Saba v Plumb

[2017] NSWSC 622

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Saba v Plumb & Anor [2017] NSWSC 622

Hearing dates:

13 – 15 February, 29 March, 31 March and 5 April 2017

Decision date:

19 May 2017

Jurisdiction:

Equity - Real Property List

Before:

Black J

Decision:

Plaintiffs’ Statement of Claim dismissed. Second Defendant’s/Cross-Claimant’s Cross-Claim dismissed in consequence.

Catchwords:

PROPERTY – Alienation of property – Application under Conveyancing Act 1919 (NSW) s 37A to avoid alienation of property with intent to defraud creditors – where property transferred pursuant to a property settlement effected by consent orders made by the Family Court of Australia – whether property settlement negotiated after a genuine breakdown of the Defendants’ de facto relationship – whether transferor intended to hinder or delay Plaintiff – whether transferee purchaser in good faith without notice

 

EQUITY – Trusts and trustees – where Defendants tenants in common of real property before the end of their de facto relationship – whether constructive or resulting trust over the property should be recognised to have existed before the Defendants’ property settlement reflecting unequal contributions to the property – whether unclean hands defence made out – whether trust should not be ordered or be postponed by reason of unsecured debt owed by putative trustee to the Plaintiff

  ESTOPPEL – By judgment – Anshun estoppel – where earlier proceedings consisted of consent orders made by the Family Court of Australia to give effect to a negotiated property settlement

Legislation Cited:

- Bankruptcy Act 1966 (Cth), Pt VI Div 3, ss 116(1)–(2), 128B–128C, 139ZU
- Bankruptcy Legislation Amendment (Superannuation Contributions) Act 2007 (Cth)
- Conveyancing Act 1919 (NSW), ss 7, 37A
- Evidence Act 1995 (NSW), ss 136, 140(2)
- Family Law Act 1975 (Cth), ss 79, 90SM
- Real Property Act 1900 (NSW), s 48
- Uniform Civil Procedure Rules 2005 (NSW), r 10.2

Cases Cited:

- Australian Receivables Ltd v Tekitu Pty Ltd (subject to deed of company arrangement) (deed admins apptd) [2011] NSWSC 1306
- B v U [2012] NSWSC 1416
- Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137
- Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) [2008] WASC 239; (2008) 39 WAR 1
- Briginshaw v Briginshaw [1938] HCA 34; (1938); 60 CLR 336
- Brown v Dunn (1893) 6 R 67
- Cannane v J Cannane Pty Ltd (in liq) [1998] HCA 26; (1998) 192 CLR 557
- Chan v Acres [2013] NSWSC 1597; (2013) 51 Fam LR 90
- Commissioner of Taxation v Oswal (No 6) [2016] FCA 762; (2016) 339 ALR 560
- Coughlan v Alexander (1905) 5 SR (NSW) 441
- Deputy Commissioner of Taxation v Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust [2016] NSWSC 1657
- Ekes v Commonwealth Bank of Australia [2014] NSWCA 336; (2014) 313 ALR 665
- Green v Schneller [2002] NSWSC 671; (2002) 29 Fam LR 346
- Henderson v Henderson (1843) 3 Hare 100; 67 ER 313
- Henderson v Miles (No 2) [2005] NSWSC 867; (2005) 12 BPR 23,579
- Krajovska v Krajovska [2011] NSWSC 903
- Lakis v Lardis [2017] NSWSC 321
- Langdon v Gruber [2001] NSWSC 276
- Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546
- McKay v McKay [2008] NSWSC 177
- Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583
- Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538
- Patel v Lal [2011] NSWSC 603; (2011) 16 BPR 30,265
- Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589
- PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515; 107 ALR 199
- Re Trautwein; Richardson v Trautwein (1944) 14 ABC 61
- Sui Mei Huen v Official Receiver for Official Trustee in Bankruptcy [2008] FCAFC 117; (2008) 248 ALR 1; 39 Fam LR 355
- West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431

Texts Cited:

- Ritchie’s Uniform Civil Procedure NSW

Category:

Principal judgment

Parties:

Anthony Michael Saba (Plaintiff/Second Cross-Defendant)
Noel Plumb (First Defendant/First Cross-Defendant)
Jeanette Minifie (Second Defendant/Cross-Claimant)

Representation:

Counsel:
P Barham (Plaintiff/Second Cross-Defendant)
P Glissan (First Defendant/First Cross-Defendant)
C Alexander (Second Defendant/Cross-Claimant)

  Solicitors:
Fraser Clancy (Plaintiff/Second Cross-Defendant)
Lexes Lawyers (Second Defendant/Cross-Claimant)

File Number(s):

2016/110233

Judgment

1. By Further Amended Summons filed on 14 February 2017 the Plaintiff, Mr Anthony Saba, seeks an order under s 37A of the Conveyancing Act 1919 (NSW) that a transfer on 14 June 2012 of the one-quarter share held by the First Defendant, Mr Noel Plumb, as tenant in common of a property at East Ryde to the Second Defendant, Ms Jeanette Minifie, is voidable. Mr Saba seeks a consequential declaration that Ms Minifie holds Mr Plumb’s interest in the property on trust for Mr Plumb; an order that Mr Plumb and Ms Minifie take steps to retransfer the interest in the property that was transferred by Mr Plumb to Ms Minifie in 2014 to Mr Plumb; and other consequential orders that it will not be necessary to address unless Mr Saba is successful in achieving the primary orders sought. Those orders are directed to allowing Mr Saba to access that quarter share of the property to enforce a costs order in other proceedings against Mr Plumb.

Affidavit evidence and background facts

2. It will be convenient to deal, initially, with the affidavit evidence and with a brief chronology of the factual matters that are relevant to Mr Saba’s claim, which largely took place in 2011–2012, and Ms Minifie’s Cross-Claim, which largely relates to dealings between her and Mr Plumb several years earlier, in 2005–2006. I will return to those events in more detail in dealing with the particular claims below. This brief narrative of events, and the more detailed narrative that follows, set out my findings as to facts that were disputed unless I otherwise indicate. I should add that Mr Saba, in particular, made detailed submissions in the proceedings, including 11 pages of closely typed submissions in opening, 30 pages of closely typed submissions in closing and further oral submissions, which addressed a wide range of factual matters and identified inferences that it was said should be drawn from each of those matters. I have had regard to those submissions in their entirety, but have not sought to address each such fact and each such inference in this judgment, but only those that are necessary to the determination of the proceedings.

3. Mr Saba relied on his affidavits dated 19 April 2016, 26 October 2016 and 14 February 2017. Mr Saba’s first affidavit dated 19 April 2016 sets out, at some length, the history of proceedings between Mr Saba and Mr Plumb in the Local Court of New South Wales and the District Court of New South Wales, several offers of settlement made by Mr Saba to which I will refer below, and aspects of his observations of Mr Plumb’s and Ms Minifie’s activities, some parts of which were admitted, some parts of which were admitted with limiting orders under s 136 of the Evidence Act 1995 (NSW) as submissions, and other parts of which were rejected. Mr Saba also refers to a costs certificate issued by a Costs Review Panel, registered as a judgment in this Court on 14 October 2015, and to the judgment certificate issued by this Court (Ex P1, Tabs 91, 96). Mr Saba’s affidavit dated 26 October 2016 sets out, inter alia, his observations of work done by Mr Plumb in respect of the East Ryde property and of the activities of Mr Plumb and Ms Minifie, which I will address below. Other parts of Mr Saba’s evidence (and Mr Plumb’s evidence) sought to agitate aspects of the history of the disputes between them, and were either not read or not admitted. In his affidavit dated 14 February 2017, Mr Saba gives further evidence as to his observations of Mr Plumb’s dealings with tradesmen in respect of the East Ryde property.

4. Mr Saba also relies on affidavits of Mr Maxwell dated 19 April 2016 and 14 February 2017, which were largely directed to Mr Maxwell’s observations, made at Mr Saba’s request, of Mr Plumb’s and Ms Minifie’s activities. I will refer to Mr Maxwell’s evidence below. Mr Saba also read the affidavit of his wife dated 14 February 2017, which stated that Mrs Saba did not believe she could give evidence of any significance, and had met with Mr Saba’s solicitor a year ago, advised him of what she could say and been informed that she would not be required as a witness. There is a substantial oddity in the fact that, although Mr Saba and Mrs Saba live in the same house, Mrs Saba has observed nothing of any significance of the matters relied on in Mr Saba’s evidence. I infer that Mrs Saba’s evidence would not have assisted Mr Saba’s case.

5. Mr Plumb relied on his affidavits dated 12 August 2016, 2 December 2016 and 12 February 2017. Those affidavits were largely prepared while Mr Plumb was representing himself in the proceedings. I will address several aspects of Mr Plumb’s first affidavit in setting out the chronology of events below. Mr Plumb also there led extensive evidence as to the history of the previous disputes between Mr Plumb and Mr Saba, in response to Mr Saba’s evidence. Much of that evidence was not relevant and was not admitted, on the same basis that Mr Saba’s evidence of those matters was not admitted. Mr Plumb’s further affidavit dated 2 December 2016 sought to address difficulties as to the admissibility of parts of his earlier evidence, which had been identified by Mr Saba’s solicitors, but large parts of that affidavit also related to the previous disputes between Mr Saba and Mr Plumb, were not relevant and were not read. Mr Plumb’s further affidavit dated 12 February 2017 annexed financial and other documentation that indicated that Mr Plumb and Ms Minifie had separately managed their financial affairs since the claimed breakdown of their relationship in late 2011 or early 2012. I will address that evidence further below.

6. Mr Plumb also relied on the affidavits of Ms Annette Whalley dated 13 November 2016 and Mr Marco Novati dated 30 November 2016, and I will address their evidence in dealing with the question whether Mr Plumb’s and Ms Minifie’s relationship had broken down below. I did not permit a further affidavit of Mr John Perkins dated 16 November 2016 to be read in Mr Plumb’s case, where Mr Perkins was not available for cross-examination.

7. Mr Saba draws attention to the fact that Mr Plumb and Ms Minifie have not called evidence from Mr Plumb’s brother, an accountant, who appears to have provided some advice to Mr Plumb and Ms Minifie as to the procedure for obtaining orders from the Family Court of Australia, or the solicitors who acted for Mr Plumb in the proceedings in which costs orders were made, to which I will refer below. I am conscious that Mr Plumb was self-represented for a large part of the proceedings and until immediately before the hearing, and may have had greater difficulty in identifying potentially relevant evidence than a represented party. I will nonetheless proceed on the basis that their evidence would not have assisted Mr Plumb’s case.

8. Ms Minifie relied on her affidavits dated 12 August 2016 and 9 February 2017. In her first affidavit, Ms Minifie gave evidence as to aspects of her relationship with Mr Plumb to which I will refer below and as to the previous disputes between Mr Plumb and Mr Saba, which was also partly not admitted or not read on relevance grounds. Ms Minifie’s affidavit dated 9 February 2017 supplemented aspects of her first affidavit and responded to Mr Saba’s second affidavit. Ms Minifie also there referred, initially in response to paragraphs of Mr Saba’s affidavit which were rejected, to a conversation with Mr Saba’s solicitor at the Local Court. That part of Ms Minifie’s affidavit was initially not read, when Mr Saba’s hearsay evidence of that matter was rejected, but was then read when Ms Minifie was cross-examined as to that conversation. That cross-examination plainly took place by reference to an affidavit of Mr Saba’s solicitor that had not at that point been served. Mr Saba subsequently sought to read that affidavit of his solicitor on the last day of the hearing, immediately prior to closing submissions. I declined leave to rely on that affidavit for reasons indicated in an earlier judgment, where that affidavit had not been served, as required by r 10.2 of the Uniform Civil Procedure Rules 2005 (NSW), a reasonable time before the occasion for using it arose. Ms Minifie also relied on the affidavit of Ms Hartley dated 11 August 2016, to which I will refer below.

9. Turning now to the relevant facts, Ms Minifie met Mr Plumb in August 1994 (Minifie [16]) and commenced a relationship with him in September 1995 and he moved into her home at North Ryde in January 1996 (Plumb [6]–[7]; Minifie [18]–[23]). Ms Minifie and Mr Plumb referred to each other as “husband” and “wife” although they were not married, and I will from time to time adopt that usage. At the time they commenced their relationship, and thereafter, Ms Minifie was in full-time employment and Mr Plumb had occasional employment, often linked with environmental concerns, and limited by depression which he suffered. Mr Plumb’s evidence is that he was then a conservation advocate and activist with no regular income or savings, other than for some superannuation that remained from his employment prior to 1992; that he suffered extended bouts of anxiety and depression from 2003 and was subsequently employed, on an irregular basis, in areas which had a link with conservation; and that he worked between two and four days a week as a bush regenerator between 2003 and 2010, as his health and involvement in environmental issues permitted. Ms Minifie’s evidence is that she was a town planner employed in local government, until her retirement, and also had an interest in protecting the natural environment and heritage buildings. She commenced a relationship with Mr Plumb in September 1995, after the death of her husband some years previously. She then owned a property at North Ryde, which was unencumbered, and Mr Plumb moved into that property in January 1996. Mr Plumb had no legal or economic interests in that property. Ms Minifie also refers to her having become aware of Mr Plumb’s anxiety and depression in the course of their relationship.

10. In 2005–2006, Ms Minifie and Mr Plumb acquired a property at East Ryde, very largely funded from the proceeds of sale of Ms Minifie’s previous home at North Ryde and borrowings that were repaid from Ms Minifie’s earnings. Mr Plumb and Ms Minifie each led evidence as to conversations between them, before Mr Plumb was provided a 25% interest as tenant in common in the East Ryde property, and the commitments he made in that respect (Plumb [25]–[27], Minifie [36]–[44]). It is necessary to refer to that evidence in some detail, since it is relevant to Ms Minifie’s Cross-Claim which I will address below.

11. Mr Plumb raised the possibility of purchase of the East Ryde property with Ms Minifie in July 2005. His evidence (Plumb 12.8.16 [27]) is that he had discussions with Ms Minifie at that time concerning the purchase of that property and he refers, in direct speech, to his having committed to carry out the necessary work on the property, doing the work himself or obtaining quotes and managing contractors, in the next two years; to a conversation concerning whether Ms Minifie would give him a share of the new property, if he could assist with the purchase costs and carry out the renovation work; and to Ms Minifie ultimately having said that:

“I will give you a 25% share of the property as we have been together so long. I am expecting you to do much of the renovation work as promised. Also, you will put in about 10% of the price as well as some money towards the renovation costs and living expenses on a regular basis.”

While Mr Plumb’s evidence as to that conversation has a somewhat stilted quality, and is more formal than the way in which people generally speak, that is less surprising in evidence given long after the relevant events. I accept that a conversation in words substantially to that effect took place.

12. In her first affidavit, Ms Minifie refers to the circumstances in which she inspected the East Ryde property, at Mr Plumb’s suggestion, in July 2005 and to her discussions with Mr Plumb in relation to the purchase. She also refers to the delay in the sale of the North Ryde property and to a conversation with Mr Plumb in which he requested a 25% interest in the property, on the basis that he would do the improvements and work on the landscape and garden, and to their agreement that she would put the house in his name as to 25% and that the works that needed to be done would be completed within two years and he would work on them (Minifie 12.8.16 [42], [44]).

13. On or about 21 July 2005, Ms Minifie exchanged contracts to acquire the East Ryde property for a purchase price of $930,000, and the contract named her as purchaser. Mr Plumb and Ms Minifie borrowed the amount of the deposit required for that property, being $46,500 or 5% of the purchase price, from Bendigo Bank under an overdraft facility taken out by both Mr Plumb and Ms Minifie, although that facility was secured by Ms Minifie’s deposit of the title deeds for her North Ryde property with Bendigo Bank by way of equitable mortgage. Ms Minifie was then unable to sell the North Ryde property and obtained bridging finance to complete the purchase of the East Ryde property, while retaining the North Ryde property, as a joint borrower with Mr Plumb. Ms Minifie paid out the equitable mortgage taken out with Bendigo Bank to secure the deposit for the East Ryde property in early October 2005 and settlement also took place in relation to the East Ryde property in late October 2005. Ms Minifie and Mr Plumb together borrowed $775,000, Ms Minifie contributed $106,811 from her own funds, and Mr Plumb paid stamp duty in the amount of $33,294. Ms Minifie contends that she could have obtained approval for the amount of borrowing without Mr Plumb’s involvement as co-borrower and I accept that she would have been able to do so, since she then owned the North Ryde property unencumbered, subject to the equitable mortgage for the deposit, and worked full time and, at that time, Mr Plumb did not have real property or substantial assets and did not work full time. The loan to Ms Minifie and Mr Plumb was necessarily made on the basis of her borrowing capacity.

14. Ms Minifie and Mr Plumb subsequently rented out the East Ryde property until the North Ryde property was sold in October 2006. Between October 2005 and December 2006, Ms Minifie made all mortgage repayments in relation to the mortgage over the East Ryde property from her salary, other than for rental proceeds received from the property. When settlement occurred in relation to the sale of the North Ryde property in December 2006, the net proceeds of sale of that property in the amount of $761,124.25 were applied to reduce the amount owed on the East Ryde property, and Mr Plumb contributed a relatively small amount, $7,278, out of his own funds, although it appears those funds were later re-credited to him in circumstances that are not clear from the evidence. Ms Minifie in turn pleads the sum of her contributions to the property by December 2006 and Mr Plumb’s substantially smaller contributions to the property by that time.

15. In her first affidavit, Ms Minifie refers to her wish to proceed with substantial alterations or a complete makeover of the East Ryde property, and to Mr Plumb’s resistance to that course in late 2006 or early 2007, and their agreement to undertake renovations, one project at a time, within a modest budget and to the delays in that work. Mr Plumb acknowledges in his affidavit evidence that he carried out very little of the promised work on the property, apart from minor landscape work, and that his earnings were irregular and low compared to Ms Minifie, and that he contributed almost nothing to repairs and renovations and rarely gave her anything for living expenses, although his evidence is that he made some contributions towards the mortgage, totalling about $10,000 between 2006 and 2011 (Plumb 12.8.16 [36]).

12. Once Mr Plumb and Ms Minifie moved to East Ryde, they became near neighbours of Mr Saba, who lives in the street behind Mr Plumb, on the other side of a nature reserve between the two properties. There have been disputes between Mr Saba on the one hand, and Mr Plumb and (possibly to a lesser extent) Ms Minifie on the other, over several years, which appear to date back at least to the circumstances in which Mr Saba caused several trees to be cut down in 2008. Following an incident in late January 2011, an interim apprehended violence order (“AVO”) was made against Mr Plumb in proceedings brought by the police against Mr Plumb, and an interim AVO was also made against Mr Saba in proceedings brought by Mr Plumb against Mr Saba (Saba [14]; Plumb [88]). Those orders and associated final orders were the subject of proceedings in the Local Court and the District Court and continued over an extended period. A permanent AVO was made against Mr Plumb in the Local Court in the AVO proceedings brought by the police against him in September 2011, but later set aside on his appeal to the District Court. Mr Plumb thereafter pursued his AVO application against Mr Saba in the Local Court. Ms Minifie was cross-examined in that application on 29 March 2012 and her Cross-Claim, to which I refer below, places some weight on that matter. Mr Plumb was unsuccessful in his AVO application in the Local Court and then pursued an appeal to the District Court which was also unsuccessful. The parties led voluminous affidavit evidence as to aspects of that dispute and at least Mr Saba and Mr Plumb appeared to anticipate that this Court would, in this application, allow a further opportunity to agitate, and review the merits of, the matters that had been agitated at length and determined in the earlier proceedings. I have not taken that approach.

13. Mr Plumb's evidence is that his relationship with Ms Minifie began to deteriorate in mid-2011 (Plumb [38]) and that deterioration continued and worsened in late 2011 (Plumb [43]–[46]). Ms Minifie also refers (Minifie [90]–[93]) to the impact of the AVO proceedings involving Mr Plumb, and the extent to which they consumed Mr Plumb, as a matter that adversely affected her continuing relationship with Mr Plumb. Mr Plumb's and Ms Minifie’s evidence is that she moved into a separate bedroom in the East Ryde property in October 2011 (Plumb [49]; Minifie [93]). Friends of Mr Plumb and Ms Minifie became aware that they were sleeping in separate bedrooms by late 2011 and I will refer to their evidence below. Mr Plumb’s evidence is that Ms Minifie pressed for a separation from early 2012 (Plumb [50]–[56]) and there is evidence of discussion of a property settlement between them in the second quarter of 2012 (Plumb [59]–[62]; Minifie [102]). Friends of Mr Plumb and Ms Minifie were also advised of the breakdown of their “marriage” and that they were negotiating a property settlement in April and May 2012, shortly before they submitted consent orders to the Family Court to implement that settlement (Whalley [12]; Hartley [8]). Mr Plumb also advised his next door neighbour that the marriage had ended about the time those orders were made by the Family Court (Novati [6]).

14. Consent orders implementing a property settlement between Mr Plumb and Ms Minifie, dated 4 June 2012, were made by the Family Court of Australia on about 14 June 2012 (Minifie [107]). Those consent orders recorded the parties’ agreement that:

“[Ms Minifie] made a substantial contribution (that is, about 85%) to the acquisition, conservation and improvement to the assets that were acquired and built up during the relationship by way of earnings from personal exertion as well as by way of a non-financial contribution.

[Mr Plumb] made a modest contribution (that is about 15%) to the acquisition, conservation and improvement of the assets that were acquired and built up during the relationship by way of earnings from personal exertion as well as by way of non-financial contribution.

The parties also ask the Court to take into account the fact that [Ms Minifie] is granting [Mr Plumb] a personal right to reside at [the East Ryde property] for life and which the parties have valued the said right at $384,000.”

Those consent orders provided, broadly, for Mr Plumb to transfer his one quarter interest as tenant in common in the East Ryde property to Ms Minifie and for Ms Minifie to grant Mr Plumb a lifetime right of residency in the property. A transfer dated 14 June 2012 of Mr Plumb’s one-quarter interest in the property was subsequently lodged with Land and Property Information and registered.

19. Mr Plumb's application for a permanent AVO against Mr Saba was dismissed by a Magistrate in the Local Court three months after the consent orders had been made by the Family Court, in late September 2012 (Saba [29]; Plumb [96]; P1, Tab 41). Mr Plumb then appealed the dismissal of his AVO application against Mr Saba to the District Court (Saba [64], Ex P1, Tab 45). That appeal was subsequently dismissed in November 2013 (Ex P1, Tab 66). A costs assessment was completed in February 2015 (Ex P1, Tab 82); the costs awarded to Mr Saba were later increased on his application for review of the cost assessor's decision (Ex P1, Tab 91); and a judgment arising from that costs assessment was registered in Mr Saba's favour in the very substantial amount of $232,187.12 in October 2015 (Ex P1, Tab 96). I do not comment further as to the size of that costs order, which is not a matter in issue in these proceedings.

Legal principles applicable to Mr Saba’s claim under s 37A of the Conveyancing Act

20. Section 37A of the Conveyancing Act relevantly provides that:

“1.   Save as provided in this section, every alienation of property, made whether before or after the commencement of the Conveyancing (Amendment) Act1930, with intent to defraud creditors, shall be voidable at the instance of any person thereby prejudiced.

2.   This section does not affect the law of bankruptcy for the time being in force.

3.   This section does not extend to any estate or interest in property alienated to a purchaser in good faith not having, at the time of the alienation, notice of the intent to defraud creditors.”

21. In Langdon v Gruber [2001] NSWSC 276, Austin J summarised the matters necessary to establish an “intent to defraud creditors” for the purposes of that section as follows (at [54]–[56]), omitting citations of authority:

“It is not necessary to prove all of the ingredients of the tort of deceit. In Lloyds Bank v Marcan, at 760-1, Cairns LJ said that a dishonest intention must be shown, at any rate where the conveyance is for consideration. But in Australia, at least, it is not necessary for the plaintiff to bring actual proof that the debtor had in his or her mind an intention to defraud creditors; if it appears from evidence of all the circumstances that the transfer might be expected to have that effect, and has had that effect, the Court will attribute fraudulent intention to the debtor … However, the onus of proof of intent to defraud is on the plaintiff … If the conveyance is voluntary, it is easier to infer a dishonest intention than when it is made for consideration …

There is Canadian authority for the proposition that, where the parties to the conveyance of property are related and the circumstances are suspicious, there is a presumption that the transfer is voidable ... This probably means no more than that a transferor and transferee being related is a factor relevant to the court's decision on the transferor's intention.”

22. Although the requisite intention to defraud creditors must be established in order to obtain an order under this section, the existence of that intention can be inferred from a consideration of all relevant circumstances: Cannane v J Cannane Pty Ltd (in liq) [1998] HCA 26; (1998) 192 CLR 557 at [12], [92]; Bell Group Ltd (in liq) v Westpac Banking Corp (No 9) [2008] WASC 239; (2008) 39 WAR 1 at [9105]. Mr Glissan, who appears for Mr Plumb, submits that the decision in Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546 establishes that an actual intent to defraud is required for the purposes of s 37A of the Conveyancing Act, notwithstanding that intent may be proved by inference from the evidence. The High Court there observed (at [20], [31]–[32]) that the section is to be accorded a “liberal construction” and extends to prohibit conduct which may “delay, hinder or defraud” a creditor or potential creditor, and the Court may infer an intention by the transferor of property to defeat or delay creditors, even in the absence of direct evidence of that intention, where that outcome was the necessary consequence of a voluntary settlement.

23. These principles were helpfully summarised in Patel v Lal [2011] NSWSC 603; (2011) 16 BPR 30,265 at [6], where Biscoe AJ observed that:

“Section 37A should receive a liberal construction in effecting its purpose of suppressing fraud. The term “defraud” in s 37A means to delay, hinder or otherwise defraud: Marcolongo v Chen [above] at [19], [20], [58]. It is unnecessary to show that the debtor wanted creditors to suffer a loss or that the debtor had a purpose of causing loss. It is necessary to show the existence of an intention to hinder, delay or defeat creditors and in that sense to show that accordingly the debtor had acted dishonestly. If the debtor disposes of an asset which would be available to creditors with the intention of prejudicing them by putting it, or its worth, beyond their reach, he is in the ordinary case acting in a fashion not honest in the context of the relationship of debtor and creditor. In cases of voluntary disposition that intention may be inferred: at [32]. A person may have acted dishonestly, judged by the standards of ordinary, decent people, without appreciating that the act in question was dishonest: at [33]. The party seeking to avoid the disposition bears the onus of proving an intent to defraud. While the existence of the intent may be inferred from the evidence, it is to be found as a fact: at [34]. Sections [sic] 37A does not require the intent to defraud to be the sole or predominant intent: at [57].”

24. It is not necessary that an intention to hinder or delay creditors is the sole or predominant or primary purpose of the transaction: Commissioner of Taxation v Oswal (No 6) [2016] FCA 762; (2016) 339 ALR 560 at [63]. I recognise that the authorities do not require actual proof that Mr Plumb had an intention to defraud creditors present to his mind, if it appears from the evidence that that effect might be expected: Re Trautwein; Richardson v Trautwein (1944) 14 ABC 61; Green v Schneller [2002] NSWSC 671; (2002) 29 Fam LR 346 at [84]. I also recognise that the reference in s 37A of the Conveyancing Act to “creditors” is not limited to persons to whom debts are presently owing and an intention to defeat future creditors may be sufficient to establish that a transaction is within the scope of the section: PT Garuda Indonesia Ltd v Grellman (1992) 35 FCR 515; 107 ALR 199 at 210; Green v Schneller above at [88]. I also accept that it is open to this Court in an appropriate case to make an order under s 37A of the Conveyancing Act, notwithstanding that a transfer of property has been made pursuant to orders made under s 79 of the Family Law Act: Green v Schneller above.

25. I have drawn, in part, on my summary of the scope of s 37A of the Conveyancing Act in Deputy Commissioner of Taxation v Peter Sleiman Investments Pty Ltd as trustee for the Sleiman Family Trust [2016] NSWSC 1657 for the outline of the elements of that section that appears above: see also Lakis v Lardis [2017] NSWSC 321. I also have regard to the helpful summary of the relevant principles, in a similar context, in Chan v Acres [2013] NSWSC 1597; (2013) 51 Fam LR 90. In that case, the plaintiff failed to establish that a transaction was within the scope of s 37A of the Conveyancing Act, where it was made in respect of a genuine decision to end a marriage; the transferor’s views as to his personal liability to the plaintiffs in other proceedings were not unreasonable or irrational and were held bona fide; and no case was made that the consent orders made by the Family Court were a sham or did not represent a reasonable or bona fide estimate of the transferor’s interest in the relevant property. Kunc J observed (at [72]–[73]) that:

“The legal principles concerning the application of that section are:

(1)   “Creditors” includes present or future, contingent or prospective creditors.

(2)    The existence of the requisite intent is a question of fact to be determined objectively from all the circumstances, irrespective of whether or not the person concerned appreciated the quality of their act.

(3)    It is easier to infer intent to defraud where the alienation is voluntary rather than for consideration.

(4)    An inference of intent to defraud creditors may be made in the case of subtraction of assets which, but for the alienation in question, would be available to meet the claims of present and future creditors.

(5)    The phrase “intent to defraud” includes an intent to delay or hinder.

(6)    It is sufficient to show an intent to hinder, delay or defeat creditors without also showing that the debtor wanted creditors to suffer loss or had the purpose of causing loss.

(7)    The intent to defraud does not have to be the sole or even predominant intent of the debtor.

(8)    The seriousness of the allegation of fraud is a matter which may be taken into account in determining whether the necessary intention has been proven on the balance of probabilities.

(9) Section 37A may be used to undo an alienation of property effected by consent orders in Family Court property settlement proceedings.

The propositions in the preceding paragraph are derived from: Marcolongo v Chen [2011] HCA 3; (2011) 242 CLR 546 at [19], [20], [25]. [32], [34] and [57]; Cannane v J Cannane Pty Ltd (in liq) [1998] HCA 26; (1998) 192 CLR 557 at [12] and [92]; Kang v Kwan [2002] NSWSC 1187; (2002) 11 BPR 20,623 at [187]; s 140 Evidence Act 1995 (NSW); Green v Schneller [2002] NSWSC 671; (2002) 29 Fam LR 346; (2002) 11 BPR 20,935.”

26. Mr Alexander, who appears for Ms Minifie, submits and I accept that any allegation of fraud on the part of Mr Plumb must be approached bearing in mind s 140(2) of the Evidence Act and the principle in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. Mr Alexander also submits, and I recognise, that there is a distinction between this case and many other claims under s 37A of the Conveyancing Act, since Mr Plumb was a plaintiff in the AVO proceedings against Mr Saba and not a defendant facing a substantive claim for damages at the time of the transfer of his interest in the East Ryde property to Ms Minifie, pursuant to the consent orders made by the Family Court. I proceed on the basis that s 37A of the Conveyancing Act would, in principle, be available in respect of a transaction directed to avoid a plaintiff’s apprehended liability for an adverse costs order. I nonetheless recognise that it would be an unfortunate result if parties in proceedings in this and other courts were generally unable to deal with their assets while those proceedings were on foot, where one or other party to any proceedings will generally fail in whole or in part and may be exposed to a costs order in consequence. The answer to that difficulty may be that commonly, as I will find below in this case, parties pursue proceedings because they anticipate their success and the recovery of their costs, not their failure and the payment of the other party’s costs. The elements of a claim under s 37A of the Conveyancing Act may therefore be rarely satisfied in this context.

Whether Mr Plumb’s and Ms Minifie’s relationship had genuinely broken down

27. Mr Saba’s primary claim was that Mr Plumb and Ms Minifie had not genuinely terminated their relationship in late 2011 or early 2012 and that the consent orders made by the Family Court of Australia in June 2012 were not genuinely made in order to give effect to the termination of that relationship. Mr Saba also relied on other evidence, which I will address below, in challenging the transfer of Mr Plumb’s interest in the property to Ms Minifie, and maintained an alternate claim that the transaction was, on its face, an attempt to defeat or delay Mr Saba’s claim for costs.

28. Although no order was made for pleadings, as it ought to have been where the case involved allegations of fraud, Mr Saba’s claim was particularised by a letter dated 9 June 2016 from his solicitors to Ms Minifie’s solicitors as directed to conduct of Mr Plumb and Ms Minifie in the period between June 2012 and 18 July 2012. Those particulars were as follows:

“[Mr Saba] says that the relevant conduct was engaged in by [Mr Plumb] and [Ms Minifie] at or around the time of the hearing of the Local Court proceedings on 14 June 2012, the execution of the Family Court of Australia consent orders on 14 May 2012, the transfer of Mr Plumb’s interest in the land also on 14 June 2012, the subsequent registration of the Consent Orders and the subsequent registration of that transfer on 18 July 2012.”

29. Mr Saba was also asked to provide particulars of Mr Plumb’s intent in transferring the property and responded, in a manner that did not illuminate the nature of his case, as follows:

“[Mr Saba] relies upon the elements of s 37A(1) of the Conveyancing Act and relevantly that [Mr Plumb] alienated [Mr Plumb’s] interest in the property by transferring that interest to [Ms Minifie] with intent to defraud [Mr Plumb’s] creditors.”

30. Mr Barham, who appears for Mr Saba, put Mr Saba’s attack on Mr Plumb and Ms Minifie’s evidence as to the breakdown of their relationship and the transfer of Mr Plumb’s interest in the East Ryde property to Ms Minifie in extraordinarily strong terms. For example, in closing submissions, Mr Barham submitted that Ms Minifie engaged “in a scorched earth policy to make sure there would be nothing there if Mr Saba did succeed” and that the “scorched earth policy” had been “dressed up as a separation to give it verisimilitude”. Mr Barham in turn characterised the consent orders made by the Family Court in June 2012 and the grant of a life interest to Mr Plumb under those orders as “done purely to spite Mr Saba’s chances of recovering under a Court order” which, I interpolate, had not then been made. In closing submissions, Mr Barham submitted that “nothing seems to have changed in the relationship” between Mr Plumb and Ms Minifie since the date of their alleged separation. As will emerge below, the evidence fell well short of establishing these matters.

31. As Mr Alexander points out, a substantial amount of time at the hearing was spent on Mr Saba’s challenge to the genuineness of the alleged breakdown of the relationship between Mr Plumb and Ms Minifie. Mr Alexander accepts that a finding of an intent to defraud on Mr Plumb's part would more readily be made, and a claim for good faith and lack of notice on Ms Minifie's part would less readily be accepted, if their evidence as to the breakdown of their relationship is false. Conversely, Mr Alexander submits that the Court may more readily accept their evidence as to other matters if it accepts their evidence as to the breakdown of their relationship, notwithstanding the substantial effort and time that has been put by Mr Saba into falsifying that evidence. I do not necessarily accept that proposition, since a party may give accurate and honest evidence in one part of his or her case and inaccurate or dishonest evidence in another part of his or her case. As will emerge below, I do accept Mr Plumb's and Ms Minifie's evidence as to the breakdown of their relationship.

32. The evidence that supports the conclusion that the breakdown of Mr Plumb’s and Ms Minifie’s relationship was genuine was, first, their evidence of what had occurred, as to which they were extensively cross-examined. In his first affidavit, Mr Plumb referred to the deterioration of his relationship with Ms Minifie, which he dated from about mid-2011, and to Ms Minifie having indicated concern as to his failure to make the contributions which he had promised in return for a 25% interest in the East Ryde property, and to her wish that her daughter inherit all of the property on her death. Mr Plumb also refers to a further conversation, in respect of the negotiations toward the consent orders made by the Family Court, in which he claimed to have said:

“I understand that you’ve paid over 90% for the place. I never intended to be entitled to more than my contributions. I just wanted to be secure. I know I’ve let you down over the years. I don’t have a problem with your daughter inheriting the whole house, since you’re giving me a personal life interest.”

This conversation has a somewhat stilted quality and it seems to me likely that it reflects a summary of a longer, and less straightforward, discussion or discussions. Having said that, I have no doubt that Mr Plumb was correct in acknowledging the extent of Ms Minifie’s contributions; that he was genuine in his expressed concern as to having a place to live, given his very limited assets; and that he in fact accepted Ms Minifie’s entitlement to leave the house to her daughter, in the relevant circumstances, provided he was allowed a life interest in the property.

33. Mr Plumb also referred, in his first affidavit, to matters that had contributed to the breakdown of his and Ms Minifie’s relationship, including the effect of his depression and anti-depressant medication upon him, leading to impatience, anger and his failure to respond to simple requests by Ms Minifie. Mr Plumb’s evidence, which I accept, was that Ms Minifie moved into a separate bedroom downstairs in late 2011 and he also referred to their discussions as to separation in the first quarter of 2012. Mr Plumb also led evidence that he initially did not take Ms Minifie’s views “seriously enough” because he was focused on the dispute with Mr Saba, his conservation work and was then affected by depression. Mr Plumb’s evidence in cross-examination was also that, in October 2011, Ms Minifie was not happy; she believed that Mr Plumb was neglecting her and that he and she were not doing the things she had anticipated on her retirement; and she believed that he was obsessed about his court case against Mr Saba and about conservation work and was generally depressed (T216). Mr Plumb’s evidence in cross-examination was also that Ms Minifie did not want the AVO proceedings against Mr Saba to continue, where she saw them giving rise to stress and anxiety and triggering his depression (T219). Mr Plumb’s evidence in cross-examination was also that, although he did not want the relationship with Ms Minifie to finish, he had failed to manage his depression, and that he “hadn't met the undertakings [he had] given [Ms Minifie] about work on the property.” Mr Plumb was plainly very upset in accepting his fault for the breakdown of the relationship in the course of his cross-examination on 29 March 2017, resulting in an early adjournment on that occasion (T222). I am satisfied that that emotion was genuine and not feigned.

34. Mr Plumb also refers in his first affidavit to the circumstances in which a joint mortgage account of himself and Ms Minifie was closed in March 2012 and the Family Court consent orders were prepared, with some assistance from Mr Plumb’s brother, who is an accountant. Mr Plumb’s evidence, admitted with a limiting order under s 136 of the Evidence Act, was that the settlement between Ms Minifie and himself did not relate to the legal proceedings between him and Mr Saba, except that the stress of those proceedings had taken its toll on Mr Plumb’s and Ms Minifie’s relationship. Mr Plumb also referred in his affidavit evidence to the existence of continued contact between Ms Minifie and himself after the breakdown of their relationship, as amicable housemates rather than as lovers or partners and to contact with their respective children as a group and social events at the property which involve their children and would only occur three or four times a year. Mr Plumb’s evidence in that respect was not inconsistent with the observations of Mr Saba and Mr Maxwell as to the existence of such events to which I will refer below.

35. I have regard to the fact that there is no record of Mr Plumb having disclosed the breakdown of his relationship with Ms Minifie to his treating doctors, including his general practitioner, until November 2013. I have given careful consideration to whether that matter impeaches Mr Plumb’s and Ms Minifie’s evidence, corroborated by third parties who have given evidence, of when that breakdown occurred. I have ultimately concluded that this matter, although undoubtedly odd, is likely to reflect the complexities of human behaviour in dealing with matters that involve embarrassment and disappointment, and that I should give greater weight to the other evidence that supports the fact of the failure of the relationship.

36. Ms Minifie also gave an account of the breakdown of her relationship with Mr Plumb in her affidavit evidence, and also pleads the relevant facts in her Cross-Claim, to which I refer below. In her first affidavit, Ms Minifie refers to the deterioration of her relationship with Mr Plumb and to her wish for a new beginning for herself, linked with her retirement from her previous employment. Ms Minifie also referred to the possibility of a settlement of the AVO proceedings between Mr Saba and Mr Plumb, raised at the end of 2011, which did not proceed in January 2012, and to her anger and frustration at that matter and her belief that her relationship with Mr Plumb could not withstand the ongoing AVO proceedings (Minifie 12.8.16 [98]) and to Mr Plumb’s depression and lack of communication with her over the subsequent period (Minifie [99]). Ms Minifie’s evidence is that she informed Mr Plumb in March 2012 that she wanted a separation. She gave evidence of her belief that he would never fulfil his promise to renovate the East Ryde property which had led her to transfer the 25% interest in the property to him and of her concern as to the effect of the ongoing AVO proceedings with Mr Saba on her relationship with Mr Plumb (Minifie [102]). Ms Minifie’s first affidavit refers to the agreement that she then reached with Mr Plumb, which she says was documented by the binding consent orders in the Family Court at the suggestion of Mr Plumb’s brother, who is (as I noted above) an accountant (Minifie [105]). Ms Minifie also refers to current living arrangements in the East Ryde property, by which she and Mr Plumb occupy separate bedroom levels, and they share the kitchen and other common facilities on the middle level of the property.

37. In closing submissions, Mr Barham criticised Ms Minifie’s evidence as to her motives for her separation from Mr Plumb, on the basis that she had “variously referred to” wanting a new beginning (Minifie [96]), her life being “miserable” and her having had enough (Minifie [102]–[103]), Mr Plumb not having met his commitments in respect of the purchase of the property, and her wishing to give her daughter “certainty”, avoid an issue with Mr Plumb’s heirs after his death and her wish to pass ownership of the East Ryde property to her daughter (Minifie [103], [112], [117]). It does not seem to me that the fact that Ms Minifie led evidence of various matters that contributed to the breakdown of her relationship with Mr Plumb impugns her evidence as to that matter, where one would ordinarily expect that there would be no single cause of a decision as significant as the termination of a long-term relationship.

38. There was also third party evidence, given by witnesses who were associated to a greater or lesser extent with Mr Plumb and Ms Minifie, of their observations of the breakdown of their relationship. That evidence was credible and convincing and I give it substantial weight. Ms Whalley is Mr Plumb’s sister, and her evidence, in her affidavit dated 13 November 2016, is that Ms Minifie had expressed concerns to her over many months in 2011 as to Mr Plumb’s involvement in the AVO proceedings with Mr Saba and as to his withdrawal and hostility to Ms Minifie, associated with his depression. Ms Whalley also referred to conversations with Mr Plumb, which were consistent with his evidence that he had a continued belief that he would be successful in the AVO proceedings involving Mr Saba, because (Mr Plumb believed) Mr Plumb was “in the right” in those proceedings.

39. Ms Whalley also referred to conversations with Ms Minifie in early 2012, in which Ms Minifie had said that she “really want[ed] [her] life back” and to Mr Plumb’s advice to her, in April 2012, that the “marriage” (as Mr Plumb and Ms Minifie had previously referred to their de facto relationship) had broken down and that he and Ms Minifie were finalising a property settlement. Ms Whalley also referred to subsequent conversations with Mr Plumb in which he had acknowledged the matters which had led to the breakdown of his relationship with Ms Minifie, including his involvement in the AVO proceedings, his depression and his anxiety. Ms Whalley was an impressive witness who, it seems to me, gave honest and convincing evidence under vigorous cross-examination. I accept her evidence and it is strongly corroborative of Mr Plumb’s and Ms Minifie’s evidence as to the breakdown of their relationship and the circumstances in which the consent orders were sought and made in the Family Court.

40. By his affidavit dated 30 November 2016, Mr Novati, who is Mr Plumb’s and Ms Minifie’s next door neighbour, gave evidence of his knowledge of the AVO proceedings between Mr Plumb and Mr Saba, and of his observations that Mr Plumb was increasingly despondent and distracted throughout 2011 and 2012, and also seemed to be doing less by way of working in the bushland around the home or in the garden, and referred to his observations of the effect of the AVO proceedings on Mr Plumb and Ms Minifie. Mr Novati refers to Mr Plumb having told him, in mid-2012, that Mr Plumb and Ms Minifie had ended their “marriage” (as they understood their relationship) but continued to live in the house as housemates. That evidence is broadly consistent with the timing of execution of the consent orders in the Family Court. Mr Novati, who lives in closer proximity to the East Ryde property than either Mr Saba or Mr Maxwell, also referred to his observation that Mr Plumb and Ms Minifie no longer entertain or have guests on a regular basis at the house, as they used to do; that he rarely sees them together, even in the garden; and that they rarely accept an invitation to go over to his home for a dinner or a party as they had previously done. Mr Novati was cross-examined and also presented as an honest witness doing his best to assist the Court. I accept Mr Novati’s evidence as to these matters.

41. Ms Minifie also relied on the affidavit of Ms Hartley dated 11 August 2016, which referred to Ms Hartley’s observations that Mr Plumb had become less communicative during 2011, appeared depressed and angry and was often sharp with Ms Minifie in that period and that, by late 2011, Ms Minifie was sleeping in a separate bedroom on the bottom level of the house and, by early 2012, Ms Hartley had observed tension in the house and that Mr Plumb was increasingly withdrawn. Ms Hartley also refers to having been told by Ms Minifie, in April or May 2012, that she had ended her “marriage” to Mr Plumb, they were finalising the “paperwork” and she had given Mr Plumb a life interest in the house. Ms Hartley was cross-examined and also presented as a credible witness. I accept her evidence.

42. It seems to me that substantial weight should also be placed upon the fact that Mr Plumb and Ms Minifie filed tax returns with the Australian Taxation Office in which they were no longer treated as a couple as at 14 June 2012, and Mr Plumb described Ms Minifie as his “ex-partner, housemate, friend” in a Centrelink application for a disability benefit lodged in December 2013. It seems to me highly unlikely, having observed Mr Plumb and Ms Minifie over extended cross-examination, that they would have deliberately misled government authorities as to the status of the relationship, taking upon themselves the risk of statutory penalties attached to such conduct.

43. On the other hand, Mr Saba sought to establish that there was no change in Mr Plumb’s and Ms Minifie’s relationship before and after October 2011, at the time of the suggested breakdown in their relationship. Significant parts of Mr Saba’s affidavit dated 26 October 2016 expressed inadmissible opinions that Mr Plumb and Ms Minifie had lived “as husband and wife” since October 2011, which were predictably not admitted. Mr Saba’s further affidavit dated 14 February 2017 led further evidence as to other observations of Ms Minifie and Mr Plumb engaged in common activities, including a “party” held at the East Ryde property in November 2013. The premise of Mr Saba’s evidence appeared to be that, if Mr Plumb and Ms Minifie could behave civilly in hosting a gathering of a number of people, then their evidence of their failure of their personal and intimate relationship must be false. While I recognise that many couples are not able to maintain civil relationships after the failure of a marital or de facto relationship, I do not accept that that common experience can be extended to establish that all couples are unable to do so, or support the premise of Mr Saba’s approach.

44. As I noted above, Mr Maxwell’s affidavits dated 19 April 2016 and 14 February 2017 were directed to Mr Maxwell’s observations, at Mr Saba’s request, of Mr Plumb’s and Ms Minifie’s activities. It appears that Mr Maxwell began to observe Mr Plumb and Ms Minifie in late 2013 “to see if they are still living together and acting like a married couple”. Mr Maxwell gave evidence as to his observations and opinions, parts of which were also inadmissible and were also not admitted. Mr Maxwell’s evidence was that Mr Plumb and Ms Minifie had not mentioned to him since June 2012 that they were divorced, separated or had otherwise changed their domestic relationship. That was not surprising, since it emerged in cross-examination that Mr Maxwell had previously aligned himself with Mr Saba in the history of disputes between Mr Saba and Mr Plumb. Mr Maxwell’s evidence was that he had observed Mr Plumb and Ms Minifie entertaining or gardening together, sitting with each other or talking to each other. Mr Maxwell also gave evidence that Ms Minifie, on many occasions since June 2012, had hung Mr Plumb’s washing on the clothes line, although Mr Plumb had not reciprocated by hanging Ms Minifie’s washing on the clothes line.

45. Mr Maxwell’s process of observation of Mr Plumb and Ms Minifie appears to have been undertaken with considerable diligence, resulting in emails to Mr Saba on 28 November 2013, reporting the fact that Mr Plumb, Ms Minifie, his daughter and another person were having dinner; on 2 December 2013 reporting that Mr Plumb and Ms Minifie were having a “dinner party”; and on 21 December 2013 reporting that Mr Plumb and Ms Minifie were having a “party” with friends. Mr Maxwell also observed that Mr Plumb and Ms Minifie performed gardening activities together both before and after June 2012 and continued to hold “Christmas parties” as they did prior to 2012, and Mr Maxwell also reported to Mr Saba that Mr Plumb and Ms Minifie had breakfast together regularly for several weeks. Mr Maxwell also pointed to occasions on which Mr Plumb and Ms Minifie had left together for several weeks and then returned together, which is not altogether surprising where there were three occasions on which they worked together on bush regeneration activities at Fraser Island, which were also the subject of close examination in Mr Saba’s case.

46. Mr Maxwell’s further affidavit dated 14 February 2017 led similar evidence, some of which was rejected and some of which was admitted with limiting orders under s 136 of the Evidence Act, and which did little or nothing to establish the continuance of any intimate relationship between Mr Plumb and Ms Minifie. The premise of Mr Maxwell’s evidence, like Mr Saba’s evidence, appears to be that the continuance of several forms of normal human activity was inconsistent with the failure of a personal and intimate relationship between Mr Plumb and Ms Minifie. I do not accept that premise or the conclusion that Mr Maxwell seeks to draw from it. It does not seem to me that the matters that Mr Maxwell observed, alone or combined with other joint activities of a civil, but not intimate, character undermined Mr Plumb’s or Ms Minifie’s evidence as to the failure of their relationship.

47. Mr Saba places weight on the fact that Ms Minifie did not refer to having separated from Mr Plumb in a statement she had made in the Local Court proceedings about 29 March 2012. I give little weight to that matter, since it does not seem to me that that matter was relevant to the issues in dispute in the AVO proceedings. Mr Saba also submits that the right of occupation given to Mr Plumb under the consent orders made by the Family Court is inconsistent with a breakdown in the relationship between Mr Plumb and Ms Minifie, where it would allow Mr Plumb a continued right to occupy the property during his lifetime. I can accept that that submission would in some cases be well-founded, because many persons whose relationship has broken down could not accept the continuance of common living arrangements. However, I do not accept that that generalisation falsifies the evidence of Mr Plumb and Ms Minifie as to the practical advantages of the arrangement for them, and their ability to accept it in the particular circumstances, or impeaches the genuineness of the breakdown of their relationship.

48. Mr Saba also relied on several emails exchanged by Mr Plumb with the organiser of bush regeneration trips to Fraser Island, which Mr Plumb appears to have written on behalf of both himself and Ms Minifie, and to Mr Plumb’s having at one point advised the organiser that Ms Minifie and he would be “very happy to sleep in a tent” and inquired whether the organiser could lend a tent or whether they should bring their own. That email also dealt with other matters of practical significance such as whether Mr Plumb should bring his lopper and hedging shears and tool belt. A reference to a double bed in one of those emails also received very detailed attention in cross-examination.

49. Mr Plumb and Ms Minifie were cross-examined at some length as to those emails to seek to establish that, if they were prepared to share a tent or accommodation which contained a double bed on undertaking bush regeneration on Fraser Island, then their relationship must not have failed. Mr Plumb and Ms Minifie were also cross-examined, again at considerable length, as to the wider arrangements for the Fraser Island visits. Having observed Mr Plumb and Ms Minifie in lengthy cross-examination, I am comfortably satisfied that their evidence of the failure of their relationship was not impugned by the fact that they were, or at least Mr Plumb was, prepared to share a tent or a room with a double bed (and, presumably, a floor) if the necessity arose in the particular circumstances. The inference that Mr Plumb and Ms Minifie were still in an intimate relationship that Mr Saba seeks to draw from correspondence concerning accommodation arrangements on Fraser Island was inconsistent with Ms Whalley’s evidence that Mr Plumb and Ms Minifie stayed in separate rooms when they stayed with her, on the way back from Fraser Island (T150). It does not seem to me that that correspondence or the cross-examination concerning it comes close to establishing that their evidence as to the breakdown of their relationship was false.

50. Mr Saba also places some weight on an incident at a video store between Ms Minifie and Mr Saba, which led to a complaint by Ms Minifie to the police, which Mr Saba characterises as unfounded and as indicating Ms Minifie's commitment to advancing Mr Plumb's cause. I do not consider it necessary to seek to resolve that collateral dispute in order to determine these proceedings.

51. Mr Saba also placed weight on inconsistencies in the time attributed to the breakdown of their relationship by Mr Plumb and Ms Minifie. Mr Barham submits that Mr Plumb and Ms Minifie have described the date of the breakdown of their relationship at various dates, in their affidavit evidence, between late 2011, January 2012, April 2012, in the orders made by the Family Court as 20 May 2012 and, in Mr Plumb’s evidence, as late as June 2012, when the Family Court orders were made. By their application for consent orders filed with the Family Court of Australia on 4 June 2012, Ms Minifie and Mr Plumb identified the date on which they began living together as 15 January 1996 and the date of their final separation as 20 May 2012. Mr Plumb’s evidence in cross-examination, which I accept, was that the latter date reflected the date on which they reached agreement as to the terms of the orders that were to be sought from the Family Court. Mr Alexander responds that the breakdown of a relationship that had lasted for over 16 years was not likely to be traced to a single incident, but was likely to be an ongoing gradual process, commencing with Ms Minifie's move to a separate bedroom in October 2011 and finalised by the consent orders made by the Family Court in June 2012.

33. It does not seem to me that the variations in these dates are particularly surprising, where the breakdown in Mr Plumb’s and Ms Minifie’s relationship occurred over an extended period, and any process of allocating a particular date to it would be artificial. It seems to me that the inconsistency in those dates reflects, in part, differences of approach as to what constitutes the point of a “breakdown” of the relationship, whether by reference to the parties having moved into separate bedrooms and ceased an intimate relationship, Ms Minifie having expressly articulated an intent to separate or an agreement reached as to the terms of the orders to be sought from the Family Court. I do not accept Mr Barham’s submission that these dates “cannot all be correct”, when the date of the breakdown of a relationship hardly has the same fixed character as, for example, the date of a birthday. These dates can all be correct, from different perspectives. I consider that the criticisms advanced by Mr Saba of the different dates attributed to that breakdown have little weight.

34. Mr Saba’s primary case was that, in effect, the whole of Mr Plumb’s evidence and Ms Minifie’s evidence as to these matters was an invention and was deliberately false. Mr Glissan responds that the evidence of Ms Hartley, Mr Novati and Ms Whalley, and the objective evidence including their bank statements, income tax returns, Mr Plumb’s application for a disability support pension and Ms Minifie’s alteration of her nominated superannuation beneficiary and her will to replace Mr Plumb, support a finding that Mr Plumb’s and Ms Minifie’s account of the breakdown of their de facto relationship was genuine.

35. As I noted above, a substantial premise of Mr Saba’s case appeared to be that the breakdown of Mr Plumb’s and Ms Minifie’s “marriage” must be a fiction, because they continued to share the East Ryde property, meet together with their respective children and friends and acquaintances, and participate together in matters of common interest including bush conservation and dealings with the local council, after the alleged breakdown in their intimate and personal relationship. It does not seem to me that those matters falsify Mr Plumb’s or Ms Minifie’s evidence as to the end of that relationship, which was corroborated by other witnesses who knew them more closely than Mr Saba or Mr Maxwell. I am satisfied, including from observations of Mr Plumb and Ms Minifie in the witness box, that their evidence as to these matters was truthful, and that evidence was supported by the evidence of Ms Whalley, Mr Novati and Ms Hartley which I have accepted. I find that their relationship had genuinely broken down and that, by late 2011 or early 2012, Mr Plumb and Ms Minifie had ceased any sexual relationship, moved into separate bedrooms and no longer resided together as de facto partners.

Whether Mr Plumb had an intent to defraud creditors in respect of the transaction

55. Mr Saba refers to a wide range of matters from which an inference should be drawn that the transfer of Mr Plumb’s 25% interest in the East Ryde property to Ms Minifie, pursuant to the consent orders made by the Family Court, was intended to defeat or delay Mr Saba’s future claim for costs, if he successfully defended the AVO proceedings brought by Mr Plumb against him. Before I turn to those matters, I should note that Mr Alexander submits that the Court should less readily draw inferences as to Mr Plumb's state of mind in June 2012 from an objective characterisation of the effect of the transaction, where Mr Plumb was then suffering very serious depression. Mr Alexander submits, and I accept, that Mr Plumb’s medical records indicate that his depression was a serious matter, requiring continuing medication and long term treatment, and had significant behavioural impacts, so that Mr Plumb often could not get out of bed while in a state of depression, was less inclined to eat and was on several occasions unable to attend medical appointments without assistance from Ms Minifie. While I accept that Mr Plumb’s depression was both serious and debilitating, I am not persuaded that he would not have recognised matters that a reasonable person would have recognised at the time the orders of the Family Court were proposed and then made.

56. The first matter on which Mr Saba relies was Mr Plumb’s suggested recognition, prior to June 2012, that his proposed AVO proceedings were likely to fail. Mr Plumb was, not surprisingly, cross-examined at length as to his appreciation of the risk that a costs order might be made against him in the AVO proceedings and his intent in respect of the transfer of his interest in the East Ryde property to Ms Minifie.

57. Mr Barham placed substantial weight on observations made by the Magistrate in the Local Court on 22 September 2011 and again on 14 February 2012. The observations made by the Magistrate in the course of a hearing on 22 September 2011 suggested that he had formed at least a tentative view that a basis was established for an AVO against Mr Plumb although, as I note below, the District Court later set aside that order. The Magistrate also made observations, plainly well-founded, about the likely costs of the AVO proceedings, which seem to me to have been directed to the risk to both parties, and not only Mr Plumb, of those proceedings. The further observations made by the Magistrate on 14 February 2012 extended to reference to the extent of any assault by Mr Saba upon Mr Plumb, the Magistrate’s generally accepting Mr Saba's evidence of what had occurred and the expression of unfavourable views as to the manner in which Mr Plumb gave his evidence.

58. Mr Barham submits that the fact that the Magistrate declined on 14 February 2012 to continue the earlier interim AVO granted in favour of Mr Plumb had indicated to Mr Plumb that Mr Saba might succeed in the proceedings. I accept that that matter would have emphasised that possibility, although that possibility would exist in any proceedings. Mr Barham goes further to submit that Mr Plumb already knew that he was at serious costs risk as at February 2012, and the hearing on that date put that matter beyond doubt and that Ms Minifie “must have” also been aware of that matter. I do not find that the Magistrate’s observations on either 22 September 2011 or 14 February 2012 communicated to Mr Plumb that he was bound to or likely to lose the application or was at substantially greater risk than Mr Saba as to the costs of the proceedings. Such a conclusion is undermined by the facts that, first, the Magistrate fairly observed on 14 February 2012 that he had not fully reviewed the extensive evidence or submissions in making the observations he then made. Those observations would have to be understood as of a preliminary character, and I should proceed on the basis that the Magistrate in fact retained an open mind as to these matters since he would otherwise have been obliged to disqualify himself from a final hearing. Second, even if an objective bystander would have understood those preliminary observations as reason for concern about the prospects of Mr Plumb’s claim, Mr Plumb was plainly heavily invested in the AVO proceedings against Mr Saba and was not an objective bystander, and it does not follow that he understood them in that manner. Third, the proposition that Mr Plumb then formed the view that his AVO proceedings against Mr Saba were very likely to fail, prompting him take steps to transfer his interest to the property to Ms Minifie to avoid a costs order arising from that failure, is inconsistent with the efforts which Mr Plumb thereafter devoted to continuing the proceedings, including an appeal from their failure in the Local Court.

59. Mr Saba also places considerable weight on an observation made by Mr Plumb in the District Court, a year after the hearing before the Magistrate on February 2012, that he had been advised by his solicitors that it would be a “waste of the Court’s time to keep applying” after the Magistrate had declined to renew the interim AVO in his favour in February 2012. I read that observation as directed to the prospects of a further application for an interim AVO and not to an assessment of the prospects of the grant of a final order. Mr Plumb's claim that he was confident in his prospects of success in the AVO proceedings finds support not only in what he did, in continuing the proceedings, but also at least qualified support in the fact that his solicitors were prepared to assert his prospects of success of those proceedings in correspondence with Mr Saba's solicitors (Ex P1, Tab 35). Mr Plumb's evidence is that, understandably, he placed weight on his successful appeal against the AVO in favour of Mr Saba (Plumb [88]–[89]).

60. It was repeatedly put to Mr Plumb in cross-examination that he knew, before the transfer of his interest in the East Ryde property to Ms Minifie, that he was likely to fail in the AVO proceeding and feared that an order for costs would be made against him. He consistently denied both propositions, and his evidence was that he believed, on the advice of his solicitor, that his application for an AVO against Mr Saba could be successful (T200); that the potential for a costs order was not a matter of great concern, because he did not believe he would lose the application, or that the costs would be particularly high, although he also acknowledged that there was always a risk of loss proceedings and of a costs order if that occurred (T201); that he was more concerned with other matters, including the stress of the litigation, his depression and other personal factors (T202); that he believed the proceedings were winnable, given his solicitors’ advice, the settlement offer made by Mr Saba in December 2011 and his success on the appeal against the AVO application made by the police (T203); that he believed that he could win the proceedings, and that the costs claimed by Mr Saba were “ridiculously inflated”, although the settlement offers made by Mr Saba discounted them (T207); that, even after the interim AVO against Mr Saba had not been renewed on 14 February 2012, he still believed that he would succeed in the proceedings (T215); that his and his solicitors’ view was that the proceedings against Mr Saba were capable of being won, and that he did not foresee liability to Mr Saba as at June 2012 (T239); that he was confident that there would be no costs order against him (T255); and that he drew encouragement from his solicitors’ letter dated 7 March 2012 to Mr Saba’s solicitors (T279).

61. While I recognise that that evidence is consistent with Mr Plumb’s interest in the proceedings, and could potentially be self-serving, it also seems to me to be consistent with the objective probabilities. In the ordinary course, one might think that parties generally bring proceedings anticipating their success not their failure. There is no reason to think that Mr Plumb was any less confident of his success in the AVO proceedings, irrespective of any matters that might with hindsight have indicated the contrary possibility, than Mr Saba appears to have been confident of his success in this claim. The fact that their respective confidence as to the success of their respective claims was, with hindsight, misplaced does not mean that it did not exist.

62. I also recognise that Mr Novati accepted in cross-examination that Mr Plumb had told him that he was involved in Court proceedings involving Mr Saba and had also told him that “he didn’t know how he was going to pay Mr Saba” (T251). However, the litigation between Mr Plumb and Mr Saba continued for a substantial period after the transfer of Mr Plumb’s interest in the East Ryde property to Ms Minifie; and it was apparent that Mr Novati recalled only one or two occasions on which that matter was raised, and did not recall when that occurred. Mr Novati’s evidence does not support an inference that Mr Plumb had significant concern as to that matter, as at mid-2012, as distinct from in the long period in which the litigation continued thereafter.

63. Mr Saba also relies, to support an inference of an intention to defeat creditors or at least Mr Saba, on the transfer of monies from the joint mortgage account of Mr Plumb and Ms Minifie to pay down the mortgage on the East Ryde property made in March 2012 and a further transfer of $35,000 made to Ms Minifie’s account in May 2012, although neither transaction is the subject of any relief sought in the proceedings. The first transaction was, as Ms Minifie pointed out in cross-examination (T359) no more than a transfer of monies held in a mortgage offset account to repay the mortgage, did not reduce the equity in the property then held by both Ms Minifie and Mr Plumb and is not suggestive of any intent to put assets out of the reach of Mr Saba. The latter transaction also does not seem to me to support the inference of an intent to defeat creditors or Mr Saba as a potential future creditor, when regard is had to the amount of monies that Mr Plumb then retained in his superannuation fund or funds and his ability to withdraw lump sums from them, to which I refer in more detail below.

64. Mr Barham also cross-examined Mr Plumb and Ms Minifie at length as to the terms of their application for the consent orders made by the Family Court. They were cross-examined as to their answer to a question in the application for those orders which confirmed that neither party was currently bankrupt or subject to other forms of insolvency proceedings, which seems to me to have been plainly correct. They were also cross-examined as to their answer to a question in the application for the consent orders as to whether any person was entitled to become a party to the case under s 90SM(10) of the Family Law Act which provides, inter alia, that a creditor of a party to the proceedings would be entitled to become a party to the proceedings, if the creditor may not recover his or her debt if an order was made. They did not identify Mr Saba as such a creditor. It seems to me that that answer was also plainly correct, since Mr Saba was not then or for a substantial time afterwards a creditor of Mr Plumb, and was never a creditor of Ms Minifie. As Mr Alexander points out, there was no more reason to identify Mr Saba as a creditor of Mr Plumb in the application to the Family Court, on the basis that costs orders may be made against Mr Plumb, than to treat him as a debtor of Mr Plumb on the basis that costs orders may be made in Mr Plumb's favour in that application. Either result was open until both the result of the proceedings and the question of costs were determined.

65. Mr Plumb and Ms Minifie also answered a question in the application for those orders to the effect that Ms Minifie had made substantial contributions of a kind mentioned in s 90SM(4) of the Family Law Act, which include direct or indirect financial contributions and non-financial contributions, such that a failure to make an order or declaration would result in serious injustice to Ms Minifie. The evidence to which I will refer below in dealing with Ms Minifie’s Cross-Claim indicates that Ms Minifie had in fact made substantial financial contributions of that kind and it seems to me that Mr Plumb and Ms Minifie could reasonably have taken the view that a failure to make such an order would result in serious injustice to her. A further question in the application form was of the same character, and was answered in the same way, but appears to have been directed to establishing the jurisdiction of the Family Court sitting in New South Wales to make the relevant order.

66. Mr Plumb was also cross-examined as to the answer which he gave in the application for those orders in respect of his gross weekly income which appears, at least with hindsight, to have been significantly optimistic. Mr Plumb was also cross-examined as to the value attributed to his 25% interest in the East Ryde property, and he explained the basis on which he had assessed that value, having regard, inter alia, to the decline in property values following the global financial crisis. It seems to me that that approach, although it had a somewhat broad brush character, was not inappropriate. Mr Saba did not seek to lead any valuation evidence to contradict the value attributed to Mr Plumb’s share in the property at that time, or make good the assumption in the questions put to Mr Plumb that that amount was an undervalue. Mr Plumb was also cross-examined as to the value of the “property” that he would receive in respect of the orders made by the Family Court. I accept that the treatment of the life interest which Mr Plumb would receive under the consent orders as “property” may be open to question and Mr Plumb’s approach to assessing that value, by reference to the rental he would have had to pay to occupy similar premises, was idiosyncratic. I do not, however, find that that assessment was not made in good faith. As Mr Plumb said in an answer in cross-examination, a life interest in a property that he and Ms Minifie both value, in circumstances where they can live comfortably together as “housemates”, would be of greater value to him, at least in practical rather than monetary terms, than a 25% interest in the sale proceeds of the property, which may well have left him without adequate funds to acquire, or even to rent over an extended period, corresponding accommodation.

67. Mr Saba submits that the application made in the Family Court of Australia was “made and finalised in great haste”. It does not seem to me that that matter has been established, although Mr Plumb did accept in cross-examination that the orders were made more promptly than he had expected after the application for them was lodged with the Family Court (T258). Mr Saba also submits that no disclosure was made to the Family Court of any debt which might be owing or become owing to Mr Saba. As I have noted above, no debt was then owing to Mr Saba, and the questions asked by the Family Court were not directed to the possibility that an uncertain amount of costs may at a future time become owing in litigation, depending on its outcome. I do not accept Mr Saba’s further submission that the application for the orders by the Family Court was a “concerted attempt” to block Mr Saba, rather than an attempt to deal with the immediate issues facing Mr Plumb and Ms Minifie as a result of the breakdown of their relationship.

68. Mr Alexander submits, and I accept, that the structure of the settlement between Mr Plumb and Ms Minifie was reasonable having regard to the history of their relationship, their respective contributions to the property and the matters that were of importance to each of them, and that the compromise reflected in the Family Court orders delivered benefits to Mr Plumb, so far as he had a modest asset position, was unable consistently to work, needed access to secure accommodation and was strongly attached to the East Ryde property and its surroundings; and also to Ms Minifie who was also attached to the property, but wished to be able to leave the property to her daughter without Mr Plumb's claim to a quarter interest arising from an arrangement which she considered he had not fulfilled.

69. I should also address several other matters that received less attention in Mr Saba’s case. First, the level of costs that Mr Plumb could reasonably have foreseen, in 2012, as recoverable by Mr Saba if Mr Plumb failed in the AVO proceedings in the Local Court is plainly a matter that is relevant to his intention in respect of the impugned transaction. Although the particulars of Mr Saba’s claim indicated that the impugned transaction was alleged to have occurred between June and July 2012, as it did, Mr Saba’s approach to that question was deeply affected by hindsight and an assumption that the legitimacy of a transaction that took place in June or July 2012 should be assessed by reference, for example, to comments made by a judge in the District Court a year later, or the very large size of costs orders that were made, later still, in Mr Saba’s favour after Mr Plumb’s appeal failed in the District Court.

106. Mr Alexander accepts that Mr Plumb's modest contributions to the acquisition of that property should be recognised in allowing the relief which Ms Minifie claims. Mr Alexander also accepted, in closing submissions, that an adjustment allowing Mr Plumb the benefit of half the interest in the amount of the outstanding mortgage, as at December 2006, could be made, such that Mr Plumb would be allowed an interest of 10% in the North Ryde property and Ms Minifie an interest of 90% in that property. It seems to me that that concession was properly made.

Mr Saba’s defences to Ms Minifie’s Cross-Claim

110. Mr Plumb, as First Cross-Defendant to Ms Minifie’s Cross-Claim, did not contest that claim. Mr Saba was joined as Second Cross-Defendant to that Cross-Claim and admitted aspects of that claim while not admitting other aspects of the claim.

111. First, Mr Saba denied that there was a joint endeavour between Ms Minifie and Mr Plumb in connection with the East Ryde property. I have held above that there was a joint endeavour between Ms Minifie and Mr Plumb in respect of their relationship and its incidents including the purchase of the East Ryde property and this defence is not established.

112. Second, Mr Saba pleaded that the purchase of the East Ryde property in joint names was pursuant to an unconditional agreement and/or gift by Ms Minifie. Ms Minifie’s evidence, which was substantially uncontested and which I accept, was that the property was purchased and an interest in it provided to Mr Plumb on the basis of the understanding between her and Mr Plumb, including, significantly, that he would make a substantial financial contribution to the purchase of the property. There is nothing implausible about Ms Minifie’s evidence in that regard and it accords with common sense and common human experience that, even within an intimate relationship, Ms Minifie would not simply donate property of substantial value to Mr Plumb, without seeking some commitments from him in return. This defence is therefore not established.

113. Third, Mr Saba pleaded that Mr Plumb had made non-financial contributions to the acquisition, conservation and improvement of the East Ryde property and to the acquisition and conservation of the North Ryde property, which sale financed, to a large degree, the acquisition of the East Ryde property (Defence to First Cross-Claim [18]). There was no evidence to support that proposition in respect of the North Ryde property. Mr Saba’s evidence was that he had observed Mr Plumb performing alterations, additions and improvements to the East Ryde property, either by performing the work himself or directing and labouring for tradesmen, and he identified numerous aspects of that work without identifying any particular occasion on which that work was done. Mr Plumb was cross-examined, at length, to establish that he had assisted tradesmen with some improvements to and performed some work around the East Ryde property, from time to time, as he accepted. However, that work was plainly constrained, particularly in later years, by Mr Plumb’s depression, to which I have referred above. There is also no suggestion that Mr Plumb had made the substantial financial contribution which his arrangements with Ms Minifie had contemplated. I do not accept that the contributions that Mr Plumb made by way of home improvement, maintenance and gardening activities, were such that Mr Plumb had a claim to an interest in the East Ryde property beyond the order of the 10–15% contribution which was recognised, in the higher percentage, in his and Ms Minifie’s application to the Family Court in respect of the consent orders and, in the lesser percentage, in the orders sought in Ms Minifie’s Cross-Claim. This defence is also not established.

114. Fourth, Mr Saba pleads an Anshun estoppel, referring to the principle in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45; (1981) 147 CLR 589. The parties did not address the applicable principles at any length. However, that principle was summarised by Sir James Wigram VC in Henderson v Henderson (1843) 3 Hare 100; 67 ER 313 at 319, quoted by Gibbs CJ, Mason and Aickin JJ in Anshun v Port of Melbourne Authority above at 598:

“where a given matter becomes the subject of litigation in, and of adjudication by, a court of competent jurisdiction, the court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case”.

115. That principle was also considered by the Court of Appeal in Ekes v Commonwealth Bank of Australia [2014] NSWCA 336; (2014) 313 ALR 665. Whether an Anshun estoppel is established will depend on whether it was unreasonable for a party not to raise a matter in earlier proceedings and that must be determined in all the circumstances, and in the context of expectations as to the manner in which litigation should be conducted. I can see no basis for an Anshun estoppel in this case, where there was no reason for Ms Minifie to pursue a resulting trust claim in the application to the Family Court, where she and Mr Plumb agreed as to their respective contributions to property and Mr Plumb consented to the orders that she sought.

116. Mr Saba also pleads that Ms Minifie’s Cross-Claim is a collateral attack on the orders made by the Family Court of Australia in June 2012 and that, where Ms Minifie consented to the Family Court of Australia making orders, she is estopped from seeking a different result from a different court. Mr Barham also submits that Ms Minifie’s claim is an abuse of process, and would bring the administration of justice into disrepute, because Ms Minifie seeks to have a State court make a declaration that is inconsistent with an order of the Family Court that has not been appealed from. Mr Alexander responds that there is no inconsistency between the consent orders made by the Family Court and the orders now sought to be made, recognising a constructive or resulting trust in favour of Ms Minifie, because the consent orders did not include any declarations or entitlements that would be overturned by an order made by this Court. Mr Alexander also submits, with substantial force, that the position in this respect is no different as between Mr Saba who brings his claim under s 37A of the Conveyancing Act and Ms Minifie who brings a cross-claim seeking to establish a constructive or resulting trust, since each rely on a jurisdiction that is separate from the jurisdiction exercised by the Family Court.

117. Again, the parties did not devote any substantial attention to the applicable legal principles. Those principles are summarised, in the context of issue estoppel, in Ritchie’s Uniform Civil Procedure NSW at [14.28.17] as follows:

“Proceedings will also be regarded as an abuse of process to the extent that they involve an attempt to relitigate particular issues that were determined, either explicitly or necessarily, in earlier judicial proceedings (including proceedings determined by consent). Such a determination gives rise to “issue estoppel”: Blair & Perpetual Trustee Co Ltd v Curran (Adam’s will) (1939) 62 CLR 464; Noall v Middleton [1961] VR 285; Commissioner for Railways v Bielewicz [1963] NSWR 482 at 486; [1963] SR (NSW) 466 at 468; Carl Ziess Stiftung v Rayner (No 3) [1970] Ch 506; [1969] 3 WLR 991 … The scope of the estoppel is confined to those issues that were directly involved in the actual decision made in the previous proceeding (and does not include every finding that was made): Murphy v Abi-Saab (1995) 37 NSWLR 280; BC 9505070. Where the basis for “issue estoppel” has been made out, the court retains an overriding discretion to permit the proceedings to continue, although this discretion is likely to be exercised only in exceptional circumstances: Arnold v National Westminster Bank plc [1991] 2 AC 93; [1991] 3 All ER 41; Johnson v Gore Wood & Co (a firm) [2002] 2 AC 1 at 30; [2001] 1 All ER 481 at 498 per Bingham LJ.”

118. These issues were also addressed in Ekes v Commonwealth Bank of Australia above, which proceeded on the basis that an issue estoppel could arise from a consent judgment. Bathurst CJ there observed (at [112]) that

“An issue estoppel will only arise in respect of those matters which a primary decree, order or judgment necessarily established as the legal foundation for the decision and nothing but that which is legally indispensable to the conclusion is thus finally closed or precluded … In the case of a judgment by consent this may be productive of some difficulty … a court will examine all evidence that is available and admissible and with the aid of such material ascertain any and what adjudication of matters in dispute was expressly or necessarily involved in the actual decision assented to.”

119. I am not persuaded that the resulting trust claimed by Ms Minifie is a collateral attack on the consent orders made by the Family Court. First, to the extent that the basis of the Family Court’s orders can be identified, they record contributions of the parties of about 85% of Ms Minifie and about 15% of Mr Plumb to the acquisition, conservation and improvement of the marital assets by way of earnings from personal exertion and non-financial contributions, although those contributions were reflected in an order for the transfer of the entire legal interest in the property to Ms Minifie subject to a life interest to Mr Plumb. Those orders did not depend on any finding as to the extent of Ms Minifie’s interest in the East Ryde property alone. The constructive or resulting trust now claimed by Ms Minifie over that property proceeds on substantially the same basis. Second, Mr Saba himself seeks to set aside a transaction which implements those consent orders under s 37A of the Conveyancing Act, a course which the authorities have long permitted if those orders were made as part of a wider fraudulent disposition of the assets. If the transfer of the property were set aside and (as Mr Saba seeks) Mr Plumb’s 25% interest in the property was re-transferred to him, but the orders made by the Family Court are left in place (as they must be) and proceed on the basis that Ms Minifie had made a contribution of 85% to the marital assets, there is no inconsistency with those orders in Ms Minifie relying on substantially the same proposition to support a constructive or resulting trust. To the extent that the consent orders made by the Family Court involve any necessary finding as to Ms Minifie’s contribution to the East Ryde property (as distinct from the marital assets generally), then the claim now brought by Ms Minifie, in response to Mr Saba’s attack on the consequential transfer, is consistent with that finding rather than seeking to impugn it.

120. I note, for completeness, that Mr Barham also refers to the circumstances in which the Family Court of Australia has, or may have, power to adjust interests under s 79 of the Family Law Act and submits that similar orders may be made under s 90SM of the Family Law Act and submits that the Family Court will normally take into account the interests of creditors of the parties in determining whether to make such an adjustment. It does not seem to me that the reference to those powers provides any substantial assistance in determining the scope of this Court’s jurisdiction in respect of a claim for a constructive or resulting trust. The fact that the Family Court may have a jurisdiction which the parties do not invoke does not exclude the equitable jurisdiction of this Court which Ms Minifie does invoke.

121. Mr Saba also submits that the application by Ms Minifie involves “unclean hands” and the impropriety complained of has an immediate and necessary relationship with Ms Minifie’s claim. That proposition seems to me to depend upon the matters advanced by Mr Saba in support of his claim under s 37A of the Conveyancing Act. No impropriety is established, in Ms Minifie’s attempt to establish an equity arising from her contributions to the relationship with Mr Plumb, where Mr Saba has not otherwise established his claim under s 37A of the of the Conveyancing Act. The position as to unclean hands seems to me to be quite different from that considered by the High Court in, for example, Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538. Ms Minifie's assertion of an equitable interest in the East Ryde property, notwithstanding Mr Saba's claim as an unsecured creditor of Mr Plumb, is not analogous to a false claim for government benefits.

122. I am reinforced in that view by the fact that the conduct giving rise to the trust claimed by Ms Minifie occurred largely at the time the East Ryde property was acquired, in 2005–2006, many years before Mr Saba's claim as an unsecured creditor of Mr Plumb arose in 2015. There is substantial force in Mr Alexander's submission that, where the Court would have imposed a resulting trust had Ms Minifie brought an application when the relationship broke down in 2012, there is no basis to adopt a different approach when that application is now brought. That submission is strengthened where there is no suggestion that Mr Saba suffered any detriment by reliance on the extent of Mr Plumb's legal interest in the property. Indeed, it appears that Mr Saba became aware of the transfer of Mr Plumb's interest in the North Ryde property to Ms Minifie by late November 2012 (Saba [66]), well before the hearing of Mr Plumb's appeal from the dismissal of his application for an AVO in the District Court and well before costs orders were made in Mr Saba's favour in respect of the Local Court proceedings and that appeal.

123. I should also address several other matters raised by Mr Saba, which seem to relate to these defences collectively. Mr Barham submits that Ms Minifie’s Cross-Claim ignores a debt for costs owed (I interpolate, since 2015) by Mr Plumb to Mr Saba. Mr Alexander responds that Mr Plumb's unsecured creditors must take his property as they find it, and subject to any equitable interests in it. In Sui Mei Huen v The Official Receiver for Official Trustee in Bankruptcy [2008] FCAFC 117; (2008) 248 ALR 1; 39 Fam LR 355, to which Mr Alexander fairly drew attention, the Full Court of the Federal Court of Australia held that a constructive trust should be ordered to recognise the arrangements between a wife and a bankrupt husband, although the interests of the husband’s creditors would be adversely affected by that result. It does not seem to me that there is any distinction, in principle, where Mr Plumb could have been, but has not been, subject to bankruptcy proceedings in respect of the costs judgment against him. In Australian Receivables Ltd v Tekitu Pty Ltd (subject to deed of company arrangement) (deed admins apptd) [2011] NSWSC 1306, Ward J (as her Honour then was) referred to the observation of Deane J in Muschinski v Dodds above (at 623) that, against the contingency that legitimate claims of third parties should be adversely affected, a constructive trust should be imposed only from the date of publication of reasons for judgment of the Court. Her Honour there also referred (at [126]) to the general principle that a constructive trust would be treated as coming into existence at the time of the conduct which gives rise to the trust and (at [130]) to a recognition in the authorities of concerns as to the priorities afforded to beneficiaries of constructive trusts against general creditors, or holders of later acquired interests. However, her Honour noted (at [132]) that there is a fairly clear (though not uncontradicted) line of authority in which prejudice to third party creditors does not appear to have prevented the imposition of a constructive trust. Her Honour did not need to determine the relevant questions in that case.

124. In this case, the resulting or constructive trust which Ms Minifie seeks to establish arises from events long before any debt owed by Mr Plumb to Mr Saba arose, although it will only be recognised by a later order of the Court. As I have noted above, there is no suggestion that Mr Saba made any decision as to the conduct of the AVO proceedings on the basis of any representation by Mr Plumb or Ms Minifie as to the extent of Mr Plumb’s interest in the relevant property, or any understanding that Ms Minifie did not have an interest of the kind she now claims in the property, and no conduct on either Mr Plumb’s or Ms Minifie’s part which could be said to have created any assumption on Mr Saba’s part that Ms Minifie’s interest in the property, whatever it was, would not be respected. It does not seem to me that Mr Saba’s interest, as a third party creditor, provides sufficient basis not to recognise a resulting or constructive trust, if the basis for it is otherwise established. In my view, there is nothing inequitable about Mr Saba being left to recover any debt owed to him by Mr Plumb alone from assets that are properly treated, in equity, as the assets of Mr Plumb.

125. Mr Saba also relies for these defences on the proposition that Mr Plumb and Ms Minifie valued Mr Plumb’s equity in the property at 40% of its value. That is a reference to the money value allowed to Mr Plumb’s life interest in the East Ryde property on the application lodged with the Family Court. Mr Plumb explained, in evidence to which I referred above, how that figure had been calculated by reference to his assessment of the value of a life interest in the property to him, by way of savings of rental. I have noted above that Mr Plumb’s assessment of that value was idiosyncratic, although it does not seem to me that it was made in bad faith. There is no suggestion that Mr Plumb had, or should have, an interest of 40% of the value of the property, as distinct from the life interest that the Family Court orders in fact conferred upon him, which was in fact of considerable value to him. As I noted above, the parties in the application to the Family Court and the evidence make clear that Mr Plumb had not, in fact, made a 40% contribution to the acquisition or maintenance of that property.

126. Mr Saba also relies for these defences on the proposition that the application by Ms Minifie seeks to circumvent orders that would otherwise benefit Mr Saba and that it would not be just and equitable to make the orders sought by Ms Minifie. That proposition seems to me to depend upon an assumption that Mr Saba should be entitled to have his unsecured debt owed by Mr Plumb paid in preference to Ms Minifie’s claim in equity against the property, and cannot be accepted where that assumption has not been established. Mr Saba also submits that Ms Minifie must, consistent with the maxim “he who seeks equity must do equity”, fulfil her own legal and equitable obligations arising out of the subject matter of the dispute, in order to obtain equitable relief. It seems to me that that submission begs the question of how Ms Minifie may come under any legal or equitable obligation to discharge a claim for costs against Mr Plumb, in respect of any property in which she has an equitable interest. Finally, Mr Saba submits that, if Ms Minifie is entitled to any relief, that relief should be postponed to the relief Mr Saba claims in the proceedings and postponed to orders giving effect to enforcement against Ms Minifie’s interest in the property if the judgment debt or costs ordered in these proceedings are not paid by Mr Plumb. It seems to me that this submission again depends upon an assumption that an unsecured debt due to Mr Saba should be preferred to Ms Minifie’s equitable interest in the property if a constructive or resulting trust is established. The basis of that assumption has also not been established.

127. I should add that I was originally sceptical of the basis of Ms Minifie’s claim for a constructive or resulting trust, and as to whether equity would intervene in her favour, if the basis for an order under s 37A of the Conveyancing Act were established. In the event, I have been persuaded that my initial scepticism as to that claim was not properly founded, quite apart from the fact that Mr Saba’s claim under s 37A of the Conveyancing Act has not been established. Had it been necessary to do so, I would have held that Ms Minifie’s Cross-Claim should succeed as to the reduced percentage which she advanced. By her Reply to Mr Saba’s Defence, Ms Minifie also raised the possibility that, if the Court declined to order a constructive or resulting trust, then equitable compensation should be ordered in favour of Ms Minifie against Mr Plumb, on a specified basis. It is not necessary to determine that matter, where I would have found that Ms Minifie had established the resulting trust which she claims.

Summary, orders and costs

128. In summary, I am not satisfied that Mr Plumb intended, at the time the consent orders were sought and made by the Family Court in June 2012, that the transfer of his interest in the East Ryde property to Ms Minifie would have the consequence of defeating or making it more difficult for Mr Saba to exercise any claim to costs in any reasonably foreseeable amount. As I have noted above, the amount of costs then in issue could not reasonably have been foreseen to be the very substantial amount now claimed, and the question whether it would have been more difficult for Mr Saba or a trustee in bankruptcy to enforce a costs judgment against the substantial monies held by Mr Plumb in a superannuation fund or funds than against Mr Plumb’s interest in the East Ryde property was not adequately addressed. Irrespective of the answer to that question, it was not put to Mr Plumb that he was aware of any such difficulty in Mr Saba (or a trustee in bankruptcy) enforcing a future costs judgment against those monies, so that the transfer of his interest in the property to Ms Minifie would adversely affect Mr Saba’s ability to enforce such a judgment.

129. I am satisfied that Ms Minifie was a purchaser for valuable consideration of her interest in the property and was not on notice of any intent of Mr Plumb to defraud his creditors. It is not necessary or appropriate to make the order for a constructive or resulting trust or consequential orders claimed by Ms Minifie, where Mr Saba’s claim under s 37A of the Conveyancing Act has failed and she remains the legal owner of the East Ryde property. I would have made an order in substantially the form she seeks had it been necessary to do so.

130. In the result, Mr Saba’s claim should be dismissed and Ms Minifie’s Cross-Claim should be dismissed in consequence. In the ordinary course, Mr Saba would be ordered to pay Mr Plumb’s and Ms Minifie’s costs of and incidental to the proceedings, including the costs of the Cross-Claim. The parties should bring agreed orders to give effect to this judgment and as to costs within 14 days or, if there is no agreement between them, their respective draft orders and short submissions as to the differences between them. If the parties are unable to agree the question of costs, then I will allocate a date to hear any questions as to the basis on which a costs order should be made, including any issues as to whether such an order should be made on a lump sum basis so as to avoid the delay and further costs that would be involved in any further assessment process.

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Amendments

23 May 2017 - Amended to correct typographical errors.

24 May 2017 - Amended to correct typographical errors.

Decision last updated: 24 May 2017