D Town properties fails, an overall adjustment of the property of he and the trustee ought to be made as finding of 85 per cent in his favour and 15 per cent to the trustee.
For the reasons that follow, the claim of the respondent, third respondent and fourth respondent as to the respondent and the trustee in bankruptcy holding their legal interest in the D Town properties beneficially for the third and fourth respondents will be dismissed. A declaration will be made as to the properties being subject to an equitable charge in the favour of the third and fourth respondents valued at a sum either as agreed in writing between the respondent, the trustee and third and fourth respondents within 21 days of my orders, or as assessed by an assessor appointed pursuant to Pt 7.2 of the Rules.
For the reasons that follow on the s 90SM dispute, the trustee will retain his interests at law vested by way of the bankruptcy in the Suburb B proceeds and the D Town properties (subject to the equitable charge in favour of the third and fourth respondents). The D Town properties will be sold. The trustee will receive 50 per cent of the proceeds, the applicant will receive 7.5 per cent of the proceeds, and the respondent the remaining 42.5 per cent of the proceeds.
The evidence
The applicant relied upon the following documents:
(a)Her Third Amended Initiating Application, filed on 12 May 2022;
(b)Her affidavit, sworn on 15 August 2018 and filed 17 August 2018 (“the applicant’s affidavit”);
(c)Her affidavit, sworn on 11 May 2022 and filed 19 May 2022 (“the applicant’s updating affidavit”);
(d)Her Financial Statement, filed on 12 May 2022;
(e)An affidavit of Mr E, sworn on 25 May 2022 and filed 26 May 2022, being the single real property valuation expert;
(f)Points of Defence filed on 12 May 2022; and
(g)A Case Outline filed on 27 May 2022 marked as Exhibit 2.
The respondent relied upon the following documents:
(a)His Further Amended Response to Initiating Application filed 18 May 2022;
(b)His affidavit, sworn on 11 June 2021 and filed 16 June 2021;
(c)His affidavit 18 May 2022;
(d)His Financial Statement filed 13 May 2022;
(e)A Case Outline document filed on 27 May 2022 marked as Exhibit 3; and
(f)An Amended Minute of Orders Sought, marked as Exhibit 4.
The trustee relied on the following documents:
(a)His Amended Response, filed on 20 May 2022;
(b)His affidavit, sworn and filed on 5 September 2018;
(c)His affidavit, sworn on 7 August 2020 and filed 8 August 2020;
(d)His affidavit, sworn and filed on 1 October 2020;
(e)His affidavit, sworn and filed on 5 March 2021;
(f)His affidavit, sworn and filed on 27 May 2022;
(g)Points of Defence filed on 13 May 2022;
(h)A Case Outline containing the orders sought by the trustee, filed on 28 May 2022 marked as Exhibit 5; and
(i)A further Case Outline produced during the course of submissions on the last day of the trial, 3 June 2022.
The trustee was not required for cross examination.
The third and fourth respondents relied on the following documents:
(a)Further Amended Response to Initiating Application filed on 6 May 2022;
(b)Affidavit of Mr B Davis filed on 19 September 2016;
(c)Affidavit of Mr B Davis filed on 20 May 2022;
(d)Affidavits of Ms K filed on 26 July 2017 and 9 November 2018;
(e)Affidavit of Mr M filed on 26 July 2017;
(f)Affidavit of Ms Q (now Ms O) filed on 17 August 2017;
(g)Affidavit of Mr L filed on 9 November 2018;
(h)Further Amended Points of Claim filed on 6 May 2022 (“the Points of Claim”); and
(i)A Case Outline document filed on 26 May 2022 incorporating written submissions, marked as Exhibit 6.
At the start of the trial, the third and fourth respondents said that they relied on affidavits of the fourth respondent filed on 19 September 2016, and Mr P Davis filed on 26 July 2017.
After the completion of the oral evidence of the applicant, the respondent, the third respondent, Mr M, Ms K, Ms O and Mr L, during the afternoon of the fourth day of the five day trial, senior counsel for the third and fourth respondents advised that the affidavits of the fourth respondent (Ms Davis) filed on 19 September 2016 and Mr P Davis (being the respondent’s brother) filed on 16 July 2017 would no longer be relied upon or read. Neither were made available for cross examination.
Some of the contents of the affidavit relied upon by each party were the subject of successful objection. Each of the parties relied on numbers of folders containing volumes of exhibits to their respective affidavits and tendered further folders of additional documents. It was made clear to each of the parties on more than one occasion during the course of the trial that I would not troll through the folders of supplementary material for the purposes of this determination, and would read and consider only the documents in the folders that had been the subject of cross-examination or submission during the course of the trial. No objection was taken to that course. It was agreed that the contents of letters sent by solicitors for a party to another would not constitute evidence of the fact asserted in them.
The bankruptcy of the applicant
On her bankruptcy on 5 October 2011, by operation of s 58(1) of the Bankruptcy Act 1966 (Cth) (“the Bankruptcy Act”), the applicant’s property vested in her trustee in bankruptcy.
Section 116(1) of the Bankruptcy Act provides that all property that belonged to, or was vested in, the bankrupt at the commencement of the bankruptcy, or has been acquired or is acquired by the bankrupt or has devolved or devolves to them after the commencement of the bankruptcy and before their discharge, is property devisable amongst the creditors of the bankrupt.
Section 116(2) of the Bankruptcy Act particularises specific property to which s 116(1) does not apply, being not part of the property that vests in the bankruptcy trustee. This exclusion includes property held on trust for another person (s 116(2)(a)) and superannuation interests (s 116(2)(d)).
The discharge of the applicant from her bankruptcy operates to release her from all debts

(s 153(1) of the Bankruptcy Act).
It was further not disputed that:
(a)The trustee has substantive rights to recover whatever property vested in him as a result of the applicant’s bankruptcy;
(b)One effect of the bankruptcy was to sever the joint tenancy between the applicant and the respondent in the three properties of which they were the registered proprietors, being Suburb B and each of the D Town properties. The trustee became the registered proprietor as tenant in common in equal shares with the respondent of each of the three properties;
(c)Upon the applicant’s discharge from bankruptcy, she did not regain the property vested in the trustee; and
(d)The bankrupt estate continues until it is annulled because the debts have been paid in full (s 153A of the Bankruptcy Act) or by Court order (s 153B of the Bankruptcy Act) or because the creditors have accepted a payment under s 73 of the Bankruptcy Act (s 74 Bankruptcy Act).
The order of priorities provided for by s 109 of the Bankruptcy Act will require the trustee’s remuneration and expenses in acting as trustee to be paid and then unsecured creditors proven in the bankrupt estate are to be paid. As recorded later in these reasons, at this stage it would seems very likely that there will not be a surplus in the bankruptcy. If there was, it would form part of the property to which the s 90SM discretion would apply.
It was also not the subject of contest that any interest of the applicant that may come into existence at the conclusion of the s 90SM trial by way of a discretionary exercise of power pursuant to Pt VIIIAB of the Act from the respondent’s current property interests (and not those of the trustee) would not form part of the vested property held by the trustee.
At the commencement of the trial, the applicant made an oral application pursuant to s 90SM(15) and (16) of the Act. That application was refused. These reasons assume familiarity with the extempore judgment delivered on that day, Peterson & Davis [2022] FedCFamC1F 402.
Background
The applicant was born in 1982. She was 40 years old as at the date of the trial. She currently lives in City R with the children. She works in sales and earns a gross salary of $102,300 per year. She is in receipt of a Family Tax benefit in the sum of $7,717 per year.
The respondent was born in 1976. He was 45 years old as at the date of the trial. He has not engaged in paid employment since his work injury in 2009. He currently lives with the third and fourth respondents at their home in Suburb S. He has not received any income or Centrelink benefits since 2017. At trial he gave evidence of being financially supported by his parents and by his brother, Mr P Davis.
The third respondent was born in 1949. He was 73 as at the date of the trial. He said during his oral evidence that he does not live with any significant health issues save for high blood pressure. He retired from employment in 2004. He said that he has not received an income since that time. He is financially supported by the fourth respondent, and by his son, Mr P Davis.

The fourth respondent was born in 1953. She was 68 at the date of the trial. She is employed in sales by T Company. Her taxation returns for the financial years ending 30 June 2010 to 30 June 2019 became Exhibit 16 at trial. Her income from her employment in 2010 was $54,068 and her reported taxable income in the latest disclosed financial year, being 2019, was $90,393.
Between 1998 and 2001, the applicant and respondent lived between each of their parents’ homes, initially with the applicant’s parents and later with the third and fourth respondent in Suburb U. The respondent gave evidence that he and the applicant moved into a rental property with the financial support of the third and fourth respondent in around 2001.
During the first few years of their relationship the applicant and respondent each worked for V Company. The applicant suffered an injury in 1999 and was thereafter unable to work for a period of time. She received workers compensation. She returned later to work. She gave no evidence of experiencing any sustained injury or health issues mitigating her capacity to work.
On the 13 August 2001 the third and fourth respondents acquired 1 N Street for $217,000. They obtained funding by way of a loan secured by mortgage to W Bank to assist in the completion of the acquisition. The property comprised two dwellings, each with separate bedrooms, bathrooms and living and kitchen areas. The respondent and applicant agreed that during their relationship one of the dwellings on the property was tenanted, and the other was used by them and their family as a holiday home from time to time.
On 16 May 2002 the third and fourth respondents refinanced the W Bank mortgage secured on 1 N Street and obtained a further loan and mortgage security from the National Australia Bank (“NAB”).
On 4 July 2002 the applicant and respondent purchased the Suburb B property for $225,000. The applicant said in her oral evidence that the parties obtained a loan for $19,500 from the respondent’s grandmother applied towards the deposit on the acquisition of the Suburb B property. The respondent contended that the loan advance originated from his brother Mr P Davis for $20,000. He said upon Mr P Davis requesting that the advance be repaid in September 2002, his grandmother agreed to “take over the loan from [his] brother [Mr P Davis]”. The balance of the acquisition was funded by a home loan secured by a mortgage in favour of NAB of $202,500.
The evidence of the respondent was that in 2003 his grandmother requested repayment of the advanced funds. There was no further evidence as to any demand being made for repayment of the advance over the next 14 years. The familial advance remained outstanding until 2017, when as recorded later in these reasons, the respondent paid monies to his grandmother $40,000 from his compensation funds. His grandmother passed away about two years ago.
The third and fourth respondent then purchased a property at BB Street, Suburb AA (“the BB Street property”). It was not apparent on the evidence when this acquisition was completed.
In 2003, the third and fourth respondent purchased two properties on CC Street in Suburb DD (“the CC Street properties”) for a total purchase price of $1.07 million. The purchase was funded in its entirety by a loan secured by mortgage in favour of Westpac Bank.
On 13 October 2003 the third and fourth respondents acquired 2 N Street for $420,000. They obtained a loan secured by a mortgage over the property from NAB to finance the purchase. Mr M acted as solicitor for the third and fourth respondent on the purchase of 2 N Street.
On 20 November 2003 the respondent obtained a second home loan from NAB also secured on the Suburb B property in the sum of $196,864. The loan was initially in his name only, the applicant being added as a borrower to the loan in May 2004.
In 2004 the respondent commenced employment as a tradesperson. He worked full-time as an employee for about two years until late 2005. It was his evidence that he earnt about $1,000 per week during this period, being approximately $52,000 per annum. Between 2005 and 2007 he continued to work as a tradesperson but did so as a sole trader operating as “EE Company”. He returned to full-time employment again in 2007.
The financial difficulties of the third and fourth respondents
In 2006, the third and fourth respondents defaulted on their loan to Westpac in respect of the CC Street Properties. The properties were repossessed by Westpac and sold on 27 November 2006. After having sold the properties, the third and fourth respondents remained indebted to Westpac in the sum of about $2,000. There was no affidavit evidence adduced on this subject matter. It emerged at trial during cross-examination of the third respondent.
On 17 January 2007, the third and fourth respondents effected a refinance of the BB Street property with “FF Finance” (a lender). The loan was for a fixed term of 12 months advancing the principal sum of $210,000 being payable in full on 1 February 2008. At the conclusion of that term they sought an extension on the mortgage for a short period of time. They ultimately sold the property on 30 January 2009. In cross-examination the third respondent could not recall the quantum of sale proceeds received by him and the fourth respondent. He said that they needed to sell the property in order to meet repayments of the loans on the D Town properties.
On 25 January 2007, being eight days after the BB Street refinance and two months after the CC Street disposal by Westpac, the third and fourth respondents effected a refinance of the D Town properties by discharging the NAB mortgages and obtaining a loan from GG Finance for a fixed term of 12 months. The principal sum advanced was $605,500 repayable in full on 17 January 2008 and was secured by mortgage on both properties. A term of the loan included the prepayment of 12 months’ interest, being $49,953.75, to be met from the principal sum advanced.
The third and fourth respondents failed to repay the principal sum to GG Finance on or before 17 January 2008. They unsuccessfully sought to extend or renew the term of their loan agreement with GG Finance. About three months later, in April 2008, GG Finance filed a Statement of Claim filed in the Supreme Court of New South Wales (“the NSWSC”) seeking a writ of possession of the D Town properties and recovery of the sum of $622,488.51 (as at April 2008) together with any interest accrued from April 2008 and the costs of the NSWSC proceedings.
From the date of their default on 17 January 2008 to the date of the discharge of the GG Finance mortgage on 14 November 2008 the GG Finance loans accrued interest at a rate of 14.25 per cent per annum. The value of the payment made to discharge the GG Finance facility on 14 November 2008 had increased by almost $65,000 to $670,666.23.
The series of meetings between various parties and witnesses
Between the third and fourth respondents defaulting on the GG Finance loan in January 2008 and the transfer of the D Town properties to the applicant and respondent in November 2008, there was a series of meetings and conversations which took place between various combinations of the parties and witnesses. The fact and details of each of those meetings conversations are disputed. There was conflicting evidence as to when and where conversations or meetings occurred, who was in attendance at those times and what was said by whom and to whom at those times. I shall return to an examination of the evidence on these subject matters later in these reasons.
The HH Finance loan
In April 2008, on the instructions of the third and fourth respondents, Mr L, a finance broker, submitted a loan application to refinance the GG Finance facility secured on the D Town properties to JJ Finance, being a subsidiary of the financing company HH Finance. That loan application formed part of the evidence. It recorded the following items:
(a)The applicants for the loan were the third and fourth respondents;
(b)The third respondent is self-employed conducting a business. His annual declared business earnings were $350,000, with an additional $143,100 derived from company income tax, and $22,672 from rental income (being recorded as $515,772 total);
(c)The fourth respondent is employed by T Company with a gross taxable income of $51,000, with an additional $11,648 derived from rental income (totalling $62,648);
(d)The two D Town properties are proposed as security for the loan, with 1 N Street at value of $480,000 and 2 N Street at value of $440,000.
On 30 April 2008, six days after the GG Finance’s Statement of Claim was filed, the third and fourth respondents received conditional approval from JJ Finance for a secured loan of $736,000. The offer of conditional approval recorded the following terms:
(a)That the loan product was a “Lite Doc – 80%”;
(b)That the loan term was 30 years;
(c)That the total monthly repayments would be $6,863.20 per month;
(d)That interest would be charged at a rate of 11.19 per cent; and
(e)That the offer was subject to a “fully completed and signed application and supporting documents” being provided to the lender, and a “panel valuation”.
HH Finance obtained valuations of the D Town properties. The reports produced by KK Valuers on inspection of each of the D Town properties opined a value of $455,000 for 1 N Street and $370,000 for 2 N Street, being a total of $825,000, as at 9 May 2008.
The third and fourth respondents did not take up this loan offer from HH Finance. It was the evidence of Mr L that they kept the HH Finance loan “on hold”. As is self-evident, the value of the approval at $736,000 was well in excess of what was required to pay out the GG Finance claim initiated in the NSWSC at $622,488.51.
The fact and terms of this finance facility did not form part of the affidavit evidence of the third respondent. There was no evidence from the fourth respondent on this matter, or at all.
The Commonwealth Bank loan application of the applicant and respondent
On 4 September 2008 Mr L prepared a loan application to the Commonwealth Bank on behalf of the applicant and respondent (“the Commonwealth Bank loan application”). The application, as signed by each of the applicant and the respondent, recorded:
(a)The applicants for the loan were the applicant and respondent;
(b)The value of the loan sought was $680,000;
(c)The “funds available for purchase” of the D Town properties, in addition to the loan, comprised $5,000 cash and a “Gift” of “Equity Family” in the sum of $200,000;
(d)The purchase price of the properties was $850,000, with stamp duty of $21,500 and an allowance of $1,000 in legal fees;
(e)The terms of the loan as sought were for two separate loans (one for each property), both with an interest rate of 8.8 per cent per annum and a loan term of 30 years, totalling monthly repayments of $4,987;
(f)The applicant’s annual income was $32,306 and the respondent’s was $175,000 (being his earnings as a self-employed contractor); and
(g)That the applicant and respondent anticipated receiving “rental income” of $1,386 per month (recorded as being “400p/wk [1 N Street]” and “325p/wk [2 N Street]”). At the time of completing the loan, they did not own real property other than their own home at Suburb B. In cross-examination the respondent conceded the recorded rental income was derived from the D Town properties.
On 1 October 2008, the applicant and respondent received approval from the Commonwealth Bank of a loan in the sum of $686,641 proposed to be secured on the D Town properties. The loan was for a term of 30 years, with a variable interest rate of 8.63 per cent per annum.
The execution by the applicant and respondent of the Commonwealth Bank loan and mortgage documents
On 7 October 2008, Ms K, as the conveyancing clerk under the supervision of Mr M, attended upon the applicant and first respondent for the purposes of execution of the loan and mortgage documents with the Commonwealth Bank purportedly to fund the purchase of the D Town properties.
The transfer of the D Town properties
On 31 October 2008, the third and fourth respondents executed transfer documents pursuant to the Real Property Act 1900 (NSW) (“the Real Property Act”) as transferors of the D Town properties in favour of the applicant and the respondent. Their son, Mr P Davis was their witness to their signatures on the transfers.
Mr M executed the transfers as the “transferees’ solicitor”. He agreed that he executed the transfers as the solicitor on behalf of, and as the solicitor acting for, the applicant and the respondent on the transactions.
The transfers record that “the transferor acknowledges receipt of the consideration” of $455,000 for 1 N Street “the transferor acknowledges receipt of the consideration” of $375,000” for 2 N Street.
Mr M said that Ms K prepared the transfers under his supervision, and that the value of the consideration recorded in each transfer was based upon valuations for stamp duty purposes obtained dated 13 October 2008. These valuations were annexed to Ms K’s affidavit. These valuations were obtained from KK Valuers, the same valuers who completed the HH Finance approval valuations. The reports recorded a value of $455,000 for 1 N Street and $370,000 for 2 N Street. There was no explanation as to why the transfer for 2 N Street recorded a consideration of $375,000 when the value of the property was opined at $370,000.
On 14 November 2008, the mortgages executed by the applicant and the respondent in favour of the Commonwealth Bank secured on the D Town properties for the sums of $290,000 and $380,000 were registered. On that day, the Commonwealth Bank advanced to the applicant and respondent $379,670 secured on 1 N Street and $306,971 secured on 2 N Street (totalling $686,641). Of that amount, $670,666.23 was paid to GG Finance at the direction of the third and fourth respondents to discharge the loan facility secured by mortgage on the properties.
Simultaneously on entry of the loans and mortgages, the transfer documents executed by the third and fourth respondents transferring their interest and title in the D Town properties to the applicant and respondent as joint tenants, together with the mortgages in favour of the Commonwealth Bank, were lodged with the Land Titles Office.
The taxation returns of the third and fourth respondents
A Notice to Produce (Exhibit 15) was served upon the third and fourth respondents on 16 May 2022. The Notice called for the production of the taxation returns and notices of assessments for both of the third and fourth respondents for the financial years ending 30 June 2003 to 30 June 2021 inclusive.
It was agreed that only the taxation returns from the fourth respondent for the period 30 June 2010 to 30 June 2019 inclusive were provided and disclosed. There was no explanation as to why the taxation returns of the fourth respondent for the period 2003 to 2009, 2020 and 2021 were not produced or disclosed.
No taxation returns as sought by way of disclosure of the third respondent were produced. He said that he had retired from work in 2004.
The third respondent said in his oral evidence that both he and the fourth respondent recorded in their taxation returns as lodged prior to 2008 the receipt of the rental income derived from the D Town properties. He said he did not continue to do so after the date of the transfer of the properties in 2008.
I did not have the benefit of any affidavit or oral evidence from the fourth respondent on this subject matter. Her taxation returns as disclosed (Exhibit 16) recorded that she did not return the rental income received from the D Town properties in her taxation returns at least for the period from 2010 until 2019.
Conduct after the transfer of the D Town properties
The undisputed affidavit evidence of the respondent was that after the date of the transfer of the D Town properties the rent received was paid directly into the Commonwealth Bank mortgage accounts. He said:
99.The rental income from the [D Town properties], based upon my investigations, was originally paid to the Commonwealth Bank mortgage account. This was subsequently changed so [the third and fourth respondents] could keep track of the amount of money they were receiving from the rental and how much they needed to add on to make up the monthly mortgage liability. At some stage the arrangement then became the rental income was paid into [the third and fourth respondents’] nominated bank account.
This was confirmed by the Commonwealth Bank loan contract executed by the applicant and respondent. It recorded the mortgage payments were to be automatically deducted from a Commonwealth Bank account in the names of the applicant and the respondent.
The Statement of Affairs filed by the applicant on 30 September 2011 records that, by that date, the third respondent was collecting the rent from the D Town properties. There is no reliable evidence that would enable me to make a finding as to when this change occurred.
It was not controversial that upon the D Town properties being transferred to the applicant and respondent, the third and fourth respondents:
(a)paid any shortfall between the value of rent received and the value of the loan instalments on the Commonwealth Bank mortgage and rates payable on the properties; and
(b)met the ongoing maintenance costs for the D Town properties;
(c)from an unspecified date commenced to directly receive all rental income from the D Town properties; but
(d)did not declare that rental income as part of their assessable income for taxation purposes; and
(e)engaged with a real estate agent for some, but not all periods, for the purpose of tenanting and managing the properties; and
(f)from time to time received rent payments in cash from tenants of the properties.
After having completed the registration of the transfers, on an unspecified date, Ms K said that she received a call from the third respondent, who requested that she “prepare contracts [of sale] for [the D Town properties]”. She deposed to having learnt from the third respondent that he had arranged with “[LL Real Estate] to see if they can sell one of [the D Town properties] to make [their financial situation easier]”. No evidence of this matter was given by the applicant, respondent or third and fourth respondents.
Ms K in her affidavit gave evidence of a further interaction with the applicant in 2010, being after the parties’ separation. She said that she, in Mr L’s presence, called the applicant and that the applicant agreed that she intended to reconvey the D Town properties to the third and fourth respondents and was willing to “sign whatever [may be] required to have [her] name taken off the properties”. Mr L did not give evidence of this conversation. The applicant denied the conversation.
On 17 March 2011, Ms K received a call at work (MM Lawyers), which she missed. An email recording that fact formed part of Exhibit 14, it recorded simply:
[Ms Peterson] – re: [N Street]
…
(As it was recorded)
In May 2011, the applicant and respondent, third and fourth respondents, Mr P Davis, Ms K and Mr M attended the funeral of Mr A Davis, who was the brother of Mr P Davis and the respondent. It was alleged by Ms K and Mr M that the applicant asked on that day to visit Mr M’s office and “sign the document needed to transfer [the [D Town] properties] back to [the third and fourth respondents]”. The fact and details of that conversation are disputed.
A further file note dated October 2011 was put to the applicant during cross-examination. It recorded the details of a phone call between the applicant and Mr PP, an officer of the Australian Financial Security Authority (AFSA) engaged by the official receiver on that day, including that the applicant had advised that the D Town properties:
… are in her and her estanged husbands names. However the proerties are held on trust for her estranged partner's parents. The bankrupt has advised that all payments for the property are made by her former in-laws.
I enquired why the properties are not in there names, the bankrupt advissed that they were the former owners of the property and that they were repossed by the bank and they were unable to obtain finance due to poor credit rating.
This assertion has been confirmed by the bankrupt's ex-husband and also a solicitor purporting to act for the bankrupt's in-laws, [Mr M].
I have verbally requested documentary evidence from the bankrupt's former husband and solicitor.
(As it was recorded)

The applicant’s affidavit was silent on this matter. She denied the conversation in cross-examination. She made the serious allegation in the course of her oral evidence that:
[THE APPLICANT]: [Mr X] [the applicant and respondent’s son] has had a conversation with [Mr P Davis] who told him that he falsified this document and put it in the last subpoena records when he went and checked the file.
The applicant said that she had seen text messages sent by Mr P Davis to Mr X confirming this evidence. She, by way of her counsel, abandoned that contention on the second last day of the trial.
Rent produced from the D Town properties after the transfers
The affidavit evidence of the respondent records that “most of the time since 2008 the [D Town] properties have been rented out” and that to the best of his knowledge, the third and fourth respondents continue to receive the rental income from the properties.
The trustee was unaware of the D Town properties being tenanted until in or around December 2015. Thereafter he sought to secure disclosure as to the value of rent paid from the date of the applicant’s bankruptcy and the payment of future rent.
On 16 October 2017, consent orders were made that the parties pay any income received from the D Town properties from 5 October 2011 to the trust account of the trustee and that the trustee in turn account to the third and fourth respondent for any costs associated with the properties.
Notwithstanding the consent orders made 16 October 2017 as to any income received from the D Town properties from 5 October 2011 being paid into the trust account of the trustee, the trustee’s evidence is that he last received a rental payment from the D Town properties on 30 August 2018. The total value of the rent received by the trustee from the D Town properties was $41,925.07.
The third respondent was silent as to the continued receipt of rent after August 2018 until his affidavit filed 22 May 2022. It was not explained why the third and fourth respondents ceased to comply with the consent order made as to rent on 16 October 2017 after 30 August 2018. There was no evidence from the fourth respondent on either of these subject matter.
Further other background after the transfer of the D Town properties
In 2009 while employed by NN Company the respondent fell off a ladder from an elevation of three metres. He sustained injuries to his back, neck and shoulders. He lodged a workers compensation claim. His workers compensation claim was provisionally accepted but disputed.
In 2011 the respondent experienced what he described as a stroke like event saying that he experienced paralysis and resultant disabilities to his right hand side.
From 2011 the respondent’s affidavit evidence records that he received Centrelink benefits by way of a disability support pension as his workers compensation insurer declined liability for the claim. His workers compensation payments were reinstated in 2014. He made a claim arising from his physical impairment. He was assessed as having a whole person impairment and he received compensation funds of $56,000. He said in his affidavit that when he was in receipt of his Centrelink benefits his grandmother assisted from time to time making some mortgage payments. His last workers compensation benefit payment was 12 December 2016.
On 5 December 2016 a consent judgment was entered in the New South Wales District Court for a compensation payment in favour of the respondent in the sum of $604,000. It was uncontroversial that on 3 January 2017 he received net $457,852.84 from the gross payment after payment of legal costs, repayment of workers compensation benefits and repayment of Centrelink disability benefits. A condition of the consent judgment was that the respondent was excluded from receiving further Centrelink payments until 2023.
In mid-2020 the respondent was incarcerated at F Correctional Centre arising from assault charges brought against him occasioned on his brother, Mr P Davis. He remained incarcerated until early 2021, when he entered a plea of guilty to one charge of assault, and was released on probation.
On 11 August 2020 orders were made for the sale of the Suburb B property. The trustee was appointed trustee of the sale
On 3 February 2021 the trustee completed the sale of the Suburb B property for a $515,000. The settlement statement records:
Payment Directions
Council Rates MERCANTILE LEGAL SERVICES               $3,228.66
Loan Payout     NATIONAL AUSTRALIA BANK LIMITED $326,724.68
Water Rates     MERCANTILE LEGAL SERVICES               $5,242.44
Loan Payout     NATIONAL AUSTRALIA BANK LIMITED   $947.56
Vendor’s Funds MERCANTILE LEGAL SERVICES               $127,808.99
PEXA Fees      MERCANTILE LEGAL SERVICES               $116.60
The vendor’s funds paid to Mercantile Legal Services (the trustee’s solicitors) were applied in accordance with the 11 August 2020 orders. The balance of proceeds of sale of the Suburb B property as of the date of the trial was $91,502.
On 26 May 2022, being four days before the start of the trial, the third and fourth respondents received a conditional approval from QQ Finance of $620,000 proposed to be secured on the D Town properties. It was submitted by counsel on their behalf that the conditional approval provided evidence as to their capacity to indemnify the applicant, respondent and trustee in respect of the Commonwealth Bank loans upon the properties by refinancing them should the primary relief of the third and fourth respondents be achieved.
Other procedural history of the litigation
On 23 June 2017 the proceedings were transferred from the Federal Circuit Court to Family Court of Australia (as it was then).
Orders were made on 19 October 2017 for valuations of the D Town properties and the Suburb B property, and for the applicant and respondent to exchange relevant disclosure. The proceedings came before a registrar on 18 December 2017, 30 January 2018 and 19 March 2018, and on each occasion the registrar noted the respondent’s non-compliance with the disclosure orders of 19 October 2017.
On 31 July 2020, orders were made permitting the trustee to attend the Suburb B property to facilitate the property being valued by a single expert real property valuer in preparation for final hearing of this matter (then listed to commence on 10 August 2020).
On 6 August 2020 an order was made pursuant to s 77 of the Crimes (Administration of Sentences) Act 1999 (NSW), obliging the NSW Commission of Corrective Services to facilitate the respondent attending the final hearing scheduled to commence four days later (the respondent being incarcerated at this time).
On the first day of the final hearing, being 10 August 2020, the respondent by way of his counsel sought that the hearing be adjourned in circumstances where he remained incarcerated. That application for an adjournment was opposed by the applicant and the trustee. Throughout this first day, as a result of complications associated with the COVID-19 situation, there were significant difficulties in the respondent appearing by telephone link from custody. Towards the latter part of the first day of trial, counsel and the solicitor representing the respondent informed the Court that they had no further instructions from the respondent and hence would cease to act for him.
On the second day of the trial, being 11 August 2020, the respondent’s solicitor filed a Notice of Ceasing to Act and did not appear. There were again difficulties contacting the respondent in custody, and in those circumstances, by orders of Foster J made on 11 August 2020 and reasons delivered on 1 September 2020:
(a)The final hearing was adjourned to a date to be advised;
(b)With the consent of the applicant, trustee, and third and fourth respondents, but in the absence of the respondent, the Suburb B property was to be sold and the trustee was appointed trustee of the sale; and
(c)Orders were made authorising:
(i)the trustee to remove chattels on or in the Suburb B property to prepare it for sale, and to store those chattels in commercial storage for six months, with the costs of storage to be paid from the proceeds of sale of the Suburb B property; and
(ii)the applicant and respondent to inspect the stored chattels and, upon providing reasonable proof of ownership of the chattels, to take the claimed chattels; and
(iii)the trustee to dispose of any chattels not collected within the six month period.
The respondent filed an Application in a Case on 16 September 2020 to have a Litigation Guardian appointed for him. That Application in a Case was dismissed on 2 October 2020. The costs incurred by the trustee in relation to the application were ordered to be paid by the respondent before 12 March 2021.
On 25 February 2021, after completion of the sale of the Suburb B property, the respondent filed a Contravention Application alleging a breach of the 11 August 2020 orders by the trustee, in that he had “not provided access for [the] purpose of inspecting” and “not [released] claimed chattels on reasonable proof of ownership”. The contravention proceedings were listed before a Registrar of the (then) Family Court on 8 March 2021, who observed by way of notations to the orders published on that date that:
“…the Court ascertained that although a Contravention Application had been filed, the main issue that [the respondent] sought to be addressed was access to collect goods held by the trustee in a Storage Facility which the trustee had no objection to [the respondent] taking.”
It was further noted on those orders that the respondent had made attempts to collect his goods from the storage facility but had been unable to do so because of his incarceration.
The respondent’s Contravention Application was ultimately withdrawn and dismissed on 6 May 2022.
On 28 April 2021, the respondent filed an Application in a Case seeking inter alia to have the 11 August 2020 orders of Foster J discharged, and that the respondent’s costs of the proceedings and the fees incurred in storing the respondent’s chattels be paid by the trustee (in his personal capacity), and that the trustee “sign Authorisation documents” to grant the respondent access to “all [his] vehicles, car trailer, [and] caravan”. That Application in a Case was withdrawn and dismissed on 6 May 2022.
On 6 May 2021, the respondent filed a further Application in a Case again seeking a discharge of some of the August 2020 orders of Foster J and again seeking access to the storage facilities wherein the applicant and respondent’s chattels were being retained. That Application in a Case was also withdrawn and dismissed on 6 May 2022.
The costs notices of the parties
Each party filed a costs notice in accordance with r 12.06 of the Rules prior to or during the course of the trial. None of the parties’ costs notices identified the source of the funds for their costs paid or to be paid as is required by r 12.06(6)(a)).
The applicant’s costs notice was filed on 27 May 2022 and recorded that as at that date, she had incurred $197,411 in legal costs and disbursements. The notice did not indicate what portion of those fees had been paid and what was outstanding. Her further estimated fees until the conclusion of the trial were $44,000. The notice did not record how those funds were to be paid.
The respondent’s costs notice was filed on 30 May 2022, being the first day of the trial. It recorded that at that date he had incurred $67,593.47 in legal costs and disbursements, $5,626.50 of which had not yet been billed or paid. His solicitors held $40,100.82 in trust. His further estimated fees until the conclusion of the trial were $77,000. The third respondent said that he and the fourth respondent met at least a portion of the respondent’s legal fees but could not say how much they had paid, and that the fourth respondent would know. At that time it was anticipated that the fourth respondent would give oral evidence. She did not. The value of the legal fees paid by the third and fourth respondents on behalf of the respondent in these proceedings is not disclosed.
The trustee’s costs notice records his significant costs incurred up to 27 May 2022, being $689,104.73. Of that amount, $76,124.12 had not been billed or paid. The trustee’s further estimated fees until the conclusion of the trial were $176,124.
The third and fourth respondents costs notice records that they had collectively incurred $194,026.33 in legal fees and disbursements up to 28 May 2022, $101,961.20 of which had not been billed or paid. Their estimated fees to the conclusion of the trial were $70,000.
The value of the bankrupt estate and the costs incurred by the trustee
On 30 September 2011 the applicant presented a debtor’s petition and Statement of Affairs. The value of her debts was recorded as $69,581. In her Statement of Affairs the applicant recorded that she was the co-owner with the respondent of the Suburb B property and the D Town properties, and that the third respondent “collected the rent” for the D Town properties.
On 10 October 2011 the official trustee wrote to the respondent advising him that the applicant was bankrupt, that her interests in the Suburb B and D Town properties were an asset of the bankrupt estate and that the joint tenancies on which the properties were held were severed.
On the following day, being 11 October 2021, the official trustee registered caveats on each of the Suburb B and D Town properties, claiming an interest as registered proprietor pursuant to s 58(1) of the Bankruptcy Act.
From 13 March 2012, the trustee commenced to correspond with the respondent providing notice of his intention to seek orders for the possession of the D Town properties.
An exchange of correspondence thereafter developed between the trustee and Mr M, who was at this time acting for the respondent and the third and fourth respondents. This correspondence exchange continued throughout 2012 and 2013. By way of this correspondence a s 77A Bankruptcy Act notice was directed to the respondent seeking a broad range of documents, including to support the trust contentions. There was no evidence of compliance with that notice by the respondent. The trustee gave notice of his intention to apply both by way of s 66G of the Conveyancing Act 1919 (NSW) (“the Conveyancing Act”) and on application to a court to sell the Suburb B and D Town properties.
The third and fourth respondents, through their solicitor Mr M, recorded in correspondence that they had expended monies in respect of the D Town properties and continued to assert that they were held on trust by the applicant and respondent for their benefit.
The correspondence further records the trustee requesting of the respondent disclosure of books and records to support the contention as to the D Town properties being held on trust.
In late 2013 the trustee unsuccessfully sought funds from the creditors to initiate the Supreme Court action pursuant to s 66G of the Conveyancing Act.
The evidence records a number of alleged telephone calls made by the respondent to the trustee’s office during which the respondent used abusive language and made threats.
On 31 July 2013 the trustee was registered on the title of each of the D Town properties as tenant in common with the respondent.
Notwithstanding the trustee’s legal interest in the D Town properties, the trustee had not received any rent from the properties from 5 October 2011 (when the applicant became bankrupt).
In January 2016 the trustee again corresponded with the respondent and the third and fourth respondents providing notice of his intention to realise the bankrupt estate’s interest in the Suburb B and D Town properties, requesting offers be made to acquire the trustee’s interest and otherwise again providing notice that an application pursuant to s 66G of the Conveyancing Act would be progressed.
In March 2016, the trustee corresponded with the real estate agent for 1 N Street to arrange for any rent to be paid into the trustee’s trust account. On 14 March 2016 it was confirmed to the bankruptcy trustee that the D Town properties were the subject of lease and that rent of $109,997.20 had been paid by a managing agent to the third and fourth respondents between 6 January 2011 and 16 November 2015.
By August 2016 the trustee become aware that one of the dwellings at 1 N Street D Town was being “privately rented by the landlord”.
In November and December 2017 the solicitors on behalf of trustee corresponded with the third and fourth respondents requesting compliance with the orders made on 16 October 2017 for the documents to be disclosed as to the rent received by the third and fourth respondents in respect of the D Town properties from 5 October 2011. On 15 December 2017 solicitors on behalf of the third and fourth respondents provided a summary of the rent contended to be received by them in compliance with the order. They contended that all rents had been applied to mortgages and expenses.
Parenting matters
At separation, Mr X was aged nine, Mr Y was aged five and Z was aged three. As between the applicant and respondent, the applicant became the parent primarily responsible for the care of the children on a day to day basis.
On 26 June 2011 final consent parenting orders were made, broadly providing for:
(a)The parents to have equal shared parental responsibility of the children;
(b)The children live with the applicant;
(c)The children to spend time with the respondent during school term over a four week cycle:
(i)Commencing in the first week of each term from the conclusion of school (or 3 pm if not a school day) on a Thursday until the commencement of school on Monday;
(ii)From the conclusion of school on Wednesday of the following week until the commencement of school on Monday.
(d)And for them to spend time with the respondent for half of each school holidays and on other special occasions as agreed.
On 24 April 2019 further final consent parenting orders were made broadly providing that:
(a)The children Mr Y and Z live with the applicant.
(b)Mr Y spend time with the respondent in accordance with his wishes.
(c)That the respondent spend time with Z as follows:
(i)Each fortnight for a period of two hours on a Saturday at a time as agreed (and failing agreement between 11.00 am and 1.00 pm) in a public place in the Suburb AA area such as ‘RR Venue’, the movies or shopping centre, (in the presence of the Father's Aunt, Ms AP or either of the paternal grandparents), with the respondent to advise the applicant as to the venue he has nominated not less than 48 hours prior to the commencement of the visit and the applicant to deliver the child to the respondent at the nominated venue and collect the child from this venue for the purpose of this order.
(ii)Until Z turns 14 years of age, each fortnight from after school (or 3.00 pm if not a school day) until 6.30 pm with the respondent to collect Z from school (or the applicant's home if Z is not at school) and return Z to the applicant's home at 6.30 pm.
(iii)For a period of four (4) hours each fourth Saturday with changeovers to occur at the Suburb B McDonalds.
(iv)Until Z turns 14 years of age, on the last Saturday of each month from 10.00 am until 6.00 pm on Saturday with changeover to occur at the Suburb B McDonalds Restaurant or as otherwise agreed.
(v)Upon Z turning 14 years of age, any time spent with the respondent, including any overnight time, shall be in accordance with Z's wishes.
The two older children, Mr X and Mr Y, each currently work but remain dependent on the applicant. Z is in year 10 at school. She lives with the applicant and does not spend overnight time with the respondent.
Child support
There is a vacuum of documentary evidence as to the value of child support assessed and as to the value paid after 2010.

It is immediately apparent that the construction of the subsection (1) contemplates that interest be payable from the date an order is made or it takes effect. The section identifies that an order for the payment of interest is discretionary. The Act provides no guidance as to how the discretion should be exercised.
The Full Court in Stephens & Stephens & Anor (Enforcement) [2009] FamCAFC 240 observed the following in relation to s 117B and the discretion conferred by it:
429.Section 117B(1) of the Act is a general provision which provides that where, in proceedings under the Act, a court makes an order for the payment of money interest is payable at the rate prescribed by the Rules from the date on which the order is made, or the date on which the order takes effect whichever is later. However, the effect of s 117B(1) is subject to any order made by the court under s 117B(2). Thus, the phrase “subject to” which is added to s 117B(1) limits its operation. Section 117B(2) allows the court, by order, to vary some of the consequences which otherwise flow automatically from s 117B(1), namely by ordering that no interest be paid or by varying the rate, or the date from which it becomes payable. The wording suggests that s 117B(2) offers a divergence from the effect of s 117B(1) and thus limits its operation by working as an exception. We are also of the view that as an exception, s 117B(2) shifts the onus onto the party seeking to take advantage of the exception: see Rural Export & Trading (WA) Pty Ltd v Hahneuser (2007) 243 ALR 356 per Gray ACJ at [65].
430.The discretion conferred by s 117B(2) of the Act is extremely wide. However, in our view it “enables such lower or higher rate of interest to be determined as the interests of justice in a particular case may require”: see Gould and Another v Vaggelas and Others.
431.We would not seek to prescribe the considerations that may be relevant to the exercise of the discretion conferred by s 117B(2) of the Act. We are of the view that a purpose of interest on a judgment debt is to compensate the party entitled to the benefit of the judgment until it is satisfied. However, we do not accept that this is the only purpose and are of the view that another purpose is to ensure compliance with orders. For example, there may be circumstances where a recalcitrant party liable to pay an amount of money may seek to take advantage of an interest rate which is less than the prescribed rate.
Importantly for this matter, the payment of interest is not on a judgment debt. The extremely wide discretion conferred by s 117B(2) of the Act as to the payment of interest includes the concept of compensation.
I was not taken to any notice provided by the third and fourth respondents as to a claim for interest on the value to be the subject of account. Their Further Amended Response and their Further Amended Points of claim, both filed 6 May 2022, and their Case Outline filed 16 May 2022, did not specify a claim for interest. The claim for interest emerged from the third respondent’s affidavit filed shortly before the trial.
Other than seeking interest at the rate prescribed by the Rules, no submissions were made as to why that rate was appropriate, or as to why any other rate of interest was inappropriate.
The third and fourth respondents had been put on notice by the trustee in January 2016 of his desire and intention to sell the D Town properties. They elected, with the benefit of legal advice, to avoid that process and to continue to collect the rent and meet the mortgage payments subject to the orders made 16 October 2017. From 30 August 2018 they elected not to comply with the order made on 16 October 2017 as to the rent being paid to the trustee.
The High Court observed in MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657 at 663 that the function of an award of interest under statute and at common law:
…is to compensate a plaintiff for the loss or detriment which he or she has suffered by being kept out of his or her money during the relevant period.
I find that such observation has some application to the circumstances of this case.
The rate of interest prescribes by the Act and the Rules carries some embedding of penalty should there be a failure to comply with an order to pay monies, and as a tool to motivate compliance with a determination. Those circumstances are not relevant in this matter.
Section 51A(1)(a) of the Federal Court Act 1976 (Cth) contemplates interest in respect of a pre-judgment period. A general practice note issued by that court on 18 September 2017 identifies that regard be had to such a rate being four per cent above the cash rate published by the Reserve Bank of Australia from time to time. To my mind, that circumstance has greater resonance to the circumstances in this matter.
Although it may be rather rough justice, exercising my broad discretion in all of the circumstances of this case, I find that it is just where the third and fourth respondents have been “kept out of their money” as paid for the benefit of the applicant and respondent simple interest to be paid on such sum as was due annually on the value of the mortgage payments made by the third and fourth respondents lees the sum of rent they received charged from 14 November 2009 (being 12 months after the registration of the transfers of the D Town properties) to the date of hereof, at a rate being four per cent above the cash rate published by the Reserve Bank of Australia for each such annual period. That annualised value of interest shall be included in the value of the charge in their favour upon each of the D Town properties.
Section 90SM determination
The balance sheet
By the time of the conclusion of the submissions the entries in the joint balance sheet that became Exhibit 1 were the subject of agreement as follows, where “Joint” means the applicant and respondent, “A” means property of the applicant, “R” means property of the respondent, and “T” means property of the trustee:

Ownership Description Value ($)

ASSETS

1 R & T Proceeds of sale of the Suburb B property 91,502

1 R & T 1 N St, D Town 1,375,000

R & T 2 N St, D Town 1,250,000

T Rental income 837

Joint J Bank account …47 1,900

Joint Household contents 5,000

R Motor Vehicle 2 500

A Motor Vehicle 3 16,000

Total $2,740,739

LIABILITIES

1 T Unsecured Creditors of the bankruptcy 74,348

R & T Loan for 1 N & 2 N Street D Town 585,078

T Trustee's costs and expenses to 20/5/22 1,122,031

A XX Finance Car Loan 16,000

A YY Finance Lease - Laptop 3,400

A Personal loan – ZZ Finance 1,011

A Buy Now Pay Later – AB Finance 150

R & T Equitable charge on 1 N & 2 N Street D Town Not known

Total 1,802,018

Member Name of Fund Type of Interest Value ($)

SUPERANNUATION

A Super Fund 1 Accumulation 23,932

R 0
Total assets, $2,740,740
Total liabilities, - $1,802,018
Net value of property (excluding superannuation), $938,721

Ownership	Description	Value ($)
1	R & T	Proceeds of sale of the Suburb B property	91,502
1	R & T	1 N St, D Town	1,375,000
R & T	2 N St, D Town	1,250,000
T	Rental income	837
Joint	J Bank account …47	1,900
Joint	Household contents	5,000
R	Motor Vehicle 2	500
A	Motor Vehicle 3	16,000
Total	$2,740,739

LIABILITIES
1	T	Unsecured Creditors of the bankruptcy	74,348
R & T	Loan for 1 N & 2 N Street D Town	585,078
T	Trustee's costs and expenses to 20/5/22	1,122,031
A	XX Finance Car Loan	16,000
A	YY Finance Lease - Laptop	3,400
A	Personal loan – ZZ Finance	1,011
A	Buy Now Pay Later – AB Finance	150
R & T	Equitable charge on 1 N & 2 N Street D Town	Not known
Total	1,802,018

Member	Name of Fund	Type of Interest	Value ($)
SUPERANNUATION
A	Super Fund 1	Accumulation	23,932
R	0

No party sought a superannuation splitting order. It was agreed during the course of the trial that in circumstances where a superannuation splitting order was not sought, and where the applicant could not readily access her superannuation entitlements for many years (she will not be 60 years of age until 2042 those entitlements would not form part of the pool of property available for adjustment and would be considered by way of any adjustment to contribution findings.
Over the course of the oral evidence it emerged that the respondent had eventually secured from the trustee a significant volume of items that the trustee had removed from the Suburb B property prior to it being sold and stored. This included a quantity of personality, tools and 11 motor vehicles. The respondent did not identify these items of property in his Financial Statement or attribute a value to them. I will take it into account in the adjustments to the contribution findings.
The affidavit evidence of the respondent records that he used part of his compensation monies to advance $30,000 to Mr SS by way of loan, and that as at the date of him swearing his evidence on 11 June 2021, that amount had not been repaid. He gave no other evidence on this topic. That loan did not form part of the respondent’s Financial Statement. Ordinarily, an as yet unpaid advance of this sort would form property of the respondent. It was not identified as an item in the agreed balance sheet. I find in the circumstances, absent any other evidence on the topic, it is more likely than not that the amount of $30,000 remains outstanding. There was no evidence as to it being recoverable by the respondent. I will take it into account in the adjustments to the contribution findings.
The applicant at the commencement of the trial sought to include in the balance sheet identifying the property of the parties an add back to the value of $457,853 being the workers compensation lump sum payment received by the respondent on 3 January 2017 subsequent to the workplace injury in 2009. She abandoned this contention during the course of submissions, conceding that the funds “no longer existed.” It was not the case of the applicant that the respondent still retained or had the benefit of some of those funds that were not identified in his Financial Statement or on the balance sheet identifying the property of the parties to the de facto relationship.
The as yet unquantified liabilities and contingent liabilities
The value of the equitable charge could, by reference to the various contentions made by the third and fourth respondents, be valued in the range of $300,000 together with interest.
Should it be just and equitable to order a sale of the D Town properties as sought by the trustee, the value of potential selling costs and any capital gains tax payable on the disposals were not the subject of evidence at trial and are unknown. Each of these labilities will crystallised as payable should a sale be ordered. The absence of any evidence of these matters at trial prevents any safe finding to be made as to the value of any such contingent liabilities.
The trustee’s remuneration
The trustee disposed of the Suburb B property pursuant to the orders made on 11 August 2020. Those orders provided for:
7.The proceeds of the sale of the Suburb B Property are to be paid as follows.
(a)To adjustments for rates and land tax.
(b)Sales agent’s commission and the cost of conveyance.
(c)The amount required to discharge the first registered mortgage.
(d)The legal costs, if any, involved in taking possession of the Suburb B Property.
(e)The cost of chattel storage for up to six (6) months and disposal of the chattels.
(f)The remuneration of the [trustee] for conducting the sale charged at his usual rates limited, until further order, to a maximum amount of $10,000.
(g)The balance to be held by the [the trustee] in his trust account until further order.
The trustee’s claim was that his fees and disbursements in effecting the disposal of the Suburb B property (including taking possession, effecting the sale, and dealing with the chattels) totalled $189,522.63. Invoices and receipts included in the exhibits to the trustee’s affidavits record most, if not all, the costs of the chattels storage have been paid from the proceeds of sale together with real estate agents’ costs. The settlement statement and trust account records exhibited by the trustee suggest that this $10,000 payment for remuneration in acting as a trustee on the sale has been paid.
The orders made on 11 August 2020 capped the reimbursement of the trustee’s fees on the sale, until further order, at $10,000. The trustee sought in his Amended Response filed 20 May 2022
14.An order that any payment to the [trustee] by any of the parties is paid in priority to any of the other parties interests and is to include the statutory realisation charge with such payments of any monies to be made on a forthwith basis.
This relief was refined in the trustee’s Case Outline as follows:
4. Next the [trustee] seeks orders that he disburse the net proceeds of sale of the [Suburb B] property after deduction of his remuneration and expenses of its sale as to half to himself as trustee of the bankrupt estate of the [applicant] and the other half to the [respondent]. It is likely that there will be a negative position (loss) from the sale of this property once the costs of [the trustee] and his expenses in realising the property are set off against the net sale proceeds which the Court should adjust against the [the respondent’s] interest.
The import of the amended relief as sought is as to the approval of his remuneration and payment of his expenses as claimed incurred on the disposal of the Suburb B property as provided for by the 11 August 2021 orders. I accept the trustee’s submission that there will be either little funds remaining or a loss from the Suburb B proceeds are adjusted to meet the balance of his costs as claimed “off the top” before any adjustment between he, the applicant and respondent.
The applicant and the respondent disputes the trustee’s claim for his remuneration, fees and disbursements incurred pursuant to the order made 11 August 2021 being greater than that provided for by the said orders. All be it that Order 7(f) was expressed to be pending further order, it was a consent order containing a quantum agreed to by the trustee and the applicant. (but undefended as against the respondent) Implicitly, the trustee anticipated at that time of entering the order that the quantum of $10,000 was sufficient to satisfy his remuneration for the role of trustee on the sale of Suburb B, and it was the events post the order that have inflated those expenses. This may be relevant to this claim. The orders made on 11 August 2020 have not been the subject of appeal. Responsibility as to the source of a portion of the significant quantum now claimed arises from the conduct of the trustee and the respondent as identified earlier in these reasons. This may be also be relevant to the claim.
The trustee did not identify the source of power relied upon grounding his amended relief as sought, nor was I taken during the course of submissions to any legislation, applicable principle or specific evidence on this subject matter. In those circumstances I am unable to make any determinations as to the necessary preconditions and relevant considerations for the making of the orders as sought by the trustee. I dismiss that part of the relief of the trustee. This determination does not preclude the trustee from making such application as he is advised as to the costs of the interlocutory and contempt applications made subsequent 11 August 2020 orders.
Likelihood of a surplus in the bankrupt estate
Having to the matters recorded in these reasons and the priorities identified in s 109 of the Bankruptcy Act, it is far more likely than not at the current time that the trustee and the debtors of the bankrupt estate will be in excess of and will consume the one half interest at law held by the trustee in the D Town properties and in the proceeds of sale for the Suburb B property. Having regard to the evidence at trial, the prospects of any surplus being available to be paid to the applicant is remote. In the event there is a surplus, it will be the property of the applicant. A factor to inflate the value of the funds recovered by the bankrupt estate may emerge should the trustee seek an order for his costs.
The recovery of any costs will have an impact on the funds available to pay the trustee’s fees, remunerations and expenses and the unsecured debtors of the bankrupt estate. The fact of any such cost applications if pressed, let alone any order that may be achieved, or the value of any order, at this time, remains alive but speculative. I am unable to make any reliable or safe finding as to these matters.
Prior to any adjustment pursuant to s 90SM of the Act, I find the property of the applicant, respondent and trustee to be:
(a)The applicant:

5 Joint J Bank account …47 1,900

6 Joint Household contents 5,000

8 A Motor Vehicle 3 16,000

Total assets and superannuation 22,900

12 A XX Finance Car Loan 16,000

13 A YY Finance Lease - Laptop 3,400

14 A Personal loan – ZZ Finance 1,011

15 A Buy Now Pay Later – AB Finance 150

Total liabilities 20,411
And hence, her net property is $2,489.
(b)The respondent:

1 R & T 50 per cent C Street, Suburb B 45,751

2 R & T 50 per cent 1 N St, D Town 687,500

3 R & T 50 per cent 2 N St, D Town 625,000

7 R Motor Vehicle 2 500

Total assets and superannuation 1,358,751

10 R & T Loan for 1 N & 2 N Street D Town 292,539

16 R & T Equitable charge on 1 N & 2 N Street D Town Not known

Total liabilities (subject to value of unknown and contingent liabilities) 292,539
And hence, his net property is $1,066,212.
(c)The trustee:

1 R & T 50 per cent C Street, Suburb B 45,751

2 R & T 50 per cent 1 N St, D Town 687,500

3 R & T 50 per cent 2 N St, D Town 625,000

Total assets and superannuation 1,358,751

9 T Unsecured Creditors of the bankruptcy 74,348

10 R & T Loan for 1 N & 2 N Street D Town 292,539

11 T Trustee's costs and expenses to 20/5/22 1,122,031

16 R & T Equitable charge on 1 N & 2 N Street D Town Not known

Total liabilities (subject to value of unknown and contingent liabilities) 1,488,918
And hence, the trustee’s net property is -$130,667.
Is it just and equitable to adjust property?

In Stanford & Stanford (2012) 247 CLR 108 the High Court observed that it is necessary for me to be satisfied that justice and equity will be achieved as part of the adjustment process pursuant to the Act. The requirements identified in the High Court are satisfied in this matter, having regard to:
(a)The period of the relationship of the parties and the contributions made over that period;
(b)The party’s relationship having broken down and them now living apart;
(c)Title to property needing to be changed or adjusted when consideration is given to the contribution and other factors identified below; and
(d)Each of the applicant and respondent seeking the exercise of a s 90SM discretion.
Contributions
The applicant, respondent and trustee agreed as to a finding of equality by way of contribution up to the date of separation, save that the respondent submitted that the D Town interests “came in as a consequence of the gratuity of” his parents and at least implicitly that contribution of the “equity” in those properties was made by his parents on his behalf (see Kessey v Kessey (1994) FLC 92-495 (“Kessey”)). This was later refined as the “equity in D Town” being a “gift” made to the applicant and respondent on behalf of the respondent by the third and fourth respondents.
A fundamental difficulty in the respondent’s argument on this issue was revealed starkly during the course of submissions. A satisfactory response could not be proffered as to how the respondent’s contended findings of fact as to the D Town properties being held on trust by himself and the applicant for the third and fourth respondents could simultaneously comfortably sit with a finding that the provision of any equity in the properties at the time of the transfer was gift for his only for his benefit.
The objective evidence does not support the respondent’s contention that the equity in the D Town properties was gifted by his parents to the respondent.
The inference drawn from the contemporaneous documents, including each of the transfers and the Commonwealth Bank loan application, is that the third and fourth respondents transferred the D Town properties to the applicant and respondent for consideration. The only evidence which would prima facie support the equity in the properties being gifted is (when taken alone) the “gift – equity family” source of funding identified in the Commonwealth Bank loan application, which was for the benefit of each of (both) the applicant and respondent. I reject the respondent’s submission that the transfer of the D Town properties to the applicant and respondent amounts to a contribution on the part of the respondent.

Submissions were made on behalf of the respondent that the payment of mortgages, rates and other outgoings in respect of the D Town properties by his parents subsequent to the 2008 transfer were a contribution in the respondent’s case on his behalf. That submission appeared to stand in direct contrast to the agreed position as to the requirement of the respondent and trustee, as a matter of equity, to account to the third and fourth respondent for those very same payments in the event the third and fourth respondents trust case failed. The submission is not accepted.
I find that contributions ought to be assessed as to equal up to the date of separation.
The children have been for differing periods post separation been solely or primarily in the care of their applicant with the respondent exercising various regimes of spending time with them. On the limited evidence before me on this issue, I find that:
(a)Upon separation, the children initially lived with the applicant and spent time with the respondent;
(b)Pursuant to the final parenting orders made on 24 April 2019, Z lived with the applicant and spent time with the respondent until February 2020;
(c)Since his release from incarceration, Z has continued to live with the applicant and spent two weeks with the respondent during a school holiday period in 2020, and Mr X has returned to live with the applicant on a full-time basis;
(d)The respondent has not seen or spent time with Z since she relocated to City R with the applicant in September 2020.
As conceded by the applicant in the course of submissions there was a vacuum of evidence as to the quantum of periodic child support paid by the respondent to the applicant for the children subsequent to separation. As recorded earlier in these reasons I find that any child support assessed after 2017 payable by the respondent to the applicant was nominal.
There are no current child support arrears. The firm evidence of the respondent was that he had always paid periodic child support as assessed. This was not materially challenged by the applicant, and I so find. I find that the current value of child support paid in respect of Z is nil.
From separation the applicant did not have the benefit of occupation of the Suburb B home. She lived in rental accommodation. The respondent occupied the Suburb B property from the date of separation until he was incarcerated. His evidence is that the mortgage instalments were paid during the period he had the sole benefit of occupation of the home.
The quantification of the paid mortgage instalments was not identified in the evidence nor the quantification of the rent paid by the applicant.
The respondent’s affidavit recorded that as at separation, he and the applicant had accrued debts in the sum of $375,906 ($357,906 being attributable to the NAB home loan and a further $18,000 to a “personal loan” with NAB”). The value of the mortgage when the property was sold by the trustee as identified in the settlement statement was $326,724.68.
The respondent contends “when [the applicant] left the home the amount owing on rates was $54,276. It is the respondent’s evidence that the outstanding rates were “settled by way of a payment plan” that he entered with the council. The settlement statement on the disposal of the Suburb B home records the amount adjusted for counsel rates was $3,228.66. The trustee gave evidence in his affidavits that as at 16 July 2018 the arrears of rates on the Suburb B property was $390.55.
The applicant broadly contends, absent foundation, that her debts of approximately $50,000 at separation had been “expenses for myself, the respondent and the children that had been accrued during the relationship”. A substantial dispute exists as between the applicant and the respondent as to the characterisation of the applicant’s debts recorded in her Statement of Affairs. They are:
(a)The secured creditors:
(i)$370,952.10 owing to NAB on the loan secured over the Suburb B property;
(ii)$307,091 owing to the Commonwealth Bank on the loan secured over 1 N Street;
(iii)$379,770 owing to the Commonwealth Bank on the loan secured over 2 N Street;
Totalling $1,057,813.10; and
(b)Unsecured creditors:
(i)$6,000 owing to TT City Council;
(ii)$219 owing to AC Ltd;
(iii)$9,917 owing to AD Company;
(iv)$516 owing to AE Company;
(v)$4,188 owing to AG Pty Ltd;
(vi)$1,750 owing to Mr AJ;
(vii)$6,263 owing to AK Finance; and
(viii)$35,000 owing to Mr AL.
Totalling $63,852.90.
The respondent submitted that there was “no evidence to suggest that anything listed in the creditor’s petition was a matrimonial debt”, and implicitly that those debts were incurred subsequent to separation. In particular it was contended that the $35,000 owing to Mr AL was a debt incurred by the applicant for payment of her solicitors, and that the applicant’s evidence as to her debts incurred after separation was inconsistent as between her affidavit evidence, oral evidence, and debtor’s petition. The respondent said that she and the respondent did not hold an account with AE Company at any time during their relationship.
There was some limited cross-examination on this topic that shed little further relevant evidence. In the circumstances the evidence does not permit a finding of fact to support the applicant’s assertion. I am unable to find that the debtors of her bankrupt estate were incurred during the relationship or for the benefit of the relationship.
The respondent gave affidavit evidence that he had superannuation entitlement of $18,228 at 30 June 2017. He says he withdrew $6,000 from that fund to undertake dental work and had a remaining balance of slightly in excess of $12,000 at the time of swearing his affidavit in June 2021. The joint balance sheet records he has no such interest at the date of the trial. On the evidence I find that this superannuation entitlement accrued over the course of the relationship has been used solely by the respondent since separation.
The respondent’s compensation payment of $457,852.84 received on 3 January 2017 was exhausted by him within that calendar year. As to this payment:
(a)The event causing injury and generating the payment occurred in 2009, being four months prior to the applicant and respondent’s separation; and
(b)The unchallenged evidence of the respondent as to the damages awarded making up the value of the compensation sum on compromise of the claim were $63,941.80 by way of a lump sum payment for his “permanent impairment”, $258,867.64 for lost wages (recorded as being “total and partial”) and a further $69,302.01 for medical expenses. Those payments total $392,11.45.
The latter is supported by the Centrelink exclusion condition attaching to the settlement.
The waste or other use of the funds of the respondent’s own funds to my mind does not weigh one way or the other in the assessment of post separation and contributions in the circumstances of this case. No submission to the contrary was made by the applicant or the trustee.
The High Court in Mallett & Mallett (1984) 156 CLR 605 stressed that the analysis supporting a contribution finding is to be sourced in the evidence rather than inferred in an absence of evidence. The Full Court in a more recent judgment of Horrigan & Horrigan [2020] FamCAFC 2 emphasised that the proper approach to the assessment of contributions is:
35…well established that an assessment of contributions is not a mathematical exercise, but rather involves the identification and assessment of all of the parties respective contributions, in a holistic way across the course of the relationship and in the post separation period to the point of assessment
Contributions up until the date of the trial are assessed holistically as favouring the applicant as to 55 per cent and the respondent as to 45 per cent.
Adjustments to the contributions findings
The applicant’s is 40 years old, is in good health and is employed receiving an income in the range of $110,000 (including her family benefits).
The respondent lives with a number of residual health challenges subsequent to his work accident in 2009 and his hospitalisation in 2011. He says absent controversy, and I find, that he suffers from complex regional pain syndrome and nerve damage to his right side and arm. He identifies the latter as a form of paralysis and weakness to his right side. He gives evidence as to consuming a range of prescription medication and being treated for anxiety and depression by a psychiatrist on a monthly basis up until February 2020. His case as to an unlikelihood of him engaging in employment in the future was not materially challenged at trial and I so find.
In his current Financial Statement the respondent reported receiving no income at all, including no government assistance. He cannot receive an income tested commonwealth benefit until 2023.
I find that the applicant will at all material times in the future have a significantly superior income earning capacity greater than the respondent.
There will be a substantive difference in the property positions of the applicant and respondent resulting from the applicant’s bankruptcy and contribution findings. As between the applicant and respondent, on the contribution findings, the respondent will achieve a substantially superior share of the remaining half of the proceeds of sale of the D Town properties to that of the applicant. He has no liabilities and will, if he is able to recover it, retain the benefit of the loan to Mr SS. The applicant will retain the benefit of her modest superannuation interest.
The respondent will continue to have the benefit of a financial resource by way of his family both by way of provision of sums of money from time to time and the provision of accommodation at no cost. He will retain the benefit of the chattels and cars stored by the trustee while the respondent was incarcerated.
For the reasons recorded above, I find that it is far more likely than not that there will not be a surplus owing to the applicant on her bankrupt estate, or that if there is a surplus it will be minimal. Any suggestion as to the possible value of that potential surplus speculative. I give this factor little weight. I do not find that the disclosure failures of the respondent as identified earlier in these reasons fall within that range of cases considered by the Full Court where the inadequacy of disclosure suggests the likelihood of undisclosed assets or income. In this case there is no basis for so concluding and I find that the Court is satisfied that at the date of the hearing there was no undisclosed assets or income of the respondent.
It was not disputed that the applicant will continue to have the full-time care of Z, who lives with her in City R save for the time that she spends with the respondent during school holidays. I find that it is more likely than not that the applicant will not receive periodic child support until Z becomes self-supporting, the respondent having no income stream.
By way of a holistic consideration of the matters contained in s 90SM(4)(e to g) of the Act I these factors warrant an adjustment from the contribution findings in favour of the applicant at 2.5 per cent.
Accordingly subject to the deduction of the as yet undetermined liabilities as set out earlier in these reasons:
(a)The trustee will retain his 50 per cent vested interest at law in the Suburb B proceeds and in the D Town properties subject to 50 per cent of the equitable charge;
(b)The applicant has an overall entitlement of 57.5 per cent of that pool and subsequent to the trustee’s retention of 50 per cent, she will receive the benefit of 7.5 per cent the Suburb B proceeds and in the D Town properties subject to 50 per cent of the equitable charge; and
(c)The respondent will retain 42.5 per cent of the Suburb B proceeds and in the D Town properties subject to 50 per cent of the equitable charge.
Conclusion – justice and equity
The respondent’s relief to acquire trustee’s interests in D Town properties
On his own evidence the applicant has no source of income and no savings. He is excluded from Centrelink benefits until 2023. He did not put into evidence any document to support a finding as to he being remotely able to access funds to acquire the trustee’s interests in the properties or to satisfy the equitable charge on the properties in favour of his parents. I find he has no such capacities. He made no submissions contrary to the primary relief sought by the trustee as to the immediate sale of the D Town properties.
The trustee has no capacity to pay the value of the sum charged in the third and fourth respondents’ favour secured on the D Town properties unless they are sold. The history of the combative and dysfunctional relationship between the trustee and the respondent does not ground a positive forecast as to their future dealings should they remain financially co-dependant as the registered proprietors of the D Town properties. The s90SM adjustment in favour of the applicant from the D Town properties ought to be realized as soon as is possible.
This litigation has been on foot for more than six years. So as to progress the s 90SM(3) mandate, orders for the forthwith sale of the D Town properties so as to ensure achieve just and equitable outcome.
Implementation of the adjustment of property
Doing the best as I can in all the circumstances of this matter, with the evidence available, and in the absence of evidence to ground findings as to the value of some liabilities (such as the value of the sum expected to be paid to the third and fourth respondents secured by the equitable charge, the value of selling costs of the D Town properties and the value of any capital gains tax payable on the sale), orders will be made as to any adjustments of the primary property in the balance sheet (being the balance of the proceeds of sale of the Suburb B property and the equity in the D Town properties), using a percentage so that each of the applicant, respondent and trustee equitably share in the inevitable “rise and fall” dependent on the determination by the assessor of the value of the equitable charge on the D Town properties in favour of the third and fourth respondents and the vagaries as to the sale price achieved on the disposal of the D Town properties and the unknown value as to selling costs and capital gains tax.
The applicant will retain her J Bank account, household contents and Motor Vehicle 3 and will be responsible for her current liabilities. The net value of this property is $2,489. She will receive 7.5 per cent of the Suburb B proceeds, being approximately $6,863. She will receive 7.5 per cent of the proceeds of sale of the D Town properties after payment of the mortgage, selling costs, capital gains tax and satisfaction of the third and fourth respondents’ equitable charge.
The respondent will retain his motor vehicle valued at $500. The respondent will receive 42.5 per cent of the Suburb B proceeds, being approximately $38,888.35. He will receive 42.5 per cent of the proceeds of sale of the D Town properties after payment of the mortgage, selling costs, capital gains tax and satisfaction of the third and fourth respondents’ equitable charge.
The trustee will retain for the benefit of the bankrupt estate his 50 per cent interest at law in the Suburb B proceeds, and 50 per cent of the proceeds of sale of the D Town properties after payment of the mortgage, selling costs, capital gains tax and satisfaction of the third and fourth respondents’ equitable charge.
The mechanics of the sale of the D Town Properties
The trustee sought relief pursuant to s 66G of the Conveyancing Act as to the appointment of trustees for sale of the D Town properties. He did not put into evidence any document recording the consent of the proposed trustees, nor was there evidence as to the professional costs or fees due to the trustees should they be charged with that role. In the circumstances, I refuse the trustees relief as sought pursuant to s 66G of the Conveyancing Act.
Orders will be made to enable the trustee and the respondent to agree as to the identity of a listing agent with a default mechanism should agreement not be achieved in a short period of time. Further orders will be made providing an ability for the trustee and the respondent to agree to listing and sale prices. Again, absent agreement being achieved in a short compass of time, orders will be made for the single expert witness to determine either a failure to agree or any dispute on that subject matter.
In all the circumstances, having regard to my findings as to the nature of exchanges between the trustee and the respondent and the likelihood that the terms of those exchanges will not approve, it is appropriate for the trustee to nominate the identity of the conveyancer and/or solicitor to act on the sale of the D Town properties. In the event the respondent is recalcitrant in providing instructions to the solicitor acting on the sale, it is appropriate that the trustee have the capacity to progress those instructions on his behalf, so as to avoid any prejudice or loss being incurred in the sale process.
All parties sought orders for a sequential sale process by way of a combination of private listings and auctions. Orders will be made to that effect, with some modifications so as to achieve consistency.
The trustee sought an order for vacant possession of the D Town properties within 28 days. No submissions were made by any party on that prayer. There was no evidence in the third or fourth respondents’ case as to the terms of any current tenancy of the D Town properties. It will be a matter for those parties to construct arrangements to ensure the provision of vacant possession of the D Town properties. The terms of the order in all the circumstances appears both reasonable and appropriate.
In all the circumstances, it is necessary to prescribe the mechanics of the sale of the D Town properties so as to avoid further conflicts, delay and costs. In the event the agent on the sale requests any work be done on either or both of the D Town properties to prepare them for sale, I find it unlikely that the respondent will facilitate that advice and in those circumstances, the orders will provide a mechanism to ensure the maximum value of the properties is achieved and for the trustee to be reimbursed for any costs incurred in that process.
Conclusion
For all of the above reasons, I make the orders as set out at the forefront of this judgement.

I certify that the preceding four hundred and eighty-six (486) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Campton.
Associate:
Dated: 31 August 2022
SCHEDULE OF PARTIES

PAC 1208 of 2016

Respondents

Fourth respondent:

MS DAVIS

File number(s):	PAC 1208 of 2016
Judgment of:	CAMPTON J
Date of judgment:	31 August 2022
Catchwords:	FAMILY LAW – PROPERTY – TRUSTS – Part VIIIAB property adjustment proceedings – Jurisdiction and s 90RD of the Family Law Act 1975 (Cth) considerations – Leave to commence out of time required – Where the applicant was a discharged bankrupt at the time of commencing proceedings in this Court, and named the trustee in bankruptcy as a respondent to her Initiating Application – Where the respondent’s parents joined to the proceedings assert an interest in two real properties held by the applicant and respondent during their relationship – Where the interests of the applicant in those real properties vested in the trustee in bankruptcy – Where the respondent’s parents seek a finding of an express bare oral trust or the imposition by equity of a constructive trust – Existence of express and constructive trusts – Examination of facts concerning whether intention to create a trust existed – Where the fourth respondent did not give evidence in her case – Inferences drawn arising from failure to give evidence – Intention to create a trust not established – Consideration of maxims of equity concerning unconscionability – Evidence insufficient to establish that it would be unconscionable for the trustee and respondent to retain their interests in the real properties – Unclean hands – Circumstances in which equitable relief (if established) would have been denied because of unclean hands – Remedy by way of equitable charge – Adjustment of property interests pursuant to s 90SM of the Family Law Act 1975 (Cth) – Sale of real properties.
Legislation:	Bankruptcy Act 1966 (Cth) ss 58, 73, 74, 77A, 109, 116, 115, 153, 153A, 153B Conveyancing Act 1919 (NSW) ss 23C, 23D, 66G Crimes (Administration of Sentences) Act 1999 (NSW) s 77 Family Law Act 1975 (Cth) Pt VIIIAB, ss 44, 117B, 90RD, 90SF, 90SK, 90SM Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2009 (Cth), Item 86A Federal Court Act 1976 (Cth) s 51A Real Property Act 1900 (NSW) s 42 Federal Circuit and. Family Court of Australia (Family Law) Rules 2021 (Cth) ch 6, Pt 7.2, 13.01, 13.02, rr 7.34, 6.06, 7.36, 12.06
Cases cited:	Bahr v Nicolay (No 2) (1988) 164 CLR 604; [1988] HCA 16 Barry v Heider (1914) 19 CLR 197; [1914] HCA 79 Black Uhlans Inc v NSW Crime Commission (2002) NSWSC 1060 Briginshaw v Briginshaw (1938) 69 CLR 336; [1938] ALR 334 Carantinos v Magafas [2008] NSWCA304 Commissioner of Stamp Duties (QLD) v Jolliffe (1920) 28 CLR 178; [1990] HCA 45 Corin v Patton (1990) 169 CLR 540; [1990] HCA 12 Trustees of the Property of Cummins (A Bankrupt) v Cummins (2006) 227 CLR 278; [2006] HCA 6 Currie v Hamilton (1984) 1 NSWLR 687 Gascoigne v Gascoigne [1918] 1 K.B. 223 Hohol v Hohol (1980) FLC 90-824; [1981] VR 221 Horrigan & Horrigan [2020] FamCAFC 2 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; [1984] HCA 64 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 9 Kation Pty Ltd v Lamru Pty Ltd (2009) 257 ALR 336; [2009] NSWCA 145 Kessey v Kessey (1994) FLC 92-495; [1994] FamCA 162 Kettles and Gas Appliances Ltd v Anthony Hordern and Sons Ltd (1934) 35 SR (NSW) 108 Khalif & Khalif & Anor [2020] FamCA 39 Khalif & Khalif [2021] FamCAFC 123 Mallett & Mallett (1984) 156 CLR 605; [1984] HCA 21 MBP (SA) Pty Ltd v Gogic (1991) 171 CLR 657; [1991] HCA 3 Micheletto (Trustee), El-Debel (Bankrupt) v El-Debel [2020] FCA 1031 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 Peterson & Davis [2022] FedCFamC1F 402 Phillip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457; [1981] HCA 7 Rizeq v Western Australia (2017) 262 CLR 1; [2017] HCA 23 Rochefoucauld v Boustead [1897] 1 Ch 196 Stanford & Stanford (2012) 247 CLR 108; [2012] HCA 52] Stansfield DIY Wealth Pty Ltd (in liq) (2014) 291 FLR 17 Stephens & Stephens & Anor (Enforcement) (2009) FLC 93-425 [2009] FamCAFC 240 Walsh Bay Developments Pty Ltd v Federal Commissioner of Taxation (1995) 130 ALR 415; [1994] Federal Court of Australia 703 Warner v Hung; Bellpac Pty Ltd (rec’s and mgrs apptd) (in liq) (2011) 297 ALR 56; [2011] Federal Court of Australia 1123 Watson v Foxman (1995) 49 NSWLR 315 Weige v Cupton Pty Ltd [2012] NSWCA 414 Weir & Weir (1992) FLC 92-338; [1992] FamCA 69
Division:	Division 1 First Instance
Number of paragraphs:	486
Date of hearing:	30 May – 3 June 2022
Place:	Sydney
Counsel for the Applicant:	Mr George
Solicitor for the Applicant:	Williamson & Learmonth Solicitors
Counsel for the Respondent:	Mr Schonell
Solicitor for the Respondent:	Adams & Partners
Counsel for the Second Respondent Trustee:	Mr Marshall SC with Mr Eardley
Solicitor for the Second Respondent Trustee:	Mercantile Legal Services
Counsel for the Third and Fourth Respondents:	Mr Cook SC
Solicitor for the Third and Fourth Respondents:	McEvoy Legal

PAC 1208 of 2016
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MS PETERSON applicant
AND:	MR DAVIS First respondent MR CUSSON Second respondent MR B DAVIS (and another named in the Schedule) Third respondent

order made by:	CAMPTON J
DATE OF ORDER:	31 August 2022

1	R & T	50 per cent C Street, Suburb B	45,751
2	R & T	50 per cent 1 N St, D Town	687,500
3	R & T	50 per cent 2 N St, D Town	625,000
7	R	Motor Vehicle 2	500
Total assets and superannuation			1,358,751
10	R & T	Loan for 1 N & 2 N Street D Town	292,539
16	R & T	Equitable charge on 1 N & 2 N Street D Town	Not known
Total liabilities (subject to value of unknown and contingent liabilities)			292,539

PAC 1208 of 2016
Respondents
Fourth respondent:	MS DAVIS