Raso & Raso - [2022] FedCFamC1F 336

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Raso & Raso [2022] FedCFamC1F 336

File number(s): PAC 5002 of 2019

Judgment of: HARTNETT J

Date of judgment: 25 May 2022

Catchwords: FAMILY LAW – PROPERTY – Equitable interests – Discrete issues – Where the paternal grandfather sought a section 78 declaration that the husband and the wife hold their real properties on constructive trust for the grandfather – Where the grandfather gave a large sum of money to the husband and wife –– Where the money applied to the purchase of real property in the relevant circumstances and as given to the wife is a gift – No constructive trust in relation to the wife’s property – Where the husband asserts the money given to him from the grandfather was a gift or subject to prior agreements – Where the money given to the husband and wife in respect of property registered in the husband’s name was for the purpose of a joint endeavour between the parties – Pooling of resources – End of joint relationship – Declaration made that the grandfather has a beneficial interest by way of constructive trust in the husband’s property – Husband and wife ordered to pay the grandfather a sum of respecting his interest in the property

Legislation:
Evidence Act 1995 (Cth) s 140

Family Law Act 1975 (Cth) ss 78, 79.

Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 10.11(d)

Cases cited:
Bell & Nahos [2016] FamCAFC 244

Baumgartner v Baumgartner (1988) 164 CLR 137

Briginshaw & Briginshaw (1938) 60 CLR 336

Cantarella v Cantarella (1976) FLC 90-056

Charlmers & Pardoe [1963] 1 WLR 677

Cressy v Johnson [2009] VSC 52

Fox v Percy (2003) 214 CLR 118

Grefeld & Grefeld [2012] FamCAC 71

Leane v Dalborn [2020] VSC 461

Lloyd v Tedesco [2002] WASCA 63

Maineri & Anor v Cirillo [2014] VSCA 227

Marley & Ormonde [2021] FamCA 105

Muschinski v Dodds (1985) 160 CLR 683

Warner v Hung; Bellpac Pty Ltd (rec’s and mgrs. apptd) (in liq) (2011) 297 ALR 56

Whisprun Pty Ltd v Dixon (2003) 200 ALR 44

Division: Division 1 First Instance

Number of paragraphs: 137

Date of last submission/s: 21 February 2022

Date of hearing: 20–21 December 2021

Place: Melbourne

Counsel for the Applicant: Mr Breeze

Solicitor for the Applicant: Prime Lawyers

Counsel for the First Respondent: Mr Levet

Solicitor for the First Respondent: AAT Legal

Counsel for the Second Respondent: Mr Harris

Solicitor for the Second Respondent: Legal Aid NSW Sydney Central Family Law

ORDERS

PAC 5002 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)

BETWEEN:
MR RASO
Applicant

AND:
MS RASO
First Respondent

MR B RASO
Second Respondent

ORDER MADE BY:

HARTNETT J

DATE OF ORDER:

25 MAY 2022

IT IS DECLARED THAT:
A.The husband holds the title in C Street, Suburb D NSW being the whole of the land comprised in title reference … (“the Suburb D property”) on constructive trust for the grandfather to the extent to which the grandfather has contributed the sum of $466,690.49 towards the Suburb D property.

THE COURT ORDERS THAT:
1.The husband and the wife pay to the grandfather the sum of $466,690.49 within 90 days of this date or such other time as agreed by the parties in writing.
2.The second respondent’s Application in a Case filed 4 May 2021 and Response filed 20 November 2020 is hereby otherwise dismissed.
3.The matter is listed for directions regarding the future progress of the outstanding applications of the husband and the wife on 29 June 2022 at 9:30am.

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 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (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 Raso & Raso is approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J:
INTRODUCTION

This proceeding commenced in the Federal Circuit Court of Australia (now Division 2 of the Federal Circuit and Family Court of Australia) on the 11 October 2019, when the applicant husband (“the husband”) filed an Initiating Application for final parenting orders.
On 2 December 2019, the first respondent wife (“the wife”) filed a Response seeking final parenting and property orders.
On 25 May 2020, the second respondent, the paternal grandfather to the husband, (“the grandfather”) issued proceedings in the Supreme Court of New South Wales against the husband.
On 20 July 2020, the husband filed an Application in a Case seeking that the grandfather be joined to the proceeding. On 12 October 2020, orders were made by consent for such joinder. The proceedings in the Supreme Court of New South Wales were discontinued.
On 20 November 2020, the grandfather filed a Response seeking:
(a)a declaration pursuant to s 78 of the Family Law Act 1975 (Cth) (“the Act”) that the property situated at C Street, Suburb D in the State of New South Wales (the “Suburb D property”) is held by the husband subject to a constructive trust for the benefit of the grandfather;
(b)a further declaration that the property situated at E Street, Suburb F in the State of New South Wales (the “Suburb F property”) is held by the wife subject to a constructive trust for the benefit of the grandfather; and
(c)the husband and/or wife pay the grandfather for his equity in the properties.
On 10 December 2020, the proceeding was transferred to the then Family Court of Australia (now Division 1 of the Federal Circuit and Family Court of Australia).
On 4 May 2021, the grandfather filed an Application in a Case and sought that his claim for relief, pursuant to his Response, be heard separately.
On 29 October 2021, the following Order, relevantly, was made:
1.Pursuant to r 10.11(d) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 there be a separate hearing concerning the [grandfather’s] claim for relief in his Response filed 20 November 2020 and listed for trial before Justice Hartnett on 20 December 2021 at 10:00am (as a two (2) day matter) by Microsoft Teams.
The husband contends that the Suburb D property is solely registered in his name, and is the property, both legally and beneficially, of the husband and the wife. The husband further contends that the Suburb F property is solely registered in the wife’s name, and that no constructive trust ought to be declared in respect to this property, even though he does not assert a legal or equitable interest in the property.
The wife accepts the grandfather’s position that he has an equitable interest in both the Suburb D and Suburb F properties. However, her affidavit evidence and evidence at trial under cross examination did not support her position in respect of the Suburb F property. Rather, it supported the position of the husband.
The question thus before the Court is whether the grandfather has an equitable interest based on a constructive trust in either or both of the parties’ real properties.
It was common ground between the parties that any agreement/s between the parties as to any matters going to the creation of an equitable trust as asserted by the grandfather, or going to a failure to establish the creation of an equitable trust in favour of the grandfather, were oral. The grandfather further asserted that some parts of any agreement/s are to be partly implied.
The matter was heard on 20 and 21 December 2021. The father and grandfather were ordered to file any written closing submissions before 21 February 2022.[1] The wife did not wish to file written submissions and no orders were made for her to do so. Her position was to abide the decision of the Court.
[1] Pursuant to Orders made 21 December 2021.
Statements of fact in these reasons are findings of fact on the balance of probabilities.[2] It is not necessary in these reasons for judgment to comment upon the entirety of the evidence including the evidence of each witness, nor to comment on every exhibit tendered. However every piece of evidence relied upon by the parties has been read and carefully considered by me.[3]
[2] Evidence Act 1995 (Cth) s 140
[3] Bell & Nahos [2016] FamCAFC 244, [28]; Whisprun Pty Ltd v Dixon (2003) 200 ALR 447, [62].
RELEVANT BACKGROUND
The grandfather was born in 1925 in Country G. He migrated to Australia in 1956. At trial he was aged 96 years. The husband was born in 1982. At trial he was aged 39 years. The wife was born in 1974. At trial she was aged 47 years.
Sometime prior to 2002, the husband commenced living with the grandfather and the grandfather’s wife (the husband’s grandmother) at their home situated at H Street, Suburb J in the State of New South Wales (the “Suburb J property”). This property was owned jointly by the grandfather and his son Mr K who is the husband’s father. Mr K was about 12 years old when the Suburb J property was purchased in 1961. He made no contribution to the purchase of this property and lived in it only as a member of his household. Mr K ultimately left the Suburb J property and resides in Sydney.
In or around 2002, and with the consent of the grandfather, the husband commenced to construct a granny flat (the “Suburb J flat”) at the rear of the Suburb J property. The husband paid the costs of this construction. Upon its completion, the husband took up residence in the Suburb J flat.
In February 2008, the husband and wife commenced their cohabitation in the Suburb J flat. The wife at that time provided the husband with a sum of $10,000 (monies from a redundancy payment as received by her) which he applied to the building of an extra room on the granny flat.
The husband and wife lived in the Suburb J flat until 2010, when the husband and wife moved to a property situated at L Street, Suburb M in the State of New South Wales (“the Suburb M property”). The wife, at the time, was pregnant with the husband and wife’s first child. The Suburb M property had been owned by the husband’s mother who sold it to the husband in 2007 or 2006 for $400,000. She secured the debt owed by the husband to her in respect of the purchase, by way of the lodgement of a mortgage in her favour over the property. From the time of his purchase of this property, until 2010, when the husband and wife took up occupation of the property, the husband received rental income receipts in respect of his ownership of the property.
No payment of rent or utilities was made by either the husband, or the husband and wife to the grandfather during their occupation of the Suburb J flat and none was sought by the grandfather or the grandmother.
Between 2010 and 2012, the Suburb J flat was occupied by Mr N; the grandfather’s grandson and the husband’s brother. The same arrangement as to the non-payment of rental applied to this grandson.
In late 2011, the grandfather’s wife (and the husband’s grandmother) died. The grandmother had been diagnosed with Parkinson’s disease in the early 2000s and suffered a rapid decline in her health from about 2006. Both the husband and his brother, Mr N, greatly assisted the grandfather in caring for the grandmother, in particular from 2006, and on an almost daily basis, until her death in 2011.
In 2012, the husband and the wife, and their child, X born 2010, returned to the Suburb J property at the request of the grandfather. By agreement with the grandfather, they took up occupation of the main house being the home in which the husband’s grandparents had resided from 1961 until the grandmother’s death in late 2011. The grandfather moved out of the main house and took up occupation of the Suburb J flat. The husband carried out some renovations to the Suburb J property. The purpose of those renovations was to make the main house more comfortable and suitable for the husband and wife, and their family. The cost of those renovations were paid by the husband. No rent was required to be paid by the husband and wife to the grandfather for their use of the main house. The husband and wife paid the utilities bills for both the main house and the Suburb J flat.
In mid-2013, the wife commenced to receive a Centrelink carer’s benefit payment for her care of the grandfather in the sum of $115.40 a fortnight.
In mid-2013, the husband and the wife married.
In 2014, the husband and wife’s second child, Y, was born.
From in or around early 2015, the grandfather authorised for the wife to have access to the grandfather’s Bank Account with the Commonwealth Bank. The wife continued to operate that account until her access was cancelled by the grandfather in mid-2019.
In late 2015/early 2016, the husband sold the Suburb M property for the sum of $1,010,000. He claimed that no monies were then owing to his mother and that the net proceeds of sale were received by him solely.
In early 2016, the husband purchased the Suburb D property in his sole name. He commenced to renovate that property. He and the wife and their children did not take up residence in this property until the construction works were mostly completed.
In or around mid-2016, the husband commenced to construct a granny flat at the rear of the Suburb D property (the “granny flat”). The husband claimed that this was built pursuant to an agreement between the husband and the grandfather that the husband would build a granny flat on the Suburb D Property for the grandfather to live in; the grandfather would meet the costs incurred; and the grandfather could live in the granny flat upon paying for the costs upon completion of the build.[4]
[4] The husband’s case outline filed 17 December 2021 at [8]; Transcript dated 20 December 2021, p.59-60.
In late 2016, the grandfather sold the Suburb J property. Settlement occurred in early 2017.
In about early 2017, the husband and wife and their children, and the grandfather, took up residence in the Suburb D Property. The grandfather resided in the granny flat. The parties and the children resided in the main house.
In early 2017, the wife received $142,000 as an inheritance from her grandmother.
In early 2017, the grandfather gave to the husband a sum of $690,340.49 being a part of the net proceeds of sale of the Suburb J property as received by the grandfather.
In mid-2017, the wife purchased the Suburb F property in her sole name. This property remained largely unoccupied, save for those periods of time the wife and/or the wife and children would stay there between early 2018 and mid-2019 when the parties finally separated and the wife and the children took up occupation of that property. The grandfather asserts that he has an equitable interest in this property because he gave the wife the necessary funds to execute its purchase as described hereafter.
At the end of 2017, the husband stopped working and required the wife to financially support the household from her part-time income. The husband sought for the grandfather to leave the Suburb D property.
In mid-2019, the grandfather was evicted by the husband from the granny flat. The grandfather had resided in the granny flat for approximately two years and four months. That same day the wife advised Centrelink that she was no longer caring for the grandfather and the wife stopped receiving the carer’s benefit payments. The grandfather stayed for a short period with his daughter Ms O before he entered, in June 2019, the P Accommodation, where he presently resides. The grandfather is without savings and was unable to pay the entry bond to the accommodation. The accommodation has ongoing fees, approximately $675 per week, which exceed the grandfather’s aged pension of $472 per week. The grandfather’s three children (Mr K (the husband’s father), Ms O, and Ms Q) have been paying the shortfall in fees and meeting their father’s other expenses such as medication and clothing.
The above factual summary is elaborated upon in a consideration of the evidence as set out hereafter.
MATERIAL RELIED UPON
The husband relied upon the following documents:
(1)Further Amended Initiating Application filed 8 December 2020;
(2)case outline filed 17 December 2021;
(3)trial affidavit filed 16 December 2021;
(4)written submissions filed 15 February 2022; and
(5)exhibit R1.
The wife relied upon the following documents:
(1)affidavit filed 6 May 2021 from paragraph 103 onwards; and
(2)outline of case dated 21 December 2021.
The grandfather relied upon the following documents:
(1)case outline filed 17 December 2021;
(2)affidavit filed 20 November 2020;
(3)written submissions filed 31 January 2022;
(4)written submissions in reply filed 21 February 2022; and
(5)exhibit SR1.
All parties to the proceeding were cross-examined on the contents of their affidavits and other relevant matters. It is important in this proceeding to acknowledge that whilst the grandfather’s recollection of events many years prior was sometimes inaccurate, he was 96 years of age at trial. He was generally a credible witness. The wife was an honest and truthful witness who did her best to recall events which occurred many years ago. Where the evidence of the grandfather and the wife differ, I generally prefer the evidence of the wife. There were some inconsistencies in the husband’s evidence and again where his evidence differs to that of the wife, I generally prefer the evidence of the wife. I note however, that the wife’s evidence did not go to the establishment of a constructive trust in the Suburb F property in favour of the grandfather, despite the position of the wife at trial, as discussed hereafter. The husband otherwise also endeavoured to recall events accurately which occurred many years ago. Each of the witnesses’ recollections about discussions as to critical matters were inconsistent at times and there was no documentary evidence to assist in the making of findings as to the competing versions of the parties. The Court has endeavoured to:
…limit [its] reliance on the appearances of witnesses and….reason…[its] conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events.[5]
[5] Fox v Percy (2003) 214 CLR 118 at [31].
I take these matters into consideration when assessing the evidence.
Further, I have had regard to Warner v Hung; Bellpac Pty Ltd (rec’s and mgrs. apptd) (in liq) (2011) 297 ALR 56 per Emmett J at [48], where his Honour observed:
When proof of any fact is required, the court must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Mere mechanical comparison of probabilities, independent of any belief in reality, cannot justify the finding of a fact. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the court. However, reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, and the gravity of the consequences flowing from a particular finding are considerations that must affect whether the fat has been proved to the reasonable satisfaction of the court. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences.[6]
[6] Referring to Briginshaw v Briginshaw (1938) 60 CLR 336, 361-2.
THE PARTIES’ PROPOSALS

The orders sought by the husband were that there be no declaration pursuant to s 78 of the Act and that as between the husband and the grandfather, each of them have the sole right, title and interest in any property which is in their respective possession, title of control.[7] The husband sought that he retain the Suburb D property; the wife retain the Suburb F property; he pay the grandfather the sum of $45,000; and the wife pay the grandfather the sum of $240,000.[8]
[7] The husband’s case outline filed 17 December 2021.
[8] Further Amended Initiating Application filed 8 December 2020.
The wife affirmed her position in her case outline dated and emailed to chambers on 21 December 2021, which stated that she adopted the chronology of the grandfather, accepted that amounts were advanced to the wife and husband by the grandfather, and asserted that the grandfather was entitled to repayment of those monies. She submitted further that the husband and wife did not however have the ability to repay the grandfather without the sale of the Suburb D property, as they did not have sufficient borrowing capacity, and the sale of the Suburb F property would not result in net proceeds of sale in sufficient sum to repay the grandfather. She wished to be heard subsequently as to any proposed sale of the real properties.
The grandfather sought a declaration pursuant to s 78 of the Act that the husband and wife hold their legal ownership of their respective properties subject to a constructive trust for the benefit of the grandfather and he accordingly sought a lump sum payment to be made to him that was equal to his equitable interest.
LEGAL PRINCIPLES
Section 78 of the Act states:
(1)In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property.
(2)Where a court makes a declaration under subsection (1), it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.
In considering whether to make a declaration the Court must apply the rules of equity and the common law.[9] The principles surrounding a constructive trust are well established.[10] In Muschinski v Dodds (1985) 160 CLR 683, Deane J, as adopted by the High Court in Baumgartner v Baumgartner (1987) 164 CLR 137 at [31], held:
… the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do…
[9] Cantarella v Cantarella (1976) FLC 90-056.
[10] Muschinski v Dodds (1985) 160 CLR 683; Baumgartner v Baumgartner (1988) 164 CLR 137.
In Marley & Ormonde [2021] FamCA 105, McClelland DCJ relevantly described the process of establishing a constructive trust as follows:
198.Essentially, a constructive trust may arise by operation of law, irrespective of the parties’ intentions, to prevent the legal owner of property from acting unconscionably toward a person promised, or otherwise entitled, to an interest in the property. That is, a constructive trust arises whenever “the circumstances are such that it would be unconscionable for the owner of property… to assert his own beneficial interest in the property and deny the beneficial interest of another” or, stated in the reverse, where it would be unconscionable to allow a legal owner of property to enjoy sole beneficial ownership of that property: see Paragon Finance plc v D B Thakerar & Co [1999] 1 All ER 400 at 409.
…
200.A windfall constructive trust may be imposed where one party has made contributions to a property and it would be unconscionable for the registered proprietor to retain the benefit of those contributions: see Baumgartner v Baumgartner (1987) 164 CLR 137 at 148 (per Mason CJ, Wilson and Deane JJ).
201. For such a trust to be found, the following is necessary:
(1)The parties must be involved in a joint relationship or endeavour: see Swettenham v Wild [2005] QCA 264 at [36]–[37];
(2)There must have been a pooling of resources for the purposes of the joint relationship or endeavour. This might include consideration of the non-financial contributions made by the parties: see Miller v Sutherland (1990) 14 Fam LR 416 at 424; see also Muschinski v Dodds (1985) 160 CLR 583;
(3)The joint relationship must have come to an end: Brendan Edgeworth et al, Sackville & Neave: Australian Property Law (LexisNexis Butterworths, 10th ed, 2016) [4.124];
(4)It would be unconscionable, in the circumstances, for the landowner to retain the benefit of the other’s contributions.
The pooling of resources can be established if the contributions are linked to the purchase, maintenance and/or improvement of the property.[11]
[11] Leane v Dalbon [2020] VSC 461; Lloyd v Tedesco [2002] WASCA 63; Cressy v Johnson [2009] VSC 52.
The grandfather carries the onus of satisfying the Court as to why it would be unconscionable for the husband and wife to enjoy sole beneficial ownership of each of the separate real properties of which they are the sole legal owner.
THE EVIDENCE
The Suburb J Property
The Suburb J flat
The husband’s evidence was that he built the Suburb J flat pursuant to an oral agreement between the husband and the grandfather that it be built by the husband, and that the costs in relation to that construction, together with any increase in value to the property occasioned by the existence of the granny flat, would be reimbursed to the husband when the grandfather sold the Suburb J property. The grandfather denied such an agreement was made, and asserted that he consented to the husband building the granny flat, at the husband’s cost, and on the condition that “he did all the work properly and got the proper approvals from the council”.[12]
[12] The grandfather’s affidavit filed 20 November 2020, at [20].
The husband claimed he spent approximately $196,000 to construct the granny flat as follows:
(1)$5,000 on plans and owner builder licence;
(2)$7,500 on Council fees;
(3)$12,500 on encasement of common sewer line beneath the Suburb J flat;
(4)$5,000 on soil and rubbish removal;
(5)$17,500 on earthworks, steel and concrete;
(6)$25,000 on electrical and plumbing;
(7)$42,500 on timber, tiles, insulation, roof and ceiling;
(8)$10,000 on solar panels;
(9)$12,500 on kitchen;
(10)$10,000 on bathroom;
(11)$12,500 on windows, doors and blinds;
(12)$10,000 on other incidental expenses; and
(13)$26,000 for the husband’s labour.
Total: $196,000.
The grandfather claimed that the husband spent approximately $100,000. It was also the wife’s evidence that the husband had told her that he had spent $100,000 on the Suburb J flat.[13]
[13] Transcript dated 21 December 2021, p. 103 line 18-21.
There is no corroborative evidence before the Court as to the husband’s claimed expenditure including any invoices, receipts, bank transfers or other relevant documents in relation to these expenses. It is logical to expect there would be so, if an agreement existed between the husband and the grandfather that the grandfather would reimburse to the husband, many years later perhaps, the quantum spent by the husband on the costs.
The husband asserted that he funded the costs of the construction of the granny flat using $55,000 he had in savings; his weekly income; and borrowed funds from his mother and maternal grandmother Ms S, borrowings he subsequently repaid. There was no documentary or other evidence before the Court as to any savings of the husband at that time, though I accept the husband had some savings. Otherwise, I note the matters referred to in the following paragraph in this regard. Further there was no documentation or other evidence before the Court as to the loans claimed by the husband to have been advanced to him, nor any repayment of any such alleged loans. There was no evidence before the Court from the husband’s mother or maternal grandmother.[14] I infer from the absence of such documentation and/or affidavit evidence that it would not have assisted the husband’s case.
[14] I infer that such evidence would not have assisted the husband.
It was the grandfather’s further evidence that he himself paid for some skip bins, and approximately $10,000 in construction costs toward the end of the construction, being costs that were not able to be met by the husband due to a then lack of funds. At the time the husband was aged 20 years, and had approached his grandparents, asking could he move in with them. The husband told them he could not afford his then rental accommodation. I accept the grandfather’s evidence as to these matters, and that of the grandfather and wife as to the costs of the Suburb J flat being approximately $100,000.
Subsequently, between 2002 and 2010, the husband and wife did not pay rent or board whilst living with the grandfather. The grandfather was solely responsible for the rates, electricity, gas and water bills. The husband also regularly ate meals with the grandfather and his grandmother in the period prior to the wife moving in, and whilst the grandmother was alive. From in or around 2006 the husband, along with Mr N, assisted the grandfather in caring for the grandmother, who had Parkinson’s disease. They were attentive and devoted grandsons in that role and, their contributions much appreciated by the grandfather.
Living in the main house (2012 – 2016)
The husband and wife, having departed the Suburb J property in 2010 (see at [19]-[21] above), returned and moved into the main house at the Suburb J property in late 2012. The husband alleged that he did not want to move back in with the grandfather, but that the grandfather was having difficulties living alone following his wife’s death. I accept that the grandfather was lonely living by himself, and that he had a couple of falls in the backyard prompting his doctor to tell him that that he needed “someone around to keep an eye on [him].”[15]
[15] The grandfather’s affidavit filed 20 November 2020, at [48].
The husband’s evidence was that the grandfather agreed to him renovating the main house on the basis that he would reimburse the husband for the money spent by him on the renovation costs as well as pay the husband the value that those renovations had added to the grandfather’s property. The grandfather disputed this evidence and asserted that the renovations were not necessary as the bathroom, for example, had been professionally renovated only a few years earlier. The husband accepted that the bath tub had been converted into a shower recess for his grandmother a few years earlier, but otherwise alleged that the paint was peeling, and the bathroom itself required improvements before the wife and children could move in. The wife agreed with the description of the property as provided by the husband.
The husband claimed to have spent approximately $50,000 on the renovations to the main house, consisting of $10,000 on the bathroom; $15,000 for the kitchen; $7,500 for repainting the house interior; and $17,500 for repaving the driveway and putting in a roller door at the end of the driveway. The quantum of this expenditure was disputed by the grandfather. Again there was no documentary corroborative evidence before the Court to assist the Court in making a finding as to the amount spent by the husband on the renovations. However, it was the wife’s evidence that the monies claimed to be spent by the husband were spent in the manner and in the sum described by him. Further, the grandfather agreed that such renovations as described by the husband were carried out by him. They were renovations however that the grandfather deemed not necessary. I find the grandfather did not offer to pay for them, and they were not for his benefit nor was there any evidence before me to which I could give any weight to suggest that the improvements to the main house resulted in significant capital gain. Even if they did, I am satisfied there was no agreement between the parties that the husband and the wife should receive any monies from the grandfather in respect of such gain. The husband and wife had the benefit of residing, rent and mortgage free, for approximately five years, in the grandfather’s property.
Further, the parties agreed that the grandfather did pay:
(1)$5,000 to the husband in mid-2015 toward the repaving of the driveway costs incurred by the husband; and
(2)$700 to move the roller door from the location the husband had placed it, as it interfered with the gas meter.
Additionally, the grandfather paid the property rates, approximately $2000 per annum.
It was not contested that between 2012 and early 2017 the husband paid the electricity, gas and water bills for both the main house and the Suburb J flat.
From in or around 2015, the wife and the husband engaged professional carers to twice weekly clean the Suburb J flat; to assist the grandfather with his personal hygiene; and to keep the grandfather company. The wife’s evidence, which is accepted, was that this service cost the husband and wife approximately $100 per week. The wife was however in receipt of a carer’s benefit from the government during this time which provide some assistance in meeting this cost. It was the grandfather’s evidence that he was largely still independent and did his own washing and cooked his own meals aside from the occasional meal with the husband and wife. I accept that the grandfather had some independence but accept the husband and wife’s evidence that the grandfather was assisted by them to a greater extent than he recalled.
The husband’s evidence that the grandfather “generally lived rent and expense free” ignored the fact that the Suburb J property was owned by the grandfather and that it was husband, wife and children who benefited from living at the Suburb J property rent free,[16] and the grandfather who paid the rates.
[16] The husband’s affidavit filed 16 December 2021, at [50].
The grandfather sold the Suburb J property in late 2016 for $1,850,000. The grandfather’s son Mr K, who was on title, received half of the proceeds of sale, which he divided between himself, Ms Q and Ms O (the grandfather’s three children). The balance of the net sale proceeds were paid to the grandfather in the sum of approximately $877,000.[17]
[17] Made of two payments being $855,947.82 and $21,830. See Annexure C of the grandfather’s affidavit filed 20 November 2020 at p.42.
The distribution of the grandfather’s portion of the Suburb J property funds
The grandfather’s evidence was that he applied his share of the Suburb J property proceeds as follows:
(1)$40,000 to the husband in late 2016 from the sale deposit;
(2)retained approximately $6,250 from the sale deposit;
(3)$101,571.33 to the wife;
(4)$30,000 to Mr N;
(5)$690,340.49 to the husband; and
(6)retained the remaining funds of approximately $9,616 in his personal bank account.
Totalling $877,777.82.[18]
[18] The grandfather’s affidavit filed November 2020 at [70], [73]-[75], Annexure C.
The wife’s evidence largely accorded with the grandfather’s evidence. The wife was more descriptive however in respect of the monies given to the husband and herself. She described the monies given to her, as being monies for the benefit of the two sons of the husband and wife. Otherwise, the monies were given to the husband for his care of the grandmother ($50,000); his equity in the Suburb J flat, which I do not give any weight to ($300,000); for repayment of his mortgage ($250,000); and for the construction of the granny flat, which I find is not accurate on the totality of the evidence as discussed elsewhere in these reasons ($90,000).[19]
[19] The wife’s affidavit filed 6 May 2021 at [150.19].
It was accepted by the parties that funds in the sum of approximately $877,777 were disbursed in accordance with the grandfather’s evidence, save for the $40,000 the grandfather claims was transferred to the husband from the deposit monies released early to the grandfather which was disputed by the husband, but not the wife.
The Suburb D property
In mid-2016, the Suburb D property was purchased in the husband’s sole name for $1,030,000; settlement occurred two months later. A property valuation obtained by the parties in late 2021 valued the Suburb D property at $1,750,000. At settlement, the husband applied $564,892.97 from the sale of the Suburb M property and additionally secured two mortgages over the property, each for $250,000. With his other funds, which included the remaining proceeds of sale from the Suburb M property and borrowings from the wife, as claimed by him, the husband commenced renovations to the property and the construction of the granny flat. The husband spent approximately $145,000 on building the granny flat, which included paying himself $15,000. In the evidence he produced receipts as to some of the costs. I accept his evidence. The husband’s evidence was further that the grandfather subsequently requested that $100,000 of the monies expended on the granny flat be returned to him. Accordingly, the husband repaid $100,000 to the grandfather. At trial, the husband was prepared to repay the grandfather the remaining $45,000. There was considerable background however to the construction of the granny flat, and more complexity than that stated by the husband as to the parties pooling of their resources.
It was the grandfather’s evidence, supported by the wife’s evidence, that when the husband and wife were looking for a property to buy they asked him, on separate occasions, to live with them. The husband’s evidence was that he did not want the grandfather to live with them but ultimately accepted that would be the eventuality, as the grandfather needed companionship and care, and the husband and wife were the only family members able to provide that level of care at the time. The grandfather asserted and I find that the husband stated they would continue the arrangement they had at the Suburb J property, being that the husband would build a granny flat for the grandfather to live in, and that he would continue to look after the grandfather. The grandfather accepted the offer of the husband and wife, and informed the husband he would only reside with them if the granny flat was separate to the main house, and had its own toilet. The husband agreed. It was further the grandfather’s evidence that “the main building work on the house and granny flat was done” by the time he signed the contract of sale for the Suburb J property and that what remained was “rewiring and electrical work” and works on the swimming pool at the Suburb D property.[20] This is consistent with the husband’s evidence.
[20] The grandfather’s affidavit filed 20 November 2020, p.10.
The parties had numerous conversations as to their future living arrangements over many months before the grandfather sold his home, the Suburb J property.
The husband’s evidence as to these discussions was that he told the grandfather he would have to pay for the construction of the granny flat once it was completed. It was the husband’s evidence that the effect of the agreement “was that if [the grandfather] paid for the granny flat, then he could live in it. [The grandfather] could come and live with [the husband and wife and their children]”,[21] and that he never intended nor agreed for the grandfather to live out his life in the granny flat but also never intended or thought to “kick [the grandfather] out”.[22] It was also the husband’s evidence that he would look after the grandfather as the husband and wife “had been doing”.[23]
[21] Transcript dated 20 December 2021, p.60 lines 37-38.
[22] Transcript dated 20 December 2021, p.67 lines 8-14.
[23] Transcript dated 20 December 2021, p.66 line 20.

It was common ground between the grandfather and the wife that during the construction of the granny flat at the Suburb D property, the husband was “running short on money”. It was the wife’s evidence that the husband borrowed $41,000 from the wife’s brother, Mr R, (who was repaid by the husband sometime later) and that the grandfather gave the early deposit he received from the sale of the Suburb J property to the husband. It was the grandfather’s evidence that the husband told him that he was “running out of money” and that following this conversation the grandfather contributed monies, including the early deposit monies, to the renovations on multiple occasions.[24]
[24] The grandfather’s affidavit filed 20 November 2021, at [64]–[71].
It was the husband’s evidence that he was not struggling to pay for the Suburb D property renovations and granny flat construction and that he was using his own money, in particular he referred to his use of net sale proceeds from the Suburb M property, of approximately $175,000-$180,000, toward the renovation. Further, it was his evidence that he did not ask the grandfather for money to help him complete the build but rather he borrowed approximately $140,000 from the wife which he applied toward the costs of the renovations, being monies deposited into his account between late 2016 and early 2017. The wife however did not receive her inheritance until early 2017, it being the source of some of the monies advanced to the husband by the wife.
The $140,000 the husband claimed he borrowed from the wife was received by the husband in the form of a number of cash deposits and otherwise bank transfers from the wife’s account to the husband’s account. Around the time when a cash deposit, of $30,000, was paid into the husband’s account, the grandfather received an early deposit from the sale of the Suburb J property. The husband’s evidence is that he cannot recall when he was told about the grandfather receiving the early deposit, and that those monies deposited into his account were from the wife.
It was the grandfather’s evidence, not disputed by the wife, and I find, that the grandfather contributed the following monetary sums to the husband for application in the construction of the granny flat and the cost of the Suburb D property renovations. These monies were only in small part applied to the granny flat and in what small part is incapable of determination, save the granny flat construction was ultimately funded by the grandfather’s monies:
(1)Prior to the purchase of the Suburb D property:
(a)$20,000 in late 2016;[25]
(b)$25,300 in late 2016;[26]
(c)$3000 in late 2016 for concreting work;[27]
(2)Following the purchase of the Suburb D property:
(a)$40,000 in late 2016 from the sale deposit of the Suburb J Property.[28] The husband’s tender bundle shows a $30,000 cash deposit. The wife’s evidence was the husband retained $10,000 in cash;
(b)$8,000 in early 2017;[29] and
(c)$690,340.49 from the sale of the Suburb J Property;
Totalling $786,640.49 (accepting that the husband received $40,000 of the sale deposit monies).
[25] The grandfather’s affidavit filed 20 November 2021, at [65].
[26] The grandfather’s affidavit filed 20 November 2021, at [67].
[27] The grandfather’s affidavit filed 20 November 2020, at [68].
[28] The grandfather’s affidavit filed 20 November 2020, at [70].
[29] The grandfather’s case outline filed 17 December 2021, p.8. The husband says this came from the wife. See the husband’s affidavit filed 16 December 2021, p.9.
The above sums of monies, as asserted by the grandfather to be advanced to the husband, some of which the husband claimed came from the wife, can be seen on the grandfather’s bank account as being withdrawn with a corresponding cash deposit appearing in the husband’s bank statement at the local Suburb J bank branch. These monies came from the grandfather.
The wife gave evidence that she advanced $79,000 to the husband for the renovations to the Suburb D property and that such advance was repaid to her by the husband by transfer to her bank account.[30] I accept that evidence.
[30] Transcript dated 21 December 2021, p. 48 lines 17-20, p. 49 lines 37-46.
It is not disputed between the parties that the grandfather gave the husband a sum of $690,340.49. A letter dated early 2017, signed by the husband, and attached to the grandfather’s Centrelink file was in evidence before the Court. It stated:[31]
To whom it may concern,
This letter serves to state that I, [Mr Raso] have received the amount of $690,340.49 from [Mr B Raso] on the sale of his home at [H Street, Suburb J] NSW in exchange for [Mr B Raso] to permanently live in my property for life, at [C Street, Suburb D] NSW.
Sincerely,
[Mr Raso]
[31] The grandfather’s affidavit filed 20 November 2020, annexure F.
The husband originally denied ever signing this document. However, at trial, the husband’s evidence as to the above letter, was that he read the document but “did not pay attention to the wording of the acknowledgment at that time”; was presented with the letter by the wife in the backyard to sign; that the wife did not explain the effect of the document and only said to the husband that it was for Centrelink to help the grandfather get a pension; and further that he never had any discussions with the grandfather as to the contents of the letter. The wife’s evidence, which I accept, was that she did have a conversation with the husband to the effect of “for [the grandfather] to get the pension, we need to state that he gave us the money so he could live with us” and that she read him the letter before handing it to the husband for his signature.[32] The husband submitted that if the wife’s evidence is preferred, this document should carry little weight.[33] I accept that the grandfather and husband may not have discussed the matter. I find the letter was drafted by the wife in accordance with a directive given by her from a member of staff at Centrelink, the purpose of the directive being to ensure that the grandfather was able to continue to be in receipt of his age pension, despite his receipt of net proceeds of sale from the Suburb J property. All of the parties understood the purpose of the document and the need for the husband to sign it in the form in which he did. I accept the husband did not pay much attention to the precise wording. The husband had received the monies from the grandfather as acknowledged by him and the grandfather was living in the granny flat as agreed by the parties. Whilst I do not place a lot of weight on the words in that letter, “…permanently live in my property for life” in the context of the wife’s drafting of the letter and circumstances in which it was given to the husband to sign, I accept that it is contemporaneous evidence as to the circumstances existing around the time of the transfer from the grandfather to the husband of the $690,340.49. There is much other evidence going to the payment of monies by the grandfather to the husband and the understanding between all of the parties that the grandfather would have ongoing occupation of the granny flat as a consequence of his advance of monies to the husband and wife.
[32] Transcript dated 21 December 2021, p.97-98.
[33] The husband’s written submissions filed 15 February 2022, at [93]-[94].
It was the wife’s evidence that:[34]
…
On 17 March 2017 [the grandfather] sold the [Suburb J] Property and gifted [the husband] a total of $690,386.49.
The mortgage on [the Suburb D Property] was a split loan with ANZ and one mortgage was paid out while one remained. It was my understanding, based on my conversation with [Mr B Raso] at the time, that the decision to give [Mr Raso] this amount of money was for the following reasons:
[The grandfather] said to me the following in [Country G language] (or words to that effect): “money for looking after [the grandmother], money for building the granny flat at [Suburb J]. The rest goes to building the granny flat at [Suburb D] for me to live in and to pay off the mortgage. I don’t want you to have a mortgage. I want you [and the husband] to stop fighting and live comfortably.”
[34] The wife’s affidavit filed 6 May 2021 at [123].
At trial, the wife’s evidence was that the arrangement between the husband and grandfather in early 2017 was that the money was being advanced by the grandfather to the husband on the condition that the grandfather would remain in the granny flat for the rest of his life.[35] Further when the wife was asked by counsel for the husband during cross examination why she hadn’t included that phrasing in her affidavit of evidence, the wife said as follows:[36]
[35] Transcript dated 21 December 2021, p. 93.
[36] Transcript dated 21 December 2021, p. 101-102.
[Counsel for the husband]:       That the 690,000 was in exchange for [Mr B Raso] to permanently live at [Suburb D] or to live there for the rest of his life?
[The wife]:Those words specifically were not used between [Mr B Raso] and I. It was very much assumed on my part and – yes.
[Counsel for the husband]:       So it was assumed on your part without [Mr B Raso] ever saying it. Correct?
[The wife]:No. He did say that he was never going to – he didn’t ever want to leave the granny flat.
[Counsel for the husband]:       Okay. So he asserted [to] you at a time – asserted to you at a time that he didn’t want to leave the granny flat..... that [is] what you’re saying?
[The wife]:Yes.
[Counsel for the husband]:       But that’s not in the context of a reason why the 690 was given to [Mr Raso]. That’s right, isn’t it?
[The wife]:Sorry. Could you repeat that?
[Counsel for the husband]:       Yes. So when [Mr B Raso] said to you that he wanted to live there for the rest - - -?
[The wife]:- - -Yes.
[Counsel for the husband]:       - - - of his life, that’s not in the context or in relation to [Mr Raso] receiving the money, is it?
[The wife]:---Well, it was all part of – everything was all included. It was all very much intertwined.
(Emphasis added)
It was the husband’s evidence that the grandfather agreed to pay him the following amounts:
(1)$345,000 for:
(a)the construction of the Suburb J flat - $196,000;
(b)the renovations to the main house at the Suburb J property - $50,000; and
(c)the value added to the property by the inclusion of the completed Suburb J flat should such value exceed the costs of construction – approximately $99,000;
(2)$145,000 for the construction of the granny flat; and
(3)$200,000 for taking care of the grandfather, and the husband’s grandmother, since 2002.
Totalling $690,000.[37]
[37] The husband’s affidavit filed 16 December 2021, at [83].
In addition, the husband asserted that the grandfather repaid him $25,000 in late 2016 for the bills that the husband paid whilst living at the Suburb J property following a conversation between them in late 2016. I do not accept this evidence.
The husband asserted that $200,000 of the $690,000 approximately was for his care of the grandfather and the grandmother between the early 2000s and her death. This contradicted a letter dated 13 December 2019, from the husband’s solicitors Prime Lawyers to the grandfather’s solicitors tendered in evidence before the Court which stated that the sum was $50,000, which “was an early inheritance in recognition of the time (5 years) that [the husband] looked after [the grandfather’s] late wife who suffered [a terminal illness].”[38] The husband denied the accuracy of the representations made in this letter.[39] It was his evidence that the care he provided “was to both grandparents over almost 15 years” and the letter only referenced five of those years.[40]
[38] Exhibit ‘SR1’ p.63 of the second respondent’s tender bundle.
[39] Transcript dated 20 December 2021, p.73 at lines 33-34.
[40] Transcript dated 20 December 2021, p.72 at lines 22-25.
The wife’s evidence was that “it was always $50,000” that the grandfather gave to the husband for the husband’s care of the grandmother.[41]
[41] Transcript dated 21 December 2021, p.26 lines 20-25.
The grandfather’s evidence was that the $200,000 was not for the care of the grandmother. Rather it was his intention that:[42]
…after [he] sold the house,…[he] wanted [the husband] not to be [out] of pocket. [The husband] would get $100,000 that he spent to build the [Suburb J flat],…$30,000, the same amount that…[Mr N] [received] for looking after [the grandfather’s] wife. And [the grandfather] didn’t want him to miss out on any inflation, so another $70,000.
[42] Transcript dated 20 December 2021, p.31.
I find that $50,000 was given to the husband for the care of the grandmother and that this gift was not conditional nor part of the joint endeavour between the parties.
It is agreed between the parties, whether by agreement or not, that $243,970.20 of the monies given by the grandfather to the husband was applied by the husband to pay out one of the two ANZ mortgages secured over the Suburb D Property.
Throughout the period of time that the grandfather lived in the Suburb J flat and subsequently the granny flat, and commencing in mid-2013, the wife was in receipt of a carer’s benefit initially of $115.40 a fortnight. By early 2017 and until mid-2019, the wife received $129.80 a fortnight which she applied to the grandfather’s expenses. The home care service was paid from the carers benefit and additionally by the husband and wife. There were however bills outstanding in respect of the grandfather’s care when the grandfather moved out of the granny flat. The grandfather’s daughter Ms O paid such bills, the grandfather having no funds.
From in or around early 2015, the wife had access to the grandfather’s Bank Account with the Commonwealth Bank until her access was cancelled in mid-2019. This enabled the wife to transfer money out of the grandfather’s account. It was the grandfather’s evidence that when the wife asked for money to pay some of her household bills, car insurances and other bills, either the grandfather or the wife would transfer the necessary funds to her account. For example, the grandfather transferred $10,000 in early 2017 to the wife’s account to pay bills.[43] I find that money was transferred to the wife’s account from the grandfather’s account on a number of occasions during this period and in a sum not able to be determined on the evidence. The wife takes no issue with the transfer of funds between the accounts as described by the grandfather save she denied any debt to have accrued as a result. She claimed that the grandfather gifted her such monies. I accept that evidence.
[43] The grandfather’s affidavit filed 20 November 2020, at [83].
In late 2017, the husband closed his business. Around this time, the husband asked the grandfather if he could find somewhere else to live as he no longer wanted the grandfather to reside at the Suburb D Property. The grandfather, however, remained living with the husband and wife and their children.
After the husband stopped working, the grandfather regretted giving to the husband the $690,340.49. The grandfather had hoped that giving the money to his grandson would stop the husband’s use of marijuana; help the husband be more focused on his family; and improve his behaviour. Certainly, it was his expectation that the husband would continue working, and that they would all remain living as they had done, together, with the grandfather in granny flat accommodation, since 2012.
In mid-2019, the grandfather departed from the granny flat following a particular incident where the husband yelled at him “about wanting [the grandfather] to leave and having no money”.[44] The wife pulled the grandfather inside the safety of the granny flat. The husband proceeded to smash the grandfather’s chair, which resided outside the granny flat door. The wife described the scene as follows:[45]
…
[The husband] had yet another explosive argument with [the grandfather] and in this fight declared he could no longer live with [the grandfather]. [The grandfather] refused to leave saying he had paid for his granny flat. Things were getting ugly in the sense that [the husband] was making threats about kicking [the grandfather] out and the fighting was escalating. I telephoned [the grandfather’s] daughter [Ms O] and expressed things were getting bad and it was not safe for [the grandfather] to be at the house in this time….[Ms O] came and picked [the grandfather] up and took him to her home in [T Town]…
[44] The grandfather’s affidavit filed 20 November 2020, at [113].
[45] The wife’s affidavit filed 6 May 2021, at [150.28]
Suburb F Property
In or around mid-2017, the grandfather asked the wife to transfer to him $100,000 of the money he had given to the husband.
The wife’s evidence was as follows:[46]
In or around May 2017 [the grandfather] said to me:
“I gave [the husband] too much money. I want $100,000 back from him to give my daughter [Ms O]. Can you arrange it for me?”
[46] The wife’s affidavit filed 6 May 2021, at [130].
The husband immediately transferred the requested funds to the wife for her to transfer on to the grandfather. I find the husband’s transfer of the funds was not discussed by any of the parties as being referable to the husband repaying the grandfather a part of the monies expended by the grandfather on the construction of the granny flat, as asserted by the husband. Following that transfer from the husband, the monies remained in the wife’s account.
The wife’s evidence was that she sought to take the grandfather to the bank to arrange transferring the husband’s money to him, but that the grandfather had changed his mind. The wife claimed the grandfather told her to put such monies toward the purchase of a two bedroom unit which the wife and the grandfather had discussed. The wife was at the time concerned as to her relationship with the husband, and was looking for alternate accommodation for herself and the children if that became necessary. The grandfather’s evidence was that the wife approached him, and requested funds to assist her in the purchase of such accommodation. Further, that she told the grandfather that she would not “abandon” him and would “still look after” him if she left the husband.[47] The grandfather further asserted that the wife and he had a further conversation, wherein the wife indicated to him that she would pay back to him the monies when she could; that she would still look after him; and, in particular, that if the grandfather needed to leave the Suburb D property and live with the wife, she would find a bigger unit. The grandfather and the wife may well have had a discussion where the wife indicated that she would continue to look after the grandfather to the extent that she could whilst living in a different household. The wife was and is very fond of the grandfather. However, I accept the evidence of the wife that the grandfather offered to give to the wife this sum of $100,000, with a view to the wife using such funds to go toward the purchase of the Suburb F property. The grandfather “approved of the purchase” and acknowledged that he would not reside in this property at any time, nor have any ownership of it. I note both the wife and the grandfather considered the property too small for the grandfather to ever reside in, and it was not a property ever contemplated by the grandfather as being one in which he would live into the indefinite future.
[47] The wife’s affidavit filed 6 May 2021, at [132].
Further, the grandfather was aware that the wife had an inheritance from her grandmother. The wife’s evidence was that the grandfather put to the wife the idea of the wife having a separate property for her and the children to live in as a result of the husband and wife’s deteriorating relationship, and that the grandfather repeatedly said words to the effect of “despite what happens I will never move out of Suburb D, my money is in here and this is where I’ll stay.” I accept the wife’s evidence that the grandfather wanted the wife and children to be in a secure home.

In mid-2017, the wife purchased a two bedroom unit, being the Suburb F property, for $390,000. It was the wife’s evidence that she purchased the property using $101,571.33 that was transferred to her account by the grandfather following the sale of the Suburb J property; the $100,000 sum the husband had transferred to her account which the grandfather had gifted her; and the inheritance from her grandmother of approximately $140,000. The wife also secured a loan of $150,000 with V Bank to “put some money in the bank to use” as she had reduced her working hours and the husband had stopped working around this time.[48]
[48] The wife’s affidavit filed 6 May 2021, at [150.23].
The wife purchased this property without the knowledge of, or informing, the husband, on the advice of the grandfather. The wife did not inform anyone, other than the grandfather and the realtor, until several months later. The wife purchase this property as accommodation for herself in the event of separation between she and the husband or alternatively, if the marriage continued, as a future investment for the husband and wife which would benefit them and their children. She did not lease out the property.
When the grandfather divided his share of the net profits from the sale of the Suburb J property, the grandfather asserted that he asked the wife to store approximately $100,000 in her bank account.[49] $101,571.33 was transferred to the wife’s bank account.[50] The wife’s evidence was that these funds were in fact gifted to her, by the grandfather, for the parties’ children. The wife’s evidence was:[51]
…[the grandfather] gifted me for my children $101,571.33. As in [the grandfather’s] affidavit at Paragraph 74. We did agree to leave it in my bank account with the proviso that money was for [the children]. He said:
“This money is for the boys [the children] ($50,000 each)”. I said to him “If you ever need it, it’s there.” His response was “I don’t need any of this money, I’m old and [the children] are young”.
[49] The grandfather’s affidavit filed 20 November 2020, at [74].
[50] Transcript dated 21 December 2021, p.106 lines 29 – 31.
[51] The wife’s affidavit filed 6 May 2021 at [150.19].
I prefer the evidence of the wife as to this matter and find that this money did not form part of any joint endeavour between the husband, wife and grandfather and nor was it advanced by the grandfather in connection with his intended and subsequent ongoing occupation of the granny flat. It was an entirely independent arrangement being for the benefit and welfare of the wife and children of the husband and wife.
The wife has been solely responsible for repaying the mortgage on the Suburb F property. From late 2018, it was the wife’s evidence that she was also repaying the Suburb D mortgage in addition to paying household bills and for the grandfather’s carer visits as discussed in [66] above. It is agreed by the grandfather and the wife that the grandfather gave the wife $25,000 to be put towards the mortgage on the unit in mid-2018. This was a gift to the wife which was not predicated on any arrangement between the parties nor provided on condition of the husband’s ongoing living arrangements at the Suburb D property. It was monies gifted in the same manner that the grandfather had gifted earlier monies to the wife for the payment of various bills whilst the parties lived in the Suburb J property as otherwise described in these reasons.
CONSIDERATION
The question as whether there is a constructive trust in favour of the grandfather in the entirety of the circumstances of this case, does not require the establishing of an agreement to that effect between the parties.
In Grefeld & Grefeld [2012] FamCAFC 71 the Full Court held at [97] that the court’s inquiry is “not as to the actual or presumed intention of the parties, but whether, according to the principles of equity, it would be unconscionable to allow a legal owner of property to enjoy sole beneficial ownership of that property”.
It is clear on the evidence that the grandfather advanced some sums to the parties pursuant to an arrangement where, in return, he would be provided with accommodation in the granny flat on the Suburb D property for so long as he needed to reside in that property. The joint endeavour ended with the grandfather being required to leave the property at that behest of the husband and wife, and in these circumstances and on the basis of the evidence before me, I am satisfied it would be unconscionable to permit the husband and wife to retain some part of those monies so advanced.
I find that the sum advanced by the grandfather of $786,690.49 to the husband and wife, encompassed not only the joint endeavour, on the condition that the grandfather would be able to live in the granny flat with no end date and no expectation that he would be required to leave that accommodation, but also other funds as provided by the grandfather independent of the joint endeavour.
When the grandfather sought and obtained a return of $100,000 of that advance of funds, those monies acquired a different characterisation. They were monies being returned to the grandfather as earlier foreshadowed by him in his handing over of the $690,340.49. That is, the grandfather had said to the husband that if he needed funds he was to be provided with them. The remaining monies advanced by the grandfather of $686,690.49 (after the deduction of the $100,000) remained in part a contribution to the joint endeavour and pooling of resources. From that sum, I find the sum of $50,000 also did not form part of the joint endeavour but was clearly, on the evidence of the wife, which I accept, a gift to the husband in the same way the grandfather gifted monies to the husband’s brother, for the husband’s care of his grandmother.
Additionally, from the remaining $636,690.49, I find, on the evidence, that the sum of $170,000 should be deducted, which was the cost of the Suburb J flat ($100,000) plus an amount added as calculated by the grandfather. I have already set out in these reasons at [70] that I do not accept the calculation as referred to by the wife of $300,000 to be deducted. The husband in his evidence provided an estimate of $99,000 to be added to the costs of construction of the Suburb J flat.[52] The grandfather in his evidence admitted that he had provided for an additional sum of $70,000 in the monies he gave to the husband (additional to the cost of construction of the Suburb J flat) for, in his words, “inflation”.[53] That advance was not one which formed part of the joint endeavour. The grandfather and the wife conceded that the husband, as asserted by him, was entitled pursuant to an earlier agreement between the husband and the grandfather, to some funds additional to the construction costs. The grandfather intended to and did honour that agreement. Doing the best I can with the conflicting and limited evidence before me, I find that the grandfather’s evidence as to the quantum is to be preferred. Again, this sum of $170,000 was not advanced by the grandfather to the husband and wife in respect of the joint endeavour. This leaves an amount of $466,690.49.
[52] See at [86] of these reasons.
[53] See at [90] of these reasons.
The grandfather has otherwise established on the evidence that he has an equitable interest in the Suburb D property in the sum of $466,690.49. He has not established on the evidence that he has an equitable interest in the Suburb F property. These matters are expanded upon below and should be read in conjunction with the entirety of the reasons as set out herein.
The Suburb F property
Counsel for the grandfather submitted that the monies advanced to the wife, being $101,571.33 in early 2017 from the Suburb J property sale proceeds, and $100,000 in mid-2017 that the grandfather asked the husband to repay to him, were advanced pursuant to the same joint relationship or endeavour as the Suburb D property.
While the $101,571.33 was on the wife’s evidence a gift for the parties’ children, counsel for the grandfather submitted that this does not affect the fact that the monies “were provided to her pursuant to the joint endeavour that the grandfather would have somewhere to live for the rest of his life”,[54] which was consistent with the wife’s understanding and evidence that the grandfather would always be cared for by the husband and/or the wife.
[54] The grandfather’s written submissions file 31 January 2022, p.11 at [54].
Counsel for the husband submitted that the evidence supported the conclusion that the grandfather wanted the money he gave to the wife to go to X and Y, the husband and wife’s children, and that such monies, on the wife’s evidence, were a gift.
The evidence of the wife was described at [105] above, namely that these monies were provided for the benefit of X and Y, and that the grandfather did not need the money. Her evidence was further that:[55]
…[she] went to visit him on Sunday 12^th January 2020….
On this visit [the grandfather] openly said to me he did not want any money back from me….[The grandfather] said in [Country G language] “I don’t want any money back from you especially if you need to sell the unit. I sacrificed to help you get that unit, that place is for you, [Y] and [X].” I said to [the grandfather] “if you need money I will sell the unit and give you the money[.]” He said “[Ms Q] has a lot of money and the nursing home gets my pension. I want to know you and the children are ok” I thanked him and hugged him.
…I told [Ms Q] the money [the grandfather] gave me was to assist me to leave [the husband] and to give me and the children somewhere to live. That [the grandfather] had mentioned to me several times it was for [X] and [Y’s] future so they can always have a roof over them. …
[55] The wife’s affidavit filed 6 May 2021, at [150.30].
The evidence as to the $100,000 transferred by the husband, at the grandfather’s request, to the wife was discussed at [98]-[101] above. I am satisfied that this money was offered to the wife by the grandfather.
On the evidence before the Court, and as discussed at [105]-[106] above, I find there was no joint endeavour or relationship between the parties or between the grandfather and the wife in the wife’s purchasing of the Suburb F property. The grandfather never intended to live there. He did not consider the wife’s purchase of that property a part of the joint endeavour. Nor did he act as if it were. Whilst he had given monies by way of gift to the wife, for the benefit of her and the husband’s children, the advancing of such monies did not deprive him of, or affect in any material way, the benefit he received in his ability to live in the granny flat at the Suburb D Property for so long as he needed and/or wished to, and to be cared for by the husband and wife.
I conclude that no constructive trust exists in relation to the Suburb F property.
The Suburb D property
It was the husband’s initial position that the $690,340.49 from the grandfather was given to him pursuant to three prior agreements, or as a gift, and not pursuant to any joint endeavour. However, the husband’s evidence at trial was as follows: [56]
[Counsel for the grandfather]: And the effect of those conversations left you with the understanding that he was advancing you money and in exchange he was going to get a place to live for as long as he needed to?
[The husband]: I agree.
[56] Transcript dated 21 December 2021, p.80 lines 6-8.
The wife’s evidence was that it was very much implied, and was assumed by her, that the grandfather was providing the monies to the husband in exchange for living in the granny flat for the rest of his life and that any such discussions to that effect between the parties were “very much intertwined” with the payment of monies and the granny flat.[57]
[57] Transcript dated 21 December 2021, p.101 line 45-46 to p.102 lines 1-3.
I accept the grandfather’s submission that it does not make logical sense why the grandfather, a man astute about his money, would gift all his lifetime savings and sell his assets, leaving him unable to provide for himself, if it was not for some assurance between the parties, for him to have a place to live, namely in the granny flat during his lifetime. I do not accept that the monies given by the grandfather to the husband and wife in respect of the Suburb D property was entirely a gift.
Further, it was the wife’s evidence that for the grandfather to keep his pension, the funds the grandfather received from the Suburb J property sale had to be disbursed. I accept that is what each of the parties thought to be the case but it is unclear why the grandfather would give the entire proceeds of his home away, as received by him, if not for the reassurance of having a secure living arrangement into the future.
The grandfather’s evidence was that he had given the husband the monies from the sale of the Suburb J property “in exchange for [the husband’s] commitment and solemn promise that [the husband would] look after [the grandfather] for the rest of [the grandfather’s] life”.[58] It was further the grandfather’s evidence that he had a conversation with the husband as follows:[59]
[The husband]: I have run out of money.
[The grandfather]: What are you going to do?
[The husband]: I will borrow it from the bank.
[The grandfather]: Don’t do that. I won’t be using the money I get from selling the house. You can use it to finish the work on the house, but if I ask you for the money in the future, because I want or need it for something, you have to give it to me.
[The husband]: You will not need anything. We will look after you. If you do need money, you can have it anytime, it will be there but you won’t need it.
[58] Transcript dated 20 December 2021, p.29 lines 27-29.
[59] The grandfather’s affidavit filed 20 November 2020, at [71].
I find that the husband and the grandfather had a conversation to this effect and such evidence is supported, as discussed at [119] above, by the fact that the husband did repay the grandfather $100,000 upon the grandfather’s request.
It is accepted that the Suburb D property was purchased prior to the grandfather providing the husband with the $690,390.49. The grandfather did not, on the evidence before me, provide the money to help the parties purchase the Suburb D property, nor with the intention of being himself registered on the title. However, the money given to the husband was used to discharge one of the two mortgages taken out for the purchase of the Suburb D property.[60] Further while the husband disputed that the grandfather gave him any monies prior to the $690,390.49, I find that the grandfather did provide the husband with money towards the costs of the granny flat and renovations as described in [79] above and as described below.
[60] Maineri & Anor v Cirillo [2014] VSCA 227 in this case sums advanced which were applied to the property mortgage was considered to be a “pooling of resources”.
A comparison of the grandfather’s and husband’s bank accounts confirm that between late 2016 and early 2017, $96,300 was withdrawn from the grandfather’s bank account, and as confirmed by the wife’s evidence, with $86,000 of those funds being deposited into the husband’s bank account. A further cash sum of $10,300 was provided to the husband. The husband acknowledged that he needed additional monies to complete the granny flat and renovations on the Suburb D property. I am satisfied that the grandfather provided $96,300 to the husband, in addition to a part of the $690,390.49, toward the granny flat and renovations on the Suburb D property, and discharge of a mortgage as described in [92] above.
The general principle of equity was summarised by the Victorian Court of Appeal in Mainieri & Anor v Cirillo [2014] VSCA 227 (“Mainieri”), in reference to the Privy Council in Chalmers v Pardoe [1963] 1 WLR 677, 681-2, at [27] as follows:
…where an owner of land has invited or expressly encouraged another person to expend money on part of the land on the faith of an assurance or promise that such part of the land will be made over to the person so expending the money, a court of equity will prima facie require the owner by appropriate conveyance to fulfil his obligation and, if it turns out to be impracticable to effect the conveyance, a court of equity may declare that the person who has expended the money is entitled to an equitable charge or lien for the amount so expended.
The detriment caused as a result of a party deferring from their original position “is not limited to cases where one party has expended money on the land of another on the faith of an assurance that he or she will be granted an interest in land.”[61]
[61] Mainieri & Anor v Cirillo [2014] VSCA 227 at [28].
In my view, the husband and the wife encouraged and invited the grandfather to live with them at the Suburb D property. The husband assured the grandfather that he would construct a granny flat with a separate toilet from the main house, which he did, and that the grandfather could live in the granny flat for effectively the rest of his life. To the detriment of the grandfather, the husband terminated the joint relationship, and as a result of the husband’s behaviour, the grandfather was forced to leave the granny flat and the property for his own safety.
Further, I am satisfied that the grandfather was promised an indefinite right to occupy the granny flat that was constructed on the husband and wife’s property.
Having determined that such assurance, expectation and/or promise existed, the question as to the quantification of the grandfather’s interest in the Suburb D Property is to be determined. In Maineri, the Victorian Court of Appeal found that where a husband’s mother had sold her home, contributed $240,000 from the proceeds of sale to reduce the husband and wife’s mortgage, and was permitted to live at said property with the husband and wife on the basis they would take care of her, that a constructive trust was “in excess of needs” and varied the orders for an equitable lien or charge over the husband and wife’s property to secure repayment of the husband’s mother’s money with interest.
In reaching that conclusion, the Victorian Court of Appeal observed as follows:[62]
The range of remedies to which the principle gives rise is equally broad and flexible. Depending on the circumstances, it may appear that nothing less than the imposition of a remedial constructive trust will suffice to satisfy the demands of justice and good conscience. In other cases, as was observed in Chalmers v Pardoe, a plaintiff who has expended money on the faith of such an assurance or understanding may instead be granted an equitable charge or lien for the amount so expended. It depends on the circumstances of what was promised or represented and on the plaintiff’s change in position in reliance on the assumption thus created. It may also be affected by the interests of third parties.
[62] Mainieri & Anor v Cirillo [2014] VSCA 227, [29]-[30].
In this case, the grandfather sought the declaration of a constructive trust in respect of the Suburb D property and the Suburb F property. Neither the husband nor the wife suggested any other remedy, if one was found to be necessary, was appropriate.
I am satisfied on the evidence that a constructive trust should be declared that the husband holds the title in C Street, Suburb D NSW being the whole of the land comprised in title reference … (“the Suburb D property”) on constructive trust for the grandfather to the extent to which the grandfather has contributed the sum of $466,690.49 towards the Suburb D property, and that such monies should be paid by the husband and wife to the grandfather within 90 days.

I certify that the preceding one hundred and thirty-seven (137) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett.
Associate:
Dated: 25 May 2022

File number(s):	PAC 5002 of 2019
Judgment of:	HARTNETT J
Date of judgment:	25 May 2022
Catchwords:	FAMILY LAW – PROPERTY – Equitable interests – Discrete issues – Where the paternal grandfather sought a section 78 declaration that the husband and the wife hold their real properties on constructive trust for the grandfather – Where the grandfather gave a large sum of money to the husband and wife –– Where the money applied to the purchase of real property in the relevant circumstances and as given to the wife is a gift – No constructive trust in relation to the wife’s property – Where the husband asserts the money given to him from the grandfather was a gift or subject to prior agreements – Where the money given to the husband and wife in respect of property registered in the husband’s name was for the purpose of a joint endeavour between the parties – Pooling of resources – End of joint relationship – Declaration made that the grandfather has a beneficial interest by way of constructive trust in the husband’s property – Husband and wife ordered to pay the grandfather a sum of respecting his interest in the property
Legislation:	Evidence Act 1995 (Cth) s 140 Family Law Act 1975 (Cth) ss 78, 79. Federal Circuit and Family Court of Australia (Family Law) Rules 2021 r 10.11(d)
Cases cited:	Bell & Nahos [2016] FamCAFC 244 Baumgartner v Baumgartner (1988) 164 CLR 137 Briginshaw & Briginshaw (1938) 60 CLR 336 Cantarella v Cantarella (1976) FLC 90-056 Charlmers & Pardoe [1963] 1 WLR 677 Cressy v Johnson [2009] VSC 52 Fox v Percy (2003) 214 CLR 118 Grefeld & Grefeld [2012] FamCAC 71 Leane v Dalborn [2020] VSC 461 Lloyd v Tedesco [2002] WASCA 63 Maineri & Anor v Cirillo [2014] VSCA 227 Marley & Ormonde [2021] FamCA 105 Muschinski v Dodds (1985) 160 CLR 683 Warner v Hung; Bellpac Pty Ltd (rec’s and mgrs. apptd) (in liq) (2011) 297 ALR 56 Whisprun Pty Ltd v Dixon (2003) 200 ALR 44
Division:	Division 1 First Instance
Number of paragraphs:	137
Date of last submission/s:	21 February 2022
Date of hearing:	20–21 December 2021
Place:	Melbourne
Counsel for the Applicant:	Mr Breeze
Solicitor for the Applicant:	Prime Lawyers
Counsel for the First Respondent:	Mr Levet
Solicitor for the First Respondent:	AAT Legal
Counsel for the Second Respondent:	Mr Harris
Solicitor for the Second Respondent:	Legal Aid NSW Sydney Central Family Law

PAC 5002 of 2019
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:	MR RASO Applicant
AND:	MS RASO First Respondent MR B RASO Second Respondent

ORDER MADE BY:	HARTNETT J
DATE OF ORDER:	25 MAY 2022