Sancomb and Sancomb and Ors
[2020] FCCA 842
•26 June 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| SANCOMB & SANCOMB & ORS | [2020] FCCA 842 |
| Catchwords: FAMILY LAW – Property – informal arrangement regarding real property as between Husband, Wife and Maternal Grandparents – Maternal Grandparents sought equitable relief granted – declaration of constructive trust – declaration of interests – parties directed to provide an agreed Minute in the light of the relief granted and the declarations made. |
| Cases cited: Baumgartner v Baumgartner (1987) 164 CLR 137 Bevan & Bevan (2013) FLC 93-545 Blomley v Ryan (1956) 99 CLR 362 Bridgewater v Leahy (1998) 194 CLR 457 Garcia v National Australia Bank Ltd (1998) 194 CLR 395 Goldsmith & Stinson and Ors [2019] FamCAFC 230 Louth v Diprose (1992) 175 CLR 621 Muschinski v Dodds (1985) 160 CLR 583 Saklani v Valder (2014) 251 CLR 502 Stanford v Stanford (2012) 247 CLR 108 Jacobs’ Law of Trusts in Australia 8th Edition (J.D. Heydon and M.J Leeming) (Sydney: LexisNexus, 2016) |
| Applicant: | MR SANCOMB |
| First Respondent: | MS SANCOMB |
| Second Respondent: | MS FALZON |
| Third Respondent: | MR FALZON |
| File Number: | WOC 251 of 2018 |
| Judgment of: | Judge WJ Neville |
| Hearing date: | 11 September 2019 |
| Date of Last Submission: | 13 December 2019 |
| Delivered at: | Canberra |
| Delivered on: | 26 June 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms C Spain |
| Solicitors for the Applicant: | Shoalhaven Family Law Pty Ltd |
| Counsel for the First Respondent: | Mr D Eardley |
| Solicitors for the First Respondent: | P J Carey Solicitor |
| Counsel for the Second and Third Respondents: | Mr D Eardley |
| Solicitors for the Second and Third Respondents: | P J Carey Solicitor |
NOTATIONS
A.The relevant value of the property located at B Street, Town C, New South Wales (“the B Street, Town C property) should be as per the agreed value at trial ($720,000); accordingly,
ORDERS
There be a declaration of constructive trust in favour of the Second and Third Respondents, in relation to the B Street, Town C property, subject to the following further Declarations and Orders.
There be a declaration of interest in relation to the B Street, Town C property in favour of:
(a)The Applicant Husband
(b)The First Respondent Wife, and
(c)The Second and Third Respondent.
The declaration of interest shall be as to one third equal parts; the Second and Third Respondents being treated as a single entity entitled to a one-third interest.
Within 21 days of the date of these Orders, being by 17 July 2020, the parties are to file an agreed Minute outlining what consequential Orders should be made to finally dispose of the proceeding
In the event that the parties do no reach agreement pursuant to Order 3, by 17 July 2020, each party is to file and serve a Minute of Orders sought and written submissions of no more than 2 pages in length, addressing what consequential Orders they seek to finally dispose of the proceeding in the light of the Court’s findings and reasons.
IT IS NOTED that publication of this judgment under the pseudonym Sancomb & Sancomb & Ors is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT CANBERRA |
WOC 251 of 2018
| MR SANCOMB |
Applicant
And
| MS SANCOMB |
First Respondent
| MS FALZON |
Second Respondent
| MR FALZON |
Third Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant Husband and First Respondent Wife were in a marital relationship for approximately 22 years. The Husband is now 49 years old; the Wife is now 48 years old.
The Husband, a professional, earns an estimated $2178.00 per week. He holds superannuation of approximately $198,586.00. The Wife, who is a health care worker, earns $850.00 per week. She holds superannuation of approximately $154,000.00.
The Second and Third Respondents are the parents of the First Respondent Wife. They are in their senior years. In these reasons, unless otherwise required, they are regularly referred to as “the Falzons”, or for convenience also, as “the Grandparents” or some version of such term.
There are two adult children of the relationship. There are no health issues to speak of in relation to the Husband and Wife. There are significant health issues in relation to the Third Respondent, who took no part in the proceeding due to his dementia, among other things.
The Second Respondent, maternal Grandmother, supports the Orders sought by her daughter, set out below.
Save for one matter, the parties have largely resolved their property dispute. The singular “sticking point”, so to speak, relates to what should be done with the largest asset in the property pool, namely a property at B Street, Town C, New South Wales (“the B Street, Town C property”). Its agreed value is now $720,000.00.[1] This property was originally owned by the Second and Third Respondents, but later purchased by the Applicant Husband and the Respondent Wife. The proceeds of the “sale” (the nature, content, and import of the “sale” is central to the current proceeding) received by the Second and Third Respondents was used by them to pay out debt accrued from a previous failed business venture.
[1] It is important to note in this regard, however, that in his trial Affidavit, filed 7th August 2019, the Husband stated, at par.60, that the B Street, Town C property had a recent estimated value from Realestate.com of between $1,100,000.00 and $1,374,999.00. He went on to state that given the “delays in this matter”, the value was likely to have dropped by up to $200,000.00. On this view, the so-called “agreed value” could be rather awry, and if the Husband’s Orders Sought are made, he would reap an even greater windfall for the bargain basement, indeed heavily discounted, price of $180,000 that was actually paid to the Falzons. During the trial, there was no discussion of this different valuation offered by the Husband.
For the reasons that follow, save as to the percentage division of the proceeds of sale of the B Street, Town C property, and in relation to what is to happen to the parties’ respective superannuation interests, the Orders sought by the First Respondent Wife should be made.
Orders sought by the Applicant Husband
The Orders sought by the Applicant Husband were set out in his Amended Initiating Application filed on 6th September 2019. Not all the Orders sought by the Applicant Husband are required to be addressed in this judgment because the parties reached substantial agreement on a final basis on 12th September 2019 regarding a range of matters, and which led to Orders being made by consent bearing that date. These Orders included the distribution of the net proceeds of sale from what was referred to at trial as the D Street, Town E property.
The only outstanding issues, by and large as already noted, are those relating to the B Street, Town C property. The Orders sought by the Applicant were as follows:
B Street, Town C Property
1. That within 42 days of the date of these Orders, The Applicant Husband make a payment to the Respondent Wife in the sum of $360,000 by way of property adjustment.
2. That simultaneously with the payment in Order 1 above, the Respondent Wife do all such acts and things and sign all such documents as may be required to Transfer to the Applicant, at the expense of the Applicant, all of her right, title and interest in the real property situate at and known as B Street, Town C, in the State of New South Wales being the whole of the land contained in Lot ... of Deposited Plan ... (“B Street, Town C property”).
3. That in the event the Applicant Husband is unable to comply with the payment in Order 1 above, then both parties take all necessary steps and execute all necessary documents to cause the property situated at B Street, Town C, B Street, Town C (Lot ... in Deposited Plan ...) (“B Street, Town C Property”) to be sold by private treaty at the earliest possible date at a price to be agreed on between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or their nominee and that the proceeds of the sale be disbursed as follows:
3.1 Payment of agent’s commission and advertising expenses and legal expenses of the sale;
3.2 Payment of any money due and owing to the mortgagee;
3.3 Payment of any money due to the Real Estate Institute or their nominee in determining the price; and
3.4 The net balance to be divided between the parties as follows:
3.4.1 50% to the Applicant Husband; and
3.4.2 50% to the Respondent Wife.
4. That in the event that the B Street, Town C property fails to be sold by private treaty within a period of three (3) months hereof, then each party take all necessary steps and execute all necessary documents to cause the said property to be sold by auction at the earliest possible date at a reserve to be agreed upon between the parties and failing such agreement to be determined by the proper officer of the Real Estate Institute or their nominee and that the proceeds of the said sale be disbursed in accordance with Order 2 3 above.
5. That on or before completion of the sale of the property the Respondent Wife will provide vacant possession, remove all items not included in the sale and ensure that the property is left in a clean and tidy condition.
Capital Gains Tax
6. That in the event the B Street, Town C property is required to be sold, both parties do all things and sign all documents to lodge their individual tax returns with the Australian Taxation Office within three (3) months of the end of financial year in which the B Street, Town C property is sold.
7. That simultaneously with Order
56 above, the parties will both direct their respective Accountants to calculate the Capital Gains Tax (“CGT”) liability payable on the B Street, Town C property.8. That within seven (7) days of receiving a calculation of the CGT liability, the parties shall provide to each other a copy of that CGT calculation and agree that they are each liable for one-half of the collective CGT liability for the B Street, Town C property, despite any differences in the respective amounts noted on their individual tax returns.
9. That within seven (7) days of the CGT Liability being calculated:
9.1 the Respondent Wife will pay a sum to the Applicant Husband representing one-half (50%) of the Applicant’s husbands individual CGT liability; and
9.2 the Applicant Husband will pay a sum to the Respondent Wife representing one-half (50%) of the Respondent Wife’s individual CGT liability.
D Street, Town E Property
10. That the nett sale proceeds from the sale of the jointly owned property at D Street, Town E (Lot ... in Deposit Plan ...) held in the trust account of Shoalhaven Family Law be divided between the parties as follows:
10. 1 50% to the Applicant Husband; and
10.2 50% to the Respondent Wife.
Other Property
11. That subject to the above Orders each party be declared to have the sole right, entitlement and interest to the following:
11.1. All bank accounts or Credit Union Accounts in their sole name or in which they have an interest;
11.2 All shares, debentures, interest in unit trusts in their sole name or which they have an interest;
11.3 All motor vehicles, household contents, other personal property and effects in their sole name or respective possession or control;
11.4 All other superannuation or interest in superannuation funds in their sole names.
12. That subject to the above orders the Applicant Husband and Respondent Wife are to be solely responsible for all other debts in their sole name as at the date hereof and agreed to indemnify the other with respect to same.
13. That both the Applicant Husband and Respondent Wife release the other from all actions, proceedings, claims, demands, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by any reason of or in respect of any act, cause, matter or thing.
14. That the Applicant Husband and the Respondent Wife shall do all acts and things necessary and give all consents and execute all documents and writings to give effect to these Orders in the time periods prescribed.
15. That in the event that either party refuses or neglects to execute any Deed, document or other instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975 to execute such Deed, document or instrument in the name of said party and do all acts and things necessary to give validity and operation to the Deed, document or instrument upon the Registrar being provided with verification of such refusal by way of Affidavit.
16. That the Respondent Wife pay the Applicant Husbands costs in respect of this Application
Orders sought by the First Respondent Wife
The Orders sought by the First Respondent Wife were set out in her written submissions filed on 16th October 2019, and were as follows:
i) A declaration that the B Street, Town C property is held in constructive trust for Ms Falzon and Mr Falzon. Alternatively, a declaration that the B Street, Town C property is held on resulting trust for Ms Falzon and Mr Falzon.
ii) An order directing the applicant husband and respondent wife to sign all such transfers and other instruments that may be necessary to cause the B Street, Town C property to be transferred to Ms Falzon and Mr Falzon within 21 days of the making of the order.
iii) In relation to the order above that the applicant husband and respondent wife pay the costs of and incidental to the transfer of property to Ms Falzon and Mr Falzon.
iv) Order that the constructive trust in favour of Ms Falzon and Mr Falzon be dissolved. Alternatively, the resulting trust to the benefit of Ms Falzon and Mr Falzon be dissolved.
v) That the applicant husband pays the costs of and incidental to this application.
vi) Any other orders that this honourable Court considers appropriate in the circumstances that are just and equitable.
List of exhibits
The following is a list of documents that became Exhibits during the hearing to which I have had relevant regard both during the hearing and in the preparation of these reasons:
| No. of Exhibit | Description of Exhibit | Party who Submitted Exhibit | Witness who Proved Exhibit | Notes |
| 1 | Water Rates Notice from Region F Council from 2002 to 2018 | First Respondent Wife | Applicant Husband | At Final Hearing on 11 September 2019 |
| 2 | Council Rates Notice from 2002 to 2018 | First Respondent Wife | Applicant Husband | At Final Hearing on 11 September 2019 |
| 1 | Document dated 21 July 2003 signed by the Applicant and First Respondent | Applicant Husband | First Respondent Wife | At Final Hearing on 11 September 2019 |
| 2 | First Respondent Wife’s Tax Return for the Financial Year ended 30 June 2004 | Applicant Husband | First Respondent Wife | At Final Hearing on 11 September 2019 |
| 3 | Tenancy Agreement dated 10 July 2009 | Applicant Husband | First Respondent Wife | At Final Hearing on 11 September 2019 |
| 4 | Applicant Husband’s “My Tax” record for the 2019 Financial Year | Applicant Husband | N/A | At Final Hearing on 12 September 2019 |
| 5 | Payroll Advice for the Applicant Husband for August 2019 | Applicant Husband | N/A | At Final Hearing on 12 September 2019 |
| 6 | Applicant Husband’s Superannuation balance as at 1 August 2018 | Applicant Husband | N/A | At Final Hearing on 12 September 2019 |
| 7 | Documents from the Department of Veterans’ Affairs for year 2003 | Applicant Husband | Second Respondent | At Final Hearing on 12 September 2019 |
| 8 | Print outs from the Department of Veterans’ Affairs dated 30 September 2004 | Applicant Husband | Second Respondent | At Final Hearing on 12 September 2019 |
| 9 | Review of Personal and Financial Circumstances from the Department of Veterans’ Affairs dated 15 February 2012 | Applicant Husband | Second Respondent | At Final Hearing on 12 September 2019 |
| 10 | Further Review of Personal and Financial Circumstances from the Department of Veterans’ Affairs dated 21 November 2018 | Applicant Husband | Second Respondent | At Final Hearing on 12 September 2019 |
| 11 | Letter from NRMA Insurance dated 25 June 2018 | Applicant Husband | Second Respondent | At Final Hearing on 12 September 2019 |
Oral evidence of the Applicant Husband
The oral evidence of the Applicant Husband, summarised and with occasional comment, was as follows.
The Husband confirmed that he was aware that the maternal Grandparents, and until recently the great maternal Grandmother, were residing at the B Street, Town C property. He also confirmed that he knew the maternal Grandfather, and great maternal Grandmother, are both unwell.
He confirmed that in 2017 he was made redundant, which resulted in him receiving a payment of $107,000. He used those funds, he said as follows:
a)A holiday to Region G for 3 weeks, which cost about $2,500.00;
b)The hire of a motor bike in Town H, for $250.00;
c)Other payments he made out of the redundancy money included, he said, household expenses, [unspecified] mortgage payments, credit card payments, health insurance and other insurance for the Wife and children, water and council rates (amounts unspecified).
Regrettably, none of this information was in the Applicant Husband’s Affidavit. As a matter of basic information, as well as pursuant to the requirement to give ongoing and complete disclosure, this was a notable and important omission.
In July 2018, the Husband was employed as a professional. This basic information was also not in his trial Affidavit, filed 7th August 2019. Why this was so was not explained. It was contained in his Financial Statement, filed 6th September 2019.
In his oral evidence, the Husband said that he probably spent another $30,000.00 on “the house” when he was living there for a time. The Husband could not formally account for the figure of $30,000 other than to confirm what was paid for the mortgage (around $2800 per month). He said that during this time he had a friend also stay there but who was charged no rent. He was in receipt of his Veteran’s Affairs pension of $150 per month.
He said that he could not recall what happened to the balance of approximately $33,000 from his redundancy. It was unclear whether this was intended to be a general reference to the previously referenced $30,000; I assume that it was. In any event, such a failure of recollection of a not insubstantial sum of money was, at least, curious. It was certainly unfortunate and unhelpful.
He said that health insurance was about $360 per month; mobile phone costs for the children of the relationship, and the Wife, totalled around $200 per month; interest on credit cards $200 per month; rates - $500 per quarter; food about $800 per month.
The Husband said that he bought tools that were used to undertake repairs on the house while he was living there. These repairs included some installation of Gyprock. Other expenditure included, he said, a $1,000 motor that he gave to the Wife.
Returning to the balance of the parties’ credit cards, the Husband said that the credit card was at its limit of $13,000; there was also a line of credit of $200,000, overdrawn. Both credit limits, he said, were “maxed out.” He said that the Wife spent the credit card funds on “smokes, drink and expensive food.” He said that he would usually or often have 2 or 3 standard drinks at the end of each day. Sometimes it was a “six pack”; sometimes he would buy a case per week, each costing about $50.
The Husband confirmed that the actual amount paid for the purchase of the B Street, Town C property was $180,000, and not the amount of $350,000 recorded in the contract and transfer.[2] He said that the funds raised were used to buy the property (which was originally owned by the maternal Grandparents) and that the maternal Grandparents, in turn, used the proceeds of sale to cover a debt incurred from an earlier failed business venture.
[2] A copy of the transfer, dated 28th June 2002, is part of Annexure A to the Second Respondent Grandmother, Ms Falzon’s, Affidavit, filed 23rd August 2019.
The Husband said that he lived at the B Street, Town C property for 10 years.
He confirmed that he knew that, prior to the registration of the transfer of the property, the maternal Grandparents were in debt to the tune of about $180,000, and that they were unable to work in order to pay out this debt. It was put to him that a scheme was devised whereby he and the Wife would raise the funds that would be used by the Grandparents to pay out their debt, using the B Street, Town C property as collateral.
The Husband confirmed that he signed the contract and transfer saying that the purchase price of the property was $350,000, when in fact only $180,000 was paid. He said he did not know if there was (or was not) a registered mortgage over the property. In my view, someone who is as astute as the Husband, when he wants to be when it comes to money matters, would be highly unlikely not to know whether there existed a mortgage over the property he was acquiring. What was not explained was that the loan from J Bank was, apparently, never secured over the property.[3] Unfortunately typical of all parties, for all of the large amount of documentation provided to the Court for the hearing, basic documentation, such as the mortgage over the B Street, Town C property, was never provided; indeed, there was not even a property search that showed its existence (or not).
[3] For the Applicant’s account of he and his then Wife’s approach to J Bank to raise funds – in his words “to see how much we could borrow” – see T 35, 43, 46, 50, among other places. It is in the course of this sequence of evidence that the Husband’s account was that the Wife was the instigator of the approach of J Bank, and the scheme to provide funds to her parents to pay out their debts.
It seems, on these basic facts, too much of a coincidence that the amount borrowed was (apparently) precisely (or almost so) the amount of the indebtedness of the maternal Grandparents. On any version of events, the Husband and Wife got a significant property at a heavily discounted price. He contended that, quite simply, he and the Wife made an “offer” for the property which the maternal Grandparents accepted. Given their indebtedness, and their inability to earn income, even on the almost disingenuous account of something suggested to be an arms-length transaction – which in my view it plainly was not and could never be so described – the Grandparents were always going to “accept” the terms of the putative purchase price.
The Husband contended that the balance between the stated purchase price, of $350,000 and the actual amount paid, of $180,000, was in fact “made up” by a form of “subsidised rent”, which (on his evidence) amounted to more than $200,000. He said that the property became a “rental” in 2009. The Husband also confirmed that, in his view, acquiring the property for $180,000 was a “bargain price”, and that in so doing, there was nothing untoward, and nothing further needed to be paid. Moreover, in his view, the “subsidised rent” for the Grandparents – he said they were not paying market rent for the property – more than compensated for the difference between the stated purchase price and the actual amount paid.
The Husband confirmed that his Orders sought in the current proceeding included to acquire the property for himself.
The Husband confirmed, in my view highly significantly, that he knew that:
a)the Grandparents’ only income was the Grandfather’s armed forces pension;
b)the Grandfather had lost his business in Town E in approximately late 2000, had incurred significant debt, and had had a breakdown;
c)he was part of discussions between the Wife and the Grandparents about how to deal with the Grandfather’s debts from the failed business;[4] and
d)the Grandparents would be using the funds received from the “sale” of the B Street, Town C property to pay out their debts. One of the options discussed to deal with the debts was the “sale/purchase” of the B Street, Town C property. The Husband denied that he took advantage of their vulnerability. The Husband confirmed that he raised the funds (with the Wife) that would be, and which were, used by the Grandparents to pay out the Grandfather’s debts.
[4] See also pars.31 – 39 of the Husband’s trial Affidavit, filed 7th August 2019. At par.31, the Husband stated: “In early 2002, Mr Falzon and Ms Falzon discussed with Ms Sancomb and I their concerns about the bank foreclosing on their B Street, Town C property due to the liability they still owed for the business secured over their home.” At pars.33 and 34 of the same Affidavit, the Husband referred to he and his then Wife going to J Bank to inquire about their borrowing capacity, following which he said that he and the Wife proposed to the Grandparents that they could purchase the B Street, Town C property for $180,000. He said that the Grandparents accepted their “offer.” He noted that the property was valued at that time at $350,000.
By way of observation – nothing more at this stage – I note that no independent legal (or any other, e.g. tax) advice was sought, or obtained, by the maternal Grandparents (or by anyone else) regarding the “purchase” of the B Street, Town C property.[5] This was in circumstances where the Wife, on the Husband’s oral evidence, was the instigator of the scheme to re-finance the B Street, Town C property. In these circumstances, subject to what is said later in these reasons, it could be argued that the transaction as a whole, from the perspective of the Second and Third Respondents, fell into a category where relief would typically be granted, perhaps most relevantly under the principles that apply to “catching bargains.”
[5] See, for example, Transcript (11th September 2019) p.71. Hereafter, all references to the Transcript will simply be “T” followed by the page number.
For example, in well-known cases such a Blomley v Ryan, and Bridgewater v Leahy, the High Court has made plain that the focus is not on any possible “undue influence”. Rather, as stated by Fullager J in Blomley v Ryan, the focus is relevantly on the following consideration (emphasis added):[6]
Equity traditionally looked at the matter rather from the point of view of the party seeking to enforce the contract and was minded to inquire whether, having regard to all the circumstances, it was consistent with equity and good conscience that he should be allowed to enforce it.
[6] Blomley v Ryan (1956) 99 CLR 362 at 401 – 402; Bridgewater v Leahy (1998) 194 CLR 457 at 478 – 479 (Gaudron, Gummow and Kirby JJ). I should note here that, at the outset of the trial, there was a general discussion about the possibility of various equitable remedies, such as estoppel, of one kind or another applying to the facts of the matter before the Court. See, for example, T 7 – 9.
In Blomley v Ryan, Fullager J also said (internal citations omitted; emphasis added):[7]
The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other. … It may be important in either or both of two ways - firstly as supporting the inference that a position of disadvantage existed, and secondly as tending to show that an unfair use was made of the occasion. … It will almost always, I think, be ". . . an important ingredient in considering whether a person did exercise any degree of judgment in making a contract, or whether there is a degree of unfairness in accepting the contract….”
[7] Blomley v Ryan 99 CLR at 405 – 406.
Another decision of the High Court might be noted briefly here because of the important statements of principle – to be considered later in these reasons.
In Garcia v National Australia Bank Ltd, the plurality (Gaudron, McHugh, Gummow and Hayne JJ) said, at [31] (emphasis added):[8]
… It holds further, in the second kind of case, that to enforce it against her if it later emerges that she did not understand the purport and effect of the transaction of suretyship would be unconscionable (even though she is a willing party to it) if the lender took no steps itself to explain its purport and effect to her or did not reasonably believe that its purport and effect had been explained to her by a competent, independent and disinterested stranger…
[8] Garcia v National Australia Bank Ltd (1998) 194 CLR 395. See also Bridgewater v Leahy at CLR 485 to similar effect.
To similar and broader effect, Kirby J also said in Garcia v National Australia Bank Ltd, at [83] (emphasis added):
The result to which I have come flows not from the fact that Mrs Garcia was a married woman in need of special protection, as such, from the law of equity. It flows from a broader doctrine by which equity protects the vulnerable parties in a relationship and ensures that in proper cases they have full information and, where necessary, independent advice before they volunteer to put at risk the major asset of their relationship for the primary advantage of those to whose pressure they may be specially vulnerable.
Accepting that every case is fact-specific, and that there are different principles that apply, for example, to matters where undue influence is alleged (which was not argued here), compared to principles that arise in situations of “catching bargains” (also not formally argued here), nonetheless, in my view, there should have been some discussion of the latter in this matter.
Put simply, in my view, (a) the almost desperate financial plight of the Grandparents (plus the Grandfather’s ill health), and (b) that plight clearly placed financial and other strain on the Grandparents such that their only choices were either to accept the transaction offered to them by their daughter and son-in-law, or have the Bank very likely foreclose. Further, the extremely large difference between the actual price paid compared to the price stated on the transfer, together with the lack of independent legal (or other advice, e.g. financial) advice, all suggest that the “deal” was, potentially, legally suspect. These matters are canvassed later in these reasons. I return to the Husband’s oral evidence.
The Husband denied that he knew the property would remain, or would return, to the Grandparents’ [legal] ownership. He confirmed that there was no agent involved in the sale/purchase. He contended that he did not know that the Grandparents were vulnerable. He denied that he said to the Grandparents that he would transfer the property back to them after the debts were paid.
The Husband said that the stated purchase price of $350,000 was determined after “the lawyers” got a valuation, which was used for stamp duty purposes only.[9] He could not recall the instructions given to the lawyers, now more than 20 years ago.
[9] T 43.
The Husband confirmed that the Grandparents have paid payments since the breakdown of the marital relationship between Husband and Wife in 2017. Those payments, at the time of the trial, totalled approximately $32,000. He had not re-paid or returned these funds to the maternal Grandparents. He confirmed that the payments did not reflect the market rental for the property. He said that he had not returned any funds to the Grandparents because, in his view, it was a ploy by them to set up, or to contrive, a circumstance that would lead to the Court finding that there was, or should be, a constructive trust in relation to the B Street, Town C property.
The Husband’s view was that the “deal” in relation to that property was all driven by the maternal Grandfather. This was contrary to his earlier evidence, namely that his then Wife was the driving force, supported by him, to assist the Grandparents with the debt from the earlier, failed business venture of the Grandfather.
The Husband confirmed that the maternal Grandparents paid some water rates on the property. He said that on other occasions both he and the Wife paid for council and water rates. There was a “call” for these documents, ultimately an unresponsive one with no documents produced.[10] There was the same result likewise in relation to a “call” for home insurance documents.
[10] Among a number of places, see T 47.
The Applicant Husband confirmed that he knew that he had obtained a “bargain” with the very significantly lower price for the B Street, Town C property. He said:[11]
You paid half the value of the property. Correct?‑‑‑I bought the property at a bargain price. Yes.
[11] T 38. This evidence was further confirmed at T 48.
He maintained that the difference between the price listed on the transfer ($350,000) and the actual amount paid ($180,000) – namely $170,000 – was not a “gift” from the maternal Grandparents. He confirmed that he did not put any other procedural course or option to the Grandparents, for example, to put the property on the open market. He said that it was up to them to do that if they so wished. It was their option to take another course, such as putting the property on the open market. The exchange was as follows (emphasis added):[12]
MR EARDLEY: Why did you not suggest to your in-laws to sell the property on the market and get a price? They ‑ ‑ ‑?‑‑‑They – they had that option.
But Mr Falzon was suffering from a breakdown at the time the transfer and this agreement came to light or came to fruition. You’ve accepted that?‑‑‑Yes.
Why didn’t you say to Ms Falzon, “Look, sell this on the market. You will get double the money for it”?‑‑‑They had that option to do that. It’s not – that’s not up for ‑ ‑ ‑
You’re the son-in-law. You know he has had a breakdown, and you take advantage of him by buying his house and Ms Falzon’s house for roughly half its value. That’s what you did?‑‑‑Yes. I also gave up my military career to follow them into a business for a whole heap of promises ‑ ‑ ‑
[12] T 48.
The suggestion of some sort of compensation owed to, or even “payback” for injury and financial loss allegedly suffered by, the Husband was rather obvious in this response.
Immediately after this discussion, the Husband confirmed that he left the armed forces voluntarily. The point obviously being made was that, unlike the mental breakdown of Mr Falzon, the Husband’s action (and sacrifice as he saw it) was voluntary.
He confirmed also that he did not suggest that the Grandparents get [independent] legal advice.
In his view, the price settled upon by all parties was “a good price.” It also represented, he said, a good deal, as earlier noted.[13] He said it was his understanding that if this “deal” was not done, the bank would intervene.
[13] T 50 & 51.
The Husband said that it was the Wife who came up with the suggested transaction to raise the funds. This is in contrast to his Affidavit evidence where, at par.31 of the Husband’s trial Affidavit (filed 7th August 2019) he affirmed that “Mr Falzon and Ms Falzon discussed with Ms Sancomb and I their concerns about the bank foreclosing on their B Street, Town C property.…” At par.34, the Husband further affirmed that: “We proposed to Mr Falzon and Ms Falzon that we could purchase the B Street, Town C property from them for $180,000.”
Yet, notwithstanding these discussions to which he deposed, the Husband denied that he knew any of the details of the deal or arrangement with the Grandparents. He denied that he knew that the deal, as proposed by his Wife, was designed to assist her parents to retain the property. His denials on these matters were, in my view, quite incredible and significantly self-serving. As just indicated, in my view, they are clearly at odds with his own Affidavit evidence.
On the one hand, he acknowledged that his Wife was the one who proposed the transaction. He denied that he knew any of the detail, or the object, of the transaction regarding the B Street, Town C property. On the other hand, he later acknowledged that the transaction was, for him, a “smart decision financially.”[14] As already noted, for someone who presented as a person who was always on the lookout for the best possible deal, in my view, it is not reasonable for someone to say it is both a “smart decision financially”, but also to deny any knowledge of any relevant details of it. To put it somewhat rhetorically: how can a person assess something as being financially beneficial if the same person does not know the relevant details of it?
[14] T 51.
He denied ever saying to the Grandparents that the property would “always be theirs.” The Husband said that he knew the Grandfather had had a breakdown but said that he could still hold “normal conversations.” He said he was unaware of the Grandfather being on “suicide watch.” Equally, he maintained that he was unaware that his Wife, and then Mother-in-law, Ms Falzon, were both very concerned about the Grandfather and his state of mental health.
The Husband denied that the transaction regarding the property was only completed with the Grandmother. He said that he did not know if all the debts of the Grandparents were paid off. However, it was put to him that, as a result of the transaction over the B Street, Town C property, all relevant debts of the Grandparents were paid off. After initially denying that this was the case (or rather that he did not know), he was directed to Wife’s trial Affidavit who confirmed that the indebtedness of her parents was paid down by the funds received from the “sale” of the B Street, Town C property. The Husband accepted this.[15]
[15] T 54.
The Husband was challenged about the evidence contained in his Affidavit dated 1st March 2018, in which he stated that the balance of the purchase price of the property was “gifted.” He denied that it was a gift, saying that it was a loan. He said that the use of the term “gift” in his earlier Affidavit was simply a “turn of phrase.” He also said that he overlooked it when speaking with his lawyer and that he had earlier assumed that it was a “gift.”[16]
[16] T 56.
For my part, I have very great difficulty in accepting the Husband’s evidence in this regard. The only time he contended that he was mistaken about the funds totalling $170,000 being “gifted” by the Wife’s parents occurred in the witness box. His earlier and uncorrected Affidavit, in my view, was very much more likely to reflect the Husband’s long-standing appreciation of the import, and purport, of the significantly under-valued purchase of the B Street, Town C property. As I have already observed, the Husband struck me very clearly as someone who would always check matters, to the finest detail, when matters of finance were concerned. It is highly unlikely that the Husband would have suddenly changed his view of the nature of the B Street, Town C property transaction, or not double-checked his documentation and affirmed evidence regarding it, if there was any possible adverse risk to any financial outcome for him.
At the same time, in my view, the Wife’s Counsel made rather too much of this. He took a discrete issue from an earlier Affidavit (which he was entitled to do), but which did not appear in the Husband’s trial Affidavit, and sought to use it as something of a club against the Husband. For the reasons given, while of some moment, in the wider scheme of things, it made not a lot of difference or relevant impression.
At par.13 of his trial Affidavit, filed 7th August 2019, the Husband outlined the purchase of the B Street, Town C property from the Wife’s parents. He was asked whether he considered, after that purchase, the property to be his. He said “no.” At the same time, he said that he did not regard it as “Nanny and Poppy’s house”. The transaction regarding the property, he said, was “family helping family.” This included the Grandparents having the benefit of a reduced “rent” for their habitation of the property.
The Husband said that his former Wife’s evidence about the transaction regarding the property, and otherwise, was a lie and that the Wife was a “liar.”[17]
[17] T 59.
During his oral evidence, the Husband raised, apparently for the first time, that the Grandfather regularly beat his Wife. He said that the Grandfather was an alcoholic and that his beating of the maternal Grandmother was well-known.[18] Notwithstanding this, he said that he did not know if she was in a vulnerable state at the time of the transaction regarding the B Street, Town C property. Part of the exchange was as follows:[19]
[18] T 59.
[19] T 60.
You wanting to acquire the property of your mother and father-in-law’s at half its value, that she was being beaten?‑‑‑I purchased the property because it was a ‑ ‑ ‑
Answer my question, please?‑‑‑I am answering your question. I did not purchase the property to take advantage of anybody.
Prior to purchasing the property did you or did you not know about the allegations of Mr Falzon beating or assaulting Ms Falzon? Yes or no?‑‑‑Yes.
How long did you know about these allegations?‑‑‑I found out about those at the business. So it was probably about 12 months prior to it.
Was Ms Falzon in a vulnerable state at that time?‑‑‑I don’t know.
Well, you knew about the beatings, as you put it, the allegations. Did you know whether or not she was vulnerable at the time?‑‑‑No.
You don’t think a person being beaten is in a vulnerable position?‑‑‑I know that when he was at the business when he was excessively drinking that he would – that he was prone to violence against Ms Falzon. I found out about that when we were at the business.
In my view, the number of matters about which the Husband claimed relevant ignorance, particularly in the light of his other admitted knowledge, was both concerning and rarely convincing.
The Husband denied that he had an online account with a gambling company. He said that he played poker once per week, which cost $12.00.
He also confirmed that the two children lived with the Wife after separation. He confirmed that he gave the Wife no funds at this time, nor did he pay any child support. He said that he regularly gave the children cash.
The Husband said that he regularly did work on the D Street, Town E property; it was, he said, “an ongoing job”. He denied that the ride-on mower was broken (he said it was “worn out”); he also denied that the septic sewerage system was not working. He confirmed that some goats had roamed on the property and destroyed fly screens over a number of years. He denied that the house was “covered in mould”, and equally that he had left the residence with rubbish left around.
He confirmed that he moved to Queensland (where he now works) just after the house was sold in either December 2017 or January 2018. He said that he finished renovating the property; he denied the Wife’s account that it was left in a state of disrepair. He said also that he traded the fire hose for a chook shed; he did not give away any assets of the relationship. He said that he paid for any other renovations or repairs.
After a break, questions to the Husband returned to the B Street, Town C property transaction.
The Husband said that after he and the Wife purchased the property in 2002, he paid the relevant rates (water etc). It was however put to him that relevant rates notices in 2005 and 2006 issued but in the name of the “Falzons” – that is, the maternal Grandparents. Similarly in 2007, water rate notices issued in the name of the maternal Grandparents. He said that he could not recall who paid those rates. It was put to him that the Wife and her Mother say that the Second Respondent, Ms Falzon, paid these rates. The Husband said that he could not recall who paid them. He denied that he was content for the Falzons to pay these rates because he (and the Wife) were holding the property for the Grandparents’ benefit.
At par.38 of his trial Affidavit, the Husband deposed to wanting to make sure (due to his lack of trust in the Grandfather following the collapse of the earlier business venture at the business) that “all arrangements for the purchase had to be legalised”. He explained that, by this expression, he meant that everything was done by a solicitor and “above board.” He said (emphasis added):[20]
[20] T 68 – 69.
So what did you mean by “had to be legalised”? What did that mean?‑‑‑Because, after all the promises that were made, going into the business, which all fell through, I was in no – I was not going to entertain into any – enter into any agreement with Ms Falzon and Mr Falzon because (1) I did not trust them – that the whole lot would all go to rubbish again in the future, and I wasn’t prepared to make that mistake.
I ‑ ‑ ‑?‑‑‑So I was only agreeing ‑ ‑ ‑
I understand that’s your evidence but I’m just wondering what you meant by “legalised” – where ‑ ‑ ‑?‑‑‑I wanted it purchased correctly, transfer of title, done by a solicitor, all above board: no backyard deals; no nothing.
Except for the undervalue?‑‑‑The undervalue, that was – like I said, that was all I could afford.
To state the obvious: the Husband’s concern that there be no “backyard deals” is rather inconsistent with the very significant undervalue of the sale of the B Street, Town C property. It showed a conveniently selective understanding of what constituted a “backyard deal.” If ever there was such a deal, the reduced price of the B Street, Town C property was a stellar example.
He confirmed that the Grandparents’ lawyers, K Law Firm, were used. Unfortunately, despite inquiry being made of them, the lapse of time meant that there were no relevant records with that firm regarding the transaction in question, including (perhaps most unfortunately) no copies of mortgage documents. In wanting to make sure that the purchase was “legalised” and have everything “above board”, the Husband confirmed (in my view, somewhat curiously) that he did not seek any advice regarding the disparity in relation to the stated price and the actual price paid because he thought he was getting a “good deal.”
The Husband said that the purchase of the B Street, Town C property was important to him for “retirement” and that (par.49) he had made a number of “large financial decisions on the basis that the B Street, Town C property was owned by Ms Sancomb and I.” Few details of what comprised these “large financial decisions” were provided.[21]
[21] Generally see his comments at T 69.
The Husband also confirmed that he obtained no legal or tax advice regarding the purchase of the B Street, Town C property. If, as he said, he was making (or had made) “large financial decisions” on the basis of this transaction, one might reasonably assume that a prudent person would seek relevant advice about them. He did not. This is especially in circumstances where, as the Husband’s evidence stated, he knew nothing about the purchase other than that he was getting a “good investment” and that he had made a “really good deal.[22]”
[22] See the somewhat longer discussion about the lack of advice at T 71 – 72.
The Husband was shown original documents, being Council rates notices up to 2018, and various water rates notices. These all became Exhibits, noted in the Exhibits list recorded elsewhere in these reasons. These were addressed to the Falzons. The Husband confirmed that until 2007, the Falzons paid the Council rates. This was so notwithstanding the Husband’s earlier evidence that he (or he and his Wife) had paid them. Again he denied that the rates were paid by the Grandparents because the property was held in trust for them.
After the Husband was provided with copies of more rates notices – original documents that came from the maternal Grandmother, Ms Falzon – he denied that the Falzons had paid these rates. He confirmed that he had no documents to confirm that he had paid any water rates to challenge those that were produced by the maternal Grandmother. He said that he suspected that his former Wife had passed these original notices to the Grandparents and/or that the Wife had paid them using the Husband and Wife’s credit card. He did not check this or provide any evidence to this effect.
The Husband confirmed that he did not in fact know who was paying the council and water rates on the B Street, Town C property. He confirmed that he made no inquiries but had assumed that his Wife was paying them. It was put to him that the Grandparents did so. He confirmed that he did not pay the insurance on the property.
Oral evidence of the Wife
Summarised, the evidence of the Wife was as follows.
The Wife confirmed that she was aware that the Court had made an Order for the net proceeds of sale of the D Street, Town E property to be put into an interest bearing account. She said however that from the date of that Order (16th August 2016) to 2019 she was unaware that this had not been done. She said that she followed it up but for unexplained reasons it still did not occur. To state the obvious: this was a needless and most unfortunate oversight by all involved.
The Wife confirmed the following matters:[23]
a)Her parents got into financial difficulty in 2001;
b)She and the Applicant Husband made an appointment with J Bank, and both of them went to that appointment;
c)She denied that $180,000 was the maximum that could be borrowed. She said that this was the sum they applied for;
d)She confirmed that the property was not worth [only] $180,000 at the time;
e)She said that she and the Husband discussed the situation regarding her parents and they offered to “take on” the transaction. She denied that she suggested to her parents that they sell the property. She denied that she had an emotional attachment to the property, but accepted that she liked living there;
f)She said that her parents offered that she and the children live at the property;
g)It was put to the Wife that the $180,000 borrowed could have been used for other investments. The Wife said that this was not the intention of the borrowing;
h)She confirmed that, after the collapse of the business venture of her Father, the Husband was “furious”. He was not in a state of mind to help out her family.
[23] See T 85 ff.
The Wife was shown a document, dated 21st July 2003. It became Exhibit 1. It was signed by the Husband and Wife. It stated that the maternal Grandparents would reside at L Street, Town N “by rental agreement of $180.00 per week.” It was stated to have commenced on 12th May 2002. She said that she did not recognise/recall this document. The rent received from the Grandparents was put into a M Bank account, what she described as a “holding account.”[24]
[24] Generally,. See the discussion at T 89 – 90.
The Wife said that she could not recall the monthly amount of her mortgage payment. She said that she never said to her Mother that these payments were for rental. Rather, she said, the payments from her parents were “mortgage payments.” It was not required, for the purposes of the Australian Tax Office (“the ATO”), to declare which of their properties was formally being rented, and therefore, which one produced rental income. Somewhat confusingly in the light of her earlier evidence, she also said (in my view, more accurately) that for tax purposes, all income had to be declared as “rental income.”
At the time of signing the document that became Exhibit 1, the Wife said that she and the Husband were living in the other apartment at L Street, Town N. Both of the apartments in this complex were declared to the ATO to be rental properties with declared rental income. The Wife confirmed that for the 2004 financial year, her tax return (Exhibit 2) showed that her parents paid rent for the L Street, Town N property. She said that she simply followed the advice of the accountant at the time and the advice of her Husband.
There was much discussion about the accuracy of information provided by the Wife to the ATO in relation to one or more of the parties’ properties. To most of these questions she said that she relied upon the advice from their accountant and the Husband.[25]
[25] T 92 – 95.
The Wife confirmed that the B Street, Town C property had been transferred into her and her Husband’s names. To this, somewhat elliptically, she stated that this was to enable her parents “to pay back the mortgage.”
She also confirmed that in 2009, she (and the Husband) used the B Street, Town C property as security for a loan. A copy of that mortgage, signed but unstamped and seemingly unregistered in the copy provided, is Annexure F to the Husband’s trial Affidavit.
Exhibit 4 is a copy of a “tenancy agreement” between the Husband and Wife and the Grandparents regarding the B Street, Town C property. It records that it was to commence on 10th July 2009, and provides for a “nominal rent of $245.00”, which was to be paid into a nominated account in the name of the Husband and Wife. In fact, the only signatories to it are the Grandmother and the Wife. Somewhat surprisingly, nothing was ever made about, or commented on, in this regard. It was yet another instance of an incomplete and not fully explained (or with competing explanations), documentary record and history.[26] My query here also relates to the [relatively] “nominal rent” proposed to be paid by the Grandparents. Equally so in relation to its characterisation as “rent”, which was described by the Wife as “mortgage payment.”[27]
[26] See T 97 – 98.
[27] T 98.
The Wife confirmed that the only source of income for her parents for the payment of this “rent” was from her Father’s pension.[28] She said that she advised her parents of the exact amount of the mortgage. That said, she confirmed that her Mother never asked how much the Husband and Wife were actually borrowing. She said that in 2002 she confirmed to her parents how much was in fact borrowed.
[28] T 97.
The Wife said that she could not say if payments were made regularly by her parents because the Husband looked after all the banking. In the Husband’s evidence, he said that the Wife did so. She said this was not true.
As earlier noted, the Wife’s evidence was that all payments made by the Grandparents, however described at any particular time, were in fact mortgage payments. She denied that after the marriage of the Husband and Wife ended, she and her Mother altered the description of the Grandparents’ payments to refer specifically to “mortgage” payments.[29]
[29] In this regard, the Wife was referred to the CBA bank statements annexed to the Husband’s trial Affidavit, Annexure I as well as to pp.44 and 56 of that Affidavit and the bank statements there annexed.
At par.36 of her trial Affidavit (filed 23rd August 2019), the Wife said that the Husband took credit funds from the account into which the Falzons paid the “mortgage payment.” The amount said to be stolen from this account was $800.00. She said further that it was following this [alleged] theft by the Husband that the Grandmother sought advice from the Commonwealth Bank in Town E about how to stop the Husband taking the mortgage payments. The advice given by the Bank was that the payments be designated “mortgage payments” when funds were paid into the nominated account.[30] She confirmed that she asked the Husband about the alleged theft. She said that she did but was told simply to speak to his lawyers.[31]
[30] T 104.
[31] See the discussion at T 104 – 105.
She confirmed that, for a time, the Husband paid the mortgage on the D Street, Town E property. This included her portion of it because, she said, she had to rent a residence for herself and the children. She also confirmed that the Husband paid her health insurance for approximately 3 – 4 months after separation. She said that the council rates on this property went unpaid and were ultimately deducted from the settlement proceeds. Likewise, she said that outstanding credit card debts were only finalised upon settlement of the sale of the D Street, Town E property.
The Wife said that she and her parents, not the Husband, did the wiring on the D Street, Town E property. She said that she and the Husband both worked on (a) the chook yard, (b) the driveway to the property, (c) the timber flooring, and (d) the fireplace.
She denied that she left that property in a mess when she moved out.
Because it was a matter not addressed in cross examination, in conclusion I simply note the substance of the Wife’s argument from par.37 of her trial Affidavit. In short, she said that (a) the Grandparents did not “gift” the B Street, Town C property to her and the Husband, (b) rhetorically, she posed the question why the Grandparents would enter an arrangement with the Husband and Wife when they could simply sell the property and have some funds left over, and (c) the Wife has a brother. She also posed rhetorically why the Husband and Wife would “gift” to the Husband and Wife the sum of $170,000, when they could not afford to provide something similar to her brother.
The Wife also confirmed (pars.34 and 35) that she and the Husband never paid local government rates and charges, or any other costs for the upkeep of the B Street, Town C property. She also said that between 1999 and 2009, when she and the Husband (and their children) lived at the B Street, Town C property, they paid nothing to the Grandparents. These matters were also not canvassed or challenged in cross examination.
Because it is so central to the issues surrounding the family arrangements regarding the B Street, Town C property, I set out a further extract from the Wife’s cross examination, which summarises her evidence, thus:[32]
[32] T 100 – 101.
I’m not asking that. What I’m asking is your mother says in her affidavit that at the time you borrowed money in 2002 ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ she didn’t know how much you borrowed and, essentially, how much she had to repay?‑‑‑All she knew was nominal amount.
No, I’m talking about the full amount, the full amount that you took out the mortgage for. She never knew that, did she ‑ ‑ ‑?‑‑‑Well ‑ ‑ ‑
‑ ‑ ‑ at that time?‑‑‑I can’t speak for my mother, but I’m assuming yes, she did.
So she got it wrong in her affidavit?‑‑‑I can’t – I can’t say that for my mother.
You never told her how much you borrowed, did you?‑‑‑In a generalised figure, yes, we did.
No – sorry – generalised or not generalised, did you or did you not tell your mother in – or your father, in 2002, the total amount that you and Mr Sancomb borrowed for the mortgage that they would need to repay?‑‑‑In a generalised figure, yes.
HIS HONOUR: Because was it the case that, in the various discussions that were going on at the time, including your earlier evidence that you borrowed the $180,000 to cover the debts that were owed by your parents ‑ ‑ ‑?‑‑‑That’s correct.
‑ ‑ ‑ the inference from my part being that you suggest that you would have been able to borrow more if needed ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ but, by borrowing 180, there must have been some discussion between at least you and your mother, possibly your father, also involving your then husband ‑ ‑ ‑?‑‑‑That’s correct.
‑ ‑ ‑ so that everyone knew this was the purpose of the borrowing, this was the amount of borrowing required to pay out the debts ‑ ‑ ‑?‑‑‑Yes.
‑ ‑ ‑ so that everyone was, basically, whatever the intrafamilial tensions – the anger by your husband, the distress of your parents at the collapse of business, whatever it was – all those things going on – nonetheless, everyone was on the same page?‑‑‑That’s correct.
Oral evidence of the Second Respondent Maternal Grandmother
The relatively brief oral evidence of the Second Respondent Maternal Grandmother was as follows.
She confirmed that her Husband has dementia, which was diagnosed in 2016. At the same time he was also diagnosed with a bi-polar disorder. She said that neither she nor her Husband have wills.
The Grandmother confirmed that the B Street, Town C property, because of its 5 bedrooms, was a more appropriate residence for the Husband and Wife and their children, than for the Grandparents.
Accordingly, in my view, the remedial course that is both just and equitable and otherwise appropriate in all of the circumstances of the matter is as follows:
a)There be a declaration of constructive trust in favour of the Second and Third Respondents (“the Grandparents”), in relation to the B Street, Town C property, subject to the following further Declarations and Orders;
b)There be a declaration of interest in relation to the B Street, Town C property in favour of the active parties in the proceedings, namely, the Applicant Husband, the First Respondent Wife, and the Grandparents. That declaration of interest shall be as to one third equal parts, the Grandparents being treated as a single entity entitled to a one-third interest.
But these declarations do not end the matter.
During the hearing in the course of the cross examination of the Grandmother, there was a discussion about the utility and or practicability of the Grandparents continuing to live on such a large property. Accepting that some assistance is provided to them from the Department of Veterans Affairs for the upkeep of the grounds, issues of utility and practicability, especially in the light of the poor health of the Grandfather, were never addressed by any party. In the light of the declarations now made by the Court, in my view, those very practical matters need to be addressed.
In the final paragraph of Deane J’s judgment in Muschinski v Dodds, his Honour said:[58]
In order to give the parties the opportunity of considering the question … and of avoiding the costs and delays which would be involved in remitting the matter to the Supreme Court for inquiry, I would stand the matter over at this stage so that the parties may have the opportunity to agree upon orders which would finally dispose of the case.
[58] Muschinski v Dodds 160 CLR at 624.
Adapting that course to the present matter leads to the following. In my view, the parties should be given a modest amount of time to consider these reasons and the declarations now made. Within 21 days, the parties are to file an agreed Minute “which would finally dispose of the case”. In the absence of agreement, each party is to file, within the same period of time, a Minute of Order Sought in the light of these reasons, together with written submissions of no more than 2 pages in length addressing what consequential, machinery or associated Orders should be made in order to finally dispose of the proceeding.
I certify that the preceding one hundred and ninety-two (192) paragraphs are a true copy of the reasons for judgment of Judge WJ Neville
Associate:
Date: 26 June 2020
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Constructive Trust
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Remedies
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Restitution
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